Competitive Strategy and the Environment: A Field of Inquiry Emerges

Russo, Michael V.; Minto, Amy

doi:10.1093/oxfordhb/9780199584451.003.0002

Cited by 20 publications

(20 citation statements)

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“…After almost 40 years of empirical research (Günther et al ., ), the results show a positive but weak relationship between corporate environmental and financial performance (Russo and Minto, ). However, the presence of conflicting results ‘suggest a move away from asking does it pay to be green to the more nuanced question when and how does it pay to be green?’ (Russo and Minto, , p. 37). Thus, the question of interest is not if companies can gain competitive advantages through environmental management.…”

Section: Introductionmentioning

confidence: 95%

“…Does it pay to be green? This question is ‘one of the dominant research questions about organizations and the natural environment […] [which] […] has generated a wealth of theoretical discussion and empirical analysis’ (Russo and Minto, , p. 36). The rationale behind such investigations is the assumption that companies engaging in ecological issues can benefit financially from efficiency improvements, new green markets, improved community relations, and better reputation (Shrivastava, ).…”

Section: Introductionmentioning

confidence: 99%

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Corporate Carbon and Financial Performance: The Role of Emission Reductions

2017

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This article uses econometric techniques to examine the effect of corporate carbon performance on corporate financial performance. I extend the existing literature in this research field by differentiating between two measurement perspectives: carbon performance expressed as annually reported carbon dioxide (CO2) emission equivalents and improvements in carbon performance over time. Thereby, the article re‐addresses the research question ‘when and how does it pay to be green?’ in the context of carbon emissions and climate change mitigation. Using a nonlinear modeling technique, the findings indicate that it pays to be green for companies with superior carbon performance but not for companies with inferior carbon performance. The results also show that carbon emission mitigation is linearly and significantly positive related to return on sales (ROS) but negatively related to Tobin's q. These contradictory findings help us to understand why – in spite of growing regulatory pressure – companies have been slow to respond with effective action to tackle climate change beyond marginal efficiency improvements that correspond to ‘low‐hanging fruits’. The empirical analysis is based on an unbalanced sample of 7625 firm‐year observations covering carbon emission data (Scope 1 and Scope 2) for 1640 international firms from 2003 to 2015. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

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Section: Introductionmentioning

confidence: 95%

Section: Introductionmentioning

confidence: 99%

Corporate Carbon and Financial Performance: The Role of Emission Reductions

2017

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“…First, our study contributes to the literature on competitive strategy and the environment by highlighting the importance of considering strategy implementation [7,[28][29][30]. The primary theoretical driving force for the field of competitive strategy and the environment has been the natural resource-based view of the firm.…”

Section: Contributions and Practical Implicationsmentioning

confidence: 96%

“…This line of work, however, has been criticized for its over-emphasis on strategy formulation, thereby calling for research on strategy implementation. As Russo and Minto highlight, "To understand more fully how competitive strategy unfolds within organizations, we need to flesh out issues of strategy implementation" [7] (p. 35). Our results suggest that a firm's environmental strategy, through sustainable innovation, cannot naturally lead to competitive advantages, if it fails to recognize the changing importance of external dependence over the implementation process of environmental innovation.…”

Section: Contributions and Practical Implicationsmentioning

confidence: 99%

“…For instance, as consumers and other interested audiences increasingly consider environmental characteristics and performance, such as carbon offsets and energy efficiency, to be significant purchasing criteria, manufacturers with strong environmental innovation capabilities can gain sustainable competitive advantages by providing their products and services through new technologies that enable energy and pollution reduction [4]. The strategic significance of environmental innovation is also logically consistent with the natural resource-based view (NRBV), which suggests that firms can explore and exploit new business opportunities by applying environmental innovation to their products and services as a critical means to create and maintain sustainable competitive advantages [5][6][7]. Rooted in the resource-based view of the firm [8][9][10], Hart proposes a natural resource-based view that identifies primary characteristics of strategically important resources, such as tacitness, social complexity, and rarity-key factors that can contribute to pollution prevention, product stewardship, and sustainable development [5].…”

Section: Introductionmentioning

confidence: 97%

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Too Much Is as Bad as Too Little? Sources of the Intention-Achievement Gap in Sustainable Innovation

Yang

Park

2016

Sustainability

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Prior work on innovation has generally emphasized the importance of an organization's exposure to external knowledge. This study, in contrast, redirects our attention toward conditions under which such exposure serves as constraints on organizational endeavors to achieve environmentally preferable innovation. We develop a two-stage model for sustainable innovation. A firm in the first stage explores a variety of alternatives and develops strategic intentions to address broader environmental concerns; thus, it may benefit from access to both diverse sources of external knowledge and network ties that enable an extensive search for new information. In the second stage, a firm exploits limited available options to achieve its strategic intentions. We suggest that dependence on external knowledge in the first stage makes the transition toward the second stage challenging, thereby reducing the probability that a firm's strategic intentions for sustainability result in actual innovation outcomes. We test our theory using the 2014 Korean Innovation Survey. Our results show that diverse sources of external knowledge through rich network ties, albeit the positive main effects on innovation outcomes, negatively moderate the relationship between a firm's intentions for environmental sustainability and its achievement of sustainable innovation. Several theoretical and practical implications are discussed.

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Identifying Worldviews on Corporate Sustainability: A Content Analysis of Corporate Sustainability Reports

2017

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Companies commonly issue sustainability or corporate social responsibility (CSR) reports. This study seeks to understand worldviews of corporate sustainability, or the corporate message conveyed regarding what sustainability or CSR is and how to enact it. Content analysis of corporate sustainability reports is used to position each company report within stages of corporate sustainability. Results reveal that there are multiple coexisting worldviews of corporate sustainability, but the most dominant worldview is focused on the business case for sustainability, a position anchored in the weak sustainability paradigm. We contend that the business case and weak sustainability advanced in corporate sustainability reports and by the Global Reporting Initiative are poor representations of sustainability. Ecological embeddedness, or a locally responsive strategy that is sensitive to local ecosystems, may hold the key to improved ecological sensemaking, which in turn could lead to more mature levels of corporate sustainability worldviews that support strong sustainability and are rooted in environmental science. This must be supported by government regulation.

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Competitive Strategy and the Environment: A Field of Inquiry Emerges

Cited by 20 publications

References 0 publications

Corporate Carbon and Financial Performance: The Role of Emission Reductions

Corporate Carbon and Financial Performance: The Role of Emission Reductions

Too Much Is as Bad as Too Little? Sources of the Intention-Achievement Gap in Sustainable Innovation

Identifying Worldviews on Corporate Sustainability: A Content Analysis of Corporate Sustainability Reports

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