Now going away from case-studies and theoretical thinking, I will look closer at the viabililty of new green innovation deployments with the help of research publications. Chen et al. (2006) have made the first study focusing on the influence of the performances of green product innovation on the corporate competitive advantage. Businesses can increase the efficient use of resources through green innovation.
Furthermore they will enjoy the “first mover advantage” asking for higher prices and simultaneously improve their corporate image and even develop new markets (Hart, 1995; Peattie, 1992 cited by Chen et al., 2006).Seeing environmental protection as an obstacle businesses merely fought for environmental protection, but this study focused on finding the correct evaluation and position for green innovation. Whereby green innovation is utilized to improve environmental management to protect the environment in a satisfying manner( Lai et al.
, 2003). This research divided green innovation into “green product innovation” and “green process innovation” and made the following propositions: Propostion 1.The performance of green product innovation is positively associated with corporate competitive advantage. Proposition 2. The performance of green process innovation is positively associated with corporate competitive advantage. A total of 600 questionnaires were sent to the managers in manufacturing, marketing, R&D, or environmental protection departments selected randomly from the “2003 Business Directory of Taiwan”. The effective response rate was 33.
8 percent.The empirical result shows that the performances of green product innovation and green process innovation were positively correlated to competitive advantage. Therefore, Propositions 1 and 2 are satisfied. It also indicates the more the investment was, the stronger the corporate competitive advantage was. Consequently investments in both performances are beneficial to the corporations. The subject of the study covered environmental protection and environmental development, which concludes the the concept of “sustainable development” caring both of environment and economy.
Therefore it is suggested to go beyond legal requirements to meet the demand and trend of environmental protection to eventually gain competitive advantage and create win-win situations. Another interesting research article by Chen (2008a) is exploring whether intellectual capital about environmental management or green innovation has a positive effect on competitive advantages of firms. This study fills the research gap and proposes a novel construct – green intellectual capital.Hereby, this article is relating to the classification of intellectual capital adopted by Johnson (1999) and Bontis (1999) to classify green intellectual into green human capital, green structural capital and green relational capital to explore the impact on competitive advantages of firms and made the following hypothesis: Hypothesis 1: Green human capital is positively associated with competitive advantages of firms; Hypothesis 2: Green structural capital is positively associated with competitive advantages of firms, whereby green structural capital is referring to organizational commitments, information technology systems, databases, operation processes etc. ; Hypothesis 3: Green relational capital is positively associated with competitive advantages of firms, whereby relational capital is referring to relationships with customers, suppliers, and partners about corporate environmental management and green innovation.The samples were randomly selected from “2005 Business Directory of Taiwan” and six hundred questionnaires were sent to the managers in manufacturing, marketing, R&D, or environmental protection departments.
The active response rate was 21 percent. The result showed that three types of green intellectual capital – green human capital, green structural capital, and green relational capital – were positively correlated to competitive advantage of firms, H1, H2 and H3 were supoorted. Even more the results indicated that the more the investments in the three types of green intellectual capital were, the stronger competitive advantages of firms were. Therefore investments was helpful to businesses.
This study focused on the information and electronics industry in Taiwan, so the further studies can focus on other industries or countries and compare with this study and moreover a closer look should be taken to observe the dynamic change of green intellectual capital in the different stages of the development. The third study Chen (2008b) made proposed another novel construct – green core competence – to explore its positive effects on green innovation and green images of firms, which wraps up the two previously mentioned studies by Chen. There is no study exploring the relationship between green core competence and green innovation performance.The study implied the following hypothesis: Hypothesis 1 Green core competences of firms are positively associated with their green innovation performance. Hypotheses 1a.
Green core competences of firms are positively associated with their green product innovation performance. Hypothesis 1b. Green core competences of firms are positively associated with their green process innovation performance. Moreover no research has been done exploring the positive influence of core competences of firms about green innovation or environmental management upon their green image, resulting in Hypothesis 2. Green core competences of firms are positively associated with their green images.Moreover hypothesis 3,3a and 3b are all referring to if green innovation performance, green product innovation performance and green process innovation performance are positively associated with their green images. 600 questionnaires were sent to randomly selected businesses from “2006 Business Directory of Taiwan” and the effective response rate was 22,7 percent.
The empirical results showed green core competences had positive effects on their green product innovation performance, green process innovation performance, and green images. Moreover green product innovation performance and green process innovation performance were positively correlated to their green images. Hence, H1a, H1b, H2, H3a, and H3b were supported in this study.Consequently, investment in the green core competence, green product innovation performance, and green process innovation performance was suggested. The study found out that making efforts in green core competence could enhance their green innovation and green images in the Taiwanese information and electronics industry and meet international regulations and conventions of environmental protection. This study cannot observe the dynamic change of green core competence.
Finally Chen (2011) concluded these ideas to form a new concept of environmental management – green organizational identity – in compliance with the environmental trends to help companies enhance their green competitive advantages.It is a environmental management model based on the theory of organizational identity, whereby the concept of organizational identity is concerned with collective identity (Albert and Whetten, 1985). In this case an very important and interesting question for companies should be which kind of collective identity the superior one is? Which identity will reduce costs and risks, lead to competitive advantages, ameliorate reputation, endorse synergistic value creation, respectively the previous mentioned business cases and thus maximize profits? The proposed idea creating this kind of superior collective identity in this study is “green organizational identity” created by Chen (2011).Chen (2011) mentioned two important factors supporting this idea: First, McWilliams and Siegel (2001) found out that there is an ideal level of CSR, and consequently there is a neutral relationship between CSR and financial performance and second Husted and Salazar (2006) demonstrated that it is wiser for companies to act strategically that to be involved into making investments in corporate social responsibility. In addition to that companies won’t be faced with the argument of “green-washing”, because their whole strategic concept is underlying the motive of a “green organizational identity”. “Green washing” is a critical description of PR-methods, creating an environmental-friendly and responsible image.Having a “green organizational identity” no such PR-methods has to be carrying out to communicate CSR efforts. Chen (2011) study proposes the following hypothesis: H1.
Environmental organizational culture of a firm is positively associated with its green organizational identity. The study refers to Hatch and Schultz (2007) and defines “environmental organizational culture” as a context about environmental management and protection within which interpretations guide behaviors and members’ sensemaking. H2. Environmental organizational culture of a firm is positively associated with its green competitive advantage. H3. Environmental leadership of a firm is positively associated with its green organizational identity.
Referring to Dechant and Altman (1994) and Cole (1996) who defined “environmental leadership” as process in which one individual influences others to contribute to environmental management and protection. H4. Environmental leadership of a firm is positively associated with its green competitive advantage, and H5. Green organizational identity of a firm is positively associated with its green competitive advantage. Chen (2011) mentioned three reasons for choosing the Taiwanese manufacturing industry as research object.
First, Taiwanese products are highly export-oriented facing environmental regulations, for example RoHS. Second, comparing to multinational enterprises Taiwanese manufacturing companies have fewer resources (Chen et al. , 2006).And third, Taiwan is a newly founded manufacturing base in the world and it is interesting how they can enhance their green competitive advantages via green organizational identity. The questionnaires were sent randomly to businesses selected from “2008 Business Directory of Taiwan”. The effective response rate was 34. 5%. Measuring the empirical results the study found out that companies with high levels of environmental organizational culture and environmental leadership can not only increase green organizational identity, but also enhance green competitive advantage.
Moreover it verified that green organizational identity had a mediation effect on its two antecedents – environmental organizational culture and environmental leadership – and consequently green competitive advantage. H1,H2,H3,H4 and H5 were supported.But this research project also pointed out that the advantages of firm size with respect to green organizational identity, environmental organizational culture, environmental leadership, and green competitive advantage were significant (advantages of resources, the advantages of scale economies etc.
) which represents the previous mentioned requirement to help LICs adopt technologies to profit from the “second mover advantage”. It created a new managerial framework which responds to the trend of “sustainable development” caring both aspects of environmental protection and economy development, resulting in a unified organizational strategic vision. However, observations scrutinizing the dynamic change of green organizational identity, environmental organizational culture, environmental leadership, and green competitive advantages are still missing.Leaving these ideas behind, we will now pay attention to “sustainable development” strategies in reality to see if any future prospects can be implied. 3. 5.
Where are CSR and sustainability efforts in reality? Concerning the implementation of “sustainable development” strategies, general CSR efforts, and the current stage of “green” adoption, scholars characterize the reality differently. Milliman et al. (2009) assume that the adoption of sustainable programs by corporations is still in the early stages rather than a done deal. They describe that it is a challenge to secure adequate resources from executives and managers to succesfully implement and perpetuate sustainability programs.Moreover the study points out company executives must follow the lead of the corporate boards of directors. Boards in turn tend to have short-term financial interests (influenced by shareholders) and are therefore an obstacle of incorporating social issues in their thinking. Consequently corporate sustainability initiatives quickly lose momentum. Ladd (2010) on the other side sees the adoption already in progress, because “Most American businesses have embraced social and environmental responsibility as instrinsically valueable to their budgetary considerations”(Ladd, 2010, p.
3). Moreover he states that some would characterize it as a (green) revolution in terms of how businesses operate, but others prefer describing as an evolutionary process.Ladd (2010) cites Todd Larsen, director of corporate responsibility programs for Green America “It’s not always a question of whether it is too costly to go green. The burden of proof doing something new can be a challenge to every company. ” This clearly identifies an obvious problem companies were facing in the past – why going green. Am I,as company ,still competitive if it is too costly to go green? Leaders should be companies with most power and influence, as for example Wal-Mart. Wal-Mart, the biggest employer in the world, has the power to influence whole supply chains to enhance their environmental friendly production process.
The company is beginning to survey its tens of thousands of global suppliers on issues of energy and climate, the resources they use and how green their materials are.Moreover it announced plans to reduce gas house emissions 20 percent at its current facilites by 2012, and cut back by 5 percent the amount of its packaging by 2013. But Wal-Mart is not the only company underlining their sustainability efforts. Intel Corporation, placed fourth overall in the Newsweek’s magazine 2009 Green Ranking, was quoted for an initiative that ties annual employee bonuses directly to the attainment of specific greening objectives,Google is creating one of the largest solar installations in the U.
S. To power its California headquarters, and many more examples could be given. The publication refers to sustainability programs as emerging trends, whereby greening has had a beneficial effect on business growth and investment, industry observers agree (Ladd, 2010).But nevertheless promoting sustainability programs is always a danger – The danger of this is accusations of corporate greenwashing, even when they are unwarranted (Roberts, 2010). Furthermore sustainability efforts made by many businesses are not recognized by consumers and therefore sustainability communications agencies are one of the most requested external services, according to the CSR Professional Services Directory. As mentioned before companies are faced with the problem of cause-related marketing and how to communicate these efforts to benefit in sales, reputation, or trust. Therefore the importance of effective communication has risen in the last years caused by the development of social media networks and other online plattforms, such as Amazon. Looking back at our proposed framework constructed by Chen et.
Al (2011) these problems would be minimized. The probability of being accused to “greenwash” is almost zero, and it is very likely that their cause-related marketing efforts will be gratefully accepted rather than questioned by consumers. 4. Summary and Future Thinking Looking at the environmental impacts in the last decades and the importance of sustainable development to save the environment politics have started already in 1987 with the restriction of CFC, but concering companies it seems that there is still much to do. But why are companies not concerned about the environment? One major reason is because the nature is for free, actually it was free in some parts.
The Kyoto Protocol and the resulting C02 carbon certificates are the first way to pay off nature somehow, but there is still room for improvement. But looking for example at polluting a river it is hard to measure the damage and sometimes even harder to say who did it. Another reason is that there is a lack of an effective implementation of CSR efforts in a companies strategic vision. Most likely caused through on the one side the companies’ unflexible structure, the absence of the courage ( or maybe fear) to change something and on the other side it seems that companies could not find many ways to profit from new regulations, for example. As mentioned in Part 2.
2.one of the four mainstream theories is Corporate Citizenship, which suggests that business is a part of society and society’s expectations that businesses will engage in social activities. The previously mentioned Green Organizational Identity theoretical framework is an idea for a collective corporate identity, respecting environment.
Connecting these two ideas a new concept can be formed – “Green Corporate Citizenship” – unfiying a companies strategic vision, a good corporate citizenship and environmental concerns all in one theoretical framework. Companies who advocate and implement this vision would contribute to a sustainable future. As shown in three researches by Chen et al. Technolgy improvements and other investments can result in green competitive advantages and consequently in higher profits.
Therefore CSR implementations shouldn’t be seen as short-term approaches by companies, but rather implement sustainable development programs in the companies’ strategic guideline.. Forcing these ideas contribute to reputation and publications of these or cause-related marketing programs will be appreciated by consumers. Moreover companies would be prepared for new political regulations and restrictions and prepared for the possible green TEP. All in all this study tried to illustrate that there are possible ways to implement sustainable development approaches in a companies strategic vision, not only to respect the environment, it can lead to competitive advantages, higher profit and reputation.