This article examines what prompted electricity supply organizations to include changing climatic conditions as key elements of the strategic environment. Utilizing themes emerging from inductive analysis, the authors explain how and why surprising climatic events drove the organizations to begin including climate trends in their strategy development and planning processes. Results indicate that organizations were surprised climate was becoming more unpredictable, was directly affecting their operations, and was challenging long-held assumptions about climatic patterns. Our findings suggest that adaptation to climate (...) change occurs predominantly as a reaction to climatic surprise, rather than a preemptive response to increasing awareness, and perceived uncertainty and risks as suggested by previous studies. Results also show that organizations are beginning to conceptually link changes in local climatic conditions to the global issue of climate change; though such linkages are not necessarily important to the inclusion of climate in the strategic environment. (shrink)

Although existing research evaluates how the adoption of proactive environmental strategies affects corporate performance, there is little understanding of the organizational mechanisms that link such strategies to competitive advantage. It is, therefore, unclear how environmental strategies relate to other management strategies that could lead to a competitive advantage. In this article, we analyze the organizational capabilities that underlie a firm’s ability to generate competitive advantage from the adoption of proactive environmental strategies. We develop and test a model where absorptive capacity (...) facilitates the development of proactive environmental strategies that result in competitive advantage. Results from a survey of 157 German chemical firms strongly support the model. (shrink)