The Effects of Green Innovations in Organizations: Influence of Stakeholders

Abstract

Organizations moving towards adopting sustainable business development has become a necessity. As more and more stakeholders increasingly show interest in pollution and environmental degradation and the major impacts on the economic activities of organizations, it has become a necessity for organizations to move towards adopting sustainable business development. To achieve this goal, organizations need to invest in green innovations (GIs). Therefore, this paper examines the important influence of internal and external stakeholders on organizations that choose to pursue sustainable development with the help of implementing green innovations. It has certain theoretical and practical implications, but the following problems exist: (a) the usage of energy has increased in recent years and further creates a warning sign that precautionary measures need to be taken soon, and if not, the situation will impact the environment and organizations’ sustainable performance; (b) stakeholders’ raise concerns about pollution and environmental deterioration and urge industrialists to incorporate green innovation into all aspects of production and processes. A positivist research paradigm is applied, and the hypotheses will be tested using Structural Equation Modelling (SEM). This study analyzes how green innovation interacts with the linkage between stakeholders and organizational sustainable performance. The contribution hopes to benefit the growth of the economy, promote a cleaner environment, and enhance the wellbeing of the country. This study will further help to enlighten the importance of embracing green innovation in industries to policy makers and manufacturers, which is currently lacking. This initiative is in line with Malaysia’s 12th plan, which aims to promote green innovation to boost the Gross Domestic Product (GDP) and push the country above the high-income barrier.