Sustainable development in Iran post-sanction: Embracing green innovation by small and medium-sized enterprises

Embracing green innovation is one of the most common elements for improving the firm's environmental performance. In a business environment with high level of bureaucratic corruption, companies can easily neglect their environmental accountability. Therefore, strong motivations are needed to prompt or force companies to acknowledge their environmental responsibility. To discover which types of companies embrace green practices, this study explored the association between customer relationship orientation—as a part of the firms' culture—and the adoption of green product and process innovation via a mediator, market-focused learning. Results from two surveys of 224 small and medium-sized enterprises in Iran post-sanction (late 2016 and early 2017) showed that the adoption of green product and process innovation is higher among small and medium-sized enterprises with customer-oriented corporate culture. In addition, this research verified that market-focused learning was an underlying mechanism through which customer-oriented corporate culture was related to the adoption of green product and process innovation. Accordingly, this study identified the extent to which companies' building a “constant relationship with customers” was a suitable way to identify those companies' going green and showing more environmental accountability in a bureaucratic corrupted environment.