Environmental Reputation: Attribution from Distinct Environmental Strategies
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How do firms risk their environmental reputation by ignoring environmentally detrimental practices? Although there is a heightened emphasis on establishing a favorable environmental reputation, the mechanism connecting firm strategies to reputational outcomes is largely understudied. Firms can pursue distinct environmental management (EM) strategies comprising proactive beyond-compliance voluntary activities (EM strengths) and/or addressing compliance-only detrimental environmental activities (EM concerns). With the capability of selective dissemination of information on their environmental pursuits, the choice of strategy and the mechanisms affecting perception for reputational gains needs further exploration. By applying attribution theory, this paper develops a novel perspective to explain the impact from distinct strategies of pursuing EM strengths and/or addressing EM concerns. Utilizing 2 years of data from the top 500 green ranked U.S. firms, the findings support a negative impact from the attribution of EM concerns under conditions of greater scrutiny. The analysis indicates that strong financial performance as well as an environmental strategy highlighting EM strengths are mechanisms for drawing scrutiny into a firm’s behavior. In doing so, the findings caution practitioners on the latent effect of EM concerns on environmental reputation.
KeywordsEnvironmental reputation Environmental strategy Visibility Attribution theory Regression analysis
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