Berchicci, L., & Bodewes, W. 2005. Bridging environmental issues with new product development. Business Strategy and the Environment, 14(5): 272.

Business Strategy and the Environment
Bus. Strat. Env. 14, 272–285 (2005)
Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/bse.488

Bridging Environmental Issues with
New Product Development
Luca Berchicci1* and Wynand Bodewes2
1
Design for Sustainability Program, Industrial Design Engineering, Delft University of
Technology, The Netherlands
2
RSM Erasmus University, Rotterdam, The Netherlands

ABSTRACT
Studies dealing with environmental issues in product development have made sig-
nificant progress explaining how firms can develop greener products that succeed on
the market. Intriguingly, although a large number of tools and methods have been
developed that supposedly help firms develop greener products, it is less common
to draw on established theories on product innovation. This may explain why firms
that have tried to develop more sustainable products have had mixed experiences.
Environmental new product development (ENPD) and new product development
(NPD) literature is reviewed to develop a model that helps explain the complexity of
greening and the challenges product development teams face in their attempts to
incorporate environmental issues into product development. This paper emphasizes
that scholars need to incorporate environmental issues into established theories on
NPD. Adapting existing theoretical models may help practitioners in their struggle
to integrate the E into NPD. Copyright © 2005 John Wiley & Sons, Ltd and ERP
Environment.

Received 1 June 2004; Revised 6 April 2005; Accepted 17 May 2005
Keywords: environmental innovation; environmental performance; environmental attributes; new products; new product devel-
opment; management support; escalation of commitments; interpretation

Introduction

T
HE ABILITY TO COMMERCIALIZE PRODUCTS SUCCESSFULLY IS CRUCIAL FOR FIRMS THAT WANT TO
compete in the marketplace (Griffin and Page, 1996). Despite an enormous amount of research
on the factors determining successful NPD, many new products prove unsuccessful in the market.
Nevertheless, the very attempt of NPD research to understand what makes products fail or succeed
allows us to explore the critical role of product advantage (features, price, durability etc.) in market accep-
tance and commercial success. Like many other new products, environmentally friendly products also

* Correspondence to: Luca Berchicci, Design for Sustainability Program, Industrial Design Engineering, Delft University of Technology,
Landberghstraat 15, 2628 CE Delft, The Netherlands. E-mail: l.berchicci@io.tudelft.nl&wbodewes@eship.nl

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment

Bridging Environmental Issues with New Product Development 273

often fail. The effort to make better products in environmental terms does not always translate into a com-
mercial or viable business case (Hall and Clark, 2003). The question is whether environmental products
fail for the same reasons that ‘regular’ products do.
Given the multidimensional character of environmental issues, previous research has drawn on exist-
ing theoretical frameworks to examine the relationship between the natural environment and organi-
zations at various levels of analysis (Starik and Rands, 1995). At the organizational level, many studies
have addressed environmental issues in relation to the strategic management and capabilities of firms.
Many authors have adopted the resource-based view (RBV) because it defines competitive advantage
as the outcome of organizational capabilities that result from a proactive environmental strategy (e.g.
Aragon-Correa and Sharma, 2003; Hart, 1995). Other studies provide in-depth investigations as to why
firms respond to environmental issues, adopting institutional theories to explain how organizations
become more aligned with the institutional environment with its environmental regulations, mimicry
and normative pressure (e.g. Bansal and Roth, 2000; King and Lenox, 2000). Others have investigated
the individual and contextual factors that influence the decision on whether or not to embrace envi-
ronmental issues, adopting theories of planned behavior (e.g. Cordano and Frieze, 2000).
Another group of studies focuses on the integration of environmental issues into products and ser-
vices (e.g. Brezet and Hemel, 1997; Charter and Tischner, 2001; Graedel et al., 1995), adding signifi-
cantly to our knowledge as to how firms can meet the environmental challenge of developing new green
products. However, these research efforts appear to have few explicit links to mainstream new product
development literature (Baumann et al., 2002).
This paper demonstrates how existing theoretical models may help address questions raised within
the environmental field, such as product performance, in response to the strong demand by some schol-
ars to integrate and link existing theories to the greening process (Starik and Marcus, 2000). We present
a model that explains the risks and challenges that emerge when one attempts to incorporate environ-
mental issues into NPD. Rather than developing a new theory for ENPD, we build on existing NPD
theories. In the first section we review ENPD literature, and in the second section we explore how ENPD
relates to existing NPD literature. The existing NPD literature is closely linked to organizational
innovation literature (Fiol, 1996) in that they both examine how organizational factors affect the
effectiveness of developing and introducing innovations. Finally, we explore the challenges related to
environmental conscious products and services from an innovation-oriented perspective. We argue that
future ENPD research will benefit from treating environmental concerns and demands as a design and
business problem (Reinhardt, 2000). Further integration of the E into NPD should help companies
respond to environmental challenges. Understanding these challenges may help us find a match
between environmental issues and market demand.

Product Development and the Natural Environment

In the last decade, a growing interest in the natural environment has been one of the drivers behind the
redesigning of existing products and the creation of new ones, making them more energy efficient or
less material intensive (Shrivastava, 1995). The challenge facing industry, practitioners and scholars sup-
ported by policy agendas has been how to incorporate environmental issues into product development,
aligning the natural environment with regulations and market requirements. ENPD,1 which aims at
reducing the environmental burden through product design and innovation, is emerging as a system-

1
ENPD is a general term, which encompasses a range of issues, from the redesigning of existing products to the creation of new products and
services driven by environmental concerns.

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 14, 272–285 (2005)

274 L. Berchicci and W. Bodewes

atic innovative approach to environmental problems (Chen, 2001) and has been proposed to represent
strategic options for value creation (Shrivastava, 1995).

ENPD as Research Agenda
Various schools of research have contributed to a better understanding of environmental new product
development. One of them uses success stories to demonstrate that aligning environmental issues with
new product development can improve market performance (see, e.g., Charter and Tischner, 2001).
Several companies, such as Xerox, Electrolux, BMW and 3M, have been heralded as ENPD pioneers,
and are said to have benefited from the approach (Baumann et al., 2002). Another school offers nor-
mative guidelines, manuals, tools and advice to engineers and managers to help them integrate envi-
ronmental concerns into the NPD process (see, e.g., Brezet and Hemel, 1997; Burall and Design Council,
1996; Mackenzie, 1997). The aim of these tools is to identify the environmental and cost-related impli-
cations of alternative materials or process decisions (see, e.g., Huisman et al., 2003), and help firms
develop greener products. Third, a number of studies was carried out to examine and identify factors
that promote the adoption of ENPD (e.g. Johansson, 2002). The role of the environmental coordinator
(Pujari and Wright, 1996), the integration of environmental professionals (Ehrenfeld and Lenox, 1997),
the involvement of customers (Pujari and Wright, 1996) and suppliers (Pujari et al., 2003), and top
management support (Ehrenfeld and Lenox, 1997; Pujari et al., 2003) are considered crucial factors.
Empirical studies have investigated in what ways firms have tried to engage in ENPD (e.g. Gutowski et
al., 2005; Lenox et al., 2000). Although these studies have increased our understanding of ENPD and
contributed to the development of a systematic approach to dealing with environmental issues in product
development, all but a few fail to draw on existing theoretical frameworks in NPD and organizational
innovation literature (as suggested by Baumann et al., 2002; Pujari et al., 2003). Scholars have appar-
ently elected not to build on existing knowledge and resources from contiguous research fields (as sug-
gested by Lenox and Ehrenfeld, 1997).
Academics have also explored how the development of new product service systems (PSSs) can realize
a better alignment between what is commercially feasible and what is environmentally sound (Mont,
2002; Senge and Carstedt, 2001). The PSS approach calls for the adoption of radical undertakings and
fundamental innovation (Hart and Milstein, 1999). This is in line with the assumption that to realize a
consistent reduction of the level of environmental degradation improvements of eco-efficiency by a factor
of 10 or 20 are required over the next 50 years (see, e.g., Weiszäcker et al., 1997). The achievement of
such leaps may indeed require an approach that is different from ‘traditional’ ENPD. This perspective
suggests and assumes that radical innovations lead to a better environmental outcome. An example of
such innovative thinking is Xerox’s decision to stop selling copiers and to sell copies instead. This step
enabled them to use reconditioned and used parts in the production of new copiers, reducing the envi-
ronmental impact of these products and saving on the costs of materials.
Greening or ENPD itself is not a well defined concept (Chen, 2001) and the extent to which envi-
ronmental concerns should be acknowledged in the development of new products is perceived differ-
ently by different stakeholders (Kleiner, 1991). There is, for instance an ongoing debate regarding what
it is that constitutes a green or environmentally friendly product. The ill defined concept of greening
manifests itself also from a market perspective. Many scholars and practitioners seem to assume that
consumers are willing to pay a premium for green products when they indicate that they care for the
natural environment or look for environmentally friendly products or brands (Ottman, 1998). Unfortu-
nately, people’s attitudes towards the environment may not always materialize in their purchasing behav-
ior (Simon, 1992). In 2000, Shell, for example, introduced Pura, a more environmentally friendly fuel
that contained fewer pollutants. Although Shell assumed that its customers would pay a premium for



the environmental aspect of the new fuel, Pura proved to be a failure. When Shell subsequently intro-
duced a new fuel, with even fewer pollutants than Pura, and marketed it as a fuel that would increase
engine performance, not even mentioning its environmental advantages, they managed to turn it into
a commercial success (Op Het Veld, 2005).
Despite these heterogeneous interpretations, in this paper greening is defined as the (explicit) attempt
to reduce and minimize the environmental impact of the development, manufacturing, use and disposal
of products and services.

ENPD as a Practice
The attempts by firms to organize and manage ENPD as a new activity with no apparent links to exist-
ing new product development may explain why they have had mixed experiences. For example, after
studying 10 firms that are considered proactive when it comes to integrating environmental issues in
their business activities, Handfield et al. (2001) found gaps between the advocates of DfE tools (envi-
ronmental managers) and the people that use them (product developers) in terms of the expectations,
perceptions and orientations regarding ENPD practices and tools. According to Gloria et al. (1995), some
of the barriers regarding the use of ENPD tools are intrinsically related to poor data quality and avail-
ability, and high implementation costs, due to the complexity of environmental issues. Moreover, many
companies mentioned in ENPD literature as examples of corporate environmentalism have used the
tools sparingly, and in addition to regular product development procedures and instruments, with mar-
ginal effects on the overall reduction of the environmental impact (Baumann et al., 2002). Similarly,
though environmental targets are added to the fundamental product requirements, they are often con-
sidered less important than cost-related or time-to-market criteria (Handfield et al., 2001).
Moreover, due to a lack of a uniform definition as to what constitutes an environmental or green
product, the assumption that ENPD methods provide a competitive advantage, supporting the win–win
logic of being ‘green and competitive’ (Hart and Ahuja, 1996; Porter and Van der Linde, 1995) has
not yet been widely accepted, even by those firms that seem to lead the ENPD pack. For example,
Ehrenfeld found that successful firms did not have to rely heavily on tools (Ehrenfeld and Lenox, 1997).

ENPD: a First Synthesis of Theory and Practice
The picture that emerges from ENPD literature is a rather hazy one: (1) there are few links between
existing product development and innovation theories and practices; (2) the concept of greening is not
clearly defined and (3) it is unclear how and to what extent incorporating the E in NPD affects the success
of new products. It would seem that the implications of ENPD with regard to product development and
market performance are not well understood. In the next section, we draw on organizational innovation
and NPD literature (e.g. Cooper and Kleinschmidt, 1987) to explore the antecedents of successful product
development.

New Product Development and Innovation

Product development is vitally important to firms competing in new and existing markets (Calantone
et al., 1995). Product development is critical not only as a potential source of competitive advantage; it
also allows firms to diversify, adapt and reinvent themselves in a fast-changing market (Brown and
Eisenhardt, 1995). NPD has to do with the transformation of market opportunities into products (and/or
services) that meet the needs of consumers and other stakeholders (Krishnan and Ulrich, 2001). NPD



success is generally conceived as a multidimensional construct (e.g. Griffin and Page, 1996). It can be
viewed in market-oriented terms, such as customer satisfaction and market share, or in strategic terms,
such as the extent to which the new product allows a firm to enter a new market. An attempt to cate-
gorize existing literature is based on the identification of determinants. More specifically, determinants
of success and failure used to predict market success are divided into two fundamental groups: (1) project
level determinants, based on examining the specific compatibility of process activities, product charac-
teristics and market opportunities during the project, and (2) determinants at the organizational level,
examining the compatibility of company practices and firm characteristics that may be important to the
success of the project but are not apparent at project level.

Project Level Determinants of NPD Success
At project level, the research focus is on factors that influence the performance and outcome of the
project. Here, project performance is related to the financial success of a product development project.
This school of research has investigated why some new products succeed and why others fail. One of
the claims is that a project that is carefully planned and executed, and has strong management support,
has a greater chance of becoming a success (Brown and Eisenhardt, 1995). Montoya-Weiss and Calan-
tone (1994) present a meta-analysis of published empirical research on the antecedents of new product
performance. Their analysis suggests that 18 factors divided into four categories represent the sub-
stantive determinants of new product performance (see Table 1). These factors have proven helpful in
screening NPD proposals, for example in project selection and NPD budgeting decisions (Cooper and
Kleinschmidt, 1995a). Product advantage – referring to the customer’s perception of a product’s supe-
riority with respect to specific attributes compared to competing products – is widely considered the
most important predictor of new product success. Also, a good match between the resource require-
ments of the project and the firm’s resources and skills – related to marketing (promotion, market

Strategic factors
• Product advantage
• Technological synergy
• Marketing synergy
• Company resources
• Strategy of product
Development process factors
• Proficiency of technical activities
• Proficiency of marketing activities
• Proficiency of up-front (homework) activities
• Protocol (product definition)
• Speed to market
• Financial/business analysis
Market environment factors
• Market potential/size
• Market competitiveness
• External environment
Organizational factors
• Internal/external relations
• Organizational factors

Table 1. Factors leading to the success of new product (Montoya-Weiss and Calantone, 1994)



Success factors for new products

How the ﬁrm organizes its activities with regard to Cross-functional team
new products A strong and responsible project leader
NPD team and team leader commitment
Management involvement and commitment
Intensive communication
Culture Allow the emergence of intrapreneurs and risk taking attitude
Product champions
Strategy Clear goal and strategic focus in NPD program
Market information and NPD program
User involvement

Table 2. Organizational aspects inﬂuencing product performance

research and customer service) and technological activities (R&D and engineering) – increases the
chance of success.

Organization Level Determinants of NPD Success
At the organizational level, success has been defined in terms of financial performance, but also in terms
of how efficient the development process (e.g. development time) or how effective the product concept
(i.e. technical superiority) is (Brown and Eisenhardt, 1995). The project level determinants that have
been used to explain NPD success include aspects such as the way the firms organize their activities, as
well as their strategy and culture (Cooper and Kleinschmidt, 1995a, 1995b). Table 2 presents the main
organizational factors influencing product performance, based on the work of Cooper and Kleinschmidt
(1995a) and Ernst (2002).

Newness as a Determinant of NPD Success
The extent to which the above-mentioned factors will actually lead to successful NPD projects is sup-
posedly influenced by the nature and degree to which a new product is innovative (Balachandra and
Friar, 1997). Newness refers to the development, production and use of a new product and it requires
firms to learn and to unlearn.2 Newness implies uncertainty and risk (Schmidt and Calantone, 1998)
and it affects the complexity of the innovation effort (Ali et al., 1995). For example, carrying out a detailed
market analysis for radical products may be futile because such a market may not even exist (Balachandra
and Friar, 1997) or consumers may find it hard to imagine the benefits of a radical product (Veryzer,
1998). The complexity that results from engaging in NPD projects that demand substantial learning and
unlearning can have a negative effect on the likelihood that the resulting products will be commercially
successful.

Synthesizing Determinants of NPD Success
Reviewing NPD literature suggests that the performance of a new product is influenced by a number
of factors (Ernst, 2002). Thus far, it does not look as if there will be a ‘unifying’ theory that helps us

2
Products that are highly innovative are seen as having a high degree of newness, whereas low-level innovative products are located at the
opposite end of the scale. One common distinction based on the innovativeness is between radical and incremental innovation.



Degree of
Newness

Process
Driver Design Outcome
Specifications

Environmental Product Product
Concerns Project Team Attributes Performance
Coordination

Management
Support

Figure 1. The inﬂuence of environmental concerns on product performance

explain and predict when a new product will prove successful. However, our review does yield some
important factors that clearly have an impact on a new product’s changes of success (Brown and
Eisenhardt, 1995; Cooper and Kleinschmidt, 1995a; Dougherty, 1992). Three of these factors appear to
be especially relevant when development teams attempt to incorporate environmental concerns and
implications in their NPD efforts.
1. Design specifications. As a set of attributes, successful products are ‘successful’ because they meet
market requirements, and provide functionalities that the market values. Hence, the challenge is to
understand what the implications are of the incorporation of environmental attributes into products
when translating functional requirements into a product specification. The chance and degree of
success is reduced when a focus on environmental implications causes the product to misalign with
the customer’s preferences.
2. Coordination and alignment within multifunctional product development teams. The final product is the
result of the effort of various team members, each with their own interpretation. Introducing envi-
ronmental attributes into this process may introduce a different set of interpretations. The social
dynamics that lead to a collective agreement with regard to the functional specifications will change
when new stakeholders become involved.
3. Management support for NPD projects. The support for environmental issues in NPD is likely to affect
product performance due to the complexity of greening. Moreover, this process may even be more
complex when a radical approach is encouraged.
In the next section these factors are examined in an attempt to address the influence of environmental
issues on product development success.

Aligning Innovation Theory with Environmental Concerns

What are the Implications of Environmental Issues with Regard to Innovative Products?
We present a model that may explain how environmental concerns affect the success of NPD
(Figure 1).



Environmental concerns are one of the reasons why a firm may engage in NPD. Environmental con-
cerns are likely to have an impact when objectives are established, resources mobilized and performance
(success) evaluated. If the project involves a level of innovation with which a firm has not had previous
experience, this is likely to influence the innovation process as well, as it increases the level of uncer-
tainty. The outcome is a bundle of product attributes that according to the literature determines the per-
formance of a product.

Design Speciﬁcations: Trading Off Environmental Attributes
Product development is a complex process involving a number of decisions that have to do with the
kinds of attribute products should incorporate. Manufacturers and designers attempt to develop prod-
ucts whose unique attributes create value for customers. A successful product contains a set of attrib-
utes that are by definition balanced. From a design perspective, there are two discrete approaches to
dealing with these attributes. First, the common linear model divides the design process into two dis-
tinctive phases: problem definition and problem solution. The former is an analytic sequence in which
the designer determinates all the elements of a problem and specifies what is needed to solve the
problem successfully. The latter is a synthetic sequence in which the requirements are combined and
balanced against each other (Buchanan, 1992). In this case a set of criteria is established regarding the
technical and process-related specifications, target costs and time to market, which have to be carefully
balanced. In response to increasing public interest in environmental issues, many companies have
started designing products with environmental attributes. Environmental attributes are seen as distinct
from the more traditional ones such as price and quality3 (Chen, 2001; Prakash, 2002). As suggested
by Chen (2001, p. 252), ‘typical environmental attributes that are listed on various green consumer
guides include recyclability, recycled content, fuel efficiency, toxic content reduction, and emission-
related performance’ and others such as efficient packaging.
Incorporating both environmental and regular attributes into a single product during the design
process is expressed in term of the choice of materials, energy efficiency, toxic waste etc. (Chen, 2001).
However, the integration of environmental attributes should not conflict with traditional product attrib-
utes or functionalities, such as safety and reliability. Moreover, the increased degree of complexity in
the functional specification results in a larger set of possible tradeoffs, where the improvement of one
attribute may only be achieved at the expense of others (Keeney and Raiffa, 1993). For example, although
electric cars produce lower levels of pollution, they do so at the expense of speed and duration (De
Neufville et al., 1996). Handfield et al. (2001) have observed that requirements that have immediately
observable effects in terms of profitability, customer needs and market share may take precedence
over environmental goals. On the other hand, giving a higher priority to environmental attributes at
the expense of other parameters (such as costumer requirements) could easily undermine product
performance.
Market information, for example a solid understanding of consumer preferences, may be of little help
when it comes to developing radical innovations (Balachandra and Friar, 1997). In such cases the set of
criteria for the design process is indeterminate, which means that are no limits to design problems where
the product is characterized by n requirements (Buchanan, 1992). Such design problems are defined as
‘wicked’ because they are ill formulated and ill defined by decision-makers with conflicting values and
confusing information at hand (Rittel and Weber, 1973). Although some specifications may be rational

3
As an anonymous reviewer correctly pointed out, environmental attributes do not necessarily have to be separate from traditional attributes,
and may, on the contrary, overlap or coexist. Problems may occur when tradeoffs are required and environmental attributes are overempha-
sized at the expense of traditional attributes, regardless of consumer preferences or potential technological or financial risks.



and based on objective decision-making, others are more subjective. Indeterminate attributes can be
judgemental, subjective or ideological, and as they are difficult to translate in product attributes, such a
translation will be inherently political in nature. When designers try to integrate indeterminate attrib-
utes into the design of a product, the additional tradeoffs increase the complexity of a project. Design-
ers face a dramatic dilemma: how are they to incorporate environmental attributes into the design when
they will be perceived differently by various stakeholders? How to incorporate specifications that are ide-
ological without increasing the risk of market rejection? This is due to the complexity of greening.
The degree of innovativeness can also increase the indeterminacy of attributes, and thus increase
the risks and uncertainties in the design process. Although customer input is usually valuable in the
creation of new products, market information may not be useful for radical product innovations, because
latent rather than existing needs are being addressed (Veryzer, 1998). Due to the uncertainties of radical
development, there are many assumptions concerning the benefits of new products. However, these
assumptions need to be tested as soon as possible in the design process, especially with regard to market
requirements. This would also apply to market requirements that refer to societal concerns as to the
environmental impact of products. Such environmental requirements may be ill formulated when they
are based on ideology, in which case the level of complexity of the design process increases without there
being a clear consensus with regard to the environmental goals. This lack of clarity may make product
developers more reluctant to address environmental concerns. On the other hand, environmental con-
cerns may be the main reason to develop a new product, in which case environmental attributes may
be overemphasized at the expense of market-driven product specifications. Testing assumption during
the development process may help identify and incorporate important market-driven requirements. Oth-
erwise, the product may turn out to have an added value in social, technological and environmental
terms, and respond to social needs and fundamental research priorities, while failing to address market
demand. Veryzer (1998) found that some aspects thought to be important by a development team some-
times are in fact not at all important to consumers.

Coordination and Alignment Within Multifunctional ENPD Teams
Product development is a complex social process involving people from different backgrounds and
management positions (Dougherty, 1992). To a large extent, the success of a product depends on the
effective communication and collaboration between the various members of the team (Cooper and
Kleinschmidt, 1995a; Dougherty, 1992). In large firms, differences in interpretation4 prove to be a barrier
rather than a lubricant (Dougherty, 1992). Such barriers are thought to explain the poor performance
of some new products. We suggest that Dougherty’s theoretical account of interpretative barriers can
also be used to understand the varying success rates of ENPD. Bringing in agents who are concerned
with environmental issues is likely to make interpersonal communication more difficult. The resulting
differences in interpretation may explain the relatively modest performance of ‘green’ products. Lenox
and Ehrenfeld (1997) argue that merely improving communication channels is not enough if one wants
to build capabilities for creating environmental products. It is only when one manages to bridge exist-
ing knowledge resources with interpretative structures through effective communication that one is able
to create genuinely new environmental products. Another reason why communication between envi-
ronmentally conscious agents and product development teams can often be problematic is because it is
just not clear what is meant by green or environmental products.

4
How people think and act about innovation.



Management Support for ENPD Projects
Firms engage in NPD to create value. For most firms NPD is crucial if they are to survive in a highly
competitive marketplace. Because product innovation is so vital to most companies, it is often company
management that controls NPD budgets and chooses which projects are selected. Such management
involvement has been found to increase NPD success (Brown and Eisenhardt, 1995). Projects with more
radical characteristics require more resources, will need more time before they can be marketed and are
more likely to be terminated (Green and Welsh, 2003). However, top management may continue to
support a radical and ambitious project even when it appears to be a failure. Building on escalation
theory, Schmidt and Calantone (1998) explain why managers are reluctant to shut down failing radical
projects despite information indicating that success is unlikely. Green and Welsh (2003) have proposed
a model that explains what factors influence the decision whether or not to terminate a NPD project.
They suggest that NPD projects are evaluated on the basis of performance indicators that affect the
go/no-go decisions. If a project is seen as less likely to achieve performance goals, management support
is likely to diminish (Green and Welsh, 2003). However, management support is not only dependent
on performance evaluations. Escalation of commitment (Schmidt and Calantone, 1998) and psycho-
logical rewards (Gimeno et al., 1997) can reduce performance thresholds (Green and Welsh, 2003) and
result in continued management support.
In situations where there are similar performance indicators environmental concerns may
influence the go/no-go decision in different ways. Firstly, a radical project with a high potential
environmental gain may be supported enthusiastically by management and co-workers who care about
environmental issues, as a result of which the threshold of the product or project performance
indicators may be lowered. This would result in a higher level of management support, regardless
of how well the project actually performs. Similarly, radical and environmentally driven projects
may also be supported by management because of regulatory or social pressure and prestige or corpo-
rate image-related considerations. As a result, management may support an environmentally driven
project that is doomed to fail. This is in line with Abrahamson’s model that explains engagement in
innovation on the basis of isomorphic forces, especially when there is a high level of uncertainty con-
cerning the value of the innovation (Abrahamson, 1991). Engagement in ENPD may represent such
innovation.
On the other hand, a project with a high level of environmental concern may receive limited man-
agement support when catering to environmental concerns is perceived to be too alien to the company.
Perhaps even when there is project team support, management may be reluctant to undertake a project.
This reluctance may then take the form of an escalated performance threshold. As a result, manage-
ment support may dwindle irrespective of how well a project is actually doing.

Discussion and Implications

In ‘organization and natural environment’ and ENPD literature, most studies focus on the integration
of environmental issues into the organizational practices and on understanding why and how firms can
meet the challenges involved in sustainable development. At the micro level, where one of the main
activities of firms is to design and develop products and services, the challenging task has been incor-
porating environmental issues into product development, aligning the natural environment with regu-
lations and market demand. Conceptual and empirical studies have achieved encouraging results and
ENPD has become a widespread practice within an increasing number of firms. Nevertheless, many
people still find it hard to understand how acknowledging environmental issues may increase the per-



formance of new products. To understand the implications of environmental concerns in product devel-
opment we propose to align and combine ENPD and NPD literature.
In product development literature, researchers have found many factors that lead to a superior market
performance of new products. Three factors seem to be of particular importance to the success of
ENPD: design specification, project coordination and management support. Using these factors we have
explained what the implications of incorporating environmental concerns for NPD and market success
of new products are. Introducing environmental issues into NPD requires a tradeoff of traditional
product evaluation attributes against environmental ones. However, there is a risk of choosing an envi-
ronmental attribute that may conflict with market requirements. We argue that it is only by focusing on
market needs that the tradeoff between these two types of attribute may lead to superior performance
of green products. In the case of radical ENPD projects, product specifications are likely to be indeter-
minate. These specifications have to be considered most carefully if one wants to avoid trying to cater
to the needs of a non-existent market. Different viewpoints within a NPD team may severely hamper
communication, with disastrous effects on the NPD process (Brown and Eisenhardt, 1995; Dougherty,
1992). In line with Lenox and Ehrenfeld (1997), we suggest that involving people in the project team
who advocate environmentally friendly products renders inter-project communication more complex,
which could affect the outcome of a project. According to Hart and Milstein (2003), the complexities
introduced by environmental issues and the way they are integrated into a product may be seen as a
nuisance rather than an opportunity.
Management support is crucial to NPD processes (Brown and Eisenhardt, 1995). When the level of
uncertainty in NPD is low, performance evaluation is likely to have an impact on the continuation of
management support. When the level of uncertainty is high and the project is perceived as innovative,
escalation of commitment and psychological rewards may result in continued management backing even
when a project appears to be heading for failure (Green and Welsh, 2003). We suggest that incorporat-
ing environmental issues into NPD increases the level of uncertainty of a project because of the
intrinsic complexity of the concept of greening (Chen, 2001) and because of the assumption that the
environmental challenge may be better addressed in a more radical manner (e.g. Hart and Milstein,
2003). Therefore, the environmental imperative may directly influence the support for radical and envi-
ronmentally conscious projects, lowering the performance judgment threshold. This means that some
projects have been continued despite their poor performance, which may explain the poor performance
of some green products.
Incorporating environmental issues into NPD has a number of important implications. Stronger
integration with NPD literature will help us appreciate the risks and uncertainties involved in trying to
introduce environmental concerns in product development. To advance ENPD theory and practice,
explanatory studies seem, at least for the foreseeable future, to be as much needed as normative and
prescriptive treaties on ENPD. Furthermore, rather than trying to design new ENPD tools, it may be
worthwhile to turn to existing NPD literature to see how environmental concerns, as a subset of market
preferences, can be translated into product specifications. Integrating ENPD literature with regular NPD
literature would strengthen the legitimacy of the field because it would allow researchers to build on a
wealth of valuable insights. In addition, the way companies respond to the call to incorporate environ-
mental concerns into product development may give NPD scholars an interesting research agenda. In
particular, radical ENPD projects may allow researchers to study the way NPD teams in general balance
paradoxical ambitions and demands.
Practitioners would benefit from a better alignment of the NPD literature with ENPD literature. ENPD
tools are often rejected as they fail to consider the complexity of the greening concept and of the NPD
context in which they are to be embedded (Lenox and Ehrenfeld, 1997). If an organization is to develop
products that address environmental concerns, its management needs a better understanding of both



the development process and the environmental concerns that render NPD into ENPD. We do hope that
our model is a step in the right direction when it comes to bringing environmental issues and com-
mercial NPD closer together.

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Biography
Luca Berchicci is a Ph.D. researcher at Delft University of Technology in the department of Design for
Sustainability program (DfS). His Ph.D. research focuses on the role of environmental issues in new
product development. His general research interest is in the area of product innovation processes and
sustainability within existing and new organizations.
Wynand Bodewes is an Assistant Professor in Entrepreneurship at RSM Erasmus University where
he co-directs eShip, the Erasmus Centre for Entrepreneurship and New Business Venturing. His
research focuses on the role of organization structure in the growth of entrepreneurial firms. RSM
Erasmus University offers a unique one-year MScBA in Entrepreneurship. In this program Wynand
teaches business development, venture planning, and entrepreneurial start-up and growth.


Berchicci, L., & Bodewes, W. 2005. Bridging environmental issues with new product development. Business Strategy and the Environment, 14(5): 272.

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