While lean management practices (LMP) help small and medium‐sized enterprises (SMEs) to be efficient, sustainability‐oriented innovation (SOI) facilitates adopting environmental and social practices. Although prior research looks into the effect of LMP on the economic performance (EP) of SMEs, less is known about the effect of LMP on sustainability (economic, environmental and social) performance. Studies on the effect of SOI on sustainability and economic performance are also scant. Additionally, examining the mediating effect of corporate social responsibility (CSR) practices (environmental and social practices) on both LMP and SOI achieving sustainability performance (SP) is rare. This research bridges these knowledge gaps by answering the question of how LMP, SOI, CSR practices, sustainability and economic performance are correlated. Through hypothesis testing using structural equation modelling, this study reveals the impact of LMP, SOI, CSR (environmental and social) practices on sustainability and economic performance. The study uses data from 119 SMEs within manufacturing industries in the Midlands, UK. The analysis reveals that LMP and SOI facilitate achieving both sustainability and economic performance, and SOI mediates LMP to achieve sustainability performance. Additionally, although CSR practices mediate LMP to achieve sustainability performance, they only borderline mediate SOI to achieve sustainability performance.

Small and medium sized enterprises adopt lean practices (LP) to reduce waste across their organisational value chain, which helps achieve sustainability. Process innovation (PI) has also been applied through cleaner production, environmental management system, eco-design etc. to address both customers" needs and legislations by policymakers. Although prior studies reveal the effect of sustainable practices, LP, and PI on sustainable performance separately less is known on the integrated effect of them on sustainability performance. Moreover, studies on mediating effect of LP and PI on sustainability performance is scant. This is significant as LP and PI are considered to be the enablers for achieving sustainability performance. This research addresses this knowledge gap. The research first theorises a model integrating these four major constructs (Sustainability practices, LP, PI and Sustainability performance) through hypotheses development. Subsequently, using structural equation modelling it is tested whether each of sustainability practices, LP, and PI effect sustainability performances. Additionally, mediating effect of LP and PI between sustainability practices and performances is derived. The study uses data from 119 SMEs within manufacturing industries in the Midlands, UK. Further, a few case studies have been undertaken to validate the findings from quantitative analysis. The overall results show that although sustainability practices, LP and PI help achieve sustainability performance of SMEs supply chain through efficiency and responsiveness respectively, the mediating effect LP is more compared to PI. Moreover, SMEs adopt LP when they are economy focused and implement PI when they are pressurised by customers and / or policymakers.

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This study assesses the relationship between social, environmental and operational practices and performance with financial performance, focusing on small‐ and medium‐sized enterprises (SMEs). We seek to establish a relationship between the sustainability and the financial performance of SMEs in economic development, as expressed by the indicators of turnover and business growth. A dataset derived from 119 British, French and Indian firms is used and links between sustainability and the financial performance of SMEs are examined. Bayesian regression modeling was chosen and a model comparison approach was used to assess the robustness of the results to the specific choice of analysis with respect to the shape of the dependent variable's distribution. Overall findings indicate robust regression results especially for the highly significant covariates, but caution should be exercised when interpreting the borderline results. A significant positive association between certain items of sustainability and firms’ financial performance is identified as we found that different indicators of sustainability display associations with the two economic indicators and adoption of the former may influence SME performance.

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