Proactive environmental management and performance by a controlling family

Abstract

Purpose – This study examined how proactive environmental management affects firm performance and whether a controlling family moderates this effect. The paper aims to discuss these issues. Design/methodology/approach – The study adopted content analysis to collect data on listed Taiwanese firms and used cross-sectional regression analysis to examine the relationship between proactive environmental management and firm performance as well as the moderating role of a controlling family. Findings – The results indicated that not all types of proactive environmental management are positively associated with firm performance and that a controlling family might be more effective in low-risk proactive environmental management practices. Research limitations/implications – The focus was on the impact of proactive environmental management from the perspective of stockholders. Future research could investigate its impact on other stakeholders as well. Practical implications – The findings might convince managers that the stereotype of an environment-friendly firm – that the more its green initiatives, the less competitive it becomes – may not necessarily be true. Investing in product-focused pollution prevention could increase revenues and improve performance. Even though process-focused pollution prevention is negatively associated with firm performance, companies are not expected to reduce investment in green processes since they are required for the production of environment-friendly products. Originality/value – This study adopted a multi-dimensional approach to reveal how different types of proactive environmental management affect firm performance. The authors used the controlling family as a moderating variable to determine whether it moderates the relationship between proactive environmental management and firm performance.

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