Organisational sustainability of manufacturing SMEs in Kurdistan Region of Iraq: the role of innovative human capital and innovation orientation

Sustainable development has become an important component and entered organisations under the denomination of organisational sustainability. Organisational sustainability is a key issue for manufacturing Small and Medium-sized Enterprises (SMEs) to cope with intense competition and to meet modern strategies implemented by successful enterprises in regards to environmental and social concern. As such, grounded by sustainability model, resource-based view theory, and stakeholder theory, the purpose of this study is to examine the factors influencing organisational sustainability among manufacturing SMEs in the Kurdistan region of Iraq. Self-administered questionnaires were distributed to the executive managers of manufacturing SMEs in the Kurdistan region. A total of 312 sustainable enterprises were involved in this study. This study utilised the partial least squares structural equation modelling (PLS-SEM) to establish the validity and reliability of the measurement model and to test the relationships. The study showed that strategic decision is found to be the most dominant predictor towards organisational sustainability, closely followed by technological capability and organisational change. On the other hand, organisational sustainability was revealed to be predicted by absorptive capacity, managerial intuition, self-efficacy, IT adoption, human capital skills and interpersonal communication skill respectively. However, R&D capability, personal valence and principal support were discovered to not have a significant effect on organisational sustainability. Moreover, the outcomes indicated that innovative human capital has a partial mediating effect in the nexus between technological capability-strategic decision and organisational sustainability, but it has not been found to mediate the relationship between organisational change and organisational sustainability. Additionally, it was observed that innovation orientation has a significant moderating effect on the relationship between innovative human capital and organisational sustainability. Overall, the results indicate that the model provides a good understanding of the factors influencing organisational sustainability. Based on the findings, this study offers theoretical and practical contributions for academics and professionals. The limitations of the study have been addressed and some valuable recommendations for future research are offered.