why companies go green a model of ecological responsiveness.pdf

^ Academy nf Management Journal2000. Vol, 43. No. 4, 717-736,

WHY COMPANIES GO GREEN:A MODEL OF ECOLOGICAL RESPONSIVENESS

PRATIMA BANSALUniversity of Western Ontario

KENDALL ROTHUniversity of South Carolina

We conducted a qualitative study of the motivations and contextual factors that inducecorporate ecological responsiveness. Analytic induction applied to data collected from53 firms in the United Kingdom and Japan revealed three motivations: competitive-ness, legitimation, and ecological responsibility. These motivations were influenced bythree contextual conditions: field cohesion, issne salience, and individual concem. Inthis article, we also identify tbe conditions tbat likely lead to bigb corporate ecologicalresponsiveness.

During the last decade, researchers concernedwith organizations and the natural environmenthave investigated why firms respond to ecologicalissues. They have examined why some firms em-brace ecologically responsive initiatives, while oth-ers in seemingly similar circumstances do not evencomply with existing legislation. Understandingthe motives for corporate ecological responsivenessis critical for two reasons. First, this understandingcould assist organizational theorists to predict eco-logically based behaviors. For example, if corpora-tions adopt ecologically responsive practicesmerely to meet legislative requirements, then firmswill engage in only those activities that are man-dated. Second, this understanding could exposethe mechanisms that foster ecologically sustainableorganizations, allowing researchers, managers, andpolicy makers to determine the relative efficacy ofcommand and control mechanisms, market mea-sures, and voluntary measures.

Several studies have identified motives for cor-porate "greening," such as regulatory compliance,competitive advantage, stakeholder pressures, eth-ical concerns, critical events, and top managementinitiative (Dillon & Fischer, 1992; Lampe, Ellis,8i Drummond, 1991; Lawrence & Morell, 1995:Vredenburg & Westley, 1993; Winn, 1995). Al-though these studies illustrate widespread interest

We wonld like to thank Keith Grint and ElizabethHoward for their assistance in the development of thisIiroject and Karen Golden-Biddle, Susan Houghton, BenOviatt and, especially, Christine Oliver for comments ondrafts of this article. We would also like to thank IBM,P&O, the Sasakawa Foundation, and Templeton Collegefor their financial support.

in understanding corporate greening, their abilityto predict ecological responsiveness is limited. Inparticular, scholars have not detailed the concep-tual distinctiveness of alternate ecologically basedmotivations or established whether the categoriesof motivations are inclusive of all motivations orare mutually exclusive of each other. Furthermore,extant research lacks clarity as to how motivationsdiffer and what contexts lead to particular motiva-tions. Similarly, although researchers acknowledgethat alternate motivations are associated with dif-ferent forms of ecological responsiveness, this rela-tionship has not been fully specified in the litera-ture or identified as relevant. Thus, a significantresearch opportunity exists to develop a model thatidentifies distinct conceptual categories of ecolog-ical motivations and the corresponding anteced-ents and outcomes associated with each motiva-tion.

. The purpose of this study was to examine whycompanies "go green" and, in so doing, to refine amodel that explains corporate ecological respon-siveness by identifying motivations for adoptingecological initiatives and the underlying factorsthat lead to each motivation. For the purposes ofthis study, we define corporate ecological respon-siveness as a set of corporate initiatives aimed atmitigating a firm's impact on the natural environ-ment. These initiatives can include changes to thefirm's products, processes, and policies, such asreducing energy consumption and waste genera-tion, using ecologically sustainable resources, andimplementing an environmental management sys-tem. Our concept of corporate ecological respon-siveness refers not to what a firm should do, but tothe initiatives that reduce the firm's "ecological

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718 Academy of Management Joumai August

footprint" (Hart, 1997). Prior literature on organiza-tions and the natural environment provided an ini-tial foundation for our conceptual model of corpo-rate ecological responsiveness.

BACKGROUND AND A PRELIMINARY MODEL

Prior research on organizations and the naturalenvironment has identified four drivers of corpo-rate ecological response: legislation, stakeholderpressures, economic opportunities, and ethical mo-tives. The importance of legislation in inducingcorporate ecological responsiveness has beenwidely recognized (Lampe et al., 1991; Lawrence &Morell, 1995; Post, 1994; Vredenburg & Westley,1993). Escalating penalties, fines, and legal costshave punctuated the importance of complying withlegislation (Cordano. 1993). Furthermore, firms canavoid expensive capital refits by keeping ahead oflegislation (Lampe et aL, 1991).

Stakeholders have also been instrumental in in-ducing corporate ecological responsiveness. Cus-tomers, local communities, environmental interestgroups, and even the natural environment itselfencourage firms to consider ecological impacts intheir decision making (Berry & Rondinelli, 1998;Bucholz. 1991; Lawrence & Morell, 1995; Starik,1995). Managers are able to avert negative publicattention and build stakeholder support by beingresponsive (Cordano, 1993; Dillon & Fischer, 1992).Lawrence and Morell (1995), however, found thatshareholders seemed to have little effect on corpo-rate ecological responses.

Economic opportunities also drive corporate eco-

logical responsiveness. By intensifying productionprocesses, firms reduce their environmental im-pacts while simultaneously lowering the costs ofinputs and waste disposal (Cordano, 1993; Lampeet al., 1991; Porter & van der Linde, 1995). Reve-nues can be improved through green marketing, thesale of waste products, and outsourcing a firm'senvironmental expertise (Cordano, 1993). Rent-earning firm-based resources, such as corporatereputation (Hart, 1995; Russo & Fouts, 1997), learn-ing capabilities (Bonifant, Arnold. & Long, 1995;Hart, 1995), and product quality (Shrivastava,1995), can be developed through corporate ecolog-ical activities.

Ethically motivated firms respond because it isthe "right thing to do" (Lampe et al., 1975; Wood,1991). Top management team members (Andersson& Batemen, 1998; Lawrence & Morell, 1995; Winn,1995) and company values (Buchholz, 1993) areinstrumental in encouraging these firms to evaluatetheir role in society.

Our preliminary model of the antecedent condi-tions of corporate ecological responsiveness, de-rived from the literature reviewed above, is illus-trated in Figure 1. The motives outlined in thefigure suggest that firms may be ecologically re-sponsive to comply with legislation, to build betterstakeholder relationships, to acquire economicwealth and competitive advantage, and to maintainecological balance. Although this model providesan important starting place, it has two limitations.First, the data that ground this model are inade-quate. Few past studies have systematically col-lected a broad range of data to determine if organi-

FIGURElA Preliminary Model of Corporate Ecological Responsiveness

DRIVERS

Leadershipcorporate values

Legislation

Stakeholderpressures

Economicopportunities

Ethical motives

Corporate ecologicalresponsiveness

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zational motives actually explained corporateecological responses. These studies' frequent reli-ance on a few case studies also constrains the gen-eralizability of their findings. Second, the model isnot fully specified. The constructs and their under-lying relationships require greater precision in or-der to be predictive. To understand ecologicallysustainable organizations, we need to further ex-plore the contexts that precipitate these motiva-tions and their interactions.

METHODS

The purpose of our research project was to de-velop a robust model of the motives for corporateecological responsiveness. To develop theory thatis empirically grounded, an inductive methodologyis appropriate (Glaser & Strauss, 1967; Yin, 1989).Of the two inductive methodologies, grounded the-ory and analytic induction, we chose analytic in-duction because it explicitly accommodates exist-ing theories (Manning, 1982). Using this approach,we went back and forth between data collectionand theory generation, beginning with a review ofthe literature to develop a set of hypotheses. Withanalytic induction, researchers collect data in-tended to cballenge their emerging hypotheses, inan effort to develop theory (Manning, 1982). Therelevant literature is visited, the hypotheses modi-fied, and another set of data collected. Discrepan-cies between existing theory and the data are rec-onciled in the subsequent iteration. Closure isachieved when the differences between the col-lected data and developed theory are small (Den-zin, 1989; Frankfort-Nachmias, & Nachmias, 1992;Glaser & Strauss, 1967).

In collecting data for this study, we sought toobtain information both broad and deep enough toensure a rich accumulation of data from which todraw inferences. To this end, we collected datafrom multiple sources, including in-depth inter-views, participant observations, and archival doc-uments. The first author collected data from 1993to 1995 from a total of 53 companies in severalcountries and in multiple industries, to supportinterindustry and international comparisons. Theresearch also focused on both stated intentions andobservable outcomes as a way to increase the reli-ability of the findings.

SamplingWe applied theoretical sampling, the recom-

mended approach to analytic induction, in select-ing the case studies (Denzin, 1989). In contrast tostatistical sampling, in which a sample is designed

to be representative of a population, in theoreticalsampling, cases are selected to highlight theoreticalissues and to refute or challenge the theory beingtested (Eisenhardt, 1989; Claser & Strauss, 1967;Pettigrew, 1990). We examined a relatively largenumber of cases to ensure diversity of practices andcontexts and thus increase the potential robustnessof the theory induced from the results. We used twoparallel selection processes: (1) a formal selectionof a series of five sets of case studies (each referredto as a data set), to build substantive theory, and (2)a more focused selection of ten individual casestudies, to address specific theoretical questions.

In the first selection process, theoretical differ-ences cut across sets of case studies. To increasereliability, we collected data from multiple firmswithin a data set that represented the same theoret-ical dimensions. The data sets included food retail-ers, subsidiaries of the diversified Britain-basedmultinational P&O, anto manufacturers, oil compa-nies, and Japan-based companies. We describe thedata sets below in the chronological order in whichthey were sampled.

Food retailers. Twelve of the 14 largest foodretailers in the United Kingdom were included inthis data set. The corporate head offices of all of thefood retailers included in this data set were in theUnited Kingdom, although some had operationsoutside of the country. We selected individualcases for this data set by approaching all large firmswithin the industry and soliciting their involve-ment. We chose this data set for three reasons. First,food retailers were facing a wide range of ecologicalissues, including tlie congestion related to in-townhypermarket sites, the use of greenfield sites, theemissions resulting from the distribution of theirproducts, energy management of shop operations,excess packaging associated with products, transitpackaging, and carrier bags, life cycle analysis ofown-brand products (in which the ecological costsof a good are calculated over the life of the good),"ecolabeling" of their own brands and competitors'brands, and providing recycling bins for local com-munities. Second, firms were particularly homoge-nous in the products they offered, in ecologicaleffects, and organizational structure and size(Simms, 1991). Third, the environmental policiesof the sector had not been widely studied, so itprovided a domain in which interviewees were lesslikely to respond with existing rhetoric.

P&O subsidiaries. To assess the importance ofinternal corporate structure and culture in motivat-ing a corporate environmental policy, we then se-lected a group of firms under the same organiza-tional umbrella: ten subsidiaries and the corporateheadquarters of P&O, a large, diversified, Britain-

720 Academy of Management Joumai August

based multinational. In consultation with the envi-ronmental director of P&O, we attempted to select adiverse group of subsidiaries that operated in dif-ferent industries and exhibited different attitudestowards the natural environment. The P&O compa-nies were firms within the construction, trucking,cruise, distribution, ferries, and property manage-ment industries. P&O was chosen for two reasons.First, it was a large diversified company that per-mitted an analysis across industry sectors, so thatthe effects of organizational structure and culturecould he better isolated. Second, because a clearcorporate direction had been established throughthe P&O Group corporate environmental policy, wecould assess the influence of the head office on theenvironmental practices of its subsidiaries. Prelim-inary analysis of the P&O data set showed that,although the corporation did influence the subsid-iaries' adoption of environmental practices, differ-ences among subsidiaries were better explained byindustry influences than by corporate influences.

Auto manufacturers. We included five firmsthat manufactured automobiles in the United King-dom in this data set. The names of the firms in thisindustry were extracted from the Excel database, aUnited Kingdom-based database that provides sta-tistical data for publicly listed firms. We selectedindividual cases by approaching the seven majorU,K. manufacturers in this industry. Six firmsagreed to participate, although a mutually accept-able appointment time could not be reached withone manufacturer. Of the five auto manufacturersstudied, four were headquartered in the UnitedKingdom, and one was headquartered in France.We selected auto manufacturers as the third dataset in an effort to capture the pertinent sectoralfactors that influenced corporate ecological re-sponses, as indicated by data from P&O. Three di-mensions appeared pertinent to the emerging the-ory: the influence of customers and localcommunities, the direct contact that an organiza-tion had with customers, and the types of ecologi-cal impacts. Auto manufacturers were consideredinformative because they hired local communitymembers, did not retail directly to consumers, andhad ecological impacts centered on manufacturingprocesses.

Oil companies. This data set included compa-nies that were involved in the extraction or refiningof oil in the United Kingdom. We approachedseven oil companies selected randomly from theExcel database to participate in this study, and fiveagreed. We selected oil companies as the fourthdata set because food retailers and auto manufac-turers were in highly fragmented sectors and expe-rienced relatively little negative environmental

press. The oil industry, in contrast, has a high levelof cohesion and interaction among firms, low prod-uct differentiation, and a negative ecological image(Adelman, 1987). This sector also differs from theother sectors we studied in that it relies heavily onprimary products, rather than on manufacturingand services, which permitted variation in the eco-logical effects. Also, firms in this sector did notinteract with consumers and local communities asdirectly as firms in the other sectors.

Japanese companies. Given the importance ofthe institutional context in influencing a firm's eco-logical practices, we chose the final data set tochallenge the emerging theory in a different cul-tural context. We included ten major Japanesefirms in this data set, all very large multinationalsoperating in the following industries: auto manu-facturing, oil, steel, chemicals, utilities, and elec-tronics. Japan offered a dramatically different cul-tiiral and institutional context from Britain's(Hofstede, 1980), and yet the firms were at similarpoints of industrialization. We also anticipated thatfirms in the United Kingdom and Japan experi-enced similar ecological issues because of theirisland geographies. Gaining participation fromJapanese firms proved to be challenging. Althoughan effort was made initially to include firms in theauto manufacturing and oil industries, to contrastdirectly with the U.K. data, such access was noteasily secured. Consequently, we used cold callsand chain sampling through personal contacts,which led to participation of a wider range of in-dustries than initially anticipated. Because indus-try-related factors are important in organizationalresponses, all of the Japanese firms had at least onematch in the United Kingdom.

The theoretical dimensions represented by thesedata sets reflected differences in some of the con-textual variables that emerged during data analysis,in particular, issue salience, field cohesion, andindividual concem. The generalizability of ourmodel, therefore, is limited to the degree to whichthe contextual variables were relevant to the con-text being evaluated.

Single case studies. The firms chosen for thissample were conceptually distinct from those inthe above five data sets across several dimensions:size, ownership, industry, and country. This dataset included a small firm, a family-owned firm, adiversified German industrial firm, two govern-ment-owned utilities, and firms in the electronics,information management, automotive parts, andchemicals industries. In addition to selecting firmsfor this group of ten for theoretical reasons, we alsoselected firms for the group opportunistically, toensure that we accounted for specific biases in the


theoretical sampling (such as bias due to firms'ready agreement to discuss their environmentalpolicies).

Using single case studies permitted us to chal-lenge and understand specific issues that emerged.For example, the data suggested that family-ownedbusinesses are motivated differently from husi-nesses with unrelated shareholders. Consequently,a case study of a family-owned husiness providedan assessment of whether the theory was influ-enced by type of organizational ownership. Al-though analyzing data from a single case study doesnot build reliability in extending theory, here ithelped to confirm whether the issue heing consid-ered represented a theoretical difference and war-ranted further consideration. For these single casestudies, there was insufficient evidence to suggestthat another data set was required.

Data SourcesInterviews. We based selection of our key infor-

mants on their knowledge ahout the ecologicallyoriented initiatives of their firms and the underly-ing reasons for the initiatives. Thus, we identifiedenvironmental managers or environmental direc-tors as the primary key informants. In 15 cases, acompany did not have an environmental manager.In these firms, we interviewed multiple seniormanagers. We perceived no systematic bias in thecontext descriptions, motivational dimensions, orfirm initiatives, hut we also gathered secondarydata for each company to assess the reliability ofthe key informants.

In total, we conducted 88 interviews, most last-ing between one and two hours. The list of inter-views is provided in Table 1. We conducted 5 in-terviews by telephone rather than on site owing tologistical constraints. All but 10 interviews weretape-recorded and then subsequently transcribedfor use in the data analysis. We took detailed notesduring the interviews that were not recorded. Theinterviews that were not recorded did not lead to asystematic selection bias because they were distrib-uted randomly across the data sets. All interviewswere conducted in English. As required, the inter-views with Japanese respondents were conductedwith an interpreter provided by the interviewee.

We kept initial interviews broad in scope in aneffort to expose a wide range of motivations andguiding themes. We started each interview hy ask-ing what the firm had done with respect to thenatural environment and then asked the respon-dent to trace the history of each initiative he or shementioned and to tell us why the initiative wasadopted. To build internal validity, we probed in-

consistencies further (Eisenhardt, 1989). In addi-tion, respondents were asked about the companies'relationships with stakeholders and about otherkey aspects of firm strategy, structure, and opera-tions. As the research project progressed and thetheory was refined, interview questions becamemore focused, as we tried to ascribe more detail tothe emerging patterns. After the main part of eachinterview was completed, if time permitted weasked respondents to comment directly on specificaspects of the emerging theory. The specific aspectof the theory probed depended on the interviewees'circumstances. For example, if, according to an in-terviewee, it appeared that her or his firm wasmotivated by legitimation, we asked if legitimation,ecological responsibility, or competitiveness bestdescribed the firm's motivations. In addition, weasked the interviewees to comment on the rele-vance of the contextual variables. These data pro-vided greater face validity to the emerging modeland, because we asked such questions later in theinterviews, the integrity of the core data was pre-served.

Participant observations. Early in the study, thefirst author observed training seminars at two largeU.K. firms, P&O and Thames Water, and took ex-tensive notes. In these seminars, the environmentalmanagers discussed corporate environmental poli-cies with senior managers. As these observationswere made at the beginning of the research process,they served to highlight some of the issues andconcerns raised by organization members whowere not convinced of the value of ecologicallyresponsive initiatives. Hence, they identified someof the factors that motivated or stalled the adoptionof ecologically responsive practices. Althoughthese observations were not coded, they were in-strumental in shaping initial conceptualizations ofan advanced model of corporate ecological respon-siveness. Approximately 60 hours were spent ob-serving in these seminars, and approximately 500pages of single-spaced transcribed notes were com-piled from the participant observation activities.

Archival documents. We used data from pub-lished sources, a newspaper search of the Reutersand Data Star databases, company accounts, annualreports, and corporate environmental reports toprovide a background for the interviews. A casestudy of each firm, constructed prior to the inter-view, included archival information on the firm'secologically responsive activities, financial perfor-mance, and ecological impacts. This informationserved to confirm the reliability of the interview-ees' responses and permitted more directed anddetailed probing in the interviews. For example, ifa food retailer reported that it was the first to re-

722 Academy of Management Journal August

TABLE 1List of Interviews

CompanyNumber of

Interviewees

Food retailersAsda Group pic 3Budgens Stores Ltd. 1Co-operative Retail Society 1Co-operative Wholesale Society Ltd. 2Gateway Foods - 1Iceland Frozen Foods 1Institute of Grocery Distribution^ 1|. Sainsbury pic 1Kwik Save Group pic %Marks & Spencer pic iSafeway 1Tesco Stores Ltd. 1Wm. Low & Co. pic 2

Total number of interviews with food retailers 17

P&O companiesBovis Construction Ltd. 1Bovis Homes Ltd. 1Containerbase (Manchester] Ltd. 1P&O European Containers 1P&O Cruises (UK) Lid. 3P&O Distribution Ltd, 2P&O European Ferries 1P&O Group 1P&O Properties Ltd. 1P&O Tankers Ltd. 1Princess Cruises 1

Total number of interviews with P&O ' 14companies . "

Auto manufacturersIBG Vehicles Ltd. 2Jaguar Ltd. 1Peugeot Talbot Motor Co. pic 3Rover Group Ltd. 1Vauxhall Motors Ltd. . iS

Total number of interviews with auto dmanufacturers

Oil companiesBritish Petroleum SConoco Ltd. . I jEsso Petroleum Company Ltd. " tGulfOiUUK] Ltd. 1Total Oil Great Britain Ltd, ' - 1^

Total number of interviews with oil companies 8

]apanese organizationsAsahi Ghemical 2'Idemitsu 1Japan Audit and Certification Organization for 1

Environment (JACO)*Keidenran" . 1MITP 1Nippon Oil Corporation 4

TABLE 1(continued)

Company

Nippon SteelNissan MotorPetroleum Association of Japan^Pioneer ElectronicsSophia University"Sumitomo CorporationTokyo Electric Power Company (TEPGO)Toshiba CorporationUbe Industries Ltd,

Number ofInterviewees

222311232

Total number of interviews with Japanese 28organizations

Single case studies ' :Albright & Wilson Ltd. ' 1British Telecommunications pic 1Burmah Castrol ' 1Hewlett Packard 2IBM United Kingdom Ltd. 1Lucas Industries ' 1Seimens AG , 1Thames Water . . 1Warburton Ltd. , . 2Rank Xerox Ltd, 1

Total number of interviews with single case 12studies

* Indicates a supplementary interview.

place chlorofluorocarbons (CFCs) in its refrigerantswith hydrochlorofluorocarbons (HCFCs), then weasked the respondent if the claim was true, thereasons for the replacement, the reasons for itsleadership position, and the reasons for reportingit. This process of prohing highlighted the relation-ships among an innovation's context, rationale, andprocess. We did not code the archival documentsbecause the objective was to investigate motiva-tions and not outcomes. Because little archival in-formation was available on our selected Japanesecompanies, we supplemented the company inter-views with eight interviews of knowledgeable rep-resentatives of relevant Japanese institutions, in-cluding the Ministry of Trade and Industry (MITI),the Keidanren (a multi-industry organization), anindustry association, a university, and the JapaneseAuditing Organization.

Data AnalysisIdentifying motivations and their key differen-

tiating dimensions. Our goal was to isolate a mean-ingful set of motivations so that implications couldbe drawn for future theory testing. It was important.


therefore, to identify a set of constructs that weretheoretically meaningful, internally consistent, ro-bust, and distinct. However, an ecological responsecould reflect multiple motivations, and any onemotivation could be expressed in several ways. Forexample, a food retailer that performs a life cycleanalysis of its own-brand products could say that ithad several motivations: "It was the right thing todo," "This is the direction of the future." or "Itcould differentiate us among our competitors." Itwas critical, then, for our analyses to apply insightsdeveloped in other research streams. It was alsoimportant to discriminate hetween the constructsso that they could be tested empirically later. Whatare assumed to he distinct differences in constructsoften converge and blur as theories evolve (Wright,1985), and the emphasis of this project on integrat-ing theory required careful consideration of thecritical differences hetween the constructs.

To derive valid constructs, we conducted twotypes of analyses: identifying motivations by com-paring actions with expressed motivations, andidentifying the relevant dimensions of the motiva-tions that help discriminate among them. First, wechronicled the ecological responses of each firmand then listed the corresponding motivations.From these lists, we generated a table that listed allpossible initiatives by their corresponding motiva-tions. This tahle was completed for each firm. If afirm engaged in a substantial number of initiativesthat were unique to a single motivation, we labeledit as having a dominant orientation (competitive-ness, legitimation, or ecological responsihility].Most firms could be associated witli a dominant mo-tivation. In the early rounds of data analysis, we usedcategories that were more descriptive than analytical(for instance, legislation, stakeholder pressures, prof-its) and developed theoretically tighter categories asdata collection and analysis proceeded.

We also coded the interview transcripts for othervariables that could help define the motivations.We coded variables that included cost reduction,increasing market share, reaction to competitors,reaction to consumers, building resources, sur-vival, legislation, avoiding penalties, license to op-erate, managing risks, doing the right thing, andavoiding personal risk. We summarized the codesfor each firm, and a distinct pattern of differencesbetween the firms with dominant motivations be-gan to emerge. We ultimately labeled these motiva-tions "competitiveness." "legitimation," and "eco-logical responsibility." Attributes of ends, means,constituent focus, decision analysis, decision rule,and strategic posture served to discriminate amongthe motivations.

The model emerged from the multiple iterations

of data collection and literature review. In general,an iteration involved collecting data from archivalsources and interviews, coding interview data, de-veloping or refining emerging ideas, researchingexisting theory, and selecting more data for the nextround of data collection. Early stages of data col-lection pointed us to prior research in sustainabledevelopment, corporate social responsibility, insti-tutional theory, strategic management theory,stakeholder management theory, resource depen-dence theory, and the resource-based view of thefirm. As the data collection progressed, the existingrelevant theory became more apparent, and weprobed deeper into specific theories. In total, wecompleted five iterations of the data sets.

Given that the theory emerged over multiple it-erations of data collection, we were concerned thatthe theory might have evolved so significantly thatit no longer described early data. Using the finalcodes of the differentiating dimensions, we re-coded all of the data with the assistance of theelectronic software QSR NUD*IST. This softwarepermitted us to view all of the text with the samecode simultaneously so the large amount of data wasmore easily handled. Summaries were generated foreach differentiating dimension and contrasted withthe motivation or motivations assigned to a firm. Thisreanalysis confirmed the validity of three motivationsand their key differentiating dimensions, although wemade minor adjustments to the labels used. For ex-ample, in the initial analysis, we labeled the motiva-tion "competitiveness" as "profit orientation," but welater felt that the latter inaccurately highlighted theimportance of financial returns.

To examine the validity of the differentiating di-mensions, we asked an independent rater to codethe data pertaining to food retailers. This data setwas selected because it was the largest and had abalanced representation of all of the firm motiva-tions. The rater was given the differentiating di-mensions and asked to assign a dominant motiva-tion to eacb firm. The rater coded each of theinterview transcripts from the food retailers, pro-duced summary sheets of the differentiating di-mensions, and independently assigned a dominantmotivation. The rater and the first author agreed on10 of the 12 firms. For those on which the rater andfirst author disagreed, the differences were easilyreconciled because of the low internal validity inthe interviewees' responses and archival docu-ments. Given the high degree of agreement, theexpectation that the 41 remaining firms would ex-hibit the same properties, and tlie time intensity ofthis task, we did not replicate this exercise for theremaining firms.


Developing contextual variables. In addition toconsidering motivations, to develop a model of eco-logical responsiveness we had to understand thecontext in which these motivations would arise.For example, we could gain greater insights ahoutthe legitimation motivation hy determining when itwas more pervasive. Thus, we also analyzed theinterview transcripts to code the different internaland external conditions that influence the propen-sity of a firm to adopt a specific motivation. We alsodrew insights about the external context fi^om ar-chival documents concerning industry characteris-tics, Britain/)apan comparisons, information per-taining to P&O, and so forth. We summarized thecodes for each firm and, in the process of develop-ing motivations, a valid set of contextual condi-tions emerged that could be related to the dominantmotivations: issue salience, field cohesion, andecological responsihility.

MOTIVATIONS FOR CORPORATEECOLOGICAL RESPONSIVENESS

As noted, the data analysis suggested three basicmotivations for ecological responsiveness: compet-itiveness, legitimation, and ecological responsibil-ity. Exemplary data supporting the motivations andan indication of their pervasiveness are provided inTable 2. The salient dimensions that discriminateamong the motivations are provided in Table 3. Theinitiatives and benefits associated with each moti-vation are provided in Table 4.

Comp etitivenessWe define the term "competitiveness" here as the

potential for ecological responsiveness to improvelong-term profitability. According to respondents,ecological responses that improved competitive-ness included energy and waste management,source reductions resulting in a higher output forthe same inputs [process intensification), ecolabel-ing and green marketing, and the development of"ecoproducts."

In terms of salient characteristics, intervieweesfrom firms motivated by competitiveness expectedthat their ecological responsiveness led to sustainedadvantage and hence improved tlieir long-term prof-itability. A respondent from a Japanese firm reportedthis: "Firms compete on price and quality and arenow competing more on the environmental issues, aswell. Competitive advantage can be gained throughenvironmental responsibility." Many of these initia-tives were relatively simple housekeeping measuresthat required minor changes to processes but im-proved operational efficiency, which increased com-

petitiveness through lower costs. For example, manyfirms turned off lights in the evening and carefullymonitored air conditioning. Other firms sold or recy-cled waste in an effort to generate revenue. Consistentwith the resource-based view, firms attempted to de-velop ecologically related resources and capabilitiesto build long-term profit potential (Hart, 1995), suchas improved reputation, process efiiciencies. andproduct reliability. These resources and capabilitieswere developed through green marketing, source re-ductions and process intensification, and new capitalequipment. Some respondents also indicated that itwas easier to hire quality employees if a firm had ahetter reputation. Competitively motivated firms en-gaged in more visible activities to improve their cor-porate environmental reputations. These activitiesserved to enhance the firms' competitive advantage.

Competitiveness, in contrast to other motiva-tions, resulted in greater attention paid to the cost-benefit analyses of ecological responses. For exam-ple, the following sentiment was expressed by onerespondent and echoed by several others: "Onceyou have the investment, then maybe the benefitversus the payment costs may be of economic valueover the long term." Respondents often focused onthe "numbers" of ecological responsiveness, ex-pressing concerns epitomized by phrases like"costs," "accurate science." "customers will notpay," and "the company share price." Another dis-tinguishing characteristic of these firms was thatthey chose the options that they believed securedthe highest returns, independent of their ecologicalconsequences. These firms often excluded environ-mental impact assessments from their decisionmaking. Only after a decision was made was therelative ecological impact recognized. For example,an oil company installed pipelines to transport oilthroughout the United Kingdom. This option has.arguably, less ecological impact than its alterna-tives, but the decision to lay pipeline rather thanuse freighters was motivated hy the cost savingsresulting from the large volume of oil transported,not the ecological consequences. Under the moti-vation of competitiveness, social initiatives areadopted only if they serve to enhance a firm's fi-nancial performance.

Firms motivated by competitiveness actively in-novated ecologically benign processes and prod-ucts to enhance their market positions. Nehrt(1996) showed that the first paper pulp companiesto employ environmental technologies realizedhigher profits. Similarly, in this study, one Japa-nese chemical firm was developing a new processthat allowed more efficient recycling of paper. An-other Japanese firm reduced the level of benzene (atoxic substance) in its petroleum products because

2000 Bansal and Roth

TABLE 2Motivations for Ecological Responsiveness

725

Motivation Exemplary QuotesNumher of FirmsShowing Strong

Evidence

Competitiveness It was seen as good business management to turn a waste product into somethingwhich has value. Environmental initiatives are seen as hoth an environmentalopportunity and a business opportunity.

There are a numher of Firms which are thinking ahout how to estahlish anecohusiness. . . . The expense for environmental conservation is hecoming so hig thatthere are plenty of business opportunities.

Jealousy, competitiveness, call it what you like. That is what drives the organization.It is greed and competition.

And I suppose if we're brutally honest ahout it, if environmental Issues have volume,put money in the till, then it will hecome a primary consideration.

We did environmental management hecause of our concern for citizenship. Yet. in theend, this can he related to money.

Environment is going to be some kind of business strategy.

Legitimation The worst scenario is that we do something stupid and then we pay for it in the way

of fines, penalties, and lousy reputation.

At the end of the day. we are talking about insurance.

We wanted improve the image . . . and make it easier for us to operate,

3 food retailers1 P&O company2 Japanese companies1 other

1 food retailer5 auto manufacturers4 oil companies7 P&O companies2 Japanese companies5 others

The business issues are forced home through stakeholders, which include customers.employees, shareholders, peer competitors, suppliers, and increasingly more, thelocal community.

We are trying to gain legitimacy or credibility with stakeholders and also withcompetitors.

We will do what we need to do legally,

Social It's something that we can do. costs nothing to do it, and it's the right thing to do fromresponsibility our standpoint, the right thing to do from the consumer's standpoint.

Overall, when I show you our policy, the thing that we talk about in our policy isbeing committed to working with government to find the best reward for what ishest for the environment. I don't mean what is best for our industry or for [us] butwhat is best for society.

Ifs about being a good environmental citizen, about heing responsihle. There's nothingwrong with doing good.

Proving that we are aware of what we should be doing . . . irrespective of the financialsituation of the business.

We are talking ahout managing a hetter company. . . . The "better" is that in the truesense there is the moral better. We want to be because we can afford to be.

We've always recognized that the feel-good factor is important and this is just one ofthe ways in which this is built up.

3 food retailers1 P&O company

726 Academy of Management Journal X^ B r *

TABLE 3 'Key Dimensions Differentiating Motivations"

August

KeyDifTerentiating

Dimensions Competitiveness Legitimacy Social Responsibility

Ends

Means

ProfitabilityEnvironmental initiatives must be

commercially viable . . . . Wewould have more difficulty asmanagers in [this suhsidiary] tosell some ideas purely on feel-good grounds.

Competitive advantage

It is a question of providingsomething that the consumerreally wants which has theknock-on effect of increasingmarket share.

Constituent focus Customers, investors

Decision analysis

Decision rule

Our numher one motivator inanything we do is that we wantto be a consumer-responsivecompany.

Cost-heneflt analysisThey have to identify the relative

benefits to us. Foremost it has tobe a financial benefit.

MaximizeI am told hy Corporate to seek

leadership. . . . It is the companyculture that we are committingto be the best in everything,including environment.

Strategic posture Innovative

Firm survivalEnvironmental management will

be institutionalized in the goodcompanies and the others willdisappear.

Compliance with norms andregulations

If we don't comply, we willinvariably go out of businessparticularly if our petrol licenseis withdrawn.

Covernment. local community,stakeholders

Really, it comes down to looking atthe stakeholders in total. Thismeans looking at our customers,at our employees, at ourshareholders. They expectindustry to be better.

Costs and risks of noncomplianceIt was environmental risk

management.

SatisficeTo be brutally honest, it would be

the expectant of impendinglegislation. The movement of thelegislative goalpost which willusually take us to a decision likethat.

Isomorphic/ imitative

Corporate moraleThere is a feel-good factor in

everything surely. There has tobe.

Social good

The commercial issue has been inpart ignored. We don't believethat there are short-term quickfixes with regard to any of theissues that are serious issues.

Society

We will eventually run out ofresources and grind to a halt. Itis not just a greenies' concern, itis society's concern.

Ecological valuesSo the halon is gone. It cost us but

. . , our computer people canwalk around and say we don'thave halon protection.

IdealizeBecause of the evolution process.

we try not to be pressured intochanges but to sit down andindependently evaluate whethera real issue exists and shouldanything and can anything bedone.

IndependentIt is not a question of a large wallet Industry does not want to be seen We pride ourselves in thinking

to buy something that will makeit all better. It usually requiresyears of research to findsomething that will make it allbetter.

as the first across the pulpit forissues which are indeterminate.There is too much risk in termsof the ways in which the issue isinterpreted.

that we have done a morethorough and well-thought-outjob [than our competitors].

" Cells identify the aspect of each differentiating dimension pertinent to the focal motivation and give exemplary quotes frominterviewees.

it discovered another use for the benzene. Severalrespondents indicated that if environmental sci-ence was more definitive in assessing the ecologi-cal impacts of alternative activities and if consum-ers were more demanding, then they would morelikely show greater ecological responsiveness.

Legitimation

A motive of legitimation refers to the desire of afirm to improve the appropriateness of its actionswithin an established set of regulations, norms,values, or beliefs [Suchman, 1995). Examples of


'' ^ TABLE 4Initiatives and Benefits Associated with the Motivations for Ecological Responsiveness

Motivation Ecologically Responsive Initiatives Anticipated Benefits

Competitiveness

Legitimation

Social responsibility

Housekeeping measures such as energy and wastemanagement, source reductions resulting in thesame output for the same level of output,ecolabeling and green marketing, the developmentof ecoproducts, and the adoption of environmentalmanagement systems (EMS), such as BS 7750 andthe Eco-Management & Audit Scheme (EMAS).

Complying with legislation, instating anenvironmental committee or environmental managerto oversee a firm's ecological impacts and advisesenior management, developing networks orcommittees with local community representation,conducting environmental audits, establishing anemergency response system, and aligning the firm'simage with environmental advocates.

Redevelopment of local community areas to greenfieldsites, the provision of a less profitable green productline, donations to environmental interest groups andother local community groups, use of recycledpaper, replacement of retail items or office productswith more ecologically benign items, and recyclingof office wastes.

Higher profits, process intensification, larger marketshare, lower costs, differentiation, higher shareprice, rent-earning resources and capabilities.

Long-term sustainability, survival, license to operate,avoiding fines and penalties, lessening risks,employee satisfaction.

Feel-good factors, employee morale, individualsatisfaction.

legitimation as shown by the data included com-plying with legislation, establishing an environ-mental committee or environmental manager posi-tion to oversee a firm's ecological impacts andadvise senior management, developing networks orcommittees with local community representation,conducting environmental audits, establishing anemergency response system, and aligning the firmwith environmental advocates.

As outlined in Table 3, several salient character-istics differentiated this motivation from the othertwo motivations. Threats to a firm's legitimacywere believed to undermine a firm's license to op-erate or its long-term survival. As one respondentsaid, "We don't want to disappear if we can helpit. . . . Firms which don't have a policy will end upgoing out of business because they won't be ac-cepted by society." Respondents such as these em-phasized concerns such as "long-term sustainabil-ity," "survival." and "license to operate." Theseobservations support the theoretical relationsbipbetween organizational legitimacy and organiza-tional survival (Meyer & Rowan. 1977; Zucker,1987).

The data suggested that legitimation was directedtoward complying with institutional norms andregulations. A word frequently used by respon-dents was "compliance." Respondents focused noton proactive efforts but on reactions to external

constraints made to avoid sanctions, as predictedby Hart (1997) and Wood (1991). Often the corpo-rate environmental policies of these firms wereaimed at keeping up with environmental regula-tions. Respondents indicated that specific stake-holders, such as the local community, customers,and the government, articulated norms. Institu-tional pressures, viewed as an "iron cage" (DiMag-gio & Powell, 1983), evoke images of passive com-pliance, with minimal latitude for negotiation ordiscretionan image that fits the observations andconcerns expressed by these respondents.

Firms motivated by legitimation were focused onthe stakeholders most influential in prescribing orarticulating legitimacy concerns. The Japanesefirms, for example, focused their attention on thepriorities articulated by the Keidanren, the MITI,and their industry associations. Customers andshareholders imposed few direct requirements.British firms, in contrast, were sensitive to localcommunity concerns and the perceptions of share-holders. Hence, British firms aimed to avoid badpublicity associated with their ecological effects.One respondent identified the purpose of compli-ance initiatives by saying, "I know our lenviron-mentall policy is just a piece of paper. It is just formaking stakeholders nice and warm and cuddly."

The decision analysis of these managers aimed toreduce the costs and risks of noncompliance. Dis-


cussions focused not on what would occur if thefirm met the conditions of stakeholders but, rather,on what would happen if they did not. Hence,many respondents identified concerns about "sanc-tions." "fines and penalties," "bad publicity," "pu-nitive damages," "avoiding clean-ups," "discon-tented employees and work force," and "risks."These concerns were also reflected in the firms'initiatives in that they reduced risks rather thanpublicized their ecological responsiveness.

In accordance with efforts to avoid negative ef-fects, these respondents also aimed to "satis-fice"to meet standards rather than exceed them.Since their goal was to minimize risks and costs,firms sought to ensure that their ecological re-sponses met the norms. Furthermore, the dominantapproach of these firms was to imitate their peers.As firms operating in close proximity were usuallysubject to the same regulations and social norms,they often operated with similar standards in asocially cohesive environment. For example, all theoil companies decided to postpone efforts to re-cover volatile organic compounds. These firmsadopted a more passive and imitative stance, notonly to minimize the risk of moving first into novelproduction processes and strategies, but also to en-hance their legitimacy by imitating successful com-petitors, as predicted by Abrahamson and Rosen-kopf (1993). One respondent explained, "Wegenerally do not lead when it comes to environ-mental issues . . . there is quite a bit of risk associ-ated with being first, along with a lot of money,time, and grief." Consistent with institutional the-ory (DiMaggio & Powell. 1983). firms exhibited mi-metic isomorphism in complying with institutionalnorms and pressures and were motivated to complyin order to establish their legitimacy and to avoidsanctions for noncompliance.

Ecological ResponsibilityWe viewed ecological responsibility as a motiva-

tion that stems from the concern that a firm has forits social obligations and values. Within the data,initiatives motivated by ecological responsibilityincluded the redevelopment of previously usedland to green areas, the provision of a less profit-able green product line, donations to environmen-tal interest groups and other local communitygroups, the use of recycled paper, the replacementof retail items or office products with ones moreecologically benign, and the recycling of officewastes.

A salient feature of this motivation was a concernfor the social good. The ethical aspects of ecologicalresponsibility, rather than the pragmatic, were em-

phasized, which clearly differentiated this motiva-tion from the other two. Firms acted out of a sense ofobligation, responsibility, or philanthropy rather thanout of self-interest (Bucholz, 1991; L'Etang. 1995).When asked why they undertook particular ecologi-cal responses, interviewees from ecologically respon-sible firms often indicated that it was the "right thingto do." supporting the findings of Lampe and col-leagues (1991). Respondents claimed to derive "feel-good factors" from the initiatives. Hence, satisfactionand high employee morale were short-term henefitsfrom their ecological responses.

Firms motivated by ecological responsibility of-ten pointed to a single individual who had cham-pioned their ecological responses. The decisionprocess was often based on the values of powerfulindividuals or on the organization's values ratherthan a widely applied decision rule. This finding isconsistent with studies by Lawrence and Morell(1995) and Winn (1995), which showed that firms"top managements were responsible for the firms'environmental management leadership. In addi-tion, the ecologically responsible firms idealized,rather than rationalized, the best course of action.As one respondent indicated, "It's something thatwe can do, costs nothing to do, and it's the rightthing to do from our standpoint, and the right thingto do fi-om the consumer's standpoint." As a resultof individual leadership and a desire to uncover themost ecologically benign solutions, firms moti-vated by ecological responsibility often chose inde-pendent and innovative courses of action, ratherthan mimicking other firms whose motive was le-gitimation. In essence, these firms were looking todo the "right thing." As one respondent said, "If Ido something I want to do it wholeheartedly andI'll want to believe in what I am doing." The deci-sion was based on ethical criteria; whether it wasfinancially optimal was irrelevant. Respondents ex-pressed such views as "We feel some responsibilityto the environment," or "We must back up ourenvironmental strategy with genuine concern forthe environment."

A MODEL OF CORPORATE ECOLOGICALRESPONSIVENESS: DEVELOPING TESTABLE

PROPOSITIONS

In addition to identifying the motivations for cor-porate ecological responsiveness, the study also re-vealed the contexts of these motivations. Threecontextual dimensions influenced the dominantmotivations of firms: issue salience, field cohesion,and individual concern. A model depicting the re-lationships hetween the motivations and their con-texts is provided in Figure 2. Each variahle and its


FIGURE 2An Advanced Model of Corporate Ecological Responsiveness

CONTEXTS

EcoLOGiCAi:. CONTEXT

FIRM MOTIVATIONS

Issue salienceCertaintyTransparencyEmotivity

ORGANIZATIONAL FIELD CONTEXT

Field cohesionProximityI nterconnected ness

INDIVIDUAL CONTEXT

Individual concernEcological valuesDiscretion

Competitiveness

Legitimation

Environmentalresponsibility

ECOLOGICALLYRESPONSIVE INITIATIVES

Process intensification Green marketing Green products

Regulatory complianceNetworking withenvironmental interest groupsImpression management

Donations to environmentalcausesUnpublicized initiativesLife cycle analysis

anticipated relationships with the motivations aredescribed in detail below, and they are summarizedas propositions to help guide future work.

Issue SalienceWe define issue salience as the extent to which a

specific ecological issue has meaning for organiza-tional constituents. Certainty, transparency, andemotivity determine an issue's salience. Certaintyis the degree to which the impact of the issue on thenatural environment can he measured. For exam-ple, the disposal of nontoxic waste was quite cer-tain because respondents had good understandingof the ecological impacts of such disposal (for in-stance, aesthetic degradation and potential leach-ing of toxins into water supplies). Global warming,on the other hand, was far less certain because itsecological impacts were harder to determine [Oil &Gas Journal 1997; Parsons & Singer, 1995). Trans-parent issues are those that are easily attrihutahle toa polluting firm. Whereas a culprit making noisewas often transparent, an emitter of volatile organiccompounds was often not. Emotive issues are thosethat elicit an emotional response from organiza-tional constituents. Almost all ecological issues aresomewhat emotive, but they vary in their degree ofemotivity. For example, oil and chemical spillsgrabbed significant public interest when pictures ofducks bathed in oil and fish floating ashore ap-peared in the media, yet the frequent minor spills

that happened daily at gas stations did not engagethe same degree of public attention.

Data from documents and interviews showedthat issue salience was reflected in the followingadjectives: "proven," "standardized," "quantifi-able," "tangible," "easily costed," "measurable,"and "based on sound science." Issues with lowsalience were referred to as "soft" and "indetermi-nate." For issues of low salience, respondents hadrelatively little knowledge, and they often said thatthe science around the issue made the decisionregarding its handling difficult. Issues of high sa-lience elicited ecological responses usually moti-vated hy legitimation or competitiveness. A firm'slegitimacy could be threatened by the issue's sa-lience because constituents could easily see theimpact of the firm's activities on the environment.For example, food retailers in Britain were con-cerned about the use of recyclable shopping bags,stray shopping carts, and recycling bins in the park-ing lots hecause of the salience of these issues.Similarly, several heavy polluters, such as oil com-panies and steel companies, indicated that theyhad carefully landscaped their sites in order todeflect negative public attention.

Respondents indicated that salient issues werealso viewed as having a potentially significant im-pact on firm profitability because government agen-cies were more likely to impose fines or penaltieson activities, and customers were more likely to beaware of negative ecological effects and less sup-


portive of firm activities. If issues were not salient,organizational constituents were less likely to im-pose pressures. Although firms were given greaterflexibility in responding to issues that were notsalient, the potential cost savings or revenuesearned were not as higb as when the issue wassalient. Salient issues were more highly valued byconsumers, aud input costs were lower becausethey did not reflect ecological impacts. Competitiveadvantage was not likely to be realized when issuesalience was low unless a firm was able to make theissue salient to its suppliers or customers. Thus,issue salience also resulted in initiatives motivatedby competitiveness. These relationships can be ex-pressed in the following proposition:

Proposition 1. Issue salience will be positivelyassociated with legitimation and competitive-ness.

Field CohesionWe define field cohesion as the intensity and

density of formal and informal network ties be-tween constituents in an organizational field. Anorganizational field consists of "those organiza-tions that, in the aggregate, constitute a recognizedarea of institutional life: key suppliers, resourcesand product customers, regulatory agencies, andother organizations that produce similar services orproducts" (DiMaggio & Powell, 1991: 64-65).Fields are built around a network of interorganiza-tional relationships. The intensity of the relation-ships is facilitated by proximity, both social andgeographic, and through the interconnectedness ofconstituents in the field (Oliver. 1991). Tbe dataindicated that the frequency of interactions andresource dependencies increased interconnected-ness within the field, as organizational memberstransferred their understanding of the organiza-tional environment, including the natural environ-ment, to each other. Proximity further facilitatedthese transfers. As DiMaggio and Powell (1983) pre-dicted, shared understandings resulted in the mim-icking of each other's actions.

Negative images of the industry's ecological im-pacts and the activities of industry associationshelped develop field cohesion (Goes & Park, 1997;Pennings & Harianto, 1992). Fields labeled as"dirty," such as the oil. chemicals, mining, andforestry industries, were under intense scrutiny. Asa result, field members colluded either through for-mal arrangements, such as industry associations, orthrough informally monitoring each other's ecolog-ical responses. Industry associations further pro-moted field cohesion by transferring information

about "best practices," lobbying government to ad-just legislation and regulations, and collectivelymanaging an industry's image.

Respondents from firms that were connectedclosely to their competitors through these types offield cohesion arrangements made comments suchas "We all live in glass houses," "The tendency forthe industry is to keep that in the family and notmake an issue of it," "We all suffered from Exxon'sbig mistake," "We have to work with the peergroup," "We can't afford to get out in front and losethe support of others," "The networks are tightlykn i t . . . we rely on each other for the supply ofproducts, distribution . . . if we go out on our ownwe could be put in a blackmail situation." and"Some of these issues are better tackled by theindustry as a whole." Institutional pressures fromindustry peers made it difficult to deviate from thenorm. Industry members had difficulty innovatingproducts and processes because these innovationsratcheted up the standards for others. Conse-quently, these firms mimicked the initiatives oftheir peers. These firms were motivated strongly byconcerns of legitimacy.

The data revealed that field cohesion influencedfirms' motivations. The connectedness of employ-ees, owners, and local residents increased the fre-quency and intensity of interactions, placing thefirms operating within that field under greater scru-tiny and resulting in concerns about their legiti-macy. Respondents commented on the need tohave a "good neighbor policy." An intervieweefrom a cooperative indicated this: "We have con-sumers locally owning us and being very muchinvolved. The local ownership and confrol getsmessages coming up from the grassroots." An oilcompany manager indicated, "The closer you get tothe market place, the more you must be carefulabout what you disclose." A respondent from anauto manufacturer said that the firm adopted anemissions control system because "the public isclose to the factory which would be affected by ouremissions so that concerns us." Continuing, hesaid, "If we have harmful emissions, people willpublicize it and it will be a problem just like if thereis a spillage." Japanese companies, in particular,emphasized the importance of cohesion in influ-encing their operations, as reflected in this com-ment: "Japan is more homogenous. People act inthe same direction in a concerted way. Local guid-ance is with local agreement with industry and thecommunity."

Firms in fields with high cohesion were lesslikely to be motivated by competitiveness. Giventhe heavy overt and covert pressures to conformwithin cohesive fields, it became difficult for firms


to be unique. Competitive moves were often repli-cated within the field. Innovations diffused amongfirms rapidly, eliminating potential benefits associ-ated with them. Firms exceeding industry expecta-tions were persecuted hy industry peers.

Firms were less likely to bo motivated by pursu-ing higher levels of ecological responsibility in acohesive field. Field cohesion implied that firmsshared the same understanding of acceptable orga-nizational practices. Superior performance was dis-couraged because it made other field members"look bad," and it ratcheted up standards for otherfield members, raising operating costs. Managershad less discretion, given the pressures to conformto standard industry practice or prescriptions im-posed by the local community. Further, organiza-tional members were more aware of socially re-sponsible practices, given that the appropriateactions were well defined. Hence, exemplary prac-tices required by ecological responsibility were notlikely considered. These relationships are ex-pressed in Proposition 2:

Proposition 2. Field cohesion will be positivelyassociated with legitimation and negatively as-sociated with competitiveness and ecologicalresponsibility.

Individual ConcernIndividual concern for the natural environment

is the degree to which organizational membersvalue the environment and the degree of discretionthey possess to act on their environmental values.Firms are comprised of individuals who have"bounded rationality," cognitive biases, and per-sonal values that direct their actions (Cyert &March. 1963: Hamhrick & Mason, 1984; March &Simon, 1958). Values are enduring, emotionallycharged abstractions that are important to individ-uals (Rokeach, 1973). Personal values can influencea firm's ecological responses in three importantways. First, organizations are bombarded with nu-merous signals, only some of which are relevant tothem (Daft & Weick, 1984). Values help decisionmakers to discriminate between those that are im-portant and those that are not (Dutton, 1997; Ferrell& Gresham. 1985; Meyer, 1982). Second, environ-mental values will induce some organizationalmembers to champion ecological responses(Andersson & Bateman, 1998; Hage & Dewar, 1973;Lawrence & Morell, 1995). Third, a firm's top man-agement team and other powerful organizationalmembers are more receptive to changes in the or-ganizational agenda, products, and processes ifthese fit with their own personal values (Andersson

& Bateman, 1998; Dutton & Ashford, 1993; Stead &Stead, 1992).

Individual concern for the environment on theparts of organizational members or owners led tothe motivation of ecological responsibility. For ex-ample, one food retailer in this study was engagedin life cycle analysis of own-brand goods, althoughrewards to the firm's legitimacy or competitivenesswere not expected. When asked why they engagedin this costly analysis, the environmental directorresponded as follows: "Our chairman was very ad-amant that we were going to become much moreecologically aware. He said 'We ought to be moregreen because we want to do good.'" Socially re-sponsible actions reflect permanent and omnipres-ent concerns and must be judged by individuals(Miles, 1987). Individual concern also led to a le-gitimation motivation if the concerns of the indi-vidual were congruent with those of constituentswithin society. These relationships lead to the finalproposition:

Proposition 3. Individual concern will be pos-itively associated with ecological responsibilityand legitimation.

IMPLICATIONS AND CONCLUSIONProfiles for Ecological Responsiveness

The purpose of this study was to understand whyfirms are ecologically responsive by identifyingfirm motivations and their contexts. Although ourintention was not to evaluate corporations' ecolog-ical responsiveness, the study provided an oppor-tunity to suggest conditions that may lead to un-usually high responsiveness. This extension of themodel, which is not part of the empirical process, isbased on two assumptions. First, motivations canbe mixed. In developing our model of corporateecological responsiveness, we wished to distin-guish between alternate motivations, and we there-fore focused on firms with dominant motivations.But a number of firms were characterized by mixedmotivations. Thus, as we considered the normativeimplications of the model, we assumed that bothdominant and mixed motivations were viable andmight lead to high responsiveness. Second, we as-sumed that the notion of equifinality could be ap-plied to the ecological setting. Katz and Kahn sug-gested that "a system can reach the same final state[for instance, the same level of organizational effec-tiveness] from differing initial conditions and by avariety of paths" (1978: 30). In essence, a "feasibleset of equally effective, internally consistent pat-terns" [Van de Ven & Drazin. 1985: 335) or equifi-nality (Gresov & Drazin, 1997) may exist. Thus,


rather than specifying a single best ecological re-sponse, or the optimal response for a given context,we attempted to identify consistent configurationalpatterns.

In discussing equifinality, Gresov and Drazin(1997) suggested four distinct types. Drawing ontheir classifications, we assumed tbat ecologicalresponsiveness exemplifies configurational equifi-nality. Tbis condition is characterized by incom-patible functional demands on an organization andan unconstrained range of responses. Applied tothis study, tbese conditions imply that a corpora-tion's ecological agenda often competes with otherfunctional agendas for resources. Further, the mul-tiple contextual conditions and motivations permita wide range of possible initiatives or organiza-tional responses. We expect, therefore, tbat multi-ple configurational profiles may lead to ecologicalresponsiveness. More specifically, we posit threeprofiles that lead to high responsiveness because ofthe coherence or consistency of the pattern: thecaring profile, the competitive profile, and the con-cerned profile.

In the caring profile, the infiuence of individualconcern on ecological responsibility is moderatedby issue salience. Whenever concerns for the natu-ral environment are based on a compelling socialbelief that is embodied in a charismatic and pow-erful manager, a firm will be ecologically respon-sive. The impact of individual concern is strength-ened as issue salience increases, however, resultingin enhanced ecological responsiveness. The abilityof an individual to infiuence organizational changeis heightened as ecological responsiveness is rec-ognized as valid. In essence, issue salience pro-vides a legitimizing context for the individual'sintroduction of change. Because tbe change re-mains largely a championing effort, the individualcan imprint tbe endeavors witb his or her valuesand direct the firm toward ecological responsive-ness. For example, individuals were observed tak-ing a particularly salient issue, such as the use ofrecycled paper or the removal of balons fFom fireextinguisbers, and inducing a response in spite ofthe added costs of responding to the issue.

In the competitive profile, the interaction be-tween individual concern and low field cohesionpromotes a mixed motive of ecological responsibil-ity and competitiveness, and this mixed motiveresults in potentially high responsiveness. As indi-vidual concerns are translated into initiatives mo-tivated by ecological responsibility, a firm is addi-tionally motivated by competitive advantage.Wben field cohesion is low, competitors do notrecognize the firm's ecological responsiveness as acompetitive threat. Competitors do not respond to

the initiatives, nor are they inclined to mimic thefirm, given the institutional context. The firm canthen develop a strategic niche in which it distin-guishes itself as a green alternative. This combinedinterest in competitiveness and ecological respon-sibility often leads to innovations tbat would nototherwise be realized. Innovations result in moreecologically benign products or processes forwhich there are efficiency or marketing gains, orproducts or processes that are superior in otherways. For example, a Japanese oil company devel-oped the technology to remove benzene from gaso-line, resulting in an ecologically friendlier formu-lation of gasoline and the opportunity to use thebenzene for other purposes.

In tbe concerned profile, the interaction of fieldcohesion and issue salience induces a more intenselegitimation motivation. In tbis profile, the field iscohesive and, as ecological concerns are recog-nized, all field members respond. This occurs be-cause of potentially delegitimizing effects associ-ated with the firms' products and/or processes. Allmembers within the field respond aggressively andcollectively by sharing information and innovatingprocesses. Issue salience magnifies the effect offield cohesion as field members are drawn togetherto protect the legitimacy of an industry. In essence,the field must be responsive to ensure survival ofits members. This profile is illustrated through thereactions of chemical and forestry companies. Thesaliency of the ecological issues within those in-dustries is instrumental in precipitating the actionsof the respective industry associations, which ulti-mately leads to an industrywide response. If firmswithin those industries fail to respond, the profitsof all industry members and the livelihood of somespecific companies could be threatened.

The manager who wants to achieve any one ofthe configurational profiles can either select tbeappropriate contexts or change tbe existing con-texts (Drazin & Van de Ven, 1985). Selecting theappropriate contexts assumes that the manager re-sponds only to salient issues, chooses to operatewithin cohesive fields, and hires managers whoexhibit ecological concern. Alternatively, the man-ager can magnify tbe infiuence of the existing con-texts. For example, training staff about tbe ecolog-ical effects of organizational activities can heigbtenindividual concern. Improved research into theecological impacts of issues, such as the effects onhuman and plant life of global warming, will in-crease issue salience. Field cohesion may be in-creased tbrough more active involvement by indus-try associations to encourage collaborative researchefforts and voluntary disclosure of ecological im-pacts.


Contributions to Research in Organizations andthe Natural Environment

Gladwin (1993) and Shrivastava (1994) issuedpleas for the greening of organizational studies.This study furthers that goal by connecting thedomains and discourses of organizational theoristswith those of researchers examining organizationsand the natural environment (ONE). In particular,our study speaks indirectly to the tension betweenecocentric and antbropocentric approaches to orga-nizational studies, which is a critical dialogue inresearch on organizations and the natural environ-ment. Anthropocentrism, the dominant paradigm,is marked by the centrality of human interests(Gladwin, Kennelly, & Krause, 1995; Purser, Park, &Montuori, 1995: Shrivastava, 1994). The naturalenvironment is used, abused, nurtured, and devel-oped only if it supports those interests.

Witbin ecocentrism, nature has centrality, and allbiophysical systems, including humans, are inte-grated parts of nature (Gladwin et al., 1995; Purser etal., 1995; Shrivastava, 1994). Human actions can beevaluated only in relation to the natural environment.Tbe motivations for ecological responsiveness exhibitelements of these perspectives. Organizational self-interest fuels competitiveness and legitimation. Eco-logical responsiveness is fragmented, so that eacbenvironmental issue is evaluated incrementally andoften independently of eacb other issue. A firm mo-tivated by ecological responsibility, in contrast, fos-ters a more holistic approach to ecological respon-siveness. Organizations evaluate their long-termrelationships with the natural environment, not topromote organizational interests, but to promote so-cial interest. Although this shift in focus does notfully exemplify an ecocentric perspective, the seedsof ecocentric values are at least planted. Although ourdata show that few firms are motivated by ecologicalresponsibility, its presence suggests that ecocentricdiscourse grounded in research on organizations andthe natural environment is relevant to managementaudiences.

Our model also highlights the importance of dif-ferent levels of analysis in shaping organizationalresponses. Starik and Rands [1995) suggested thatdifferent levels of analysis are required to assess thepotential for an organization to be ecologically sus-tainable. In particular, they suggested that organi-zations have relationships with individuals, otherorganizations, political-economic entities, socio-cultural entities, and witb nature. Identifying andmanaging these interfaces is critical to achievingsustainability. Our results show that a firm's re-sponsiveness is directly related to the ecologi-

cal, interorganizational, and individual levels ofanalysis.

Our model points not only to the importance ofintegrating different levels of analysis but also tothe importance of integrating tbeoretical perspec-tives. To fully understand corporate ecological re-sponsiveness, the application of ideas rooted ininstitutional theory, economic theory, and individ-ual values is required. Although each of the moti-vations is described by their distinctiveness, theirpower to affect corporate ecological responsivenessis strengthened through their interactions. Re-search in organizations and the natural environ-ment requires multidisciplinary analysis. As ourresearch shows, applying only a single paradigm tocorporate ecological responsiveness paints an in-complete picture. Applications of organization the-ory witbin work on organizations and natural en-vironment necessitate and facilitate tbe bridging oftheories that are often treated independently.

Limitations and Future DirectionsThe limitations of this research provide anchors

for future research. First, this research was induc-tive in design. Our goal was to build substantivegeneralizable theory in an underresearched area.Tbe strength of this design is that it exposes newinsights and new relationships. The weakness isthat it does not permit a researcher to make validspeculations about the relative efficacy of the mo-tivations. The data here indicated that firms weremotivated largely by concerns for legitimacy, lessby competitiveness, and even less by ecologicalresponsibility. However, these findings could notbe tested because tbe constructs and their relation-ships were induced from this data set. Future re-search could test the efficacy and prevalence ofthese contexts and motivations and their relation-ship to ecological responsiveness.

Second, this research is generalizable only to theextent that the theoretical dimensions are capturedin this study. Although we controlled for someindustry, country, and company effects, we did notinclude firms in environmental industries, such aswind or photovoltaic energy producers. We alsolimited our study primarily to two countries, theUnited Kingdom and Japan, because of our interestin investigating specific concerns pertaining to thecontext, such as field cohesion, issue salience, andindividual concern. However, the United Kingdomand Japan are very different across other culturaldimensions that were not investigated in this re-search. For example, Hofstede (1980) found that theUnited Kingdom was considerably more individu-alistic, had lower uncertainty avoidance, had lower


"power distance," and was less masculine than Ja-pan. We did not explore the interactions of thesecultural dimensions with the motivations of corpo-rate environmental responses, but they could beinstrumental in furthering the richness of our pro-posed model. Furthermore, if we had chosen othercultural contexts, such as those of Brazil or Indo-nesia, richer insights might have been generated.We also did not investigate effects of differences inthe institutional ownership of corporations on cor-porate ecological responsiveness, which is particu-larly salient to research involving Japanese firms. Itis also possible that our reliance on supplementalinterviews inappropriately heightened the impor-tance of the role of institutional organizations. Fu-ture research could test whether otber dimensionsof the contexts we uncovered are relevant to thisframework.

Third, in this research we attempted to uncover afirm's motivations after the firm had made its de-cision to act. In spite of our efforts to validate theaccounts offered by participants, this research issubject to the biases associated with accounts thatacquire greater efficacy over time (Van de Ven,1988). However, if we had researched firm motiva-tions while decisions were being made, we wouldhave had to reduce the number of case studies andthereby compromise data validity and reliability.At the outset of this project, we decided that a morerobust theory could be developed by using themethodology employed here, rather than conduct-ing a study during decision making. It would beuseful for future researcb to apply tbe model devel-oped bere to decisions as they are being made, inorder to assess the model's predictability.

Tbis researcb is an attempt to advance under-standing of wby firms are ecologically responsive.A rich model of corporate ecological responsive-ness requires consideration of the underlying mo-tivations. In this project, we attempted to informthe literature on organizations and the natural en-vironment by developing theory that helps to ex-plain and predict corporate ecological responsive-ness.

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