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E n v i r o n m e n t a l M a r k e t i n g S t r a t e g y

a n d F i r m P e r f o r m a n c e

E f f e c t s o n N e w P r o d u c t

P e r fo r m a n c e a n d M a r k e t S h a r e

W i ll ia m E B a k e r

S a n D i e g o S t a t e U n i v e r s i ty

J a m e s M S i n k u la

U n i v e r s it y o f V e r m o n t

R e c e n t s t u d i e s o n m a r k e t i n g a n d t h e n a t u r a l e n v i ro n m e n t

h a v e c a l l e d f o r r e s e a rc h t h a t l i nk s e n v i r o n m e n t a l m a r k e t -

i n g s t r a t e g i e s to t h e p e r f o r m a n c e o f th e f i r m . T h i s r e s e a r c h

o p e r a t i o n a l i z e s t h e e n v i r o p r e n e u r i a l m a r k e t i n g ( E M ) c o n -

s t r u c t a n d e x a m i n e s i ts r e l a ti o n s h ip w i t h f i r m p e r f o r -

m a n c e . I t is t h e f i r s t e m p i r i c a l r e s e a r c h t o o p e r a t i o n a l i z e

t h e E M c o n s t r u c t . T h e n e w s c a l e , a l b e i t a f i r s t a t t e m p t ,

d e m o n s t r a t e s e n c o u r a g i n g p s y c h o m e t r i c p r o p e r t i e s . A c -

c o r d i n g t o t h e r e s o u r c e - b a s e d v i e w o f t h e f i r m , a r e s o u r c e

s u c h a s E M s h o u l d d i r e ct l y i n fl u e n c e f i n n s c a p a b i l it i es

( e.g ., n e w p r o d u c t d e v e l o p m e n t s u c c e s s ) b u t n o t c o m p e t i -

t i v e a d v a n t a g e ( e . g . , c h a n g e i n m a r k e t s h a r e ) . A n a t i o n -

w i d e s t u d y o f t o p - le v e l m a r k e t i n g m a n a g e r s s u p p o r t s t h i s

p e r s p e c t i v e . I n a d d i t i o n , a l t h o u g h m a r k e t t u r b u l e n c e a l s o

a f f ec t s n e w p r o d u c t d e v e l o p m e n t s u c c e ss , i t d o e s n o t h a v e

a n i m p a c t o n E M . T h i s s u g g e s ts t h a t E M fo r m a t i o n i s

d r i v e n b y i n t e r n a l r a t h e r t h a n e x t e r n a l f o r c e s .

K e y w o r d s :

env ironmenta l marke t ing s t ra tegy; env iropre-

neur ia l marke t ing; corporate env ironmenta l -

i s m ; n e w p r o d u c t s u c c e s s ; o r g a n i z a t i o n a l

p e r f o r m a n c e

H i s t o r ic a l ly , m a n a g e m e n t t h e o r y h a s v i e w e d th e e n v i -

r o n m e n t a s c o n s i s t i n g o f le g a l , p o l i ti c a l , e c o n o m i c ,

J o u r n a l o f th e A c a d e m y o f M a r k e t i n g S c i e n c e

V o l u m e

33, No. 4, pages 461-475.

DOI: 10.1177/0092070305276119

Copy righ t 9 2005 by

A c a d e m y o f

Ma rket ing Science .

s o c i a l , a n d t e c h n i c a l e l e m e n t s . H a r t ( 1 9 9 5 ) a r g u e d t h a t t h is

c o n s t r u a l i s n a r r o w b e c a u s e i t i g n o r e s i s s u e s p e r t a i n i n g

t o t h e w e l l - b e i n g o f , a n d c o n s t r a i n t s i m p o s e d b y , t h e n a t u -

r a l e n v i r o n m e n t . U l t i m a t e l y , s u c h c o n s t r a i n t s c o u l d r e n d e r

s o m e p r o d u c t - m a r k e t p o l i c i e s a n d s t r a t e g i e s u n s u s t a i n -

a b l e . T h e o p i n i o n t h a t t h e c u r r e n t e x p a n s i o n i s t p a r a d i g m

( K i n g 1 9 9 5 ; S t o n e a n d W a s h i n g t o n - S m i t h 2 0 0 2 ) o f

p r o d u c t - m a r k e t i n g s t r a te g y m a y n o t b e s u s t a i n a b le i n d e f i -

n i t e l y i s n o t n e w ( H o f f m a n a n d E h r e n f e l d 1 9 9 8 ) . S o m e

f i r m s h a v e i m p l e m e n t e d c a r e f u l l y d e s i g n e d e n v i r o n m e n -

t a l m a r k e t i n g s t r a t e g i e s t h a t h a v e l e d t o c o m p e t i t i v e a d v a n -

t a g e i n p r o d u c t - m a r k e t n i c h e s . C o n s i d e r t h e f o l l o w i n g

e x a m p l e :

N o v o N o r d i s k , t h e f a s t - g ro w i n g D a n i s h p h a r m a c e u -

t i c a l a n d b i o t e c h n o l o g y c o m p a n y , h a s b e e n a p i o -

n e e r in g r e e n c h e m i s t r y , t h a t i s , f i n d i n g b i o l o g i c a l

s u b s t i tu t e s f o r s y n t h e ti c c h e m i c a l s . N o v o ' s c o m m i t -

m e n t t o t h i s t e c h n o l o g y d u r i n g t h e p a s t tw o d e c a d e s

( b e f o r e s y n t h e ti c c h e m i c a l s w e r e w i d e l y p e r c e i v e d

a s e n v i ro n m e n t a l l y u n a c c e p t a b l e ) h a s n o w p l a c e d i t

i n th e le a d ( w i t h a 5 0 % s h a r e ) i n t h e e m e r ~ n g w o r l d

m a r k e t f o r i n d u s t ri a l e n z y m e s a n d b i o l o g i c a l i n s e c -

t i c i d e s ; i t i s w e l l p o s i t i o n e d f o r e n t r y i n t o d e v e l o p -

i n g c o u n t r i e s . ( H a r t 1 9 9 5 : 9 9 8 )

I n t h e f u t u r e , t h e r e a r e l i k e l y t o b e i n c r e a s i n g c i r c u m -

s t a n c e s w h e r e a d a p t in g t o th e c o n s t r a in t s i m p o s e d b y t h e

n a t u r a l e n v i r o n m e n t w i l l b e n e c e s s a r y f o r s u r v i v a l a n d

p r o s p e r i t y . Y e t, l i tt l e e m p i r i c a l w o r k h a s b e e n d o n e i n m a r -

k e t i n g t h a t e x a m i n e s e n v i r o n m e n t a l m a r k e t i n g s t r at e g y a s

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4 6 2 J O U R N A L O F T H E A C A D E M Y O F M A R K E T I N G S C I E N C E F A L L 2 00 5

F I G U R E

Meas urem ent and St ruc tura l R e la t ionsh ips

nv ironmen t

as

pponunily

"fl

32

E nv iro nm e n v i r o p r e n e u r i P r o d u c t

a s ~ M a r k e t i n g ~ S u c c e s s M a r k e t

Comrrutment J

~ . / ~ 9 9

S h a r e

nv ironmen t as

Rig h t e o u s n e s s

y3

y4

y

y6

M a r k e t

T u r b u l e n c e

NOT E : B o ld

l i n e s r e p r e s e n t

expecta t ion of a s ign if ican t re la t ionsh ip . Enviropreneur ia l market ing is a seco nd-order construct wi th me asurem ent paths rep-

rese nted by ~q, Y2, and yy

i t re la te s to f i rm pe r form a nce and com pe t i t ive advan tage

( B a n e r j e e , I y e r , a n d K a s h y a p 2 0 0 3 ; S h a r m a a n d

Vredenburg 1998) . Wh i le som e trad i t iona l m ana gem e nt

s c h o l a r s ( M a r c h a n d S i m o n 1 9 5 8 ) v i e w c o n s t r a i n t s

brought on by the na tura l env i ronm ent a s s im ply a sub-

c la s s o f the l a rge r p rob lem of e f fec t ivenes s (i .e . , c rea ting

flexible , eff ic ient s t ra tegies that can thrive in changing

m arke t s ) , o the rs v iew i t s om is s ion a s inadequa te (Har t

1995).

As F igur e 1 i l lus tra tes , our purpo se in this art ic le is to

advance the p roces s o f em pi r ica l ly in tegra ting an env i ron-

m enta l pe rspec t ive in to the m arke t ing l i t e ra tu re by exam -

in ing the ro le o f env i ropreneur ia l m arke t ing (EM) on f i rm

perform ance and to a s ses s the ex ten t to which EM i s cu l t i-

va ted by ex te rna l m ark e t p r io r it i e s o r by e lem ents in t r insic

to the f i rm (e . g ., cu l tu re ) . Th i s en ta i ls the deve lopm ent o f

an ope ra t iona l i za t ion o f the EM cons t ruc t . The re source -

based v iew o f the fu 'm (RBV; Barney 1991; Werne r fe l t

1984) is used as a theo ret ical framew ork to tes t the effect

o f EM on new p roduc t succes s and change in m arke t sha re .

Env i ropreneur ia l Marke t ing

Num erous m anagem ent s cho la rs have begun to a rgue

tha t few of our pas t econom ic , o rgan iza t iona l , and m arke t -

ing p r inc ip le s can pe rs i s t fo r ve ry long in to the fu tu re

because they a re s im ply no t env i ronm enta l ly sus ta inab le

(Gladwin , K enne l ly , and Krause 1995; Har t 1995; King

1995; Shrivas tava 1995). Ou r intent is not to make the case

that the earth ' s resources are s t ra ined. No r is i t to belabor

the im por tance o f corpora te c i t i zensh ip a s key in sus ta in -

ing and a l loca t ing the s ca rce phys ica l re sources o f our

planet (O'Callaghan 1996; P iasecki 1995). This argu-

m ent , we m a in ta in , i s we l l known and gene ra l ly accep ted .

I t i s a l ready re la t ive ly com m o n for f i rm s to cu l t iva te m ar-

ke t n iches tha t a re bo th p rof i t ab le and env i ronm enta l ly

respons ib le (Graham an d Havl ick 1999). Ho wever , i t m a y

be d i f f i cu l t to reach green cus tom ers because m any have

a negat ive a t t itude toward bu s iness and toward adv ert isers

(Z inkhan and Car l son 1995) . S t i ll , m any f i rm s a re ab le to

ba lance soc ie ta l conce rns wi th m arke t oppor tun i t ie s . They

are ab le to l eve rage env i ronm enta l i s sues a s m arke t ing

propos i t ions fo r t ransac t iona l exchanges (Meno n and

M eno n 1997:57). In som e cases , this type of behavio r is

m ere ly a ca lcu la ted re sponse to ex te rna l p ressure . In o the r

cases , i t re f l ec t s cu l tu ra l va lues tha t inc lude goo d co rpo-

rate (and world) c i t izenship. In the la t ter case , the des ire

for p rof i t i s t em pered by the des i re to do the r igh t th ing .

Managers in such f i rm s m igh t be desc r ibed a s en t repre -

neurs w ho a re , a t the s am e t im e , env i ronm enta l advoca tes .

I t i s our pos i t ion tha t t rue EM i s no t m ani fe s t s im ply by a

recogni t ion o f the im por tance o f env i ronm enta l conce rns

and/or a need to re spond to them bu t by a com m i tm ent to

deve lop m arke t ing s t ra teg ie s tha t ba lance o rgan iza t iona l

and socie ta l concerns .

Cons ide r Green M ounta in Coffee Roas te rs (GMCR ), a

purveyo r o f roas ted cof fee beans f rom a round the wor ld .

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Baker, Sinkula ENVIRONMENTALMARKETINGSTRATEGY 463

G M C R h a s a p r o c u r e m e n t s y s t e m b u i lt o n a p r in c i p le o f

f a i r tr ade . T h i s i s e s sen t i a l ly a p r i ce f l oor pa i d t o f a r me r s

w h o g r o w a n d h a r v e s t c o f fe e b e an s ( S t e c k l o w a n d W h i t e

2004) and gu a r an t ees t ha t f a r mer s a r e pa i d a f a i r p r i ce f o r

t he i r ha r ves t . F a i r t r ade a l l ows t hem t o con t i nue f a r m-

i ng and exp and t he i r capac i t y and s t anda r d o f l iv i ng whi l e

ma i n t a i n i ng t he qua l i t y o f f r ag i l e ecosys t ems . I t a l so

secur es a l ong t e r m - sup p l y o f t he h i ghes t qua li t y , o r gan i -

c a l ly g r o w n b e a n s f o r G M C R . G M C R ' s e n v i r o p re n e u r i al

f ocus i s a un i que r e sour ce t ha t has a l l owed t hem t o cu l ti -

va t e spec i f i c p r oduc t deve l opment capab i l i t i e s , t he r eby

succes s f u l l y deve l op i ng en t i r e l y un i que p r oduc t l i nes o f

cof f ee . I n t he i r mar ke t i ng , t hey p r omot e t he F a i r T r ade

l abe l a s a gua r an t ee o f p r emi um t a s te and qua l i t y p r oduc-

t i on . GM C R pr o v i des an exce l l en t examp l e o f a f unc t i ona l

un i on be t ween cor por a t e and soc i e t a l i n te r e s ts .

M o r e t han a decade ago , Var ada ra j an ( 1992) ca l l ed f o r

env i r opr en eur sh i p a s an idea whose ti me has com e ( p .

342) . Accor d i ng l y , he de f i ned t he t e r m

enviropreneurial

ma rke t i n g a s env i r onm ent a l l y - f r i end l y mar ke t i ng p r ac -

t ices , s t ra tegies , and tact ics ini t ia ted by a f i rm in the realm

of mar ke t i ng : ( 1 ) t o ach i eve compe t i t i ve d i f f e r en t i a t i on

advan t age f o r t he f i r m ' s o f f e r i ngs v i s - a - v i s compe t i t o r s '

o f f e r i ngs , and ( 2 ) i n f l uenced by t he f i r m ' s v i ews on t he

du t i e s and r e spons i b i l i ti e s o f a cor por a t e c i ti zen ( p. 342) .

S ubsequen t l y , M e non and M enon ( 1997) a r gued tha t en -

v i r onm ent a l conce r ns had begun t o r e shape the l andscape

O

i n whi ch g l oba l o r gan l zau ons compe t e ( p . 51) . Bu i l d i ng

on Var ada r a j an ' s p r emi se , t hey se t ou t t o concep t ua l i ze

and r e f i ne t he na t u r e and sco pe o f env i r opr eneur i a l mar -

ke t i ng ( E M ) as t ha t whi ch emphas i zes t he need fo r an

en t r epr eneur i a l appr oach i n me l d i ng eco l og i ca l conce r ns

and mar ke t i ng s t ra t egy ob j ec t i ves ( M enon and M e non

1997: 52) . T hose adop t i ng such an appr oach woul d see

env i r on men t a l i ssues a s m ar ke t oppor t un i ti e s , be w i l li ng

t o t ake r isk , make com mi t me nt s ( bo t h f i nanc i a l and non f i -

nanc ial ) that are substant ia l and vis ible , and posse ss a fun-

dam ental des i re to do the r ight thing. In real ity , EM does not

ex i s t i n i so l a t ion bu t i ns t ead f l ows f r om an organiza t ion

wid e

phi l osophy t ha t p l aces t he phys i ca l env i r onment

amo ng t he t op conce r n s and po t en t i a l d i ff e r en t i a ti ng f ac -

t o r s o f t he f i r m. However , we con t end t ha t t he env i r on-

m e n t a l r e s p o n s i v e n e s s o f th e m a r k e t in g d e p a r t m e n t

r e f l ec t s t he b r oade r v i s i on o f t he f i rm. O f cour se , i ns t i tu t -

i ng an i n i ti a t ive o f un i l a t er a l env i r onm ent a l r e spons i ve -

nes s m eans t ak ing r i sk ; one t ha t cou l d r e su l t in succes s o r

in fa i lure . At i ssue i s how to adept ly tap the capabi l i t i es

t ha t acc r ue f r om t he cu l t i va t ion o f E M as a un i que r e sour ce

of t he f i rm.

The extant l i t era ture on EM suggests to us that i t i s a

mul t i d i mens i ona l cons t r uc t , one t ha t i s bes t v i ewed as a

h i ghe r - o r de r cons t r uc t t ha t g i ves r i se to a domai n o f

subcons t r uc t s . Our go a l i s t o d raw f r om t he dom ai n o f E M

subcons t r uc t s t ha t r epr esen t t he me l d i ng o f eco l og i ca l

conc e r ns and mar ke t i ng s t ra t egy ob j ec ti ves i n a comm i t -

t ed , r e spons i b l e , and p r oac t i ve f a sh i on . T he r e f o r e , we

adopt a pe r spec t i ve o f E M as env i r onm ent a s com mi t -

O

m e n t , e n v i r o n m e n t a s n = h t e o u s n e ss , a n d e n v i r o n m e n t

as oppor t un i t y a s the cor e o f our E M oper a t i ona l i za ti on .

As the re ader wi l l see la ter , thi s goal guides the const ru c-

t io n o f o u r m e a s u r e m e n t m o d e l . B e f o r e e la b o r a ti n g o n o u r

concep t ua l mode l , however , we w oul d l i ke to b r i e f l y d is -

cus s som e r e l a t ed concep t s and how t hey d i f f e r f r om E M .

Corporate Envi ronm ental ism Envi ronm ental

Or ien tat ion and Envi ronm ental S t rategy

I mpr es s i ve p r ogr es s has been mad e i n in t egr a t ing and

r ecogn i z i ng t he i m por t ance o f t he na tu r a l env i r onmen t i n

mar ke t i ng s t r a tegy dec i s i on m aki ng ( G l adwi n e t a l . 1995 ;

Har t 1995 ; K i ng 1995 ; S ha r ma and Vr edenbur g 1998 ;

Shr ivas tav a 1995; Varadarajan 1992). As i s typical when

deve l op i ng a r e sea r ch domai n , however , many de f i n i t ions

of t e r ms and cons t r uc t s a r i s e . T he i n t r oduc t i on o f t he na t u -

r a l env i r onm ent i n t o d i scus s ions o f mar ke t i ng s t r a t egy i s

no exce p t i on . Our i n t en t is no t t o r e so l ve a l l t he i ssues t ha t

accom pany com pe t i ng de f i n i t i ons . It is t o p r ov i de a wor k-

i ng under s t and i ng o f the t e r mi no l og y so tha t we may com -

par e , con t r a s t, and u l t i ma t e l y pos i ti on E M i n t he con t ex t o f

r e l a t ed cons t r uc ts . T hr ee such cons t r uc t s a r e ( 1 ) co r por a t e

env i r onm ent a l i sm, ( 2 ) env i r onm ent a l o r i en ta t i on , and ( 3 )

env i r onm ent a l s t r a tegy f ocus ( B aner j ee 2002) .

C o r p o r a t e e n v i r o n m e n t a l i s m is d e f i n e d a s t h e

o r g a n i z a t i o n - w i d e r e c o g n i t i o n o f t h e l e g i t i m a c y a n d

i mpor t an ce o f t he b i ophys i ca l env i r onm ent in t he f o r mul a -

t i on o f o r gan i za t i on s t r a t egy , and t he i n t egr a t ion o f env i -

r onment a l i s sues i n t o t he s t r a t eg i c p l ann i ng p r oces s

( Baner j ee 20 02 : 18 1) . Af t e r a me t i cu l ous s ea r ch o f t he l it -

e r a t u r e , Bane r j ee ( 2002) an d B aner j ee e t a l. ( 2003) f ound

t w o p r i m a r y c o m p o n e n t s o f c o r p o r a t e e n v i r o nm e n t a l is m .

T h e s e c a n b e d e s c r i b e d a s e n v i r o n m e n t a l o r i e n t a t i o n

( i n t e rna l and ex t e r na l ) and env i r onm ent a l s t ra t egy f ocus

( cor por a t e and m ar ke t i ng) .

E nv i r on ment a l o r i en t a t ion r e f l ec t s the ex t en t t o whi ch

e m p l o y e e s recognize t he l eg i t i macy o f env i r onment a l

i ssues and the impact that the f i rm has on those i ssues

( Baner j ee 2002) . I n t e r na l env i r onment a l o r i en t a t ion r e f e r s

t o t he env i r onm ent a l l y r e la t ed va l ues and s t anda r ds he l d

by o r gan i za t i ons . T h i s o r i en t a t i on can be f o r ma l l y cod i -

f i ed i n mi s s i on s t a t ement s , po l i c ie s , and p r ocedur es , bu t i t

may a l so be i n f o r ma l l y expr es sed i n cor por a t e cu l t u r es

t h r ough em pl oye e nor ms and behav i o r s . E x te r na l env i r on-

ment a l o r i en t a t i on r e f l ec t s the need t o r e spond t o s t ake -

ho l de r s w i t h env i r onment a l conce r ns . T h i s o r i en t a t i on

r e l i e s on man ager s ' pe r cep t i ons o f whom t he s t akeho l de r s

a r e a s we l l as whi ch p r es s i ng env i r onm ent a l i s sues mer i t

r e sponse .

E nvi r onment a l s t r a t egy f ocus r e f l ec t s t he degr ee t o

whi ch env i r onm ent a l i s sues a r e i n t egr a t ed i n t o t he s t ra t e -

g i c p l ann i ng p r oces s ( Baner j ee 2002 ; Baner j ee e t a l .

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464 JOURNAL OF THE ACADEMY OF MARKETING SCIENCE FALL 2 5

2003). I t focuse s on

whe ther

m anagers cons ide r the env i -

ronm ent w hen m aking p lans . Th i s sense o f focus can be

de l inea ted and has been ope ra t iona l i zed a t the m arke t ing

s tra tegy or corporate level .

These p r io r cons t rua l s o f env i ronm enta l cons t ruc t s t e l l

us w he the r f i rm s recognize and in tegra te env i ronm enta l

conce rns in to s t ra teg ic dec i s ion m aking . EM focuses on

why

a t wha t

level

and to wha t

degree

m anagers re ly on

envi ronm enta l conce rns in the i r s t ra tegy fo rm ula t ion .

Cons ide r why . Marke te rs m igh t engage in EM because

they s ee a m arke t oppor tun i ty , because they a re m ere ly

com ply ing w i th the l aw, o r because they s ee i t a s the r igh t

th ing to do . Co ns ide r the l eve l a t which EM s t ra teg iz ing is

conduc ted . I t cou ld be done a t the corpora te o r the

func t iona l /d iv i s iona l leve l , by top m ana gem en t o r by m id-

l e v e l m a n a g e m e n t . C o n s i d e r d e g r e e . E n v i r o n m e n t a l

i s sues m ay en te r in to m arke t ing s t ra tegy deve lopm ent in

the fo rm o f com m i tm ents tha t a re i r reve rs ib le o r ones tha t

a re loose ly he ld . Envi ronm enta l s t ra tegy m ay re su l t in

inves tmen ts , f inancial and non financial , that are qui te sub-

s tant ia l or minima l . There is no guara ntee that these inves t-

m ents w i l l be v iew ed favorab ly by a l l o rgan iza tiona l

s takeholde rs . F or exam ple , Mathur and Mathur (2000)

found a nega t ive reac t ion by s tockholde rs (a d rop in m ar-

ke t va lue o f 3 . 14%) to ce r tain corpora te announcem ents o f

green m arke t ing ac t iv it i e s. In the i r s tudy , announ cem ents

for g reen prom ot iona l e f fo r t s p roduce [d] s ign i f i can t ly

n e g a t i v e s t o c k p r i c e r e a c t i o n s ( M a t h u r a n d M a t h u r

2000:193). As a re su l t , ce r t a in com m i tm ents m ay be m ade

vis ib le m ore than o the rs o r d i rec ted to d i f fe r ing s e t s o f

s takeholde rs. EM i s des igned to cap ture the s e t o f c i rcum -

s tances ou t l ined above . Above a l l , EM i s unde rs tood he re

to enco m pass p roac t ive , en trepreneur ia l ly g rounded , env i -

ronm en ta l m arke t ing s t ra tegy tha t does n o t ex i s t in i so la -

t ion bu t i s in f luenc ed by the f i rm ' s v iews on corpora te c i ti -

zenship (Varadarajan 1992) vis -h-vis i ts obl igat ion to

s takeholde rs. I t i s th i s com m i tm en t to the env i ronm ent (o r

lack the reof ) tha t we be l i eve de f ines the s t reng th (o r

weaknes s ) o f o rgan iza t ions ' EM e f for t s and i t s u l t im a te

in f luence on corp ora te behav ior .

C O N C E P T U L M O D E L N D H Y P O T H E S ES

E n v i r o n m e n t a l M a r k e t i n g S t r a te g y a n d

F i r m P e r f o r m a n c e

Theore t i ca l unde rp inn ings fo r our hypotheses rega rd-

ing EM and f i rm pe r form ance a re d rawn f rom bo th re -

source theory (Barney 1991; Werne r fe l t 1984) and the

em erg ing na tura l re source -based v iew of the f i rm (Har t

1995) . Mo re recen t ev idence tha t suppor ts our hypotheses

com es f rom a case s tu dy of the Canadian o i l and gas indus -

t ry . Here S h a rm a an d Vredenburg (1998:729) a rgued tha t

a s t ra tegy of be ing e nv i ronm enta l ly p roac t ive should be

viewe d as a key organ izat ional resource that is associa ted

wi th the em ergence o f un ique o rgan iza t iona l capab i li -

t i e s . . , which , in tu rn , were s een to have im pl ica tions fo r

f i rm com pe t i t ivenes s .

The re source -based v iew (R BV) of the f i rm proposes

tha t o rgan iza tiona l pe r form ance depends on organ iza t ion-

specif ic resources and capabil i t ies . RBV implies specif ic

pa th dependenc ies be tween re sources , capab i l i t i e s , and

f i rm pe r form ance . Hence , RB V takes the pe rspec tive tha t

va luab le , cos t ly to copy f i rm resources and capab i l i t ie s

prov ide the key sources o f sus ta inab le com pe t i tive advan-

tage (Ha rt 1995:986). R esource s can be tangible or intan-

gible , are valuab le and nonsubst i tutab le . They are usual ly

tac it , soc ia l ly com plex , and ra re. A ccord ing to RBV, f i rm

resources lead to capabi l i t ies , and capabil i t ies influence

f inn pe r fo rm ance (Barney 1991; W erne r fe l t 1984) . In cer -

ta in c ircumstan ces , i t is diff icul t to discern differences be-

tween capab i l i t i e s and pe r form ance . F or exam ple , new

product success is cons idered here as a capabi l i ty , but

som e m ight cons ide r i t a d im ens io n of f i rm pe r form ance .

Marketers have, natural ly, been highly interes ted in

how va r ious s t ra teg ie s and or ien ta t ions a f fec t com pany

per form ance . To c lea r ly addres s th i s i s sue , however ,

researchers and pract i t ioners a l ike must agree on accept-

ab le m easures o f pe r form ance . In un ders tand ing m arke t -

based pe r form ance m easures , the l i t e ra tu re revea l s th ree

them es : (1 ) wh i le the m a jor i ty o f pe r form ance m easures

are subject ive (self-report) , research sugges ts that subjec-

t ive pe rcep tions a re h igh ly cor re la ted wi th ob jec t ive m ea-

sures such a s re tu rn on inves tm ent (ROI) and s a le s g rowth

(Dess and Robinson 1984; Han , Kim and S r ivas tava

1998); (2) perf orm ance is a mu lt i faceted concept that

inc ludes d im ens ions o f e f fec t ivenes s , e f f i c iency , and

adap tab i l i ty (Walke r and Rueker t1987) ; and (3 ) pe r for -

m ance m easures tha t re f l ec t e f fec t ivenes s (as opposed to

adap tab i l i ty o r e f f i c iency) a re l ike ly to be m os t use fu l to

m anagers . Th e l a t t e r po in t s a re suppor ted b y Cla rk (2000)

who foun d tha t , in a su rvey of s en ior m arke t ing m anagers ,

' pe rcep t ions o f m arke t ing pe r form ance appea r m ul t id i -

m ens iona l bo th in t e rm s of the num b er o f m easures used

a n d t h e m e t h o d s o f e v a l u a t in g t h o se m e a s u r e s . . , o f a ll t h e

pe rspec tives , e f fec t ivenes s is the m os t im por tan t conce rn

of ma nag ers (p. 21).

Baker and S inkula ( fo r thcom ing) have recen t ly ana -

lyzed 40 em pi r ica l s tud ies tha t have exam ined the m arke t

or ien ta t ion-pe r form ance re la t ionsh ip . They show tha t

pe r form ance in these s tud ies i s m os t o f t en m easured wi th

se l f - repor t m easures o f new produc t succes s, p rof i t ab i li ty ,

o r m arke t sha re . However , i t is no t uncom m on to use m ea-

sures of ROI, sa les or sa les growth, and overal l perfor-

m ance a s ind ica to rs o f com pan y pe r form ance (Baker and

Sinku la 1999; Jaworski and Koh li 1993; S la ter and Narver

1994) . Th i s re sea rch uses chan ge in m arke t sha re a s an

ind ica to r o f f i rm pe r form ance . t Th i s m easure o f pe r for-

m ance was chosen no t on ly to rep l ica te p roven m easures

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Baker. Sinkula ENVIRONMENTALMARKETINGSTRATEGY 465

used in pas t research but a lso because Wa lker and Rue ker t

(1987:19) regard i t as a per form ance dim ension of pr imary

im por tance to top cor por a te and bus ines s un i t m anager s .

They a r gued tha t an ope r a t iona liza t ion of the succes s o f a

busines s ' products and p rogram s in re la t ion to those of its

com pe t i to r s in the m a r k e t . . , m easur ed by such it em s as

sa les g r owth in com par i son wi th tha t o f com pe t i to r s o r

changes in m ar ke t sha r e r epr esen t s an

ef fect iveness

dimension of per formance. As we s ta ted ear l ier , Clark

( 2000) f ound th i s d im ens ion o f m os t im por tance to m an-

agers . S ince, by d ef ini t ion, changes in mark et share repre-

sen t im pr oving or dec l in ing pe r f or m ance r e la t ive to com -

peti tors , i t inherent ly ref lects the a t ta inment or loss of

com pe t i t ive advan tage .

Of cour se , o r gan iza t iona l pe r f or m ance can be con-

s trued on a var ie ty of dimen sions , and no s ingle resource

can be expec ted to have the s am e e f f ec t on a l l d im ens ions .

We me ntion ed new product success earl ier . New p roduct

success represents an

a d a p ta b i l i t y

dim ens ion , one tha t

ref lects the business ' success in respondin g over t ime to

changing condi t ions and oppor tun i t i e s in the env i r on-

me nt (Walker and Rueker t 1987:19) . Clear ly, adaptabi l-

i ty i s a d i f f e r en t d im ens ion of o r gan iza t iona l succes s than

is ef fect iveness . Hence, we concur with the resource-

based v iew in t reat ing new product success as a capabil i ty

r a the r than a m easur e o f o r gan iza t iona l pe rf or m ance .

His to r ica l ly , m anagem ent theor i s t s have v iewed the

external environment as including legal , pol i t ical , eco-

nom ic, socia l, and technical e lements . Har t (1995) argued

that the omiss ion of the natural environment in s tra tegic

del iberat ions has rendered exis t ing theory regarding the

sources of competi t ive advantage as incomplete . He in-

se r ted the na tur a l env i r onm ent a s an e lem ent o f RBV

(which he cal led the

n a tu ra l

resource-based view of the

f irm) and argued that com peti t ive advan tage wil l be

rooted in creas ingly in a se t of emerg ing capabil i t ies such

as was te m in im iza t ion , g r een

p ro d u c t d es ig n

and technol-

ogy cooper a t ion wi th the deve lop ing wo r l d . . , s t ra teg is t s

and theor i s t s m us t beg in to g r asp how envi r onm enta l ly

or iented resources and capabil i t ies can yie ld sus ta inable

sources of competi t ive advanta ge (p. 99 I , i tal ics added) .

Follow ing Har t (1995), wh o argued that innovative

environmental s t ra tegies lead to unique capabil i t ies , we

view EM not as a capabil i ty but as a resource that enables

capabil i t ies . For example, an organizat ion leaning highly

towar d EM would deve lop we l l - honed env i r onm enta l ly

rela ted capabil i t ies in new produ ct developm ent, procure-

men t (Drumw right 1994) , and dis tr ibut ion. Such capabil i -

t ies would a l low the f i rm a degree of exper t ise in pol lut ion

control , product s tewardship, and sus ta inable develop-

ment (Har t 1995) . In turn, the f i rm's unique capabil i t ies

wi l l l ead to enhanced or gan iza t iona l pe r f or m ance and ,

accor d ing to RBV, com pe t i t ive advan tage . An EM - r e la ted

com pe t i t ive advan tage cou ld de r ive f r om the use o f sus -

ta inab le deve lop m ent to d r ive dow n cos t s .

According to RBV, resources inf luence capabil i t ies ,

which in turn inf luence competi t ive advantage. Resources

do not direct ly inf luence competi t ive advantage. Juxta-

posed onto Figure 1, EM (a resource) should direct ly

inf luence new produc t success (a capabil i ty) , but i t should

not a f f ec t change in m ar ke t sha r e ( a m easur e o f com pe t i -

t ive advantage) .

I n the i r s tudy of Canad ian o i l and gas f i r m s , S ha rm a

and Vreden burg (1998) posi ted that the greater the de-

gr ee to which a com pany adopts p r oac t ive env i r onm enta l

responsiveness s tra tegies , the greater the l ikel ihood that

f i rm-specif ic organizat ion al capabil i t ies wil l emerg e and,

in turn, that the greater the degree to which f irm-specif ic

organizat ion capabil i t ies emerge within a company, the

gr ea te r the l ike l ihood of com pe t i t ive bene f i t s f lowing

from these capab il i t ies (p. 743). Rely ing on RBV theory,

they do not argue for direct ef fects of resources on f i rm

per f or m ance . Given th i s backdrop , the f o l lowing hypothe -

ses regarding EM and f irm per formance are of fered below:

Hyp o th es i s 1 :

EM (a resource) is direct ly and po si t ively

rela ted to the f i rm's new product succe ss (a capabil-

i ty) in i ts pr incipal m arket segmen t .

Hyp o th es i s 2 :

New product success (a capabil i ty) is di-

rect ly and posi t ively re la ted to changes in market

share (an ind icator of competi t ive advantage) in the

f irm's pr incipal market segment .

M a r k e t T u r b u l e n c e E M a n d

F i rm P e r f o r m a n c e

M a rk e t t urb u len ce a n d EM .

Capita l ism , by nature , is

evo lu t iona r y and tu r bu len t; a f o r m o f econom ic change

(Zinkhan and Zinkhan 1997) . Har t (1995) noted that

techn olog ical discontinui t ies or shif ts in external c ircum-

stances m ay rend er exis t ing com petencies obsolete or , a t a

m in im um inv i te the r ap id r edep loym ent o f new r esour ces

(Tushm an and A nderson 1986, p. 989). Taking our guid-

ance f rom W erner fel t ' s (1984) sem inal piece on resources

in the f irm, we view market turbulence as a composite of

(1) change in produc tion/service technolog y, (2) competi-

t ive intens i ty, and (3) the general ra te of chang e in an in-

dus t ry . He a r gued tha t dyna m ism in the m ar ke tp lace can

faci l i ta te f i r s t move r advan tage and resource posi t ion

bar r iers that wil l af fect com peti tors ' des ire and abi l i ty to

develop subst i tute resources (p. 173) . Given this , one

mig ht expect se lected f i rm-specif ic resources to sur face in

m or e tu r bu len t env i r onm ents . EM m ay be one such r e -

source. For example, recent research on turbulence has

suggested that cer ta in marketplace upheavals or s take-

hold er interes ts ma y fuel the organ izat ion ' s des ire to con-

s t ruc t and enac t EM ( Jenn ings and Zandber gen 1995).

Alternat ively, one could argue that socia l ly complex,

intangible resources such as EM are cul tural ly rooted and

less susceptible to the pressures of turbulence. Research

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466 JOURNALOF THE ACADEMYOF MARKETINGSCIENCE FAL L 2005

on market or ienta t ion, another soc ia l ly complex, in tangi-

ble resource , could shed l ight on this a rgument . In the ir

p ionee r ing work in marke t o r i en ta t ion , Na rve r and S la te r

(1990) and Jaworski and Ko hl i (1993) both foun d a pos i-

t ive re la t ionship be tween market or ienta t ion (a f i rm re-

s o u r c e ) a n d c o m p a n y p e r f o r m a n c e . T h e s e a u t h o r s

expec ted marke t tu rbu lence to a f fec t ma rke t o r ien ta t ion

and to a f fec t t he s t reng th o f m a rke t o r i en ta t ion 's e f fec t on

pe r fo rmance . N o conv inc ing ev idence fo r the s e re l at ion -

s h ips was found ( J awors k i and Koh l i 1993 ; S la t e r and

Narv er 1994). Sla ter and Narv er (1994) asserted tha t mar-

ket or ienta t ion is a produc t of cul ture , not external market

fo rce s . In s um mary , a l though the ro le o f ma rke t tu rbu lence

in the acquis i t ion of EM as a f i rm resource is important , i t

i s d i ff icul t a t th is junc ture to predic t the na ture of tha t re la-

t ionship. We do bel ieve tha t , a t the very leas t to support

future research, i t i s impor tant to inves t iga te i t.

Market turbulence and new product success There is

s ign i f i c an t s uppor t fo r a m a rke t tu rbu lence -new p rodu c t

success re la t ionship (C alantone , Garc ia , and Droge 2003).

Ga t ignon and Xue reb (1997) no ted tha t t he s uccess o f an

innova t ion i s no t independen t o f the marke t in wh ich the

fi rm funct io ns (p . 80) . Sta t ic indus tr ies of ten portend low

leve l s o f innova t ion , pa r t i cu la r ly p roduc t innova t ion ,

am ong the f i rms tha t compr i s e them (H ope 1988) . He re ,

innova t ion ma y be mo re adap t ive and inc remen ta l in na -

ture as opposed to innovat ion tha t is radica l . External

s hocks to s uch indus t r ie s w i l l l i ke ly a f fec t pe r fo rmance

th rough a type o f fo rced p roduc t innova t ion . F i rms tha t do

no t re s pond to tu rbu lence wi th p roduc t changes tha t , a t

min imum, fo l low the compe t i t ion wi l l unde rpe r fo rm,

whi l e p roac t ive pa r t i c ipan ts a re l i ke ly to ou tpe r fo rm. One

of the key f ind ings o f M o orm an and M ine r (1998) was tha t

tu rbu lence a f fec ted o rgan iza t iona l improv i s a t ion in new

produc t a c t ions and had a mod e ra t ing e f fec t on the re l a -

t ions h ip be tween im prov i s a t ion and new p roduc t /p roces s

ou tcomes . S ince marke t tu rbu lence p lace s demands on

f i rms to improv i s e in new p roduc t a c t ions and innova te

fa s t e r and mo re e f fec t ive ly , we do exp ec t an e f fec t on n ew

product success .

Hypothesis 3:

M a rke t tu rbu lence i s d i rec t ly and pos i -

t ive ly rel a t ed to the f i rm 's new p roduc t s ucces s.

Market turbulence and change in market share W h i l e

the re l a t ions h ip be tween m arke t s t ruc tu re and innova t ion

has in t e re s t ed and puzz led economis t s fo r a ve ry long

t im e (Ho pe 1988:475), there is l i t t le in the l i te ra ture tha t

pos i t s d i rec t r e l at ions h ips be tween marke t tu rbu lence and

change in marke t s ha re (o r o the r ind ica to rs o f f i rm pe r fo r -

mance ) . Obv ious ly , a l l f i rms canno t l eve rage a tu rbu len t

env i ronmen t to improve the i r r e l a t ive marke t pe r fo r -

mance . M arke t dynam is m, howeve r , does crea te an oppor -

tun i ty fo r aggre s s ive f i rms to enac t the type o f rad ica l

changes tha t c an imp rove the i r pos i t ion . S ince the ab i l i t y

o f marke t tu rbu lence to be pa r l ayed in to marke t s ha re

ga ins i s dependen t on the p re s ence o f the f i rm 's s pec i f ic re -

s ource s and capab i li t ie s , we do no t expec t a d i rec t e f fec t o f

dyn amis m on change in marke t s ha re . Ye t , as i l l u st ra t ed in

Figure 1 , to add ins ight to our f indings , we do tes t the

re la t ionship.

M E T H O

Given tha t ou rs rep re s en t s the f i r s t a t tempt to m eas ure

E M , we chos e a c ros s - s ec t iona l , ex pos t f a c to s u rvey

des ign a s the approach to the re s ea rch s tudy . Our da ta

com e f rom a b road s ample o f uppe r - l eve l ma rke t ing exec -

u t ive s, whom we a s s e s s ed by v i r tue o f the i r s t a tu re in the

organiza t ion, had s t ra tegic market ing respons ibi l i t ies and

expe r i ence . Whi le the un i t o f ana lys i s in the s tudy i s t he

bus ine s s un i t , we us ed s ing le in fo rm an t s a s pa r t i cipan t s

fo r the re s ea rch . T h i s approach i s en t i re ly cons is t en t w i th

pas t s tud ie s on marke t ing s t ra tegy (Hena rd and S zym ans k i

2001) , s ome o f wh ich have compared s ing le to mul t ip l e

re s ponden t approaches and found n o d i f fe rences (S la t e r

and Na rve r 1998) . Some o f the s u rvey i t ems we re adop ted

f rom prev ious re s ea rch (B ake r and S inku la 1999 ; S la t e r

and N a rve r 1994) , wh i l e E M s t ra tegy , a new cons t ruc t , was

bas ed on the concep tua l / theo re t i c a l wr i t ings o f M enon

and Men on (1997) and Varadara jan (1992). We use st ruc-

tu ra l equa t ions mo de l ing (SE M ) to t e s t t he s tudy hypo the -

s e s. We tu rn now to a de s c r ip t ion o f the s ampl ing f ram e

and da ta co l l e c t ion p rocedure .

Sampl ing Frame and Ma i l ing Procedure

Data fo r the s tudy come f rom a d i rec t ma i l s u rvey o f top

marke t ing execu t ive s d rawn f rom a na t ionwide s ample o f

man ufac tu r ing and s e rv ice o rgan iza t ions . T he ma i l ing l i s t

o f 2 , 000 com pan ie s was acqu i red f rom Dun & B rads t ree t .

T he s amp le was random ly d rawn f rom a un ive rs e o f fo r -

p ro f i t f i rms ac ros s a l l S tanda rd Indus t r i a l C la s s i f ic a t ion

(SIC ) ca tegor ie s and w i th a t l e a st $100 m i l l ion annua l rev -

enue . Ha l f o f the s ample was s pec i f i ed to be f i rms wi th

more than $500 mi l l ion in annua l revenue ; ha l f o f the s am-

p le was s pec i f ied to be o r ig ina l equ ipm en t man ufac tu re r s .

T o ens u re an appropr i a t e l eve l o f knowledge rega rd ing

bo th the f i rm 's ma rke t ing s t ra t eg ie s and i ts o rgan iza t ion -

wide ob jec t ive s , pa rt i c ipan t s we re chos en f rom the uppe r

levels of the organ iza t ional mark et ing hierarch y ( i .e . , v ice

p re s iden t o f m a rke t ing o r above ) . Ind iv idua l s w i th th i s s t a-

tus in the o rgan iza t ion cou ld be expec ted to tho rough ly

unde rs t and the fac to rs tha t t hey and top m anagem en t inpu t

into the s t ra tegy process . I f the env ironm ent is a pr ior i ty ,

i t i s r e a s onab le to p re s ume tha t t hey wou ld know and

unde rs t and the genes i s o f th i s p r io ri ty .

F o l l o w i n g t h e p r o c e d u r e r e c o m m e n d e d b y D i l l m a n

(1978), the direc t m ai l ques t ion naire was sent to the sam-

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Baker, Sinkula ENVIRONMENTALMARKETINGSTRATEGY 467

p ie o f co m p an ies i n t h r ee wav es . Th e seco n d an d t h i rd

m ai l i n g s were sen t o n ly t o f i rm s wh o h ad n o t y e t r e -

sp o n d ed . Each wav e co n t a in ed a co p y o f th e q u es t i o n n a i r e

an d m o d i f i ed co v er l e t t er . No e x p l i c i t i ncen t i v es were p ro -

v ided . In addi t ion to returned quest ionnai res due to fau l ty

ad d resses , fo l l o w-u p p h o n e ca l ls we re co n d u c t ed t o as sess

n o n resp o n se . Resu l t s i n d i ca ted t h a t 2 0 p e rcen t o f t h e q u es -

t i o n n a ir es d id n o t r ea ch t h e i r i n t en d ed r esp o n d en ts . T h e

resu l t i n g p o o l o f 2 4 3 co m p le t ed q u es t i o n n a i r es r ep re -

sen t ed an e f f ec t i v e r esp o n se r a t e o f 1 5 .1 p e rcen t . Of t h e

resp o n ses , 4 7 .2 p e rce n t were o r i g in a l eq u ip m en t m an u fac -

tu re rs ; 4 0 .7 p e rcen t h ad an n u a l r ev en u e ex ceed in g $ 5 0 0

mil l ion .

Al th o u g h l o wer t h an wh a t we wo u ld h av e l i k ed , t h i s

response rate i s no t unusual in today 's research envi ron-

m en t ( e .g . , s ee Ho m b u rg an d P f l es se r 20 0 0 ; Ga t i g n o n an d

Xue reb 1997) . The orga nizat ional s tature of the respon-

d en t , l en g th an d d i f f i cu lt y o f t h e q u es t i o n n a ir e , an d co m -

parab le respo nse rates in s imi lar s tud ies led us to conclude

that the sample w as ade quate fo r purposes of the study .

e a su re s

Wh i le m an y o f o u r m easu res h av e b een u sed i n p r i o r

r esea rch (Bak er an d S in k u l a 1 9 9 9 ; Narv er an d S l a t e r

1990; S later and Narver 1994) , the core element of th is

s t u d y (EM) i s a n ew co n s t ru c t . F o r tu n a t e ly , m u ch g ro u n d -

wo rk fo r t h e o p era t i o n a l i za t i o n o f t h e co n s t ru c t h as b ee n

l a id b y Men o n an d Men o n (1 9 9 7 ) , Varad ara j an (1 9 9 2 ) ,

an d o th e r s (Ho f fm an 2 0 0 0 ; Led g erwo o d an d Bro ad h u r s t

2 0 0 0 ; P i aseck i 1 9 9 5 ) . Th i s g ro u n d wo rk p e rm i t t ed u s t o

develop a ser ies o f t igh t ly targeted quest ions. We d iscuss

th e o p era t i o n a l i za ti o n o f EM an d o th e r m easu res b e lo w.

The appendix includes a l i s t o f a l l const ruct measures ,

i n c lu d in g t h o se t h a t were n o t u l t im a t e ly u sed i n t h e

analyses .

Enviropreneurial marketing.

EM i s a m easu re o f en -

v i ro n m en ta l s t r a t eg y . It i s u n iq u e ly m ark e t in g fo cu sed an d

ent repreneur ial ly grounded . In addi t ion , i t p rompts the

resp o n d en t t o fo cu s o n t h e r easo n s wh y en v i ro n m en ta l

i s sues en t e r i n to m ark e t i n g s t r a t eg y d ev e lo p m e n t wi th

i t em s t h a t a r e l i n k ed t o co n cep t s l i k e co m p et i t i v e ad -

v an t ag e , co m m i tm en t , an d d o in g t h e r i g h t t h in g fo r t h e

en v i ro n m en t .

In acco rd an ce wi th t h e l i t e r a tu re , we co n cep tu a l i ze

an d o p era t i o n a l i ze EM as a t h r ee - f ac to r seco n d -o rd er co n -

s t r u c t . F o l l o w i n g M e n o n a n d M e n o n ( 1 9 9 7 ) a n d

Varad ara j an (1 9 9 2 ) , EM i s m easu red b y p ro b in g r esp o n -

d en t s o n t h e fo l l o win g d im en s io n s : (1 ) en v i ro n m en t as

o p p o r tu n i ty , (2) en v i ro n m en t as co m m i tm en t , an d (3 ) en -

v i ro n m en t as r i g h t eo u sn ess .

En v i ro n m en t as o p p o r tu n i t y u ses i t em s t h a t q u ery en -

v i ro n m en ta l m ark e t i n g s t r a t eg ies t h a t (1 ) were d es ig n ed

t o a c h i e v e a c o m p e t i t iv e d i f fe r e n t i a ti o n a d v a n t a g e

(Varad ara j an 1 9 9 2 :3 4 2 ) , (2) t o o k a m o re p ro ac t i ve s tan ce

wi th r esp ec t t o co rp o ra t e en v i ro n m en ta l i sm (Men o n an d

Me n o n 1 9 9 7 :5 3 ) , an d (3 ) saw en v i ro n m en ta l co n cern s as

an o p p o r tu n i t y (Men o n an d Men o n 1 9 9 7 :5 4 ) . Th e l it e r a-

ture suggests that a t rue envi roprene ur ial market ing s t rate-

g is t i s no t on ly ab le to ide n t i fy (see) marke t oppor tun i t ies

in envi ronmental concerns bu t i s a l so wi l l ing to en t rust

co m p an y r eso u rces t o t h e s t r a t eg y (Ho f fm an 2 0 0 0 ) . En v i -

ro n m e n t as co m m i tm en t , t h e re fo re , u ses i t em s t h a t fo cu s

o n en v i ro n m e n ta l m ark e t i n g s t r a t eg ies t h a t t ake t h e fo rm

o f i n v es tm en t s ( f i n an c i a l an d n o n f in an c i a l ) t h a t a r e v e ry

su b s t an t i al an d v i s i b l e an d a re a l so co n s id e red t o b e

co m m i tm en t s t h a t a r e i rr ev er s ib l e . An im p o r t an t e le -

m en t o f t h e EM c o n s t ru c t is t h e n o t i o n th a t m an ag er s v i ew

th e p u r su i t o f en v i ro n m en ta l l y f r i en d ly en d eav o r s as t h e

r i g h t th in g t o d o . He n ce , t h e t h i rd d im en s io n o f t h e EM

co n s t ru c t can b e d esc r i b ed as en v i ro n m en t as r i g h t eo u s -

n ess . Here , m easu res a r e a im ed a t th e f i rm ' s b u s in ess p h i -

l o so p h y o f co n se rv a t i o n i sm , su s t a in ab i l i t y , an d a t t h e

d eg ree t o w h ich en v i ro n m en ta l i s su es en t e r i n to m ark e t i n g

s t r a t eg y d ev e lo p m en t b ecau se t h is is fu n d am en ta l l y t h e

r i g h t t h in g t o d o . Hen ce , en v i ro n m e n t as r i g h teo u sn ess

m easu res t h e f i rm ' s v i ews o n t h e d u t ies an d r esp on s i -

b i l i t ies o f a corpo rate ci t ize n (Varadarajan 1992:342) .

Ou r m easu re o f EM em p lo y ed t h e fo l l o win g i n s t ru c -

t i on s : No w we 'd l i k e t o ask ab o u t h o w y o u r o rg an i za t io n

deals wi th i ssues per tain ing to the physical envi ronment

(e.g . , sustainable development , po l lu t ion , e tc) . Environ-

m en ta l i s sues en t e r i n to o u r m ark e t in g s t r a teg y d ev e lo p -

m en t : fo l l o wed b y a se l ec t i o n o f a l te rn a t iv e r easo n s ( see

ap p en d ix ) . We u sed 7 -p o in t L ik er t - t y p e sca l es wh ere 1 =

strongly disagree

and 7 =

strongly ag ree .

Co n f i rm ato ry

fac to r an a ly ses were u sed t o as sess t h e v a l i d it y o f a sec -

o n d -o rd er f ac to r m o d e l co m p o sed o f t h r ee f i r s t -o rd er

co m p o n en t s an d t o p u rg e i n ap p ro p r ia t e m easu res f ro m th e

EM sca l e. De scr ip t i o n o f t h is p ro cess i s p ro v id ed i n t h e

Resul ts sect ion of th is ar t ic le .

Performance measures.

Since envi ronmental in i t ia-

t i v es i n n ew p ro d u c t d ev e lo p m en t can t ak e m an y fo rm s

(e.g . , cost reduct ion , choice of mater ials , p roduct design)

and occur at any s tage in the supply chain , an at tempt to

cap tu re t h e p rec i se n a tu re an d ro l e o f EM in n ew p ro d u c t

d ev e lo p m en t was b ey o n d t h e sco p e o f th i s s tu d y . Acco rd -

in g ly , we ch o se t o em p lo y an accep t ed , g en era l m easu re o f

n ew p ro d u c t su ccess t o cap tu re an y e f f ec t o f EM in it ia -

t iv es . New p ro d u c t su ccess (Bak er an d S in k u l a 1 9 99 ) co n -

s i s t ed o f fo u r i t em s m easu red o n a 7 -p o in t L ik er t - t y p e

sca l e an ch o red b y

low high

( i .e . , new prod uct in t roduc-

t i on r a te r e la t i v e t o la rg es t co m p et i t o r , d eg ree o f p ro d u c t

d i f feren t iat ion , new produ ct success rate relat ive to larg-

est com pet i to r , and f i rs t to ma rket wi th new appl ica-

t i o n s ) . Ch an g e i n m ark e t sh a re co n s i s t ed o f i t em s o n a 7 -

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4 6 8 J O U R N A L O F T H E A C A D E M Y O F M A R K E T I N G S C I E N C E F A L L 2 00 5

TA B LE 1

C on s t ruc t Means Standard D ev iat ions C orrelat ions and A lpha C oe f f i c ien ts A m ong C o ns t ruc ts

Correla t ion M atrix

Construct M SD 1 2 3 4 5 6 7

1 . Env i rop reneu r i a l marke t ing (EM)a

2 . E n v i r o n m e n t a s o p p o r t u n i t y ( E A O )

3 . E n v i r o n m e n t a s c o m m i t m e n t ( E A C )

4 . E n v i r o n m e n t a s r i g h t e o u s n e s s ( E A R )

5 . N e w p r o d u c t success

6 . C h a n g e i n m a r k e t sh re

7 . M a r k e t t u r b u l e n c e

4.31 0.94 .74 .82 .65 .72 .23 .01 * - .01 *

4.17 1.27

.73 .25

. 3 9 . 2 2 - . 0 8 * - . 0 1

4.08 1.29 .76 . 31 . 13 . 1 0 ' - . 0 6 *

4.76 1.23

. 6 8

.18 .05* .04*

4.54 1.22

.84

.22 .21

4 .67 1 .06 .90 .03*

4.89 1.07

.62

N O T E : T h e a l p h a c o e f f i c i e n t f o r ea c h c o n s t r u c t i s i n d i c a t e d i n i t a li c s a l o n g t h e d i a g o n a l .

a . E M i s th e u n w e i g h t e d a v e r a g e o f E A O , E A C , a n d E A R .

* No t s ign i f i ca n t a t p < .05 .

T A B L E 2

Env i ropreneur ia l Marke ting A l te rna t i ve Measu reme nt Mo de ls

S e c o n d - Ord e r C o n s t ru c t Mo d e l S e c o n d - Ord e r C o n s t ru c t Mo d e l

First-Order Construct Mod el a l l measures) reduced measures)

G o o d n e s s - o f - f i t s t a t i s t i c s

;t2 240-67(27 dr) 93.84(2 df) 1 1.91(6 f

g21df, p< .00 8 .91 ,p < .0001 3 .91 ,p < .0001 1 .99 ,p < .064

RM SE A .18 . I I .06

TLI .29 .74 .95

CF I .57 .86 .99

N O T E : R M S E A = r o o t m e a n s q u a r e e r r o r o f a p p r o x i m a t i o n ; T L I = T u c k e r- L e w i s I n d e x ; C F I = C o m p a r a t i v e F i t In d e x .

poin t L ike r t - typesca le anchor ed by significant decrease

significant increase. Change in m ar ke t sha r e was m ea-

sur ed by chang e in m ar ke t shar e r ela t ive to l a rges t com -

peti tor , cha nge in market share , and chan ge in sales

rela t ive to larges t competi tor . These scales were inf lu-

enced by Walke r and R ueker t (1987), who d i scus sed orga -

n iza t iona l pe r f or m ance m easur es based on or gan iza tiona l

adaptabi l i ty , ef fect iveness , and ef f ic iency.

Market turbulence. Mar ke t tu r bu lence was m easur ed

wi th th r ee i t em s on a 7 - po in t L ike r t - type sca le anchor ed

b y low high. Responden ts wer e a sked to desc ribe the ex-

ten t to which pr oduc t / s e r v ice t echnology has chang ed dur -

ing the pas t 3 yea r s , the leve l o f com pe t i tive in tens i ty in

you r p r inc ipa l s e r ved m ar ke t s egm ent , and in gene r a l,

the r a te o f change in the m ar ke tp lace in your p r inc ipa l

se r ved m ar ke t s egm ent . These m easur es m i r r or those o f

Slater and N arver (1994).

Industry covariates. A num ber o f con t r o l va r iab le s

deem ed to be im por tan t de te r m inan ts o f pe r f or m ance

(Aaker 1988; Bain 1959; Day 1984) were included. The

m easur es , which wer e d r awn f r om r e la ted r e sea r ch on

m ar ke t o r ien ta t ion ( Baker and S inkula 1999; J awor sk i and

Ko hli 1993; Na rver and Slater 1990) , include re la t ive size ,

growth, buyer power , supplier power , se l ler concentra-

t ion , ease o f en t r y , t echnolog ica l change , and gov er nm ent

control .

R ESU LTS

S t r uc tur a l equa t ion m od e ls ( S EMs) wer e em p loyed to

te s t the s tudy hypotheses ( J r r e skog 1993). Con f i r m a tor y

f ac tor ana lyses ( CF As) wer e used to ensur e in te r na l con-

s i s tency and un id im en s iona l i ty o f each cons t r uc t ' s m ea-

sur es . CF A and o the r m eans wer e used to t e s t f o r the

d i sc r im inan t va l id i ty o f the cons t r uc t s . The cha r ac te ri s t ic s

of a l l m ode l f ac to r s and cons t r uc ts , the i r m eans , s t anda r d

deviat ions , re l iabi l i ty measu res , and cor rela t ions with the

other constructs in the m odel are provide d in Table 1.

Al te r na t ive m easur em ent m ode ls f o r EM a r e repor ted

in Tab le 2. The f ina l second- or de r m easur em en t m ode l f o r

EM , w i th i t s t e s ted m easur em ent r e la t ions and r e su l t s, i s

shown in Tab le 3 . The pr im ar y S EM m od e l eva lua t ion is

shown in Tab le 4 . W e beg in wi th a d i s cus s ion of the t e s t s

pe r f or m ed to e s tab l i sh the conver gen t and d i sc r im inan t

va l id i ty o f the m easur es , s ta r t ing w i th the s econd - or de r

cons t r uc t EM.

Measure Va l ida t ion

Second order construct. Given that i t is a new con-

s t r uc t , we f o l lowed r igor ous m e thods ( Ander son 1987;

Churchil l 1979; Gerbing and Anderson 1988) to val idate

the EM sca le . F i r s t, an exp lor a to r y p r inc ipa l com pone nts

f ac to r y ana lys i s revea led tha t each of the m easur es loaded

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T A B L E 3

Enviropreneur ia l Marketing S econd O rder Measurem ent Model

I n d i c a t o r p a r a m e t e r ) E n v i r o n m e n t a s O p p o r t u n i t y E n v i r o n m e n t a s C o m m i t m e n t E n v i r o n m e n t a s R i g h t e o u s n e s s

Stand ard ize d f i rs t -order Ioadings ( .~ i)a

EAO1 (XI)

E A O 2 (X 2 )

EAC1 Q 3)

E A C 2 (L 4)

E A R l ( ~ )

EAR2 (~-6)

S tand ard iz ed s econ d-ord er Ioadings (.~j)a

F i r s t - o rd e r co n s t ru c t ( p a r am e t e r )

Env i ronm ent as oppo rtuni ty (~t l)

E n v i ro n m en t a s co m m i t m en t ( /2 )

Env i ronm ent as r igh teo usness (~ 3)

G o o d n es s -o f - f i t s t a t is t i c s

Z2(6 d.D, p < .00

: d S

T u ck e r L ew i s In d ex

B en d e r s C o m p ara t i v e F it I n dex

R M S E A

.68 b

.91

82 b

.76

E w i ro p ren eu r i a l M ark e t i n g

.74b

.55

.76

.76b

.70

I 1.91, p < .064

1 99

.99

1.00

.06

N O T E : E A O = en v i ro n m en t a s o p p o rt u n it y ; E A C = en v i ro n m en t a s co m m i t m en t ; E A R = en v i ro n m en t a s r i g h t eo u s n es s ; R M S E A = ro o t m ean s q u a re e r ro r

o f ap p ro x i m a t i o n .

a~ Al l repo r ted Ioading s s ign i f icant a tp < .001.

b . F ixed parameter .

T ABL E 4

Param eter Est imates for the C ausal Paths

P a r a m e t e r H y p o t h e s i s P a t h S t a n d a r d i z e d E s t i m a t e a

132

f~3

75

76

G o o d n es s -o f - f i t s t a t is t i c s

Z2(232 d.])

z 2 / d f

T u ck e r L ew i s In d ex

B en t l e r s C o m p ara t i v e F i t I n d ex

R M S E A

Hypo thes i s I EM---+New Product Succ ess .31 (3 .53)*

E M --+ C h an g e i n M ark e t S h a re . 01 ( -0 .2 9 )

H y p o t h es i s 2 N ew P ro d u c t S u cces s - -+ C h an g e i n M ark e t S h a re . 21 (2 .2 4 )*

Ma rket Turbulence--+EM .02 (0.23)

Hyp othes i s 3 Ma rket Turbulence--+New Produ ct Succe ss .33 (4 .14)*

Ma rket Turbulence--+Chang e in Mark et Share - .0 3 (0 .03)

361.6

1 56

.97

.98

.05

E M = en v i ro p ren eu r i a l m ark e t in g ; R M S E A = ro o t m ean s q u a re e r ro r o f ap p ro x i m a t i o n .

a . t values f rom the uns tandard ized so lu t ion are shown in parentheses .

*p < .05.

o n th e i r r e sp ec t iv e f i r s t -o rd e r f ac to r s E n v i ro n m en t a s O p -

p o r t u ni t y , E n v i r o n m e n t a s C o m m i t m e n t , E n v i r o n m e n t a s

R ig h teo u sn ess ) , a s ex p ec t ed . N ex t , a s e r ie s o f C F A an a ly -

ses w ere co n d u c ted to 1 ) e s t ab l i sh t h e v a l id i ty o f o u r co n -

c e p t u a l i z a t i o n o f E M a s a s e c o n d - o r d e r c o n s t r u c t w i t h

th ree f i r s t -o rd e r f ac to r s an d 2 ) p ru n e w eak lo ad in g in d i -

c a n t s f r o m t he m e a s u r e m e n t m o d e l . T h is s e r i e s o f C F A s i s

d esc r ib ed a s fo l lo w s .

F i r s t , a C F A an a ly s i s t e s t ed E M as a f i r s t -o rd e r co n -

s t ru c t w i th n in e i n d i can t s . A s r ep o r t ed in T ab le 2 , t h e f i t

w as p o o r . A s ex p ec t ed , k ey m ea su res o f f it i n c lu d in g ch i -

sq u a re /d f , t h e C o m p ara t iv e F i t In d ex C F I ) , t h e T u ck e r

L e w i s I n d e x T L I ) , a n d r oo t m e a n s q u a r e e r r o r o f a p p r o x i -

m a t i o n R M S E A ) w e r e u n a c c e p t a b l e B r o w n a n d C u d e c k

1 9 93 ; B en t l e r an d C h o 1 9 88 ; M a rsh , B a l l a , an d M c D o n a ld

1 9 8 8 ) . N ex t , t h e seco n d -o rd e r co n s t ru c t o p e ra t io n a l i -

za t io n w i th t h ree f ir s t -o rd e r f ac to r s en v i ro n m e n t a s o p -

p o r t u n i t y , e n v i r o n m e n t a s c o m m i t m e n t , e n v i r o n m e n t a s

r ig h t eo u sn ess ) w as t e s t ed u s in g a l l n in e m easu res o f E M ,

th ree i n d i can t s p e r each f i r s t o rd e r co n s t ru c t . A s r ep o r t e d

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i n t he t ab l e , the f i t i mproved bu t r em a i ned unaccep t ab l e .

T hr ee o f t he m easures , one fo r each o f t he f i r s t- o rde r f ac -

t o r s , d i d no t l oad sa t i s f ac t o r i l y . T he f i na l CF A ana l ys i s

exc l ude d t hese th r ee i nd i can ts . T h i s r educed second -orde r

cons t ruc t ope ra t i ona l i za t i on was a s ses sed t o be accep t -

ab l e . Not ab l y , t he ch i - squa re i n t h i s f i na l cons t ruc t mo de l

was ins ign i f icant ( ; (2 = 11.9,

d f

= 6, p < .064) . Jarvis ,

M a c K e n z i e , a n d P o d s a k o f f ( 2 0 0 3 ) s u g g e s te d t h a t m o d e l

i ns i gn i f i cance may b e t he s t ronges t i nd i ca t o r o f adequa t e

fit.2 T ab l e 3 shows t he l oad i ngs and f i t i nd i ces r e su l ti ng

f rom f i tt i ng t he fi na l E M opera t i ona l i za t i on mode l t o t he

da t a . A l l f i r s t- o rde r f ac t o r load i ngs were s t rong and h i gh l y

s i gn i f i can t (p < .001) . T he f ac t o r l oad i ngs o f each f i r s t -

o rde r cons t ruc t t o t he second-orde r cons t ruc t were a l so

l a rge and h i gh l y s i gn i f i can t (p < .001). T he append i x l is t s

t he measures fo r each co ns t ruc t and i den t if i e s whi ch m ea-

s u r es w e r e r e m o v e d f r o m t h e m o d e l .

D i sc r i mi nan t va l i d i t y fo r t he t h r ee subcons t ruc t s was

a s s e s se d b y c o n d u c t i n g a s e r ie s o f t w o - f a c t o r C F A m o d e l s

i n whi ch t he ph i co e f f i c i en t was co ns t r a i ned t o un i ty and

t hen f r eed (Ander son 1987 ; Bagozz i and P h i l l i ps 1982) .

A ch i -d i f f e r ence t e s t was t hen pe r fo rme d on a l l poss i b l e

pa i r s o f t he t h r ee cons t ruc t s . T he mode l s w i t h t he f r ee

pa ram et e r s were foun d t o be supe r i o r , p rov i d i ng ev i dence

of t he d i sc r i mi nan t va l i d i t y o f t he cons t ruc t s . W e a l so

asses sed d i sc r i mi nan t va l i d i t y by con t r a s t i ng t he squa red

cor r e l a t i on o f each f ac t o r pa i r w i t h t he va r i ance ex t r ac t ed

f rom ea ch f ac t o r (F orne l l and L arck e r 1981) . I n each case ,

t h e a v e r a g e v a r i a n c e e x t r a c t e d e x c e e d e d t h e s q u a r e d c o r -

r e l a t ion , su ppor t i ng d i sc r i mi nan t va l id i t y .

First-order constructs.

M ark e t t u rbu l ence , new produc t

success , and chan ge i n mark e t sha re were a l l conf i gu red a s

f i r s t - o rde r cons t ruc t s . A t h r ee - f ac t o r conf i rma t ory f ac t o r

ana l ys i s was con duc t ed t o t e s t f o r convergen ce o f t he i t ems

on t he i r expec t e d cons t ruc t . Resu l t s i nd i ca ted t ha t t he

mod e l f i t t he da t a we l l z2/df= 1.57, CFA = .99, TLI = .99,

R M S E A = . 0 5) a n d t h a t th e i t e m s c o n v e r g e d o n t h e i r e x -

pec t ed co ns t ruc t s ( i . e ., t va l ues r anged f ro m 4 .03 t o 18 .66 ,

ave rage i t em r e l i ab i l i ty = .74 , a ll coe f f i c i en t a l phas w ere

acc ep t ab l e - - s ee T ab l e 1 ) . I n add i t ion , t o te s t d i sc r i mi nan t

va l i d i t y , a ch i -d i f f e r ence t e s t was t hen pe r fo rmed on a l l

poss i b l e pa i r s o f t he t h r ee cons t ruc t s (Ander son 1987 ;

Bago zz i and P h i l l i ps 1982) . T he m ode l s w i t h t he f r ee pa -

r ame t e r s were four l d t o be supe r i o r , p rov i d i ng ev i dence o f

t he d i sc r i mi na n t va l i d i t y o f t he cons t ruc t s .

Tests of Hypotheses

A S E M m e t h o d o l o g y w a s e m p l o y e d t o te s t t h e h y p o t h -

eses . I n t he i n t e r e s t o f pa r s i mony , F i gure 1 il l us tr a t e s t he

proposed l a t en t va r i ab l e mode l w i t hou t i nd i ca t o r va r i -

ab l e s . T he pa ramet e r e s t i ma t es fo r t he causa l pa t hs a r e

shown i n T ab l e 4 . Based on such i nd i ca t o r s o f mode l ade -

quac y a s the d i sc r epan cy r a t io

z2/df=

1.56) , Ben t ler s CFI

( .98) , t he T ucker L ewi s Index ( .97) , and t he RM S E A ( .05) ,

t he f i t o f t he ove ra l l mod e l t o t he da t a appea r s t o be good .

Test results on EM hypotheses. As can be seen i n T ab l e

4, the parameter es t imates for the s t ructural paths 75, 131,

and 133 we re a l l posi t ive and s ta t i s t ical ly s ign i f icant (and 74,

~/6and 132 are not ) . Th is i s cons is tent w i th the ef fects posi ted

i n t he hypo t heses . As hypo t hes i zed i n Hypot hes i s 1 , t he

endogenous cons t ruc t new produc t success i s pos i t i ve l y

rela ted to EM (13~= .31 ,p < .001) . Hy pot hes i s 2 p roposed a

d i r e c t e f f e c t o f n e w p r o d u c t s u c c e s s o n c h a n g e i n m a r k e t

share . Th is too w as su ppo r ted (133 = .21, p < .025) . As

w o u l d b e e x p e c t e d b y R B V t h e o r y , t h e r e w a s n o d i r e c t e f-

f ec t o f E M on ch ange i n marke t sh a re (132= .01) . Ins tead, as

e x p e c t e d b y R B V t h e o ry , i t a p p e a r s t h a t E M i n f lu e n c e d

new produc t success , whi l e new produc t success i n f l u -

enced change i n marke t sha re .

Test results on m arket turbulence hypotheses. H y p o t h e -

s i s 3 ma i n t a i ned t ha t marke t t u rbu l ence wou l d d i r ec t l y a f-

f ec t new produ c t success . T h i s was su ppor t ed 0 s = .33 , p <

.001). I t i s i n t e r e s t i ng t ha t t he r e was no d i r ec t e f f ec t o f

mark e t t u rbu l ence on e i t he r E M 0 4 = .02) o r change i n

marke t sha re (~ 6 = - . 03 ) . T he absen ce o f an e f f ec t o f mar -

k e t t u rb u l e n c e o n E M p r o v i d e s p r e l im i n a r y s u p p o r t t o t h e

propos i t i on t ha t , l ike marke t o r i en t a t i on , E M i s a soc i a l ly

com pl ex r e source t ha t i s cu l t u r a l l y d r i ven . T he absen ce o f

a n e f f e c t o f m a r k e t t u r b u l e n c e o n c h a n g e i n m a r k e t s h a r e

r e f l ec t s t he l og i c t ha t marke t t u rbu l ence ma y a f f ec t the ne -

ces s i t y fo r ac t ion , bu t changes i n m arke t sha re a r e ne t ze ro

o u t c o m e s .

Covariate relationships. W h i l e n o h y p o t h e s e s w e r e o f -

f e r e d , w e d i d i n c l u d e c o v a r i a te s i n o u r m o d e l t o e x a m i n e

t h e i r e f f e c t s o n n e w p r o d u c t s u c c e s s a n d c h a n g e i n m a r k e t

sha re . T o s t r eng t hen our conc l us i ons r ega rd i ng t he hy-

po t hes i zed s t ruc t u r a l r e l a t i onsh i ps , t hese va r i ab l e s were

m o d e l e d a s d i r e c t p a t h s t o n e w p r o d u c t s u c c e s s a n d

change i n marke t sha re . Of t he n i ne cova r i a t e s i nc l uded

( see append i x) , t h r ee we re s i gn i f i can t l y r e l a t ed t o t he va r i-

ab l e s i n ques t i on . T he ab i l i ty o f t he f i rm t o nego t i a t e l owe r

pr i ces f rom supp l i e r s was pos i t i ve l y r e l a t ed t o bo t h new

produc t success ( t = 2 .13 , p < .03) and change i n marke t

sha re ( t = 1 .98 , p < .05) . T he sa l e s g row t h r a t e i n t he f irm s

pr i nc i pa l s e rved mark e t was po s i t i ve l y r e l a t ed t o new

prod uc t success ( t = 4 .11 , p . 001) , bu t no t chang e i n mar -

ke t sha re . Gove rnm ent r egu l a t i on was nega t i ve l y r e l a ted t o

new pro duc t success ( t = 3 .06 , p . 002) , bu t no t change i n

marke t sha re .

DIS USSION

T he purpose o f t h i s r e sea r ch i s t o advance t he p rocess

of empi r i ca l l y i n t egra t i ng an env i ronment a l pe r spec t i ve

i n t o t he marke t i ng l i t e r a t u r e by exami n i ng t he ro l e o f

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env i r opr eneur i a l mar ke t i ng ( E M ) on f i r m pe r f o r mance

and t o a s sess t he ex t en t t o whi ch E M i s cu lt i va t ed by ex t e r -

nal market pr ior i t i es or i s more int r ins ic to the f i rm. In

keep i ng w i t h t hi s pur pose , we ( 1 ) deve l oped a r i gor ous l y

conf i gur ed , a l be i t f i r st - cu t , measur e o f en v i r opr eneur i a l -

i sm, and ( 2 ) mode l ed i t s r e l a t i onsh i ps w i t h new pr oduc t

succes s and change i n mar ke t sha r e . I n add i t i on , we ex-

p l o r ed t he r e l a t i onsh i p o f E M wi t h mar ke t t u r bu l ence .

Our s i s t he f ir s t a tt empt t o ope r a t i ona l i ze t he co ncep t o f

env i r opr eneur i a l mar ke t i ng , whi ch was p i onee r ed i n t he

mar ke t i ng l i t e r a tu r e mor e t han a deca de ago ( Var ada ra j an

1992) . I t is a l so the f ir s t to show the speci f ic con f igurat ion

o f e f f e c ts o f E M o n c o m p a n y p e r f o r m a n c e . I n a t te m p t i ng

t o unde r s t and t hese r e l a t i onsh i ps , we o bse r ved t ha t t he r e

a r e ce r t a in pa t h depende nc i es i n o ur r e su l t s t ha t mi r r o r the

t heor y r e f e r r ed t o a s the r e sour ce - ba sed v i ew of t he f ir m

(Barney 1991; Wernerfel t 1984) .

As w e d i scus s our r e su l ts be l ow, t he r eade r shou l d v i ew

them in l ight of the const ra ints of the s tudy. Speci f ical ly,

t he c r os s - sec t i ona l na t u re o f t he da t a l i mi t ed t he degr ee t o

whi ch we wer e ab l e t o exp l o r e o r gan i za t i ona l i mpr ove-

ment . I n add i t i on , we sampl ed p r i mar i l y l a r ge , we l l -

e s t ab l i shed o r gan i za t i ons . I t ma y be i n t e re s t i ng t o exami ne

E M ac t iv i t ie s i n sma l l e r o r gan i za ti ons . W e do no t i nc l ude

a l l pos s i b l e an t eceden t s o f E M i n our empi r i ca l mode l ;

on l y t u r bu l ence was exam i ned . Ou r r e su l t s wer e l i mi ted t o

t he e f f ec t o f E M on p r od uc t - r e l a t ed capab i li t ie s . O t he r

capab i l i ti e s , f o r exampl e , o t he r m ar ke t i ng mi x and co s t -

re la ted var iables , were not s tudied here . F inal ly, i t should

be noted that ours i s a f i r s t a t tempt to operat ional ize the

E M cons t r uc t and t ha t t he r e is r oom f or r e fi nement .

onclusions and Implicat ions for Scholars

and S uggest ions for Future Research

We f ind i t reasonable to expect that , in pract ice , a

higher-order const ruct (EM) exis t s and that i t , in turn,

g i ves r i s e t o o r gan i za t i on- wi de en v i r opr eneur i a l - spec i f i c

va l ues and behav i o r s . Hence , our exp l i ca t i on o f t he E M

cons t r uc t l eads us t o conc l ude t ha t i t i s bes t ope r a t i on-

a l i zed a s a s econd- o r de r f act o r . I n so do i ng , our appr oach

has been t o s ampl e f r om t he domai n ( C hur ch i l l 1979) o f

f i r s t - o r de r cons t r uc t s t o p r ov i de a mean i ngf u l , ye t pa r s i -

moni ous , measur e o f env i r opr eneur i a l - r e l a t ed o r gan i za -

t i ona l va l ues and behav i o r s . I n t he day- t o - day op e r a t i ons

of t he f i r m, no t on l y do t hese va l ues a l l ow E M - r e l a t ed

s t r a teg i e s t o ensue , b u t t hey i n f l uence t he i r e f fec t i venes s

and e f f i c i ency . Accor d i ng l y , we f o l l owed we l l - accep t ed

pr o t oco l s f o r s ca l e deve l opment and t e s t i ng ( Ander son

1987; Church i l l 1979; Ge rbing and Anders on 1988) to

conf i gu r e an E M m easur e t ha t demons t r a t e s a s t rong sec -

ond - or de r mod e l f i t w i t h our obse r v ed da t a . S t r ong empi r i -

ca l f i nd i ngs conf i r m t he o r i g i na l concep t ua l i za t i on o f E M

as a cons t r uc t tha t is com pose d o f a ph i l osophy o f do i ng

t he r i gh t t h i ng a s we l l a s a des i r e t o t ake advan t age o f

mar ke t oppo r t un i t i e s .

W h i l e we s t ud i ed E M i n the con t ex t o f the mar ke t i ng

func t ion ( fo r that i s how i t is def ined ) , i t i s l ikely that the

va l ues and behav i o r s t ha t p r omot e env i r onment a l con-

sc i ousnes s a r e sha r ed ac r os s t he o r gan i za t i on . F u t u r e

r esea r ch shou l d i nves t i ga t e the ex t en t t o whi ch t he v i s i on

of t op l eade r sh i p i n f l uences E M and t he degr ee t o whi ch

t he e f f ec t s o f E M a r e o r gan i za t i on- wi de r a t he r than occur -

r i ng so l e l y i n a m ar ke t i ng con t ex t . A l so , s t ud i es t ha t exam-

i ne t he ex t en t t o whi ch E M a f f ec t s t he f i r m ' s ove r a l l

i mage , i t s ab i l i t y t o r ec r u i t ded i ca t ed empl o yees , and i ts

adep t nes s a t nego t i a t i ng po l i t i ca l l andscapes woul d be

useful .

Acc or d i ng t o t he r e sour ce - based v i ew o f t he f' tr m , o r ga -

n i za t i ons i den t i f y and d i f f e r en t ia t e themse l ves by t he s e t

o f r e sour ces t hey choo se t o deve l op . Indeed , f i r ms can be

t hought o f a s bu nd l es o f r e sour ces . RBV cons i de r s a s t ra -

t eg i ca l ly i mp or t an t r e sou r ce a s so met h i ng t ha t i s r a r e ; i t is

no t w i de l y d i s t r i bu t ed w i t h i n an i ndus t r y . F or exampl e ,

mos t f ar ms do no t a sp i r e t o env i r opr eneur i a l i sm as a p r i -

mar y d i f f e r en t i a t i ng f ac to r . I n suppor t o f th i s , on l y 10 o f

t he pa r t i c i pa t i ng f i r ms i n t h i s s t udy scor ed above 5 .5

( r a n g e o f 1 t o 7) o n E M . R B V w o u l d c a t e g o r i z e

env i r opr eneur i a l mar ke t i ng a s a un i que o r gan i za t i ona l

r e sour ce , on e t ha t i s d i f fi cu l t t o l ea r n and cos t l y t o copy .

Acco r d i ng t o t he RBV, t he degr ee o f t ac i t ness o f a r e sour ce

enhance s t h is d i f fi cu l ty . T ac it r e sour ces ( such a s mar ke t

o r i en t a t i on and E M ) a r e sk il l based . F o l l owi ng RBV t he -

or y , we con cep t ua l i zed E M as a va l uab l e ( r en t - p r oduc i ng)

r e s o u r c e

T h e p a t h d e p e n d e n c i e s s u g g e s t e d b y R B V a n d s u p -

por t ed i n o ur r e su l ts c an be desc r i bed a s r e so ur ce - -~ capa -

b i l i ty ~ com pe t i t i ve advan t age . Our f i rs t hypo t he s i s pos -

i t ed t ha t a f i r m ' s E M s t r a t egy deve l opment i s pos i t i ve l y

r e l a t ed to new pr oduc t succes s , whi l e Hypot he s i s 2 s ta t ed

t ha t new pr o duc t succ es s i s pos i t ive l y r e la t ed t o change i n

m a r k e t s h a r e . T h e s e h y p o t h e s e s w e r e b o r n e o u t . T h e s e

r esu l t s a r e cons i s t en t w i t h t he pe r spec t i ve t ha t un i que

r esour ces ( E M ) l ead t o un i que capab i l i t i e s ( new pr oduc t

succes s ) . Bu t t h i s i s wher e t he d i r ec t e f f ec t o f E M may end .

T ha t is , RB V sugges t s no d i r ec t e f f ec t o f E M on a f i r m ' s

com pe t i t i ve advan t age ( e .g ., change i n mar ke t sha r e) . T he

ab i l i t y o f E M t o u l t i ma t e l y t r ans l a t e i n t o compe t i t i ve

advan t age depend s on f i r ms ' en t i r e bund l e o f capab i li t ie s

( i .e . , s t r eng t h o f d i s t r ibu t i on , sup p l y cha i n e f f i c iency , p r ic -

i ng power , e t c . ). T h i s no t i on was bor n e ou t by an absence

of a s i gn i f i can t r e l a t ionsh i p o f E M wi t h change i n mar ke t

sha r e . Howe ver , i t shou l d be r eas sur i ng t o env i r onm ent a l -

i s ts t ha t E M d i d no t r e l a t e nega t i ve l y to ma r ke t sha r e . A

f e a r o f t r a d in g o f f e n v i r o n m e n t a l is m w i th p e r f o r m a n c e

m a y b e h i n d e r in g s o m e f i rm s f r o m b e c o m i n g m o r e e n v i -

r onm ent a l i n the i r f ocus . F or exampl e , som e f i rms m ay no t

want t o emp has i ze e nv i r onm ent a l bene f i t s f o r f ea r o f d i l u t -

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i ng b r and i den t i ty , op t i ng i ns tead t o emp has i ze wha t t h e y

vi ew t o be t he p r i ma ry a t t r ibu t e s o f t he b r and .

Our i nves t i ga t i on r ega rd i ng t he ro l e o f marke t t u rbu-

l ence i mpl i e s t ha t E M i s a deep l y i ngra i ned bus i nes s ph i -

l osophy , a l t hough a l ong i t ud i na l s t udy woul d be r equ i r ed

to ver i fy this . In this s tudy at leas t , turbulenc e in the mar-

ke t p l ace d i d no t r e l a t e t o t he l eve l o f E M i n o rgan i za t ions .

T h i s r e su l t i s cons i s t en t w i t h t hose t ha t have exami ned

o t he r t ac it , sk i l l -based r e sources i n o rgan i za t ions (S l a t e r

and N arve r 1994) . As ope ra t i ona l i zed he re , E M cap t ures

no t on l y t he m i nd- se t t ha t t he r e a r e oppor t un i t i e s i n env i -

ronm ent a l e f fo r t s bu t t ha t f i rms h ave r e spons i b i l it i e s t o t he

env i ronment and t o fu t u r e gene ra t i ons . Bus i nes ses t ha t

have em bed ded t h i s mi nd- se t i n t he i r cu l t u r e a r e no t l i ke l y

t o chang e a s t u rbu l en ce i nc r eases o r dec reases . Ce r t a i n ly ,

t h i s no t i on mus t be t e s t ed i n fu t u r e r e sea r ch .

M e nt i oned ea r l ie r , our r e su l t s were l i mi t ed t o p roduc t -

r e l a t ed ac t i v it i e s , and o t he r marke t i ng m i x va r i ab l e s may

come i n t o p l ay . Cer t a i n l y t he a rgument can be made t ha t

E M s t r a teg i e s can l ead t o p r i ce supe r i o r i t y made poss i b l e

by cos t adv an t age (P o r t e r 1980) . E M m ay dr i ve subs tan t i al

cos t advan t ages made poss i b l e by r educ i ng was t e , con-

se rv i ng ene rgy , r eus i ng ma t e r i a l s , and addres s i ng l i f e -

cyc l e cos t s (S hr i vas t ava 1995 : 955) . E M may a l so have

pos i t i ve i mpac t s on ove ra l l co rpora t e i mage , whi ch m i gh t

t r ans l a te i n t o i nc r ea sed mark e t sha re and p rof i tab i l it y . One

cou l d a l so hy po t he s i ze t ha t E M woul d a f f ec t the o rgan i za -

t i on ' s bo t t om l i ne d i r ec t l y th rough t he po t en t i a l f o r r educ -

i ng l ong- t e rm r i sks a s soc i a t ed wi t h r e source dep l e t i on ,

f l uc t ua t i ons i n en e rgy cos t s , p roduc t l i ab i l it i e s, and p o l l u -

t i on and was t e management (S hr i vas t ava 1995 : 955) . T h i s

i s f e r t il e g round fo r f u t u r e r e sea r ch .

mp licat ions for M anagers

Impl i ca t i ons fo r manager s a r e numerous . F i r s t , man-

age r s shou l d no t a s sume t ha t a bus i nes s ph i l osophy t ha t

i nc l udes a com mi t m ent t o t he env i ronme nt is incons i s t en t

wi t h t he p ropo s i t i on t ha t t he f i r s t p r i o r it y o f an y f i rm i s i t s

own we l f a r e an d t ha t o f i t s s t akeho l de rs . Resu l t s i n t h i s

s t udy sugges t t ha t whi l e E M s t r a t eg i e s may have t he i r

bas i s i n p rom ot i ng t he pub l i c good , i t i s no t necessa r i l y t o

t he de t r i men t o f t he o rgan i za t i on . T h i s i s cons i s t en t w i t h

M a t h u r a n d M a t h u r ( 2 0 0 0 ) , w h o f o u n d t h a t o n ly c e r ta i n

t ypes o f env i ronm ent a l marke t i ng s t r a teg i e s r e su l t i n nega -

t i ve s t ock p r i ce r eac t i ons . I ndeed , t he r e a r e many exam-

p l e s o f f ir m s t h a t h a v e u s e d E M t o i m p r o v e t h e i r

com pe t i t i ve pos i ti on .

S e c o n d , a f u t u r e c h a l l e n g e f o r m a n a g e r s w h o w i s h t o

mo ni t o r t he i r com pe t i t i on i s t o d i sce rn f i rms t ha t a r e t r u l y

embark i ng on an E M s t r a t egy ve r sus f i rms t ha t a r e em-

p l oy i ng t he env i ronment a s a means t o p l aca t e spec i a l

i n t e r e s t g roups o r pander t o n i che t a rge t marke t s . G i ven

t ha t ex t e rna l marke t p r es sures do no t s eem t o d r i ve f i rms '

dec i s i ons t o adop t E M , mana ger s ma y be ab l e t o d i sc r i mi -

n a t e t r u e E M b y m o n i t o r i n g t h e e x t e n t t o w h i c h g o v -

e rnment a l o r spec i a l i n t e r e s t p r e s sures a r e i nc r eas i ng i n

s e r v e d m a r k e t s a n d b y t h e e x t e n t t o w h i c h t h e a d o p t i o n o f

env i ronment a l p r e roga t i ves a r e occur r i ng a t t he s t r a t eg i c

or tact ical level in the f i rm.

T h i r d , i n t h e c a s e o f a n o t h e r s o c i a ll y c o m p l e x r e s o u r c e ,

marke t o r i en t a t i on , we have l ea rned t ha t gaps be t ween

p h i l o s o p h y a n d f u n c t i o n c a n c re a t e p ro b