Managerial Perceptions of Stakeholder Pressures, Top Management Commitment, and Proactive Environmental Management: Evidence from Indonesia's Chemical Manufacturing Industry

2.1 Research design

This study adopted a quantitative explanatory design to examine the relationships between managers' perceptions of stakeholder pressures, TMC, and PEM. Information was obtained through a structured questionnaire completed by managers who were directly involved in, or familiar with, environmental management practices in their organizations.

The survey recorded respondents' perceptions during one data-collection period. It is therefore suitable for estimating associations among the latent constructs, but it cannot determine temporal sequence or causality. For this reason, the results are interpreted as relationships among managerial perceptions [18].

2.2 Population and sample

The population of interest consisted of managers working in chemical manufacturing firms in Banten Province, Indonesia. Chemical manufacturing was chosen because its operations are environmentally sensitive and create substantial demands for managing production-related environmental impacts.

The individual manager was the unit of observation and analysis. Each response represents one manager's assessment of stakeholder pressures, TMC, and environmental practices in the employing organization. The responses were analyzed separately and were not aggregated to the firm level; accordingly, the measures reflect managerial perceptions of organizational conditions. Purposive sampling was applied to reach managers with relevant operational, strategic, or environmental-management knowledge.

Questionnaires were distributed to 150 prospective respondents, of whom 102 returned them, producing a gross response rate of 68.0%. Returned questionnaires were checked for completeness and eligibility. An instrument was excluded if one or more questions were unanswered, the respondent was not directly involved in environmental operations, related strategic decisions, or environmental-program implementation, or both conditions occurred. Twenty-one returns met at least one exclusion condition. The screening record did not provide separate totals for incomplete and ineligible responses, so they are reported together. No missing value was imputed. The final Partial Least Squares Structural Equation Modeling (PLS-SEM) analysis used 81 complete and eligible responses, equivalent to 54.0% of all questionnaires distributed. Screening for straight-lining or statistical outliers did not remove any further cases. Table 1 summarizes the questionnaire return and data-screening process.

Participation was voluntary. Before answering the questionnaire, respondents received an explanation of the research purpose, the confidential treatment of their responses, and the exclusive use of the information for academic purposes. Informed consent was obtained before data collection.

2.3 Measurement of variables

The questionnaire items were adapted from validated instruments and adjusted to the context of Indonesia's chemical manufacturing industry. Each construct was rated on a five-point Likert scale from 1 (strongly disagree) to 5 (strongly agree).

PEM is the dependent construct and reflects voluntary environmental practices that extend beyond regulatory compliance. It covers pollution prevention, efficient resource use, process innovation, and the integration of environmental considerations into business strategy. The items were adapted from Buysse and Verbeke [5] and refined with reference to Singh et al. [6].

Stakeholder pressure refers collectively to five separate predictors: GP, CP, SHP, EAP, and COMP. Each construct records managers' perceptions of environmental demands from one external stakeholder group. Stakeholder pressure is retained for the general domain, while SHP is used only for shareholders, preventing ambiguity between the abbreviations.

TMC, the second independent variable, measures the extent of senior management's commitment to implementing environmental strategies. This construct reflects leadership commitment in establishing a sustainability vision, allocating organizational resources, fostering an environmentally oriented organizational culture, and integrating environmental considerations into strategic decision-making. The measurement items were adapted from Memon et al. [16] and Yusliza et al. [17]. Table 2 presents the operational definitions of all research variables.

Table 1. Questionnaire return and data-screening results

Table 2. Operational definitions of variables

2.4 Data analysis

The model was estimated with PLS-SEM using SmartPLS. This approach was considered appropriate because the study emphasizes prediction, includes several latent constructs, and uses a relatively modest sample [18, 20].

Analysis proceeded in two stages. The measurement model was examined first through indicator loadings, Cronbach's alpha, composite reliability (CR), average variance extracted (AVE), and the heterotrait-monotrait ratio (HTMT). Together, these criteria assess indicator performance, internal consistency, convergent validity, and discriminant validity.

The use of a self-administered questionnaire completed by a single respondent may create common method bias. This possibility was examined through full-collinearity Variance Inflation Factors (VIFs) for all latent constructs. Values below the conservative threshold of 3.3 indicate that pathological collinearity and material common method bias are unlikely [21].

The structural model was then assessed using R², f², Q²predict, the standardized root mean square residual (SRMR), and the normed fit index (NFI). Hypothesis decisions were based on the estimated path coefficients and their bootstrapped t-statistics and p-values [18, 20].

The results show that managers' assessments of PEM were related most strongly to perceived TMC and COMP. GP had a positive but marginal relationship, whereas consumer, shareholder, and EAP were nonsignificant. This pattern does not imply that stakeholders are generally unimportant; instead, it shows that their perceived influence differs across groups and institutional mechanisms.

The government-pressure coefficient was positive but did not reach the conventional 5% significance level (β = 0.211, p = 0.085). This marginal result should not be interpreted as evidence that GP has no relevance. Instead, it suggests a limited or emerging association that may depend on enforcement, monitoring, incentives, and managers' assessments of regulatory urgency. From an institutional perspective, formal rules may generate coercive pressure without consistently prompting practices beyond compliance when their implementation is perceived as uneven [12-14].

The findings further indicate that pressure from consumers, shareholders, and environmental activists does not significantly influence PEM. These results suggest that not all stakeholder groups possess equal capacity to shape corporate environmental strategies. According to Stakeholder Salience Theory, stakeholders' influence depends on the extent to which they possess power, legitimacy, and urgency [11]. Consequently, stakeholder demands do not necessarily lead to strategic organizational change unless organizations perceive them as important enough to affect legitimacy, long-term sustainability, or business performance.

Several contextual factors may explain these findings. Within Indonesia's chemical manufacturing industry, which primarily operates in business-to-business (B2B) markets, pressure from end consumers is generally less pronounced than in consumer-oriented industries. This observation is consistent with Sharma et al. [19], who argued that consumer influence on corporate sustainability practices depends largely on environmental awareness and the value consumers attach to sustainability attributes. Likewise, shareholders' influence on environmental decision-making varies across institutional contexts because the integration of environmental, social, and governance (ESG) considerations into investment decisions remains uneven across countries [2]. Similarly, the effectiveness of EAP depends on industry visibility, media attention, and civil society organizations' capacity to impose reputational costs on firms through public scrutiny.

These results refine Stakeholder Theory by indicating that stakeholder pressure does not have a uniform relationship with PEM. Its influence varies with stakeholder salience, industry characteristics, and the institutional setting in which firms operate. Corporate environmental strategies should therefore be interpreted in their broader social and economic context rather than as automatic responses to stakeholder demands [10, 14, 23].

COMP, unlike the other external pressures examined, had a positive and significant relationship with PEM. The result suggests that firms respond to environmental practices adopted within their industry. From an Institutional Theory perspective, this supports mimetic isomorphism: organizations imitate peers regarded as successful or legitimate to protect their own legitimacy and competitive position [12]. As certifications, sustainability standards, and green operating practices spread among competitors, other firms may be encouraged to adopt similar approaches.

The competitor result also suggests that PEM is shaped by competitive dynamics as well as regulatory demands. Environmental initiatives can strengthen reputation, respond to market expectations, facilitate access to environmentally sensitive markets, and support long-term competitiveness. This interpretation is consistent with evidence that institutional and competitive pressures influence corporate environmental strategies [2, 4, 13]. In this setting, competitive imitation appears to be an important route through which sustainability practices diffuse.

The most prominent result is the strong role of TMC in PEM. Environmental transformation requires leaders to set priorities, allocate resources, foster an environmentally supportive culture, and place sustainability within corporate strategy. External demands alone cannot produce proactive practice unless management translates them into organizational decisions and routines. This interpretation is consistent with studies emphasizing environmental leadership, organizational support, and managerial commitment [1, 16, 17].

The strong TMC relationship further suggests that internal capabilities become particularly important when external pressures are weak or uneven. Sustainability-oriented leaders may view environmental initiatives as strategic investments rather than merely compliance obligations. In an emerging-economy setting, this commitment can provide the continuity needed to implement PEM. Related evidence identifies environmental management systems, supportive culture, and strategic managerial support as mechanisms that improve environmental performance in manufacturing [24].

Taken together, the findings connect stakeholder salience with institutional mechanisms. External stakeholders do not exert equal influence, competitive pressure operates through imitation, and top management provides the internal capacity needed for implementation. PEM in this context is therefore better understood as the result of external pressures interacting with organizational capabilities, rather than as a simple response to stakeholder demands.

The practical implications concern both organizations and policymakers. Companies need visible top management support, adequate resources, an environmentally oriented culture, and the integration of environmental objectives into strategy. Recent evidence likewise links managerial sustainability commitment with green performance and longer-term competitiveness [25]. Policymakers should complement regulation with credible enforcement and appropriate incentives. Industry associations and benchmarking programs can also encourage environmental learning by spreading successful practices among competing firms.