Role of Institutional Pressure and Organization Climate in Adoption of Process Innovation for Improving Environmental Performance – A Research on Indian Mining Industry

In recent years, the significance of Environmental Performance in attaining organizational performance and sustainable development has been acknowledged. This paper seeks to discover whether and how institutional pressure can stimulate Environmental Performance, and examines how process innovation mediates this relationship, as well as the moderating effect of organizational climate, through amalgamating institutional theory and resource-based view (RBV). The proposed hypotheses are examined using the survey data from 206 firms working in mining industry in India, by partial least squares (PLS) approach. The results suggested that process innovation mediates the positive effects of institutional pressures on environmental performance, which results in improved organizational performance. Additionally, the moderating role of organization climate was also examined. This study provides the first empirical evidence of process innovation’s mediatory role between institutional pressures and environmental performance. Furthermore, it deepens our understanding of the contribution of organizational climate to the relationship between institutional pressure and environmental performance, with evidence derived from the mining industry of an emerging economy.