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Abstract:In this study, the relationship between environmental innovation and sustainability is analyzed in 168 handicraft businesses in the Mexican states of Oaxaca, Puebla, and Tlaxcala. The results show a direct, positive relationship between environmental innovation and sustainability in three dimensions: economic, social, and environmental. In terms of determination, the variables that best explain sustainability are: organization type, product innovation, and process innovation. The age of the handicraft businesses was not a significant factor in explaining sustainability. This study concludes that handicraft businesses make sustainable choices more as a result of a desire for profit maximization than as a result of environmental consciousness, as can be explained by neoclassical view of economics.

Based on institutional theory, this study develops the understanding of how the institutional environment influences the propensity to adopt green practices. Taking into consideration the limitations of institutional theory, this research explores the mediating role of farmers’ environmental concern in the relationship between institutional pressures and green practices. Environmental concern is a factor that can explain why businesses are heterogeneous in their green practices and stances even though they are embedded in the same institutional environment. Data obtained from 130 small businesses in the agricultural sector in Oaxaca, Mexico, reveal that institutional pressures influence green practices directly. The results also reveal that farmers’ environmental concern partially mediates the relationship between these variables. This study tests the applicability of the theoretical framework of the institutional theory in this context and contributes to this theory by considering the role of the farmer. Specifically, it addresses environmental concern as a means through which businesses respond to institutional pressures, and how farmers implement green practices as a means for legitimacy. Environmental concern motivates environmental behavior in search of environmental conservation, but farmers mainly implement green practices to survive in the market in response to institutional pressures.

Based on the stakeholder theory, this research aims to analyze the relationship between hoteliers' perceptions of stakeholders' interests and the implementation of environmental management practices in Oaxaca, Mexico, incorporating the effect of three hotel characteristics: size, age and economic capacity. Empirical evidence, obtained from hotel owners and/or managers, reveals a direct and positive relationship between the hoteliers' perceptions of stakeholders' interests and the implementation of environmental management practices, with hotel age and size having a moderating effect. Economic capacity, as an independent variable, is also an important factor in the implementation of environmental management practices.

PurposeBusinesses in Mexico, particularly small and mid-sized companies, are faced with numerous challenges: a lack of competition, difficulty in positioning and maintaining oneself in the market, irrational use of natural resources, and poverty in the environment in which they develop. In spite of these problems, many are able to succeed; however, there is limited knowledge about how these businesses could implement organizational changes that would positively impact their results.Design/methodology/approachUsing dynamic capabilities theory and survey data obtained from pottery businesses in several artisan communities in Mexico through the application of face-to-face interviews, this paper analyzes the relationship between organizational capability for change (OCC) and economic and environmental performance.FindingsThis research proves that OCC positively and significantly impacts economic and environmental performance. Results contribute to the existing literature on OCC in the context of poverty.Originality/valueThis study offers empirical research that illustrates the relationship between OCC and the environmental and economic performance of pottery businesses. Additionally it contributes to a field of knowledge in progress; that is, OCC in contexts of subsistence where poverty is a constant issue. Artisans living in this context can also develop business capabilities that contribute to the permanence of their business in the market.

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