Untangling Environmental Strategies with Absorptive Capacity - Development and Competitive Advantage

We present a model for a firm’s ability to generate competitive advantage through a proactive environmental strategy by applying the resource-based view and the concept of absorptive capacity. We suggest the firm’s potential absorptive capacity as related to, and limiting the ability to develop a proactive environmental strategy. We propose the firm’s realized absorptive capacity as related to the competitive advantage gained from a proactive environmental strategy. We illustrate our theoretical findings with anecdotal case-study-evidence from the chemical company BASF. Finally, we see possible extensions of the model beyond the environmental domain to other primarily firm-external domains.