Elsevier

Omega

Volume 29, Issue 6, December 2001, Pages 457-471
Omega

An analysis of environmental management, organizational context and performance of Spanish hotels

https://doi.org/10.1016/S0305-0483(01)00033-0Get rights and content

Abstract

This paper addresses the factors that determine the deployment of environmental management practices and its effects on firms’ financial performance. Empirical evidence supporting this investigation is gathered from the Spanish hotel industry. Our results find support for the notion that age of facilities, size, chain affiliation, stakeholder environmental pressures, and their use of operations management techniques exert a lasting influence on the degree of implementation of environmental management practices by hotel firms. Moreover, our findings show a positive relationship between environmental management practices and firms’ financial performance.

Introduction

The degradation of the environment constitutes a main concern of modern society, and this in turn affects firms’ strategy. Industries affect the environment differently and, arguably, each sector may have deployed different strategies to tackle environmental issues [1]. Investigations addressing the responses of firms to environmental concerns have overwhelmingly focused on the manufacturing industry [2]. Surprisingly, however, service firms, “the silent destroyers of the environment” [3] have attracted much less research attention. As a service industry, the tourist sector is particularly interesting as the focus of an investigation on environmental management practices for two main reasons. First, this sector has an increasing economic importance [4], [5]. Second, the tourist industry shows an increasingly higher environmental concern [4]. Such distinctive characteristics of the tourist industry are especially dominant in Spain, where this industry generates 11.1% of the Gross National Product [5]. The tourist industry involves two main activities, namely: accommodation and transportation. In this study, we focus on the accommodation sub-sector for both its outstanding role in the offer of tourist services and for its impact on the environment.

This paper studies the driving factors for hotels to deploy environmental management practices. Our review of the extant literature on environmental management determinants lead us to identify a number of factors that have exerted a considerable impact on such practices: age of facilities, size, chain affiliation, stakeholder environmental pressure, and the use of operations management techniques [6], [7]. Additionally, we have found a number of factors pertinent to the hotel industry that affects environmental management practices, including hotels’ legal category and type of dominant tourism among hotels’ clientele. In addition to exploring such driving factors of environmental management practices, we study the extent to which the deployment of such practices exerts a positive impact on firms’ financial performance.

Our study is structured as follows. First, we review the extant literature on environmental management, focusing on those investigations addressing the hotel industry. We then outline the factors that may influence corporate environmental management and the eventual relationship between such practices and firms’ financial performance. Such discussion leads us to a number of hypotheses. Our empirical investigation is shown in due course and addresses the extent to which our findings show support for our hypotheses. Lastly, the results are discussed and some suggestions for future research are posed.

Section snippets

Corporate environmental management and strategy

Corporate environmental management embraces both technical and organizational activities aimed at reducing the environmental negative impact caused by firms’ operations [8]. Environmental management activities may be classified as “technical or hardware” and “organizational or software” [6], [8], [9]. The former aim at the straight reduction of firms’ pollution output (e.g., modifications in the physical characteristics of the product, or changes in the machinery used to reduce the firms’

Hotel environmental management

As noted above, the absence of environmental regulation addressing the hotel industry lead us to focus on other external mechanisms, such as pressures from stakeholders, as the driving factors of environmental management practices [22], [28], [29]. Furthermore, these practices may be affected by variables such as operations management techniques and methods [30], [31] and the age of hotels’ facilities [32]. We also study the effect of firms’ size on our dependent variable as long as size may

Corporate environmental strategy and firms’ performance

Implementation of corporate environmental strategies tightens organizational boundaries. Restrictions to firms’ behavior may arise from the enactment of internal procedures as well as from conformity with extant regulation. Further, compliance with internal and external procedures posits considerable restrictions to opportunistic behavior of firms as well as increase operational costs, and this in turn has a negative impact on firms’ financial performance [26], [62].

On the other hand,

Sample

A first survey was conducted in November 1998. It targeted the entire population of Spanish 3-, 4- and 5-star hotels. The closing date for replies was February 15, 1999. At that time, we received 168 questionnaires and proceeded with a second survey to establishments, which either did not complete the questionnaire or did not identify themselves. The closing date for reception of the questionnaires was April 8, 1999 and that made a total number of 304 replies. No significant differences were

Results

Table 3 shows means, standard deviations, and correlations for all variables. As noted above, hierarchical multiple regression analysis models used environmental management as the dependent variable. Such models tested for the effects of facility age (Hypothesis 1), size (Hypothesis 2), chain affiliation (Hypothesis 3), environmental pressures from stakeholders (Hypothesis 4), and operations management (Hypothesis 5) on environmental management practices. Our control variables encompassed hotel

Discussion of the results

The results support our hypotheses on the determinants of hotel environmental management. Further, we have also found significant differences between the financial performance of active environmental management hotels and their counterparts with a low profile in environmental management practices.

Our findings suggest that the age of hotels’ facilities negatively influence the deployment of environmental management practices, that is, hotels with old facilities put in place less extensive

Acknowledgements

We wish to thank Salvador Carmona and the three anonymous reviewers for the substantial improvements in our manuscript resulting from their suggestions. This research was partially funded through DGES aids (references PB97-1358, PB97-0089 and PR95-583).

References (79)

  • S.T Foster et al.

    The impact of customer contact on environmental initiatives for service firms

    International Journal of Operations and Production Management

    (2000)
  • R De Rato y Figaredo

    La incidencia del turismo en la economı́a nacional

    Estudios Turı́sticos

    (1999)
  • R.D Klassen et al.

    Environmental management in operations: the selection of environmental technologies

    Decisions Sciences

    (1999)
  • P Bansal et al.

    Why companies go green: a model of ecological responsiveness

    Academy of Management Journal

    (2000)
  • J Cramer

    Environmental management: From “fit” to “stretch”

    Business Strategy and the Environment

    (1998)
  • S.L Hart

    A natural-resource-based view of the firm

    Academy of Management Review

    (1995)
  • M.V Russo et al.

    A resource based perspective on corporate environmental performance and profitability

    Academy of Management Journal

    (1997)
  • R.D Klassen et al.

    The impact of environmental technologies on manufacturing performance

    Academy of Management Journal

    (1999)
  • C.B Hunt et al.

    Proactive environmental management avoiding the toxic trap

    Sloan Management Review

    (1990)
  • A Schaefer et al.

    Stage models of corporate “greening”: a critical evaluation

    Business Strategy and the Environment

    (1998)
  • N Roome

    Developing environmental management strategies

    Business Strategy and the Environment

    (1992)
  • Winsemius P, Guntram U. Responding to the environmental challenge. Business Horizons,...
  • K Sadgrove

    The green's manager handbook.

    (1993)
  • Steger U. The greening of the board room: how german companies are dealing with environmental issues. In: Fischer K,...
  • J.A Aragón Correa

    Strategic proactivity and firm approach to the natural environment

    Academy of Management Journal

    (1998)
  • U Steger

    The strategic dimensions of environmental management. Sustaining the corporation during the age of ecological discovery.

    (1998)
  • I Henriques et al.

    The relationship between environmental commitment and managerial perceptions of stakeholders importance

    Academy of Management Journal

    (1999)
  • D Kirk

    Environmental management in hotels

    International Journal of Contemporary Hospitality Management

    (1995)
  • M.E Porter et al.

    Green an competitive: ending the stalemate

    Harvard Business Review

    (1995)
  • S Sharma et al.

    Proactive environmental strategy and the development of competitively valuable organizational capabilities

    Strategic Management Journal

    (1998)
  • J.J Cordeiro et al.

    Environmental proactivism and firm performance: evidence from security analyist earning forecast

    Business Strategy and the Environment

    (1997)
  • W.Q Judge et al.

    Performance implications of incorporating natural environmental issues into the strategic planning process: an empirical assessment

    Journal of Management Studies

    (1998)
  • S Fineman et al.

    Green stakeholders: industry interpretations and response

    Journal of Management Studies

    (1996)
  • M.C Gupta et al.

    Environmental operations management: an opportunity for improvement

    Production and Inventory Management Journal

    (1996)
  • R.D Klassen et al.

    The impact of environmental management on firm performance

    Management Science

    (1996)
  • G Theyel

    Management practices for environmental innovation and performance

    International Journal of Operations and Production Management

    (2000)
  • Ingram P, Baum JAC. Chain affiliation and the failure of Manhattan hotels, 1898–1980. Administrative Science Quarterly...
  • Shrivastava P. Environmental technologies and competitive advantage. Strategic Management Journal 1995;16(special...
  • R.J Welford

    Corporate environmental management, technology and sustainable development, postmodern perspective and the need for a critical research agenda

    Business Strategy and the Environment

    (1998)
  • Cited by (408)

    View all citing articles on Scopus
    View full text