How Do Small and Medium‐Sized Enterprises Embed Sustainability Through Partnerships? An Integrated Dynamic Capabilities, Stakeholder and Institutional Theory Perspective

ABSTRACT Sustainability partnerships offer small and medium‐sized enterprises (SMEs) access to expertise and resources, yet how these relationships connect to organisational adaptation remains insufficiently explained. Drawing on template analysis of interviews with leaders from 13 service‐oriented SMEs in Northeast England, this study integrates dynamic capabilities, stakeholder and institutional theories. It identifies four partnership models: due diligence, organised around values‐based screening; ad hoc engagement, responding to immediate needs; bilateral collaboration, based on reciprocal exchange; and client‐driven engagement, drawing on existing commercial trust. These distinctions explain how SMEs approach collaboration, while accounts of learning and contextualising external advice illuminate the relationship between resource access and internal implementation. Three integrative propositions connect institutional expectations, stakeholder relationships and organisational capabilities. The study contributes an empirically grounded account of partnership engagement and organisational adaptation and develops a prospective support ecosystem from participants' expectations, with implications for SME managers and intermediaries.