Environmental strategy and performance in small firms: A resource-based perspective

• Published in: Journal of environmental management Vol. 86; no. 1; pp. 88 - 103
• Main Authors: Aragón-Correa, J. Alberto, Hurtado-Torres, Nuria, Sharma, Sanjay, García-Morales, Víctor J.
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 2008; Elsevier; Academic Press Ltd
• Subjects: Animal, plant and microbial ecology; Applied ecology; Biological and medical sciences; Case studies; Commerce; Conservation, protection and management of environment and wildlife; Corporate environmental strategy; Economic impact; Environment; Environmental management; Fundamental and applied biological sciences. Psychology; General aspects; Impact analysis; Models, Theoretical; Motor Vehicles; Natural environment; Organizational capabilities; Organizational Policy; Regulation; Small & medium sized enterprises-SME; Small and medium sized enterprises; Small and medium-sized enterprises (SMEs); Social impact; Spain; Strategic planning; Spain; Natural environment; Organizational capabilities; Small and medium-sized enterprises (SMEs); Corporate environmental strategy; Strategy; Performance; Environmental management
• ISSN: 0301-4797; 1095-8630
• DOI: 10.1016/j.jenvman.2006.11.022

In spite of the widespread recognition of the important roles that small and medium sized enterprises (SMEs) play in most economies, limited research has focused on their impacts on the natural environment and the strategies such enterprises adopt to reduce these impacts. It is usually assumed that SMEs lack the resources to implement proactive environmental strategies that go beyond minimum regulatory compliance. In this study of 108 SMEs in the automotive repair sector in Southern Spain, we found that SMEs undertake a range of environmental strategies from reactive regulatory compliance to proactive pollution prevention and environmental leadership. These strategies are associated with three organizational capabilities: shared vision, stakeholder management, and strategic proactivity, hypothesized based on the unique strategic characteristics of SMEs—shorter lines of communication and closer interaction within the SMEs, the presence of a founder's vision, flexibility in managing external relationships, and an entrepreneurial orientation. We also found that firms with the most proactive practices exhibited a significantly positive financial performance.