Environmental Management of Threatening Government Public Policy Jess Mikeska University of Nebraska-Lincoln

University of Nebraska - Lincoln DigitalCommons@University of Nebraska - Lincoln Dissertations, Theses, and Student Research from Business, College of the College of Business Summer 7-2014 Environmental Management of Threatening Government Public Policy Jess Mikeska University of Nebraska-Lincoln Follow this and additional works at: http://digitalcommons.unl.edu/businessdiss Mikeska, Jess, "Environmental Management of Threatening Government Public Policy" (2014). Dissertations, Theses, and Student Research from the College of Business. 48. http://digitalcommons.unl.edu/businessdiss/48 This Article is brought to you for free and open access by the Business, College of at DigitalCommons@University of Nebraska - Lincoln. It has been accepted for inclusion in Dissertations, Theses, and Student Research from the College of Business by an authorized administrator of DigitalCommons@University of Nebraska - Lincoln. ENVIRONMENTAL MANAGEMENT OF THREATENING GOVERNMENT PUBLIC POLICY by Jess Mikeska A DISSERTATION Presented to the Faculty of The Graduate College at the University of Nebraska In Partial Fulfillment of Requirements For the Degree of Doctor of Philosophy Major: Interdepartmental Area of Business (Marketing) Under the Supervision of Professor Leslie Carlson Lincoln, Nebraska July, 2014 ENVIRONMENTAL MANAGEMENT OF THREATENING GOVERNMENT PUBLIC POLICY Jess Mikeska, Ph.D. University of Nebraska, 2014 Adviser: Leslie Carlson This dissertation is the first to propose a test of environmental management theory through a reflective, managerial scale, and does so through a public policy lens. It matches 76 managerial respondents’ (17 firms) perceptions of environmental management with objective, secondary data ranging between 2002 and 2014 so as to reflect longitudinal changes in marketplace activities which influence end consumers (e.g., pricing, promotional activity). Such changes are artifacts of firms’ environmental management of threatening government public policy. The findings of two studies, qualitative interviews based on a transcendental phenomenological design and an online survey matched to secondary marketplace data utilizing Hierarchical Linear Modeling, confirm the two classic orientations offered through environmental management theories: strategic choice and deterministic orientations, but extends the latter. This dissertation finds deterministic firms proactively avoid being determined by a force in the external business environment rather than let it completely determine the firms’ business. Additionally, this dissertation finds that environmental management is at least two-dimensional in that viewing the socio-political force of the external business environment as malleable is, in fact, a dimension of a firm’s management ability. However, this management ability is mitigated by a duty orientation. Finally, both studies confirm that not only do some strategic choice oriented firms use marketing skills and tactics (i.e. product development) to offset the public policy pressure over using political behaviors, but also that marketing tactics are viewed by some firms as a way to manage government public policy while still serving society’s stakeholders. While firms which manage government public policy pressures through political strategies affect consumers by changing promotion activities, a relatively unbeneficial consumer outcome, firms which manage such policy through marketing strategies benefit consumers by offering products of higher quality. Thus, government public policy that encourages firms to fight back through political behaviors create an unintended consequence of increasing utilization of non-personal, mass advertising rather than the intended improvements in safety and/or health among consumers for which the policy was inherently designed. i TABLE OF CONTENTS Chapter 1: Introduction 1 Introduction 1 Research Objectives 2 Conceptualization 3 Literature Gaps 4 Topic Importance 8 Proposed Contributions and Implications 10 Chapter 2: Literature Review 11 Objectives of the Chapter 11 Theories of the Firm 11 Firm Typology 16 Chapter 3: Hypothesis Development 19 Strategic Tendency 19 Consumer Related Outcomes 27 Firm Impact 30 Social Impact 33 Objectives Behind Hypotheses 34 Chapter 4: Methods 37 Research Objectives 37 Mixed Methods Justification 39 Purpose of Study 1 40 Purpose of Study 2 41 Study 1, Qualitative Inquiry 42 Study Context 42 Recruitment 42 Participants 43 Analysis 43 Qualitative Design, Phenomenology 44 Philosophical Assumptions 45 Data Collection Procedures 47 Data Analysis 49 Validity and Reliability 52 Study 2, Quantitative Confirmation 54 Study Context 56 Recruitment 56 Respondents 57 ii Data Collection Procedures 59 Measures 63 Analytic Approach 81 Chapter 5: Findings 86 Study 1 Findings 86 Firm Orientations 89 Firm- Versus Leader-Based 101 Pushing Forward versus Pushing Back 105 Non-Traditional Management Strategies 113 Study 1 Discussion 125 Study 2 Findings 128 Respondent Descriptions 128 Confirmatory Factor Analyses 132 Common Method Variance 135 Social Desirability 136 Hypothesis Tests Results 136 Study 2 Discussion 142 Chapter 6: Discussion, Implications, and Areas for Future Research 149 Discussion 149 Theoretical Implications 155 Implications for Public Policy Leaders 158 Limitations 160 Areas for Future Research 161 Conclusion 162 References 164 Appendices 177 1 CHAPTER ONE INTRODUCTION Public policy is a “political and technical approach to solving problems via instruments” (Lascoumes and Le Gales 2007, p. 2). Marketing research typically studies public policy to better understand the problems it attempts to solve. For example, Goldberg, Gorn, and Lavack (1994) study alcohol promotions that target underage drinkers and Kaikati and Label (1980) study US firms operating in foreign markets governed through corruption. Marketing research also examines the approach a public policy takes in solving problems, such as taxing consumer products like soda so as to reduce their consumption (e.g., Andreyeva, Long, and Brownell 2010) or standardizing product information to aid consumer nutrition decision-making (e.g., Moorman 1996). Regardless of the research objective(s), marketing research involving US public policy aids marketers in understanding how public policy alters marketplace activities (e.g., consumer preference, product availability) and public policy makers in understanding how marketplace activities influence the effectiveness of public policy. This dissertation attempts to continue these trends in marketing research of US public policy by studying both the 1) firm response to public policy which sometimes involves marketing activities and 2) the manner in which public policy impacts end consumers after accounting for the firm’s strategic response. While most US public policy aims to directly or indirectly protect and benefit end consumers, some policies also work to protect consumers by altering or limiting the way firms conduct business. The Nutrition Facts Panel (NFP) of the Nutrition Labeling and Education Act provides information directly to consumers so as to assist in their nutrition 2 decisions, but also is designed to prompt food manufacturers to compete on nutrition rather than traditional attributes, such as price or convenience (e.g., Ghani and Childs 1999; Petruccelli 1996). As another example, the Federal Trade Commission’s (FTC) recent Green Guides help consumer decision-making through standardization efforts regarding environmental product claims, but also facilitates inter-firm litigation in which firms use the guidelines to legally accuse, and thus limit, competitors’ promotions (e.g., FTC 2013; Westervelt 2012). These examples illustrate potential firm strategy in managing public policy and revolve around new ways to compete in the marketplace in light of threatening public policy, i.e., either materialized (e.g., law, fine) or immaterialized (e.g., bill, guidelines) local, state, national, or international government communication (e.g., documented law, press conference) that is threatening to a firm because it either directly or indirectly limits the way the firm conducts business or its ability to compete in the marketplace. Unintended consequences of public policy which attempt to benefit consumers through altered firm strategies for competition include firm strategies that instead manage the actual policy. Firms contribute money to Political Action Committees (PACs) so as to gain access to key members of Congress and influence legislative decision-making in favor of the given business or lobby so as to discourage legislation that limits the way a firm conducts business, for example. This dissertation asks Why do some firms manage threatening public policy while others do not? Additionally, of those that do manage these pressures, why do some push back by influencing the policy and others push forward by influencing competition? The answers to these questions likely reside in environmental management theories which 3 posit that some firms perceive forces, such as the socio-political force, as determining the way they do business while others perceive forces as malleable and manageable (e.g., Child 1972; Duncan 1972; Emery and Trist 1965; Lawrence and Lorsch 1967; Terreberry 1968; Zeithaml and Zeithaml 1984). Environmental management is the firm’s “deliberate actions aimed at controlling, changing, influencing, or adapting to inputs” in the external business environment (Clark, Varadarajan, and Pride 1996, p. 23). Not to be confused with the natural

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