Social Embeddedness In Sustainable Innovation Process

The significance of innovation to the sustainability has been increasingly capturingmore and more attention from scholars, practitioners and policy makers in the lastdecade. A thorough review of the literature suggests that sustainable innovation requiresthe active involvement and embedded collaboration of a broader and more diversenetwork of traditional and non-traditional stakeholders, due to the complexity ofsustainability related issues and the huge challenges it has caused on companies’ currentsystems, strategies, technologies, markets and business modes. Yet, to our bestknowledge, few scholars has systematically applied theoretical frameworks and doneempirical researches to explore why social embeddedness is so important for sustainableinnovation and how companies should be socially embedded into the social context inthe sustainable innovation process.Given the above research gap, this study frames the responses by companies to thechallenges of sustainable innovation from the perspective of social embeddedness.Based on twelve cases in Chinese context, this study explores the concept of socialembeddedness in the sustainable innovation process. The main conclusions are asfollows:Firstly, this study draws on the literature of sustainable development and classicdefinitions of innovation to define sustainable innovation, which is defined in our studyas socially, environmentally sustainable-oriented innovative activities that at the sametime stays financially sustainable. The sustainable innovation can be in the form ofproduct innovation, service innovation, technological innovation and business modelinnovation. Then, sustainable innovation can be divided into three categories throughthe innovation externality lens: Eco-innovation, BOP-oriented innovation and GreenLeap.Secondly, this study finds that the embedded network built for sustainableinnovation contains a large number of commercial stakeholder partners andnon-commercial stakeholder partners. The embedded partners play a various of roles insustainable innovation process: co-developer, supplier, distributor, customer, loanprovider, mediator and investor. What is more, the diversity and roles of embeddedpartners evolve as the embedding and de-embedding process. Thirdly, using a multiple-case inductive analytical method, this study reveals theantecedents and consequences of becoming socially embedded and underlyingcontextual factors during the sustainable innovation process. Our findings suggest that afirm has a bigger incentive to build embedded ties and partnerships under thosesituations: the higher uncertainty and institutional voids in the institutional level; thehigher stakeholder pressure and lack of capabilities and resources in the organizationallevel; and the higher managerial cognitive level in the individual level. In addition, thisstudy observe that becoming socially embedded contributes beyond bringing andleveraging network resources, like establishing legitimacy, gaining structural support,and creating shared value.Finally, this study explores the impact of social embeddedness on sustainableinnovation. Exploratory study shows that social embeddedness has a positive impact onsustainable innovation. And social embeddedness influences the performance ofsustainable innovation through dynamic capabilities as the mediating variable, whichcontains three sub-categories: stakeholder integration, continuous innovation andsustainability-focused learning.