Does Entrepreneurial Orientation Lead to Successful Sustainable Innovation? The Evidence from Chinese Environmentally Friendly Companies

Abstract

This research examines the linkage between entrepreneurial orientation and sustainable innovation. Research shows that the effects of entrepreneurial orientation on the exploitation and exploration of sustainable innovation are significantly positive, whereby absorptive capacity acts in a significant mediating role. The interaction between entrepreneurial orientation and absorptive capacity helps organizations overcome organizational inertia and strengthen the sustainability of innovation. By introducing the absorptive capacity theory and the view of organizational inertia, we have conducted empirical research on 392 Chinese environmentally friendly companies that have passed China’s national high-tech enterprise certification. We verified the relevant hypotheses in our framework in a structural model analysis using Mplus. To further look at the interaction terms of potential and realized absorptive capacity, we used PROCESS in SPSS to evaluate the conditional effects of absorptive capacity on coefficient paths between entrepreneurial orientation and the two types of innovation. The results show that entrepreneurial orientation improves the absorptive capacity of organizations, thereby promoting their sustainable innovation. Furthermore, based on the theory of sustainable innovation, we proved the positive impact of realized and potential absorptive capacity on the exploitation and exploration of sustainable innovation. Organizations could balance exploitation and exploration to implement sustainable innovation by adjusting their potential and realized absorptive capacities. Our results can help environmentally friendly organizations adjust the combination of entrepreneurial orientation and absorptive capacity to overcome organizational inertia, manage exploitation and exploration, and implement sustainable innovation.

The effect of entrepreneurship orientation and flexibility toward adaptive innovation and improved firm performance

“…The more often they carry out activities to search for information on the external environment, they will be able to increase their ability to adapt to changing consumer needs (Keh et al, 2007). The result supports the result of a study by Lee et al (2019), Mao et al (2021), andIqbal et al (2021).…”

“…Research results prove that the effects of entrepreneurial orientation on the exploitation and exploration of sustainable innovation are significantly positive (Mao et al, 2021). Iqbal et al (2021) suggested the significantly positive direct relationships among entrepreneurial orientations, organisational commitment, and innovation performance at various levels in SMEs.…”

Driving Innovation: Unleashing the Power of Logispreneurship in the Logistics Industry

“…Logispreneurs also understand the power of data analysis and use it to inform their logistics decisions. They understand the importance of collecting data and analysing it to identify opportunities to improve their operations, thereby increasing their efficiency and improving customer satisfaction (Kang et al, 2021). Furthermore, logispreneurs have a strong sense of customer service, using their knowledge and resources to ensure that customers receive high-quality services.…”

“…Logispreneurs must be able to think strategically and develop plans that allow them to meet customers' needs and maximise efficiency (Chin, 1998;Kang et al, 2021).…”

Leveraging Strategic Orientations in Achieving a Competitive Advantage Among Msmes: A Cross-Country Marketing Analysis

“…Several previous studies had proved the role of self-efficacy in fostering a pioneering outlook (Mostafiz, Hughes, Simeonova, & Sambasivan, 2023) and the importance of flexibility in the entrepreneurial orientation (Salem, Elbaz, Al-Alawi, Alkathiri, & Elkhwesky, 2023). They also explored the interaction between strategic orientations and entrepreneurial orientation (Baskoro, Radzi, & Omar, 2022) and the impact of entrepreneurial orientation on organizational absorptive capacity and sustainable development (Mao, Wang, & Yi, 2021). The integrated entrepreneurial responsible orientation (ERO) framework integrates the entrepreneurial orientation, stakeholder demands, and sustainable development (Iqbal & Khizar, 2022;Zhou, Zhang, & Su, 2022).…”