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Management of the natural environment is becoming an increasingly important issue to manufacturing firms, yet their managers are also challenged to implement changes that improve competitiveness. To meet this challenge, a new construct grounded in the resource-based view of the firm and manufacturing strategy has been developed: the environmental technology portfolio. The composition of a plant's portfolio the pattern of its investment in environmental technologies in manufacturing over time-was found to significantly affect both manufacturing and environmental performance for a sample of manufacturing plants.
Customers, suppliers, and the public are increasingly demanding that businesses in general, and manufacturing firms in particular, minimize any negative impact of their products and operations on the natural environment. Indeed, a number of international firms now publish separate annual environmental performance reports (Hart, 1995). In response, management research and conceptual thinking on environmental issues has expanded from a narrow focus on the concept of pollution control (Bragdon & Marlin, 1972) to include a larger set of management decisions, programs, tools, and technologies that incorporates environmental issues into functional considerations (Hunt & Auster, 1990). Yet managers seemingly have found the combination of environmentally and competitively sound improvements-a central tenet of sustainable development (World Commission on Environment and Development, 1987)-very difficult to implement.
Manufacturing operations, through product and process technologies, have been recognized as a critical driver of environmental performance (Cairncross, 1992; Hart, 1995; Schmidheiny, 1992). Ecological impacts vary with raw material specifications, production efficiencies, energy consumption, pollutant emissions, product delivery systems, and recycling (Sarkis, 1995). Technologies that limit or reduce negative impacts of products or services on the natural environment have been termed environmental technologies (Shrivastava, 1995). Shrivastava called for their inclusion in frameworks of strategy, and he, along with others (Hart, 1995; Porter & van der Linde, 1995), has noted the potential of these technologies to offer competitive advantage. To address these issues, this study explored whether and under what conditions investment in environmental technologies offers both environmental and manufacturing performance benefits.
Unfortunately, understanding of the relationships among environmental management, implementation of technologies, and performance outcomes remains limited at best. As a result, the implications of environmental management for business performance and manufacturing competitiveness continue to be hotly debated in the popular press and research literature. Some researchers (Porter...