Integrating Environmental and International Strategies in a World of Regulatory Turbulence

Companies operating in multiple countries face different and often changing regimes of environmental regulation. This regulatory turbulence raises the question of what environmental strategies multinational enterprises with a portfolio of divergent regulatory regimes should develop in relation to their international business expansion strategies. We argue that multinationals seeking to develop an effective environmental strategy should integrate relative regulatory stringency and international market interdependence. We discuss and illustrate four environmental strategies that match different regulatory/market configurations for multinationals from both developed and emerging markets, as well as the factors that drive strategic changes. We introduce a ‘regulatory turbulence tool’ that describes relevant regulatory/market configurations and prescribes contingently effective, dynamic environmental strategies