Stakeholder Integration, Ethical Orientation, and Environmental Performance: Evidence From SMEs in Ghana

Abstract

This paper offers a novel theoretical account of how and when stakeholder pressures translate into environmental performance. Building on the Natural Resource-Based View, we develop a moderated-mediation model showing (a) stakeholder integration mediates the effect of primary and secondary stakeholder pressures on environmental performance (how) and (b) organizational ethical orientation moderates this mediated effect (when). We tested our model in the context of Ghanaian manufacturing small and medium-sized enterprises (SMEs). A time-lagged survey of 367 firms showed that both primary and secondary stakeholder pressures positively influence environmental performance via stakeholder integration, and this mediated effect is stronger when ethical orientation is high rather than low. Our study advances research in three ways. First, it highlights the role of stakeholder integration as a relational capability distinct from traditional technical environmental capabilities. Second, it demonstrates the contingent role of ethical orientation in shaping sustainability outcomes. Third, it provides context-sensitive insights from SMEs operating in institutionally fragile environments.