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What colours them green? An enquiry into the drivers of corporate environmentalism in business organizations in developing and developed countries

Sandhu, Sukhbir K.
Date
2008
Type
Thesis
Fields of Research
Abstract
Drawing on perspectives from stakeholder, resource dependence, institutional and the resource based theories and using a multiple-case inductive study, this research reframes the drivers of corporate environmentalism in the context of developing and developed countries. Based on case analysis of 23 environmentally responsive organizations in India and New Zealand, corporate environmentalism in this research has been operationalized as a two level construct. Organizations were categorized as being at first order responsiveness when they were observed to recognize the importance of the natural environment and exhibited attempts to decrease their impact on the natural environment through the adoption of programmes aimed at pollution reduction and prevention, decreased resource consumption and recycling of wastes. Organizations at second order responsiveness were observed to exhibit a higher order commitment in integrating environmental issues into their strategic decision making. This involved strategies such as green product development and initiating projects aimed at industrial ecology. Detailed within and cross case analysis revealed fundamental differences in the drivers that propel business organizations in developing and developed countries to be environmentally responsive at each level. The findings of this study reveal that lax enforcement of environmental regulations in developing countries implied that domestic regulations were not a driving factor for corporate environmentalism. Neither was pressure from consumers or communities reported to be a driving factor. Instead first order environmental responsiveness in organizations in developing countries was observed to be driven by pressure arising out of internationalization. Thus pressure from multinational organizational customers in developed countries and the institutional pressures imposed by the liability of foreignness (that arises when these firms set up subsidiaries in developed countries) drives first order responsiveness in the organizations in developing countries. However higher order environmental responsiveness in organizations in developing countries was observed to be associated with deep rooted identities and capabilities based in social responsiveness. In the context of business organizations in developed countries, the necessity to comply with stringently enforced domestic environmental regulations emerged as the primary driver for first order responsiveness. Societal expectations to comply with environmental regulations reinforce the regulatory drivers. Internationalization drives first order responsiveness in organizations in developed countries to the extent that the requirements of the host country are additional to and exceed current regulatory requirements in the parent country. Higher order corporate environmentalism in organizations in developed countries was observed to be associated with environmentally high impact organizations. Such organizations are considered environmental liabilities and are forced by stakeholders (with access to resource needed for continuity of operations) to exhibit higher order responsiveness or face a cancellation of the license to operate. The major contribution of this research lies in extending and reframing the existing theory about the drivers of corporate environmentalism.
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