Anatomy of a Paradox: Management Practices, Organizational Structure and Energy Efficiency
London School of Economics & Political Science (LSE) - Department of Economics; Imperial College Business School
Grantham Institute for Climate Change; London School of Economics - Centre for Economic Performance
Laure B. de Preux
University of York - Centre For Health Economics (CHE); London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)
Ulrich J. Wagner
Universidad Carlos III de Madrid - Department of Economics; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)
May 16, 2011
This paper provides new evidence on the relationship between management practices and firm performance. We interviewed managers of 190 randomly selected manufacturing plants in the UK and matched their responses with official business microdata. We find that climate friendly management practices are associated with lower energy intensity and higher productivity. Firms that adopt more such practices also conduct more climate friendly R&D which will sustain future growth in energy efficiency. Our findings are akin to the "energy efficiency paradox" and highlight the linkages between particular management practices and firm-level energy efficiency. We also find a strong empirical link between climate friendly management practices and organizational structure. Firms are more likely to adopt such practices if climate change issues are managed by the environmental or energy manager, and if this manager is close to the CEO. Adoption is less likely when the CEO is in charge of climate change issues.
Number of Pages in PDF File: 39
Keywords: climate policy, energy efficiency, firm behavior, management practices, manufacturing, microdata, organizational structure
JEL Classification: M20, M14, D22, Q41, Q54, Q58working papers series
Date posted: March 21, 2010 ; Last revised: May 30, 2012
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