Greening the business: How ambidextrous companies succeed in green innovation through to sustainable development

Abstract

AbstractThis paper seeks to investigate the impact of ambidexterity (exploration and exploitation) on green product innovation and the success of new products through the effects of sustainability, considering the moderating role of customer pressure. This research proposes a theoretical model that was tested using structural equation modelling (SEM) and a multigroup analysis to understand the moderating role of customer pressure. A 23‐item questionnaire was developed to explore the proposed relationships, applied in two different moments, answered by two other critical respondents from each company. At the end of the second collection moment, 336 valid questionnaires were collected from a sample of industrial SMEs in Portugal. The results show a positive influence of ambidexterity on sustainability and, therefore, on new product success and green product innovation. In addition, green product innovation increases the success of new products due to the growing demand for more sustainable products. Furthermore, the chain of effects between ambidexterity and further product success was strengthened when customer pressure was higher. This study stresses the need to actively manage exploration and exploitation investments to enhance ambidexterity, especially when sustainability and green innovation are the expected outcomes. The originality of this research is related to the contributions of hierarchical dynamic capabilities, combining and balancing exploration and exploitation, to produce successful ambidextrous companies in sustainability and green strategies.