The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0025-1747.htm

The role of environmental Environmental

management
management control systems control
systems
for ecological sustainability
and sustainable performance
Shafique Ur Rehman and Anam Bhatti Received 25 June 2020
Revised 10 October 2020
ILMA University Business School, ILMA University, Karachi, Pakistan 13 November 2020
Sascha Kraus Accepted 7 December 2020

Faculty of Economics and Management, Free University of Bozen, Bolzano, Italy, and
Jo~ao J. M. Ferreira
NECE - Research Unit in Business Sciences, Management and Economics Department,
Faculdade de Ci^encias Sociais e Humanas, Universidade da Beira Interior (UBI),
Covilh~a, Portugal

Abstract
Purpose – The purpose of this study determines how environmental management control system (MCS)
packages influence ecological sustainability and sustainable performance through the mediating role of
environmental strategies. Furthermore, this applies organizational capabilities as moderating variables
between environmental strategies, ecological sustainability and sustainable performance in a sample of 373
construction firms.
Design/methodology/approach – The authors apply quantitative questionnaire data from construction
firm representatives (from project, sales and construction managers and contract managers, executive
directors and engineers) to structural equation modeling and SmartPLS for our analysis.
Findings – The results demonstrate that recourse to environmental MCS packages significantly influence
ecological sustainability, sustainable performance and environmental strategies. Additionally, environmental
strategies and organizational capabilities significantly influence ecological sustainability and sustainable
performance. Moreover, environmental strategies mediate between environmental MCS packages, ecological
sustainability and sustainable performance. Organizational capabilities significantly moderate the relationship
between ecological sustainability and sustainable performance.
Practical implications – This research highlights the issue of how the management of construction
organizations deploy environmental MCS packages, organizational capabilities and business strategies to
measure ecological sustainability and improve their sustainable performance. This study fills a gap in the
literature and facilitates the management of construction organizations in strengthening their internal
resources in terms of environmental MCS packages, environmental strategies and organizational capabilities
able to help improve their ecological sustainability and sustainable performance.
Originality/value – There are few studies building theoretical frameworks for incorporating environmental
MCS packages, organizational capabilities, environmental strategies, ecological sustainability and sustainable
performance into a single study. Although the influence of various types of intangible resources on ecological
sustainability and sustainable performance receive considerable examination in the literature, there is a dearth
of attention paid to understanding the role of environmental MCS packages, environmental strategies and
organizational capabilities in determining the ecological sustainability and sustainable performance of
construction organizations.
Keywords Environmental MCS package, Business strategies, Organizational capabilities, Ecological
sustainability, Sustainable performance
Paper type Research paper

1. Introduction
Nowadays, various organizations deploy managers to concentrate on corporate Management Decision
sustainability with this concept extending to social, economic and environmental issues © Emerald Publishing Limited
0025-1747
with differing business implications. The term “ecological sustainability” provides a platform DOI 10.1108/MD-06-2020-0800
MD for business management to overcome its economic, social and environmental problems. In
the past, environmentally friendly services or products appeared as a burden to organizations
in as much as these only work for their own betterment, e.g. concentrating on increasing sales,
reducing costs and improving profitability (Kraus et al., 2018). Contemporary organizations
necessarily turn to environmental activities in keeping with how the global population is
rapidly increasing and with the natural environment deteriorating due to environmental
pollution, poor material selection, the amount of material wastage, biodiversity problems,
water shortages, energy crises and inappropriately applied land usage. Furthermore,
organizations worldwide are building on their commitments to sustainability and striving to
implement programs and measures with lower levels of impact on the environment (Gray
et al., 2014) with the ultimate aim of ensuring ecological sustainability (Malovics et al., 2008).
In turn, ecological sustainability refers to the ability of one or more entities, either collectively
or individually, to exist and flourish for prolonged timeframes in such a way that the
existence and flourishing of other collectivities of entities is acceptable at related levels and in
related systems (Starik and Rands, 1995). Thus, managers can return better sustainability
results in construction firms whenever reducing the ecological influence of construction
processes. Construction organizations rank as one of the major concerns of current ecological
sustainability research due to their significant influence on the depletion of natural resources,
contributions to climate change, output of landfill site wastage and alongside soil, water and
air environmental pollution.
Nevertheless, whereas ecological sustainability-related issues receive widespread
discussion in ecology and management fields, the environmental management control
system (MCS) package still remains a largely ignored area. The MCS holds particular value for
organizations seeking to measure the environmental sustainability impacts caused by their
company outputs (Naranjo-Gil, 2016). Research on the interface between the MCS and
sustainability thus represents an emerging dimension. Researchers have already examined
the influence of innovative capabilities on ecological sustainability (Shari and Soebarto, 2014).
Nevertheless, the various organizational mechanisms deployed to enhance construction
organization ecological sustainability, the influence of the environmental MCS package,
environmental strategies and organizational capabilities on ecological sustainability have
not yet been subject to thorough discussion.
The definition of sustainable performance applied by Elkington (1994), which considers
the economic, social and environmental performance, also aligns with the triple bottom line
concept. Social performance covers the well-being of stakeholders, employees and customers.
Moreover, while economic performance is all about monetary performance, environmental
performance encapsulates the minimization of environmental damage and the measures
taken against resource exploitation. Organizations now face economic issues (Zhu et al., 2013),
social issues (Paulraj, 2011 and environmental issues (Laosirihongthong et al., 2013) that are
detrimental to the environment, the general public and also to organizations. Several decades
ago, academics, industrial practitioners, businessmen and environmental policymakers did
not pay any great attention to the environment in the belief that the products they
manufactured did not have any great impact (Malovics et al., 2007). Nowadays,
environmental issues are considered a serious issue worldwide and there is a need to pay
far greater attention (Kraus et al., 2020). Thus, one core issue faced by organizations arises
from the commitment to environmental protection (Radhouane et al., 2018). Furthermore, in
recent years, environmental concerns have pressured practitioners to adopt environmental
initiatives (Chen et al., 2018). In this paper, we approach the environmental MCS package
deployed to determine the sustainable performance level and thereby correspondingly
constituting one of the strategic management accounting techniques. Environmental MCS
remains in the developing stage. The literature review elucidates how a comprehensive MCS
significantly examines the sustainability strategy (Gond et al., 2012) with the package
emerging as a significant internal resource for organizations seeking to determine their Environmental
managerial performance (Roetzel et al., 2019). Additionally, a MCS plays a vital role in management
fostering the integration of sustainable development dimensions such as the economic, social
and environmental factors (Gond et al., 2012). Hence, the environmental MCS package might
control
provide a significant predictor for improving sustainable performance. systems
When the senior management of organizations focus on strategies that help prevent
environmental harm, then they can attain sustainable performance levels. The natural
resource-based view (NRBV) theory serves to develop the prevailing theoretical framework.
Prior researchers have deployed MCS to measure environmental strategy (Gond et al., 2012),
and environmental sustainability (Naranjo-Gil, 2016). The motivation of this study stems
from the scant attention paid by researchers to the environmental MCS package for
determining ecological sustainability and sustainable performance in conjunction with
environmental strategy (mediating) and organizational capabilities (moderating). Thus, our
study attempts to fill this gap and holds the following research objectives:
(1) To examine the relationship between the environmental MCS package and other
factors (e.g. ecological sustainability, sustainable performance).
(2) To examine whether the environmental strategy meditates between the
environmental MCS package and other factors (e.g. ecological sustainability,
sustainable performance).
(3) To determine whether the environmental strategy determines ecological
sustainability and sustainable performance.
(4) To determine whether organizational capabilities moderate between environmental
strategy and other factors (e.g. ecological sustainability, sustainable performance).

2. Literature review and hypotheses development

2.1 Theoretical considerations
To develop the theoretical framework, this research deployed the NRBV (Hart, 1995). NRBV
theory is well-known in academia, emerging with specific significance in the sustainable
operations literature. The resource-based view (RBV) theoretically emphasizes the role of
resources and organizational capabilities in determining the sustainable competitive
advantage of firms (Barney, 1991). Hart (1995) proposes that the RBV theory contains
several severe omissions. For instance, Barney ignores the interactions between the natural
organizational environment and the organization itself. In the past, this omission would have
been understandable while it has since become clear how the natural environment plays a
vital role in determining sustainable advantage. The research has correspondingly
recognized several resources and capabilities that improve profitability through reducing
levels of pollution. Moreover, the author confirms how natural resources, pollution prevention
strategies and organizational capabilities influence the sustainable organizational
performance of companies (Hart and Dowell, 2011). The environmental MCS package thus
represents a vital organizational resource for achieving such managerial performances
(R€otzel et al., 2019). Hence, this study applies natural resources through the environmental
MCS package and environmental strategies with organizational capabilities in order to
determine two outcomes: ecological sustainability and sustainable performance.

2.2 The environmental MCS package, sustainable performance and ecological sustainability
This research adopted the MCS package presented by Malmi and Brown (2008). According to
Henri and Journeault (2010), environmental MCSs apply “formalized procedures and systems
MD that use financial and ecological information to maintain or alter patterns in environmental
activity” (p. 64). This deems MCSs a significant factor for organizations in determining how
environmental sustainability may lead to better organizational outcomes (Naranjo-Gil, 2016).
MCSs and sustainability are still emerging concepts with innovative capabilities holding an
influence on ecological sustainability (Shari and Soebarto, 2014). Nevertheless, less research
attention has gone into determining the level of ecological sustainability obtained through
recourse to the environmental MCS package.
MCS has gained recognition as a significant factor in managing interfirm relationships and
a vital source of organizational performance. Environmental MCSs applied in the study of the
hotel industry deploy structuration theory to inform their design and analysis (Parker and
Chung, 2018). Moreover, researchers have also shifted their focus from the industrial sector
and applied environmental MCSs to the financial sector (Hummel et al., 2020). Furthermore,
MCSs generate a valuable component of strategic management accounting and allow for
determining levels of firm performance and their sustainable competitive advantages
(Rehman et al., 2019c). Organizations thus have to recognize how environmental MCS
packages assist in measuring environmental resources and their sustainable performance.
Esty and Winston (2009) state that with the rapid growth in awareness of environmental
responsibility, organizations now aim not only to enhance their financial performance but also
to improve their environmental performance. Recent research confirms that the
environmental MCS package significantly improves managerial performance (R€otzel et al.,
2019). Hence, this study adopts the environmental MCS package to determine sustainable
performance and ecological sustainability. Thus, the proposed hypotheses are
H1. The environmental MCS package significantly determines ecological sustainability.
H2. The environmental MCS package significantly determines sustainable performance.

2.3 The environmental MCS package and environmental strategy

MCSs provide a facilitating system for implementing the business strategies deployed to
support employees engaged in the management process to attain a firm’s objectives.
The environmental MCS package thus constitutes an internal organizational resource. The
literature confirms that a comprehensive MCS package significantly determines the
sustainability strategy (Gond et al., 2012) with MCSs correspondingly considered a fruitful
means of promoting integrated thinking and implementing the environmental strategy
through managerial decision-making and actions. Although several studies have approached
the association between MCSs and business strategy, the literature contains scant findings on
the environmental MCS package and environmental strategy. Thus, this study applies the
environmental MCS package to determine the environmental strategy. Hence, we arrive at the
following hypothesis:
H3. The environmental MCS package significantly determines environmental strategy.

2.4 Environmental strategy, sustainable performance and ecological sustainability

Implementing an environmental business strategy provides a significant predictor for the
measuring of ecological sustainability. Organizational management emerges with an
important role in the movement toward corporate sustainability with researchers thus
needing to focus on how environmental strategy determines ecological sustainability. The
RBV theory ignores the business strategy factor in examining firm performance (Barney and
Arikan, 2001). On the other hand, from the perspective of the NRBV, the environmental
strategy is considered a vital factor in enhancing both the environmental performance and
sustainable development (Hart, 1995). Therefore, business strategy represents a contributing
predictor for business operations and environmental protection (Kong et al., 2020). The Environmental
existing literature has mostly studied the influence of environmental strategies on management
organizational performance, including environmental, market and financial outcomes
(Quan et al., 2018). Additionally, there is evidence that proactive environmental strategies
control
significantly improve economic performance (Brulhart et al., 2017). systems
In contrast, the environmental strategy neither influences nor determines managerial
performance within the context of Germany (R€otzel et al., 2019). Therefore, the relationship
between environmental strategies and business performance remains unclear and needs
further study. Moreover, researchers have paid less attention to studying environmental
strategies as a factor determining sustainable performance. Thus, there are the following
proposed hypotheses:
H4. Environmental strategies significantly determine ecological sustainability.
H5. Environmental strategies significantly determine sustainable performance.

2.5 Organizational capabilities, sustainable performance and ecological sustainability

In the earliest stage, researcher discussions on the capabilities of innovative organizations to
ease exchanges between economic benefits and environmental sustainability revolved
around the “Porter hypothesis” (Porter and Van der Linde, 1995). Environmental regulations
do not here represent an extra burden on organizations given their capacity to adapt as a
result of fundamental organizational capabilities such as technological innovation and
diffusion. Those organizations with flexible designs generate benefits in terms of superior
returns (Lopez-Cabrales et al., 2006). Shari and Soebarto (2014) state that these innovative
capabilities play a vital role in determining ecological sustainability.
According to NRBV research, organizational capabilities facilitate in making the
association between environmental and financial performance (Hart and Dowell, 2011). Only
a few studies confirm that management teams attribute importance to organizational
capabilities in determining their respective level of performance (Khan et al., 2019; Rehman
et al., 2018, 2019a, c). However, marketing innovation significantly helps attain sustained
competitive advantage (Quaye and Mensah, 2019). Innovation processes significantly
improve the corporate sustainability that underpins the long-term performance of companies
(Tomsic et al., 2015). Moreover, internationalization processes also positively associate with
the corporate sustainability that improves company economic performance standards
(Bojnec and Tomsic, 2020). Additionally, organizational capabilities significantly enhance
sustainable competitive advantage (Hart, 1995). Organizations are only able to profit from the
minimization of pollution when deploying significant innovative capabilities, especially those
linked to constant development. The research has paid less attention to determining
ecological sustainability and sustainable performance in terms of organizational capabilities.
Hence, the proposed hypotheses are
H6. Organizational capabilities significantly determine ecological sustainability.
H7. Organizational capabilities significantly determine sustainable performance.

2.6 Environmental strategies as a mediator

The discussion detailed above regarding the environmental MCS package, environmental
strategies, ecological sustainability and sustainable performance maintains that the
environmental MCS package influences the environmental strategies that lead to
ecological sustainability and sustainable performance. The environmental crisis presents a
competitive challenge to firms and with natural environmental restrictions on the ability of
organizations to build strategies that drive sustainable competitive advantages. While NRBV
MD theory indicates that environmental strategy significantly determines environmental
performance and sustainable development (Hart, 1995; Hart and Dowell, 2011), there is a
lack of research on determining ecological sustainability through applying innovative
capabilities (Shari and Soebarto, 2014). Furthermore, the research has largely ignored the
measuring of ecological sustainability by applying the environmental MCS package in large
organizations. The environmental MCS package is a vital factor for determining the
environmental strategies that consequently lead to better ecological sustainability and
sustainable performance. Environmental MCS packages provide a platform for organizations
to utilize environmental strategies to enhance their ecological sustainability and sustainable
performance. Hence, we arrive at the following proposed hypotheses:
H8. Environmental strategies mediate between the environmental MCS package and
ecological sustainability.
H9. Environmental strategies mediate between the environmental MCS package and
sustainable performance.
Figure 1 demonstrates the theoretical framework.

2.7 Organizational capabilities as a moderator

Observations of organizational management identify its important role in the movement
toward corporate sustainability. According to the NRBV, environmental strategies play a
crucial role in improving environmental performance and sustainable development (Hart and
Dowell, 2011). Moreover, researchers argue that environmental strategies significantly boost
organizational performance in terms of market, environmental and financial outcomes (Quan
et al., 2018). Despite this, the environmental strategy does not significantly influence
managerial performance (R€otzel et al., 2019).
The relationship between environmental strategy and both ecological sustainability and
sustainable performance is therefore not consistent. Hence, there is a need for a moderator
that boosts the association between environmental strategies and both ecological
sustainability and sustainable performance. This study applies organizational capabilities
as a moderator. The research literature conveys how innovative capabilities significantly
improve ecological sustainability (Shari and Soebarto, 2014).
Moreover, organizational capabilities facilitate managers in their nurturing a positive
association between environmental and financial performance (Hart and Dowell, 2011). The
proposed hypotheses are thus:
H10. Organizational capabilities moderate between environmental strategies and
ecological sustainability.

Organizational
H6 - H7
Capabilities
H10 - H11
Environmental Ecological Sustainability
H3 Management Control Environmental
H4 - H5 Systems Packages Strategies Sustainable Performance

H8 - H9

H1 - H2
Figure 1.
Theoretical framework Note(s): Direct ( )
Indirect: ( )
 H11. Organizational capabilities moderate between environmental strategies and Environmental
sustainable performance. management
control
3. Methodology systems
3.1 Population and sampling
This research focuses on the Malaysian construction industry in keeping with the lack of
literature on the environmental MCS package, organizational capabilities and business
strategies for determining ecological sustainability and sustainable performance in the
Malaysian construction sector (Iranmanesh et al., 2019). In Malaysia, there are a total of 4,520
large construction firms registered and currently in business in accordance with the list on
the Construction Industry Development Board (CIDB) website (Adewale et al., 2016). The
current research applied a questionnaire with a 5-point Likert scale for collecting data from
respondents. This included only variables established by previous research and that also
measured the constructs according to 5-point Likert scales (Arshad et al., 2020; Khan et al.,
2019; Rehman et al., 2019d). Furthermore, this study adopted a simple random sampling
technique for data collection. Sekaran and Bougie (2016) state that this proposes equal
chances of respondent selection and without any bias. Additionally, several other researchers
have confirmed that a simple random sampling technique presents generalized outcomes
(Rehman et al., 2018, 2019a, b).
Thus, our study focuses on sustainable performance, the environmental MCS package,
business strategies and ecological sustainability among large Malaysian construction
organizations. For this purpose, we thereby collected data from large organizations in the
domain of building construction and civil engineering with the research respondents from
construction firms and with one representative (a project manager, sales manager,
construction manager, quantity surveyor, account manager, contract manager, executive
director and/or engineer) nominated per organization according to their knowledge about the
study variables. This incorporated a pretest phase to confirm the content validity of the
questionnaire prior to data collection as we adapted the items for every variable from
previous studies. A total of six individuals undertook this pretest process with three such
individuals from an academic background and with the remainder holding industrial
experience. The findings of the pretest demonstrate that all the items for variables measure
the specific respective variable. After conducting this pretest, we applied a revised version of
the questionnaire for data collection.
In accordance with Krejcie and Morgan (1970), we randomly selected 354 organizations as
a sample of the total population of 4520 companies with the data collected from respondents
for this study between September and December 2019. From the study sample perspective,
the response rate was low and thus requiring researchers to triple the sample size to minimize
the sampling error. Hence, we were able to resolve the response rate problem with a total of
(354*3 5 1062) questionnaires distributed to respondents but with only 373 serving for
analysis. Hence, the study response rate came in at 35%. Among these 373 respondents, 284
(76.14%) are male and with 89 (23.86%) female respondents. Moreover, a total of 218 (58.44%)
organizations have fewer than 100 employees, with 43 employing 100–250 (11.53%)
organizations, 38 with between 251–500 employees (10.19%) organizations, and with 74
respondent companies employing over 500 (19.84%) members of staff. Meanwhile, the
number of organizations in business for between one and five years is 63 (16.89), those with
6–10 years in operation totaling 48 (12.87%), and with 262 (70.24%) businesses active for over
a decade. Moreover, the respondent profiles included project managers (69 or 18.50%), sales
managers (39 or 10.46%), construction managers (26 or 6.97%), quantity surveyors (46 or
12.33%), account managers (37 or 9.92%), contract managers (45 or 12.06%), executive
directors (51 or 13.67%), engineers (42 or 11.26%) and others (18 or 4.83%). Finally, the
MD working experience of respondents ranged from one to five years in 187 cases (50.14%), from
6 to 10 years for 91 (24.40%) respondents and with 95 (25.46%) respondents having careers of
10 years or longer.

3.2 Measures
The environmental MCS package proposed by Henri and Journeault (2010) and Banerjee
(2002) consists of 27 items. This package includes a total of five controls, specifically
environmental planning (four items), environmental cybernetic (seven items), environmental
rewards and compensation (three items), and environmental administration (nine items) as
adapted from Henri and Journeault (2010). The environmental cultural control, adapted from
Banerjee (2002), consists of four items. The organizational capabilities measured in this
research spanned a total of 28 items. These organizational capabilities include innovation and
reengineering (four items), quality orientation (five items), customer loyalty (five items),
flexible design (five items), product diversity (four items) and strategic vision (five items)
adapted from Lopez-Cabrales et al. (2006). The environmental strategy, adapted from Banerjee
(2002), consists of eight items. In turn, the environmental strategy dimensions include the
environmental business strategy (three items) and the environmental corporate strategy
(five items).
Ecological sustainability includes eight items proposed by Abidin (2009). The sustainable
performance includes 15 items from various sources, respectively. For instance,
environmental performance draws five items from Laosirihongthong et al. (2013), with
social performance incorporating five items from Paulraj (2011) and economic performance
featuring five items from Zhu et al. (2013). We measured the environmental MCS package,
environmental strategy, organizational capabilities, ecological sustainability and sustainable
performance on a 5-point Likert scale, ranging from 1 5 strongly disagree to
5 5 strongly agree.

3.3 Common method bias (CMB)

This research study collected data regarding exogenous variables and endogenous variables
from a single source; questionnaires. Hence, there is a chance that common method bias
(CMB) may arise and distort the study data. During the data collection process, the research
team informed all respondents that their responses would remain confidential whatever their
respective answer. CMB represents a severe problem arising mostly in self-survey research
(Podsakoff and Organ, 1986; Spector, 2006) as it enhances the relationships existing within
the measured constructs. This study carried out Harman’s single factor analysis for CMB and
with the findings revealing that no single factor explains more than 38.13% of the total
variance. As this remains below 50%, there is thus no issue with CMB in the data.

3.4 Model estimation

This study applied the structural equation modeling (SEM) technique to test the proposed
study hypotheses by executing SmartPLS 3.2.8. Partial least square (PLS) is a variance-based
nonparametric SEM that works with smaller samples (Sarstedt et al., 2014). Furthermore, as a
nonparametric method, PLS is “a suitable method when study data is skewed or does not
fulfill normality assumptions” (Khan et al., 2014). The PLS model returns much more
established outcomes than other ordinary least squared models when studying smaller
samples, with missing data values and issues of multicollinearity (Farahani et al., 2010). Our
study contains a smaller sample size; and we thus followed PLS as our primary research
method. The theoretical framework consists of seven reflective variables in which the
environmental MCS package, business strategies and organizational capabilities contain
several dimensions. PLS-SEM accounts for the measurement and structural models.
 The measurement model includes four kinds of tests to validate reflective variables such Environmental
as indicator reliability, internal consistency reliability, convergent validity and discriminant management
validity (Hair et al., 2014). Table 1 demonstrates a minimum loadings value of 0.519 and a
maximum of 0.977 that are both above the suggested threshold of 0.50 (Hair et al., 2014). This
control
indicates there is no issue as regards to individual item reliability. When the value of loadings systems
is within the range (0.40–0.50) of any item and this does not disturb the average variance
extracted (AVE) and composite reliability (CR) values then researchers can retain those items.
Loading values of below 0.40 should be excluded from the calculations. Measuring the
reliability of internal consistency serves to compute the CR of constructs. The CR result must
come in greater than 0.60 (Hair et al., 2014). In exploratory research, the CR value should lie
between 0.60 and 0.70 to obtain an acceptable level with the range of 0.70–0.90 deemed
satisfactory to good. However, any value of above 0.95 is problematic.
Table 1 sets out how the CR values achieve that standardized value (0.60) testifying to the
homogeneity, internal consistency and reliability of every variable in this research (Bagozzi
et al., 1991). Table 1 demonstrates there are no issues regarding the CR values. Convergent
validity means the degree for observing when the construct items determine a similar
construct (Rehman et al., 2019a). Table 1 demonstrates that the minimum result for AVE is
0.506, and with the highest reaching 0.816. Hence, the convergent validity meet the criterion
set as all values come in above the threshold value, that is 0.50 as proposed by Hair
et al. (2014).
The recent results from the study by Kraus et al. (2020) carried out in Malaysia returned a
minimum AVE for the social dimension equal to 0.523 whereas this study attained a
minimum AVE of 0.506 for administrative controls that meets the criterion as recommended
by Hair et al. (2014). The reason for the lower AVE level stems from how the measurement of
the environmental MCS package takes place at a second-order spanning five dimensions
incorporating environmental planning, cultural facets, cybernetic, rewards and
compensation, and administrative controls. When calculating the AVE of the
environmental MCS package as a whole, this study returns a result of 0.531 and hence
significantly higher than the standardized value. Table 1 identifies how 16.9, 57.5 and 59.5%
of the variance in environmental strategy, ecological sustainability and sustainable
performance, respectively, stems from the exogenous variables. Table 1 reports a
Cronbach’s alpha (α) result greater than the threshold value (0.60) as recommended by
Fornell and Larcker (1981).

4. Regression model test

This section covers the structural model applied to test the proposed hypotheses. The
bootstrapping procedure runs by incorporating 2,000 subsamples. To estimate the research
model and analyze the structural path, SmartPLS 3.2.8 served to test the hypotheses
proposed in the earlier section. After implementing the measurement model, this section
includes the structural model. In the structural model, the research method calculates the
p-value and t-value to test the hypotheses. When the p-value is less than 0.05 and the t-value is
greater than 1.96, the result attains significance, with two-tailed test results achieving
significance at 0.05.
Table 2 demonstrates the empirical results for the hypotheses. The environmental MCS
package significantly and positively associates with ecological sustainability (β 5 0.171,
p 5 0.042, t-value 5 2.336) and thereby supports H1. The results resemble those of Naranjo-
Gil (2016) who also reports that MCS positively associates with environmental sustainability.
Moreover, the environmental MCS package also positively interlinks with sustainable
performance (β 5 0.232, p 5 0.009, t-value 5 3.161) in support of H2. The findings align with
those of R€otzel et al. (2019) who identify how environmental MCS packages significantly
MD First-order Second-order Factor
constructs construct Items loading AVE CR R2 α
Environmental EPC1 0.649 0.593 0.851 0.763
planning control EPC2 0.864
EPC3 0.868
EPC4 0.672
Environmental ECLC1 0.870 0.765 0.929 0.897
cultural control ECLC2 0.924
ECLC3 0.894
ECLC4 0.808
Environmental ECYC1 0.749 0.561 0.899 0.869
cybernetic control ECYC2 0.842
ECYC3 0.854
ECYC4 0.677
ECYC5 0.749
ECYC6 0.706
ECYC7 0.641
Environmental EREWC1 0.827 0.739 0.895 0.824
rewards and EREWC2 0.872
compensation EREWC3 0.879
control
Environmental EAC1 0.809 0.506 0.901 0.879
administrative EAC2 0.760
control EAC3 0.682
Environmental EAC4 0.606
administrative EAC5 0.620
control EAC6 0.810
EAC7 0.677
EAC8 0.718
EAC9 0.690
Environmental Environmental 0.778 0.531 0.847 0.906
MCS package planning control
Environmental 0.712
cultural control
Environmental 0.856
cybernetic control
Environmental 0.735
rewards and
compensation
control
Environmental 0.519
administrative
control
Environmental EBS1 0.867 0.726 0.888 0.812
business strategy EBS2 0.864
EBS3 0.824
Environmental ECS1 0.922 0.651 0.900 0.855
corporate strategy ECS2 0.594
ECS3 0.649
ECS4 0.870
ECS5 0.934
Environmental Environmental 0.840 0.735 0.847 0.169 0.910
strategies business strategy
Environmental 0.874
corporate strategy
Table 1.
Convergent validity (continued )
First-order Second-order Factor
Environmental
constructs construct Items loading AVE CR R 2
α management
control
Innovation and INVR1 0.814 0.650 0.881 0.817
reengineering INVR2 0.843 systems
INVR3 0.862
INVR4 0.695
Quality orientation QUO1 0.696 0.540 0.824 0.715
QUO2 0.786
QUO3 0.720
QUO4 0.734
Customer loyalty CUSL1 0.808 0.594 0.879 0.828
CUSL2 0.813
CUSL3 0.755
CUSL4 0.773
CUSL5 0.700
Flexible design FLXD1 0.869 0.566 0.865 0.814
FLXD 2 0.820
FLXD 3 0.665
FLXD 4 0.633
FLXD 5 0.750
Product diversity PRDD1 0.887 0.816 0.930 0.887
PRDD2 0.928
PRDD3 0.893
Strategic vision STV1 0.728 0.555 0.860 0.797
STV2 0.815
STV3 0.734
STV4 0.816
STV5 0.611
Organizational Innovation and 0.862 0.646 0.916 0.934
capabilities reengineering
Quality orientation 0.648
Customer loyalty 0.893
Flexible design 0.808
Product diversity 0.816
Strategic vision 0.774
Ecological ECOS1 0.730 0.597 0.922 0.575 0.903
sustainability ECOS2 0.780
ECOS3 0.678
ECOS4 0.840
ECOS5 0.764
ECOS6 0.717
ECOS7 0.834
ECOS8 0.823
Environmental EVP1 0.864 0.682 0.914 0.879
performance EVP2 0.783
EVP3 0.652
EVP4 0.906
EVP5 0.896
Economic EP1 0.643 0.534 0.849 0.781
performance EP2 0.872
EP3 0.803
EP4 0.606
EP5 0.694

(continued ) Table 1.
MD First-order Second-order Factor
constructs construct Items loading AVE CR R2 α
Social performance SOP1 0.715 0.619 0.889 0.843
SOP2 0.867
SOP3 0.818
SOP4 0.671
SOP5 0.843
Sustainable Environmental 0.969 0.810 0.927 0.595 0.934
performance performance
Economic 0.849
performance
Table 1. Social performance 0.877

Hypotheses Paths β values T-values p-values BCI LL BCI UL Results

H1 EMCSP → ECOS 0.171 2.336 0.042 0.023 0.252 Accepted

H2 EMCSP → SSP 0.232 3.161 0.009 0.076 0.300 Accepted
H3 EMCSP → ES 0.411 6.240 0.000 0.308 0.484 Accepted
H4 ES → ECOS 0.214 7.799 0.000 0.166 0.257 Accepted
H5 ES → SSP 0.216 4.621 0.001 0.092 0.186 Accepted
H6 OC → ECO 0.545 7.935 0.000 0.409 0.564 Accepted
H7 OC → SSP 0.562 9.156 0.000 0.450 0.569 Accepted
H8 EMCSP → ES → ECOS 0.088 5.432 0.000 0.070 0.116 Mediated
H9 EMCSP → ES → SSP 0.089 3.620 0.005 0.038 0.084 Mediated
H10 OC*ESV → ECOS 0.073 2.404 0.037 0.026 0.122 Moderated
H11 OC*ES → SSP 0.080 3.031 0.013 0.033 0.114 Moderated
Table 2. Note(s): EMCSP 5 Environmental management control systems package; OC 5 Organizational capabilities;
Results of hypotheses ES 5 Environmental strategies; SSP 5 Sustainable performance; ECOS 5 Ecological sustainability

influence managerial performance. Furthermore, environmental MCS packages have a

statistically significant effect on environmental strategy (β 5 0.411, p 5 0.000,
t-value 5 6.240) and thus supporting H3. The outcomes are similar to Gond et al., 2012,
who maintain that MCSs positively influence sustainability strategies. Moreover,
environmental strategy interrelates significantly and positively associates with ecological
sustainability (β 5 0.214, p 5 0.000, t-value 5 7.799) and thereby supporting H4.
These findings reflect those of Kong et al. (2020) that deem business strategy a
contributing factor in business operations and environmental protection. Additionally,
environmental strategy significantly improves sustainable performance as (β 5 0.216,
p 5 0.001, t-value 5 4.621) and in support of H5. These outcomes are similar to Quan et al.
(2018) that conclude how environmental strategies positively associate with organizational
performance. Organizational capabilities significantly influence ecological sustainability
(β 5 0.545, p 5 0.000, t-value 5 7.935) and thus providing support for H6.
The findings align with the NRBV that states firms can become environmentally
sustainable by concentrating on distinct firm capabilities (Hart, 1995). Furthermore,
organizational capabilities significantly enhance sustainable performance (β 5 0.562,
p 5 0.000, t-value 5 9.156) and in support of H7.
Few research findings conclude that organizational capabilities significantly enhance
organizational performance (Khan et al., 2019; Rehman et al., 2018, 2019a, c). Moreover,
environmental strategies mediate between the environmental MCS package and the two
variables for ecological sustainability and sustainable performance and hence in support of Environmental
H8 and H9. management
The study deployed the product indicator approach for moderation to apply PLS-SEM
and the Cohen effect size method (1988) to recognize and compute the strength of the
control
moderating effect. Table 2 reveals that organizational capabilities significantly moderate systems
between environmental strategy (β 5 0.073, p 5 0.037, t-value 5 2.404), sustainable
performance (β 5 0.080, p 5 0.013, t-value 5 3.031) and ecological sustainability. Thus, H10
and H11 receive significant support. Figures 2 and 3 identify how organizational capabilities
significantly strengthen the relationships between environmental strategy, ecological
sustainability and sustainable performance.

4.1 Predictive relevance and size effect

Cohen et al. (2013) maintain that a Q2 result of 0.02 holds small, 0.15 medium and 0.35 large
predictive relevance. Table 3 demonstrates that only environmental strategy (0.071) returns a
low level of predictive relevance, while ecological sustainability (0.246) and sustainable
performance (0.227) generate adequate predictive relevance. Hence, the current research
model returns predictive power over ecological sustainability and sustainable performance.
The f2 value reveals whether an exogenous construct has a significant influence on an
endogenous construct. The value of f2 within a range from 0.02 to 0.15 ranks as small in effect,
from 0.15 to 0.35 is medium in effect while above 0.35 returns a large effect (Cohen, 1988).
Table 4 details how the environmental MCS package and environmental strategies generate
smaller effects on ecological sustainability and sustainable performance. Nevertheless,
organizational capabilities provide a higher effect on ecological sustainability and
sustainable performance.

5. Discussion
This study elucidates on how firms that deploy environmental MCS packages significantly
enhance their ecological sustainability. The adoption of ecological sustainability by large
construction organizations has always differed from their smaller peers where these methods
normally become more informal and less systematic. An MCS is nevertheless essential for
organizations to determine the environmental sustainability measures capable of enhancing
firm outcomes (Naranjo-Gil, 2016). Additionally, the environmental MCS package

Figure 2.
Moderators for
ecological
sustainability
MD

Figure 3.
Moderators for
sustainable
performance

Endogenous variables SSO SSE Q2

Table 3.
Predictive relevance of Environmental strategies 2984.000 2773.148 0.071
the endogenous Ecological sustainability 2984.000 2249.537 0.246
variables Sustainable performance 5595.000 4324.463 0.227

ECOS SSP

Environmental MCS package 0.047 0.091

Table 4. Environmental strategies 0.083 0.036
The effect size model Organizational capabilities 0.486 0.545

significantly improves levels of sustainable performance with the package fostering the
integration of sustainable development (Gond et al., 2012). There are only a few studies that
approach the relationship among the environmental MCS package, ecological sustainability
and sustainable performance in the light of NRBV theory. Nonetheless, the environmental
MCS package would appear to significantly influence environmental strategy. The extant
literature confirms that comprehensive recourse to MCSs significantly determines the
implementation of sustainability strategies (Gond et al., 2012). In contrast, contingency theory
advocates that the influence of MCSs stems from certain factors whether internal (e.g.
strategy) or external (e.g. environment) to the organization. Peljhan and Tekavcic (2008)
affirm the relationship existing between strategy and MCS while also considering how this
association influences firm levels of performance.
The current research was able to calculate significant empirical evidence for
hypothesizing the increasing influence of environmental strategies on the ecological
sustainability of Malaysian construction companies. The findings report that organizations
adopting environmental strategies attain benefits in terms of ecological sustainability.
Researchers have paid scant attention to environmental strategy for measuring ecological
sustainability in the context of construction firms, and with this study meeting this gap.
Moreover, this study demonstrates how environmental strategic practices significantly and
positively improve sustainable performance. These findings match with the NRBV theory Environmental
that environmental strategies significantly improve environmental performance and management
sustainable development (Hart, 1995).
Organizational capabilities have a significant and positive influence on the ecological
control
sustainability of large construction companies in Malaysia. This significantly positive systems
influence of organizational capabilities on ecological sustainability provides a new empirical
indication that large construction organizations are in a better situation to reap the positive
results of implementing sustainability measures, such as reducing pollution and better
controls through enhancing strategic organizational capabilities. These results are in line
with the NRBV perspective that organizations may become environmentally sustainable
through focusing on their distinct organizational capabilities (Hart, 1995). While NRBV
highlights strategic organizational capabilities that meet the needs of firm stakeholders while
simultaneously minimizing the ecological constraints as a key to its sustainability. The
findings of this current research provide an in-depth explanation about how major
construction organizations might uphold their strategic capabilities through deploying the
environmental MCS package. Moreover, organizational capabilities significantly improve the
sustainable performance of construction firms in Malaysia. Previous studies (Hart and
Dowell, 2011) have indicated that firm capabilities facilitate in improving organizational
profits through preventing polluting activities.
The environmental strategy significantly mediates between the environmental MCS
package and ecological sustainability and sustainable performance. These outcomes match
NRBV theory; a strategy that considers reducing environmental pollution obtains benefits for
the firm in terms of sustainable development and competitive advantage (Hart and Dowell,
2011). Large organizations hold greater financial capacity to invest in environmental
resources such as environmental MCS packages, building environmental strategies and
concentrating on strategic capabilities than do small- or medium-sized organizations.
However, firms only adopting environmental strategies fall short as there remains the need to
effectively implement these strategies. Organizational capabilities thus play a vital role in
enhancing the relationship between environmental strategy, ecological sustainability and
sustainable performance. These outcomes align with NRBV theory that states organizational
capabilities help in preventing pollution that thereby acts to raise organizational profits (Hart
and Dowell, 2011).

5.1 Conclusion
Overall, this study indicates how the environmental MCS package (involving environmental
planning control, environmental cultural control, environmental cybernetic control,
environmental rewards and compensation control, and environmental administrative
control) and the environmental strategy (environmental business strategy and
environmental corporate strategy) significantly enhance levels of ecological sustainability
and sustainable performance (environmental, economic and social performances).
Moreover, the environmental MCS package generates a significant influence on
environmental strategies. Furthermore, organizational capabilities (customer loyalty,
flexible design, product diversity, quality orientation, innovation and reengineering, and
strategic vision) significantly boost both ecological sustainability and sustainable
performance. In terms of meditators, environmental strategies play a significant mediation
role between environmental MCS packages and both ecological sustainability and
sustainable performance. In turn, organizational capabilities positively associate with
ecological sustainability and sustainable performance. Finally, organizational capabilities
significantly moderate environmental strategies and both ecological sustainability and
sustainable performance.
MD 5.2 Theoretical implications
Making theoretical contributions needs a specific kind of research finding that generates
novel insights into a phenomenon deemed of value to improving firms. The current research
returns such an original insight in keeping with the empirical data on the study variables.
Environmental MCS package researchers have yet to fully grasp the environmental strategy,
ecological sustainability and sustainable performance dimensions. Moreover, organizational
capabilities strengthen the positive relationship between environmental strategy, ecological
sustainability and sustainable performance. Hence, this study makes a significant
contribution in these areas. According to the best of the researcher’s knowledge, there are
few available studies that incorporate environmental MCS packages, environmental strategy,
organizational capabilities, ecological sustainability and sustainable performance within the
same framework. This study adds to the body of knowledge on determining the relationship
between exogenous and endogenous constructs in accordance with NRBV theory. Indeed, it
designs and implements a robust theoretical framework based on this theoretical perspective.
There has hitherto been a lack of research attention to NRBV theory in determining ecological
sustainability and sustainable performance. Hence, the environmental MCS package serves
to measure environmental managerial performance by applying contingency theory (R€otzel
et al., 2019). The research literature has hitherto omitted any inclusion of details on
environmental MCS packages measuring ecological sustainability and sustainable
performance in construction firms. Hence, this study meets this gap. The theoretical model
returns valuable insights into the dual function of environmental MCS packages whether for
examining the environmental strategy or predicting ecological sustainability and sustainable
performance levels.
This study furthermore proposes that environmental strategy (e.g. the environmental
business strategy and the environmental corporate strategy) significantly explains the
relationship between the environmental MCS package, ecological sustainability and
sustainable performance. Moreover, our study conveys how the environmental MCS
package, environmental strategy and organizational capabilities provide benefits for
construction firms in terms of waste treatment, the cost of material purchases, lower fines for
environmental accidents, reduced energy consumption and waste discharges. Additionally,
the management structures of construction firms obtain benefits in terms of occupational
health and safety, improvements to stakeholder welfare, reduced environmental risks to the
general public, and community health and safety.
Moreover, environmental MCS packages, organizational capabilities and environmental
strategies help to enhance compliance with environmental standards, to reduce air emissions
and material usage and to lower the consumption of both hazardous materials and energy.
Furthermore, our study identifies how environmental MCS packages, environmental
strategies and organizational capabilities assist in utilizing land and water efficiently
alongside better material selection, heritage and amenity protection, reductions in waste,
better biodiversity protection, the conservation of energy and control over pollution. Finally,
organizational capabilities (e.g. customer loyalty, flexible design, product diversity, quality
orientation, innovation and reengineering, and strategic vision) strengthen the association
between environmental strategy and ecological sustainability and sustainable performance.

5.3 Managerial implications

The results generate significant implications for managers and policymakers with our
findings conveying how management needs to establish and build integrated environmental
MCS packages. Implementing environmental MCS packages is correspondingly highly
important to attaining ecological sustainability and sustainable performance. Within the
scope of construction industry management, practically every aspect needs considering
should organizations wish to attain ecological sustainability and sustainable levels of Environmental
performance. For instance, environmental issues should represent a core component of management
organization strategic planning processes. Environmental preservation requires
consideration across the organization and with every worker understanding the
control
importance of environmental preservation. Organizations should therefore deploy systems
environmental performance indicators to drive continuous improvement, provide data
both for external reporting and for internal decision-making, and monitor internal compliance
with environmental policies and regulations. These environmental indicators should also
feature in the reward system in effect.
Finally, owners/managers should adopt natural environmental management manuals
spanning internal practices, audit, ecological guidelines, administrative work, seminars for
executives, training for workers and the sponsorship of natural environmental events.
Construction industry decision-makers shall receive benefits in terms of land utilization,
material selection, waste minimization, heritage and amenity protection, energy
conservation, water efficiency, pollution control and biodiversity protection through
implementing environmental MCS packages. Moreover, senior management become able
to decrease the cost of acquiring materials, energy consumption, waste treatment, waste
discharges as well as avoiding fines for environmental accidents. Furthermore, other benefits
to the construction industry include reductions in air emissions, material usage, consumption
of hazardous materials and improved compliance with environmental standards. The
implementation of environmental MCS packages may thus serve to improve overall
stakeholder welfare, community health and safety while also reducing both environmental
impacts and risks to the general public.
Senior management should furthermore focus on ensuring marketing strategies
incorporate environmental concerns. Moreover, managers need to incorporate quality in
ways that reduce the prevailing environmental impacts. Additionally, managers have to take
environmental issues into account at the time of developing new products. By following such
strategies, construction industry companies will obtain meaningful benefits. Finally, senior
construction industry management should concentrate on core facets of their decision-
making, including satisfying customers, designing products according to customer needs,
promoting decentralized decision-making, treating all customers fairly and impartially,
listening to customer needs and criticisms, with different products for diverse regions, unique
but related products, without compromising on quality, producing innovative products and
all through managers understanding and implementing the overall business strategy.
Applying these factors in organizational decision-making generates benefits in terms of
ecological sustainability and improved sustainable performance levels. Thus, managers
should include organizational capabilities in their decision-making on measures designed to
enhance ecological sustainability and sustainable performance.

5.4 Limitations and future research

Despite the research contributions and implications, the current research contains numerous
limitations and expects future research to build on its findings. Firstly, this study applied a
cross-sectional approach, and there is no certainty that environmental MCS packages,
environmental strategies and organizational capabilities in construction companies underpin
long-term ecological sustainability and sustainable levels of performance. Thus, there is a
need to study a similar theoretical model over a long-term framework to ascertain whether the
findings remain the same or if they vary. The current research examines ecological
sustainability and sustainable performance in terms of significant factors, such as the
environmental MCS package, environmental strategies and organizational capabilities. In the
future, the researchers might include other factors including green human resource practices,
MD green entrepreneurship (e.g. Melay and Kraus, 2012), corporate social responsibility (e.g.
Malovics et al., 2008) or innovative capabilities as mediating variables between
environmental MCS packages, ecological sustainability and sustainable performance (e.g.
Kraus et al., 2018). This study focused exclusively on the Malaysian construction sector and
may reflect a particular culture. Thus, there is also a need to deploy a similar theoretical model
in both developed and developing economies and to test for variations in outcomes.

References
Abidin, N.Z. (2009), “Sustainable construction in Malaysia–developers’ awareness”, World Academy of
Science, Engineering and Technology, Vol. 41, pp. 807-814.
Adewale, B., Mohammed, K. and Nasrun, M. (2016), “Assessing the sustainable construction of large
construction companies in Malaysia”, AIP Conference Proceedings, Vol. 1761, p. 020027, doi: 10.
1063/1.4960867.
Arshad, I., Haider, G., Rehman, S.U. and Loh, C.I. (2020), “The mediating role of management
innovation between organizational innovation between organizational culture, organizational
learning, business strategy, and firms performance”, Journal of Critical Reviews, Vol. 7 No. 10,
pp. 3136-3147.
Bagozzi, R.P., Yi, Y. and Phillips, L.W. (1991), “Assessing construct validity in organizational
research”, Administrative Science Quarterly, Vol. 36, pp. 421-458.
Banerjee, S.B. (2002), “Corporate environmentalism: the construct and its measurement”, Journal of
Business Research, Vol. 55 No. 3, pp. 177-191.
Barney, J.B. (1991), “Firm resources and sustained competitive advantage”, Journal of Management,
Vol. 17 No. 1, pp. 99-120.
Barney, J.B. and Arikan, A.M. (2001), “The resource-based view: origins and implications”, The
Blackwell Handbook of Strategic Management, Blackwell Publishers, Oxford, Chapter 4,
pp. 124-188.
 and Tomsic, N. (2020), “Corporate sustainability and enterprise performance: the mediating
Bojnec, S.
effects of internationalization and networks”, International Journal of Productivity and
Performance Management. doi: 10.1108/IJPPM-05-2019-0226.
Brulhart, F., Gherra, S. and Marais, M. (2017), “Are environmental strategies profitable for companies?
The key role of natural competences from a resource-based view”, Management Decision,
Vol. 55 No. 10, pp. 2126-2148.
Chen, F., Ngniatedema, T. and Li, S. (2018), “A cross-country comparison of green initiatives, green
performance and financial performance”, Management Decision, Vol. 56 No. 5, pp. 1008-1032.
Cohen, J. (1988), Statistical Power Analysis for the Behavioral Sciences, 2nd, Erlbaum, Hillsdale, NJ.
Cohen, L., Manion, L. and Morrison, K. (2013), Research Methods in Education, Routledge, London.
Elkington, J. (1994), “Towards the sustainable corporation: win-win-win business strategies for
sustainable development”, California Management Review, Vol. 36 No. 2, pp. 90-100.
Esty, D.C. and Winston, A. (2009), Green to Gold: How Smart Companies Use Environmental Strategy
to Innovate, Create Value, and Build Competitive Advantage, John Wiley & Sons, New Jersey.
Farahani, H.A., Rahiminezhad, A. and Same, L. (2010), “A Comparison of Partial Least Squares (PLS)
and ordinary least squares (OLS) regressions in predicting of couples mental health based on
their communicational patterns”, Procedia-Social and Behavioral Sciences, Vol. 5, pp. 1459-1463.
Fornell, C. and Larcker, D.F. (1981), “Evaluating structural equation models with unobservable
variables and measurement error”, Journal of Marketing Research, Vol. 18 No. 1, pp. 39-50.
Gond, J.-P., Grubnic, S., Herzig, C. and Moon, J. (2012), “Configuring management control systems:
theorizing the integration of strategy and sustainability”, Management Accounting Research,
Vol. 23 No. 3, pp. 205-223.
Gray, R., Adams, C.A. and Owen, D. (2014), Accountability, Social Responsibility and Sustainability, Environmental
Pearson Education, London.
management
Hair, J.F., Hult, G.T.M., Ringle, C. and Sarstedt, M. (2014), A Primer on Partial Least Squares Structural
Equation Modeling (PLS-SEM), Sage Publications, Thousand Oaks.
control
Hart, S.L. (1995), “A natural-resource-based view of the firm”, Academy of Management Review,
systems
Vol. 20 No. 4, pp. 986-1014.
Hart, S.L. and Dowell, G. (2011), “Invited editorial: a natural-resource-based view of the firm: fifteen
years after”, Journal of Management, Vol. 37 No. 5, pp. 1464-1479.
Henri, J.-F. and Journeault, M. (2010), “Eco-control: the influence of management control systems on
environmental and economic performance”, Accounting, Organizations and Society, Vol. 35
No. 1, pp. 63-80.
Hummel, K., Laun, U. and Krauss, A. (2020), “Management of environmental and social risks and
topics in the banking sector-an empirical investigation”, The British Accounting Review, 100921,
doi: 10.1016/j.bar.2020.100921 (accessed 20 April 2020).
Iranmanesh, M., Zailani, S., Hyun, S., Ali, M. and Kim, K. (2019), “Impact of lean manufacturing
practices on firms’ sustainable performance: lean culture as a moderator”, Sustainability, Vol. 11,
p. 1112.
Khan, M.S., Breitenecker, R.J. and Schwarz, E.J. (2014), “Entrepreneurial team locus of control:
diversity and trust”, Management Decision, Vol. 52 No. 6, pp. 1057-1081.
Khan, S.N., Hussain, R.I., Rehman, S.-u., Maqbool, Q., Engku ALI, E.I. and Numan, M. (2019), “The
mediating role of innovation between corporate governance and organizational performance:
moderating role of innovative culture in Pakistan textile sector”, Cogent Business and
Management, Vol. 6, 1631018.
Kong, D., Yang, X., Liu, C. and Yang, W. (2020), “Business strategy and firm efforts on environmental
protection: evidence from China”, Business Strategy and the Environment, Vol. 29 No. 2, pp. 445-464.
Kraus, S., Rehman, S.U. and Garcıa, F.J.S. (2020), “Corporate social responsibility and environmental
performance: the mediating role of environmental strategy and green innovation”,
Technological Forecasting and Social Change, Vol. 160, 120262.
Kraus, S., Burtscher, J., Vallaster, C. and Angerer, M. (2018), “Sustainable entrepreneurship
orientation: a reflection on status-quo research on factors facilitating responsible managerial
practices”, Sustainability, Vol. 10, p. 444.
Krejcie, R.V. and Morgan, D.W. (1970), “Determining sample size for research activities”, Educational
and Psychological Measurement, Vol. 30 No. 3, pp. 607-610.
Laosirihongthong, T., Adebanjo, D. and Tan, K.C. (2013), “Green supply chain management practices
and performance”, Industrial Management and Data Systems, Vol. 113 No. 8, pp. 1088-1109.
Lopez-Cabrales, A., Valle, R. and Herrero, I. (2006), “The contribution of core employees to organizational
capabilities and efficiency”, Human Resource Management, Vol. 45 No. 1, pp. 81-109.
Malmi, T. and Brown, D.A. (2008), “Management control systems as a package—opportunities,
challenges and research directions”, Management Accounting Research, Vol. 19 No. 4, pp. 287-300.
Malovics, G., Racz, G. and Kraus, S. (2007), “The role of environmental management systems in
Hungary: theoretical and empirical insights”, Journal for East European Management Studies,
Vol. 12 No. 3, pp. 180-204.
Malovics, G., Nagypal, N. and Kraus, S. (2008), “The role of corporate social responsibility in strong
sustainability”, Journal of Socio-Economics, Vol. 37 No. 3, pp. 907-918.
Melay, I. and Kraus, S. (2012), “Green entrepreneurship: definitions of related concepts”, International
Journal of Strategic Management, Vol. 12 No. 2, pp. 1-12.
Naranjo-Gil, D. (2016), “The role of management control systems and top teams in implementing
environmental sustainability policies”, Sustainability, Vol. 8 No. 4, p. 359.
MD Parker, L.D. and Chung, L.H. (2018), “Structuring social and environmental management control and
accountability”, Accounting, Auditing and Accountability Journal, Vol. 31 No. 1, pp. 993-1023.
Paulraj, A. (2011), “Understanding the relationships between internal resources and capabilities,
sustainable supply management and organizational sustainability”, Journal of Supply Chain
Management, Vol. 47 No. 1, pp. 19-37.
Peljhan, D. and Tekavcic, M. (2008), “The impact of management control systems-strategy interaction
on performance management: a case study”, Organizacija, Vol. 41 No. 5, pp. 174-184.
Podsakoff, P.M. and Organ, D.W. (1986), “Self-reports in organizational research: problems and
prospects”, Journal of Management, Vol. 12 No. 4, pp. 531-544.
Porter, M.E. and Van der Linde, C. (1995), “Toward a new conception of the environment-
competitiveness relationship”, Journal of Economic Perspectives, Vol. 9 No. 4, pp. 97-118.
Quan, Y., Wu, H., Li, S. and Ying, S.X. (2018), “Firm sustainable development and stakeholder
engagement: the role of government support”, Business Strategy and the Environment, Vol. 27
No. 8, pp. 1145-1158.
Quaye, D. and Mensah, I. (2019), “Marketing innovation and sustainable competitive advantage of
manufacturing SMEs in Ghana”, Management Decision, Vol. 57 No. 7, pp. 1535-1553.
Radhouane, I., Nekhili, M., Nagati, H. and Pache, G. (2018), “The impact of corporate environmental
reporting on customer-related performance and market value”, Management Decision, Vol. 56
No. 7, pp. 1630-1659.
Rehman, S.-u., Mohamed, R. and Ayoup, H. (2018), “Cybernetic controls, and rewards and
compensation controls influence on organizational performance. Mediating role of
organizational capabilities in Pakistan”, International Journal of Academic Management
Science Research (IJAMSR), Vol. 2 No. 8, pp. 1-10.
Rehman, S.-U., Mohamed, R. and Ayoup, H. (2019a), “The mediating role of organizational capabilities
between organizational performance and its determinants”, Journal of Global Entrepreneurship
Research, Vol. 9 No. 1, pp. 1-23.
Rehman, S.-u., Bhatti, A. and Chaudhry, N.I. (2019b), “Mediating effect of innovative culture and
organizational learning between leadership styles at third-order and organizational performance
in Malaysian SMEs”, Journal of Global Entrepreneurship Research, Vol. 9 No. 1, pp. 1-24.
Rehman, S.U., Bano, T. and Bhatti, A. (2019c), “Factors influencing online purchase intention with the
mediating role of customer satisfaction”, International Journal of Economics, Management and
Accounting, Vol. 27 No. 1, pp. 235-252.
Rehman, S.-u., Bhatti, A., Mohamed, R. and Ayoup, H. (2019d), “The moderating role of trust and
commitment between consumer purchase intention and online shopping behavior in the context
of Pakistan”, Journal of Global Entrepreneurship Research, Vol. 9 No. 1, p. 43.
R€otzel, P.G., Stehle, A., Pedell, B. and Hummel, K. (2019), “Integrating environmental management
control systems to translate environmental strategy into managerial performance”, Journal of
Accounting and Organizational Change, Vol. 15 No. 4, pp. 626-653.
Sarstedt, M., Ringle, C.M. and Hair, J.F. (2014), “PLS-SEM: looking back and moving forward”, Long
Range Planning, Vol. 47 No. 3, pp. 132-137.
Sekaran, U. and Bougie, R. (2016), Research Methods for Business: A Skill Building Approach, John
Wiley & Sons, New Jersey.
Shari, Z. and Soebarto, V. (2014), “Investigating sustainable practices in the Malaysian office building
developments”, Construction Innovation, Vol. 14 No. 1, pp. 17-37.
Spector, P. (2006), “Method variance in organizational research: truth or urban legend?”,
Organizational Research Methods, Vol. 9 No. 2, pp. 221-232.
Starik, M. and Rands, G.P. (1995), “Weaving an integrated web: multilevel and multisystem
perspectives of ecologically sustainable organizations”, Academy of Management Review,
Vol. 20 No. 4, pp. 908-935.
  and Simcic, B. (2015), “Corporate sustainability and economic performance in
Tomsic, N., Bojnec, S. Environmental
small and medium sized enterprises”, Journal of Cleaner Production, Vol. 108, pp. 603-612.
management
Zhu, Q., Sarkis, J. and Lai, K.-h. (2013), “Institutional-based antecedents and performance outcomes of
internal and external green supply chain management practices”, Journal of Purchasing and
control
Supply Management, Vol. 19 No. 2, pp. 106-117. systems

Corresponding author
Jo~ao J. M. Ferreira can be contacted at: jjmf@ubi.pt

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com