Customer pressure and green innovations at third party logistics providers in China

Purpose: The purpose of this paper is to investigate how customer pressure influences green innovation in the context of Chinese third-party logistics (3PL) providers, and especially the role of organizational culture in moderating this relationship. Design/methodology/approach: Based on survey data collected from 165 3PL providers in China, hierarchical moderated regression analysis was conducted to test the hypotheses. Findings: Customer pressure is an important driver of green innovation amongst 3PL providers. Flexibility-oriented organizational culture strengthens the effect of this driving force, while control-oriented organizational culture weakens this force. Green innovation significantly contributes to financial performance and flexibility orientation strengthens this contribution, while control orientation weakens it. Research limitations/implications: This research examines the contingency effect of organizational culture in helping to resolve inconsistencies in the relationship between customer pressure and green innovation. Although the inconsistencies cannot be resolved completely, the research opens an avenue to explore other contingency factors or the possibility of a non-linear relationship. Practical implications: 3PL firms could undertake green innovation to satisfy customers’ environmental requirements. To develop their green innovation initiatives, managers should allow their employees greater autonomy and design (or re-design) operations procedures and regulations to be more flexible, thus enabling the diffusion of green innovation and avoiding or reducing the potential influence of control-oriented organization culture. Originality/value: The study considers the conditional effect of organizational culture to reconcile the mixed results in the literature regarding the relationship between customer pressure and green innovation of logistics service providers.