Effects of Sustainable Culture on CSR and Financial Performance in Manufacturing Industry

Abstract

The relationship between culture and firm sustainability practices is widely recognized in the literature, but little is known about a sustainable culture, particularly in a context of corporate social responsibility, since sustainability in manufacturing firms involves managing physical aspects of production and transforming the organization’s culture into a sustainable culture. However, the existing research in the literature has been mainly oriented towards the analysis of a culture that focuses on improving firm financial performance. The present study aims to fill this existing gap, and generate new knowledge of the relationship between these three constructs, distribute a questionnaire to a sample of 300 manufacturing firms in Mexico, and analyze the data through partial least squares structural equation modelling. The results showed that the sustainable culture has positive effects on social responsibility and firms financial performance, and corporate social responsibility has positive effects on financial performance of manufacturing firms. Thus, the results obtained allow us to conclude that manufacturing firms that have adopted a sustainable culture have not only improved their social responsibility, but also their financial performance. However, when corporate social responsibility acts as a mediating variable, it further improves firm financial performance.