Digital Green Orchestration Capability and Supply Chain Flexibility: Integrating Dynamic Capabilities and Institutional Perspectives

Supply chain resilience increasingly depends on the alignment of digital transformation and sustainability initiatives. This paper develops and validates the concept of digital green orchestration capability a meta capability integrating digital, environmental, and governance resources to enhance flexibility and performance. Drawing on the dynamic capabilities view and institutional theory, survey data were collected from 394 manufacturing SMEs across two contrasting institutional environments: Iran (developing, turbulent) and Canada (advanced, stable). Using Partial Least Squares Structural Equation Modelling (PLS-SEM), results reveal that digital green orchestration capability enhances sustainable performance primarily through innovation driven resilience (β = 0.40) and, secondarily, through collaboration (β = 0.25). The institutional pressure moderation was not significant, reflecting a governance saturation effect, while Relational trust significantly strengthened the collaboration resilience relationship (β = 0.18). Findings confirm that digital green orchestration capability manifests as institutionalized flexibility in advanced systems and necessity driven flexibility in developing ones. The paper extends dynamic capabilities view to network level adaptation and offers actionable guidance for policymakers seeking to embed digital green orchestration into supply chain governance.