Social sustainability practice innovation diffusion and its relationship to organizational improvement: A mechanism for Vietnamese handicraft companies

Social sustainability practices (SSP) have gained global recognition as management innovations for improving organizational performance, thus promoting sustainable development of individual companies and across supply chains. However, the literature on the diffusion mechanisms of SSP, particularly in developing countries, remains ambiguous. This study aims to fill this gap by exploring SSP adoption in the Vietnamese handicraft industry. An explanatory sequential mixed-methods approach was employed, beginning with a survey of 310 Vietnamese handicraft companies. This was complemented by 12 in-depth case studies, providing a comprehensive view of the SSP diffusion process. The survey identified five distinct patterns of SSP adoption: innovative adopters, early adopters, early followers, late followers, and laggards. A deeper analysis revealed that companies with a proactive SSP approach, particularly the first three categories (innovative adopters, early adopters, and early followers), focus on supply chain responsibility-based and employee-oriented practices, leading to superior performance improvements compared to their reactive counterparts. These findings enhance stakeholder theory by illustrating its integration with the diffusion of innovation framework, offering an insightful diffusion mechanism toward full-scale SSP adoption in Vietnamese handicraft companies. Practically, the research outcomes provide valuable insights for managers, policymakers, and sustainability practitioners. They offer guidance on benchmarking SSP adoption and enhancing performance, with the identified adoption patterns serving as milestones for companies to achieve different levels of social sustainability.