Strategic motives and performance implications of proactive versus reactive environmental strategies in corporate sustainable development

Abstract

This study proposes and empirically tests a model delineating how different environmental motives would affect the practice of proactive and reactive environmental strategies, and ultimately corporate market performance. It also explores the moderating role of competitive intensity for the motiveÀstrategy and strategyÀperformance relationships. By surveying manufacturing firms operating in the Pearl River Delta region of China, the study has derived several important findings. To summarize, the findings reveal that while performance-based motivation drives the practice of proactive environmental strategy, it curtails the practice of reactive environmental strategy. Conversely, regulation-based motive exerts exactly opposite influences on these two strategies. The findings further highlight that proactive environmental strategy directly enhances corporate market performance, and this enhancing effect will be strengthened as competitive intensity increases.However, reactive environmental strategy is found not to exert any significant direct influence on such performance, and competitive intensity does not moderate this influence too. Last, while competitive intensity does not moderate the positive influence of promotion-based motive on proactive environmental strategy, it strengthens the negative influence of this motive on reactive environmental strategy. These findings furnish several significant academic and practical implications for pursuing corporate sustainable development.

Enhancing corporate sustainable development: Organizational learning, social ties, and environmental strategies

“…RES is viewed as externally‐driven initiatives through which firms seek primarily to comply with mandated environmental regulations to avoid penalties and deal with stakeholder pressures (Aragón‐Correa et al, 2020; Murillo‐Luna et al, 2007), which consists of symbolic actions aiming at protecting firms from institutional and stakeholder pressures (Chan et al, 2022). Firms with RES normally view environmental issues as threats or burdens, and they tend to exert minimum effort to controlling pollution and waste materials by using easy‐to‐adopt pollution control techniques or applying mandated technologies in the production process (Aragón‐Correa et al, 2008; Murillo‐Luna et al, 2007).…”

“…When firms adopt PES, they must continually modify existing operations and product portfolios and internalize environmental issues into their strategic planning processes in a timely way (Aragón‐Correa et al, 2020; Nguyen & Adomako, 2021). This requires the development of innovative systems, processes, and structures that reduce the impact on environment in a way that exceeds stakeholder demands (Chan et al, 2022; Delmas & Toffel, 2008). We posit that the adoption of PES is closely related to exploratory learning because such strategies move firms away from their long‐held outdated knowledge, competencies, and working systems (Huber, 1991), pushing them to enhance innovation behaviors and develop fresh viewpoints in dissimilar knowledge zones (Roome & Wijen, 2006).…”

“…This distinction matters because the two strategies provide different paths that enable firms to create and capture value. RES does not provide direct value and is less likely to create a competitive advantage for firms (Chan et al, 2022; Christmann, 2000). By comparison, PES is recognized as valuable because they tend to provide new opportunities and superior competitive advantage over competitors (Christmann, 2000; Rueda‐Manzanares et al, 2008).…”

A systematic and major review of proactive environmental strategies in hospitality and tourism: Looking back for moving forward

“…Being proactive is a competitive strategic behavior (Sanchez‐Ollero et al, 2016). The issue of environmental proactivity has gained popularity in the past years (Brown, 1996; Carballo‐Penela & Castromán‐Diz, 2015; Chan et al, 2022; Jiang et al, 2021). PESs could be defined as urgent, sustainable, and profitable ways enterprises deal with the natural environment.…”

How to Embrace Sustainable Performance via Green Learning Orientation: A Moderated Mediating Model

“…Finally, we also used the marker-variable technique based on Lindell and Whitney's [42] study to test CMV. According to the study of Malhotra et al [43] and Chan et al [44], we adopted the respondent's working function as the marker variable, which should be theoretically irrelevant to other variables. The average correlation between the marker variable and the variables of conceptual model was represented by rm (rm = 0.026).…”