Sustainability practices and organizational performance during the COVID-19 pandemic and economic crisis: A case of apparel and textile industry in Sri Lanka

Abstract

The apparel and textile industry is the backbone of the Sri Lankan economy, contributing significantly to the country’s gross domestic product (GDP). The coronavirus (COVID-19) pandemic, which also triggered the ongoing economic crisis in Sri Lanka, has a profound effect on the organizational performance of apparel sector firms in Sri Lanka. In this context, the study examines the impact of multi-dimensional corporate sustainability practices on organizational performance in the said sector. The study employed the partial least squares structural equation modelling (PLS-SEM) technique for analysing and testing the hypothesis of the study while using Smart PLS 4.0 software as the analysis tool. Relevant data were collected through a questionnaire from 300 apparel firms registered with the Board of Investment of Sri Lanka (BOI). The study results indicated that "economic vigour,” “ethical practices," and "social equity" have a significant impact on organizational performance, while "corporate governance" and "environmental performance" have an insignificant impact. Unique discoveries from this study would be useful to prosper organizational performance and formulate novel sustainable future strategies not limited to the garment industry even during harsh economic conditions.