1. Two-dimensional Three-level Sustainability Framework for Achieving Short- and Long-term Gains: Empirical Evidence from Chinese Automotive Sector
Lin WU
Lecturer in Business Management
SBC 10th Anniversary Conference and Inaugural Annual Conference
27th October, 2016
SBC Campus, Shanghai

2. Agenda Motivation and research questions
Literature review and research gaps
Research methodology
Empirical case studies
Framework and hypotheses development
Survey data collection and analysis
Survey results
Contributions

3. Motivation 1) Why two-dimensional?
The traditional Triple-Bottom-Line (3BL) perspective dominates the existing empirical studies on sustainability;
Sustainability should concern both the present and the future (WCED 1987 definition);
Standalone practices in lean, green and social management systems have been found to influence sustainability performance;
A time dimension is missing.

4. Short- and long-term sustainability practices, capabilities, and performance
Short-term sustainability practices
Yang
Operational innovation
Operational improvement
Yin
Short-term sustainability practices
Long-term sustainability performance

5. Motivation 2) Why three-level?
Practice-performance relationship is well studied;
Capability-performance relationship is well studied;
Practice-capability relationship is not clear especially in the context of sustainability.

6. Motivation 3) Why Chinese automotive sector? Importance
- Rapid expansion
Huge contribution to national GDP
Influence on related sectors
Unsustainability
Economic
Environmental
Social

7. Research questions
How do short- and long-term sustainability practices contribute to short- and long-term sustainability performance of firms?
How do operational improvement and operational innovation capabilities contribute to short- and long-term sustainability performance of firms?
How do sustainability practices (short- and long-term) interact with capabilities (operational improvement and innovation) in achieving superior sustainability performance (short- and long-term)?

8. Literature review – theories
External drivers of sustainability
Stakeholder theory
Institutional theory
Internal drivers of sustainability
Resource-based view (RBV) (static)
Natural resource-based view (NRBV) (static)
Practice-based view (PBV) (static)
Dynamic capabilities view (DCV) (dynamic)
Yinyang philosophy

9. Review of empirical studies and research gaps
Researchers suggest that “time” should be incorporated as the 4th dimension of sustainability. However, how to incorporate it in empirical studies is not clear.
Capabilities have been proven to be the real source of superior firm performance. However, in the sustainability context, how operational practices and capabilities interact with each other to achieve better performance is not clear.

10. Research methodology Mixed methods
Qualitative – empirical case studies for framework development
Quantitative – survey for framework validation
Qualitative – research finding dissemination

11. Empirical case studies
Sample: 8 automotive firms located in China
Data collection: semi-structured interviews, direct observations and secondary data
Results: provided supplement to theoretical information to develop the two-dimensional perspective of sustainability and the causal relationship between sustainability practices and capabilities

12. Research framework 1 – based on PBV
Short-term sustainability practices H1
Short-term sustainability practices H2 H3
Short-term sustainability practices
Short-term sustainability practices H4
-----no significant relationship
P1: The implementation of short- and long-term sustainability practices significantly contributes to the improvement of short- and long-term sustainability performance of the firm.

13. Research framework 2 – based on RBV&DCV
P2: The implementation of short- and long-term sustainability practices significantly contributes to the development of operational improvement and innovation capabilities.
P3: Operational improvement and innovation capabilities are significantly associated with short- and long-term sustainability performance of the firm.

14. Research framework 3
P4: Operational improvement and innovation capabilities mediate the relationship between sustainability practices and performance.

15. Hypotheses H1
Short-term sustainability practices Short-term sustainability performance H2
Short-term sustainability practices Long-term sustainability performance H3
Long-term sustainability practices Short-term sustainability performance H4
Long-term sustainability practices Long-term sustainability performance
H1a
Short-term sustainability practices Operational improvement capability
H1b
Operational improvement capability Short-term sustainability performance
H2a
Short-term sustainability practices Operational innovation capability
H2b
Operational innovation capability Short-term sustainability performance
H3a
Long-term sustainability practices Operational improvement capability
H3b
Operational improvement capability Long-term sustainability performance
H4a
Long-term sustainability practices Operational innovation capability
H4b
Operational innovation capability Long-term sustainability performance

16. Hypotheses H5
Operational improvement capability mediates the effect of short-term sustainability practices and short-term sustainability performance of the firms. H6
Operational innovation capability mediates the effect of long-term sustainability practices and long-term sustainability performance of the firms. H7
Operational improvement capability mediates the effect of long-term sustainability practices and long-term sustainability performance of the firms. H8
Operational improvement capability mediates the effect of short-term sustainability practices and long-term sustainability performance of the firms. H9
Operational improvement capability mediates the effect of long-term sustainability practices on short-term sustainability performance.

17. Survey data collection and analysis
Four ways to collect data – to increase response rate
284 usable responses
Response rate: approximately 21.25%
No problems of common method bias (CMB) and non-response bias (NRB)
Structural Equation Modeling (SEM)

18. Survey results H1 Supported H5 H2 H6 H3 H7 H4 H8 H1a H9 H1b H2a
Not supported
H2b
H3a
H3b
H4a
H4b

19. Contributions
This study adds, or provides a direction to add, a time dimension to empirical studies on sustainability;
It contributes to the capability theory in clarifying the relationship between operational practices and capabilities in the context of sustainability;
It illustrates a possibility to integrate PBV and RBV;
It extends the NRBV to the context of sustainability.

20. Thank you very much!