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Associate Professor of Management

Standing at the crossroads of policy and management, my research focuses on the various interactions between policy and business strategy at the national and international level. I seek to understand how firms respond to, and in turn, help shape governmental policy in the areas of the natural environment.

My research revolves around the following questions: What are the drivers of the adoption of innovative management practices? What are the institutional factors that explain the international diffusion of these practices? Examples of innovative management practices that I study include alliances, environmental voluntary agreements between firms and regulatory agencies, or recent international management standards such as the international environmental management standard ISO 14001. To answer these questions, I build on both transaction economics and institutional theory.

A crucial aspect of my work involves the development of a theory to explain how environmental voluntary programs and standards should be designed to increase their private as well as public gains, and in which institutional context these programs should be implemented. 

First, I develop a theory on the costs and benefits of voluntary programs and standards. In particular I compare the transaction costs of these programs to more traditional regulation (Delmas &, Marcus, 2004; Delmas & Mazurek, 2004). I analyze how the adoption of voluntary practices can be explained by institutional pressures (Delmas & Toffel, 2004, 2005). I also investigate the potential for technological and organizational innovation associated with environmental voluntary programs (Delmas & Terlaak, 2001). I show that these voluntary approaches provide benefits that exceed their costs in specific and limited instances. They should be used with caution and as a complement to more traditional regulations.

To test my hypotheses, I have gathered original data about Environmental Voluntary Agreements, ISO 14001 and environmental management practices through extensive surveys of participating firms. These databases allow me to analyze empirically the costs and benefits of adopting sustainable strategies and participating in these voluntary programs (Delmas, 2001; Delmas & Keller, 2005), and to advance our understanding of environmental voluntary agreements. For example, I recently administered a survey of 3000 facilities in the United States with a grant from the US Environmental Protection Agency (EPA). Although there is information on environmental performance through various US EPA databases, there is still little data on firms’ environmental management practices. The first paper based on this original database shows that managers respond more positively to pressure from market actors than from regulators when deciding to adopt environmental management practices that go beyond regulatory compliance (Delmas & Toffel, 2005). It also shows that the adoption of management practices by organizations varies not only due to different levels of institutional pressures but also because of the organizational structure and processes that influence manager’s interpretation of these pressures.

Second, I am interested in explaining the phenomenon of globalization and more specifically how the characteristics of national institutional environments facilitate the adoption of voluntary practices and standards (Delmas, 2000; Delmas & Terlaak, 2002, Delmas, 2002; Delmas, 2005). International comparisons form the basis of most of my analyses. In particular, I argue that institutional environments that strengthen the regulator’s ability to credibly commit to the objectives of governmental programs are key for the implementation of the agreements. Specifically, fragmentation of power and open access in policymaking reduce regulatory credibility and this hampers the implementation of voluntary agreements. Furthermore, I find that institutional context marked by a high level of litigation may deter the adoption of voluntary environmental management practices. This work clarifies the institutional context in which such innovative programs should be implemented and the difficulties associated with the globalization of international management standards.

Recently, I started researching how restructuring in the electric utility sector influence firm strategies and performance. With funding from the University of California Energy Institute I built a comprehensive database on the financial and environmental performance of US electric utilities from 1994 to 2002. This database allows me to answer a new set of questions that are relevant not only to the overall field of management, but also to corporate environmental management. My first paper on this new scholarly direction analyzes the impact of retail deregulation on the comparative efficiency of governance structures, which range on a continuum from fully vertically integrated structures to market transactions (Delmas & Tokat, 2005). My second paper investigates the impact of retail deregulation on the environmental strategies of electric utilities (Delmas, Russo & Montes, 2007). My third paper examines the effectiveness of the US environmental Climate Challenge Program that aims at reducing green house gases (Delmas & Montes, 2006). It identifies the conditions that favor utilities’ commitment to the objective of this voluntary program