The role of competitive capabilities and stakeholder pressure in the adoption of environmental practices and business performance

This paper examines the underlying effect of manufacturing plants' competitive capabilities and their adoption of environmental practices. A Natural Resource Based View (NRBV) theoretical approach was utilized to develop and test a set of hypotheses surrounding how manufacturing plants with specific competitive capabilities would have a greater likelihood of implementing sets of environmental practices with similar underlying resources and capabilities. Further analysis evaluated how the influence of stakeholder pressures moderated the relationship between competitive capabilities and the degree of adoption of environmental manufacturing practices. Multiple regression results indicate quality and cost competitive capabilities are positively significantly associated with the adoption of specific environmental practices. Further analysis indicates stakeholder pressures do not moderate the relationship between competitive capabilities and the degree of adoption of environmental practices. Unique sets of stakeholder pressures are independent predictors for each set of environmental practices. ANOVA analysis indicates competitive process flexibility capability and product design environmental practices and competitive product innovation capability and product design environmental practices positively significantly impact business performance. This study contributes to the literature by providing insights into competitive capabilities which link to the degree of adoption of specific environmental practices and insights into synergies which may exist between competitive capabilities and environmental practices and their effects on business performance.