Why Firms Mandate ISO 14001 Certification

Abstract

Thousands of facilities worldwide have certified to International Organization for Standardization (ISO) 14001, the international environmental management system standard, and previous research typically has studied these certification decisions at the facility level. However, significant anecdotal evidence indicates that firms may have a strong role, and if so, prior studies may be drawing inappropriate conclusions about the rationale for ISO 14001 certification. Drawing on institutional theory and the resource-based view of the firm, this study offers a conceptual framework that explains why parent companies would mandate—rather than simply encourage—their operational units to certify to ISO 14001. The framework is tested using survey data of corporate environmental managers. The results show that firms have a central role in nearly half of all facility-level certifications and that firms that mandate ISO 14001 endure greater external pressures and have stronger complementary resources and capabilities that support their organization-wide ISO 14001 policies.

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