The nexus between environmental strategy and environmental performance: analyzing the roles of green product innovation and mechanistic/organic organizational structure

Abstract

The relationship between environmental strategy and environmental performance has been extensively analyzed in the environmental management literature. However, this relationship is spurious due to the inconsistence outcomes, lack of intervening mechanism, and scarcity of appropriate context. This study undertakes these considerations by exploring the underlying moderation-mediation mechanism through which proactive corporate environmental strategy affects corporate environmental performance. The hypotheses of the study were empirically tested on the data gathered from 147 ISO 14001:2015 certified firms in Pakistan. The data was statistically validated and then tested with Bootstrapping method using Preacher and Hayes Process Macros. The findings of the study revealed that a proactive corporate environmental strategy predicts corporate environmental performance through green product innovation. Moreover, the moderation hypothesis of the organizational structure variable in the nexus between proactive corporate environmental strategy and green product innovation was not supported in the full sample, whereas the split sample based on organizational size indicated moderation effects in the small firm’s sample. The findings of the study carry important implications for firms related to corporate environmental strategy and green product innovation strategy.