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Sustainability 2017, 9(7), 1108; doi:10.3390/su9071108

Manager’s Dilemma: Stockholders’ and Consumers’ Responses to Corporate Environmental Efforts

1
Korea Advanced Institute of Science and Technlogy, Global Information and Telecommunication Technology Program, Munji-ro, Yuseong-gu, Daejeon 34051, Korea
2
Korea Advanced Institute of Science and Technology, College of Business, School of Business and Technology Management, Daehak-ro, Yuseong-gu, Daejeon 34141, Korea
*
Author to whom correspondence should be addressed.
Academic Editor: Fabio Carlucci
Received: 23 May 2017 / Revised: 22 June 2017 / Accepted: 23 June 2017 / Published: 26 June 2017
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
View Full-Text   |   Download PDF [240 KB, uploaded 26 June 2017]

Abstract

This study aims to reveal that different stakeholders have different environmental preferences by demonstrating the managers’ dilemma of selecting an appropriate environmental strategy to achieve firms’ corporate goals. It analyzes the effects of firms’ efforts in environmental impact through actual environmental practices and environmental considerations in environmental management on stockholders’ and consumers’ responses by using the Newsweek Green Rankings 2012 for large US-based firms. The study uses the event study methodology and the ordinary least squares multivariate regression model conditioned with relevant firm and industry-specific characteristics. The results indicate that both stockholders and consumers appreciate corporate efforts in reducing environmental damage; however, consumers exhibit a significant and negative response against firms’ environmental management efforts. The conflicting results provide valuable insights into the alignment of environmental efforts for developing core competencies that lead firms toward sustainability. Further, this research makes a valuable contribution to the existing literature and provides guidelines for the formulation of public policies that encourage corporate environmental efforts to ensure simultaneous development of business and society. View Full-Text
Keywords: corporate environmental performance; creating shared value; stakeholder; sustainable development; stockholder expectation; consumer response corporate environmental performance; creating shared value; stakeholder; sustainable development; stockholder expectation; consumer response
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Yadav, P.L.; Han, S.H.; Kim, H. Manager’s Dilemma: Stockholders’ and Consumers’ Responses to Corporate Environmental Efforts. Sustainability 2017, 9, 1108.

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