Business Administration (PhD) / Διοίκηση Επιχειρήσεων (PhD)

Today’s businesses increasingly acknowledge that practicing sustainability not only benefits the society and the environment, but also could be a source of competitive advantage. Smart progressive firms are engaging in social sustainability and Corporate Social Responsibility (CSR) applications differentiating themselves from competition and creating higher reputation levels. Specifically, social sustainability could become a key factor influencing the performance of Small to Medium-sized Enterprises (SMEs). Even though several studies have been carried out mainly in the developed world on the role of Social Sustainability Practices (SSP), little has been done for the case of developing nations. Accordingly, this study is the first to investigate the effect of SSP on the overall business performance of SMEs in Lebanon. Departing from the Resource Based View (RBV) theory and strategic choice theory, the hypothesis here is that the implementation of SSP has a positive effect on the overall performance of SMEs in the Lebanese context. The research design employed in this study is mainly quantitative in nature, via a survey study administered to a representative sample of SMEs from the manufacturing sector in Lebanon. To ensure validity of the results, a random sampling procedure was followed to select a sample of 700 out of 4033 SMEs, getting 355 valid responses in total. Structural Equation Modeling (SEM) was utilized for analyzing the collected data and testing a set of hypothesized relationships. Findings from analyzing the validated structural model indeed showed moderate to strong positive direct effects between SSP and the overall performance of the firm. Moreover, significant indirect effects have been identified through the involvement of barriers, drivers, and the development of competitive advantage. This indicates that the implementation of SSP helps in increasing the level of the overall performance of SMEs including operational and social performance outcomes in addition to productivity improvement, organizational learning competency and an enhanced public image. Moreover, the results highlight the positive significant relationships between drivers and SSP, competitive advantage and SSP, and the resulting competitive advantage and the overall firm performance. However, contrary to expectations, barriers did not exhibit significant effects on SSP, competitive advantage, and performance. This unexpected result challenges the conventional wisdom in the SSP field as it does not align with the current literature findings. One explanation of this result might be the resilient culture of a specific country, such as Lebanon. This finding might imply that encountering barriers should not be always seen as preventive to SSP, however, firms might view barriers as opportunities to strengthen social sustainability initiatives. The overall research findings suggest that SMEs should implement SSP to enhance their performance. The study provides an invaluable contribution to the existing literature by adding more empirical evidence about the positive direct and indirect relationship between SSP and the overall business performance. Moreover, this thesis offers practical recommendations for SMEs leaders, practitioners, and policy makers. Further, the road is paved for future researchers to explore more studies related to social sustainability based on this research findings.