| This study analyzes the effects of multinational firms' responses to external pressures to protect the natural environment on competitive position. Existing theoretical perspectives on relationship between environmental strategies and competitiveness--the environmental management perspective (e.g., Shrivastava, 1995), the dynamic perspective of environmental regulation (Porter and van der Linde, 1995), and the environmental economics literature (e.g., Jaffe, Peterson, and Portney, 1995)--have come to conflicting conclusions. This study reconciles the conflicting results and increases the understanding of the competitive effects of environmental strategies by using two theoretical perspectives--a business strategy and a global management perspective. It is argued that firm resources and capabilities, which have so far been ignored in the analysis of environmental strategies, moderate the effect of environmental strategies on competitiveness which explains the conflicting conclusions. In addition, this study increases our understanding of the competitive effects of environmental strategies for multinational firms by analyzing pressures for global integration and national responsiveness of environmental strategies and determinants and competitive effects of global environmental strategy standardization.; The empirical analysis is carried out using data collected through a mail questionnaire survey of 512 business units operating in the chemical industry in the United States. Multiple OLS regression is used to test the hypotheses.; Results indicate that firm specific "green" competencies defined as process innovation and implementation capabilities, moderate the relationship between environmental strategies and competitiveness. This implies that "best" practices of environmental management do not contribute to competitive advantage for all firms which explains the conflicting results in the existing literature. Firms need to choose environmental strategies that fit with their business strategy.; Results also indicate that multinationals benefit from global standardization of environmental strategy dimensions, while setting a high level of worldwide internal environmental standards increases costs. Global standardization of multinationals' environmental strategies is determined mainly by the global integration of other functions, but also by external pressures for globalization of environmental strategies. These results suggest that the cross-country organization of environmental strategies is especially challenging for multinationals, because it needs to fit with the cross-country organization of the core business functions as well as with the external pressures. |
