Sustainability management in the global automotive industry: A theoretical model and survey study

Abstract

In the past decade, several publicized issues have revealed that the environmental and social performance of major automotive companies does not always conform to regulations or expectations. The purpose of this paper is to explore the sustainability behavior of automotive companies. Based on a systematic literature review, it is found that previous studies (a) offer only partial explanations for the behavior of automotive companies related to sustainability issues, and (b) both case studies and survey-based papers use inconsistent measurements. To address these gaps and inconsistencies, we propose a comprehensive theoretical model that describes the behavior of automotive companies along the relationships between “external pressures – strategy – practices – operational performance – financial performance”. To empirically validate our model, we apply structural equation modeling in SmartPLS using data on 142 automotive units from 22 countries. The results of the analysis suggest that pressure from external stakeholders has a positive impact on the inclusion of sustainability in the strategic agenda of automotive companies, which, in turn, increases the effort undertaken by these companies to implement sustainability practices. The implementation of such practices has a positive influence on operational performance in terms of environmental and social sustainability. Surprisingly, however, our findings do not indicate any significant effect on the financial performance of these firms.