Purpose: Firms need to develop absorptive capacities to effectively source and exploit knowledge relevant to environmental behaviour for their own innovation activity. Business-to- business interactions can represent a significant route through which knowledge and resources about environmental innovations are transferred along the supply chain. The purpose of this paper is to explore how firms exploit business partnerships in order to build capacity for environmental innovation. In order to do so, it investigates two elements of B2B interactions – partner alignment and compatibility – and their influence on absorptive capacity-building.
Design/methodology/approach: This paper is based on a qualitative interview study of knowledge intensive business services (KIBS) operating in the environmental goods and services sector and their clients involved in adopting environmental innovations. Matched pairs of engineering consulting firms and their clients – tourism accommodation establishments - were selected as a sampling frame in order to study the influence of partner alignment an compatibility on the exchange of environmentally-relevant knowledge and competencies.
Findings: The findings show that the synergistic attributes of business partners influence absorptive capacity-building and give rise to different patterns of interaction of KIBS with their client. The B2B interactions investigated are characterised by alignment along multiple objectives about the relevance of environmental behaviour. Furthermore, the compatibility of the partners’ competences is a key determinant of environmental innovation outcome.
Practical implications: The study highlights the role of managers in identifying and selecting those business partnerships that accrue greater potential benefit for accessing resources and competencies for eco-innovation.
Originality/value: The study contributes to the literature on absorptive capacity and innovation by demonstrating how B2B interactions – in this study, the interaction of KIBS with their clients - influence the capacity of firms to adopt environmental innovations which is an area of study that deserves further attention.