THE LONG-TERM BENEFITS OF ORGANIZATIONAL RESILIENCE THROUGH SUSTAINABLE BUSINESS PRACTICES

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