Environmental Performance And Firm Performance: The Mediating Roles Of Market-Based Assets And Integrated Marketing Communication

ABSTRACT

Africa, after the expiration of the Millennium Development Goals (MDGs) in 2015, was described as the most urbanising region of the world because the continent had witnessed a proliferation of new businesses. The upsurge of businesses, however, was not without environmental consequences which were affecting life. Pressure was mounting on businesses to safeguard the environment. But the response of businesses to this call remained mixed. Consequently, scholars are attracted to research into the link between environmental performance (EP) of firms and their overall firm performance (FP). Inconclusive and contradictory findings, labelled a Porter-Wagner dilemma, were reported. Consequently, the need for fresh research to explain and resolve the Porter-Wagner dilemma conflict was urgent. This study took on the challenge to resolve the Porter-Wagner dilemma conflict by exploring the mechanisms through which the environmental protection activities of firms impact their overall FP. Questionnaires were used to gather data from 194 respondents. The data were analysed using descriptive statistics and structural equation modelling (SEM). While the descriptive statistics focussed on measures of central tendencies, dispersions and the shape of the dataset, the SEM focussed on measurement and structural models. The study found that, directly, there is a very strong negative relationship between EP and FP. Indirectly, however, the study established that market-based assets (MBA) and integrated marketing communication (IMC), used individually and simultaneously, mediate the EP-FP relationship. Used individually, while MBA fully mediates the association between EP and FP, IMC mediates the relationship partially. Used simultaneously, both MBA and IMC partially mediate the relationship between EP and FP. Based on the results of the study, it is concluded that the Porter-Wagner dilemma conflict can be resolved with the concept of a corporate environmentalism continuum, which theories that the relationship between EP and FP is both positive and negative, depending on how firms perceive and approach their environmental protection activities. That is, although protecting the environment involves huge outlay of (financial) resources, the benefits are enormous if it is supported with the right mindset, technology and strategies. The thesis makes several contributions to both theory and practice. The study has effectively conceptualised EP to include both objective and nonobjective indicators across extractive, manufacturing and service industries. In addition, the study investigated and established that EP is both an asset and a capability that can be marketed through MBA and IMC for enhanced FP. It is however recommended that future studies should examine the individual effects of the dimensions of EP on FP and its dimensions. It is suggested also that qualitative research should undertake to explore the factors responsible for the corporate environmentalism continuum.