The Effect of New Green Product Development on the Economic Performance of Organizations: A System Dynamics Approach

Nowadays, organizations are active in complex circumstances which make it inevitable for them to be constantly innovative and do research to develop new products. Therefore, regarding environmental changes and the increasing awareness of nature researchers have developed products that reflect the necessity of saving the environment. Also, in many countries such as Iran, due to the necessity of meeting customers’ needs quickly, more complexity in designing products and speedy changes in technology, it is vital to select a complex for developing a new product in order to fulfill a company’s long-term success. Thus, the most important components affecting the development of new green products in small and medium industries were identified, simulated and predicted according to the present situation in this study. Later in the research, the effects of these factors on each other were studied. Using a flow model, it was shown that, if the percentage of the returned natural goods decreases, it will result in an increase in the company’s revenue and an increase in the level of green projects. Also an increase in the required staff and facilities for green projects increases the company’s ability to recycle and regenerate, more projects will be conducted over time, and, finally, it will result in developing green products. This will, consequently, increase the revenue of expansion of green projects. It can be, thus, concluded that developing projects for producing green goods in an organization ultimately leads to improved financial performance of companies and their revenues.