Social Innovation: A Mediator between Collaborative Competence and Sustainable Business Practices

Abstract

The global economy is expanding which has resulted into the expansion of business activities. However, as businesses multiply, more attention is being paid to generating revenues amidst a growing concern about aspects of environmental degradation exacerbated by business activities. This has heightened the need for promoting sustainable business practices so as to preserve the environment, living standards of people and profit margins of firms. The current study sought to investigate the mediating effect of social innovation on the relationship between collaborative competence and sustainable business practices. The study used a cross sectional design and it was carried out from Uganda. The sample consisted of micro and small enterprises in the sectors of trade and manufacturing. Structural equation modelling was used to test the relationship under investigation. The results showed that social innovation significantly mediates positively the relationship between collaborative competence and sustainable business practice. This implies that when businesses collaborate, socially innovative solutions emerge which are directed towards promoting sustainable business practices.