Environmental technical and administrative innovations in the Canadian manufacturing industry

This article integrates perspectives from the stakeholder influence literature, the natural environment literature and Daft’s (1978) dual core model of organizational innovation to propose and empirically test how managers’ perceptions of different types of stakeholders influence the type of environmental innovations undertaken. We propose that environmental administrative innovations such as an environmental management system (EMS) will increase the likelihood of a facility implementing environmental technologies that change the production process rather than end-of-pipe solutions which control pollution but do not deal with the underlying environmental problem itself. Using notions developed by Daft (1978), we also propose that facility employees will have a positive impact on the implementation of changes in environmental technological processes but that administrative pressures (corporate headquarters and shareholders/investors) will have no impact on technological innovations. Finally, using the stakeholder influence literature, we propose that external stakeholders such as regulators, community groups and environmental groups as well as customers and suppliers will each increase the likelihood that facilities would use environmental technologies that change the production process rather than use end-of-pipe technologies. Using Canadian facility level manufacturing data, all our hypotheses were supported with the exception of the impact of having implemented an EMS. Surprisingly, an EMS reduces the likelihood that a facility will implement environmental technologies that change the production process. In other words, EMSs tend to increase the use of end-of-pipe technologies. In this case, an administrative innovation appears to be dampening the innovation process insofar as environmental technologies are concerned. 1 The data upon which this report is based is the exclusive property of the Organisation for Economic Cooperation and Development. The views contained in this article are those of the author(s) and may not reflect those of the OECD. The financial support of Environment Canada and the OECD is gratefully acknowledged.