Natural Environment, Market Orientation, and Firm Innovativeness: An Organizational Life Cycle Perspective

Drawing upon the corporate social responsibility literature, we investigate the moderating effects of the natural environment and the stage of an organization's life cycle on the market orientation to firm innovativeness relationship. Through 229 owners or chief executive officer respondents, our results establish evidence of (1) a positive linkage between market orientation and firm innovativeness; (2) natural environmental policy positively moderating the market orientation to firm innovativeness relationship; and (3) organizational life cycle negatively moderating market orientation to innovativeness. Our findings suggest ventures characterized as being early in the organizational life cycle are more likely to have a positive environmental policy toward the natural environment leading to a competitive advantage through firm innovativeness.

[1]  Terry S. Overton,et al.  Estimating Nonresponse Bias in Mail Surveys , 1977 .

[2]  Nuria E. Hurtado-Torres,et al.  Environmental strategy and performance in small firms: a resource-based perspective. , 2008, Journal of environmental management.

[3]  Stuart L. Hart,et al.  From Heresy to Dogma: An Institutional History of Corporate Environmentalism , 1997 .

[4]  K. Cameron,et al.  Organizational Life Cycles and Shifting Criteria of Effectiveness: Some Preliminary Evidence , 1983 .

[5]  Larry E. Toothaker,et al.  Multiple Regression: Testing and Interpreting Interactions , 1991 .

[6]  P. H. Friesen,et al.  A Longitudinal Study of the Corporate Life Cycle , 1984 .

[7]  E. Iyer,et al.  Corporate Environmentalism: Antecedents and Influence of Industry Type , 2003 .

[8]  J. McGuire,et al.  Corporate Social Responsibility and Firm Financial Performance , 1988 .

[9]  Eric Hansen,et al.  How managerial attitudes toward the natural environment affect market orientation and innovation , 2011 .

[10]  C. Schriesheim.  Causal Analysis: Assumptions, Models, and Data , 1982 .

[11]  Warren Boeker,et al.  New Venture Evolution and Managerial Capabilities , 2005, Organ. Sci..

[12]  Amy J. Hillman,et al.  Corporate Political Activity: A Review and Research Agenda , 2004 .

[13]  P. Shrivastava.  The Role of Corporations in Achieving Ecological Sustainability , 1995 .

[14]  Shaker A. Zahra,et al.  The Effect of the Environment on Export Performance among Telecommunications New Ventures , 1997 .

[15]  S. Laforet.  Size, strategic, and market orientation affects on innovation , 2008 .

[16]  John F. Sherry,et al.  Creating a Market Orientation: A Longitudinal, Multifirm, Grounded Analysis of Cultural Transformation , 2006 .

[17]  A. Campbell,et al.  Corporate strategy: The quest for parenting advantage , 1995 .

[18]  Matthew W. Rutherford,et al.  The Influence of Large Stake Family Control on Performance: Is It Agency or Entrenchment? , 2009 .

[19]  Anne L. Souchon,et al.  The quality of market-oriented behaviors: Formative index construction , 2008 .

[20]  Christian Homburg,et al.  Applications of structural equation modeling in marketing and consumer research: A review , 1996 .

[21]  C. Fombrun,et al.  What's in a Name? Reputation Building and Corporate Strategy , 1990 .

[22]  Yu‐Shan Chen.  The Positive Effect of Green Intellectual Capital on Competitive Advantages of Firms , 2007 .

[23]  M. Hannan,et al.  Structural Inertia and Organizational Change , 1984 .

[24]  Caron H. St. John,et al.  Environmental Uncertainty and Product-Process Life Cycles: A Multi-level Interpretation of Change Over Time , 2003 .

[25]  Ram Subramanian,et al.  Examining the Market Orientation-Performance Relationship: A Context-Specific Study , 1998 .

[26]  Ivo Welch,et al.  The Effect of Socially Activist Investment Policies on the Financial Markets: Evidence from the South African Boycott , 1995 .

[27]  James M. Sinkula,et al.  The Complementary Effects of Market Orientation and Entrepreneurial Orientation on Profitability in Small Businesses** , 2009 .

[28]  Kenneth E. Aupperle,et al.  An empirical examination of the relationship between corporate so#al responsibility and profitabilit , 1985 .

[29]  D. Dougherty,et al.  Sustained product innovation in large, mature organizations: Overcoming innovation-to-organization problems. , 1996 .

[30]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[31]  A. Grinstein.  The effect of market orientation and its components on innovation consequences: a meta-analysis , 2008 .

[32]  Gregory G. Dess,et al.  Clarifying the Entrepreneurial Orientation Construct and Linking It To Performance , 1996 .

[33]  Bernard J. Jaworski,et al.  Market orientation: Antecedents and consequences , 1993 .

[34]  Anil Menon,et al.  Enviropreneurial Marketing Strategy: The Emergence of Corporate Environmentalism as Market Strategy , 1997 .

[35]  Anil Menon,et al.  Cause-Related Marketing: A Coalignment of Marketing Strategy and Corporate Philanthropy , 1988 .

[36]  R. Rumelt.  How much does industry matter , 1991 .

[37]  J. R. Camino,et al.  Re-evaluating green marketing strategy : a stakeholder perspective. , 2007 .

[38]  Ricky Y. K. Chan,et al.  Does the Natural-Resource-Based View of the Firm Apply in an Emerging Economy? A Survey of Foreign Invested Enterprises in China , 2005 .

[39]  Patrick T. Gibbons,et al.  Influences on Strategic Planning Processes among Irish SMEs , 2005 .

[40]  J. Aragón-Correa.  Strategic proactivity and firm approach to the natural environment , 1998 .

[41]  Thomas C. Powell,et al.  How much does industry matter ? An alternative empirical test , 1996 .

[42]  Ahmet H. Kirca,et al.  Market Orientation: A Meta-Analytic Review and Assessment of its Antecedents and Impact on Performance , 2005 .

[43]  Abagail McWilliams,et al.  Corporate social responsibility and financial performance: correlation or misspecification? , 2000 .

[44]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[45]  J. Aragón-Correa.  RESEARCH NOTES. STRATEGIC PROACTIVITY AND FIRM APPROACH TO THE NATURAL ENVIRONMENT. , 1998 .

[46]  Alfred A. Marcus,et al.  A General Dynamic Capability: Does it Propagate Business and Social Competencies in the Retail Food Industry?* , 2006 .

[47]  R. Bagozzi,et al.  On the evaluation of structural equation models , 1988 .

[48]  M. Meulenberg,et al.  Market Orientation, Innovativeness, Product Innovation, and Performance in Small Firms , 2004 .

[49]  C. Coulton,et al.  Interaction Effects in Multiple Regression , 1993 .

[50]  Allison W. Pearson,et al.  An Exploratory Comparison of the Behavioral Dynamics of Top Management Teams in Family and Nonfamily New Ventures: Cohesion, Conflict, Potency, and Consensus , 2005 .

[51]  Sanjay Sharma,et al.  Proactive corporate environmental strategy and the development of competitively valuable organizational capabilities , 1998 .

[52]  S. Hart.  A Natural-Resource-Based View of the Firm , 1995 .

[53]  G. Carroll,et al.  The Liability of Newness: Age Dependence in Organizational Death Rates , 1983 .

[54]  K. Fernow.  New York , 1896, American Potato Journal.

[55]  Robert D. Klassen,et al.  PLANT‐LEVEL ENVIRONMENTAL MANAGEMENT ORIENTATION: THE INFLUENCE OF MANAGEMENT VIEWS AND PLANT CHARACTERISTICS , 2001 .

[56]  Samuel L. Seaman,et al.  HIGH AND LOW LEVELS OF ORGANIZATIONAL ADAPTATION: AN EMPIRICAL ANALYSIS OF STRATEGY, STRUCTURE, AND PERFORMANCE , 1994 .

[57]  V. Govindarajan,et al.  Organizational DNA for Strategic Innovation , 2005 .

[58]  M. C. Jensen,et al.  Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit , 1976 .

[59]  M. Russo,et al.  A Resource-Based Perspective On Corporate Environmental Performance And Profitability , 1997 .

[60]  Kayhan Tajeddini,et al.  Examining the Effect of Market Orientation On Innovativeness , 2006 .

[61]  S. Venkataraman,et al.  The entrepreneur–environment nexus: Uncertainty, innovation, and allocation , 2010 .

[62]  Ichak Adizes,et al.  Organizational passages—Diagnosing and treating lifecycle problems of organizations , 1979 .

[63]  Andrew J. Hoffman,et al.  From Heresy to Dogma: An Institutional History of Corporate Environmentalism , 1999 .

[64]  Neil A. Morgan,et al.  A Configuration Theory Assessment of Marketing Organization Fit with Business Strategy and Its Relationship with Marketing Performance , 2003 .

[65]  O. C. Ferrell,et al.  Corporate citizenship: Cultural antecedents and business benefits , 1999 .

[66]  Peter Wright,et al.  AGENCY CONFLICT AND CORPORATE STRATEGY: THE EFFECT OF DIVESTMENT ON CORPORATE VALUE , 1997 .

[67]  Michael E. Porter,et al.  Green and Competitive : Ending the Stalemate , 1996 .

[68]  D. Dillman,et al.  How to conduct your own survey , 1994 .

[69]  D. Slevin,et al.  Strategic management of small firms in hostile and benign environments , 1989 .

[70]  Gregory G. Dess,et al.  Linking Two Dimensions of Entrepreneurial Orientation to Firm Performance: The Moderating Role of Environment and Industry Life Cycle , 2001 .

[71]  Arieh A. Ullmann.  Data in Search of a Theory: A Critical Examination of the Relationships Among Social Performance, Social Disclosure, and Economic Performance of U.S. Firms , 1985 .

[72]  Samuel B. Graves,et al.  The corporate social performance-financial performance link , 1997 .

[73]  R. Cyert,et al.  Theory of the Firm , 1966 .

[74]  F. Webster.  The rediscovery of the marketing concept , 1988 .

[75]  Nazim U. Ahmed,et al.  Perceptions of Environmental Consciousness in U.S. Small Businesses: An Empirical Study , 2003 .

[76]  David W. Gerbing,et al.  An Updated Paradigm for Scale Development Incorporating Unidimensionality and Its Assessment , 1988 .

[77]  D. Hambrick,et al.  TOP EXECUTIVE COMMITMENT TO THE STATUS QUO: SOME TESTS OF ITS DETERMINANTS , 1993 .

[78]  Raimar Richers.  The theory of economic development , 1961 .

[79]  David J. Miller,et al.  The Correlates of Entrepreneurship in Three Types of Firms , 1983 .

[80]  Justin B. Craig,et al.  The Natural Environment, Innovation, and Firm Performance: A Comparative Study , 2006 .

[81]  P. M. Podsakoff,et al.  Self-Reports in Organizational Research: Problems and Prospects , 1986 .

[82]  Giovanni Gavetti,et al.  Capabilities, cognition, and inertia: evidence from digital imaging , 2000 .

[83]  John C. Narver,et al.  The Effect of a Market Orientation on Business Profitability , 1990 .

[84]  P. Julien,et al.  Defining the field of research in entrepreneurship , 2001 .

[85]  P. Bentler,et al.  Comparative fit indexes in structural models. , 1990, Psychological bulletin.

[86]  F. Schmidt,et al.  Corporate Social and Financial Performance: A Meta-Analysis , 2003 .

[87]  Joel Makower,et al.  The E-Factor: The Bottom-Line Approach to Environmentally Responsible Business, Joel Makower. 1993. Times Books, New York, NY. 292 pages. ISBN: 0-8129-2057-0. $22.50 , 1995 .

[88]  Judith F. Posnikoff.  Disinvestment From South Africa: They Did Well By Doing Good , 1997 .

[89]  Mark Cordano,et al.  Pollution Reduction Preferences of U.S. Environmental Managers: Applying Ajzen'S Theory of Planned Behavior , 2000 .

[90]  Bernard J. Jaworski,et al.  Market Orientation: The Construct, Research Propositions, and Managerial Implications , 1990 .

[91]  S. Banerjee,et al.  Corporate environmentalism : the construct and its measurement , 2002 .

[92]  Frances J. Milliken,et al.  Explaining organizational responsiveness to work-family issues: The role of human resource executives as issue interpreters , 1998 .

[93]  G. Luffman,et al.  Implementing Marketing Strategy Through a Market Orientation , 2000 .

[94]  Nick Sofroniou,et al.  Statistical Concepts: a Second Course for Education and the Behavioral Sciences , 2003 .

[95]  P. H. Friesen,et al.  Innovation in Conservative and Entrepreneurial Firms: Two Models of Strategic Momentum , 1982 .

[96]  Jin K. Han,et al.  Market Orientation and Organizational Performance: Is Innovation a Missing Link? , 1998 .