The Impact of Green Transformational Leadership on Sustainable Performance in Pakistan’s Manufacturing Sector: The Mediation Effect of Green Innovation
DOI:
https://doi.org/10.55737/qjss.597193536Keywords:
Green Transformational Leadership, Green Innovation, Environmental Performance, Financial Performance, Social PerformanceAbstract
As the concerns about the environment grow and the need to promote sustainable practices becomes more pressing, organizations are looking increasingly to green transformational leadership as a key component in guiding their operations toward ecological responsibility. The goal of this study is to analyze the impact of green transformational leadership on sustainable performance mediated by green innovation. This is a quantitative study and uses a deductive approach. The Pakistan Securities Exchange Commission-regulated elite manufacturing sector, which employs manufacturing workers, was the subject of the study. Convenience sampling, a non-probability technique, was used to gather data from Pakistan's industrial companies. 250 people made up the study's sample, and 238 questionnaires were returned within the allotted research period. The study reveals a significant relationship between green transformational leadership, green innovation, and environmental, financial, and social performance. The study found a strong correlation between changes in green transformational leadership, predictable changes in green innovation, and improved environmental, financial, and social performance. This research is noteworthy because it shows how leadership shapes organizational strategies and behaviors, especially those related to sustainability. Understanding how green transformational leadership affects sustainable performance is crucial for researchers and managers alike as sectors struggle with the urgent need to address environmental issues.
Downloads
References
Adegbile, A., Sarpong, D., & Meissner, D. (2017). Strategic foresight for innovation management: A review and research agenda. International Journal of Innovation and Technology Management, 14(04), 1750019. https://doi.org/10.1142/s0219877017500195
Afum, E., Issau, K., Agyabeng-Mensah, Y., Baah, C., Dacosta, E., Essandoh, E., & Agyenim Boateng, E. (2021). undefined. Journal of Engineering, Design and Technology, 21(1), 167-187. https://doi.org/10.1108/jedt-05-2021-0267
Aggarwal, R., & Dow, S. (2012). Corporate governance and business strategies for climate change and environmental mitigation. The European Journal of Finance, 18(3-4), 311-331. https://doi.org/10.1080/1351847x.2011.579745
Aguilera-Caracuel, J., & Ortiz-de-Mandojana, N. (2013). Green innovation and financial performance. Organization & Environment, 26(4), 365-385. https://doi.org/10.1177/1086026613507931
Ahmeda, U., Mozammelb, S., & Zamanc, F. (2020). Green HRM and green innovation: Can green transformational leadership moderate: Case of pharmaceutical firms in Australia. Systematic Review in Pharmacy, 11, 616-617. https://d1wqtxts1xzle7.cloudfront.net/97914938
Albort-Morant, G., Leal-Millán, A., & Cepeda-Carrión, G. (2016). The antecedents of green innovation performance: A model of learning and capabilities. Journal of Business Research, 69(11), 4912-4917. https://doi.org/10.1016/j.jbusres.2016.04.052
Albort-Morant, G., Leal-Rodríguez, A. L., & De Marchi, V. (2018). Absorptive capacity and relationship learning mechanisms as complementary drivers of green innovation performance. Journal of Knowledge Management, 22(2), 432-452. https://doi.org/10.1108/jkm-07-2017-0310
Ali, F., Ashfaq, M., Begum, S., & Ali, A. (2020). How “Green” thinking and altruism translate into purchasing intentions for electronics products: The intrinsic-extrinsic motivation mechanism. Sustainable Production and Consumption, 24, 281-291. https://doi.org/10.1016/j.spc.2020.07.013
Asadi, S., OmSalameh Pourhashemi, S., 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 Malaysian hotel industry. Journal of Cleaner Production, 258, 120860. https://doi.org/10.1016/j.jclepro.2020.120860
B. DiPietro, R., Cao, Y., & Partlow, C. (2013). Green practices in upscale foodservice operations. International Journal of Contemporary Hospitality Management, 25(5), 779-796. https://doi.org/10.1108/ijchm-may-2012-0082
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. https://doi.org/10.1177/014920639101700108
Begum, S., Ashfaq, M., Xia, E., & Awan, U. (2021). Does green transformational leadership lead to green innovation? The role of green thinking and creative process engagement. Business Strategy and the Environment, 31(1), 580-597. https://doi.org/10.1002/bse.2911
Begum, S., Xia, E., Ali, F., Awan, U., & Ashfaq, M. (2021). Achieving green product and process innovation through green leadership and creative engagement in manufacturing. Journal of Manufacturing Technology Management, 33(4), 656-674. https://doi.org/10.1108/jmtm-01-2021-0003
Berrone, P., Fosfuri, A., Gelabert, L., & Gomez‐Mejia, L. R. (2013). Necessity as the mother of ‘green’ inventions: Institutional pressures and environmental innovations. Strategic Management Journal, 34(8), 891-909. https://doi.org/10.1002/smj.2041
Buysse, K., & Verbeke, A. (2002). Proactive environmental strategies: A stakeholder management perspective. Strategic Management Journal, 24(5), 453-470. https://doi.org/10.1002/smj.299
Chan, H. K., Yee, R. W., Dai, J., & Lim, M. K. (2016). The moderating effect of environmental dynamism on green product innovation and performance. International Journal of Production Economics, 181, 384-391. https://doi.org/10.1016/j.ijpe.2015.12.006
Chandra, K., Arafah, W., & Basri, Y. Z. (2021). Analysis of the effect of green organizational culture on organizational performance and competitive advantages of green through green innovation in manufacturing industries. Journal of Hunan University Natural Sciences, 48(6), 112-121. http://www.jonuns.com/index.php/journal/article/view/596/593
Chen, Y., & Chang, C. (2012). The determinants of green product development performance: Green dynamic capabilities, green transformational leadership, and green creativity. Journal of Business Ethics, 116(1), 107-119. https://doi.org/10.1007/s10551-012-1452-x
Chen, Y., Chang, C., & Lin, Y. (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/su6106604
Chen, Y., Lai, S., & Wen, C. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics, 67(4), 331-339. https://doi.org/10.1007/s10551-006-9025-5
Cop, S., Alola, U. V., & Alola, A. A. (2020). Perceived behavioral control as a mediator of hotels' green training, environmental commitment, and organizational citizenship behavior: A sustainable environmental practice. Business Strategy and the Environment, 29(8), 3495-3508. https://doi.org/10.1002/bse.2592
Daily, B. F., Bishop, J. W., & Massoud, J. A. (2012). The role of training and empowerment in environmental performance. International Journal of Operations & Production Management, 32(5), 631-647. https://doi.org/10.1108/01443571211226524
Daily, B. F., Bishop, J. W., & Steiner, R. (2011). The mediating role of EMS teamwork as it pertains to HR factors and perceived environmental performance. Journal of Applied Business Research (JABR), 23(1). https://doi.org/10.19030/jabr.v23i1.1411
Della Peruta, M. R., Del Giudice, M., Lombardi, R., & Soto-Acosta, P. (2016). Open innovation, product development, and inter-company relationships within regional knowledge clusters. Journal of the Knowledge Economy, 9(2), 680-693. https://doi.org/10.1007/s13132-016-0356-x
Dubey, R., Gunasekaran, A., & Samar Ali, S. (2015). Exploring the relationship between leadership, operational practices, institutional pressures and environmental performance: A framework for green supply chain. International Journal of Production Economics, 160, 120-132. https://doi.org/10.1016/j.ijpe.2014.10.001
Egri, C. P., & Herman, S. (2000). Leadership in the North American environmental sector: Values, leadership styles, and contexts of environmental leaders and their organizations. Academy of Management Journal, 43(4), 571-604. https://doi.org/10.2307/1556356
El-Kassar, A., & Singh, S. K. (2019). Green innovation and organizational performance: The influence of big data and the moderating role of management commitment and HR practices. Technological Forecasting and Social Change, 144, 483-498. https://doi.org/10.1016/j.techfore.2017.12.016
García-Guiu, C., Moya, M., Molero, F., & Moriano, J. A. (2016). Transformational leadership and group potency in small military units: The mediating role of group identification and cohesion. Revista de Psicología del Trabajo y de las Organizaciones, 32(3), 145-152. https://doi.org/10.1016/j.rpto.2016.06.002
Gürlek, M., & Koseoglu, M. A. (2021). Green innovation research in the field of hospitality and tourism: The construct, antecedents, consequences, and future outlook. The Service Industries Journal, 41(11-12), 734-766. https://doi.org/10.1080/02642069.2021.1929930
Henseler, J., Ringle, C. M., & Sarstedt, M. (2014). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115-135. https://doi.org/10.1007/s11747-014-0403-8
Hervani, A. A., Helms, M. M., & Sarkis, J. (2005). Performance measurement for green supply chain management. Benchmarking: An International Journal, 12(4), 330-353. https://doi.org/10.1108/14635770510609015
Imran, M., & Jingzu, G. (2022). Green organizational culture, organizational performance, green innovation, environmental performance: A mediation-moderation model. Journal of Asia-Pacific Business, 23(2), 161-182. https://doi.org/10.1080/10599231.2022.2072493
Kammerer, D. (2009). The effects of customer benefit and regulation on environmental product innovation. Ecological Economics, 68(8-9), 2285-2295. https://doi.org/10.1016/j.ecolecon.2009.02.016
Karimi Takalo, S., Sayyadi Tooranloo, H., & Shahabaldini parizi, Z. (2021). Green innovation: A systematic literature review. Journal of Cleaner Production, 279, 122474. https://doi.org/10.1016/j.jclepro.2020.122474
Karimi, R. F., & Nabavi Chashmi, S. A. (2019). Designing green entrepreneurship model in sustainable development consistent with the performance of Tehran industrial towns. Journal of Business-to-Business Marketing, 26(1), 95-102. https://doi.org/10.1080/1051712x.2019.1565143
Khurshid, R., & Darzi, M. A. (2016). Go green with green human resource management practices. Clear International Journal of Research in Commerce & Management, 7(1), 19-21.
Kraus, S., Rehman, S. U., & García, F. J. (2020). Corporate social responsibility and environmental performance: The mediating role of environmental strategy and green innovation. Technological Forecasting and Social Change, 160, 120262. https://doi.org/10.1016/j.techfore.2020.120262
Leal-Rodríguez, A. L., Ariza-Montes, A. J., Morales-Fernández, E., & Albort-Morant, G. (2018). Green innovation, 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
Lee, K., & Min, B. (2015). Green R&D for eco-innovation and its impact on carbon emissions and firm performance. Journal of Cleaner Production, 108, 534-542. https://doi.org/10.1016/j.jclepro.2015.05.114
Lee, W., Min, W., Chun, S., Lee, Y., Park, H., Lee, D. H., Lee, Y. K., & Son, J. E. (2005). Long-term effects of green tea ingestion on atherosclerotic biological markers in smokers. Clinical Biochemistry, 38(1), 84-87. https://doi.org/10.1016/j.clinbiochem.2004.09.024
Leyva-de la Hiz, D. I., Ferron-Vilchez, V., & Aragon-Correa, J. A. (2018). Do firms’ slack resources influence the relationship between focused environmental innovations and financial performance? More is not always better. Journal of Business Ethics, 159(4), 1215-1227. https://doi.org/10.1007/s10551-017-3772-3
Li, L., Msaad, H., Sun, H., Tan, M. X., Lu, Y., & Lau, A. K. (2020). Green innovation and business sustainability: New evidence from energy intensive industry in China. International Journal of Environmental Research and Public Health, 17(21), 7826. https://doi.org/10.3390/ijerph17217826
Li, R., & Ramanathan, R. (2020). Can environmental investments benefit environmental performance? The moderating roles of institutional environment and foreign direct investment. Business Strategy and the Environment, 29(8), 3385-3398. https://doi.org/10.1002/bse.2578
Lin, W., Cheah, J., Azali, M., Ho, J. A., & Yip, N. (2019). Does firm size matter? Evidence on the impact of the green innovation strategy on corporate financial performance in the automotive sector. Journal of Cleaner Production, 229, 974-988. https://doi.org/10.1016/j.jclepro.2019.04.214
Liu, X., & Jie, X. (2019). Can manager’s environmentally specific transformational leadership improve environmental performance? Advances in Intelligent Systems and Computing, 730-742. https://doi.org/10.1007/978-3-030-21255-1_56
Liu, Z., Li, J., Zhu, H., Cai, Z., & Wang, L. (2012). Chinese firms’ sustainable development—The role of future orientation, environmental commitment, and employee training. Asia Pacific Journal of Management, 31(1), 195-213. https://doi.org/10.1007/s10490-012-9291-y
Long, X., Chen, Y., Du, J., Oh, K., & Han, I. (2017). Environmental innovation and its impact on economic and environmental performance: Evidence from Korean-owned firms in China. Energy Policy, 107, 131-137. https://doi.org/10.1016/j.enpol.2017.04.044
Mehta, K., & Chugan, P. K. (2015). Green HRM in pursuit of environmentally sustainable business. Universal Journal of Industrial and Business Management, 3(3), 74-81. https://doi.org/10.13189/ujibm.2015.030302
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
Montabon, F., Sroufe, R., & Narasimhan, R. (2006). An examination of corporate reporting, environmental management practices and firm performance. Journal of Operations Management, 25(5), 998-1014. https://doi.org/10.1016/j.jom.2006.10.003
Montiel, I., & Delgado-Ceballos, J. (2014). Defining and measuring corporate sustainability. Organization & Environment, 27(2), 113-139. https://doi.org/10.1177/1086026614526413
Niazi, U. I., Nisar, Q. A., Nasir, N., Naz, S., Haider, S., & Khan, W. (2023). Green HRM, green innovation and environmental performance: The role of green transformational leadership and green corporate social responsibility. Environmental Science and Pollution Research, 30(15), 45353-45368. https://doi.org/10.1007/s11356-023-25442-6
Nisar, Q. A., Zafar, A., Shoukat, M., & Ikram, M. (2017). Green transformational leadership and green performance: The mediating role of green mindfulness and green self-efficacy. International Journal of Management Excellence, 9(2), 1059-1066. https://doi.org/10.17722/ijme.v9i2.916
Nushrath, N. F. (2021). Green Transformational Leadership and Green Performance: The Mediation Effects of Green Mindfulness in Banking Sector in Hatton Area, Nuwara-Eliya District [Doctoral Dissertation]. Faculty of Commerce and Management Eastern University, Sri Lanka.
Oliva, F. L., Semensato, B. I., Prioste, D. B., Winandy, E. J., Bution, J. L., Couto, M. H., Bottacin, M. A., Mac Lennan, M. L., Teberga, P. M., Santos, R. F., Singh, S. K., Da Silva, S. F., & Massaini, S. A. (2019). Innovation in the main Brazilian business sectors: Characteristics, types and comparison of innovation. Journal of Knowledge Management, 23(1), 135-175. https://doi.org/10.1108/jkm-03-2018-0159
Para-González, L., Jiménez-Jiménez, D., & Martínez-Lorente, A. R. (2018). Exploring the mediating effects between transformational leadership and organizational performance. Employee Relations, 40(2), 412-432. https://doi.org/10.1108/er-10-2016-0190
Pujari, D. (2006). Eco-innovation and new product development: Understanding the influences on market performance. Technovation, 26(1), 76-85. https://doi.org/10.1016/j.technovation.2004.07.006
Qi, G., Zeng, S., Shi, J. J., Meng, X., Lin, H., & Yang, Q. (2014). Revisiting the relationship between environmental and financial performance in Chinese industry. Journal of Environmental Management, 145, 349-356. https://doi.org/10.1016/j.jenvman.2014.07.010
Qu, X., Khan, A., Yahya, S., Zafar, A. U., & Shahzad, M. (2021). Green core competencies to prompt green absorptive capacity and bolster green innovation: The moderating role of organization’s green culture. Journal of Environmental Planning and Management, 65(3), 536-561. https://doi.org/10.1080/09640568.2021.1891029
Rehman, S. U., Shahzad, M., Farooq, M. S., & Javaid, M. U. (2020). Impact of leadership behavior of a project manager on his/her subordinate's job-attitudes and job-outcomes. Asia Pacific Management Review, 25(1), 38-47. https://doi.org/10.1016/j.apmrv.2019.06.004
Rhead, R., Elliot, M., & Upham, P. (2015). Assessing the structure of UK environmental concern and its association with pro-environmental behaviour. Journal of Environmental Psychology, 43, 175-183. https://doi.org/10.1016/j.jenvp.2015.06.002
Rodríguez-Antón, J. M., Del Mar Alonso-Almeida, M., Celemín, M. S., & Rubio, L. (2012). Use of different sustainability management systems in the hospitality industry. The case of Spanish hotels. Journal of Cleaner Production, 22(1), 76-84. https://doi.org/10.1016/j.jclepro.2011.09.024
Shahzad, M., Qu, Y., Zafar, A. U., Rehman, S. U., & Islam, T. (2020). Exploring the influence of knowledge management process on corporate sustainable performance through green innovation. Journal of Knowledge Management, 24(9), 2079-2106. https://doi.org/10.1108/jkm-11-2019-0624
Shamim, S., Zeng, J., Shariq, S. M., & Khan, Z. (2019). Role of big data management in enhancing big data decision-making capability and quality among Chinese firms: A dynamic capabilities view. Information & Management, 56(6), 103135. https://doi.org/10.1016/j.im.2018.12.003
Singh, S. K., Giudice, M. D., Chierici, R., & Graziano, D. (2020). Green innovation and environmental performance: The role of green transformational leadership and green human resource management. Technological Forecasting and Social Change, 150, 119762. https://doi.org/10.1016/j.techfore.2019.119762
Song, M., Yang, M. X., Zeng, K. J., & Feng, W. (2020). Green knowledge sharing, stakeholder pressure, absorptive capacity, and green innovation: Evidence from Chinese manufacturing firms. Business Strategy and the Environment, 29(3), 1517-1531. https://doi.org/10.1002/bse.2450
Suliman, M. A., Abdou, A. H., Ibrahim, M. F., Al-Khaldy, D. A., Anas, A. M., Alrefae, W. M., & Salama, W. (2023). Impact of green transformational leadership on employees’ environmental performance in the hotel industry context: Does green work engagement matter? Sustainability, 15(3), 2690. https://doi.org/10.3390/su15032690
Sun, X., El Askary, A., Meo, M. S., Zafar, N. U., & Hussain, B. (2022). Green transformational leadership and environmental performance in small and medium enterprises. Economic Research-Ekonomska Istraživanja, 35(1), 5273-5291. https://doi.org/10.1080/1331677x.2021.2025127
Swanson, D. L. (1995). Addressing a theoretical problem by reorienting the corporate social performance model. Academy of Management Review, 20(1), 43-64. https://doi.org/10.5465/amr.1995.9503271990
Tahir, R., Athar, M. R., Faisal, F., Shahani, N. u., & Solangi, B. (2019). Green organizational culture: A review of literature and future research agenda. Annals of Contemporary Developments in Management & HR, 1(1), 23-38. https://doi.org/10.33166/acdmhr.2019.01.004
Turban, D. B., & Greening, D. W. (1997). Corporate social performance and organizational attractiveness to prospective employees. Academy of Management Journal, 40(3), 658-672. https://doi.org/10.5465/257057
Vasileiou, E., Georgantzis, N., Attanasi, G., & Llerena, P. (2022). Green innovation and financial performance: A study on Italian firms. Research Policy, 51(6), 104530. https://doi.org/10.1016/j.respol.2022.104530
Wang, L., Cui, Z., & Liang, X. (2015). Does it pay to be green? Financial benefits of environmental labeling among Chinese firms, 2000–2005. Management and Organization Review, 11(3), 493-519. https://doi.org/10.1017/mor.2014.8
Weng, H., Chen, J., & Chen, P. (2015). Effects of green innovation on environmental and corporate performance: A stakeholder perspective. Sustainability, 7(5), 4997-5026. https://doi.org/10.3390/su7054997
Wong, C. W., Wong, C. Y., & Boon-itt, S. (2020). Environmental management systems, practices and outcomes: Differences in resource allocation between small and large firms. International Journal of Production Economics, 228, 107734. https://doi.org/10.1016/j.ijpe.2020.107734
Wood, D. J. (1991). Corporate social performance revisited. Academy of Management Review, 16(4), 691-718. https://doi.org/10.5465/amr.1991.4279616
Xie, X., & Zhu, Q. (2020). Exploring an innovative pivot: How green training can spur corporate sustainability performance. Business Strategy and the Environment, 29(6), 2432-2449. https://doi.org/10.1002/bse.2512
Xie, X., Hoang, T. T., & Zhu, Q. (2022). Green process innovation and financial performance: The role of green social capital and customers’ tacit green needs. Journal of Innovation & Knowledge, 7(1), 100165. https://doi.org/10.1016/j.jik.2022.100165
Xie, X., Huo, J., & Zou, H. (2019). Green process innovation, green product innovation, and corporate financial performance: A content analysis method. Journal of Business Research, 101, 697-706. https://doi.org/10.1016/j.jbusres.2019.01.010
Xie, X., Huo, J., Qi, G., & Zhu, K. X. (2016). Green process innovation and financial performance in emerging economies: Moderating effects of absorptive capacity and green subsidies. IEEE Transactions on Engineering Management, 63(1), 101-112. https://doi.org/10.1109/tem.2015.2507585
Yadegaridehkordi, E., Hourmand, M., Nilashi, M., Alsolami, E., Samad, S., Mahmoud, M., Alarood, A. A., Zainol, A., Majeed, H. D., & Shuib, L. (2020). Assessment of sustainability indicators for green building manufacturing using fuzzy multi-criteria decision making approach. Journal of Cleaner Production, 277, 122905. https://doi.org/10.1016/j.jclepro.2020.122905
Yi, Y., Zeng, S., Chen, H., & Shi, J. J. (2023). When does it pay to be good? A meta-analysis of the relationship between green innovation and financial performance. IEEE Transactions on Engineering Management, 70(9), 3260-3270. https://doi.org/10.1109/tem.2021.3079098
Zhou, J., Sawyer, L., & Safi, A. (2021). Institutional pressure and green product success: The role of green transformational leadership, green innovation, and green brand image. Frontiers in Psychology, 12. https://doi.org/10.3389/fpsyg.2021.704855
Zhu, Q., Sarkis, J., & Lai, K. (2008). Confirmation of a measurement model for green supply chain management practices implementation. International Journal of Production Economics, 111(2), 261-273. https://doi.org/10.1016/j.ijpe.2006.11.029
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
