Unpacking the value of supply chain integration and innovation ambidexterity in promoting business sustainability and brand image: implications for B2B manufacturing firms in a next-eleven emerging country
thesisposted on 28.03.2022, 23:14 authored by Seyed Mahdi Vesal
Increasing resource consumption and pollution, and their detrimental effects on the environment are forcing firms across the globe to adopt strategies directed at sustainability. This is especially so for business-to-business (B2B) manufacturing firms operating in emerging countries who intensively use natural resources in their operations and are blamed for observable impacts on the environment. Sustainability when viewed from a business perspective is defined as an organizational activity that is directed to reducing pollution and efficient use of energy and other resources aiming at diminishing the detrimental effects of firms' activities on the environment and human race. In an attempt to address the challenges that sustainability is raising, innovation is promoted as an especially important solution. In the pursuit of innovation, a widely acknowledged approach toward categorizing innovation is via the notions of radical and incremental innovation. While radical innovation involves substantial changes in technical skills, knowledge, and design, incremental innovation improves on a known product or the process for producing it, reinforcing existing engineering and manufacturing know-how. However, little emphasis has been given to unpacking the mechanisms by which radical and incremental innovation, when managed ambidextrously (hereafter referred to as innovation ambidexterity) drive sustainability. In addition, while marketing literature has focused on the necessity of transitioning toward sustainability, far less attention has been given to uncovering whether the investments necessary for B2B firms to adopt sustainability practices pay off in terms of improving their brands as a major marketing asset. Accordingly, this research examines the role of innovation ambidexterity in the sustainability of B2B manufacturing firms operating in emerging countries, as well as factors that support innovation and whether the pursuit of sustainability helps these firms in building strong brands and improving their long-term performance. This research adopts a thesis by publication format and comprises three inter-related but distinct papers. The first paper draws on organizational ambidexterity theory to investigate the relationship between innovation ambidexterity and sustainability in manufacturing firms operating in emerging countries. To unpack this relationship, this paper brings critical attention to the contingent role of CEOs' leadership style and business unit managers' attitudes toward sustainability. To test the theory, this paper uses a multi-informant dataset collected from production managers and supply chain managers in business units of manufacturing firms. The results show that innovation ambidexterity is a trigger for driving a firm's ability to pursue sustainability goals. Further, the results demonstrate that CEOs' leadership style and business unit managers' attitudes toward sustainability enhance the positive effect of innovation ambidexterity on sustainability. This paper advances the current literature on innovation and sustainability by delving into how firms can ambidextrously manage their radical and incremental innovation to support sustainability activities. The second paper brings signaling theory into the sustainability literature with a specific focus on emerging countries and explores the extent to which a firm's pursuit of sustainability underpins its ability to create a positive brand image, which in turn, promotes its market performance. In addition, this paper examines the roles of customer relationship management (CRM) and business customers' attitudes toward sustainability as keys to foster the relationship between sustainability practices and brand image. The dyadic data for this paper comes from cross-industry B2B firms and their customers. The findings reveal that sustainability practices significantly influence the generation of positive brand image perceived by customers and this relationship is significantly improved through use of CRM practices and customers' holding favorable attitudes toward sustainability. In doing so, this paper extends the boundaries of sustainability research and offers appropriate strategies for B2B firms to better direct their attention to sustainability practices in driving brand success and improve long-term performance. The third paper integrates the relational view and organizational ambidexterity theories and investigates how the individual and combined effects of supplier integration (SI) and customer integration (CI) help firms in emerging countries generate both radical and incremental innovation. In addition, this paper articulates the moderating role of internal integration in enhancing the relationship between external (supplier and customer) integration and radical and incremental innovation. Empirical support for the proposed effects comes from a triadic matched, multi-stakeholder (focal firms, suppliers and customers) design from broad range of industrial firms in the manufacturing sector. The findings indicate that SI and CI are not equally beneficial in driving both radical and incremental innovation. Moreover, the findings highlight the significant role of internal integration in improving the effects of external integration on radical and incremental innovation. The findings of this paper provide new insights for firms to manage available resources and capacities to integrate suppliers and customers into their operations to ensure they maximize innovation and performance. Overall, through the three papers, the thesis advances the literature by providing novel theoretical explanations to understand the determinants of innovation and sustainability across the supply chain, as well as the contribution that sustainability practices make to achieving superior brand image and organizational performance in emerging countries.