Abstract
Purpose – The purpose of this paper is to analyze the moderating effect of environmental human resource management on the relationship between firms’ environmental management practices and competitive advantages of cost and differentiation.
Design/methodology/approach – CEOs of Spanish chemical firms were asked to respond to a questionnaire containing the measures of the study variables. The final sample consists of 94 firms and the hypotheses were tested using partial least square methodology.
Findings – Empirical evidence showed that companies with a high level of human resource environmental practices can benefit from the advantages in costs and differentiation derived from the implementation of pollution prevention technologies.
Originality/value – From a theoretical standpoint, the paper discusses the moderating role of environmental human resource management practices in the relationship between pollution prevention technologies and economic performance. Empirically, it provides evidence of the role of human resource management practices and proactive environmental management practices in supporting competitive advantages of cost and differentiation.
Introduction
The analysis of the relationship between the adoption of environmental practices and corporate performance constitutes a central stream of research in the literature on environmental management (Cohen et al., 1995). Studies that analyse environmental practices from the resource-based view (RBV) suggest that environmental strategies can lead to the creation and development of valuable capabilities which are both rare and difficult to imitate. This focus suggests that companies that adopt proactive or advanced environmental strategies will obtain a sustainable competitive advantage (Hart, 1995; Russo and Fouts, 1997; Sharma and Vredenburg, 1998).
Limitations
A set of limitations of the present article should be noted. First, the cross-section empirical study design does not allow clear causal relationships to be inferred from the results of PLS. For instance, in the case of chemical companies environmental management practices and complementary resources which allow companies to obtain value may be characteristic of the most profitable companies. Nevertheless, there are some indications that refute the fact that these companies experience advantages in costs and differentiation derived from environmental practices to a greater extent than companies with less profitability. The correlation between the profit in previous years and the complementary assets (human resource practices) is very low and not significant (r ¼ 0.03). Another possibility is that the most profitable companies are those which can apply environmental protection measures since they possess a greater quantity of resources. However, the correlation between profit growth and each of the environmental practices is very low or even negative.
Second, there are additional limitations with regard to the data themselves and their sources. Although the data have been confirmed wherever possible by means of alternative sources (e.g. size), this has not been possible in the case of all the variables. The possibility exists, therefore, that the data include a subjective component which is difficult to quantify.
