Strategy to derive benefits of radical cleaner production, products and technologies: a study of Indian firms

Journal of Cleaner Production 126 (2016) 236e247

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Journal of Cleaner Production journal homepage: www.elsevier.com/locate/jclepro

Strategy to derive benefits of radical cleaner production, products and technologies: a study of Indian firms Kumar Verma Bhupendra a, *, Shirish Sangle b, ** a b

Chameli Devi Group of Institutions (CDGI), Indore, Madhya Pradesh, India National Institute of Industrial Engineering (NITIE), Vihar Lake, Mumbai 400087, India

a r t i c l e i n f o

a b s t r a c t

Article history: Received 15 November 2014 Received in revised form 7 March 2016 Accepted 18 March 2016 Available online 12 April 2016

Cleaner technology strategy is a firm's long term planning to avoid negative externality to the natural environment and remain competitive in future markets. The paper proposes a comprehensive definition of cleaner technology strategy and presents its important aspects to derive competitive advantages based on an empirical study of sixty firms across the industry sectors in India. A measure of cleaner technology strategy was constructed and, tested for its reliability and validity. Descriptive statistics was used to understand the relative importance of competitive aspects of cleaner technology strategy in Indian firms. The result shows that cleaner technology strategy derived from top management's vision of future technologies and ability to manage risk due to natural environment play a critical role in implementation of cleaner technology strategy. Firm's ability to pursue regulators for additional benefits, ability to manage risk associated with failures and imitation, and focus on up-gradation of in-house technological capabilities help in re-positioning to derive competitive advantages. The results also indicate that sustainable solutions offer differential competitive advantages across the industry sectors and firm's focus to update skill set of employees is also linked with industry sectors. The paper contributes to existing literature by making distinction between cleaner technology strategy and other strategies like pollution prevention and product stewardship. It further argues the strategic perspective of cleaner technology, cleaner production and eco-friendly products to develop necessary attributes for competitiveness. It also provides a measurement tool for the managers to check the performance of their firm to achieve the goals of cleaner technology strategy. Further, the paper provides important managerial, policy and research implications. © 2016 Elsevier Ltd. All rights reserved.

Keywords: Cleaner technology strategy Sustainability strategy Eco-friendly products Cleaner production Sustainable solutions

1. Introduction Firms must develop sustainable technologies and products that do not exist yet to reduce the burden on natural resources and build sustainable competencies (Hamel and Prahalad, 1991, 1994). Breakthrough product and process innovation is required to optimize the use of scare and non-renewable natural resources in products (Bringezu, 2009) and eliminate wastes and emissions within and outside the organization boundary to take efficiencies to unprecedented level (Seuring and Muller, 2008; van Weenen, 1990). Sustainable firms are generally strategically proactive and undertake

* Corresponding author. Tel.: þ91 9584040312. ** Corresponding author. Tel.: þ91 22 28035202. E-mail addresses: [email protected] (K.V. Bhupendra), sangle.shirish@ gmail.com (S. Sangle). http://dx.doi.org/10.1016/j.jclepro.2016.03.115 0959-6526/© 2016 Elsevier Ltd. All rights reserved.

development of disruptive products and processes and create new markets (Aragon-Correa, 1998; Roome, 1992). To capture the market opportunities due to sustainable challenges, managers must re-conceptualize their prevailing approach on strategy, technology, and markets (Hart, 1995; Hart and Milstein, 1999). This requires an essential and radical shift from current processes, technologies and products to sustainable solutions for mankind's long term survival and well-being (Bolis et al., 2014). These solutions are not about marginal improvements over pollution prevention or control measure but a disruptive and significant departure from existing processes, knowledge and innovation (Vergragt and van Grootveld, 1994; Holton et al., 2010). Today's firm shall initiate the change process in their working in gradual way and prepare simultaneously for drastic change in use of technology to develop products, services and processes which are not only economically viable but also ecologically and socially justifiable (Boons and Lüdeke-Freund, 2013; Dunphy et al., 2003). But, the

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question arises is that what shall be the important ingredients of firm's strategy that firms can derive competitive benefits given risk prone investment and long-term commitment required for such radical changes (Hart and Milstein, 2003; Montalvo, 2008). Research so far has been focused on identifying determinants or barriers to development/adoption of cleaner technology. Literature on cleaner production processes and technology has main theme around the factors affecting cleaner technology (CT) adoption (Montalvo, 2003, 2008), drivers and barriers of environmentally sound technology (EST) (Luken and van Rompaey, 2008), determinants of EST adoption (Luken et al., 2008), firm's willingness to adopt CT (Zhang et al., 2013), CT adoption for climate change proactivity (Sangle, 2011), organisational aspects leading to successful cleaner production (CP)/pollution prevention (Stone, 2006a, 2006b), barriers to dissemination of the concept of CP (Baas, 2007). An another similar stream of literature on determinants to adoption of proactive environmental strategies, which also cover the aspects of cleaner production and technology strategy, have identified parameters as pressure from non-governmental organizations, external and internal factors of organization, managerial and strategic aptitude (Gonzalez-Benito and Gonzalez-Benito, 2006; Gunningham et al., 2003) and, regulations and competitive forces (Christmann, 2000; Sharma and Vredenburg, 1998). Based on the studies mentioned above, it is not clear that what firms shall plan to maximize the desired benefits from risk prone initiatives of cleaner technology strategy (CTS); given that firms have taken a decision to adopt cleaner production/technologies or have taken some steps in this direction based on determinants identified in literature. Also, it remains unexplored that what preparations a firm shall do to achieve transformation from current practices so that efforts can lead to fulfilment of the objectives of a CTS. This article presents outcome of empirical study based on data of sixty firms located in India that have a track record of implementing or developing radical sustainable solutions in the last three years. A measure of CTS was constructed and tested for its validity and reliability. The literature on environmental strategies and radical sustainable solutions in India is mostly found in sustainability/environmental reports, business articles in professional and business publications, and project design documents on IPCC (Intergovernmental Panel on Climate Change) website. These publications report on strategies, products, services and processes of individual firms and few of them are audited by third parties. These publications along with the track record of firm's outlook and approach towards sustainable solutions have helped in identifying firms suitable for sampling requirement of current research work. Based on data analysis, the attributes of CTS in Indian firms were identified. These attributes were then discussed to understand the current status of CTS implementation and attempt has been made to link them to the content of existing literature to understand the capabilities that may help in successful development and implementation of sustainable solutions in form of cleaner production, technologies and products to exploit future markets. The discussion provided in this paper shall guide other firms to design a system that is more adaptable to future markets and may help in achieving strong market reposition against the competition. This paper is organized in 6 sections. Section 2 presents literature on clean technology, environmental strategy and helps in defining a comprehensive definition of cleaner technology strategy to deliver radical sustainable solutions. The literature review also explores the way to extract advantages of radical sustainable solutions. Section 3 is based on research method and covers the topics on operationalization of research, measurement instrument, sample, data collection and data analysis. Section 4 presents research findings. Section 5 discuss the outcome of this study and provide

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managerial implications. Section 6 provides implications for policy makers and section 7 concludes the study. 2. Literature review This section reviews the existing literature to derive a definition of CTS and identifies the drivers and barriers of this strategy. Further, it extracts important points from literature that can be useful in deriving competitive benefits of a CTS. 2.1. Defining cleaner technology strategy Researchers have given different names to various products/ service developments which are geared towards objective of natural environment protection. Some of them have technological aspects linked with them, like environmental new product development (Pujari et al., 2003); eco-innovation (Young, 2006); sustainable product development or design for environment (van Weenen, 1995); design for sustainability (Spangenberg et al., 2010); cleaner technology (Montalvo, 2008); cleaner production (Glavi and Lukman, 2007). While other concepts like industrial ecology (Desrochers, 2004; Ehrenfeld, 2004) and producteservice system (Mont, 2002; Morelli, 2006) are based on new business models. Cleaner technologies can belong to any industry sector like genomics, bio-mimicry, information technology, nanotechnology, and renewable energy technologies which essentially delink economic prosperity with burden on natural resources like minerals, water, soil etc. (Hart and Milstein, 1999) and helps in maintaining the capacity of eco-system to absorb harmful outputs due to human activities. CP is a “systematically organized approach to production activities, which has positive effects on the environment. These activities encompass resource use minimization, improved ecoefficiency and source reduction, in order to improve the environmental protection and to reduce risks to living organisms” (Glavic and Lukman, 2007). Eco-friendly products (EFP) integrate environmental aspects to enhance recycling, reuse, repair, regeneration, recovery, remanufacturing, product durability and upgradeability to reduce environmental impact throughout the product's life cycle (Glavic and Lukman, 2007; Young, 2006). Although, CT and CP may have a role to deliver EFP; CT and CP are related to firm level aspects (business to business or within firm) while EFP pertains to technology oriented products which are delivered to final consumers. EFP are driven by psychograph and behaviour of final consumers. We propose a definition of CTS as a long term planning to transform the firm radically towards eco-effectiveness to incorporate or provide technology enabled competitive products, processes and services in form of cleaner technology, cleaner production process and eco-friendly product and, any other services thus leading to the most optimal use of natural resources; hence avoidance of negative externalities to natural environment. CTS aims beyond removing negative impacts on society and natural environmental due to production and consumption by a drastic shift from eco-efficiency measures to eco-effective solutions (Dyllick and Hockerts, 2002; McDonough and Braungart, 2002; Young and Tilley, 2006). CTS belongs to corporation looking for long term advantages and wants to strengthen their competitive position in future markets that are going to be full of sustainability challenges. 2.2. Drivers and barriers to CT adoption and environmental strategy Many studies have discussed and identified various drivers and barriers for CT adoption as technological capabilities of a firm and the perceived economic risk to firm as major determinants to

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develop/adopt cleaner technologies by firms in Mexico (Montalvo, 2003); environmental policy, economic risk, consumer awareness about eco-friendly products/services, communities and social pressure, attitude and social values of managers, technological opportunities and capabilities, firm's capability to carryout innovation (Montalvo, 2008); environmental regulation and market pressure as dominant factors than community pressure for the adoption of environmentally sound technology in developing countries (Luken and van Rompaey, 2008); environmental commitment, technological capabilities, ownership of firm, market factors like foreign involvement and water and energy price perception, regulations, and funding assistance play important role than community pressure (Luken et al., 2008); manager's attitude, perceived economic risk, social pressure, economic risk taking ability and technological capability in Chinese firms (Zhang et al., 2013); perceived techno-economic benefits, higher technical capability and perceived higher regulatory pressure for cleaner technology adopter firms (Sangle, 2011). Baas (2007) identified barriers to dissemination of the concept of cleaner production as information processing capability of firm, the dilemmas of responsibility towards natural resources, perceptions of stakeholders towards sustainable solutions and their role, power equations among stakeholders. Stone (2006a, 2006b) studied firms in New Zealand and provided the detail explanations on organisational aspects leading to successful CP/pollution prevention programme implementation like top management's commitment and support to carryout radical cleaner production activities, employees skills set, motivating culture, effective communication, clarity on roles and responsibility, employees involvement, CP programme compatibility with firm's culture. Researchers have also discussed implementation of pro-active environmental strategies. Aragon-Correa (1998) surveyed firms in Spain and realized that the firms with the most proactive business strategies employed both corrective as well as preventive natural environmental approaches. Berry and Rondinelli (1998) identified elements of successful environmental strategy as support of top management, clearly stated environmental policy, declared and measureable goals, participatory decision making by employee engagement, and stricter monitoring, auditing, reporting and assessment system. Christmann (2000) studied American firms to establish that capabilities related to process innovation and execution are complementary assets that helps in determining environmental performance leading to cost advantages. Ramus and Steger (2000) studied European firms to understand the important environmental policy factors and management support behaviour leading to employee's eco-initiatives. Sharma and Vredenburg (1998) found out that Canadian firms having capabilities for stakeholder integration, higher order learning, and continuous innovation were proactive in implementing environmental strategies. In similar line, a study on Indian firms identified institutional pressure as a major determinant along with manager's attitude and business case of risky investment as factors in the context of developing country (Sangle, 2010). Another study on Indian firms identified internal and market pressures (Singh et al., 2014) as main drivers of proactive environmental management practices. An another major stream of research on environmental strategy is based on exploration of advantages of effective management of environmental issues at firm level rooted in resources based theory, institutional theory, stakeholder theory, or economic theory (Aragon-Correa et al., 2004; Orsato, 2006; Porter and van der Linde, 1995a, 1995b). There have been some empirical studies as well on the relationship between corporate financial performance and environmental performance (Ambec and Lanoie, 2008; Berrone and Gomez-Mejia, 2009; Clemens, 2006; Forsman, 2013). Few

studies (Li and Zhang, 2010; Lourenco and Branco, 2013; Muller and Kolk, 2010; Zu and Song, 2009) have been taken in emerging markets to understand the determinants of corporate sustainability performance covering aspects like firm's size, profitability, growth options and funding characteristics. However, taking a strategic perspective, the existing literature on determinants of proactive environmental strategies does not focus on factors that are responsible for adoption or implementation of a specific strategy like pollution prevention, product stewardship and cleaner technology. It only identifies factors that can explain adoption of any beyond-compliance strategy. Although, sustainability requires simultaneous implementation of multiple proactive environmental strategies including CTS (Hart and Milstein, 2003), some strategies deliver results immediately while some are required for better performance in longer term. And, organizational setup, resources and capabilities required to implement each of these strategy are different (Hart, 1995), it is argued that they should be dealt differently. The current study aims to deal the CTS independently to understand its important aspects to leverage firm's efforts in the context of developing nations. 2.3. How to derive benefits of cleaner technology strategy Considering the comprehensive definition of CTS proposed in section 2.1 and, based on drivers/barriers associated with external business environment and internal organization setting presented in section 2.2; it is clear that what is required to be done to create a smoother transition from conventional business to business of future markets. However, considering a firm's perspective, while carving out a CTS, it is essential to match the requirements of futuristic business environment through a long term planning leading to conducive internal environment. A firm must consider all aspects that may develop a business case of CTS to create competitive advantages in future markets. Firms looking to carve out a niche for themselves must consider the aspects of cost reduction, differentiation, management of market forces with strong focus on redefining future markets and eliminating environmental risk due to their operations (Reinhardt, 1999). The current study aggregates the important criteria from existing literature and formulates a comprehensive CTS measure for competitiveness by attaching the strategic perspective to design, development, and implementation of sustainable solutions. This study further helps in identifying the weightage of competing criteria to derive generic understanding about surveyed firms' standing in current situation. This shall leverage benefits for other firms while implementing a CTS to remain competitive in future market. Following literature highlights important points that may help in deriving benefits of CTS. Sustainability demands radically different cleaner technologies and product delivery system that can replace conventional products and services (Pujari, 2006). Radical changes are not possible without support and commitment of top management to create firm wide transformation required reposition in future markets (Holton et al., 2010). Top management' support for new product development ensures sufficient resources for innovation (Cooper and Kleinschmidt, 1991). Development of sustainable solutions is not just about radical changes in products, processes and services but also about a preparation for firm wide changes, and top management's pro-activeness make it smoother (Baumgartner and Zielowski, 2007; Lozano, 2012). A transition towards sustainability starts with concise definition of sustainability and formulating vision and strategy accordingly (Baumgartner, 2011). Hence, top management should possess a clear vision of future technologies/ processes to be adopted in a particular industry. This vision shall help in providing necessary resources to conceive and implement a CTS.

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Manager must plan their activities to incorporate likely risk to firm's operations due to natural environment (Millennium Ecosystem Assessment, 2005; Reinhardt, 1999). Managers shall put extra efforts to reduce their dependency on continuously depleting natural resources to remain competitive in future markets (Hart and Milstein, 2003). They shall be able to track development in policy framework to plan for future environmental regulations (Luken and van Rompaey, 2008; Montalvo, 2008) to reduce higher implementation and compliance cost. The proactiveness regarding this shall help firms to manage their exposure to environmental risk. As the sustainability challenges becomes stronger, it is very likely that consumer awareness about eco-friendly products/services will improve and they will demands much better sustainable solution to satisfy their needs and wants (Luken and van Rompaey, 2008; Montalvo, 2008). In this regard, firms also have a role to play in pushing sustainable lifestyle by active engagement in policy formulation and new business models development (Mont et al., 2014; Reinhardt, 1999), so that material consumption can be optimized to reduce the burden on natural resources (Bringezu, 2009). Optimum resources utilization may strengthen benefits of cost advantages as well in market place. The performance standards offer optimal incentive for the adoption of clean technologies, so regulation or policy framework can be used effectively to motivate a firm to develop/adopt CT (Mohr, 2006). Firms may pursue the regulators for policy reforms to derive the benefits of sustainable solutions offering in market (Delai and Takahashi, 2013; Reinhardt, 1999). With enhanced clarity on regulatory framework, firms may take a call to develop sustainable products when they see that it may enhance their competitiveness in the market place (Tsai, 2012). When firms realize that development CT/processes, products shall improve their image among consumers and competitors, and demonstrate high competitiveness in market they shall be able to design effective market program to position themselves strongly against competition (Ko et al., 2013; Zhao et al., 2014). Some conceptual research work have highlighted that the firm's proactive action towards environmental stewardship leads to differentiation advantage in market place (Berry and Rondinelli, 1998; Dixon-Fowler et al., 2013; Maas et al., 2014). And, offering of sustainable solutions shall help firms in creating difference among competitors in future market place (Aragon-Correa, 1998; Hart and Milstein, 2003; Reinhardt, 1999). With time, strict environmental regulations will improve the whole industry performance (Delai and Takahashi, 2013) and proactive firms would act in more sustainable ways to enhance their competitive advantages when the market competitiveness becomes more intense due sustainability challenges (Chih et al., 2010). To address the sustainability challenges by implementing CTS, firms must prepare their employees for required technological capabilities to deliver break-through sustainable solutions in market place (Luken et al., 2008; Montalvo, 2008; Zhang et al., 2013). To safeguard the investment and share the risk of design/development/adoption of technology oriented disruptive sustainable solutions, firms shall look for appropriate collaboration opportunities with high tech firms (Luken et al., 2008; Montalvo, 2008) with proven records. Such collaboration and higher risk in such investment demand that firms must be able to protect their rights as designer and developer of sustainable solutions through structured intellectual property right management (IPR). 3. Research method This section describes the methodology used to achieve the objective this study. Subsections are dedicated to explain operationalization of research, how the measure of CTS was formulated,

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which process was adopted to collect the data and what statistical techniques were used to analyse the data. 3.1. Operationalization of research Deriving the extracts from existing literature, a comprehensive definition of CTS was proposed. Based on drivers, barriers and critical elements of competitive CTS implementation (mentioned in section 2.3 above), it was considered necessary to formulate a measure of CTS which can represent all aspects of long term planning. As business strategy is internal aspect of a firm, all elements that are external to a firm were transformed in organizational factors as a proxy. To assess the validity and reliability of this measure, a well-established statistical procedure was followed. After testing the measure of CTS, it was introduced to managers of firm to understand the status of implementation of this strategy in their firm. It is considered important to learn from successful and proactive firms, so firms were chosen such that they are competitive, front runners and generally have a track record of absorbing new trends in markets. Factorial analysis technique helped in identifying variables of CTS that are closely linked with each other and may have common characteristics. Mean value of responses on Likert scale for a particular item of CTS measure improved the understanding about the state of variable associated with the item of the measure among firms surveyed. Relative ranking of variables based on mean values were discussed to provide managerial and policy implications to improve CTS implementation in firms to derive its competitive advantages. 3.2. Data collection instrument This study aims to identify factors that may help in deriving maximum benefits out of a CTS. It was considered necessary to understand priority areas based on the perception of managers related to industry sectors which are closely linked to markets; evolving due to challenges or opportunities of sustainability. To understand general business environment in country and cover variety of firms, and larger number of respondents, a quantitative method was chosen. A questionnaire was designed using a sevenpoint Likert scale (1-strongly disagree to 7-strongly agree). Secondary sources of information such as sustainability reports based on Global Reporting Initiative (GRI) guidelines, business magazines and journals along with the important inputs from the available literature was used to formulate measure of CTS. Seventeen variables on various aspects, requiring measurement were identified as explained in the section 2.3 above. Questions were constructed around following variables: top management's vision of future technology (VRTAB1); top management's risk taking ability (VRTAB2); environmental risk perception (RPSM1); regulatory risk perception (RPSM2); products redesign to waste minimization (RPSM3); community's demand for eco-initiative (EFPMA1); firm's readiness to introduce eco-friendly products (EFPMA2); perception related to competitiveness associated with clean technology/processes (EFPMA3); firm's perception about dependency on natural resources (DERIP1); firm's pro-activeness in getting regulatory support for new technology (DERIP2); firm's pro-activeness in protecting IPR (DERIP3); firm's readiness to develop/adopt clean technology (TDIHC1); firm's readiness to adopt cleaner production processes (TDIHC2); employee's readiness to innovate (TDIHC3); training for future technologies (TDIHC4); management perception about CT as differentiator in near future (VAR1) and firm's readiness to collaborate with hightech firms (VAR2). The content analysis was carried out in consultation with 25 numbers of professionals and subject experts. The

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test of face validity was carried out with 117 numbers of respondents during pilot study. 3.3. Sampling and data collection procedure Population for the study covered managers associated with large scale firms belonging to industry sectors having significant direct or indirect impact on natural environment and operating in India. Firms were selected based on information available about their implementation or plan to develop CTS in sustainability/ environmental reports, business articles in professional and business publications, and project design documents related to CDM (Clean Development Mechanism). A representative selection of variety of firms was made to cover different industry sectors responsible for deteriorating condition of natural environment such as telecommunication, fast moving consumer goods (FMCG), steel, petroleum and gas, cement, automobile, textile, chemicals and paint (Table 1). For data collection, the questionnaire was mailed electronically to 1500 managers from over 150 firms in India. To cover the overall perception about CTS in a firm, the questionnaire was e-mailed to personnel of different departments in a single firm. The cover letter that accompanied the questionnaire presented the definition and examples of CPP, CT and EFP, sustainable solutions, technology capabilities, IPR in order to minimize misunderstanding amongst the respondents. The responses received were 724 (48%) from 60 firms and questionnaires in the usable form were 689 (45.9%), which is significantly higher than the usual electronic survey response rate of 35.7% (Baruch and Holtom, 2008). The effective sample size finally was 689. The respondents were predominantly male (88%), aged between 32 and 56 years and were the companies' authorized spokesperson on environmental issues. Most of the respondents possessed reasonable experience, with 13% having more than 20 years, 33% possessing more than 15 years and the remaining 54% laid claim to more than 8 years of experience in the industry. These descriptions of respondents were voluntarily disclosed by them. The description of respondents' designations is given in Table 2. 3.4. Data analysis methods As part of this study, the data analysis had two purpose. First, to ascertain whether measure of CTS is valid and reliable. And, second to understand the status of implementation of CTS in Indian firms covered in this study to extract points that may create competitive

advantages. Data analysis was carried out with SPSS version 16.0. The Kaisar Meyer Olkin (KMO) measure of sampling adequacy was applied to examine the appropriateness of factor analysis to test construct of measurement scales. KMO values were confirmed to be greater than 0.5 for the measurement scales. Bartlett's test of sphericity was conducted to test the hypothesis that the variables with each dimension of a scales were uncorrelated in the population (Sig. ¼ 0.000). These tests supported the use of factor analysis. The data obtained for CTS scale were executed with factor analysis using principal component analysis (PCA) utilizing varimax rotation method with Kaiser normalization in order to reduce the information in numerous variables into a set of weighted linear combinations of these variables. In factor analysis only those component were considered that had eigenvalue greater than unity. To evaluate consistency in responses among respondents, the analysis of variance (ANOVA) test was performed. The consistency was evaluated on two criteria e first based on stages of follow ups for data collection and second based on nature of industry sector. For, the first criteria, the respondents were divided into four groups: the first mailing, the first follow-up with call from mobile phone, the second follow-up with call from mobile phone and third follow-up by personal meeting. Using the ANOVA test, the groups were compared on all variables of CTS scale. The result revealed that there was no significant difference (at the 95% confidence interval) between these groups. This confirmed that there were insignificant non-response biases and inconsistency in responses. For the second criteria, consistency was checked among nineteen industry sectors covered under the survey as part of this research work. The result showed that there was no significant difference (at the 95% confidence interval) among the industry sectors on all variables of CTS scale except the two variables e one related to perception about competitiveness attached with sustainable solutions (EFPMA3) and second about employee's skill set to innovate (TDIHC3). This finding establishes that firms surveyed under various industry sectors are performing in a more or less similar fashion on various attributes of CTS. However, management in some sectors do not perceive radical solutions as a contributor of significant competitive advantages. CTS in some industries are driven by regulations while in some it may be due to offerings of products/services by competitors and in some cases it may be the requirement to attract new set of consumers. For example, the development of products in cement, fertiliser and oil refining industries are controlled by regulations and they may not be in

Table 1 Industry sectors and types of firm covered in the study. Industry sector

Number of firms

Type of firms

Automobile Consumer Durables Textile Wind Turbine Manufacturer Paints Beverages Fertiliser Petroleum Refinery Gas Production FMCG Cement Construction Steel Aluminium, Copper Chemicals Tele-communication Tyre Manufacturer Pump Manufacturer Heavy Machinery

4 3 3 2 2 3 3 5 2 6 3 3 5 2 4 2 3 3 2

Private Ltd., 2 firms have foreign partnership Private Ltd., 1 firm have foreign partnership Private Ltd. Private Ltd. Private Ltd., 1 firm is Subsidiary of a foreign company Private Ltd., 2 firms are Subsidiary of foreign companies 2 Private Ltd. firms, 1 Public sector firm 1 Private Ltd. firm, 4 Public sector firms 1 Private Ltd. firm, 1 Public sector firm Private Ltd., 3 are Subsidiary of foreign companies Private Ltd., 1 firm have foreign partnership Private Ltd., 2 firms have foreign partnership 4 Private Ltd. firms, 1 public sector firm Public sector firms Private Ltd. Private Ltd., firms have foreign partnership Private Ltd. Private Ltd., 1 firm have foreign partnership Private Ltd., firms have foreign partnership

K.V. Bhupendra, S. Sangle / Journal of Cleaner Production 126 (2016) 236e247 Table 2 General description of respondent designations. Title

Numbers

%

Sustainability/Clean Development Mechanism/Health, Safety & Environment Department Mangers Corporate Governance Managers Marketing Department Managers Research & Development Managers Production Department Managers

449

65

34 48 69 89

5 7 10 13

position to differentiate their products significantly. However, firms in industries like automobiles, consumer durables and FMCG may develop products that may be appealing to final customers. Some industries like telecommunication envisage huge market potential because of bursting demand and may have long term plans to compete in future markets thus considering the growth phase as right time to invest in sustainable solutions. Arguing in similar line, some industry sectors may prefer to rely upon expertise of external agencies to design, develop and implement turnkey type sustainable solution than doing the same with internal expertise. In such situation, a firm may take a decision to train their employees just to operate and work with new set of processes/products. So, the focus shall not be to radically upgrade the skill set of employees. Hence, the industry sectors have differential competing aspects when it comes to preparing employees for future markets. The designed questionnaire was subjected to construct validity (convergent and discriminant). It was checked that attributes loads in excess of 0.5 with related factor to test convergent validity positively. It was also checked that attributes load strongly on related factors than on any other factor to confirm discriminant validity. Two variables were discarded from scale due to higher loading under more than one component. Cronbach alpha coefficient is the most efficient measure of reliability (or internal consistency) and should be always greater than or equal to 0.7 when items are selected for test (George and Mallery, 2003). The Cronbach alpha value was found to be 0.969. This indicated that the measurement scale was valid and reliable, thus acceptable for further use. 4. Research findings The result obtained for CTS measurement scale with factor analysis using PCA is presented in Table 3. It is evident that there are five components accounting for about 66.65% of the total variance. Components 1, 2, 3, 4, and 5 accounts for approximately 18.3%, 13%, 13%, 12.4% and 9.9% of the total variance, respectively. Based on % of the variance explained (18.3%), the factor-1 (Technology Development & In-house Capability) can be considered as the most significant one among factors. A factor covers the variables of measurement scale that have shown highest variability among respondents and may have close association among themselves. Factor-1 shows that firms implementing or intended to prepare for cleaner technology (factor loading of 0.702) and cleaner

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production methods (factor loading of 0.703) realize the importance of in-house technology capability which includes the skill set of employees to innovate (factor loading of 0.761), and organization wise focus to enhance understanding of state of the art technologies (factor loading of 0.719). Through planning of in-house technology capability firms looks to secure them internally on technological aspects to grab the opportunities in market whenever they arise. Such preparations may put the firms ahead of competition on learning curve. Factor-2 (Design for Environment, Regulations & Intellectual Property Rights) explains about 13% of the variance in data and consist of attributes on firm's understanding of natural resources constraints and subsequent plans to take steps towards design and development of CPP, CT and EFP to reduce dependency on natural resources (factor loading of 0.579). When planning to invest resources, they proactively pursue support in regulations (factor loading of 0.736) to maximize benefits by availing subsidies, tax benefits, and infrastructure advantages, and seek faster project approvals from regulator and easy finance or loan at lesser interest rates. Also, they take necessary steps to safeguard their investment and business interest from imitators by protecting their work with stronger IPR (factor loading of 0.67). Strong support from regulators may actually motivate firms to take concrete steps in favour of natural resources, as evident from higher correlation between these variables. Firms tend to reduce cost of their operations and raise the operational cost of rivals by more favourable regulation and stronger IPR regime. Firms believe in removing dependency on scare natural resources for future competitiveness. ‘Eco-friendly Solutions & Market Advantages’ is the term representing factor-3 which explains about 13% of the data variance, highlights that planned introduction of EFP (factor loading of 0.62) is driven by scalable demand of such products from community and consumers, whereas design/development/implementation of CPP and CT (factor loading of 0.614) may find support in market place advantages (factor loading of 0.752). These advantages may not be limited to cost advantages and differentiation only; but may extend to unique identity creation by becoming a preferable and reputed supplier/vendor or original equipment manufacturer to pre-empt competition. Overall it is evident that strong signals of market place advantages lead to introduction of EFP, CPP and CT. It also indicates that strong market orientation guides the way to develop effective CTS. Fourth factor on ‘Risk Perception & Safeguard Measures’ (factor4, explained variance about 12%) provides insight that likely strong regulations in future (factor loading of 0.882) pushes firms towards introduction of CPP, CT and EFP. These regulations also alert firms about environmental risks (factor loading of 0.838) due to limited availability of natural resources as well as limited capacity of natural environment to absorb harmful effects of firm's operations. As a safeguard measures, firms tend to focus on minimization of waste of natural resources (factor loading of 0.525) by increasing ecoefficiency to state of the art level through improved production processes and by adopting CT and offering EFP. Firms are looking for

Table 3 Data analysis result (Extraction method: Principal component analysis). Component

1 2 3 4 5

Initial eigenvalues

Extraction sums of squared loadings

Rotation sums of squared loadings

Total

% of variance

Cumulative %

Total

% of variance

Cumulative %

Total

% of variance

Cumulative %

6.082 1.647 1.341 1.2 1.061

35.776 9.686 7.89 7.057 6.241

35.776 45.463 53.352 60.41 66.651

6.082 1.647 1.341 1.2 1.061

35.776 9.686 7.89 7.057 6.241

35.776 45.463 53.352 60.41 66.651

3.107 2.221 2.217 2.112 1.674

18.275 13.062 13.044 12.424 9.846

18.275 31.337 44.381 56.805 66.651

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significant cost advantages in eco-efficiency. It is also helping them in minimization of risk related to natural environment concerns. Firms are following the regulations very closely and perceive that they will become stricter. Factor-5 (Vision & Risk Taking Ability, explained variance about 10%) informs that as payoffs due to investments in sustainable solutions take time and risks associated with such returns are high, top management's vision of future technologies and market (factor loading of 0.896) and risk-taking ability (factor loading of 0.734) play a key role to pursue development and adoption of environment friendly technologies, processes and products. These traits may prove to be key deciding factors for competitiveness in dynamic future markets. This factor highlights the importance of vision for future markets embedded with risk taking abilities. Two variables, one on management perception about CT as differentiator in near future (VAR1) and, another on firm's readiness to collaborate with high-tech firms (VAR2) were discarded due to cross loadings. Final structure of the CTS questionnaire considering components extracted based on % of the variance explained, factor loading and eigenvalue is presented in Table 4. The rotated component matrix (Table 5) using varimax rotation method with Kaiser normalization is shown below. Whereas the factorial analysis provided the factors that are closely related to each other, to assess the ranking of variables based on the weightage given by respondents, the result of descriptive statistics is presented in Table 6. The variable with higher mean was considered higher in ranking. Ranking of variables in decreasing order are as follows: products redesign to waste minimization (RPSM3); top management's vision of future technology (VRTAB1); environmental risk perception (RPSM1); top management's risk taking ability (VRTAB2); firm's perception about dependency on natural resources (DERIP1); firm's readiness to introduce eco-friendly products (EFPMA2); training for future technologies (TDIHC4); regulatory risk perception (RPSM2); firm's pro-activeness in getting regulatory support for new technology (DERIP2); firm's pro-activeness in protecting IPR (DERIP3);

firm's readiness to develop/adopt clean technology (TDIHC1); perception related to competitiveness associated with clean technology/processes (EFPMA3); firm's readiness to adopt cleaner production processes (TDIHC2); employee's readiness to innovate (TDIHC3); community's demand for eco-initiative (EFPMA1). 5. Discussion and managerial implications This section has two parts. First part of the discussion is based on understanding provided by factors extraction. Second part of the discussion is derived from ranking of variables of CTS measure. First factor highlights firms' belief that sustaining competitive advantages due to CT and CP would require in-house capabilities. It also indicates that such preparation would lead to cost advantages in long run only when firms are prepared to absorb changes in CT and CP on continual basis. Customization and integration of new advancements in existing system may be effective, when firm develop necessary focus and capabilities for radical future changes. Firms surveyed are in congruence with this trend and indicates that sudden jump to new technologies and processes may not deliver sustainable competitive advantages unless there is organization wide effective readiness. The second factor indicates that corporate's mind set to preempt competition is driven by stricter regulations in favour of CT and CP, and protection from government against imitation. It also hints that firm's movement towards radical changes are not driven by the main market force-the customers. Firms have understanding that cost and differentiation advantages in near term have base in raising barriers against competition. Probably, firms shall prepare to reverse this trend by devising the new ways to determine new priceeperformance relationship of any new and radical product/ service. The market repositioning based on this dual consideration may prove to be a major determinant of financial success in long run. This aspect is reflecting in third factor that community will be demanding eco-friendly products/services and such offering with revised consideration of value offering may lead to strong competitiveness in future markets.

Table 4 Final structure of cleaner technology strategy questionnaire. Factor

Description of variable

Technology Development & In- My organization is planning to develop/adopt clean technology (TDIHC1) house Capability My organization is planning to adopt cleaner production processes (TDIHC2) Employees have updated skill set to innovate clean technology/process in my organization (TDIHC3) My organization has strong focus on up gradation of employee skill set required for future technologies (TDIHC4) Design for Environment, My organization believe that dependency on natural resources must be minimized (DERIP1) Regulations & IPR My organization is proactive in getting regulatory support for new technology development/ adoption (DERIP2) My organization is proactive in protecting its intellectual property rights (DERIP3) Eco-friendly Products & Market My organization perceive that community will be demanding eco-friendly products/services Advantages (EFPMA1) My organization is planning to introduce eco-friendly products (EFPMA2) Development of clean technology/processes, products demonstrate high competitiveness in market for my organization (EFPMA3) Risk Perception & Safeguard My organization perceive that environmental risk from its operations must be eliminated Measures (RPSM1) My organization perceive regulatory pressure to develop/adopt clean technology/processes (RPSM2) My organization is redesigning its product to minimize waste (RPSM3) Vision & Risk Taking Ability In my organization, top management has a clear vision of future technologies to be adopted in industry (VRTAB1) In my organization, top management is ready to take risk in adopting/developing new technologies (VRTAB2) In my organisation, top management perceive that cleaner technology deployment is required to differentiate in near future market (VAR1) My organisation has resources to collaborate effectively with high-tech firms (VAR2)

Factor loading

% of variance explained

Eigenvalue

0.702 0.703 0.761

18.3

6.082

13

1.647

13

1.341

12.4

1.2

0.719 0.579 0.736 0.67 0.614 0.62 0.752 0.838 0.882 0.525 0.896 0.734

9.9

1.061

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Table 5 Rotated component matrix: cleaner technology strategy. Factors

Technology Development & In-house Capability

Design for Environment, Regulations & IPR

Eco-friendly Products & Market Advantages

Risk Perception & Safeguard Measures

Vision & Risk Taking Ability Variable removed due to cross-loading

TDIHC1 TDIHC2 TDIHC3 TDIHC4 DERIP1 DERIP2 DERIP3 EFPMA1 EFPMA2 EFPMA3 RPSM1 RPSM2 RPSM3 VRTAB1 VRTAB2 VAR1 VAR2

Table 6 Descriptive statistics: cleaner technology strategy.

VRTAB1 VRTAB2 RPSM1 RPSM2 RPSM3 EFPMA1 EFPMA2 EFPMA3 DERIP1 DERIP2 DERIP3 TDIHC1 TDIHC2 TDIHC3 TDIHC4

Mean

Std. deviation

5.9815 5.8333 5.9167 5.6389 6.25 4.4815 5.787 5.2963 5.8148 5.5741 5.5185 5.3241 5.2778 5.0185 5.7315

0.84258 0.91202 0.81027 0.94184 0.81027 1.34985 0.91765 1.02546 0.84442 0.79958 1.03654 0.97471 1.04866 0.91694 0.83841

The fourth factor provides the information that environmental risk perception is outcome of likely stricter future regulations and waste generation due to firm's operations. Waste minimization not only direct efforts towards eco-efficient products but also averts the risk that may arise due to waste disposal. This also provides a clue that it is better to play safe against any event that may lead to sudden outburst of sentiments in favour of natural environment and societies. It is evident from fifth factor that the ability of top management to manage risks associated with radical technology, process and products design/development/adoption, market positioning, and transformation within the organization may prove to be critical differentiating factors. Top management's commitment to deliver value in the long-term by transforming the organization, and managing risk and failures innovatively may deliver competitive advantages of CTS. Based on the ranking of variables, it can be ascertained that current focus of firms is to minimize waste through redesigning of products. It can be because of two main reasons. First, firms want to minimize risk to its operations due to environmental concerns and second to improve resources efficiency thus leading to lesser dependency on natural resources. Resources efficiency not only provide ground for cost advantages in short term but also institutionalise culture of eco-innovation. This also hints that firms first look for ways to achieve compliance with regulation to avoid any environmental risk due to its operation then take other measures to improve resources efficiency. Payoffs in cleaner technology

1

2

3

4

5

0.702 0.703 0.761 0.719 0.168 0.467 0.072 0.261 0.217 0.323 0.248 0.141 0.051 0.105 0.207 0.312 0.562

0.249 0.081 0.062 0.287 0.579 0.736 0.67 0.196 0.357 0.045 0.111 0.136 0.196 0.163 0.047 0.421 0.544

0.354 0.297 0.189 0.065 0.447 0.006 0.239 0.614 0.62 0.752 0.051 0.063 0.449 0.112 0.037 0.394 0.043

0.119 0.173 0.116 0.099 0.162 0.092 0.247 0.167 0.046 0.025 0.838 0.882 0.525 0.011 0.396 0.058 0.056

0.137 0.212 0.002 0.148 0.242 0.017 0.098 0.145 0.224 0.11 0.139 0.079 0.054 0.896 0.734 0.255 0.018

and radical product development take time (Hart and Milstein, 2003) hence top management's vision of future technologies and risk taking ability to manage risk associated with development/ adoption of radical technology, processes and products, market positioning and transformation within organization play a key role (Hall and Vredenburg, 2003). The higher ranking of variables on top management's vision of future technology and risk taking ability also support this claim. Also, the risk-taking ability is not only about undertaking risky measures, experimenting with new ideas, and accepting likely failures as a consequence but also about simulating risk scenarios and significantly managing and exploiting the failures, as well. Researchers have also highlighted the importance of shared vision for sustainable solutions (Boons et al., 2013; Hart, 1995; Stone, 2006b). Shared vision shall bring all members of a firm on common plate-form to prepare for turbulent future markets and may reduce conflicts on risk-orientated decisions. The management's vision of future markets and technologies percolates to innovative orientation in the behaviour of individuals, teams, management and processes to absorb and adapt to new radical requirements and expectations of organization to prepare for future positioning of the firm. Senior management shall strive hard to develop organization environment so that managers can take risky measures to develop technologies, products, and processes of future. This finding can also be linked with the outcome of another study that demonstrates that the risk taking ability drive sustainable firms to set more aspirational goals and strive for transformation (Robert et al., 2012). This also indicates that merely having a vision of future markets and technology may not be sufficient. It must be complemented by demonstrated readiness of the top management to undertake risky measures and accept failures, and their support in providing infrastructure to experiment with new ideas. The finding from current research also indicates that firms usually follow top to down approach for sustainable solutions implementation. However, to sustain competitive advantages in longer run and effective execution of CTS, firms shall engage lower management also at the project conceptualisation stage. From the medium level ranking of variables, it can be said that the radical requirements from external business environment may arise due to stricter regulations and natural environmental constraints. Similar observations have been highlighted in literature that risk perception due to natural environment's impact on business and perception of stricter future regulatory drives firms to develop or implement cleaner production processes and technology and, design for environment activities (Battisti, 2008; Clayton et al.,1999;

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Luken and van Rompaey, 2008; Sangle, 2010). Development and implementation of sustainable solutions depends a lot on in-house technological capabilities and skill set of employees. The factor extracted in this study provided the evidence that it may prove to be one of the differentiator when it comes to firm's readiness to design/ development and adoption of sustainable solutions. This also conforms to finding by other researchers (Montalvo, 2003; Van Berkel, 2006; van Hoof and Lyon, 2013) that firm's willingness to develop CT solutions depends on technological and organizational capabilities. The outcome also supports the existing literature that firm level capabilities, specific skill set of employee and expertise in specific technologies (Cagno and Trucco, 2008; Eder, 2003; Roome, 1994) helps in planning for cleaner technology and production processes. The readiness of employees to competitive in future market must be driven by corporate culture and attitudes (Baumgartner and Zielowski, 2007). Management shall focus on skill set up-gradation to design eco-friendly products (Tukker et al., 2000), and to develop sector specific state of the art technologies (Huhtala, 2003; Koefoed and Buckley, 2008) to deliver a stream of radical sustainable solutions. However, differential competitive advantages due to this aspect indicates that it is important to understand the optimum requirements of skill set up-gradation based on the industry sector and nature of implementation of sustainable solutions. A long term approach shall guide firms to spare suitable and optimum resources for this objective. Stone (2006a, 2006b) pointed that transformative and collaborative learnings are very important for sustainable solutions. Baas (2007) identified information processing capability of a firm as one of the very critical barriers to the dissemination of concept of cleaner production. It implies that firms must move away from generic training modules to transformative skills development to grasp the advanced knowledge and practical know-how to take early mover advantages in sustainable solution space. But, it is required to understand that what capabilities will prepare a firm dynamically so that it develops a system of transformative and collaborative learning. Researchers (Cohen and Levinthal, 1990; Lichtenthaler, 2009; Todorova and Durisin, 2007) have identified absorptive capability as an organizational capability that shall strengthen an organization to recognize and absorb external information and knowledge and, further apply it for a commercial purpose. This capability shall help in creating a conducive environment within a firm for transformative learning leading to design and development of compatible radical innovations. Also, introduction of any sustainable solution either in form of cleaner technology or cleaner production or eco-friendly products may change the perception about firm's ability to compete in future market. This may help in building stronger strategic alliances with suppliers, technology and market partners. Final consumers also may prefer reliable service provider. Managers shall be proactive to track the latest regulations to pre-empt competition (Calleja et al., 2002) and understand the stakeholders who work as proxies to natural environment (Montalvo, 2003; Sharma and Henriques, 2005; Williams et al., 1993). Given the risk associated with such developments, firms must look for options to maximize the returns by pursuing favourable regulations to get government subsidies, tax benefits, infrastructure advantages, easier and rewarding finance and faster project approvals. IPR management aims protection and leveraging intellectual capital for market advantages. Extracting significant profit is a critical aspect of high-tech innovations (Carneiro, 2000; Sullivan, 1999) and plays a key role in competitiveness (Allen, 2003; Blomqvist et al., 2004). Firms shall be able to take early mover advantages by formulating structured IPR management within organization and proactively pursuing for strong regime of IPR with regulators, so that they shall be able to pre-empt

competition. This shall also help in safeguarding their investment and mitigating risk due to imitation (Michael and Joseph, 2009). A dynamic IPR management must also pave a way to design and develop transformative training modules for employees to deliver high end technological capabilities. But, all firms do not respond and introduce the managerial changes as per new regulations as intended. In this regard, firms shall develop suitable organizational capabilities to address rapidly changing business environment (Hilliard, 2006; Teece et al., 1997). So that firms can integrate the necessary elements required to address not only current regulations but likely future regulations and enforcements. Absorptive and innovative capabilities have been identified as organizational capabilities (Wang and Ahmed, 2007), that can guide a firm to understand regulators, policy makers and societal stakeholders, and innovate accordingly. These capabilities must be institutionalised such that consideration of broader set of stakeholders and natural environment becomes a normal routine (Boons, 2009; Zadek, 2004). As the time progresses, sustainability challenges are likely to grow, so firms must start today to avoid operational risk in longer run. Firm's strategic planning and readiness to comply with future regulations may create early advantages to plan for future expansion and smoother approvals from regulatory bodies. Introduction of sustainable solution is driven by market place advantages and demand of eco-friendly products by community (Montalvo, 2003). Managers shall use the community pressure to develop and design cleaner technology, processes and products to reposition themselves in market to create differentiation. The result of this study suggests that firms are indifferent in their perception that such technology deployment is required to differentiate in near future. The respondents answered in similar way leading to removal of associated variable (VAR1). But, at the same time firms perceive that sustainable solutions demonstrate different competitiveness among industry sectors. This indicates that most of the firms are in early stages of adoption of sustainable solutions and looking for cost advantages to establish competitiveness. In some cases the differentiation in products/ services may not be visible due to their common characteristics and in some cases either the demand for such solutions may not be very significant or consumers are not ready to reward the producers significantly. Firms shall strive to create differentiating advantages even from such offering to take a leap from the competitors. Value added services can be one option to enrich the similar looking offerings. From ranking, is also evident that firms prefer to develop/adopt clean technology than cleaner production processes. This means that firms mainly look for green-field project rather than transforming existing manufacturing processes. It again relates to lower ranking on employee's current readiness to innovate. While implementing green-field projects, firms mainly look for turnkey solutions and seek external expertise. 6. Policy implications It requires a fundamental shift in managerial interpretations, attitudes, and perceptions to incorporate environmental considerations in decision making (Berry and Rondinelli, 1998; Sharma, 2000; Aragon-Correa and Sharma, 2003). The decision response uncertainty related to natural environment arise from the fact that managers lacks the information about long term impact of natural environment on business and lack of capabilities to devise suitable managerial actions in this regard (Shrivastava, 1995; Aragon-Correa and Sharma, 2003). This indicates that having subject expert on this shall help firm visualizing the impact of natural environment on its business performance so that they can prepare for real and

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achievable goals. This shall diminish decision response uncertainty at firm's end. In similar line, companies shall be motivated by policy makers to have a subject expert onboard to identify grey areas and to help in setting real and achievable goals. Cleaner technology and product' design and development requires clear vision of technological developments in national and international markets. This vision must be supported with significant economic returns and protection from imitators. This can be assured through strong regime of appropriability (Teece, 1986) through IPR. The efforts and investment of designer and developers shall be safeguarded with stricter IPR policies so that they are encouraged to work on technologies of future. Also, a strong regime of IPR may bring new entrepreneurs in market. Given the risk associated with such developments, policy makers and regulators may design favourable regulations to provide subsidies, tax benefits, infrastructure advantages, easier and rewarding finance and faster project approvals to negate risk perceptions among firms to bring early movers and new entrepreneurs in the market. One of the item of measurement scale which was discarded due to cross loading was about top management's perception that cleaner technology deployment is required to differentiate in near future market (VAR1 of scale). Respondents were indifferent about this. This indicates that either all firms knows that sustainable solution create differentiation advantages in near future or they believe that such differentiation is temporary as many other firms which are late entrants will replicate such offerings. If the later statement is true than this may hint towards weak regime of IPR and, policy makers shall address this to propagate radical innovations for sustainable future. Also, it requires policy maker's rethinking on how they can motivate firms to provide distinct characteristics to product/services that are usually perceived as similar. Policy maker's intervention in this regard may gear firms towards differentiation along with cost advantages. Similarly, firms shared same perception about the firm's readiness in terms of resources to collaborate effectively with high-tech firms (VAR2 of scale). Although, CDM improved the economic viability of projects (Schneider et al., 2008). Dechezlepretre et al. (2009) in their study on technology transfer due to CDM in emerging economies found out that international technology transfer in India is low relative to other economies and mainly driven by investment opportunities. We believe that policy intervention is required to transfer latest knowledge and advancement not only to large scale firms but also to medium and small scale entities which form a substantial part of economy and may add value to sustainable competitiveness. The collaboration with hightech firms may help in shifting the industry's focus towards ecoeffectiveness in totality. The current advancement in sustainable solutions is mainly due to environmental and regulatory risk perception. This has received boost due to top management's vision of constraints due to natural resources and their recognition of the facts that dependency on natural resources must be optimized to compete in future markets. Thus implementation of sustainable solutions is following top to down approach in value chain without significant pull from consumers and communities. Policy interventions are necessary that an overall business environment is created to reward implementation of sustainable solutions such that demand of such solutions originates at the end of value chain. 7. Conclusions Sustainable firms are generally strategically proactive and undertake radical developments and create new markets. Breakthrough product and process innovation is required to eliminate

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burden on natural resources and preserve the capacity of natural environment to absorb harmful effects of human activities. The paper derives analysis from the firms which are proactive and competitive. Hence, the outcome of this study shall help preparing other organizations which are yet to open their doors for radical solutions to remain competitive in future markets. This study adds to existing literature in following ways. First, it attaches the strategic perspective to topics on CT, CP and EFP to design an effective CTS for competitiveness in long term. It also provides a scope of the strategy belonging to radical sustainable solutions and separates it from short term incremental planning. Second, a measure of CTS was formed and tested for its validity and reliability. This tool can be used further by managers to check the performance of their firm on design and execution of CTS. Third, it presents the characteristics of general business environment related to sustainable solutions in a developing country like India and provides perceptions of managers working in industries facing challenges of sustainability. Fourth, various aspects of a CTS were ranked to understand the factors that make firms early adopter of CTS. It also offers important clues that shall help in understanding priority areas for other firms that are in phase of designing and implementing a CTS. The study's findings shall help firms to formulate vision and preparation required for future technologies and markets amid natural resources constraints and stricter regulations. Firms may become effective in implementing CTS due to their technological capabilities and employee's skill set. The demonstrated importance of radical departure from existing skill set and knowledge base to the understanding of products and services which do not exist yet shall guide firms to start developing in-house technological capabilities to remaining competitive. To maximize the economic returns on highly risky investment in design, development, implementation of sustainable solution, firms shall also look for favourable regulations and stricter IPR. To sustain long term competitive advantages, firms shall strive to educate end consumers about radical eco-friendly products and practices. Pre-empting competitors based on dual tactic of favourable regulations and preparing consumer's mind set for unconventional products/services may help in a strong repositioning. Last but not the least is that risk taking ability of top management shall play a key role in transforming firms to set more aspirational goals and, create innovative products and services relevant to future market repositioning. It is the top management's mindset toward sustainable solutions and risk taking ability that sets the momentum across the organisation. Management's clear vision of natural resources constraints in future market must help in accumulating necessary resources to offer competitive sustainable solutions. Removal of VAR1 in factorial analysis hints that sustainable solutions may help in demonstrating the competitiveness of a firm but management perceive that such advantages will not last longer due to imitation. This outcome can be linked with IPR regimes and require further exploration. It is also interesting to note in current study that firms are more inclined for favourable regulations that stricter IPR regime. A complete analysis is required to understand impacts of stronger as well as weaker regime of IPR considering design, development and implementation of sustainable solutions in developing countries. Similarly, reasons shall be explored for lesser international collaboration with high-tech firms. Taking the clues from strategic management literature, firms shall develop organizational capabilities in order to transform organization for radical development and pro-active alignments with current and future regulations. Absorptive and innovative capabilities may play a role in development of CTS. However, it shall be researched further in order to understand the role of these capabilities in

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shaping CTS. Future work is required to provide deep understanding about differential perception related to competitiveness due to radical sustainable solutions and employee's skill set among industry sectors. This study has few limitations. First, as the analysis covers the firms from several industrial sectors, like telecommunication, FMCG, steel, petroleum and gas, cement, automobile, textile, chemicals and paint, so the research findings are generic and applicable to general business environment in India as a country. As part of this research, the survey covered limited number of responses per industry sector so future research work can be taken to understand industry-specific phenomenon on CTS. Second, main respondents (about 65%) were Sustainability/Clean Development Mechanism/Health, Safety & Environment Department managers. Although they possessed significant work experience and communicated frequently with top management due to importance given to sustainability issues, they might be biased in their perception about firm's stand on CTS. Third, survey covered nine firms from public sector which have government shareholdings. The organization setting for CTS implementation of these firms vary from private limited firms. Fourth, the selection of firms for sampling purpose was based on documents available in public domain. Although, there were multiple and different sources providing important information on firm's CTS; there are chances that their content may not be elaborate and accurate. However, firms shall be able to measure their progress on CTS measurement scale provided in this study. We would suggest that two items (VAR1 & VAR2) which were omitted due to cross loading shall be retained and considered for measurement in future studies. References Allen, K.R., 2003. Bringing New Technology to Market. Pearson Education, New Jersey. Ambec, S., Lanoie, P., 2008. Does it pay to be green? A systematic overview. Acad. Manag. Perspect. November, 45e62. Aragon-Correa, J.A., 1998. Strategic proactivity and firm approach to the natural environment. Acad. Manag. J. 41, 556e567. Aragon-Correa, J.A., Matías-Reche, F., Senise-Barrio, M.E., 2004. Managerial discretion and corporate commitment to the natural environment. J. Bus. Res. 57 (9), 964e975. Aragon-Correa, J.A., Sharma, S., 2003. A contingent resource based view of proactive corporate environmental strategy. Acad. Manag. Rev. 29 (1), 71e88. Baruch, Y., Holtom, B.C., 2008. Survey response rate levels and trends in organizational research. Hum. Relat. 61 (8), 1139e1160. Baas, L., 2007. To make zero emissions technologies and strategies become a reality, the lessons learned of cleaner production dissemination have to be known. J. Clean. Prod. 15, 1205e1216. Battisti, G., 2008. Innovations and the economics of new technology spreading within and across users: gaps and way forward. J. Clean. Prod. 16 (1S1), 22e31. Baumgartner, R.J., 2011. Critical perspectives of sustainable development research and practice. J. Clean. Prod. 19, 783e786. Baumgartner, R.J., Zielowski, C., 2007. Analyzing zero emission strategies regarding impact on organizational culture and contribution to sustainable development. J. Clean. Prod. 15, 1321e1327. Berrone, P., Gomez-Mejia, L.R., 2009. Environmental performance and executive compensation: an integrated agency-institutional perspective. Acad. Manag. J. 52 (1), 103e126. Berry, M.A., Rondinelli, D.A., 1998. Proactive corporate environmental management: a new industrial revolution. Acad. Manag. Exec. 12 (2), 38e50. Blomqvist, K., Hara, V., Koivuniemi, J., Aijo, T., 2004. Towards networked R&D management: the R&D approach of Sonera Corporation as an example. R&D Manag. 34 (5), 591e603. Bolis, I., Morioka, S.N., Sznelwar, L.I., 2014. When sustainable development risks losing its meaning. Delimiting the concept with a comprehensive literature review and a conceptual model. J. Clean. Prod. xxx, 1e14. Boons, F., 2009. Creating Ecological Value. Edward Elgar, Cheltenham. Boons, F., Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. J. Clean. Prod. 45, 9e19. Boons, F., Montalvo, C., Quist, J., Wagner, M., 2013. Sustainable innovation, business models and economic performance: an overview. J. Clean. Prod. 45, 1e8. Bringezu, S., 2009. Visions of a sustainable resource use. In: Bringezu, S., Bleischwitz, R. (Eds.), Sustainable Resource Management Global Trends, Visions and Policies. Greenleaf Publishing, Sheffield, pp. 155e215.

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