Do senior managers hold the keys to unlock innovation and environmental sustainability?

Ongoing concerns about intensive natural resource consumption and environmental degradation raise constant concerns about whether manufacturers' innovation activities can support the environment sustainably. These concerns come from past research showing innovation is resource-consuming and highly risky, leaving managers with concerns about the supportive effect of innovation on their environmental sustainability activities. Drawing on innovation ambidexterity and upper echelons theory, we use data from multiple senior managers from Strategic Business Units (SBUs) in B2B manufacturing firms to show that the simultaneous achievement of high levels of radical and incremental innovation (hereafter innovation ambidexterity) supports environmental sustainability practices. In turn, such practices improve manufacturers' production cost efficiency. Further, the strength of the path from innovation ambidexterity to environmental sustainability is contingent on CEOs' leadership style and the environmental attitudes of senior managers in SBUs. Our findings contribute to discussions on the contribution of radical and incremental innovation in driving environmental sustainability by explaining how innovation ambidexterity enhances environmental sustainability. Further, our findings challenge previous research which assumes sustainability practices involve high costs and thus lower profitability. Of central importance are our explanations about how the behavior, values, and views of influential upper echelons promote greater support for innovation-driven environmental sustainability, an area that has largely been neglected in theory and practice. To this point, we provide insights for managers on how to curb the negative environmental impact of their manufacturing operations.