Do firms gain environmental legitimacy when they conform to external expectations regarding the natural environment? Drawing on institutional logic and signaling theory, we investigate sources of ...heterogeneity in the impacts of environmental actions on environmental legitimacy. Longitudinal data (1997-2001) about 325 publicly traded U.S. firms in polluting industries support the notion that environmental actions help firms gain environmental legitimacy. However, some actions instead can harm this legitimacy if environmental performance deteriorates and the firm is subject to intense scrutiny from nongovernmental organizations. Thus, an important contribution of this research is to identify conditions under which greenwashing can backfire.
Relying on institutional theory, agency rationale, and environmental management research, we hypothesize that, in polluting industries, good environmental performance increases CEO pay; that ...environmental governance mechanisms strengthen this linkage; that pollution prevention strategies affect executive compensation more than end-of-pipe pollution control; and that long-term pay increases pollution prevention success. Using longitudinal data on 469 U.S. firms, we found support for three hypotheses. Contrary to our expectations, firms with an explicit environmental pay policy and an environmental committee do not reward environmental strategies more than those without such structures, suggesting that these mechanisms play a merely symbolic role.
Drawing on institutional theory and innovation literature, we argue that greater regulatory and normative pressures concerning environmental issues positively influence companies' propensity to ...engage in environmental innovation. Analysis of environment-related patents of 326 publicly traded firms from polluting industries in the United States suggests that institutional pressures can trigger such innovation, especially in those firms displaying a greater deficiency gap (i.e., firms polluting relatively more than their industry peers). Moreover, we find that this effect is stronger when asset specificity is high, and that the availability of resources plays different roles depending on the type of pressures (regulatory vs. normative).
This paper compares the environmental performance of family and nonfamily public corporations between 1998 and 2002, using a sample of 194 U.S. firms required to report their emissions. We found that ...family-controlled public firms protect their socioemotional wealth by having a better environmental performance than their nonfamily counterparts, particularly at the local level, and that for the nonfamily firms, stock ownership by the chief executive officer (CEO) has a negative environmental impact. We also found that the positive effect of family ownership on environmental performance persists independently of whether the CEO is a family member or serves both as CEO and board chair.
Researchers have endeavoured to explore how hybrid organizations navigate conflicting institutional demands. Yet, the role of time has often been neglected. We address this oversight through a ...longitudinal comparative case study, where we investigate how time and stakeholder engagement shape hybrid organizations’ capacity to secure support from stakeholders adhering to different logics. Grounding our insights in the literatures on hybrid organizations and stakeholder management, we reveal how stakeholder demands that appear to be incompatible when analysed from a short-term perspective can be seen as paradoxical when addressed with a long-term perspective. We also find that the development of this paradoxical perspective is facilitated by stakeholder engagement. Finally, we show that a long-term perspective helps hybrid organizations manage symbolic and substantive actions with the appropriate sequence and timing. Together, this evidence contributes to research by providing a better understanding of temporality and how it influences the effectiveness of organizations in responding to divergent stakeholder demands.
Drawing on institutional theory and property rights literature, this paper examines how different types of ownership adopt norm-conforming environmental practices in China. We propose that compared ...to governmental owners and institutional investors, which align themselves with the state and financial logics, respectively, family owners will adhere to a community logic, given their emphasis on socioemotional elements and property expropriation concerns. Thus, they are prone to norm-conforming environmental practices. Using a sample of 622 Chinese firms over six years, we find general support for the notion that ownership types are strongly associated with the adoption of norm-conforming environmental practices.
We employ the literature on institutional theory and environmental management to argue that environmental innovation as an unconventional source of innovation can lead to financial performance ...through environmental legitimacy. Using data on environmental innovation (in the form of patents), environmental legitimacy, and market valuation for 191 industrial firms in polluting industries for a 25-year period, our analysis supports our argument. The results show that environmental innovation has a positive impact on market value, but this relationship is partially mediated by legitimacy. Although firms tend to not consider environmental innovation as a conventional source of competitive advantage and financial returns, our findings indicate that managers of industrial firms should focus their operations on developing environmental innovations to attain legitimacy in industries that are stigmatized by high pollution levels. In turn, environmental legitimacy will not only shield the firm from the industry’s mounting institutional pressures but also lead to higher market valuation.
Research in corporate environmental practices has shown that stakeholders impose coercive and normative forces that drive firms to perform environmental protection actions. However, limited attention ...has been placed on how different constituents of stakeholders value the firm's environmental actions. By focusing on industry peers as a constituent of stakeholders, we examine how the firm's environmental actions impact its reputation. Based on institutional theory and signaling theory we propose that symbolic environmental actions negatively affect reputation, whereas substantive actions improve firm's reputation among its peers. Building on the notion of signaling process, the authors also observe that a firm's reporting practices moderate positively the negative effect of symbolic actions. Data from a sample of 213 publicly traded firms operating in polluting industries from 2006 to 2013 support these results. The findings emphasize the danger of using symbolic actions to signal environmental commitment in a context of high-involvement information search and opportunistic behaviors.
•We examine how the firm's environmental actions impact its reputation.•We used data from 213 publicly traded firms operating in polluting industries over 8 years.•Symbolic environmental actions negatively affect reputation, while substantive actions improve firm's reputation.•Using symbolic actions to signal environmental commitment in a context of high-involvement information search is risky.
Socioemotional Wealth in Family Firms Berrone, Pascual; Cruz, Cristina; Gomez-Mejia, Luis R.
Family business review,
09/2012, Letnik:
25, Številka:
3
Journal Article
Recenzirano
This article makes the case for the socioemotional wealth (SEW) approach as the potential dominant paradigm in the family business field. The authors argue that SEW is the most important ...differentiator of the family firm as a unique entity and, as such, helps explain why family firms behave distinctively. In doing so, the authors review the concept of SEW, its different dimensions, and its links with other theoretical approaches. The authors also address the issue of how to measure this construct and offer various alternatives for operationalizing it. Finally, they offer a set of topics that can be pursued in future studies using the SEW approach.
We theoretically discuss and empirically show how CEO power based on environmental expertise and formal influence over executives and directors, in the absence and presence of shareholder activism, ...spurs firms toward greener strategies. Our results support the idea that CEOs with informal power, grounded in expertise, reduce corporate environmental impact and this relationship is amplified when the CEO also enjoys formal power over the board of directors. Additionally, we found that any source of CEO power, whether informal or formal, is a good catalyst for transforming shareholder activism into corporate greening. However, in the absence of such activism, only CEOs' informal environmental expert power acts as a determinant of firm environmental performance.
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