Sustainable Innovation: Drivers, Conditions, and Impact on Triple Bottom Line Performance

This dissertation investigates the role of sustainable innovation as well its drivers, conditions and impact on triple bottom line performance of firms. This research examines this phenomenon through the lens of the dynamic capabilities theory, and is secondarily informed by the organizational learning and market orientation viewpoints. This dissertation addressed the primary research question: how do firms effectively pursue sustainable innovation and how does such innovation impact triple bottom line performance? The aim was to uncover strategic, climate, leadership and market drivers of sustainable innovation, investigate the role of organizational processes such as learning and unlearning—and their impact on sustainable innovation, as well as determine the impact of sustainable innovation on triple bottom line performance and whether any boundary conditions moderate this relationship. The methodology by which the theoretical framework was tested was through an empirical survey distributed among members of various LinkedIn membership groups. The participants in the study were all situated in roles focused on sustainable innovation within their organization. The analysis was conducted using Partial Least Squares (PLS) path modeling via SmartPLS. The findings indicate that sustainable innovation requires an organization-wide configuration focused on behaviors and activities such as learning and unlearning. Additionally, it demonstrates that those activities are driven by an organization’s climate and the activities of its leadership. Specifically, the findings suggest that fostering an environment that is high in trust and focused on sensing the needs of its customers and stakeholders is critical to organizational learning and unlearning, which in turn leads to effective sustainable innovation. Additionally, assigning an internal sustainability champion and encouraging market-oriented behaviors also have a significant impact on the innovation process. Finally, a significant relationship between sustainable innovation and triple bottom line performance indicates that these initiatives do pay off for the firm. This research offers implications for theory and practice. With regard to theory, it offers a capabilities-based approach to understanding innovation in a new and encompassing context. For practice, it offers many guidelines for firms looking to meet the needs of their stakeholders (e.g., the local community, shareholders, and employees) by becoming more sustainable.