The Influence of Sustainability Orientation on Portfolio Innovativeness in Manufacturing and Service Firms
Jadena Bechtel, Tobias Röth, Alexander Kock
kHUB post date: March 2026
Originally published: October 1, 2025 (PDMA JPIM • Vol. 43, Issue 2 • March 2026)
Read time: 50 minutes
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Firms increasingly adopt a sustainability orientation in response to regulatory, competitive, and customer pressures. We examine how this orientation shapes innovation portfolio management (IPM) outcomes. Using a cross-industry, multi-informant survey of 115 innovation portfolios, we show that sustainability orientation positively relates to portfolio innovativeness, and portfolio innovativeness partially mediates the relationship between sustainability orientation and portfolio success. Further, the effect is stronger in manufacturing than in service firms. Our findings extend prior research on the role of sustainability orientation in innovation management. By showing that a pronounced sustainability orientation is positively associated with portfolios of more innovative projects, we challenge insights that sustainability orientation leads primarily to incremental improvements. Further, we contribute to the literature on strategic orientations in innovation portfolio management by introducing sustainability orientation as a crucial factor for portfolio decision-making. We conceptualize sustainability orientation with strategic, structural, and cultural dimensions, offering a more holistic understanding than existing conceptualizations. Finally, we highlight an important boundary condition by showing that the relationship between sustainability orientation and portfolio innovativeness varies between service and manufacturing firms, contributing to the debate on sustainability-driven innovation across sectors.