Resolving Sustainability Paradoxes: How Leadership Commitment and Paradox Management Capability Enable Sustainable Performance in Pakistani Organizations

Abstract

There are growing pressures on organisations to meet short-term financial and sustainability goals. While sustainability practices and organizational outcomes have been studied previously, there has been little attention to the internal capabilities of firms to handle competing sustainability and financial requirements. This study examines the moderating effect of leadership commitment on the relationship between stakeholder pressure and sustainability orientation, how stakeholder pressure influences the ability to translate sustainability commitments into sustainable performance, and the moderating effect of paradox management capability. The primary (quantitative) data were collected through questionnaires from Pakistani firms. A total of 470 questionnaires were distributed, and 405 questionnaires were returned, which resulted in a response rate of 85.9%. The data were analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that stakeholder pressure has a positive effect on sustainability orientation, which contributes to increasing the capability of managing paradoxes. Paradox management capability enhances sustainable organizational performance and moderates the relationship between sustainability orientation and sustainable organizational performance. Moreover, leadership commitment reinforces the link between sustainability orientation and paradox management capability. This study supports sustainability management research by explaining the organizational mechanism by which firms handle the tensions between short-term financial and sustainability goals. The study also brings together Stakeholder Theory and Paradox Theory, giving the study a unique and valuable perspective that shows that achieving sustainability success is not necessarily driven by external pressure or strategic orientation, but also by internal capabilities that enable organizational responses to reconcile conflicting goals.

Keywords: Sustainability paradox, Paradox management capability, Stakeholder pressure, Leadership commitment, Sustainable organizational performance.