Abstract:
Prior work on the benefits of business sustainability often applies short-term
causal logic and data analysis. In this article, we argue that the social and the environmental
practices (SEPs) associated with business sustainability not only contribute to short-term
outcomes, but also to organizational resilience, which we define as the firm’s ability to sense
and correct maladaptive tendencies and cope positively with unexpected situations. Because
organizational resilience is a latent, path-dependent construct, we assess it through the long-term
outcomes, including improved financial volatility, sales growth, and survival rates. We tested these
hypotheses with data from 121 U.S.-based matched-pairs (242 individual firms) over a 15-year
period. We also tested, but did not find support for, the relationship between SEPs and short-term
financial performance
