Are Environmental Innovations Embedded within High-Performance Organizational Changes?

Many scholars have highlighted the role of high performance work practices (HPWP) and Human Resource Management (HRM) as contents of organizational change that integrate with green business strategies, mainly in the realm of the ‘Porter paradigm of change’ and competitive advantage. We investigate whether manufacturing firms, in light of the challenges that the path to a ‘Green economy’ poses, have given heavier weight in most recent times to internal sources of environmental innovation (EI) that refer to structural mechanisms of organizational change. More specifically, we analyse how the complementarity between different performance oriented strategies such as training and organizational innovations of labor and production can (jointly) foster the adoption of relatively more radical innovations, as environmental ones are. We use an original dataset on 555 Italian industrial firms on EI and high performance work practices, coherent with the last CIS5 survey, to analyse whether various, more or less radical, forms of environmental innovations are correlated to complementarity investments in HPWP/HRM. Empirical evidence shows that the strict complementarity assumption is not valid as a general rule for the HPWP/HRM strategies we analyse. We indeed find that trade offs (substitutability) is present when training competencies and organizational change in production are investigated. Weaknesses in organizational change processes are then highlighted for the sake of management restructuring. Sector specificity and market conditions eventually matter: the only case where we do find strict complementarities in organizational change is for CO2 abatement, a relatively more radical type of EI, but when we restrict the sample to more polluting (and regulated) firms. This evidence is coherent with the Porter hypothesis: complementarity related adoption of EI is an element of organizational change in firms that are subject to more stringent regulations. The fact that strict complementarity is not a diffused factor behind the adoption of all environmental innovations does not come indeed at a surprise. At this stage of development of green strategies, the share of eco-firms is still limited even in advanced countries that are seeking for new competitiveness tools. Market Leaders do find innovations sources mainly ‘outside’ the boundaries instead of reshaping organizations along complementary green lines. The integration of EIs with the internal capabilities and firm’s own assets is far from being reached even in advanced and competitive industrial settings.