The influence of accountability and responsibility on managerial decision making: An investigation of environmental, health, and safety decisions within the chemical and steel industries
As the number of environmental regulations and the related compliance costs increase, corporate executives are viewing the environment as a key factor in determining their future competitiveness. Thus, it is of interest to determine what factors influence firms in making environmental investment decisions. Past research has primarily looked at the influence of economic factors on environmental, health, and safety (EHS) decisions. This dissertation explores the behavioral factors on these decisions, specifically accountability and responsibility levels, and explores the resulting managerial and policy implications. First, I address the question of how the increase in regulatory requirements, and hence an increase in external accountability, influences a firm's EHS decisions by developing a theoretical model which incorporates reputational effects on these decisions. An empirical study is then conducted to determine whether companies in the chemical industry see, understand, and pursue reputation benefits by increasing their levels of external accountability. Using data from the Council of Economic Priorities, positive relationships are found between reputation levels and a firm's level of internal accountability systems, improvements in objective environmental performance, and external accountability/communication levels. A second study reveals that steel companies having higher levels of accountability by participating in the voluntary 33/50 program had greater improvements in EHS performance and financial return compared to non-participating companies. Further evidence on the role of internal accountability on EHS performance is provided by an in-depth case study of a large steel manufacturer. Through interviews and survey data, this study looks at the deployment of accountability for environmental performance within the organization. Although top management has a commitment to EHS performance, an increase in the level of accountability for EHS performance is necessary to make improvements in this area. The theoretical and empirical research together provide evidence that suggest that behavioral factors, particularly accountability and reputation levels, in addition to economic factors, influence EHS investment decisions.
|Year of publication:||
|Authors:||Chinander, Karen Renee|
|Type of publication:||Other|
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