This conceptual paper looks at the influence of external drivers, regulatory pressure, competitive pressure, normative pressure and customer green demand on the adoption of eco-innovation. It further synthesizes the literature and makes a logical argument for the moderating role of organizational ambidexterity in these relationships.
The study is grounded in a dual-theoretical framework integrating institutional theory and the dynamic capabilities view. Institutional theory explains why external pressures compel firms towards eco-innovation, while the dynamic capabilities view elucidates how internal capabilities, specifically organizational ambidexterity, condition these responses. A systematic review of the existing literature is used to develop a set of testable propositions.
A conceptual paper proposes that all four external drivers have a positive influence on eco-innovation adoption. However, the strength of these relationships is not uniform and is significantly contingent upon a firm’s level of organizational ambidexterity. Firms that can simultaneously exploit existing operational efficiencies and explore new, sustainable practices (i.e. ambidextrous firms) are posited to be more effective at translating external pressures into substantive and strategic eco-innovation, moving beyond mere symbolic compliance.
This paper makes a distinct contribution by integrating Institutional Theory and the Dynamic Capabilities View to offer a more holistic explanation of eco-innovation adoption in an under-researched context. It moves beyond a direct-effects model by theorizing the crucial boundary condition of organizational ambidexterity. For practitioners, it underscores the importance of developing internal dynamic capabilities to navigate the complex landscape of external sustainability pressures effectively.
