Stakeholders and environmental management practices: an institutional framework

Abstract Despite burgeoning research on companies' environmental strategies and environmental management practices, it remains unclear why some firms adopt environmental management practices beyond regulatory compliance. This paper leverages institutional theory by proposing that stakeholders – including governments, regulators, customers, competitors, community and environmental interest groups, and industry associations – impose coercive and normative pressures on firms. However, the way in which managers perceive and act upon these pressures at the plant level depends upon plant‐ and parent‐company‐specific factors, including their track record of environmental performance, the competitive position of the parent company and the organizational structure of the plant. Beyond providing a framework of how institutional pressures influence plants' environmental management practices, various measures are proposed to quantify institutional pressures, key plant‐level and parent‐company‐level characteristics and plant‐level environmental management practices. Copyright © 2004 John Wiley & Sons, Ltd and ERP Environment.