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«PROACTIVE ENVIRONMENTAL STRATEGIES IN SMALL BUSINESSES: RESOURCES, INSTITUTIONS AND DYNAMIC CAPABILITIES Jan Lepoutre Promotor: Prof. Dr. Aimé Heene ...»

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“The resource-based theory: dissemination and main trends”. This exclusion process yielded a total of 170 usable papers.

I am aware that the combined approach of key words and key paper citations may not entirely correct for variant classifications or nomenclature usage. For example, influential articles that were published before or around the same time as the three key articles would not be captured in this process. To correct for this bias, the fifth phase consisted of an additional check using a database of papers that was collected during the time of my PhD project and by checking the references used by the articles read. Together, this process yielded a total of 202 papers that were used in the review process.

3.3. Descriptive review of the literature Given the extensive discussion on the evolution and publication outlet characteristics of the PES research in Bansal and Gao (2006), I will only describe three observations that drew my attention while reading the sampled papers.

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Although the number of papers that are published on PES seems to stabilize in recent years, Figure 3.2 shows a dramatic increase in publications in the 1990’s. The pattern is similar to the review as presented by Bansal and Gao (2006) and shows a stable publication rate, with a number of peaks in 1995, 1998 and 2000 that reflects the publication of special issues on PES in the Academy of Management Review in 2005 and in the Academy of Management Journal

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in 2000. No definite explanations can be found for the peak in 1998, although Bansal and Gao (2006) suggest that this surge may be the effect of a sudden increased attention in PES in general, in response to the 1995 AMR Special Issue, or because of a larger supply of recently graduated doctoral students that publish their doctoral research. Although Bansal and Gao (2006) concluded that the publishing rate was stable over the period 1995 – 2005 when correcting for the special issue peaks, the 3-year average trend line in Figure 3.2 nevertheless shows that the number of publications has grown from almost nothing in the beginning of the 1990’s to about 18 papers per year today.

Observation 2: “Proactive environmental strategies” cover a broad spectrum of operationalizations, confusing the comparability of findings.

As argued in the introduction and the methods section, many denominations have been used to refer to the equivalents of “proactive environmental strategies”. In addition to the key words that we used in our search, we found such alternatives as “ecologically sustainable organizations”, “corporate environmentalism”, “pollution prevention strategies”, “enviropreneurial marketing” and many more. In addition to this semantic variety, however, the “environmental strategies” have been operationalized and measured in multiple ways as well. In order to assess the way PES were manifested in the literature, I first coded all papers on their conceptual or empirical contribution, yielding 66 conceptual (33%) and 136 (67%) empirical papers. I then focused only on the empirical papers and coded whether PES were used as a dependent variable or independent variable (112 papers), and indicated how the PES was manifested. Table 3.2 provides an overview of the uses of each PES proxy. Whereas some studies measure PES by the strategic intentions and attitudes towards the natural environment (Rojsek, 2001; Goldstein, 2002), others have used more actions-based proxies (Gilley, Worrell, Davidson, & El-Jelly, 2000; Aragon-Correa, Matias-Reche, & SeniseBarrio, 2004; Sharma & Henriques, 2005; Pujari, 2006), environmental management systems (Curkovic, Melnyk, Handfield, & Calantone, 2000; Jiang & Bansal, 2003; Potoski & Prakash, 2005; McKeiver & Gadenne, 2005), awards and/or events (Klassen & McLaughlin, 1996;

Banerjee, 2001), membership of programs (such as Responsible Care in the chemical industry or the CST scheme in Costa Rica) (King & Lenox, 2000; Rivera & De Leon, 2005; Lenox, 2006), and still others have used a combination of practices and (perceived) environmental results (Sharma & Vredenburg, 1998; Sharma, 2000; Zhu & Sarkis, 2004; Bansal, 2005).

Such a plethora of meanings of PES has led some authors to differentiate between “environmental orientation” and “environmental strategy” (Banerjee, 2001; Banerjee, Iyer, &

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Kashyap, 2003). Whereas environmental orientation is “the recognition by managers of the importance of environmental issues facing their firms”, environmental strategy reflected “the extent to which environmental issues are integrated with a firm’s strategic plans” (Banerjee et al., 2003: 106). Other authors conclude that “there are different types of proactive initiatives and practices, and that they might not always be reduced to a single dimension” (Gonzalez-Benito & Gonzalez-Benito, 2005c: 2). As a result, the most recent articles, and most specifically those published in operations management journals, have engaged in a further refinement of correlations between antecedents and consequences of specific subdimensions of PES, such as strategic practices vs. operational practices (Gonzalez-Benito & Gonzalez-Benito, 2005a; Wagner, 2007) or product-related improvements vs. processrelated practices (Gilley et al., 2000). Such further refinements are likely to increase in the future, since they uncover the complexity of processes that are underlying the broader concept of proactive environmental strategy. This will also become clear in the discussion of the antecedents and consequences of PES.





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Observation 3: The larger enterprise dominates PES research.

A third element that emerged from the literature was its predisposition towards investigations of the larger firm. In order to get a more quantitative estimate of the firm size balance in the sample, I coded all empirical papers on the size of the firms that were used in their investigation. As the cut-off levels, I used the earlier presented definition of micro ( 10 employees), small (10-50 employees), medium (50-250 employees) and large ( 250 employees) businesses as provided by the European Commission. Table 3.3 presents an overview of this analysis.

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Although small and medium-sized businesses generally represent over 99% of businesses and generate over 40% of economic added value and 60% of the employment in a country (Observatory of European SMEs, 2003), they are represented in less than 30% of the research. Furthermore, investigations that are specifically interested in PES in small or microbusinesses are almost inexistent. Only 4% of the papers in the sample were specifically focused on this group of firms. Such a low interest in small businesses is not only inappropriate because of the large impact small firms have on the natural environment (at least, in cumulative terms), but the models that have been developed for large firms may also not be applicable to smaller firms: “Given differences in the structure, governance, scale, reach and resource base of large and small enterprises, it would be unwise to presume that findings in the general literature can be directly applied to the small company sector” (McKeiver & Gadenne, 2005: 200). Before making such conclusions, however, the next subsections are dedicated to a thematic overview of the models and relations that have been either proposed or tested based on theoretical and empirical work in the sampled papers.

3.4. Thematic review of the literature As mentioned before, I have structured my review along two major streams in the literature, namely the antecedents and consequences of PES. As a roadmap through the various constructs that were defined in this process, Figure 3.3 presents an overview of the categories that are presented in each of the following subsections.

Chapter 3

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3.4.1. Antecedents of Proactive Environmental Strategies A large part of the literature has been interested in the reasons why and when a firm would be inclined to adopt a PES. In line with the description of strategy in the former chapter, I have summarized these antecedents as the external drivers and contingencies (outside-in perspectives), and the internal drivers and facilitators (inside-out perspectives). In

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the next subsections, I will discuss the literature of each of these antecedents and highlight gaps in the literature where this dissertation aims to contribute.

3.4.1.1. Internal drivers: motivation and goal-related factors (a) The importance of motivations and goal-related factors becomes most evident when asking the question “why do firms not adopt a PES”? In general, this question generally elicits the response “because they simply do not want to.” In other words, a lack of motivation is considered one of the most important reasons why firms do not take environmental issues into account, let alone be proactive in the matter. One of the most comprehensive efforts to synthesize the internal drivers for PES to date can be found in Bansal and Roth (2000). Based on their findings in 53 diverse companies, using several data sources, they proposed “environmental responsibility”, “competitiveness” and “legitimacy” as the three main motivations for environmental responsiveness and some indications were given on their implications for the level of proactivity assumed. Their model was further confirmed by Gonzalez-Benito and Gonzalez-Benito (2005a) in a survey among Spanish firms and several contributions in the literature can be fit in to their framework. This has given both interesting and sometimes diverging conclusions.

1. Environmental responsibility. Although the level of our analysis is the firm, a number of authors have argued that the strategies, initiatives and actions spring from the personal theories, values and perceptions of individuals operating in the firm (Egri & Herman, 2000; Prakash, 2001; Gonzalez-Benito & Gonzalez-Benito, 2005b). Several studies therefore highlighted the importance of “environmental champions” or “environmental stewardship” in the firm: employees or managers that have – as an individual – a concern for the environment and sell their concern inside the organization (Bansal, 2003). Only when there was some form of commitment from employees (Andersson & Bateman, 2000; Bansal, 2003), or more importantly from strategic decision-makers (Sharma, 2000; Banerjee, 2001; Banerjee et al., 2003;

Aragon-Correa et al., 2004; Branzei, Ursacki-Bryant, Vertinsky, & Zhang, 2004; del Brio, Fernandez, & Junquera, 2007), did firms engage in strategic environmental actions. In their study on ‘environmental leaders’, Egri and Herman (2000) found that such individuals were mostly characterized by an openness to change, selftranscendence and ecocentrism, along with personality characteristics that correlate well with entrepreneurship and leadership. However, despite the importance of

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individual values, Bansal (Bansal, 2003) found that the speed, scope and scale of an organization’s response to environmental issues depended on the combined effect and congruence of individual concerns and organizational values. This finding is important, since it highlights how individual concerns may be attenuated by the culture and values of his or her environment.

2. Competitiveness. Businesses will also be more inclined to adopt PES when they perceive environmental responsiveness as an opportunity to increase or secure the longer-term profitability of the firm (Sharma, 2000; Bansal & Roth, 2000; Banerjee, 2001; Bansal & Bogner, 2002; del Brio & Junquera, 2002; Banerjee et al., 2003;

Carmona-Moreno, Cespedes-Lorente, & De Burgos-Jimenez, 2004; Gonzalez-Benito & Gonzalez-Benito, 2005c). The need for this competitiveness argument pervades almost all studies that discuss motivational antecedents of PES. While some believe that attention to the natural environment will spawn innovations, reduce costs and uncover new market opportunities (Shrivastava, 1995a; Porter & van der Linde, 1995b), other think that such win-wins between economic and environmental prosperity are only possible to a certain point and will incur costs from thereon (Walley & Whitehead, 1994; Palmer et al., 1995; Schaltegger & Synnestvedt, 2002).

As a result, many firms that do not engage in more proactive types of environmental strategies motivate their choice by referring to a lack of competitiveness benefits (Boiral, 2006).



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