Extending the literature on the environmental strategy of MNEs

Extending the literature on the environmental strategy of MNEs Purpose – The purpose of this paper is to explain the different international environmental strategies that multinational enterprises (MNEs) can adopt. Design/methodology/approach – This study updates the traditional country‐specific advantages/firm‐specific advantages (FSA/CSA) framework. In order to do so, the concepts of environmental institutional distance between countries and MNEs' availability of slack resources are used. Findings – First, a low environmental institutional distance between headquarters' and subsidiaries' countries contributes to creating environmental standards within the company. Second, MNEs with high availability of slack resources are willing to standardize their environmental practices. However, those MNEs that have a high availability of slack resources but have units based in high‐distance countries prefer to generate valuable and advanced environmental management practices only in specific countries. Finally, those MNEs with a low level of slack resources and with units based in low‐distance countries only comply with national environmental institutional requirements, becoming isomorphic with other local firms. Research limitations/implications – Although previous findings suggest that MNEs are increasingly standardizing their environmental practices, this generalization can be applied to those MNEs with units based in low‐distance countries that have a high availability of slack resources, which lead them to create valuable non‐location‐bound, green, firm‐specific advantages (FSAs). Originality/value – This paper sheds light on the way in which MNEs' activities affect the natural environment. Since MNEs are key actors in terms of economic and environmental development, they can promote social and environmental values in society, and at the same time encourage other organizations and institutions to adopt a socially responsible attitude. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Multinational Business Review Emerald Publishing

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1525-383X
DOI
10.1108/15253831111190153
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to explain the different international environmental strategies that multinational enterprises (MNEs) can adopt. Design/methodology/approach – This study updates the traditional country‐specific advantages/firm‐specific advantages (FSA/CSA) framework. In order to do so, the concepts of environmental institutional distance between countries and MNEs' availability of slack resources are used. Findings – First, a low environmental institutional distance between headquarters' and subsidiaries' countries contributes to creating environmental standards within the company. Second, MNEs with high availability of slack resources are willing to standardize their environmental practices. However, those MNEs that have a high availability of slack resources but have units based in high‐distance countries prefer to generate valuable and advanced environmental management practices only in specific countries. Finally, those MNEs with a low level of slack resources and with units based in low‐distance countries only comply with national environmental institutional requirements, becoming isomorphic with other local firms. Research limitations/implications – Although previous findings suggest that MNEs are increasingly standardizing their environmental practices, this generalization can be applied to those MNEs with units based in low‐distance countries that have a high availability of slack resources, which lead them to create valuable non‐location‐bound, green, firm‐specific advantages (FSAs). Originality/value – This paper sheds light on the way in which MNEs' activities affect the natural environment. Since MNEs are key actors in terms of economic and environmental development, they can promote social and environmental values in society, and at the same time encourage other organizations and institutions to adopt a socially responsible attitude.

Journal

Multinational Business ReviewEmerald Publishing

Published: Nov 11, 2011

Keywords: Multinational companies; Strategic management; Resource management; Natural environment; Country‐specific advantages; Firm‐specific advantages; Environmental institutional distance between countries; Slack resources

References

  • Knowledge management systems and developing sustainable competitive advantage
    Adams, G.L.; Lamont, B.T.
  • National culture and the standardization versus adaptation of knowledge management
    Ang, Z.; Massingham, P.
  • Evolving sustainably: a longitudinal study of corporate sustainable development
    Bansal, P.
  • Green and competitive? An empirical test of the mediating role of environmental innovation strategy
    Eiadat, Y.; Kelly, A.; Roche, F.; Eyadat, H.
  • The determinants of an environmentally responsive firm: an empirical approach
    Henriques, I.; Sadorsky, P.
  • Corporate strategies and environmental regulations: an organizing framework
    Rugman, A.M.; Verbeke, A.
  • Subsidiary‐specific advantages in multinational enterprises
    Rugman, A.M.; Verbeke, A.
  • Does country matter?
    Shige, M.; Isobe, T.; Chan, C.M.
  • The dynamics of the liability of foreignness: a global study of survival in financial services
    Zaheer, S.; Mosakowski, E.

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