Shades of Green: Cognitive Framing and the Dynamics of Corporate Environmental Response

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INTRODUCTION

Degradation of the natural environment continues at a pace beyond that which the planet can sustain. Governments have historically attempted to curtail environmental degradation using regulation and economic instruments, but such interventions are usually not sufficient to bring about a sustainable development path. Policy instruments are subject to failures, as violations may not be detected, and regulations may fail to be sufficiently enforced. Furthermore, it is often not clear what kind of regulations or interventions will be most effective in an increasingly global and interdependent world (Rugman, Kirton & Soloway, 1997; Rugman & Verbeke, 1998). Market mechanisms are also subject to failure as consumers are largely unable to verify "green" claims by manufacturers, and media exposes of false claims lead all such claims to be suspect.

In the midst of such market and policy failures, the importance of voluntary efforts by firms to improve their environmental performance is increasing. There is growing recognition that "...changes in corporate organization, culture and procedures can yield environmental improvement in ways that a compliance-based [regulatory] approach cannot" (Roht-Arriaza, 1997:294). [1] We contend that a firm's commitment to pro-environmental values and actions is a good predictor of its long run environmental performance. It is thus important for those desiring sustainable development to understand what drives firms to commit to voluntary, pro-environmental efforts.

At least since Thompson's explanation of systems theory in 1967, the idea that firms must be aligned with their task environments has been a dominant assumption of organizational theorists and strategists. Firms that are out of alignment are expected to experience performance decrements, assessments of illegitimacy, and pressures for conformity. With severe misalignments, crisis can be the result. Yet there are different perspectives within the literature as to how these pressures for alignment come about and how they are experienced and responded to by firm members.

Economic explanations for the voluntary greening of firms point to incentives in the economic environment that reward pro-environmental behaviour and penalize behaviour that damages the environment (Baumol & Oates, 1988; Kneese & Schultz, 1975). For example, consumer markets that demand environmental responsibility force firms to adapt or forego sales, and firms that have greater consumer contact have been found to over-comply with environmental legislation (Arora & Cason, 1996). Firms in highly regulated industries have also been found more likely to over-comply with regulation (McKinsey & Company, 1991; UNCTAD, 1993), often in strategic attempts to influence the direction of future regulation such that it is more favourable to the firm (Porter & van der Linde, 1995). Given that firms in the same industry and geographical area often face similar consumer markets and regulatory regimes, we might expect similar environmental stances from these firms.

Sociological explanations from institutional theory also point to convergence among firms in the same industry/geographical space. Firms are expected to reflect the dominant forms, practices and interpretive frames (i.e. institutions) of the organizational field in which they are embedded (Meyer & Rowan, 1977), and these institutions are considered stable, enduring, and largely taken for granted by organizational field members (Scott, 1995). Institutional theory uses the "startling homogeneity of organizational forms and practices" (DiMaggio and Powell, 1983: 148), as its starting point. Norms, values, forms and practices are diffused within organizational fields by interaction among industry members (e.g., within trade associations), consultants who specialize in the industry, the common requirements of financial institutions and capital markets (Hoffman, 1997; Jennings, Zandbergen & Martens, 1997), and executive migration (Kraatz & Moore, 1998). …

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