Corporate environmental responsiveness in India: lessons from a developing country

This article appeared in a journal published by Elsevier. The attached copy is furnished to the author for internal non-commercial research and education use, including for instruction at the authors institution and sharing with colleagues. Other uses, including reproduction and distribution, or selling or licensing copies, or posting to personal, institutional or third party websites are prohibited. In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier’s archiving and manuscript policies are encouraged to visit: http://www.elsevier.com/copyright

Author's personal copy

Journal of Cleaner Production 35 (2012) 203e213

Contents lists available at SciVerse ScienceDirect

Journal of Cleaner Production journal homepage: www.elsevier.com/locate/jclepro

Corporate environmental responsiveness in India: lessons from a developing country Sukhbir Sandhu a, Clive Smallman b, *, Lucie K. Ozanne c, Ross Cullen d a

School of Management, Centre for Accounting, Governance and Sustainability, University of South Australia, Adelaide, Australia School of Business, University of Western Sydney, Locked Bag 1797, Penrith, NSW 2751, Australia c Department of Management, College of Business and Economics, University of Canterbury, Christchurch, New Zealand d Faculty of Commerce, Lincoln University, Christchurch, New Zealand b

a r t i c l e i n f o

a b s t r a c t

Article history: Received 22 October 2010 Received in revised form 5 May 2012 Accepted 28 May 2012 Available online 12 June 2012

We examine corporate environmental responsiveness in business organizations in India. Based on theoretically informed case analysis, we operationalize corporate environmental responsiveness as a two order construct. We find that level one (the lower level) responsiveness is driven by pressures arising out of powerful supply chain customers and institutional pressures resulting from internationalization. The drivers for organizations at level two (the higher level) responsiveness are associated with organizational identities and cultures rooted in a long history of social responsiveness. Ó 2012 Elsevier Ltd. All rights reserved.

Keywords: Corporate environmentalism Developing countries India Organization theory Qualitative case analysis

1. Introduction In attempting to understand organizational environmental management practices (Abreu et al., 2012; Jones, 2010), management scholars have engaged in research aimed at defining corporate environmental responsiveness and examining its antecedents (Bansal, 2005; Burritt et al., 2009; Sandhu et al., 2010). Hence, there exists an extensive and well-developed body of sophisticated normative and empirical literature on corporate environmentalism, which we define as ‘the recognition of the importance of the natural environment by business organizations and its integration into strategic decision making’ (Hart, 2007; Menguc et al., 2010). Various theories of corporate environmentalism have been advanced, but this literature is arguably limited by a socioeconomic scope that remains largely biased to organizations in developed countries. The perspective from developing countries, where massive industrialization is currently underway (Bawa et al., 2010), has been explored largely in the form of a limited number of empirical case studies (Ciliberti et al., 2008; Lobendahn Wood et al., 2010; Luken and Vanrompaey, 2008; Park et al., 2010). However, these approach the issue almost exclusively from a practice-based perspective. * Corresponding author. Tel.: þ61 2 9685 9083; fax: þ61 2 9685 9514. E-mail address: [email protected] (C. Smallman). 0959-6526/$ e see front matter Ó 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.jclepro.2012.05.040

Rapid growth, particularly in industries that are environmentally resource intensive and heavily polluting is currently ‘enjoyed’ by many developing countries (notably India and China) and is a major contributor to global environmental challenges (Bawa et al., 2010). Exacerbating this, governments in developing countries often focus on economic growth at the cost of environmental issues (Economy and Lieberthal, 2007). This has become a major risk for the well being of populations in these countries, and beyond because environmental issues are not constrained by national boundaries (IPCC, 2012; United Nations, 2011). These factors lead us to contend that a theoretically informed perspective on corporate environmentalism in developing countries is vital, especially so, as the developing world increasingly becomes the developed world’s manufacturing workshop (Bawa et al., 2010). Insights obtained from research in the developed world can guide inquiry into organizational environmental responsiveness. However, these findings should not simply be mapped to developing countries. The differences that exist between developing and developed nations suggest that the realities of corporate environmentalism in developing countries should be different from that in developed countries (Abreu et al., 2012; Palma and Dobes, 2010). Of the studies that deal with corporate environmentalism in developing countries, and despite the excellent case studies we have previously referred to, a majority either examine the environmental effects of multinationals operating in developing

Author's personal copy

204

S. Sandhu et al. / Journal of Cleaner Production 35 (2012) 203e213

countries or the environmental effects of linkages with multinational corporations (MNCs). A predominant conclusion reached by these studies is that MNCs do not lead to a ‘race to the bottom’, but rather that they set heightened environmental standards. Yet, other studies have found no relationship between multinational ownership and improved environmental performance in developing countries (Dasgupta et al., 2000). Whilst this narrow focus on environmental performance of MNCs can be explained by Banerjee’s observation that corporate environmentalism is inherently a Western-centred concept (Banerjee, 2003), one consequence of this has been that the domestic firm (independent of MNC interests) in developing countries has largely been ignored as the focus of investigation. In this paper we focus on what drives corporate environmentalism in India? India’s developing country status coupled with its accelerating economic growth and resulting environmental challenges provides a very valuable context to explore this issue. Insofar as developing countries share social, political, and economic contexts with each other, our findings may have lessons for other developing countries. In the following section we outline the theoretical synthesis that drove our analysis. In the next section we describe our case study methods. Our findings are detailed in section four. In section five we provide a discussion of our findings. We conclude the paper in section six with a theoretically- and empirically-informed analysis of corporate environmentalism in India and suggest directions for future research. 2. Theoretical framing In previous research on corporate environmentalism, researchers have been guided by: stakeholder theory (Liu and Anbumozhi, 2009; Russo and Perrini, 2010) or the resource dependence perspectives (Kassinis and Vafeas, 2006; Sharma and Henriques, 2005) or institutional theory (Bansal and Clelland, 2004; Campbell, 2007) or by the perspectives from the resource based view (RBV) (Aragon-Correa and Sharma, 2003; Menguc et al., 2010). A limitation of these singular theoretical perspectives is that the enquiry will of necessity, be constrained and scoped in accordance with the prescriptions of the given framework. For complex phenomena such as corporate environmentalism decision making involves interplay between various determinants, which may not necessarily be explained by a singular theoretical framework (Sandhu, in press; Sparrowe and Mayer, 2011). In attempting to address this insufficiency, researchers have previously brought together perspectives from distinct theoretical frameworks. Thus Bansal’s (2005) longitudinal enquiry into organizational determinants of corporate sustainable development was guided by the RBV and institutionalism, and Delmas and Toffel (2004) advocated bringing in stakeholder theory and institutionalism to understand the adoption of environmental management systems. In this research we employ a synthesis of stakeholder theory, resource dependence theory, institutional theory and resourcebased theory to guide our work. We now outline perspectives on these theories and use them to develop our research questions. 2.1. Stakeholder theory and corporate environmentalism Stakeholder theory (Freeman, 1999) suggests that organizations are driven to environmental responsibility due to pressures from stakeholders. However, its inclusiveness makes it difficult to determine which stakeholders are genuinely important in influencing an organization’s environmental responsiveness (Mitchell et al., 1997). Moreover, stakeholder importance is transitory and subject to change. Pressures from stakeholders who were considered secondary

in the past are now significant catalysts for environmental change in many organizations (Sharma and Henriques, 2005). In attempting to refine stakeholder theory, Mitchell et al. (1997) proposed that stakeholders with power, legitimacy and urgency would be regarded as salient by managers of a firm. What still remains unanswered is the process by which such stakeholders gain these saliency attributes. Resource dependence theory informs stakeholder theory by unpacking the process through which stakeholders gain saliency. 2.2. Resource dependence theory and corporate environmentalism According to resource dependence theory (Frooman, 1999; Pfeffer and Salancik, 1978) organizations are dependent on the external environment (and hence on stakeholders) for their resource needs (Pfeffer and Salancik, 1978). It is this dependence of firms on stakeholders for critical resources that gives stakeholders leverage over firms. Resource dependence thus creates differentials among stakeholders; the more dependent a firm is on a stakeholder for critical resources, the greater is the extent to which that stakeholder can influence the firm’s response (Pfeffer and Salancik, 1978). Applying the resource-based logic to corporate environmental practices provides a theoretical rationale for understanding stakeholder saliency and provides a basis for understanding how stakeholders influence corporate environmental responsiveness. Since the central aim of this study is to address what drives corporate environmental responsiveness in business organizations in India, the above theoretical rationale leads to our first research question (RQ): RQ1: Who are the stakeholders who can leverage business organizations in India into being environmentally responsive? Organizations however are not just beholden to stakeholders who control resources. As DiMaggio and Powell (1983, p. 150) point out ‘organizations compete not just for resources and customers but also for institutional legitimacy’. Organizations as social actors thus do not always act as rational profit maximisers; their policies also result from a desire to conform and to seek social approval and legitimacy (Oliver, 1991), which is explained by institutional theory. 2.3. Institutional theory and corporate environmentalism Institutional theory emphasizes the social context in which firms operate and explains the role of institutions in shaping organizational responses (DiMaggio and Powell, 1983; Oliver, 1991). This theory explains how pressures from social institutions become ‘institutionalised’ and accepted as given over a period of time. Through adhering to commonly accepted institutionalised norms, organizations seek social approval and legitimacy, and failure to conform to critical norms can threaten an organization’s legitimacy and survival. Institutional theory helps to explain how consensus develops around the meaning of environment sustainability and how shared concepts and practices related to environmental responsiveness disseminate amongst organizations (Campbell, 2007). Shared environmental norms become embedded in organizations through conformity and passive acceptance of institutionalized norms (Oliver, 1991). Hence, our research problem is further specified in a second question: RQ2: What is the role of institutions in driving corporate environmental responsiveness in India? Combining perspectives from stakeholder, resource dependence and institutional theories provides a theoretical basis for

Author's personal copy

S. Sandhu et al. / Journal of Cleaner Production 35 (2012) 203e213

understanding drivers of corporate environmentalism insofar as the drivers are explained by a firm’s resource dependence or its search for legitimacy. However these three theories essentially focus on forces that lie beyond the organizational boundaries. They ignore the dynamics happening inside the ‘black box’ that is the firm. Resource-based theory, with its focus on costly-to-copy, firm specific, internal resource as factors that differentiate the strategic choices of a firm, helps explain the above dilemma.

2.4. Resource based theory and corporate environmentalism Despite, what may be perceived as semantic similarities, the resource-based theory is distinct from the previously discussed resource dependence theory. The latter theory helps to explain the processes through which stakeholders can leverage organizations into meeting their demands; the resource-based theory in contrast helps unpack how internal competencies of the firm can influence its strategy. According to resource based theory (Barney, 2001; Oliver, 1997), physical, human capital and organizational resources that are valuable, rare, imperfectly imitable, and non-substitutable, can lead to the development of internal competencies, which, when applied to the appropriate external environment, can secure competitive advantage. Major transformations are now occurring in the business environment due to the constraints imposed and opportunities offered by changes in the natural environment (Porter and Reinhardt, 2007). Hart (1995) expanded the resourcebased theory to include the challenges posed by constraints of the natural environment in the natural resource based view (NRBV). This perspective offers a range of interrelated strategies ranging from proactively decreasing pollution to a visionary commitment to sustainable development. The choice of the strategy that the firm can or will actually adopt, will in turn be dependent on the resource endowments of that firm. Thus according to the NRBV firms differ in their environmental strategies depending upon the disparity between the organizational resources that they can marshal. The stress in the NRBV is on the significance of the internal organizational resources and characteristics in influencing corporate environmental responsiveness (Hart, 1995; Hart and Dowell, 2011). This leads to our third research question: RQ3: What is the role of firm specific resources in influencing the adoption of corporate environmental responsiveness in India?

205

3. Methods We chose an inductive case study methodology because it facilitates the development of constructs, measures and testable theoretical propositions about a real world, context dependent phenomenon (Eisenhardt and Graebner, 2007; Yin, 2003). Hence, we developed case studies of 11 environmentally responsive Indian organizations. We chose India because it is one of the most rapidly growing countries in the developing world. Under the economic liberalization programme introduced in 1991, growth in Indian gross domestic product (GDP) has more than doubled. From four per cent in 2000 it peaked at 9.4 per cent in 2006 (current GDP growth averages six per cent), and exports were at a record high of US$ 144 billion in 2007 (The Economist, 2012; World Bank, 2012). This increase has been associated with severe environmental damage, and India is predicted to be amongst the major emitters of green house gases in the next decade (Bawa et al., 2010). Organizations were theoretically sampled from a list of the top 500 Indian businesses (based on revenue), because larger organizations are more likely to be environmentally responsive (Bowen, 2000), especially in India (Sandhu et al., 2010). To shortlist organizations on the basis of environmental responsiveness, a detailed content analysis of organizational websites, annual reports and environmental or sustainability reports of the top organizations was conducted. The environmental credentials of the organizations were also inferred from environmental awards and media reports. We attempted to include business organizations across a wide range of industries, and the sample (Table 1) reflects this. Furthermore, to prevent the findings being constrained by local conditions, firms were sampled across geographically diverse regions. Our case studies thus included a wide range of industries from geographically diverse regions. These diverse multiple cases facilitate replication logic (Eisenhardt and Graebner, 2007; Yin, 2003). Replication logic allows the cases to be treated as a series of experiments wherein each case serves to confirm or disconfirm the inferences drawn from others (Eisenhardt and Graebner, 2007; Yin, 2003). This ensures that the insights gained are not idiosyncratic, but instead are consistently replicated (literally or theoretically) across multiple cases. This leads to more robust theory development (Eisenhardt and Graebner, 2007) and insofar as developing countries share social, political, and economic contexts with India, our findings may have lessons for other developing countries.

Table 1 Profile of case study organizations and levels of environmental responsiveness. Organizational profilea

Measures of level one responsiveness

Measures of level two responsiveness

Organization

Industry

Pollution control

Recycling wastes

Decreased resource consumption

New green product

Valiance Tripax Pharmachem Sun Raj Cottex Organochem Mayer Endeavour Calibre Cosmos

Petrochemicals Pharmaceutical Pharmaceutical Chemical Hotel Chain Textile Fertilizer Electronics FMCG Pulp & Paper Steel

O O O O O O O O O O O

O O O O O O O O O O O

O O O O O O O O O O O

a

Names of the organizations have been changes to provide confidentiality.

O O O

Drivers of environmental responsiveness

Industrial ecology

O O O

Organizations at level one responsiveness

Drivers of level one responsiveness: Supply chain and internalization pressures (research question 1 and 2)

Organizations at level two responsiveness

Drivers of level two responsiveness: Commitment by top management, based on deep rooted organizational histories of social responsiveness (research question 3)

Author's personal copy

206

S. Sandhu et al. / Journal of Cleaner Production 35 (2012) 203e213

3.1. Data sources Primary data collection was through semi-structured interviews. Secondary sources were used, both as an information source and as a check against the information provided by the respondents in the depth interviews. Fifty-six interviews were conducted in two phases covering a total of 17 months between 2005 and 2008. The first phase of the research included 45 interviews with corporate communication directors, managers responsible for environmental issues, environmental engineers, board level executives, and experts outside of organizations, across five business organizations in India. These interviews indicated that decisions regarding corporate environmental practices were made by very small groups of organizational elites. The remaining eleven interviews followed a similar structure, but focused more closely on the role of the elites in environmental decision-making. Time between the phases was taken up by data analysis. The semi-structured interviews were typically between 60 and 90 min. The interviews began with background information regarding the environmental issues that an organization considered relevant and the way the organization dealt with those issues. This was followed by an open-ended enquiry about the drivers of environmental responsiveness. All interviews in the primary phase (except those with outside experts) were tape recorded and transcribed verbatim. For the interviews with outside experts, extensive notes were taken during the interviews. These detailed notes were then written up immediately after the interview. When further clarifications were needed, follow-up questions were normally asked through email and phone. The characteristics of the sample firms are summarized in table one. The organizations that participated were promised confidentiality and their names have been changed accordingly. 3.2. Data analysis We first analysed each case individually (Eisenhardt and Graebner, 2007; Yin, 2003). Within case analysis typically involves developing detailed case histories for each of the organizations, which assists the researcher in becoming intimately familiar with each case (Eisenhardt and Graebner, 2007). This facilitates the emergence of unique patterns for each individual case, without being influenced or constrained by patterns in other cases. Accordingly, detailed individual case histories were prepared for all 11 organizations. NVivo 8 qualitative analysis software was used to corroborate and synthesize the data from the extensive field notes, the interview transcripts and archival data. To provide a check on the emerging case histories, a second researcher who was not engaged in data collection and thus had not been sensitized to the data, read the original interviews and the documents and formed an independent view. This view was then incorporated into each case history to provide a more accurate view of each organization. Although similarities and differences among cases were noted, no further comparative analysis was undertaken, until the detailed individual case write ups were completed. We then moved to cross case analysis, comparing cases with each other. We sought within-group similarities and differences, as well as intergroup differences and similarities. We aimed to broaden the frame of reference and systematically proceed beyond initial impressions. The analysis process was iterative and took eight months to complete. A second stage of coding was then done using NVivo 8. The initial themes for each individual organization were organised into clusters based on cross case analysis. Responses from individual

cases were now coded under these categories to identify the emerging patterns. Using the matrix query function in NVivo, 2  2 cell designs were also used to compare several categories at once. This further brought out the similarities and differences in the drivers of environmental responsiveness within the case study organizations. This detailed within and cross case analysis improved the likelihood of more accurate and reliable theory emerging from case study data (Eisenhardt and Graebner, 2007). The findings and insights obtained from within and cross case analysis, are discussed below. 4. Findings Our analysis revealed that corporate environmental responsiveness is distinct at two levels: level one (the lower order) and level two (the higher order). This is consistent with the literature on stages of corporate environmental responsiveness (Hart, 1995; Sandhu, 2010). While subtle nuances differentiate the levels of corporate environmental responsiveness developed by the above authors, our classification of level one and level two environmental responsiveness closely follows Hart’s categorization. Hart (Hart, 1995; Hart and Dowell, 2011) classifies environmental responsiveness into pollution prevention (level one), product stewardship (level two) and sustainable development (the third and highest level). According to Hart, each of these levels is path dependent. Competencies developed at each level assist in attaining the next level. Our level one captures Hart’s pollution prevention stage and our level two (higher order) responsiveness reflects the product stewardship stage. Like Hart, we failed to find any organizations in our sample that had achieved the highest ideal of a true commitment to sustainable development. Organizations in our sample were categorized as being at level one responsiveness where they were starting to recognize, the importance of the natural environment and were exhibiting attempts to decrease their environmental impact through adopting pollution reduction and prevention programmes. Level one environmental responsiveness was mostly manifested through existence of an environment division, environmental policies, environmental/sustainability reports and ISO 14001 certification. The reason why ISO 14001 certification has been categorized as level one responsiveness (and not at a higher level) is because ISO 14001 does not lay down levels of environmental performance. It only demands compliance with applicable environmental regulations and a commitment to continual improvement. Thus it is very useful as a starting point for integrating environmental issues into strategic decision-making but it does not meet the requirements of level two responsiveness which demands extensive redesign and product stewardship (Hart, 1995). Organizations at level two were observed to be exhibiting greater commitment in integrating environmental issues into strategic decision-making. This involved having all of the level one competencies but also taking the next step towards commitment to green product development and initiating complex projects aimed at industrial ecology. These commitments are categorized as being at level two because they involve extensive redesign and advanced integration of environmental concerns across multiple functional areas. For the organizations in this study, efforts aimed at green product development and industrial ecology involved investments in technologies that are not available off the shelf and involve very high sunk costs. Investments, in both new product development and industrial ecology, involve setting up new business units and manufacturing facilities. Level two commitment is not easily reversible and involves deeper strategic integration of environmental issues. Table 1 summarizes the basis of our classifying case

Author's personal copy

S. Sandhu et al. / Journal of Cleaner Production 35 (2012) 203e213

study organizations into level one and level two environmental responsiveness. In summary, although all of the case study organizations had environmental management systems in place, eight of the organizations (Valiance, Cottex, Tripax, Organochem, Mayer, Pharmachem, Sun and Raj) did not proceed beyond level one responsiveness. Three (Cottex, Mayer and Organochem) were observed to be making initial efforts in product life cycle analysis, but at that time of this research, these efforts had not resulted in the introduction of products with reduced environment impacts. Only three case study organizations (Cosmos, Calibre and Endeavour) had successfully extended their environmental responsiveness to the next level, to include activities aimed at green product stewardship and industrial ecology aimed at reducing the environmental impact of their products. 4.1. Drivers of corporate environmental responsiveness All the case study organizations in this research reported their environmental responsiveness as being beyond mandatory regulatory requirements. The case study organizations had sophisticated pollution control and prevention measures and were ISO 14001 certified. Interestingly however, none of the organizations credited their environmental responsiveness to environmental regulatory requirements. This is despite the fact that there are comprehensive environmental regulations in place in India. However, the prevailing managerial perception is that they are poorly enforced and penalties are rare. Hence: “India is the most enacted but the least acted upon country.” Chief Environmental Officer Organochem (chemical company) “The environmental regulation is very comprehensive. The problem lies only in terms of implementation and the lack of will on the part of enforcement agencies that enforce it.” Environmental Director Endeavour (fast moving consumers goods company) “Regulations should motivate or reward industries that are going beyond the mandatory norms. Instead of that what is happening, in absence of effective implementation, if we are doing recycling and our competitor is not doing the recycling, not even the basic requirements of the local laws, then he definitely is much more cost effective than us. This becomes quite de-motivating factor some times.” Manager, Cottex (textile company) Thus, there was perceived to be no legitimacy bestowed by conformance nor was a loss of legitimacy perceived due to noncompliance with regulations. None of the case study organizations cited pressures from stakeholders such as consumers, employees, local community, the civil society or environmental NGO’s as drivers that propelled them to be environmentally responsive. In absence of these pressures, what drives organizations in India to be environmentally responsive? 4.2. Drivers of level one responsiveness Our analysis revealed that level one responsiveness in the case study organizations is driven by pressures emerging from their international linkages. The majority of the level one organizations were both trading with multinational organizational customers and also had global ambitions, which involved setting up international subsidiaries (in both developed and developing countries).

207

Hence, corporate environmental responsiveness resulted from pressures from their multinational organizational customers in developed countries (who demanded an environmental commitment of at least level one as a necessary condition for doing trade with their suppliers in India) and from the institutional pressures that emerge when firms set up global subsidiaries (especially in developed countries). International linkage was not the basis for selecting the case study organizations in this research, but as a consequence of economic liberalization in India, a majority of the top 500 organizations now report some kind of international linkages. In order to be able to exploit these opportunities, organizations in India had to be environmentally responsive at least to level one. The managers at the level one case study organizations clearly stated that their multinational organizational customers (e.g. Sony, Philips, Nike, Gap, Bayer, etc) demand a certain level of environmental responsiveness (manifested primarily through ISO 14001 certification), e.g.: “Our customers, from Europe and Japan, they want their suppliers like us to follow their environmental requirements. That is number one. To satisfy the norms of our customers, we take lead in protection of ecology and our environment. Like Sony and Philips (two of their main customers) they go for the green partner certificate as well as green purchase and ISO 14001 certification.” Manager (Environment, Health and Safety), Mayer (an electronic equipment manufacturer) The manager at Tripax (manufacturers by license for foreign pharmaceutical developers and exports to 125 countries) explains that being compliant with international environmental requirements (of organizational customers) is an essential requirement. He also provides an interesting perspective wherein he elaborates that it would be difficult to invest in similar levels of environmental investments if Tripax was competing in the Indian market: “Our main aim is to comply fully as an international player. So whatever cost comes into that - like ISO 14001 certification - we do take that cost onto our product cost and because we place our products internationally, we do get prices internationally which can support that additional expenditure on environment and we are quite happy to continue that . If we try to follow what we are following in terms of environment and also try to be competitive in India, it would be difficult.” Manager, Tripax (Pharmaceuticals) Additionally the organizations also had international subsidiaries in both developing and developed countries, which had to comply with strictly enforced environmental regulations of the host countries. Over a period of time this resulted in these organizations benchmarking the environmental performance of their operations in India against international best practice, resulting in level one environmental improvements in their domestic operations, e.g., “India today is in a global market and our business is globally driven. We have global ambitions. We like to create our benchmarks at a global stage and today in the global world environment is one of the most important factors. So becoming global has been a major factor.” Manager, Valiance (Petrochemicals) “Though it is an Indian company, it is a multinational company. We have manufacturing operations in 7e8 countries including US, UK and Europe and presence is there in more than 100 countries. So it has to follow the international environmental and other regulations” Manager, Tripax (Pharmaceuticals)

Author's personal copy

208

S. Sandhu et al. / Journal of Cleaner Production 35 (2012) 203e213

The case study organizations that were environmentally responsive at level one thus had very pragmatic reasons for being so. International organizational customers had a mandatory requirement for environmental measures corresponding to at least level one responsiveness. Additionally, when these organizations set up subsidiaries, especially in developed countries, they were forced to comply with the strictly enforced environmental regulations prevalent in those countries. These environmental improvements then were also manifest in their domestic operations both due to supply chain pressures and because of legitimacy reasons. Thus to be able to avail the global opportunities, the case study organizations complied with what were deemed as essential environmental requirements. 4.3. Drivers of level two responsiveness Is internationalization a driver for level two responsiveness? The three case study organizations (Endeavour, Calibre and Cosmos) at higher order environmental responsiveness also had strong international linkages. Cosmos is among the top five steel manufactures in the world, and has manufacturing operations across 15 countries. Calibre is a diversified business with major presence in hotels and pulp and paper. It outsources, exports, and has manufacturing operations in Europe, North America and Australia. Endeavour is a fast moving consumers goods business (FMCG) and exports to Europe and developing countries in South East Asia. Endeavour’s international linkages also arise out of it being a subsidiary of a prominent multinational that has operations in 150 countries. However, while these three organizations had definite international linkages, their environmental responsiveness exceeded the level one responsiveness demanded by international linkages. Their environmental responsiveness went beyond the initial attempts at recycling and pollution control and prevention measures that characterize the organizations at level one. In addition to adopting level one responsiveness measures, these three organizations were actively engaged in new green product development and had advanced projects aimed at industrial ecology. All three organizations had extensively invested in green product development. As an example, Endeavour has developed a detergent which reduces the amount of water needed for washing clothes by half. Calibre has developed chlorine free paper and has also initiated sustainable forestry programmes. In addition Calibre has also developed eucalyptus clones which yield more pulp, have shorter felling cycles and can be grown in wastelands. Cosmos has pioneered steel which has a significantly lower raw material index (compared to industry averages). Similarly, industrial ecology projects at these three case study organizations went beyond initial level one recycling. As an example, Cosmos Steel undertook a detailed expansion programme aimed at industrial ecology. Slag is a waste product of steel manufacturing and in an effort to fully use this waste, Cosmos set up a separate cement plant (distinct from their main business steel). In this cement plant slag replaces limestone (which is traditionally used as an input for cement). Calibre has made investments to use fly ash to make bricks (without any legislative requirement to remove fly ash from its power plants). Endeavour is extensively engaged in closed loop production. This higher order environmental responsiveness at these three organizations is not driven solely by the pressure to meet internationalization requirements, for example: “We have built the largest green building in India. It has been rated platinum by the US Green Business Council under their LEEDS programme - Leadership in Environmental and Energy

Design. It is the largest platinum rated building .there is no pressure, regulatory or otherwise on Calibre to make a green building. It has cost us may be 10e15 percent more than a normal building. We went in for that because we wanted to put an example in the country that e look how good buildings can be made and how they would save energy and give wonderful place to work.” Manager, Calibre (Diversified business with major presence in hotels and pulp and paper) “We are for example also in the business of making shoes and exporting shoes. So if we are exporting shoes to Germany for example, they will come and would like to see whether our facilities are not only environmentally safe but our people are also environmentally safe . However it is not an additional pressure on us because it is a part of our job, part of our routine. We have been doing it. Everybody knows that. Maybe once or twice there was some requirement which was additional to what we are doing, for which we had to set up some additional facilities but in every other case we found that we already do it, nothing great in that. It is not something that will give us sleepless nights.” Manager, Endeavour (FMCG business) Therefore while these organizations had to incorporate certain environmental measures as an internationalization requirement, unlike organizations at level one, environmental responsiveness at these organizations was not dictated solely by their international linkages. So what drives level two responsiveness at these organizations? Our findings reveal that the higher level environmentalism in these organizations can be traced back to internal resource based competencies arising out of unique organizational history and culture. Cosmos, Calibre and Endeavour all have a long history, dating back more than 100 years and all three share a distinct identity of social and environmental responsiveness. They enjoy immense reputational goodwill because of the pivotal role they have played in the development of Indian industry and also because of their philanthropic contributions and social development initiatives. Interestingly, all three organizations trace their current environmental responsiveness to their history of being socially responsive. For them environmental responsiveness has been a natural progression from their social responsiveness. Under changing circumstances - resulting from issues surrounding climate change and global warming gaining prominence - their social responsiveness has extended to include environmental responsiveness. This environmental responsiveness is of a higher order than meeting the pragmatic market requirements of their organizational customers. In the following section we provide a brief background of these organizations in an effort to shed light on how their higher order environmental responsiveness has evolved from a base of very strong social responsiveness. Cosmos Steel was established c.1900 and is widely acknowledged as the most environmentally and socially responsive organization in India. In the interviews with experts outside the organization, Cosmos Steel consistently ranked as the number one environmentally responsive organization in India. As the manager at Cosmos steel summarizes ‘Cosmos has a different kind of reverence in India’. Cosmos has become synonymous with honest and socially responsible business practices (e.g. they pioneered social auditing in India in the 1970’s, when it was unheard of in India). From its inception, Cosmos has independently developed infrastructure and cities around its factories. It has also built schools to provide free education to workers’ children. In addition it has built charity hospitals and invested in non-profit higher education and advanced research centres. These social sustainability endeavours

Author's personal copy

S. Sandhu et al. / Journal of Cleaner Production 35 (2012) 203e213

have always been guided by the philosophy of its founding father for whom ‘wealth was not the end but a means to an end; the increased prosperity of India’ Environmental Director, Cosmos Steel Cosmos Steel is a founding member of the United Nations Global Compact and has also been hailed by the United Nations as an exemplary organization for its work in environmental and social responsibility. Our case analysis of Cosmos Steel links its social and environmental responsiveness to the vision of its founding father and the unique organizational culture arising out of a distinctive organizational history, for example: “Even 100 years ago Mr Cosmos said ‘build roads, build hospitals’. The reason I mention our vision to build roads, build hospitals is so you know that it is from about 100 years back what this man was thinking of developing societies. It has been always the cornerstone of our philosophy . For us environmental responsibility is a part of social responsibility. We have been commended by the UN for our environmental and development programmes. Our social responsibility extends to environmental responsibility. A commitment to preserve the environment is now integral to the way we do business . We have completed 100 years and this has not happened because of a focus only on profit making. For the last 100 odd years, social responsibility has played a very important part. An important element of our vision is that when we are looking into the next hundred years, environmental and social, they play an equally important role.” Environmental Director, Cosmos Steel Higher level environmental responsiveness at Cosmos Steel is driven by a unique identity rooted in an organizational history and culture of social responsiveness: “Our motivation comes from our values and our founding father’s philosophy. The moment it becomes externally motivated then we will do things which are by selection, which will be by design, not by default. To invest in the environmental projects that we are, it has to be an integral part of the value system.” Environmental Director, Cosmos Steel Calibre is one of India’s oldest private sector companies with its origins going back to the early 1900s. It is currently one of India’s foremost private sector companies with a market capitalization exceeding US$ 18 billion and has consistently been ranked amongst the world’s most reputable companies. Like Cosmos, Calibre is regarded as a pioneer in the emergence of the Indian industry and has been active in social sustainability issues since its inception: “This plant was set up in 1906 and towns have grown up around the factory. So in such cases especially since you are the only big unit and the employer, a lot of expectations do emerge from the society. We are known here as a ‘Thali’ company, which means the farmers, would say that we are a mother company. ‘Thali’ is the word for mother.” Calibre is actively engaged in social forestry programmes, which apart from making it a carbon neutral company have had very positive social and environmental spin-offs both for the marginal farmers and economically deprived tribal people in the local areas: “There is a lot of wasteland in this country that is called tribal private wastelands. What we have done is developed better clones, which give very high yield and very short felling cycles and which can grow in these wastelands. The eucalyptus that Calibre has developed gives more than 100 tonnes of wood for every hectare in

209

a four-year cycle. The felling cycle has also been shortened by development. So the small farmers find this very useful. The model that Calibre has developed is that 20 percent of this is social forestry on tribal wastelands to support the tribals and the balance is private small-scale forestry for marginal farmers.” The manager at Calibre expresses a very similar sentiment to the one expressed by the manager at Cosmos, indicating that environmental sustainability at Calibre is deeply interwoven with economic and social sustainability: “As a corporate if you are operating on such a large scale and you are also operating in so many businesses you have to take a much larger view then just than the finances. It has always been the fundamental wisdom at Calibre. As a company we have always known to be very responsible . For Calibre making profit is not enough. Although we have always been socially active... when we started towards sustainability platform, we realized that we have to address the triple bottom line. We now consider our ecological, environmental, social and economic affects.” Endeavour is one of the largest fast moving consumer goods company in India. It is a subsidiary of a prominent multinational and has been operating in India since the early 1900’s. Currently Endeavour is owned 51 percent by the parent multinational and the remainder by 380,000 individual shareholders and financial institutions in India. Endeavour has a consumer base of more than 600 million and ‘touches the life of two out of three Indians’ (Manager, Endeavour). Although Endeavour is a multinational, the manager at Endeavour emphasizes that their long history in India sets them apart from other recent multinational entrants (who have often been criticized by the media for their lack of social and environmental responsibility): “I can give you a number of examples of why we are different e from a number of (multinational) businesses such as Coca-Cola, Pepsi and McDonalds. Our reputation in India, it has been build over years, over decades of work; it cannot be regained within a short time. And that is something, which is most valuable for us.” Manager, Endeavour (FMCG business) Endeavour is widely acclaimed for its projects in social and environmental responsibility. One of the social projects at Endeavour has created more than 30,000 women entrepreneurs in 100,000 villages, and has emancipated many uneducated rural women from poverty and subjugation. Another major social project at Endeavour involves improving hygiene practices in rural India. Currently this project is spread over 15,000 villages in eight states and touches 70 million rural Indians. Like Cosmos and Calibre, the environmental responsiveness at Endeavour originates from its long history of social responsiveness in India: “We have been here since early 1900. We have always believed that we must take them (the communities) along and we must make sure that their economic and social development is not affected, because of our operations. We are not here only to do business just for ourselves. Our products have always been used by a lot of people. We have always been conscious of the fact that there are a lot of people and a lot of communities whom we affect . For example we have a huge programme on the rural upliftment of women and women empowerment. The project is a part of the corporate social responsibility and is not related to environment as such. But what I am saying is we see social development, economic development, environmental up gradation, they go hand in hand with that. Our sustainable development approach encompasses all three things.” Manager, Endeavour (FMCG business)

Author's personal copy

210

S. Sandhu et al. / Journal of Cleaner Production 35 (2012) 203e213

Hence, environmental responsiveness at Endeavour is intricately woven with its culture of social responsiveness: “Similarly we are involved with women’s education and children education. In many places we have adopted the special children homes. Our managers actually spend some time with those children so that they understood how the life is lead by those children, how hard is surviving . Our factory manager for example has compulsorily to spend some time in the community there, with the schools or with the hospitals, with environmental bodies or local NGO’s. He has to do that . We thus have a very integrated approach to the social and environmental issues.” Manager, Endeavour Thus, for all three organizations at the higher order environmental responsiveness, drivers of corporate environmentalism emanated from organizational histories and organizational cultures of being socially responsive. Unlike the organizations at level one whose strategies were directed at capitalizing on the opportunities presented by globalisation, these three organizations exhibited a deeper understanding of the broader issues surrounding environmental challenges. Drawing from their unique organizational competencies they have now extended their social responsiveness to include higher order environmental responsiveness. 5. Discussion Corporate environmentalism in developing countries has been reported to be largely nonexistent (Abreu et al., 2012; Jeswani et al., 2008) or if present, it has been characterized as being confined to a few large organizations (D’Souza and Peretiatko, 2002; Jeswani et al., 2008). The prevailing perception is that lax enforcement of environmental regulations in developing countries leads to a race to the bottom and this in turn has resulted in developing countries becoming pollution havens for multinational operations (Pearson, 1987). The case for severe regulatory failure in developing countries is widely supported (D’Souza and Peretiatko, 2002). Yet despite the ineffective enforcement of environmental regulations in developing countries, the evidence presented by recent studies (Jeppesen and Hansen, 2004) not only contradicts the pollution haven viewpoint, but also lauds the multinationals for ‘creating islands of environmental excellence in a sea of dirt’ (Ruud, 2002, p. 103). And yet, other studies have found no link between multinational linkages and environmental improvements (Hartman et al., 1997; Hettige et al., 1996). Our findings inform this debate through suggesting that corporate environmentalism in India is not solely limited to multinationals or to multinational linkages. We find that it is only the initial level (level one) of corporate environmentalism that benefits from multinational linkages and even there the drivers are better specified as effects of internationalization. Hence, we suggest that as business organizations in developing countries become more integrated with the global economy they are forced to improve their environmental standards such that they correspond to the environmental standards prevalent in their chosen markets. For organizations that go beyond the level one requirements, the drivers are rooted in their history of social responsiveness. 5.1. Level one responsiveness and internationalization Our findings suggest that level one environmental responsiveness, in organizations, in India, is driven by international linkages, and is manifested through existence of an environment division, environmental policies, environmental/sustainability reports and ISO 14001 certification. The literature pertaining to the greening of supply chains (Nawrocka et al., 2009; Testa and Iraldo, 2010)

suggests that when buyers and suppliers are separated by large cultural, physical and institutional distances, buyers often demand that suppliers be ISO 14001 certified. While there are studies that remain sceptical about the links between ISO 14001 adoption and improvements in environmental performance (Bansal and Hunter, 2003), in general ISO 14001 certification provides an assurance of compliance with the requisite environmental standards and also checks against free riding (Potoski and Prakash, 2005). It therefore assists in reducing information asymmetries and opportunistic behaviour between supply chain partners. Consequently, in developing countries characterized by lax environmental regulation, ISO 14001 certification not only bestows a symbolic legitimacy, but also (at least in principle) guarantees conformance with actual environmental standards. Thus even though the costs of certification are not trivial (Potoski and Prakash, 2005), the legitimacy bestowed by ISO 14001 makes it a worthwhile investment for suppliers in developing countries (Christmann and Taylor, 2006). Accordingly, an increasing number of business organizations in developing countries are adopting ISO 14001 certification (Oliveira et al., 2010). Furthermore extant theory of the internationalization of organizations, supports the finding that internationalization of firms can under certain conditions (such as regulatory differences between host and home nations) be associated with improvement in environmental performance (Bansal and Hunter, 2003; Rugman and Verbeke, 1998). Stakeholder and institutional theories (research questions 1 and 2) thus provide a framework for understanding what drives organizations in India to be at level one environmental responsiveness. While resource based competencies (research question 3) developed during internationalization were not observed to be a driving factor, they do however appear to provide a platform that facilitates the development of capabilities needed for level one environmental responsiveness. The findings of this study thus suggest that even under conditions of lax enforcement and an institutionalized regulatory failure, the demands of multinational organizational customers in developed countries and the institutional pressures for legitimacy arising as result of the liability of foreignness (Kostova and Zaheer, 1999, p. 76) ensures that the large business organizations in India may adopt and conform with at least the level one environmental responsiveness. 5.2. Higher level environmental responsiveness as an extension of social responsiveness Case study organizations at the higher level responsiveness shared a commonality with those at level one responsiveness because these organizations were also an integral part of the current vibrant phase of economic growth in India. They were thus actively involved in extending and streamlining their value chain and also had a rapidly growing portfolio of international subsidiaries in both developed and developing countries. However, while both types faced similar internationalization and stakeholder pressures, environmental responsiveness measures at higher order organizations were not limited to demands imposed by external institutional or multinational organizational requirements. Consequently while the demands posed by internationalization explains the drivers for level one corporate environmentalism, it however does not explain why some organizations in a developing country go well beyond what is expected or required of them in terms of environmental responsiveness. This is especially intriguing considering the absence of regulatory or societal requirements for higher level responsiveness in most developing countries.

Author's personal copy

S. Sandhu et al. / Journal of Cleaner Production 35 (2012) 203e213

The findings of this study indicate that organizations at higherlevel responsiveness in India had at least a century long history of being prominently socially responsive. Being socially responsive is an integral part of the organizational identities and branding at these case study organizations. As explained by the managers at these organizations, the adoption of higher order environmental responsiveness (in response to challenges posed by the natural environment) is a continuation of and an extension of the deeprooted social responsiveness at these organizations. In an era where triple bottom line is fast becoming a popular yardstick, an organization cannot have a deep-rooted identity of being highly socially responsive and not have a matching environmental profile (Bansal, 2005). The idea of environmental responsiveness as an extension of social responsiveness is an established part of the literature on corporate social responsiveness (Gardberg and Fombrun, 2006; Margolis and Walsh, 2003; van der Heijden et al., 2010). For these organizations higher level environmentalism was a continuation of their long history of prominent social responsiveness. Our findings further explain that social responsiveness in these organizations had its roots in the vision of the respective founding fathers and is reflected in the policies of the current top management. Whiteman and Cooper (2011, p. 906) use the term ‘ecologically embedded’, to describe such organizations that are characterized by top managers with a strong personal identification with local social and ecological systems. According to these authors such organizations exhibit a higher order commitment to social and environmental practices. The literature on leadership provides further support for ecologically embedded organizations being guided by the vision of transformational founding fathers which then is carried forward by strong charismatic leaders (Agle et al., 2006). However, what happens with changes in leadership (or a change in priorities of leaders)? Is higher level environmental responsiveness fickle to the whims of leadership changes? The literature on organizational identity suggests that an identity that has been chalked out over a century cannot be easily disowned (Dutton and Dukerich, 1991). It instead tends to deepen through the years (Margolis and Walsh, 2003). Galaskiewicz (1997) in his study on corporate philanthropy concluded that once established the charitable contributions continued at the same rate irrespective of who was leading the firms. Recent research in organizational identity by Brickson (2007) further reiterates the viewpoint that organizational identities (while not immutable) are stable and are resistant to change. One consequence of a stable identity is that it can lock in organizational behavioural patterns (Brickson, 2007). Thus identities not only situate and define organizations but also provide the foundation for future organizational vision (Dutton and Dukerich, 1991; Scott and Lane, 2000). The literature on corporate citizenship, through suggesting that organizations which have been rooted in a community for a long time tend to contribute more and at higher levels than other industries (Campbell, 2007; Whiteman and Cooper, 2011) further supports this viewpoint. The resource-based view also strengthens the contention that organizations with a strong corporate identity (in this case of higher social or environmental responsiveness) will not ‘digress from the founder’s vision’ (Oliver, 1997, p. 702). According to the resource-based view, resources result from unique path dependent capabilities that in turn are rooted in organizational history and culture. According to Oliver (1997, p. 702) these resources derive ‘their value from time compression diseconomies - that is from development over a long period of time’ and the embeddedness of these competencies in history ensures their perpetuation. Thus such organizations which are ‘culturally attuned to responsible behaviour’ (Basu and Palazzo, 2008, p. 113) and have deep rooted resource based capabilities (research

211

question 3) for successfully implementing socially responsive strategies are not subject to the rapid disengagement that might occur with change in the top management priorities in other less committed organizations (Basu and Palazzo, 2008). Additionally unlike in western cultures wherein a mastery of nature orientation prevails, the underlying culture in most developing societies stresses the harmony and interdependence between the natural environment and humans (Gardberg and Fombrun, 2006). In such societies organizations that extend their social responsiveness to protection of the natural environment beyond the call of pragmatic necessities are widely respected. Accordingly, organizations that commit to continuous corporate social and environmental responsiveness benefit through being bestowed with long term moral legitimacy (Basu and Palazzo, 2008; Margolis and Walsh, 2003). While moral legitimacy is difficult and elusive to attain, once established, it is also profound and self-sustaining (Suchman, 1995). The stock of social capital resulting from moral legitimacy creates a reservoir of goodwill and stands the organization in good stead during isolated reversals (Bhattacharya and Sen, 2004). Thus the self sustaining virtuous circle of intangible and tangible benefits, which result from an organizational identity based in social responsiveness, ensures that such ecologically embedded organizations respond to environmental challenges through higher level environmental responsiveness. 6. Conclusion This paper examines the drivers of corporate environmental responsiveness in business organisations in India. Our enquiry is guided by perspectives from well established organisational theories; stakeholder theory (informed by resource dependence theory), institutional theory and the resource based view.1 Accordingly, we asked the following research questions: 1. Who are the stakeholders who can leverage business organisations in India into being environmentally responsive? 2. What is the role of institutions in driving corporate environmental responsiveness in India? 3. What is the role of firm specific resources in influencing the adoption of corporate environmental responsiveness in India? Our findings suggest that corporate environmental responsiveness in the case study organisations could be observed at two distinct levels: level one (the lower) and level two (the higher order). Level one responsiveness captures policies that aim at pollution prevention and the level two responsiveness reflects a more advanced product stewardship stage. Based on our findings, we report that level one responsiveness is anchored in stakeholder, resource dependence, and institutional explanations (research questions 1 and 2). Thus, pressures from powerful supply chain customers (stakeholders who control resources e in the form of buying power) and institutional pressures arising out of internationalization (e.g. setting up subsidiaries abroad, especially in developed countries), forced large business organisations in India to adopt at least level one environmental responsiveness. Internal firm specific resource based competencies (research question 3) were not observed to be a driving factor for level one responsiveness. In contrast, level two (higher order) responsiveness was not driven by external stakeholder and institutional pressures

1 Please refer to the note on pp. 6e7 about semantic similarities but fundamental conceptual differences between resource based and resource dependence theories.

Author's personal copy

212

S. Sandhu et al. / Journal of Cleaner Production 35 (2012) 203e213

(research questions 1 and 2). Instead, it was driven by tacit, firm based, specific organizational resources (such as organizational identity and culture) which have developed over a long history of organizational social responsiveness (research question 3). Our findings should however, be extrapolated with care. We suggest that insofar as other developing countries share social, political, business history, and economic contexts with India, our findings may have lessons for other such developing countries. Keeping this caution in mind, our research highlights some interesting differences between drivers of corporate environmental responsiveness across developing and developed country contexts. Thus, our study suggests that in the absence of regulatory enforcement, regulations are not reported as a driver for environmental responsiveness for either level one or level two responsiveness. However, in the context of developed countries, regulations are often better developed, and more importantly better enforced, and are often cited as a driver for level one corporate environmental responsiveness (Sharma and Henriques, 2005). Also, our findings suggest that stakeholders such as employees, local communities, and NGOs, are not a driver for the adoption of either level one or two environmental responsiveness. Interestingly, these stakeholders have been reported to be the key drivers for higher order environmental responsiveness in developed countries (Sharma and Henriques, 2005). In light of these important differences, a valuable avenue for future research could be to conduct a comparative analysis of the drivers of level one and level two environmental responsiveness across developed and developing countries. This will provide a more nuanced understanding of the drivers of environmental responsiveness and thereby assist policy makers, managers, and researchers, in propelling organizations towards more responsible environmental management. References Abreu, M.C.S.D., Castro, F.D., Soares, F.D.A., Filho, J.C.L.D.S., 2012. A comparative understanding of corporate responsibility of textile firms in Brazil and China. Journal of Cleaner Production 20, 119e126. Agle, B.R., Nagarajan, N.J., Sonnenfeld, J.A., Srinivasan, D., 2006. Does CEO charisma matter? An empirical analysis of the relationship among organizational performance, environmental uncertainty, and top management team perceptions of CEO charisma. Academy of Management Journal 49 (1), 161e174. Aragon-Correa, J.A., Sharma, S., 2003. A contingent resource based view on proactive corporate environmental strategy. Academy of Management Review 28 (1), 71e88. Banerjee, S.B., 2003. Who sustains whose development? Sustainable development and the reinvention of nature. Organization Studies 24 (1), 143e180. Bansal, P., 2005. Evolving sustainably: a longitudinal study of corporate sustainable development. Strategic Management Journal 26 (3), 197e218. Bansal, P., Clelland, I., 2004. Talking trash: legitimacy, impression management, and unsystematic risk in the context of the natural environment. Academy of Management Journal 47 (1), 93e103. Bansal, P., Hunter, T., 2003. Strategic explanations for the early adoption of ISO 14001. Journal of Business Ethics 46 (3), 289e299. Barney, J., 2001. Is the resource based “view” a useful perspective for strategic management research? Yes. Academy of Management Review 26 (1), 41e56. Basu, K., Palazzo, G., 2008. Corporate social responsibility: a process model of sensemaking. Academy of Management Review 33 (1), 122e136. Bawa, K.S., Koh, L.P., Lee, T.M., Liu, J., Ramakrishnan, P.S., Yu, D.W., Zhanf, Y.P., Raven, P.H., 2010. China, India, and the environment. Science 327, 1457e1459. Bhattacharya, C.B., Sen, S., 2004. Doing better at doing good: when, why and how consumers respond to corporate social initiatives. California Management Review 47 (1), 9e24. Bowen, F., 2000. Environmental visibility: a trigger of green organizational response? Business Strategy and the Environment 9 (2), 92e107. Brickson, S.L., 2007. Organizational identity orientation: the genesis of the role of the firm and distinct forms of social value. Academy of Management Review 32 (3), 864e888. Burritt, R.L., Herzig, C., Tadeo, B.D., 2009. Environmental management accounting for cleaner production: the case of a Philippine rice mill. Journal of Cleaner Production 17 (4), 431e439. Campbell, J.L., 2007. Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Journal 32 (3), 946e967.

Christmann, P., Taylor, G., 2006. Firm self regulation through international certifiable standards: determinants of symbolic versus substantive implementation. Journal of International Business Studies 37 (6), 863e878. Ciliberti, F., Pontrandolfo, P., Scozzi, B., 2008. Investigating corporate social responsibility in supply chains: a SME perspective. Journal of Cleaner Production 16 (15), 1579e1588. D’Souza, C., Peretiatko, R., 2002. The nexus between industrialization and environment: a case study of Indian enterprises. Environmental Management and Health 13 (1), 80e97. Dasgupta, S., Hettige, H., Wheeler, D., 2000. What improves environmental compliance? Evidence from Mexican industry. Journal of Environmental Economics and Management 39 (1), 39e66. Delmas, M., Toffel, M.W., 2004. Stakeholders and environmental management practices: an institutional framework. Business Strategy and the Environment 13 (4), 209e222. DiMaggio, P.J., Powell, W.W., 1983. The iron cage revisited: institutional isomorphism and collective rationality in organisational fields. American Sociological Review 48, 147e160. Dutton, J.E., Dukerich, J.M., 1991. Keeping an eye on the mirror: image and identity in organizational adaptation. Academy of Management Journal 34 (3), 517e554. Economy, E., Lieberthal, K., 2007. Scorched earth: will environmental risks in China overwhelm its opportunities? Harvard Business Review 85 (6), 88e96. Eisenhardt, K.M., Graebner, M.E., 2007. Theory building from cases: opportunities and challenges. Academy of Management Journal 50 (1), 25e32. Freeman, R.E., 1999. Divergent stakeholder theory. Academy of Management Review 24 (2), 233e236. Frooman, J., 1999. Stakeholder influence strategies. Academy of Management Review 24 (2), 191e205. Galaskiewicz, J., 1997. An urban grants economy revisited: corporate charitable contributions in the Twin Cities, 1979e81, 1987e89. Administrative Science Quarterly 42 (3), 445e471. Gardberg, N.A., Fombrun, C.J., 2006. Corporate citizenship: creating intangible assets across institutional environments. Academy of Management Review 31 (2), 329e346. Hart, S.L., 1995. A natural resource based view of the firm. Academy of Management Review 20 (4), 986e1014. Hart, S.L., 2007. Capitalism at the Crossroads: Aligning Business, Earth, and Humanity. Wharton School Publishing, New Jersey. Hart, S.L., Dowell, G., 2011. A natural-resource-based view of the firm: fifteen years after. Journal of Management 37 (5), 1464e1479. Hartman, R.S., Huq, M., Wheeler, D., 1997. Why Paper Mills Clean up: Determinants of Pollution Abatement in Four Asian Countries, World Bank, Policy research working paper (1710 ), pp. 1e38. Hettige, H., Huq, M., Pargal, S., Wheeler, D., 1996. Determinants of pollution abatement in developing countries: evidence from South and Southeast Asia. World Development 24 (12), 1891e1904. IPCC, 2012. Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation. Retrieved March 30, 2012. http://ipcc.ch/#. Jeppesen, S., Hansen, M.W., 2004. Environmental upgrading of third world enterprises through linkages to transnational corporations. Theoretical perspectives and preliminary evidence. Business Strategy and the Environment 13 (4), 261e274. Jeswani, H.K., Wehrmeyer, W., Mulugetta, Y., 2008. How warm is the corporate response to climate change? Evidence from Pakistan and the UK. Business Strategy and the Environment 18 (1), 46e60. Jones, C., 2010. Exploring new ways of assessing the effect of regulation on environmental management. Journal of Cleaner Production 18 (13), 1229e1250. Kassinis, G., Vafeas, N., 2006. Stakeholder pressure and environmental performance. Academy of Management Journal 49 (1), 145e159. Kostova, T., Zaheer, S., 1999. Organizational legitimacy under conditions of complexity: the case of the multinational enterprise. Academy of Management Review 24 (1), 64e81. Liu, X., Anbumozhi, V., 2009. Determinant factors of corporate environmental information disclosure: an empirical study of Chinese listed companies. Journal of Cleaner Production 17 (6), 593e600. Lobendahn Wood, M.D.K., Mathieux, F., Brissaud, D., Evrard, D., 2010. Results of the first adapted design for sustainability project in a South Pacific small island developing state: Fiji. Journal of Cleaner Production 18 (18), 1775e1786. Luken, R., Vanrompaey, F., 2008. Drivers for and barriers to environmentally sound technology adoption by manufacturing plants in nine developing countries. Journal of Cleaner Production 16 (1), S67eS77. Margolis, J.D., Walsh, J.P., 2003. Misery loves companies: rethinking social intiatives by business. Administrative Science Quarterly 48 (2), 268e305. Menguc, B., Auh, S., Ozanne, L., 2010. The interactive effect of internal and external factors on a proactive environmental strategy and its influence on firm performance. Journal of Business Ethics 94, 279e298. Mitchell, R.K., Agle, B.R., Wood, D.J., 1997. Towards a theory of stakeholder identification and salience: defining the principle of who and what really counts. Academy of Management Review 22 (4), 853e886. Nawrocka, D., Brorson, T., Lindhqvist, T., 2009. ISO 14001 in environmental supply chain practices. Journal of Cleaner Production 17 (16), 1435e1443. Oliveira, O.J. d., Serra, J.R., Salgado, M.H., 2010. Does ISO 14001 work in Brazil? Journal of Cleaner Production 18 (18), 1797e1806. Oliver, C., 1991. Strategic response to institutional processes. Academy of Management Review 16 (1), 145e179.

Author's personal copy

S. Sandhu et al. / Journal of Cleaner Production 35 (2012) 203e213 Oliver, C., 1997. Sustainable competitive advantage: combining institutional and resource based views. Strategic Management Journal 18 (9), 697e713. Palma, R.D., Dobes, V., 2010. An integrated approach towards sustainable entrepreneurship - experience from the TEST project in transitional economies. Journal of Cleaner Production 18 (18), 1807e1821. Park, J., Sarkis, J., Wu, Z., 2010. Creating integrated business and environmental value within the context of China’s circular economy and ecological modernization. Journal of Cleaner Production 18 (15), 1494e1501. Pearson, C.S. (Ed.), 1987. Multinational Corporations, Environment and the Third World: Business Matters. Duke University Press, Durham. Pfeffer, J., Salancik, G.R., 1978. The External Control of Organizations. Harper and Row, New York. Porter, M.E., Reinhardt, F.L., 2007. A strategic approach to climate. Harvard Business Review 85 (10), 22e26. Potoski, M., Prakash, A., 2005. Covenants with weak swords: ISO 14001 and facilities’ environmental performance. Journal of Policy Analysis and Management 24 (4), 745e769. Rugman, A.M., Verbeke, A., 1998. Corporate strategy and international environmental policy. Journal of International Business Studies 29 (4), 819e834. Russo, A., Perrini, F., 2010. Investigating stakeholder theory and social capital: CSR in large firms and SMEs. Journal of Business Ethics 91 (2), 207e221. Ruud, A., 2002. Environmental management of transnational corporations in Indiaare TNC’s creating islands of environmental excellence in a sea of dirt? Business Strategy and the Environment 11 (2), 103e118. Sandhu, S., 2010. Shifting paradigms in corporate environmentalism: from poachers to gamekeepers. Business and Society Review 115 (3), 285e310. Sandhu, S. Towards an integrated conceptual framework for corporate social and environmental sustainability. in Wells, G. (Ed.), Sustainable Business: Emerging Research on the Principles and Practice of Business under Sustainability Principles. Edward Elgar, in press.

213

Sandhu, S., Ozanne, L., Smallman, C., Cullen, R., 2010. Consumer driven corporate environmentalism: fact or fiction? Business Strategy and Environment 19 (6), 356e366. Scott, S.G., Lane, V.R., 2000. A stakeholder approach to organizational identity. Academy of Management Review 25 (1), 43e62. Sharma, S., Henriques, I., 2005. Stakeholder influence on sustainability practices in the Canadian forest products industry. Strategic Management Journal 26 (2), 159e180. Sparrowe, R.T., Mayer, K.J., 2011. From the editors, Publishing in AMJ - Part 4: grounding hypothesis. Academy of Management Journal 54 (6), 1098e1102. Suchman, M., 1995. Managing legitimacy: strategic and institutional approaches. Academy of Management Review 20, 571e610. Testa, F., Iraldo, F., 2010. Shadows and lights of GSCM (Green Supply Chain Management): determinants and effects of these practices based on a multinational study. Journal of Cleaner Production 18 (10e11), 953e962. The Economist, 2012. Unfinished Journey. Retrieved April 2, 2012. http://www. economist.com/node/21551061. United Nations, 2011. The Millennium Development Goals Report. Department of Economic and Social Affairs of the United Nations Secretariat, New York. van der Heijden, A., Driessen, P.P.J., Cramer, J.M., 2010. Making sense of corporate social responsibility: exploring organizational processes and strategies. Journal of Cleaner Production 18 (18), 1787e1796. Whiteman, G., Cooper, W.H., 2011. Ecological sensemaking. Academy of Management Journal 54 (5), 889e911. World Bank, 2012. India Data and Statistics. Retrieved 30 March 2012, 2012. http:// www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/ INDIAEXTN/0, menuPK:295609wpagePK:141132wpiPK:141109wtheSitePK: 29558400.html. Yin, R.K., 2003. Case Study Research: Designs and Methods, third ed. Sage Publications, California, Thousand Oaks.