Please use this identifier to cite or link to this item:
http://hdl.handle.net/10397/106617
Title: | Sweeping it under the rug : positioning and managing pollution-intensive activities in organizational hierarchies | Authors: | Lee, J Bansal, P |
Issue Date: | Jun-2024 | Source: | Strategic management journal, June 2024, v. 45, no. 6, p. 1151-1179 | Abstract: | Research Summary: Many corporate groups have multiple layers with parent companies owning subsidiaries, which own other subsidiaries, and so forth, in a pyramid-like ownership structure. We argue that corporate groups perform their pollution-intensive activities at the lower levels of the corporate hierarchy to buffer the parent from pollution-related regulatory risks. Our analysis of 7400 US-based business establishments owned by the 67 largest US-headquartered chemical manufacturing corporate groups supported this argument. We also found that they were even more likely to do so in states with greater environmental stringency, whether it be in the home state of the parent or the host state of the subsidiary. Our research calls into question the effectiveness of environmental regulations if companies have the opportunity to shift polluting activities lower in their corporate hierarchy. Managerial Summary: Many commentators assert that firms offshore or outsource pollution-intensive activities to avoid environmental regulations. In this research, we suggest a third approach in avoiding environmental regulations: locating pollution lower in the hierarchy of multilayered corporate groups, which are companies that own subsidiaries that own other subsidiaries and so on. By analyzing data on the 67 largest US-headquartered chemical manufacturing corporate groups, we found support for this assertion. We also found that pollution is more likely to be located lower in multilayered corporate groups when they are subject to stringent environmental regulations. The multilayered corporate form allows parent companies to insulate themselves from the regulatory risks of pollution-intensive activities of their subsidiaries through their limited liability status. |
Keywords: | Corporate environmental practices and performance Multilayered corporate groups Organizational buffering State environmental stringency |
Publisher: | John Wiley & Sons Ltd. | Journal: | Strategic management journal | ISSN: | 0143-2095 | EISSN: | 1097-0266 | DOI: | 10.1002/smj.3582 | Rights: | © 2024 The Authors. Strategic Management Journal published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made. The following publication Lee, J., & Bansal, P. (2024). Sweeping it under the rug: Positioning and managing pollution-intensive activities in organizational hierarchies. Strategic Management Journal, 45(6), 1151-1179 is available at https://doi.org/10.1002/smj.3582. |
Appears in Collections: | Journal/Magazine Article |
Files in This Item:
File | Description | Size | Format | |
---|---|---|---|---|
Lee_Sweeping_Rug_Positioning.pdf | 2.33 MB | Adobe PDF | View/Open |
Page views
16
Citations as of Jun 30, 2024
Downloads
5
Citations as of Jun 30, 2024
Google ScholarTM
Check
Altmetric
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.