Standardization and Discretion: Does the Environmental Standard ISO 14001 Lead to Performance Benefits?

Abstract

This study sought to determine if the environmental management standard ISO 14001 helps organizations reduce the negative impact their business activities may have on the environment, and as a result, also improves their business performance. Forty organizations participated in the study and described how they implement ISO 14001 requirements. They also reported how the standard impacts on their environmental and business performance. The results show that if ISO 14001 requirements become part of the organization's daily practices, then standardization of the organization's handling of environmental issues follows-leading, consequently, to better organizational environmental performance. In addition, standardization augments its effect on organizational environmental performance through its positive impact on employee discretion. Allowing employees discretion further improves environmental performance. We saw that discretion partially mediates the effect of standardization on environmental performance. Analysis of survey and financial data did not reveal any support for the hypothesis that achieving improvement in environmental performance as result of ISO 14001 implementation leads to better business performance; on the other hand, we saw that business performance was not harmed