Enhancing corporate sustainable development: Organizational learning, social ties, and environmental strategies

Abstract

AbstractEnvironmental strategies—reactive environmental strategy (RES) and proactive environmental strategy (PES)—emerged as an effective tool for firms to respond to various stakeholders' pressures and mounting environmental issues. Despite their vital role, scant studies have examined how and why firms facing the same institutional environment adopt heterogonous, instead of homogeneous, strategies for achieving corporate sustainable development. To fill this research gap, this study anchored to resource dependence theory investigates how organizational learning (both exploitative and explorative) and social ties (both political and business) independently and interactively affect the adoption of environmental strategies. Using a sample of 272 Chinese firms, the data are analyzed through the SPSS 21, and the proposed hypotheses are tested through moderated hierarchical regression analyses. The findings reveal that firms that engage in exploitative learning tend to adopt RES rather than PES, whereas firms that engage in explorative learning are more likely to adopt PES as opposed to RES. Moreover, firms that are involved in exploitative learning benefit to a greater extent from political ties than from business ties as a means of adopting RES, whereas firms that engage in explorative learning benefit to a greater extent from business ties than from political ties to adopt RES. Our study adds value to the environmental management and strategy literature by clarifying the underlying mechanisms through which firms adopt distinct environmental strategies.