Knowledge management strategies for radical environmental innovations
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In response to climate change, manufacturers need to reduce their environmental impacts through actively developing environmental innovations (EIs). In contrast to incremental EIs, radical EIs are more effective to reduce environmental impacts, but simultaneously, their development involves more uncertainty. Additionally, small- and medium-sized manufacturers have relatively less resources to innovate compared to larger firms, making them more dependent on external knowledge. This research aims to provide recommendations to manufacturers and public policy-makers to enhance an overall increase of radical EI adoption. Through the theory of Relative Absorptive Capacity, it explores knowledge management strategies preceding incremental and radical EIs. It does so by a cross-case study of small- and medium-sized manufacturers in the US. In total, 11 interviews gathered data of manufacturers’ external knowledge sourcing strategies, organizational structure, and innovation radicalness. The results show that supplier interactions for radical EIs are more intensive and newer relations compared to incremental EIs. Intensive supplier interactions are even a necessary condition for successful development of radical EIs. Customer interactions do not relate to EI radicalness, but rather to innovation type. Competitor interactions are potentially very fruitful for incremental EI adoption. For radical EIs, competitor interaction is totally absent, due to the newness of innovation. Finally, advisory interaction (e.g. consultants, universities), is not necessarily affecting EI radicalness. Whether a manufacturer sources knowledge from advisories depends on the firm’s intellectual capabilities and size. Firms with a high transformative learning capacity are characterized by an organizational structure in which knowledge disseminates smoothly across different departments. The results show this is necessary for the successful adoption of EIs with higher levels of knowledge complexity. Radical EIs are more likely to be more complex and therefore it can be concluded that transformative learning - although not a necessary condition - is beneficial for the adoption of radical EIs. The more intensive a knowledge interaction is, the more important strategic fit becomes. Developing radical EIs is more uncertain and requires intensive interactions. Therefore, strategic fit is more important in radical EIs. Strategic fit does not drive effectiveness of adoption, but rather the efficiency. Radical EIs can be indirectly driven by regulatory bodies, whereas incremental EIs are more likely to be result from direct governmental actions. Apart from governmental drivers, financial reasons seem to be the most influential in adopting an EI.