Environmental Management and Corporate Strategy: Framework and (new?) Instruments

Nowadays, environmental management is being increasingly seen as an important management task. Indeed, the integration of environmental concerns into business functions can allow companies to find new opportunities and to reduce their risks and liabilities. Consequently, being a possible noteworthy determinative of companies’ competitive position, with the capability to ensure or even increase companies’ value, environmental concerns may play an important role in companies’ strategy management process. Environmental drives ought not to be forgotten in shaping companies strategy and in defining corporate mission. But to integrate the environment in business functions, and to try to apprehend its potential, managers must have tools to accurately evaluate potential environmental impacts on companies’ organization and markets. This article tries to put together and analyse a set of instruments (new or adapted ones) that may be able to facilitate the incorporation of environmental concerns in companies’ strategic management. STRATEGIC ANALYSIS AND PLANNING Company Strategy and the Environment as a Factor Capable of Shaping It In the new competition scenario, to be winners companies must perform two essential tasks: conceive better-quality corporate strategies and carry them out effective and superiorly. Hence, managers need to be prepared with a complete set of tools and instruments which allow them to analyse a company’s competitive position and its threats and opportunities – and need to possess and put into practice strategic thinking, in order to accurately recognize businesses’ future evolution, to understand company’s capabilities, and to establish guidelines to the organization’s future management. Strategic management approach offers firms six major advantages: it provides better guidance to the organization as a whole, it increases the organization’s awareness of opportunities and threats, it helps to unify the organization, it facilitates a proactive management posture, it helps in continuously evaluating and adjusting the business model, and, finally, it provides a good guide for an effective resource allocation along the entire organization [24]. Currently, environmental management is being growingly thought of as an important management function. In fact, the integration of environmental concerns into business functions can allow companies to find new opportunities (such as cost reductions, efficiency improvements, new markets opening, reputation enhancement and a better meeting of stakeholders expectations) and to reduce their risks and liabilities. Therefore, being a possible significant determinative of companies’ competitive position and a potential competitive advantage factor, environmental management can ensure, and even increase, companies’ value [11]. Thompson and Strickland (2001) point five main tasks of strategic management: developing a strategic vision, setting objectives, crafting a strategy, implementing and executing the strategy, and evaluate, monitor and make corrective adjustments to the strategy (see fig. 1). We believe that environmental concerns may play an important role during companies’ strategy management process. The first task of strategic management is developing a strategic vision. Managers must be able to look to the future and have a long-run vision of the businesses in which to be present and of the organization’s structure. These two factors must serve as guidelines for companies’ activities. But, unlike corporate mission statements, a strategic vision implies a deep analysis of company’s capabilities and markets (actual and potential). It is now commonly accepted that companies must be managed in a value making perspective [9]. Thus, managers must clearly understand what are a company and businesses’ value drivers the