IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v248y2022ics092552732200072x.html
   My bibliography  Save this article

Revisiting the relationship between environmental and financial performance: The moderating role of ambidexterity in logistics

Author

Listed:
  • Rintala, Oskari
  • Laari, Sini
  • Solakivi, Tomi
  • Töyli, Juuso
  • Nikulainen, Reetta
  • Ojala, Lauri

Abstract

Research has shown the need for business organizations to be ambidextrous, which means they should possess the ability to simultaneously exploit existing competencies and explore novel opportunities for improved organizational performance. Past evidence suggests that corporate environmental and financial performance may benefit from well-organized logistics operations. Meanwhile, the causality between the performances has been continuously debated, and the role of ambidexterity in the relationship is largely unexplored. We argue that ambidexterity in logistics operations enhances the link between environmental and financial performance. Using longitudinal data from Finnish manufacturing and trading firms, we applied regression analysis to test a theory-driven moderation model. Our findings indicate that ambidexterity in logistics operations affects the strength of the virtuous cycle between environmental and financial performance. Notably, the stronger the explorative orientation in logistics in a firm, the more enhanced the link between their environmental and financial performances. Overall, firms may find it challenging for their available resources to be employed for environmental and financial sustainability unless they are ambidextrous. Financial resources and environmental investments are necessary conditions but not sufficient for performance improvements in themselves; they need to be coupled with a desire to seek new, innovative solutions rather than just exploit existing practices. Combining exploitative and explorative orientations in logistics helps businesses meet divergent stakeholder expectations and translate their resources into performance. To this end, logistics operations should be organized to support organizational performance through an active search for new solutions as well as investments to develop both existing and new logistics practices.

Suggested Citation

  • Rintala, Oskari & Laari, Sini & Solakivi, Tomi & Töyli, Juuso & Nikulainen, Reetta & Ojala, Lauri, 2022. "Revisiting the relationship between environmental and financial performance: The moderating role of ambidexterity in logistics," International Journal of Production Economics, Elsevier, vol. 248(C).
    • Handle: RePEc:eee:proeco:v:248:y:2022:i:c:s092552732200072x
    DOI: 10.1016/j.ijpe.2022.108479
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S092552732200072X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2022.108479?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sandra A. Waddock & Samuel B. Graves, 1997. "The Corporate Social Performance–Financial Performance Link," Strategic Management Journal, Wiley Blackwell, vol. 18(4), pages 303-319, April.
    2. James G. March, 1991. "Exploration and Exploitation in Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 71-87, February.
    3. Steven W. Bradley & Dean A. Shepherd & Johan Wiklund, 2011. "The Importance of Slack for New Organizations Facing ‘Tough’ Environments," Journal of Management Studies, Wiley Blackwell, vol. 48, pages 1071-1097, July.
    4. Earnhart, Dietrich & Lizal, Lubomir, 2006. "Effects of ownership and financial performance on corporate environmental performance," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 111-129, March.
    5. Venugopal, Aparna & Krishnan, T.N. & Upadhyayula, Rajesh Srinivas & Kumar, Manish, 2020. "Finding the microfoundations of organizational ambidexterity - Demystifying the role of top management behavioural integration," Journal of Business Research, Elsevier, vol. 106(C), pages 1-11.
    6. Asoke Dey & Paul LaGuardia & Mahesh Srinivasan, 2011. "Building sustainability in logistics operations: a research agenda," Management Research Review, Emerald Group Publishing Limited, vol. 34(11), pages 1237-1259, October.
    7. Partanen, Jukka & Kohtamäki, Marko & Patel, Pankaj C. & Parida, Vinit, 2020. "Supply chain ambidexterity and manufacturing SME performance: The moderating roles of network capability and strategic information flow," International Journal of Production Economics, Elsevier, vol. 221(C).
    8. David Gadenne & Jessica Kennedy & Catherine McKeiver, 2009. "An Empirical Study of Environmental Awareness and Practices in SMEs," Journal of Business Ethics, Springer, vol. 84(1), pages 45-63, January.
    9. Ahmed Al‐Hadi & Bikram Chatterjee & Ali Yaftian & Grantley Taylor & Mostafa Monzur Hasan, 2019. "Corporate social responsibility performance, financial distress and firm life cycle: evidence from Australia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(2), pages 961-989, June.
    10. Dasí, Àngels & Iborra, María & Safón, Vicente, 2015. "Beyond path dependence: Explorative orientation, slack resources, and managerial intentionality to internationalize in SMEs," International Business Review, Elsevier, vol. 24(1), pages 77-88.
    11. Ojha, Divesh & Acharya, Chandan & Cooper, Danielle, 2018. "Transformational leadership and supply chain ambidexterity: Mediating role of supply chain organizational learning and moderating role of uncertainty," International Journal of Production Economics, Elsevier, vol. 197(C), pages 215-231.
    12. Ramakrishnan Ramanathan, 2018. "Understanding Complexity: the Curvilinear Relationship Between Environmental Performance and Firm Performance," Journal of Business Ethics, Springer, vol. 149(2), pages 383-393, May.
    13. Ping-Sheng Koh & Cuili Qian & Heli Wang, 2014. "Firm litigation risk and the insurance value of corporate social performance," Strategic Management Journal, Wiley Blackwell, vol. 35(10), pages 1464-1482, October.
    14. Sini Laari & Juuso Töyli & Lauri Ojala, 2018. "The effect of a competitive strategy and green supply chain management on the financial and environmental performance of logistics service providers," Business Strategy and the Environment, Wiley Blackwell, vol. 27(7), pages 872-883, November.
    15. Mario Testa & Antonio D’Amato, 2017. "Corporate environmental responsibility and financial performance: does bidirectional causality work? Empirical evidence from the manufacturing industry," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 13(2), pages 221-234, June.
    16. Waqas, Hamid & Md-Rus, Rohani, 2018. "Predicting financial distress: Applicability of O-score and logit model for Pakistani firms," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 14(2), February.
    17. Markus Hang & Jerome Geyer‐Klingeberg & Andreas W. Rathgeber, 2019. "It is merely a matter of time: A meta‐analysis of the causality between environmental performance and financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 28(2), pages 257-273, February.
    18. Nancy Staudenmayer & Marcie Tyre & Leslie Perlow, 2002. "Time to Change: Temporal Shifts as Enablers of Organizational Change," Organization Science, INFORMS, vol. 13(5), pages 583-597, October.
    19. Constantine Andriopoulos & Marianne W. Lewis, 2009. "Exploitation-Exploration Tensions and Organizational Ambidexterity: Managing Paradoxes of Innovation," Organization Science, INFORMS, vol. 20(4), pages 696-717, August.
    20. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    21. Chee Yew Wong & Christina W.Y. Wong & Sakun Boon-itt, 2020. "Effects of green supply chain integration and green innovation on environmental and cost performance," International Journal of Production Research, Taylor & Francis Journals, vol. 58(15), pages 4589-4609, July.
    22. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    23. Angeloantonio Russo & Rosamartina Schena, 2021. "Ambidexterity in the context of SME alliances: Does sustainability have a role?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 606-615, March.
    24. Ghiyoung Im & Arun Rai, 2008. "Knowledge Sharing Ambidexterity in Long-Term Interorganizational Relationships," Management Science, INFORMS, vol. 54(7), pages 1281-1296, July.
    25. Friedman, Milton, 2002. "Capitalism and Freedom," University of Chicago Press Economics Books, University of Chicago Press, number 9780226264202.
    26. Julia Hartmann & Stephan Vachon, 2018. "Linking Environmental Management to Environmental Performance: The Interactive Role of Industry Context," Business Strategy and the Environment, Wiley Blackwell, vol. 27(3), pages 359-374, March.
    27. Vastola, Vincenzo & Russo, Angeloantonio & Vurro, Clodia, 2017. "Dealing with Cultural Differences in Environmental Management: Exploring the CEP-CFP Relationship," Ecological Economics, Elsevier, vol. 134(C), pages 267-275.
    28. Christoph Trumpp & Thomas Guenther, 2017. "Too Little or too much? Exploring U‐shaped Relationships between Corporate Environmental Performance and Corporate Financial Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 26(1), pages 49-68, January.
    29. Wenwen Zhao & Taiwen Feng & Xuexiang Xin & Guangyi Hao, 2021. "How to respond to competitors' green success for improving performance: The moderating role of organizational ambidexterity," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 489-506, January.
    30. Sahi, Gurjeet Kaur & Gupta, Mahesh C. & Cheng, T.C.E., 2020. "The effects of strategic orientation on operational ambidexterity: A study of indian SMEs in the industry 4.0 era," International Journal of Production Economics, Elsevier, vol. 220(C).
    31. Tom Vanacker & Veroniek Collewaert & Shaker A. Zahra, 2017. "Slack resources, firm performance, and the institutional context: Evidence from privately held European firms," Strategic Management Journal, Wiley Blackwell, vol. 38(6), pages 1305-1326, June.
    32. Michael E. Porter & Claas van der Linde, 1995. "Toward a New Conception of the Environment-Competitiveness Relationship," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 97-118, Fall.
    33. Qing Cao & Eric Gedajlovic & Hongping Zhang, 2009. "Unpacking Organizational Ambidexterity: Dimensions, Contingencies, and Synergistic Effects," Organization Science, INFORMS, vol. 20(4), pages 781-796, August.
    34. Friedman, Milton, 2002. "Capitalism and Freedom," University of Chicago Press Economics Books, University of Chicago Press, number 9780226264219, Febrero.
    35. Gligor, David M. & Holcomb, Mary C. & Feizabadi, Javad, 2016. "An exploration of the strategic antecedents of firm supply chain agility: The role of a firm's orientations," International Journal of Production Economics, Elsevier, vol. 179(C), pages 24-34.
    36. Nuttaneeya Torugsa & Wayne O’Donohue & Rob Hecker, 2012. "Capabilities, Proactive CSR and Financial Performance in SMEs: Empirical Evidence from an Australian Manufacturing Industry Sector," Journal of Business Ethics, Springer, vol. 109(4), pages 483-500, September.
    37. Hamid Waqas & Rohani Md-Rus, 2018. "Predicting financial distress: Applicability of O-score model for Pakistani firms," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(2), pages 389-401, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liang, Jing & Yang, Shilei & Xia, Yu, 2023. "The role of financial slack on the relationship between demand uncertainty and operational efficiency," International Journal of Production Economics, Elsevier, vol. 262(C).
    2. Du, Gang & Li, Wendi, 2022. "Does innovative city building promote green logistics efficiency? Evidence from a quasi-natural experiment with 285 cities," Energy Economics, Elsevier, vol. 114(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gomes, Paulo J. & Silva, Graça Miranda & Sarkis, Joseph, 2020. "Exploring the relationship between quality ambidexterity and sustainable production," International Journal of Production Economics, Elsevier, vol. 224(C).
    2. Gu, Minhao & Yang, Lu & Huo, Baofeng, 2021. "The impact of information technology usage on supply chain resilience and performance: An ambidexterous view," International Journal of Production Economics, Elsevier, vol. 232(C).
    3. Markus Hang & Jerome Geyer‐Klingeberg & Andreas W. Rathgeber, 2019. "It is merely a matter of time: A meta‐analysis of the causality between environmental performance and financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 28(2), pages 257-273, February.
    4. Partanen, Jukka & Kohtamäki, Marko & Patel, Pankaj C. & Parida, Vinit, 2020. "Supply chain ambidexterity and manufacturing SME performance: The moderating roles of network capability and strategic information flow," International Journal of Production Economics, Elsevier, vol. 221(C).
    5. Úbeda-García, Mercedes & Claver-Cortés, Enrique & Marco-Lajara, Bartolomé & Zaragoza-Sáez, Patrocinio, 2020. "Toward a dynamic construction of organizational ambidexterity: Exploring the synergies between structural differentiation, organizational context, and interorganizational relations," Journal of Business Research, Elsevier, vol. 112(C), pages 363-372.
    6. Asif Khan & Chih-Cheng Chen & Kuan-Hua Lu & Ardy Wibowo & Shih-Chih Chen & Athapol Ruangkanjanases, 2021. "Supply Chain Ambidexterity and Green SCM: Moderating Role of Network Capabilities," Sustainability, MDPI, vol. 13(11), pages 1-13, May.
    7. Shashi, & Centobelli, Piera & Cerchione, Roberto & Singh, Rajwinder, 2019. "The impact of leanness and innovativeness on environmental and financial performance: Insights from Indian SMEs," International Journal of Production Economics, Elsevier, vol. 212(C), pages 111-124.
    8. Jing A. Zhang & Xiling Cui, 2017. "In Search Of The Effects Of Business And Political Ties On Innovation Ambidexterity," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(02), pages 1-27, February.
    9. Sini Laari & Tomi Solakivi & Anu Bask & Juuso Töyli & Lauri Ojala, 2021. "Unravelling Mickey Mouse: The Effect of Supply Chain Position and Organisational Slack on the Uneven Balance of Sustainability Dimensions," Sustainability, MDPI, vol. 13(24), pages 1-16, December.
    10. Lee, Neil Chueh-An, 2021. "Reconciling integration and reconfiguration management approaches in the supply chain," International Journal of Production Economics, Elsevier, vol. 242(C).
    11. Franck Brulhart & Sandrine Gherra & Bertrand V. Quelin, 2019. "Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?," Journal of Business Ethics, Springer, vol. 158(1), pages 25-46, August.
    12. Matsuno, Ken & Kohlbacher, Florian, 2020. "Proactive marketing response to population aging: The roles of capabilities and commitment of firms," Journal of Business Research, Elsevier, vol. 113(C), pages 93-104.
    13. Chang, Kuo-Hsiung & Gotcher, Donald F., 2020. "How and when does co-production facilitate eco-innovation in international buyer-supplier relationships? The role of environmental innovation ambidexterity and institutional pressures," International Business Review, Elsevier, vol. 29(5).
    14. Bai Xue & Zhuang Zhang & Pingli Li, 2020. "Corporate environmental performance, environmental management and firm risk," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1074-1096, March.
    15. Balasubramaniam Ramesh & Kannan Mohan & Lan Cao, 2012. "Ambidexterity in Agile Distributed Development: An Empirical Investigation," Information Systems Research, INFORMS, vol. 23(2), pages 323-339, June.
    16. Joern Hoppmann & Alice Sakhel & Marcel Richert, 2018. "With a little help from a stranger: The impact of external change agents on corporate sustainability investments," Business Strategy and the Environment, Wiley Blackwell, vol. 27(7), pages 1052-1066, November.
    17. David B. Audretsch & Maribel Guerrero, 2023. "Is ambidexterity the missing link between entrepreneurship, management, and innovation?," The Journal of Technology Transfer, Springer, vol. 48(6), pages 1891-1918, December.
    18. Songsong Cheng & Qunpeng Fan & Yang Song, 2023. "Performance Gap and Innovation Ambidexterity: A Moderated Mediation Model," Sustainability, MDPI, vol. 15(5), pages 1-22, February.
    19. José Andrade & Mário Franco & Luis Mendes, 2021. "Technological capacity and organisational ambidexterity: the moderating role of environmental dynamism on Portuguese technological SMEs," Review of Managerial Science, Springer, vol. 15(7), pages 2111-2136, October.
    20. Hamed, Ruba Subhi & Al-Shattarat, Basiem Khalil & Al-Shattarat, Wasim Khalil & Hussainey, Khaled, 2022. "The impact of introducing new regulations on the quality of CSR reporting: Evidence from the UK," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 46(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:248:y:2022:i:c:s092552732200072x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.