Friday, February 15, 2013

Customer Centricity and Adoption of Environmental Management Practices

INSEAD Working Paper 2013/31/MKT

Environmental management practices are recognized to be critical for establishing a competitive edge. Such innovations are driven by the strategic orientation of the firm, in particular the extent to which the firm focuses on customers. However, the impact of customer centricity in firms’ decision to adopt these practices has received little empirical attention. This study investigates the effect of three customer centricity components, namely customer information processing, responsiveness and values and norms, on a firm’s decision to adopt environmental practices. Consistent with the strategy and marketing literature, we also examine the moderating effect of marketplace characteristics. Based on a largescale survey of firms across industries, the results indicate that customer information processing and values and norms contribute directly to the adoption of environmental management practices. The results also show that the effects of customer information processing on environmental management practices are contingent on the levels of market competition.