HOW DO STAKEHOLDER PRESSURES DRIVE PROACTIVE ENVIRONMENTAL STRATEGIES? EXTERNAL INSTITUTIONAL FORCES AND LEGITIMACY
By
David Graham Hyatt Submitted in Partial Fulfillment of the Requirements for the Quantitative Research Report in the Doctor of Management Program at the Weatherhead School of Management Advisors: Nicholas Berente, Ph.D., University of Georgia Jeffrey Longhofer, Ph.D., PsyA., LCSW, Rutgers, The State University of New Jersey
CASE WESTERN RESERVE UNIVERSITY May 2011
HOW DO STAKEHOLDER PRESSURES DRIVE PROACTIVE ENVIRONMENTAL STRATEGIES? EXTERNAL INSTITUTIONAL FORCES AND LEGITIMACY
ABSTRACT Previous research indicates that stakeholder pressures can drive proactive environmental firm strategies—that is, strategies that reflect an internalized, voluntary commitment to the natural environment and typically involve dedication to environmental leadership by the firm. An institutional perspective highlights how legitimizing strategies can mediate the effect of stakeholder pressures on proactive environmental strategies. Furthermore, by distinguishing between “internal” and “external” normative pressures, this chapter theoretically accounts for the institutionally plural contexts of organizations and their environments. The findings suggest that though internal pressures directly drive environmental proactivity, external pressures drive legitimating responses and then indirectly affect environmental proactivity. Key words: institutional theory; proactive environmental strategies; environmental legitimacy; stakeholder pressure; structural equation modeling
TABLE OF CONTENTS Abstract ..................................................................................................................................... 2 Introduction............................................................................................................................... 4 Conceptual Framework ............................................................................................................. 6 Research Methodology ........................................................................................................... 21 Results..................................................................................................................................... 40 Discussion ............................................................................................................................... 43 Limitations .............................................................................................................................. 46 Implications and Conclusion................................................................................................... 47 Appendixes Appendix A: Survey Instrument ................................................................................ 50 Appendix B: Construct Definition Table................................................................... 58 Appendix C: Correlation Table.................................................................................. 60 Appendix D: EFA Factor Loadings (Post-CFA) ....................................................... 62 References............................................................................................................................... 63 List of Figures Figure 1: Theoretical Model of the Role of Environmental Legitimacy in Environmental Strategy ............................................................................. 21 Figure 2: Final Structural Model................................................................................ 41 Figure 3: Simple Slope Graphs for Interaction Term Effects—Environmental Legitimacy ................................................................................................. 43 List of Tables Table 1: Dimensions of Environmental Proactivity..................................................... 8 Table 2: Alternative Classifications of Stakeholder Groups...................................... 14 Table 3: Respondent Demographics by Role, Tenure, and Industry ......................... 26 Table 4: Interfactor Correlation Matrix, AVE, Reliability, and Validity .................. 37 Table 5: Confirmatory Factor Analysis Results......................................................... 38 Table 6: Goodness-of-Fit Indices............................................................................... 40 Table 7: Bootstrapping Results of Mediational Effects ............................................. 42
INTRODUCTION Firms’ commitment to protecting the natural environment has become a significant and urgent issue for society, and these societal concerns often get transmitted by stakeholder groups that attempt to influence firm strategy (Aragón-Correa & Rubio-López, 2007). Recent scholarly attention thus addresses how stakeholder groups influence environmental strategies (Buysse & Verbeke, 2003; Henriques & Sadorsky, 1999), distinguishing among different environmental strategies according to the degree to which they are proactive (GonzálezBenito & González-Benito, 2010; Murillo-Luna, Garcés-Ayerbe, & Rivera-Torres, 2008). On a continuum from least to most environmentally proactive (Buysse & Verbeke, 2003), proactive policies indicate an internalized, voluntary commitment by the firm to the natural environment, which typically involves a dedication to taking an environmental leadership position. Less proactive strategies at the extreme instead imply reactive, symbolic, or superficial compliance and greenwashing. Thus it is impossible to overstate the importance of proactive environmental strategies for bringing about substantial environmental change. Furthermore, despite some evidence that different stakeholder pressures affect environmental practices at different stages of proactivity (e.g., Sharma & Henriques, 2005), little is known about the mechanisms by which these pressures drive more or less proactive strategies. To remedy this situation, we employ an institutional perspective (Greenwood, Oliver, Suddaby, & Sahlin-Andersson, 2008; Ingram & Silverman, 2002) and argue that stakeholder pressures result in broad-based, legitimizing strategies that indirectly drive proactive environmental strategies. We develop a construct we refer to as “environmental legitimacy” to account for managerial perceptions of firm legitimizing approaches. To adopt the institutional perspective fully, we draw on DiMaggio and Powell’s (1983) coercive, 4
normative, and mimetic sources of organizational isomorphism but extend this commonly used scheme by distinguishing between internal and external normative institutional pressures. Although strictly speaking, all isomorphic institutional pressures are internal to an organization—in that they are enacted by employees at an intra-organizational level (Powell & DiMaggio, 1991)—by differentiating internal and external pressures, we theoretically accommodate the institutionally plural contexts of organizations (Kraatz & Block, 2008) and their environments (Dunn & Jones, 2010). In contrast with recent work that proposes that firm strategies do not reflect differentiated responses to different stakeholder pressures (Murillo-Luna et al., 2008; Sprengel & Busch, 2010), we argue that internal normative forces directly drive environmental proactivity, but external forces only drive proactive policies indirectly through environmental legitimacy tactics. In making this prediction, we turn to Delmas and Toffel (2008), who find that organizational environmental responses vary with different stakeholder groups. To test our theoretical proposal, we analyze responses from 214 supply chain managers across 182 companies, using structural equation modeling. Many existing studies focus on a particular industry or particular point in the supply chain; we instead include a variety of companies across the supply chain, though the sample features only those firms generally involved in the production, distribution, or sale of goods. The remainder of this chapter is organized as follows. We briefly discuss literature on firm proactive environmental strategies and their antecedents before exploring the concept of environmental legitimacy and the impact of differentiated institutional forces on environmental strategies to develop the hypotheses. Next we describe the instrument
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development, sample, analysis, and results. We conclude with a discussion of interaction effects and implications for research and practice. CONCEPTUAL FRAMEWORK Environmental Proactivity Environmental proactivity generally encompasses two dimensions. The first is the degree of proactivity, which refers to a continuum on which a company might lie. On the lower end, the continuum usually is anchored by a passive or reactive approach, symbolizing a lack of commitment or concern for environmental matters; on the high end, it indicates a high degree of concern or a proactive approach (cf., Buysse & Verbeke, 2003; Hart, 1995; Henriques & Sadorsky, 1999; Hunt & Auster, 1990; Murillo-Luna et al., 2008; Roome, 1992). Buysse and Verbeke (2003) propose a succinct three-dimensional definition of environmental strategy: (1) reactive, (2) pollution prevention, or (3) environmental leadership. Proactive approaches explicitly place a high priority on the natural environment and voluntary implementation of practices that aim at improving environmental performance and organizational capabilities (Sharma & Vredenburg, 1998). They also go beyond regulations or the search for competitive advantages (Porter & Van der Linde, 1995). In turn, the second dimension of proactivity refers to firm practices, which provide the basic strategy scholars use to assign firms to the continuum. In an expansive review, González-Benito and González-Benito (2006) thus offer a useful functional classification of practices and initiatives that distinguishes three categories of environmental proactivity: (1) planning and organizational practices, (2) operational practices, and (3) communication practices. The first group, planning and organizational practices, represents the extent and means by which firm managers develop and implement environmental management systems, 6
policies, plans, and objectives to support the natural environment; means for proceeding in a coordinated fashion; and means of assessing progress on environmental goals. Operational practices include both product- and process-related practices. According to González-Benito and González-Benito, product-related practices include “designing and developing more environmentally conscious products … design efforts for eliminating polluting and hazardous materials in products, for reducing resource consumption in production as well as in product usage or for facilitating disassembly and hence reusability, recyclability and remanufacturing” (2006: 88). Process-related operational practices instead center on the “development and implementation of more environmentally conscious manufacturing and operational methods and processes” (González-Benito & González-Benito, 2006: 88). Within this framework, internal practices and processes include remediation, control, and prevention, whereas external versions influence supply and distribution activities or company interactions with other elements of the value chain (e.g., green purchasing, supplier standards, packaging initiatives, cleaner transportation methods). Finally, communication practices refer to the mechanisms by which the organization communicates its environmental performance, both internally and externally, and thereby bolsters its environmental brand or stakeholder engagement. Together, the dimensions of the degree of proactivity and environmental practices account for environmental proactivity as a whole by defining the types of practices available to measure corporate environmental performance. To extend this framework, we develop possible anchor points related to specific environmental practices. For example, life cycle analysis practices could be nonexistent in reactive companies but prominent in proactive companies. Table 1 offers a summary and some example practices. 7
TABLE 1: Dimensions of Environmental Proactivity Reactive
← Degree of Environmental Response - Example Typologies →
Proactive
Hunt and Auster (1990) Beginner → Firefighter → Concerned cizen → Pragmast → Proacvist Roome (1992) Noncompliance → Compliance → Compliance + → Commercial/env. excellence → Leading edge Hart (1995) End-of-pipe → Polluon Prevenon → Product stewardship → Sustainable development Henriques and Sadorsky (1999) Reacve → Defensive → Accommodave → Proacve Buysse and Verbeke (2003) Reacve → Polluon Prevenon → Environmental leadership Murillo-Luna et al. (2008) Passive → A9enon to legislaon → A9enon to stakeholders→ Total environmental quality
Planning and organizational practices (primarily benefiting the socio-economic environment)
Reactive
← Degree of Environmental Response - Example PracƟces →
Proactive
Minimal
Explicit environmental policies, goals, objectives, and plans
Embedded
Missing
Clearly defined environmental roles and responsibilities
Minimal
Environmental management systems and environmental staffing
Integrated
Employee training and development on environmental matters
Important
Unimportant Missing Operational practices (primarily None benefiting the natural None environment) None May meet None Minimal Communication practices Possible (primarily benefiting the socio- Possible economic environment) Unlikely
Explicit
Environmental dimensions of managerial evaluation
Explicit
Cradle-to-cradle and cradle-to-grave planning
Likely
Environmental criteria in purchasing and supply chain
Explicit
Life cycle analysis
Possible
Regulatory compliance
Exceeding
External certification systems "Green" processes--reduce, reuse, recycle; end-of-pipe concerns
Likely Extensive
Internal and external elaboration of environmental performance
Likely
Environmental arguments in marketing systems
Likely
Stakeholder engagement and community involvement
Likely
Note: Typology of environmental practices adapted from González-Benito and González-Benito (2006).
A firm’s environmental proactivity usually results from regulation and competitive forces (Aragón-Correa, 1998; Banerjee, Iyer, & Kashyap, 2003; Christmann, 2000; Hart, 1995; Sharma & Vredenburg, 1998), public concern and top management commitment (Banerjee et al., 2003), the organizational context and design (Sharma, 2000; Sharma, Pablo, & Vredenburg, 1999), or strategic attitudes (Aragón-Correa, 1998). However, stakeholder pressure also has emerged as a central determinant of a firm’s adoption of proactive environmental strategies (González-Benito & González-Benito, 2006). The research gap that
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remains pertains to how stakeholder pressure drives proactive strategies. To fill it, we draw on an institutional perspective. Institutional Theory and Environmental Legitimacy Institutional theory emphasizes the social context within which organizations aim to satisfy the expectations of social actors whose norms determine what constitutes appropriate behavior for the organization (DiMaggio & Powell, 1983; Oliver, 1997). Success in conforming to such institutionalized norms can improve access to resources, legitimacy, and survival capabilities (Scott, 1987). The organizational search for legitimacy thus is a central tenet and anchor of institutional theory (Greenwood et al., 2008; Suchman, 1995). Furthermore, norms for environmental conformance and legitimacy reflect DiMaggio and Powell’s (1983) three types of institutional pressure—coercive, mimetic, and normative— which influence the rate at which environmental practices diffuse (Jennings & Zandbergen, 1995). Pressures can originate from external (i.e., environmental organizations, governments, or customers) or internal (i.e., marketing, operations, or corporate relations) sources (Deephouse, 1996; Oliver, 1997). We begin by outlining the concept of environmental legitimacy, then return to the three types of institutional pressure. Specifically, using the organizing framework we described in the previous section (organizational and planning, operational, and communication practices), we distinguish among the expected beneficiaries of environmental practices or initiatives. Operational practices directly influence environmental performance and the natural environment through improved processes, such as waste reduction, pollution prevention, and supply chain mandates. Neither planning and organizational nor communication practices have a direct
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impact on the natural environment; rather, they should benefit the socio-economic environment (González-Benito & González-Benito, 2006). Conceptually, this pathway frees the organization to satisfy the expectations of institutional pressure groups by either engaging in impression management practices (Bansal & Clelland, 2004; Suchman, 1995) or making substantive changes in its environmental practices (Sharma & Henriques, 2005). Sharma and Henriques elaborate on the difficulty of the latter: Because advanced environmental practices tend to be voluntary and entail longterm paybacks, when they initiate such practices, firms often lack “a set of guidelines or regulations to turn to when addressing criticisms from stakeholders. Consequently, when criticisms are launched … [firms] must assess the potential damage these criticisms/disruptions may have on their reputation and legitimacy” (Sharma & Henriques, 2005: 174). Bansal and Clelland similarly argue that “institutional theory directs attention away from the risk-seeking behaviors associated with extracting superior organizational performance and directs it to the risk-reducing behaviors that support the stability and persistence of organizational forms and actions in meeting the expectations of societal stakeholders” (2004: 94). Because organizational members likely use impression management techniques to achieve organizational legitimacy (Elsbach, 1994), the firm might view impression management as a less risky path to environmental legitimacy, defined as “the generalized perception or assumption that a firm’s corporate environmental performance is desirable, proper, or appropriate” (Bansal & Clelland, 2004: 94). Organizations can acquire legitimacy by conforming to institutional expectations (Suchman, 1995). Thus, consistent with institutional theory, we consider environmental legitimacy a property conferred by 10
stakeholders, according to their own institutional norms and based on their perceptions of environmental performance, which may differ from actual performance (Hunter & Bansal, 2007). The difference may become especially acute when organizations engage in symbolic management of their legitimacy to enhance others’ perceptions of their environmental record (Driscoll, 2006). In turn, higher corporate environmental legitimacy should be associated with higher environmental proactivity for three reasons. First, firms that have established environmental legitimacy become anxious to leverage it to attain a competitive advantage. Bansal and Hunter (2003) find that early adopters of ISO 14001 (an international standard that specifies requirements for environmental management systems) cite reasons for doing so that include reinforcing their existing strategies and leveraging their existing legitimacy, rather than reorienting themselves to new strategies. Firms thus can “catch up” to symbolic claims they made previously or simply build on those claims. In either case, the slack provided by existing legitimacy mitigates a risk of deploying voluntary actions earlier than competitors. Second, Hart (1995) suggests an interconnectedness across successive stages of environmental proactivity. One interconnection—path dependency—can explain the progression from one stage to another. Path dependence invokes a temporal component, such that “what has happened at an earlier point in time will affect the possible outcomes of a sequence of events occurring at a later point in time” (Sewell, 1996: 262-263), as well as a directional component, such that increasing returns predict travel down a particular path: There will be other choice points, but the entrenchments of certain institutional arrangements obstruct an easy reversal of the initial choice. Perhaps the better metaphor is a tree, rather than a path. From the same trunk, there are many different branches and smaller branches. Although it is possible to turn around or to clamber from one to the other—and essential if 11
the chosen branch dies—the branch on which a climber begins is the one she tends to follow (Levi, 1997: 28). Accordingly, as firms take actions to influence stakeholder perceptions of their environmental legitimacy, those actions (e.g., promoting the environmentally friendly attributes of products) commit the firm to living up to new norms of reduced impacts on the natural environment. Failure to do so puts their credibility and legitimacy at risk. Third, embeddedness, which requires the presence of other, simultaneous resources, can either limit or encourage the firm in terms of making voluntary process or product transformations that support the natural environment (Hart, 1995). If the firm does not possess environmental legitimacy, stakeholders may not believe a real transformation is possible and discount proactive efforts. The withdrawal of legitimacy then would prove damaging to the firm, or at least provide disincentives for moving forward. In this example, environmental legitimacy is more a necessary condition than a determinant of environmental proactivity. King, Lenox, and Terlaak (2005), in another study of ISO 14001 adoption, find that certified firms actually exhibit poorer environmental performance than their industry peers, which might imply that organizations with poor environmental performance use ISO 14001 certification to symbolize their intent to improve that performance. Accordingly, we expect that an emphasis on environmental legitimacy will drive long-term proactive environmental strategies. Hypothesis 1. Environmental legitimacy positively affects environmental proactivity. Stakeholder Pressure as an Institutional Force on Environmental Strategy Murillo-Luna et al. (2008), in their study of small industrial firms in northeastern Spain, propose that a firm’s environmental strategies do not reflect its differentiated 12
responses to different stakeholder pressures. Sprengel and Busch (2010) study global company response strategies to pressures to reduce greenhouse gas emissions and report similar findings. Unless the norms conveyed by stakeholders were consistent, we consider these conclusions conceptually problematic, according to institutional theory. Therefore, after summarizing some stakeholder classifications, we build a case for differentiated responses according to the framework of normative, mimetic, and coercive institutional pressures. Because legitimizing strategies relate to the importance of external stakeholders, we also distinguish between internal and external normative pressures. Stakeholder pressure has emerged in prior literature as a central determinant of firm adoptions of proactive environmental strategies (Buysse & Verbeke, 2003; Delmas & Toffel, 2008; González-Benito & González-Benito, 2006, 2010; Henriques & Sadorsky, 1999; Murillo-Luna et al., 2008; Sprengel & Busch, 2010). Stakeholder theory provides the dominant theoretical platform for such analyses, and classifications of stakeholder groups generally follow this tradition, as the examples in Table 2 indicate. These results underscore the cautions that Buysse and Verbeke issue for scholars “not to take mainstream classifications of environmental strategies or relevant stakeholder groups found in the academic literature for granted” (2003: 468). Rather, the table shows factor results that include two studies, each of which produces two factors (market/nonmarket, government/nongovernment). Murillo-Luna et al. (2008) instead create a second-order factor that encompasses five first-order factors. Another recent, large-scale study suggests three stakeholders: value chain (household consumers, commercial buyers, and suppliers), internal (management and nonmanagement employees), and societal (environmental groups and
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community organizations, labor unions, industry or trade associations) (Darnall, Henriques, & Sadorsky, 2010). TABLE 2: Alternative Classifications of Stakeholder Groups
Stakeholder Group
Buysse & Verbeke (2003)
Murillo-Luna et al. (2008)
Delmas & Toffel (2008)
González-Benito & González-Benito (2010)
Governments/Regulators Customers/consumers Suppliers Employees/unions Shareholders Financial Institutions/SRI Funds Citizens/Communities/Social Groups Environmental Organizations/NGOs Competitors/Rivals Media Trade Associations Local Agencies/Adminstrative Control Insurance Companies Managers
Regulatory External Primary External Primary Internal Primary Internal Primary Internal Primary ———— Secondary Secondary Secondary ———— Regulatory ———— ————
Regulatory External Economic External Economic Internal Economic Corporate Government External Economic External Social External Social External Economic External Social ———— Regulatory External Economic Corporate Government
Non market Market Market ———— Excluded Excluded Non market Non market Market Non market Excluded ———— ———— ————
Governmental Nongovernmental Nongovernmental Nongovernmental Nongovernmental Nongovernmental Nongovernmental Nongovernmental Nongovernmental Nongovernmental ———— ———— ———— ————
Institutional theory also might explain the forces acting on corporate environmental strategies (Bansal, 2005; Bansal & Roth, 2000; Delmas & Montiel, 2009; Delmas & Toffel, 2008; Tate, Dooley, & Ellram, Forthcoming). That is, firms seek to obtain legitimacy by conforming to the dominant norms and practices of connected and similar others within their institutional fields (DiMaggio & Powell, 1983). Therefore, we consider how environmental strategies might converge through legitimation, according to varying levels of intuitional pressure (Lounsbury, 2001) and whether the change is substantive or largely ceremonial (Meyer & Rowan, 1977). Internal normative pressures. Managers, employees, shareholders, labor unions, and other internal groups likely produce the most pertinent internal normative forces. Normative isomorphism suggests that professionals organize similarly across and within firms because 14
of their prior socialization and adherence to dominant norms. Intuitively then, internal normative pressures should be significant in any environmental strategy. For example, Lounsbury (2001) finds that the presence of student groups can account for variation in the recycling strategies universities adopt. For business organizations, internal stakeholders are not only embedded in the work environment but also are members of wider society. As Keith Davis has noted, as society moves toward “norms of social responsibility…, then the businessman is subtly and inevitably guided by these same norms. Though his decisions are not fully determined by these norms, his decisions are influenced toward a socially defined behavior” (1973: 315). Environmental issues thus become embedded and institutionalized in professions and ultimately incorporated into organizations as internal institutional pressures (Meyer & Rowan, 1977). According to Buysse and Verbeke (2003), internal, primary stakeholders have significant influences on environmental strategies; external, primary stakeholders do not. Managers and employees also could be responsible for shaping how other stakeholders view the firm. Bansal and Clelland (2004) find for example that firms with low environmental legitimacy expose themselves to great risk if they express commitment to the natural environment. In all of these examples, the scholars implicitly characterize organizational fields using a singular, prevailing normative pressure that becomes internalized by firm managers—that is, a singular institutional logic (Friedland & Alford, 1991; Thornton & Ocasio, 2008). However, recent work in institutional theory emphasizes the “institutionally plural” way that fields generate multiple, often contradictory institutional logics (Dunn & Jones, 2010), such that organizations exist at the nexus of multiple institutional pressures (Kraatz & Block, 2008). From an institutional pluralism perspective, a field in which a firm 15
is situated might have a prevailing logic, but that prevailing logic might not reflect the logic of the broader field. Managers within certain organizations then might draw on different logics to guide their activities (Friedland & Alford, 1991). Although organizations in a field generally end up resembling one another (DiMaggio & Powell, 1983), at any given moment there may be disparity between the norms and logics that guide organizational activity and those that prevail in the broader field. Contradictory institutional logics also generate innovation and change (Seo & Creed, 2002), which make them important considerations when we study shifts toward concern for the natural environment. Because the broader normative discourse might be dramatically different from the discourse adopted by any given firm, we propose that normative institutional pressures have both internal and external dimensions. Positive managerial attitudes toward the environment encourage the firm’s adoption of a proactive environmental strategy (Sangle, 2010), so when internal attitudes about the environment are important to the organization, its culture is more likely to be sensitive to and guided by an environmentally conscious logic. Managers with an internalized commitment to the natural environment likely enthusiastically encourage environmental leadership strategies and voluntary tactics related to the firm’s environmental impact. This authentic concern does not preclude such managers from wanting recognition for the environmental strategy; that is, they also should be interested in presenting the firm as a legitimate actor in terms of its environmental performance. Accordingly, we anticipate both direct and mediated effects of internal normative pressures on environmental proactivity. Hypothesis 2. The positive effect of internal normative pressures on environmental proactivity is partially mediated by the positive effect of internal normative pressures on environmental legitimacy. 16
External institutional forces. These external forces typically appear in terms of normative, mimetic, and coercive pressures. Normative environmental pressures arise from the norms, values, or standards of conduct promoted by community groups (Henriques & Sadorsky, 1996), professional networks, industry associations, academic institutions (Rivera, 2004), environmental organizations (Hendry, 2006), the media (Bansal, 2005), or consumer groups (Doh & Guay, 2006). Henriques and Sadorsky (1996), in their study of 400 Canadian firms, find that consumer groups influence decisions to adopt an environmental plan, and Rivera (2004) discovers isomorphism when industry coalitions collaborate to avoid increased scrutiny from environmental groups, the media, and regulators. den Hond and de Bakker (2007) and Campbell (2007) also offer strong institutional arguments for the influence of social movements on corporations: This influence is most effective when the movement contains pluralistic opinions. For environmental nongovernmental organizations (ENGOs), such diversity might be reflected in their preference to work with business on environmental problems or instead to adopt adversarial approaches (Lyon, 2010). Multisectoral partnerships often form to create voluntary environmental codes of conduct (for a review, see Waddock, 2008), such as the Forest Stewardship Council (FSC), which formed in 1993 in the wake of mass consumer movements against tropical deforestation (Taylor, 2004). At that time, the FSC represented an unprecedented democratic alliance among environmental groups, the wood industry, and forest product users, whose purposes included social and market concerns, as well as environmental concerns. The media generally appear to exert significant influences on environmental strategies too, though research results are mixed. Henriques and Sadorsky (1999) find that that managers of environmentally proactive firms perceive all stakeholders as important— 17
except for the media. Managers in reactive firms instead consider the media the only important stakeholder. Similarly, Bansal (2005) suggests that the media’s influence is significant only in the early periods of a company’s sustainability evolution, though Buysse and Verbeke (2003) find the influence persists across all stages. Empirical research generally confirms that media can influence corporate environmental responses (Bansal & Clelland, 2004; Bansal & Roth, 2000; Bowen, 2000). Therefore, we hypothesize that external forces have an indirect effect on proactive environmental strategies, mediated by environmental legitimacy. Hypothesis 3. The positive effect of external normative pressures on environmental proactivity is fully mediated by the positive effect of external normative pressures on environmental legitimacy. Managers instead perceive coercive pressures to conform to specific behaviors when they depend on or risk sanctions from other organizations (Meyer & Rowan, 1977). Although other stakeholders potentially exert coercive forces, governments (local, regional, and national), financial institutions, and insurance companies do so more regularly and thus are the primary representatives of our broad grouping of external institutional coercive pressures. Regulatory pressures generally are associated with legal mandates to which organizations adhere, including regulations, rules, and norms (Oliver, 1991). Firms that fail to adhere to these pressures risk noncompliance penalties, revocation of permits, and unwanted media attention. Regulatory pressure or government support of environmental practices also provides significant inducements for firms to undertake voluntary environmental initiatives (Winter & May, 2001). Thus Delmas (2002) confirms that government is influential in firms’ decision to adopt ISO 14001, because by endorsing the standard, it created coercive pressures on firms to obtain the related reputational benefits. Henriques and Sadorsky (1996) consider 18
regulation the single most important source of pressure and the main determinant of managerial environmental action. However, Buysse and Verbeke (2003) offer mixed results: In their study, firms with an environmental leadership profile felt less pressure from regulatory stakeholders than those with more reactive strategies, though the differences are small and the overall effects weak. Because we expect coercive pressures to act primarily on environmental legitimacy, such that firms work hard to present a positive environmental profile to avoid regulatory penalties or earn funds, perceptions of coercive forces should increase legitimating responses. Hypothesis 4. The positive effect of coercive pressures on environmental proactivity is fully mediated by the positive effect of coercive pressures on environmental legitimacy. Finally, the need for organization legitimacy in uncertain conditions can account for the importance of mimetic forces, such that firms model themselves after or accommodate other organizations that they perceive as more legitimate or successful (DiMaggio & Powell, 1983; Galaskiewicz & Wasserman, 1989; Hoffman, 1999). Those other firms might include competitors, customers, or suppliers. Although benchmarking against competitors provides a source of mimetic isomorphism, which often encourages the diffusion of innovative practices (Zsidisin, Melnyk, & Ragatz, 2005), customer–supplier relationships might be even more significant. Anderson, Daly, and Johnson (1999) attain this result for the diffusion of quality management standards. Studying the diffusion of environmental management systems, Henriques and Sadorsky (1996) reveal that customer pressures to adopt a system are second only to government pressures. For example, customers of Chinese manufacturers have been influential in causing the suppliers to improve their environmental compliance and adoption of ISO 14001 (Christmann & Taylor, 2001). Because the environmental legitimacy of the 19
firm is critical to building and maintaining relations with customers and suppliers, firms should be attentive to the construction and maintenance of that legitimacy. In addition to accounting for the importance of industry pressures in the standardization of operational environmental policies, Christmann (2004) finds that perceived customer pressures contribute to the standardization of environmental communications. Although their analysis indicates low adoption rates for the environmental policies that firms describe in their corporate environmental policy statements, Ramus and Montiel (2005) also find that companies across four industry sectors follow similar patterns in their commitments to specific sets of environmental policies. Hypothesis 5. The positive effect of mimetic pressures on environmental proactivity is fully mediated by the positive effect of mimetic pressures on environmental legitimacy. We have argued that normative, coercive, and mimetic pressures from the institutional environment create conditions in which companies feel compelled to strengthen their environmental legitimacy. We also argue that firm environmental legitimacy is a means by which external stakeholder pressure leads to a commitment to environmental proactivity. Thus we summarize our theoretical model in Figure 1.
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FIGURE 1: Theoretical Model of the Role of Environmental Legitimacy in Environmental Strategy
Internal Institutional Forces Environmental Legitimacy
Environmental Proactivity
External Institutional Forces
RESEARCH METHODOLOGY To understand the dynamics of a firm’s development of an environmental strategy, we studied extant literature, particularly strategy and supply chain research, that pertains to our particular constructs of interest. We gained further insight from company fieldwork; using such rich sources to develop our theoretical model and inform our research question, we collected data to test our framework and hypotheses. Instrument Creation and Scale Development The survey research methodology followed the total design method (Dillman, Smyth, & Christian, 2009). The survey instrument incorporated multiple items designed to measure the particular constructs of interest, primarily developed or adapted from prior literature, though some were based on informal interviews with managers using scaled development procedures and guidelines (Churchill, 1979) (for the final survey instrument, see Appendix 1). The survey evolved dramatically from the first pretest with a panel of eight experts, using concurrent verbal protocol content analysis (Bolton, 1993); items were added, removed, 21
rewritten, or revised according to the feedback from both managers and academics. An initial pilot study with 36 managers and our ongoing literature review prompted further refinements of the research question and revisions of the survey instrument. Due to these changes, we decided to conduct a second pilot study with 80 managers, which suggested minor revisions to several items and the addition of questions to increase the scale’s reliability and validity. We aimed for six to eight items per construct. To reduce common method bias, we measured all multi-item constructs on a five-point scale, on which higher values indicated higher levels of the construct (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003). Stakeholder influence. The stakeholder influence measures came primarily from Murillo-Luna et al. (2008) and Buysse and Verbeke (2003); they assess the extent to which the organization perceives an effect of stakeholder pressure on its environmental strategy making. We also added three items—consumer groups, industry groups and associations, and universities and other research agencies—to the list, then asked: “To what extent are the environmental strategies of your organization influenced by the following stakeholder groups?” The items represent four groups: internal normative (composite reliability [CR] = .80), external normative (CR = .86), external mimetic (CR = .65), and external coercive (CR = .79) (see Appendix 2). Environmental legitimacy. We measured the extent to which company reputation drives the development of environmental strategies. These questions were newly developed but influenced by Brønn and Vidaver-Cohen (2009) and Bansal and Roth (2000). We asked respondents to indicate the importance of being known for their environmental compliance, improving their brand through environmental stewardship, being recognized for their environmental leadership, enhancing the company’s environmental reputation, and working 22
with ENGOs to improve their company image (CR = .93). Three other items were excluded from the final analysis (Appendix B). Environmental proactivity. We measured the extent to which the organization has adopted a proactive stance toward environmental issues, using an existing five-item scale (α = .83) adapted from Bowen, Cousins, Lamming, and Farukt (2001) and three items that we newly developed. Respondents indicated the extent to which the following details described their environmental strategy: going beyond compliance on environmental matters, high management priority to environmental issues, environmental criteria used in managerial decision making, transparency in reporting, and environmental strategies as means to explore new opportunities (CR = .91). Three additional items, not listed here, were excluded from final analysis (Appendix B). Other factors also may contribute to the development of an environmental strategy (González-Benito & González-Benito, 2010). Therefore, we included control measures related to a proactive approach (Aragón-Correa, 1998; Murillo-Luna et al., 2008), firm size and market share (Buysse & Verbeke, 2003), the regulatory environment, and the industry (Henriques & Sadorsky, 1999). We also controlled for stakeholder engagement, or the extent of the organization’s experiences with integrating stakeholders in environmental initiatives (Sharma & Vredenburg, 1998; Vachon & Klassen, 2008). Thus we controlled for the effects of industry, regulatory environment, firm size (number of employees and market share), and stakeholder engagement on both environmental legitimacy and environmental proactivity. We controlled for the effects of proactive approach on environmental proactivity only.
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Sample Frame and Sample Because we are interested in environmental strategies across the supply chain, as well as how stakeholders influence the development of those strategies, we focus on logistics and supply chain professionals, or others charged with thinking across the supply chain, as key informants. Supply chain management is a core business process, and supply chain managers increasingly undertake inter-organizational projects to improve their new product development or logistics processes (Srivastava, Shervani, & Fahey, 1999)—including environmental partnerships with suppliers, customers (Vachon & Klassen, 2008), and environmental organizations (Plambeck, 2007). Because we seek a broad understanding of environmental strategies, we also consider multiple industries (e.g., retailers, wholesalers, manufacturers, third-party logistics providers). To identify a representative sample of supply chain managers, we contacted the Council of Supply Chain Management Professionals and obtained a membership list of 5,978 names. We gathered a second list of 2,642 supply chain professionals from a university’s supply chain research center, resulting in 8,620 potential respondents. To ensure the respondents were knowledgeable and appropriate informants, we only selected those who seemed able to answer the survey questions (e.g., rank of manager or above, sales and marketing professionals). The instrument also included an item to determine if the respondent was familiar (yes/no) with his or her organization’s environmental practices. Any respondents who answered “no” were excluded. We limited our sample to respondents who worked for firms that engaged in the sourcing, manufacture, distribution, or sale of goods. To enable us to conduct the study online, we also limited the distribution list to respondents with e-mail addresses. 24
Through these efforts, we derived a list of 3,381 managers whom we invited to participate. These invitations prompted some unusable responses, such as returned e-mails (136), respondents being out of office for most of the survey period (176), beyond the firm’s scope (92), and patterned or outlier responses (5). Overall, we received 214 usable surveys, which represented a 7.0% response rate (9.9% response rate if we include partially completed surveys). If we extrapolate the out of scope responses, which suggested the respondents were not familiar with their organization’s environmental practices, to the full sample, the effective response rates would be 10.2% and 14.2%. As we show in Table 3, of the 214 respondents, 36% worked in manufacturing, and 29% were carriers, third-party logistic providers, or freight forwarders. Eighteen percent of the respondents were retailers, wholesalers, or warehousers, and the remainder functioned in other areas of the supply chain. Twenty-five percent were c-suite, 67% were managers or higher, and 9% were other professionals. Because of the nonnormality of the underlying distributions and potential inequality of variances across these different roles, we used nonparametric Kruskal-Wallis tests to evaluate the null hypothesis that the distribution of variable scores would be the same across roles in an organization. In all cases, the test statistic was not significant, and the null hypothesis was retained. In addition, we tested for nonresponse bias by comparing early and late responses, as suggested by Armstrong and Overton (1977).
25
TABLE 3: Respondent Demographics by Role, Tenure, and Industry Tenure in Organization (Years) Num Chief Executive Officer President Senior Vice President Vice President Other Corporate Officer Director or Senior Manager Manager Other Professional
10 6 12 21 2 82 61 20
% 5% 3% 6% 10% 1% 38% 29% 9%
214
Y .70) and convergent validity (AVE > .5, CR > AVE). Discriminant validity appears likely, because the AVE exceeds the MSV. Thus, even in the presence of potential method bias, we attain similar evidence regarding the reliability and validity for all factors except for external normative, which gains support only from weak evidence. Because of the significant changes to the model suggested by the EFA (i.e., removal of the five items), we returned to our EFA and used the trimmed constructs suggested by the CFA. The proposed factor structure performed marginally better. Therefore, and in the interest of parsimony, we conclude that CMV is not significant in this model and assert that sufficient evidence does not exist to adjust the factor scores. Our position is strengthened by a general consensus that the common factor method cannot differentiate between CMV and other variance caused by a common factor (Podsakoff et al., 2003). In turn, we believe the estimated measurement model represents the sample covariance matrix; we summarize the CFA results in Tables 4–6 and Appendix D. Although the χ2 value is significant (p = .000), other absolute and incremental fit indices are good and fall within the standard parameters. The standardized loadings are all positive, with all values greater than .50 and most exceeding .70; all p-values are significant at the .001 level. The standard errors are low; the critical ratio values exceed |1.96|. We find evidence of reliability and construct validity (convergent and discriminant). Therefore, and considering the lack of 36
evidence suggesting any model misfit, we consider the six-factor model in Appendix 4 an accurate description of the hypothesized factors. TABLE 4: Interfactor Correlation Matrix, AVE, Reliability, and Validity Factor
1
2
3
4
5
6
.567
.349
.328
.343
.083
2. Environmental Proactivity
.725 .753
.329
.618
.281
.108
3. External Normative Influence
.591
.658 .574
.267
.423
.523
4. Internal Normative Influence
.573
.786
.670 .517
.329
.152
5. External Mimetic Influence
.586
.530
.650
.654 .574
.138
6. External Coercive Influence
.288
.328
.723
.390
.483 .372
.655
5
5
3
2
2
2
1-5
1-5
1-5
1-5
1-5
1-5
Mean
3.995
4.021
3.093
3.628
3.649
3.495
Standard Deviation Coefficient alpha (α)
0.998
0.933
1.125
0.988
0.909
1.042
0.927
0.902
0.859
0.791
0.646
0.749
Construct Reliability
0.929
0.905
0.859
0.791
0.650
0.785
1. Environmental Legitimacy
Number of items Range of scale
Note: values below the diagonal are the correlation estimates among the constructs, diagonal elements are AVE values, and values above the diagonal are squared correlations. All correlations are significant at .001
37
TABLE 5: Confirmatory Factor Analysis Results Unstd. Load L3 L4 L2 L1 L5 P2 P3 P1 P5 P4 SH13 SH14 SH12 SH1 SH3 SH6 SH7 SH11 SH10
← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ← ←
Environmental Legitimacy Environmental Legitimacy Environmental Legitimacy Environmental Legitimacy Environmental Legitimacy Environmental Proactivity Environmental Proactivity Environmental Proactivity Environmental Proactivity Environmental Proactivity External Normative Influence External Normative Influence External Normative Influence Internal Normative Influence Internal Normative Influence External Mimetic Influence External Mimetic Influence External Coercive Influence External Coercive Influence
Std. Error
0.926 0.882 0.870 0.834 0.721 0.921 0.861 0.811 0.777 0.654 0.846 0.814 0.788 0.809 0.804 0.747 0.636 0.957 0.622
0.052 0.054 0.055 0.056 0.060 0.053 0.055 0.057 0.058 0.062 0.057 0.058 0.059 0.062 0.062 0.075 0.073 0.068 0.068
Critical Ratio
a
Std. Load
17.695 16.294 15.920 14.894 12.035 17.469 15.586 14.188 13.313 10.525 14.758 13.923 13.285 13.030 12.939 9.937 8.666 14.023 9.106
b
0.928 0.884 0.872 0.836 0.723 0.924 0.863 0.812 0.778 0.655 0.848 0.816 0.790 0.811 0.806 0.749 0.637 0.960 0.624
a
T he critical ratio (CR) is a t-value obtained by dividing the estimate of covariance by its standard error. A value exceeding |1.96| indicates statistical significance at the 0.05 level. All CR values indicate significant effects. b
All loadings significant at p < .001.
Specification of the Structural Equation Model (SEM) To test our hypotheses, we specify the full structural model in AMOS and use maximum likelihood for its estimation. Structural equation modeling offers the advantage of modeling indicator measurement error and provides for the simultaneous estimation of a system of structural equations. Bootstrapping within SEM provides superior estimates for the indirect effects of mediation (MacKinnon, Lockwood, & Williams, 2004). We have proposed that multiple institutional stakeholder pressures influence environmental proactivity though their effects on environmental legitimacy. Although not shown, our model also includes 38
controls for firms’ proactive approaches, regulatory environment, stakeholder partnerships, industry, and size. The SEM estimates a series of path coefficients reflecting the specified relationships among the latent variables. We trim the model according to the factor loadings and mediation tests, to reach the structural model in Figure 2 that provides excellent fit measures. After adding the controls to the model, the fit remains good (χ² = 373.93, df = 207, p = .000; χ²/df = 1.806; CFI = .948; SRMR =.046; RMSEA = .062, PCLOSE = .027). The purpose of this analysis is to test relationships between the constructs of interest, so we use a “test of not close fit” for RMSEA to assess the adequacy of the sample size (MacCallum, Browne, & Sugawara, 1996). Using a desired alpha of .05 with 171 degrees of freedom, a hypothesized population RMSEA of .05, and a sample size of 214, we calculated the statistical power to equal .99 (Preacher & Coffman, 2006), above the commonly accepted criterion of .80.9 Accordingly, we are relatively confident that the sample is large enough to support the statistical inferences regarding relationships between the constructs. The mediational analyses feature two procedures for estimating asymmetric confidence intervals for specific indirect effects: bootstrapping and the product of coefficients model (MacKinnon et al., 2004; Preacher & Hayes, 2008). These methods have more power than casual steps methods (e.g., Baron & Kenny, 1986) for testing mediation (MacKinnon, Lockwood, Hoffman, West, & Sheets, 2002), especially with small path coefficients (Fritz & MacKinnon, 2007). The analyses were conducted on all possible mediational relations (including null direct effects, to explore whether mediators may function as suppressor variables for the direct effect; Preacher & Hayes, 2008).
9
At this power level, a RMSEA of .08 is excluded from the confidence interval. If the hypothesized RMSEA were the same as the observed value (.062), then the statistical power would be .83.
39
TABLE 6: Goodness-of-Fit Indices Statistic
CFA
Chi-square (χ2) Chi-square (CMIN) Degrees of freedom Significance Absolute Fit Measures Root mean square error of approximation (RMSEA) 90 percent confidence interval for RMSEA (lo/high) Closeness of fit for RMSEA (PCLOSE) Standardized root mean residual (SRMR) Hypothesized Browne-Cudeck criterion (BCC) ÷ saturated BCC Normed chi-square (CMIN ÷ df ) Incremental Fit Indices Normed fit index (NFI) Non-normed fit index (NNFI, TLI) Comparative fit index (CFI) Relative fit index (RFI) Parsimony Fit Indices Parsimony normed fit index (PNFI) Non-centrality Based Measures Noncentrality parameter, NCP 90 percent confidence interval for NCP (lo/high) Sample Size Hoelter's Critical N (.05/.01) a
SEM
a
291.46 137 .000
373.93 207 .000
0.073 .061/.084 0.001 0.051 0.976 2.127
0.062 .052/.072 0.027 0.046 0.873 1.806
0.901 0.931 0.959 0.877
0.894 0.931 0.948 0.858
0.722
0.667
154.458 109.17/207.50
166.930 117.66/226.04
121/131
137/146
The SEM model fit statistics are computed including the ill-fitting External Mimetic in the model
RESULTS A summary of the hypothesis testing results appears in Figure 2.
40
FIGURE 2: Final Structural Model
Most of the hypotheses receive support, though one construct, external mimetic, ultimately must be removed from the model because its path is not significant (dotted line in Figure 2). Hypothesis 1. The model indicates a positive relationship between environmental legitimacy and environmental proactivity. As predicted, the causal relationship is both positive and statistically significant (unstandardized β = .436, CR = 5.166, p < .001). Hypotheses 2–5. The model offers good support for H2 and H3, which predict a mediating effect of environmental legitimacy on the relationships between internal normative influence and environmental proactivity (partial mediation) and between external normative influence and environmental proactivity (full mediation). All critical ratios are greater than |1.96|, and none of the confidence intervals includes 0, so the indirect paths and mediating 41
effects are significant (MacKinnon et al., 2004), as we show in Table 7. However, we cannot confirm H4, because though the mediation effect is significant, the sign is opposite our prediction. That is, the indirect and total effects on environmental proactivity are significant but negative. We also do not find support for H5 because the path between external mimetic influence and environmental legitimacy is not significant, and we could not test the mediation effects. TABLE 7: Bootstrapping Results of Mediational Effects
Two control variables (not shown in the model) are significant. Proactive approach relates positively to environmental proactivity (β = .158, CR = 2.487, p < .05), and stakeholder partnerships relate positively to both environmental legitimacy (β = .296, CR = 4.528, p < .001) and environmental proactivity (β = .155, CR = 2.409, p < .050). We explore the potential interactions between institutional pressures on environmental legitimacy and proactivity and find two significant interactions that we depict in Figure 3: internal normative with external normative and internal normative with mimetic. In the first interaction, the 42
external normative pressures amplify the effect of internal normative pressures on environmental legitimacy. In the second, mimetic isomorphism has a dampening effect on the relationship between internal normative pressures and environmental legitimacy. FIGURE 3: Simple Slope Graphs for Interaction Term Effects—Environmental Legitimacy
DISCUSSION For this chapter, we take an institutional perspective on proactive firm strategies for dealing with issues associated with the natural environment and thereby make several contributions. First, we emphasize the importance of legitimacy as a key driver of proactive environmental strategies. Second, we take an institutionally plural view of contemporary organizations and their fields and draw a distinction between internal and external normative pressures. Third, we show how different institutional pressures affect environmental strategies differently, highlighting the need to theorize about different pressures separately. We address each of these contributions next and conclude with areas for further study. Despite the variety of definitions of the concept (Deephouse & Suchman, 2008), legitimacy inevitably involves some cultural support for an organization in broader society
43
(Meyer & Scott, 1983). In our formulation, we do not theorize about legitimacy in terms of social support for an organization’s environmental policy though. Instead, we use the term “environmental legitimacy” to describe a strategy whereby the organization strives to appear in a way that seems legitimate in the environment. This concept leaves quite a bit of space for organizational activity. Legitimizing activity as a largely symbolic practice can be fairly innocent and is frequently linked to positive firm outcomes, such as resource acquisition and firm survival (Deephouse & Suchman, 2008; Meyer & Rowan, 1977; Suchman, 1995). However, there is a darker side. Commonly described as “greenwashing,” which implies outright deception and disinformation (Laufer, 2003), environmental legitimacy might shield a firm’s regressive tactics and enable harmful strategies. Our analysis does not support this view but indicates instead that efforts to achieve environmental legitimacy enhance a proactive environmental posture. This finding is consistent with the recent discursive turn in institutional theory (Heracleous & Barrett, 2001; Phillips, Lawrence, & Hardy, 2004). When firms “talk the talk,” however ceremonial or symbolic it may be, it encourages them to be more proactive in their environmental strategies. Taking recent insights into institutional pluralism seriously (Dunn & Jones, 2010; Kraatz & Block, 2008), we extend DiMaggio and Powell’s (1983) classic formulation of three broad institutional forms of pressure to include a fourth: internal normative pressures. Strictly speaking, there is no normative pressure outside the enacted logics of members of an organization (Powell & DiMaggio, 1991), yet this internal/external distinction enables us to capture plural environments, in which the institutional logics dominant in the field may be poorly reflected in the dominant logics of the organization. Because proactive environmental strategies represent a change from most traditional organizational logics, it is important to 44
embrace multiple, potentially contradictory institutional logics as sources of change (Seo & Creed, 2002). Beyond distinguishing internal from external normative forces, we show how different institutional forces affect environmental strategies. External normative forces act indirectly on proactive strategies through their effects on environmental legitimacy; internal normative forces act directly on them. Firm responses to external normative pressures thus are calculated to create an impression of environment responsiveness that may or may not be supported by environmental practices. Considering our equivocal findings regarding the indirect effects of internal and external normative forces on environmental proactivity, additional research is warranted to explore the effects fully. We also have identified some surprises from our analysis. First, we find a negative relationship between external coercive influence and environmental legitimacy, whereas we had expected a positive relationship. To explain these findings, we recall that respondents indicated the extent to which their environmental strategy was influenced by various stakeholder groups. Because firms with high coercive ratings are likely subject to strict regulation regimes, they may have less need to appear concerned with the natural environment, because the regulations take care of it. These findings also suggest a practical cap on legitimating strategies, in the sense that regulatory pressures could increase beyond what firms are willing to invest. Some studies show a significant relationship between regulatory forces and environmental strategies (Banerjee et al., 2003), but growing literature also appears to be deemphasizing the influence of regulation on social or environmental practices. In a supply chain context, Carter and Jennings (2004) find no significant influence of regulatory forces on socially responsible purchasing; Park-Poaps and Rees (2009) suggest 45
a negative, insignificant relationship of regulation with the firm’s internal or external orientation toward socially responsible supply chain management. Even Buysse and Verbeke (2003) find negative and significant effects of regulation on reactive and proactive firms, whereas the effects appear positive and significant for firms with a pollution prevention strategy. These findings indicate the need for further explorations of the relationship between government regulation and proactive environmental strategies. Second, considering what we already know about the relationships between sellers and buyers, we were surprised to find insignificant external mimetic forces in the model. This study does not distinguish between buyers and sellers, which might explain some of the variation. Buysse and Verbeke (2003) find similar results in their study of polluting companies in Belgium, such that international customers’ influence is significant at p < .01, while the effects of international suppliers, domestic suppliers, and domestic customers are all significant at p < .05, and yet the factor is significant only at p < .10. In the interactions between external mimetic and internal normative pressures, with weak internal influence, mimetic influence in our study drives a certain pressure for legitimacy, compensating for the lack of internal influence. Again, further investigation of these relationships is warranted. LIMITATIONS The implications of our study should be considered in light of its limitations. Causality cannot be substantiated with certainty, because our research design is crosssectional. However, the relationships we hypothesized are consistent with those in other studies in this domain. The influences of stakeholder groups on corporate strategy are well established. We also assert that the direction of causality between environmental legitimacy and environmental proactivity, beyond the theoretical support we provide, is intuitive. It 46
seems implausible that a firm characterized by proactive strategies just “wakes up” and realizes it needs to focus on its environmental brand. However, firms might not want to promote their environmental brand excessively, due to the risk of increased scrutiny. In general, the environmental strategy domain suffers from a dearth of longitudinal studies; noting the questions that arise from this study, we call for longitudinal qualitative studies. It is also possible that other variables could account for the adoption of proactive or legitimating strategies. The included controls also warrant further investigation. In particular, we find significant stakeholder partnerships for both strategies. Our study is further limited by its context. We may provide insights at a higher level of abstraction in the supply chain, but this investigation cannot advance understanding of particular industries in the supply chain. Furthermore, by controlling for industry and firm size, we find that neither has a significant effect on the dependent variables, which seems implausible. Finally, the firms in our sample mainly come from the United States. Replication of this study in different settings and with additional controls could provide further insights. IMPLICATIONS AND CONCLUSION Even given these limitations, this study makes important contributions to theory and practice. Drawing on institutional theory and institutional pluralism, we add a distinction between internal and external normative pressures and uncover unique effects. We show varying effects for different stakeholder pressures, though further study is needed. This study also has important implications for practitioners in external stakeholder groups. Current investments to influence corporate strategy may not deliver exactly the change these stakeholders seek. For at least one stakeholder group—environmental organizations—the strategy is to influence firm environmental practices directly, rather that going through brand 47
or reputational practices. This strategy may apply across stakeholder groups (Sharma & Henriques, 2005), in which case a reassessment of strategies would be needed. For firms, this study provides rich description of the influence of stakeholder groups and how companies respond. These response patterns have important implications. First, we show that firms represent a continuum of environmental responsiveness, such that some firms have extensive capabilities and others do not. Those without these capabilities may have focused on regulatory compliance or have no environmental strategy at all. Organizations with relatively low capabilities, in response to stakeholder pressures, could adopt a strategy calculated to create an impression of environmental stewardship and legitimacy to protect their brands. Because of the relative ease with which stakeholder groups can access and disseminate information about firm environmental performances, this strategy seems risky (Hart & Sharma, 2004), in that the organization easily could suffer reputational losses greater than it would have suffered had it done nothing. Firms might also learn from more environmentally proactive firms that temper, or even understate, their environmental achievements, because introducing them into the public domain increases the likelihood of stakeholder scrutiny, especially by stakeholder groups that are more interested in short-term results (Bansal, 2006). Although creating an impression of environmental stewardship is risky, particularly if it is untrue, there still might be some good reasons for doing so. To change beliefs in an organization, one approach requires changing behavior. To produce environmental legitimacy, firms deploy rhetoric, both outside and within the organization. This rhetoric as action/behavior may lead not only to changed beliefs within the organization but also to a cycle of increased changes in beliefs and behavior. As positive images of environmental 48
stewardship emerge, so does positive action (Cooperrider, 2000). Thus the effects of firm rhetoric for establishing environmental legitimacy can launch a dynamic feedback condition that increases efforts to achieve environmental proactivity.
49
APPENDIX A: Survey Instrument Q4.1 Are you familiar with your organization's overall environmental sustainability efforts (or lack thereof) and can you answer questions about these efforts? Yes (1) No (2) Q1.1 Please indicate that you understand how your privacy is protected as laid out below. I have read the informed consent and agree to take the survey (1) I would like to exit the survey (2) Q33 Informed Consent Dear Survey Participant: Thank you for agreeing to participate in a research study conducted by David G. Hyatt, a doctoral candidate at Case Western Reserve University. The purpose of this research is to best understand organizational strategies to improve the natural environment or reduce negative environmental impact across the global supply chain. The amount of time required for your participation will be 10-15 minutes (Really!). You are asked to complete the following survey to the best of your ability. There are no major risks associated with this research. Nothing asked is personal in nature. Be assured that we will not share any of this information with anyone. There will be no direct benefits of participation to either individuals or specific firms; however, indirect benefits may include a better understanding of the organizational strategies for the natural environment. You will be provided at the end of the survey will an opportunity to request a copy of the study and to participate in a drawing. If you request a copy or participate in the drawing, your request will not be connected in any way to your responses to this survey. Furthermore, once I have sent a copy of the study, your email will be deleted. The records of this research will be kept private. In any report the researchers publish, the researchers will not include any information that will identify a participant. Any information you provide will be kept in a secure password protected file and firewall protected from internet access. No researcher will ever know about your responses or that you have participated in this study. All printed information concerning the study will be shredded securely. Access to information will be limited to the researchers, the University Review Board responsible for protecting human participants, and regulatory agencies. Further, no identifying information will be included in the research findings. Your participation in this research study is voluntary. You may choose not to participate and you may withdraw your consent to participate at any time. You will not be penalized in any way should you decide not to participate or to withdraw from this study. The researchers conducting this study are Dr. Kalle Lyytinen and David G Hyatt. If you have any questions, you may contact Dr. Lyytinen at
[email protected] or David Hyatt at
[email protected]. If the researchers cannot be reached, or if you would like to talk to someone other than the researcher(s) about; (1) concerns regarding this study, (2) research participant rights, (3) research-related injuries, or (4) other human subjects issues, please contact Case Western Reserve University's Institutional Review Board at (216) 368-6925 or write: Case Western Reserve University; Institutional Review Board; 10900 Euclid Ave.; Cleveland, OH 44106-7230. Q37 The remainder of the survey will be focused on your organization's strategies for the natural environment, referred to hereafter as "environmental strategies". There will be a brief set of company demographic questions at the end that will only take a few moments to complete. Due to the unevenness of the questions, the progress bar is misleading, when the bar indicates 50% you are really at 75% (+/-)! Please note that responses are required on all screens--you will be prompted if there are any blanks. Q3.1 Which of the following best describes your role in your organization? Chief Executive Officer (1) President (2) Senior Vice President (3) Vice President (4) Other Corporate Officer (5) Director or Senior Manager (6) Manager (7) Supervisor (8) Buyer (9) Sales and Marketing Professional (10) Other (11)
50
APPENDIX A Survey Instrument (Continued) Q36 How long have you worked at this organization? Less than 1 year (1) More than 1 but less than 3 years (2) More than 3 but less than 6 years (3) More than 6 but less than 10 years (4) More than 10 years (5) Q5.1 How important are the following factors in your company’s environmental strategy? Not at all Slightly Somewhat important (1) important (2) important (3)
Moderately important (4)
Very important (5)
Protecting/preserving habitats and species (1)
Restoring environmental damage (2)
Reducing wastes and emissions (3)
Substitution of fossil fuels used (4)
Reduced energy use (5)
Reducing environmental risk (6)
Reduced environmental impact of products (7)
Preventing environmental damage (8)
Sincere environmental stewardship (9)
A genuine concern with global climate change (10)
Moderately (4)
To a Great Extent (5)
Q5.6 To what extent do the following statements describe your environmental strategy: Not at All Slightly (2) Somewhat (1) (3) We always attempt to go beyond basic compliance with laws and regulations on environmental issues. (1)
Our corporate management gives a high priority to environmental issues. (2)
We integrate environmental criteria into managerial decision-making. (3)
We are transparent in our environmental reporting. (4)
Our environmental strategy is a means to explore new opportunities. (5)
Addressing the environment helps to broaden our product-market domain. (6)
We demonstrate environmental leadership in our industry. (7)
We effectively manage the environmental risks which affect our business. (8)
51
APPENDIX A Survey Instrument (Continued) Q5.2 To what extent are the environmental strategies of your organization influenced by the following stakeholder groups: Not at all Slightly Somewhat Moderately Very Influential (1) Influential (2) Influential (3) Influential (4) Influential (5) Managers (1)
Shareholders/owners (2)
Employees (3)
Labor unions (4)
Customers (5)
Suppliers (6)
Financial institutions (7)
Insurance companies (8)
Competitors (9)
National (and regional) governments (10)
Local public agencies (11)
The media (12)
Citizens/communities (13)
Environmental organizations (14)
Consumer groups (15)
Industry groups/associations (16)
Universities and other research agencies (17)
Q50 Which of the following statements best describes your role in your company's environmental strategy? Minimal role (1) Implementing role (2) Formulating role (3) Implementing and formulating role (4)
52
APPENDIX A Survey Instrument (Continued) Q5.3 To what extent has your company established collaborative partnerships with external stakeholders (e.g. environmental organizations, suppliers, governmental agencies, customers, competitors) for the following purposes: Not at All Slightly (2) Somewhat Moderately To a Great (1) (3) (4) Extent (5) Achieving shared environmental goals. (1)
Developing a mutual understanding of expected environmental performance. (2)
Working together to reduce negative environmental impact of your operations, products, or services. (3)
Conducting joint planning to anticipate and resolve environmental-related problems. (4)
Making joint decisions about environmental standards (e.g. guidelines, codes of conduct, certifications, or management systems). (5)
Joint technology and research alliances on environmental matters. (6)
Work in partnership on programs of environmental preservation. (7)
Collaboration on development of environmental policy. (8)
Q5.4 To what extent has your company engaged in collaborative partnerships for environmental purposes with the following stakeholders: Not at All (1) Slightly (2) Somewhat (3) Moderately To a Great (4) Extent (5) Retailers/distributers (1)
Other companies/competitors (2)
Suppliers (3)
Regulating authorities (4)
Environmental organizations (5)
Industry groups/associations (6)
Universities and other research agencies (7)
53
APPENDIX A Survey Instrument (Continued) Q5.5 Thinking about how your company works with external stakeholders (e.g. environmental organizations, suppliers, governmental agencies, customers, competitors), to what extent are the relationships characterized by: Not at All (1) Slightly (2) Somewhat (3) Moderately To a Great (4) Extent (5) Fluid exchange of information (1)
Exchange of strategic information (2)
Transparent negotiations (3)
Helping each other (4)
Problem-solving approach rather than mutual conflict (5)
Mutual trust among partners (6)
Flexibility to make adjustments when difficult situations unfold (7)
Mutual commitment to partners (8)
Q5.7 How important are the following factors in your company for developing your environmental strategy? Not at all Slightly Somewhat Moderately Important Important Important Important (1) (2) (3) (4)
Very Important (5)
Being known for environmental compliance. (1)
Improving our brand through environmental stewardship. (2)
Being recognized for environmental leadership. (3)
Enhancing our environmental reputation. (4)
Working with environmental organizations can improve our image. (5)
Being seen at the forefront of environmental standards. (6)
Having an environmental strategy ensures the legitimate operation of our business. (7)
Minimizing appearances of environmental impact. (8)
54
APPENDIX A Survey Instrument (Continued) Q5.8 Considering your company’s overall assessment of its environmental strategies, to what extent have they led to any of the following competitive benefits? Not at All (1) Slightly (2) Somewhat (3) Moderately To a Great (4) Extent (5) Reduced costs (1)
Improved operations (2)
Improved product quality (3)
Product innovations (4)
Organization-wide learning among employees (5)
Improved employee morale (6)
Overall improved company reputation or goodwill (7)
Better relationships with stakeholders such as local communities, regulators, and environmental groups (8)
Q5.10 To what extent do the following statements describe your company: Not at All (1) Slightly (2) Somewhat (3)
Moderately (4)
To a Great Extent (5)
We undertake innovative projects, in spite of the associated risk (1)
We are early adopters of new information and communication technologies (2)
The company reinvests profits into research and development (R&D) (3)
Q5.11 Please indicate the extent to which you disagree or agree with the following statements: Strongly Disagree (2) Neither Agree (4) Disagree (1) Agree nor Disagree (3)
Strongly Agree (5)
Our industry is highly regulated (1)
Relative to our competitors, my company is high performing (2)
Q5.12 OK, there are 5 more screens with short and basic questions about your company. How many employees did your company have at its most recent year end? Less than 100 (1) 100 to below 200 (2) 200 to below 500 (3) 500 to below 1,000 (4) 1,000 to below 3,000 (5) 3,000 to below 10,000 (6) 10,000 to below 30,000 (7) 30,000 and above (8)
55
APPENDIX A Survey Instrument (Continued) Q5.13 In which industry are you employed? Carrier (1) Finance/Insurance (2) Freight Forwarder (3) Health Care (4) Manufacturer (5) Material Handling Equipment (6) Merchandiser/Retailer (7) Third Party Service Provider (8) Trade Press/Publishing Company (9) Utility (10) Warehouse (11) Wholesale/Distributor (12) Other (13) Q5.14 Please let us know the company you work for. This information will only be used for our research purposes and not connected to you in any way. If you prefer not to provide the company name, please just type N/A in the text box provided: Q29 Does your company operate in multiple countries? Yes (1) No (2) Q5.15 In what continent/country are you based? Africa (1) China (2) Japan (3) Other Asian (4) Australia (5) Canada (6) Europe (7) Brazil (8) Other South America (9) Central America and Mexico (10) United States (11) Q5.16 In comparison to other firms like us in our industry, we have: Very small market share (1) Below average market share (2) Average market share (3) Above average market share (4) Industry leading market share (5) Q5.17 In comparison to other firms like us in our industry, we have: Much poorer growth (1) Less growth (2) Slightly less growth (3) Average growth (4) Slightly more growth (5) More growth (6) Much more growth (7) Q5.18 Compared to other industries, our industry is typically considered to be: Relatively high polluting industry (1) Relatively low polluting industry (2)
56
APPENDIX A Survey Instrument (Continued) Q5.19 In comparison to other firms like us in our industry, we are: Much less profitable (1) Less profitable (2) Slightly less profitable (3) Average (4) Slightly more profitable (5) More profitable (6) Much more profitable (7)
57
APPENDIX B: Construct Definition Table S takeholder Pressure (5-item scale anchored by "Not at all influential" and "Very influential") To what extent are the environmental strategies of your organization influenced by the following stakeholder groups: Internal Normative SH1 M anagers SH2 Shareholders/owners a SH3 Employees SH4 Labor unions a External Mimetic SH5 Customers SH6 Suppliers SH9 Competitorsa External Coercive SH7 Financial institutions a SH8 Insurance companies a SH10 National (and regional) governments SH11 Local public agencies External Normative SH12 The media SH13 Citizens/communities SH14 Environmental organizations SH15 Consumer groups a SH16 Industry groups/associationsa SH17 Universities and other research agencies a
Measures the extent to which the organization perceives and considers stakeholder pressure in their environmental decision making. Scale adapted from M urillo-Luna, GarcésAyerbe, & Rivera-Torres (2008: 1236) and Buysse & Verbeke (2003: 462). National (and regional) governments and local public agencies substituted for “administrative control” and “environmental legislation”, respectively, Consumer groups, industry groups/associations, universities and other research agencies added by authors. M urillo-Luna et al. produced a 5-factor solution all with CA > .64: corporate government stakeholders (F1), internal economic stakeholders (F2), external economic stakeholders (F3), regulatory stakeholders (F4), and external social stakeholders (F5).
Environmental Legitimacy (5-item scale anchored by "Not at all important" and "Very important") How important are the following factors in your company for developing your environmental strategy? L1 Being known for environmental compliance. Measures the extent to which company L2 Improving our brand through environmental stewardship reputation is a driving factor for . L3 Being recognized for environmental leadership. developing environmental strategies. L4 Enhancing our environmental reputation.
a b
L5 L6 L7
Working with environmental organizations can improve our image Being seen at the forefront of environmental standards.a Having an environmental strategy ensures the legitimate operation of our
L8
business.a M inimizing appearances of environmental impact.a
Scale developed by authors Items 1-6 influenced by Brønn & VidaverCohen (2008: 101).
Items not retained in final CFA and SEM model Environmental Legitimacy and Environmental Proactivity were separated by several sets of questions in the survey instrument.
58
APPENDIX B Construct Definition Table (Continued) b
Environmental Proactivity (5-item scale anchored by "Not at all" and "To a great extent") To what extent do the following statements describe your environmental strategy: P1 We always attempt to go beyond basic compliance with laws and regulations on environmental issues. Measures the extent to which the P2 Our corporate management gives a high priority to environmental issues. organization has adopted a proactive stance towards environmental issues. P3 We integrate environmental criteria into managerial decision-making. P4
We are transparent in our environmental reporting.
P5
Our environmental strategy is a means to explore new opportunities.
P6 P7 P8
Addressing the environment helps to broaden our product-market a
We demonstrate environmental leadership in our industry.a We effectively manage the environmental risks which affect our
Adapted from Bowen, Cousins, Lamming, & Farukt (2001: 182) CA = .83 Items 3-6 by authors
a
Proactive Approach (5-item control scale anchored by "Not at all" and "To a great extent") To what extent does the following describe your company’s culture: CP1
We undertake innovative projects, in spite of the associated risk
CP2
We are early adopters of new information and communication technologies
Measures the overall proactive strategic approach of the company. Adapted from M urillo-Luna, Garcés-Ayerbe, & Rivera-Torres (2008: 1234)
CP3 The company reinvests profits into research and development (R&D) S takeholder Partnerships (5-item control scale anchored by "Not at all" and "To a great extent")
To what extent has your company established collaborative partnerships with external stakeholders (e.g. environmental organizations, suppliers, governmental agencies, customers, competitors) for the following purposes: CE1 Achieving shared environmental goals a Q1-5 adapted from Vachon & Klassen (2008: CE2 Developing a mutual understanding of expected environmental 312) CA = .96; performancea Q6 adapted from Sharma & Vredenburg CE3 Working together to reduce negative environmental impact of your (1998: 745). a operations, products, or services CE4 Conducting joint planning to anticipate and resolve environmental-related Q7-8 by authors problems CE5 M aking joint decisions about environmental standards (e.g. guidelines, Note that the factor loaded on all the items codes of conduct, certification schemes, or management systems) but in order to reduce the number of CE6 Joint technology and research alliances on environmental matters parameters in the model only the last five CE7 Work in partnership on programs of environmental preservation were utilized CE8 Collaboration on development of environmental policy Regulatory Environment (5-item control scale anchored by "Not at all" and "To a great extent") CR1 Please indicate the extent to which your industry is regulated: Market S hare (5-item control embedded scale) CM 1 In comparison to other firms like us in our industry, we have: (1) Very small market share; (2) Below average market share; (3) Average market share; (4) Above average market share; (5) Industry leading market share. a
Items not retained in final CFA and SEM model
b
Environmental Legitimacy and Environmental Proactivity were separated by several sets of questions in the survey instrument.
59
APPENDIX C: Correlation Table P1
P2
P3
P4
P5
P6
P7
P8
L1
L2
L3
L4
L5
L6
L7
L8
SH1
SH2 SH3 SH4
P2 P3 P4 P5 P6 P7 P8 L1 L2 L3 L4 L5 L6 L7 L8 SH1 SH2 SH3 SH4 SH5 SH6 SH7 SH7 SH9 SH10 SH11 SH12 SH13 SH14 SH15 SH16 SH17 CP1 CP2 CP3 CR1 CE1 CE2 CE3 CE4 CE5 CM1 empl indu
.768 .696 .805 .524 .597 .560 .624 .693 .667 .557 .482 .593 .496 .402 .715 .648 .732 .674 .579 .709 .662 .523 .601 .642 .528 .503 .485 .585 .555 .604 .579 .429 .510 .487 .580 .547 .491 .611 .532 .423 .594 .632 .702 .434 .748 .542 .624 .548 .437 .593 .595 .724 .450 .762 .831 .515 .627 .565 .430 .552 .572 .661 .539 .730 .733 .836 .456 .573 .477 .362 .460 .505 .518 .446 .618 .596 .639 .681 .617 .661 .630 .428 .592 .583 .723 .473 .704 .741 .831 .754 .665 .544 .616 .617 .437 .571 .539 .581 .510 .683 .622 .669 .679 .592 .713 .365 .448 .464 .273 .415 .415 .362 .419 .520 .461 .497 .614 .519 .536 .579 .489 .594 .567 .485 .542 .405 .554 .537 .420 .419 .446 .452 .393 .429 .411 .254 .385 .451 .401 .333 .355 .332 .372 .295 .308 .324 .335 .284 .321 .350 .280 .219 .363 .500 .558 .543 .381 .529 .441 .528 .448 .341 .418 .368 .381 .389 .408 .388 .274 .654 .385 .208 .277 .233 .211 .179 .170 .249 .222 .177 .163 .151 .161 .204 .181 .222 .155 .171 .191 .226 .282 .326 .136 .355 .466 .301 .300 .338 .406 .329 .411 .321 .309 .359 .323 .240 .338 .359 .330 .353 .206 .427 .392 .393 .260 .365 .386 .366 .343 .353 .408 .338 .226 .299 .235 .327 .386 .349 .237 .353 .254 .321 .303 .325 .273 .262 .316 .370 .354 .332 .223 .292 .245 .103 .175 .210 .081 .112 .069 .056 .235 .196 .059 .122 .186 .212 .205 .264 .180 .133 .118 .031 .086 .128 .020 .133 .283 .079 .097 .236 .233 .242 .252 .240 .237 .317 .292 -.013 .063 .060 .157 .184 .138 .099 .179 .156 .286 .325 .198 .245 .295 .264 .218 .295 .370 .232 .191 .205 .299 .341 .185 .198 .163 .238 .343 .255 .148 .204 .311 .328 .241 .330 .345 .299 .137 .214 .326 .352 .189 .338 .326 .331 .355 .372 .366 .389 .423 .435 .439 .433 .390 .212 .213 .455 .525 .492 .326 .412 .365 .435 .430 .428 .401 .421 .432 .453 .495 .521 .373 .351 .296 .362 .420 .426 .279 .372 .393 .427 .375 .432 .413 .456 .476 .566 .469 .484 .341 .319 .229 .401 .432 .397 .255 .394 .447 .401 .370 .384 .376 .343 .408 .496 .466 .440 .354 .293 .255 .321 .392 .405 .321 .434 .414 .408 .369 .369 .404 .412 .419 .435 .462 .398 .307 .338 .365 .384 .422 .393 .313 .382 .348 .389 .302 .405 .355 .344 .363 .457 .433 .404 .252 .324 .299 .532 .508 .484 .390 .536 .444 .501 .405 .364 .353 .385 .371 .340 .473 .425 .212 .399 .341 .473 .462 .442 .312 .470 .422 .440 .340 .419 .397 .416 .359 .392 .487 .430 .224 .419 .274 .452 .445 .459 .324 .390 .345 .359 .413 .362 .263 .299 .319 .305 .396 .439 .345 .338 .245 .236 .263 .301 .212 .198 .104 .220 .277 .335 .187 .231 .258 .246 .283 .355 .255 .178 .144 .523 .605 .560 .460 .520 .488 .618 .534 .446 .491 .502 .531 .528 .544 .497 .374 .459 .315 .515 .556 .536 .456 .537 .466 .574 .492 .502 .478 .525 .537 .511 .594 .631 .372 .411 .373 .504 .543 .484 .423 .494 .496 .585 .415 .472 .488 .551 .521 .532 .632 .610 .368 .333 .324 .530 .558 .492 .426 .542 .491 .592 .434 .483 .524 .532 .541 .566 .631 .580 .391 .384 .350 .522 .552 .498 .403 .479 .425 .557 .508 .469 .460 .524 .537 .504 .607 .561 .381 .408 .320 .210 .241 .181 .132 .249 .277 .309 .236 .184 .282 .264 .249 .280 .290 .216 .174 .147 .115 .265 .327 .222 .248 .258 .286 .355 .275 .230 .304 .304 .269 .260 .265 .318 .196 .186 .098 -.144 -.097 -.112 -.105 -.125 -.090 -.194 -.012 -.121 -.127 -.120 -.109 -.105 -.193 -.182 -.033 -.106 -.161
Mean SD Scale
4.00 1.09 5
4.08 1.11 5
3.88 1.09 5
4.24 0.98 5
3.91 1.18 5
3.75 1.19 5
4.06 1.20 5
4.09 1.00 5
4.14 1.17 5
4.22 1.05 5
4.07 1.15 5
4.11 1.08 5
3.43 1.23 5
3.77 1.25 5
3.88 1.22 5
3.73 1.18 5
3.73 1.09 5
SH5
SH6
SH7
.234 .332 .186 .412 .229 .478 .307 .335 .222 .383 .116 .262 .152 .251 .552 .085 .224 .384 .386 .128 .134 .232 .282 .185 .272 .308 .225 .254 .243 .363 .244 .284 .326 .386 .335 .487 .317 .310 .365 .470 .383 .337 .348 .482 .448 .350 .335 .411 .442 .468 .435 .200 .466 .501 .401 .360 .326 .275 .445 .432 .477 .138 .263 .302 .347 .392 .028 .218 .258 .338 .351 .091 .214 .239 .213 .194 .213 .156 .218 .326 .523 .174 .410 .446 .344 .433 .202 .347 .359 .400 .382 .216 .333 .406 .372 .459 .296 .356 .403 .360 .391 .291 .294 .315 .399 .171 .134 .127 .127 .174 .154 .224 .108 .180 .239 .005 -.067 -.097 -.137 -.038
3.84 3.53 1.23 1.09 5 5
1.57 0.98 5
4.09 1.05 5
3.21 1.07 5
2.42 1.24 5
N = 214. Correlations greater than |.1.4| p < .05; correlations greater than |.175| p < .01, correlations greater than |.223| p < .001
60
APPENDIX C Correlation Table (Continued) SH7 SH9 SH10 SH11 SH12 SH13 SH14 SH15 SH16 SH17 CP1
CP2
CP3
CR1
CE1
CE2
CE3
CE4
CE5 CM1 empl indu
P2 P3 P4 P5 P6 P7 P8 L1 L2 L3 L4 L5 L6 L7 L8 SH1 SH2 SH3 SH4 SH5 SH6 SH7 SH7 SH9 SH10 SH11 SH12 SH13 SH14 SH15 SH16 SH17 CP1 CP2 CP3 CR1 CE1 CE2 CE3 CE4 CE5 CM1 empl indu
.261 .377 .368 .569 .304 .598 .400 .437 .373 .378 .290 .396 .314 .353 .399 .340 .369 .315 .300 .373 .424 .304 .282 .317 .113 -.010 -.037 .063 .027 .087 .116 .103 .139 .327 .217 .349 .196 .165 .270 .297 .192 .320 .230 .207 .271 .189 .189 .276 .220 .214 .336 .019 .089 .158 .107 .118 .233 .027 -.039 -.032
.573 .611 .512 .517 .420 .391 .180 .106 .231 .380 .373 .359 .323 .346 .355 .081 .139 .054
.665 .655 .690 .662 .696 .531 .560 .506 .530 .193 .347 .225 .308 .219 .359 .296 .381 .318 .456 .377 .444 .369 .451 .378 .511 .338 .476 .229 .237 .240 .323 .026 -.032
.666 .605 .618 .589 .599 .240 .302 .316 .266 .271 .326 .298 .259 .459 .412 .450 .434 .464 .466 .549 .467 .467 .429 .178 .199 .286 .277 .012 -.025
.576 .347 .389 .259 .316 .632 .291 .283 .514 .471 .288 .217 .199 .170 .351 .427 .412 .501 .425 .359 .288 .536 .466 .512 .438 .432 .315 .772 .453 .490 .536 .453 .484 .352 .727 .787 .456 .461 .446 .406 .417 .270 .740 .720 .768 .431 .413 .461 .421 .440 .298 .745 .760 .768 .789 .173 .152 .202 .216 .409 .112 .269 .289 .324 .280 .314 .149 .244 .166 .182 .373 .146 .340 .312 .396 .275 .357 .587 .005 -.096 -.098 -.135 -.268 -.200 -.089 -.122 -.179 -.137 -.178 -.282 -.257
Mean SD Scale
2.65 1.32 5
3.25 1.23 5
2.93 1.24 5
3.13 1.32 5
3.36 1.15 5
3.23 1.15 5
3.74 1.10 5
3.22 1.27 5
2.96 1.23 5
2.71 1.16 5
3.14 1.18 5
3.24 1.23 5
3.42 1.35 5
3.68 1.19 5
3.32 1.34 5
3.30 1.37 5
3.05 1.37 5
3.24 1.35 5
3.14 1.39 5
3.94 1.11 5
5.55 2.26 8
6.40 3.51 13
N = 214. Correlations greater than |.1.4| p < .05; correlations greater than |.175| p < .01, correlations greater than |.223| p < .001
61
APPENDIX D: EFA Factor Loadings (Post-CFA)
62
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