THE ROLE OF ABSORPTIVE CAPACITY, GREEN DYNAMIC CAPABILITY, AND GREEN MANUFACTURING PRACTICES ON GREEN INNOVATION PERFORMANCE IN MANUFACTURING COMPANIES BY

• Main Author: Amaranti, Reni
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/74678
• Institution: Institut Teknologi Bandung

Environmental issues such as scarcity of natural resources, global warming, pollution, and waste management have become the world's attention, including the industrial world. Manufacturing companies that generally consume large amounts of natural resources must be able to respond to these environmental issues. One way to respond to these issues is to implement green manufacturing. Companies need to change the products produced and the processes carried out to implement green manufacturing. The green implementation also requires a change in perspective and commitment from all parts of the company to pay attention to environmental aspects in every activity. These changes require innovation in products, processes, or management to make them more environmentally friendly. Green innovations are called innovations that consider environmental aspects and aim to reduce negative environmental impacts. From studies that discuss green innovation, a company's ability to absorb knowledge from the external environment, the ability to share knowledge, and the company's dynamic capabilities are factors that influence green innovation performance in different ways. These factors are considered relevant for manufacturing companies in Indonesia which tend to need to be faster in responding to environmental issues. This research produces a model that describes the role of dynamic capabilities, knowledge-sharing capabilities, absorptive capacity, and green manufacturing practices in green innovation performance in manufacturing companies. This research differs from earlier similar studies in describing green dynamic capability into three different but interrelated capabilities (sensing, seizing, and reconfiguring capability). In addition, the research model also describes green manufacturing practices as one of the variables influencing green innovation performance. Therefore, this research is considered to provide a more complete explanation compared to previous studies in the area of green innovation, especially research that examines green innovation from the perspective of a company's dynamic capabilities. This research was conducted in 3 (three) stages, namely (1) designing a research plan; (2) model development and model testing; and (3) analysis, synthesis, and conclusion of the research. The survey strategy is used at the model testing stage, while case studies are used at the analysis stage. The survey was conducted to determine how knowledge-sharing capabilities, absorptive capacity, green dynamic capability, and green manufacturing practices influence green innovation performance. Case studies are conducted to explain how the relationship between variables in the model occurs in the company. This study uses the PLS-SEM method for processing survey data. The research model that has been tested quantitatively shows that green dynamic capability directly affects green innovation performance.The three capabilities that describe green dynamic capability (sensing, seizing, and reconfiguring capability) show sequential linkages. Sensing capability positively affects seizing capability, and seizing capability affects reconfiguring capability. Therefore, what directly influences green innovation performance is reconfiguring capability. Knowledge- sharing capability affects absorptive capacity. Absorptive capacity does not directly affect green innovation performance but must be mediated by green dynamic capability or manufacturing practices. Green manufacturing practices have a positive and direct effect on green innovation performance. The results of testing the research model also show that the model is moderately able to explain green innovation performance. The research model that has been tested quantitatively is also confirmed and explained more fully by the results of case studies. Thus, the variables discussed in the research model can explain green innovation performance. Practically, this research also provides benefits for manufacturing companies in Indonesia to determine the stages and aspects that must be considered to develop green innovation performance.