Sustainability-oriented innovation in manufacturing firms: implementation and evaluation framework

Harsanto, Budi ORCID: https://orcid.org/0000-0002-0732-0993, Kumar, Niraj ORCID: https://orcid.org/0000-0002-7918-5188 and Michaelides, Roula ORCID: https://orcid.org/0000-0002-3444-4625 (2024) Sustainability-oriented innovation in manufacturing firms: implementation and evaluation framework. Business Strategy and the Environment, 33 (6). pp. 5086-5108. ISSN 0964-4733

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Abstract

In this paper, complementary perspectives from innovation management capabilities (IMC), the natural resource-based view (NRBV) and the social resource-based view (SRBV) are revisited in order to lay the theoretical foundation for developing evaluation framework for sustainability-oriented innovation (SOI). Six dimensions of SOI are identified, as innovation focus, sustainability focus, integration intra-organisation, integration inter-organisation, ambidexterity, and emphasis on physical life cycle — which then lead to developing the key parameters for the evaluation framework. The proposed framework is validated through analysis of 25 cases from the manufacturing sector in Indonesia. Data were primarily collected through semi-structured interviews and analysed using a polar diagram. This approach offered a comprehensive understanding of the qualitative data by assessing all six SOI dimensions simultaneously, presenting an effective visualisation of the firms' approach to SOI. The findings suggest that the majority of firms tend to adopt an operational optimisation approach when developing their SOI, while only a few opt for organisational transformational, and none choose the system building approach. This research paper makes a significant contribution to literature by introducing transition phases among SOI approaches, which were previously not explored in literature. The framework developed in this study would provide valuable support to practitioners in implementation and enhancement of their SOI practices.