Influence of environmental strategy and management control on environmental and economic performance

Abstract

This study aims to explore the role of eco-controls in translating competitive environmental strategic intents into eco-practices, as well as the associations between eco-practices and environmental and economic performance. A web-based survey was used to collect data from 151 Thai manufacturing firms from September to November 2020. Structural Equation Modeling (SEM) was employed for data analysis. The findings from the study suggest that firms pursuing predominantly eco-efficiency intent, firms pursuing predominantly eco-branding intent, and firms pursuing both eco-efficiency intent and eco-branding intent at the same degree, tend to adopt more bureaucratic forms of eco-control regardless of their environmental strategic intents. In addition, the strategic alignment of eco-production practices fully mediates the relationship between eco-controls and eco-production practices, while the strategic alignment of eco-marketing practices fully mediates the relationship between eco-controls and eco-marketing practices. The study also revealed the direct effect of eco-marketing practices and the indirect effect of eco-production practices on environmental and economic performance. The implication for firms is that more bureaucratic forms of eco-control such as action control, formal control, and tight control are recommended to create a strategic alignment of eco-practices, which in turn, lead to sustainable competitive advantage.