Organisational learning, innovativeness, chief executive officer values, and sustainability performance of medium and large manufacturing firms in Uganda

Abstract

Medium and large manufacturing firms immensely contribute to global warming through air emissions, natural resources exhaustion, waste mismanagement and discharge of untreated effluents. These adversely affect the ecosystem and human health calling for research on corporate sustainability performance. Existing direct effect studies linking Organisational Learning (OL) to Sustainability Performance (SP) have produced inconclusive results in different contexts. Few conditional indirect effect studies have been conducted in this area, particularly in developing countries. Anchored on the stakeholder, organisational learning, dynamic capability, and upper echelon theoretical framework, this study contributes to literature by examining the moderating effect of CEO Values (CV) on the indirect relationship between OL-SP via Firm Innovativeness (FI) in the Ugandan manufacturing sector. The study was guided by 10 objectives; To examine the direct effect of OL, FI and CV on SP, OL and CV on FI. Further, the study examined the indirect effect of FI between OL-SP. Also, the moderating effect of CV was examined between OL-SP, FI-SP as well as between OL-SP. Lastly, the moderating effect of CV on the indirect effect of OL on SP via FI was examined. A positivist paradigm supported with an explanatory cross-sectional design was used to obtain quantitative data from a sample of 256 medium and large manufacturing firms drawn from a target population of 1221.The sampling of these firms followed a multistage procedure. Hierarchical multiple regression analysis was used to test hypotheses of the direct effect relationships while PROCESS macro was used to test the indirect, interactive and conditional indirect effect hypotheses. Findings show that; OL (β=.505, t=9.116), FI (β=.618, t=13.293), and CV (β=.128, t=2.427) significantly affect SP. Similarly, OL (β=.438, t=7.572) and CV (β=.511, t=9.737) significantly affect FI. FI significantly mediate the link between OL and SP (Coeff=.324, 95% Boot CI =.236, .417) while CV significantly moderates the link between FI and SP (Coeff= .13, t = 2.52, CI= .03,.23) and OL and SP (Coeff=.19, t =2.57, CI= .01,.34). Lastly, findings show that CV has an enhancing conditional effect on the indirect effect between OL on SP via FI (b=.080, BootS.E=.034, BootCI=.015, .146). Overall, this study provides new insight by revealing that FI significantly mediates the link between OL- SP, CV enhance the effect of FI on SP, as well as the effect of OL on SP. In addition, there is evidence of a moderated mediation effect of CV on the relationship between OL-SP via FI. Such that at higher levels of CV, the indirect effect of OL on SP via FI is stronger. Therefore, industry policy makers need to advance policies that promote learning and innovativeness among medium and large manufacturing firms. Such policies need to encourage organizing periodic learning sessions like dialogues, workshops, conferences, bench-marking tours, trade fares, and exhibitions where owners and managers of manufacturing firms are sensitized on innovative manufacturing practices that improve sustainability performance. Additionally, the existing industrial policy need to be reviewed to stress the importance of adopting sustainability manufacturing practices such as learning and innovativeness. To managers of manufacturing firms, learning should be treated as a firm resource and incorporated in the firm’s objectives, strategies, and core values. In addition, practices such as teamwork that promote knowledge acquisition, sharing, utilisation and storage need to be put in place. There is also need to establish a research and development department that steers, guides, and oversees innovations in products and processes. Further still, CEO values should be assessed during the hiring processes using appropriate psychometric tests in order to identify and appoint CEOs value preposition is inclined towards openness to change, flexible, challenge, stimulation, and self-directed. The findings of this study withstanding, certain limitations were observed that call for further research to test the hypothesised model in another context, following a mixed method approach using a longitudinal design in order to validate the results obtained.