“How Digital Organizational Culture and ESG Orientation Foster Intrapreneurial Behavior and Performance in Emerging-Market Smes”

Abstract

Organizations in emerging economies are increasingly challenged to innovate while responding to growing expectations for environmental and social responsibility. This study examines how two strategic orientations—digital organizational culture and ESG commitment—influence employees’ intrapreneurial behaviour and, in turn, shape sustainable performance within SMEs and startups. Drawing on dynamic capability theory and socio-technical perspectives, we propose and test a mediation model in which intrapreneurship functions as the central mechanism linking organizational conditions to sustainability outcomes. Using survey data from firms operating in a MENA emerging-market context and analysing the relationships through PLS-SEM, the results show that both digital culture and ESG orientation significantly encourage intrapreneurial engagement. The findings further reveal that intrapreneurial behaviour plays a decisive role in enhancing sustainable performance, particularly by enabling employees to initiate and drive internal improvements aligned with long-term environmental and social goals. Mediation tests highlight that the influence of digital and ESG orientations becomes effective primarily when translated into employee-driven innovation efforts. The study contributes to the literature by integrating digital transformation, sustainability strategy and employee innovation within a single framework, and by extending intrapreneurship research to an underexplored regional context. Practical implications emphasize the need for managers to nurture digital mindsets, strengthen ESG integration and create conditions that empower employees to act entrepreneurially. The paper concludes with future research directions centred on psychological moderators, sectoral differences and longitudinal examination