The effect of ISO 14001 implementation on SME innovation improvement and performance

by Kulrada Kiatkulthorn

Institution: Högskolan i Gävle
Year: 2016
Keywords: SMEs; innovation; ISO 14001; innovation performance; Engineering and Technology; Civil Engineering; Transport Systems and Logistics; Teknik och teknologier; Samhällsbyggnadsteknik; Transportteknik och logistik; Industriell ekonomi – magisterprogram (sv eller eng); Management of logistics and innovation – master’s programme (one year) (swe or eng); Industriell ekonomi; Industrial engineering and management
Posted: 02/05/2017
Record ID: 2123694
Full text PDF: http://urn.kb.se/resolve?urn=urn:nbn:se:hig:diva-21653


Introduction –ISO 14001 is one of the environmental management systems (EMS) that are used in industries in order to deal with environmental issues. Many researchers point out that the adoption of ISO 14001 could help firms improve operational procedures and gain competitive advantages, increase their environmental performance, adopt management strategies in terms of energy consumption, materials and waste, cost efficiency and company reputation. Previous studies have focused on the connection between ISO 14001 and technology innovation. However, there are still some gaps in the literature between the effect of ISO 14001 and other types of innovation (product, production, position), especially in small-to-medium-sized enterprises (SMEs). Purpose – This paper studied the implementation of ISO 14001 in SMEs associated with the improvement and performance of different dimensions of innovation (product/process/position). Design/Methodology – This study had a phenomenological approach. A case study was used for examining the innovation actions and activities that were developed by the help of ISO 14001. Documents were used to collect secondary data, especially in firm performance in order to show the innovation performance before and after implementation of ISO 14001. Semi-structured interviews were used to collect primary data from four employees among top management as well as staff who are related to ISO 14001 and each type of innovation in aluminium industry – FEAL AB in this case –  in Horndal, Sweden. Each interview session took around 20 minutes. Findings – The finding shows that the adoption of ISO 14001 led to incremental changes in product and process innovation. ISO 14001 led the company to innovate their products by using new chemical materials that are environmentally friendly, and ISO 14001 requirements were used when specifying requirements for new products. It also led the firm to develop a procurement process, waste management, and organization strategies. Yet, there was no positive impact of the implementation of ISO 14001 on position innovation. In terms of performance, ISO 14001 led to improved performance in product and process innovation. It led the firm to have better methodology, cost efficiency and waste reduction. It also changed behaviour and mind-set of employees and the process for developing new products. Research limitations and further study – Only one case – a 25-year-old SME in the aluminium industry in Sweden - was used in this research. It can be broadened to either comparative case studies or quantitative studies in order to compare the influences of ISO 14001 on innovation and performance among them. Practical implication –This study could provide a guideline for building innovation in SME firms with the help of ISO 14001 in order to create competitive advantages in highly competitive markets. It…