Abstract
Modern firms are reconsidering the 20th century model of mass production, mass consumption,
and mass disposal, and in the midst of the need to adopt a sustainable model of economic
growth that minimizes harm to the world. In response to such a social order, this paper examines the
relationships between the environmental and economic performances of the construction industry in
the Shikoku region. We discuss alternative functional relationships between them through the theory
of organizational capabilities. Based on the findings of an empirical study, we propose the introduction
of a funnel role of organizational capabilities within the relationship between environmental
and economic variables, taking a different viewpoint from the Porter hypothesis. Finally, our study
presents a tentative conclusion clarifying a part of the causation, and proposes a model to understand
the interdependence between sustainable strategy and organizational capability.
