Abstract
Purpose
This article develops a conceptual framework explaining how organizational culture influences green innovation and, consequently, sustainable firm performance in developing-economy contexts. It addresses the limited theoretical understanding of how firms operating under institutional uncertainty can leverage culture to support sustainability-oriented innovation and performance.
Design/methodology/approach
The article integrates the resource-based view (RBV), dynamic capabilities theory and institutional theory to develop an integrated conceptual framework. Rather than treating organizational culture generically as a valuable, rare, inimitable and nonsubstitutable resource, the framework specifies the conditions under which culture's inherent ambiguity may satisfy the inimitability and nonsubstitutability criteria. It conceptualizes learning orientation, environmental values and collaborative norms as culture-based antecedents of green innovation. Institutional pressures and absorptive capacity are theorized as boundary conditions influencing the translation of cultural capabilities into green innovation. Sustainable firm performance is conceptualized as a multidimensional construct comprising economic, environmental, social and resilience outcomes, with resilience treated explicitly as an outcome with potential feedback effects rather than as an interchangeable antecedent.
Findings
The framework proposes that organizational culture can function as a strategic and adaptive capability through which firms respond to institutional pressures, overcome institutional voids and pursue green innovation. It further theorizes that institutional environments may either create conditions in which organizational culture substitutes for weak formal institutions or generate institutional layering and strategic tensions that constrain sustainability-oriented innovation. Green innovation is therefore positioned as a key mechanism through which culture contributes to sustainable firm performance, while institutional pressures and absorptive capacity shape the strength of these relationships. The framework also reconciles the potential tension between hierarchical and family-centered cultural norms and the increasing transparency and accountability requirements associated with environmental, social and governance (ESG) reporting.
Research limitations/implications
As a conceptual study, the framework has not yet been empirically validated. The propositions provide a theoretically grounded foundation for future empirical research examining the interaction between organizational culture, green innovation, institutional conditions and sustainable performance in developing economies. The proposed mixed-methods design offers a pathway for testing and refining the conceptual model across different institutional contexts.
Practical implications
The framework provides managers with guidance on cultivating organizational cultures characterized by learning orientation, environmental commitment and collaboration to strengthen green innovation capabilities. It also offers policymakers insights into designing institutional mechanisms that encourage sustainable innovation and improve firms' long-term competitiveness within developing economies.
Social implications
The framework supports sustainable economic development by demonstrating how organizational culture can foster environmentally responsible innovation while improving organizational resilience and social performance. The study further contributes to the achievement of the United Nations Sustainable Development Goals (SDGs 8, 9, 12, 13 and 17) by promoting sustainable industrial development, responsible production, climate action and collaborative partnerships.
Originality/value
The article contributes to sustainability and strategic management literature by contextualizing established Western sustainability perspectives within the socio-institutional realities of developing economies. It advances a theoretically integrated explanation of the culture–green innovation–sustainable performance nexus while clarifying the boundary conditions under which organizational culture can constitute a strategically valuable, difficult-to-imitate and nonsubstitutable organizational resource. The framework also extends sustainable performance research by explicitly incorporating resilience as an outcome with feedback properties. Practical implications are offered for managers seeking to cultivate sustainability-oriented cultures and for policymakers designing institutional mechanisms that facilitate green innovation. The framework is explicitly aligned with the United Nations Sustainable Development Goals (SDGs 8, 9, 12, 13 and 17). A mixed-methods research agenda is proposed in which qualitative case evidence informs the subsequent development of a cross-sectional survey with an embedded longitudinal subsample, thereby providing a pathway for empirical validation of the framework.