Adverse consequences from negative impacts on the environment have become a major global concern as a result of industrial development and evolution. In Vietnam, human-caused activities including the emission and discharge of untreated waste from industrial parks, mines, and traditional craft villages cause heavy environmental pollution (Chu 2018). In addition, traffic, agriculture, and deforestation also contribute to pollution in urban, rural, and forested areas. These issues have ramifications not only for the environment’s sustainability but also endanger human health (Raza et al. 2022). Therefore, environmental degradation is always a difficult topic and attracts people’s attention (Choi 2020; Oh and Park 2020; Nguyen et al. 2021). As environmental issues are being clearly perceived by the public, green products are also gaining attention and acceptance (Chen 2010). According to Chen and Chang (2012), many consumers pay more attention to green products. Many companies are willing to develop more green products (Chen 2011) since it can help companies and economies thrive in the international market, bring value and drive towards sustainable development of the environment. Moreover, the creation of green products is very important for businesses to respond appropriately to the environmental crisis (Albino et al. 2009), which is also the social responsibility of businesses. Consumers are smart enough to recognize and resist companies whose actions destroy their environment.

Researchers will develop a research framework that can help companies improve their green product development performance through five related determinants: green creativity, green dynamic capabilities, green transformational leadership, reactive green innovation, and proactive green innovation. Success in green product development depends on creating products with core attributes that can satisfy the needs of customers and other internal and external stakeholders. Product development firms will contribute little to the sustainability mission unless they can provide consumers with a realistic “green” product option (Pujari et al. 2003). Green product development also plays an important role in determining the sales of green products of a business and this development process not only changes the company management model but also reshapes the global market principles for business (Lymperopoulos et al. 2012). Furthermore, since the goal of sustainability is eliminating hunger, reducing poverty, and improving people’s spiritual and material lives, this will be difficult if the country does not generate income that contributes to the economy (Costa et al. 2021). It is an obvious fact that the majority of consumers of green products are the driving force for enterprises to research and develop green products. In addition, this study was conducted in Vietnam, where the economy is in a developing stage, with the aim of providing clear directions for countries in the development stage toward economic integration, society, the environment and fulfilling social responsibilities. Business sustainability can be defined as attaining environmental goals while maintaining long-term company growth. Innovative practices in business operation and development are essential for economic sustainability. New improvements in the production process and efficient development of green products will bring a number of benefits, including promoting the nation’s ecosystem (Costa et al. 2021). According to the results of previous studies, businesses in the next stage of sustainable management should focus on green transformation, minimize harmful emissions to the environment and human health, and actively find measures for green space development and sustainability (Hoffman 2018). Therefore, according to the experimental results, this study tries to fill the gaps of previous studies by analyzing and identifying the factors green creativity, green dynamic capabilities, green transformational leadership, reactive green innovation, and proactive green innovation. All hypotheses are accepted and they all have a positive impact on the performance of green product development, providing strategies that companies need to improve, the most powerful of which is green transformation leadership. Furthermore, this study is a useful document for Vietnamese firms that want to elevate the value of green products to an international level in order to make tangible contributions to the global community, decrease negative impacts from exploitation and manufacturing activities, and supply the current and future demand for green products.

‘Green Creativity’ is defined as the development of new ideas with new useful characteristics for green products, services and practices (Song and Yu 2018). Organizational creativity is accomplished by the creation of an idea, product, or service of useful value by individuals working together within an organizational system (Woodman et al. 1993). To improve the development efficiency of enterprises, promoting solutions to develop organizational creativity is the main way to bring about innovation (Halbesleben et al. 2003). Organizations that accumulate innovative ideas can develop better and superior product performance (Hunt and Morgan 1995). The success of new product development will be significantly influenced by innovative ideas (Cooper 1979). The creativity of the team can create the conditions for the development of new products with new characteristics since usefulness is decisive for the success of the new product (Chang et al. 2010). Previous literature suggested that group creativity can be defined as the creativity developed by group members (Pirola-Merlo and Mann 2004). From the customer’s point of view, an innovative idea is considered by its originality and measured by how useful it is to the customer (Ford 1996). In addition, consumer needs can be effectively met by the unique, outstanding innovation of the product development and improvement team (Cooper 1979; Deshpande’ et al. 1993). For organizations and enterprises, group creativity is considered the main factor of innovation (Yoon et al. 2010). Therefore, research carried out by (Cooper 1979; Smith and Reinertsen 1992; Amabile et al. 1996; Griffin 1997) has shown that product development performance is positively influenced by creativity in product development teams.

Dynamic capability is defined as the process of using an organization’s resources, focusing on the process of setting up or rearranging internal and external processes and resources to accommodate changes in the organization environment (Teece et al. 1997). In addition, green dynamic capability is shown to be the ability of organizations and companies to integrate resources for the purpose of achieving sustainability and improving the green environment in their business activities (Rodrigo-Alarcón et al. 2018). According to Wohlgemuth and Wenzel (2016), in a competitive, complex and unstable business environment, dynamic capability will be a useful solution in improving the company’s competitiveness. To develop green product performance, businesses need to apply their dynamic capabilities through combining existing knowledge elements and acquiring new knowledge (Andriopoulos 2001). An organization with stronger dynamic capabilities will be able to improve and develop better product performance (Arora 2002). Therefore, dynamic capabilities have a significant positive effect on product development performance (Hsu and Fang 2009). Innovation requires finding new sources of information different from the existing knowledge base in order to innovate, supplement and grow it, so organizations that embrace innovation will have to deal with a high degree of uncertainty, where dynamic capabilities are an important driver of innovation (March 1991; Lee and Kelley 2008). Organizational product development teams can rapidly develop new products that match and meet customer needs by applying dynamic capabilities to integrate resources and easily align operations development (Pavlou and El Sawy 2011). Thus, firms’ competitive advantages can affect innovation performance through dynamic capabilities (Galunic and Eisenhardt 2001). Therefore, dynamic capability will positively affect new product development performance (Clark and Fujimoto 1991; Iansiti and Clark 1994).

Transformational leadership is a multidimensional concept that has meanings in terms of goals, culture, vision, structure, personal support, and performance expectations (Luyten and Bazo 2019). Previous literature has also widely demonstrated that transformational leadership has a direct influence on creating an innovative climate in the organization to create incentives for members to improve the operational efficiency of the business (Boehm et al. 2015; Pasha et al. 2017; Thomas 2017; Sethibe 2018). Robertson (2018) defined green transformational leadership as the behavior of leaders who motivate employees to achieve corporate environmental goals and inspire to exceed environmental performance expectations. Additionally, the meaning of green transformational leadership is to provide clarity, motivation to employees, and support for employees’ development needs towards their environmental goals for the organization (Mittal and Dhar 2016; Chen and Chang 2013). Studies have determined that the performance of companies is due to the interaction between leaders and their employees (Caplan 1987). Green transformational leadership motivates employees to acquire new knowledge (Le and Lei 2018; Han et al. 2016) and engages them interactively in activities related to green processes, product innovation, or introducing green products or services into the market (Andriopoulos and Lewis 2010). In addition, Bass (1985) suggested that transformational leaders should include four aspects: intellectual stimulation, individualized consideration, charisma, and inspirational motivation. Intellectual stimulation helps employees build cognitive processes appropriate to the creativity of problem formulation, information seeking, solution creation, and problem solving (Reiter-Palmon and Illies 2004). Research (Gong et al. 2009) suggests that transformational leaders can foster collective creativity through identifying individuals’ needs, and providing coaching and mentoring. For charismatic transformational leaders, they create a clear vision for the team, energize, and drive creative generation (Avolio et al. 1999). Finally, transformational leaders with a high level of motivation inspire their followers to think creatively by encouraging them to voice their ideas (Gong et al. 2009). Therefore, green transformational leadership can enhance new product development performance by setting expectations, stating a vision for high performance, motivating and inspiring team members with clear goals and supporting individuals in green product development activities (Podsakoff et al. 1990; Sarros et al. 2008).

For the organization’s green product development activities, this is considered an important way for the company to connect with the market. Enterprises should spend money on development and product improvement strategies in order to stay ahead of their competitors in the business market (Ayag 2005). In addition, for green product development strategies, creating a product that can be produced at the lowest cost or innovating the product to make the product differentiated to meet the needs of consumer consumption are all methods that help businesses gain a significant competitive advantage (Orsato 2006). An organization or enterprise will face many disadvantages in competition and future business risks if it cannot effectively control the product development department (Fitzsimmons et al. 1991). From the above discussion, it can be considered in the field of environmental protection, to implement enterprise-wide environmental management in a proactive manner. Competitors will adjust and innovate so as not to be negatively affected by the adverse competitive environment.

For businesses, product development is a potential way, it supports the image of businesses that are firmly established in the market and to create a competitive advantage compared to other competitors in a continuously changing market (Brown and Eisenhardt 1995). According to Benn et al. (2014), product development is the main source of competitive advantage of enterprises in the context of market diversity, so businesses must emphasize their brands in designing an outstanding organizational image in the market. Customer needs are met by seizing market opportunities in product development (Stark 2015). Enterprises develop green products to innovate and redesign products with the aim of minimizing environmental pollution problems, contributing to jointly dealing with environmental issues (Chen 2001). Besides, research (Cronin et al. 2011) has demonstrated that the development of environmentally friendly products and services is necessary. This is considered the key to helping businesses succeed in fulfilling the growing demand of customers for environmental protection products. Meanwhile, companies are striving to meet the needs of customers regarding the development of environmentally friendly products and services. 

Chen and Chang (2013) gave the first definition of green product development performance as the ability to create products with a less negative impact on the environment and less harm to human health. It is part or whole made by using recycled materials, and produced in a more energy-efficient manner and supplied with less packaging to the market. Companies are still trying to figure out how to profit from green products, despite the fact that green development is becoming more common (Gabler et al. 2015). Furthermore, Chen et al. (2016) argue that creating green products with efficiency, as a new kind of business strategy, requires breaking the original production method. Research results from Chang (2016) show that corporate environmental commitment has a direct and indirect positive impact on green product innovation performance through green adaptability. Managers must recognize that providing green product development performance is critical to long-term sustainability and can provide a competitive advantage and strengthen an organization’s ability to grow sustainably.

The conceptual framework of this study is depicted in Figure 1.