‘The role of environmental management in sustainable business development: A multi-country investigation‘ Schoenherr, T. (2012) examines the nature of any link between plant performance and environmental management, including ISO 14001 certification. The research’s first hypothesis is that environmental initiatives such as ISO 14001 certification have a positive influence on a plant’s quality, delivery,flexibility and cost performance. Research from over 1200 manufacturing plants in 21 countries, a mixture of industrialised, emerging and developing countries was used to test the hypothesis.
The ‘study overall supports the notion that environmental initiatives are beneficial, not only in terms of ‘‘doing the right thing’’, but also in terms of operational performance’. The report expands this by adding, ‘The positive relationships with quality, delivery, flexibility, and cost performance support the notion that in the process of aiming for high environmental stewardship and of implementing these initiatives, new and innovative approaches for conducting operations may be discovered, or waste in certain processes maybe identified (Montabon etal.,2007). Once these opportunities for improvement (which may be discovered as a ‘‘by-product’’ of implementing environmental initiatives, and which are likely to be more tacit in nature) are realized, performance in the four competitive dimensions should be heightened. As an added benefit achievable on the quality performance aspect, a firm’s practice of environmental initiatives may also increase the customers’ perception of the plant’s product in the marketplace, thus increasing the implied or perceived quality performance. Overall, the environmental initiatives can thus serve as a VRIN resource able to increase a plant’s competitive advantage’.
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The Eli Broad Graduate School of Management, Michigan State University (Schoenherr)