Our Common Purpose: Understanding the Relationship Between SMEs’ and their Stakeholders within Sustainability-Oriented Innovation

While stakeholder engagement is central to the sustainability development literature, research has mostly focused on stakeholder pressures or interests. However, recent literature has started exploring stakeholders’ roles as being more collaborative (Goodman et al., 2017), and the impact of their collaboration with firms (Sulkowski, Edwards, & Freeman, 2017). Goodman et al. (2017) describe sustainability- oriented innovation as a ‘multidimensional concept’ that necessitates actors and knowledge that exceed the capabilities of one organization, thus sustainability-oriented products and services cannot be created by one organization alone, but through the collaboration with its stakeholders. While stakeholder theory aims to create value for all stakeholders, sustainability management believes that creating sustainable value, on the economic, environmental and social levels have to be interlinked with the core of the business (Hörisch, Freeman, & Schaltegger, 2014). This paper explores the role and impact of the collaboration between SME’s and their stakeholders within the Sustainability-Oriented Innovation (SOI) process. Our findings show that SMEs and their stakeholders, driven by a shared purpose, form and align with networks to inform, educate, and spread awareness about sustainability. This collaboration impacts the industry, by changing core operations of organizations businesses practices and changes the markets perception of the organization in addition to having an impact on individual stakeholders’ sense of identity resulting in the development of stronger relationships with SMEs. This study contributes to the literature of SOI by providing empirical evidence to support ‘sustainability-rooted’ strategic sustainability behavior (Klewitz and Hansen, 2014) and the ‘systems building’ approach (Adams et al. 2016)