Industrial organisation and environmental performance of the electricity industry in England-Wales and Spain

• Main Author: Boira-Segarra, Isabel
• Published: University of Sussex 1996
• Subjects: 658; Competition
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.318570

This study analyses how electricity generating firms achieve certain environmental performance under different industrial organisational structures through a comparative study of the main electricity utilities in England-Wales and Spain. This work studies industrial organisation by referring to firms' operating environment arguing that structural transformations and changing environmental constraints introduce complexity and risk that make technical and organisational shifts necessary for electricity firms to adapt and survive. Environmental performance is measured employing the concept of environmental capabilities as an analytical tool to study the way firms develop and accumulate the required technical, human and organisational assets to manage, co-ordinate and govern environmental performance in the face of uncertainty and technical and organisational change. Studying electricity producing firms in England-Wales and Spain allows assessment of the influence on the creation and accumulation of environmental capabilities of markets characterised by different levels of competition whilst being subjected to similar environmental pressures. The evidence shows that English-Welsh enterprises respond to competitive demands by implementing cost cutting strategies with environmental requirements being seen as a cost drain that needs to be minimised. This results in a tendency to satisfy environmental compliance by obtaining their environmental capabilities externally which together with a lack of internal competence rebuilding reduces short-term costs but compromises learning, their ability to generate change and thus, the sustainability of their environmental performance. In turn, Spanish firms operate in highly controlled markets that allow them to recover some environmental costs, thus reducing the commercial risk embodied in compliance. They satisfy environmental requirements in a less cost effective way than English-Welsh firms but their commercial strategies include continuous investment in a stock of internal competencies that witl allow them to learn from their outsourcing relationships and sustain their environmental performance.