MDIM Journal of Management Review and Practice

Building Digital Sustainability Capabilities in Indian SMEs: An Integrative Framework of Strategic Alignment, Ecosystem Engagement and Contextual Moderators

K. S. Shibani Shankar Ray¹ and Durga Madhab Mahapatra²

First Published 6 Nov 2025. https://doi.org/10.1177/mjmrp.251375819

Article Information

Corresponding Author:

K. S. Shibani Shankar Ray, School of Management Studies, GIET University, Gunupur, Rayagada, Odisha 765022, India.
Email: k.sshibanishankarrray@giet.edu

¹School of Management Studies, GIET University, Gunupur, Rayagada, Odisha, India

²Department of Commerce, North East Hill University, Shillong, Meghalaya, India

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License (http://www.creativecommons.org/licenses/by-nc/4.0/) which permits non-Commercial use, reproduction and distribution of the work without further permission provided the original work is attributed.

Abstract

India’s indigenous economic practices, policies and novel, frugal innovations are fine testaments to its Small and Medium Enterprises (SMEs). Contributing around 30% of the national GDP, they act as a cornerstone of the Indian economy. However, driven mainly by conventional methodologies, integrating sustainability into operations has been a far cry. In the digital era, aligning sustainability with digital transformation—termed ‘digital sustainability’—requires new organisational capabilities. This study explores how Indian SMEs can develop digital sustainability capabilities (DSCs), drawing on the resource-based view and dynamic capabilities theory. With a blend of methodological approaches, including a survey of more than 300 SMEs and interviews with 25 SME leaders across sectors, this research identifies the enablers, barriers and impact of digital sustainability initiatives on firm performance. Findings show that strategic alignment, digital leadership and ecosystem engagement are key to developing DSCs.

Keywords

Digital sustainability, SMEs, strategic alignment, ecosystem engagement, capability development

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