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Choosing strategic responses to address emerging environmental regulations: Size, perceived influence and uncertainty

Listed author(s):
  • Bruce Clemens


    (Western New England College)

  • Charles E. Bamford


    (McColl School of Business, Queens University of Charlotte)

  • Thomas J. Douglas


    (Southern Illinois University Edwardsville School of Business)

How companies respond to impending regulations is a significant aspect of corporate strategy. Regulations, especially environmental regulations, are expanding quickly and are increasingly important to firm success. The threat of impending environmental regulation forces companies to choose levels of strategic responses on a continuum from passive to active. Using practitioner oriented research and existing theoretical models of corporate response, this study finds that the types of strategic response are negatively related with size, positively related with state uncertainty and negatively related with effect/response uncertainty. Based on existing literature and the results of this study, this paper suggests that simplifying the uncertainty construct could lead to more definitive findings in future research. The study results also suggest that a curvilinear relationship may exist between managerial perception of influence and level of strategic response. Most importantly, the findings could have a significant impact on firm decision making regarding environmental investments. For example, it is hoped that firms will be able to use the findings of this study to further understand and anticipate their competitors’ decisions. Practitioners may also benefit from the conclusions on uncertainty in that they may be able to more cleanly parse the types of uncertainty immersed in impending environmental regulations. Finally, firms may be better able to understand decisions by their own managers and their competitors, managers in terms of their perceived influence over the regulatory process.

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Paper provided by McColl School of Business, Queens University of Charlotte in its series Discussion Paper Series with number 2008-02.

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Length: 42 pages
Date of creation: 2008
Handle: RePEc:msb:wpaper:2008-02
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  1. Chester Harris, 1967. "On factors and factor scores," Psychometrika, Springer;The Psychometric Society, vol. 32(4), pages 363-379, December.
  2. Clemens, Bruce W. & Douglas, Thomas J., 2005. "Understanding strategic responses to institutional pressures," Journal of Business Research, Elsevier, vol. 58(9), pages 1205-1213, September.
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