The Mediating Role of Organizational Ambidexterity on Environmental Proactivity and SME Performance

Amid rapidly accelerating environmental challenges, the proactive engagement of businesses in environmental matters is crucial. While previous research has examined the relationship between environmental proactivity and performance, findings have been inconsistent. This study introduces organizational ambidexterity as a novel mediating factor in this relationship, building on its previous exploration in business research. In addition, this research shifts focus to small and medium‐sized enterprises (SMEs), which constitute the majority of businesses but remain underrepresented in existing research on this topic. Survey data was collected from 174 SME owner‐managers in Finland. Consistent with the natural‐resource‐based view, findings suggest that environmental proactivity alone does not guarantee success; rather, the link between proactivity and performance is mediated by SMEs' ability to integrate exploitative and exploratory innovation. This research provides valuable insights for SMEs on how proactive environmental initiatives can enhance performance, while also offering actionable guidance for policymakers and stakeholders committed to promoting sustainability.