Linking PMS sophistication to sustainability performance: the mediating role of sustainability orientation

Purpose The purpose of this study is to focus on the relationships among the sophistication level of performance measurement systems (PMSs), sustainability orientation and sustainability performance. Design/methodology/approach Data from 207 small- and medium-sized enterprises (SMEs) across distinct industries were collected using a structured survey questionnaire. Findings The results of this study show that a higher level of PMS sophistication is positively related to sustainability orientation, which in turn affects sustainability performance. Thus, this study provides evidence that an orientation toward sustainability mediates the connection between PMS sophistication level and sustainability performance. This finding of this study suggests that PMS sophistication alone is insufficient. Sustainability benefits are more likely when PMSs are substantively used to inform decisions and trigger concrete actions. Originality/value While an orientation toward sustainability has been encouraged in prior research, comparatively limited research has focused on PMS sophistication level that underlies the execution of target-oriented activities and, hence, provides the potential for sustainability. The results of the current study enrich the understanding of managerial means (i.e. PMSs) and the implications underlying the enhancement of SMEs’ sustainability orientations.