Strategic Alignment of Eco-Practices: The Mediator of Eco-Controls in Translating Environmental Strategy

Authors

  • Kanya Sannamwong Faculty of Management Science, Udon Thani Rajabhat University
  • Wila-sini Wongkaew Chulalongkorn Business School
  • Danupol Hoonsopon Chulalongkorn Business School

Keywords:

Competitive environmental strategy, Eco-control, Strategic alignment of eco-practice, Environmental performance, Economic performance

Abstract

This study aims to explore the role of eco-controls in translating competitive environmental strategic intents into eco-practices, as well as the associations between eco-practices and environmental and economic performance. A web-based survey is used to collect data from Thai manufacturing firms in high-polluting industries. Structural Equation Modeling (SEM) is employed for data analysis. Findings from the study show most firms use more bureaucratic forms of eco-control (151 out of 169 firms). Firms with more bureaucratic forms of eco-controls show a high level of alignment between environmental strategic intents and eco-practices, regardless of their environmental strategic intents. While firms with eco-marketing practices exhibit high environmental and economic performance, firms with eco-production practices show high environmental and economic performance only when they also adopt eco-marketing practices. The study extends existing literature by explicitly distinguishing between intended environmental strategy (i.e. environmental strategic intent) and realized environmental strategy (i.e. eco-practice) and extends the analysis to examine environmental and economic performance. For practical implication, it is recommended that firms should use more bureaucratic forms of eco-control, such as action control, formal control, and tight control, to create a strategic alignment of eco-practices, which in turn, will lead to high performance.

Author Biographies

Kanya Sannamwong, Faculty of Management Science, Udon Thani Rajabhat University

Lecturer

Wila-sini Wongkaew, Chulalongkorn Business School

Chulalongkorn University

Danupol Hoonsopon, Chulalongkorn Business School

Chulalongkorn University

References

Anderson, J. C., & Gerbing, D. W. (1984). The effect of Sampling error on convergence, improper solutions, and goodness-of-fit indices for maximum likelihood confirmatory factor analysis. Psychometrika, 49(2), 155-173.

Aragón-Correa, J. A. (1998). Strategic proactivity and firm approach to the natural environment. Academy of Management Journal, 41(5), 556-567. https://doi.org/10.5465/256942

Arjaliès, D.-L., & Mundy, J. (2013). The use of management control systems to manage CSR strategy: A levers of control perspective. Management Accounting Research, 24(4), 284-300. https://doi.org/https://doi.org/10.1016/j.mar.2013.06.003

Auzair, S. M., & Langfield-Smith, K. (2005). The effect of service process type, business strategy and life cycle stage on bureaucratic MCS in service organizations. Management Accounting Research, 16(4), 399-421. https://doi.org/10.1016/j.mar.2005.04.003

Banerjee, S. B., Iyer, E. S., & Kashyap, R. K. (2003). Corporate environmentalism: Antecedents and influence of industry type. Journal of Marketing, 67(2), 106-122. https://doi.org/10.1509 %2Fjmkg.67.2.106.18604

Bedford, D. S., & Speklé, R. F. (2018). Construct validity in survey-based management accounting and control research. Journal of Management Accounting Research, 30(2), 23-58. https://doi.org/10.2308/jmar-51995

Bocken, N. M., De Pauw, I., Bakker, C., & van der Grinten, B. (2016). Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 33(5), 308-320. https://doi.org/10.1080/21681015.2016.1172124

Burnett, R. D., & Hansen, D. R. (2008). Ecoefficiency: Defining a role for environmental cost management. Accounting, Organizations and Society, 33(6), 551-581. https://doi.org/10. 1016/j.aos.2007.06.002

Chen, D., Wei, W., Hu, D., & Muralidharan, E. (2016). Survival strategy of OEM companies: a case study of the Chinese toy industry. International Journal of Operations & Production Management, 36(9), 1065-1088. https://doi.org/10.1108/IJOPM-04-2015-0212

Chenhall, R. H. (2005). Integrative strategic performance measurement systems, strategic alignment of manufacturing, learning and strategic outcomes: An exploratory study. Accounting, Organizations and Society, 30(5), 395-422. https://doi.org/10.1016/j.aos.2004 .08.001

Chenhall, R. H. (2006). Theorizing contingencies in management control systems research. Handbooks of Management Accounting Research, 1, 163-205. https://doi.org/10.1016/ S1751-3243(06)01006-6

Christ, K. L., & Burritt, R. L. (2013). Environmental management accounting: the significance of contingent variables for adoption. Journal of Cleaner Production, 41, 163-173. https:// doi.org/10.1016/j.jclepro.2012.10.007

Dixon-Fowler, H. R., Slater, D. J., Johnson, J. L., Ellstrand, A. E., & Romi, A. M. (2013). Beyond “does it pay to be green?” A meta-analysis of moderators of the CEP–CFP relationship. Journal of Business Ethics, 112(2), 353-366. https://doi.org/10.1007/s10551-012-1268-8

Sannamwong et al. (2023) Creative Business and Sustainability Journal (CBSJ)

Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing research, 18(1), 39-50. https:// doi.org/10.1177/002224378101800104

Ginsberg, J. M., & Bloom, P. N. (2004). Choosing the right green marketing strategy. MIT Sloan Management Review, 46(1), 79-84.

González-Benito, J., & González-Benito, Ó. (2005). A study of the motivations for the environmental transformation of companies. Industrial Marketing Management, 34(5), 462-475. https:// doi.org/10.1016/j.indmarman.2004.08.005

Govindarajan, V., & Shank, J. K. (1992). Strategic cost management: Tailoring controls to strategies. Journal of Cost Management, 6(3), 14-25.

Guenther, E., Endrikat, J., & Guenther, T. W. (2016). Environmental management control systems: A conceptualization and a review of the empirical evidence. Journal of Cleaner Production, 136, 147-171. https://doi.org/10.1016/j.jclepro.2016.02.043

Hair, J., Black, W., Babin, B., & Anderson, R. (2009). Multivariate Data Analysis 7th Edition Pearson Prentice Hall. JOUR.

Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of Management Review, 20(4), 986-1014. https://doi.org/https://doi.org/10.5465/amr.1995.9512280033

Heggen, C., & Sridharan, V. (2020). The effects of an enabling approach to eco-control on firms’ environmental performance: A research note. Management Accounting Research, 100724. https://doi.org/10.1016/j.mar.2020.100724

Henri, J.-F., & Journeault, M. (2010). Eco-control: The influence of management control systems on environmental and economic performance. Accounting, Organizations and Society, 35(1), 63-80. https://doi.org/10.1016/j.aos.2009.02.001

Henri, J. F., & Journeault, M. (2018). Antecedents and consequences of eco‐eontrol deployment: Evidence from Canadian manufacturing firms. Accounting Perspectives, 17(2), 253-273. https://doi.org/https://doi.org/10.1111/1911-3838.12168

Hofstede, G. (1984). Cultural dimensions in management and planning. Asia Pacific Journal of Management, 1(2), 81-99. https://doi.org/10.1007/BF01733682

Hoonsopon, D., & Puriwat, W. (2021). The role of leadership behaviour of project manager in managing the fuzzy front end in the development of radical and incremental innovation. International Journal of Innovation Management, 25(02), 2150022. https://doi.org/ 10.1142/S1363919621500225

Hoonsopon, D., & Ruenrom, G. (2012). The impact of organizational capabilities on the development of radical and incremental product innovation and product innovation performance. Journal of Managerial Issues, 24(3), 250-276.

Jeeravorawong, C., & Hoonsopon, D. (2015). Attitudes subjective norms and the involvement product affecting the intentions to buy the green products. Songklanakarin Journal of Management Sciences, 32(1), 65-90.

Journeault, M. (2016). The influence of the eco-control package on environmental and economic performance: A natural resource-based approach. Journal of management accounting research, 28(2), 149-178. https://doi.org/10.2308/jmar-51476

Journeault, M., De Ronge, Y., & Henri, J.-F. (2016). Levers of eco-control and competitive environmental strategy. The British Accounting Review, 48(3), 316-340. https://doi.org/ 10.1016/j.bar.2016.06.001

Lisi, I. E. (2015). Translating environmental motivations into performance: The role of environmental performance measurement systems. Management Accounting Research, 29, 27-44. https://doi.org/10.1016/j.mar.2015.06.001

Lopez-Valeiras, E., Gomez-Conde, J., & Naranjo-Gil, D. (2015). Sustainable innovation, management accounting and control systems, and international performance. Sustainability, 7(3), 3479-3492. https://doi.org/10.3390/su7033479

Lueg, R., & Radlach, R. (2016). Managing sustainable development with management control systems: A literature review. European Management Journal, 34(2), 158-171. https://doi .org/10.1016/j.emj.2015.11.005

Marchi, V. D., Maria, E. D., & Micelli, S. (2013). Environmental strategies, upgrading and competitive advantage in global value chains. Business Strategy and the Environment, 22(1), 62-72. https://doi.org/10.1002/bse.1738

Martyn, P., Sweeney, B., & Curtis, E. (2016). Strategy and control: 25 years of empirical use of Simons’ levers of control framework. Journal of Accounting & Organizational Change, 12(3), 281-324. https://doi.org/10.1108/JAOC-03-2015-0027

Melnyk, S. A., Sroufe, R. P., & Calantone, R. (2003). Assessing the impact of environmental management systems on corporate and environmental performance. Journal of Operations Management, 21(3), 329-351. https://doi.org/10.1016/S0272-6963(02)00109-2

Merchant, K. A. (1982). The control function of management. Sloan Management Review (Pre-1986), 23(4), 43-55. https://search.proquest.com/docview/206766218?accountid=15637

Mintzberg, H. (1978). Patterns in strategy formation. Management Science, 24(9), 934-948. https://doi.org/https://doi.org/10.1287/mnsc.24.9.934

Mokhtar, N., Jusoh, R., & Zulkifli, N. (2016). Corporate characteristics and environmental management accounting (EMA) implementation: Evidence from Malaysian public listed companies (PLCs). Journal of Cleaner Production, 136, 111-122. https://doi.org/10.1016 /j.jclepro.2016.01.085

Moraga, G., Huysveld, S., Mathieux, F., Blengini, G. A., Alaerts, L., Van Acker, K., De Meester, S., & Dewulf, J. (2019). Circular economy indicators: What do they measure? Resources, Conservation and Recycling, 146, 452-461. https://doi.org/10.1016/j.resconrec.2019.03.045

Moravcikova, D., Krizanova, A., Kliestikova, J., & Rypakova, M. (2017). Green marketing as the source of the competitive advantage of the business. Sustainability, 9(12), 2218. https:// doi.org/10.3390/su9122218

Muñoz-Leiva, F., Sánchez-Fernández, J., Montoro-Ríos, F., & Ibáñez-Zapata, J. Á. (2010). Improving the response rate and quality in Web-based surveys through the personalization and frequency of reminder mailings. Quality & Quantity, 44(5), 1037-1052. https:// doi.org/10.1007/s11135-009-9256-5

Orsato, R. J. (2009). When Does it Pay to be Green? In Sustainability strategies (pp. 3-22). Springer. https://doi.org/10.1057/9780230236851_1

Otley, D. (2016). The contingency theory of management accounting and control: 1980–2014. Management accounting research, 31, 45-62. https://doi.org/10.1016/j.mar.2016.02.001

Otley, D. T. (1980). The contingency theory of management accounting: Achievement and prognosis. Readings in accounting for management control (pp. 83-106). Springer. https://doi.org/https://doi.org/10.1007/978-1-4899-7138-8_5

Perego, P., & Hartmann, F. (2009). Aligning performance measurement systems with strategy: The case of environmental strategy. Abacus, 45(4), 397-428. https://doi.org/10.1111/j.1467-6281.2009.00297.x

Pérez-Calderón, E., Milanés-Montero, P., Meseguer-Santamaría, M.-L., & Mondéjar-Jiménez, J. (2011). Eco-efficiency: Effects on economic and financial performance. Evidences from Dow Jones Sustainability Europe Index. Environmental Engineering & Management Journal (EEMJ), 10(12), 1801-1808.

Plaza‐Úbeda, J., Burgos‐Jiménez, J., Vazquez, D., & Liston‐Heyes, C. (2009). The ‘win–win’paradigm and stakeholder integration. Business Strategy and the Environment, 18(8), 487-499. https://doi.org/10.1002/bse.593

Pondeville, S., Swaen, V., & De Rongé, Y. (2013). Environmental management control systems: The role of contextual and strategic factors. Management Accounting Research, 24(4), 317-332. https://doi.org/10.1016/j.mar.2013.06.007

Porter, M., & Van der Linde, C. (1995). Green and competitive: Ending the stalemate. Harvard Business Review, 73(5), 120-134.

Puriwat, W., & Hoonsopon, D. (2022). Cultivating product innovation performance through creativity: The impact of organizational agility and flexibility under technological turbulence. Journal of Manufacturing Technology Management, 33(4), 741-762.

Rodrigues, V. P., Pigosso, D. C., & McAloone, T. C. (2017). Measuring the implementation of ecodesign management practices: A review and consolidation of process-oriented performance indicators. Journal of Cleaner Production, 156, 293-309. https://doi.org /10.1016/j.jclepro.2017.04.049

Russo, M. V., & Fouts, P. A. (1997). A resource-based perspective on corporate environmental performance and profitability. Academy of Management Journal, 40(3), 534-559. https:// doi.org/https://doi.org/10.5465/257052

Schaltegger, S. (2011). Sustainability as a driver for corporate economic success: Consequences for the development of sustainability management control. Society and Economy, 33(1), 15-28. https://doi.org/10.1556/SocEc.33.2011.1.4

Schaltegger, S., & Zvezdov, D. (2015). Expanding material flow cost accounting. Framework, review and potentials. Journal of cleaner production, 108, 1333-1341. https://doi.org/ 10.1016/j.jclepro.2014.08.040

Setthasakko, W. (2010). Barriers to the development of environmental management accounting: An exploratory study of pulp and paper companies in Thailand. EuroMed Journal of Business, 5(3), 315-331. https://doi.org/10.1108/14502191011080836

Shrivastava, P. (1995). The role of corporations in achieving ecological sustainability. Academy of Management Review, 20(4), 936-960. https://doi.org/10.5465/AMR.1995.9512280026

Shutibhinyo, W., & Wongkaew, W. (2018). Strategy, choice of performance measures and use of performance measurement systems: Empirical evidence from Thailand. International Journal of Economic and Management, 12(S2), 365-375.

Slagmulder, R. (1997). Using management control systems to achieve alignment between strategic investment decisions and strategy. Management Accounting Research, 8(1), 103-139. https://doi.org/10.1006/mare.1996.0035

Stead, W. E., & Stead, J. G. (1995). An empirical investigation of sustainability strategy implementation in industrial organizations. Research in Corporate Social Performance and Policy, 1(S1), 43-66.

Suansawat, R. (2013). The influence of supply chain integration and green supply chain management practices on sustainable firm performance in Thai manufacturing industry [Unpublished doctoral dissertation]. The University of Hull.

Van der Stede, W. A., Young, S. M., & Chen, C. X. (2005). Assessing the quality of evidence in empirical management accounting research: The case of survey studies. Accounting, Organizations and Society, 30(7-8), 655-684. https://doi.org/10.1016/j.aos.2005.01.003

Vance, C. M., McClaine, S. R., Boje, D. M., & Stage, H. D. (1992). An examination of the transferability of traditional performance appraisal principles across cultural boundaries. MIR: Management International Review, 32(4), 313-326. https://www.jstor.org/stable/ 40228116

Whitehead, B., & Walley, N. (1994). It's not easy being green. Harvard Business Review, 72(3), 171-180.

Wolf, E. J., Harrington, K. M., Clark, S. L., & Miller, M. W. (2013). Sample size requirements for structural equation models: An evaluation of power, bias, and solution propriety. Educ Psychol Meas, 76(6), 913-934.

Zink, T., & Geyer, R. (2017). Circular economy rebound. Journal of Industrial Ecology, 21(3), 593-602. https://doi.org/10.1111/jiec.12545

Downloads

Published

2023-07-18

How to Cite

Sannamwong, K. ., Wongkaew, W.- sini, & Hoonsopon, D. (2023). Strategic Alignment of Eco-Practices: The Mediator of Eco-Controls in Translating Environmental Strategy. Creative Business and Sustainability Journal, 45(1), 1–21. Retrieved from https://so01.tci-thaijo.org/index.php/CBSReview/article/view/263303

Issue

Section

Research Articles