Green innovation practices: a case study of Vietnamese manufacturing companies

Thuyen, Truong Thi Ngoc; Bich, Le Nhu Article Green innovation practices: a case study of Vietnamese manufacturing companies Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Thuyen, Truong Thi Ngoc; Bich, Le Nhu (2024) : Green innovation practices: a case study of Vietnamese manufacturing companies, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-13, https://doi.org/10.1080/23311975.2024.2333603 This Version is available at: https://hdl.handle.net/10419/326192 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 Green innovation practices: a case study of Vietnamese manufacturing companies Truong Thi Ngoc Thuyen & Le Nhu Bich To cite this article: Truong Thi Ngoc Thuyen & Le Nhu Bich (2024) Green innovation practices: a case study of Vietnamese manufacturing companies, Cogent Business & Management, 11:1, 2333603, DOI: 10.1080/23311975.2024.2333603 To link to this article: https://doi.org/10.1080/23311975.2024.2333603 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group Published online: 01 Apr 2024. Submit your article to this journal Article views: 2430 View related articles View Crossmark data Citing articles: 4 View citing articles Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 ManageMent | ReseaRch aRticle Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2333603 Green innovation practices: a case study of Vietnamese manufacturing companies truong thi ngoc thuyena and le nhu Bichb athe economics and Business administration Department, Dalat university, Dalat, Vietnam; bthe agriculture and Forestry Department, Dalat university, Dalat, Vietnam ABSTRACT green innovation is among the most potential approaches to resolve the world’s current environmental pollution issues. this study explores green innovation practices from developing countries with the perspective of Vietnamese manufacturing companies as background. the case study method was conducted based on in-depth interviews with key respondents from five enterprises. Businesses were selected based on their use of innovative green concepts to produce environmentally friendly products. Outcome proposes a typological framework to identify green innovation practices of enterprises and identifies motivations for green innovation, such as technology, enterprise characteristics, products, regulatory mechanisms, human resources, market pressures; and connections. IMPACT STATEMENT in the process of economic development today, environmental challenges are taken very seriously. however, for sustainable development, it is key to construct green growth models; that is, to promote economic growth and development while ensuring that resources are guaranteed for long-term use. in this development, industries have a responsibility to safeguard the environment and ensure the availability of natural resources for future generations. Firms are expected to reduce the negative impact of their environmental footprint by controlling production activities. the proliferation of new and innovative business models in nongreen industries demonstrates that environmentalism is not only a regulatory trend or a marketing issue, but a way to create value and build or maintain a competitive advantage. this article also contributes practical knowledge for practitioners. When enterprises practice green innovation, society as a whole will benefit from an improved quality of life, and that future generations will not suffer from pollution or a scarcity of natural resources. By committing to green innovation, companies can create a win-win situation. the result of adopting green innovation is profit and less pollution to the environment. Introduction in the process of economic development today, environmental challenges are taken very seriously. therefore, the goal of sustainable development is of prime importance, not just growth or development. however, for sustainable development, it is key to construct green growth models; that is, to promote economic growth and development while ensuring that resources are guaranteed for long-term use (carrillo-hermosilla et al., 2010). in this development, industries have a responsibility to safeguard the environment and ensure the availability of natural resources for future generations. Firms are expected to reduce the negative impact of their environmental footprint by controlling production activities (handfield et al., 1997). Manufacturing enterprises have started paying attention to the environmental aspects of their production activities. the production process has to deal with various challenges in managing business © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group CONTACT truong thi ngoc thuyen [email protected] the economics and Business administration Department, Dalat university, Dalat, Vietnam https://doi.org/10.1080/23311975.2024.2333603 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY Received 6 February 2022 Revised 24 February 2024 accepted 15 March 2024 SUBJECTS sustainable Development; environmental economics; innovation Management KEYWORDS green innovation; sustainability; environmentally friendly; Vietnamese enterprises REVIEWING EDITOR huifen (helen) cai, Middlesex University Business school, United Kingdom 2 t. thi ngOc thUYen anD l. nhU Bich resources and environmental, economic, and social sustainability concerns. although it is important to understand how firms manage these challenges, very few studies have focused on this issue (Fernando et al., 2016). however, the situation has changed. Due to increased environmental awareness, more responsible business practices are needed (Wagner, 2010). currently, business pressures on a manufacturing enterprise come not only from employees, customers, suppliers, and business partners, but also from government, competitors, and society. all these stakeholders continuously monitor business practices in line with sustainability aspects (Weng et al., 2015). numerous studies on the motivation for green innovation have been published. Particularly research on green innovation in developing and emerging countries is increasing attention; in these countries, where attribute imbalances (Wang etal., 2023), resource bricolage (abid etal., 2023), public environmental demand, and government environmental governance (Zhang et al., 2023) seem far from supportive to green practices of business yet provide an important notice on sustainable source. however, little research has focused on green innovation in the context of Vietnam. le et al. (2019) explored the influences of stakeholders on the implementation of horizontal and vertical green product diversification. their results show that foreign customers play a significant role in driving companies to adopt a strategy of green product diversification. Vietnamese companies often face serious environmental problems, so they need the considerable attention of researchers and practitioners in the field of green innovation practices to find business solutions (truong, 2023). this article explores green innovation concepts and practices of manufacturing enterprises in Vietnam. the findings encourage businesses to continuously innovate their production processes in an environmentally friendly manner. green products are not widely available in emerging market countries due to consumer ignorance, limited purchasing power (due to expensive product prices), and lack of government subsidies. consumers have not yet considered purchasing green products as part of their responsibility to protect the environment for future generations. this paper first clarifies the driving force of green innovation for a better understanding. since this is a case study, information about the companies is briefly presented. next, the methodology and tools used to analyze the data are presented. in the last section, the results are discussed and limitations, recommendations, and conclusions are presented. this study contributes to the existing literature by expanding on existing green innovation concepts and practices and exploring how Vietnamese businesses can achieve sustainability by adopting environmentally friendly practices in their business activities. Green innovation practices the important motivation for green innovation practices is extracted and determined from the literature. the motivation for green innovation is similar to theoretical innovation in that it includes both external motivation that businesses can achieve and internal motivation based on their development (calza etal., 2017). in this regard, Díaz-garcía etal. (2015) explain the main factors as supply-side factors (such as the organizational capacity of enterprises) and demand-side mechanisms (such as customer and social requirements for corporate social responsibility). these factors also act as push-and-pull factors in business operations. green innovation is often driven by a combination of factors such as technology, product development, enterprise characteristics, mechanisms and regulations, and market pressures. Technology technological motivation is essential in the early development of green innovation (horbach, 2008). green process innovation is the improvement of existing production processes and the use of environmentally friendly technologies to produce goods and provide services with less harm to the environment (Wong et al., 2012). this motivation refers to the ability of businesses to gain core competencies or increase profits through new products or services resulting from the adoption of new technology. technology comes from an investment in knowledge, which results in more innovation (Baumol, 2002). therefore, many large enterprises allocate budgets to research and development (R&D) departments to acquire more knowledge. Businesses also need to ensure that employees are skilled enough to use cOgent BUsiness & ManageMent 3 technology in their business operations because a lack of knowledge will hinder the production process. a delay in one part will diminish the performance of other parts. the time allocation of every process should be recorded and can later be used as a standard (Fernando et al., 2016). Enterprise characteristics Factors such as size and organizational capacity have an impact on the performance and innovation of companies (Díaz-garcía et al., 2015). compliance can be tied to business characteristics such as the source of raw materials, the number of suppliers, the type of technology, or the number of buyers. it is also important to recognize that small businesses with flexible decision-making, lean organizational structures, and less bureaucratic communication can better respond to changes or developments. Managers with environmental concerns will have a positive impact on the adoption of environmental innovation strategies. it is more likely that they will pursue green innovation, thereby improving company efficiency and performance (Qi etal., 2010). Furthermore, Dangelico etal. (2017) argue that considering environmental aspects from the outset is a critical success factor in green product innovation. green absorptive capacity is the moderator in the process of transforming eco eco-institutional pressure of government into eco-innovation practices of enterprises (Mady et al., 2022). Product Product innovation involves using novel or cleaner inputs with less impact on the environment than using recyclable materials, reducing or optimizing the use of raw materials, changing the composition of raw materials, and producing products that have a longer shelf life and are recyclable (garcía-granero et al., 2018). Mechanisms and regulations strict regulations and policies encourage business decisions to engage in green innovation. two main views exist regarding the impact of regulations on corporate performance. in the first view, policymakers make green innovation policies a condition for business conduct. if enterprises do not carry out green innovation or comply with environmental regulations, they may not be granted business licenses (Weng et al., 2015). the second, cost-based view holds that if environmental management is profitable, firms will seek to pursue green innovation to maximize profits and increase shareholder wealth (Jaffe et al., 1995). Market pressure Díaz-garcía et al. (2015) consider the motivation of customers and social requirements for corporate social responsibility. green innovation is often driven by a combination of factors such as competitive advantage and customer pressure. aggressive competition forces businesses to be more creative and innovative to increase demand or market share. the strategy of differentiating green products or services from conventional products or services helps businesses enhance their uniqueness in the market. Jansson etal. (2011) also found that customer perception is an important indicator of innovation adoption in the marketing of green products or services to customers. Market pressure pushes businesses to adopt greener production practices (Ketikidis et al., 2013). naruetharadhol et al. (2021) claim that green management practices need to link with open innovation to solve the consumers’ pain points. nguyen et al. (2021) studied the social impact of innovative green enterprises. their study suggests that such businesses have the potential to generate broader social impacts in addition to the usual positive business outcomes. the main arguments stem from the triple helix model of government, universities, and businesses, which proposes a cooperative approach between these organizations. the conceptual framework identifies (1) how different actors have supported firms to implement green innovations, and (2) to what extent green innovation creates a social impact through a triple helix model. authors show 4 t. thi ngOc thUYen anD l. nhU Bich that forming a conceptual framework of the social impact helps governments maximize public benefits by supporting green innovation projects initiated by businesses. although their research focuses on green products and social impact, it does not focus on the green innovation activities of businesses for sustainable development. Research methods case studies can capture details of green innovations that would otherwise go unnoticed in aggregated top-down quantitative analyses. this approach entails carrying out multiple case studies to generalize the findings (cook & campbell, 1976). this study uses qualitative research methods in which case studies are used to collect and interpret data. to achieve the research objectives, businesses were selected through referrals from personal relationships and then screened according to the following criteria: (1) enterprises with innovative green activities, (2) green innovation solutions that have been implemented for at least two years, and (3) agreement to participate. the identities of the respondents and their companies are kept anonymous; otherwise, the companies would not have participated in this study. the companies are referred to as company a, B, c, D, and e (the smallest companies in the study have approximately 20 employees; the two largest have approximately 1000 employees), and can be described as follows: • company a: this firm is the inventor of a household waste treatment technology. the company has been granted a patent from the national Office of intellectual Property of Vietnam for its waste treatment technology. the advantage of the technology is that it can effectively treat domestic waste without garbage source pre-treatment and with no garbage, odour, leachate, bacteria, or daily waste treatment. these characteristics are very suitable for the conditions in Vietnam, where regulations on waste classification at the source have not been implemented, many current waste treatment technologies are not effective, and waste treatment capacity is not sufficient, which wastes resources and causes environmental pollution. changing public awareness and forming a habit of garbage classification remains a difficult problem in many localities and requires much time, resources, and new policy mechanisms to be implemented. • company B: the company’s main activity is to provide solutions to support farmers growing organic pepper and coffee according to global gaP, haccP, isO22000, Fairtrade, eti, and organic standards. the company also helps connect farmers with organic fertilizer producers so that farmers no longer depend on chemical fertilizers from businesses that supply chemical fertilizers and pesticides for crops. in addition, the company provides a solution for market produce that does not meet accepted standards of appearance. specifically, about 60% of fresh produce meets the standards and can be sold, while the 40% that does not meet the preferences of consumers is sold to processing enterprises to make juice, dried, or powdered products. this company can sustain its business due to the owner’s philosophy, which is to assist farmers in developing sustainable agriculture. through these activities, company B maintains relationships with suppliers and customers. • company c: this company specializes in designing and manufacturing furniture for households, hotels, luxury villas, and resorts. the company uses alternative materials that are environmentally friendly and do not destroy forests. in particular, the company uses synthetic wood or alternative materials rather than natural wood. the company pioneered green-oriented furniture, targeting 4-star and 5-star hotels as well as the resort market. company c starts with a strategy to solve environmental problems by implementing green practices step by step. at the establishment stage, the firm planned to implement green practices in furniture manufacturing as a strategic approach to competitiveness. company c combats deforestation by reducing the use of natural wood in the production of furniture. conventional manufacturing leaves forests with insufficient time to regenerate so natural forests are shrinking. With the aim of high profits, some furniture manufacturing companies obtain raw materials from the illegal logging of forests and the illegal timber trade. the company claims that this practice harms society. cOgent BUsiness & ManageMent 5 • company D: this company operates in the electric cable industry. it began operating in the Vietnamese market in 2006 with a total investment capital of about 40 million UsD and more than 600 employees. the factory is equipped with a modern closed production line system imported from europe to create quality products that meet international standards. currently, the company has obtained isO 9001, isO 14001, and isO 45001 certifications. company D is a subsidiary of a multinational company. company with many branches that specialize in manufacturing construction cables. Korean Mother headquarters considers eco-friendly practices a priority in their strategy. the company applies various management measures to achieve net Zero by practicing eco-friendly material purchase, and eco-friendly product development. this policy is also embedded in the requirements of their foreign subsidy, including company D. the company recycles, and uses scrap copper from faulty cables as part of a clean production strategy. the company also launched a program to mobilize the entire workforce to contribute ideas to reduce raw material use or reduce costs while ensuring product quality. the company removes the insulation from faulty cables and melts them. the company can recycle and reuse 100 tons of copper per month instead of selling it as copper scrap. • company e: this company is a food processing company with more than 1000 employees. the company is the leading producer and most prestigious brand in Vietnam of dried and freeze-dried agricultural products. initially, the company focused on improving product value, minimizing losses, and preserving local produce. the company prioritizes the use of materials with low environmental impact, uses energy-efficient technology, and requires suppliers to address environmental issues. the company has obtained haccP, halal food, Kosher, isO 9001:2008, FDa, UsDa Organic, and eU Organic certificates. the company has also adopted traceability and environmental standards. the company’s leaders are increasingly interested in developing sustainable, environmentally friendly products. the company values the philosophy of sustainable development, as reflected in the company’s behaviour from seed selection to the moment the product is put on the consumer’s table. the company constantly improves and applies biotechnology to bring fresh products to customers without using colorants, chemical additives, or preservatives. With a macrobiotic philosophy, the company is continuing to develop technologies to make products that are delicious and healthful. the data collection process was carried out by a variety of methods to gain a deeper understanding of the current situation of green innovation. in particular, the authors conducted in-depth interviews combined with field trips to relevant working establishments. the interviews aimed to explore the leadership’s policies, the conditions to support innovative start-ups, action programs, and strategic views on the development of innovative start-ups. the authors also searched for relevant information on websites, patent applications, and environmental news. these are basic but effective methods for investigating the research problem. after screening, the research team approached and conducted interviews with these companies. to collect data, the authors used semi-structured interviews and personal interviews. Due to geographical distances and the cOViD-19 epidemic, all interviews were arranged through the google Meet app at a convenient time for the respondents. the interviews were conducted during the business day and lasted one to two hours. additionally, the respondents provided secondary data (company documents related to green innovation) after each interview to support the data analysis. Respondents were selected and interviewed to determine the understanding and practice of green innovation in manufacturing enterprises (table 1). to understand the definition and practice of green innovation at five green manufacturing companies, interview questions were asked about the determinants of green innovation from an environmental perspective. Other questions related to how the firms carry out green innovations and the challenges and markets for green products. Before conducting the interviews, a brief introduction about the research team, research objectives, and a commitment regarding the intended use of the information was presented to the respondents. the research team also requested the respondents’ permission to use the firm’s information for analysis and permission to record the interview. Both audio recording and handwritten notes were used throughout the interview. after the first interview, the interview questions were revised and suggestions were added for the following interviews. 6 t. thi ngOc thUYen anD l. nhU Bich after the interview, the research team typed the entire interview records into a text script. Responses from each interview were carefully summarized in a tabular form. at the same time, following saunders et al. (2009), the main points in the responses to each question were aggregated and interpreted into topics and subtopics, making data processing and analysis easier. the interview content was then combined and rearranged to make across-group factor comparisons. Factors analysis examines the differences and similarities across the different groups. to gather a complete understanding of the key factors affecting green innovation between companies. to analyze the interview data, the study proposed diagrams and two analytical tools were used. the diagrams aim to explain the factors related to green innovation that manufacturing companies consider the most important and to sort them based on their impact on the company. the impacts were identified from the findings of a literature review. according to arundel and Kemp (2009), no single instrument is sufficient to measure green innovation. the first analytical tool used is a research framework developed by the Organization for economic co-operation and Development (OecD, 2009) called green innovation typology. this framework is used to position green manufacturing companies based on their understanding and practices. the taxonomy framework is an analytical framework for examining green innovation goals and mechanisms. according to the framework, the goals of green innovation are products and processes, organizations and marketing methods, institutions, and the mechanisms for green innovation are improvement, redesign, substitution, and creativity. By categorizing the positioning of companies by goals and mechanisms, this study can determine the level of green innovation and the improvements that companies need to focus on. the second analytical tool used in this study was a tree diagram of the main thematic analysis of green innovation motivation from the point of view of the interviewed firms (arundel & Kemp, 2009). Results and discussion Overall, this study finds that green innovation concepts and practices are consistent with those described in the existing literature. Based on the research results, the understanding of green innovation from the point of view of five manufacturing companies is quite similar to that of previous research (Kemp & Pearson, 2007; OecD, 2009). During one interview, the director of company e explained the current activities of green innovation, providing us with an understanding of green innovation. From the collected data, the research team found the following views about green innovation. company e: ‘environmental protection is considered in every business decision of the company’s leadership. talking the environment, it is always taken care of, not just when the decision begins to be of concern. We include environmental goals in business plans and in the behaviour the company has already adopted, not just in plans. We seek to create an environmentally friendly brand image. We use product and service suppliers, and input suppliers, that have requirements for environmental assurance. exactly, because it is the way for me to keep my reputation in the market. environmental protection is the responsibility of enterprises. ‘long-term stable development is more important. Because if we want to think about sustainability, we have to put less emphasis on immediate benefits and more priority on life; the balance has to Table 1. Methods of collecting information from respondents. Method occupation Required information in-depth interviews, observations, recordings, notes Chairman of the Board of Directors – general Director understand the definition and practice of innovation for the whole company. Ceo understand the definition and practice of innovation for the whole company. Finance and logistics staff understand the definition and practice of green innovation at the relevant departments. Production staff supervising green innovation practices at the production plant. Quality control staff supervising green innovation practices at the production plant. observations Determine the difference between the company’s green innovation activities in Vietnam and the results of the literature review. short survey emailing some employees of the company to collect information related to their awareness and understanding of the company’s implementation of green innovations. cOgent BUsiness & ManageMent 7 improve. compliance with the law helps businesses develop sustainably. environmental issues have a great influence on the company’s fortunes. exactly, because it is the way for me to keep my reputation with the market. environmental protection is the responsibility of enterprises. environmental management is a mandatory requirement for a company to export its products. it’s voluntary on the part of the company, and it’s the trust that customers choose’. company B: ‘green innovation brings greater economic efficiency. i work in the field. if it doesn’t cost, i’ve saved about 20%. the second reason is the money for health costs, for the environment. You don’t have to worry about the cost of going to the doctor. the savings for farmers are great. the third one is when they make the product. the price is the result of your achievements and efforts. Farmers can create a field that is free of chemicals and environmentally friendly. sincerely, its reputation for morality is said to attract people to visit. Polite, friendly environment, competitive prices, they say. Due to dedication and environmental friendliness, customers will buy in quantity and the price will rise. the price is only high when i bring value to the customer; then the customer will pay me a high price’. company c: ‘green innovation is mainly the production of synthetic wood products to replace natural wood, resulting in a good environment. the second benefit is the use of environmentally friendly materials. the third is the preservation of nature, and the fourth is that these innovative materials have many advantages over the old materials’. to better understand the current applications of green innovation in case studies, green innovation activities were reviewed based on the OecD (2009) research framework (table 2). these examples illustrate green innovation processes and the different contexts of its realization. the agriculture and food technology industries have taken steps to reduce the amount of chemicals used, producing clean products, especially concerning environmental impact (company B). along with the growing demand for organic food, green innovation initiatives have focused on sustainable agricultural production, sustainable product development, environmentally friendly products, and environmental protection. although most of the industry’s green innovation initiatives are focused on technological product and process innovations, the industry’s involvement in various institutional arrangements has laid the groundwork for much of this development. For example, with the development of traceability and environmental standards desired by customers, company B has obtained haccP, halal food, kosher, isO 9001:2008, FDa, UsDa Organic, and eU Organic certificates. company e has also applied traceability and environmental standards. similarly, developments in these areas have built on institutional and organizational green innovation arrangements. in recent years, the Vietnamese industry has significantly enhanced its environmental performance through the redesign of various manufacturing processes. these are often driven by strong external pressures to reduce pollution and by rising prices and scarcity of raw materials. For other industries, most green innovations have been realized through technological advances, typically in the form of product or process modification and redesign, such as waste technology efficiency (company a), by ideas contributed to reduce raw material use or reduce costs while maintaining product quality (company D), or by reducing the use of wood by using alternative materials in furniture production (company c). the company is also looking for more efficient ways to dispose of its scrap. a notable example is the use of discussion groups throughout the company to tap into the innovative ideas and knowledge of employees (company D). there are signs that the understanding of ecological innovation in this area is expanding. alternative business models and production methods are being explored, as well as new methods to deal with pollutants from the manufacturing process. in summary, the main focus of green innovation today in manufacturing companies tends to be on products or processes as the goal of green innovation and with modification or redesign as the main Table 2. green innovation activities of manufacturing companies. Company green innovation activities aimproved waste treatment system Bsustainable agriculture reduces the waste of raw materials Csubstitute materials with less environmental impact, reduce resource use and deforestation DRecycles makes use of scrap euses materials with low environmental impact, uses energy-efficient technology, requires suppliers to address environmental issues