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

Author

Listed:
  • Bruce Clemens

    (Western New England College)

  • Charles E. Bamford

    (McColl School of Business, Queens University of Charlotte)

  • Thomas J. Douglas

    (Southern Illinois University Edwardsville School of Business)

Abstract

How companies respond to impending regulations is a significant aspect of corporate strategy. Regulations, especially environmental regulations, are expanding quickly and are 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 types of strategic response are negatively related with size, positively related with state uncertainty and negatively related with effect/response uncertainty. Based on existing literature and the results of this study, this 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.

Suggested Citation

  • Bruce Clemens & Charles E. Bamford & Thomas J. Douglas, 2008. "Choosing strategic responses to address emerging environmental regulations: Size, perceived influence and uncertainty," Discussion Paper Series 2008-02, McColl School of Business, Queens University of Charlotte.
    • Handle: RePEc:msb:wpaper:2008-02
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    14. 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.
    15. 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).
    16. 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.
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    21. 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.
    22. 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.
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    24. 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.

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