Sustainability-oriented capabilities and high-performing enterprises in technologically turbulent business environments represent a major research issue particularly in emerging industrial settings like China. This research examines the role of green supply-chain practices (GSCP), knowledge-management capability (KMC), and enterprise-management support (EMS) on enterprise performance (EP) through the mediation of innovation capability (IC), while considering the moderating role of technological turbulence (TT). Drawing on the Resource-Based View (RBV) and Dynamic Capabilities Theory (DCT), the former conceptualizes GSCP, KMC, and EMS as strategic organizational resources, whereas the latter describes how firms dynamically reorganize these resources in response to the quickly evolving technological environments. In this study, data from 630 respondents who worked in the managerial positions in manufacturing and service sector across China were gathered using quantitative cross-sectional survey. . Measurement items deriving from existing scales were tested using a seven-point Likert response scale. Partial Least Squares Structural Equation Modeling (PLS-SEM) in Smart-PLS 4.0 was used to porcess the data Findings reveal that GSCP, KMC and EMS have strong positive impacts on IC which subsequently boosts EP, whereas, TT reinforces the association between IC and EP, denoting that robust IC improves the performance of firms in the context of rapidly changing technologies. These findings highlight the significant role of IC in converting sustainability-oriented resources and knowledge-based abilities into quantifiable organizational results. On the management front, the results underscore the importance of incorporating green supply-chain activities with knowledge-management activities and management support to develop innovation-based competitiveness. Practically, for policymakers, achieving sustainable industrial growth might be facilitated through supporting organizational innovation and green operations. Future studies could further develop the framework to examine how these dynamics vary over time, and how sector specific factors and other environmental contingencies affecting the capability-innovation-performance nexus.
In today’s global economy, organizations are increasingly compelled to forces like economic competitiveness, environmental sustainability, and technological adaptability . Additionally, modern companies that are environmentally concious and innovative unavoidably will face challenges from the regulators, consumers, and global supply-chain partners. . These issues are especially acute in China, where the accelerated pace of industrialization, mass production processes and national sustainability goals have significantly transformed corporate practices. Being the key players in global supply chain, companies in China are now shifting towards digitalization, automation, and greener development to stay afloat. In this context, enterprise performance is crucially depending on its ability to synergize sustainability-related supply-chain practices with knowledge-based capabilities and managerial support.
Moreover, these challenges are further aggravated by the rapid technological transformation of the Chinese industrial environment. For instance, Chinese enterprises involve in rapid technological changes, increased consumer demands on sustainable products, and tough environmental laws are forced to keep restructuring resources and organizational capabilities to be competitive. Subsequently, innovation capability (IC) has therefore emerged as a strategic process by which organizations can transform internal resources into sustainable performance outcomes. In addition, organizational flexibility via innovation is central to firms adapting to technological disruption and remain competitive in the long-term (Uzkurt, Ekmekcioglu & Ceyhan, 2023). Building on this, this study examines the interaction of green supply-chain practices (GSCP), knowledge management capability (KMC), and enterprise management support (EMS) in technologically turbulent environments to promote IC and ultimately enhance enterprise performance (EP).
To start with, GSCP have become the focus of increased academic and policy discourse as companies gradually recognize the need to incorporate environmental issues into their working processes. GSCP represent the strategic interconnection of environmental goals with the supply-chain operations, encompassing product design, procurement, manufacturing processes, distribution and end-of-product management (Silva, Gomes & Sarkis, 2019). Grounded in the supply chain sustainability concepts, organizations can minimize the environmental costs and while simultaneously enhancing the organizational efficiency and competitiveness in the long term (Younis, Sundarakani & Vel, 2016). Further, according to Teixeira and Jabbour (2016), these practices tend to drive technological and organizational innovation by prompting firms to restructure processes, implement cleaner technologies, and establish collaborative relationships within the supply-chain networks.In sum, as sustainability expectations increase, GSCP are now regarded as a strategic capability rather than a compliance mechanism.
Concurrently, KMCis a key organizational resource that helps firms to gain, distribute, and use knowledge efficiently. KMC reflects the extent to which organizations can convert tacit and explicit knowledge into strategic insights that facilitate innovation and improve performance (Tseng & Lee, 2014). In particular, companies with strong knowledge-management systems are more responsive to environmental uncertainty and they tend to embrace technological changes, and take advantage of new market opportunities (Shaqrah & Alzighaibi, 2021; Zia, Zhang & Alam, 2023). Furthermore, past literature also posits that KMC support organizational learning and help to convert knowledge assets to novel products and processes (Özbağ, Esen & Esen, 2013). In this respect, in China, knowledge management is used as a vital tool in transforming technological knowledge and market intelligence into innovation potential (Shehzad, Zhang, Alam & Cao, 2022).
In addition, EMS that affects managerial commitment is a core factor in resource alignment, employee motivation, and developing a culture of experimentation and creativity (Min et al., 2020). Specifically, EMS involves the commitment of the leaders, strategic direction and provision of financial and technological resources for innovation activities. To sustain performance, proactive managerial support is crucial in emerging market settings, where companies tend to be overly resource-constrained and environmental uncertainties are prevalent(Loan, Brahmi, Nuong & Binh, 2023). As EMS gives the organization strategic guidance and organizational coordination, thus ensuring the sustainability efforts and knowledge-management processes in the long run (Shehu & Mahmood, 2014). Hence, in this study, managerial support serves as a mediating process between organizational resources and innovation-based performance outcomes.
Furthermore, the core process of converting internal resources into performance advantages is known as IC, through which organizations secure performance advantages. Drawing upon the resource based and dynamic capabilities theories, companies must continuously refresh competencies and respond to the evolving market and technological environment to maintain competitive advantage (Yeşil & Doğan, 2019). In pratice, IC helps organizations to come up with new products, better operational processes, and effective responses to changes in regulatory procedures and the market. Empirically, IC enhances the connection between organizational practices and performance by acting as a mediating mechanism (Yusr, 2016). Within sustainability-oriented settings, IC helps in converting the green supply-chain initiatives and knowledge-management operations into superior EP.
Taken together, these organizational capabilities exert an even stronger effect in a setting that is technologically turbulent. Technological turbulence (TT) is the pace, complexity, and uncertainty of the technological change in an industry, which are driving factors affecting how firms distribute and reorganize resources (Yang, Qi, Du, Chen & Zhou, 2024). As technology evolves rapidly, companies must continuously adapt their capabilities and embrace new ways to stay relevant and competitive. Although, research shows that TT strengthens the association between organizational capabilities and innovation results, since companies must adjust to technological changes faster (Santos, Beuren, Bernd & Fey, 2022), it does not affect all organizations similarly, its impact varies based on the adaptive capacity and strategic orientation of an organization (Uzkurt et al., 2023). In this context, IC emerges as a critical mechanism to maintain EP as technological disruption and digital transformation are prevalent in China.
Although research on sustainability-related capabilities is gaining scholarly attention, the most focuses are on the independent impact of GSCP (Silva et al., 2019), KMC (Shaqrah & Alzighaibi, 2021; Tseng & Lee, 2014), and EMS (Loan et al., 2023; Min et al., 2020) on firm performance. These studies while comprehensive lack the evidence on how these constructs interact synergistically to affect IC and EP in the technologically turbulent settings. Existing research adopt a fragmented approach by considering individual relationships or dyadic interactions between variables and ignore the dynamic and integrated nature of organizational capabilities and dynamic environments in which they are exercised (Panigrahi et al., 2023). Moreover, while the moderating influence of IC has been recognized in the previous studies (Yeşil & Doğan, 2019; Zia et al., 2023), the moderating impact of TT on these relationships are under-investigated in a multi-capability framework.
In selecting the research site, China offers a very appropriate empirical context to fill these research gaps. Being one of the largest manufacturing economies in the world and one of the largest actors in the global supply chains, China proactively pursuing policies that facilitate green development, digital transformation, and technological innovation. For instance, national policies such as green manufacturing programs, environmental regulation reforms, and digital economy strategies are implemented to enhance their technological abilities and be more eco-friendly. However, many Chinese businesses are at a crossroad of sustainability transitions and high-speed technological change as the question of how companies integrate green supply-chain activities, knowledge-management competencies, and managerial assistance to increase innovation capacity in the presence of TT remains unanswered. .
Therefore, this study adopts the Resource-Based View (RBV) and the Dynamic Capabilities Theory (DCT) to explain how companies utilize internal resources to generate sustained competitive advantage in the dynamic technological worlds. RBV assumes that organizational performance is motivated by valuable, rare, inimitable, and non-substitutable resources, whereas DCT focuses on the necessity to constantly reconfigure these resources as the environmental change occurs. GSCP, KMC and EMS are conceptualized in this paper as strategic organizational resources; IC is positioned as a dynamic capability that facilitates firms to transform resources into performance results; and TT is the environmental state that defines these associations.
Methodologically, this study addresses recent demands of more integrative analytical methods to identify both mediating and moderating mechanisms in complex organizational systems (Santos et al., 2022; Suciati, Sumiati, Indrawati & Andarwati, 2024). Using the Partial Least Squares Structural Equation Modelling (PLS-SEM), this study simultaneously allows direct, indirect and conditional analyses of the interrelations between the constructs, presenting a comprehensive analysis on the role of sustainability-oriented capabilities in EP.
Research objectivesThis study aims to explore the dynamics between GSCP, KMC, EMS, IC, TT and EP in the Chinese industry context. In particular, the study has the following objectives:
- 1.
To determine the direct impact of GSCP, KMC, and EMS on EP.
- 2.
To investigate the influence of GSCP, KMC and EMS on IC in organizations.
- 3.
To determine the mediating effect of IC in the relationship between GSCP, KMC, and EMS and EP.
- 4.
To examine the moderating effect of TT in the relationships between organizational capabilities, IC, and EP.
- 5.
To provide empirical evidence of Chinese firms to show how sustainability-oriented and knowledge-based capabilities play a role in organizational competitiveness within technologically dynamic contexts.
This study adds to the literature in three primary ways. First, it contributes to green supply-chain management by examining how it interacts synergistically with KMC and EMS. . Second, it expands the study on innovation-capability as a pivotal mediating variable between various strategic assets and the enterprise performance. Third, the research examines TT’s moderating role in determining the effectiveness of organizational capabilities in the dynamic market settings.
The rest of this paper is structured in the following way. The second section provides the theoretical background and the hypothesis formulation, and the third section discusses the research methodology. The fourth section presents the findings which are subsequently discussed in the final section. Theoretical and managerial implications, limitations, and the future research directions are provided at the end of the paper.
Literature reviewIn today’s industrial settings, EP is increasingly reliant on the ability of an organization to simultaneously pursue sustainability, optimize its knowledge utilization, and adapt to technological change. Organizations must be more environmentally responsible in their operational process while simultaneously developing IC.In this context, the interplay between the GSCP, EMS, and KMC has received increasing scholarly interest. Such capabilities promote the minimization of environmental impact, improve operational efficiency, and foster innovative solutions that enhance EP. Concurrently, external environmental forces, including TT, introduce further complexity, altering the mechanisms through which organizational capabilities influence the innovation and performance outcomes.
Although previous literature has examined the association between sustainability practices, knowledge management, and organizational performance, limited attention has been given to understand how these capabilities interact within technologically dynamic settings. The literature implies that sustainable operational procedures, knowledge bases, and management support can work together to drive IC, which subsequently improves EP. However, the processes by which these capabilities interact, especially under high TT, remainunderexplored. This gap is specifically pronounced in the rapidly industrializing economies like China, where technological transformation, environmental regulation, and digitalization are simultaneously reinventing the business practices.
Enterprise management support and enterprise performanceAs discussed above, EMS refers to the extent to which senior management shows leadership commitment, offers strategic direction, and allocates necessary resources to support organizational initiatives and innovation activities. Hence, strong managerial support is essential to meet the organizational goals, motivating the workforce, and implementing strategic initiatives (Min et al., 2020). Virtually managerial assistance comprises the financial resource provision, the promotion of experimentation, the facilitation of open communication, and the establishment of the environment conducive to continuous improvement and innovation. Empirical studies indicate that strong managerial engagement can significantly increase organizational performance because leadership commitment guarantees effective execution of strategic plans across departments (Loan et al., 2023). Notably, when management proactively supports innovation and operational improvement, employees are more willing to embrace new practices and engage in problem-solving processes that bolster productivity and efficiency. This is more pronounced in the emerging economies, where organizations often face limited resources and a highly dynamic market environment.
Moreover, EMS improves EP by enhancing organizational alignment and facilitating effective process of decision-making. Leadership commitment drives effective resource planning, develops knowledge-sharing processes, and encourages joint innovation (Shehu & Mahmood, 2014). Moreover, companies with high managerial support have higher chances to achieve higher operational results and maintain performance benefits. Therefore, the following hypothesis is synthesised.
H1 There is a significant positive relationship between EMS and EP.
In addition to its direct impact on performance, EMS also increases IC within an organization. The climate created by managerial support encourages creativity, experimentation, and knowledge sharing among employees. When leadership supports innovation efforts and invests in R & D, companies are in a better position to develop new products, services, and business processes. Further, managerial support coordinates knowledge resources and technological investments required for innovation activities. By providing strategic direction and a culture of innovation, management helps organizations to convert ideas into viable innovations that enhance competitive advantage. Hence, EMS is critical in developing IC within organizations. The following hypothesis is developed.
H2 There is a significant positive relationship between EMS and IC.
GSCP can be defined as a strategic initiative to incorporate the environmental factors across the supply chain with practices involving eco-design, green procurement, green processes in the product manufacturing and recovery or recycling at the end of its lifecycle (Laosirihongthong, Adebanjo & Choon Tan, 2013). Therefore, the researcher believes that a company can achieve both environmental sustainability and operational efficiency by integrating environmental sustainability into supply chain operations. Past research also reveals GSCP can enhance EP by reducing the costs of operations, increasing the efficiency of resource use, and improving customer confidence in eco-friendly products and services (Ariyanti, 2018). Moreover, sustainability-oriented supply chains enable companies to strategically differentiate themselves in the competitive markets. With effective implementation of GSCP, companies can build brand reputation, appeal environmentally aware consumers, and tap emerging green markets (Abdelaziz, Wu, Yuan & Ghonim, 2023). As such, the following hypothesis is proposed.
H3 There is a significant positive relationship between EMS and GSCP.
Other than performance outcomes, GSCP also stimulate IC. Scholars also assert that suppliers’ cooperations, production systems’ sustainability principles and reverse logistics often pushes a company to adopt new technologies, redesign working processes, and test new business models (Ariyanti, 2018; Bin et al., 2021). When organizations integrate environmental thinking into their supply-chain decision-making, they are likely to create new knowledge and technological strength that can facilitate innovation-based growth. Hence, the following hypothesis is synthesized.
H4 There is a significant positive relationship between GSCP and IC.
KMC is defined as the organizational ability to effectively acquire, share, store, and apply knowledge resources to achieve strategic goals (Alaarj, Mohamed & Bustamam, 2017). Knowledge-management systems allow organizations to convert scattered information and knowledge into practical insights that can be used in innovation, solving problems, and making strategic decisions (Idrees, Haider, Xu, Tehseen & Jan 2023). Organizations that are better equipped with strong KMC are more adaptable to changes in the environment and more resposive in capitalizing on new opportunities. Moreover, cross-departmental knowledge-sharing and collaboration allow firms to combine the organizational expertise with the external sources of knowledge, which enhances organizational learning and increases the responsiveness to technological change (Kee, Yusoff & Khin, 2019). The processes eventually result in improved EP as firms become more attuned to market needs and technological changes (Ribau, Moreira & Raposo, 2017). Therefore, the following hypothesis is proposed.
H5 There is a significant positive relationship between KMC and enterprise performance.
Furthermore, IC is also closely related to KMC. A company that manage knowledge resources better can use technological information, customer insights, and organizational experience to develop innovative products, services, and operational procedures (Shehzad et al., 2022). As a result, knowledge-management systems act as preliminary infrastructure that enables perpetual innovation and organizational renewal. Hence, the following hypothesis is synthesised.
H6 There is a significant positive relationship between KMC and IC.
TT characterizes the pace and uncertainty of technological change in an industrial setting (Alnsour, 2024). In extremely turbulent technological environments, companies should continuously update technologies, redesign processes, and reorganizing organizational capabilities to maintain competitiveness (Hoang & Hien, 2024). Although these conditions generate uncertainty, they also provide opportunities for organizations capable of swiftlyadjusting to technological changes. Companies working in technologically dynamic industries tend to gain competitive edge by rapidly adapting to emerging technologies and taking initiatives to react to changes in the market (Awain, Asad, Sulaiman & Asif, 2025). Consequently, TT can directly spur EP by prompting firms to innovate and modernize their operations. Therefore, the following hypothesis is developed.
H7 There is a significant positive relationship between TT and EP.
In addition, IC is also affected by TT. Facing the rapid technological changes, companies must constantly experiment, invest in research and development, and establish a network of collaborative innovation to stay competitive (Loan et al., 2023; Singh, Nika & Bashir, 2024). As a result, TT tends to act as an innovation catalyst. The following hypothesis is proposed.
H8 There is a significant positive relationship between TT and IC.
In addition to its direct impacts, TT can enhance or diminish the connections between organizational capabilities and performance outcomes. Previous studies reveal that EMS tends to be more efficient when TT is high as companies trying to leverage more advanced technologies to meet the changing environmental regulations (Abdelaziz et al., 2023). On the same note, GSCP can be more effective in performance when companies are under pressure to implement new environmental technologies quickly (Kuei, Madu, Chow & Chen, 2015). Therefore, the following hypotheses are synthesised.
H9 Technological turbulence (TT) positively moderates the reltionship between EMS and EP, such that the positive effect of EMS on EP is stronger under high technological turbulence.
H10 Technological turbulence (TT) positively moderates the reltionship between EMS and IC, such that the positive effect of EMS on IC is stronger under high technological turbulence.
H11 Technological turbulence (TT) positively moderates the reltionship between GSCP and EP, such that the positive effect of GSCP on EP is stronger under high technological turbulence.
IC refers to an organizational capability to create, adopt, and commercialize new ideas through products, services, or processes (Bahta, Yun, Islam & Ashfaq, 2020). In organizations where sustainability is a central strategic priority, IC acts as the utmost crucial mechanisms by which internal capabilities are converted into performance results. EMS can enhance IC by incorporating environmental needs in the R & D process to promote eco-innovations that enhance operational efficiency and sustainability. GSCP promote innovation by cooperating with suppliers and incorporating the environmental technologies into manufacturing. KMC facilitates innovation through informational infrastructure that facilitates ideas generation (Idrees et al., 2023). As a result, while EMS, GSCP, and KMC can directly impact EP, their impact is strongly enhanced by IC. By transforming sustainability-focused capabilities and knowledge resources into innovative solutions, firms can deliver higher performance and while simultaneously addressing the environmental and technological challenges.
Integrated mediated-moderation perspective and research gapExtensive of research has been conducted on sustainability practices, knowledge management, and innovation, nonetheless, these studies mainly analyze the constructs separately or examine them individually. As such, there is a dearth of studies that explore the combined effect of GSCP, EMS, and KMC on EP mediated by IC within technologically turbulent settings. This study narrows the gap by suggesting a combined mediated-moderation model wherein IC mediates the interactions between organizational capabilities (EMS, GSCP, and KMC) and EP, with TT moderating the interactions at both the capability-performance and capability-innovation stages. This combined view provides a more holistic perspective of the nature of interaction between sustainability-oriented capabilities and knowledge resources to create innovation and performance. The integration of GSCP, KMC, and EMS within a single framework represents a novel contribution, because it embodies the complex relationships between environmental practices, knowledge-based resources, and managerial support mechanisms. Moreover, investigating these relationships in the conditions of TT highlights the dynamic characteristic of capabilities development in modern industrial environments.
Other contribution is further supported by the empirical analysis conducted on a cross-industry sample of Chinese enterprises. The Chinese industrial environment is marked by high-speed technological transformation, the tightening of environmental regulation, and the massive government support for green innovation and digital transformation. As a result, the Chinese context offers a good setting to study the interactions between sustainability-oriented capabilities and TT as well as its impact on EP. The suggested mediated-moderation model (Fig. 1) thus adds to the literature by incorporating the practices of sustainability, KMC, and TT in a single framework. This study contributes to the existing literature on the capabilities-innovation-performance relationships by comparing the combined impact of these variables on EP through IC, providing insights on the issue of organizational adaptation within technologically dynamic environments.
Theoretical framework
This study adopts the RBV and DCT to explain how organizational capabilities influence EP in environments characterized by TT. The RBV asserts that firms gain a sustainable competitive advantage by possessing valuable, rare, and inimitable resources (Kuei et al., 2015). Based on this view, the conceptualization of GSCP, KMC, and EMS represents the strategic organizational resources that enable firms to improve operational efficiency, sustainability performance, and competitiveness.
GSCP constitute a key sustainability-based resource, since they incorporate environmental aspects in procurement, production, and distribution. These practices reduce the effects on the environment and simultaneously increase the efficiency and the corporate image (Ariyanti, 2018; Younis et al., 2016). Empirical evidence shows that adoption of green practices across all supply-chain activities helps promote innovation and enhance firm performance (Silva et al., 2019; Teixeira & Jabbour, 2016). Another important intangible asset is KMC that helps organizations to gain, share, and make the best use of knowledge. Effective knowledge-management systems improve decision-making, organizational learning, and innovation processes (Tseng & Lee, 2014; Yusr, 2016). Companies with superior KMC are better equipped to translate information and knowledge into new products and processes (Alaarj et al., 2017; Idrees et al., 2023). From the RBV perspective, KMC enhances absorptive capability, allowing organizations to use the knowledge resources to create innovation (Yeşil & Doğan, 2019; Zia et al., 2023).
Moreover, EMS is also a strategic organizational resource. The successful implementation of innovation and sustainability programs depends on managerial dedication, leadership direction, and resource distribution. Managerial support allows firms to organize organizational resources and promote experimentation, which strengthens their ability to roll out strategic initiatives (Loan et al., 2023; Panigrahi et al., 2023; Singh et al., 2024). Whereas RBV explains the role of these resources in creating competitive advantage, DCT highlights the ability of the firm to re-arrange the resources to meet the environmental change. According to DCT, organizations need to keep changing their capabilities to survive in the dynamic technological world (Alnsour, 2024; Yang et al., 2024). IC, within this theoretical framework, is a critical dynamic capability which allows firms to convert sustainability practices, knowledge bases, and managerial support into better performance outcomes.
More impotantly, TT represents a relevant environmental state which impacts this process. Rapid technological change requires the companies to constantly modernize their technologies and enhance their organizational capacities. Under these conditions, organizations that successfully combine sustainability-related practices and knowledge bases have higher chances to develop higher levels of innovation and maintain a competitive edge (Abdelaziz et al., 2023; Awain et al., 2025). Furthermore, under high TT, the translation of EMS into actual IC becomes more critical, as managerial backing is required to navigate and implement rapidly changing technologies (Loan et al., 2023). Consequently, TT acts as a catalyst that amplifies the effect of managerial support on innovation. Organizations that can change their environmental and knowledge strategies in the wake of TT are consequently more likely to show excellent innovation and performance results (Hoang & Hien, 2024; Santos et al., 2022). In conclusion, RBV explains the role of GSCP, KMC, and EMS as strategic resources that support competitive advantage, while DCT explains how IC enables the dynamic reconfiguration of these resources in technologically turbulent environments. Both provide a solid theoretical basis to explore the synergistic impact of sustainability practices, knowledge management, and managerial support on IC and EP within the Chinese industrial context.
Data and methodologyThis study used quantitative cross-sectional research to investigate the association among GSCP, KMC, EMS, TT, IC and EP in Chinese companies. This method is appropriate in exploring the relationships between organizational capabilities and performance outcomes in large samples as it has been extensively used in studies focusing on sustainability practice, innovation, and firm performance (Idrees et al., 2023; Kuei et al., 2015; Silva et al., 2019).
Data collection and sampleData was gathered from managers working in the Chinese manufacturing and service-sector enterprises. The sampling frame included firms that were in industries whose supply-chain management, sustainability efforts, and innovation practices are strategically applicable. A purposive sampling strategy was used to select the respondents. Respondents only involved the middle and senior managers who had a direct role in supply-chain operations, knowledge-management processes, environmental initiatives, or innovation-related decision making. Structured questionnaire was administered online and offline for wider coverage and improving of response rates. The online questionnaires were distributed through professional circles, corporate email contacts, and communication platforms related to industries. The physical questionnaires were distributed during the professional meetings and visiting to companies. Overall, 1500 questionnaires were sent to the potential respondents.. Out of these, 674 responses were obtained, attributing to the response rate of 44.9 percent. Following the screening process of incomplete responses and outliers, 630 valid questionnaires were retained, lowering the response rate to 42 percent. As the respondents were reminded through the emails and professional communication means, the response rate is relatively high. This step has reduced the non-response bias and increased the representativeness of sample. The 630 sample sizeis deemed adequate in structural equation modelling and it is more than the minimum number needed. As suggested by Hair et al., 2021, the recommended sample size is ten times the highest number of structural paths that lead to any latent construct in the model. This ten times rule
Measurement of constructsMulti-item scales were used to operationalize all constructs in this study. GSCP scale includesseven questions adapted from Kuei et al. (2015) and Silva et al. (2019) covering green procurement, collaboration with suppliers, waste management, and environmental-friendly logistics. KMC was measured based on six items of knowledge acquisition, storage, sharing and application adapted from Fan, Feng, Sun and Ou (2009). EMS was measured by five items based on the Dahlgaard and Ciavolino (2007) scale, which evaluates managerial guidance, allocation of resources and encouragement of innovation. The moderating variable TT was operationalized using six items based on the Abdelaziz et al. (2023) and (Yang et al., 2024) measuring the intensity and unpredictability of technological change. IC was assessed using seven items based on Bahta et al. (2020) and Yeşil and Doğan (2019), which characterized the capacity of the organization to create and introduce innovations. Lastly, EP was measured using six questions derived from Amin (2015)), Dahlgaard and Ciavolino (2007) measurements. Each item was measured in a seven-point Likert scale between 1 (strongly disagree) and 7 (strongly agree).
Data analysis techniqueData analysis was performed using the Smart-PLS 4.0 based on the Partial Least Squares Structural Equation Modelling (PLS-SEM). PLS-SEM was selected based on its suitability in assessing research models involving multiple constructs with mediation and moderation effects. Furthermore, the PLS-SEM are designed for predictive and exploratory studies that do not presuppose multivariate normality, which makes it an adequate fit for surveying organizations (Hair et al., 2021; Shehzad et al., 2022). The data analysis was performed in two phases.
- 1.
First, the measurement model was tested for the indicators’ reliability, internal consistency reliability (Cronbach’s alpha and composite reliability), convergent validity measured by average variance extracted (AVE), and discriminant validity measured by HTMT (Henseler, Ringle & Sarstedt, 2015; Tseng & Lee, 2014).
- 2.
Secondly, the proposed hypotheses were tested using bootstrapping, 5000 resamples, on the structural model. Relationship between the constructs was measured using path coefficients and R-square (R2). The product-indicator approach and bootstrapping procedures were used to test the mediation and moderation effects as suggested by Hair et al. (2021) and Awain et al. (2025).
These processes strengthened the quality of the parameter estimation and were in line with previous studies that had used PLS-SEM in the studies of innovation, sustainability, and organizational capabilities (Hoang & Hien, 2024; Santos et al., 2022; Zia et al., 2023).
ResultsConvergent validity measurementConvergent validity test results are shown in Table 1. Factor loadings of all indicators range between 0.674 and 0.820 which exceed the threshold of 0.70 suggest a good representation of its constructs. The values of Variance Inflation Factor (VIF) are between 1.483 and 1.868 that are significantly less than a critical value of 5, minimizing the issue of multicollinearity. Constructs reliability is supported by Cronbach’s alpha values ranging between 0.833 and 0.861 and Composite Reliability (CR) values ranging between 0.836 and 0.874, all of which are above the recommended threshold of 0.70. Moreover, the Average Variance Extracted (AVE) falls between 0.544 and 0.599, which exceeds the acceptable cutoff of 0.50 showinggood convergent validity. In general, these findings support the claim that the measurement model has sufficient indicator reliability, internal consistency reliability, and convergent validity. These constructs are further analyzed in the structural measuremnt.
Convergent validity test.
Table 2 presents the Heterotrait-Monotrait (HTMT) ratios used to assess discriminant validity between the constructs. The HTMT values lie within the range of 0.13–0.284 that is significantly smaller than the standard 0.85 threshold.. These results indicate the constructs are empirically different, confirming there is sufficient discriminant validity. . As such, the constructs of EMS, EP, GSCP, IC, KMC, and TT are conceptually different phenomena, and there are no overlaping issues . Overall, HTMT findings indicate the measurement model satisfies the discriminant validity standard and supports the suitability of the constructs.
Table 3 shows the results of cross-loadings used to evaluate the discriminant validity under HTMT. . The cross-loading criterion states that the indicators must have higher loadings on their own constructs as opposed to other constructs. The results show that every indicator is maximally loaded on its related construct. The EMS indicators, as an example, load EMS 0.753 to 0.798 and that is greater than their loadings on other constructs. Likewise, EP indicators load between 0.674 and 0.787 on EP, GSCP indicators between 0.692 and 0.771 on GSCP, IC indicators between 0.705 and 0.786 on IC, KMC indicators between 0.736 and 0.801 on KMC and TT indicators between 0.685 and 0.820 on TT. Notably, other constructs have relatively low cross-loadings. These results suggest each measurement item is more closely related to its target construct than to other constructs, indicating the measurement model has enough discriminant validity.
Cross loadings.
Fig. 2 shows the results of the measurement model The diagram reveals that the relationships between the latent constructs and the indicator variables that measure them along with the factor loadings and the percentage of explained variance. All the constructs have indicator loadings ranging between 0.674 and 0.820, and thus exceeding the generally accepted value of 0.70. This implies there is acceptable reliability of the indicators. The constructs placed in the model are GSCP, KMC, EMS, IC, TT, and EP. The R2 statistics indicate the explanatory power of the model. The findings reveal that the IC is linked with a R2 value of 0.085, which place GSCP, KMC, and EMS as a group explaining 8.5 percent of the IC. On the same note, the EP has a R2 value of 0.137. This means that the model accounts for a 13.7 percent of the variance in the performance due to the combined influence of GSCP, KMC, EMS, IC, and TT. Generally, the measurement model exhibits satisfactory indicator loadings and explanatory power, which justifies the sufficiency of the constructs and indicators to be used in the further structural-model analysis.
Path analysis estimates
Table 4 shows the results of the path analysis estimated using bootstrapping . The results show that several a priori hypothesized relationships are statistically significant. EMS has a statistically significant and positive impact on IC (β = 0.182, p < 0.001), but the direct impact on EP is weak (β = 0.073, p = 0.055). GSCP have a great impact on IC (β = 0.102, p = 0.006) as well as EP (β = 0.094, p = 0.014). Similarly, KMC has a positive relationship with IC (β = 0.139, p = 0.001) and EP (β = 0.107, p = 0.007). In addition, EP is also greatly boosted by IC (β = 0.088, p = 0.028), hence supporting its contributory nature to the development of organizational performance. As per moderating effects, TT is a significant moderator of the relationship between EMS and EP (β = 0.090, p = 0.009) and KMC and EP (0.087, p = 0.024). On the other hand, the modulating effect of TT on the GSCP- EP relationship is not statistically significant (β = 0.046, p = 0.229). The mediation analysis shows that IC is a partial mediator of the relationship between EMS and EP (β = 0.016, p = 0.046). By contrast, the KMC to IC to EP (p = 0.088) and GSCP to IC to EP (p = 0.096) indirect effects are not significant. Overall, the empirical findings reveal that KMC, GSCP, and EMS have a joint positive impact on the IC that, in turn, supports EP. Moreover, some of these effects are enhanced by TT.
Path analysis.
Fig. 3 shows the findings of the structural model obtained through PLS-SEM analysis . This diagram describes the relationships between the study constructs and t-values with its explanatory power. As demonstrated by t -values of 2.752, 3.510, and 4.645 respectively, the analysis shows that GSCP, KMC, and EMS have a strong positive influence on IC. The results support the hypothesis that organizational sustainability initiatives, knowledge-management capabilities and managerial support, are mutually effective in creating improved innovation capacity. Furthermore, the positive impact of IC on EP is substantial (t = 2.200), which implies that the companies with strong innovation capabilities are more likely to achieve better performance results.
Moreover, the direct effect on EP was found to be significant in both GSCP (t = 2.467) and KMC (t = 2.675), but the impact of EMS on EP is very slight (t = 1.921). The model also focuses on one moderating factor TT. The results have shown that TT is a significant moderator of the relationship between EMS and EP (t = 2.624) and between KMC and EP (t = 2.262) that means that the dynamic technological conditions enhance the associations. Conversely, the moderating effect of TT on the GSCP-EP relationship is also non-significant (t = 1.202). The R2 estimates reveal that the model explains 8.5% of variance in IC and 13.7% of variance in EP. In this way, these results support the claim that the GSCP, KMC, and executive support play a joint role in the improvement of IC and EP, and TT enhances some of the relationships in the dynamic environment.
Slope analysisFig. 4 exhibits the moderating effect of TT with the association between EMS and EP. The positive correlation between EMS and EP enhancing byTT is high (+1 SD). The correlation between the two variables shows a moderately positive trend at the average intensity of TT, but at the lower degrees of TT (−1 SD), the correlation weakens.
Fig. 5 shows how TT moderates the relationship between GSCP and EP. The positive effect of GSCP on EP is enhanced when TT increases by one standard deviation (+1 SD) and reduced when TT decreases by one standard deviation (−1 SD) hence showing that TT reinforces the performance benefits provided by GSCP.
Fig. 6 presents the moderating effect of TT on the association between KMC and EP. The affirmative effect of KMC on EP is significantly enhanced when TT is high (+1 SD) and reduced when TT is low (−1 SD) therefore showing that TT boosts the performance gains of successful knowledge management.
The model fit results (Table 5) suggest that the proposed model achieves a reasonable overall fit. In particular, Standardized Root Mean Square Residual (SRMR = 0.044) is below the traditional value of 0.08, thus indicating a good fit. Moreover, the discrepancy values d_ULS (1.346; 1.363) and d_G (0.293) are also in the acceptable range, which once again confirms the model ability to generate the observed values sufficiently. Moreover, the Normed Fit Index (NFI = 0.881) agrees with an acceptable degree of model fit. In turn, all the evidence presented above serves to prove that the structural model provides sufficient representation of the data and can be used to test the hypotheses.
DiscussionThis study evidence suggest that there are significantly positive relationships between GSCP, KMC, and EMS on EP. In addition, the data also affirm that IC acts as a mediating construct in these relationships, but TT is a contextual moderator. These results support previous literature that highlights the importance of integrating sustainability efforts into supply-chain management (Kuei et al., 2015; Silva et al., 2019; Younis et al., 2016). In line with these findings, current study suggests that incorporating eco-efficient procurement, supplier partnership, waste management, and logistics processes improves the efficiency, as well as financial performance of the operations. Similarly, these conclusions are consistent with Teixeira and Jabbour (2016), stating that environmentally oriented supply chains encourage both product and process innovation. This evidence appeals to Ariyanti (2018) and Laosirihongthong et al. (2013), who imply that green supply-chain programs enhance the performance of firms in both developed and developing economies.
The role of GSCP in strengthening organizational results through innovation is further supported by recent scholarship. For instance, Chaudhuri, Chatterjee, Gupta and Kamble (2023) show that green supply-chain technologies enhance the performance of firms through IC and dynamic environmental conditions. On the same note, Watto, Abubakar, Kouser, Quddus and Fayaz (2025) assert that green innovation and dynamic capabilities serve as key intermediaries between sustainability practices and sustainable firm performance. However, other studies have shown that the performance gains achieved as a result of green supply-chain activities are not necessarily immediate and direct. Furthermore, Shafique, Hussain and Ezzah (2026) argue that sustainability-based supply-chain projects could only be translated into a better performance with the help of complementary innovation capabilities and organizational preparedness. These observations highlight the importance of examining mediating processes like IC which is explicitly validated by this research.
The findings also indicate that KMC is an essential contributor to IC and EP. This outcome can be compared with the findings of Alaarj et al. (2017), Tseng and Lee (2014), and Idrees et al. (2023), who discover that companies with strong capabilities of acquiring, sharing, and using knowledge resources have better innovation performance and competitive edge. Similarly, Shaqrah and Alzighaibi (2021) and Zia et al. (2023) emphasize that both tacit and explicit knowledge processes are crucial in the performance improvement. Such assertion is supported by recent evidence, such as the study of . Cristache, Croitoru and Florea (2025) establishes that knowledge management practices play a major role in organizational innovation and performance results. Likewise, Chen, Huang and Zhou (2025) posit that KMC is a key factor facilitating the ability of firms in sustainable business-model innovations. However, there are researchers stating that knowledge management programs would not necessarily lead to performance improvements unless they are supported by organizational capabilities. It is necessary to transform knowledge into actionable innovations, which in turn support the mediating role of IC between knowledge resources and organizational performance.
The empirical findings also support the view that the EMS has a significant effect on IC and EP. Experimentation and innovation can be encouraged in an organizational environment having active managerial support, proper resource allocation, and leadership commitment. These results correspond with Dahlgaard and Ciavolino (2007) and Kee et al. (2019) who state that managerial involvement is a crucial factor to improve EP. The findings are also echoed by Min et al. (2020) and Panigrahi et al. (2023) who reveal that managerial support can increase the efficacy of organizational improvement programs and operational initiatives. Some studies however show that managerial support on its own might not be sufficient to ensure the success of innovation. Technological capabilities or knowledge infrastructures are needed to ensure higher chance of innovation success. In turn, the current results imply that the managerial support should be incorporated within sustainability practices and knowledge management processes to effectively support IC.
The findings also support the mediating role of IC which implies that GSCP, KMC, and EMS influence EP as it stimulates innovation. This is in line with Bahta et al. (2020), Yeşil and Doğan (2019), and Yusr (2016), who claim that IC is the primary mechanism that connect organizational resources to performance results. Similarly, the significance of IC as a transformative force that help firms in transforming their internal capabilities into competitive advantage is highlighted by Singh et al. (2024) and Ribau et al. (2017). More recent studies also confirm this mediating role. For example, Zaragoza-Sáez and González-Illescas (2026) prove that knowledge management significantly boosts IC which in turn enhances the performance of firm in dynamic settings. The implications of these findings are that IC is critical for transforming sustainability practices and knowledge resources into actual performance results.
Lastly, TT is identified to have a significant moderating effect. This indicates that positive impacts of GSCP, KMC, and EMS on IC and EP are more pronounced in the context of high TT. Such observations supported by Abdelaziz et al. (2023), Uzkurt et al. (2023), and Yang et al. (2024) who claim that technological change prompts firms to keep innovating and reorganize their resources. However, previous research also warns that too much turbulence can breed unpredictability and put pressure on organizational resources. For example, Alnsour (2024) proposes that TT may hinder the execution of strategic initiatives when companies are not ready or technologically able to implement the strategic initiatives. Similarly, Awain et al. (2025) observed that turbulent environments can increase the risk of operation when companies lack adaptive capabilities. These conflicting results indicate that TT is both a threat and an opportunity to organizations.
In general, the results further develop resource-based and dynamic capabilities thoughts by emphasizing that sustainable performance can be attained when the green operational practices, KMC and the managerial support are well coordinated with IC in technologically dynamic settings. This study improves the understanding on how organizational capabilities impact EP by combining sustainability practices, knowledge resources, managerial support, and IC with TT in one single framework. Thesefindings not only confirm the previous empirical results but also add to literature by explaining the mediating and moderating mechanisms through which sustainability-oriented capabilities influence performance outcomes of enterprises.
ConclusionThis study explores the interdependences of GSCP, KMC, EMS, IC, TT, and EP among Chinese companies. The integration of RBV and DCT allows the researcher to explain the sustainability-based practices, knowledge resources, and managerial support as strategic organizational assets improving EP through IC. Empirical results prove that GSCP, KMC, and EMS can considerably reinforce innovation ability, which in turn enhances EP. IC, therefore, serves as a vehicle through which organizations can transform their resources into measurable performance outputs. Additionally, TT increases the relationships between organizational capabilities and innovation performance, which suggests that dynamic technological environments encourage firms to use their sustainability practices, knowledge resources, and managerial support more efficiently.
Academically this studyis relevant to the literature because it incorporates sustainability practices, knowledge-management processes, and managerial support in a cohesive framework that preempts the mediating effect of IC and moderated through TT. This combined view builds upon RBV by acknowledging the usefulness of GSCP, KMC, and EMS in the organization as the assets and DCT explains how the IC allows the firms to dynamically restructure these assets in response to technological change. Crucially, this study results indicate that firms can attain sustainable EP by tactically structuring organizational resources in accordance with innovation potential in turbulent environment. Comprehensively, this study highlights that to sustain competitiveness, companies should go beyond isolated sustainability efforts and rather integrate their strategies to combine green supply chain, sustainable knowledge-management, and strong managerial support with innovation-oriented capabilities. Such strategic alignment enables organizations to react more effectively to technological change and constantly revitalizing its competitive advantage in the volatile industrial environments.
Managerial implications and policy recommendationsThe research results yield substantive implications for policy makers and managers who are interested in enhancing sustainable EP within technologically dynamic environments.
Managerial implicationsFirst, managers are advised to focus on the systematic incorporation of GSCP across the supply-chain network. These initiatives involve partnering with suppliers to adopt green practices through environmentally friendly sourcing policies, adopting energy efficient production systems, and implementing reverse-logistics system to facilitate product recovery and recycling. Supply chains sustainability can be strengthened by developing supplier-evaluation systems based on environmental performance measures. Second, organizations should invest in strengthening their KMC through organized knowledge-sharing systems. Managers can implement digital knowledge systems, internal learning programs, and cross-functional collaboration systems, which can be used to share both tacit and explicit knowledge among their employees. IC and evidence-based organizational decision-making can be improved by cultivating knowledge sharing culture and integrating knowledge repository into organization;s regular operations.
Third, EMS should be proactive in developing innovation-based organizational cultures. Top management should invest sufficiently in R & Dprojects, promote experimentation and reward any innovative ideas presented by their employees. The creation of special innovation teams or cross-departmental innovation committees can also increase organizational capability to create new products, services, and operational solutions. Fourth, companies operating within technologically turbulent markets should formulate adaptive innovation strategies. The managers ought to keep track of the technological trends, invest in digital-transformation projects, and engage with the technology partners to stay competitive. Strategic partnerships with technology suppliers and research centers can also support the responsiveness of a firm to technological shocks.
Policy recommendationsPolitically, governments and regulatory bodies are very instrumental in maintaining the innovation and competitiveness of enterprises. First, policymakers ought to develop specific incentives that persuade companies to implement GSCP. Firms can be encouraged to incorporate sustainability into their supply-chain operations through tax incentives, green-financing programs, and subsidies for environmentally friendly technologies. Second, governments must encourage the creation of national and regional knowledge-sharing systems. Knowledge sharing between universities, research institutions, and industry can be done through the creation of industrial knowledge hubs, innovation clusters, and joint research platforms. Third, policymakers must facilitate IC through increasing the availability of research funding, innovation grants, and technology-development programs. Partnership between government and companies can speed up the commercialization of new technologies and strengthen the innovation capabilities of companies.
Fourth, governments ought to develop policies that increase technological preparedness and digital transformation across industries. To help firms predict the technological change, policymakers could propose setting up technology-forecasting centers, innovation observatories, and technology-transfer platforms helping companies in strategizing the evolving technological landscape. Lastly, integrating sustainable and innovative approaches into national industrial strategies can enhance economic competitiveness in the long run. Policymakers ought to promote cross sector partnerships among businesses, research centers, and colleges and fostersustainable technological innovation and resilience to TT.
Limitations of the study and future research directionsDespite its contributions, this study has various limitations that present the avenues for future studies. First, the cross-sectional design limits the ability to track the dynamic changes in organizational capabilities and innovation performance over time. Future studies may apply longitudinal study to compare and trackthe evolution patterns of sustainability practices and KMC, as well as their effects on EP across various phases of technological progress. Second, the empirical study is confined to companies in China. Although such a context provides valuable insights of the rapid technological and industrial changes in a country, the results might not be entirely generalizable to other countries or economic settings. Future studies can expand this work by conducting cross-country comparisons to determine whether similar relationships hold true in various industrial settings. Third, the research mainly examines organizational capabilities at the firm level. Incorporating additional contextual variables, including institutional pressures, digital-transformation capabilities, or organizational culture, that might affect the relationship between sustainability practices, IC, and EP, representing avenues for future research possibilities. Lastly, future studies can also include other theoretical lenses, including the institutional theory or the stakeholder theory. These approaches can shed more lights on the development of sustainability practices and innovation strategies in response to outside pressure and stakeholder expectations. Addressing these limitations will possibly enhance the understanding of how companies can successfully incorporate sustainability, knowledge management, and innovation capabilities to attain sustainable competitive advantage in the technologically turbulent environments.
CRediT authorship contribution statementZiguang Dong: Investigation, Formal analysis, Data curation, Conceptualization. Shafinar Ismail: Supervision, Project administration. Sri Utami Ady: Software, Resources, Methodology. Abdisamat Sattarov: Writing – review & editing, Writing – original draft, Visualization, Validation.
I would like to express the sincere appreciation to Universiti Teknologi MARA (UiTM), Malaysia, and the Faculty of Business and Management for the continuous support, encouragement and research facilities provided throughout the completion of this study; Zhejiang Shuren University Basic Scientific Research Special Funds.
