Proactive environmental management and performance by a controlling family

Abstract

Purpose

This study examined how proactive environmental management affects firm performance and whether a controlling family moderates this effect. The paper aims to discuss these issues.

Design/methodology/approach

The study adopted content analysis to collect data on listed Taiwanese firms and used cross-sectional regression analysis to examine the relationship between proactive environmental management and firm performance as well as the moderating role of a controlling family.

Findings

The results indicated that not all types of proactive environmental management are positively associated with firm performance and that a controlling family might be more effective in low-risk proactive environmental management practices.

Research limitations/implications

The focus was on the impact of proactive environmental management from the perspective of stockholders. Future research could investigate its impact on other stakeholders as well.

Practical implications

The findings might convince managers that the stereotype of an environment-friendly firm – that the more its green initiatives, the less competitive it becomes – may not necessarily be true. Investing in product-focused pollution prevention could increase revenues and improve performance. Even though process-focused pollution prevention is negatively associated with firm performance, companies are not expected to reduce investment in green processes since they are required for the production of environment-friendly products.

Originality/value

This study adopted a multi-dimensional approach to reveal how different types of proactive environmental management affect firm performance. The authors used the controlling family as a moderating variable to determine whether it moderates the relationship between proactive environmental management and firm performance.

Citation

Huang, Y.-C., Wong, Y.-J. and Yang, M.-L. (2014), "Proactive environmental management and performance by a controlling family", Management Research Review, Vol. 37 No. 3, pp. 210-240. https://doi.org/10.1108/MRR-09-2012-0196