Abstract

Companies operating in multiple countries face different and often changing regimes of environmental regulation. This regulatory turbulence raises the question of what environmental strategies multinational enterprises with a portfolio of divergent regulatory regimes should develop in relation to their international business expansion strategies. Forward-looking multinationals seeking to develop an effective environmental strategy should integrate relative regulatory stringency and international market interdependence. There are four environmental strategies that match different regulatory/market configurations for multinationals from both developed and emerging markets, and which identify the factors that drive strategic changes. The article presents a “regulatory turbulence tool” that describes relevant regulatory/market configurations and prescribes contingently effective, dynamic environmental strategies.