Eco-friendly product development strategy: antecedents, outcomes, and contingent effects

Abstract

Integrating sustainability aspects into product development has long been recognized as a strategic priority for practitioners. Yet the literature reports mixed results on the product development effectiveness outcomes of sustainable product development strategies, while scant research has investigated how companies integrate environmental aspects into product development. This study develops a model that integrates effectiveness-enhancing outcomes and organizational inputs of eco-friendly product development strategies. Using questionnaire responses from firms from multiple industries, supplemented with lagged primary product development performance data, we find that top management commitment and corporate environmental support policies can facilitate eco-friendly product development strategies, while environmental performance incentives do not. In turn, the adoption of such strategies has a positive effect on firms’ product development effectiveness. This effect weakens when business conditions are highly complex but tends to become stronger with increasing levels of munificence in the business environment. These findings have important implications for practitioners and researchers that are discussed.