Relative effect of geographic context and international

Int. J. Sustainable Strategic Management, Vol. 4, No. 3, 2014 221

Copyright © 2014 Inderscience Enterprises Ltd.

Relative effect of geographic context and international strategic approach on sustainability management

Joel Harmon* and Kent D. Fairfield Silberman College of Business, Fairleigh Dickinson University, 285 Madison Avenue – M-MS1-05, Madison, NJ 07940, USA E-mail: [email protected] E-mail: [email protected] *Corresponding author

Abstract: Organisations around the world are increasingly factoring in environmental and social demands as they strive to achieve enduring success beyond near-term financial returns. Only partially understood are the ways that organisations manage sustainability based on geographic location and multinational standardisation. This study analysed a worldwide survey of managers (N = 1,514) to compare across borders their perceptions of sustainability-related external influences, internal inhibitors, internal enabling factors, decision drivers, practices, and operating performance. Guided by an existing integrative model combining these factors, this paper analysed variation across geographic region, country-wide sustainability conditions, and level of economic development. Corporate sustainability motives, practices, and benefits do vary significantly across geographic contexts, but organisation size and strategy of operating as a national, multi-local, or global firm make an even bigger difference. Further research is suggested to deepen these findings.

Keywords: sustainability management; sustainability strategy; cross-border management; international management; global management.

Reference to this paper should be made as follows: Harmon, J. and Fairfield, K.D. (2014) ‘Relative effect of geographic context and international strategic approach on sustainability management’, Int. J. Sustainable Strategic Management, Vol. 4, No. 3, pp.221–246.

Biographical notes: Joel Harmon is a Professor of Management at the Silberman College of Business, Fairleigh Dickinson University.

Kent D. Fairfield is an Associate Professor of Management at the Silberman College of Business, Fairleigh Dickinson University.

222 J. Harmon and K.D. Fairfield

1 Introduction

Corporate leaders are increasingly seeing ‘sustainability’ – integrating the social, environmental and economic dimensions of organisational performance – as an organisational imperative (Berns et al., 2009). Evidence shows that sustainability is becoming increasingly embedded in core business strategy (Laszlo and Zhexembayeva, 2011). A sizable literature on international management establishes that corporate strategy, behaviour and performance are strongly affected by both geographic context and organisational characteristics (e.g., Prahalad and Doz, 1987; Ghemawat, 2007). Some authors have sought to map cultural, economic or institutional factors across countries and regions, translate them to various types of sustainability management agendas, and link them to various dimensions of corporate social and environmental performance (Husted, 2005; Waldman et al., 2006). Among the most salient organisational characteristics is a firm’s strategic scope of operations – the extent it conducts operations in only one country or across borders, and its choices regarding managing cross-border operations. Organisations operating across borders may seek to emphasise the virtues of locally-influenced adaptation through a ‘multi-local’ strategy, or they may seek to emphasise global consistency and coordination through a ‘global’ strategy. Many studies have examined the behaviours and relative performance of strategic scope and type of cross-border strategy (for good reviews see Bartlett and Ghoshal, 1989; Johansson and Yip, 1994; Ghemawat, 2007).

Few prior academic studies have bridged the literatures on both geographic context and strategic scope to look at how enterprise sustainability management varies across geographic contexts as well as a function of a firm’s cross-border strategy. Thus, this study investigates the unsettled question of the extent to which enterprise sustainability management is most influenced by geographic context or by strategic approaches to national or multinational management Investigation of this question could aid globalisation-customisation decisions by helping us more clearly understand the relative importance and performance implications of geographic versus organisation influences on corporate sustainability management.

To illuminate these issues, we used survey data from 65 countries in six regions against an integrative framework of sustainability management (Fairfield et al., 2011). This paper first elaborates on previous research on sustainability management and describes an existing model that enables us to explore the current research question. Then, it outlines considerations related to geographic context and sustainability management, followed by findings on the impact of organisational size, scope, and cross-border approach. Based on this groundwork, we advance some hypotheses, describe our methods, and report the data analysis and results. Discussion and conclusion, along with the study’s limitations, managerial implications, and indicated future research bring the paper to a close.

2 Theoretical background

A fundamental assumption of corporate sustainability research is that business and society are interwoven rather than distinct entities (Porter and Kramer, 2006). Today,

Relative effect of geographic context and international strategic approach 223

more companies are looking beyond traditional concerns of running a business for immediate profit and are dealing more proactively with factors in the greater world that impinge on their medium- to long-term success (Anderson, 1998; Blackburn, 2007; Esty and Winston, 2006; Prahalad and Hammond, 2002; Wirtenberg et al., 2007). Recent surveys (e.g., Berns et al., 2011; Lacy et al., 2010) have shown that the majority of CEOs now report increases in sustainability investments as critical to their firms’ future success. A consensus is emerging that corporations can no longer avoid considering the environmental, social, as well as economic aspects of their operations, the so-called ‘triple bottom line’ of people, planet, and profit (Elkington, 1997; Savitz and Weber, 2006; Willard, 2002).

Research on sustainability embraces scholarship on sustainable development and corporate social and environmental responsibility. Some scholars argue that firms should take on environmental and social challenges because that is the virtuous thing to do (Marcus and Fremuth, 2009), while others insist that such actions make sense only if a firm sees a direct payoff (Siegel, 2009). Porter and Kramer (2006, 2011) advocate that companies do the most good when they take actions to benefit society that also complement their own business models to create ‘shared value’, calling on firms to reframe their strategic approach for this purpose. Firms of all sizes report managing sustainability for various instrumental and values-based reasons – avoiding damage to reputation and litigation, achieving competitive advantage through innovation, market development, and cost efficiency, and contributing to social benefit (Bansal and Roth, 2000; Basu and Palazzo, 2008).

Current thinking points to the importance of embedding sustainability in core business strategy (Laszlo and Zhexembayeva, 2011) – not just as a series of initiatives bolted on to operations but rather integrated into business purpose and operations (Grayson and Exter, 2012). Leadership is central to that process (Thomas and Simerly, 1995; Sully de Luque et al., 2008), and involves a mindset that is holistic, forward-looking, and collaborative (Gladwin et al., 1995). Next, we describe the model used to explore this study’s research questions.

2.1 An integrative model of organisational sustainability management

To enable comparisons of organisations’ sustainability behaviour, one useful approach is the integrative conceptual model by Fairfield et al. (2011), summarised in Figure 1. To derive their meso-theoretical model, those authors integrated a range of previously disconnected theories and empirical evidence on sustainability management from several complementary conceptual frameworks. These included the resource-based view of the firm (e.g., Barney, 1991; Hart, 1995; McWilliams and Siegel, 2001), industry and competitive dynamics (e.g., Porter, 1998; Porter and Van der Linde, 1995), the stakeholder view of the firm (e.g., Freeman, 1984; Clarkson, 1995), and institutional theory (e.g., Scott, 1995; Bansal and Clelland, 2004; Doh et al., 2010; Jennings and Zanderbergen, 1995; Marquis et al., 2007). The resulting model identifies a set of linkages among external influences, sustainability decision drivers, organisational enabling and inhibiting conditions, actual sustainability practices and organisation performance.


Figure 1 Integrative model of sustainability management factors guiding the study

Source: Fairfield et al. (2011)

The structural-equation test of their model, using the same data from a worldwide survey as drawn upon for this study, accounted for two-thirds of the variance in responses, and established that:

1 organisations that were implementing sustainability practices to a greater degree perceived better performance improvement as compared to those that were not

2 organisations that saw sustainability issues as more important decision drivers implemented sustainability practices more broadly compared to organisations for which they were less important

3 internal inhibitors (such as lack of awareness, ideas, or business case) had a negative effect on the implementation of sustainability practices

4 stronger foundational enablers (such as sustainability values, centrality to strategy, top-management support) positively affected the implementation of sustainability practices

5 lack of external stakeholder demand indirectly reduced the degree to which organisations implemented sustainability practices.

Importantly, the relationships among the variables depicted in the model were found to be invariant by organisation size or strategic scope of operations or by geographic region, indicating that the model is applicable to different organisation types and locations. What their model leaves unclear, and what we wanted to establish in this study, is the relative degree to which organisations’ strategic scope and approach as well as operational location affect the type and level of sustainability management.


In the current study, we use as dependent variables the set of factors comprising sustainability management from Fairfield et al.’s (2011) study. We first examine sustainability management in the USA compared to the rest of the world, as well as differences among various regions in the world, predicting significant differences across geographic boundaries. Then, we investigate differences attributable to organisation size and strategic scope, expecting that larger and more globalised firms engage in more sustainability management.

2.2 Influence of geographic context on sustainability management

Scholars in international management have established that the behaviour and performance of firms depends on the characteristics of the countries where they operate or are headquartered (Delios and Henisz, 2003; Hawawini et al., 2004; Henisz and Delios, 2002; Makino et al., 2004). Sustainability management by national companies is influenced by the interplay between such factors as level of economic development (Husted, 2005), environmental conditions (Esty et al., 2008), government interests (Fligstein, 2008), legal restrictions (La Porta et al., 1998), political constraints (Henisz, 2000), regulatory pressures (Dasgupta et al., 2000; Henriques and Sadorsky, 1996), industry dynamics (Christmann, 2004), and expectations of customers and other stakeholders (Barnett, 2007). National differences also flow from cognitive or cultural variation (Denzau and North. 1994; Walsh, 1995). Cognitive imprinting is reproduced through educational systems and cultural values that affect how people and their politicians pursue environmental policy (Vogel, 1987; Husted, 2005). The influence of these factors is even more complex for international firms operating outside their home country.

2.2.1 Geographic socio-cultural influences

A range of research establishes national cultural differences and their likely effects on sustainability management behaviour. Some of this research (House et al., 2001; Javidan et al., 2006) confirms the national tendencies first articulated by Hofstede (1980, 2001). One of Hofstede’s classic behavioural characteristics of national culture is a long-term orientation, which manifests itself in perseverance and thrift, as opposed to near-term achievement and consumption (Hofstede and Minkov, 2010). Independent of other factors, one would expect greater environmental stewardship with a long-term orientation, such as in Asia, Africa and the Middle East (Berns et al., 2009) as well as Latin America.

Hofstede’s typology describes Masculinity in a culture as a behavioural tendency that is concerned with assertiveness, competition, and the pursuit of material goals, rather than modesty, caring, and quality of life (see also House et al., 2001; Javidan et al., 2006). Husted’s (2005) research indicates that low masculinity (feminism) tends to contribute to environmental focus. A predominantly short-term oriented, masculine culture in the USA, along with its capitalistic tradition, suggests that US managers would manifest more concern for profitability than taking societal good into account (Hofstede, 2009).


Hofstede’s Individualism dimension measures the orientation of people to be concerned with self-focused personal achievement. A Collectivist view, on the other hand, describes those whose cognitive and social focus is on the well being of a group, clan, or country. Husted (2005) found that environmentalsustainability was stronger in more individualistic countries. He reasoned that eenvironmental interest-group activity appears to be much more widespread and diverse in individualistic cultures resulting in a greater social and institutional capacity to respond to environmental problems.

Such reasoning also pertains to Hofstede’s Power Distance dimension, or the extent to which the less powerful members of institutions within a country accept that power is distributed unequally. Higher power distance and greater respect for authority has been found to reduce the extent of debate and advocacy for social and environmental issues (Husted, 1995; Katz et al., 2001).

An alternative cultural view of international business practice to Hofstede’s framework comes from Chen and Miller’s (2011) study of the relational perspective as a mindset that sets apart Far Eastern cultures from the West. By this thinking, the Confucian ideal emphasises harmony and balance in relationships and construal of self as collective or relational (Markus and Kitayama, 1991), starting with the family as the most fundamental relationship. Such a view contrasts with the individualistic assumptions of personal worth and accomplishment. As the relational construal carries over to inter-organisational life, it affects broad social networks that make up part of sustainability management, including ties through more porous boundaries to one’s vendors, customers, and civil society. The relational view also includes the perception of time as continuous, including links to the past and toward the future, and a more holistic, interdependent view of the world more characteristic of China, other East Asian countries, and Latin America (Chen and Miller, 2011; Hofstede, 1980, 2009). Similarly, concern for the greater society, beyond one’s organisation, is another potential motivation to engage in sustainability strategies (Bansal and Roth, 2000; Marcus and Fremuth, 2009), which may be seen in East Asia and Germany (Hofstede, 2009).

Turning to the internal workplace and governance, the US compares favourably on ethical issues with the rest of the world (Ibrahim and Parsa, 2005). Likewise, attention historically in the USA to employee engagement, health and safety, and employee rights issues is generally greater than in most emerging-market countries and contrasts with the more rigid institutional context in Europe (Brewster, 2004).

2.2.2 Geographic economic and environmental influences

Organisations will likely be inclined to adapt their sustainability strategies to economic and environmental conditions in their operating arenas. McWilliams and Siegel (2000) suggested that when the overall affluence of a society is high, there should be a stronger demand for corporate social responsibility, compared to low-GDP countries more concerned about basic subsistence and economic growth. Many economists attribute environmental degradation to in adequate property rights, low economic development, and LAX environmental enforcement (Mendelsohn, 1994; Sedjo, 1992). Husted (2005) and Gnyawali (1996) found that the higher a countries level of economic development, the higher its social and institutional capacity for environmental sustainability. Esty and his colleagues also found the highest ratings for environmental health, air quality, water


resources and sustainable energy in more economically-advantaged nations that have the resources to invest in such things as anti-pollution measures, efficient infrastructure, and human rights (Emerson et al., 2010; Esty et al., 2008).

Importantly, economic development and cultural variables interact in different ways. For example, environmental issues become more salient in rich societies characterised by strong pluralism and lively debate, because more basic issues have already been resolved (Husted, 2005). However, environmental issues are less likely to enter the national agenda in rich countries such as in Japan where high power distance and collectivism have traditionally deterred vigorous dissent. In poor countries, though, even societies characterised by pluralistic politics and lively political debate are forced to focus on more basic needs (Vogel, 1987). Modern-day China’s paramount interest in economic development via state capitalism with high power distance has led to great environmental degradation.

As a result, comparing organisations’ sustainability approaches across varying national economic contexts may show unpredictable correlations. On the one hand, higher levels of economic development could provide more available resources, greater political will for stringent social and environmental regulatory policies, and greater capacity to make bigger investments in ecological and socially sustainable practices. On the other, powerful political and business forces in highly-developed countries, such as in the USA, Europe, and Japan, could possess enough influence to dampen tighter environmental regulations and enforcement.

Strategic competitive factors could be expected to contribute to more vigorous sustainability action by firms confronted by acute problems of ecological deterioration and human welfare in less developed countries. This could lead firms to more aggressively address localised issues such as air pollution, water and energy usage, and solid waste within their borders. It may steer them to contribute to improved education, healthcare, and adherence to stricter regulation, despite any laxity due to governmental indifference or corruption. In addition, international treaties, industry association standards, and non-governmental organisations are increasingly calling for more transparency and improved corporate citizenship. This can influence not only national companies but can pressure multinational and global firms even more. The latter have to be concerned about the risk of acquiring a public stigma locally that could possibly erode their reputation around the world and even jeopardise both customer good will and governmental permission for their license to operate.

Anecdotal evidence exists of multinational companies targeting local social, economic or environmental deficiencies in lower income countries in order to strengthen their business models (Blackburn, 2007). For example, Unilever Hindustan invests in local initiatives partly to boost consumer buying ability, and McDonald’s is investing in local agriculture to improve the quantity and quality of local supply (Laszlo and Zhexembayeva, 2011). Amanco promotes micro-financing, anti-corruption and transparency initiatives to both improve its Latin American business environment for its plastic pipes and fittings and create reputational differentiation in its commodity-like market (IFC and Sustainability, 2007). Thus, organisations may respond to various influences to step up sustainability management in less developed countries so as to enhance competitive advantage, protect their reputations and avoid litigation, as well as to benefit society (Bansal and Roth, 2000).


2.3 Influence of organisation size and strategic approach

Beyond the influence of a country’s national culture, environment, and economy on a firm’s sustainability management, evidence suggests that the size and strategic scope of an operation also will have a major effect. Larger companies are much more likely to engage in strategies and practices for sustainability (Aragon-Correa, 1998; Fairfield et al., 2011; Gallo and Christensen, 2011). It is argued that larger firms have deeper resources and are more able to move beyond short-term survival issues and set up the kind of investments and processes to enhance long-term prosperity and even societal contributions. Larger firms are also more likely to adopt multi-national standardisation (Yip et al., 1997).

MNCs face a tension between standardising their sustainability policies and adapting these policies to different countries’ regulatory and consumer preferences. Industry association codes of conduct and arise in international government cooperation like trade blocs and global environmental treaties have the effect of setting up similar regulations across borders. This commonality inhibits multinationals from taking advantage of cross-border differences in regulations, promoting more standardisation of MNCs’ environmental policies (Christmann, 2004).

The ease with which a MNC can globally standardise its environmental policies can be expected to depend on how it organises its overall worldwide operations. Few studies of sustainability management have distinguished between global and multi-local approaches to cross-border management. Companies adopting more global strategies tend to manage themselves in a more unified way regardless of geographic location, looking to centralise their value-chain activities in the locations that best serve their worldwide operational network (Ghemawat, 2007). By contrast, other MNCs have adopted a multi-local approach to cross-border strategy – including sustainability management – in terms of less extensive decision-making and guidance from corporate headquarters, allowing considerable subsidiary autonomy. Getting the support of line managers responsible for implementing a firm’s sustainability policy in their business units is one of the biggest challenges for a firm’s corporate-level sustainability executives (Rappaport and Flaherty, 1992; Christmann, 2004). Subsidiary managers in countries for which looser local pressures for environmental responsibility contrast with stricter aspirations in the home country may perceive headquarters-imposed stringent environmental policies as adding costs to their operations without commensurate benefits.

Some evidence exists that global companies engage in more sustainability activities than multi-locals or national firms (Christmann, 2004; Fairfield et al., 2011). In a rare study of sustainability management as a function of corporate global integration, Christmann found MNCs with more global standardisation of overall operations also had more global standardisation of their environmental policies. She reasoned that firms with global strategies tend to implement uniform environmental policies to reduce complexity, just as they implement other functional policies on a global scale. Such pragmatism may even lead subsidiaries to exceed local government regulations for strategic reasons, even if a MNCs management does not deeply value responsible environmental conduct. Her result simply that “global firms may be less likely to negatively exploit cross-country differences in environmental regulations and seek out countries with lax regulations for their dirty operations than anti-globalization critics suggest” (p.756). A caveat is that she studied only chemical MNCs with operations in the USA, an industry with stringent environmental regulations.


It should be noted that the positive sustainability behaviour of global firms noted above may be lessened if they are insulated from the unsavoury practices of subsidiaries, Sirroca et al. (2010) found that MNCs confronted with social and environmental pressures for compliance, rather than adopting uniform policies, are sometimes more likely to transfer socially irresponsible practices to overseas subsidiaries that are apparently unconnected to the parent company, and thus less likely to undermine its global legitimacy.

This paper will examine organisations’ sustainability behaviour first as a function of individual country level of economic development, then comparing US-based respondents to all others (due to the heavily US-weighted distribution of respondents), and finally among six regions of the world. It is necessary to first account for effects of organisation size and scope of operations to assess the impact of geographic factors.

2.4 Study hypotheses

Prior research has already established that larger organisations engage more widely in sustainability management (Fairfield et al., 2011; Gallo and Christensen, 2011). Focusing on strategic scope, our review above leads us to expect that firms that are not only large but also global in their strategic approach may also be more inclined to emphasise sustainability. These data do not distinguish whether a subject is responding for one’s headquarters location or an operating location. We surmise that simply because of their cross-border strategic approach, global companies’ senior leaders may have greater concern for standardisation and reputation, and may have a more worldwide orientation that can heighten their awareness of sustainability management. Our expectations are that international organisations with multi-local strategies customised to different localities, on the other hand, will partly emulate the sustainability behaviour of both national and global organisations, and fall somewhere between the two. Thus we hypothesise:

Hypothesis 1 Organisational strategic scope and approach: organisations with more globally-integrated business strategies will be most advanced on various indicators of sustainability, and those operating primarily in single nations will be least advanced. Organisations with multi-local strategies will be in between.

We also expected to see differences in sustainability behaviour across geographic contexts. Based on prior evidence that higher levels of economic development greatly increases propensity toward sustainability management (Emerson et al., 2010; Esty et al., 2008), we hypothesised the following effects of economic development and used it as a control variable wherever possible.

Hypothesis 2 High versus low economic development: respondents based in countries with higher levels of economic development will report that their organisations are more advanced on most indicators of sustainability than will those based in less economically developed countries.

Husted (2005) states that “egalitarian, individualist, and feminine values appear to constitute ‘green’ or ‘sustainable’ values”. The USA is a country with low power distance and individualism, and a high level of economic development, which would theoretically promote greater sustainability management. However, the USA has along history of


masculine achievement orientation, short-term focus, and generally low concern for nature, along with a political discourse resistant to environmental sustainability. Furthermore, the individualistic, capitalist tradition in the USA has tended to keep government out of much business regulation. These factors lead us to expect that US managers will have less regard for most aspects of sustainability management compared to counterparts in Europe, Latin America, and Asia. At the same time, American respect for the individual seems to have translated into concern for employees and an emphasis on the legal defence of workers’ rights and anti-discrimination provisions. Thus, our expectations were less clear with respect to how US firms’ performance would compare to the rest of the world regarding work force and ethical, issues. Thus, we hypothesise:

Hypothesis 3A US compared to rest of the world: respondents based in the USA will report that their organisations are less advanced on most indicators of sustainability than will those based in non-US locations.

Comparing all six regions separately may be confounded by the well-known variation in conditions within regions. It is perilous to generalise across countries that vary greatly on many economic, environmental and cultural dimensions, such as Malaysia versus Japan in Asia or Ukraine versus Germany in Europe. Nevertheless, because of cultural influences in much of Europe similar to the emerging regions, along with its relatively high level of economic development that foster affordability and stakeholder pressures for sustainability, we suggest that Europe-based organisations will exhibit the greatest sustainability management. We are less certain about differences among the three less-developed regions. The similarity of socio-cultural and economic influences on organisations in the USA and Canada led us to expect less vigorous sustainability management in these two countries than in Europe, Asia, Latin America, and Africa/Middle East. As noted above, such factors as more long-term focus and more relational and nature-oriented behaviour outside of North America point in this direction (Chen and Miller, 2011; Hofstede, 1980, 2001). Thus, we hypothesise:

Hypothesis 3B Across all regions: respondents based in Europe will report the greatest sustainability management among all regions. Respondents based in the USA, and Canada will report that their organisations are less advanced on most indicators of sustainability than will those based in Europe, Asia, Latin America, and Africa/Middle East.

3 Methods

We used data from a worldwide survey designed for a study by Fairfield et al. (2011). The survey asked respondents about the degree to which their organisations were implementing sustainability practices; the factors driving, enabling and inhibiting organisational sustainability; and the relative amount of performance improvement experienced over the previous five years.


3.1 Participants

The target survey population consisted of the American Management Association’s international e-mail list of executives, managers, supervisors, and individual contributors. A total of 1,514 usable surveys were submitted from 65 identifiable countries, approximately 3.5% of all e-mail invitations sent out. As shown in Table 1, 61.1% (925) were based in the USA. Respondents represented virtually every economic sector, and a broad variety of functions, with about 75% at or above the managerial level. About 54% of respondents’ organisations were either multinational or global in operational scope with a relatively even split between smaller, medium, and large-sized organisations. Table 1 Geographic distribution of survey respondents

In which country and overall region are you located?

Region (nation and N respondents) N Percent Africa-Middle East (Egypt 2, Iran 1, Israel 2, Mauritius 1, Nigeria 2, Oman 1, Qatar 2, Saudi Arabia 6, South Africa 8, Tanzania 1, UAE 5)

80 5.3

Asia-Pacific (Australia 12, China 22, India 64, Indonesia 5, Japan 7, S. Korea 3, Malaysia 1, New Zealand 1, Pakistan 1, Philippines 3, Singapore 8, Thailand 1, Vietnam 1)

177 11.7

Canada 98 6.5 Europe – Eastern and Western (Austria 1, Belgium 5, Croatia 1, Cyprus 1, Czech Republic 4, France 6, Georgia 1, Germany 10, Greece 2, Greenland 1, Hungary1, Iceland 3, Ireland 1, Lithuania 1, Macedonia 3, Netherlands 3, Norway 1, Poland 4, Portugal 1, Romania 3, Russia 4, Slovenia 2, Spain 3, Sweden 4, Switzerland 4, UK 25)

162 10.7

Latin America – South America, Caribbean, Mexico (Antigua and Barbuda 1, Argentina 2, Bolivia, 1, Brazil 3, Ecuador 1, El Salvador 1, Guatemala 1, Jamaica 1, Mexico 38, Trinidad 1, Venezuela 1)

72 4.8

USA 925 61.1

Notes: The total N in a region does not equal the sum of country responses shown under that region because the country in which a respondent was based could not always be reliably established from their survey responses to demographic questions.

3.2 Survey measures

Internal/sustainability management factors. All of the survey questions used five-point, Likert-type scales, with a 1 rating generally designated as ‘not at all’ and a 5 rating as ‘to a very great extent’ or ‘extremely important.’ Questions were grouped by perceptions of sustainability practices, performance improvement, decision drivers, organisation implementation enablers, and implementation inhibitors. There also were two separate overall questions:

‘1 To what extent do you believe that your organisation is implementing a sustainability strategy?’

2 ‘To what extent is your organisation seeing measurable benefit from sustainability initiatives?’


Table 2 Descriptive statistics and correlation coefficients for variables in the study

1 2

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t the

p <

.05

leve

l. M

eans

and

co

rrel

atio

ns re

port

ed a

bove

do

not c

orre

ct fo

r wid

e di

spar

ities

in n

umbe

r of r

espo

nden

ts a

cros

s cou

ntri

es.


We borrow for our analysis the factors and highly-reliable measurement scales (see Table 2 for scale reliability scores) created and validated by Fairfield et al. (2011), as detailed below.

Sustainability Practices were assessed via responses to the multi-part question: ‘On a scale from 1–5, to what extent does your company have practices in place to do the following?’ Confirmatory factor analysis produces three five-point scale scores:

Practices 1 Integration/alignment, including such areas as cross-functional integration, metrics and using sustainability criteria in recruitment and promotion.

Practices 2 Eco-efficiency, covering energy efficiency, emissions, and waste.

Practices 3 Employee-centred/ethics, such as employee engagement, work-life issues, and ethical accountability.

Decision drivers were assessed via responses to the multi-part question: ‘On a scale of 1–5, to what extent does each of the following items drive key business decisions for your company today?’ Factor and reliability analyses of the items under this umbrella produce four five-point scale scores:

Drivers 1 Eco-system concerns, including reducing pollution and waste and securing energy and water resources.

Drivers 2 External stakeholder/marketplace issues, using sustainability to satisfy customers and civic groups.

Drivers 3 Workplace issues, including attracting and retaining talent.

Drivers 4 Reputation/innovation/compliance issues, covering reputation with investors, regulators and the public, and enhancing innovation.

Internal inhibitors were assessed via responses to the multi-part question: ‘To what degree does each of the following issues hinder your company from moving toward sustainability?’ A single five-point scale score resulted, including the lack of ideas, business case, and metrics.

Foundational organisation enablers were assessed via responses to the umbrella question On a scale of 1 to 5, to what extent does your company have the following qualities for building a sustainable enterprise:

a top management support

b centrality to business strategy

c deeply ingrained sustainability values.

These three items produced a single five-point scale score. We also explored two types of External Influences that would be expected to

undermine an organisation’s desire to pursue a sustainability strategy. The stem for this survey section was “to what degree does each of the following hinder your company from moving toward sustainability?” Analyses of the four items probing for lack of demand for sustainability actions from the community, suppliers, customers, and shareholders and investors produced a single five-point scale score, called Lack of External Stakeholder Demands, which appeared to capture external aspects consistent with the stakeholder view of the firm (Freeman, 1984; Clarkson, 1995). A second independent factor emerged


based on responses to the item, “Fear of competitors taking advantage of us”, labelled Competitive Disadvantage, which appeared to capture an external aspect of rivalry dynamics consistent with theories of industry structure (Porter and van der Linde, 1995).

Organisational factors: We created measures for organisational factors by using responses to survey demographic questions concerning size and strategic scope of operations.

We created a Size control variable based on the reported amount of total annual revenue in seven categories, which we then collapsed to create three revenue categories with relatively even proportions of respondents:

1 revenues of below $50 million (34%)

2 revenues more than $50 million and less than $1 billion (32%)

3 revenues greater than $1 billion (34%).

Confirming prior research, preliminary analyses showed that organisations with larger revenue exhibited higher levels of sustainability than smaller and mid-size ones.

As an indicator of strategic operational scope, we created a variable based on responses to a three-category survey item:

1 national (operations in one country only; 46%)

2 multi-local (national/regional operations acting independently; 25%)

3 global (high level of global integration; 29%).

Geographic factors: We created measures for geographic comparison simply by using responses to survey demographic questions concerning the region and country in which each respondent was based. We were able to identify the regional location of all 1,514 survey respondents, and the country location of 1,344 respondents.

We ascertained respondents’ Regional Location in one of six regions, as shown in Table 1. Further, we assigned US vs. other as a two-category grouping variable.

As a measure of Country Level of Economic Development, we used contemporary purchasing power parity (PPP) scores. Gross domestic product (GDP) per capita when expressed in PPP standards eliminates the differences in price levels between countries allowing meaningful volume comparisons of GDP. Scores were available for 64 of the 65 countries in our data set, encompassing 1,341 respondents. There was a .97 correlation between per-capita GDP and PPP for these countries.

4 Analysis

Data analysis was conducted using the SPSS 19.0 software package. We used multivariate analysis of variance (MANOVA) to test for differences between organisational strategic scope and regional groupings on the mean ratings of respondents across the study’s dependent measures. We used regression analysis to test for the effects of country-level economic development on respondents’ ratings. Company size (revenues), strategic scope of operations (national, multi-local, global), and level of country economic development (PPP), were introduced as control variables in certain analyses as appropriate.


5 Results

Table 2 shows the descriptive statistics and correlations for the measures used in this study.

5.1 Test of Hypothesis 1 – effects of organisation strategic scope

The results largely confirmed our hypothesis of an ordered relationship according to increasing strategic scope (controlling for size). As expected, we found a significant multivariate effect of organisation strategic scope across our survey measures (Pillai’s Trace 5.7, p < .001, R2 = .05). As shown in Table 3, except for workforce-oriented drivers and external stakeholder-demand pressures, significant univariate effects were found for every measure (F’s > 5.2, p < .01). Organisations with global scope were rated more strongly on almost all indicators of sustainability effort than were national and multi-local ones. For the most part, multi-local organisations more closely mirrored national than global organisations.

Table 3 Analysis of variance results for national, multi-national, and global organisations

Variables

Geographic scope of organisation operations

National N = 509

Multi-national N = 491

Global N = 524 Sig.

Mean S.D. Mean S.D. Mean S.D.

1 Extent implementing sustainability

2.80a 1.16 2.94a 1.13 3.27b 1.15 ***

2 Extent seeing benefits from sustainability

2.77a 1.06 2.86b 1.12 3.07c 1.10 ***

3 Practices 1 – integrative for sustainability

2.74a 1.06 2.88b 1.04 3.08c 1.06 ***

4 Practices 2 – eco-efficiency

2.71a 1.07 2.99b 1.10 3.28c 1.11 ***

5 Practices 3 – employee-centred/ethical

3.59a .86 3.59a .82 3.79b .79 ***

6 Drivers 1 – eco-system concerns

3.12a 1.14 3.35b 1.05 3.51c 1.05 ***

7 Drivers 2 – external stakeholders concerns

3.34a 1.08 3.48a .98 3.58b .97 **

8 Drivers 3 – workforce concerns

3.73 .91 3.68 .87 3.77 .89 NS

Notes: *Denotes ANOVA p < .05, **denotes p < .01, ***denotes p < .001. Means in the same row that do not share the same subscripts differ at p < .05 on the Dunnett-C measure of between-group differences.


Table 3 Analysis of variance results for national, multi-national, and global organisations (continued)

Variables

Geographic scope of organisation operations

National N = 509

Multi-national N = 491

Global N = 524 Sig.

Mean S.D. Mean S.D. Mean S.D.

9 Drivers 4 – reputation/innovation/regulation concerns

3.91a .85 4.08a .75 4.19b .73 ***

10 Foundation enablers – sustainability strategy execution qualities

3.10a 1.13 3.20a 1.14 3.44b 1.11 **

11 Barriers – internal deficiencies

3.14a .99 3.14a 1.03 2.89b 1.04 ***

12 External 1: lack stakeholder demand

3.02 1.14 3.03 1.15 3.00 1.12 NS

13 External 2: fear of competitive disadvantage

2.36a 1.22 2.47b 1.23 2.36a 1.20 ***

Notes: *Denotes ANOVA p < .05, **denotes p < .01, ***denotes p < .001. Means in the same row that do not share the same subscripts differ at p < .05 on the Dunnett-C measure of between-group differences.

5.2 Test of Hypothesis 2 – country economic development

We examined the effects of economic development using country as the unit of analysis. To avoid overweighting countries with a large number of respondents, we averaged respondent ratings within a country into 65 unique country scores for each dependent survey measure. As a consequence of reduced sample size for these exploratory analyses (N = 65), we were unable to employ multivariate techniques and considered an acceptable level of significance to be p < .10.

We found little support for our expectation of a positive relationship between country economic development and organisation sustainability efforts. In fact, most of the means tended to be in the opposite direction, showing greater sustainability management in less developed countries. Univariate regression analysis, controlling for the average level of firms’ strategic scope in a country, showed significant effects of PPP on only two specific survey measures – the lower the PPP, the higher were respondents’ ratings on perceived benefits and their fear of competitive disadvantage from sustainability implementation (F = 4.2, p < .05, R2 = .06, and F = 3.2, p < .10, R2 = .03, respectively). Thus, there appeared to be at least as much sustainability management going on in less developed countries (controlling for scope), counter to what most prior research suggests, with greater perceived value yet more fear of being taken advantage of because of it.


5.3 Test of Hypothesis 3 – Regional differences

ANOVA showed that countries’ PPP scores (average level of economic development) varied greatly across the six geographic regions (F = 744.5, p < .000, R2 = .61). Post hoc analysis showed that the PPP scores for each of the six regions were significantly different from one another (Asia $12, 670, Latin America $16,208 Africa/Middle East $28,279, Europe $33,399, Canada $38,941, USA $47,199).

H3A: US versus non-US-based respondents. Given the large proportion of respondents from the USA (61%), we first compared responses of US-based respondents to those from all other regions combined. Because significant differences in organisation size and strategic scope were found across regions, we judged it necessary to introduce these as controls variables in all regional analyses. It was not possible to control for country PPP in regional analyses because countries were unequally represented within regions, and aggregation would both reduce sample size dramatically and obscure differences across firms. However, much of the effects of economic development were picked up due to its high correlation with region, as noted above. Table 4 Analysis of variance results for US versus other regions, controlling for organisation

size and strategic scope

Variables

Geographic region

Sig. US N = 925

Other N = 589 Mean (S.D.) Mean (S.D.)

1 Extent implementing sustainability 2.90 (1.21) 3.10 (1.10) ** 2 Extent seeing benefits from

sustainability 2.74 (1.09) 3.10 (1.05) ***

3 Practices 1 – integrative for sustainability

2.79 (1.08) 3.02 (1.04) ***

4 Practices 2 – eco-efficiency 2.80 (1.11) 3.18 (1.11) *** 5 Practices 3 – employee-centred/ethical 3.64 (1.11) 3.55 (.97) NS 6 Drivers 1 – eco-system concerns 3.19 (1.11) 3.66 (0.86) *** 7 Drivers 2 – external stakeholders

concerns 3.42 (1.01) 3.55 (.97) **

8 Drivers 3 – workforce concerns 3.71 (.91) 3.76 (0.85) NS 9 Drivers 4 – reputation/innovation/

regulation concerns 4.04 (0.82) 4.02 (0.77) NS

10 Foundation enablers – sustainability strategy execution qualities

3.16 (1.16) 3.33 (1.09) **

11 Barriers – internal deficiencies 3.06 (1.04) 3.08 (.98) NS 12 External 1: lack stakeholder demand 3.00 (1.17) 3.10 (1.07) NS 13 External 2: fear of competitive

disadvantage 2.29 (1.20) 2.54 (1.24) ***


MANCOVA results showed a significant multivariate effect of US versus non-US groups across the study’s dependent measures (Pillai’s Trace 9.1, p < .001, R2 = .08). The univariate ANOVA results are shown in Table 4. As predicted, US-based respondents rated their companies significantly lower than their international counterparts on the majority of sustainability measures (controlling for size and scope). However, the US and non-US respondents did not differ on their ratings of reputation-innovation-compliance drivers, workforce drivers, and ethical and employee-centred management practices. No difference emerged with respect to the strength of demands from external stakeholders or the extent of internal inhibitors to implementing sustainability practices. In addition, US respondents rated their companies as having less fear of encountering competitive disadvantage from their sustainability initiatives. Thus, US companies did not report higher outside barriers to acting more sustainably; however, they reported overall fewer positive drivers and practices for sustainability. In general these results mostly confirm H3A in painting a clear picture that, excepting innovation and workplace issues, the US lags behind its international counterparts in making sustainability a priority and deriving benefits from it.

5.4 Test of Hypothesis 3B – Differences across all geographic regions

Testing of Hypothesis 3B called for examining sustainability-management differences across all six regions, controlling for organisation size and scope. MANCOVA results showed a significant multivariate effect of region across the study’s dependent measures (Pillai’s Trace 4.1, p < .001, R2 = .04). Table 5 shows the univariate analysis results of regional effects on survey measures. The overall pattern from post hoc analyses revealed that US, Canadian and, in some cases, European respondents tended to report less robust sustainability management than did those in the other three regions, particularly Latin America and Asia-Pacific.

More specifically, we found significant regional effects for 8 of 13 dependent measures (whereas PPP only accounted two). Latin American respondents reported greater sustainability implementation than those based in Canada. Compared to the USA and Canada, respondents from the three regions other than Europe reported seeing greater company benefits from implementation. Latin American respondents reported greater sustainability integration practices and eco-system concerns than those based in the USA. In addition, Latin American and Asia-Pacific respondents also reported stronger foundational enablers in their organisations than did those in the USA and Canada. Further, Asia-Pacific respondents reported more fear of being at a competitive disadvantage from their sustainability initiatives than did those in the US, Canadian, and European regions. Generally, the ratings of European-based respondents tended toward being between and not significantly different from all the other regions. The pattern of these findings deviates substantially from what we hypothesised. The US and Canadian organisations were laggards, as expected. But counter to expectations, it was not firms in the European region but rather those in the three less-developed ones that evidenced greater sustainability management, despite their poorer economic context.


Table 5 Analysis of variance results for six geographic regions, controlling for organisation size and strategic scope

Regi

on

USA

N

= 9

25

Can

ada

N

= 9

8 Eu

rope

N

= 1

62

Afri

ca-M

E

N =

80

Asia

-Pac

ific

N

= 1

77

Latin

Am

eric

a N

= 7

2 Va

riab

les

Mea

n S.

D.

M

ean

S.D

.

Mea

n S.

D.

M

ean

S.D

.

Mea

n S.

D.

M

ean

S.D

.

Sig.

1 Ex

tent

impl

emen

ting

sust

aina

bilit

y 2.

90a,

b1.

20

2.

83a

1.22

3.09

a,b

1.80

3.23

a,b

1.06

3.17

a,b

1.02

3.28

b 1.

15

**

2 Ex

tent

seei

ng b

enef

its fr

om su

stai

nabi

lity

2.74

a 1.

09

2.

79a

1.08

2.95

a,b

1.12

3.24

b 1.

00

3.

30b

.92

3.

22b

1.10

**

* 3

Prac

tices

1 –

inte

grat

ive

for s

usta

inab

ility

2.

79a

1.08

2.73

a 1.

06

2.

85a,

b .9

8

3.08

a,b,

c1.

06

3.

16b,

c .9

6

3.34

c 1.

11

**

4 Pr

actic

es 2

– e

co-e

ffici

ency

2.

80a

1.09

3.07

a,b

1.11

3.11

a,b

1.11

3.05

a,b

1.09

3.23

b,c

1.01

3.51

c 1.

03

***

5 Pr

actic

es 3

– e

mpl

oyee

-cen

tred/

ethi

cal

3.64

.8

2

3.74

.8

2

3.72

.7

9

3.42

.9

1

3.62

.8

8

3.76

.9

2 N

S 6

Driv

ers 1

– e

co-s

yste

m c

once

rns

3.19

a 1.

12

3.

26a,

b 1.

15

3.

23a,

b 1.

11

3.

44a,

b,c

1.00

3.61

b,c

.99

3.

79c

.97

***

7 D

river

s 2 –

ext

erna

l sta

keho

lder

s con

cern

s 3.

41a,

b1.

01

3.

38a,

b 1.

01

3.

26a

.97

3.

79c

.96

3.

75c

.89

3.

70b,

c .9

6 **

* 8

Driv

ers 3

– w

orkf

orce

con

cern

s 3.

71

.91

3.

79

.91

3.

63

.84

3.

67

.90

3.

83

.85

3.

92

.72

NS

9 D

river

s 4 –

repu

tatio

n/in

nov/

regu

l con

cern

s 4.

04

.82

3.

91

.79

3.

95

.80

4.

06

.82

4.

09

.70

4.

11

.75

NS

10

Foun

datio

n en

able

rs –

sust

ain.

stra

tegy

ex

ecut

ion

qual

ities

3.

16a

1.16

3.13

a 1.

13

3.

23a,

b,c

1.11

3.21

a,b

1.14

3.49

b,c

.97

3.

52b,

c 1.

11

**

11

Bar

riers

– in

tern

def

icie

ncie

s 3.

06

1.04

3.20

1.

05

2.

96

.91

3.

07

1.08

3.12

.9

8

3.07

.9

7 N

S 12

Ex

tern

al 1

– la

ck st

akeh

olde

r dem

and

3.00

1.

17

3.

12

1.23

3.11

1.

04

3.

08

1.07

2.97

1.

03

3.

04

1.02

N

S 13

Ex

tern

al 2

– fe

ar o

f com

petit

ive

disa

dvan

tage

2.

29a

1.20

2.32

a,b

1.36

2.32

a 1.

16

2.

64a,

b 1.

28

2.

77b

1.90

2.67

a,b

1.16

**

*

Not

es: *

Den

otes

AN

OV

A p

< .0

5, *

*den

otes

p <

.01,

***

deno

tes p

< .0

01. M

eans

in th

e sa

me

row

that

do

not s

hare

the

sam

e su

bscr

ipts

diff

er a

t p <

.05

on th

e

Dun

nett-

C m

easu

re o

f bet

wee

n-gr

oup

diffe

renc

es.


6 Discussion and conclusions

We sought to illuminate the relative influence of organisational versus geographic factors on sustainability management. These results confirm some of our hypotheses and raise other questions that are not easily answered. Of the approximately 15 to 19% of variance explained in sustainability management indicators, about 11% can be attributed to organisational attributes, while about 4 to 8% is due to regional or country differences. This suggests that organisations do to some extent modify their sustainability strategy according to geographic institutional context but that their size and overall strategic approach to cross-border management has greater influence on strategy.

More specifically, our findings for strategic scope say that the distinction between an organisation’s operations being national, multi-local, or global is meaningful when it comes to dedication to sustainability. As hypothesised, with respect to environmentally-oriented drivers and practices, integrative practices, and extent of perceived benefits, international firms were stronger than national ones, and international firms with global cross-border strategic approaches were the strongest of all. Our hypothesis was only partially confirmed on other measures of sustainability management in that companies with global strategies were again strongest but firms with multi-local cross-border approaches appeared to behave much as national firms.

Very little previous research has reported unequivocally that global companies are engaging more deeply in sustainability management, as indicated here. Why would sustainability management increase with firm globalisation? Sustainability was reported here to be more central to business strategy, more deeply rooted in values, and more supported by top management for organisations with global cross-border strategies. In addition, firms with global strategies may tend to implement uniform sustainability policies, particularly in regard to the environment, just as they implement other functional policies on a global scale, to reduce complexity and increase legitimacy. Christmann (2004) found that the standardisation of multinational firms’ environmental management increased with the degree of standardisation in their cross-country functional operations. Firms adopting multi-local approaches to cross-border management, granting greater autonomy to subsidiaries, may experience greater resistance from country managers who perceive headquarters-imposed stringent policies on sustainability as adding costs to their operations without commensurate local benefits. Such firms may also see less reputational risk from transferring irresponsible practices to loosely-linked subsidiaries where local sustainability pressures are weaker (Sirroca et al., 2010). The finding that multi-locals more closely mimic that of their national competitors on many sustainability dimensions suggests that sustainability is more often driven from a strong headquarters than a more autonomous subsidiary. That would be congruent with the interpretation that sustainability is inherently a macro issue that cuts across a variety of company’s environmental, social, and economic concerns and is best understood at senior-most levels across companies’ lines of business, functions, supply chains, and distribution networks. Arguably, a full-blown sustainability strategy requires leadership of insightful vision and orientation to global citizenship (Waldman et al., 2006, 2012), which may be possessed to a greater extent in companies with a globally-integrated strategy. Our findings should reassure anti-globalisation critics by suggesting that global firms may be less likely to negatively exploit lax local regulations but rather more likely to adopt higher levels of sustainability management, even when local conditions do not require them.


Regarding the effects of geographic context, the pattern of our findings deviate in important ways from what we hypothesised. Consistent with expectations, US organisations of all sizes and scopes for the most part lagged in sustainability management compared to those in the rest of the world. Despite being a country with low power distance and individualism, and a high level of economic development, which would theoretically promote greater sustainability management (Husted, 2005), the long history of masculine orientation, short-term focus, and generally low concern for nature, along with a political discourse resistant to environmental sustainability led us to expect this finding. Exceptions were in areas relating to governance and employee-centred work practices, where the US is known to be relatively strong.

We also found significant differences across the six regions of the world in sustainability activity (controlling for organisation size and strategic scope). The lowest levels occurred in the USA and Canada. Somewhat surprisingly, organisations in the three less-developed regions reported greater sustainability management, even more than those in Europe. In fact, contrary to prior research, we found no support for a positive relationship between country-level economic development and organisational sustainability efforts but just the reverse.

Why might there be at least as much corporate sustainability management, with greater perceived benefits, reported by respondents from less-developed regions? Some have suggested that companies operating in Latin American, Asian, and even African and Middle Eastern locations would be bombarded by an array of cultural, environmental and developmental challenges calling for sustainability management. Cultural attributes associated with many countries in these regions, such as more long-term focus, more relational and nature-oriented behaviour, and in some cases lower masculinity, point in this direction.

Country-wide awareness and achievements in environmental and human welfare may tend to be higher in more economically developed countries (Emerson et al., 2010; Esty, et al., 2008). At the level of the firm, however, evidence suggests that organisations in less developed regions, especially global firms, often take it upon themselves to exceed local requirements by more aggressively addressing ecological and social needs than in higher income countries (Blackburn, 2007; Laszlo and Zhexembayeva, 2011). This suggests that companies may indeed be investing in areas of relevance for their host country, whether because it benefits their potential consumers, fosters a healthy and literate workforce, increases their institutional legitimacy, or is simply the ‘right thing to do’ (Bansal and Roth, 2000). In addition, while some US, Canadian and European policy makers and politicians may view sustainability as a luxury, it may be seen as more of a necessity in countries with lower-income and greater ecosystem deficiencies.

Implications for managers also emerge from these results. Multinational firms that tend to operate with the autonomy and market-specific practices of multi-locals can learn from the higher sustainability management levels of global companies. Senior executives may be encouraged that it appears easier to expand sustainability management in companies with global cross-border strategies due to the strong affinity of such firms for worldwide consistency and reputation. While multi-locals may derive advantage from not imposing certain dictates from headquarters, they could re-examine whether having more influence in sustainability management could enhance payoffs for the whole firm. Local management may be ideally situated to govern local marketing and manufacturing operations. However, if corporate management can derive a richer global vision for


sustainability policies and practices, such as cross-border supply chain issues, the entire firm may benefit from more fruitful practices, enhancement of reputation, and operating performance. Such centralisation need not come from corporate headquarters but could be effective when driven from regional headquarters or global line-of-business executives so as not to abrogate the sense of independence at the local level. Similarly, multi-local country managers aware of these findings could become sympathetic to relinquishing certain authority for decisions about sustainability issues.

Another managerial implication is that managers may find it easier to implement sustainability practices in non-US and Canadian operations. If, as conjectured, greater sustainability management partly derives from firms’ willingness to meet developing-country sustainability needs in order to strengthen their own competitive success in those geographies, then mangers who ignore such needs may increasingly find themselves at a competitive disadvantage in such regions. Beyond that, managers may have to accept that the complex cross-currents of national influences makes it risky to predict the impact of any unique configuration of national factors on their sustainability initiatives.

Several limitations prevent us from drawing sweeping conclusions. One obvious deficiency is the modest number of respondents from outside the USA. This raises the question of representativeness, as well as constricts what statistical inferences can safely be drawn. Low response rate was particularly limiting in regard to country-level analysis. Data limitations also forced us to grossly aggregate countries within regions, which obscured many potentially salient differences within those broad geographic groupings. We were unable to disentangle the effects of economic development from a host of cultural and institutional factors. However, we found significant regional effects for eight of 13 dependent measures, whereas PPP itself accounted for only two, suggesting that sustainability management is affected by geographic factors beyond economic development.

A more fundamental limitation is that all data come from self-reports. This can lead to personal biases, not to mention potential differences of interpretation across regions. For instance, one respondent might be more self-critical of the company due to customs in the home country than another in a different country describing a comparable situation. Further, perceived external influencers were phrased as deterrents and did not query positive factors. Another limitation is our inability to infer causation.

We acknowledge that our study explains only a relatively small amount of variance around decisions on sustainability strategy. To more fully explain sustainability management actions and track such strategies over time, follow-on studies should employ more nuanced instruments and seek a much larger and more representative international sample. Our results suggest that organisations may be at least partly customising their sustainability strategies to meet geographic developmental needs in a way that creates competitive advantage (Porter and Kramer, 2011). To the extent that this is occurring, future researchers will need instruments more fine grained than used here to detect interactions among different business models, industry factors, local conditions, specific types of sustainability practices implemented, and resulting performance outcomes. Particular attention is advised to assessing such potentially important international-management factors as a firm’s home country, not just a respondent’s operating location, or its stage of international expansion, which our data did not permit (Guillen and Garcia-Canal, 2009; Luo and Rui, 2009).


Nevertheless, this study does shed some light on how sustainability strategies arise in the context of different locations. This is the first evidence that the strategic scope and approach of an organisation’s operations may have an even bigger association with sustainability strategy and practice than do geographic differences, even while both influence such strategies. In a world where sustainability issues are fast becoming even more critical, this knowledge can provide some insight for the vital trip forward.

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Documents

Relative effect of geographic context and international