Institutional Pressures and Organizational Characteristics: Implications for Environmental Strategy

Abstract

This article describes the empirical research that examines how pressures from constituents of firms' institutional environments affect their adoption of environmental strategies. Firms can adopt various types of voluntary environmental strategies that seek to decrease the environmental impacts of operations beyond regulatory requirements. Additionally, it differentiates two main sets of agents within the organizational field: market and non-market constituents, and argues that both may impose institutional pressure. It summarizes the empirical evidence that various institutional actors have influenced organizations' environmental practices, focusing on politicians, regulators, local communities, customers, competitors, and shareholders (owners). Market pressures can lead firms to adopt environmental management practices. Empirical research on the interaction between institutional pressures and organizational characteristics is considered. Most prior studies predict and show positive relationships between institutional pressures and the adoption of environmental strategies.