The role of environmental management in sustainable business development: A multi-country investigation

This paper investigates the influence of sustainable business development on manufacturing plant operations. Among the three pillars of sustainability consisting of environmental, social and economic longevity and foresight of a firm, we focus on the environmental component. Specifically, basing our arguments on the resource‐based view of the firm, we hypothesize the impact of environmental management on plant performance. Environmental initiatives considered include ISO 14000 certification, pollution prevention, recycling of materials, and waste reduction; plant performance is assessed with the dimensions of the four competitive capabilities of quality, delivery, flexibility, and cost. Further, building on the theory of performance frontiers, we investigate these relationships across plants located in different economic regions of the world (plants are classified into emerging, developing and industrialized regions). We suggest that recent emphasis on these environmental initiatives has been greatest among plants located in emerging economies, compared to their counterparts in industrialized and developing nations. In addition, we contend that the influence of these initiatives is greatest for plants located in emerging and developing economies when compared to plants in industrialized nations. These notions are tested with data collected from 1211 plants located in these three economic regions. Overall, this study contributes to the investigation of strategies for sustainable business development, highlighting important implications for both theory and practice.