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The impact of green core competencies on green image and green innovation--an Indian perspective.

INTRODUCTION

One of the best ways of brand differentiation is to "go green". According to Polanski (1994), "Green marketing or environmental marketing consists of all activities designed to generate and facilitate any exchange intended to satisfy human needs and wants, such that satisfaction of these needs and wants occur with minimum detrimental impact on the natural environment" Mintu and Lozada (1993) defined green marketing as "the application of marketing tools to facilitate exchanges intended to satisfy organizational and individual goals in such a way such that reservation, protection and conservation of physical environment is upheld". According to Stanton and Futell (1987), "all activities designed to generate and facilitate any exchanges intended to satisfy human needs and wants; therefore, it ensures the interest of all organization as protected and voluntary exchange will not take place unless buyers and sellers are mutually benefitted".

Today companies are adopting this green marketing strategy in order to enhance their brand equity and to build competitive edge in the market. "Going green" for some of the companies has acted as the first mover advantage helping them to climb the ladder of success. Besides this, companies go green because of the following reasons: a) profitable venture, b) it is a part of CSR activity, c) govt. rules and regulations d) cost and profit issue.

India has been one of the top most countries which have paid attention to green marketing some of the best successful campaigns in are:

GREEN IT PROJECT: SBI--SBI is well known for its green marketing campaigns. It has used eco-friendly equipments. It has also introduced green channel counter wherein, it has introduced the concept of paperless banking, no deposit slip, withdrawal forms etc.

WIPRO Green it--Wipro has been one of the pioneers in the green marketing campaigns Wipro has launched new range of desktops and laptops called 'green ware'.

TATA NEW MANTRA--Tata has been a leader in eco-friendly products. Even its showrooms building material are eco-friendly.

LEAD FREE PAINTS FROM NEROLAC--Nerolac has launched lead free paints. Lead in paints causes injury to health especially children resulting in lower intelligence and disturbed nervous system.

The concept of green marketing clearly embraces concepts like, green core competence, green innovation and green image. This paper seeks to explain how green core competencies of the firm influences green innovation (includes green product innovation and green process innovation) and green image.

This paper focuses on the role of green core competence in affecting green innovation and green image with special reference to automobile industry in India. Green innovation is divided into green product innovation and green process innovation. The paper is sequenced as follows: it starts with a brief introduction of the current scenario, followed by review of literature, on the basis of which research gap is identified and objective of study are defined. In the second phase, hypothesis formulation is done followed by data collection and data analysis. In the third phase, managerial implications and scope for future research is explained.

REVIEW OF LITERATURE

The paper revolves around three key words; green core competencies, green innovation and green image.

Green core competencies:

The term 'green core competencies' was first used by Prahalad and Hamel in 1990. According to them, "Core competencies represent the sum of learning across individual skill sets and individual organisational units. Bogner and Thomas (1994) defined core competence as "firm specific skills and cognitive traits directed towards the attachment of highest possible level of customer satisfaction vis a vis competitors" The term green core competence is core competence in relation to the environment. Chen (2007) developed a novel construct of green core competence in which he studied the effect of green core competence on green innovation and green image. Results of the study concluded that green core competence plays an important role in building green innovation and green image.

Green innovation

According to Chen et al (2006) green innovation is defined as, "hardware or software innovation that is related to green products or processes ,including innovation in technologies that are involved in energy -saving, pollution prevention ,waste recycling ,green product design or corporate environmental margin". Schiederig et al. (2011) explained the concept of green innovation and gives an overview of the available literature in green innovation. Shan (2007) pointed out that there are two types of green innovation i.e. proactive and reactive green innovation. The study seeks to find out what causes proactive green innovation and what causes reactive green innovation. Another study by Chang (2011), checks the effect of corporate environment ethics on competitive advantage. The study takes into consideration two aspects of green innovation i.e. green product innovation and green process innovation. The results of the study showed that green product innovation acts as a mediating factor between corporate environment ethics and competitive advantage. Similarly, Rosa and Devashish (2010) make use of case study method to investigate about green product innovation. The study prepares a conceptual framework of three important dimensions of green product innovation such as energy minimization, material reduction and pollution.

Green Image

According to Cretu and Bordie (2007), "Brand image includes symbolic meanings that associate with the specific attribute of the brand and it can be defined as the mental picture of the brand in the consumer's mind that is linked to an offering". Padgett and Allen (1997) defined brand image as, "a set of perceptions about the brand reflected by the brand association of the consumers". Green brand image as defined by Chen (2010), "is a set of perceptions of a brand in consumer's mind that is linked to environmental commitments and environmental concerns". Chan and Ricky (2000) conducted a research on how environmental claim affects communication and how country's green image plays an important role in moderating the claim. Chang and Fong studied the impact of green corporate image on green satisfaction and green customer loyalty the results of the study indicate that green corporate image is positively associated with green corporate image and green satisfaction. Chen (2010) conducted research to study the drivers of green brand equity. It was an empirical study which was conducted to find out how the drivers of green image, green trust and green satisfaction are related to green brand equity. The results of the research show that green image green trust and green satisfaction are positively related to green brand equity. However, green brand equity is mediated by green satisfaction and green trust. Phuong et al (2013) conducted research to identify the main factors affecting green brand preference in Taiwan industry in Egypt. The researchers try to develop a conceptual model of green brand preference, green brand image and green satisfaction. The results of the study show that there is a strong correlation between green brand image, green preference and green trust.

RESEARCH GAP

There is lack of research in the Indian scenario regarding how does green core competencies affects green innovation and green image.

OBJECTIVES OF STUDY

(1) To find out if green core competence is positively correlated with green innovation (product innovation and process innovation) and green image.

(2) To find out how green core competence affects green innovation and green image.

HYPOTHESIS DEVELOPMENT

[H.sub.1a]: Green core competence is positively related to green product innovation

[H.sub.1b]: Green core competence is positively related to green process innovation

[H.sub.1c]: Green core competence is positively correlated with green image

[H.sub.2a]: Green core competence affects green product innovation

[H.sub.2b]: green core competence affects green process innovation

[H.sub.2c]: green core competence affects green image.

DATA COLLECTION

The data was collected through written questionnaire method and personal interview method. The unit of analysis was the middle and top level employees of three different automobile companies (R+D) dept. Mahindra & Mahindra, Mahindra Swaraj, Forbes Marshall from Mumbai and Pune region. The companies were selected on the basis of random sampling method. Around 15 employees from three different companies are selected for the purpose. Data collection was done in two phases. In the first phase personal interview was done to get some idea about the companies. In the second phase, respondents were mailed questionnaire which they had to fill and return within a week. The questionnaire was divided into four parts i.e. green core competencies, green product innovation, green process innovation and green image.

The variables included under green core competencies are (a) the company chooses the material of the product that produces the least amount of pollution for conduction product development or design. (b) The company chooses the material of the product that chooses the least amount of energy and resources for conducting product development. (c) The company uses the least amount of material to comprise the product for conducting product development and design. (d) The company would circumspectly deliberate whether the product is easy to recycle, reuse and decompose for conducting product development.

Green product innovation comprises of the following: (a) the Company chooses the material of the product that consumes the least amount of energy and resources for conducting product development. (b) The company uses the fewest amount of material to comprise the product for conducting product development or design. (c) The company would circumspectly deliberate whether the product is easy to recycle, reuse for conducting product development.

Green process innovation includes: (a) the manufacturing process company effectively reduces the emission of hazardous substance or waste. (b) The manufacturing co recycles waste and allows them to be treated as used. (c) The manufacturing process of the co reduces consumption of water and electricity and coal.

Green image includes (a) The company is regarded as the best benchmark for environmental management. (b) The company is successful about environmental management. (c) The company is trustworthy about environmental management. (d) The company is dependent on environmental management. (e) The reputation about the company environment is stable.

All the questions were on five point likert scale (1--strongly disagree and 5--strongly agree). Before actual surveys, pilot study was done by taking a small group of 5 experts and modifications were done in line of the suggestions given by them.

DATA ANALYSIS

Through personal interview method it was found out that core competencies of Mahindra and Mahindra as well as the Mahindra Swaraj unit include technology, innovation and leadership. The core competencies of Forbes Marshall include information, communication and IT security.

Data analysis was done with the help of SPSS. Reliability score was done before actual data analysis. Previously the reliability score was less than .7. Hence, certain variables in each of the parameters were removed in order to increase the degree of reliability; viz. in case of green core competence, the variable company uses the fewest amount of material to comprise the product for conducting product development and design In manufacturing process innovation the variable, the manufacturing process reduces the use of raw material was removed. In green image, the variable, the company is successful about environmental management is removed. After removing these variables the reliability score was again calculated and the values found out are as follows:
Table 1: Table showing the reliability of various parameters

Parameters Cronbach Alpha score

Green core competence .752
Green product innovation .772
Green process innovation .891
Green image .755


From the table 1 it can be seen that the cronbach Alpha score exceeds .7 for the variables hence, all the variables are reliable.

Descriptive analysis was also done to know the importance of each of the variables

From the table 2, it can be see that green image emerges as the most important parameter because the mean is the highest (mean = 22.026)

Bivariate correlation was done to find the degree of correlation between green core competence and green product innovation and green process innovation.

From the table 3 we can see that green core competence is positively correlated with green product innovation, green process innovation and green image. Hence H1a, H1b, H1c are accepted. However, it can be noted that highest degree of co-relation exists in case of green image while green process innovation has the lowest correlation. From this we can conclude that green core competence and green image are highly co related.

REGRESSION ANALYIS

In order to test the effect of green core competence on green product innovation, green process innovation and green image regression analysis was done.

Independent variable-green core competence is treated as an independent variable.

Dependent variable-green product innovation, green process innovation and green image are taken as dependent variable.

[H.sub.2a]: Green core competence affects green product innovation process

From the above table we can see that the adjusted R = .373 which means the strength of association is quite low. The beta value is .771 and the t-value amounts to 2.672. However, the sig value is less than .05, therefore [H.sub.2a] is accepted. This implies that green core competence affects green product innovation process.

Paying attention to green core competence will help to launch innovative products in the market.

[H.sub.2b]: Green core competence affects green process innovation process

From the above table it can be seen that adjusted R=.123 and the level of significance is .219. Which is greater than .05? Therefore, [H.sub.2b] is rejected. Therefore, we can say that processes are not affected by the green core competencies.

[H.sub.2c]: Green core competence affects green image

The regression table shows that adjusted R=.709 which shows the strength of association is quite good and the level of significance is .000 which implies that H3 accepted. Therefore, green core competencies play an important role in affecting green image. Companies can lay emphasis on developing their core competencies to improve the brand image of the company.

Therefore, it can be seen that green core competence affects green product innovation but does not affect process innovation. However, green core competence affects green image very effectively.

MANAGERIAL IMPLICATIONS

The study is of great use to the automobile industry in strengthening their core competencies in a way which can help them in enhancing their green image. The study can also help the manufacturers in identifying the reasons for non-effectiveness of green core competence over green process innovation. The study opens wide avenues for future research. A better research can be done by tapping industries from other areas; comparative study can also be taken up in this regard. An inter-country comparison on these parameters can also be an important area of study. Research can also be undertaken to find how green product innovation and process innovation can be strengthened.

LIMITATIONS

The main limitation of the research is small sample size and only few variables taken for study. Another limitation of the research is only automobile industries considered for study.

CONCLUSION

Therefore, where the concept of 'go green' is occupying a stronger hold in the corporate sector, the importance of green core competencies cannot be ignored. Many automobile companies are laying emphasis on developing green core competencies and have seen their earnings increasing over the years. The same should apply to other companies also. The desire to keep the environment greener and making India a greener place to live in, can only take place if every Company aims at identifying the green core competencies and concentrate on that to build a positive green brand image. Since green core competence has a direct impact on the green product innovation, Indian companies can also cash on it by developing strategies for sustainability in the market. Hence, to conclude we can say that green core competencies can become an effective tool in driving more profits and healthy way of climbing the ladder of success, doing good to the customers and to the country.

REFERENCES

(1.) Bogner, W., & Thomas, H. (1994). Core competence and competitive advantage, a model and illustrative evidence from the pharmaceutical industry. In G. Hamel, & A. Heene (eds.), Competence Based Competition (pp. 111-143). Chichester: Wiley.

(2.) Chan, R. Y. K. (2000). The effectiveness of environmental advertising the role of claim type and the source country green image. Journal of Advertising, 19(3), 349-375.

(3.) Chang, C. H. (2011). The influence of environmental ethics on competitive advantage: the mediation role of green innovation. Journal of Business Ethics, 104, 361-370.

(4.) Chen, Y. S., Blai, S., & Wen, C. T. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics, 67(4), 331-339.

(5.) Chen, Y. S., Chang, C. H., Wu, F. S. (2012). Origins of green innovation-the difference between proactive and reactive green innovation. Management Decision, 50(3), 368-398.

(6.) Cretu, A. E., & Bordie, R. J. (2007). The influence of brand image of the company reputation where manufacturers market to small firms: a customer value perspective. Industrial Marketing Management, 36(2), 230-240.

(7.) Dangelico, R., & Pujari, D. (2010). Mainstreaming Green Product Innovation: Why and How Companies Integrate Environmental Sustainability. Journal of Business Ethics, 95(3), 471-486.

(8.) Mintu, A. T., & Lozada, H. R. (1993). Green marketing education: a call for action. Marketing Education Review, 3(3), Fall 93, 17.

(9.) Ng, P. F., Butt, M. M., Khong, K. W., & Ong F. S. (2013). Antecedents of green brand equity--An integrated approach. Journal of Business Ethics, 1-13.

(10.) Polanski, M. J. (1994). An introduction to green marketing. Electric Green Journal, 1(2), 1-10.

(11.) Prahalad, C. K., & Hamel, G. (1990). The core competence of the competition Harwardbusinessinessreview, 68(3), 79-91.

(12.) Stanton, W., & Futrell, J. C. (1987). Fundamentals of Marketing (8th ed.). New York: McGraw Hill Book Company.

(13.) Yu, C. S. (2007). The driver of green innovation and green image-green core competence. Journal of Business Ethics, 81, 531-543.

(14.) Yu, C. S. (2010). The drivers of green brand equity: green image, green satisfaction and green trust. Journal of Business Ethics, 93(2), 307-319.

Dr. Sangeeta Trott, Associate Professor, Marketing, ITM-SIA Business School, Mumbai; e-mail: sangeeta.trott@gmail.com
Table 2: Table showing the descriptive statistics

Parameters Mean Standard
 deviation

Green core competence 12.9464 1.51967
Green product innovation 8.0952 1.91899
Green process innovation 13.6071 1.90575
Green image 22.1026 1.98436

Table 3: Bivariate correlation between various
parameters with green core competence

Parameters Correlation

Green product innovation .611
Green process innovation .351
Green image .842

Table 4: table showing the regression results of how green core
competence affects green product innovation, green process
innovation and green image

Parameters Adjusted R BETA t-value Sig value

Green product innovation .373 .771 2.672 .020
Green process innovation .123 .440 1.297 .219
Green image .709 1.327 5.178 .000

Level of sig. is at 5%
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Author:Trott, Sangeeta
Publication:Paradigm
Article Type:Author abstract
Geographic Code:9INDI
Date:Jan 1, 2013
Words:3085
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