Abstract

Changes in regulation trigger changes in the innovation environments. They may block specific development trajectories, but they may simultaneously inspire and stimulate completely new openings. In this study, we look into regulation that aims to address environmental problems and facilitate creation and diffusion of sustainable technologies and processes as we examine the responses of innovators to the regulation on plastic use and production—specifically, the so-called SUP-directive. A multiple-case study comprising six companies suggests that companies manage (with) the regulation-induced innovation and needs for change by adopting three distinctive strategies: (1) proactive change orientation, (2) reactive opportunity capturing, or (3) reactive survival mode. Acknowledging that sustainability-oriented regulation may push companies with environmentally friendly innovation activities and solutions towards reactive survival mode highlights the need for managerial agility in adjusting the solutions and the ability to adopt parallel innovation strategies. Observing the strategies adopted by innovators also is informative when evaluating whether the regulation meets its profound goals and intended effects.