Enhancing the Organizational Sustainability through Innovation and Continuous Improvement in the Context of Pakistan: Moderating Effect of Industry 4.0

Abstract

Based on the Resource-based View (RBV), this study examined how Innovation may be related to the sustainability of an organization in the manufacturing sector of Pakistan. Moreover, this study also tested the mediating role of continuous improvement and moderating impact of Industry 4.0 in this relationship. Data was collected from over 322 firms in the manufacturing sector of Pakistan using a survey questionnaire. A conceptual framework and related hypotheses were developed after the literature review, which was tested with PLS-SEM and analyzed. The results of this study showed that Innovation was directly and significantly related to Organizational Sustainability. It was also found that Continuous Improvement mediates the influence of Innovation on sustainability and Industry 4.0 moderates these relationships. Overall, the study findings supported the hypotheses for their direct and indirect effects, which were also in line with the findings of the studies conducted in past on sustainability. This study has major theoretical and practical implications. Theoretically, it advances RBV by suggesting the roles of Innovation and Continuous Improvement with sustainability and also established the boundary mechanism of Industry 4.0. practically, the findings are useful for the firms not only in the manufacturing sector but also in other industries and guide the policymakers in making strategies for enhancing sustainability.