Strategic integration of green practices and knowledge management for frugal innovation

Purpose Growing environmental constraints and declining natural resources have encouraged businesses to adopt sustainable operational practices. In this context, this study aims to investigate how green selection practices (GSP) and knowledge management (KM) processes collectively drive frugal innovation (FI) in manufacturing firms, particularly in resource-constrained environments. It explores the individual and configurational effects of GSP and KM dimensions on FI outcomes. Design/methodology/approach This study applies a quantitative method, utilizing survey responses from 321 green human resource (HR) managers and industry experts in ISO-certified manufacturing firms in Pakistan. The authors employed a mixed-method approach, combining partial least squares structural equation modeling (PLS-SEM) to examine direct and mediating effects and fuzzy set qualitative comparative analysis (fsQCA) to uncover alternative causal configurations leading to FI. Findings The results show that specific dimensions of GSP positively influence FI when supported by effective KM processes, particularly knowledge sharing and knowledge utilization. However, knowledge acquisition alone does not significantly impact FI, emphasizing the need to internalize and strategically apply knowledge. The integration of GSP and KM processes creates dual value, enhancing cost efficiency and promoting environmental sustainability. Originality/value This study redefines FI as a strategic outcome of aligning green practices with KM processes. It offers robust empirical evidence (via PLS-SEM and fsQCA) of their mutually reinforcing effect in sustainable manufacturing, effectively bridging resource-based view (RBV) and knowledge-based view (KBV) theories and delivering an actionable framework for low-cost, environmentally responsible innovation.