Pertinent literature
Studya
| Context | Unit of analysis | Time frame | Eco-friendly product development variables examined | Performance variables examined | Relevant empirical findings |
---|---|---|---|---|---|---|
Pujari et al. (2003) | 151 U.K. manufacturers | Project | Cross-sectional |
Environmental new product development (ENPD) (e.g., effective groundwork, product experiment, environmental database for LCE, and benchmarking) |
ENPD project market performance (i.e., created new markets, new international markets, competitive advantage, good return on investment) | Environmental database for LCA, benchmarking and effective groundwork positively related to market performance but not related to product experiment |
Sroufe (2003) | 1118 U.S. manufacturers | Plant | Cross-sectional |
Environmental design practices (e.g., reduce, substitution, process redesign, product redesign, disassembly, recycling) |
Operational performance (e.g., improved quality, lead time, position in marketplace, and product design/development) | Environmental design practices positively related to operational performance |
González-Benito and González-Benito (2005) | 186 Spanish industrial firms | Corporate | Cross-sectional |
Environmental product design (e.g., design for disassembly, reusability, recyclability) and environmental internal production processes (i.e., process design reducing energy and natural resources consumption) |
Operational performance (e.g., operational costs, time needed for designing/manufacturing products, pace of new product launching, and increase in product range, product quality, production flexibility) | Environmental internal production processes negatively related to operational performance, while environmental product design has no effect |
Chen et al. (2006) | 203 Taiwanese information and electronics firms | Corporate | Cross-sectional |
Performance of green product innovation (e.g., choosing materials producing least pollution in product development, choosing materials consuming least amount of energy and resources in product design) |
Corporate competitive advantage (i.e., low cost, R&D and innovation, manufacturing capability, profitability, growth, first mover, corporate image) | Performance of green product innovation positively affect competitive advantage |
Pujari (2006) | 68 North American producers | Project | Cross-sectional |
Green products (i.e., green market focus, supplier involvement) |
ENPD project performance (i.e., new country markets, market share, ROI, competitive advantage, environmental image, product differentiation, new international markets) | Green market focus and green supplier involvement positively affect ENPD performance |
Montabon et al. (2007) | 45 U.S. and international corporate environmental reports | Corporate | Cross-sectional |
Environmental management practices (EMPs) (i.e., environmental design) |
Performance (i.e., process innovation, product innovation, ROI, and sales growth) | Environmental design positively associated with product innovation, process innovation, and sales growth, but negatively associated with ROI |
Zhu et al. (2007) | 89 Chinese automotive supply chain enterprises | Corporate | Cross-sectional |
Eco-design (i.e., design of products for reduced consumption of material/energy, reuse/recycle/recovery of material/component parts, and reduced use of hazardous products and/or their manufacturing) |
Operational performance (i.e., increase in goods delivered on time, reduction of inventories, increasing scrap rate, enhanced product quality, widened product line, and improved capacity utilization) | Eco-design has no significant effect on operational performance |
Fraj-Andrés et al. (2009) | 361 Spanish industrial firms | Corporate | Cross-sectional |
Strategic environmental marketing (i.e., product design, packaging, material choice in product manufacturing) |
Costs performance (i.e., production costs, cost efficiency) and process performance (i.e., product quality, innovation capacity in new product development, pace of new product launching, and product range) | Strategic environmental marketing positively influences costs and process performance |
Chang (2011) | 106 Taiwanese manufacturers | Corporate | Cross-sectional |
Green product innovation (i.e., choosing materials producing the least amount, using the fewest amount of materials, and circumspectly deliberating the recycle, reuse, and decompose product features in product development/design) |
Competitive advantage (i.e., quality of products and services, R&D capability, managerial capability, profitability, corporate image) | Green product innovation positively influences competitive advantage |
Zhu et al. (2012) | 396 Chinese manufacturers | Corporate | Cross-sectional |
Eco-design (i.e., design of products for reduced material/energy consumption, reuse, recycle, recovery of materials and component parts, reduced use of hazardous products and/or manufacturing, and waste minimization processes) |
Operational performance (i.e., increased product line, improved capacity utilisation, product quality improvement, scrap reduction, and inventory reduction) | Positive link between eco-design and operational performance |
Chen and Chang (2013) | 254 Taiwanese electronics firms | Project | Cross-sectional |
Green dynamic capability (e.g., effective routines to identify and develop new green knowledge, ability to develop green technology, ability to successfully integrate and manage specialized knowledge, ability to successfully allocate resources to develop green innovation) |
Green product development performance (i.e., contributing revenues to the company, developing excellent green products, improving product development processes, being more innovative in green product development than competitors, meeting environmental goals in green product development) | Green dynamic capability positively affects green product development performance |
Dangelico et al. (2013) | 102 Italian manufacturers | Corporate/ Program | Cross-sectional |
Integration of environmental issues in NPD (i.e., green manufacturing and green product design) |
Creation of new opportunities (i.e., opening new markets, entering new product arenas, and introducing new technologies) and financial performance (i.e., NPD program success relative to overall objectives and relative to profit goals, and profitability of NPD program profitability relative to competitors) | Green manufacturing and green product design have no significant effects on new opportunity creation and financial performance |
Galeazzo et al. (2014) | 19 interviews in two Italian firms | Project | Cross-sectional |
Green practices (i.e., “a set of techniques that limit or reduce the possible negative impacts of the production and consumption of products and services on the natural environment, thus improving a firm’s environmental footprint” (p.2)) |
Operational performance
| Green practices lead to improved operational performance |
Mitra and Datta (2014) | 81 Indian industrial firms | Corporate | Cross-sectional |
Environmentally sustainable product design and logistics (i.e., designing products with biodegradable materials, using alternative transport mechanisms, and achieving economies of scale in transportation) |
Competitiveness (i.e., improvement in product and process quality, efficiency and productivity, innovation in product and process design, and patenting of products and processes) | Environmentally sustainable product design and logistics positively associated with competitiveness |
Hartmann and Germain (2015) | 875 Russian manufacturers | Corporate | Cross-sectional |
Ecological product design (i.e., redesign of products/services for resource requirement reduction, environmental impact of components, and impact on health and safety) |
Manufacturing performance (i.e., product quality levels, work-in-progress inventory levels, finished goods inventory levels, product availability, and on-time delivery to customers) | Ecological product design relates positively to manufacturing performance |
Theoretical framework and hypotheses
Top management commitment
Corporate environmental support policies
Environmental performance incentives
Eco-friendly product development strategy and product development effectiveness
The contingent role of the business environment
Research methodology
Research context
Field interviews
Measures
Constructs, scale items, and statistics | St. Loadings a
|
---|---|
TMC1 – The top management team in our organization is committed to environmental preservation. | 0.86 c
|
TMC2 – Our top management team provides full support to our organization’s environmental efforts. | 0.88 (16.14) |
TMC3 – The top management team in our organization drives through its commitment the organization’s environmental efforts. | 0.93 (17.98) |
TMC4 – The top management team in our organization is highly interested in catering for the needs of customers who are environmentally conscious. | 0.75 (12.38) |
TMC5 – The top management team in our organization is geared toward providing environmentally friendly products. | 0.81 (13.90) |
CESP1 – We have a specialized person or department responsible for coordinating environment-related issues. | 0.79 c
|
CESP2 – We pay particular attention to environmental matters when we communicate things to people inside and outside the organization. | 0.83 (12.35) |
CESP3 – We provide specialized environmental training and education programs to employees. | 0.87 (13.04) |
CESP4 – We have a formalized environmental caretaking system. | 0.82 (12.23) |
CESP5 – We highly appreciate the importance of environmental issues in managerial decision-making. | 0.86 (12.94) |
EPI1 – Formal rewards (e.g., pay rises, promotions) are forthcoming to anyone who consistently develops ideas to improve our organization’s environmental performance. | 0.72 c
|
EPI2 – In our organization, an individual’s environmental performance has a definite effect on his/her performance appraisal. | 0.82 (10.51) |
EPI3 – Our organization’s environmental safety record influences manager and front line supervisor performance evaluations. | 0.77 (9.83) |
EPI4 – No matter which department they are in, people in our organization get recognized for being sensitive to environmental concerns. | 0.87 (10.96) |
EPDS1 – We are careful when choosing the contents, ingredients, and raw materials of our products in order to be environmentally friendly. | 0.87 c
|
EPDS2 – We are geared to designing and developing products that are friendly to the environment. | 0.84 (13.72) |
EPDS3 – We have significantly increased the recycling content of our packaging over the past years. | 0.71 (10.78) |
EPDS4 – We use lifecycle analysis to assess the environmental impact of our products. | 0.81 (12.28) |
EPDS5 – We tend to modify our packaging and labeling decisions to emphasize any environmental benefits. | 0.73 (11.18) |
EPDS6 – We eliminate products from our product line if these are not environmentally friendly. (D) | – |
PDE1 – Rate of new individual product introductions in the market. | 0.89 c
|
PDE2 – Rate of launching new diversified products. | 0.88 (17.47) |
PDE3 – New individual products’ success rate. | 0.85 (16.25) |
PDE4 – Rate of individual product development extension. | 0.93 (19.83) |
PDE5 – Rate of individual product quality improvement. | 0.84 (15.77) |
MUN – Munificence
b (Adapted from Achrol and Etzel 2003) | |
MUN1 – The market is characterized by a high rate of economic growth. | 0.72 c
|
MUN2 – There is an excellent potential of business in general in the market in which our organization operates. | 0.84 (9.24) |
MUN3 – The general consumer demand conditions faced by our organization in the market are favorable. | 0.76 (8.97) |
DYN – Dynamism
b (Adapted from Sarin and Mahajan 2001) | |
DYN1 – In our kind of business, marketing strategies change very frequently. | 0.80 c
|
DYN2 – In our kind of business, product standards change very frequently. | 0.85 (12.70) |
DYN3 – In our kind of business, customer preferences in product features change very frequently. | 0.85 (12.62) |
DYN4 – In our kind of business, technology employed changes very frequently. | 0.76 (11.06) |
COM1 – The environment in which our organization operates is ambiguous. | 0.73 c
|
COM2 – The environment in which our organization operates is easy. (R) | 0.70 (8.24) |
COM3 – The environment in which our organization operates is complicated. | 0.84 (8.60) |
ERP1 – Regulation by government agencies has greatly influenced our organization’s concern for environmental issues. | 0.91 c
|
ERP2 – Environmental legislation can affect the continuing growth of our organization. (D) | - |
ERP3 – Stricter environmental regulation is a major reason why our organization is concerned about its impact on the natural environment. | 0.70 (9.98) |
ERP4 – Our organization’s environmental efforts can help shape future environmental legislation in our industry. | 0.60 (8.38) |
ERP5 – Our industry is faced with strict environmental regulation. | 0.65 (9.09) |
ECOP1 – Competition centering on environmentally-friendly issues is growing in our industry. | 0.98 c
|
ECUP1 – Our customers feel that environmental protection is a critically important issue facing the world today. | 0.71 c
|
ECUP2 – Our customers are increasingly demanding environmentally friendly products and services. | 0.80 (9.28) |
ECUP3 – Our customers expect our organization to be ecologically friendly. | 0.76 (8.99) |
CFC1 – It is easy to talk to virtually anyone you need to in this organization, regardless of rank or position. | 0.75 c
|
CFC2 – There is plenty of opportunity for informal “hall talk” among individuals from different departments. | 0.68 (8.96) |
CFC3 – Employees from different departments feel comfortable about calling each other when the need arises. | 0.89 (11.45) |
CFC4 – Managers discourage employees from discussing work-related matters with those who are not their immediate superiors or subordinates. (R) (D) | – |
CFC5 – People in one department are quite accessible to those in other departments. | 0.80 (10.57) |
CFC6 – Junior managers in this department can easily schedule meetings with junior managers in other departments. (D) | – |
Fit statistics:
χ
2
(880) = 1432, p < 0.001; χ
2/df = 1.63; NFI = 0.90; NNFI = 0.95; CFI = 0.96; SRMR = 0.061; RMSEA = 0.059; AOASR = 0.049. |
Sample and data collection
Analysis and results
Measure validation procedure
Construct | 1. | 2. | 3. | 4. | 5. | 6. | 7. | 8. | 9. | 10. | 11. | 12. | 13. |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1. Top management commitment |
0.72 (0.87) | 0.31 | 0.30 | 0.34 | 0.16 | 0.06 | 0.04 | 0.00 | 0.15 | 0.12 | 0.24 | 0.07 | 0.01 |
2. Corporate environmental support policies | 0.56**
|
0.70 (0.86) | 0.25 | 0.19 | 0.05 | 0.01 | 0.01 | 0.00 | 0.10 | 0.01 | 0.06 | 0.03 | 0.02 |
3. Environmental performance incentives | 0.55**
| 0.50**
|
0.63 (0.81) | 0.19 | 0.07 | 0.04 | 0.09 | 0.01 | 0.12 | 0.04 | 0.10 | 0.04 | 0.00 |
4. Eco-friendly product development strategy | 0.58**
| 0.43**
| 0.43**
|
0.63 (0.84) | 0.17 | 0.02 | 0.03 | 0.00 | 0.06 | 0.12 | 0.19 | 0.08 | 0.03 |
5. Product development effectiveness | 0.40**
| 0.22**
| 0.27**
| 0.41**
|
0.78 (0.89) | 0.09 | 0.28 | 0.02 | 0.04 | 0.16 | 0.17 | 0.05 | 0.04 |
6. Munificence | 0.25**
| 0.12 | 0.19*
| 0.13 | 0.30**
|
0.60 (0.74) | 0.10 | 0.00 | 0.05 | 0.08 | 0.05 | 0.03 | 0.01 |
7. Dynamism | 0.20**
| 0.12 | 0.30**
| 0.18*
| 0.53**
| 0.32**
|
0.67 (0.83) | 0.05 | 0.04 | 0.14 | 0.12 | 0.00 | 0.01 |
8. Complexity | 0.01 | 0.06 | 0.07 | –0.01 | 0.13 | 0.06 | 0.23**
|
0.58 (0.73) | 0.01 | 0.01 | 0.01 | 0.01 | 0.00 |
9. Eco-friendly regulatory pressures | 0.39**
| 0.32**
| 0.34**
| 0.24**
| 0.19*
| 0.22**
| 0.21**
| 0.10 |
0.53 (0.75) | 0.10 | 0.17 | 0.04 | 0.00 |
10. Eco-friendly competitive pressures | 0.35**
| 0.12 | 0.19*
| 0.34**
| 0.40**
| 0.29**
| 0.37**
| 0.11 | 0.31**
| – | 0.24 | 0.01 | 0.04 |
11. Eco-friendly customer pressures | 0.49**
| 0.25**
| 0.32**
| 0.43**
| 0.41**
| 0.22**
| 0.35**
| 0.11 | 0.41**
| 0.49**
|
0.58 (0.73) | 0.01 | 0.02 |
12. Cross-functional coordination | 0.27**
| 0.18*
| 0.19*
| 0.29**
| 0.22**
| 0.18*
| 0.01 | 0.12 | 0.20**
| 0.09 | 0.12 |
0.61 (0.80) | 0.00 |
13. Firm size (log) | 0.07 | 0.13 | 0.05 | 0.17*
| 0.19*
| 0.11 | 0.12 | 0.03 | 0.00 | 0.20**
| 0.13 | –0.06 | – |
Mean | 4.94 | 4.51 | 3.16 | 4.93 | 4.46 | 4.32 | 3.48 | 4.89 | 5.20 | 4.39 | 4.88 | 5.87 | 5.65 |
Standard deviation | 1.20 | 1.64 | 1.34 | 1.20 | 1.38 | 1.22 | 1.44 | 1.27 | 1.16 | 1.50 | 1.15 | 0.93 | 1.45 |
Cronbach’s alpha (α) | 0.93 | 0.92 | 0.87 | 0.89 | 0.94 | 0.81 | 0.89 | 0.80 | 0.80 | – | 0.80 | 0.85 | – |
Tests of hypotheses
Model 1 | Model 2 | Model 3 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Eco-friendly product development strategy | Product development effectiveness | Eco-friendly product development strategy | Product development effectiveness | Eco-friendly product development strategy | Product development effectiveness | ||||||||
Independent variable | H | Coefficient (t-value) | Std. Err. | Coefficient (t-value) | Std. Err. | Coefficient (t-value) | Std. Err. | Coefficient (t-value) | Std. Err. | Coefficient (t-value) | Std. Err. | Coefficient (t-value) | Std. Err. |
Constant | −4.17 (−6.38)*** | 0.65 | 1.38 (1.85)* | 0.75 | −4.59 (−8.05)*** | 0.57 | 3.57 (5.36)*** | 0.66 | −4.57 (−8.01)*** | 0.57 | 3.72 (5.54)*** | 0.67 | |
Main effects | |||||||||||||
Top management commitment | H1 | 0.35 (4.38)*** | 0.08 | 0.35 (4.44)*** | 0.08 | ||||||||
Corporate environmental support policies | H2 | 0.13 (2.50)** | 0.05 | 0.13 (2.46)** | 0.05 | ||||||||
Environmental performance incentives | H3 | 0.04 (0.59) | 0.06 | 0.04 (0.63) | 0.06 | ||||||||
Eco-friendly product development strategy | H4 | 0.54 (7.82)*** | 0.07 | 0.55 (8.06)*** | 0.07 | ||||||||
Munificence | 0.07 (1.03) | 0.07 | 0.06 (0.94) | 0.07 | |||||||||
Dynamism | 0.41 (6.93)*** | 0.06 | 0.41 (6.81)*** | 0.06 | |||||||||
Complexity | −0.01 (−0.14) | 0.06 | −0.01 (−0.12) | 0.06 | |||||||||
Interaction effects | |||||||||||||
Eco-friendly prod. dev. strategy × Munificence | H5 | 0.10 (1.83)* | 0.05 | ||||||||||
Eco-friendly prod. dev. strategy × Dynamism | H6 | −0.02 (−0.39) | 0.05 | ||||||||||
Eco-friendly prod. dev. strategy × Complexity | H7 | −0.13 (−2.54)** | 0.04 | ||||||||||
Control links | |||||||||||||
Eco-friendly regulatory pressures | 0.03 (0.44) | 0.07 | 0.17 (2.62)*** | 0.06 | 0.17 (2.70)*** | 0.06 | |||||||
Eco-friendly competitive pressures | 0.08 (1.30) | 0.06 | 0.11 (2.10)** | 0.05 | 0.11 (2.16)** | 0.05 | |||||||
Eco-friendly customer pressures | 0.28 (3.54)*** | 0.08 | 0.19 (2.60)*** | 0.07 | 0.18 (2.53)** | 0.07 | |||||||
Cross-functional coordination | 0.34 (3.99)*** | 0.08 | 0.34 (3.24)*** | 0.11 | 0.21 (2.77)*** | 0.08 | 0.10 (1.14) | 0.09 | 0.21 (2.78)*** | 0.08 | 0.09 (0.92) | 0.09 | |
Firm size | 0.11 (2.02)** | 0.05 | 0.19 (2.84)*** | 0.07 | 0.07 (1.45) | 0.05 | 0.05 (0.88) | 0.06 | 0.07 (1.44) | 0.05 | 0.04 (0.72) | 0.06 | |
χ
2
| 53.24*** | 17.50*** | 149.07*** | 168.32*** | 149.52*** | 185.48*** | |||||||
R2
| 0.26 | 0.09 | 0.44 | 0.38 | 0.44 | 0.41 |