FROM GREEN-BLINDNESS TO THE PURSUIT OF ECO-SUSTAINABILITY: AN EMPIRICAL INVESTIGATION OF LEADER COGNITIONS AND CORPORATE ENVIRONMENTAL STRATEGY CHOICES

Branzei, O.,Vertinsky, I., & Zietsma, C. (2000). FROM GREEN-BLINDNESS TO THE PURSUIT OF ECO-SUSTAINABILITY: AN EMPIRICAL INVESTIGATION OF LEADER COGNITIONS AND CORPORATE ENVIRONMENTAL STRATEGY CHOICES. Academy Of Management Proceedings & Membership Directory, C1-C6.

Difference between corporate instrumental and normative approaches with regards to environmental concerns.

• Instrumental orientation states that "firms do what they have to do to manage the natural environment in order to maximize their profits".
• Normative view suggests that "since corporate decisions affect the state of the natural environment, firms should espouse a fundamental moral obligation to protect nature, adopting proactive environmental strategies".

The study investigates "how leaders' personal values, and their perceptions of corporate environmental commitment, influence their firm's pursuit of proactive strategies towards the natural environment and their firms' subsequent adoption of environmental innovation."

According to their literature review when companies do not have a long-term commitments to proactive environmental strategies, change is brought on by government regulation and the market. Both of these are subject to failure since government regulation may not be adequately enforced and market mechanisms can be ineffective if consumers cannot verify "green" claims by manufacturers. Therefore "voluntary corporate commitments are seen as essential for achieving long-run sustainability".

"The more the leaders of the organization are committed to environmental protection, the more likely that the firm will develop an environmental plan and environmentally-oriented organizational structures". Ultimately the organization's leaders' personal values, roles, and commitments influence the company's actions and environmental performance. Also leaders are not necessarily the CEO or CFO, a leader is someone that can closely communicate with top management and is proactively interested in pro-environmental issues.

Hypothesis:
1) There is a positive relationship between a leader's personal values and the firm's adoption of proactive environmental strategies.
2) The CEO's perception of corporate environmental commitment mediates the relationship between the CEO's personal values and the adoption of proactive environmental strategies.
3) There is a positive relationship between the CEO's personal values and the firm's environmental innovation activity.
4) The CEO's perception of corporate environmental commitment mediates the relationship between the CEO's personal values and the firm's environmental innovation activity.
5) There is a positive relationship between the use of proactive environmental strategies and the firm's environmental innovation activity.

Results:
"CEO's personal values had a significant positive effect both on firms' adoption of proactive environmental strategies (H1) and environmental innovation (H3).

The perceived corporate commitment mediates both relationships (H2&H4) so that the stronger the perceived commitment the more likely the choice of proactive strategies and, respectively, the adoption of environmental innovation.

Finally, the choice of proactive environmental strategies had a significant effect on firms' environmental innovation (H5)."

"Findings suggest that pro-environmental personal values and the perceived corporate environmental commitment represent key variables in the choice of proactive environmental strategies and in the adoption of environmental innovation"