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Whether environmental responsibility can promote corporate performance has always been a focus of debate in theory and practice. We address the dispute regarding the effect of environmental responsibility by focusing on small and medium‐sized enterprises (SMEs) in China. Furthermore, based on team faultline theory, we argue that top management team (TMT) faultlines and bankruptcy threat combine to affect the relationship between environmental responsibility and long‐term performance in SMEs. Using data from 410 Chinese companies listed on the Growth Enterprise Market (GEM) during 2011–2020, we find that SMEs that engage in more environmental responsibility tend to have worse long‐term performance. Additionally, this relationship varies depending on the conditions of TMT composition (i.e., faultlines) and situation (i.e., bankruptcy threat). Specifically, when the bankruptcy threat is high, TMT faultlines negatively affect the relationship between environmental responsibility and long‐term firm performance. However, TMT faultlines positively affect this relationship when the bankruptcy threat is low. This paper sheds new light on corporate environmental responsibility by adopting a theoretical perspective of TMT faultlines and identifying the specific situations in which TMT faultlines act.

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How to break through multiple legitimacy constraints to gain stakeholder recognition is a problem that every startup company must solve. From the perspective of stakeholders, this paper applies case study and grounded theory, reveals the inner mechanism of legitimacy formation and evolution of Giant Network and JD in the life cycles. Finally, we use grounded theory to build the mechanism of improving legitimization of Internet companies. The conclusions are as follows: during the process of improving legitimization of internet companies, the conformance strategy and manipulation strategy are mainly used to overcome the regulative legitimacy constraint and cognitive legitimacy constraint from competitors and customers in the startup and growth phases. Conformance strategy is the most commonly used one to overcome the regulative legitimacy constraint and normative legitimacy constraint from government, competitors and the public in the mature phase. Due to dynamic of legitimacy and the heterogeneity of stakeholders' legitimacy judgment, enterprises should adopt different legitimate strategies based on the different stakeholders at different phases.