It is suggested that dynamic capabilities are a multidimensional construct that operates at the managerial and organizational levels. However, many studies have conceptualized dynamic capabilities as a single phenomenon at the organizational level, neglecting micro-level factors that contribute to the heterogeneity of dynamic capabilities within firms. This oversight is particularly evident in discussions surrounding green ambidexterity. This gap prompts the authors to investigate the phenomenon of green ambidexterity from the microfoundations of dynamic capabilities. Specifically, this study develops a multilevel framework that links CEO attention to stakeholders as a microfoundational dynamic capability with green ambidexterity as an organizational-level dynamic capability, ultimately contributing to corporate environmental performance.
The authors conducted a content analysis of 145 firms, examining their 697 sustainability reports and 647 CEO letters spanning the period from 2017 to 2021, along with regression analysis.
The authors found that CEO attention to stakeholders positively affects green exploitation innovation, green exploration innovation and green ambidexterity focused on exploration. In addition, green exploration innovation and green ambidexterity focused on exploration have a positive impact on corporate environmental performance. In contrast, green exploitation innovation negatively affects environmental performance.
The findings provide insights into the role of CEOs’ cognitive capability of attention to stakeholders as a microfoundational dynamic capability, highlighting how this individual-level ability can facilitate the development of organizational dynamic capabilities and enable the achievement of green ambidexterity.
