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‘Carrots for Corporate Sustainability’: Impacts of Incentive Inclusiveness and Variety on Environmental Performance
Author(s) -
Dahlmann Frederik,
Branicki Layla,
Brammer Stephen
Publication year - 2017
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.1971
Subject(s) - incentive , variety (cybernetics) , sustainability , conceptualization , business , context (archaeology) , multinational corporation , public economics , normative , corporate sustainability , economics , environmental economics , marketing , industrial organization , microeconomics , finance , computer science , ecology , paleontology , artificial intelligence , biology , philosophy , epistemology
In this paper we explore the role that managerial incentives play in improving corporate environmental performance, finding that greater inclusiveness of incentive beneficiaries and greater variety of incentive types are important factors in firms' incentive schemes. Drawing on a large dataset of multinational enterprises, our results suggest that including more beneficiaries from different levels within the corporate hierarchy and offering both monetary and non‐monetary rewards are generally more likely to lead to reductions in corporate greenhouse gas emissions. Developing two principles of incentive design, inclusiveness and variety , and the conceptualization of patterns of these in organizations as configurations of incentives , our research contributes substantially to normative advice regarding the relative effectiveness of alternative systems of environmental incentives. Such an understanding of the potential of incentives is critical to informing how firms address complex problems such as sustainability in the context of increasingly extended organizational hierarchies and designs. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment