Nicole Darnall

Arizona State University
School of Public Affairs & School of Sustainability

411 N Central Avenue, Ste 480-E, MC 3720
Phoenix, AZ
USA
85004-0687
ndarnall@asu.edu |  Visit Personal Website


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Nicole Darnall is Professor of Management and Public Policy in both the School of Public Affairs and the School of Sustainability at Arizona State University, and Associate Director of the Center for Organizational Research and Design. Her research investigates non-regulatory governance as it relates to global sustainability. Operating at this nexus of the policy and management sciences, she considers a variety of non-regulatory governance approaches (e.g., voluntary programs, strategic alliances, certification, and information-based initiatives) to determine whether the absence of state coercion, combined with appropriate institutional design, can encourage organizations and individuals to behave more sustainably.

Citation:
Kim Y & Darnall N. 2016. Business as a collaborative partner: understanding firms’ socio-political support for policy formation. Public Administration Review 76(2), 326-337. Best Journal Article, Academy of Management, Public and Nonprofit Management Division, 2016
Abstract: While many scholars have discussed the merits of collaborative governance, especially for addressing complicated modern policy challenges, the literature has paid less attention to how business can serve as an effective collaborative partner during the formation of mandatory policies and regulations. Drawing on scholarship in the management sciences and combining it with literature in public administration and public policy, we elaborate on four distinct types of business responses to proposed regulations based on degrees of political activity and social responsiveness: defensive, reactive, proactive, and anticipatory. We then characterize the reasons why proactive firms are more likely to be valuable collaborative partners with policy makers and public managers in that their engagement may avoid costly stalemates that frequently hinder policy making, and develop cost-effective, flexible policy approaches to complex social problems.
DOI: DOI: 10.1111/puar.12463
Citation:
Arimura T, Darnall N, Ganguli R, Katayama H. 2016. The effect of ISO 14001 on environmental performance: resolving equivocal findings. Journal of Environmental Management 166(15), 556-566.
Abstract: Previous research evaluating ISO 14001 certification has shown that it both increases environmental performance and has no effect. We hypothesize that the equivocal findings are due to two factors: institutional pressures arising from differences in regulatory settings across and within countries, and typical methodological approaches for addressing endogeneity. We examine these factors using facility-level data from the United States and Japan for two environmental impacts. After applying Altonji, Elder, and Taber’s (2005) method for dealing with the case where there are no potential instruments, we find evidence that the effectiveness of these environmental governance tools varies across countries and type of environmental impact being assessed.
DOI: 10.1016/j.jenvman.2015.10.032
Citation:
Ferrón-Vílchez V & Darnall N. 2016. Two are better than one: The link between management systems and business performance. Business Strategy and the Environment 25(4), 221-240. Best Paper Finalist, Academy of Management, Organizations and the Natural Environment, 2014
Abstract: Little is known about the complementary performance benefits associated with facilities’ combined use of both quality management systems (QMS) and environmental management systems (EMS), and how these performance benefits might differ from those associated with facilities’ use of only one of these management systems (or neither). We suggest that complementarities arise because each management system fosters the development of internal capabilities that facilitates the adoption and routine operationalization of the other, while maintaining differentiated goals that enhance strategic value. We examine these relationships using a sample of 2,619 manufacturing facilities operating within six OECD countries, while controlling for self-selection issues. Our findings support the idea of complementarity in that facilities, that adopt both QMS and EMS, are associated with positive business performance more than facilities that adopt either QMS or an EMS on its own, or no management system.
DOI: 10.1002/bse.186
Citation:
Darnall N & Milstein M.B. 2015. "Damaí Lovina Villas: Can Eco-Standards and Certification Create Competitive Advantage for a Luxury Resort?" Case Research Journal 34 (3):1-20.
Abstract: The general manager of Damaí Lovina Villas, a boutique hotel located in northern Bali, wants to strengthen the hotel's competitive position by increasing utilization rates beyond the hotel's 65% occupancy. The central question that the case poses is whether leveraging an organization's sustainability activities, and participating in a voluntary environmental program (VEP) that promotes standardization and certification, is a reasonable vehicle to do so. This case considers what sustainability means in the context of a specific company, including issues related to value creation stemming from efficiency and productivity, reputation and legitimacy, innovation and repositioning, and strategic visioning opportunity framing. It presents an assessment framework (1) to evaluate a firm's environmental and social activities, (2) to assess the sustainability activities of various VEPs, and (3) compare the two to determine whether and how a company's sustainability programs align with the choices of VEPs under consideration. The framework creates a foundation to assess whether VEPs can offer strategic competitive advantage, and at what cost. The case is intended for an MBA or advanced undergraduate course to explore issues around strategic differentiation and standardization and strategy-environment fit, as well as courses dealing with topics related to sustainable enterprise, corporate social responsibility, international management, hospitality or hotel management, and eco-tourism.
URL: https://hbr.org/product/dama%C3%AD-lovina-villas-can-eco-standards-and-certification-create-competitive-advantage-for-a-luxury-resort/NA0300-PDF-ENG
Citation:
Lin H & Darnall N. 2015. "Strategic Alliance Formation and Structural Configuration." Journal of Business Ethics 127:549-564.
Abstract: While previous research considering the emergence of strategic alliances has typically viewed their formation through a single theoretical lens, we suggest that multiple theoretical perspectives are needed to understand their complexity. This research conceptually integrates the resource-based view and institutional theory to assess variations in firm-level motivations to form strategic alliances. Applying these ideas to the context of complex environmental problems, we propose that strategic alliances typically are either competency- or legitimacy-oriented, and that four structural dimensions characterize both types of alliances—organization learning, partner diversity, governance structure, and partner relations. We present research propositions that describe how alliances differ along these dimensions, and offer an important broader perspective on alliance formation that is applicable towards understanding their strategic and social outcomes.
URL: https://www.researchgate.net/publication/266201750_Strategic_Alliance_Formation_and_Structural_Configuration
Citation:
Darnall N & Aragón-Correa JA. 2014. "Can Eco-Labels Influence Firms’ Sustainability Strategy and Stakeholder Behaviors?" Organization & Environment 27 (4):319-327.
Abstract: Ecolabels are policies and programs that are designed to signal information to stakeholders about a product’s attributes and reduce stakeholder uncertainty about the validity of green product claims. However, for ecolabels to be successful at addressing information asymmetries external stakeholders must perceive them as being credible. We assess the prospects of different sorts of ecolabels to influence firms’ sustainability strategies and stakeholder behavior based on the credibility of their institutional construction. We then describe important areas for future ecolabel research, and analyze connections between these future research areas and the articles that form this issue. Finally, we emphasizethe importance of collaborative stakeholder initiatives in advancing sustainability strategy and how accurate information is vital to the success of these initiatives.
DOI: 10.1177/1086026614562963
Citation:
Barnett M, Darnall N & Husted B. 2015. "Sustainability in Constrained Economic Times. Long Range Planning 48 (2):63-68.
Abstract: While firms have increasingly adopted environmentally and socially sustainable management strategies, little is known about how these organizations react during times of economic constraint. On the one hand, conventional wisdom suggests that firms' sustainability strategy would be de-emphasized. However, emerging scholarship suggests that many firms may increase their sustainability investments during constrained economic times. Building on the articles comprising this Special Issue, we offer notable evidence that firms tend to shift their sustainability strategy in innovative ways that enable them to do more with less and increase firm value without undertaking significant cutbacks. Specifically, we argue that, during times of economic constraint, firms a) engage in sustainability “trimming” to adapt to their new economic setting; b) use trimming to compete more effectively; and c) trim in ways that are path dependent, building upon prior complementary capabilities and resources. We formulate an explanation for these novel findings and conclude with observations about future research opportunities.
DOI: 10.1016/j.lrp.2014.07.001
Citation:
Darnall N & Milstein M. 2014. Damaí Lovina Villas: Can Eco-Standards and Certification Create Competitive Advantage for a Luxury Resort?" Case Research Journal, 34 (3).
Abstract: Located in northern Bali, Damaí Lovina Villas and Restaurant was a boutique hotel with a generous staff to room ratio of 57:8 that ensured a guest’s experience would be more personal, luxurious, and secluded than could be offered by the island’s typical large-scale beach resorts. Damaí’s general manager, Glenn Knape, wanted to strengthen the hotel’s competitive position and increase utilization rates beyond the hotel’s 65% occupancy. Knape wondered whether his prior efforts to address a host of social and environmental issues could be leveraged to brand Damaí as a “green” hotel and attract additional customers. Specifically, Knape was considering whether participating in a voluntary environmental program (VEP), which relied on eco-standards and certification, could leverage Damaí’s sustainability efforts by increasing its external profile and guest bookings. Knape had to decide whether or not Damaí’s existing sustainability practices would be enough to qualify for one of the VEPs under consideration. He also needed to decide whether the hotel had to invest additional resources to qualify for participation, and if so what those investments would be. At a more strategic level, he needed to decide whether membership in a VEP would achieve Damaí’s competitive goals – to increase guest occupancy and its related revenues – and if so, which VEP (or combination of VEPs) would make the most sense?
URL: http://www.nacra.net/crj/PurchaseCase.php5
Citation:
Barnett ML, Darnall N, Husted BW. 2014 "Sustainability in Constrained Economic Times." Long Range Planning.
Abstract: While firms have increasingly adopted environmentally and socially sustainable management strategies, little is known about how these organizations react during times of economic constraint. On one hand conventional wisdom suggests that firms’ sustainability strategy would decrease. However, emerging scholarship suggests that many firms may increase their sustainability investments during constrained economic times. Building on the articles that comprise this Special Issue, we offer notable evidence that firms tend to shift their sustainability strategy in innovative ways that enable them to do more with less and increase firm value without undertaking significant cutbacks. Specifically, we argue that during times of economic constraint, firms a) engage in sustainability “trimming” to adapt to their new economic setting; b) use trimming to compete more effectively; and c) trim in ways that are path dependent, building upon prior complementary capabilities and resources. We formulate an explanation for these novel findings and conclude with observations about future research opportunities.
URL: https://www.researchgate.net/publication/265089988_Sustainability_Strategy_in_Constrained_Economic_Times
DOI: 10.1016/j.lrp.2014.07.001.
Citation:
Darnall, Nicole and Stephen Sides. 2012. "Assessing the Performance of Voluntary Environmental Programs: Does Certification Matter?" Susse Georg and Andy Hoffman A. (eds). Business and the Natural Environment. New York, NY: Routledge 36(1):95-117.
Abstract: The promotion of voluntary environmental programs (VEPs) as alternative approaches to traditional environmental regulation has fueled numerous researchers to evaluate VEP performance. However, these studies have focused on assessing the environmental performance of a single VEP. As yet, we know little about the overall environmental benefits of these programs. Moreover, questions remain about whether VEPs designed with different monitoring regimes—related to whether programs are self-monitored or undergo external certification—vary in their ability to improve environmental conditions. Using meta-analysis methodology, this paper evaluates the aggregated environmental outcomes of US VEPs drawing on data from 9 studies and over 30,000 firms. We show that collectively VEP participants do not improve their environmental performance over nonparticipants. Rather, nonparticipants improve their environmental performance by 7.7% more than VEP participants. Additionally, nonparticipants improve the environment 24% more than participants in self-monitored VEPs, whereas participants in ISO 14001 as a group exhibit inconclusive environmental performance improvements.
URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1030622
Citation:
Kurapatskie, Brent and Nicole Darnall. 2013. "Are Some Corporate Sustainability Activities Associated with Greater Financial Payoffs?" Business Strategy and the Environment 11(1):49-61.
Abstract: While many company managers and academic researchers have argued that businesses which develop a sustainability focus also may improve their financial performance, little information is known about whether firms’ different types of sustainability activities are related to varying degrees of financial gain. This paper assesses the economic relationship between two types of sustainability activities – lower- and higher-order – derived from Hart & Milstein’s (2003) sustainability value framework. Our analysis reveals that both types of sustainability activities are similarly associated with firms’ financial performance in terms of direction and trend. However, the average level of financial benefits related to firms’ higher-order sustainability activities (which develop new products and processes) is greater than the average level of financial benefits related with firms’ lower-order sustainability activities (which modify existing products and processes). These findings offer initial evidence that companies which reach further by developing higher-order sustainability activities may reap greater financial benefits, while improving the natural environment to a greater degree.
URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2118261
Citation:
Darnall N., Potoski M. & Prakash A. 2010. "Sponsorship Matters: Assessing Business Participation in Government- and Industry-Sponsored Voluntary Environmental Programs." Journal of Public Administration Research and Theory 20 (2):283-307.
Abstract: Stakeholders who seek to reward or punish businesses for their environmental programs often cannot observe these organizations’ internal policies and operations. To address these informational problems, and signal their beyond-compliance environmental commitments, some businesses are participating in voluntary environmental programs (VEPs). This article examines whether business managers associate the brand value of VEPs – due to their differing program sponsors – with the perceived preferences of their critical stakeholders. Drawing on a novel data set of nearly 300 organizations, we assess business’ participation in 19 government- and industry-sponsored VEPs. We find that managers who recognize the importance of stakeholder influences on their business’ environmental practices are more likely to participate in a VEP but that pressures from different stakeholders are associated with variations in organizations’ participation in either government- or industry-sponsored VEPs.
URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1582793
Citation:
Edwards Jr. D. & Darnall N. 2010. "Averting Environmental Justice Claims? The Role of Environmental Management Systems." Public Administration Review 70 (3):422-433.
Abstract: Greater regulatory protections exist for low income minority populations that share a disproportionate amount of environmental harms. Recognized as communities of “environmental justice” (EJ), industrial facilities that are located in these areas bear greater legal liabilities and societal scrutiny for their environmental activities. In an effort to avoid regulator and societal claims that they are disproportionately harming minority and ethnic populations, these facilities may be motivated to adopt an environmental management system (EMS). This paper examines these issues. It offers evidence that facilities operating in EJ communities have a greater probability of adopting an EMS, and therefore may be acting to avert societal claims that they are disproportionately harming low income minority populations. These findings raise the question of whether facilities that are located in EJ communities actually improve the environment as a consequence of EMS adoption or whether EMSs are being used as means to subvert greater social scrutiny without reducing the facility’s environmental risk.
URL: http:// http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1439153
Citation:
Darnall N., Ponting C. & Vazquez-Brust D. 2012. "Why Consumers Buy Green." Vazquez-Brust, D. and Sarkis J. (eds.) Green-Growth: Managing the Transition to Sustainable Capitalism. New York: Springer 287-308.
Abstract: Increasingly, consumers are becoming more knowledgeable about the environment and reflecting this knowledge in their decisions to buy green products. While previous research on the topic has generally examined green consumption related to a single product label, numerous questions exist about why consumers choose various green products and services. We address these concerns by examining individuals’ actual green consumption as it relates to their trust of various sources to provide them with environmental information, environmental knowledge, and personal affect towards the environment. These relationships are studied for a sample of more than 1,200 UK residents using multiple regression techniques. We show that individuals’ total green consumption is related to their trust of various sources to provide them with environmental information, environmental knowledge, and personal affect towards the environment. These findings have important implications to policy-makers and businesses alike as greater efforts are made to encourage more widespread green consumption.
URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2118265
Citation:
Darnall N. & Kim Y. 2012. "Which Types of Environmental Management Systems are Related to Greater Environmental Improvements?" Public Administration Review 72 (3):351-365.
Abstract: While there is little empirical evidence regarding which types of environmental management systems (EMSs) are associated with greater environmental improvements, governments worldwide are encouraging facilities to adopt them. This research compares the environmental performance of facilities that adopt ISO 14001-certified EMSs, complete (uncertified) EMSs, and incomplete EMSs, across multiple environmental media. We analyze these relationships for manufacturing facilities in seven countries using a two-stage model to control for selection bias. Our findings indicate that the adoption of all types of EMSs is related to improved environmental performance in an international setting. However, ISO 14001-certified EMSs are associated with environmental improvements to a broader array of environmental media. These findings offer important implications about which types of EMSs have greater promise as voluntary environmental governance tools.
URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1915891
Citation:
Lin, Haiying, and Nicole Darnall. 2010. "Strategic Alliances for Environmental Protection." In Facilitating Sustainable Innovation through Collaboration: A Multistakeholder Perspective. eds. Sarkis J., Cordeiro J., and Vazquez Brust D. New York: Springer 233-246.
Abstract: Existing scholarship regarding strategic alliances has been limited by the tendency to view alliance formation through a single theoretical lens and to focus solely on the economic aspects (e.g. acquisition of capabilities) of narrowly defined relationships. As yet, there has been little attention towards examining how strategic alliances?of all sorts?can address social, economic and environmental issues. This chapter addresses these concerns by integrating the resource-based view of the firm with institutional theory to assess firms? decisions to participate in a strategic alliance. Drawing on these motivations, this chapter articulates a framework to characterize strategic alliances based on their focus on competency- and legitimacy-orientation. A conceptual model is then constructed to examine the extent to which these strategic alliances are likely to encourage firms to adopt more (or less) proactive environmental strategies.
URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1602007
Citation:
Arimura, Toshi, Nicole Darnall, and Hajime Katayama. 2011. "Is ISO 14001 a Gateway to More Advanced Environmental Action? The Case for Green Supply Chain Management." Journal of Environmental Economics and Management 61 (2):170-182.
Abstract: Using Japanese facility-level data, we estimate the effects of ISO 14001 certification on the promotion of more advanced practices, namely green supply chain management (GSCM). Our results show that ISO 14001 promotes GSCM practices. Facilities with environmental management systems (EMS) certified to ISO 14001 are 40% more likely to assess their suppliers? environmental performance and 50% more likely to require that their suppliers undertake specific environmental practices. Further, government programs that encourage voluntary EMS adoption indirectly promote GSCM practices. These programs increase the probabilities that facilities will assess their suppliers? environmental performance and require suppliers to undertake specific environmental practices by 7% and 8% respectively. Combined, these findings suggest that there may be significant but previously unnoticed spillover effects of ISO 14001 and government promotion of voluntary action.
URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1666976

Substantive Focus:
Environmental Policy PRIMARY
Governance SECONDARY

Theoretical Focus:
Agenda-Setting, Adoption, and Implementation PRIMARY
Policy Analysis and Evaluation SECONDARY

Keywords

GREEN CONSUMERISM SELF-REGULATION STRATEGIES SUSTAINABLE ENTERPRISE ENVIRONMENTAL POLICY CORPORATE GOVERNANCE NONREGULATORY GOVERNANCE STRATEGIC ALLIANCES INSTITUTIONAL DESIGN NONREGULATION BUSINESS ENVIRONMENT VOLUNTARY PROGRAMS INFORMATION-BASED POLICIES VOLUNTARY GOVERNANCE SUSTAINABLE PUBLIC PROCUREMENT GREEN PURCHASING