Purpose This study investigates the effect of green innovation (GI) on organizational performance (OP) and examines whether power distance (PD) moderates this relationship within Indonesia’s automotive sector. Design/methodology/approach Data were obtained from 272 branch managers of automotive dealerships across various brands in Indonesia. The analysis was performed using structural equation modeling with partial least squares (SEM-PLS). Findings The results indicate that GI has a significant positive effect on OP. However, PD does not moderate the GI–OP relationship; instead, it demonstrates a significant direct effect on OP, suggesting that its role operates independently rather than as a boundary condition. Research limitations/implications The study highlights the importance of integrating sustainability-oriented innovations in strategic and operational practices, while also considering contextual factors such as leadership, employee engagement, and hierarchical dynamics (PD) that may influence how GI impacts OP. Practical implications The findings offer actionable guidance for managers and policymakers to promote GI, manage hierarchical dynamics (PD) effectively, and integrate sustainability-oriented practices into strategic and operational processes to enhance OP in the automotive industry. Social implications By emphasizing the value of GI, the study highlights its contribution to environmental sustainability, resource efficiency, and broader societal welfare in Indonesia. Originality/value This study presents a novel empirical investigation of GI, PD, and OP in Indonesia’s automotive sector, a context that remains underexplored in prior literature. Grounded in the resource-based view (RBV) and institutional theory, the study provides policy-relevant insights and practical guidance for managers seeking to enhance sustainability initiatives and strategic performance in emerging-market automotive firms.
Setiawan et al. (Tue,) studied this question.
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