Synergizing Green Innovation and HRM Practices: Exploring the Mediating Role of Green Process and Green Product Innovation on Organizational Performance

Sustainability in organizations is one of the most persistent issues for ecologists and business managers today. The emerging urgency of environmental sustainability has compelled organizations to adopt green innovation practices aimed at balancing ecological responsibility with performance outcomes. This study investigates the impact of green innovation adoption on the three critical dimensions of organizational performance—operational, ecological, and production and evaluates the serial mediation roles of green process and green product innovation. This study offers a unique perspective and contribution by examining the serial mediation effect of green process and product innovations in the relationship between green innovation and multi-dimensional organizational performance. Unlike most prior research that views green innovation as a monolithic construct, this study separates its components to reveal interdependent pathways of innovation impact. Grounded on the Ecological Modernization Theory, the study conceptualizes green innovation through two dimensions: green adoption and green capacity. Whereas organizational performance is analyzed through three dimensions, including the organization’s production, ecological, and operational performance of organizations. The data was collected by administering a structured questionnaire to managerial employees of five leading companies in the construction industry in Pakistan and was examined using the Partial Least Squares Structural Equation Modeling (PLS-SEM) technique. The findings demonstrate that green innovation significantly enhances ecological performance but has a weaker direct influence on operational and production outcomes. However, when green process innovation leads to green product innovation, a strong serial mediation effect emerges, highlighting their combined role in translating green innovation into comprehensive organizational performance gains. The study findings suggest that embracing green innovation is not only essential to advocate environmental sustainability in organizations, but it is also favorable towards business performance and productivity.