Anatomy of a Paradox: Management Practices, Organizational Structure and Energy Efficiency

39 Pages Posted: 21 Mar 2010 Last revised: 14 Sep 2013

See all articles by Ralf Martin

Ralf Martin

London School of Economics & Political Science (LSE) - Department of Economics; Imperial College Business School

Mirabelle Muûls

Imperial College Business School and Grantham Institute - Climate Change and the environment; 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

University of Mannheim - Department of Economics

Date Written: May 16, 2011

Abstract

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.

Keywords: climate policy, energy efficiency, firm behavior, management practices, manufacturing, microdata, organizational structure

JEL Classification: M20, M14, D22, Q41, Q54, Q58

Suggested Citation

Martin, Ralf and Muûls, Mirabelle and de Preux, Laure Bellice and Wagner, Ulrich J., Anatomy of a Paradox: Management Practices, Organizational Structure and Energy Efficiency (May 16, 2011). Available at SSRN: https://ssrn.com/abstract=1575994 or http://dx.doi.org/10.2139/ssrn.1575994

Ralf Martin

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Mirabelle Muûls

Imperial College Business School and Grantham Institute - Climate Change and the environment ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

London School of Economics - Centre for Economic Performance ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Laure Bellice De Preux

University of York - Centre For Health Economics (CHE) ( email )

York YO10 5DD
United Kingdom

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Ulrich J. Wagner (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

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