A Process Model of Building Sustainable Competitive Advantage for Multinational Enterprises: An Empirical Case Study

Multinational enterprises (MNEs) are the leading entities in the process of global economic integration, whose international expansion would be regulated and constrained by environmental issues. Drawing on theories of corporate social responsibility, corporate environmental behavior and legitimacy, this paper establishes a grounded process model that has both theoretical and practical significance. The model reveals that development of sustainable competitive advantage of MNEs is a gradual process that is dependent on the corporate environmental behavior and the legitimation of their behaviors. Via a real in-depth case study of Badische Anilin-Soda-Fabrik (BASF), one of the largest chemical companies in the world, the application and effectiveness of the proposed process model are demonstrated. Also, implications of this model and future directions for both research and practice are indicated.

Keywords:

multinational enterprises (MNEs), corporate social responsibility, corporate environmental behavior, corporate legitimacy, sustainable development

References

ALDRICH H. E., FIOL C. M., 1994, Fools Rush In? The Institutional Context of Industry Creation, in: Academy of Management Review, vol. 19, no 4, p. 645-670.

ARAG N-CORREA J. A., 1998, Strategic Proactivity and Firm Approach to the Natural Environment, in: Academy of Management Journal, vol. 41, no 5, p. 556-567.

ARAGON-CORREA J. A., SHARMA S., 2003, A Contingent Resource-Based View of Proactive Corporate Environmental Strategy, in: Academy of Management Review, vol. 28, no 1, p. 71-88.

BANSAL P., 2005, Evolving Sustainably: A Longitudinal Study of Corporate Sustainable Development, in: Strategic Management Journal, vol. 26, no 3, p. 197-218.

BANSAL P., CLELLAND I., 2004, Talking Trash: Legitimacy, Impression Management, and Unsystematic Risk in the Context of the Natural Environment, in: Academy of Management Journal, vol. 47, no 1, p. 93-103.

BANSAL P., HUNTER T., 2003, Strategic Explanations for the Early Adoption of ISO 14001, in: Journal of Business Ethics, vol. 46, no 3, p. 289-299.

BANSAL P., ROTH K., 2000, Why Companies Go Green, in: Academy of Management Journal, vol. 43, no 4, p. 717-747.

BARNEY J., 1991, Firm Resources and Sustained Competitive Advantage, in: Journal of Management, vol. 17, no 1, p. 99-120.

BILKEY W. J., NES E., 1982, Country-of-Origin Effects on Product Evaluations, in: Journal of International Business Studies, vol. 13, no 1, p. 89-99.

CANTWELL J., DUNNING J. H., LUNDAN S. M., 2010, An Evolutionary Approach to Understanding International Business Activity in: Journal of International Business Studies, vol. 41, no 4, p. 567-586.

CHEN H.-C., CHUNG M.-F., 2014, How to Go Global with Differentiated Products, in: Expert Systems with Applications, vol. 41, no 7, p. 3484-3490.

CHRISTMANN P., 2004, Multinational Companies and the Natural Environment: Determinants of Global Environmental Policy, in: Academy of Management Journal, vol. 47, no 5, p. 747-760.

CHRISTMANN P., TAYLOR G., 2001, Globalization and the Environment: Determinants of Firm Self-Regulation in China, in: Journal of International Business Studies, vol. 32, no 3, p. 439-458.

CLAVER E., L PEZ M. D., MOLINA J. F., TAR J. J., 2007, Environmental Management and Firm Performance, in: Journal of Environmental Management, vol. 84, no 4, p. 606-619.

COSTA R., MENICHINI T., 2013, A Multidimensional Approach for CSR Assessment: The Importance of the Stakeholder Perception, in: Expert Systems with Applications, vol. 40, no 1, p. 150-161.

DELMAS M., 2001, Stakeholders and Competitive Advantage: The Case of ISO 14001, in: Production and Operations Management, vol. 10, no 3, p. 343-358.

DELMAS M., RUSSO M. V., MONTES‐SANCHO M. J., 2007, Deregulation and Environmental Differentiation in the Electric Utility Industry, in: Strategic Management Journal, vol. 28, no 2, p. 189-209.

DIMAGGIO P. J., POWELL W. W., 1983, The Iron Cage Revisited, in: American Sociological Review, vol. 48, no 2, p. 147-160.

DOWLING J., PFEFFER J., 1975, Organizational Legitimacy: Social Values and Organizational Behavior, in: Pacific Sociological Review, vol. 18, no 1, p. 122-136.

DUNNING J. H., 1980, Toward an Eclectic Theory of International Production: Some Empirical Tests, in: Journal of International Business Studies, vol. 11, no 1, p. 9-31.

DUNNING J. H., 1988, The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions, in: Journal of International Business Studies, vol. 19, no 1, p. 1-31.

DUNNING J. H., 2001, The Eclectic (OLI) Paradigm of International Production: Past, Present and Future, in: International Journal of the Economics of Business, vol. 8, no 2, p. 173-190.

EISENHARDT K. M., MARTIN J. A., 2000, Dynamic Capabilities: What Are They?, in: Strategic Management Journal, vol. 21, no 10-11, p. 1105-1121.

FAHY J., 2002, A Resource-Based Analysis of Sustainable Competitive Advantage in a Global Environment, in: International Business Review, vol. 11, no 1, p. 57-77.

HAKSEVER C., CHAGANTI R., COOK R. G., 2004, A Model of Value Creation: Journal of Business Ethics, vol. 49, no 3, p. 295-307.

HUMPHREYS P., MCIVOR R., CHAN F., 2003, Using Case-Based Reasoning to Evaluate Supplier Environmental Management Performance, in: Expert Systems with Applications, vol. 25, no 2, p. 141-153.

HUSTED B. W., ALLEN D. B., 2006, Corporate Social Responsibility in the Multinational Enterprise: Strategic and Institutional Approaches, in: Journal of International Business Studies, vol. 37, no 6, p. 838-849.

KAPLAN S. E., RULAND R. G., 1991, Positive Theory, Rationality and Accounting Regulation, in: Critical Perspectives on Accounting, vol. 2, no 4, p. 361-374.

KOLK A., PINKSE J., 2008, A Perspective on Multinational Enterprises and Climate Change: Learning from ‘An Inconvenient Truth’?, in: Journal of International Business Studies, vol. 39, no 8, p. 1359-1378.

KOLK A., VAN TULDER R., 2010, International Business, Corporate Social Responsibility and Sustain. Develop., in: International Business Review, vol. 19, no 2, p. 119-125.

LEE V.-H., OOI K.-B., CHONG A. Y.-L., SEOW C., 2014, Creating Technological Innovation Via Green Supply Chain Management: An Empirical Analysis, in: Expert Systems with Applications, vol. 41, no 16, p. 6983-6994.

LIU Y., 2009, Investigating External Environmental Pressure on Firms and Their Behavior in Yangtze River Delta of China, in: Journal of Cleaner Production, vol. 17, no 16, p. 1480-1486.

LOGSDON J. M., WOOD D. J., 2005, Global Business Citizenship and Voluntary Codes of Ethical Conduct, in: Journal of Business Ethics, vol. 59, no 1-2, p. 55-67.

LOW P., YEATS A., 1992, Do ‘Dirty’ Industries Migrate? In: International Trade and the Environment, ed. Low P., WB, Washington.

LUO Y., 2006, Political Behavior, Social Responsibility, and Perceived Corruption: A Structuration Perspective, in: Journal of International Business Studies, vol. 37, no 6, p. 747-766.

MEYER J. W., ROWAN B., 1977, Institutionalized Organizations: Formal Structure as Myth and Ceremony, in: American Journal of Sociology, vol. 83, no 2, p. 340-363.

MONTEALEGRE R., 2002, A Process Model of Capability Development: Lessons from the Electronic Commerce Strategy at Bolsa De Valores De Guayaquil, in: Organization Science, vol. 13, no 5, p. 514-531.

MOON S. g., 2008, Corporate Environmental Behaviors in Voluntary Programs: Does Timing Matter?, in: Social Science Quarterly, vol. 89, no 5, p. 1102-1120.

OLIVER C., 1991, Strategic Responses to Institutional Processes, in: The Academy of Management Review, vol. 16, no 1, p. 145-179.

OLIVER C., 1997, Sustainable Competitive Advantage: Combining Institutional and Resource-Based Views, in: Strategic Management Journal, vol. 18, no 9, p. 697-713.

ORSATO R. J., 2006, Competitive Environmental Strategies: When Does It Pay to Be Green?, in: California Management Review, vol. 48, no 2, p. 127-143.

PARSONS R., LACEY J., MOFFAT K., 2014, Maintaining Legitimacy of a Contested Practice: How the Minerals Industry Understands Its ‘Social Licence to Operate’, in: Resources Policy, vol. 41, p. 83-90.

PENG G. Z., BEAMISH P. W., 2007, Evolving FDI Legitimacy and Strategic Choice of Japanese Subsidiaries in China, in: Management and Organization Review, vol. 3, no 3, p. 373-396.

PENG M. W., WANG D. Y., JIANG Y., 2008, An Institution-Based View of International Business Strategy: A Focus on Emerging Economies, in: Journal of International Business Studies, vol. 39, no 5, p. 920-936.

PORTER M. E., VAN DER LINDE C., 1995, Green and Competitive, in: Harvard Business Review, vol. 73, no 5, p. 120-134.

PRAHALAD C. K., HAMEL G., 1990, The Core Competence of the Corporation, in: Harvard Business Review, vol. 68, no 3, p. 79-91.

RAMACHANDRAN J., PANT A., 2010, The Liabilities of Origin: An Emerging Economy Perspective on the Costs of Doing Business Abroad, in: Advances in International Management, vol. 23, no, p. 231-265.

RUGMAN A. M., VERBEKE A., 1998a, Corporate Strategies and Environmental Regulations: An Organizing Framework, in: Strategic Management Journal, vol. 19, no 4, p. 363-375.

RUGMAN A. M., VERBEKE A., 1998b, Corporate Strategy and International Environmental Policy, in: Journal of International Business Studies, vol. 29, no 4, p. 819-833.

RYDZEWSKI P., 2013, The Implementation of Sustainable Development Vs. Environmental Attitudes in International Comparative Studies, in: Problemy Ekorozwoju/Problems of Sustainable Development, vol. 8, no 1, p. 125-137.

SARKAR R., 2008, Public Policy and Corporate Environmental Behaviour: A Broader View, in: Corporate Social Responsibility and Environmental Management, vol. 15, no 5, p. 281-297.

SHARFMAN M. P., SHAFT T. M., TIHANYI L., 2004, A Model of the Global and Institutional Antecedents of High-Level Corporate Environmental Performance, in: Business & Society, vol. 43, no 1, p. 6-36.

SHARMA S., VREDENBURG H., 1998, Proactive Corporate Environmental Strategy and the Development of Competitively Valuable Organizational Capabilities, in: Strategic Management Journal, vol. 19, no 8, p. 729-753.

SHRIVASTAVA P., 1995a, Environmental Technologies and Competitive Advantage, in: Strategic Management Journal, vol. 16, no, p. 183-200.

SHRIVASTAVA P., 1995b, The Role of Corporations in Achieving Ecological Sustainability, in: The Academy of Management Review, vol. 20, no 4, p. 936-960.

STEG L., VLEK C., 2009, Encouraging Pro-Environmental Behaviour: An Integrative Review and Research Agenda, in: Journal of Environmental Psychology, vol. 29, no 3, p. 309-317.

STRIKE V. M., GAO J., BANSAL P., 2006, Being Good While Being Bad: Social Responsibility and the International Diversification of Us Firms, in: Journal of International Business Studies, vol. 37, no 6, p. 850-862.

SUCHMAN M. C., 1995, Managing Legitimacy: Strategic and Institutional Approaches, in: Academy of Management Review, vol. 20, no 3, p. 571-610.

TEECE D. J., 2007, Explicating Dynamic Capabilities: The Nature and Microfoundations of (Sustainable) Enterprise Performance, in: Strategic Management Journal, vol. 28, no 13, p. 1319-1350.

TEECE D. J., PISANO G., SHUEN A., 1997, Dynamic Capabilities and Strategic Management, in: Strategic Management Journal, vol. 18, no 7, p. 509-533.

TIAN X., 2007, Accounting for Sources of Fdi Technology Spillovers: Evidence from China, in: Journal of International Business Studies, vol. 38, no 1, p. 147-159.

WCED, 1987, Our Common Future, Oxford University Press, New York.

WEI Y., LIU X., 2006, Productivity Spillovers from R&D, Exports and Fdi in China's Manufacturing Sector, in: Journal of International Business Studies, vol. 37, no 4, p. 544-557.

WERNERFELT B., 1984, A Resource-Based View of the Firm, in: Strategic Management Journal, vol. 5, no 2, p. 171-180.

Shan, M., You, J., Wang, Y., & Liu, H. (2015). A Process Model of Building Sustainable Competitive Advantage for Multinational Enterprises: An Empirical Case Study. Problemy Ekorozwoju Problems of Sustainable Development, 10(1), 67–78. Retrieved from https://ph.pollub.pl/index.php/preko/article/view/4929

Downloads

Download data is not yet available.

A Process Model of Building Sustainable Competitive Advantage for Multinational Enterprises: An Empirical Case Study

Issue Vol. 10 No. 1 (2015)

Archives

Authors

Abstract

Keywords:

References

License

Downloads

Article Sidebar

Issue Vol. 10 No. 1 (2015)

Archives

Main Article Content

Authors

Abstract

Keywords:

References

Article Details

License

Downloads