An international comparison of environmental management in operations: the impact of manufacturing flexibility in the U.S. and Germany

Abstract

Pressures to improve environmental management in the U.S. and Germany are among the strongest in the world, demanding quick responsiveness from managers of manufacturing firms. However, even in these countries, the managerial implications of environmental regulation can vary dramatically. Our synthesis of related literatures indicates that manufacturing flexibility, by enabling efficient adaptation to change and uncertainty, can support environmental management. This paper empirically explores the linkage between flexibility and environmental management in the U.S. and Germany. Environmental management was operationalized along two dimensions: level of environmental ambition, defined as scope of environmental efforts; and level of regulatory‐driven motivation. Survey data were collected from a sample of 218 U.S. and German manufacturing sites. Neither the probability of having a dedicated environmental department nor of having an environmental policy statement differed between countries; however, the impact of flexibility on the level of ambition was found to vary significantly between countries. One potential explanation is that command‐and‐control regulation of the manufacturing process is heavily emphasized in the U.S., while closed loop (recycling) regulation of final product disposition is predominant in Germany. Thus, manufacturing firms need to evaluate general regulatory differences between countries before using manufacturing flexibility to support environmental management. Future research needs to explore whether other operational capabilities, such as quality, also support environmental management across international contexts.

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