presentation of an article "Challenges of the green imperative....a natural resource-based approach toward environmental orientation-business performance relationship." by bulent and lucie.

1. CHALLENGES OF THE “GREEN
IMPERATIVE”: A NATURAL
RESOURCE-BASED APPROACH
TO THE ENVIRONMENTAL
ORIENTATION-BUSINESS
PERFORMANCE RELATIONSHIP
Bulent Menguc, Lucie K.Ozanne

2. Group members:
Farhan Ahmad
Abdul Salam
Mubarak Hussian
Waqas Ahmad

3. Core idea of article
 Drawing on the natural-resource-based view
(NBRV) of the firm, the authors test a model of
the impact of the higher order construct (CSR,
Entrepreneurship, Commitment to natural
environment) of natural environmental
orientation (NEO) on firm performance
(profitability, sale growth and market share).

4. Introduction
 Due to overpopulation, alarming global
environmental issues, increasing
industrialization, and the loss of the threatened
habitats and species have threatened the
business community and the current practices.
 Thus, not only must the business community
face the challenges of this green imperative
but they must also capture the resources and
develop the skills and capabilities to remain
competitive in this new, dynamic and green
environment.

5.  Many scholars have proposed a variety of
concepts to capture this phenomenon (the
challenges posed by the natural environment)
such as green orientation,enviropreneurial
marketing,eco-emarketing orientation and
corporate environmentalism etc.
 But the literature in this area lacks strong
theoretical grounding.

6. Purpose of this Study
To propose a
higher order
construct of
natural
environmental
orientation (NEO).
Drawing on NRB
theory,
researchers argue
that these
capabilities will
lead to competitive
advantage
This article
hypothesizes and
tests the
relationship b/w
NEO and firm
performance.
Entrepreneurship, CSR
and commitment to
natural environment
Through
Empirical
Evidence

7. An overview of the NRBV (natural resource
based view)
 Researchers consider the NRBV of the firm as
theoretical foundation.
 RBV suggests that it is a firms bundle of
resources rather than a product deployment of
those resources that determines a firm’s
competitive position.
 Thus, the NRBV of the firm is an adaption of
the RBV of the firm, made necessary because
of the demands imposed by natural
environment.

8. The green imperative
 Complex, inter-related nature of environmental
problems has challenged the business world…
compelling them to response with innovative
answers and strategies apart from
environmental regulations.
 Those responses include reducing waste and
emissions, reducing and recycling solid waste,
conserving energy and reducing business
impacts on eco-systems.

9. Natural environmental
orientation(NEO) and its components
 Researchers have identified and proposed a
high order construct of NEO that is composed
of three core themes /first order factors
namely:
 Entrepreneurship.
 CSR.
 Commitment to the natural environment.
These resources have the capacity to transform the
org into a natural environmentally oriented
organization that in return will increase
organization’s performance.

10. Theoretical Background and
hypothesis

11. Conceptual framework
 Drew on and extended Hart’s (1995) conceptual
framework of NRBV in the selection of 3
components of NEO.
Hart’s NEO
components
• Pollution
prevention.
• Product
stewardship.
• Sustainable
development.
This article
• CSR
• Entrepreneurship.
• Environmental
commitment.

12. Conceptual framework
 Entrepreneurship defined.
 Pro-activeness + risk + innovation.
 Reasons for selecting Entrepreneurship.
 CSR defined.
 Reasons for selecting CSR.
 Environmental commitment defined.

13. Hypothesis
 Hypothesis 1: NEO is a higher order construct
composed of three dimensions : a)
entrepreneurship, b) CSR, c) Environmental
commitment.
 Hypothesis 2: NEO will be related positively
to an org’s sales growth.
 Hypothesis 3: NEO will be related positively
to an org’s profit after tax.
 Hypothesis 4: NEO will be related positively
to an org’s market share.

14. Method
 Measure development.
 Entrepreneurship was measured with a 9-item,5
point scale (1= doesn’t describe the org, 5=
definitely describe the org).
 For CSR, CERES principles were utilized to
develop 10-item, 5-point scale (1= strongly
disagree, 5= strongly agree).
 Commitment to natural environment was
measured with 9-item,5-point scale model.

15.  Sample and data collection.
 485 Australian major manufacturing firm’s were
selected and questionnaires were sent with a
response rate of 29 %(140).
 Firms sectors were chemical/petroleum,
beverage, tobacco, basic metals, machinery,
textiles etc.
 75 % firms have an environmental market share
of 1-9 %.

16. Analysis and results
 Hypothesis were tested using a higher order path
analysis in LISREL 8.30.
 Entreprenuership,CSR, and commitment to
natural environment were significantly loaded on
the high order construct of NEO…thus supporting
hypothesis 1.
 NEO was found to be negatively and significantly
related to sales growth.
 NEO was found to be positively and significantly
related to profitability and market
share…supporting hypothesis 3 and 4.

17. Table 2

18. Table 1

19. Discussion and implications
 Relationship b/w NEO and selected
performance measures was significant and
positively related to firm’s profit and market
share except sales growth.
 Article’s results support the argument that
sound environmental practices can be
profitable, and help to set course for high
business performance i.e. market share, sales
growth in the long run, profitability.

20.  Explanation for negative relationship b/w NEO
and sales growth.
 Article is the first study to explicitly test Hart’s
(1995) theory of competitive advantage based
upon the firm’s relationship to natural
environment.
 Further, article results support the NRBV of the
firm.

21.  Commitment to the natural environment was
found to be the most important components in
the high order construct of NEO with
entrepreneurship and CSR next.

22. THANKYOU!