Journal of Cleaner Production 421 (2023) 138510

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Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

The direct and interacting effects of strategic environmental management

and socially responsible practices on new product advantage
Antonio K.W. Lau a, Y.M. Jiang b, *, Peter K.C. Lee c, d
a
Kyung Hee University, South Korea
b
School of Business, Anhui University of Technology, China
c
Keele Business School, Keele University, UK
d
Aston Business School, Aston University, UK

A R T I C L E I N F O A B S T R A C T

Handling editor: Tomas B. Ramos A substantial body of literature has shown the relationship between corporate sustainability (CS) and firm
performance, but the effects of individual CS practices on new product advantage (NPA) remain ambiguous.
Keywords: Drawing on stakeholder theory and relevant CS literature, the purpose of this study is to investigate the direct
Strategic environmental management and interacting effects on NPA of four CS practices, namely, strategic environmental management (SEM), CS
New product advantage
management control, safety climate, and community relationship management. Our study method involved a
Safety climate
multi-respondent questionnaire survey of 198 Chinese manufacturers, and we statistically verified the survey
Community relationship
Management control data to test the research model with three hypotheses. The findings of this study show that all CS practices can
Stakeholder theory directly improve NPA. We found that, in affecting NPA, SEM interacts positively with CS management control,
negatively with community relationship management, and not at all with safety climate. Our findings provide
new evidence to prioritize and balance the efforts of CS practices on new product performance. They also pri­
marily clarify the conflicting or unclear relationships among the four CS practices for new product development
(NPD).

1. Introduction
Corporate sustainability (CS) is a strategic imperative that improves
corporate performance through the creation of social, moral, and eco­
nomic capital owing to stakeholder engagement and the improvement of
corporate reputation (Du et al., 2011; Peloza and Shang, 2010) as well as
through the increased profitability resulting from energy- and
cost-saving activities and the customer’s willingness to purchase CS
products (Berger, 2019). Thus, organizations have implemented a wide
range of CS practices, such as green human resource management,
charitable donations, sustainable innovation, community development,
and safety climate, to name a few (e.g., Lindgreen et al., 2009; Zohar,
2014). Accordingly, CS is a multidimensional construct consisting of
numerous CS practices whose interactions have not been comprehen­
sively verified (Hardcopf et al., 2019; Lindgreen et al., 2009), and those
interacting effects on firm performance are underexplored (Lau et al.,
2018; Lindgreen et al., 2009; Murcia, 2020).
The effects of CS on new product development (NPD) are particularly
indeterminate in the literature (Flammer, 2013; Obal et al., 2020),
requiring further empirical examination (Adams et al., 2016; Lee et al.,
2016). On the one hand, CS practices are considered to improve new
product advantage (NPA)—defined as a company’s new product supe­
riority relative to its largest competitor’s products (Li and Calantone,
1998; Xiao and Zhang, 2021)—because they can improve stakeholder
relationships (Lo et al., 2014), generate sustainability-related NPD
(Berger, 2019; Xiang et al., 2020), and enhance employee productivity
and recruitment (Peloza and Shang, 2010), leading to better product
innovation (Murcia, 2020; Vishwanathan et al., 2020). On the other
hand, CS practices possibly diminish the firm’s efforts in NPD (Guiral,
2012; Lee et al., 2016). When a firm invests in some CS practices to the
detriment of research and development (R&D) funding, it creates new
CS-related features but limits the novelty of the product (Barnea and
Rubin, 2010). The CS-modified product features may be inconsistent
with existing NPD practices (Agrawal et al., 2019; Wagner, 2010).
Furthermore, some empirical evidence from developing countries sug­
gests that CS efforts do not affect firm innovation (Ullah and Sun, 2021).
Therefore, the effects of CS practices in NPD are still ambiguous, which
requires further study.

* Corresponding author.
E-mail addresses: antoniolau@khu.ac.kr (A.K.W. Lau), yanmeijiang@ahut.edu.cn (Y.M. Jiang), plkl2000@hotmail.com (P.K.C. Lee).

https://doi.org/10.1016/j.jclepro.2023.138510
Received 30 October 2022; Received in revised form 31 July 2023; Accepted 17 August 2023
Available online 19 August 2023
0959-6526/© 2023 Elsevier Ltd. All rights reserved.
A.K.W. Lau et al.
Adopting stakeholder theory as the theoretical framework (Freeman
et al., 2010) of this study, our research examines the direct and inter­
acting effects of multiple CS practices, namely, strategic environmental
management (SEM), CS management control, safety climate, and com­
munity relationship management, on new product advantage (NPA).
According to stakeholder theory, we select the four CS practices related
to three important stakeholders who have a high level of legitimacy,
power, or urgency on the focal firm (Mitchell et al., 1997; Wood et al.,
2021). First, the natural environment, or its intermediaries such as local
governments and green-related nongovernmental organizations
(NGOs), is widely recognized as a dominant stakeholder to which
manufacturers have to respond (Hörisch et al., 2014). In this study, we
selected SEM because it shows top management’s commitment to
implement green practices strategically (Goldstein, 2002; Yang et al.,
2019). Another dominant group of stakeholders to be studied are em­
ployees (Mitchell et al., 1997), where we focus on two empirically less
studied CS practices: CS management control and safety climate. CS
management control, referring to the top-level corporate management
system for CS activities, is critical to overseeing employee behaviors
relative to CS practices and managing employee well-being (Klassen,
2001; Klassen and Whybark, 1999). Safety climate, referring to the so­
cially shared employee awareness of the relative priority of workplace
safety in the organization (Zohar, 2014), shows the management’s
commitment to employees’ health and safety (Beus et al., 2016), which
is crucial for employee commitment and trust in the employer (Geisler
et al., 2019). Finally, although the local community may not be a
dominant stakeholder (Mitchell et al., 1997), they can strongly influence
the approval of the focal firm to build facilities locally and get benefits
from the contributions of the firm (Freeman et al., 2010). Community
relationship management is also a catalyst for NPD, improving organi­
zational identity, pride, and reputation; supporting knowledge-sharing
across stakeholders (Murcia, 2020); and advancing new product mar­
ket performance (Vesal et al., 2021). Therefore, we examine their effects
on NPA in this study, and we refine the research question as the
following:
1.1. How do the interrelationships of SEM, CS management control,
safety climate, and community relationship management affect new
product advantage?
Our research contributes to the literature in two ways. First, this
study fills a research gap concerning the unclear relationships of mul­
tiple CS practices with NPD by exploring their direct and interacting
effects on NPD (Haffar and Searcy, 2017; Paparoidamis et al., 2019).
Recent literature suggests that the interactions between CS practices
may not improve NPD performance but shift traditional
customer-focused NPD processes to nonmarket stakeholder issues
(Haffar and Searcy, 2017), hindering the performance or innovativeness
of the new products (Lee et al., 2016; Wagner, 2010). While relevant
studies are scant in the literature, our findings offer insights to address
this important knowledge gap.
Second, the other research gap we attempt to address, following
stakeholder theory, is the differential importance of critical stakeholders
in the context of NPD management (Jones et al., 2018; Wood et al.,
2021). As companies need to treat fairly multiple, possibly competing,
stakeholders with limited resources (Lange et al., 2022), they need to
engage and balance claims from different stakeholders in various NPD
activities (Driessen and Hillebrand, 2013; Paparoidamis et al., 2019). In
this study, through the four studied CS practices, we examine which of
the stakeholders, among employees, the natural environment, and the
local community, are more influential in enhancing the effectiveness of
NPD. This gives practitioners an insight into how to effectively allocate
their scarce resources to more important stakeholders during NPD ac­
tivities requiring engagement from multiple stakeholders, specifically in
the Chinese context (Ketprapakorn, 2019; Yang et al., 2019).
We organize the remainder of the paper as follows. First, we provide
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Journal of Cleaner Production 421 (2023) 138510
background literature about stakeholder theory with related literature
on corporate social responsibility. Second, we present our research
model along with three hypotheses. We explain the methodology and
findings of this study later. Third, we discuss our findings with theo­
retical contributions and managerial implications, draw a conclusion,
and note the study limitations.
2. Theoretical framework
This section will firstly introduce the literature background of
stakeholder theory, identification of stakeholders and their related CS
practices. The hypothesis development with the research model will
then be explained.
2.1. Background literature
2.1.1. Stakeholder theory and identification
In this study, we adopt stakeholder theory as the theoretical frame­
work to examine the relationship between the four CS practices and NPD
because stakeholder theory and CS are highly related and can inform
each other (Dmytriyev et al., 2021; Schaltegger et al., 2019). The CS
literature has extensively adopted stakeholder theory (Dmytriyev et al.,
2021; Hörisch et al., 2014). Some scholars even consider CS as a form of
stakeholder management, which can be normative, descriptive, or
instrumental (Donaldson and Preston, 1995). This theory proposes that
a firm should create value for all its stakeholders who can affect or be
affected by the existence or operations of the firm (Freeman et al., 2010).
With better stakeholder relationships, the focal firm gains reciprocal
collaboration, knowledge sharing, quality stakeholders, lower trans­
action costs, moral motivation (Jones et al., 2018), legitimacy (Freeman
et al., 2010), and improved brand value or reputation (Kim et al., 2021).
Firms in different industries have different compositions of stake­
holders at different times, which typically include customers, em­
ployees, shareholders, suppliers, and communities (Wood et al., 2021).
Thus, the value creation for stakeholders can range from the financial
returns for shareholders to benefits associated with social responsibility
for all stakeholders in a broad sense. Accordingly, the stakeholder
relationship is not only bilateral between a firm and a stakeholder
depending on the assumptions of fairness and reciprocity (Phillips,
2003) but also complex with relationships among multiple stakeholders
(Lange et al., 2022). Indeed, when a firm attempts to meet one stake­
holder’s expectations, it must respond consistently and fairly to the
other stakeholders’ claims as well. For example, if a firm does not pro­
vide a safe and healthy workplace for its employees but instead donates
a lot to local communities, the employees would be dissatisfied because
they would perceive unfair, inconsistent treatment from the firm,
reducing their morale and productivity. They might be less dissatisfied if
the firm simply concerned itself with closer stakeholders such as em­
ployees, customers, and suppliers rather than pay attention to the
community and the environment. As such, the prioritization of conflicts
arising from managing stakeholders via CS practices could diminish the
value creation for firms (Crane, 2020). The focal firm should thus
identify and effectively manage diverse groups of stakeholders to ach­
ieve successful value creation through stakeholder relationship activities
(Freeman et al., 2010; Wood et al., 2021).
In this study we adopt Mitchell et al.’s (1997) approach to identify
stakeholders relevant to NPD. The approach suggests that we can
identify stakeholders according to their power, legitimacy, and urgency
to the focal firm. Power refers to the stakeholder’s ability to influence
the firm’s decisions, legitimacy refers to society’s expectation of socially
accepted and expected behaviors conducted toward stakeholders, and
urgency refers to the need to give stakeholders immediate attention. The
more a stakeholder satisfies these three criteria, the more the firm needs
to give priority to its claims.
Following these three criteria, we choose to examine the natural
environment, employees, and the local community as the important
A.K.W. Lau et al.
stakeholders in NPD. Although the existing literature has reported that
many stakeholders can be influential for businesses (e.g., Wood et al.,
2021; Zhou et al., 2020), and that a number of stakeholder management
processes and capabilities are relevant to NPD performance (Vaquero
Martín et al., 2016), we choose to examine the CS practices that serve
important stakeholders but have received limited attention or been re­
ported with conflicting empirical results. By focusing on the examina­
tion of CS practices concerning a small group of stakeholders (i.e., the
natural environment, employees, and the local community), we are able
to discuss the intricacies of the practices when developing the posited
hypotheses.
First, the natural environment is a primary stakeholder that a firm
depends on to operate (Laine, 2010). Based on Mitchell et al.’s (1997)
three criteria of power, legitimacy, and urgency, we argue that the
natural environment gains coercive power and legitimacy from
green-conscious communities (Laine, 2010; Starik, 1995). In­
termediaries such as local government, green-related NGOs, religious
groups, and global institutions can strongly influence firms for the
benefit of the natural environment (Hörisch et al., 2014), in particular in
Chinese manufacturing (Lau et al., 2018). Thus, environment is a
powerful and legitimate stakeholder with urgency for firms.
In this study we identify SEM as the CS practice relevant to the
natural environment. SEM denotes the adoption of environmentally
responsible practices that have a strategic integration with the plans and
decisions of top management within organizations (Montabon et al.,
2007; Yang et al., 2019), for example, the regular publication of a CS
report (Ruokonen and Temmes, 2019). Such a strategic integration
shows the organizational commitments to CS issues as part of the firm’s
business strategy that balances environmental concerns with economic
and social concerns in strategic decision-making processes. This can
create sustainable capabilities for sustainable firm performance (Li
et al., 2018; Yang et al., 2019). However, SEM may conflict with some
socially responsible practices like donations to the local community or
job creation (Isil and Hernke, 2017; Stokes and Seto, 2018). Because the
literature (e.g., Hardcopf et al., 2019; Potrich et al., 2019) widely ex­
amines the operational level of environmentally responsible practices,
our investigation of SEM can supplement it by offering an alternative
view on how strategic-level environmental planning and practices (i.e.,
SEM) directly and interactively affect NPD with other socially respon­
sible practices.
Second, employees are undeniably powerful, legitimate, and urgent
stakeholders for firms because they make decisions on and directly
contribute to a firm’s performance (Mitchell et al., 1997) in NPD (Zhou
et al., 2020). Employees in general are powerful in that they make
different levels of decisions and implement them as well. They legiti­
mately represent a company when working or communicating with
different stakeholders. Their participation in companies’ daily opera­
tions is so essential that their failure to perform duties would lead to
urgent and critical consequences. Indeed, relevant evidence in the
literature indicates that employees are one of the stakeholder groups
that matter the most for new product performance (Driessen and Hill­
ebrand, 2013). To extend prior studies that explored CS practices from
human resources management perspectives (Lopez-Cabrales and
Valle-Cabrera, 2020), we examine how employees as stakeholders link
with NPD in terms of CS management control and safety climate.
CS management control refers to the organizational management
system that monitors and follows up the implementation of CS activities
(Klassen, 2001) at the corporate governance level (Engert et al., 2016).
Some management control systems, such as Occupational Health and
Safety Assessment Series (OHSAS) 18001, the United Nations Global
Compact, or International Organization for Standardization (ISO)
26000, were introduced to improve firm performance (Lo et al., 2014;
Tuczek et al., 2018). An effective implementation of a CS management
system can help the focal firm substantively implement multiple CS
practices in different units within the focal firm, achieving the expected
socio-environmental outcomes (Wijen, 2014). Because the adoption of
3
Journal of Cleaner Production 421 (2023) 138510
CS management control is effective for linking CS to corporate objec­
tives, it involves additional resources and the problematic selection of
indicators, which requires further study (Engert et al., 2016; Klassen,
2001).
Safety climate refers to socially shared employee awareness of the
relative priority of workplace safety in an organization (Zohar, 2014). It
shows the commitment of corporate management to employees’ health
and safety, which not only improves employee-level safety performance
(Beus et al., 2016) but also enhances employee commitment (Geisler
et al., 2019) and firm competitiveness (Fernández-Muñiz et al., 2012). A
safe working environment for employees is essential to avoid accidents
and risks (Baby et al., 2021). If a firm can consistently practice SEM with
a good safety climate for its employees, they may perceive the firm as
socially responsible (Lopez-Cabrales and Valle-Cabrera, 2020), which
should further increase their morale and productivity. Conversely, if a
firm does not consistently implement a good safety climate, it might
confuse the employees about its true intention toward CS (Maon et al.,
2019), possibly damaging employees’ morale and trust in the firm
(Crane, 2020). Empirical evidence on the interactions between safety
climate and other CS activities, however, are scant in the literature
(Macassa et al., 2021).
Finally, the local community can be an important stakeholder for
NPD. Community relationship management refers to an organization’s
commitment to adopt CS practices to improve the well-being of the
surrounding communities it affects (Lau et al., 2018; Zhu et al., 2016).
Community services can improve public image, which helps attract
quality employees and gain access to capital for NPD (Panwar et al.,
2016). Local community relationships are important because firms need
to cooperate with and respect harmony in their domestic communities to
gain legitimacy and a reputation in the marketplace (Kim and Moon,
2015; Yin and Quazi, 2016). Cortez et al. (2022) showed that local cit­
izens are important stakeholders for CS-related innovation because they
help firms gain credibility on brand and business performance. Thus, the
local community is a powerful and legitimate stakeholder influencing
firms’ legitimacy to build facilities and operate in the local community
(Freeman et al., 2020).
However, the literature does not clarify the relationship between
SEM and community relationship management. Prior studies showed
that, if a firm embraces SEM, it improves the living environment of the
local community, further strengthening the relationship with the com­
munity (López-Navarro et al., 2015). However, a high level of invest­
ment in environmental protection might reduce a firm’s financial
support to local communities (Barnea and Rubin, 2010). Some envi­
ronmental management activities (e.g., conservation) can be counter­
productive to the economic development of local society, detrimentally
affecting the local community’s needs, such as job creation (Stokes and
Seto, 2018). Thus, we argue that their interrelationship warrants further
research.
2.1.2. The interrelationships of CS practices in NPD
Because the adoption of CS represents organizations’ substantial
investments in a wide range of CS practices (Lindgreen et al., 2009;
Zohar, 2014), it is crucial to understand how a firm can implement
multiple CS practices effectively (Hardcopf et al., 2019; Lindgreen et al.,
2009). Recent literature suggests two approaches: a complementary
view and a trade-off or prioritization view. The empirical examination of
both views is, however, in its infancy (Lindgreen et al., 2009; Murcia,
2020).
The trade-off or prioritization view suggests that firms need to come
to a compromise when adopting CS practices for business performance
because investment in one CS practice can prevent a firm from spending
on another CS practice (Barnea and Rubin, 2010). Thus, they need to
prioritize or balance the adoption of different CS practices according to
the importance of the stakeholder served (Freeman et al., 2010). A firm
adopts this view according to its internal resources and the external
environment (Hardcopf et al., 2019; Lau et al., 2018) and the
A.K.W. Lau et al. Journal of Cleaner Production 421 (2023) 138510

complexities of adopting multiple CS practices simultaneously (Haffar literature has, for example, adopted new product introduction (Murcia,
and Searcy, 2017). However, the complementary view proposes that 2020), R&D investment (Bendell and Nesij Huvaj, 2020), product
firms should adopt a synergetic approach to manage multiple CS prac­ newness (Costa et al., 2015), and CS-related innovation (Papagiannakis
tices for different stakeholders (Lau et al., 2018; Walker et al., 2020). et al., 2019) to measure the consequences of CS in NPD. Our selection of
These conflicting arguments for CS practices require further investiga­ NPA can complement these performance outcomes by introducing a new
tion (Lindgreen et al., 2009; Murcia, 2020). performance indicator of CS for NPD into the literature. In this way, we
In NPD, the debate about CS practices persists (Bocquet et al., 2019; also provide new evidence to explore the nonfinancial forms of stake­
Broadstock et al., 2020; Zhou et al., 2020). Some scholars have proposed holder value creation that benefits the customers in the literature
that CS practices improve a firm’s abilities to develop new and (Schaltegger et al., 2019).
strengthen existing relationships with stakeholders, leading to greater
access to external and internal knowledge to advance NPD (Adams et al.,
2.2. Hypothesis development
2016). CS practices help innovative firms create value to compensate for
the complexity of NPD practices (Lo et al., 2014). The CS practices can
To address the research question of this study, we developed a
help generate new ideas and creative product solutions from diversified
research model as shown in Fig. 1.
stakeholders that lead to product innovation (Bocquet et al., 2019). For
instance, a sustainable local community relationship can improve
2.2.1. SEM and NPA
corporate reputation (McWilliams et al., 2006) for better new product
According to stakeholder theory, CS practices can improve NPA in
market performance (Vesal et al., 2021). In addition, evidence shows
three ways. First, from the customer perspective, SEM can improve a
that progressive CS practices can help internal stakeholders build a sense
firm’s reputation by showing that it not only looks for profitable op­
of identity and pride in the organization, leading to more effective new
portunities but also fills institutional requirements and considers the
product introduction (Murcia, 2020).
needs of society at large (Su et al., 2016), helping in the development of
Other scholars, however, reported some controversial findings of CS
customers’ trust with a better brand image for NPD (Vesal et al., 2021).
practices in NPD. Hull and Rothenberg (2008) suggested that less
Because of the improved relationship with the firm, customers would be
innovative firms may invest heavily in CS practices to differentiate
more collaborative and willing to share new ideas and their preferences
themselves, but highly innovative firms may not get significant financial
on product attributes (Papagiannakis et al., 2019). For new products,
returns from such investments because these innovative firms already
customers are usually uncertain about product performance. The firm’s
provide customers with highly differentiated products. When market
adoption of SEM helps customers trust in the reliability, greenness,
competition is not high, the positive effect of CS efforts on consumers’
quality, and safety of the product (Xiang et al., 2020). With a good
purchasing decisions tends to be insignificant (Pigors and Rockenbach,
understanding of customer needs, firms can develop new products with
2016). In addition, CS efforts may be inconsistent with firms’ existing
higher quality and lower cost that differentiate their new products from
NPD practices (Wagner, 2010) because CS-oriented NPD usually re­
the competitors’ products (Vishwanathan et al., 2020).
quires a new business model (Adams et al., 2016) or can be perceived by
Second, a firm adopting SEM enjoys greater relationships with other
shareholders as diminished returns on their NPD investments (Guiral,
external stakeholders (Carroll and Brown, 2018). It improves the firm’s
2012). Organizations may substitute innovation efforts for CS efforts
ability to acquire external innovation, reduce idea searching cost, and
(Lee et al., 2016). Consumers may consider that the firm’s CS efforts
facilitate communications with external stakeholders to generate new
diminish the product quality if they perceive that these efforts come at
ideas and knowledge (Du et al., 2011). With better legitimacy across
the expense of other product performance features (Janssen and Van­
stakeholders, a firm can access diverse knowledge from different
hamme, 2015; Kim et al., 2021). Given these mixed findings on CS
stakeholders in the field of manufacturing operations (e.g., waste
practices in NPD, the associations between CS and NPD require further
reduction and recycling programs) and uncover value-added operations
study (Adams et al., 2016).
(e.g., new suppliers, new processes) that enhance the productivity and
quality of new products (Bendell and Nesij Huvaj, 2020), reduce waste
2.1.3. New product advantage
and production cost (Christmann, 2000) and improve the firm’s
To measure the impact of the CS practices on NPD, we propose first
absorptive capacity for innovation (Broadstock et al., 2020).
to examine NPA, referring to the supremacy of quality, features, and
Finally, when green practices are adopted in employee management
benefits of a new product relative to the competition (Slotegraaf and
practices, they improve employees’ well-being and health (Amrutha and
Atuahene-Gima, 2011). New product advantage measures new product
Geetha, 2020), leading to better eco-innovation performance (Huang
attributes (e.g., product quality, reliability, novelty, and uniqueness)
et al., 2016). For example, environment-related CS activities improve
that benefit the customers, showing an actual description of a firm’s
employees’ pride and engagement in the organization (Singh et al.,
ability to satisfy customer needs with its products (Li and Calantone,
2020). The positive image that SEM generates can also help recruit and
1998). Manufacturers sell new products based on price, quality, variety,
retain a high-quality workforce because potential employees will gain a
distribution, and innovation (Paliwoda and Marinova, 2007). Successful
sense of pride and motivation from being associated with an environ­
products may not be innovative but are based on superior product
mentally responsible firm (Carlini et al., 2019). When employees as
performance, features, and quality (Griffith and Lee, 2016). Some
stakeholders are capable and engaged with the firm, they are more
manufacturers can develop new products at a lower price for global
willing to share and create new product knowledge as well as overcome
markets and make customized products with new features for domestic
difficulties during NPD activities (Driessen and Hillebrand, 2013). This
markets (Cheng and Yiu, 2016), or they are concerned with the inno­
should help create new products with high quality and efficiency, which
vation, quality, efficiency, and sustainability of the new products (Liu
eventually enhance NPA. Thus, we hypothesize the following:
and Atuahene-Gima, 2018).
By adopting this measure, we can access a firm’s overall ability to H1. SEM relates positively to NPA.
provide new products, regardless of their sustainability level. CS not
only affects the novelty of new products or R&D investment but also 2.2.2. Socially responsible practices and NPA
contributes to a firm’s reputation and addresses the stakeholders’ con­ Following our discussion of the concepts of stakeholder theory, we
cerns that help create superior NPD performance (Song et al., 2019). expect that the benefits of SEM on NPA apply to the other three CS
According to stakeholder theory, the benefits of CS, such as increased practices. When a firm adopts one of the three selected CS practices, it
stakeholder trust, knowledge sharing, and brand reputation, can aid the helps develop a positive image for customers, which can (a) improve the
performance of both sustainable and typical new products. Existing firm’s new product features through the use of better information shared

4
A.K.W. Lau et al. Journal of Cleaner Production 421 (2023) 138510

Fig. 1. Research model.

by customers, (b) establish good relationships with other external
stakeholders that help with access to external resources (e.g., finance,
knowledge) for creating new products, and (c) motivate current em­
ployees and recruit high-quality new staff to conduct NPD activities
more effectively.
For CS management control, proactive management reviews of em­
ployees’ CS performance, assessment of CS-related capital investment,
and the evaluation of CS impacts on existing production operations
(Klassen, 2001; Klassen and Whybark, 1999) can demonstrate to inter­
nal and external stakeholders the firm’s actual behaviors in CS practices.
For instance, if a firm adopts voluntary international standards (e.g.,
OHSAS, 18001, ISO 14001, or ISO 26000) to control and monitor CS
practices, it not only provides stakeholders with new information about
the firm’s commitment to society, thus developing trust between cus­
tomers and employees, but it also generates CS-related resources (Lo
et al., 2014; Tuczek et al., 2018), thereby leading to better product
performance. Without effective CS management controls, employees
may perceive that the firm is not genuine in its commitment to social
responsibility, thereby reducing their commitment to participate in their
work duties. Consequently, less committed employees would be less
likely to obtain, process, and transfer knowledge in NPD processes,
which may reduce the efficiency of NPD (Liao et al., 2021).
For safety climate, when a firm provides safe and healthy working
conditions, it shows that management is aware of employees’ well-
being, which can enhance their productivity, motivation, and stake­
holder interactions (Jones et al., 2018; Thomas et al., 2021). The
commitment to employees’ health and safety enhances overall employee
performance (Carlini et al., 2019). In response to the safety climate,
employees will be more satisfied, engaged, and identified with the or­
ganization (Geisler et al., 2019), which will increase their ability and
motivation to absorb and transfer knowledge that facilitates time to
market and the understanding of market and customer needs for
enhancing new product performance (Liao et al., 2021). For example,
cross-functional team members from R&D, sales and marketing, and
operations need to be motivated and engaged in NPD so that valuable
knowledge and resources are properly used in creating superior products
(Cooper, 2019). As the dominant stakeholders of a firm, employees
engaged and involved in NPD could connect their diverse knowledge
and information for NPD, which improves new product performance
(Zhou et al., 2020). A safe and healthy working climate can also help
reduce operational risks (Lo et al., 2014).
With regard to community relationship management, activities such as
donations to the local community improve a firm’s image and reputation
among stakeholders, help develop local labor and consumer markets,
and promote employee engagement and collaboration (Thomas et al.,
2021). It shows customers that the firm is cooperative and trustworthy
(Jones et al., 2018). With a firm’s community engagement enhancing its
reputation, it can recruit local quality employees, gain access to capital,
and stand out from its competitors (Panwar et al., 2016).
Community-related CS practices can also create a favorable brand image
and align the firm with social norms and beliefs, eventually advancing
stakeholder recognition and legitimacy to operate in the marketplace
(Bai and Chang, 2015). By continually engaging with the communities,
firms are more capable of identifying and responding to new opportu­
nities for product innovation (Broadstock et al., 2020). For example, in
the minerals industry, firms need to engage with local communities to
obtain social approval to operate (Ghassim and Bogers, 2019). Coordi­
nating with local communities can also help firms create CS-oriented
innovation that involves improvements in production cost and product
quality (Michelini and Fiorentino, 2012) with enhanced product
uniqueness (Papagiannakis et al., 2019), which should then improve
new product performance (Adomako et al., 2023). Therefore, we pro­
pose the following hypotheses:
H2a. CS management control relates positively to NPA.
H2b. Safety climate relates positively to NPA.
H2c. Community relationship management relates positively to NPA.
2.2.3. SEM and socially responsible practices
As discussed in Section 2.1.2, we note that the interrelationships
between environmentally and socially responsible practices can be
controversial in NPD (Agrawal et al., 2019; Haffar and Searcy, 2017;
Maon et al., 2019). The trade-off approach, for example, suggests that CS
practices are substitutable (Cavaco and Crifo, 2014). CS practices may
reduce the export performance of exploitative innovation because CS
efforts may not effectively deliver product differentiation (Costa et al.,
2015). Firms may minimize certain SEM efforts to create more job op­
portunities in the local community in product development and
manufacturing processes (Isil and Hernke, 2017). The complementary
approach, however, argues that firms should adopt a balanced, syner­
getic approach to manage the contradictory outcomes of adopting
multiple CS practices (Hahn et al., 2018). Companies that consider
multiple CS issues in NPD can create CS-oriented new products in an
attempt to achieve better corporate performance (Adams et al., 2016).
To resolve these conflicting ideas, according to the stakeholder
perspective, we initially propose that the adoption of CS practices could
positively interact with each other to enhance NPA. The adoption of
multiple CS practices together can create coherent, consistent, and
reliable information to demonstrate to all stakeholders that the firm
genuinely acts in an environmentally and socially responsible way
(Lange et al., 2022). This, in turn, enhances customer trust and
employee engagement in the firm and, as we discussed, should improve
NPA. In contrast, if a firm adopts SEM but pays limited attention to
responsible practices concerning employees or the local community, it

5
A.K.W. Lau et al.
may create an image associated with inconsistency and unfairness that
confuses stakeholders (e.g., employees, customers, communities),
detrimentally affecting the satisfaction and motivation of stakeholders
and the overall performance of NPD (Maon et al., 2019). In fact, a
consistent implementation of all CS practices can help firms reduce the
impacts of conflicts of interests among stakeholders (Mitchell et al.,
1997). The adoption of multiple interrelated CS efforts can also create
new resources and capabilities for sustainable competitive advantage
(Lange et al., 2022). According to the cited literature, the CS practices
should positively interact with each other to enhance NPA.
Specifically, SEM could be an integral part of CS management control
(Klassen, 2001). Popular voluntary standards such as the Global
Reporting Initiative (GRI) or ISO 26000 set out management principles
related to corporate governance, environmental management, and CS
auditing altogether. The integration of SEM and CS management control
can send a clear signal to stakeholders about the firm’s overall CS
commitment. Similarly, such an integration creates more CS-related
resources for NPD (Tuczek et al., 2018) and thus should have a posi­
tive influence on NPA.
In a similar vein, adopting both SEM and safety climate may
demonstrate to employees the firm’s actual intention toward CS activ­
ities (Lopez-Cabrales and Valle-Cabrera, 2020), which should further
increase their productivity in NPD (Maon et al., 2019). In addition,
because SEM and safety climate practices may share some similar ac­
tivities, such as hazard control or audit training (Kruse et al., 2019), the
adoption of both may lead to the development of specialized expertise
(e.g., knowledge in reusing hazardous products), leading to low-cost or
innovative NPD.
Finally, the implementation of both SEM and local community ser­
vices could create a consistently informed image to external stake­
holders, leading to extra CS-related resources and improved stakeholder
engagement for NPD. When a firm invests substantially in SEM, the
pollution reduction efforts could directly improve the living environ­
ment of the local community, further strengthening community rela­
tionship management (López-Navarro et al., 2015). However, despite
the benefits in the implementation of both SEM and local community
services, some scholars have argued that the costs involved should not
be ignored (Jones et al., 2018). Thus, we propose to test the following
further hypotheses:
H3a. SEM interacts with CS management control to relate positively to
NPA.
H3b. SEM interacts with safety climate to relate positively to NPA.
H3c. SEM interacts with community relationship management to
relate positively to NPA.
After the three research hypotheses are developed, we will discuss
the methodology in the next section.
3. Methodology
This section will firstly describe the survey instrument. After that,
population and sampling will be explained.
3.1. Instruments
We developed the entire survey instrument based on the existing
literature. We used a 7-point Likert scale ranging from “strongly
disagree” (1) to “strongly agree” (7). We adapted the scales for CS
management control from Klassen and Whybark (1999), those for safety
climate from Das et al. (2008) and Neal et al. (2000), and those for
community relationship management from Lau et al. (2018). We took
the scales for SEM from Douglas and Judge (1995) and Yang et al.
(2019) and the scales for NPA from Li and Calantone (1998). The scales
of these variables were widely adapted in the literature (Barbaranelli
et al., 2015; Xiao and Zhang, 2021). Control variables in this study
6
Journal of Cleaner Production 421 (2023) 138510
included R&D intensity (McWilliams and Siegel, 2001), advertising in­
tensity (Yang et al., 2019), company size, company age (years), the type
of industry (Li et al., 2018; Yang et al., 2019), and export orientation,
that is, export oriented or domestic (Lau et al., 2020). We conducted a
pilot study in two stages: six expert interviews and a panel comprising
15 managers in the sampled industries (see Appendix A for details).
Table 1 shows the scales for the variables of this study.
3.2. Population and sampling
We collected the data from several manufacturing industries in
China, including food and beverage, drug and medical devices, auto­
motive, textile and clothing, and machinery and electronics. We selected
these industries because they were highly representative in terms of
their contributions to China’s economic development and environ­
mental conservation (China Statistical Year Book, 2021; Yang et al.,
2019). In 2020, these industries hired more than 34 million workers on
average with annual sales of 43,025 billion yuan (China Statistical Year
Book, 2021). However, their CO2 emissions were severe (Liu et al.,
2016), and related CS scandals could not be ignored (e.g., Chan et al.,
2014; Vallery, 2022). Because of their importance to environmental
protection, pollution, and waste reduction, extant CS literature also
studied industries such as food and beverage (Cai et al., 2022), drug and
medical devices (Li et al., 2020), automotive (Zhu et al., 2007), textile
and clothing (Li et al., 2021), and machinery and electronics (Zeng et al.,
2005). For example, China is a leading global exporter of textile and
clothing, whose industries could cause adverse environmental impacts
because of the use of dyes and chemicals (Li and Wu, 2017). To achieve a
more sizable and representative data set, we collaborated with a local
professional research company with its database of greater than 4500
manufacturers in the selected industries (Appendix A). Assuming that
large-scale firms were more likely to adopt multiple CS practices
(Graafland and Zhang, 2014), we came up with a narrower company
database comprising 850 manufacturers. We defined large-scale
manufacturing firms in China as those with annual sales of at least 20
million yuan, 300 or more regular employees, and in operation for more
than two years according to the classification criteria of the National
Bureau of Statistics of China (2017). The research company then con­
tacted these firms by telephone, email, or social media; 421 agreed to
participate in our survey, forming the final sampling frame of this study.
The CS managers completed the questionnaire on CS management
control; the operations managers completed the questionnaire on safety
climate; and top management representatives completed the question­
naire on NPA, SEM, and community relationship management. We
received 206 sets of responses, each comprising three completed ques­
tionnaires. After deleting the responses with missing data, we used 198
valid responses for data analysis. We completed the data collection with
a response rate of 47% (198 out of 421).
Table 2 shows the sample profiles. The annual sales volume of the
responding firms was about 30–1000 million yuan, and the average
company age was approximately 15 years, which fully met our re­
quirements. The majority (greater than 70%) of respondents was
departmental managers or executives, indicating that knowledgeable
staff members completed our questionnaires. The findings of this study
will be presented in the next section.
4. Findings
Following the methodology section, this section would present the
results of our empirical verification of the research hypotheses and
model. Results on common method bias and robustness tests would be
presented and discussed at the end.
Tables 1 and 3 show the results of the reliability and confirmatory
factor analysis. In Table 1, Cronbach’s alpha values of each construct (i.
e., 0.766–0.852) were greater than 0.7, indicating good reliability. All
the standardized factor loadings are above 0.5 at p-value <0.001,
A.K.W. Lau et al. Journal of Cleaner Production 421 (2023) 138510

Table 1
The results of confirmatory factor analysis.
Variables measurements Standardized factor AVE CR Cronhach’s
loading α
CS management control According to the company’s current situations, to what extent do you agree with the following 0.539 0.778 0.777
statements in your company? 0.771#
Formal procedures are in place to review CS concerns for all new investment for the
company (CS)
An audit of CS programs and their results is performed annually for all production areas 0.718***
(CS)
An audit of CS risks (e.g. employees, environmental) for the existing equipment is 0.713***
performed annually for all production areas (CS)

Safety climate According to the company’s current situations, to what extent do you agree with the following 0.541 0.77 0.774
statements in your company? 0.578#
Management places a strong emphasis on workplace health and safety (OP)
Safety is given a high priority by management (OP) 0.962***
Management considers safety to be important (OP) 0.604***

Community relationship
management
According to the company’s current situations, to what extent do you agree with the following 0.657 0.849 0.834
statements in your company? 0.849#
Financially support education (e.g., school building, or scholarship) and cultural (e.g.,
arts, or sports) activities in the communities where we operate (TOP)
Donate to charities located in the communities where the company operates (TOP) 0.912***
Stimulate the economic development in the communities where we operate (TOP) 0.646***

χ2 = 57.360, df = 21, p-value <0.001, χ2/df = 2.731, SRMR = 0.045, RMSEA = 0.094, CFI = 0.956, IFI = 0.957, TLI = 0.925
Strategic Environmental To what extent do you agree with the following statements in your company? 0.534 0.773 0.766
management Voluntarily exceed government-imposed environmental regulations (TOP) 0.688#
Incorporate environmental performance objectives in our organizational plans (TOP) 0.818***
Incorporate environmental concerns in our business decisions (TOP) 0.678***

New product advantage Compared with our largest competitor’s product, our product …
Increases a customer’s work efficiency (TOP) 0.643# 0.686 0.865 0.852
Is free of errors (TOP) 0.952***
Is compatible with existing equipment, products or services (TOP) 0.859***

χ2 = 17.668, df = 8, p-value <0.05, χ2/df = 2.208, SRMR = 0.030, RMSEA = 0.078, CFI = 0.984, IFI = 0.984, TLI = 0.969

Notes: ***: p-value <0.001. #: factor loading was fixed as 1. Note: * CS refers to the respondents responsible for the CS operations in the firm. OP refers to the re­
spondents responsible for the operations management of the firm. TOP refers to the respondents responsible for the general management of the firm.

We tested the proposed hypotheses of this study by using a series of

Table 2a
hierarchical moderated ordinary least squares regression analyses, as
Sample profiles - firms.
shown in Table 4. We used the analysis technique because all the con­
Variables Level Frequency structs were continuous variables and passed normality tests. The
(Valid %)
Durbin-Watson value of the full model was 1.766, that is, within the
Company Company Size <30 million 19 (9.7) range of 1.5–2.5, suggesting that an autocorrelation problem was un­
profiles (annual sales in 30 - 50 million 54 (27.7) likely to be serious. All the regression models were significant with their
yuan) 50 -100 million 27 (13.8)
100 -1000 million 61 (31.3)
adjusted R-values ranging from 0.193 to 0.659. Because we examined
1 - 2 billion 12 (6.2) the interacting effects of four CS practices, all the independent variables
2 - 3 billion 8 (4.1) are mean centered to lessen the correlation between them and their
3 - 5 billion 4 (2.1) interaction terms. The collinearity tests showed that none of the vari­
>5 billion 10 (5.1)
ables in any of the models had a variance inflation factor value higher
Type of major Export-oriented 26 (13.1) than 5, indicating that multicollinearity issues might not be severe in
markets Domestic-oriented 172 (86.9) this study. We tested additional two-to four-way moderation effects
Industry types Food & beverage 30 (15.2) among SEM and other three CS practices on the NPA, but the results
Drug and medical device 32 (16.2) were not statistically valid.
Automotive 36 (18.2)
Textile & clothing 32 (16.2)
The results of Model 2 in Table 4 showed that SEM (β = 0.598, t =
Electronics and 65 (32.8) 10.152) were positively associated with NPA, supporting H1. The results
machinery of Model 3 showed that CS management control (β = 0.244, t = 4.293),
Others 3 (1.5) safety climate (β = 0.161, t = 2.802), and community relationship
Minimum Maximum Mean
management (β = 0.438, t = 7.060) were positively associated with
RD Intensity (%) 1 4 2.56
Advertising 1 5 2.2 NPA, supporting H2a–c. In Model 5, SEM had a positive moderating
Intensity (%) effect (β = 0.205, t = 2.554) on the relationship between CS manage­
Company Age 2 85 14.66 ment control and NPA but a negative one (β = − 0.358, t = − 4.026) on
(year) the relationship between community relationship management and
NPA. SEM had no statistically significant moderating effect on the as­
supporting the convergent validity of the study. Table 3 indicates that sociation between safety climate and NPA (β = 0.061, t = 1.077). These
the square root of the average variance extracted from each construct results support H3a but not H3b–c.
was greater than the correlations between the focal construct and other
constructs in the analysis, supporting the presence of adequate
discriminant validity of our study (Fornell and Larcker, 1981).

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A.K.W. Lau et al. Journal of Cleaner Production 421 (2023) 138510

Table 2b multiple-respondent survey data set with the above supportive statisti­
Sample profiles – respondents. cal results, it is unlikely that the common method bias should be a sig­
Variables Level Frequency (Valid %) nificant concern in this study.
CS* OP* TOP*

Respondent Gender Female 52 30 29

4.2. Robustness test
profiles (26.3) (15.2) (14.6)
Male 146 168 169 In this study we adopted the cross-validation tests to evaluate the
(73.7) (84.8) (85.4) robustness of the model (Schoenherr and Swink, 2012). First, we
Age (year) 70 50 13
randomly selected 50% of the data and tested it with our research model
<35
(35.4) (25.3) (6.6)
36–45 108 129 125 of all the research constructs. As a random sample size of 107, the sta­
(54.5) (65.2) (63.1) tistical results showed that NPA was directly correlated with SEM (β =
More than 35 20 19 60 0.311, t = 2.843), CS management control (β = 0.138, t = 1.735), safety
(10.1) (9.6) (30.3) climate (β = 0.210, t = 2.299), and community relationship manage­
Company Executives 16 25 107
(8.1) (12.6) (54.0)
ment (β = 0.288, t = 2.679). In addition, SEM interacted with CS
positions Departmental 129 132 66 management control to affect NPA (β = 0.265, t = 2.131). The inter­
managers (65.2) (66.7) (33.3) action between SEM and safety climate on NPA was statistically insig­
Professionals 26 24 13 nificant (β = 0.040, t = 0.426), and that between SEM and community
(13.1) (12.1) (6.6)
relationship management on NPA was marginally insignificant, but the
Administrative 16 10 8 (4.0)
(8.1) (5.1) sign of direction was the same as our original finding (β = − 0.259, t =
Others 11 7 (3.5) 4 (2.0) − 1.653). Second, we tested our model using a path model in AMOS 25
(5.6) software. The statistical results showed that SEM (β = 0.193, p-value =
Years of 0.009), CS management control (β = 0.171, p-value = 0.004), safety
service <1 year 5 (2.5) 3 (1.5) 4 (2)
1–5 years 135 124 75
climate (β = 0.207, p-value = 0.000), and community relationship
(68.2) (62.6) (37.9) management (β = 0.341, p-value = 0.000) directly affect NPA. In
6–10 years 47 61 70 addition, SEM interacted with CS management control (β = 0.165,
(23.7) (30.8) (35.4) p-value = 0.04) and community relationship management (β = − 0.256,
>10 years 11 10 49
p-value = 0.003) to affect NPA. The interaction between SEM and safety
(5.6) (5.1) (24.7)
climate on NPA was statistically insignificant (β = 0.046, p-value =
Notes: * CS refers to the respondents responsible for the CS operations in the 0.419). Overall, the above analysis results demonstrate the robustness of
firm. OP refers to the respondents responsible for the operations management of our findings. The findings will then be discussed next.
the firm. TOP refers to the respondents responsible for the general management
of the firm.
5. Discussion

4.1. Common method bias

To detect the nonresponse bias, we conducted tests of early and late
responses and found no statistical significance between them. In addi­
tion, the research firm provided us with the annual sales and company
age information of 40 randomly selected nonresponding firms. We then
randomly selected 40 responding firms and compared them with t-tests
but found no statistical significance between them. Furthermore, we
controlled common method variances, including informant and social
desirability bias through procedural and statistical stages (Podsakoff
et al., 2012). Appendix A shows the details. In the statistical stage of
testing common method variances, Harman’s single-factor test results
showed that one factor accounted for 44.7% of the total variance
(<50%), supporting the view that common method bias was not sig­
nificant. Also, a marker variable technique was adopted (Podsakoff
et al., 2012). Two confirmatory factor analysis (CFA) measurement
models together with a marker variable (i.e., type of major market) were
tested (Lindell and Whitney, 2001). The results of the CFA marker var­
iable technique indicated that the model fitted the data consistently for
the data sets of social responsibility (i.e., χ2/df = 2.773, CFI = 0.955, IFI
= 0.957, TLI = 0.904 and RMSEA = 0.095) and SEM and NPA (i.e.,
χ2/df = 2.168, CFI = 0.984, IFI = 0.985, and RMSEA = 0.077). As a
In this section, we will first discuss and explain the findings of this
study. Next, the relevant academic contributions and practical impli­
cations will be explained.
5.1. Discussion of findings
Consistent with the H1 and H2a–c hypotheses, we found that SEM,
CS management control, safety climate, and community relationship
management positively correlate with NPA. This new empirical evi­
dence supports the extant literature that CS practices can enhance NPD
performance (Murcia, 2020), possibly through better customer
involvement in NPD (Papagiannakis et al., 2019), improved relation­
ships with other external stakeholders to access to external resources
(Carroll and Brown, 2018), and more motivated, high-quality employees
to conduct NPD activities (Amrutha and Geetha, 2020). Our results also
support the idea that the implementation of CS management control
provides stakeholders with information and enhances their trust for
better engagement with the focal firm (Tuczek et al., 2018), leading to
better NPA. A safe and healthy working climate and local community
services should improve internal and external stakeholder relationships,
facilitating stakeholders’ participation in NPD activities (Thomas et al.,
2021).

Table 3
Correlations among the research constructs.
Constructs Mean SD CMC SC CRM SEM NPA

CS management control (CMC) 5.682 1.332 0.734

Safety climate (SC) 5.827 1.326 .552** 0.736
Community relationship management (CRM) 5.551 1.485 .437** .610** 0.81
Strategic environmental management (SEM) 5.753 1.273 .598** .653** .626** 0.731
New product advantage (NPA) 5.418 1.476 .551** .590** .605** .636** 0.828

Note: Spearman’s correlations are below the diagonal, and the square root of AVE estimates are presented on the diagonal.

8
 A.K.W. Lau et al.
Table 4
The results of regression analysis.
Variables Model 1 Model 2 Model 3 Model 4 Model 5

β t VIF β t VIF β t VIF β t VIF β t VIF

Constant 5.466 7.659 10.502 10.488 10.676

Market − 0.070 − 1.014 1.141 − 0.050 − 0.911 1.142 − 0.098* − 2.060 1.153 − 0.085 − 1.802 1.166 − 0.082 − 1.816 1.167
RD Intensity 0.369*** 4.717 1.465 0.183** 2.800 1.590 0.133* 2.339 1.631 0.115* 2.055 1.653 0.135* 2.468 1.695
Adv. Intensity 0.080 1.025 1.465 0.023 0.369 1.477 0.010 0.190 1.492 0.005 0.089 1.495 0.032 0.603 1.561
Company Size 0.075 1.046 1.240 0.040 0.688 1.244 0.013 0.257 1.251 0.013 0.269 1.251 0.024 0.511 1.257
Company Age 0.009 0.122 1.228 0.051 0.889 1.235 0.016 0.322 1.249 0.025 0.506 1.255 0.001 0.026 1.281
Industry1 0.011 0.153 1.313 0.092 1.532 1.336 0.044 0.849 1.368 0.060 1.175 1.387 0.058 1.151 1.417
Industry2 − 0.289*** − 3.760 1.408 − 0.107 − 1.665 1.527 − 0.137* − 2.515 1.512 − 0.109* − 2.003 1.569 − 0.141** − 2.656 1.604
Industry3 − 0.029 − 0.374 1.397 0.028 0.449 1.409 0.012 0.231 1.465 0.021 0.398 1.471 0.018 0.347 1.482
Industry4 0.031 0.391 1.517 0.118 1.830 1.545 0.059 1.044 1.637 0.076 1.359 1.659 0.053 0.952 1.738
Industry5 − 0.077 − 1.167 1.028 − 0.002 − 0.044 1.048 0.025 0.535 1.071 0.027 0.598 1.071 0.042 0.954 1.091
9

SEM 0.598*** 10.152 1.294 0.186** 2.662 2.569 0.105 1.319 3.583
CMC 0.244*** 4.293 1.638 0.178** 2.906 1.962 0.183** 3.013 2.088
SC 0.161** 2.802 1.674 0.148* 2.605 1.687 0.173** 2.890 2.031
CRM 0.438*** 7.060 1.957 0.367*** 5.520 2.328 0.327*** 4.942 2.479
SEM*CMC 0.205* 2.554 3.637
SEM*SC 0.061 1.077 1.842
SEM*CRM ¡0.358*** ¡4.026 4.468

F-value 5.613*** 17.317*** 25.246*** 24.742*** 22.922***

F-value change 5.613*** 103.061*** 69.638*** 7.086** 5.576**
R2 0.235 0.511 0.646 0.659 0.689
Adjusted R2 0.193 0.482 0.62 0.633 0.659
R2 change 0.235*** 0.277*** 0.411*** 0.013** 0.03**

Note: *** p-value <0.001; **p-value <0.01; *p-value <0.05. Industry 1–5 were dummy variables of the type of industries. The dependent variable is NPA. CMC refers to CS management control; SC refers to safety climate;
CRM refers to community relationship management; SEM refers to strategic environmental management. Industry1-5 are five dummy variables to represent the type of industry. Industry1 = 1 for food and beverage;

Journal of Cleaner Production 421 (2023) 138510

Industry2 = 1 for Drug and medical device; Industry3 = 1 for Automotive; Industry4 = 1 for Textile and clothing; Industry1-5 = 0 for machinery.
A.K.W. Lau et al.
To examine the trade-off or prioritization and complementarity ef­
fects of CS practices on NPD for the stakeholders of natural environment,
employees, and local community, we tested H3a–c. Consistent with
hypothesis H3a, we show that SEM can positively interact with CS
management control to generate better NPA. This finding is reasonable
because certain parts of CS management control can be related to SEM
practices (Klassen, 2001). The combination of planning, implementing,
and controlling SEM practices can improve the actual behaviors of green
practices and their effectiveness within firms (Mura et al., 2018). The
consistent view of social and environmental planning and control may
create a stronger, unified recognition among stakeholders about the
firm’s commitment to the environment and society. Such CS control
systems are critical for CS to affect business performance and, if properly
disclosed, show a firm’s commitment to society, which improves the
relationship with external stakeholders in NPD (Mura et al., 2018).
Inconsistent with hypothesis H3b, we found that safety climate does
not interact with SEM to affect NPA. It means that they have no signif­
icant complementary or trade-off effect on NPA in the sampled firms, for
three possible reasons. First, workplace safety and green practices are
likely to be unrelated in both the daily operational routine and the
mindset of employees. Instead, comprehensive CS-related human
resource management practices for employees as stakeholders are
needed to interact with green practices for NPD (Lopez-Cabrales and
Valle-Cabrera, 2020; Singh et al., 2020). Second, such situations may
reflect the fact that the sampled companies have not yet developed the
integrative capabilities or new business models that effectively generate
synergic effects between environment and employee safety climate for
firm performance (Amrutha and Geetha, 2020; Lopez-Cabrales and
Valle-Cabrera, 2020). Finally, it may show that the sampled manufac­
turers adopt SEM to ensure their political legitimacy (Yang et al., 2019),
but they do not coordinate it with the building of a safe and healthy
environment for employee performance.
Inconsistent with hypothesis H3c, we found that SEM negatively
interacts with community relationship management to affect NPA.
There are three explanations. First, when a firm implements SEM, it may
face resistance from the local community because of different norms and
values (Winn et al., 2012). For example, there could be a trade-off of
environmental protection and job accessibility for local low-income
workers (Stokes and Seto, 2018). Second, the investment in SEM may
reduce the firm’s resources for donations to local communities (Barnea
and Rubin, 2010) because the philanthropic actions may create fewer
benefits to improve the customer’s purchase intention (Thomas et al.,
2021). Third, it is likely that the sampled firms have not been able to
develop new business models or integrative capabilities to implement
both practices simultaneously and effectively (Hahn et al., 2018; Walker
et al., 2020).
5.2. Academic contributions
This study makes several contributions to the literature. First, we fill
the first research gap in the NPD literature by showing that all CS
practices can individually improve NPA regardless of whether the
product innovation is CS-oriented or not. We provide new empirical
evidence to support the roles of CS in NPD with an alternative measure
of NPA (Lee et al., 2016; Obal et al., 2020). According to stakeholder
theory, the four CS practices we studied can enhance stakeholder re­
lationships with the natural environment, employees, and community,
which advances a firm’s ability to create new products of higher quality
and with features that benefit customers. The findings concerning in­
teractions between SEM and CS practices imply that implementing SEM
and CS management control together may create a consistent view for all
stakeholders that the firm spends substantively on green and social ef­
forts, helping them trust the firm and share information, and leading in
turn to superior new products. However, we found that there is a risk in
balancing local community needs (e.g., donations) with SEM efforts for
NPA. It is possible that, because the implementation of both practices
10
Journal of Cleaner Production 421 (2023) 138510
requires significant financial resources, firms may increase product
prices, making buyers skeptical about their motives or less likely to
purchase their products (Thomas et al., 2021). This study thus provides
new evidence to support the literature that, if multiple CS practices are
simultaneously implemented, we need to identify those that are con­
tradictory and find new ways to come to a win-win situation or alter­
natively prioritize what is most important (Agrawal et al., 2019;
Driessen and Hillebrand, 2013).
Second, in aligning with the first research gap, our study contributes
to the CS literature by clarifying the unclear interrelationships of four
empirically less explored CS practices on new product performance. We
show that, in affecting NPA, SEM interacts positively with CS manage­
ment control but negatively with community relationship management.
This result gives us a better understanding of how these practices
interact to affect firm performance (Hardcopf et al., 2019; Lindgreen
et al., 2009). On the one hand, this study partially supports the trade-off
or prioritization view of the CS (Cavaco and Crifo, 2014; Murcia, 2020).
On the other hand, it also partially supports the complementary view
that a firm can perform well if it can achieve simultaneously both
environmentally and socially responsible practices.
Third, the study provides new evidence to address the second
research gap, exploring through stakeholder theory the costs and ben­
efits of managing several legitimate stakeholders (Lange et al., 2022;
Wood et al., 2021). We suggest that when the environment, employees,
and community, as three important stakeholders, are managed well with
the studied CS practices, they can be beneficial to firm performance in
terms of new product offerings. According to our study, there is a po­
tential trade-off between environment and community but a synergy
between environment and employees. These results give new insights
into the establishment of priorities among different stakeholders (Amis
et al., 2020). It is possible that, to address simultaneously stakeholder
concerns about environmental protection and community philanthropic
actions, firms may increase their development costs and time, dimin­
ishing their product advantage (Jones et al., 2018). But environmental
and employee management based on the adoption of a CS-related
management system can strengthen each other to improve NPA, sup­
porting the win-win situation of stakeholder engagement for product
innovation (Papagiannakis et al., 2019). This implies that future re­
searchers should examine how charitable activities and other CS prac­
tices can be implemented effectively and what CS capabilities or
strategies are needed to address this trade-off situation. In addition,
future researchers may address how to integrate environmental man­
agement strategies with different CS management control systems while
exploring how an employee safety climate is related to green production
practices.
Fourth, except for addressing the two knowledge gaps in the litera­
ture, our use of Chinese manufacturers as the sample answers the call for
providing additional evidence on CS practices in the Chinese context
(Ketprapakorn, 2019; Lau et al., 2018) that CS practices can help
improve NPA in China. Because NPA is a more complete measure of NPD
that evaluates product superiority relative to competitors’ products
(Wang et al., 2018; Yin and Quazi, 2016), our study shows that CS
practices are critical for designing a superior product, verifying the costs
and benefits of CS practices for manufacturers in China. Specifically,
Chinese manufacturers can improve their NPA by directly adopting
SEM, safety climate, CS management control, and community relation­
ship management. However, tensions may appear between environ­
mental management and local community efforts. Future researchers
may examine the effects of the institutional and cultural contexts on
different CS practices in developing countries.
Finally, our study supplements new insights to the existing envi­
ronmental management literature by indicating that environmental
management should be integrated at the strategic level (Engert et al.,
2016). We also show that SEM is important to the manufacturing in­
dustry, which coheres with the findings from the construction industry
(Park and Ahn, 2012). The integration of SEM and CS management
A.K.W. Lau et al.
control can help improve green innovation performance (Huang et al.,
2016) as well as environmental performance (Latan et al., 2018). Future
researchers may examine how SEM can effectively interact with other
CS management control systems or how to implement these systems at
the strategic level. For example, although existing CS management
controls such as the adoption of ISO 26000 already incorporate the
concepts of environmental, social, and economic pillars of CS, we are
still not sure how they create new product advantages in practice. This
requires further study. As no interacting relationship between SEM and
safety climate is found in our study, we also call for more research about
sustainability and safety (Nawaz et al., 2019). In adopting CS-related
new technologies, firms should consider the related risks of accidents
or unsafe situations, which can be costly and deadly (Nawaz et al.,
2019). Thus, a better understanding of relating safety concepts (e.g.,
safety climate or culture) to CS practices will be needed.
5.3. Managerial implications
According to our empirical tests, NPD managers should consider
implementing SEM, CS management control, safety climate, and com­
munity relationship management practices individually. Spending on CS
would help create NPA by facilitating better stakeholder engagement
and relationships with employees, the natural environment and its
proxies, and local communities. CS management control practices, such
as the adoption of the planning and evaluation part of ISO 26000 and the
UN Global Compact (Tuczek et al., 2018), can be used to enhance the
firm’s ability to create new products that satisfy customer needs.
Employee safety climate, such as the adoption of OHSAS 18001 (Lo
et al., 2014), and local community relationship management, such as
philanthropic actions (Thomas et al., 2021), could be considered to link
with NPD. In addition, because SEM can positively interact with CS
management control on NPA, managers may more closely integrate SEM
with socially responsible practices. However, managers should be aware
that adopting only SEM practices with lax control over other CS activ­
ities may create a confusing perception among stakeholders that their CS
efforts are merely symbolic, resulting in a diminished impact on NPA. To
this end, managers might deal with this by developing new business
models (Salim et al., 2019) or by balancing local needs with environ­
mental protection (Hahn et al., 2018). In the next section, we will
conclude our study and describe the study limitations.
6. Conclusions
In this final section, we will conclude our study with several rec­
ommendations for further research.
6.1. A summary
This study first examines the direct and interacting effects of CS
practices on NPA. Our empirical results show that SEM, CS management
control, safety climate, and community relationship management can
positively affect NPA. The interacting effect of SEM and CS management
control can positively affect NPA, but the effect of SEM and community
relationship management is negative. The results first verify unclear
relationships of four CS practices with NPD (Flammer, 2013; Lee et al.,
2016; Obal et al., 2020) by examining their direct and interacting effects
on NPA. Following stakeholder theory, we also provide new evidence to
explore the benefits and costs of firms’ CS activities across employees,
community and natural environment as stakeholders (Jones et al., 2018;
Wood et al., 2021) within NPD (Driessen and Hillebrand, 2013; Papar­
oidamis et al., 2019), specifically in the Chinese context (Ketprapakorn,
2019; Yang et al., 2019).
6.2. Limitations
This study has several limitations, for which we make
11
Journal of Cleaner Production 421 (2023) 138510
recommendations for future studies. First, like other survey studies, we
adopted a cross-sectional approach in an industrial survey, so it was
difficult to test the causal relationships among our hypotheses, even
though we adopted several ways to minimize the common method bias.
Second, this study was limited to the subjective performance indicator
that we measured. Future researchers may try to collect objective data
about NPA, but as advised by our research firm, it would be difficult to
collect those data in developing countries. Third, we could not identify
all CS practices and examine their interacting effects on new product
performance because it was impractical to do so in a single study. Thus,
we could not fully address the omitted variable issues in the regression
model even if we had added a number of control variables and con­
ducted some validation tests as shown. Future researchers may examine
other CS practices and their interactions on firm performance. Finally,
our study findings are limited to our data collected from the
manufacturing industries that were representative but environmentally
concerned in China. Such institutional contexts might be different in
other countries (Bai and Chang, 2015; Kim and Moon, 2015).
CRediT authorship contribution statement
Antonio K.W. Lau: Conceptualization, Writing – original draft,
Writing – review & editing, Methodology, Formal analysis, Investiga­
tion. Y.M. Jiang: Validation, Formal analysis, Writing – review &
editing. Peter K.C. Lee: Writing – review & editing, Data curation,
Funding acquisition, Resources.
Declaration of competing interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
Data availability
Data will be made available on request.
Acknowledgements
There is no specific acknowledgement in this original article.
Appendix A. Supplementary data
Supplementary data to this article can be found online at https://doi.
org/10.1016/j.jclepro.2023.138510.
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