Green transformational leadership as a foundationfor implementing green strategic orientations andthe development of green innovation and green performance

Abstract

Objective: The objective of the article is to examine the influence of green transformational leadership on green entrepreneurial and green market orientations, which, in turn, affect green innovation. Moreover, the article analyses the relationship between green innovation and green performance.

Research Design & Methods: We used a quantitative research design. We applied a 37-item survey to a sample of 398 small, medium, and large companies in the industrial and service sectors of Mexico. We analysed the results using the partial least squares structural equation modelling approach.

Findings: Green transformational leadership has a strong influence on green entrepreneurial and green market orientation. Besides, only green entrepreneurial orientation positively influences green innovation. Finally, there is a relationship between green innovation and green performance.

Implications & Recommendations: Theoretical implications support most of the arguments put forth in various studies. However, the context can modify the behaviour of the studied relationships. The results provide arguments for adopting a sustainable view of activities within organisations, leading to improved performance and the achievement of competitive advantages.

Contribution & Value Added: The main contribution of this article is that it demonstrates the importance of green transformational leadership as an element that allows the development of green entrepreneurial orientation and green market orientation, which stimulate green innovation. Likewise, the context does influence the behaviour of the observed variables.

Keywords

Green transformational leadership, strategic orientations, green innovation, performance, companies

Author Biography

Juan Benito Vela-Reyna

PhD in Administrative Sciences (2019); Titular Professor at the Faculty of Administrative Sciences, Autonomous University of Baja California (Mexico). His research interests include international business and marketing.

Felipe Hernández-Perlines

PhD in Economics and Business; Titular Professor at the Department of Business Administration, Faculty of Legal and Social Sciences, University of Castilla La Mancha (Spain). His research interests include family business and agri-food cooperatives.

References

1. Aftab, J., Abid, N., Sarwar, H., & Veneziani, M. (2022). Environmental ethics, green innovation, and sustaina-ble performance: Exploring the role of environmental leadership and environmental strategy. Journal of Cleaner Production, 378, 134639. https://doi.org/10.1016/j.jclepro.2022.134639
2. Albort-Morant, G., Leal-Rodríguez, A.L., & De Marchi, V. (2018). Absorptive capacity and relationship learn-ing mechanisms as complementary drivers of green innovation performance. Journal of Knowledge Man-agement, 22(2), 432-452. https://doi.org/10.1108/JKM-07-2017-0310
3. AlNuaimi, B.K., Singh, S.K., & Harney, B. (2021). Unpacking the role of innovation capability: Exploring the impact of leadership style on green procurement via a natural resource-based perspective. Journal of Business Research, 134, 78-88. https://doi.org/10.1016/j.jbusres.2021.05.026
4. Alwakid, W., Aparicio, S., & Urbano, D. (2020). Cultural Antecedents of Green Entrepreneurship in Saudi Arabia: An Institutional Approach. Sustainability, 12(9), 3673. http://doi.org/10.3390/su12093673
5. Asadi, S., Pourhashemi, S.O., Nilashi, M., Abdullah, R., Samad, S., Yadegaridehkordi, E., Aljojo, N., & Razali, N.S. (2020). Investigating influence of green innovation on sustainability performance: A case on the Malaysian hotel industry. Journal of Cleaner Production, 258, 120860, https://doi.org/10.1016/j.jclepro.2020.120860
6. Begum, S., Ashfaq, M., Xia, E., & Awan, U. (2022). Does green transformational leadership lead to green innovation? The role of green thinking and creative process engagement. Business Strategy and the Envi-ronment, 31(1), 580-597. https://doi.org/10.1002/bse.2911
7. Borah, P.S., Dogbe, C.S.K., Pomegbe, W.W.K., Bamfo, B.A., & Hornuvo, L.K. (2023). Green market orientation, green innovation capability, green knowledge acquisition and green brand positioning as determinants of new product success. European Journal of Innovation Management, 26(2), 364-385. https://doi.org/10.1108/ejim-09-2020-0345
8. Carmines, E.G., & Zeller, R.A. (1979). Reliability and Validity Assessment. Sage Publications, Beverly Hills. 17.
9. Cernas, D.A., Salgado, P.M., & León, F. (2017). La varianza del método común en la relación entre la satisfac-ción laboral y la satisfacción con la vida. Estudios Gerenciales, 33(145), 321-329. https://doi.org/10.1016/j.estger.2017.11.004
10. Chahal, H., Dangwal, R., & Raina, S. (2014). Conceptualisation, development and validation of green market-ing orientation (GMO) of SMEs in India. Journal of Global Responsibility, 5(2), 312-337. https://doi.org/10.1108/jgr-02-2014-0005
11. Chen, Y.S., & Chang, C.H. (2013). The Determinants of Green Product Development Performance: Green Dynamic Capabilities, Green Transformational Leadership, and Green Creativity. Journal of Business Eth-ics, 116(1), 107-119. https://doi.org/10.1007/s10551-012-1452-x
12. Chen, Y.S., Chang, C.H., & Lin, Y.H. (2014). Green Transformational Leadership and Green Performance: The Mediation Effects of Green Mindfulness and Green Self-Efficacy. Sustainability, 6(10), 6604-6621. https://doi.org/10.3390/su610660
13. Chin, W.W. (1998). The partial least squares approach to structural equation modelling. Modern Methods for Business Research, 295(2), 295-336.
14. Cillo, V., Petruzzelli, A.M., Ardito, L., & Del Giudice, M. (2019). Understanding sustainable innovation: A systematic literature review. Corporate Social Responsibility and Environmental Management, 26, 1012-1025. https://doi.org/10.1002/csr.1783
15. Cohen, J. (1988). Statistical Power Analysis for the Behavioral Sciences. Lawrence Erlbaum, Mahwah, NJ.
16. Criado-Gomis, A., Cervera-Taulet, A., & Iniesta-Bonillo, M.A. (2017). Sustainable Entrepreneurial Orienta-tion: A Business Strategic Approach for Sustainable Development. Sustainability, 9(9), 1667. https://doi.org/10.3390/su9091667
17. Dechant, K., & Altman, B. (1994). Environmental leadership: From compliance to competitive advantage. Academy of Management Executive, 8(3), 7-20. https://doi.org/10.5465/ame.1994.9503101163
18. Dhaouadi, K. (2021). Transformational Leadership and Entrepreneurial Orientation: Does Gender Make Dif-ference in The Tunisian SMEs?. African Journal of Business and Economic Research, 16(4), 26. Retrieved from https://hdl.handle.net/10520/ejc-aa_ajber_v16_n4_a13 on October 15, 2023.
19. Dijkstra, T.K., & Henseler, J. (2015). Consistent partial least squares path modelling. MIS. Quarterly, 39(2), 297-316. https://doi.org/10.25300/MISQ/2015/39.2.02
20. Engelen, A., Gupta, V., Strenger, L., & Brettel, M. (2015). Entrepreneurial Orientation, Firm Performance, and the Moderating Role of Transformational Leadership Behaviors. Journal of Management, 41(4), 1069-1097. https://doi.org/10.1177/0149206312455244
21. Fornell, C., & Larcker, D.F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50. https://doi.org/10.1177/002224378101800104
22. Gali, N., Niemand, T., Shaw, E., Hughes, M., Kraus, S., & Brem, A. (2020). Social entrepreneurship orientation and company success: The mediating role of social performance. Technological Forecasting and Social Change, 160, 120230. https://doi.org/10.1016/j.techfore.2020.120230
23. Guo, Y., Wang, L., & Chen, Y. (2020). Green Entrepreneurial Orientation and Green Innovation: The Mediat-ing Effect of Supply Chain Learning. SAGE Open, 10(1). https://doi.org/10.1177/2158244019898798
24. Hair, J., Hult, G., Ringle, M., & Sarstedt, M. (2011). PLS-SEM: indeed, a silver bullet. Journal of Marketing The-ory and Practice, 2(19), 139-151. https://doi.org/10.2753/MTP1069-6679190202
25. Hair, J., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. (2014). Partial least squares structural equation model-ling (PLS-SEM): an emerging tool in business research. European Business Review, 26(2), 106-121. https://doi.org/10.1108/EBR-10-2013-0128
26. Hanif, S., Ahmed, A., & Younas, N. (2023). Examining the impact of Environmental Management Accounting practices and Green Transformational Leadership on Corporate Environmental Performance: The medi-ating role of Green Process Innovation. Journal of Cleaner Production, 414 August, 137584. https://doi.org/10.1016/j.jclepro.2023.137584
27. Harris, L.O., & Ogbonna, E. (2001). Leadership style and market orientation: an empirical study. European Journal of Marketing, 35(5/6), 744-764. https://doi.org/10.1108/03090560110388196
28. Henseler, J., Ringle, C.M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in vari-ance-based structural equation modelling. Journal of the Academy of Marketing Science, 43(1), 115-135. https://doi.org/10.1007/s11747-014-0403-8
29. Hernández-Perlines, F., & Rung-Hoch, N. (2017). Sustainable Entrepreneurial Orientation in Family Firms. Sustainability, 9(7), 1212. https://doi.org/10.3390/su9071212
30. Ho, C.Y., Tsai, B.H., Chen, C.S., & Lu, M.T. (2021). Exploring Green Marketing Orientations toward Sustainability the Hospitality Industry in the COVID-19 Pandemic. Sustainability, 13(8), 4348. https://doi.org/10.3390/su13084348
31. Hur, W.M., Kim, Y., & Park, K. (2013). Assessing the effects of perceived value and satisfaction on customer loyalty: a ‘Green’ perspective. Corporate Social Responsibility and Environmental Management, 20(3), 146-156. https://doi.org/10.1002/csr.1280
32. Jiang, W., Chai, H., Shao, J., & Feng, T. (2018). Green entrepreneurial orientation for enhancing firm performance: A dynamic capability perspective. Journal of Cleaner Production, 198, 1311-1323. https://doi.org/10.1016/j.jclepro.2018.07.104
33. Le, P.B., & Lei, H. (2019). Determinants of innovation capability: The roles of transformational leadership, knowledge sharing, and perceived organizational support. Journal of Knowledge Management, 23(3), 527-547. https://doi.org/10.1108/JKM-09-2018-0568
34. Leal-Rodríguez, A.L., Ariza-Montes, A.J., Morales-Fernández, E., & Albort-Morant, G. (2018). Green innova-tion, indeed a cornerstone in linking market requests and business performance. Evidence from the Spanish automotive components industry. Technological Forecasting and Social Change, 129, 185-193. https://doi.org/10.1016/j.techfore.2017.07.021
35. Leite, C., & Rua, O. (2022). Linking Transformational Leadership and Firm Performance: The Role of Entre-preneurial Orientation. Open Journal of Business and Management, 10, 1900-1922. https://doi.org/10.4236/ojbm.2022.104098
36. Li, W., Bhutto, T.A., Xuhui, W., Maitlo, Q., Zafar, A.U., & Ahmed Bhutto, N. (2020). Unlocking employees’ green creativity: The effects of green transformational leadership, green intrinsic, and extrinsic motiva-tion. Journal of Cleaner Production, 255, 120229. https://doi.org/10.1016/j.jclepro.2020.120229
37. Li, Y., Wei, Z., & Liu, Y. (2010). Strategic orientations, knowledge acquisition, and firm performance: The perspective of the vendor in cross-border outsourcing. Journal of Management Studies, 47(8), 1457-1482. https://doi.org/10.1111/j.1467-6486.2010.00949.x
38. Lin, R.J., Chen, R.H., & Huang, F.H. (2014). Green innovation in the automobile industry. Industrial Manage-ment & Data Systems, 114, 886-903. https://doi.org/10.1108/IMDS-11-2013-0482
39. Lin, Y.-H., Kulangara, N., Foster, K., & Shang, J. (2020). Improving Green Market Orientation, Green Supply Chain Relationship Quality, and Green Absorptive Capacity to Enhance Green Competitive Advantage in the Green Supply Chain. Sustainability, 12(18), 7251. https://doi.org/10.3390/su12187251
40. Mahdi, G.A., Sakhdari, K., & Alirezaei, A. (2021). A review of the literature on entrepreneurship and the environment: opportunities for researching on the green entrepreneurial orientation. Environmental Engineering and Management Journal, 20(5), 819-839. https://doi.org/10.30638/eemj.2021.077
41. Makhloufi, L., Laghouag, A.A., Meirun, T., & Belaid, F. (2022). Impact of green entrepreneurship orientation on environmental performance: The natural resource‐based view and environmental policy perspective. Business Strategy and the Environment, 31(1), 425-444. https://doi.org/10.1002/bse.2902
42. Menguc, B., & Auh, S. (2008). Conflict, leadership, and market orientation. International Journal of Research in Marketing, 25(1), 34-45. https://doi.org/10.1016/j.ijresmar.2007.08.001
43. Menguc, B., Auh, S., & Shih, E. (2007). Transformational leadership and market orientation: Implications for the implementation of competitive strategies and business unit performance. Journal of Business Re-search, 60(4), 314-321. https://doi.org/10.1016/j.jbusres.2006.12.008
44. Mittal, S., & Dhar, R.L. (2016). Effect of green transformational leadership on green creativity: A study of tourist hotels. Tourism Management, 57, 118-127. https://doi.org/10.1016/j.tourman.2016.05.007
45. Muangmee, C., Dacko-Pikiewicz, Z., Meekaewkunchorn, N., Kassakorn, N., & Khalid, B. (2021). Green entre-preneurial orientation and green innovation in small and medium-sized enterprises (SMEs). Social Sci-ences, 10(4), 136. https://doi.org/10.3390/socsci10040136
46. Narver, J.C., & Slater, S.F. (1990). The effect of a market orientation on business profitability. The Journal of Marketing, 54(4), 20-35. https://doi.org/10.1177/002224299005400403
47. National Institute of Statistics, Geography and Informatics. (2023a). Producto interno bruto por actividad económica. Retrieved from https://www.inegi.org.mx/temas/pib/ on November 15, 2023.
48. National Institute of Statistics, Geography and Informatics. (2023b). DENUE establishments directory. Re-trieved from https://en.www.inegi.org.mx/app/mapa/denue/default.aspx on March 12, 2023.
49. Nunnally, J.C., & Bernstein, I.J. (1995). Teoría Psicométrica. Editorial McGraw-Hill Latinoamericana, McGraw Hill, Mexico, D.F.
50. Nurjanah, S., Pebianti, V., & Handaru, A.W. (2020). The influence of transformational leadership, job satis-faction, and organizational commitments on Organizational Citizenship Behavior (OCB) in the Inspec-torate General of the Ministry of Education and Culture. Cogent Business & Management, 7(1), 1-12. https://doi.org/10.1080/23311975.2020.1793521
51. Nuryakin, N., & Maryati, T. (2022). Do green innovation and green competitive advantage mediate the effect of green marketing orientation on SMEs’ green marketing performance?. Cogent Business & Manage-ment, 9(1), https://doi.org/10.1080/23311975.2022.2065948
52. Obeidat, B.Y., Razan, N., & Ra’ed, M. (2018). The Effect of Transformational Leadership on Entrepreneurial Orientation: The Mediating Role of Organizational Learning Capability. Modern Applied Science, 12(11), 1-18. Retrieved from https://ssrn.com/abstract=3300274 on August 21, 2023.
53. Oc, B. (2018). Contextual leadership: A systematic review of how contextual factors shape leadership and its outcomes. The Leadership Quarterly, 29(1), 218-235. https://doi.org/10.1016/j.leaqua.2017.12.004
54. Papadas, K.K., Avlonitis, G.J., & Carrigan, M. (2017). Green marketing orientation: Conceptualization, scale development, and validation. Journal of Business Research, 80, 236-246. https://doi.org/10.1016/j.jbusres.2017.05.024
55. Papadas, K.K., Avlonitis, G.J., Carrigan, M., & Piha, L. (2019). The interplay of strategic and internal green marketing orientation on competitive advantage. Journal of Business Research, 104, 632-643. https://doi.org/10.1016/j.jbusres.2018.07.009
56. Peng, X., & Liu, Y. (2016). Behind eco-innovation: Managerial environmental awareness and external re-source acquisition. Journal of Cleaner Production, 139, 347-360. https://doi.org/10.1016/j.jclepro.2016.08.051
57. Peris, S.F., Supian, K., Hasanat, M.W., & Hossain, N. (2020). A Mediating Effect of Green Market Orientation on the Environmental Performance: From a Literature Review to a Conceptual Framework. Journal of Management Info, 7(2), 92-118. https://doi.org/10.31580/jmi.v7i2.1421
58. Podsakoff, N.P., MacKenzie, S., Lee, J.Y., & Podsakoff, N.P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879-903. https://doi.org/10.1037/0021-9010.88.5.879
59. Pomegbe, W.W.K., Dogbe, C.S.K., Bamfo, B.A., Borah, P.S., & Novixoxo, J.D. (2022). Social risk, green market orientation, entrepreneurial orientation, and new product performance among European Multinational Enterprises operating in developing economies. Business and Society Review, 127(4), 891-914. https://doi.org/10.1111/basr.12292
60. Roy, M., & Khastagir, D. (2016). Exploring the role of green management in enhancing organiza-tional efficiency in petrochemical industry in India. Journal of Clean Production, 121(1), 109-115. https://doi.org/10.1016/j.jclepro.2016.02.039
61. Rua, O., & Rodrigues, S. (2017). Empowerment e orientacao empreendedora: Fundamentacao teórica. Dos Algarves: A Multidisciplinary e-Journal, 31, 70-80. https://doi.org/10.18089/DAMeJ.2017.31.5
62. Shehzad, M.U., Zhang, J., Latif, K.F., Jamil, K., & Waseel, A.H. (2023). Do green entrepreneurial orientation and green knowledge management matter in the pursuit of ambidextrous green innovation: A moder-ated mediation model. Journal of Cleaner Production, 388, 135971. https://doi.org/10.1016/j.jclepro.2023.135971
63. Singh, S.K., Del Giudice, M., Chierici, R., & Graziano, D. (2020). Green innovation and environmental perfor-mance: The role of green transformational leadership and green human resource management. Techno-logical Forecasting and Social Change, 150, 119762. https://doi.org/10.1016/j.techfore.2019.119762
64. Sung, C., & Park, J. (2018). Sustainability Orientation and Entrepreneurship Orientation: Is There a Tradeoff Relationship between Them?. Sustainability, 10(2), 379. https://doi.org/10.3390/su10020379
65. Teece, D.J. (2016). Dynamic capabilities and entrepreneurial management in large organizations: toward a theory of the (entrepreneurial) firm. European Economic Review, 86, 202-216. https://doi.org/10.1016/j.euroecorev.2015.11.006
66. Tian, H., Siddik, A.B., Pertheban, T.R., & Rahman, M.N. (2023). Does fintech innovation and green transfor-mational leadership improve green innovation and corporate environmental performance? A hybrid SEM-ANN approach. Journal of Innovation & Knowledge, 8(3), 100396. https://doi.org/10.1016/j.jik.2023.100396
67. Tjahjadi, B., Soewarno, N., Hariyati, H., Nafidah, L.N., Kustiningsih, N., & Nadyaningrum, V. (2020). The Role of Green Innovation between Green Market Orientation and Business Performance: its Implication for Open Innovation. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 173. https://doi.org/10.3390/joitmc6040173
68. Vilkaite-Vaitone, N., & Skackauskiene, I. (2019). Green marketing orientation: evolution, conceptualization, and potential benefits. Open Economics, 2(1), 53-62. https://doi.org/10.1515/openec-2019-0006
69. Wang, C.H. (2020). An environmental perspective extends market orientation: Green innovation sustainabil-ity. Business Strategy and the Environment, 29(8), 3123-3134. https://doi.org/10.1002/bse.2561
70. Wang, G., Feng, T., Zhu, Z., & Jiang, Y. (2023). Enabling green supply chain integration via green entrepre-neurial orientation: Does environmental leadership matter?. Corporate Social Responsibility and Envi-ronmental Management, 30(2), 518-530. https://doi.org/10.1002/csr.2371
71. Widiana, M.E. (2017). Transformational Leadership Effect on the Marketing Performance through Market Orientation. Advances in Social Sciences Research Journal, 4(9), 118-132. https://doi.org/10.14738/assrj.49.3150
72. Yadegaridehkordi, E., Foroughi, B., Iranmanesh, M., Nilashi, M., & Ghobakhloo, M. (2023). Determinants of environmental, financial, and social sustainable performance of manufacturing SMEs in Malaysia. Sus-tainable Production and Consumption, 35, 129-140. https://doi.org/10.1016/j.spc.2022.10.026
73. Yamin, M. (2020). Examining the role of transformational leadership and entrepreneurial orientation on employee retention with moderating role of competitive advantage. Management Science Letters, 10(2), 313-326. https://doi.org/10.5267/j.msl.2019.8.039
74. Ye, F., Yang, Y., Xia, H., Shao, Y., Gu, X., & Shen, J. (2022). Green entrepreneurial orientation, boundary-spanning search, and enterprise sustainable performance: The moderating role of environmental dy-namism. Frontiers in Psychology, 13(1), 1-17. https://doi.org/10.3389/fpsyg.2022.978274
75. Zameer, H., Wang, Y., & Yasmeen, H. (2020). Reinforcing green competitive advantage through green pro-duction, creativity, and green brand image: implications for cleaner production in China. Journal of Cleaner Production, 247, 119119. https://doi.org/10.1016/j.jclepro.2019.119119
76. Zhai, Y.M., Sun, W.Q., Tsai, S.B., Wang, Z., Zhao, Y., & Chen, Q. (2018). An empirical study on entrepreneurial orientation, absorptive capacity, and SMEs’ innovation performance: A sustainable perspective. Sus-tainability, 10(2), 31. https://doi.org/10.3390/su10020314
77. Zhan, Y., Tan, K.H., Ji, G., Chung, L., & Chiu, A.S.F. (2018). Green and lean sustainable development path in China: Guanxi, practices and performance. Resources, Conservation and Recycling, 128(1), 240-249. https://doi.org/10.1016/j.resconrec.2016.02.006