Corporate Environmentalism: A Perspective of Multinational Company

Abstract

Research on environmentalism is still inconclusive and limited especially for global company. This paper tried to explore the theoretical framework in examining how the concept should be applied by multinational firm in order to be accepted by the host society. Having adequate combination between stakeholder theory and international business concepts, we found that there are possibilities for reverse relations between parent and subsidiaries environmentalism-based competitive advantage. Having examining potential challenges on host country, the study highlighted the importance of internal and external awareness for environment-friendly business atmosphere and the existence of the three antecedents: regulatory, industrial and market pressure. Regulatory pressure comes from host government policy which tried to protected local environment from pollutions. For high awareness nations, obligation to prolong environment quality has become one of industrial policy which in turn creates pressure to the company. The same pressure count for customer side. Lastly, having treating the variable on learning management context, there is possibility that after subsidiary achieved its best performance, then it will have an inverse impact to an internal, external and the three antecedents simultaneously. The final contribution of this study is comprehensive environmental-based competitive advantage for multinational companies. We enclosed the paper by proposing questionnaires for future research.

Keywords: Corporate Environmentalism; Multinational Company; Market pressure; Industrial pressure; Green regulation; Competitive advantage