Sustainability Values and Strategic Innovation in Sustainable Fashion MSMEs: the Dynamic Capabilities Perspective

Despite the paradigmatic shift towards sustainable fashion, MSMEs are experiencing additional challenges when making efforts to integrate sustainability values in their innovations. To intensify the transition towards sustainable fashion, there is a need to strategically innovate for MSME. There is a research gap on how MSMEs could effectively select sustainability values and integrate them in strategic innovations with limited resources to gain commercial success and to successfully compete in the market. This research aims to reveal the essential sustainability-related values in MSMEs and the strategic innovation implementation applying the dynamic capabilities perspective. Based on an exploratory qualitative study of sustainable fashion enterprises in Lithuania, this research contributes to the strategic management literature by identifying microfoundations that allow sustainable fashion enterprises to develop dynamic capabilities, as well as to sustainable fashion literature by extracting sustainability values which can enable enterprises to pursue their goals more efficiently.