SYNERGY OR CONFLICT? THE RELATIONSHIPS AMONG ORGANISATIONAL CULTURE, SUSTAINABILITY-RELATED INNOVATION PERFORMANCE, AND ECONOMIC INNOVATION PERFORMANCE

Abstract

Despite the growing pressure to become more sustainable and the availability of managerial practices, organisations still struggle with being innovative without neglecting sustainability concerns. This paper approaches this issue from two perspectives: First, the organisations’ cultural DNA is assumed to explain differences in the sustainability-related innovation performance of firms. Drawing on the competing values framework, this research examines whether certain cultural types predispose some organisations to perform better. Second, the skepticism among managers about the economic benefits of sustainability-related innovation holds organisations back to consider sustainability concern in their innovation activities. Thus, the relationship between sustainability-related innovation performance and economic innovation performance is investigated to clarify whether they represent conflicting goals. Using multiple-respondent data of a cross-sectional firm sample and a comprehensive measure of sustainability-related innovation performance, the empirical data show that clan cultures have a negative influence on sustainability-related innovation performance, whereas hierarchy and adhocracy cultures exert positive effects. Furthermore, sustainability-related innovation performance has a moderately positive effect on economic innovation performance.