Received: 23 December 2018 Revised: 28 April 2019 Accepted: 13 May 2019

DOI: 10.1002/csr.1794

RESEARCH ARTICLE

Improving green product development performance from

green vision and organizational culture perspectives

Yu‐Shan Chen | Shu‐Hsien Lin | Chun‐Yu Lin | Shu‐Tzu Hung | Chih‐Wei Chang |

Ching‐Wen Huang

Department of Business Administration,

National Taipei University, New Taipei City, Abstract
Taiwan The main purpose of this study is to how to enhance the green product development

Correspondence
Yu‐Shan Chen, Department of Business
Administration, National Taipei University, 151
University Rd., San Shia, New Taipei City 237,
Taiwan.
Email: dr.chen.ys@gmail.com
Funding information
Ministry of Science and Technology in Taiwan,
Grant/Award Numbers: MOST 106‐2410‐H‐
305 ‐054 ‐SS3 and MOST 106‐2410‐H‐305‐
054–SS3
performance from the perspectives of green vision and organizational culture. This
study explores the influences of a green shared vision and the environmental organi-
zational culture on the green product development performance in Taiwan's
manufacturing industry. It also examines the mediation effect of the green absorptive
capacity. The empirical results indicate that both the green shared vision and environ-
mental organizational culture have positive effects on the green absorptive capacity,
which in turn positively affects the green product development performance. In par-
ticular, the green absorptive capacity completely mediates the relationship between
the green shared vision and green product development performance, whereas it par-
tially mediates the relationship between the environmental organizational culture and
green product development performance.

K E Y W OR D S

environmental organizational culture, green absorptive capacity, green product development

performance, green shared vision, sustainable development

1 | I N T RO D U CT I O N stakeholders, such as consumers and employees, are usually alerted

Growing environmental action from different sources, such as envi-
ronmental regulations and consumer environmentalism, has emerged
for addressing the serious environmental pollution caused by the
increasing industrial activity. Formal environmental conventions,
including the Montreal Convention, Kyoto Protocol, Paris Agreement,
EU directives on Restricting the Use of Certain Hazardous Substances
in Electrical and Electronic Equipment (RoHS), and Waste of Electrical
and Electronic Equipment (WEEE), and the rising consumer environ-
mentalism movement are changing the context in which industries
worldwide compete and operate (Chen, Hung, Wang, Huang, & Liao,
2017). Because of such changes in environmental protection issues,
companies should adopt a preventive approach toward environmental
pollution and improve their business models and management thinking
for stimulating green opportunities and innovations (Holt, 2012; Melo
& Garrido‐Morgado, 2012). For instance, informed and concerned
about the environmental performance of companies (Chen, Lee,
Chang, & Cheng, 2017; Chen & Wu, 2015). Moreover, they take
action against companies they perceive to be environmentally irre-
sponsible (Wu & Lin, 2016). Thus, companies are being compelled to
improve their environmental management performance. Effective
environmental management can comprise various elements that span
all aspects of organizational operations (Lee, 2009). Accordingly, envi-
ronmental management concepts, such as green design, marketing,
products, and production, are being developed to meet the require-
ments of environmentalism. In other words, environmental manage-
ment has become a crucial part of the business management
strategy of organizations (Babiak & Trendafilova, 2011).
Some managers argue that corporate environmental management
is not essential or effective because it may harm their companies'
financial development. Nevertheless, scholars have stated different
perspectives. Because pollution results from inefficient resource use,

Corp Soc Resp Env Ma. 2019;1–10. wileyonlinelibrary.com/journal/csr © 2019 John Wiley & Sons, Ltd and ERP Environment 1
2 CHEN
companies pioneering in environmental management or green innova-
tion can achieve a “first mover advantage” and enjoy increased bene-
fits from green production (Chen, Chang, Lin, Lai, & Wang, 2016).
Furthermore, this advantage enables them to improve their green
image and thus gain increased competitive advantage (Chen, 2008;
Porter & van der Linde, 1995).
According to the concept of absorptive capacity, this study pro-
poses a novel construct, namely, the green absorptive capacity, and
develops an original environmental management model. Although
the green absorptive capacity has been widely discussed in theory in
relevant fields, such as business administration, no research has pro-
posed an integral green absorptive capacity model for the field of
environmental management. Therefore, this study develops a green
absorptive capacity framework to bridge this research gap.
The environmental culture embedded within an organization pro-
vides the symbolic material from which the meaning with respect to
environmental issues in the organization can be identified (Fiol,
2001). In addition, a green shared vision can be viewed as a symbol
of green absorptive capacity with respect to environmental issues. It
can also be viewed as a dynamic process through which an organiza-
tion's leader influences its handling of environmental issues. Thus,
the antecedents of green absorptive capacity are two symbolic con-
texts, namely, the environmental organizational culture and green
shared vision. Moreover, its consequence is the green product devel-
opment performance, which is defined as a nonimitable condition
under which an organization occupies positions of environmental
management. In this research framework, the green absorptive capac-
ity is examined as a mediator.
2 | L I T E R A T U R E R E V I E W A ND H Y P O T HE S I S
D E V E L O P M E NT
2.1 | Corporate environmental management
Because of the enormous amount of environmental pollution directly
connected to industrial manufacturing globally, environmental issues
are being increasingly emphasized (Chen, 2008). Various environmental
forces can influence companies' operations and strategic decisions,
including government environmental policies, national and international
environmental regulations, stakeholder activism and environmentalism,
and competitive pressures (Rugman & Verbeke, 1998). Accordingly,
companies may tend to implement environmental protection activities
to comply with international regulations related to environmental pro-
tection and to satisfy the environmental consciousness of consumers
(Berry & Rondinelli, 1998). Today, however, companies are more willing
to assume responsibility and take action for eliminating factors harmful
to the environment because of strategic considerations (Chen, 2008).
Suitable environmental regulations or standards can trigger green inno-
vations that actually decrease costs, increase productivity, or make
companies more competitive (Chen, Lai, & Wen, 2006; Porter & van
der Linde, 1995). The environment has rapidly emerged as a mainstream
ET AL.
topic among consumers because of global warming, and many busi-
nesses are seeking to seize this opportunity.
Corporate environmental management is defined by managerial
activities, processes, approaches, and concepts. It can help companies
achieve environmental goals, comply with environmental regulations,
anticipate the environmental impacts of their operations, and adopt
measures to reduce waste and pollution in advance of regulations.
Moreover, companies can discover positive ways of seizing business
opportunities through improvements in the effectiveness and effi-
ciency of their environmental activities (Berry & Rondinelli, 1998;
Chen, 2008). Companies that adopt proactive environmental manage-
ment strategies can incorporate the objective of environmental pro-
tection in different departments and solve environmental problems
by using innovative technology (Greeno & Robinson, 1992; Guziana
& Dobers, 2013). Therefore, managements should anticipate and plan
for environmental protection and integrate relevant ideas into corpo-
rate strategies (Haden, Oyler, & Humphreys, 2009). Some scholars
have studied an emerging field of management that focuses on dealing
with the natural environment because it affects corporate strategy
(Rugman & Verbeke, 1998). Pollution is caused by inefficient resource
use, and companies pioneering in green innovation would have a “first
mover advantage,” which would enable them to charge high prices for
green products and thus improve their competitiveness (Chen et al.,
2006; Dwyer, 2009; Molina‐Azorín, Claver‐Cortés, López‐Gamero, &
Tarí, 2009; Porter & van der Linde, 1995). Furthermore, companies
can embed green concepts in the design and packaging of their prod-
ucts to increase the differentiation advantage of their products (Chen
et al., 2006; Porter & van der Linde, 1995).
2.2 | Green shared vision and green absorptive
capacity
Because the environment is rapidly changing, companies must establish
an absorptive capacity for acquiring, assimilating, transforming, and
exploiting knowledge. They should develop the absorptive capacity
required to actively undertake knowledge management and gain com-
petitive advantages. The integration of external knowledge with inter-
nal capability can provide significant ideas for successful innovation.
The absorptive capacity can enable companies to acquire and apply
external and internal knowledge; both of which have a positive effect
on innovation. Because companies must create mechanisms for acquir-
ing and exploiting knowledge that can lead to innovation, they require
an absorptive capacity that can enable them to produce creative and
innovative ideas. An organization's absorptive capacity is related to its
research and development (R&D) resources, interaction mechanisms,
and managerial processes. Therefore, the absorptive capacity is critical
to an organization's innovative capabilities. Thus, exploring the effect
of the green shared vision and green absorptive capacity on the green
radical and incremental innovation performance would be useful, spe-
cifically for investigating the mediation effect of green organizational
ambidexterity in handling environmental issues. Moreover, because
Taiwan's electronics industry is renowned worldwide and innovative,
CHEN ET AL.
comprehensively understanding the green innovations of the Taiwan-
ese electronics industry is essential. In addition, Taiwan is a newly
emerging manufacturing base. Thus, examining how Taiwanese elec-
tronics companies enhance their green radical and incremental innova-
tion performance through the green shared vision, green absorptive
capacity, and green organizational ambidexterity is interesting. These
specific characteristics of Taiwan's electronics industry can contribute
to theoretical findings. Chen, Chang, and Lin (2014) proposed the orig-
inal concept of green shared vision, defining it as “a clear and common
strategic direction of collective environmental goals and aspirations that
has been internalized by members of an organization.” Chen et al. (2014)
proposed another novel notion, namely, the green absorptive capacity,
and defined it as “the ability to acquire, assimilate, transform, and exploit
environmental knowledge.” Studies have demonstrated that a shared
vision is a critical driver of the absorptive capacity. Accordingly, the
green shared vision is positively related to the green absorptive capac-
ity. Therefore, this study asserts that the green shared vision positively
affects the green absorptive capacity and proposes the following
hypothesis:
Hypothesis 1 (H2) : The green shared vision is positively
associated with the green absorptive capacity.
2.3 | Green shared vision and green product
development performance
Product development is the process of designing, creating, and mar-
keting new products or services to benefit customers. Product
development is sometimes referred to as new product development,
and it involves either improving an existing product and its presenta-
tion or developing a new product to target a particular market seg-
ment or segments (Chang, 2016). Consistent product development
is necessary for companies that strive to keep up with marketplace
changes and trends for ensuring their future profitability and suc-
cess. A competitive product development strategy should include a
company‐wide commitment to create items that satisfy particular
consumer needs or characteristics. Employees are more willing to
undertake environmental initiatives when their managers and super-
visors embrace a democratic and open style of communication
regarding environmental ideas and actively consider their thoughts
on improving environmental goals (Govindarajulu & Daily, 2004;
Ramus, 2001). Chen, Chang, Yeh, and Cheng (2015) suggested that
a lack of expertise likely leads to wasted time and inefficiency, which
tend to limit any major financial returns from environmental prog-
ress. Another method of motivating and engaging employees is
green performance appraisals (Guoyou, Saixing, Chiming, Haitao, &
Hailiang, 2013; Renwick, Redman, & Maguire, 2013) that cover
topics such as environmental incidents, environmental responsibili-
ties, and the communication of environmental policies. Such
appraisals would hold managers accountable for the environmental
management performance as well as wider performance objectives.
Chen and Chang (2013) proposed the novel notion of green product
development performance and defined it as “the development
3
performance of products that have less of an impact on the environ-
ment, are less detrimental to human health, are formed or part‐
formed from recycled components, are manufactured in a more
energy‐conservative way, or are supplied to the market with less
packaging.” The development of both green dynamic capabilities
and green transformational leadership is a useful starting point in
improving the green product development performance (Chen &
Chang, 2013). Moreover, winning the “hearts and minds” of
employees and keeping them motivated and engaged in green prod-
uct development is essential. Therefore, an organizational culture
that encourages employees to develop green products that improve
the environment is imperative for employee engagement (Renwick
et al., 2013). This study therefore proposes the following hypothesis:
Hypothesis 2 (H2) : The green shared vision is positively
associated with the green product development
performance.
2.4 | Environmental organizational culture and green
absorptive capacity
Investing resources in environmental management would prevent
both environmental protests and punishment and result in the
enhancement of companies' production efficiency, development of
new environmental markets, and enhancement of green R&D capa-
bilities (Chen, 2008; Porter & van der Linde, 1995; Shrivastava,
1995). Environmental management is becoming essential for compa-
nies in today's dynamic global environment, and many of these com-
panies are willing to invest increased effort into developing green
innovations and designs (Haden et al., 2009; Molina‐Azorín et al.,
2009). Companies may decide to adopt environmental management
because of various factors, such as stakeholder environmentalism,
competitive pressures, and environmental regulations (Berry &
Rondinelli, 1998; Rugman & Verbeke, 1998). Neoclassical economists
have argued that maximizing shareholder wealth is a company's main
goal (Friedman, 1970). The agency theory doubts whether compa-
nies should undertake environmental management and suggests that
managers should only adopt environmental management to advance
their careers or other personal agendas, thus implying that environ-
mental management is a misuse of corporate resources (Friedman,
1970). However, the institutional theory emphasizes the influence
of external institutions on company strategies and asserts that a
company's social objective is not always profit maximization because
its activities often face external pressures for legitimacy (Hoffman,
1997). To obtain the trust of external institutions, companies must
make their products green and adopt innovations with green absorp-
tive capacity. In a resource‐based view (RBV), competitive advantage
results from companies' valuable resources and capabilities (Barney,
1991). Furthermore, the environmental social responsibility and
organizational culture can become key capabilities that result in
sustained competitive advantage (Hart, 1995). Environmental man-
agement thus becomes a crucial element of a company's strategies
and should be considered a unique capability according to an RBV
4 CHEN
(Chen, 2008; Hart, 1995). Therefore, this study proposes the follow-
ing hypothesis:
Hypothesis 3 (H3) : The environmental organizational
culture is positively associated with the green absorptive
capacity.
2.5 | Environmental organizational culture and green
product development performance
A growing number of studies have focused on the integration of envi-
ronmental issues into product development and innovation (Chen, Lin,
Lin, & Chang, 2015; Cronin, Smith, Gleim, Ramirez, & Martinez, 2011).
These studies can be mainly divided into three categories. Studies
belonging to the first category specifically center on green product
development practices and discuss them in terms of content (e.g., pack-
aging, lifecycle approaches, and design), types (e.g., radical and incre-
mental), scope (e.g., strategies, programs, and projects), and
measurement (e.g., systems, frameworks, and tools; Melnyk, Sroufe, &
Calantone, 2003; Matos & Hall, 2007; Dangelico & Pujari, 2010).
However, various definitions of sustainable product development
performance have been provided in the literature (Chen, Chang,
et al., 2015), which impedes the comparability of findings and
cumulative knowledge development. The organizational culture
encompasses values and behaviors that contribute to an organization's
unique social and psychological environment. According to Needle
(2004), the organizational culture represents the collective values,
beliefs, and principles of an organization's members and results from
factors such as history, products, markets, technology, strategy,
employee type, management style, and national culture. Culture
comprises an organization's vision, values, norms, systems, symbols,
language, assumptions, beliefs, and habits. Ravasi and Schultz (2006)
argued that the organizational culture is a set of shared assumptions
that guide organizations by defining appropriate behavior in various
situations. It also encompasses the pattern of collective behaviors
and assumptions taught to new organization members for perceiving,
thinking, and feeling. Thus, the organizational culture affects how
people and groups interact with each other, clients, and stakeholders
(Hatch, 1993). Moreover, the organizational culture may affect the
extent to which employees identify with an organization.
Schein (1992), Deal and Kennedy (2000), and Kotter and Heskett
(1992) have asserted that organizations often have varied cultures
and subcultures. Although a company may have its “own unique cul-
ture,” in large organizations, subcultures sometimes coexist or even
clash because each is linked to a different management team. Appro-
priate strategies and operations, such as green processes and product
development, play a crucial role in helping companies respond effec-
tively to the environmental sustainability challenge. Therefore, this
study proposes the following hypothesis:
Hypothesis 4 (H4) : The environmental organizational
culture is positively associated with the green product
development performance.
ET AL.
2.6 | Green absorptive capacity and green product
development performance
According to Cohen and Levinthal (1990), the absorptive capacity
represents a company's ability to perceive the value of new data
and integrate and apply it to commercial ends. Zahra and George
(2002) asserted that the absorptive capacity constitutes a series of
organizational routines through which firms obtain, integrate, convert,
and use knowledge to generate dynamic capabilities. The absorptive
capacity theory emphasizes organizational learning, knowledge
innovation, knowledge asset application, and dynamic resource
integration. In accordance with Chen et al. (2014) and Daghfous
(2004), this study proposes that the green absorptive capacity
comprises the ability to understand, communicate, combine, identify,
and commercialize environmental knowledge. The generation of
dynamic capabilities can be considered a potential integrated approach
to understand the source of competitive advantage. The absorptive
capacity is based on the analysis of knowledge accumulation and flow
within organizations. De Waard, Volberda, and Soeters (2013) argued
that the absorptive capacity positively affects organizations' dynamic
capabilities. The absorptive capacity can develop the dynamic
capabilities of an organization and effectively create and sustain its
competitive advantage. The literature on dynamic capabilities, which
is a concept introduced by Hamel and Prahalad (1989), is based on
both a RBV of companies and the concept of routines from the
theory of organizational evolution. Eisenhardt and Martin (2000)
claimed that dynamic capabilities represent a company's ability to
integrate, reconfigure, and acquire gains in response to uncertain
situations. Dynamic capabilities refer to a company's capacity to
assimilate, develop, and reconstruct its internal and external resources
for adapting to a rapidly changing environment. De Waard et al. (2013)
noted that the absorptive capacity positively influences the dynamic
capabilities. The absorptive capacity developed by the dynamic
capabilities can create and sustain competitive advantages by applying
resources and knowledge (Daghfous, 2004). The green absorptive
capacity have been defined by Chen et al. (2014) and Chen, Lin,
et al. (2015) as “the ability to obtain, integrate, alter, and exploit
environmental knowledge.” According to Chen and Chang (2013),
green dynamic capabilities denote “the ability of a company to apply
its existing resources and knowledge to renew and create its green
organizational capabilities to respond to the dynamic market.” The
absorptive capacity is related to the ability to evaluate the
collected organizational knowledge, whereas dynamic capabilities
can be considered a critical determinant of competitive advantage.
The more a company uses its environmental knowledge, the more
easily it can resolve problems related to green technology or
market turbulence. This study argues that increasing companies' green
absorptive capacity can enhance their green dynamic capabilities.
Therefore, the following hypothesis is proposed:
Hypothesis 5 (H5) : The green absorptive capacity is
positively associated with the green product development
performance.
CHEN ET AL.
According to the concept of green absorptive capacity, this study
suggests that the antecedents of green absorptive capacity are two
major sources of symbolic context, namely, the green shared vision
and environmental organizational culture, whereas the consequence
of the green absorptive capacity is the green product development
performance. The green absorptive capacity thus plays the role of a
partial mediator in our research framework, which is displayed in
Figure 1.
3 | METHODOLOGY AND MEASUREMENT
3.1 | Data collection and sample
The business level was the unit of analysis in this study. A survey
questionnaire was used to verify the research hypotheses and frame-
work for the Taiwanese manufacturing industry. This industry was
selected as the research subject for three reasons. First, Taiwanese
products are highly export oriented and thus subject to strict environ-
mental regulations, such as the Montreal Convention, Kyoto Protocol,
EU directives on RoHS, and WEEE. Therefore, Taiwanese manufactur-
ing companies must make products that satisfy their consumers' envi-
ronmental requirements (Chen, 2010). In circumstances where
environmental regulations represent considerable challenges for
Taiwanese manufacturing companies, investigating the sources and
consequences of their green organizational identity is essential. Sec-
ond, most Taiwanese manufacturing companies have fewer resources
than international multinational enterprises (Chen et al., 2006). There-
fore, discussing their methods of environmental management with
insufficient resources is a meaningful exercise. Third, because Taiwan
is a newly emergent manufacturing base, exploring how Taiwanese
manufacturing companies enhance their green product development
performance through the green shared vision, environmental organiza-
tional culture, and green absorptive capacity is a useful task consider-
ing that the environmental regulations are stricter than before. These
specific characteristics of the Taiwanese manufacturing industry can
thus contribute to theoretical development. The research samples in
this study were randomly selected from the 2008 Business Directory
of Taiwan from Business Express Co., Ltd. The respondents to the
questionnaires were CEOs or managers of environmental, marketing,
FIGURE 1 Research framework
5
HR, manufacturing, or R&D departments at Taiwanese manufacturing
companies. To maximize the valid survey response rate, the research
assistants telephoned each sampled company prior to sending out
the questionnaires for explaining the objectives of the study and the
questionnaire contents and for confirming the names and job titles
of the respondents. The respondents were asked to return the com-
pleted questionnaires by mail within 2 weeks.
This study referred to the literature when designing survey items
for the questionnaire. In the first pretest, eight specialists were asked
to modify the questionnaire before it was mailed to the respondents.
Questionnaires were then randomly mailed to 12 CEOs or managers
in the aforementioned departments at different Taiwanese
manufacturing companies. In the second pretest, the 12 CEOs or man-
agers were asked to fill in the questionnaire and identify any ambigu-
ous terms and meanings or other deficiencies. A high content validity
was a prerequisite for the questionnaire in this study. To avoid com-
mon method variance, the respondents to the survey items were dif-
ferentiated according to the various constructs in this study. In
particular, the respondents for environmental leadership were envi-
ronmental department managers; the respondents for environmental
organizational culture and green organizational identity were HR,
manufacturing, marketing, or R&D department managers; and the
respondents for green competitive advantage were CEOs of Taiwan-
ese manufacturing companies. Of the 500 questionnaires sent to
CEOs or managers of the aforementioned departments, 146 were
valid, which represents an effective response rate of 29.2%.
3.2 | Definition and measurement of constructs
For measuring the questionnaire items, a 5‐point Likert scale was
employed, with responses ranging from 1 (strong disagreement) to 5
(strong agreement). The definitions and measurements of the con-
structs in this study were as follows.
3.2.1 | Environmental organizational culture
This construct had not been validated before this study. In accordance
with Hatch and Schultz (1997), this study defined the environmental
organizational culture as a symbolic context of environmental manage-
ment and protection within which interpretations guide an organiza-
tion's members in their sense‐making behaviors and processes.
Following Denison and Mishra (1995), the measurement of a
company's environmental organizational culture comprised six items:
(a) knowledge of environmental management and protection, (b) col-
laboration on environmental management and protection, (c) environ-
mental agreements, (d) environmental management and protection, (e)
responsiveness of environmental management and protection, and (f)
vision of environmental management and protection.
3.2.2 | Green shared vision
The respondents for the green shared vision were managers of envi-
ronmental departments. In accordance with Chen et al. (2015), the
6 CHEN ET AL.

TABLE 1 Descriptive statistics of this study measurement of this construct comprised four items: (a) A commonal-
ity of environmental goals exists in the company, (b) there exists total
Standard
Constructs Mean deviation A B C agreement on the company's strategic environmental direction, (c) all
the members of the company are committed to its environmental
A. Green shared vision 3.521 0.881
strategies, and (d) the company's employees are enthusiastic about
B. Environmental 3.788 0.849 0.620**
its collective environmental mission.
organizational culture
C. Green absorptive 3.555 0.715 0.645** 0.707**
capacity
3.2.3 | Green absorptive capacity
D. Green product 3.144 0.830 0.435** 0.474** 0.585**
Following Chen et al. (2014, 2015), the green absorptive capacity was
development
performance measured using five items: (a) The organizational structure of the com-
pany can comprehend, analyze, and interpret external environmental
**p < .01.
knowledge; (b) the company can communicate environmental knowl-
edge to its units; (c) the company can combine existing environmental
TABLE 2 Factor analyses of the four constructs in this study
knowledge with newly acquired or assimilated environmental knowl-
Accumulation edge; (d) the company can recognize, value, and acquire external envi-
Number Number percentage of explained ronmental knowledge critical to its operations; and (e) the company
Constructs of items of factors variance
can successfully commercialize new external environmental knowledge.
Green shared vision 4 1 80.08
Environmental 6 1 80.34 3.2.4 | Green product development performance
organizational
culture
In accordance with Chen and Chang (2013), the measurement of the
Green absorptive 5 1 72.54 green product development performance comprised five items: (a)
capacity
The green product development constitutes a key source of revenue
Green product 5 1 73.19 for the company, (b) the green product development within the com-
development
pany results in superior green products, (c) the company continually
performance
improves the processes of its green product development over time,

TABLE 3 The items' loadings (λ) and the constructs' Cronbach's α coefficients and AVEs

The square
root of
Constructs Items λ Cronbach's α AVE AVE

Green shared vision GSV1 0.792 0.92 0.801 0.895

GSV2 0.947**
GSV3 0.939**
Environmental organizational culture EOC1 0.824 0.951 0.758 0.870
EOC2 0.846**
EOC3 0.874**
EOC4 0.896**
EOC5 0.904**
EOC6 0.863**
Green absorptive capacity GAC1 0.770 0.904 0.578 0.760
GAC2 0.777**
GAC3 0.747**
GAC4 0.800**
GAC5 0.706**
Green product development performance GDP1 0.795 0.919 0.713 0.844
GDP 2 0.833**
GDP 3 0.838**
GDP 4 0.910**
GCA5 0.807**
GCA6 0.824**
GCA7 0.813**
GCA8 0.820**

**p < .01.

CHEN ET AL. 7

TABLE 4 The results of the structural model

Hypothesis Proposed effect Path coefficient Results

H1 + 0.533** H1 is supported
H2 + 0.156 H2 is not supported
H3 + 0.579** H3 is supported
H4 + 0.214* H4 is supported
H5 + 0.344** H5 is supported

Note. The number in the bracket is t value.

*p < .05. **p < .01.

FIGURE 2 The results of the full model

(d) the green product development of the company is more innovative
than that of its competitors, and (e) the green product development of
the company can meet its environmental goals.
4 | EMPIRICAL RESULTS
Confirmatory factor analysis and structural equation modeling were
employed to verify the hypotheses of the research framework. SPSS
(Version 21.0) and AMOS (Version 7.0) were used to generate the
empirical results of this study.
4.1 | Results of the measurement model
Table 1 presents the means, standard deviations, and correlation
matrix. The table indicates the positive correlations among the green
shared vision, environmental organizational culture, green absorptive
capacity, and green product development performance. Table 2 pre-
sents the factor analyses of the four constructs in this study, with each
construct classified into only one factor. We referred to relevant stud-
ies for designing the questionnaire items and performed two pretests
to review the questionnaire items before conducting the survey.
Therefore, the content validity of the constructs was satisfactory.
Moreover, we used two sets of measurements to confirm the reliabil-
ity of the results. Moreover, we examined the loadings of each con-
struct's individual items and found that the loadings (λ) of all the
items of the four constructs listed in Table 3 were significant. Hence,
the measurements in this study were accurate. We then employed
Cronbach's α to test the reliability for each construct in Table 3. The
minimum value of Cronbach's α coefficient is usually fixed at 0.7 (Hair,
Anderson, Tatham, & Black, 1998), and the coefficient values for all
four of this study's constructs were larger than 0.7. Thus, the reliability
of the constructs was acceptable.
To verify the validity of the constructs in this study, two measure-
ments were employed. First, in accordance with Fornell and Larcker
(1981), the average variance extracted (AVE) was applied to assess
the discriminative validity of the constructs. The AVE measures the
amount of variance captured by a construct's items relative to the
amount of variance due to measurement error. To satisfy the discrim-
inative validity requirement, the square root of a construct's AVE must
be larger than the correlation between this construct and another con-
struct in the model. For example, in Table 3, the square roots of the
8 CHEN
AVEs for the constructs of environmental organizational culture and
green absorptive capacity are 0.870 and 0.760, respectively, which
are larger than the correlation value between the constructs (i.e.,
0.707; Table 1). This indicates that there existed adequate discrimina-
tive validity between the aforementioned two constructs. The square
roots of the AVEs of all the constructs in Table 3 are larger than the
correlations among them in Table 1. Therefore, the discriminative
validity of this study's constructs was acceptable. Second, if the AVE
of a construct is larger than 0.5, the construct's convergent validity
is satisfactory. As presented in Table 3, the AVEs of the four con-
structs were 0.801, 0.758, 0.578, and 0.713, respectively. Because
all these values are larger than 0.5, the convergent validity of this
study's constructs was acceptable. Therefore, the constructs used in
this study were acceptable in terms of both the discriminative and
convergent validities. Several tests thus demonstrated adequate reli-
ability and validity for this study's constructs.
4.2 | Results of the structural model
Table 4 lists the results of the structural model, and Figure 2 illustrates
the results of the complete model. The overall fit measures of struc-
tural equation modeling indicated that the fitness of the complete
model was good, as displayed in Figure 2 (GFI = 0.83, RMSEA = 0.095,
NFI = 0.903, and CFI = 0.919). According to the results presented in
Table 4 and Figure 2, all paths except Path 2 were estimated as signif-
icant. Consequently, 1, 3, 4, and 5 were supported, as presented in
Table 4. Thus, the green absorptive capacity completely mediates
the relationship between the green shared vision and green product
development performance and partially mediates the relationship
between the environmental organizational culture and green product
development performance. According to these findings, companies
should increase their green absorptive capacity to enhance their green
product development performance.
5 | CONCLUSIONS AND DISCUSSION
According to our findings, both the green shared vision and environ-
mental organizational culture had positive effects on the green
absorptive capacity. The green absorptive capacity also positively
affected the green product development performance. Furthermore,
the green absorptive capacity completely mediated the relationship
between the green shared vision and green product development per-
formance and partially mediated the relationship between the envi-
ronmental organizational culture and green product development
performance.
This study provides five main contributions for theory and man-
agement. First, no other research has yet explored the interaction
between the green shared vision, environmental organizational cul-
ture, green absorptive capacity, and green product development per-
formance. This study developed an original framework to explore the
managerial implications, antecedents, and consequences of the green
absorptive capacity, thus filling the research gap. Second, this study
ET AL.
demonstrated that the environmental organizational culture positively
affected both the green absorptive capacity and green product devel-
opment performance. Third, our empirical results indicated that the
green shared vision had a positive effect on the green absorptive
capacity, which suggests that management can pass on a shared vision
and clear policy objectives and tasks to other members of the organi-
zation. Moreover, enterprises that establish a clear common vision
with respect to sustainability can quickly build up their green absorp-
tive capacity.
Fourth, in the past, environmental management and enterprise
performance may have been in conflict. However, our findings indi-
cated that the green absorptive capacity positively affected the green
product development performance. Businesses committed to the pur-
suit of environmental and carbon management can undertake the “cra-
dle to cradle” idea to eliminate wastes, enhance the use of renewable
energy, raise eco‐efficiency, and achieve biological diversity.
Manufacturing industries are often considered to be highly polluting.
Thus, they have a large impact on their surrounding environment
and potentially cause conflicts and disputes with local residents and
nonprofit organizations. Enterprises can upgrade their green technolo-
gies, develop a blue ocean strategy to create a green niche market, and
generate a win–win solution for their stakeholders.
Fifth, this study found that the relationship between the green
shared vision and green product development performance was
completely mediated by the green absorptive capacity. Therefore,
companies should commit to establishing a green absorptive capacity
through both potential (knowledge acquisition and absorption) and
practical (knowledge transformation and application) absorptive
capacities for ensuring their competitiveness and green image.
ACKNOWLEDGMENTS
The authors are grateful for the funding of Ministry of Science and
Technology in Taiwan for this study, and the project number of this
study is MOST 106‐2410‐H‐305‐054–SS3.
ORCID
Yu‐Shan Chen https://orcid.org/0000-0002-7406-9372
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How to cite this article: Chen Y‐S, Lin S‐H, Lin C‐Y, Hung S‐T,
Chang C‐W, Huang C‐W. Improving green product
development performance from green vision and organizational
culture perspectives. Corp Soc Resp Env Ma. 2019;1–10.
https://doi.org/10.1002/csr.1794