OTROS SERVICIOS PÚBLICOS DOMICILIARIOS 1 Energía

From Freeman's point of view, stakeholders arise from both internal and external changes to the enterprises (1984). Internal stakeholders includes owners, customers, employees and suppliers, while external stakeholders refers to governments, competitors, consumer advocates, environmentalists, special interest groups and

media, which originate in the

the ability of the enterprise to cope with internal change. Some examples changes include the expansion of government activities,

competition, the 1960s environmentalist movement ass of Rachel Carson’s Silent S

Environmental Protection Acts, the growth of groups concerned with special interests such as gun control or abortion, and also the

media in business. Figure 2.14 shows the internal and external changes an enterprise, indicating a

Figure 2.14Internal and external

Based on: Freeman (1984)

Enterprises are deemed to produce externalities which can affect many parties, both internal and external, to the enterprises

stakeholders to increase pressures on companies to reduce negative impacts and increase positive ones. T

responding to these pressures

media, which originate in the inconspicuous area labelled “environment the ability of the enterprise to cope with internal change. Some examples

the expansion of government activities, an increase in foreign competition, the 1960s environmentalist movement associated with the publication

Spring in 1962 (see section 2.2.3) and the formation of the Environmental Protection Acts, the growth of groups concerned with special interests such as gun control or abortion, and also the increasing importance of the media in business. Figure 2.14 shows the internal and external changes

a simple framework of stakeholder theory.

Internal and external changes view of an enterprise

Enterprises are deemed to produce externalities which can affect many parties, both internal and external, to the enterprises (Freeman, 1984). Externalities often cause stakeholders to increase pressures on companies to reduce negative impacts and

The capabilities of an enterprise play a critical role responding to these pressures (Roome and Wijen, 2006). It is also important to note

environment” and affect the ability of the enterprise to cope with internal change. Some examples of external increase in foreign ociated with the publication and the formation of the Environmental Protection Acts, the growth of groups concerned with special importance of the media in business. Figure 2.14 shows the internal and external changes that impact

Enterprises are deemed to produce externalities which can affect many parties, both ities often cause stakeholders to increase pressures on companies to reduce negative impacts and he capabilities of an enterprise play a critical role in It is also important to note

that it was support by Freeman (1984:12) who argued that all suppliers, owners, customers and employees could be viewed as the internal changes as they had “relatively more comfortable relationships” with the corporation than those external changes which would produce uncertainty and discomfort. But suppliers and customers are regarded as the external sources of pressures in this research project as argued as Handfield et al. (1997), Zhu and Sarkis (2004), and Delmas and Montiel (2007).

Internal stakeholder pressures for environmental concerns

The primary group of internal stakeholders are employees because they are often the initiators and recipients of an enterprise’s proactive environmental activities (Hanna et al., 2000; Daily and Huang, 2001). However, the precondition for employee commitment to an enterprise’s environmental performance is that they must have support from management. Zhu et al. (2008) argued that support and leadership from top-level managers is vital to ensure understanding of and commitment to environmental issues across the enterprise hierarchy, which further helps to guarantee the adoption of new environmental programmes and update the enterprise’s environmental strategy over time. In fact, managerial attitudes and views (Cordano and Frieze, 2000), managerial interpretations (Sharma, 2000), and environmental values and leaders (Egri and Herman, 2000) all influence management decisions regarding environmental activities (Fernandez et al., 2003; Sharma, 2000). Thus, as internal stakeholders, managers as well as employees play a significant role in the adoption of environmental operational practices.

The pressures from employees and managerial stakeholders to proactively implement environmental management practices can create a virtuous cycle which leads to additional pressures from internal stakeholders. According to Reinhardt (1999), if there is a prevalence of environmental concerns throughout an enterprise, it is more likely to recruit talented applicants who have a strong preference to work

in enterprises with proactive environmental management philosophies.

External stakeholder pressures of environmental concerns

Unlike internal stakeholders, external stakeholders do not have control of critical organisational resources (Sharma and Henriques, 2005); however, they do have the capacity to regulate or mobilise public opinions in favour of, or in opposition to, the environmental practices of an enterprise (Freeman, 1984). There are a number of external stakeholder groups, including customers, government regulators, shareholders, and society in general represented by non-governmental organisations (NGOs).

Regulatory parties and government are the most significant external stakeholders when it comes to environmental issues (Freeman, 1984; Backer, 2007), and are typically associated with coercive pressures (Zhu and Sarkis, 2007). Enterprises must comply with environmental regulations, or face the threat of regulators levying legal action, penalties and fines. Failure to yield to regulatory stakeholders will damage the enterprise’s public image and customer relations. Enterprises can conduct organisational training of proactive environmental practices as one means by which to alleviate these regulatory threats and risks. In fact, initiatives on proactive environmental practices may help enterprises to form collaborative relationships with government and explore more non-regulatory ways in which government can encourage greater environmental improvements (Darnall et al., 2008) and to provide more opportunities to build trust between enterprises and regulators (Hoffman, 2000). Additionally, Backer (2007) argued that there also exist some less coercive regulatory pressures. For example, some advocating pressures may come in the form of voluntary initiatives for matters such as pollution prevention. Thus, the pressures from regulatory stakeholders should be addressed in this study.

(Eesley and Lenox, 2006), which can be viewed as public stakeholders. These stakeholders include, but are not limited to, environmental groups, neighbourhood groups, the media and labour unions (Hoffman, 2000). These groups are believed to be able to mobilise public opinion in favour of or against the environmental strategy of an enterprise (Roome and Wijen, 2006; Benn et al., 2009). If the enterprise fails to submit to the pressures of public stakeholders, it risks enduring public protests (Hoffman, 2000). Furthermore, community and public stakeholders may publicise information which could persuade consumers to favour the products of competitors that have demonstrated a stronger regard for the environment. Therefore, it seems that public stakeholders can provide a “social license” for an enterprise to operate in the market, and the pressures originating from those stakeholders also play an important role in influencing the decision-making process for the enterprise (Gunningham et al., 2004).

Supply chain stakeholders, including customers and suppliers, can affect the implementation of environmental practices within an enterprise; especially those stakeholders who require their suppliers to adhere to certain practices for the improvement of their environmental performance (Lee and Klassen, 2008; Zhu and Sarkis, 2004). For instance, customers tend to ask for their suppliers to provide documentary evidence of their compliance with all environmental regulations, such as ISO 14000 (Delmas and Montiel, 2007). Pressures originate from customers because they like to ensure that their purchases meet environmental quality standards and, by doing so, reduce environmental liabilities associated with final product development (Handfield et al., 1997).

There is another group of external stakeholders who are also sometimes regarded as internal ones; these are called shareholders. These shareholders might be the most fundamental stakeholders for an enterprise because they financially invest in the enterprise. In order to yield to the pressures from these shareholders, enterprises should make every effort to maximise their value (Reinhardt et al., 2008). Apparently,

enterprises’ environmental concerns have nothing to do with their shareholders; however, proactive environmental practices have been shown to improve financial and production performance for them (Montabon et al., 2007; Zhu and Sarkis, 2004). Furthermore, both Goldstein and Wiest (2007) and Reinhardt (1999) conclude that the reduction of risks and liability from proactive environmental practices contributes to shareholder value. Therefore, shareholder pressures undertaken by enterprises in terms of environmental issues can help to protect investments against environmental liabilities, and even help to improve their financial performance.