Heterogeneity and change in environmental strategy: Technological and political responses to climate change in the global automobile industry

Abstract

The formulation of strategy is generally treated as a rational process of matching corporate capabilities to market demands. But this does not always account well for the heterogeneity observed in corporate strategies toward complex environmental issues such as climate change. In this chapter, we propose that strategy is often developed in light of expectations and assuptions concerning a firm's internal competencies and the external market and non market environments. These expectations, we propose, are shaped by institutional forces at multiple levels, including the firm, the national industry, the global industry, and the specific environment issue. In particular, we argue that collective interpretations about the nature of and solutions to climate change constitute important drivers of strategy, and these collective interpretations are molded and contested within institutional fields.