Environmental policy and corporate greening in China
Creators: name: Zhang, Weijiong
Publisher: name: University of British Columbia
Year: 2009

description: Rapid economic development in the past two decades in China has caused serious environmental problems. These problems will not only threaten sustainable development in China, but also threaten it on a global scale. A review of Chinese environmental policy indicated that while the prevalent control and command approach can be very effective under certain conditions, it has severe limitations in its application as it involves high transaction and monitoring costs. Business enterprises have an essential role to play in sustainable development. In order to mitigate environmental problems more effectively, policies need to be designed which could bring about behavioral change and motivate businesses to adopt voluntary measures to protect the environment. A review of empirical studies of corporate behaviour demonstrated the existence of a wide range of behaviours of businesses in relation to their physical environment. The study revealed similar diversity in the responses of Chinese firms with regard to environmental protection. Several alternative paradigms of organizational behaviour provided the basis for articulating an eclectic model to explain differences in the environmental protection behaviour of businesses. The model was tested using data on Chinese enterprises in urban settings. It was then used to interpret and explain differences in the behaviour of Chinese enterprises. Specifically, three methods were used in the empirical investigation: (1) a multi-case study of 30 Shanghai firms. This qualitative study interpreted the experiences of enterprises in terms of the eclectic model; (2) a structural equation modelling (SEM) study. This study tested part of the eclectic model and estimated the relative impacts on corporate policy and environmental performance of institutionalization, organizational structure, organizational culture, attitudinal profiles of leaders and the influence of societal institutions. It was based on a sample of 529 Shanghai enterprises; and (3) a multivariate analysis of variance (MANOVA) study exploring the geographical, economic and demographic antecedents of individual environmental attitudes and corporate responses. This study was based on a survey of 939 enterprises nation wide. The research indicated that most Chinese enterprises were at best reactive and compliance oriented. Only a minority of firms surveyed had moved to a proactive stance where they searched for strategic advantages through greening. No companies were found to have undergone the kind of radical change that makes environmental values dominate the priorities of the firm. Severe financial and space constraints often prevented enterprises from complying with environmental regulations or pursuing environmental objectives articulated in their organizational policies. Three main factors were found to lead to a positive environmental performance. These factors were: (1) positive personal beliefs, attitudes and values regarding environmental protection held by managers; (2) external pressures from government, media and trade associations; and (3) internal influences such as an environmentally-friendly company culture, leadership commitment, and a well designed corporate environmental policy and organizational structure. Age, education, training, average income, industrial sector, company size, city size and GDP level were found to influence people's environmental attitudes and corporate environmental behaviour. Based on these findings, a combination of push and pull strategies were suggested which might induce firms and managers to change their behaviours toward the environment.