Systematic analysis of green innovation strategies for updating digital frameworks

(industry 5.0) in the context of environmental regulations and performance

management

Abstract
Over the past few years, the relationship between green innovation strategies and the
managerial performance of organizations has received increasing attention from researchers.
This study helps to present the researchers from the various researchers regarding the green
innovation strategies industrial revolution within the environmental regulations and
performance management of the organizations. This research use the secondary research
method and in this regard it use the existing researches on the topic of green innovation
strategies and digital revolution. collection method in this research. The discussion in this
article after the results that obtain from the previous researches shows that environmental
regulations are one of the fundamental factors that enforce organizations to implement
effective green innovation strategies in order to improve their managerial performance and
compete in the market. This article also helps to develop two important hypotheses to
evaluate the relationship between green innovation strategies and the industrial performance
of organizations.

Keywords: Green innovation strategies, Managerial performance, increasing attention,

Environmental regulations.

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Introduction
The Green Revolution refers to the efforts by agricultural workers and agricultural activists in
numerous nations to reduce human impact on the environment and promote sustainable
lifestyles, such as boosting food production. This revolution began in the 1940s and had a
significant impact during the 1960s and 1980s. The Green Revolution was typified by the
propensity of a few agriculturalists to embrace environmentally sustainable practices.
Indicators of the Green Revolution
The Green Revolution was intended to assist the environment and economy by improving the
agricultural harvesting rate of farmers in developing nations. Rich nations, such as the United
States and the United Kingdom, have spent time, money, and effort to the development of
crops that have the potential to greatly improve the amount of food available to the citizens of
poor nations. Key components of the Green Revolution include the use of hybridized seeds,
advanced equipment and technologies, synthetic pesticides, novel fertilizers, and scientific
agricultural approaches such as multiple-cropping, which will be addressed in further detail
in the next section.
A Brief History of the Green Innovation Strategies
In the history of humanity, the Green Revolution is the most recent agricultural revolution.
The First Agricultural Revolution was characterized by the shift from passive to active food
acquisition and animal domestication. The Second Agricultural Revolution was initiated by
the Industrial Revolution and featured the use of machinery to grow, harvest, and transport
crops.
In the 1940s, the Green Revolution began in response to a worldwide demand for increased
food productivity. Multiple developing nations lacked sufficient food sources. The American
agronomist Norman Borlaug, who created a high-yield wheat cultivar, was one of the most
influential figures of the Green Revolution. This wheat was employed to combat hunger in a
lot of places, particularly in poor countries. The Nobel Peace Prize was awarded to Borlaug
as a result of this study. This is one example of the enormous progress made possible by the
Green Revolution.
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According to experts at the University of California, Berkeley, the name "Green Revolution"
was coined because genetically modified wheat in northern Mexico was so successful. This
was one of the most important products of the Green Revolution, and it was sent to Asia,
India, and other emerging nations.
The Green Revolution did not have a substantial global impact until the 1960s, although
beginning in the 1940s. However, Mexico and India were affected immediately. In these
nations, it substantially reduced hunger and poverty and raised food production. However, the
strategies and techniques utilized to improve agricultural output had negative environmental
consequences.
The Green Revolution ended in the second half of the 1980s, when Green Revolution
programs were prevalent. The expansion of these initiatives stimulated the adoption of
organic and sustainable agricultural practices.
Green Innovation Imagery
The Green Revolution has changed since its inception. As agricultural technological
advancements evolved, the objectives and priorities of the Green Revolution shifted. •
Multiple-cropping, which uses a single field to cultivate multiple crops throughout the year;
this assures that a crop is always growing in the field throughout the year. Although these
insecticides were more effective at eliminating insects, they also killed other species,
prompting advocates like Rachel Carson (author of Silent Spring) to oppose their usage.
• The creation of novel crop types, which were then distributed to developing countries.
• Establishment of numerous research consortia whose purpose is to investigate
techniques for optimizing specific cash crops The Philippines founded the
International Rice Research Institute at this period (IRRI).

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Material and Methods
This research is based on the secondary research method. Secondary research, often known as
desk research, is a type of research that uses information that has already been obtained. To
improve the overall effectiveness of the investigation, existing data is compiled and
summarized. Studies that have already been published in research reports and other articles of
a similar sort are referred to as secondary research. Online sources, public libraries,
previously completed surveys, etc. may make these resources available. A few governmental
and non-governmental organizations also maintain data that can be gathered and used for
research. Secondary research is significantly less expensive than primary research since it
uses data that is already in use rather than gathering data directly or indirectly from
organizations or enterprises. Moreover, two hypothesis and four research objectives and
questions are formulated in the context of this research.
Consequently, a green innovation strategy is a form of strategy that a corporation takes in
order to apply green innovation in order to gain a competitive advantage, satisfy market
demands, and meet stakeholder expectations. Song and Yu (2017) advocated that companies
should build green innovation strategies to promote green innovation. On the basis of the
preceding justification, the following preliminary hypothesis is proposed:
H1. The impact of green innovation strategies on green innovation is positive.
In an age of environmental consciousness, a company's competitiveness depends on its ability
to innovate sustainably. Scholars have suggested numerous elements as the push for green
growth. Recent research has identified public expectations resources and capabilities
(Leonidou et al., 2017), export intensity, women leaders, absorptive ability (Galbreath, 2017),
and executive compensation as predictors of green innovation.
Firms require strategies to address environmental issues, to gain markets with
environmentally friendly products, and to continue in business for the foreseeable future;
therefore, the green innovation strategy is the most important strategy in the era of
environmental consciousness. Some researchers have also examined how organizations
develop and implement environmental plans, innovate, and manufacture green products to
improve their performance and competitive advantage . According to Porter (1996), the
essence of strategy is the decision to do activities differently than rivals, and the essence of
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strategy is cross-functional or cross-activity integration. The green innovation strategy of a
corporation affects its environmental awareness around pollution avoidance, product
stewardship, and clean technology (Hart, 1997). A green innovation strategy will encourage a
company's upper, middle, and lower management, as well as its internal stakeholders, to
integrate organizational resources and guide employee behavior in order to reduce the
negative environmental impacts of industrial processes and outputs. As a result, this move
will reinforce the company's identity (Song and Yu, 2017).
If a company's management has a strong environmental commitment, it will not disregard the
negative environmental impact of its operations. This type of environmental concern is a
component of organizational identity , which has been referred to in recent years as the green
organizational identity . Therefore, the second stated hypothesis is as follows:
H2. Green organizational identity is positively influenced by green innovation strategy.
Organizational identity is a collection of claims that members of an organization view as
significant, unique, and enduring . In other words, organizational identity is a summary of
how an organization wishes to be seen by internal and external stakeholders, consumers, and
investors. Chen invented the term "green organizational identity" to describe the
interpretative framework of environmental management and preservation that members
create jointly to give their efforts meaning (Chen, 2011).

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Research Questions
• What are the importance of the green innovation strategies?
• How green innovation strategies bringing the industrial revolution?
• How green innovation strategies work with the environmental regulations?
• How green innovation strategies help the organizations to improve their performance
management?
Research Objectives
• To study importance of green of innovation strategies for the organizations.
• To understand that how green innovation strategies help to introduce the industrial
revolution in the society.
• To develop the understanding with the relationship of green innovation strategies and
environmental regulations.
• To understand the impact of green innovation strategies on the performance
management of organizations.

Hypothesis
H1. The impact of green innovation strategies on green innovation is positive.
H2. Green organizational identity is positively influenced by green innovation strategy.
Results
Green Innovation Practices
Global adoption of green innovation ideas has garnered considerable interest. Beginning to
recognize the gravity and severity of environmental problems and climate change are
consumers, manufacturers, governments, and communities. The manufacturing sector, as one
of the primary producers to industrial waste and environmental contamination, poses a danger
to environmental sustainability. The industrial industry must adopt green innovation
techniques for environmental sustainability. Nevertheless, it is crucial to identify, analyze,
and evaluate the features and sub-aspects of green innovation from the standpoint of
manufacturing industry sustainability performance indicators.
Environmental Regulations
Environmental legislation includes regulations regarding air pollution, water quality,
wilderness, endangered species, and other environmental aspects. Several laws and
regulations fall under the category of environmental legislation, but they all have the same
purpose: to govern the interaction between humans and the natural world in order to reduce
environmental risks and improve public health. How to protect the air and water quality has
6
long been a topic of contention. Since the beginning of time, laws have governed these and
other environmental issues. There is evidence that water and sewage treatment techniques
were governed by early Roman legislation. The longevity of the Roman Empire is attributed
to the maintenance of sewage networks and large freshwater delivery systems.
Organizational Performance
Organizational performance includes tangible and intangible outcomes and outputs, such as
employee morale, product quality, and customer satisfaction. Sara is supervising this
performance by finding methods for increasing outputs. She believes that agility is essential
for the progression of her company since it enables organizations to be flexible and
responsive to market and internal changes. Nevertheless, these procedures vary based on the
sort of organization for which you work. A high-performance organization is one that,
relative to other comparable organizations on the market, creates and shows products and
behaviors that surpass expectations and objectives. A low-performing company struggles to
accomplish its goals, and when it does, the goods and actions it generates are, at best,
substandard. Due to their major differences, the management of these two institutions differs
greatly.
Indonesia, like other emerging nations, continues to face significant environmental
difficulties. Decades of forest degradation in Indonesia, the third biggest tropical forest region
after Brazil and the Congo, have resulted in global and local environmental problems.
Furthermore, there have been extensive discussions between environmental sustainability
conservation and the production of economic products. Decades ago, Indonesia surpassed
Brazil as the tropical nation with the highest deforestation rates (Margono et al., 2014). If the
environment and natural resources are not protected, environmental deterioration can
endanger organisms and ecosystems (Fransson and Garling, 1999). As a result of the effects
of rapid climate change, worldwide governments, corporations, and civil society have
become more aware of the necessity of environmental preservation.
Environmental concerns will eventually influence society's perspective on activities that have
the potential to destroy ecosystems. In order to reduce their negative influence on the
environment, businesses must develop plans for implementing innovations. The term "green
innovations" refers to a number of technologies that enable the reduction of negative
environmental impacts, so providing businesses with a significant chance to satisfy
environmental performance objectives and reap environmental benefits .
A strategy is an organization's long-term direction and scope to fulfill market demands and
stakeholder expectations . In contrast, green innovation refers to an innovation that prioritizes
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the mitigation of environmental impacts. System for minimizing waste, preventing pollution,
and managing the environment .

In addition to agricultural techniques, the Green Revolution had a profound effect on a

variety of other socioeconomic concerns. The revolution has huge sociopolitical, economic,
and environmental ramifications for countries. Green technologies, also known as eco-
friendly technologies, contribute to environmental protection and a sustainable future.
Analyze the efficacy and use of eco-friendly technologies, as well as the concept of
renewable energy.
Technologies with a Positive Impact on the Environment
According to the Union of Concerned Scientists, extensive scientific research has revealed
that our planet is warming unnaturally due to human activity, a phenomenon known as global
warming, and that global warming and other methods of human consumption and production
are irreparably harming the environment and the organisms that comprise our planet. Despite
this, firms, organizations, and people have created and deployed energy-saving and
environmentally friendly technologies that use less electricity and have a negligible impact on
the environment. This course will outline and illustrate the top technologies for a sustainable
future. Mr. Environmental Technology Box defines eco-friendly technology, also referred to
as green technology, as a sort of technology that employs a renewable energy source and has
no net negative impact on the environment. These eco-friendly technologies are gaining
popularity because they are not only beneficial for the environment but also favorable for the
user. Additional features of eco-friendly technologies include:
 utilized or repurposed materials
 Reduction of greenhouse gas and other harmful emissions
 Utilization of renewable energy sources and conservation of natural resources
 minimal impact and limited use
Examples of prevalent eco-friendly technologies are hybrid and electric vehicles. The
combination of an internal combustion engine with an electric motor makes hybrid vehicles
exceptionally fuel-efficient. Electric vehicles are only powered by electricity and have no
greenhouse gas emissions. Despite the widespread prevalence of hybrid vehicles in the
United States, electric vehicles are beginning to enter the mainstream, as seen by California's
quick construction of the necessary infrastructure. These fuel-efficient automobiles lower
greenhouse gas emissions significantly.

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The widespread adoption of high-efficiency LED lighting is an additional ecologically
beneficial technology that is on the rise. The incandescent light bulbs utilized during the past
half-century are extremely inefficient, dissipating 98% of their energy as heat. However,
contemporary LED light bulbs can consume 160 watts to replace a 400-watt lamp while
providing the same or more light. These light bulbs can reduce energy usage by 90%,
resulting in significant energy savings and environmental benefits.
The economy is an indispensable aspect of contemporary life. Examine the evolution of the
economy through the agricultural and industrial revolutions, along with its role in
postindustrial society and the three economic sectors.
Economy and Culture
In this lesson, economy refers to how humans interact with and utilize their surroundings to
achieve their needs. Production, exchange, distribution, and consumption comprise the
economy. As the economy has developed, so have societies.
Agricultural Revolution
The second agricultural revolution marked the beginning of the economic evolution. Between
the 18th and 19th centuries, agricultural production and farm technology grew substantially.
Inventions such as the plow, the wheel, and the number system enhanced human labor
throughout this time period. These changes have both positive and harmful consequences for
society. Farmers developed more practical and efficient agricultural techniques, such as crop
rotation and the use of fertilizer, which led to an ever-increasing surplus of food.
Due to the advent of new farming techniques and the enhancement of implement durability,
human labor became more productive. During this agricultural period, towns and cities grew,
and select regions became into economic and commercial hubs.
A higher food surplus was produced as a result of the efficacy of these inventions' processes
(for example, a plow pulled by animals could cover far greater areas of land than one
operated by a human).
People had more time to pursue and participate in activities unrelated to their immediate
survival. People were able to devote more time to pursuits like music and philosophy, which
led to the discovery of alternative sources of nourishment.
During this period, however, there were also negative repercussions, such as a wider division
of labor and status in which the wealthy seized control of surplus resources and power
became more consolidated. The wealthy had access to additional resources and could afford a
higher quality of life. Exceptional Industrial Revolution

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The Industrial Revolution resulted in a rapid and major economic transformation due to the
introduction of power-driven machinery and other energy sources. The move from agriculture
to industrialization was swift. Work that was once conducted by individuals is now
centralized in cities with massive factories and machinery able to mass-produce products
rapidly. During this time, steam engines, textile mills, and other massive equipment were
developed.
The Industrial Revolution enabled faster and larger production of goods and a more diverse
population, but it also had negative consequences, such as: • Overcrowding in cities due to
the large number of people who moved there to be closer to factories; • Skilled workers were
replaced by unskilled workers who left agricultural work. Low-skilled laborers were
overworked and underpaid.
The purpose of every organization is for all of its operations to be successful and efficient.
Performance management is the constant monitoring and evaluation of employee
performance to ensure the achievement of the organization's strategic objectives.
Communication between managers and employees must be constant for effective
performance management. Furthermore, it occurs throughout the year as opposed to annually.
In every firm, enhancing performance and identifying individual and team objectives are
crucial.
Businesses use performance management because it is crucial to their profitability and
growth. It is not enough for an organization to have performance management. The
administration must guarantee its efficacy. Performance management is vital in a business
because: • It enables the firm to accomplish its objectives effectively. A corporation can
achieve its goals and objectives without performance management if its people are self-
motivated and goal-oriented. This is not always the case, however, as the performance of the
organization can lag. Therefore, performance management increases the efficiency with
which objectives are attained.
It fosters operational harmony and aligns the organization as a whole. Effective performance
management ensures that all aspects of a company, including its personnel, resources, and
programs, are aligned with its goals. It leads to employee satisfaction and motivation. The
connection between employees and their obligations is fundamental to their jobs. Because it
will effect the organization's success, they must develop a strong emotional and mental
connection to their work and the firm. In addition, happy workers bring a great deal of energy
to the workplace and contribute to an increase in remarkable performance. It expedites the
detection and settlement of problems. Costly is the practice of allowing problems within an
10
organization to go undetected. In addition, management can identify areas for improvement
and endeavor to improve the performance of both programs and workers.
Management and employees may need to work together to achieve the desired levels of
employee work performance. It makes performance management an integral aspect of any
organization.
Green Innovation Strategies and Performance Management of the Organizations
The significance of green innovation in enhancing organizational performance is substantial,
and it assists businesses in implementing environmentally friendly business practices despite
internal and external obstacles. Green innovation and the adoption of the combination of
green product innovation and green process innovation involve the reduction of energy
consumption and pollution emissions, the recycling of wastes, the utilization of sustainable
resources, and the production of green commodities. Green management occurs when a
corporation decreases or removes known environmentally damaging practices. Analyze the
cost-effectiveness and short- and long-term benefits of green management for firms. Green
design requires the use of eco-friendly materials and manufacturing processes. As a result of
modern society's increased environmental consciousness and concern, consumers have
developed a high level of sensitivity to eco-friendly items. Therefore, organizations are
expected to incorporate green innovation in order to meet the demands of stakeholders. Green
innovation includes energy conservation, pollution control, waste recycling, product design,
and environmental management . The legitimacy of an organization can facilitate enterprises'
conformity with societal norms . According to a study conducted by Figueroa et al. (2018) on
three Mexican and five Spanish businesses, CSR and social legitimacy are positively
correlated with economic outcomes. The stronger a company's stakeholder legitimacy, the
greater its access to resources and support from internal and external stakeholders, which
permits the development of superior green technologies (Chang and Chen, 2013). Therefore,
the fourth hypothesis given is as follows:
Environmental organization legitimacy fosters green innovation positively.
When a company implements a green innovation strategy, managers and other internal
stakeholders are prepared to integrate organizational resources to limit the risks of
manufacturing processes and output impacts on the environment. Consequently, this behavior
can contribute to the development of organizational identity .
When a company's identity includes the environment, environmental protection and
management can no longer be neglected (Chen, 2011). Green organizational identity
contributes to this by combining a company's different skill sets and domains to foster
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innovation that emphasizes waste reduction, pollution prevention, and the implementation of
an environmental management system. A green organizational identity incorporates several
talents and disciplines of knowledge in order to foster innovation that prioritizes waste
reduction, pollution prevention, and the implementation of a green management system. The
presence of a green organizational identity helps business managers to adopt new
technologies requested by the market.

Discussion
Today, it is more crucial than ever to make prudent use of our limited resources. Here, eco-
friendly design is implemented. We describe green design as design that takes into account
the future sustainability of resources. Sustainable design is another term for green design.
When businesses are created with sustainability in mind, they do not waste the planet's finite
resources. Moreover, they examine the environmental, economic, and social elements of
sustainability. Green design involves every area of an organization's operations, including
sourcing, production, and daily operations.
Green Innovation with the Context of Environmental Regulations
Environmental protection has become a crucial topic and concern for all nations. Businesses
must generate positive externalities in order to maintain a positive public image, and green
innovation is one of the most effective ways to aid firms in adopting better tactics in
compliance with environmental regulations and protection law. It is crucial to recognize that
green innovation methods have a considerable impact on the management effectiveness of
businesses, or that effective green innovation enhances not only the productivity but also the
competitiveness of businesses. In general, green innovation has enhanced the manufacturing
and sourcing methods of businesses.
Definition of Environmental Sustainability
The natural environment provides humanity with a variety of resources for daily use.
Environment is used to produce food, water, wood, minerals and metals, and energy.
However, over exploitation of these resources can lead to their depletion, restricting our
ability to exploit them in the future.
Environmental sustainability refers to the judicious management of natural resources to
ensure their continued availability in the future. This includes minimizing the usage of natural
resources and preventing their depletion. For example, freshwater can be protected by
limiting excessive water usage and preventing the introduction of impurities.

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Education is essential for sustainability. Many individuals do not utilize their resources
properly due to a lack of knowledge. A farmer who lacks knowledge of sustainable
agricultural practices may employ unsustainable tactics. If they are instructed on how to farm
sustainably by rotating their crops, they will be able to continue farming without degrading
the soil quality of their property. Their descendants can continue farming in the same manner
in the future.
True environmental sustainability takes into account the oceans, land, and atmosphere, in
addition to specific resources such as a river or farm. Due to the fact that excessive
greenhouse gas pollution affects the chemical composition of the atmosphere and damages
natural resources, climate change is today a major barrier to sustainability. Other
environmental issues such as deforestation, habitat loss, extinction of species, overfishing,
and excessive water waste happen when the environment is not maintained in a sustainable
manner.
Renewable energy is essential for environmental sustainability. Energy usage considerably
contributes to pollution and resource loss. Renewable energy sources can provide energy
indefinitely, however nonrenewable energy sources will eventually deplete. Typically,
renewable energy produces less pollution than nonrenewable energy.
Mining can cause considerable environmental damage and pollution. Reusing metals and
minerals decreases the amount that must be extracted from the earth. Effective utilization of
resources can increase their lives.
Crop rotation and cover crops are two examples of sustainable agriculture. When a single
crop is produced in a field year after year, the nutrients in the soil become depleted. Crop
rotation is a cycle of soil-conserving plants that typically includes legumes. This can boost
agricultural output and extend the farm's productive life. Planting cover crops outside of the
growing season helps to prevent soil erosion. Their roots hold the dirt in place, safeguarding
the field until the following growth season. In the field of forestry, selective logging improves
sustainability. Few trees are selected for harvest, while the remainder of the forest remains
unharvested. This minimizes environmental damage and permits the forest to regenerate after
logging.
When a resource is classified as renewable, it means that it can be replenished at a rate
greater than its consumption. A nonrenewable resource, in contrast, cannot be regenerated
and is gone after it has been consumed. Poor management can lead to the exhaustion of
certain renewable resources. If maintained properly and old trees are not destroyed faster than

13
new ones can grow, a forest can be a renewable resource. If the forest is utilized carelessly,
however, it may become a nonrenewable resource.
Because the sun and wind never run out of energy, solar and wind power are renewable
energy sources. Examples of nonrenewable energy sources include fossil fuels such as coal,
oil, and natural gas. This resource cannot be replenished during a person's lifetime because it
is produced by a complex process that takes millions of years to complete.
Environmental Sustainability Objectives
Environmental sustainability is primarily intended to enable sustainable development.
Sustainable development assures that economic growth and resource consumption are
compatible. Environmental constraints, often known as planetary boundaries, must be
recognized for sustainable growth. These limitations define the greatest amount of
degradation a resource can sustain before experiencing irreparable damage. Global and local
resource management must be performed with care if environmental sustainability is to be
maintained.
Therefore, environmental regulations exist to prevent the depletion of natural resources. In
the United States, numerous rules limit the quantity of poisons that industries can emit into
the environment. The Clean Air Act, the Clean Water Act, and the Safe Drinking Water Act
are examples. Through international agreements, such as the Paris Agreement of 2015,
renewable energy and climate change mitigation are addressed. The purpose of these policies
is to protect human health and economic development without sacrificing environmental
health.
Green innovation with the context of industrial revolution and environment regulations
The environment has become a major global concern; therefore, it merits special attention.
These constraints have impacted both economic growth and business operations . Globally,
firms are currently exposed to considerable environmental restraints. In an effort to
counteract deterioration, there is a global movement among government entities to enhance
environmental norms and regulations. For instance, the Chinese government has modified a
number of environmental policies and programs (Chan, 2005). Environmental protection has
been controlled in Indonesia since 2009, granting regional governments the authority to
enforce regulations. These national and regional policies must lower emissions by 29–41
percent by 2030 to comply with international agreements.
Environmental constraints and forces also contribute to the creation of a new competitive
landscape . Green consumers are expanding rapidly. They are switching to more ecologically
friendly products despite initial resistance . Businesses must also account for eco-friendly
14
competitors in their business planning (DeBoer et al., 2017). Businesses in the twenty-first
century must continue to innovate and effectively handle environmental challenges to
maintain a competitive advantage. On occasion, green innovation attains strategic
importance.
Companies that overlook environmental quality have considerably contributed to the
degradation of the environment. Stakeholders mandate that enterprises minimize emissions of
greenhouse gases such as carbon monoxide (CO), carbon dioxide (CO2), and fly ash, and
adopt resource efficiency. Moreover, stakeholders continue to urge businesses to employ
resource efficiency measures (Bundgaard et al., 2017). Implementing the cleaner production
(CP) approach, which often involves reducing, reusing, recycling, and reformulating, can
improve resource efficiency. Non-manufacturing industries have a tendency to implement the
CP approach. Future corporations are responsible not only for economic and environmental
performance, but also for human rights, ethics, and community involvement.
Manufacturers must employ eco-friendly technologies to lessen the environmental impact of
their production operations. Green innovation emphasizes waste reduction, pollution
prevention, and the development of an environmental management system . Continuous
innovation is required to address external constraints, such as those provided by customers,
competitors, and regulators (Porter and Van der Linde, 1995). Consequently, industrial
businesses must adopt green innovation to satisfy these stakeholders .
Multiple authors presented empirical evidence about the external and internal factors
influencing green innovation and competitive advantage. Chen et al. (2006) discovered a
correlation between eco-friendly innovation and Taiwan's competitiveness. Green suppliers
market demand for green products and environmental restrictions are external effects on
green innovation . Internal aspects include environmental ethics (Chang, 2011),
environmental dedication, green human capital, and green adaptability . Chen et al. (2012)
conducted supplementary study on the origins of inventions and discovered both internal and
external sources. Environmental regulations and the environmentalism of investors and
clients are examples of external roots. Internal sources include environmental leadership,
environmental culture, and environmental competency. Both external and internal sources
can generate reactive green innovation, but only internal sources can promote proactive green
innovation. Albort-Morant et al. (2016) investigated the antecedents of green innovation
performance in the Spanish automotive components manufacturing sector and discovered that
learning capacities modulate the relationship between dynamic capabilities and green
innovation performance.
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In Taiwan, environmental commitment and environmental organizational legitimacy were
found to influence the relationship between organizational identity and green innovation
performance. Song and Yu (2017) provide empirical evidence that green organizational
identity and green creativity affect the relationship between green innovation strategy and
green innovation in a variety of Chinese sectors.
Second, according to Song and Yu (2017), the manufacturing industry is the focus of this
study, as opposed to other industries. Following Chang and Chen (2013) and Song and Yu
(2017), future research should focus on new nations. This research is being undertaken in
Indonesia, a developing nation whose cultures, customs, and business practices are notably
distinct from those of Taiwan and China. Comparable to the aforementioned research, this
study investigates the causes of green innovation using organizational theory and legitimacy
theory.
Few researchers have examined how green innovation strategy influences the success of
green innovation; this is also the impetus for our study. The purpose is therefore to
empirically evaluate the theories of organizational identity and organizational legitimacy in
the context of environmental issues in a developing nation. This study examines and
evaluates the mediating roles of green organizational identity and environmental
organizational legitimacy on the link between green innovation strategy and green innovation
in Indonesian manufacturing firms.
A corporation must first design a green innovation strategy in order to attain green innovation
performance. Johnson and Scholes (1993) describe a strategy as the long-term direction and
scope to meet market requirements and stakeholder requirements. According to Porter
(1996), a strategy is based on unique activities; hence, firms must intentionally choose a
collection of activities to offer a unique combination of value. When corporations create a
strategy with the objective of preserving the environment, they create green innovation
strategies. A green innovation plan enhances an organization's environmental responsiveness
in the areas of pollution prevention, product stewardship, and non-polluting technology (Hart,
1997). By developing a number of environmentally friendly programs, a green innovation
strategy enables a company to achieve a competitive advantage.
When companies build a green innovation strategy, management and internal stakeholders
combine organizational resources to limit the risks of manufacturing processes and output
impacts on the environment, while strengthening the organization's identity . Organizational
identity describes how a company evaluates its management and wants to be perceived by
internal and external stakeholders, consumers, and investors. Identity and image are
16
important organizational perceptions that impact behavior during strategic change . Chen
(2011) created the phrase green organizational identity, which refers to an interpretive system
addressing environmental management and protection that members develop in order to give
their actions meaning. Companies with a green corporate identity will utilize eco-friendly
technologies without question.
The green society will offer legitimacy to businesses with a green organizational identity with
relative ease. Legitimacy in the Green innovation action participation approach demands
shared perspectives.
According to Dowling and Pfeffer (1975), a firm is legitimate when its principles correspond
with those of the greater society. Legitimacy theory examines the relationship between
corporations and society; hence, it is a crucial paradigm for studying the relationships
between businesses and their environment. In addition to recognizing the linkages between a
company and its community, legitimacy theory is used to understand the motivations,
strategies, and responses of firms to particular events or crises in social and environmental
issues . Environmental organizational legitimacy is achieved when a company's principles
accord with societal expectations about environmental issues. In addition, the legitimacy or
trust of society may motivate and contribute to the continued development of
environmentally friendly products or services. Currently, pioneers of green innovation earn
from first-mover advantages and increased performance by charging higher prices for their
eco-products, increasing their corporate image, and gaining access to new markets.
This research contributes to a greater comprehension of how a green innovation strategy
supports green innovation through the use of green organizational identity and environmental
organizational legitimacy. This study employs both the organizational identity theory and the
organizational legitimacy theory. This study also assesses the environmental motivations and
responses of corporations. It states that managers must recognize they may improve their
green innovation performance through the development and implementation of a green
innovation strategy, the establishment of a green corporate brand, and the acquisition of
social legitimacy.
The subsequent sections are structured as follows. The section that follows will discuss the
literature review and development of hypotheses, followed by the methodology and
measurements of the study.
Indonesia, like other emerging nations, continues to face significant environmental
difficulties. Decades of forest degradation in Indonesia, the third biggest tropical forest region
after Brazil and the Congo, have resulted in global and local environmental problems.
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Furthermore, there have been extensive discussions between environmental sustainability
conservation and the production of economic products. Decades ago, Indonesia surpassed
Brazil as the tropical nation with the highest deforestation rates (Margono et al., 2014). If the
environment and natural resources are not protected, environmental deterioration can
endanger organisms and ecosystems (Fransson and Garling, 1999). As a result of the effects
of rapid climate change, worldwide governments, corporations, and civil society have
become more aware of the necessity of environmental preservation.
Environmental concerns will eventually influence society's perspective on activities that have
the potential to destroy ecosystems. In order to reduce their negative influence on the
environment, businesses must develop plans for implementing innovations. The term "green
innovations" refers to a number of technologies that enable the reduction of negative
environmental impacts, so providing businesses with a significant chance to satisfy
environmental performance objectives and reap environmental benefits .
A strategy is an organization's long-term direction and scope to fulfill market demands and
stakeholder expectations . In contrast, green innovation refers to an innovation that prioritizes
the mitigation of environmental impacts. System for minimizing waste, preventing pollution,
and managing the environment . Consequently, a green innovation strategy is a form of
strategy that a corporation takes in order to apply green innovation in order to gain a
competitive advantage, satisfy market demands, and meet stakeholder expectations. Song and
Yu (2017) advocated that companies should build green innovation strategies to promote
green innovation. On the basis of the preceding justification, the following preliminary
hypothesis is proposed:
The impact of green innovation strategies on green innovation is positive.
In an age of environmental consciousness, a company's competitiveness depends on its ability
to innovate sustainably. Scholars have suggested numerous elements as the push for green
growth. Recent research has identified public expectations resources and capabilities
(Leonidou et al., 2017), export intensity, women leaders, absorptive ability (Galbreath, 2017),
and executive compensation as predictors of green innovation.
Firms require strategies to address environmental issues, to gain markets with
environmentally friendly products, and to continue in business for the foreseeable future;
therefore, the green innovation strategy is the most important strategy in the era of
environmental consciousness. Some researchers have also examined how organizations
develop and implement environmental plans, innovate, and manufacture green products to
improve their performance and competitive advantage . According to Porter (1996), the
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essence of strategy is the decision to do activities differently than rivals, and the essence of
strategy is cross-functional or cross-activity integration. The green innovation strategy of a
corporation affects its environmental awareness around pollution avoidance, product
stewardship, and clean technology (Hart, 1997). A green innovation strategy will encourage a
company's upper, middle, and lower management, as well as its internal stakeholders, to
integrate organizational resources and guide employee behavior in order to reduce the
negative environmental impacts of industrial processes and outputs. As a result, this move
will reinforce the company's identity (Song and Yu, 2017).
If a company's management has a strong environmental commitment, it will not disregard the
negative environmental impact of its operations. This type of environmental concern is a
component of organizational identity , which has been referred to in recent years as the green
organizational identity . Therefore, the second stated hypothesis is as follows:
Green organizational identity is positively influenced by green innovation strategy.
Organizational identity is a collection of claims that members of an organization view as
significant, unique, and enduring . In other words, organizational identity is a summary of
how an organization wishes to be seen by internal and external stakeholders, consumers, and
investors. Chen invented the term "green organizational identity" to describe the
interpretative framework of environmental management and preservation that members
create jointly to give their efforts meaning (Chen, 2011).
In response to growing environmental concerns and issues among stakeholders, businesses
around the world have been compelled to create and manufacture environmentally friendly
products . Companies with a green organizational identity will adopt environmentally
friendly innovations, such as the implementation of an environmental management system
and the usage of renewable energy, in their business operations.
Green innovation approach
The use of energy-efficient technology or software can reduce the amount of pollution and
waste produced by a business.
In addition, environmentally responsible businesses recognize the need of environmental
protection and demonstrate their interest through action. When environmental concerns
become an organization's primary raison d'être, members will be inspired to make additional
environmental contributions (Sharma, 2000).
Chen (2011) defines green organizational identity as an interpretive framework for
environmental management and preservation that members develop together to add value to
their operations. Companies having a green corporate identity will get legitimacy with
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relative ease. Dowling and Pfeffer (1975) defined legitimacy as the occurrences in which a
business's values align with those of the greater society. Therefore, an organization has
environmental organizational legitimacy if its ideals coincide with society expectations
concerning environmental issues.
The Green Revolution was intended to assist the environment and economy by improving the
agricultural harvesting rate of farmers in developing nations. Rich nations, such as the United
States and the United Kingdom, have spent time, money, and effort to the development of
crops that have the potential to greatly improve the amount of food available to the citizens of
poor nations. Key components of the Green Revolution include the use of hybridized seeds,
advanced equipment and technologies, synthetic pesticides, novel fertilizers, and scientific
agricultural approaches such as multiple-cropping. According to Massey (2001), an
interdependent relationship between the organization and its stakeholders is crucial not just
for the organization's survival but also for its legitimacy. Therefore, organizations that
demonstrate a green organizational identity and execute environmental management and
protection in every element of their operations can gain environmental organizational
legitimacy with relative ease. According to Thomas (2007), the reputations of enterprises are
indirectly tied to the legitimacy of organizations. Consequently, corporations that attain the
legitimacy of environmental organizations will obtain a positive reputation as socially
responsible businesses. The following fourth hypothesis is offered based on the previously
mentioned justifications:
Environmental organizations' legitimacy is positively influenced by their green organizational
identities.
In general, a company's financial objective is to maximize investors' equity. However, profit
maximization is not always the primary purpose, as a company must also contend with a
range of external forces to establish its legitimacy . This thesis explains the link between
corporations and society. Organizational legitimacy, according to Dowling and Pfeffer
(1975), is the degree to which an organization's operations match with the norms, beliefs, and
expectations of its stakeholders.
Future Directions
New technologies allow for the automation of energy conservation. Internet of Things (IoT)
sensors can detect when a room is occupied and automatically turn off the lights when the
occupants leave. Existing systems can recognize personnel and change temperature
accordingly. Choose a solution that is compatible with the size and layout of your office.
There are a lot of approaches for medium-sized enterprises to reduce their environmental
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impact, and the process typically begins with an evaluation of how technology and improved
legislation might be of assistance. Learn how developing technologies may boost productivity
and sustainability through automation. You can do better, whether via the use of intelligent
sensors that switch off lights when no one is present in a certain office or by the creation of
smarter systems for managing electricity in always-on server rooms.

Conclusion
As stated previously, a green innovation strategy is a plan that emphasizes waste reduction,
pollution prevention, and environmental management system . To foster green innovation,
businesses must develop a green innovation plan . To develop a plan for green innovation,
managers at all levels must combine all organizational resources and coordinate employee
behavior with an emphasis on environmental considerations. This type of effort will boost the
green nature of the organization . When a company has a powerful green corporate brand,
societal trust and legitimacy are readily attained . Therefore, a reputable business will have
access to more resources and assistance from both internal and external parties. With these
resources and societal support, it will be easier for a company to create and implement
concepts that are environmentally beneficial. The relationship between green innovation
strategy and green innovation is mediated by the green organizational identity.
Environmental organizational legitimacy and green organizational identity moderate the
relationship between green innovation strategy and innovation.

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