Sustainability and Innovation Interlink; The Evidence from Varied Perspectives

Sustainable development has attracted increasing attention of both researchers and practitioners. While the attention of recent sustainability studies has shifted to innovation, there is a need to understand how sustainability and innovation are interlinked when comes to operations management. Thus, the purpose of this paper is threefold: First, to show the relationship between firms' sustainability propensity and innovation propensity. Secondly, to show how putting effort on sustainability practices' adoption affects firms' effort on coordination mechanisms needed for new product development, and finally to show the relationship between firms' performances of innovation and sustainability. Evidence is drawn from a sample of 931 manufacturing plants in 24 countries from the sixth edition of the International Manufacturing Strategy Survey 2013 (IMSS). It was conducted using a self-administered questionnaire completed. Structural equation modelling approach has been employed to test the model. The results show that sustainability and innovation correlates positively and significantly on performance level and the on the effort firms put for implementing relevant practices, while sustainability propensity acts as an antecedent of innovation propensity. The study implies that enhanced sustainable development does not just require innovation, but acts as an antecedent agent of change in organizations leading businesses to be more innovative.