Technology investments fail without strong organizational values

The study found that organizational values account for more than half of the variance in economic performance across the surveyed firms. Economic performance is measured through profitability, cash flow, market competitiveness and the company’s ability to grow sustainably.

A new study finds that many manufacturing firms may be overlooking the single most important ingredient in turning sustainability investment and technological modernization into real financial results: the values that shape how organizations operate. The research indicates that without strong internal values, even the most ambitious technological or sustainability initiatives fail to deliver sustained economic performance.

The findings come from a study titled “Integrating Economic and Social Sustainability with Technological Competence: The Mediating Effect of Organizational Values on Economic Performance,” published in Sustainability, which is based on survey data from 367 employees working across 18 Saudi manufacturing firms. It assesses how economic sustainability, social sustainability and technological competence influence financial outcomes when filtered through organizational values.

Sustainability and technology matter but values determine their impact

The research maps the three major forces shaping corporate transformation in Saudi Arabia: economic sustainability, social sustainability and technological competence. Each factor reflects pressure from global markets, national policy and shifting customer expectations. However, the study finds that firms cannot rely on these drivers in isolation.

Using PLS-SEM modelling, the researchers show that all three forces strongly influence organizational values. Among them, social sustainability emerges as the strongest predictor, followed closely by technological competence and economic sustainability. These relationships suggest that employees respond most intensely to initiatives that prioritize worker wellbeing, ethical conduct, community welfare, fair wages and safety.

On the other hand, economic sustainability, focused on resource efficiency, waste reduction and business continuity, plays a slightly smaller but still meaningful role in shaping how organizations think and act. Technological competence, defined through Industry 4.0 readiness, digitalization capabilities and the firm’s ability to adopt new systems, also holds major influence. Employees perceive advanced technology not merely as machinery but as a signal of progress, innovation and strategy.

What ties these forces together is the mediating role of organizational values. The study confirms that values are not an abstract concept but a concrete mechanism through which sustainability and technology translate into economic performance. Values drive employee commitment, influence decision-making and set the tone for long-term innovation, all of which contribute directly to improved financial results.

Values explain more than half of economic performance variation

The study found that organizational values account for more than half of the variance in economic performance across the surveyed firms. Economic performance is measured through profitability, cash flow, market competitiveness and the company’s ability to grow sustainably.

This means that sustainability or tech upgrades produce meaningful financial gains only when employees see them as part of the company’s moral and strategic foundation. The more aligned employees are with a shared set of values, the more they support innovation, adopt new systems, reduce waste, improve safety practices and contribute to long-term performance.

The analysis shows that organizational values not only have a direct effect on economic outcomes but also mediate the impact of each sustainability dimension and technological competence. In other words, values act as the “activation switch” that turns sustainability efforts and technology investment into measurable financial payoff.

The model confirms:

• Economic sustainability improves performance when it aligns with internal values.
• Social sustainability produces financial gains only when embedded as a shared commitment.
• Technological competence leads to better financial outcomes when reflected in the organization’s culture and values.

The consistency of these findings highlights a critical insight: values do not simply support economic performance, they are the pathway through which sustainability and technology exert their influence.

Saudi Vision 2030 creates new pressure to integrate values with strategy

As Saudi Arabia invests heavily in digital infrastructure, renewable energy, industrial modernization and workforce development, manufacturing companies face mounting expectations to integrate sustainability and technology into their operations.

However, the authors argue that successful transformation depends on internal alignment. Technology adoption, waste reduction initiatives, supply-chain sustainability programs and workforce wellbeing strategies will produce inconsistent results unless they are tied to the organization’s value system.

The research suggests that companies striving to meet Vision 2030 targets should prioritize values such as transparency, ethical conduct, long-term thinking, continuous learning, worker safety and community responsibility. These values promote adaptability, support digital upskilling and encourage employees to engage with sustainability initiatives rather than resist them.

Social sustainability emerges as the most powerful driver

Among the three main drivers, economic sustainability, social sustainability and technological competence, the strongest predictor of organizational values is social sustainability. This outcome indicates that employees are most influenced by how companies treat their workers, engage with their communities and uphold ethical standards.

The study highlights several social sustainability factors that shape organizational values:

• fair wages and financial equity
• safe working conditions
• diversity and inclusion
• community engagement
• ethical conduct
• mental and physical wellbeing initiatives

Firms that prioritize these aspects signal to employees that they view sustainability as more than a checklist; it becomes a core philosophy. This fosters trust, engagement and a willingness to adopt new technologies or participate in continuous improvement efforts.

The prominence of social sustainability aligns with global research showing that workers increasingly judge employers by how they treat people, not just how they manage profits. For Saudi manufacturing firms, the finding suggests that worker-centered sustainability initiatives may generate stronger financial returns than purely economic efficiency measures.

Technological competence reinforces values and strengthens competitiveness

Technological competence also shows a strong positive relationship with organizational values. The research defines technological competence through digital readiness, automation capability, AI adoption, data analytics maturity and Industry 4.0 integration.

Firms that invest in technology create a culture of innovation and growth, signaling that they are preparing for future market shifts. This strengthens employee confidence and contributes to a shared sense of purpose. When workers believe that technological upgrades reflect the company’s values, they are more likely to adopt new tools, overcome resistance to change and contribute to operational improvements.

The study finds that technological competence indirectly boosts economic performance through the mediating effect of organizational values. Without strong values, even sophisticated technologies may fail to produce the productivity gains and competitive advantages they are expected to deliver.

Economic sustainability still matters, but indirectly

Economic sustainability, covering cost efficiency, responsible resource use, environmental protection and waste management, also influences organizational values. Employees respond positively when companies show commitment to reducing environmental impact and improving operational efficiency.

However, the study indicates that economic sustainability has a slightly weaker effect on organizational values compared to social sustainability and technological competence. This suggests that while green initiatives and cost-saving measures are important, they resonate more strongly when framed in ethical, social or long-term developmental terms.

Economic sustainability also contributes to performance primarily through the mediating effect of organizational values. The more a company’s sustainability initiatives reflect its culture and identity, the more likely employees are to support them and drive improved financial outcomes.

Organizational values are the critical link missing from many strategies

Organizational values operate as a strategic bridge connecting sustainability, technology and economic performance. Firms that invest in values-based leadership, value alignment, and cultural development are far more likely to see positive returns from their sustainability and digitization efforts.

The authors stress that values should not remain abstract or ceremonial. They must be embedded in training programs, decision-making frameworks, incentive structures, HR policies and leadership behavior. Only then can values amplify the effects of sustainability and technology on economic performance.

The research also notes methodological limitations such as cross-sectional data and convenience sampling, suggesting future studies should adopt longitudinal designs and multi-sector comparisons. Nonetheless, the findings provide a strong foundation for understanding how values determine the real economic impact of sustainability and technological modernization in Saudi manufacturing.

Based on the study’s findings, Saudi manufacturing firms aspiring to improve economic performance within the Vision 2030 framework should prioritize:

• integrating sustainability initiatives into core organizational values
• emphasizing social sustainability as a key driver of workforce engagement
• adopting digital and Industry 4.0 technologies as part of a broader cultural strategy
• linking values explicitly to operational behavior, decision-making and incentives
• promoting continuous learning, employee wellbeing and ethical conduct

The research makes clear that companies investing heavily in sustainability reports or new technologies without aligning these efforts to values may see limited returns. Conversely, firms that embed values at the center of their strategy can turn sustainability and technology into powerful engines of long-term profitability.