Environmental scanning, cross-functional coordination and the adoption of green strategies: An information processing perspective

Abstract

Information processing theory was applied to explore how external information processing and internal information sharing affect a firm's choice of a green strategy. Analyses of two datasets from Chinese manufacturing firms reveal that environment scanning and inter-functional coordination are important drivers for the adoption of a green strategy. Specifically, firms that engage in extensive environment scanning tend to adopt reactive as opposed to proactive green strategies, whereas firms with effective inter-functional coordination mechanisms tend to adopt proactive rather than reactive green strategies. An entrepreneurial orientation plays a complementary role in a firm's choice of green strategy. It increases the likelihood that a firm will adopt proactive rather than reactive green strategies, and it further strengthens the influences of environment scanning and inter-functional coordination. Overall, these findings offer significant implications for firms regarding how and under what conditions they should adopt green strategies.