Complementary Assets and the Use of Leading Practices to Positively Contribute to Company’s Cost Advantage

Abstract

Research has shown that a firm’s performance has disregarded the existing resources and capabilities to apply environmental management leading practices. The leading practices concept refers to that of protecting the environment while minimizing costs. The aim of this paper is to analyze the importance of complementary assets and whether they are required to generate a cost advantage as a result of implementing leading practices. Results from 88 chemical companies have shown that creating a relationship between leading practices and cost advantage is achievable through the application of process innovation and implementation as complementary assets. Key Terms ⎯ leading practices, complementary assets, cost advantage, environmental management.