This chapter examines the theoretical foundations of the study and stresses its relationship to the business policy/strategy and organizational innovation literature. It discusses the energy management strategy and programs as a component of corporate strategy and elaborates the linkage between energy management and organizational innovation. Strategies may be defined in terms of organizational level: Lorange and Vancil distinguish between corporate strategy, business strategy and functional strategy. The chapter attempts to shed some light on both economic and non-economic rationales in energy management decision making. In the business policy and planning literature, the environment is generally conceived as a source of problems and threats and/or opportunities for the firm. The evolution of strategic management and, specifically, the emergence and implementation of a social response process as described by Ackerman and Murray can be viewed from an organizational innovation perspective. Knight has identified four innovation categories: people, organizational/structure, production/process and product/ services innovations.