Explicating the microfoundation of SME pro-environmental operations: the role of top managers

Abstract

PurposeBy recognizing the decisive role of top managers (TMs) of small- and medium-sized enterprises (SMEs), this study attempts to explicate the microfoundation of pro-environmental operations of SMEs by examining the influence of institutional pressure on managerial cognition and subsequent SME pro-environmental operations. This study highlights the personal ethics of TMs, so as to examine the moderating effect of TMs' place attachment on SMEs' pro-environmental operations.Design/methodology/approachEmpirical data are collected from a questionnaire survey of 509 SMEs in China. Hierarchical regression results are subject to cross-validation using secondary public data.FindingsThis study demonstrates that coercive and mimetic pressures have inverted U-shaped effects, whilst normative pressure has a U-shaped effect on the threat cognition of TMs. The results also show that TMs' threat cognition (as opposed to opportunity cognition) positively influences SMEs' pro-environmental operations. Moreover, both the emotional (place identity) and functional (place dependence) dimensions of place attachment have positive moderating effects on the relationship between threat cognition and SMEs' pro-environmental operations.Practical implicationsFindings of this study lead to important implications for practitioners such as regulators, policy makers and trade associations. Enabling better understanding of the nature of SMEs' pro-environmental operations, they allow for more targeted development and the provision of optimal institutional tools to promote such operations.Originality/valueThis study allows some important factors that differentiate SMEs from large firms to surface. These factors (i.e. institutional pressures, managerial cognition and place attachment) and the interactions between them form important constituents of the microfoundations of SMEs' pro-environmental operations.

Actions speak louder than words? The impact of subjective norms in the supply chain on green innovation

“…For instance, Wade and Griffiths (2022) argue that firms' managerial inaction on climate change might be attributed to the lack of managers' emotional connection with environmental issues. Zhao and He (2022) identify the positive relationship between top managers' managerial cognitions and corporate pro-environmental operations. Applying the TPB to understand decision-making mechanisms of firm managers can help researchers better explain variations in corporate behaviors.…”

“…Future research may consider whether our conclusions are still consistent in the context of large enterprises. While executives' managerial cognitions are crucial for operational decisions of both SMEs and large enterprises (Nadkarni and Barr, 2008), some researchers might argue that large firms' decision-making lies in the board of directors rather than an individual manager (Zhao and He, 2022). Therefore, regarding the microfoundations of large firms' GI decisions under subjective norms in the supply chain, future research can take diversity in perceptions of the board of directors into consideration.…”

“…SMEs serve as a fertile ground for us to study the impact of SN in the supply chain on corporate GI for several reasons: The high financial commitment in GI brings more concerns for SMEs with relatively limited access to capital; The relative narrow supply base of SMEs renders them dependent on their supply chain relationships and networks to a large extent and thus behavioral standards stipulated in the supply chain are more important for SMEs (Quayle, 2003); Managers of SMEs are more likely to refer to other firms for what they should do in compensation for their lack of own experience (Oehme and Bort, 2015); In addition, according to Lubatkin et al (2006), SMEs' managers play more decisive roles in corporate operations. Compared with large enterprises, corporate executives' behavioral characteristics are more determinant for SMEs' practices (Zhao and He, 2022). Therefore, as the first attempt to apply the TPB and investigate the microfoundations of corporate decisions under SN, the SME context is appropriate.…”

“…Recently, the role of corporate executives' perceptions and cognitions in corporate green behaviors has started to attract research attention (e.g. Shou et al ., 2020a, b; Zhao and He, 2022). Nevertheless, there is a paucity of research attempting to borrow theoretical lenses originating from studies about individuals' behavioral mechanisms to understand the microfoundations of corporate GI decisions (Fahimnia et al.…”

“…(2006), SMEs' managers play more decisive roles in corporate operations. Compared with large enterprises, corporate executives' behavioral characteristics are more determinant for SMEs' practices (Zhao and He, 2022). Therefore, as the first attempt to apply the TPB and investigate the microfoundations of corporate decisions under SN, the SME context is appropriate.…”