Drivers of sustainable business model innovations. An upper echelon theory perspective

Abstract

This study explores the factors that drive the adoption of sustainable business model innovations (SBMIs). In this mixed-method (qualitative and quantitative) study, we draw on upper echelon theory to identify the factors that have led firms to switch from conventional products and processes to sustainable business innovation. This study of senior managers uses qualitative data to understand the mechanisms adopted by top management to make the switch to SBMIs. Data was gathered from 285 middle managers to empirically validate the theoretical model. The study concludes that in the top management team (TMT), ambidextrous learning has a positive association with the firm's decision to adopt SBMIs. However, TMT diversity and university-industry collaboration are positively associated with ambidextrous learning by top management and, subsequently, the adoption of SBMIs. Our findings also suggest that transformational leadership positively moderates the association between TMT diversity and ambidextrous learning. However, the impact on the relationship between collaboration and ambidextrous learning is negative.