THE ALTERING OF A FIRM'S ENVIRONMENTAL MANAGEMENT COMPETENCE DURING THE ACQUISITION INTEGRATION STAGE.

Abstract

A growing body of research examines the relationship between a firm's environmental performance and its economic performance. Using RBV as a framework, this literature suggests that, when valuable, rare, non-substitutable, inimitable and exploited, environmental management technologies, capabilities and know-how are sources of sustainable competitive advantage which lead to superior returns. Thus, managers should consider the environmental impact of their actions when engaged in strategic decision making. Mergers and acquisitions continue to be a popular strategic decision of growing firms. Because existing research yields equivocal results relative to post-acquisition performance, recent work has focused on gaining a better understanding of the entire acquisition decision making process. How firms manage this process has important implications on the ability to transfer dynamic capabilities and strategic resources between the two firms as well as realize performance improvements. Because environmental management practices provide a source of strategic capabilities and know-how and the acquisition process represents a major strategic decision of firms that affects the ability to transfer resources, there is a definite need to further explore the interconnections between these two critical research areas. While some anecdotal evidence exists that firms consider environmental compliance issues and potential liabilities during the courtship stage, no known studies have investigated the extent to which environmental management practices are considered during the acquisition integration stage. As a result, this paper develops a conceptual model identifying critical factors which are likely to influence whether environmental management competence is enhanced, destroyed or unaltered during the acquisition integration stage.