Amalesh Sharma, Sourav Bikash Borah, Anirban Adhikary and Tanjum Haque
The extant literature provides much-needed support to understand marketing accountability and how marketing actions are related to financial performance (FP). However, we have…
Abstract
The extant literature provides much-needed support to understand marketing accountability and how marketing actions are related to financial performance (FP). However, we have limited understanding of the relationships between marketing actions and firms' social performance (SP) and environmental performance (EP). Understanding these links is critical to enhancing sustainable FP, SP, and EP. Moreover, the literature provides limited understanding of the measures by which SP and EP may be operationalized, or the data necessary to reach a conclusion. This study bridges these gaps by extensively reviewing the extant literature to offer a set of measures and data sources to operationalize SP and EP, and empirically show their relationships with marketing actions. We find that greenhouse gas (GHG) emission, environmental disclosure score, waste reduction, energy consumption, and recycling are prominent measures of EP, and that social disclosure score, philanthropy or community spending, and diversity of gender and race are prominent measures of SP. The KLD, ASSET4, and Bloomberg are prominent sources of data that can be used to operationalize SP, to which CDP may be added for EP. We also show that marketing actions positively affect EP and SP. This study contributes to the extant literature on SP and EP by identifying measures and data sources and linking marketing actions to both performance types. It contributes to policy development by identifying the importance of EP and SP and how marketing actions can help achieve such performance.
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Sime Curkovic and Robert Landeros
This study develops an integrated theory about how Total Quality Management (TQM) based capabilities can be leveraged for Environmentally Responsible Manufacturing (ERM). It…
Abstract
This study develops an integrated theory about how Total Quality Management (TQM) based capabilities can be leveraged for Environmentally Responsible Manufacturing (ERM). It suggests that efforts should be coordinated to take advantage of the potential synergies between TQM and ERM. The means for capturing these synergies might be accomplished by using the Malcolm Baldrige National Quality Award (MBNQA) framework. The MBNQA framework was adapted to address environmental issues and it was shown that the framework can be used as a basis for an integrative definition of ERM. This adaptation of the MBNQA framework suggests that there is an environmental version of the MBNQA framework and that quality principles can be seamlessly integrated into the practice of managing environmental issues. However, an empirical examination of the linkage between TQM and ERM remains untested. The findings of this study provide an important foundation for accomplishing this goal.
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Thomas P. Lyon and John W. Maxwell
A large literature studies why firms self-regulate and “signal green.” However, it has ignored that regulators have enforcement discretion, and may act strategically. We fill this…
Abstract
A large literature studies why firms self-regulate and “signal green.” However, it has ignored that regulators have enforcement discretion, and may act strategically. We fill this gap. We build a game theoretic model of whether a firm should signal its type through substantial self-regulation. We find self-regulation is a double-edged sword: it can potentially preempt legislation, but it can also lead regulators to demand higher levels of compliance from greener firms if preemption fails. We show how self-regulatory decisions depend upon industry characteristics and political responsiveness to corporate environmental leadership. We have made a number of simplifying assumptions. We assume activist groups cannot challenge regulatory flexibility in court, and that regulatory penalties are fixed and are not collected by the regulator. Firms with low compliance costs confront a tradeoff regarding self-regulation. They can blend in with the rest of the industry, and take few self-regulatory steps. This reduces the risk of regulation somewhat, and preserves their ability to obtain regulatory flexibility should regulation be imposed. Alternatively, they can step up with substantial self-regulation. This better mitigates the risk of regulation, but at the risk of signaling low costs and becoming a target for stringent enforcement should regulation pass. Recent work has found negative market reactions to corporate claims of voluntary emissions reductions, despite the conventional wisdom that it “pays to be green.” We offer a new explanation to scholars and managers: regulatory discretion may undermine the ability of industry self-regulation to profitably preempt mandatory regulatory requirements.
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S.A. Bergen and C.P. McLaughlin
Much is being said about the comparative productivity of the industrialised countries. This study looks at the development and introduction of new products in a single…
Abstract
Much is being said about the comparative productivity of the industrialised countries. This study looks at the development and introduction of new products in a single manufacturing industry in four countries — the United Kingdom, West Germany, the United States and Japan. Data were collected from 54 companies in the scientific instrument industry concerning 65 new product design projects. These data show that there are significant differences in investment in R&D, in firm productivity, in R&D rewards and motivation, in project manager openness to new ideas, in project team ability, and in the communication of problem definitions and design data among the companies in the industry in the four countries. The factors important to project and company success in this industry vary from country to country and from stage to stage of the development process. Communications at the production/R&D interface and lack of CEO involvement are the particular problems of the US companies.
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Fereshteh Mahmoudian, Jamal A. Nazari and Irene M. Herremans
Drawing on the natural resource-based view and the literature on management control systems as a package, this study aims to investigate organizations’ sustainability control…
Abstract
Purpose
Drawing on the natural resource-based view and the literature on management control systems as a package, this study aims to investigate organizations’ sustainability control systems designed to achieve the interrelated sustainability objectives of performance and reporting.
Design/methodology/approach
The authors use three-stage least squares regressions on archival data for a large sample of international companies.
Findings
Better environmental performance and sustainability reporting quality are related to certain control system components, and the dual objectives of sustainability performance and reporting are interrelated.
Originality/value
This study provides theoretical contributions and practical implications by demonstrating how a set of sustainability control components can enable better sustainability reporting and performance outcomes.
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Mumbi Maria Wachira and David Wang’ombe
Though environmental management accounting (EMA) is a globally recognized accounting practice, its application and development within several developing economies remain stunted…
Abstract
Purpose
Though environmental management accounting (EMA) is a globally recognized accounting practice, its application and development within several developing economies remain stunted. The aim of this chapter is to provide an overview of the extent to which EMA practices have been implemented by local manufacturing companies in Nairobi, Kenya.
Methodology
We measure the degree to which EMA methods have been adopted by manufacturing entities and hypothesize that firm size, financial performance, and regulation are positively associated to the extent to which EMA techniques are applied by Kenyan corporations. The chapter employs a mixed methods research approach and combines the use of surveys with semi-structured interviews to gain insights into drivers of EMA and the extent to which these methods are applied locally.
Findings
We find environmental regulation and financial performance are positively associated with the level of EMA practices applied by manufacturing entities.
Originality
The findings illustrate the complexities of applying EMA practices within an emerging context and provide evidence that EMA practices are still predominantly used by entities to meet local regulatory requirements. The qualitative findings indicate there could be some companies who engage with EMA at a more sophisticated level.
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David Mutua Mathuva, Mumbi Maria Wachira and Geoffrey Ikavulu Injeni
In this chapter, we examine whether corporate environmental reporting (CER) by listed companies in Kenya improves stock liquidity. The investigation is motivated by the growing…
Abstract
Purpose
In this chapter, we examine whether corporate environmental reporting (CER) by listed companies in Kenya improves stock liquidity. The investigation is motivated by the growing interest by corporations, investors, and regulators toward embracing ecological protection with a view to creating sustainable societies for the future.
Design/Methodology/Approach
Using a panel dataset comprising of 244 firm-year observations from 50 listed firms in Kenya over a five-year period (2011 to 2015), we perform fixed-effects regressions to discern whether CER is associated with stock liquidity. To examine this, we utilize bid-ask (as well as quoted) spreads measured over month −9 to month +3 relative to a firm’s year end.
Findings
Despite the seemingly low levels of CER across firms in the sample (average: 32.6%), the results depict that CER is positively associated with stock liquidity. The results are robust even when we consider changes in bid-ask spreads and CER together with the other variables. The same results emerge when we study the association between bid-ask spreads and each CER item at a time over the period 2011–2015.
Practical Implications
The results imply that listed companies in Kenya that engage in higher CER seem to be more attractive to investors. The higher CER seems to improve the information environment, hence reducing information asymmetry and therefore attracting investors. The results provide some evidence of positive economic consequences of engaging in additional disclosure over and above the traditional corporate financial reporting.
Originality/Value
The study adds onto the dearth of literature on the economic consequences of embracing additional disclosure frameworks in developing countries where the adoption of alternative reporting frameworks is at infancy.
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Randolph Nsor-Ambala, Gabriel Sam Ahinful and Jeff Danquah Boakye
This study applies social identity theory (SIT) to explore the perceptual differences among various stakeholder groups regarding the relevance of social and environmental…
Abstract
Purpose
This study applies social identity theory (SIT) to explore the perceptual differences among various stakeholder groups regarding the relevance of social and environmental accounting (SEA), SEA education and mandatory disclosure of SEA.
Methodology
The study adopts a mixed method applying a qualitative and quantitative approach. In total, 325 structured questionnaires were analyzed quantitatively, using ANOVA and group comparison methods. Responses from 18 interviews were analyzed qualitatively to provide complementary evidence for the quantitative study.
Findings
There were significant differences between various stakeholder groups regarding the relevance of SEA practice and SEA education. Regulators were mostly affected by considerations about the external perception of work quality, followed by financiers. Practitioners and shareholders were influenced by the ability of SEA in its current state to affect actual work quality. This possibly indicates that academic qualifications have marginal effects on predicting considerations about SEA compared to social identity.
Originality/Value
This is the first application of SIT to SEA research and contributes to the effort to improve SEA within emerging economies, highlighting that a one-size-fits-all approach may be ineffective.