Dynamic capabilities linking lean practices and sustainable business performance

This study empirically investigates the relationships between lean management practices, dynamic capabilities, and sustainable business performance (including economic, environmental, and social performance). Based on the dynamic capabilities approach, known also as a theory of sustainable competitive advantage, we explain why many adopters of lean management fail to sustain positive outcomes over time. More concretely, first, this study conceptually identifies systematic problem-solving, agile manufacturing (or change proficiency), and continuous improvement as higher-order or "lean-related dynamic capabilities" that seem to be effective for sustainable benefits. Then, a survey questionnaire on a sample of 99 Italian manufacturing firms is carried out and results of partial least square structural equation modelling indeed reveal that "lean-related dynamic capabilities" can serve as mechanisms through which lean management contributes to sustainable business performance. The main findings help to distinguish between "lean adopters" achieving sustainable outcomes and "lean duplicators" obtaining only short-term outcomes and quick wins. For firms to become "lean adopters", they are required not only to consider lean as a full package but also to constantly establish and develop higher-order or "lean-related dynamic capabilities". This study is an innovative empirically-informed attempt to conceptualize "lean-related dynamic capabilities" and embed them into a framework through which lean management practices result in sustainable outcomes.