Embedding Sustainability in Lean Systems: Cultural and Institutional Pathways to Environmental Performance in <scp>ISO</scp> ‐Certified Taiwanese Manufacturing

ABSTRACT This study examines how lean manufacturing contributes to environmental performance in ISO‐certified Taiwanese firms. Drawing on the resource‐based view and institutional theory, we conceptualize sustainability‐oriented culture as a capability that transforms lean routines into environmental gains, while coercive institutional pressure shapes these effects. Survey data and structural equation modeling show that lean practices enhance environmental performance directly and indirectly through culture. However, strong regulatory pressure weakens the lean–culture link, indicating a compliance paradox. The findings highlight that regulations alone are insufficient; firms must foster sustainability values and employee engagement to unlock lean's environmental potential.