Performance Implications of Incorporating Natural Environmental Issues into the Strategic Planning Process: An Empirical Assessment

Abstract

This paper explores the ability of firms to integrate a critical strategic issue, the natural environment, into the strategic planning process within the natural resource‐based perspective. Using survey data collected from a wide variety of firms and industries based in the United States, we empirically examined the antecedents and effects of integrating the natural environment into the formal planning process. These data were analysed using structural equation modelling with the LISREL technique. Overall, our data provided strong support for the hypothesized relationships. Specifically, we found that the level of integration of environmental management concerns in the strategic planning process was positively related to financial and environmental performance. Furthermore, we found that the greater the functional coverage and the more resources provided to environmental issues, the greater the integration of environmental issues in the planning process. These results suggest that concern for environmental issues may yield competitive advantages in the marketplace as the natural resource‐based perspective suggests