Resource-Based View or Slack Availability of Resources: A Perception Survey of Japanese Automotive & Electronic Companies

By Cortez, Michael Angelo A.; Nugroho, Katarina Marsha Utama | Journal of International Business Research, January 1, 2011 | Go to article overview

Resource-Based View or Slack Availability of Resources: A Perception Survey of Japanese Automotive & Electronic Companies


Cortez, Michael Angelo A., Nugroho, Katarina Marsha Utama, Journal of International Business Research


ABSTRACT

The resource-based view perspective has been referred to as the theoretical foundation of studies linking the impact of corporate social performance to financial performance. Alternatively, scholars argue that the direction of the relationship could be the other way around - that financial performance facilitates the investment in corporate social performances.

We join the scholarly discussion by surveying the perception of top Japanese automotive and electronics companies. The Corporate Social Responsibility (CSR) reporting divisions of these companies were sent links to an on-line Likert scale questionnaire to verify the earlier statistical findings on the relationship of the variables: environmental cost, revenue, profit, assets, long-term debt and equity.

We expect our descriptive statistics to yield the predominant motivation of sustainability reporting across the companies in this study, considering that they observe similar management principles and belong to the same business environment. This case study supports earlier theorization between resource-based view and slack availability of resources while leading to proposed rival theories unique to Japanese management.

INTRODUCTION

The resource-based view perspective has been widely espoused as the theoretical foundation of sustainability practices. Through the investments in inimitable internal capabilities like environmental performance that translate to measurable benefits, the first direction of construct relationship is established: environmental innovations impact financial performance.

On the other hand, the slack availability of resources explains that corporate social performance, particularly environmental innovations, could possibly be a result of the availability of financial resources. Without these, it would be difficult for companies to comply with regulations and satisfy other stakeholders' claims to social and environmental issues. Hence, the second direction of relationships is: financial performance in preceding years impact environmental innovations.

While virtuous cycles are observed between these constructs, we attempt to determine the motivation for Japanese automotive and electronics companies, based on their perception for engaging in environmental innovations. Do they see environmental innovations as leading to improved financial performance? Or is it the other way around? Do they perceive enhanced financial performance as facilitating environmental innovations? A number of empirical studies have validated these directions of the relationships. We attempt to capture the perception of Japanese management on CSR, particularly environmental accounting and reporting practices, in order to determine the predominant mindset.

CSR in this context refers to the requirement set by the MOE for companies to adapt more sustainable business practices. This opens to another construct which is Corporate Social Performance (CSP) being the operationalization of CSR: avenues through which the objectives set by CSR are attained. Thus, the concept of environmental accounting, particularly the variable environmental cost, measures the degree of CSP that companies undertake to comply with the sustainability objective of CSR.

A Likert scale was executed by sending paper forms and online survey links to CSR reporting divisions of automotive and electronics companies listed on the Tokyo Stock Exchange. Four out of ten automotive companies and 13 out of 30 electronics companies participated in the survey. To support the descriptive statistics, the following non-parametric analysis are performed: central tendency, dispersion, concentration, peaked-ness and histogram analysis. Shapiro- WiIk test and Runs tests are performed to show normal distribution and randomness (See Annex 1).

THEORETICAL REVIEW

The Resource-Based View

Wernerfelt (1984) was the first to invite business leaders and scholars to look at companies from the perspective of resources, rather than the products in order to form management strategies. …

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