Green management and the nature of pollution prevention innovation

Abstract

Management systems have a strong impact on the level of innovation and on production operations. Understanding this impact sheds light on how firms function. This paper examines the relationship between a firm’s approach to environmental management and the nature of the pollution prevention activities or practices that it undertakes. We differentiate pollution prevention activities according to (i) four functional characteristics and (ii) visibility to consumers. We find that the application of the Total Quality Management approaches on pollution prevention has a stronger effect for practices that involve procedural changes or are of a customized nature. These are indeed the type of practices where one would expect Total Quality Management to have a disproportionate impact in decision-making effectiveness. There seems to be no corresponding effect on the adoption of practices that are visible to consumers. Our results corroborate the notion that a well-designed management system can help stimulate innovation, but only for specific types. They also help identify the types of firms that are more likely to benefit from adoption of Total Quality Management principles.

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