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Advances in Social Sciences Research Journal – Vol. 8, No. 9
Publication Date: September 25, 2021
DOI:10.14738/assrj.89.10546. Suprobo, F. P., Laksmana, A., & Wulani, F. (2021). Possibility of Realizing Green Innovation by Urban Social Enterprises in Indonesia.
Advances in Social Sciences Research Journal, 8(9). 28-41.
Services for Science and Education – United Kingdom
Possibility of Realizing Green Innovation by Urban Social
Enterprises in Indonesia
F. Priyo Suprobo
Dr. Candidate, Widya Kartika University, Surabaya, Indonesia
Arsono Laksmana
Postgraduate School, Widya Mandala Catholic University
Surabaya, Indonesia
Fenika Wulani
Postgraduate School, Widya Mandala Catholic University
Surabaya, Indonesia
ABSTRACT
This study examines environmental innovation as a prominent strategic issue in the
current development of business practices. According to preliminary studies,
profit-based business practices are used to determine the success of environmental
innovation as superior competitiveness. Countries in Asia prioritize business
development based on economic development, with social and environmental
functions included in other agendas. However, this is contradictory with the
phenomenon of Surabaya, where environmental-based urban social enterprises
actors actually complement the role of the city government by carrying out the
function of a hybrid organization (profit and social) with environmentally friendly
practices. Therefore, this study aims to determine the possibility of urban social
enterprises in Indonesia to obtain green innovation. This is a systematic research
with 4 (four) strategic factors and conceptual models that makeup 6 (six)
propositions formulated based on the scope of knowledge management theory and
resource-based view. This conceptual model that connects green knowledge
sharing, entrepreneurial orientation, dynamic capability, and innovation
performance is still relatively rare and needs to be tested to determine its
theoretical resilience. The novelty of this model is formulated from contextual
urban and regional social enterprises in Indonesia, therefore, it is expected to
provide ready-to-test opportunities to be duplicated in other urban areas in the
world that have the same contextual organizational functions and environmentally
friendly business base.
Keywords: urban, social enterprises, strategic management, green innovation.
INTRODUCTION
Environmental or green innovation is a strategic approach that acts as an antecedent of
competitive advantage and positively influences organizational performance [1,2,3,4].
Martinez [5] stated that in Asia, the prioritization of social and environmental aspects based on
this approach is related to the country's economic development where the company operates.
This result contradicts the phenomenon in the city of Surabaya, Indonesia.
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Suprobo, F. P., Laksmana, A., & Wulani, F. (2021). Possibility of Realizing Green Innovation by Urban Social Enterprises in Indonesia. Advances in
Social Sciences Research Journal, 8(9). 28-41.
URL: http://dx.doi.org/10.14738/assrj.89.10546
Surabaya has been designated as one of the Global Green Cities by the United Nations (UN) on
October 31, 2017. This is because the urban social enterprise roles and its citizens do not fully
depend on the Local Government's economic development. The emergence of this motivation
is determined by groups of environmental cadres or community members that constitute the
civil society and acts as a complement or substitute for government functions. Urban
environmental problems are a unifying value in realizing social and economic sustainability [6].
Social enterprises in Surabaya have a hybrid organizational function. This organization is
profit-oriented and a subsidized commercial company that deals with beneficiary groups
[7,8,9]. The social enterprise model includes 1) non-profit entrepreneurship, 2) the public
sector, 3) social cooperatives, and 4) businesses (SME). Meanwhile, in terms of mission, it
includes 1) integrated work, 2) social services, 3) ethical consumption/ecological products and
social transition, and 4) poverty alleviation and social exclusivity [7].
Some of the empowerment programs carried out by urban social enterprises include the 3R
(Reduce, Reuse, Recycle) campaign. Residents are not only expected to ensure that their villages
are clean and beautiful, however its socio-economic potential also needs to be developed. The
growing business fields include wastewater management, waste banks, waste product craft
industry, micro-electric power generation, plant cultivation, fish farming, village tourism, etc
[10]. Currently, Surabaya has approximately 14 villages in terms of economic, social, and
environmental aspects of the society. The sharing of environmental insights with leaders,
cadres, and residents is a determinant in creating awareness and motivating citizens'
management capabilities and the development of other innovations [11]. These independent
efforts are important social capital to maintain the sustainability of the program and realize
socio-economic potentials.
Therefore, an interesting relationship exists between environmental-based knowledge sharing,
entrepreneurial orientation, and the dynamic management ability to develop green innovation,
a form of organizational performance. These strategic factors form a unique relationship that
requires further research on knowledge management based on scientific views.
Therefore, the novelty of this study is not only in its objective as a hybrid organization and
research location, rather it also aims to determine the gaps needed to realize green innovation.
This study proposes a theoretical, conceptual model of strategic factors that influence green
innovation performance of social enterprises situated in Surabaya. It investigated the
relationship among strategic factors, which in several studies experiences gaps in developing
green innovation. This study is summarized as follows: theoretical background, research
methodology, discussion, proposed conceptual model, implication theory, future research, and
conclusion.
THEORETICAL BACKGROUND
Green Knowledge Sharing
Knowledge sharing plays an important role in improving the performance or competitiveness
of a company [12]. This also occurs in the context of green knowledge, regarded as the general
awareness about facts, concepts, and all things related to the natural environment and
ecosystems. It offers great potential in improving company performance or competitiveness
[13,14].