Firms have indeed come a long way in designing and implementing challenging environmental programs. From resisting and challenging environmental laws and regulations, they now are willing to go beyond-compliance. However, there exist variations within and among firms on adopting beyond-compliance policies, specifically Type 2 policies, and this book examines such variations in Eli Lilly and Baxter International. The previous chapters discussed the theoretical framework and laid out the broad institutional context in which Lilly and Baxter have developed their environmental programs. I argued that the neoclassical economic theory cannot adequately explain why firms such as Lilly and Baxter selectively adopt Type 2 policies. For this we need to “unpack” the firm and examine intra-firm dynamics. To do so, I suggested employing power-based and leadership-based theories in the new-institutionalist tradition and also drawing upon insights from institutional theory and stakeholder theory.

In assessing the desirability of an environmental project, managers often have multiple objectives and varying preferences. All objectives cannot be collapsed into a single dimension – maximizing quantifiable profits – that standard procedures of project appraisal require. The book focuses on the most widely accepted procedure by US-based firms – capital budgeting. Type 2 policies create a political space for discursive struggles, where intra-firm dynamics shape managerial perceptions on the long-term benefits and costs of such policies. Profits are no longer an objective criterion that is invariant across managers. If Type 2 policies are adopted, it is due to two types of processes – power-based or leadership-based.