Customer green orientation and process innovation alignment: A configuration approach in the global manufacturing industry

Abstract

Research suggests that manufacturers increasingly innovate processes to meet customer's green requirements; however, little is known about the impact on performance and the contextual conditions, under which they are effective. Grounded on configuration approach, this study develops taxonomies of manufacturing firms based on the degree of customer's green orientation and process innovation. This study argues that performance differences between these clusters, highlight managerial implications for sustainable development. The empirical data used in this study were drawn from Global Manufacturing Research Group (GMRG) survey project (with data collected from 629 manufacturing firms from nine countries). Our results show that customer green innovation taxonomies influence differently on environmental measures, costs, and financial performance. The study proposes three clusters: Process active, Green minimalist, and Green proactive. The main differences between manufacturers are based on the level of investments in joint green improvement initiatives and customer direct investments in green activities. Firms that belong to the Process active cluster, who are first within the industry to deploy new processes and update the latest process development, gained significant improvement in financial measures such as market share and profits. Whereas Green minimalist cluster lagged behind, Green proactive manufacturers aligned in both capabilities to experience higher payoffs in sustainable performance measures and efficiency. The findings provide a step‐by‐step decision‐making process and offer guidance for supply chain managers who have to stretch their needs to align the innovation processes to enhance their sustainable performance.

Sustaining brand loyalty: The moderating role of green consumption values

“…The green values denote the consumer's expression about environmental protection through the adoption and consumption of eco‐friendly offers (Khan & Mohsin, 2017; Koller et al, 2011; Sharma et al, 2020). Consumers are more likely to adopt and purchase products that promote green values, as their concern and the value they attach to the environment protection have increased (H. Han et al, 2018; Kautish & Sharma, 2018); hence, firms seek to enhance their organizational sense of green identity (Nguyen et al, 2020; Song et al, 2019). On the other hand, ecological concerns did not necessarily translate into environmentally friendly behaviour (Finisterra do Paço & Raposo, 2010; Mostafa, 2007).…”

Building supply chain relational capital: The impact of supplier and customer leveraging on innovation performance

“…Thi Mai Anh et al (2019) found that RC creates a willingness between companies for functional integration, based on mutual interaction and similar behaviour. Moreover, Nguyen et al (2020) highlight that in order to appropriately utilise knowledge from their external stakeholders, companies must attain cultural alignment in terms of values, norms, behaviours, and codes of conduct. This concurs with Wagner and Bode (2014), in that supplier/customer leveraging represents a relationship specific investment by the SC members.…”

“…Schoenherr and Swink (2015) note that capturing and applying the technological and market knowledge gained from sources from the SC partners can be an important source of firm's competitive advantage. Studies such as Nguyen, Onofrei, Truong, and Lockrey (2020); Canevari‐Luzardo, Berkhout, and Pelling (2019); and Du, Zhang, and Feng (2018) have highlighted important benefits that companies can achieve from working closely with the immediate SC actors. By leveraging knowledge obtained from suppliers and customers, firms can enhance their innovation activities (Schoenherr, 2018), green performance (Du et al, 2018), operational performance, and customer satisfaction (Chavez, Yu, Feng, & Wiengarten, 2016).…”

Impact of Green Initiatives on the Financial Performance of Small and Medium Enterprises: The Case of Manufacturing Firm in Central Luzon

“…Bulbs. Nguyen et al, (2020) on their study shows that customer green innovation taxonomies influence differently on environmental measures, costs, and financial performance. Table 4 shows the computation of savings on the electricity consumption of small and medium enterprises.…”