Strategic Orientation, Environmental Innovation Capability, and Environmental Sustainability Performance: The Case of Taiwanese Suppliers

Abstract

Although previous research has explored the effect of strategic orientation (SO) on innovation and business performance, little attention has been paid to its effect on environmental innovation capability (EIC) and environmental sustainability performance. Drawing on the strategic marketing and dynamic capability theory, this study attempts to increase the understanding of how SO (i.e., customer orientation, competitor orientation, and technology orientation) influences the EIC, which in turn enhances supplier’s environmental sustainability performance in the context of buyer-supplier relationships. In addition, this study examines the impact of inter-functional coordination on SO and also explores the moderating role of buyers value added in the relationship between SO and EIC. Hierarchical regression analysis was performed to test hypotheses that are based on survey data collected in 127 Taiwanese information technology firms. The results show that customer orientation and technology orientation have a positive impact on the EIC, that buyers value added has a synergistic effect on the impact of competitor orientation on EIC, that inter-functional coordination has a positive impact on SO, and that EIC mediates the relationship between SO and environmental sustainability performance.

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