Stakeholder pressure for sustainability: Can ‘innovative capabilities’ explain the idiosyncratic response in the manufacturing firms?

Suresh Kumar Jakhar, Arijit Bhattacharya, Himanshu Rathore, Sachin Kumar Mangla

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Abstract

This study explores role of innovative capabilities in determining a manufacturing firm's response to stakeholder pressure for adopting sustainable practices. Drawing on the theory of conservatism, we delineate that the firm's response is idiosyncratic and undergirded in the nature of its innovative capabilities. Our empirical investigation reveals that the response to the stakeholder pressure is mediated by the nature of the firm's innovative capabilities. Indian manufacturing firms are identified as unit of analysis for this study. The individual manufacturing facilities implement the environmental practices. The findings suggest that the manufacturing firm's exposure to exploitative/exploratory innovative capabilities triggers sustainable behaviours with ephemeral focus and enduring focus. Further, the exploratory/exploitative innovation is capable of explaining idiosyncratic behaviour for the firms' sustainability practices adoption. The findings delineate, with analysis, that unlike China, regulatory stakeholder pressures in India inhibit the adoption of sustainable practices with enduring focus in manufacturing firms.
Original languageEnglish
Pages (from-to)2635-2653
Number of pages19
JournalBusiness Strategy and the Environment
Volume29
Issue number6
Early online date29 May 2020
DOIs
Publication statusPublished - Sep 2020

Keywords

  • ambidexterity
  • innovative capabilities
  • manufacturing firms
  • stakeholder pressure
  • sustainability practices
  • theory of conservatism

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