Confronting the grand challenge of environmental sustainability within supply chains: How can organizational strategic agility drive environmental innovation?

Supply chains are interconnected, globally distributed, and complex systems that significantly impact the environment and human civilization. Approximately more than two-thirds of global trade today, involving global value chains and supply chains, often get impacted by their natural environment. It is estimated that around 90% of environmental impact occurs in the supply chain. Achieving environmental sustainability is a grand challenge that requires nurturing organizational capabilities in conjunction with coordinated and innovative efforts.

Drawing on the natural-resource-based view and stakeholder-resource-based view perspectives, and using data from 758 managers from 185 firms in the emerging market of Turkey, we provide evidence that organizational strategic agility, enabled by organic organizational structures and regional innovation initiatives, stimulate collaboratives innovations among its suppliers for environmental sustainability.

Previous research shows that solutions to grand challenges are yet minuscule as piecemeal efforts by organizations acting individually and independently of each other. So, responses to environmental sustainability issues can rarely succeed in isolation, requiring coordinated innovation with supply chain partners to reduce environmental harm across their global value chains. In this research, we explain that the potential of organizational strategic agility to stimulate collaborative innovations with suppliers for environmental sustainability lies in organizational and resource-based mechanisms, the demand for which originates from the depletion of natural resources coupled with resource-replenishing strategies.

We then go a step further to unveil the mechanisms and circumstances through which strategically agile organizations can capitalize on their suppliers’ resources to drive innovation and change in those suppliers. An organic organizational structure (refers to flexible rules and regulations and an informal communication network that provides a basis to interact and better adapt to the external environment) and regional innovation initiatives (represent to the organizational networks and linkages with public and private institutions such as research laboratories, universities and colleges, and technology transfer agencies) are key organizational capabilities to convert strategic agility into greater environmental collaboration with suppliers. This contribution provides the missing theoretical insights and empirical elaborations needed to explain why, despite considerable technological, economic, and social progress, the world remains besieged by grand challenges centred on climate change and diminishing natural resources – because they neglect the conditions needed to create coordinated and multiplex responses.

Our research also offers crucial empirical evidence regarding contributions to practice for managers and policymakers. First, managers can generate value for grand challenges by deploying strategic agility as a meta- organizational capability to steer collaboration with stakeholders and drive innovation for environmental solutions. Regional innovation initiatives and organic organizational structure also play an important role in maintaining a successful collaboration with stakeholders geared toward sustainability. Moreover, policymakers can harness the potential of collaboration in addressing grand challenges by creating policies and mechanisms for cross-regional, sectoral, and organizational collaboration to tackle environmental issues jointly.

This study aims to examine how organizational strategic agility can foster collaborative environmental innovation and enhance environmental sustainability in supply chains. We use data from 758 managers from 185 firms in Turkey, an emerging economy context.