This study aims to explore the internal triggers that enable small and medium-sized enterprises (SMEs) to break from conventional practices and create new paths toward sustainable business transformation, focusing on the organizational change processes through which deviation is initiated and new pathways are formed.
Using a qualitative case study design, this study examines two Japanese SMEs that shifted from profit-centered to sustainability-oriented business practices. The grounded theory approach was applied to analyze longitudinal interview data with owner-managers and employees, highlighting the roles of managerial observation, critical stance and internal reflection.
Findings reveal that sustainable transformation is not driven solely by new technological adoption or market pressure but by owner-managers’ critical observations of routine practices and ethical discomfort. These cognitive triggers prompt intentional deviations from conventional business models that initiate path-creating processes. Servitization, when aligned with evolving organizational values, serves as a means, not an end, to co-create value for the employee, company, society and environment.
The study suggests that promoting sustainability in SMEs requires more than structural reform; transformation must begin with internal attentiveness and a critical stance toward existing organizational routines. Owner-managers play a pivotal role by embedding technological innovation into meaningful daily practices that prioritize employee well-being and long-term social value.
This study advances the servitization and path creation literature by identifying internal managerial triggers for deviation and offering practice-based insights into how sustainable change unfolds within SMEs. It also provides actionable insights for value-driven leadership in sustainable transformation.
