The construction of environmental performance in ISO 14001-certified SMEs

Abstract

This paper explores the relationship between the implementation of an environmental management system (EMS) and environmental performance (EP) from a management accounting and control (MAC) stance. Particularly, it asks: How is environmental performance constructed in firms using ISO 14001? And, b), what is the relationship between ISO 14001 and environmental performance? Grounded in the relative novelty of a qualitative cross-case approach to construct EP from the perspectives of small to medium sized enterprises (SMEs) as an understudied empirical context in MAC research, it finds that EP is a fluid, multidimensional concept that embraces not only environmental, but also social, operational and financial dimensions. It also regards the interrelation of processes and outcomes, as well as field and firm, with temporal and spatial horizons. The findings of this research contribute to the MAC literature by proposing that ISO 14001 results in the formalisation of performance measures and outcomes in SMEs. Moreover, the study presents EP as a multidimensional construct and suggests that there are research limitations in trying to capture it solely as an output at the intra-organisational level through quantitative items. Consequently, future theorisations of environmental management control systems require a recognition of the intra-organisational and extra-organisational dimensions that contribute to the construction of EP. For SMEs, this study highlights the value of EMS in improving both substantive and symbolic performance.