Sustainable Innovation and Knowledge Management

Abstract

I draw on the emerging literature on organizational capabilities associated with learning and sustainability innovation to investigate the effects of knowledge management, dynamic capabilities and normative values on sustainable innovation. The aim of this paper is to gain an understanding of how sustainability is managed from a knowledge management perspective, and how sustainable innovation and knowledge management foster integrative- and dynamic capabilities.
To measure how and to which degree sustainable innovation has been implemented in manufacturing companies, I have conducted a literature review of four articles that empirically deal with organizational capabilities associated with learning and sustainability innovation. Two of these focus on organizational capabilities and two of these focus on the company’s absorptive capacities. The empirical studies deal with manufacturing companies in Denmark, Italy, and two in Germany one of which deals with a multinational company with local branches worldwide.
Managing sustainable innovation is relevant for firms, as sustainability is becoming increasingly complex and dynamic, due to rules and regulations, health- and climate catastrophes, increasing consumer demand for sustainable products and services, and due to resources that are being used up faster than they can be regenerated.
My findings suggest that sustainable innovation is an inevitable prerequisite for the long-term survival of today’s companies. The main findings of the study are that firms should focus on the development of environmental-oriented absorptive capacities of knowledge acquisition and knowledge exploitation; both a unit-specific absorptive capacity and a common absorptive capacity. Furthermore, A second finding is that a firm’s organizational capabilities seem to develop through focus on corporate sustainability. A third finding reveals that dynamic capabilities were found to be of high relevance for firms in VUCA conditions (volatility, uncertainty, complexity and ambiguity), and that firms should use the sensing capability to adapt their knowledge to environmental VUCA conditions and possibly be the drivers of new knowledge themselves. Finally, I found that corporate sustainability should be a part of the cognitive frame of the firm to encourage normative values and in turn increase the managers' open-mindedness and motivation towards sustainable innovation, and their willingness to risk-taking concerning sustainability.