The Impact of Profitability, Certainty, and Degree of Fine on the Persuasiveness of Environmental Assessment Reports

Article excerpt

Many companies have followed the suggestion of the Environmental Protection Agency to conduct voluntary self-audits of their environmental practices. When company environmental assessment auditors present the results of these compliance audits to management, their proposals for environmental remediation compete with many legitimate alternative proposals for limited company resources. The research reported on here evaluated the impact of three factors on the persuasiveness of environmental remediation memos. Specifically, the present investigation hypothesized that meeting profitability goals, the relative certainty of the costs of solving the environmental violation, and higher fines if the violation is discovered by government regulators would add to the persuasiveness of an environmental memo. Lack of meeting profitability goals, significant uncertainty about the costs of solving the environmental violation, and lower fines would reduce an environmental remediation proposal's persuasiveness. Data analysis c onfirmed the hypotheses.

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Over the last 40 years the dominant metaphor of how corporate communicators portray their organization's environmental commitments has changed significantly. Livesey (1999) characterizes this as a shift from a vocabulary of "command and control" where company rhetoric is reactive portraying critics of its environmental practices as adversaries to economic progress, to a rhetoric of creating "sustainable development" where corporate communicators portray their organizations as advocates of environmental progress in agreeing to design "corporate practices to reduce the ecological harm of economic practices" (p. 8). One of the most visible signs of this shift has taken place in the relationship between environmental regulators and the companies they regulate. Many companies have followed the suggestion of the Environmental Protection Agency to conduct voluntary self-audits of their environmental practices (O'Reilly, 1994). The EPA defines audits as "systematic, documented, periodic and objective reviews by regul ated entities of facility operations and practices related to meeting environmental requirements" (cited in O'Reilly, 1994, p. 120). Since such audits are voluntary, the definitions of systematic, documented, periodic, and objective vary greatly among the affected companies. Varied too are the number of people who receive the reports, as well as the amount of attention the audits receive at the highest company levels. When an audit reveals a violation of environmental regulations, the company's environmental audit team typically is charged with reporting the violation to management, proposing ways of remediating the violation, and indicating potential penalties for continued noncompliance. The extent to which management supports proposals for environmental remediation is an index of its support for the priority of environmental responsibility in their company's hierarchy of objectives.

The present study reports on a research project conducted to determine some of the content and situational factors that influence the persuasiveness of environmental remediation. We first discuss the rationale for and risks of writing voluntary environmental self-assessment reports. Then the relevant legal and business communication literature that provides the foundation for the three variables we test in this study is presented. Finally, we report the results, discuss implications for managerial practice, and suggest directions for future research.

Advocates argue that active audit programs identify environmental problems and prevent them from happening or growing. Framing this decision as a choice between voluntary compliance and a government-imposed regimen, those who support such a viewpoint point out that the ability to identify and correct an environmental problem early can save an organization thousands or even millions of dollars (Crawley, 1993). …