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The Interactive Effect of Internal and External Factors on a Proactive Environmental Strategy and its Influence on a Firm's Performance

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Abstract

While the literature on the effective management of business and natural environment interfaces is rich and growing, there are still two questions regarding which the literature has yet to reach a definitive conclusion: (1) what is the interactive effect between internal and external drivers on a proactive environmental strategy (PES)? and (2) does a PES influence firm's performance? Drawing on the resource-based view for the internal drivers’ perspective and institutional and legitimacy theories for the external drivers’ perspective, this study suggests that the effect of entrepreneurial orientation on a PES is moderated by the intensity of government regulations and customers’ sensitivity to environmental issues. The authors also examine the relationship between the PES and a firm's performance in terms of sales and profit growth. Implications are discussed regarding the role of a PES in achieving a competitive advantage in the marketplace.

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Authors and Affiliations

  1. Faculty of Business, Department of Marketing, Int’l Business and Strategy, Brock University, 500 Glenridge Ave., St. Catharines, L2S3A1, ON, Canada

    Bulent Menguc

  2. Thunderbird School of Global Management, 1 Global Place, Glendale, AZ, 85306, U.S.A.

    Seigyoung Auh

  3. Department of Management, University of Canterbury, Christichurch, New Zealand

    Lucie Ozanne

Authors
  1. Bulent Menguc
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  2. Seigyoung Auh
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  3. Lucie Ozanne
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Correspondence to Bulent Menguc.

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Menguc, B., Auh, S. & Ozanne, L. The Interactive Effect of Internal and External Factors on a Proactive Environmental Strategy and its Influence on a Firm's Performance. J Bus Ethics 94, 279–298 (2010). https://doi.org/10.1007/s10551-009-0264-0

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