An empirical examination of the relationship between globalization, integration and sustainable innovation within manufacturing networks

Abstract

Purpose: While controlling for supply chain effects, the purpose of this paper is to investigate if globalization and collaborative integration within a firm-wide manufacturing network have significant implications for the adoption of sustainable production (SP) and sustainable sourcing (SS) practices at the plant level. Design/methodology/approach: The authors conceptualize SP and SS as process innovations with moderate degrees of innovativeness and apply “Organizational integration and process innovation” theory to build our conceptual model. Then, the authors use primary survey data from 471 assembly manufacturing plants operating in the US, Europe and Asia to test our hypotheses rigorously. Findings: This research finds that the adoption of SP practices at the plant level is significantly and positively associated with globalization and integration of the firm-wide manufacturing network. On the contrary, the adoption of SS practices is more strongly affected by integration in the external supply chain and benefits from the manufacturing network only indirectly, through the association with SP practices. Originality/value: Operations management literature devoted to sustainability has studied sustainable practices mostly from a risk management angle. Also, there exists contrasting evidence in the operations strategy literature about the positive and negative effects that globalization of a manufacturing network may have on the adoption of sustainable practices at the plant level. Moreover, several studies show how integration with supply chain partners helps manufacturing plants transition into more SP and SS practices; however, related literatures have neglected that collaborative integration within a firm-wide manufacturing network may also help to develop, or adapt to, new sustainable practices. This research represents a first attempt to resolve discordance and unveil the positive effects that manufacturing networks may have on sustainable innovations at the plant level.