Radical Green Strategy and Environmental Performance: A Mediation-Moderation Analysis

Abstract

Despite extensive research on environmental sustainability, the relationship between a firm’s strategy, such as a radical green strategy, and its environmental performance remains limited. To bridge this research gap, the current study tests these relationships by developing a conceptual framework which relates radical green strategy to environmental performance through competing mediators – green employee support and green induced job stress – with moderating influence of institutional pressures. Focusing on transport and logistics-related firms from both manufacturing and service sectors, the study conducted a survey which collected data from 227 firms using questionnaires as the research instrument. The informants for the firms were top level managers including CEOs, directors, operational managers, transport managers among others. The findings obtained using 2SLS estimator revealed that radical green strategy relates negatively and insignificantly with environmental performance. Also, the results indicate that the relationship between radical green strategy and environmental performance is positively mediated by green employee support. It was also found that the relationship between radical green strategy and environmental performance is negatively mediated by green induced job stress. Finally, the effect of radical green strategy on environmental performance through green employee support is conditioned by high levels of institutional pressure but the effect of radical green strategy on environmental performance through green induced job stress was not statistically significant. The study provided theoretical and managerial contributions and suggested areas for future research.