Corporate Environmental Management: Individual‐Level Drivers and the Moderating Role of Charismatic Leadership

Abstract

Drawing upon norm‐activation and social cognitive theories, we examine whether the personal norms and self‐efficacy of top managers affect their decisions to engage in environmental management initiatives (EMI). We also investigate whether this relationship is moderated by CEO charisma. Empirical evidence from a sample of 125 companies indicates that significant variation in EMI is explained by the two activators of personal norms – namely, awareness of consequences and ascription of responsibility – as well as self‐efficacy with respect to environmental decisions. Furthermore, the effects of managers' personal norms on EMI engagement are more intense when charismatic leadership is present. The results offer insights into the microfoundations of proactive environmental management and their interplay with charismatic leadership. Managerial implications for firms seeking to advance their environmental conduct are discussed.

The influence of feedback and awareness of consequences on the development of corporate sustainability action over time

“…In good agreement with Doluca, Holzner, and Wagner (2018), our findings reveal a positive development of corporate sustainability Our results thus support earlier findings by Zhang et al (2013) and Papagiannakis and Lioukas (2017), who found for the context of employees within corporations that actions concerning an issue lead to higher levels of awareness about this issue and sensitise for the sustainability-related consequences of the corporations' actions. Our analysis furthermore reveals that the positive effect of corporate action on awareness for sustainability-related consequences is positively moderated by feedback.…”

“…For the context of this paper, this implies that corporations become aware of the importance of the environment and social issues for them through engaging in corporate sustainability and consequently further improve their sustainability‐related actions. This finding lends support to Papagiannakis and Lioukas (), who also reported a positive influence of awareness of consequences of managers in Greek manufacturing companies on their engagement in corporate sustainability actions. The results are also in line with the findings by Qian and Schaltegger (), who found that improving disclosure on carbon information leads to improved carbon performance in subsequent periods of time.…”

“…As ness of the organisation is a common procedure, also applied by Papagiannakis and Lioukas (2017). For the eight functional units displayed in Table A1, the average score was calculated and standardised.…”

“…On the basis of Schwartz's (1968) norm activation model, De Groot and Steg (2009) and Zhang, Wang, and Zhou (2013) highlight the importance of the awareness of consequences as they find that actors develop positive norms, that is, feelings of moral obligation, towards a certain action in case they become aware of the consequences this action implies. With regard to corporate sustainability, past literature has indicated a positive influence of awareness of consequences of top managers on the organisations' sustainability engagement (Papagiannakis & Lioukas, 2017).…”

“…Extant literature suggests that corporate actions concerning an issue lead to higher levels of corporate awareness of the consequences concerning this issue (Papagiannakis & Lioukas, 2017; Zhang et al, 2013). In the context of corporate sustainability, Papagiannakis and Lioukas (2012) stress that the awareness of consequences of individuals within an organisation is important in regulating future action.…”