The effect of environmental ethics and spiritual orientation on firms’ outcomes: the role of senior management orientation and stakeholder pressure

Abstract

Due to their significant environmental impact, small and medium-sized enterprises (SMEs) are critical in improving a green economy. This research examines the influence of firm environmental ethics, spiritual orientation, and stakeholder pressure on the green orientation of SME senior management. Utilizing a sample of CEOs and owner-managers from 489 Chinese SMEs, data accumulated from October 2023 to March 2024 were analyzed using structural equation modeling. The outcomes confirm the significant impact of firm environmental ethics, spiritual orientation, and stakeholder pressure on senior management’s green orientation, which, in turn, improves SME outcomes. In addition, senior management’s green orientation partially intermediates the influence of firm environmental ethics, spiritual orientation, and stakeholder pressure on SME outcomes. Stakeholder pressure further moderates the link between the senior management’s green orientation and SME outcomes, indicating the importance of external pressures in adopting strategic green orientations. These results support the resource-based view, stakeholder theory, and upper-echelon theory, offering practical guidance for businesses seeking to incorporate green strategies into their fundamental operations.