Relationship between environmental management strategies and profitability among Kenyan manufacturing firms
Organizations formulate and implement varied forms of strategies to improve their performance. Environmental strategies are largely borne out of push by regulation unlike other strategies which are motivated by need to improve performance and profitability. Therefore the influence of environmental strategies on profitability presents a fertile ground for research. The general objective of the study was to find out the relationship between environmental strategies and profitability of manufacturing firms in Kenya. A descriptive study was conducted with a target population of 735 manufacturing firms who were members of KAM as at 2013. A sample size of 110 firms was selected from which primary data was collected using questionnaires. Data was analysed using SPSS through descriptive analysis and multiple OLS regression analysis. Results were presented using charts and tables for ease of interpretation. Study findings revealed that majority of the Kenyan manufacturing firm had adopted ISO certification to a great extent. However, environmental components such as training on EMS, redesigning of products, developing EMS policies, environmental auditing, documentation of environmental issues, implementation of EMS, investment in green technology, undertaking eco-friendly activities, production of green products, adopting renewable energy and recycling activities were adopted to a moderate extent. The study further established thatmost of the respondents indicated that adoption of environmental strategies increased firm revenues. Further, study results indicated that environmental strategies applied enhanced cost saving from safer workplace conditions, ensured cost savings from conservation of natural resources and cost reductions associated with reduced emissions. Study results further revealed that environmental management strategies had a positive relationship with profitability of firms. The study recommends that there is need for increased compliance on environmental regulations and adoption of environmental strategies so as to increase revenue for the firms, improve corporate image, increase efficiency in production by reducing wastage thus achieving ISO certification and gaining competitive advantage. The study also recommends that the government should give incentives to companies adopting the environmental management strategies and also provide more information through research and case studies, so as to guide the firms adopting these strategies. The companies also need to allocate more resources and employ services of environmental consultants to guide the firms in adopting and implementing the environmental management strategies.