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Introduction
Environmental issues are increasingly becoming important to manufacturing industries as decision makers face mounting public sensitivity, stricter environmental regulations and growing shareholder pressure to preserve the natural environment (Leonidou et al., 2013; Yu et al., 2017). From the supply side, global warming, carbon restrictions, soil erosion and shortages of electricity are now critical issues for manufacturing industries (Delmas and Toffel, 2008). From the demand side, customers are increasingly shifting their preferences to more environmentally friendly products and services (Kotler, 2011), which are less harmful or even beneficial to the natural environment (Hoffmann, 2007; Zhu et al., 2008). Governmental monitoring and control of ecological impacts of production activity are being implemented to minimize environmental damage. Environmental concerns have thus impacted manufacturing firms’ innovation.
Green innovation has responded to this awareness by focusing on greener strategies that allow manufacturing firms to achieve corporate objectives for protecting the natural environment (Robinson and Stubberud, 2013). However, according to Andersen (2008, p. 3), green innovation research is still in an early phase that lacks substantial achievement. The current literature has few empirical researchers working with innovation and environmental issues. Research on green innovation and performance has also yielded mixed results. On one hand, encouraging manufacturing firms to use green innovation strategies, though they may not increase profits, can lead to the implementation of such strategies (Rao and Holt, 2005). However, other studies have found that such integration could result in poor performance due to increased development time and development costs (Das et al., 2006; Ragatz et al., 2002). These mixed results have increased interest among researchers in better understanding the relationships between the firms’ green innovation and green performance (Martins and Terblanche, 2003; McLean, 2005). Accordingly, this paper explores these contradictions to determine if green innovation actually provides green performance for organizations.
One of the variables with a substantial influence on green innovation is organizational green culture (OGC). As Hart (1995) shows, organizational resource have a pivotal role in developing successful environmental strategies, and one of the resources that may support competitive advantage and green performance is OGC (Banerjee, 2002). Culture here refers to a shared system of beliefs, values, ideas and attitudes that shape organizational behavior. Organizational culture can be developed by a...