Assessment of the Construct Validity of Environmental Strategy Measures

Abstract

The natural-resource-based view of the firm is emerging to be a dominant paradigm for understanding the intersection of strategic management and the natural environment. Firms that proactively incorporate a natural environment perspective into their enterprise strategies are said to have sustainable competitive advantages. However, defining and measuring environmental strategy has been challenging, with different approaches yielding inconsistent results. Many studies ignore the empirical difficulties of marrying the theoretical connection between the firm’s resource base and environmental strategy, and its impact on environmental firm performance. In this paper, we apply an inductive approach to derive a measure of environmental strategy theoretically congruent with the natural-resource-based-view of the firm. We assess its reliability and, using a multi-trait multi-method matrix, we confirm the convergent and discriminant validities of this measure against other measures often used by researchers. We also establish predictive validity of our environmental strategy measure for environmental performance. We discuss the implications of the measure for future research and practice.