The implementation of eco-innovation in Proton Holdings Berhad

Abstract

Innovation is a crucial instrument for a company to create competitive advantage that lead to the success of the company. However, at the same time, the company also try to reduce the environment pollution resulted from their rigorous manufacturing activities through eco-innovation. This research will explore the implementation of eco-innovation in Proton Holdings Berhad, the only Malaysia’s local automotive company, and the driven factors that lead toward the eco-innovation implementation within the company. From previous studies, it is found that ecoinnovation can be implemented in product innovation and organizational innovation which are driven by factors of public awareness, competition and government regulations and incentives. 5 employees from managerial and executive level from the company have been interviewed through face to face and email to acquire the primary data. From the data analysis, it is found that Proton mostly implements eco-innovation through integrated eco-innovation in product innovation to improve its vehicles’ powertrain and design optimization and applying alternative materials to build its vehicles. The company is also implements alternative product eco-innovations by developing alternative vehicles, but only until prototype level. Add-on eco-innovation is less prioritized by Proton in innovating its offerings. In organizational innovation, Proton implements eco-innovation through green procurement and waste management. The eco-innovation efforts implemented by Proton are mostly driven by the regulations and incentives enforced and provided by the governments, meanwhile competition and public do not consider as driven factors for Proton to implement ecoinnovation. This study can contribute to the current literature regarding the ecoinnovation practice and its driven factors in Malaysia’s automotive industry which can be beneficial in developing efficient and productive business strategies and developing environmental policies.