IDEAS home Printed from https://ideas.repec.org/a/bla/bstrat/v17y2008i8p493-511.html
   My bibliography  Save this article

Choosing strategic responses to address emerging environmental regulations: size, perceived influence and uncertainty

Author

Listed:
  • Bruce Clemens
  • Charles E. Bamford
  • Thomas J. Douglas

Abstract

How companies respond to impending regulations is a significant aspect of corporate strategy. Regulations, especially environmental regulations, are expanding quickly and increasingly important to firm success. The threat of impending environmental regulation forces companies to choose levels of strategic responses on a continuum from passive to active. Using practitioner oriented research and existing theoretical models of corporate response, this study finds that the type of strategic response is negatively related to size, positively related to state uncertainty and negatively related to effect/response uncertainty. Based on existing literature and the results of this study, the paper suggests that simplifying the uncertainty construct could lead to more definitive findings in future research. The study results also suggest that a curvilinear relationship may exist between managerial perception of influence and level of strategic response. Most importantly, the findings could have a significant impact on firm decision making regarding environmental investments. For example, it is hoped that firms will be able to use the findings of this study to further understand and anticipate their competitors' decisions. Practitioners may also benefit from the conclusions on uncertainty in that they may be able to more cleanly parse the types of uncertainty immersed in impending environmental regulations. Finally, firms may be better able to understand decisions by their own managers and their competitors' managers in terms of their perceived influence over the regulatory process. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.

Suggested Citation

  • Bruce Clemens & Charles E. Bamford & Thomas J. Douglas, 2008. "Choosing strategic responses to address emerging environmental regulations: size, perceived influence and uncertainty," Business Strategy and the Environment, Wiley Blackwell, vol. 17(8), pages 493-511, December.
    • Handle: RePEc:bla:bstrat:v:17:y:2008:i:8:p:493-511
    DOI: 10.1002/bse.601
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/bse.601
    Download Restriction: no
    File URL: https://libkey.io/10.1002/bse.601?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. A. Ghobadian & H. Viney & J. Liu & P. James, 1998. "Extending linear approaches to mapping corporate environmental behaviour," Business Strategy and the Environment, Wiley Blackwell, vol. 7(1), pages 13-23, February.
    2. Clemens, Bruce & Douglas, Thomas J., 2006. "Does coercion drive firms to adopt 'voluntary' green initiatives? Relationships among coercion, superior firm resources, and voluntary green initiatives," Journal of Business Research, Elsevier, vol. 59(4), pages 483-491, April.
    3. Chester Harris, 1967. "On factors and factor scores," Psychometrika, Springer;The Psychometric Society, vol. 32(4), pages 363-379, December.
    4. Aseem Prakash, 2001. "Why do firms adopt ‘beyond‐compliance’ environmental policies?," Business Strategy and the Environment, Wiley Blackwell, vol. 10(5), pages 286-299, September.
    5. Stephen Fineman, 2000. "Enforcing the environment: regulatory realities," Business Strategy and the Environment, Wiley Blackwell, vol. 9(1), pages 62-72, January.
    6. David Norburn, 1989. "The chief executive: A breed apart," Strategic Management Journal, Wiley Blackwell, vol. 10(1), pages 1-15, January.
    7. Olivier Boiral, 2005. "The impact of operator involvement in pollution reduction: case studies in Canadian chemical companies," Business Strategy and the Environment, Wiley Blackwell, vol. 14(6), pages 339-360, November.
    8. Magali Delmas & Michael W. Toffel, 2004. "Stakeholders and environmental management practices: an institutional framework," Business Strategy and the Environment, Wiley Blackwell, vol. 13(4), pages 209-222, July.
    9. R. J. Welford, 1998. "Editorial: Corporate environmental management, technology and sustainable development: postmodern perspectives and the need for a critical research agenda," Business Strategy and the Environment, Wiley Blackwell, vol. 7(1), pages 1-12, February.
    10. Clemens, Bruce W. & Douglas, Thomas J., 2005. "Understanding strategic responses to institutional pressures," Journal of Business Research, Elsevier, vol. 58(9), pages 1205-1213, September.
    11. Jonatan Pinkse, 2007. "Corporate intentions to participate in emission trading," Business Strategy and the Environment, Wiley Blackwell, vol. 16(1), pages 12-25, January.
    12. Jean L Johnson & Tomoaki Sakano & Naoto Onzo, 1990. "Behavioral Relations in Across-Culture Distribution System: Influence, Control and Conflict in U.S., Japanese Marketing Channels," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 21(4), pages 639-655, December.
    13. Knud Sinding, 2000. "Environmental management beyond the boundaries of the firm: definitions and constraints," Business Strategy and the Environment, Wiley Blackwell, vol. 9(2), pages 79-91, March.
    14. Elaine Mosakowski, 1997. "Strategy Making Under Causal Ambiguity: Conceptual Issues and Empirical Evidence," Organization Science, INFORMS, vol. 8(4), pages 414-442, August.
    15. Aseem Prakash & Kelly Kollman, 2004. "Policy modes, firms and the natural environment," Business Strategy and the Environment, Wiley Blackwell, vol. 13(2), pages 107-128, March.
    16. Marilu Hastings, 1999. "A new operational paradigm for oil operations in sensitive environments: an analysis of social pressure, corporate capabilities and competitive advantage," Business Strategy and the Environment, Wiley Blackwell, vol. 8(5), pages 267-280, September.
    17. Siv Nyquist, 2003. "The legislation of environmental disclosures in three Nordic countries—a comparison," Business Strategy and the Environment, Wiley Blackwell, vol. 12(1), pages 12-25, January.
    18. Peter Hills & Jacqueline Lam & Richard Welford, 2004. "Business, environmental reform and technological innovation in Hong Kong," Business Strategy and the Environment, Wiley Blackwell, vol. 13(4), pages 223-234, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marcus Linder & Joakim Björkdahl & Daniel Ljungberg, 2014. "Environmental Orientation and Economic Performance: a Quasi‐experimental Study of Small Swedish Firms," Business Strategy and the Environment, Wiley Blackwell, vol. 23(5), pages 333-348, July.
    2. Niklas Egels-Zandén, 2014. "Revisiting Supplier Compliance with MNC Codes of Conduct: Recoupling Policy and Practice at Chinese Toy Suppliers," Journal of Business Ethics, Springer, vol. 119(1), pages 59-75, January.
    3. Esben Rahbek Gjerdrum Pedersen & Wencke Gwozdz & Kerli Kant Hvass, 2018. "Exploring the Relationship Between Business Model Innovation, Corporate Sustainability, and Organisational Values within the Fashion Industry," Journal of Business Ethics, Springer, vol. 149(2), pages 267-284, May.
    4. Nigel Martin & John Rice, 2010. "Analysing emission intensive firms as regulatory stakeholders: a role for adaptable business strategy," Business Strategy and the Environment, Wiley Blackwell, vol. 19(1), pages 64-75, January.
    5. Sultan Sikandar Mirza & Tanveer Ahsan, 2020. "Corporates' strategic responses to economic policy uncertainty in China," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 375-389, February.
    6. Muddassar Sarfraz & Wang Qun & Li Hui & Muhammad Ibrahim Abdullah, 2018. "Environmental Risk Management Strategies and the Moderating Role of Corporate Social Responsibility in Project Financing Decisions," Sustainability, MDPI, vol. 10(8), pages 1-17, August.
    7. Nigel James Martin & John Lewis Rice, 2014. "Influencing Clean Energy Laws: an Analysis of Business Stakeholder Engagement," Business Strategy and the Environment, Wiley Blackwell, vol. 23(7), pages 447-460, November.
    8. López-Gamero, María D. & Molina-Azorín, José F. & Claver-Cortés, Enrique, 2011. "Environmental uncertainty and environmental management perception: A multiple case study," Journal of Business Research, Elsevier, vol. 64(4), pages 427-435, April.
    9. Walid Cheffi & Sonia Abdennadher, 2019. "Executives’ Behaviour and Innovation in Corporate Governance: The Case of Internet Voting at Shareholders’ General Meetings in French Listed Companies," Journal of Business Ethics, Springer, vol. 156(3), pages 775-798, May.
    10. Christopher D. H. Wilson & Ian David Williams & Simon Kemp, 2012. "An Evaluation of the Impact and Effectiveness of Environmental Legislation in Small and Medium‐Sized Enterprises: Experiences from the UK," Business Strategy and the Environment, Wiley Blackwell, vol. 21(3), pages 141-156, March.
    11. Moser, Roger & Kuklinski, Christian Paul Jian-Wei & Srivastava, Mohit, 2017. "Information processing fit in the context of emerging markets: An analysis of foreign SBUs in China," Journal of Business Research, Elsevier, vol. 70(C), pages 234-247.
    12. Jacob Hörisch & Matthew P. Johnson & Stefan Schaltegger, 2015. "Implementation of Sustainability Management and Company Size: A Knowledge‐Based View," Business Strategy and the Environment, Wiley Blackwell, vol. 24(8), pages 765-779, December.
    13. Canning, Mary & O’Dwyer, Brendan, 2013. "The dynamics of a regulatory space realignment: Strategic responses in a local context," Accounting, Organizations and Society, Elsevier, vol. 38(3), pages 169-194.
    14. Esben Pedersen & Wencke Gwozdz, 2014. "From Resistance to Opportunity-Seeking: Strategic Responses to Institutional Pressures for Corporate Social Responsibility in the Nordic Fashion Industry," Journal of Business Ethics, Springer, vol. 119(2), pages 245-264, January.
    15. David Christopher Sprengel & Timo Busch, 2011. "Stakeholder engagement and environmental strategy – the case of climate change," Business Strategy and the Environment, Wiley Blackwell, vol. 20(6), pages 351-364, September.
    16. Francesca Di Pillo & Vito Introna & Nathan Levialdi & Laura Marchegiani, 2018. "Regulatory Response to Self-production of Energy: A Risk for the Development of Renewable Sources and Combined Heat and Power," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 121-130.
    17. Guilin Gao & Xueting Zeng & Chunjiang An & Lei Yu, 2018. "A Sustainable Industry-Environment Model for the Identification of Urban Environmental Risk to Confront Air Pollution in Beijing, China," Sustainability, MDPI, vol. 10(4), pages 1-22, March.
    18. Juan J. Martínez Hernández & Patricia S. Sánchez‐Medina & René Díaz‐Pichardo, 2021. "Business‐oriented environmental regulation: Measurement and implications for environmental policy and business strategy from a sustainable development perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 507-521, January.
    19. Pasi Heikkurinen & Sari Forsman‐Hugg, 2011. "Strategic Corporate Responsibility in the Food Chain," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 18(5), pages 306-316, September.
    20. Pasi Heikkurinen & Tarja Ketola, 2012. "Corporate Responsibility and Identity: from a Stakeholder to an Awareness Approach," Business Strategy and the Environment, Wiley Blackwell, vol. 21(5), pages 326-337, July.
    21. Asghar Afshar Jahanshahi & Alexander Brem, 2020. "Entrepreneurs in post-sanctions Iran: Innovation or imitation under conditions of perceived environmental uncertainty?," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 531-551, June.
    22. Christopher Wilson & Ian David Williams & Simon Kemp, 2011. "Compliance with Producer Responsibility Legislation: Experiences from UK Small and Medium‐sized Enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 20(5), pages 310-330, July.
    23. Bing Zhang & Hanxun Fei & Yongjing Zhang & Beibei Liu, 2015. "Regulatory Uncertainty and Corporate Pollution Control Strategies: An Empirical Study of the ‘Pay for Permit’ Policy in the Tai Lake Basin," Environment and Planning C, , vol. 33(1), pages 118-135, February.
    24. Hu, Yingde & Bai, Wensong & Farrukh, Muhammad & Koo, Chun Kwong, 2023. "How does environmental policy uncertainty influence corporate green investments?," Technological Forecasting and Social Change, Elsevier, vol. 189(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sanjay Patnaik, 2020. "Emissions permit allocation and strategic firm behavior: Evidence from the oil sector in the European Union emissions trading scheme," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 976-995, March.
    2. Nigel James Martin & John Lewis Rice, 2014. "Influencing Clean Energy Laws: an Analysis of Business Stakeholder Engagement," Business Strategy and the Environment, Wiley Blackwell, vol. 23(7), pages 447-460, November.
    3. Clemens, Bruce & Douglas, Thomas J., 2006. "Does coercion drive firms to adopt 'voluntary' green initiatives? Relationships among coercion, superior firm resources, and voluntary green initiatives," Journal of Business Research, Elsevier, vol. 59(4), pages 483-491, April.
    4. Neil Harris, 2007. "Corporate engagement in processes for planetary sustainability: understanding corporate capacity in the non‐renewable resource extractive sector, Australia," Business Strategy and the Environment, Wiley Blackwell, vol. 16(8), pages 538-553, December.
    5. Olga Goncalves & Elisabeth Robinot & Hélène Michel, 2015. "Does It Pay to Be Green? The Case of French Ski Resorts," Grenoble Ecole de Management (Post-Print) hal-01591790, HAL.
    6. Wu, Guo-Ciang & Ding, Jyh-Hong & Chen, Ping-Shun, 2012. "The effects of GSCM drivers and institutional pressures on GSCM practices in Taiwan’s textile and apparel industry," International Journal of Production Economics, Elsevier, vol. 135(2), pages 618-636.
    7. Bruce Wayne Clemens & Maria Papadakis, 2008. "Environmental management and strategy in the face of regulatory intensity: radioactive contamination in the US steel industry," Business Strategy and the Environment, Wiley Blackwell, vol. 17(8), pages 480-492, December.
    8. Ailie K.Y. Tang & Kee‐hung Lai & T. C. E. Cheng, 2012. "Environmental Governance of Enterprises and their Economic Upshot through Corporate Reputation and Customer Satisfaction," Business Strategy and the Environment, Wiley Blackwell, vol. 21(6), pages 401-411, September.
    9. Marileena Koskela & Jarmo Vehmas, 2012. "Defining Eco‐efficiency: A Case Study on the Finnish Forest Industry," Business Strategy and the Environment, Wiley Blackwell, vol. 21(8), pages 546-566, December.
    10. Romy Morana & Stefan Seuring, 2011. "A Three Level Framework for Closed-Loop Supply Chain Management—Linking Society, Chain and Actor Level," Sustainability, MDPI, vol. 3(4), pages 1-14, April.
    11. Delyse Springett, 2003. "An ‘incitement to discourse’: benchmarking as a springboard to sustainable development," Business Strategy and the Environment, Wiley Blackwell, vol. 12(1), pages 1-11, January.
    12. Runa Sarkar, 2008. "Public policy and corporate environmental behaviour: a broader view," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 15(5), pages 281-297, September.
    13. Adrian SOLOMON & Panagiotis KETIKIDIS & Felicia SIAVALAS, 2017. "Institutional Co-Creation Interfaces for Innovation Diffusion during Disaster Management," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 5(1), pages 77-95, March.
    14. Gricelda Juárez-Luis & Patricia S. Sánchez-Medina & René Díaz-Pichardo, 2018. "Institutional Pressures and Green Practices in Small Agricultural Businesses in Mexico: The Mediating Effect of Farmers’ Environmental Concern," Sustainability, MDPI, vol. 10(12), pages 1-18, November.
    15. Pasi Heikkurinen & Tarja Ketola, 2012. "Corporate Responsibility and Identity: from a Stakeholder to an Awareness Approach," Business Strategy and the Environment, Wiley Blackwell, vol. 21(5), pages 326-337, July.
    16. Jouni Korhonen & Thomas P. Seager, 2008. "Beyond eco‐efficiency: a resilience perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 17(7), pages 411-419, November.
    17. Antony Paulraj, 2009. "Environmental motivations: a classification scheme and its impact on environmental strategies and practices," Business Strategy and the Environment, Wiley Blackwell, vol. 18(7), pages 453-468, November.
    18. E. Shvarts & A. Pakhalov & A. Knizhnikov & L. Ametistova, 2018. "Environmental rating of oil and gas companies in Russia: How assessment affects environmental transparency and performance," Business Strategy and the Environment, Wiley Blackwell, vol. 27(7), pages 1023-1038, November.
    19. Marco Guerci & Annachiara Longoni & Davide Luzzini, 2016. "Translating stakeholder pressures into environmental performance – the mediating role of green HRM practices," Post-Print hal-01251759, HAL.
    20. Tingey-Holyoak, Joanne, 2014. "Sustainable water storage by agricultural businesses: Strategic responses to institutional pressures," Journal of Business Research, Elsevier, vol. 67(12), pages 2590-2602.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:bstrat:v:17:y:2008:i:8:p:493-511. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-0836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.