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The human firm in the natural environment: a socio-economic analysis of its behavior
In: Ecological Economics. Elsevier: Amsterdam; New York; Oxford; Tokyo. ISSN 0921-8009; e-ISSN 1873-6106
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| Abstract |
New realities are leading an increasing number of businesses to discard their old managerial perspectives and practices with regard to the natural environment. As desirable as the new approaches are, the environmental behavior (pollution, pollution prevention, etc.) of these firms cannot be explained by the neoclassical model. Thus, this paper develops a socio-economic model of the firm's environmental behavior that incorporates managerial, social, environmental, and ethical realities not found in the neoclassical model. In contrast to short-term oriented, opportunistic approaches, managements are increasingly setting high environmental goals, integrating environmental management with other aspects of management, developing environmentally oriented strategies that harmonize economic and environmental interests, and utilizing system-wide approaches along with socially responsible decision making. This cannot be explained by the neoclassical model in which the firm's environmental behavior is an outcome of economic incentives from (1) product and resource markets, and (2) regulators. The socio-economic model adds four important new elements: (1) the firm's internal organizational capability; (2) environmental opportunities; (3) society's environmental concerns, awareness, and demands; and (4) influences from extra-firm institutions. Therefore, the firm's environmental behavior is an outcome not only of economic incentives but of (1) the firm's capacity to take advantage of opportunities, and (2) the external social influences on it. |
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