RESEARCH ARTICLE Sustainable social responsibility toward multiple stakeholders as a trump card for small and medium‐sized enterprise performance (evidence from China) Sher Zaman Khan 1 | Qing Yang 1 | Najib Ullah Khan 2 | Sonia Kherbachi 3 | Martina Huemann 4 1 School of Economics and Management, University of Science and Technology Beijing, Beijing 100083, China 2 College of Economics and Management Science, Beijing University of Technology, Beijing 100124, China 3 Department of Management, Faculty of Economics, Commerce and Management Science, University of Bejaia, Bejaia 06000, Algeria 4 Department of Strategy & Innovation, WU Vienna University of Economics and Business, Welthandelsplatz 1, D5, 1020 Vienna, Austria Correspondence Qing Yang, School of Economics and Management, University of Science and Technology Beijing, Beijing 100083, China. Email: yangqing@manage.ustb.edu.cn Funding information National Natural Science Foundation of China, Grant/Award Numbers: 71472013, 71528005 and 71872011 Abstract Sustainable social responsibility (SSR) toward multiple stakeholders is proclaimed as an obligation of firms rather than a voluntary deed. Keeping in view the stipulation of sus- tainability, this paper examines the influence of SSR on sustainable competitive position (SCP) and firm performance (FP) in the context of 307 Chinese small‐ and medium‐sized enterprises. The results indicate a significant influence of aggregated and segregated SSR on SCP and FP. With the exception of SSR toward owners, the dimensions of SSR toward employees, the environment, the community, suppliers, and customers exhibit a signifi- cant positive influence on SCP and FP. Simultaneously, the results show that SCP has a mediating role in the relationship between SSR and FP. The findings of the study inculcate the managers to stretch substantial consideration to the interests of multiple stake- holders rather than owners only. Based on the evaluation, theoretical and practical impli- cations are presented for managers, owners, and local governments. KEYWORDS China, firm performance, SMEs, sustainable competitive position, sustainable social responsibility 1 | INTRODUCTION In response to heightened pressure and expectations from multiple stakeholders (Hasan, Kobeissi, Liu, & Wang, 2018; S. N. Khan, 2018), firms are ordained to contribute socially, economically, and environmentally to multiple stakeholders, including customers, employees, the environment, the community, and suppliers (Boccia & Sarnacchiaro, 2018), rather than to owners alone (Vallaster, 2017). Simultaneously, firms are no more endured to be laissez‐faire in exercising the inhumane approaches to operation (Vallaster, 2017), where profit maximization is envisaged as the sole purpose of exis- tence (Kane, 2009). Nonetheless, firms focus on sustainable social responsibility (SSR) toward multiple stakeholders because they com- prehend that most of the firm's interests can be advanced (Hasan et al., 2018) via satiating the expectations of stakeholders (Boccia & Sarnacchiaro, 2018). The term SSR is used as a synonym for corporate sustainability, corporate social responsibility, people–profit–planet, sustainable investment, triple bottom line, and so forth (Amin‐Chaudhry, 2016; Dyllick & Hockerts, 2002; Signitzer & Prexl, 2007). Based on the var- ious contentions in the literature, SSR is conceptualized as a firm's strategic posture toward sustainable development that is aimed at persistently satisfying the economic, social and environmental obliga- tions of the people and planet. Similarly, any individual or group of individuals who affects or is affected by the operation and survival of a firm is considered as a stakeholder of that firm (C. Freeman, 1984). Clarkson (1995) recognized customers, shareholders, the com- munity, suppliers, the environment, and employees as the primary stakeholders of a firm (Javed, Rashid, & Hussain, 2017). A well‐managed SSR strategy corresponds with a positive message and favorable image of a firm in the eyes of customers, employees, suppliers, owners, and society (Bai & Chang, 2015; Boccia & Received: 18 January 2019 Revised: 1 April 2019 Accepted: 13 April 2019 DOI: 10.1002/csr.1776 Corp Soc Resp Env Ma. 2019;1–14. © 2019 John Wiley & Sons, Ltd and ERP Environment wileyonlinelibrary.com/journal/csr 1