Strategic Implications of Stakeholders’ Green Expectations for Organizational Performance

This study aims to identify the key enabling factors and their interrelationships that facilitate the successful implementation of sustainability initiatives, driven by increasing stakeholder expectations and global commitments to environmental sustainability, thereby enhancing organizational performance. The hotel industry, which is a major source of greenhouse gas emissions in the service sector, has shown different levels of dedication to eco-friendly measures. While large, branded hotel chains have increasingly embraced sustainability often in response to growing customer appreciation small and midsized hotels frequently lag behind, citing high implementation costs and limited awareness as major barriers. In the context of developing economies like India, which is witnessing rapid growth in the number of small and mid-sized hotels, it becomes imperative to examine this segment more closely. The impetus for this investigation is to comprehensively examine the factors influencing sustainability across various categories of hotels, thereby establishing them as exemplars of the wider hospitality sector. With global targets such as achieving net-zero emissions in the near future, it is essential for organizations regardless of size to integrate sustainability into their core business strategies to remain relevant and competitive. Purpose: Today customers, both internal and external, increasingly expect and value environmentally responsible practices. Hence, this study aims to fill a critical research gap by examining the interlinkages among enabling factors that support sustainability efforts, without compromising the major goals of profitability and long-term organizational performance. Design/methodology/approach: Grounded in institutional theory, this study employs Interpretive Structural Modelling (ISM) to explore the relationships among key variables and their collective impact on organizational performance. Results: The findings show that sustainability efforts suggestively enhance organizational performance, especially regarding profitability. Profitability, in turn, is strongly influenced by an enhanced brand image and the organization’s ability to secure an optimal market share. At the foundational level, key driving factors such as an organizational culture that promotes green practices, adherence to government mandates, evolving customer expectations, and employees’ positive attitudes towards sustainability emerge as critical enablers. These basic parts are the main forces that start and keep the process going toward higher-order results. This helps the organization reach both its environmental and economic goals. Practical implications: This study provides actionable insights for hotel managers, especially those in small and mid-sized establishments, to better appreciate the strategic benefits of adopting sustainable practices. Importantly, it dissipates the delusion that sustainability requires heavy financial investment. Instead, it emphasizes the importance of having a clear vision and strategic focus, representative that impactful sustainability outcomes can be achieved with thoughtful preparation and resource alignment. Originality/value: The study offers a novel framework that elucidates the hierarchical structure and influence pathways among sustainability-related variables and their role in enhancing organizational performance. By highlighting the driving and dependent factors, the findings provide a strategic roadmap for decision-makers to implement green initiatives with greater confidence and clarity. The ISM-based approach further enhances the study’s value by offering a structured method to prioritize actions and allocate resources effectively toward sustainability goals.

Department

General Education

Publisher

Association for Consumer Research

Sponsor

NA

Copyright

CC0 1.0 Universal

cb