Challenges and strategies towards Sustainable Innovation in the UK Cosmetic Industry
1
Introduction
In recent decades, numerous industries, including cosmetics,
have been confronted with the growing need for environmentally friendly and
socially responsible solutions. The research conducted by Chen, Peng, and Hung (2015) is of significant importance as it examines the impact of corporate social responsibility (CSR) activities and several other factors on the feelings and commitment of customers towards upscale eating businesses. This expectation has placed a greater emphasis
on all businesses’ social and environmental responsibility (Feng, 2016).
According to the definition that is provided in the “egg of sustainability”
model, a product can be considered sustainable if it meets both of the
following criteria: 1.) It is sustainable for the users, which means that it
does not have any short-term or long-term possibly hazardous impact on the
users; and 2.) It is produced through a sustainable and environmentally
friendly production process and sources raw material, concoct, manufacturing
companies, packs, disburses, and markets the goods ethically (Gottardo et al., 2021).
Concerns regarding how to use natural resources and the
environment for the sake of speeding industries in a more ethical manner are an
issue that faces our planet in today’s modern times. More and more people are
beginning to limit their shopping habits to engage in more socially and
ecologically responsible consumption practices that include energy savings and
are beneficial to the environment. Businesses may gain a competitive edge and
new prospects for innovation by focusing on sustainability, which in turn
creates new opportunities (Bom et al., 2019). Research on sustainability has mostly
concentrated on the problems associated with sustainable development in various
business sectors. However, it seldom discusses the elements that contribute to
the success of sustainable innovations or the challenges that prevent their
widespread adoption (Romani et al., 2016).
The concept of sustainability may be interpreted and defined
in several different ways; however, the most often used version originates from
a study published in 1987 titled “Our Common Future.” The notion of
sustainability originated from the idea of sustainable development, which may
be described as development that is capable of satisfying the requirements of
the people at present without compromising the capacity of future generations
to satisfy their own needs (Feng et al., 2018). The resolution known as Agenda 21 (Fortunati et al., 2020), which is considered to be
one of the foundational papers of the sustainability movement, identified
excessive production and consumption norms as the primary drivers of ecological
deterioration. Later, in 1994, Elkington entered the “triple bottom line” of
sustainability, adapting this same concept to the business sector. This
involved integrating not only the environment, but also the social and economic
dimensions, all of which were required to develop a global economy that could
be sustained by the planet (Hitce et al., 2018). Consequently, given that the cosmetics industry
is a rapidly expanding economic sector around the world—the total value of the
cosmetics market in Europe was estimated to be €77.6 billion in 2017—it only
makes sense for this science-driven, fast-paced, and highly innovative industry
to place a significant emphasis on enhancing the social and environmental
sustainability of its products and services (Cosmetics Europe - The Personal
Care Association, 2018).
The current European regulation on cosmetics defines cosmetics as “any substance or mixture intended to be placed in contact with the outer parts of the human body (epidermis, tresses system, nail polish, lips, and external genital organs) or with the teeth and mucous membranes of the oral cavity with a view entirely or mainly to cleaning them, disinfecting them, changing their appearance, protecting them, keeping them in good condition (Benoit et al., 2021). Cosmetics are defined as “In this sense, cosmetic companies need to keep up with the expectations of consumers, as a crescent amount of people are slowly shifting mindsets and looking for sustainability through their purchases. In other words, cosmetic companies must keep up with consumers’ expectations. This statement elucidates the influence of customers' emotional attachments to certain brands on their purchase patterns. This finding aligns with the study conducted by Chen et al. (2015), which shown that corporate social responsibility (CSR) initiatives have the potential to enhance customer brand connection, thereby impacting consumer buying behaviour. For businesses to maintain their lead in a market saturated with intense competition and in which customers anticipate an ever-increasing range of options with an increased level of performance, the development of novel, environmentally friendly goods is essential (Boccia et al., 2021). Nevertheless, throughout this process of evolution, businesses have challenges while attempting to adapt to sustainable practices, particularly concerning the selection of components to formulate their goods. Because the designing phase of a cosmetic product is so important, it is necessary to focus on the environmental friendliness of the components used to create the product. The sustainability of a cosmetic product will be affected by each stage of the product’s life cycle (Sempels and Hoffmann, 2013).
Historically, the needs for ingredients’ sustainability and
performance have often conflicted with one another. Several research has
previously been conducted on natural and environmentally friendly cosmetic
compounds. However, the use and performance of these substances may not always
be well defined. In this research, the composition of skin care cosmetics
received most of the attention dedicated to it. Many skin care cosmetics
include moisturizing and anti-aging creams, eye creams and moisturizers,
cleaning lotions, exfoliators, face masks, séruns, and toners. The skin care
cosmetics category is wide (Sahota, 2014).
Consumers are becoming more knowledgeable than ever due to
rising education levels, the Internet, and the expanding usage of mobile
devices. This has led consumers to the realization that the world in which we
live is changing (Lainez et al., 2018). People are beginning to reevaluate their buying
behavior, leading to changes in consumption patterns due to the increasing
prevalence of sustainability in almost every facet of human existence. Cosmetic
Customers are becoming more knowledgeable of the potentially hazardous chemical
components that are included in cosmetic goods, and as a result, they are
demonstrating a greater preference for cosmetic items that are created with “natural”
or “organic” components (Romano et al., 2021). No regulation in the United States regulates
what may or cannot be advertised as “natural” and “organic,” even though a
growing number of cosmetic businesses have promoted their goods as “natural”
and “organic”.
Although many cosmetic businesses market and label their
products as “natural” or “organic,” the percentage of these types of components
that the goods contain is often disappointing. Customers are thus more likely
to be deceived and to assume, as a matter of course, that the fact that a
product contains natural or organic components also accounts for a bigger
portion of the product’s total contents. In contrast to multi-ingredient food
products, which are required by certain rules that have been published for all
food producers and retailers to disclose nutrition and ingredient information
on the outside of their packaging, including the percentage of each ingredient,
multi-ingredient food products are not (Reficco et al., 2018). When describing cosmetic
goods, it is often insufficient to list all components one by one, and it is
sometimes not stated what proportion of each component is present. It is
unreasonable or dishonest to claim that a cosmetic product is natural or
organic if it contains just a trace amount of naturally occurring or
organically produced components (Kolling et al., 2022).
1.1
Problem Statement
One of the most active and inventive sectors driving the
economy is the cosmetic and care products goods business. This sector is
responsible for producing a wide range of items. The report demonstrates that
the British cosmetics industry contributed a cumulative contribution to the GDP
of the United Kingdom for £28.4 billion in 2018. In addition, it was
responsible for supporting £7.0 billion in tax revenues in the United Kingdom
in 2018, and consumption was valued at £27.2 billion (Amrina et al., 2021).
The industry that produces cosmetics in the United Kingdom
is the third biggest in Western Europe. The market for cosmetics is the
third-largest market that is now active in the UK and the seventh-largest
market worldwide (Subramanian et al., 2016). In 2022, the Cosmetics
Retailers sector is projected to have a market size of £2.1 billion, measured
by revenue. The expectation among consumers is growing that eco-friendly beauty
products would be safe not just for them but also for the environment. Consequently,
the market for environmentally friendly cosmetics is seeing meteoric growth. Using
unprocessed, natural components might help your brand reestablish itself in
both the environmental and financial senses (Betoret et al., 2016).
Innovation is widely regarded as the most important business
strategy for driving economic growth; however, it also has the potential to
play a significant part in addressing social and environmental problems, such
as the misuse of chemicals, the pollution of the environment, and the depletion
of natural resources (Withisuphakorn et al., 2019). These days, businesses are
up against development constraints brought on by various environmental
concerns. The difficulties arising from the sustainable growth of society and
business mean that there will be a rising need for more intelligent inventions.
To address this new wave of corporate innovation strategy and better comprehend
how new technology and social practices allow organizations to become more
sustainable, the term “sustainability-related innovation” or “sustainable
innovation” was proposed. In a broad sense, the term “sustainable innovation”
can be described as the “coupling of environmentalism’s preservation of marine
systems with the notion of business model innovation while having to deliver
essential products and services that function social goals of human health,
equity, and protection of the environment” (quoted from “coupling
environmentalism’s preservation of natural systems with the notion of venture
creation while delivering essential services and goods that serve social At the
level of the organization, the concept of sustainable development applies to
the design of the product, service, and process, in addition to the strategy of
the business, in order to provide a commercial value proposition (Philippe et al., 2012).
The magnitude of the invention is also an important
consideration. Traditional techniques, such as eco-design and clean technology
used to actualize sustainable consumption and production may be categorized as
incremental innovations because they are small-scale innovations that improve
already existing goods, processes, and enterprises. Experimental results are
required on a bigger scale because sustainable innovation implies significant
shifts in financial life and society as much as they do in technological
advancements and problem-solving strategies (Hargadon, 2015). A paradigm change in the way management and
production are carried out is required due to this. Different people have
different points of view when it comes to determining which kind of innovation
is most helpful to the environment. When added up over a longer period,
incremental innovation in products and business operations has the potential to
guide economic activity onto a more sustainable course. On the other hand, an
increasing number of people argue that true innovation should involve a shift
in socioeconomic structure and our relationship with the natural environment
and that only disruptive and radical advancements can change our unsustainable
growth pattern while producing greater environmental gains. Companies across various
sectors are embracing innovation via the whole sustainability agenda, which
encompasses their communities' financial, ecological, environmental, and social
well-being and prosperity and establishing it as the basis for achieving
long-term success (Moshood et al., 2021).
Although the cosmetics industry has noticed an increase in
the market’s demand for more sustainable solutions to cosmetic products, such
as ethical sourcing, green formulation, and the reduction of the negative
impact that manufacturing has on the economy, society, and the environment in
general, the cosmetics industry is still struggling to meet these demands.
According to the study's findings, four factors encourage sustainable
innovation in the cosmetics industry. These factors include an ethical
imperative, a tendency toward more regulation, technological advancement, and
long-term success for the company (Yang et al., 2012).
More and more customers are becoming environmentally
conscious and aware that the choices they make regarding their spending habits
may have an indirect or direct influence on the communities in which they live
as well as the natural world as a whole as a result of the growing pressures
from society to ensure ethical and sustainable business practices. They do this
by looking at the carbon footprint and the component origins of cosmetic goods,
choosing items that fulfill high ethical and ecological criteria (Cinelli et al., 2019). They are doing this because
they are questioning the ethics of corporations. These days, cosmetics
consumers are concerned not only about the natural or organic components
contained within the products but also about the factory process that occurs
throughout the entirety of the product’s lifecycle. This is done to learn about
the potential negative effects that using the product in question may have on
the surrounding environment (Fleaca and Journal, 2016). Suppose ten years ago,
cosmetic products specifically designed for environmentally conscious consumers
were considered a market niche, then today, with the demand for natural or
organic skin products growing in the economy. In that case, sustainable
cosmetic products that are both safe for the human body and friendly to the
environment might change from the peripheral market to the mainstream market.
The eco-category is no longer reserved just for the participants in the
specialized markets. For cosmetic enterprises to thrive amidst the recent shift
in the cosmetics sector, sustainable innovation is essential (Sarpaneswaran et al., 2022). As a result, this research
has been carried out to investigate the obstacles that stand in the way of
sustainable innovation in the cosmetics industry in the UK.
1.2
Research Aim
The main aim of this study is to investigate the challenges
of achieving sustainable product innovation in UK cosmetic industry.
1.3
Research Objectives
The following are the main objectives of this research
·
To examine sustainable product innovation in UK
cosmetic industry
·
To examine the challenges towards sustainable
product innovation faced by the Cosmetic industry in the UK
·
Examine the strategies to mitigate the
challenges related to sustainable product innovation.
1.4
Research questions
The research questions related to this study are given
below:
RQ1: What are the drivers of sustainable innovation in the UK
cosmetic industry?
RQ2: What are the challenges faced by the Cosmetic industry in
the UK toward sustainable product innovation?
RQ3: What strategies are used by cosmetic firms to mitigate
the challenges related to sustainable product innovation?
1.5
Significance
Along the same lines as in other industries, sustainable innovation in chemical companies has the potential to impact the bottom line directly. This assists the companies in lowering their long-term business costs by reducing their consumption of raw materials and energy, in addition to the waste produced. When organizations “do more with less” as a result of incorporating sustainability into their business practices, they are better able to make profits (Drobac et al., 2020). Both the morale of employees and the image of the firm as a good citizen may be boosted by becoming more environmentally friendly. Employees are more likely to be motivated to perform at a better level and remain with the firm for a longer period if they are employed by an ethical organization that allows them to contribute to “good causes.” Incremental innovation in sustainable development may bring cosmetic companies a short-term profit gain; however, the innovation process through the companies’ full strategic planning agenda will generate long-term growth (Cubas et al., 2022). This growth will include cost reduction, customer loyalty strengthening, and the creation of new businesses.Chen, Peng, and Hung (2015) used survey research methodology to examine the impact of corporate social responsibility (CSR) initiatives and various attributes of high-end eating places on consumers' emotional states and loyalty. Not much study is being done on how businesses might achieve success via sustainable innovation. This research will concentrate on the elements that contribute to and have the potential to enable sustainable innovation in the cosmetics business.
1.6
Motivation to study
An explicit goal
of sustainable innovation is to "address the demands of current
generations without sacrificing the requirements of future generations."
Human rights and climate change are two examples of topics that need to be
proactively included into firms' innovation strategies.
In order for
projects that prioritise ethics, the environment, and sustainability to thrive,
the cosmetics business must embrace sustainable innovation. Ethical sourcing
ensures the raw materials used in cosmetics are obtained in a fair and lawful
manner. However According to the data presented in the research, the British
beauty business contributed £28.4 billion to UK GDP in 2018, generated £7.0
billion in tax revenues, and was responsible for £27.2 billion in consumer
expenditure. All these factors led an interest for reseraching the challenges
towards the sustainable innovation in UK cosmetic industry.
This study use
interview based reaserch methodlogy that compromies the primary qualtatitive
data. Four majour UK based firms has been seceltecd for this research.
Here is how the rest of the argument is laid up. The
literature in this area will be discussed in the next section. After that, we
introduce the methodology, where we talk about how we settled on a qualitative
study. After introducing the four firms under study and detailing our empirical
results, we next provide our interpretation of the data. The thesis concludes
with a section that summarises the key points, makes theoretical and managerial
comments, and offers up some ideas for where to go next in terms of research.
2
Literature Review
Next, we'll take a look at what's already been written on
sustainable innovation, focusing on theoretical viewpoints that explain the
idea and propose potential elements that affect sustainable innovation. We will
also discuss the theory behind massive corporations.
2.1
Strategy
The ancient Greek term "strategos," which means
"the art of leading and prevailing in combat," is whence we get our
modern English word "strategy" (Boons and Lüdeke-Freund, 2013). The success of every
organisation hinges on its strategy, which lays out the guidelines that must be
adhered to in order to attain success (Boons et al., 2013). An organization's strategy may be defined in
terms of the choices and actions it routinely takes and the outcomes it
consistently sees, as stated by Ellis and Goodyear (2013). According to Evans et al. (2017), a company's strategy is its "long-term
direction and scope." Stakeholders' market requirements and demands must
be addressed, therefore they stress the significance of strategy in deciding
how to allocate resources. Professor of Business Administration at Harvard
University Michael Porter, on the other hand, stresses the importance of an
organization's ability to combine its resources, talents, and competences to
gain a competitive edge. A company's strategic operations to reach its goal
state are planned, implemented, and monitored with the use of a strategy. In
order to stay ahead of the competition, it's important to be able to see into
the future and plan for a variety of possible outcomes (Ellis and Goodyear, 2013).
2.1.1
Sustainability Strategy
The importance of sustainability in business strategy
formulation cannot be overstated (Evans et al., 2017). Previously, businesses' primary goal was to
increase their profits in the near term. However, there is a rising expectation
that businesses would act in ways that protect the environment and the
community over the long run (Cannas et al., 2020) .Long-term success increasingly requires a focus
on sustainability. Research shows that businesses with a "high
sustainability" score perform better than their peers. Therefore, the
success of a business may be gauged by how well it does in terms of
sustainability, and this success can then be translated into increased profits.
There has been an uptick in the number of businesses that see sustainability as
a competitive advantage and are open to adopting more sustainable practices (Cannas et al., 2020).
However, sustainability can only be achieved if it is a part
of company strategy and strategic decision-making (Silva et al., 2018). As defined by Patterson et al. (2017),
sustainability strategy is an approach that "attempts to strike a balance
between the social, environmental, and economic demands of the organization and
society." The authors argue that studying efficiency indicators requires a
long-term perspective on sustainable practises. One way to enhance the
procedure is to pinpoint its most important determinants of success. Noppers et al. (2014) add that instead of asking "why the organization
needs to be sustainable," leaders should be thinking about "how it
might become more sustainable." Finding a sustainable business model that
fits each company's unique needs is difficult. In addition, sustainability must
be included into the overarching business plan, opening up new channels for
revenue generation (Patterson et al., 2017).
2.1.2
Formulation of Sustainability
Strategy
No organization has found a foolproof method of implementing
a sustainability plan that yields the intended benefits. Thus, one of the key
issues that the firm has is choosing the sustainability plan and its careful
modification to the organization's unique conditions (Noppers et al., 2014). According to strategic
management theory, a business must first conduct an in-depth examination of its
internal and external environments to determine its priorities (Kourmentza et al., 2017). However, sustainability
plans vary from "normal" strategies in formulation since they are
driven mostly by external stakeholders instead of current consumer needs and
the issue's long-term character. This makes it harder to develop solutions for
sustainability. Researchers that have studied the subject of sustainability
have come to the conclusion that it is a 'wicked' problem (Kourmentza et al., 2017), which acknowledges that
sustainability might have unanticipated, novel outcomes. Even though
sustainability strategies are usually formulated via careful planning, emergent
strategy-making is an important consideration when developing sustainability
strategies (Marlow et al., 2013).
Companies that recognize the value of incorporating
sustainability into their operations yet look for less involved approaches,
such as treating sustainability as an afterthought rather than an integral part
of their strategy. The sustainability ideas of firms and the tactics of such
organizations often conflict with one another (Marlow et al., 2013). Studies show that if a corporation wants its
strategy to last, they need to make sustainability a central part of it (Monteiro et al., 2017). When developing their
strategies, businesses should consider the long-term effects of their decisions
at every level. In addition, Monteiro et al. (2017) stress the significance of a
company's having a vision that incorporates sustainability into the company's
culture at the stage of sustainability plan creation.
2.1.3
Implementation of
Sustainability Strategy
The success of a corporate plan relies, in large part, on
how well its strategy is implemented, as stated by (Zimmermann et al., 2017). Implementation of a strategy
focuses on the process through which well-crafted strategies are put into
motion (Smith et al., 2014). According to Roseland (2012), a company's strategy consists of both its
intentions and its actions; hence, a strategy should be executed as a routine
part of the business's operations. Because they haven't had enough experience, managers are struggling
with the many challenges they're encountering as they try to put the plan into
action. Problems may also arise for a number of other reasons, such as
managers' inexperience or the widespread misunderstanding that strategy design
and execution are one and the same process. Due of the many potential
challenges that arise during implementation, it takes longer than the plan
design phase (Roseland, 2012).
One of the world's biggest markets, the cosmetics business has seen steady expansion over the last decade (Schaltegger et al., 2016). The need for goods and services has increased in both developed and emerging nations. However, the cosmetics sector is notorious for its wasteful practises, including its use of plastics and harmful chemicals. The manufacturing process in the cosmetics sector generates a lot of carbon dioxide and uses a lot of water and power. The cosmetics sector is one that has been greatly impacted by the shift toward a more environmentally and socially responsible way of doing business (Baldassarre et al., 2017). The whole cosmetics supply chain is affected by sustainability (Carayannis et al., 2012). The cosmetics sector is being drawn towards sustainable growth by the growing tide of ethical consumerism and the accompanying desire for more environmentally friendly products Ethical Consumer Decisions. (2016). It's no secret that the 21st century has been a watershed moment for the beauty business, and with it comes a renewed focus on environmental responsibility (Carayannis et al., 2012). A lot of focus these days is on environmentally responsible developments in the sector. Sustainable components that are good for neither society nor the environment are a hot commodity right now, therefore businesses are seeking for ways to get their hands on them (Carayannis et al., 2012). Not only that, but this is having a significant impact on general developments in the sector. Multinational corporations are committed to sustainability and keeping the trend alive. This is achieved via the launch of brand-new product lines and the revision of plans with an eye toward sustainability, both of which foretell promising times ahead for the sector and inspire novel approaches.
2.1.5
Sustainability Strategy in SME
The European Commission estimates that SMEs are responsible
for almost 70% of the industrial pollution created by European businesses. SMEs
need to adjust their strategy to match the evolving demands of the global
market (Antikainen and Valkokari, 2016). In the same way that major
corporations are reevaluating their strategy and incorporating sustainability
principles into their core business operations, SMEs are now making an effort
to do the same. As a result, businesses of all sizes gain an edge via
sustainable practices (Talwar et al., 2022). Many benefits accrue to small and medium-sized
organisations from adopting these tactics, including increased competitiveness,
increased interest from major corporations in SMEs as viable investment
opportunities, and improved operational efficiency (Toivonen, 2022). In addition, being a sustainable SME gives a
business the opportunity to adapt to an ever-evolving marketplace and reach
clients who aren't yet part of that marketplace. According to European
Commission, SMEs are increasingly investing in social and ecological capital
and human resource management in order to move toward more sustainable methods
of production and commerce. Antikainen and Valkokari (2016) found that for small and
medium-sized enterprises, success in adopting sustainability strategies is
exemplified by their capacity to strike a dynamic balance between providing
value for society and future generations and maximizing profits. However, adopting sustainable
initiatives might be difficult for SMEs. For instance, establishing a
sustainability plan is challenging for SMEs because of a lack of financial and
human resources. SMEs' lack of information and expertise in sustainable
practices leads to difficulty in adopting sustainability into real-life
operations (Talwar
et al., 2022).
As an added complication, the methods utilised to direct big corporations
through sustainability adoption may not be appropriate for smaller businesses.
Even though SMEs are attempting to apply sustainability strategies, doing so is
difficult due to a lack of study on the feasibility of such strategies in SMEs.
Additionally, the vacuum in the literature addressing SMEs and the adoption of
sustainability methods in the core of their commercial activities is recognized
(Romano et al., 2021).
2.2
The Sustainable Innovation
Concept
More and more businesses see sustainability1 as a new
opportunity for growth and development. And as a result, businesses are being
compelled to reevaluate their product lines, manufacturing methods, and
business strategies to become more environmentally (Bom et al., 2019). Sustainable innovation is on the rise and is
becoming recognised as a significant driving force of change in business and
society because of its potential to revolutionise industries, markets, and
products (Antikainen and Valkokari, 2016). Businesses now innovate and
run differently due to the growing focus on environmental and social
responsibility. Sustainable innovation broadens the definition of innovation
beyond its traditional emphasis on the economic to include consideration of its
effects on the environment and society.
The last decade has seen a tremendous growth in the study of
sustainable innovation, and as a result, our grasp of the concept has matured.
Despite this, there is currently no agreed-upon definition of sustainable
innovation in the literature (Baumgartner and Rauter, 2017). The term "sustainable
innovation" has been used synonymously with a wide variety of other terms,
including "eco-innovation," "ecofriendly innovation,"
"environmentally sustainable innovation," "green
innovation," "sustainability driven innovation,"
"sustainability enhancing innovation," "sustainability focused
innovation," and "sustainability oriented innovation". It is
stated that sustainable innovation includes the social component, making it
distinct from eco-innovation, environmental innovation, and green innovation (Magon et al., 2018). In conclusion, Antikainen and Valkokari (2016) state that sustainable
innovation is an all-encompassing and multi-faceted concept that contributes to
sustainability's global and long-term goals. This line of thinking informs the
thesis's concept of sustainable innovation: Sustainability (environmental,
social, and economical) factors are taken into account at every stage of the
innovation process, from ideation to R&D to product launch, in sustainable
innovation. The same holds true for brand-new business and organisational
structures, in addition to goods, services, and technology (Zimmermann et al., 2017). Cost savings, expanded markets,
improved brand image, and a competitive edge are some of the benefits
highlighted in previous research on sustainable innovation (Drobac et al., 2020). However, the returns on investment for
sustainable innovation are generally tied to the company's long-term goals,
rather than its short-term performance. Sustainable innovation is believed to
be more costly than traditional innovation since it often necessitates
investments in alternative technologies beyond a company's present technical
capabilities (Zimmermann et al., 2017). In addition, the market
uncertainties that come with sustainable innovation make it difficult for
businesses to fully commit to its growth. Therefore, businesses may be wary of
pursuing sustainable innovation for fear it may cause them to lose market share
or cause their current goods to lose sales.
2.3
External factors for
sustainable innovation
Below, we'll talk about the two most frequently cited
examples of external factors that affect the growth of sustainable innovations:
regulations and market demand.
2.3.1
Regulations
The term "regulatory push" is often used to
describe the role that regulations play as an external element in the spread of
sustainable innovation (Lee and Saen, 2012). Laws and restrictions on social and
environmental concerns, as (Bouchery et al., 2012) point out, may add to the
drive for innovation. The likelihood of investments in new equipment and
technology, and hence the success of sustainable innovations, increases with
the level of government regulation (Sahota, 2014).
According to Baumgartner and Management (2014), sustainable innovation is
bolstered by the demands that regulatory stakeholders are perceiving to exert
on them. This, in turn, helps to stimulate R&D policies and create
sustainable innovation marketplaces that are at the forefront of their field.
As a result of companies' reactions to regulatory processes, sustainable
innovation has gone from being an optional to a required competency (Shen, 2014).
How significant rules are will also vary by company size. Due to a lack of
resources, Baumgartner and Rauter (2017) argues that small and
medium-sized businesses are often the last to find out about new legislation.
However, bigger companies can better adapt to regulatory changes and be among
the first to market with innovative solutions.
2.3.2
Market demand
Those with a stake in a company's success, suppliers, consumers,
rivals, advisors, and non-governmental organizations (NGOs) comprise what is
known as "market demand" (Giannakis and Papadopoulos, 2016). One the one hand, these
parties have been pressing for more sustainable product development, including
the adoption of eco-efficient methods, reduced energy and resource consumption,
lessened negative environmental consequences, and enhanced occupational and
community health and safety. Conversely, enterprises gain a great deal by
engaging with a wide range of stakeholders because these relationships enable
the businesses to better anticipate, comprehend, and adapt to the dynamic
business environment (Antikainen and Valkokari, 2016). The desire of customers to
purchase innovations is crucial to the sustainability of the invention, making
the customer base an essential stakeholder group (De Medeiros et al., 2014).
Consumers have high expectations, particularly in the areas of environmental
performance, process improvements that boost material efficiency, and decreased
energy, waste, and hazardous chemical output. It is in the best interest of
businesses to meet the needs of their consumers (Antikainen and Valkokari, 2016). Customers who are more aware
of sustainability concerns may respond strongly to businesses' unsustainable
behaviour by refusing to buy their wares. Customers are more likely to stick
with a brand that has earned a reputation for being environmentally
responsible. Companies may improve their knowledge and skills via project work,
partnerships, and multi-stakeholder cooperation in response to market demand
for such arrangements. These partnerships are essential for promoting long-term
innovation (Økland, 2015).
Businesses, non-governmental organisations (NGOs), and government agencies
(governments) are only few of the many entities that might benefit from
networking with one another, as emphasized by Bouchery et al. (2012). As businesses expand into
uncharted territory, they require strategic partnerships with organisations
that can complement their existing capabilities. By working with a variety of
partners, businesses may learn crucial information that can improve the success
of their sustainable innovation initiatives (Marcelino-Sádaba et al., 2015).
However, firms can have difficulty cooperating, forming
strategic alliances, monitoring, and communicating with other stakeholders.
Stakeholders might have conflicting goals and expectations because of these
differences. Companies
working in sustainable innovation will face a formidable challenge if they fail
to recognize, manage, and integrate these objectives (Romano
et al., 2021).
2.4
Internal factors for
sustainable innovation
Even though businesses have little influence over external
causes, they do have some say over internal ones. To better understand how
businesses may nurture sustainable innovation and, by extension, build
competitive advantages, it is essential to examine the internal reasons
underpinning the creation of such innovations.
2.4.1
New business opportunities
Research shows that companies become involved in sustainable
innovation because they see potential in the market. There is a significant
possible cost saving for businesses in this move. This is because of improved
workflows and less wasteful usage (Bom et al., 2019). As mentioned in the introduction, authors
developed a shoe that is 19% lighter than typical running shoes, resulting in
80% less waste during manufacture (Quarshie et al., 2016). Companies may boost
profitability through increasing revenue and decreasing expenses.
In addition, sustainable innovation is a long-term
investment that gives businesses an edge in the marketplace. When more
companies focus on environmental responsibility, it alters the marketplace and
prompts adjustments in product development, operations, and business models.
Sustainable innovation gives early adopters a leg up on the competition by
helping them gain skills their contemporaries lack (Schaltegger et al., 2016). Engaging in sustainable
innovation also improves a business' standing in the marketplace, which in turn
attracts a larger clientele (Romani et al., 2016). When businesses are able to reach out to and
serve a broader range of customers thanks to sustainable innovations, it
creates new avenues for growth. Companies may get an edge over their
competition and satisfy the growing demand for environmentally friendly goods
by being the first to market with innovations that prioritize sustainability (Baumgartner and Management, 2014).
2.4.2
International collaboration
Several studies stress the significance of
cross-departmental cooperation in creating environmentally friendly new
products and processes. Collaborations across departments or divisions within
an organization are known as "inter-functional" (Fortunati et al., 2020). Sustainable innovation is
frequently seen as more difficult than traditional innovation, and as a result,
needs more intricate procedures and skills. Companies need to take a broader
perspective and make significant changes to the organisation if they want to
foster sustainable innovation. According to several studies, interdepartmental
cooperation is crucial for a company to achieve its objectives and create
sustainable innovation. Sustainable innovation is an area that requires close
cooperation between HR, R&D, manufacturing, marketing, and sales, among
many other departments. In order to increase their sustainable innovation
performance, businesses need to build a network that links together various
areas of expertise inside the organization (Romano et al., 2021).
2.4.3
Knowledge management
Knowledge management is "the practice of systematically acquiring, disseminating, and using information and other expertise to achieve organizational goals (Baumgartner and Rauter, 2017). It stresses the importance of people in the knowledge production process and how much in-house expertise contributes to a company's ability to innovate (Fortunati et al., 2020). As argued by Wilhelm et al. (2016), sustainable innovation is intrinsically linked to knowledge since it involves the elaboration, generation, and production of new information. To that aim, it is important to recognise that people are the source of new knowledge and the realisation of previously acquired information, making knowledge the primary driver of sustainable innovation. Bouchery et al. (2012) share this perspective, arguing that a firm's capacity to recognise and gather opportunities from the environment, determine priorities, and pick the most critical ones, is enhanced when its people are motivated and well-trained. In order to transform information into novel concepts, businesses must have an efficient system for managing and using their internal knowledge. Firms need to provide specialised training for workers to prepare them for the execution of sustainable innovation activities due to the perception that the knowledge necessary for effective sustainable innovation is more difficult and unpredictable than for conventional innovation (Magon et al., 2018). To facilitate knowledge transfer, it is essential to implement formal learning procedures and structures including platforms, networks, workshops, sustainability programmes, and greater investment on staff training (Evans et al., 2017). In order to foster long-term creativity and progress, these networks should be flat and adaptable. Knowledge from many sources may be accessed and managed by workers in this way, leading to sustained innovation. Therefore, knowledge management encourages incessant progress and supports sustainable innovation in goods and corporate operations. However, the results of sustainable innovation initiatives might be negatively impacted by a lack of planning and training for staff. According to research published by Bloomsbury Publishing Inc. (2016), sustainability initiatives in the retail fashion business adhere to industry standards.
2.5
Corporate culture
Strategy development for sustainable innovation relies
heavily on the interaction of all people, relations, and processes; this is
where corporate culture comes in. A company's established solutions and social
integration are reflected in its corporate culture. A sustainability vision must
be included all aspects of the organization, its strategy, and its complete
supply chain. Sustainable practices and principles should permeate all levels
of an organization, not just the top brass (Romani et al., 2016). According to Wilhelm et al. (2016), sustainable
innovation is primarily a cultural problem for businesses, calling for a
greater communicative discourse on the topic. The innovation process requires a
shift in attitude and conduct on the part of companies. Customers and business
partners' cultural norms and customs have to be taken into account as well.
Further elaborating on the inseparable link between culture
and sustainable innovation, Zimmermann et al. (2017) argue that the latter demands
a shift in the prevailing cultural paradigm. To do so requires a radical
reassessment of the present corporate value system, a shift away from focusing
on small, incremental gains in resource efficiency and toward radical,
game-changing shifts in how businesses operate. The principles, beliefs,
objectives, and goals of sustainable innovation companies should differ from
those of conventional innovation firms (Philippe et al., 2012). According to Brones et al. (2020), innovative company culture is necessary for
businesses to understand the importance of innovation. Sustainable innovation
cannot develop without companies adopting an open culture that exposes
employees to information from a wide variety of outside sources. Sustainable
innovation is essential to the success of any company, and de Brones et al. (2020) agree that cultural obstacles must be removed if
businesses are to take advantage of sustainable innovation prospects. Reficco et al. (2018) echo similar sentiments, arguing that an
entrepreneurial and libertarian work environment is crucial to the development
of sustained innovation inside an organisation.
2.6
Challenges
One of
the greatest difficulties mankind has in the twenty-first century is achieving
sustainable development. Governments and companies have had to reevaluate their
priorities in the wake of the COVID-19 epidemic, which has disrupted economic
and social life. The findings of Fellows and Liu (2021 point to the need to
surmount some hurdles, such as the high rates of social inequality and poverty
that continue to pose serious barriers to environmentally friendly innovation.
The greatest difficulties of the present day are preventing a pandemic and
ensuring economic growth that helps the poor escape poverty without dooming
subsequent generations to an even more damaged environment than the present
one. As we move toward a more sustainable global society, innovation is crucial
(Fellows and Liu., 2021)
3
Methodology
This part will discuss the specific methodology used to
collect the aforementioned empirical information. We begin by discussing our
underlying assumptions for this study. After that, we explain how a case study
was designed, and then we offer our research methodology. In addition, the
methods used to gather and analyze the data are detailed. Finally, we will talk
about issues of research quality and ethics.
3.1
Research Philosophy
The researchers' opinions and beliefs are outlined in the
philosophical research paradigms that serve as the basis for the study's
design, data collecting, and analysis. Researchers have a diverse range of
philosophical perspectives. These are sometimes framed as a philosophical
divide in the literature, with positivism on one side and interpretivism on the
other. Experiments, quantitative research, and empiricism tend to follow the
positivist philosophical stance because they take an objective look at
knowledge and strive for unbiased outcomes. The positivist research paradigm
holds that there are objective aspects of society that can be seen and studied (Håkansson, 2013). On the other hand, interpretivism is also
referred to as anti-positivism. Knowledge, according to interpretivists, is
contingent on factors such as one's culture, history, experience, and way of
thinking (Garg, 2016).
According to interpretivism, the researcher may affect how the data is
gathered, interpreted, and analysed.
Given that the nature of the case study itself necessitates
an exploration of how different businesses understand and implement
sustainability strategies, an interpretivist approach was chosen as the
research paradigm for this study. Since there is no absolute truth, the
authors' exploration of the drivers and motivating factors of formulation and
implementation of green initiatives in the cosmetics industry is necessarily
subjective, as it requires the analysis and comparison of a number of companies
for the sake of the research purpose. Therefore, interpretivism is the superior
research paradigm.
3.2
Research Approach
Further data collecting might be conducted using either
qualitative or quantitative techniques. When researchers seek information on
the frequency with which a certain feature occurs, they use a quantitative
research strategy to count the occurrences of that variable to conclude (Håkansson, 2013). However, precise figures and measurable data
aren't always useful for a given research and might be difficult to pin down.
For this reason, qualitative research methods are used for certain kinds of
investigations. When doing research using a qualitative approach, writers often
rely on interviews, work documentations, and other non-numerical approaches to
glean relevant information. For the purpose of a research study, either qualitative
or quantitative approaches may be relied on and are useful. In addition, these
methods are used when a societal issue necessitates a response (Romano et al., 2021). Because the questions posed in Chapter 1 are
primarily concerned with the intangibles of developing and implementing a
sustainable plan, a qualitative research strategy is more suited to answering
them.
Additionally, one must decide whether to use an inductive,
deductive, or abductive strategy. The deductive method, as described by Fellows and Liu (2021), involves "going from
the general to the specific" and seeks to verify an existing hypothesis.
The inductive method, on the other hand, seeks to form a theory by "going
from the specific to the general." To investigate an observation and
arrive at a reasonable explanation, writers often resort to the adductive
method. As the writers begin their analysis of the data by using the framework
of preexisting hypotheses, they are engaging in abductive reasoning. In
addition, connections are established between the observable variables and the
observed changes in circumstances. Therefore, the authors postulate an
explanation for the observed behaviour. Finally, research might have an
exploratory, descriptive, or explanatory objective. Finding and analysing novel
insights in a given observation is the hallmark of exploratory research.
Explanatory studies investigate connections between and dependencies among
variables (Fellows and Liu, 2021). The primary emphasis of descriptive
research is on already established concepts, hypotheses, or circumstances (Taherdoost, 2016). Because this study aims to learn about the
design and execution of sustainability policies within the cosmetics sector
from the perspectives of specific enterprises, it has an exploratory research
goal.
3.3
Case Study Design
Case studies are a kind of research design used to learn
specifics about a single entity or small group of entities (e.g., a
phenomenon). When doing research using qualitative methodologies, a case study
is an essential tool (Saldanha and O'Brien, 2014). A case study has a broad
definition and may be carried out in a variety of ways, including via the use
of different analytical data gathering techniques and the integration of
numerous resources. Interviews, surveys, and in-the-field observations are all
examples of the varieties of data gathering techniques. Creswell (2014) argue that a larger body of evidence, such as
several case studies, is necessary to fully grasp the development of a theory
and the research issues it raises. A case study may also help strengthen a
theory by providing concrete examples to back up its claims. In order to
collect sufficient data from which to make meaningful conclusions, the writers
of this thesis opted for a combination of case study and survey methods. The
writers may learn more about the phenomena in its natural habitat thanks to the
multiple case design, which will also lead to the larger discovery of
theoretical development and research issues. The primary objective is to learn
about the sustainability practises of large and small cosmetics companies.
Because of this, we use a multiple-case study comparison methodology.
3.3.1
Case Selection
This research uses a selection method called purposive sampling, in which researchers choose samples depending on how well they fit the study's criteria (Newby, 2014). The writers choose and study examples that pertain to the topic of interest using a purposive sampling strategy. Purposive sampling allowed the authors to choose a group of participants who would have provided the most useful data for the research. Results are restricted to the sample categories and can't be generalised to the entire industry since the instances selected reflect the authors' perceptions and preferences (Timans et al., 2019). The five criteria were used to make the case selections. The first factor to consider is the kind of business it is. Businesses that use sustainable business practises in sectors other than the cosmetics industry were not included in the study. Incorporating sustainable practises within the company is the second requirement. The writers researched cosmetics firms online to identify those with a commitment to responsible business practises. Since the advent of internet purchasing and increased customer engagement, the fashion retail business has seen significant transformation (Bloomsbury Publishing Inc, 2016). The sample was chosen based on whether or not it included sustainable practises. The third factor is the kind of market in which businesses compete. Given that the purpose of the research is to draw parallels between multinational corporations and small and medium enterprises, this criteria was split into two categories. As a starting point, the writers chose multinational corporations. In addition, we prioritised firms having regional presence in advanced economies. Company size is the fourth element to consider. This study contrasts multinational corporations with small and medium-sized enterprises, hence the authors choose to define MNCs and SMEs according to the connection between the firms. The final and most restrictive requirement is the language used. Researchers are only collecting information in English. In light of this need, participating businesses were chosen according to their capacity to provide data in English.
3.3.2
Profile of The Case Study
Companies
A summary of the selected cases is presented in Table 2.
|
COMPANY NAME |
ORIGIN |
SIZE (nr of employees) |
YEAR FOUNDED |
MARKET |
|
CASE A |
UK |
10,000 employees |
1995 |
Global |
|
CASE B |
UK |
5,000 employees |
1995 |
Global |
|
CASE C |
UK |
2,000 employees |
2019 |
Global |
|
CASE D |
UK |
1,000 |
2020 |
UK |
Both primary and secondary data were utilized to ensure
reliable outcomes.Creswell and Clark (2017) claim that using many ways of
data gathering resulted in higher quality data and more trustworthy
conclusions. In addition, primary data is obtained and organised specifically
for this analysis. Secondary data, however, is compiled from information
already in the public domain, such as that found on websites, social media
profiles, and mainstream media outlets (Creswell and Clark, 2017).
3.3.3
Primary Data Collection:
Interviews
The interview is a regularly utilized data-gathering
approach in a qualitative (Rosenthal and learning, 2016). A conversation between
persons with a specific goal in mind. Many elements may promote its use: during
the interview, direct engagement with the interviewee helps the interviewer to
acquire the information immediately and emphasise the underlying answer
motivations. The interviewer can decipher the respondent's nonverbal cues in a
face-to-face meeting. The interviewer may clarify the replies and enhance his
knowledge by asking further questions or asking for explanations and
justifications for the interviewee's thoughts (Rosenthal and learning, 2016). In order to acquire primary
data for this research, the authors conducted semi-structured interviews with
respondents from the chosen firms. The interviews were semi-structured so that
participants could have a free-flowing conversation rather than just answering
a series of questions (Owen, 2014).
Covid-19 epidemic limitations made it impossible to plan in-person gatherings.
As a result, we conducted in-depth interviews with representatives from the
chosen businesses through Google Meet/WhatsApp and followed up with them via
email with additional questions. Employees that have the role of addressing
sustainability processes inside companies were interviewed, and further contact
was maintained with them. The major data gathering procedure is summarised in
Table.
|
Case companies |
Interviewee |
Interview Date |
Mode of interaction |
Duration |
Data confirmation with respondent |
|
CASE A |
Sustainability Head |
|
A video interview (Google Meet) |
|
|
|
CASE B: |
Head of Innovation |
|
Telephone interview |
|
|
|
CASE C: |
Marketing Head |
|
Answered questions via email |
|
|
|
CASE D: |
CEO |
|
Answered questions via email / Telephone
interview (through Whatsapp) |
|
The interviews were semi-structured theme interviews since questions
directed them the authors had developed in advance (Appendix 1). (Harrell &
Bradley, 2009). The interview questions, however, were tailored to the scope
and scale of the company's operations to glean the most relevant information.
Specific topics of interest are chosen in advance for the themed interview. The
development and adoption of corporate and sector-wide sustainability plans are
central to this analysis. Requests for interviews were extended between January
11 and February 13, 2021.
A follow-up message was sent after a week if the invitee
hadn't responded. Each interviewee received a maximum of two emails, one of
which served as a gentle reminder. Fifty businesses were approached for
interviews, but only eight were ultimately confirmed. However, at the last
minute, three organizations declined to interview for various reasons. Five
firms were interviewed, and everything went well for the writers. The authors
kept in touch with the respondents after the data was collected so that they
could collect more information throughout the analysis phase. Following the
completion of the study, respondents were contacted to verify data and to
request permission to publish the results. After gathering data from 5
interviews, the researchers found that doing more interviews would not provide
any extra relevant insight. When no more information can be gained by gathering
any more data, researchers have reached what is known as the "data
saturation threshold" (Owen, 2014).
3.4
Ethical Considerations
The inclusion of an ethical framework is crucial to the
study's success. Therefore, all proper research ethics were followed during the
study. As stated by the declaring entity, none of the individuals involved have
been deemed to constitute a threat of bodily or mental damage. Participants
were briefed on the study's history and goals before collecting data. Each
participant was made aware of how their information will be used and that they
might end the interview without explaining. There were no financial or other
benefits to participating in the research, and participation was optional. The
interviews were scheduled in advance and conducted in a confidential
environment. Confidentiality was maintained, and the restricted data was not
shared with anybody outside the study community.
4
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