Managerial values and sustainable oriented innovation: Examining the role of knowledge exploration versus exploitation practices

Abstract

Purpose Leveraging upper echelon theory and knowledge-based view of the firm, this paper aims to explore how chief executive officers’ (CEO) sustainability orientation influences explorative and exploitative knowledge management practices, which in turn influence incremental and radical sustainable innovation under boundary conditions of CEOs’ temporal focus and regional affiliation in the home country. Design/methodology/approach This study used a nonprobability convenience sampling strategy. Using survey-based research, the authors tested the study hypotheses using partial least squares structural equation modeling on a sample of 298 CEOs from Indian small and medium enterprises. This study also tested the reliability and validity of the study variables by using internal consistency tests and convergent and discriminant validity procedures. Findings The study finds that CEO sustainability orientation affects incremental and radical sustainable innovation via the mediating effect of explorative and exploitative knowledge management practices. Furthermore, CEOs’ past temporal focus increases the influence of orientation on exploitative knowledge management. In contrast, future temporal focus increases the influence of CEO sustainability orientation on exploratory knowledge management practices. Finally, CEOs from the southwest, west and northwest regions of India increase the influence of exploratory knowledge management on radical sustainable innovation. Research limitations/implications This study has significant implications for understanding upper-echelon factors that drive knowledge management practices. CEO temporal focus (time orientation) and demographic aspects (regional affiliation) influence CEOs’ investment in different knowledge management and, hence, sustainable innovation management practices. However, this study does not explore cross-cultural differences and the role of the entire top management team in influencing sustainability values on sustainability innovation via knowledge management practices. Practical implications This study comprehends upper-echelon factors that drive investment in knowledge management and sustainable innovation practices. Findings imply that CEOs with past and future temporal focus can influence sustainable innovation, but their investment in knowledge management strategies differs. Past temporal-focused CEOs invest more in exploitative and future temporal focus more in explorative knowledge management for influencing sustainable innovation. Originality/value The study provides novel insights into the influence of upper-echelon traits on knowledge management and sustainable innovation practices. Extant literature has largely explored firm-level factors such as organizational culture influencing a firm's knowledge management practices. However, by integrating the upper echelon with the knowledge-based view of the firm, we explain how the traits of the CEO, especially the temporal perspective, influence knowledge management and sustainable innovation practices of firms.