Sustainability oriented innovation and organizational values: a cluster analysis

Abstract

Purpose: Sustainability is an important priority for CEOs according to a recent Mckinsey (2021) survey. However, despite growing pressure from capital investors, employees and consumers, few organizations are satisfied with the sustainability objectives achieved beyond objectives related to economic savings. The sustainability challenge is even more difficult for organizations when dealing with designing their innovation portfolio strategies since the markets´ demands and competitors´ strategies may contradict organizations’ sustainability objectives and thus jeopardize their continuity. Some researchers argue that a commitment to sustainability in organizations is not so much a matter of managerial practice but rather is rooted in organizational values (Globocnik et al., 2020). Therefore, this research aims to explore what types of organizational values more effectively promote sustainability-oriented innovation in organizations. Using as a conceptual framework the competing values theory (Quinn & Rohrbaugh, 1983), and adding one dimension, risk aversion, we empirically define some clusters of business typologies from which we derive patterns of value profiles. We show how these clusters’ patterns of values relate to the success of a firm’s sustainability-oriented innovation.

Methodology: To make sense of our literature review and ensure managerial relevance, we surveyed 128 senior managers from different industries and countries to understand how their perceived organizational values may impact their firms’ sustainability-oriented innovation success. As a result, we group the studied organizations into four clusters according to the informed organizational values, and we assess how the different clusters are more or less prone to succeed with a sustainability-oriented innovation strategy.

Findings: Our results show that not all organizational values contribute equally to the success of sustainability-oriented innovation in the market. As a theoretical contribution, we advance current knowledge about how organizational values may impact sustainability-oriented innovation success by providing a framework to measure and follow up on the evolution of necessary organizational values to embrace sustainability-oriented innovation within an organization. From a managerial perspective, we advance knowledge on how organizational values should evolve and change to efficiently deliver more sustainability-oriented innovation. In addition, we describe specific values that organizations should measure and track and otherwise establish as an important first step toward implementing sustainability-oriented innovation within them.

Originality: Our research provides original results by expanding current knowledge on organizational values to better understand which values more efficiently promote competitive sustainability-oriented innovation in organizations. We expand the four organizational cultural archetypes of organizational values to develop a more flexible and actionable framework of five dimensions by adding an important dimension to the model, risk aversion. Together, these dimensions generate new insights through a cluster analysis of organizational differences and inform priorities and courses of actions to undertake.

Research limitations and implications: This research is based on self-report surveys and is therefore exposed to the expected limitations of the survey research methodology.