Natural Environmental Strategies by Corporations

Abstract

Corporate environmentalism refers to the recognition by a corporation of the importance of environmental issues and how it integrates those issues into its strategy. A developing country provides a very different context with regard to environmental issues. The researcher has proposed an extended corporate environmentalism model and tested this model in a developing country, Pakistan. Six theories including Stakeholder Theory, Institutional approach, Strategic Fit, Slack Resource Theory, Agency Theory and Resource Based View were analyzed for development of extended corporate environmentalism model. The drivers of corporate environmental strategies were separated in internal and external factors. Internal drivers include issue legitimation, discretionary slack, employee concern, BOD concern and international experience while external drivers include regulatory forces, customer concern, competitive advantage, competitor concern, activists pressures and media concern. Top management commitment was taken as antecedent as well as mediator in the proposed model. Impact of industry type and corporation size on the proposed model was also analyzed. Data were collected through a questionnaires survey from 356 managers from organizations in a variety of industries from major cities of Pakistan. Structural Equation Modeling (SEM) technique was applied for model fit measures while Preacher and Hayes (2004) macro (syntax for SPSS) was used for mediation analysis. This study makes a contribution by identifying institutional pressures in the form of regulatory forces (coercive forces), issue legitimation (normative forces), competitive advantage and competitors (mimic forces) as important drivers for Pakistani organizations. Conversely, customer, media and activists are less effective drivers for corporate environmental strategies.