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Article Excerpt
Relationships between stakeholder influences and the effectiveness of environmental management practices are examined using a sample of 130 diesel fleet operations within Hong Kong Special Administrative Region of China (HKSAR) companies. The results indicate that fleet managers, in the HKSAR have adopted numerous elements of environmental management systems (e.g., environmental policies, planning methods, and implementation practices), but these have yet to be formally systematized. The influence of stakeholder groups on the adoption of more effective environmental management practices was found to be modest in the sample of fleets and appears to be limited to influences from community and media pressures. Fleet size, however, was shown to significantly moderate these relationships. For larger fleets, competitive and governmental pressures also emerge as significant predictors of environmental management practices.
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With increasing regularity, scientific evidence reminds us that current business practices are not sustainable. Whether one looks at the pace of global warming, evidence of mass species extinction, a looming crisis of potable water resources, or the monotonic buildup of toxic materials in our food chains, it is clear that businesses will eventually have to change the way they operate. Not surprisingly, as the true costs of this environmental degradation become clearer, stakeholder pressures are increasingly brought to bear on business firms for more sustainable practices (Mitroff, Pauchant, and Shrivastava 1989; Shrivastava and Siomkos 1989).
Although the best corporations have always listened closely to their customers, the importance of heeding broader stakeholder interests is increasingly being put forth as being critical to long-term business success (Freeman 1994; Freeman and Evan 1990; Henriques and Sadorsky 1999). This case for increased stakeholder influence is grounded in several developments. The Internet and wireless technologies provide stakeholders with better access to timely information, the means to publish their views to an international audience, and greater capacity to form alliances. This not only facilitates their involvement in decision making, but greatly enhances their ability to "shame and blame" large firms. As a result, an increasing number of larger firms are becoming aware of the importance of both building and maintaining a good corporate reputation. Not only can this lead to increased sales in global markets, but it can also translate into a number of other advantages over their rivals (Hart 1995; Nash 2000). Moreover, responsiveness to stakeholder pressures can take on special importance countries with more liberal political traditions (i.e., many European countries), where relationships are especially critical (i.e., Asian cultures), and where joint ventures may be mandated (i.e., developing countries).
In addition, there is a growing realization that sustainable business practices imply a broadened concept of business performance than is the current norm in most countries. In order for societies to avoid depriving future generations of an ability to meet their needs, firms should pursue a "triple bottom line" that addresses economic, environmental, and social dimensions (Deegan 1999; Elkington 1999). Because these broader expectations are emerging at a time when corporate legitimacy is increasingly suspect due to serious breaches in corporate governance, it is reasonable to anticipate actions that will promote greater sensitivity to stakeholder influences. Although these actions can be accomplished through various government-designed and -mandated mechanisms (i.e., regulatory, economic, and communicative), the business community would certainly prefer to convince government policy makers that various voluntary initiatives can effectively inculcate greater stakeholder sensitivity. If widely perceived to be successful, such initiatives may forestall unwanted regulations while, at the same time, affording businesses ample flexibility in their implementation. For example, firms that adopt ISO 14001 certification--an international standard for environmental management systems--or that sign up to more industry-focused initiatives (e.g., "Responsible Care," a voluntary code of practice within the chemical industry) have a mechanism for demonstrating to interested parties that they are environmentally responsive. It is also relevant that most of these programs require firms to provide some evidence that they have a methodology for better understanding stakeholders' views.
Unfortunately, relatively little is known about how much a firm's environmental practices are influenced by stakeholder pressures. Accordingly, this study will take a focused approach by examining how stakeholder pressures are influencing fleet operations within firms in the Hong Kong Special Administrative Region of China (HKSAR). For the purpose of this study, fleet operations encompass the management of corporate diesel vehicles (cars, buses, and trucks), which may be used for a broad range of purposes involving the transport of both people and goods within the territory. In the HKSAR, fleet vehicles are predominantly diesel powered and fleets tend to be relatively smaller as the territory is both small and congested. The HKSAR is an interesting area to examine these relationships because well-enforced regulations have yet to emerge in response to both ample and growing public concerns about environmental issues. Moreover, emissions from diesel vehicles comprise the greatest single contributor to air pollution in the HKSAR and are among the most obvious manifestations of environmental degradation (Tung 2000; Tung 2001).
BACKGROUND
Air pollution poses a serious threat to the HKSAR's economy and the well-being of its citizens. Apart from being a serious threat to people's health (Kinney 1999; Morgan, Reger, and Tucker 1997), there is also much concern that it will further tarnish the image of the HKSAR as an international city, thereby affecting its tourism industry and efforts to attract high-tech firms (Ng 2000). Air pollution now tops the list of complaints to the Environmental Protection Department (EPD) and pressures are mounting from a broad range of stakeholders for the government of the territory to do something about it. Of particular relevance to this study, direct stakeholder pressure on companies with substantial fleet operations is also increasing.
Air Pollution and Fleet Operations
Air pollution is comprised of many components, including black smoke, total suspended particulates (TSPs), respirable suspended particulates (RSPs), nitrogen dioxide (N[O.sub.2]), sulphur dioxide (S[O.sub.2]), carbon monoxide (CO), ozone, volatile organic compounds (VOC), and lead. RSPs, which in urban areas are most often from diesel engines, are particularly troublesome and lead to numerous respiratory ailments such as shortness of breath, coughing and wheezing, and damage to lung tissues. Individuals with chronic lung and heart disease, influenza, and asthma, as well as elderly people and children, are more susceptible to RSPs than healthy adult populations. Such particulate matter has been clearly linked to increases in mortality (Dora 1999; MacKenzie 1997).
In order to evaluate the monetary values associated with morbidity and mortality caused by the rise of ambient air pollutants, a study was commissioned by the HKSAR's Environmental Protection Department (Lai 1998). The "cost of illness" relating to air pollution, respiratory and cardiovascular diseases, was estimated to be 0.35 percent of GDP (HK$3.84 billion) in 1996. This includes direct and indirect costs such as medical expenses, productivity loss, compensation schemes, and awards. When a more liberal "willingness to pay" approach (which asks people how much they would be willing to pay to avoid disease occurrence) was used to take into account other, nonmarket values (e.g., pain and suffering over and above the cost of illness), the economic cost increases to HK$5.64 billion, or 0.51 percent of GDP. These monetary values provide some indication of the economic benefits that may attend reductions in air pollution.
As reported by the Environmental Protection Department, air pollution from diesel vehicles in the HKSAR has exceeded that from all industrial activity since 1991 (EPD 2000). Although industrial pollution has been reduced by the migration of most manufacturing to mainland China, this has been much more than offset by a substantial net increase in the number of motor vehicles. In addition, depending on the season, much of the industrial pollution simply blows back across the border from neighboring Shenzhen. As a result, RSPs in the HKSAR are about 30 to 50 percent higher than those in New York and Tokyo. Of relevance to this study is the fact that diesel vehicles, by themselves, account for 98 percent of the RSPs and 75 percent of nitrogen oxide emissions from all vehicular sources. This reflects the fact that the HKSAR has the highest ratio of diesel-powered vehicles in the world, with about 30 percent of all vehicles being diesel-powered,...
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