Abstract
This manuscript examines the impact of supply chain uncertainty on environmental management spending in manufacturing plants. Building on the attention-based view of the firm (ABV), the basic premise is that with increased uncertainty in the supply chain, managers’ attention to environmental management lessens which in turn leads to (i) fewer resources devoted to green issues within the plant and (ii) a bias to use resources toward less disruptive pollution control approaches rather than pollution prevention approaches. Data from a survey of 251 Canadian manufacturing plants was used to test the link between the level of uncertainty in the supply chain and environmental management decisions. The results indicate that supply chain uncertainty does not have a substantial impact on the level of environmental spending in a plant but has a substantial and significant impact on the allocation of the spending between pollution prevention and pollution control. More particularly, as supply chain uncertainty increases, organizations shift their resources away from pollution prevention to favor pollution control approaches.
Highlights
One of the fundamental questions related to corporate environmental management remains “does it pay to be green?” (Ambec and Lanoie, 2008)
Building on the attention-based view of the firm (ABV) (Ocasio, 1997), this paper proposes that supply chain uncertainty (Vilko et al, 2014; van der Vorst and Beulens, 2002) is an important factor in (i) allocating organizations’ resources to environmental management, and (ii) the type of environmental initiatives adopted
Remarks The empirical analysis provides support for the hypotheses developed in Linking Supply Chain Uncertainty to Environmental Management section
Summary
One of the fundamental questions related to corporate environmental management remains “does it pay to be green?” (Ambec and Lanoie, 2008). Pollution control devices allow to address an environmental issue without tampering with the existing technical systems (product or process)—facing high level of supply chain uncertainty, a manager would lean on keeping the existing technologies and the related capabilities intact, privilege the exploitation of the existing operational competences, and opt for less disruptive pollution control technologies. Cronbach’s alpha aThe leading question was: “Over the last 2 years, to what extent has your plant invested resources (money, time, and/or people) in programs in the following areas?” bExploratory factor analysis using principle components with varimax rotation points to five different types of environmental expenditures: two were associated with pollution prevention, two were related to pollution control, and the fifth type was about management systems (see Appendix 1 and Vachon, 2007).
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