Impact of Environmental Orientation on Proactive and Reactive Environmental Strategies: Mediating Role of Business Environmental Commitment

Although they are significant contributors to environmental concerns, emerging economies provide a very different context concerning corporate environmental behavior. The study investigates the impact of environmental orientation and business environmental commitment on proactive and reactive environmental strategies by firms in an emerging economy. Based on stakeholder perspective, organizational legitimacy concept, and natural-resource-based view, we have proposed a model where business environmental commitment is presented as an explanatory mechanism for the relationship of internal and external environmental orientation and proactive and reactive environmental strategies. A convenient sampling method was used for data collection from 152 SMEs operating in three industrial cities of Pakistan. Structural equation modeling (SEM) was used as an analysis technique. Results revealed that internal environmental orientation has a more profound impact on proactive stance than the impact of external environmental orientation on reactive environmental strategies. Similarly, the business environmental commitment was also identified as an important mediating force. Our results draw important implications for theory and practice.