How do firm social practices produce social impacts? Investigating the role of social and long-term orientation

Sustainability practices are expected to yield positive outcomes for both firms and the community. The literature reviewing the relationship between sustainability practices and performance has mainly concerned on environmental issues and financial outcomes. However, there are not many empirical studies that deal with the social dimension on sustainability. This article seeks to address these gaps and contribute to social sustainability studies by suggesting a positive correlation between firm social sustainability practices – towards employees and community - and social performance, highlighting the role of social and long-term orientation as mediators. Social identity theory and practice-based view are employed to explain these relational mechanisms. Data were collected through a survey of Italian firms in the manufacturing and trade sectors. A two-stage structural equation modelling approach was followed to test the proposed mediation model. The results reveal that when practices are supported by a strong orientation, it triggers the process of social identification, thereby enhancing the firm's social outcomes. From a practice-based view, orientation can explain the performance differences among firms. To succeed in enhancing social impacts, managers and policymakers should prioritise promoting the cultural aspects of sustainability.