The Decoupling of Institutional Decoupling: Differential Implementation of Voluntary Environmental Programs between Initial Innovators and Early Adopters

Abstract

While the importance of organizational learning and technological innovation for environmental sustainability is well noted, little is known about why and how firms choose not to implement what they learn and innovate. We examine the learning-doing gap in an empirical context of sustainable innovation and environmental technologies, the domain where social constituents increasingly consider environmental performance to be significant evaluative criteria. Building upon institutional perspectives, we suggest that the increased popularity and social attention toward sustainable innovation may serve as externally imposed pressures that are difficult for firms to ignore, thus leading to the creation and development of novel technologies aligned with the normative pressures. Our key argument is that such technologies are not fully implemented, a situation referred to as decoupling. This argument is empirically supported by our analysis of data from the Green Certification Program, a relatively new, government-initiated certification system for legitimating green technologies in Korea. More importantly, we find that decoupling is further differentiated in terms of adoption timing between initial innovators and early adopters, two groups of firms that develop different risk perceptions of the consequences of certification implementation. Implications for organization studies, sustainable innovation, and environmental policies are discussed.