toward a process framework of environmental …

1

TOWARD A PROCESS FRAMEWORK OF ENVIRONMENTAL CHANGE:

A Guide for Empirical Research into the

Formulation and Implementation of Environmental Change in SME

vs. Large Manufacturing Facilities

LINDA C. ANGELL *

Management Science and Information Systems Smeal College of Business Administration

The Pennsylvania State University 337 Beam Business Administration Building

University Park, PA 16802-1913 Tel. 814-863-2645 Fax. 814-863-2381

E-mail: [email protected]

GORDON P. RANDS Department of Management

College of Business and Technology Western Illinois University

1 University Circle Macomb, IL 61455 Tel. 309-298-1342 Fax. 309-298-1019

E-mail: [email protected]

* Presenting Author

Empirical Findings Presented at:

SME-Partnerships Workshop,

The Greening of Industry Network (GOIN) Conference

Rome, Italy

17 November 1998

Partnership and Leadership: Building Alliances for a Sustainable FutureNovember 15-18, 1998 Seventh International Conference of Greening of Industry Network Rome

Toward A Process Framework of Environmental Change

2

TOWARD A PROCESS FRAMEWORK OF ENVIRONMENTAL CHANGE

ABSTRACT

M anu fac turing organizations are under a w ide range of p ressu res to look at th e

environm ental c onseq u enc es of th eir p rodu c tion ac tiv ities. S ou r c es of th ese p ressu res inc lu de

gov ernm ents, sup p liers, c om p etitors, sh are h olders, ac tiv ist grou p s, and c u stom ers. T h ese

p ressu res h ave resulted in a c onside rable inc rease in attention to environm ental m anagem ent,

both in th e p op u lar bu siness p ress and in th e ac adem ic literatu re.

R esearc h h as p rov ided an understanding of m u c h of th e c ontent of environm ental c h ange,

w h ic h m ay oc c u r at any p oint along th e v alu e c h ain or w ith in th e organizational h ierarc h y. T h u s,

th e c ontent of environm ental c h ange c an involve strategy dev elop m ent, m anagem ent p rogram s,

design for environm ent, op erations m anagem ent, m ark eting, logistic s, and p rodu c t stew ardsh ip.

M anu fac turing c h anges inc lude rem ediation, c ontainm ent, pollu tion c ontrol eq u ipm ent, new

m anagem ent system s, or p roc ess and ev en produ c t adaptations.

H ow ev er, little researc h h as foc u sed on th e pr oc ess of environm ental c h ange as it unfolds

w ith in bu siness organizations. For exam p le, w h o is involv ed in environm ental c h ange ac tiv ity?

W h en and w h ere does signific ant environm ental c h ange tak e p lac e, and under w h at

c ir c u m stanc es? W h y do firm s engage in environm ental c h ange? H ow do th ey p lan and

im p lem ent environm ental c h ange ac tiv ities?

These are the questions which matter most to managers who are struggling to respond

effectively and efficiently to pressures for environmental change. This paper focuses on these

questions by developing a conceptual framework of environmental change based on the research

literature. We then build on this knowledge with empirical data to introduce a testable decision

process framework of environmental change.


3

TOWARD A PROCESS FRAMEWORK OF ENVIRONMENTAL CHANGE

INTRODUCTION

Manufacturing organizations in advanced industrialized countries are facing a wide range

of forces that pressure them to look at the environmental consequences of their production

activities. The nature and impact of environmental regulation has been steadily increasing on an

international level. Many multinationals have established a policy of compliance with the

strictest laws in existence among the nations in which they operate. Suppliers are finding it more

difficult to procure raw materials in the face of declining natural resources. Competitors are

gaining advantage by investing in environmental technologies, products, and services.

Shareholders are including environmental ‘good citizen’ considerations in their investment

portfolio decisions. Customers are insisting on more environmentally-friendliness, not simply at

the point-of-sale, but throughout the entire life of a product or service.

These various pressures have resulted in a considerable increase in attention to

environmental management, both in the popular business press and in academic research. Much

of the recent literature in this relatively new area of inquiry has focused on environmental

management strategy, particularly on the development of typologies of environmental

management approaches (Angell, 1996; Arnfalk & Thidell, 1992; Hunt & Auster, 1990; Post and

Altman, 1992).

Research has provided a good understanding of much of the content of environmental

change. To date, however, little work has focused on the process of environmental change as it

unfolds within business organizations. For example, who is involved in environmental change

activity? When and where does environmental change take place, and under what

circumstances? Why do firms engage in environmental change? How do they plan and

implement environmental change activities? These are the questions which matter most to

managers who are struggling to respond effectively and efficiently to the myriad external


4

pressures which they face. This paper focuses directly on these questions first by outlining what

is currently known about the setting of environmental change, and second, by building on this

knowledge with empirical data obtained via in-depth interviews with a variety of managers in

four manufacturing facilities. The discussion section of this paper introduces a testable process

framework for environmental change.

THE CONTEXT OF ENVIRONMENTAL CHANGE

The literature on environmental management and organizational change provides an

overall context for the study of environmental change (Figure 1). This literature suggests that a

series of pressures which are external to the firm are recognized and interpreted in light of a

variety of factors which make up the firm’s business context, including organizational

characteristics, general management systems, and environmental management program

characteristics. These contextual factors, coupled with the external pressures, result in the

development of internal drivers for, and barriers to, environmental action. Internal drivers and

barriers then shape environmental change efforts. The change content -- the environmental

programs and activities -- appears to be well understood, however the environmental change

process remains relatively unexplored in the literature. The implementation of environmental

changes affect the organization in two ways: first, some change occurs in operational and

environmental performance; and second, some organizational learning occurs. Performance

outcomes and organizational learning feed back to the business context, and thereby impact the

interpretation of future external pressures and the development of future internal drivers for

environmental action.

---------------------------------------------------------------------------------------------------------------------

Insert Figure 1 about here

---------------------------------------------------------------------------------------------------------------------

External Pressures


5

External pressures facing firms range from government actions to individual stakeholders

to natural events. They may also result from the following trends: the increase in environmental

awards (Klassen & McLaughlin, 1996); general societal concerns about the ecology (Stead &

Stead, 1995); the movement toward sustainable development (Hart, 1997); green labeling

schemes (Hass, 1996b); and general resource availability in the form of capital, consultants,

infrastructure, and raw materials (Swinth & Vinton, 1992).

Regulations are the most frequently cited external drivers for environmental action,

impacting firms at the local, state, national, and international levels (Angell, 1996; Barry et al.,

1993; Byrne & Deeb, 1993; Girard & Perras, 1994; Gouldson, 1994; Hanna & Newman, 1995;

Hart, 1997; Hass, 1996; Jaffe et al., 1995; Jose, 1995; King, 1993; Lawrence & Morell, 1995;

Meffert & Kirchgeorg, 1994; Porter & van der Linde, 1995; Swinth & Vinton, 1992). Porter and

van der Linde (1995) argue that the product and process changes prompted by environmental

legislation can serve to increase a firm’s international competitiveness. They assert that

regulations are necessary to increase the likelihood that product and process innovations will be

environmentally friendly, and to level the competitive playing field during the transition to

innovation-based environmental solutions. Other government actions which can lead to

environmental change within a firm include the financial support of environmental innovation

projects (Moors et al., 1995), regulatory enforcement activities such as lawsuits and audits

(Cordano, 1993), and the implied reduction of regulatory pressures in exchange for proactive

environmental change within industry (Hass, 1996).

Other external stakeholders are in a position to place enormous pressures on firms. Both

industrial customers and end consumers are demanding product stewardship - the ‘cradle-to-

grave’ management of products throughout their entire life cycle (Barry et al., 1993; Byrne,

1993; Girard & Perras, 1994; Gouldson, 94; Hanna & Newman, 1995; Labatt, 1995; Meffert &

Kirchgeorg, 1994). Industrial customers, in particular, can influence their suppliers simply by

requesting product and process information as new environmental regulations are introduced.

Suppliers encourage environmental change simply by developing an infrastructure for the return,


6

reuse, and/or recycling of containers and pallets (Angell, 1996). Local communities and

neighborhoods often require nearby industrial facilities to commit to the continual improvement

of their environmental impact (Jose, 1995). Environmental groups induce corporate

environmental change by using both cooperative and confrontational tactics (Clair et al., 1995;

Girard & Perras, 1994; Meffert & Kirchgeorg, 1994; Stead & Stead, 1995; Turcotte, 1995).

Other external stakeholders influencing environmental change in firms include: the news media

(Lawrence & Morell, 1995); insurance industry (Eckel-Kächele, 1995), competitors (Meffert &

Kirchgeorg, 1994); and industry standards (Hass, 1996).

Additional sources of external pressure result from events such as: environmental

accidents/spills (Hanna & Newman, 1995; Jose, 1995; Lawrence & Morell, 1995); resource

depletion and raw material scarcity (Jose, 1995; Swinth & Vinton, 1992); and the existence of

environmental hazards (Lawrence & Morell, 1995). These external pressures serve to create a

motivation for environmental change, and researchers have found that strong motivation is

essential for a firm to become proactive in their approach to environmental management

(Lawrence & Morell, 1995). Previous research suggests that initially reactive responses to

external pressures can evolve over time into proactive responses to perceived opportunity

(Angell, 1996; Halme, 1996; Parker & Wallace, 1995). The occurrence of environmental change

has also been found to significantly increase in firms faced with broader and more varied

external pressures (Winn, 1996).

Business Context

The business context creates a filter through which external environmental pressures are

experienced, acknowledged, and considered within an organization. The nature of this filter is

influenced by such factors as organizational characteristics (including resource availability),

general management systems, and for the purposes of environmental change, the structure of a

firm’s environmental management program.


7

Organizational characteristics. Organizational characteristics which may influence

decisions about environmental change include: resource availability (Lawrence & Morell,

1995), size (Brown & Fryxell, 1995; Henriques & Sadorsky, 1995; Kirchgeorg, 1995; Labatt,

1995), regulatory burden (Brown & Fryxell, 1995), level of vertical integration (Brown &

Fryxell, 1995), propensity to innovate (Cordano, 1993), learning capacity (Jose, 1995; Post &

Altman, 1992; Winn, 1996), ownership status (Labatt, 1995), and relationships with

environmental groups (Clair et al., 1995). Capital availability, technical knowledge and skill,

information, and time are all resources which support, but are not critical to environmental

proactivity in a firm (Lawrence & Morell, 1995).

General management systems. The existence of certain general management systems

have been found to be crucial for enabling a firm to engage in proactive environmental change

(Lawrence & Morell, 1995). These general management systems include: risk management

programs (Eckel-Kächele, 1995; Hunt & Auster, 1990; Meffert & Kirchgeorg, 1994); cross

functional teams (Hart, 1995; Lawrence & Morell, 1995; Meffert & Kirchgeorg, 1994); total

quality management programs (Lawrence & Morell, 1995; Sarkis, 1995; Taylor & Welford,

1993; Welford, 1992); contextual scanning processes (Meffert & Kirchgeorg, 1994; Post &

Altman, 1992); opportunities for networking with state agencies, educational communities, trade

associations, stakeholders, and the community (King, 1995; Moors et al., 1995; Swinth &

Vinton, 1992); human resource programs such as employee suggestion systems, participative

team management, employee involvement, and achievement rewards (Hanna & Newman, 1995;

Hart, 1995; Jose, 1995; Lawrence & Morell, 1995; Swinth & Vinton, 1992; Taylor & Welford,

1993); and planning and control systems (Swinth & Vinton, 1992; Taylor & Welford, 1993).

Environmental management program characteristics. Important characteristics

which impact the likelihood of environmental change include strategic plans, level of

organizational commitment, utilization of environmental management tools, and program design.

Environmental strategies have generally been found to range from reactive to proactive in nature

(Angell, 1996; Brown & Fryxell, 1995; Hunt & Auster, 1990). Organizational commitment to


8

environmental management can be demonstrated by the general mindset of management,

commitment of resources, the establishment of an environmental affairs department, and top

management support and involvement (Hunt & Auster, 1990). An organization which regularly

engages in environmental audits, environmental reporting, environmental accounting, and/or life

cycle analysis is more likely to maintain a proactive environmental change program (Hanna &

Newman, 1995; Lawrence & Morell, 1995; Moors et al., 1995; Parker & Wallace, 1995; Post &

Altman, 1992; Swinth & Vinton, 1992; Tattum, 1993). Important design characteristics of an

environmental management program include: the level of formality; the existence of training

programs; integration with other functions (Swinth & Vinton, 1992); level of deployment (Post

& Altman, 1992); the assignment of line vs. staff responsibility (Lawrence & Morell, 1995; Post

& Altman, 1992; Swinth & Vinton, 1992); the nature of reporting relationships (Hunt & Auster,

1990; Lawrence & Morell, 1995; Meffert & Kirchgeorg, 1994); and the existence of

performance objectives (Hunt & Auster, 1990).

Internal Drivers and Barriers

The unique business context within any particular firm influences the translation of

external pressures into internal drivers for, and barriers to, environmental change. Certainly, the

degree to which management views external pressures as either threats or opportunities will

influence the approach toward environmental change (Jackson & Dutton, 1988).

Internal drivers. The business context described above could influence management to

view external pressures as providing opportunities to: increase economic returns and

competitive position (Cordano, 1993; Girard & Perras, 1994; Grant, 1997; Hart, 1995; Jose,

1995; Post, 1993; Stead & Stead, 1995); enhance legitimacy and image (Cordano, 1993;

Lawrence & Morell, 1995); recruit a more socially concerned employee base (Eckel-Kächele,

1995); and gain new facilities, products, and processes (Lawrence & Morell, 1995).

Internal barriers. The business context described above could alternatively influence

management to view external pressures as posing a threat of: increased material costs (Byrne &


9

Deeb, 1993; Gouldson, 94); increased investment requirements (Byrne & Deeb, 1993; Girard &

Perras, 1994); and unstable markets (Gouldson, 94). An organization may find that its

established performance measurement and compensation system does not reward environmental

change activity, and therefore acts as a disincentive (Gabel & Sinclair-Desgagne, 1994). General

resistance to change is often a barrier to new programs (Shrivastava, 1995b). The very nature of

the current business marketplace works against environmental change because environmental

considerations are not included in pricing, but are external to any transaction (Shrivastava,

1995b). An organization may find that technological transformations are threatened by cultural,

economic, institutional, and knowledge barriers. Many times the technology required for

environmental change remains undeveloped (Moors et al., 1995).

The Content of Environmental Change

Most of the research conducted on changing companies’ environmental performance has

focused on what is changed. Therefore, types of environmental change activities will be

outlined first, following a supply-chain progression from idea conception (i.e. strategy

development) to product retirement (i.e. product stewardship). Environmental changes may take

place at any point along the value chain or within the organizational hierarchy.

Strategy Development. Some of the most critical and basic environmental change

activities occur within the realm of top management. Environmental changes often occur at this

level when upper management first begins to acknowledge the relevance and potential impact of

external environmental pressures for their business. Many firms are experimenting with the

development of a environmental visions , objectives (Dambach & Allenby, 1995), quality

statements (Post & Altman, 1992), master plans, practices and procedures (Taylor & Welford,

1993). The leading firms are struggling with the definition of sustainability, and developing an

understanding of how sustainability concepts will impact their business (Gladwin et al., 1995;

Hart, 1997; Magretta, 1997; Starik, 1995; Starik & Rands, 1995; Shrivastava, 1995b).


10

Management Programs. Another series of environmental changes take place with the

development and installation of overarching programs for environmental management. Many

firms are working to certify under a variety of environmentally-oriented operating standards such

as BS7750 (Rothery, 1993), EMAS (Blau, 1995), and ISO 14000 (Blau, 1995; Sarkis, 1995;

Sissel & Mullin, 1995; Zuckerman, 1996). Other companies are striving to leverage their total

quality management programs to guide environmental management efforts (Dambach &

Allenby, 1995; Roome, 1992; Sarkis, 1995; Shrivastava, 1995a & 1995b; Starik, 1995; Tattum,

1993; Taylor & Welford, 1993), or to install environmental accounting procedures (Gabel &

Sinclair-Desgagne, 1994; Magretta, 1997). Management programs which involve environmental

change can also include risk management (Eckel-Kächele, 1995), technology assessment

(Shrivastava, 1995), environmental audits (Hanna & Newman, 1995; Lawrence & Morell, 1995;

Murphy et al., 1996; Parker & Wallace, 1995; Post & Altman, 1992; Starik, 1995; Taylor &

Welford, 1993), life cycle analysis (Barry et al., 1993; Parker & Wallace, 1995; Taylor &

Welford, 1993; Young, 1997), and the development of information systems for tracking

environmental data (Black, 1997; Magretta, 1997; Meffert & Kirchgeorg, 1994; Parker &

Wallace, 1995; Post & Altman, 1992; Sarkis, 1995; Starik, 1995; Swinth & Vinton, 1992).

Design for the Environment. There has been much discussion in the literature about

the concept of ‘design for the environment’ (Byrne & Deeb, 1993; Sarkis, 1995; Sarkis, 1995;

Shrivastava, 1995a; Young, 1997). This is a fairly broad term which encompasses ‘design for

disassembly’ (Shrivastava, 1995), ‘design for reparability’ (Stead & Stead, 1994), ‘design for

recyclability’ (Barry et al., 1993; Girard & Perras, 1994), etc. Design for the environment

concepts can be incorporated into new products (Starik, 1995; Stead & Stead, 1994) and in the

modification of existing products, where products are redesigned to eliminate waste (Barry et al.,

1993; Moors et al., 1995), remove hazardous content (Girard & Perras, 1994), increase product

durability and life span (Girard & Perras, 1994; Lund, 1993), minimize pollution during use

(Girard & Perras, 1994), and incorporate recycled materials (Stead & Stead, 1994). Products

can also be designed for reuse so that they can be renewed, refurbished, or remanufactured when


11

the customer is finished using them (Lund, 1993). Packaging is also a focus for environmental

change as firms struggle to minimize materials used, redesign packages as bulk or refills,

eliminate hazardous or difficult to recycle materials, and develop distribution channels to recover

used packaging (Angell, 1996; Barry et al., 1993; Byrne & Deeb, 1993; Girard & Perras, 1994;

Stead & Stead, 1994).

Operations Management. Much of the environmental change which occurs within

firms falls under the jurisdiction of operations management. External environmental pressures

can influence decisions about site location (Bowman, 1995; Taylor & Welford, 1993), suppliers

and procurement (Bowman, 1995; Byrne & Deeb, 1993; Girard & Perras, 1984; Hass 1996;

Murphy et al., 1996; Sarkis, 1995; Stead & Stead, 1994), and distributor relationships (Tattum,

1993). Environmental changes can be made in the human resource arena (Starik, 1995) by

implementing environmental suggestion systems, pollution prevention or sustainability

management teams (Hanna & Newman, 1995), environmental training (Bowman, 1995; Knight,

1992; Lawrence & Morell, 1995; Meffert & Kirchgeorg, 1994; Murphy et al., 1996; Parker &

Wallace, 1995; Tattum, 1993), environmental performance appraisals (Gabel & Sincliar-

Desgagne, 1994; Murphy et al., 1996), utilization of environmental management consultants

(Murphy et al., 1996), and the assignment of environmental responsibility within existing units

(Dambach & Allenby, 1995; Parker & Wallace, 1995). Some firms are even beginning to

include environmental considerations in hiring and promotion decisions (Murphy et al., 1996).

Manufacturing processes offer some of the biggest opportunities for environmental change.

There are a variety of options to choose from. Reengineering a process to be more

environmentally ‘friendly’ may involve: eliminating the process altogether; eliminating toxic

substances required in the current process; recycling or minimizing process waste; modifying

processes to accept secondary raw materials; and investing in new pollution prevention

technologies (Angell, 1996).

Marketing. A number of environmental change activities can take place in the

marketing arena, as well. Advertising and public relations can pursue eco-labeling options


12

(Stead & Stead, 1994) and promote sustainable consumption practices (Shrivastava, 1995b).

Policies relating to marketing mix, product range, brands, customer service, pricing, distribution,

and new market entry are all open for adjustment when external environmental pressures and

internal motivators are considered (Eckel-Kächele, 1995; Kirchgeorg, 1995; Magretta, 1997;

Meffert & Kirchgeorg, 1994; Shrivastava, 1995; Stead & Stead, 1994).

Logistics. Logistics can be redesigned to reduce environmental impact (Murphy et al.,

1996; Sarkis, 1995). Warehouses and transport systems can be modified to incorporate

product/packaging takeback (Byrne & Deeb, 1993; Girard & Perras, 1994; Kirchgeorg, 1995).

Arrangements can be made for innovative logistical programs which improve environmental

performance via optimized delivery modes, collection and recycling programs, and product

disassembly centers (Girard & Perras, 1994).

Product Stewardship. Product stewardship involves taking responsibility for a product

from its conception (i.e. ‘cradle’) to its final disposal (i.e. ‘grave’). It involves both lengthening

the time between cradle and grave, as well as reducing the overall environmental impact of a

product as it moves through its life cycle. The implementation of a product stewardship program

involves many environmental changes (Barry et al.., 1993; Byrne & Deeb, 1993; Girard &

Perras, 1994; Hart, 1997; Kirchgeorg, 1995; Lund, 1993; Tattum, 1993; Young, 1997). In

addition to building an infrastructure for handling hazardous waste, firms must educate their

employees and the general public about hazardous waste disposal (Girard & Perras, 1994).

Firms may change their basic business concept by becoming more of a service organization

leasing products rather than a manufacturer engaged in ‘final sales’ (Gouldson, 94; Magretta,

1997). Customers must be educated about appropriate product usage, and how to conveniently

return products for reuse, remanufacture, or recycle (Kirchgeorg, 1995). A proper takeback

infrastructure must be developed, in cooperation with marketing and logistics (Barry et al, 1993).

The Process of Environmental Change


13

Although there has been a flurry of recent research activity which attempts to develop

frameworks and lists of the content of environmental change activities, the process of

environmental change remains relatively unexplored. Both the organizational change and

development literature and those few studies of corporate environmental change which have

been conducted (Dambach & Allenby, 1995; Halme, 1996; Hoffman, 1994; King, 1994; Post &

Altman, 1992) are also reviewed.

Woodman (1989) identifies two basic types of organization development theories:

change process theories describe the dynamics by which change occurs, while implementation

theories -- which are more practitioner oriented -- focus on identifying the key factors which lead

to successful change. Surprisingly, few comprehensive, descriptive models of the organizational

change process are encountered in a review of the organizational development literature; most

models are of the implementation theory type. Woodman (1989) observes that scholars often

bemoan the lack of a widely accepted overarching theory of organizational change, but that this

should not be surprising. In part this stems from the diverse types of change which can occur.

Several researchers have identified three different types of change. These have been variously

described as first-, second- and third-order change (Bartunek & Moch, 1987), and incremental,

strategic and transformative change (Lundberg, 1990). The difference lies in how much the

behavioral change requires extensive modification to underlying values, assumptions, and

cognitive frameworks (schemas). Environmental management studies focus on change which

has been extensive and could be viewed as transformative, except that it has generally occurred

over lengthy periods of time. Thus it is not clear that it is appropriate to use a change model

specific to one of the three types.

The differences between these types of change suggest either use of a very general model

of change or the selection of a model based on the type of change to be examined. It is not clear

which of these types of change best apply to environmental change activities. While the

environmental management studies reviewed above tend to focus on change which has been

extensive and could be viewed as transformational, implementation of many environmental


14

activities can be strategic or incremental in nature. The extensiveness of a change depends not

only upon the content of the change, but upon the position of a firm in the three phase

developmental process (adjustment, adaptation, innovation) outlined by Post and Altman (1992).

This suggests that the use of a general model is appropriate in the initial stages of research.

Burke and Litwin (1992) present a model of organizational performance and change

which acknowledges the possible iterative relationships between many variables. In this model

the external environment is seen as a primary driver for change. Mission/strategy, leadership,

and organizational culture are viewed as being directly affected by forces in the external

environment. They in turn affect structure, management practices, systems, and work unit

climate. These factors influence task and individual skills, motivation, and individual needs and

values. Finally, these changes affect individual and organizational performance. This model is

consistent with the general framework which is suggested by the environmental management

literature, providing support for the significance of external pressures, business context, and

internal drivers and barriers. Burke and Litwin’s (1992) model still provides little direct insight

into the questions of who is involved, when they act, where in the process they intervene, why

they do so, and how actual change efforts succeed or fail.

While the organizational development and change literature emphasizes the role of

internal and external organization development (OD) consultants, there is no indication that these

groups have been important in facilitating environmental change. The environmental

management literature suggests that the key personnel involved in such change are

environmental managers and operating managers (Dambach & Allenby, 1995; Halme, 1996;

Hoffman, 1994; King, 1994). Top managers set an important tone, but implementation of

changes depends on lower level managers. The manner in which these groups appear to

successfully implement change entails collaboration between environmental and operating

managers, which is facilitated by prior experience in the other specialty, or by sensitivity to the

concerns of the other group developed in other ways (Dambach & Allenby, 1995; Hoffman,

1994, Post & Altman, 1992).


15

Both literatures appear silent on questions of where involvement occurs. Regarding

when and how action occurs, the concept of readiness for change (Armenakis, Harris &

Mossholder, 1993) appears to be important. Readiness for change is essentially the opposite of

resistance to change, and can be influenced by managers. Two other points of widespread

agreement regarding how change occurs are that it involves either linkage to or change in the

organizational culture, and is facilitated by employee participation. In general, however, the

models presented in the organizational change and environmental management literatures give

little insight regarding how implementation of environmental change in manufacturing facilities

is likely to occur.

Performance

The content and process of environmental change can impact economic, operational, and

environmental performance. The current state of knowledge about these relationships, and the

types of measures which can be used, are outlined below.

Economic performance. The relationship between environmental change activity and

economic performance remains unclear, although evidence is beginning to emerge that there is a

positive relationship between proactive environmental change and the firm’s financial situation.

Stead & Stead (1995) have found that environmental change activity results in ‘reasonable’

financial returns and investment payback periods. Several scholars have determined the

existence of an early mover advantage (Porter & van der Linde, 1995; Shrivastava, 1995b).

Klassen & McLaughlin (1996) report a positive relationship between the receipt of

environmental awards and financial performance, with a corresponding negative relationship

between environmental crises and financial performance. However, Jaffe et al. (1995) suggest

that there is little evidence that environmental regulations impact economic performance at all.

Economic measures which have been studied include return on sales, return on assets, return on

equity, revenues from recyclables, market share gains, and price premiums.


16

Operational performance. Traditionally, operational performance is measured in terms

of cost, quality, service, and flexibility (Hayes & Wheelwright, 1984). With regard to costs,

there is some evidence to indicate that proactive environmental change leads to lower costs in

many areas relating to: packaging, materials, energy use, waste disposal, insurance premiums,

legal costs, downtime, the transformation of waste to value, storage and handling costs,

compliance, products, and a general reduction in waste (Byrne & Deeb, 1993; Eckel-Kächele,

1995; Porter & van der Linde, 1995; Shrivastava, 1995a & 1995b). The impact of environmental

change activities on quality is mixed. Environmental activities tend to expand the definition of

quality (Angell, 1996; Kirchgeorg, 1995) and improve overall process yields and consistency

(Porter & van der Linde, 1995), but the impact on product quality is unclear. Many customers

worry that the inclusion of recycled or non-hazardous raw materials will adversely impact

product quality. The relationship between environmental activity and flexibility remains

relatively unexplored (Eckel-Kächele, 1995). But, researchers report that environmental activity

leads to improved service due to better control over distribution channels (Byrne & Deeb, 1993),

an expansion in the definition of customer satisfaction (Hanna & Newman, 1995), and lower

costs of product disposal for customers (Porter & van der Linde, 1995).

Environmental performance. Environmental change activities are generally considered

to have a positive influence on environmental performance, although it is important to take a

very broad view of performance to clearly understand this relationship (Starik, 1995; Stead &

Stead, 1995). Lober (1994) argues that the level of ‘success’ of environmental activities can be

measured against organizational goals, system resources, and internal programs. Researchers

have been struggling to develop a clear measure of environmental performance that can be

compared across industries in a quantitative manner. Sources used for environmental data

include: toxic release inventory (TRI) (Brown & Fryxell, 1995; Hart, 1995; Lawrence &

Morell, 1995), investor responsibility research center’s (IRRC) corporate environmental profiles

(Hart & Ahuja, 1994), and sewer authority archives (King, 1993). Quantitative measures

include: ecological footprint per unit of product (Wackernagel & Rees, 1996), corporate green


17

indices (Lober, 1996), percentage of waste recovered /recycled/sold/disposed of (Melnyk &

Tummala, 1996), and amount of waste generated per $1K in sales (Swinth & Vinton, 1992).

Qualitative measures used in the past include such self reported measures as improvement in

utilization of waste byproducts, risk of accidents, and frequency of noncompliance (Swinth &

Vinton, 1992)

Other performance impacts. Environmental change activity can influence a number of

other performance measures, as well. Researchers report the following opportunities for

performance improvements: image/reputation (Byrne & Deeb, 1993; Eckel-Kächele, 1995,

Shrivastava, 1995a & 1995b); advertising efficiency (Eckel-Kächele, 1995); reduced liability

(Eckel-Kächele, 1995; Shrivastava, 1995a); increased innovation (Girard & Perras, 1994; Porter

& van der Linde, 1995); heightened supplier relationships (Shrivastava, 1995a); social,

ecosystem and health benefits; influence on future environmental policy; general competitive

advantage (Shrivastava, 1995a & 1995b).


18

Organizational Learning

Environmental change activity may result in organizational learning (Halme, 1996; Post

& Altman, 1992; Winn, 1996). Cordano (1993) argues that environmental change requires

double loop learning because once low-hanging fruit has been addressed, additional and

continuous improvement requires more planning and investment. King (1994) focused on the

relationship between operational performance and organizational learning, arguing that learning-

from-waste occurs and generates key process innovations. He argues that this learning

sometimes improves firm performance, however the amount of learning that takes place varies

considerably among firms. Studies of environmental change reviewed earlier clearly indicate

that companies can learn from the change activities that they have implemented. Adoption of an

environmental policy (Hoffman, 1994), installation of sophisticated waste treatment technologies

(King, 1994), and collection and use of corrugated cardboard (Halme, 1994), all have been

reported as contributing to subsequent learning and environmental change. As such, the content

of environmental change at one period in time becomes part of the overall process of creating

future environmental change, as represented by the feedback loop (Figure 1) from organizational

learning to the business context.

METHODOLOGY

Upon completion of the literature review outlined in the previous section, the conceptual

framework shown in Figure 1 was tested with in-depth interviews with a variety of managers in

four manufacturing facilities located in central Pennsylvania. These interviews represent the

preliminary phase of an ongoing research project involving a mail survey of facilities located

throughout Pennsylvania. The goal for this research project is to develop an understanding of the

environmental change process as it unfolds in manufacturing facilities.

The four manufacturing organizations interviewed for this preliminary phase of the

research were chosen as a convenience sample in order to empirically test and expand the

conceptual framework. Semi-structured interviews (Appendix 1) took place in the early fall of


19

1997, and in every case were attended by both authors of this paper. On average, interviews

lasted approximately 1 1/2 hours. All interviews were tape recorded, and complete written

transcripts were compiled within several days of each session. Observations regarding

conversation, production tours, and corporate context were recorded by each interviewer

immediately following each visit; notes were then compared for discrepancies and additional

insights within hours after each interview. The resulting field notes therefore contain extensive

contextual impressions and connotative aspects relating to the subtle interpersonal aspects of the

interviews (Brenner et al., 1985; Yin, 1989).

Two of the manufacturing facilities were fairly small, specialty chemical plants

employing fewer than 300 people each. In these smaller firms, interviews took place with the

environmental managers only. These small firms primarily used job shop and batch

manufacturing process technologies. The other two manufacturers were fairly large, component

manufacturers using assembly line and continuous flow process technologies and employing

over 1000 people each. In one of these larger firms, three separate interviews were conducted

with the environmental manager, an operations manager, and a process engineer respectively. In

the other large firm, one interview session was held with three people in attendance, including

the environmental manager, the mold shop supervisor, and a process engineer. This firm also

provided an extensive tour of their production, mold shop, and waste water treatment facilities.

Data from these interviews was compiled by both authors working together. The results

section will provide brief summaries of the setting for environmental change, and specifically the

environmental change process, for each of the four firms interviewed. Comparisons and

contrasts of the various interview transcripts were used to build a two-part decision framework

for environmental change (Figure 2). This model will be discussed in further detail in the

discussion section of this paper.


20

RESULTS

Four manufacturing facilities located in central Pennsylvania were targeted for

interviews. The setting for environmental change will be summarized here for each set of

interviews, in order of size, from the smallest to the largest facility.

Facility A - Batch Processing of Intermediate Chemicals

Because Facility A has been a Superfund cleanup site since the late 1970’s, its

environmental change program is almost entirely driven by regulatory pressures. There are also

some pressures from customers, primarily revolving around the use and disposal of hazardous

materials. Because of its Superfund liabilities, Facility A felt the need for an environmental

manager with a strong legal background - the environmental manager also serves as general

counsel.

Facility A’s CEO is German and has an environmental background. This helps to ensure

top management commitment to environmental change, and coupled with the environmental

manager’s close working relationship with the CEO, translates into general resource availability.

As has already been mentioned, the firm is relatively small (approx. 100 employees) and faces a

large regulatory burden. This facility is not vertically integrated, and innovation is not the focus.

Facility A is a one of three U.S. manufacturing locations of a wholly owned subsidiary of a very

large German conglomerate, which maintains a headquarters in the U.S. Production unit volume

is typically low, and the company is relatively flexible. It’s capacity for learning and

relationship with environmental groups remains unclear. The environmental manager does have

a strong personal relationship with water conservation groups, and the facility maintains a

citizens advisory group.

The general management approach can be characterized as practical with a ‘roll-up-your-

sleeves’ mentality. Technical skills are generally very high among the workforce. It is a union

facility, and often very traditional in its relationship with employees. The environmental

management program is fairly reactive in nature. It is divided into a remediation group and a


21

compliance group which includes a regulatory specialist. Daily environmental responsibility is

pushed down to the plant level. The environmental management program plays a supportive role

to the operations function. Internal motivation for environmental change stems from the CEO’s

and the environmental manager’s personal interest in environmental issues. In addition, Facility

A is strongly concerned with minimizing the costs of regulatory compliance.

The content of the environmental change program in this firm has been almost entirely

focused on raising interest in and awareness about environmental issues. The environmental

manager had to get the CEO to understand the environmental issues facing the facility, and to

support the environmental management program. The next step was to get the middle level of

management to buy in to the importance of this program. The environmental manager’s

approach to this was to show that environmental action could positively impact the bottom line

of the firm - he did this by legally challenging a regulatory fine that had been imposed over a

‘violation’. He was able to save the firm $170K on the bottom line, and bring in another $15M

in savings for environmental remediation and mitigation. This gained him the respect of his

colleagues, and the necessary support to move forward with his plans.

Facility B - Job Shop Processing of Specialty Chemicals

Facility B was a very interesting case because it did not appear to be influenced at all in

its environmental change program by external pressures. This appears to be due primarily to a

lack of interest in these issues on the part of the environmental manager, who expressed interest

in phasing out the environmentally-oriented responsibilities of his job. Facility B is a the only

manufacturing plant of a fully-owned subsidiary of a conglomerate which is based in the

midwest United States. Production volume is very low, and the facility is very flexible for its

customer needs. This firm is also relatively small in size (approx. 300 employees) and

innovative, but faces a relatively low regulatory burden. It does not appear to have any

relationship with environmental groups, nor any strong capacity for environmental learning.


22

In general, the management approach in this organization involves close supervision of

lab technicians, but is relatively hands-off for middle management, who are generally bench

scientists. The environmental manager is the only staff person engaged in environmental

activity. He works closely with the safety department and with security, but his background is

primarily scientific. His main responsibilities are for Material Safety Data Sheets (MSDS) and

hazardous labels. Although he plans to go back to R&D work in the laboratory, there are

currently no plans to assign a new person as environmental management. He is hoping instead to

automate his responsibilities and thereby phase out the position.

All of this appears to translate into an environmental change program which is primarily

motivated by a perception of financial opportunity. In general, the environmental change

program is relatively inactive. Two recent changes were described during the interview. The

first involved a training session for laboratory workers to get them to cut back on the quantities

and volumes of chemicals purchased in order to reduce hazardous waste disposal costs. The

second involved the sale of solvents, previously discarded as hazardous waste, to a third party for

the production of paint stripper. Once again, this action reduced hazardous waste disposal costs

and provided new opportunities for revenue.

Facility C - Mixed Continuous Flow/Ass’y Line for Circuit Board Components

The environmental change program at Facility C is driven by external pressures such as

regulations stemming from the Montreal Protocol, customer requests for information, and

ISO14000 standards. Facility C is one of two U.S. manufacturing plants run by a wholly owned

subsidiary of a Japanese corporation. This wholly owned subsidiary maintains a U.S.

headquarters in Atlanta, GA. Therefore, major environmental change requires approval first

from the facility manager, than from U.S. headquarters, and then from Japanese headquarters.

Resources are generally available for environmental change as long as a legitimate need is

demonstrated, and ample time is provided for the international approval process.


23

Facility C is larger in size than Facilities A and B, but approximately the same size as

Facility D with 1100 to 1200 full-time employees. It has an extremely high unit production

volume, with relatively low levels of production flexibility. The firm manages all aspects of the

production of the circuit board components and manufactures a small number of final circuit

boards, but is not vertically integrated to manufacture raw materials. One ISO 9001-certified

department in this facility does maintain product research and development (i.e. innovation)

capabilities for its product line; the remaining product lines are certified as ISO 9002 suppliers,

primarily to the auto and computer industries. It’s organizational learning capacity is generally

quite high, however this facility does not appear to have any direct relationships with

environmental groups. Facility C’s regulatory burden could be classified as moderate.

This facility’s management is very bottom-line and technology oriented , yet also very

open in communications with the workforce. Managers tend to be entrepreneurial and are

generally empowered. The environmental management program in this organization plays

primarily a support role to operations. The environmental manager has a chemical engineering

background and reports to the Human Resources Manager. The environmental management

program in this facility is relatively centralized and proactive with responsibility for

environmental compliance training, ISO14000 certification efforts, the tracking of environmental

technology and disposal costs, customer inquiry response, environmental permitting, compliance

audits, the development of environmental improvement ideas, communication with regulators,

and collecting and disposing of hazardous waste. This facility maintains an environmental

management policy which contains a commitment statement, as well as pollution prevention,

compliance, continual improvement, and communication clauses.

These external pressures and business context factors translate into an internal motivation

for environmental activity which results from perceptions of process improvement opportunities,

as well as safety and liability threats. Several environmental change activities were related

during the interviews. One involved the elimination of ozone-depleting chemicals as a result of

the requirements of the Montreal Protocol and the Clean Air Act. Process engineering led an


24

effort to convert solvent-based cleaning systems to aqueous-based systems. Another major

change involved the development of a system for the in-process recycling of ceramic powders.

This activity resulted in a reduction of scrap material from 65% of total ceramic powder used to

about 30%. These activities resulted in an improvement in safety, product quality, efficiency,

and productivity.

Facility D - Mixed Continuous Flow/Ass’y Line Processing of TV Components

The external pressures driving environmental change in Facility D are regulations and the

ISO 14000 standards. Facility D is one of two manufacturing plants operated by a joint venture

between one Japanese and one U.S. corporation. Resource availability for environmental change

is generally not a problem. Facility D employs approximately 1200 people, and has a moderate

regulatory burden. The facility manages all of the production processes necessary to

manufacture certain television components. However, the facility does not produce televisions.

It has a high production volume, with relatively low levels of production flexibility. There are

no research and development capabilities located at this facility.

The environmental management program at Facility D is relatively proactive and

formally structured, with both line and staff (i.e. support) responsibilities. The environmental

engineering department manages the industrial waste water treatment plant on the facility

grounds, and provides supports to operations. In this support role, the environmental engineering

department has encouraged the decentralization of environmental management responsibilities

into individual operating units. The department’s motto is ‘going beyond compliance’. The

environmental engineering manager has an industrial engineering background and emphasizes

pollution prevention activities. He reports to the Manager of Regulatory Affairs, who in turn

reports to the Plant Manager. The facility maintains an Environmental Steering Committee, in

which the plant manager and his staff meet quarterly to review progress towards environmental

goals, which are set using Management by Objectives. The external pressures and business

context which Facility D faces results in a strong internal concern for reputation as a motivator


25

for environmental action. Facility D is highly concerned with its reputation with government

agencies, industry peers, the media, the investment community, customers, and the local

community. Most recently, it was cited by Fortune 500 as the third best environmental company

in the nation.

The three interviewees who participated together during one interview session spoke of

an environmental activity that they all worked on. The activity involved the voluntary

installation of chrome scrubbers in the mold shop. This activity was the first success story in the

move towards the decentralization of environmental management activity. This activity resulted

in a three-fold reduction in air emissions, and was successfully completed on time and within

budget. This activity also provided significant organizational learning as to the pros and cons of

the decentralized, team approach to environmental change.

A PROCESS FRAMEWORK OF ENVIRONMENTAL CHANGE

The results section provided the setting for environmental change in each of the four

manufacturing facilities studied. This discussion section will outline a process framework of

environmental change (Figure 2) as it emerged from these interviews. This framework is divided

into two parts: the pre-approval process and the post-approval process. These two parts of the

framework will be outlined first, and then will be applied to the environmental changes described

in the interviewed manufacturing firms described above.

---------------------------------------------------------------------------------------------------------------------

Insert Figure 2 about here

---------------------------------------------------------------------------------------------------------------------

Pre-Approval Process for Environmental Change

The preapproval process begins with the existence of an external environmental pressure.

This pressure is either not recognized, in which case the environmental change process is

immediately derailed, or it is recognized as having an impact on the organization. Once the


26

external pressure is recognized, the process enters a problem definition stage, in which a

determination is made as to whether the problem is clearly defined or ill-defined.

Clearly defined problems. On the one hand, a clearly defined problem is one in which

the cause and effect relationships are understood, and the types of responses appear obvious and

workable. These types of problems will likely be considered to have a highly feasible solution,

but may be assessed as to the urgency of the situation (Clair et al., 1995; Dutton & Duncan,

1987). A clearly defined problem which is assessed to have high feasibility and high urgency

will result in a small-scale formal study of available alternatives. If this study results in a

proposal for a desired option in which the cost of implementation is considered to be high, the

likely response from upper management will be to broaden the scope of the study - immediate

approval is only moderately likely. A low or moderate cost proposal is likely to gain immediate

approval. A clearly defined problem which is assessed to have high feasibility and low urgency

will result in an informal consideration of available options. In this case, if the cost of the

preferable option is high, it is unlikely that a call will be made for action. If the cost is expected

to be moderate, the solution is likely to be implemented with immediate approval. If the cost is

expected to be low, a solution may be implemented without even bringing the proposal up for

approval by upper management.

Ill-defined problems. On the other hand, an ill-defined problem is one in which the

cause and effect relationships are unclear, the range of responses are unknown, and no workable

responses are readily available. In this situation, an assessment is likely to be made that the

optimal solution has a low level of feasibility. Problems with low feasibility and high urgency

will result in a large, formal study of alternatives available. A chosen alternative that is high cost

in nature will likely result in continued study, with implementation approval unlikely at the point

of initial recommendation. A chosen alternative that is low or moderate cost will result in a

recommendation for action which is likely to be approved right away. An ill-defined problem

with low feasibility and low urgency is likely to be tabled until further information becomes

available.


27

Post-Approval Process for Environmental Change

The pre-approval process for environmental change ended with a recommendation for

environmental change and the subsequent prospects for approval. The post-approval process

begins with an assumption that a recommended option for environmental action has been

approved by an organization’s management. The first step in the post-approval process involves

a determination as to the magnitude of the change involved for operations and the workforce in

order to implement the environmental activity (Clair, et al., 1995; Dutton & Duncan, 1987). An

environmental change activity may be seen as nondisruptive/minor or disruptive/major to normal

operations. Another judgment must then be made as to the level of workforce involvement to

be attempted in implementation -- it can be narrow or broad. We do not assert that managers

will always recognize and/or choose the level of employee involvement that would be most

appropriate.

Nondisruptive & narrow involvement. A nondisruptive change implemented with

narrow employee involvement will likely be designed and managed by an individual (often the

environmental manager) or a departmental team. Such a project is likely to be fast paced and

low profile. The result will be a routine change process with good performance results. It will

be implemented on-time and within budget, but will inspire little enthusiasm outside of the

project team/champion. For the purposes of improving the approach to forthcoming projects,

individual learning will take place. In addition, the ‘element of surprise’ for these low-profile

projects with significant performance results may lead to broad-scale learning and support for

future environmental change activities.

Nondisruptive & broad involvement. A nondisruptive change implemented with broad

employee involvement will likely be designed and managed by a cross-functional team at a

medium pace. Progress on this project will initially be significant, but may evolve into

inefficiency as people begin to lose interest. The outcome of this type of change process is again

likely to be good performance. It will be a smooth process that is implemented on-time and


28

within budget. Broad ownership of the resulting change is likely, and this type of process may

lead to broader group or even firm-level learning.

Disruptive & narrow involvement. A disruptive change implemented with narrow

employee involvement will likely be designed and managed by an individual or a departmental

team, and therefore will proceed at a relatively slow pace as it encounters heavy resistance

among the workforce. This is likely to be a painful change process, in which employee

resistance can lead to implementation failure. This kind of change process is likely to be

accomplished at a much higher price than initially expected, with little ownership of the results.

Learning from this kind of process could go in one of two directions: first, it could lead to

backsliding to the initial way of doing things, or second, it could lead to acknowledgment of the

need for broader involvement in environmental change.

Disruptive & broad involvement. A disruptive change implemented with broad

involvement will likely be designed and managed by a cross functional team. This process will

go slowly as the team works to generate support among the workforce. This is likely to be an

intense and risky process, which could result either in failure or in high performance. Broad

ownership of the results are likely, as is a high level of organizational learning in preparation for

future environmental change activities.

Empirical Application of the Process Framework of Environmental Change

The decision framework for environmental change will now be used to discuss the

environmental change process which occurred in each of the facilities described above.

Facility A. Facility A described a change process in which the key problem was

recognized by the environmental manager to be heightening the awareness of general

environmental pressures among management in the facility. This problem appeared to be

clearly defined to the environmental manager as he first joined the firm, and he perceived it to be

of high feasibility and low urgency to the organization (although it was high urgency to him

personally). As such, the environmental manager conducted an informal study of the options


29

available to him for raising awareness among upper and middle managers. To do this, he

evaluated the environmental issues facing the firm, and tried to estimate the degree of impact

resolution of each of these issues would have on upper and middle management. He decided,

unilaterally, to legally challenge a violations fine levied on the firm prior to his arrival, and

implemented this decision without upper management’s approval.

The magnitude of this change was very minor for everyday operations, and

implementation entailed very narrow involvement (only himself). The environmental manager

himself managed the project, which was low-profile during implementation but which resulted in

strong bottom-line financial improvements for the organization. An additional result was the

generation of wide-scaled increase in environmental awareness and in organizational support for

environmental activities.

Facility B. Facility B described one environmental change which involved cutting back

on the quantities and volumes of chemicals purchased in order to reduce hazardous waste

disposal costs. The main motivation for this change was the recognition by the environmental

manager of the very high costs of hazardous waste disposal. This was judged to be a clearly

defined problem, again with low urgency and high feasibility. The environmental manager did

not consider a wide range of options, but instead decided informally to hold a meeting with lab

technicians to educate them about the high costs of their purchasing strategy.

The cost of this meeting was considered to be very low, and implementation of his idea

occurred without upper management’s approval. The magnitude of the change involved for lab

technicians was relatively minor, but required broad levels of support. In this case, the

environmental change was minor enough that a cross-functional team did not become necessary,

and the change was implemented smoothly and successfully. Overall lab technician

environmental awareness appears to have increased slightly. Waste disposal costs declined

dramatically.

Facility C. The environmental change program described involved the problem of

eliminating ozone-depleting chemicals to meet the requirements of the Montreal Protocol and the


30

Clean Air Act. This problem was recognized by the environmental manager when he began to

receive customer requests for information that had been forwarded from the Quality Department.

Customers wanted to know whether their suppliers would be compliant with the requirements

stemming from this new legislation. Although recognized, the problem was not considered to be

clearly defined. In the early 90’s, it was unclear what options existed for removing solvents from

the production process for components. Although a solution did not appear to be immediately

feasible, customer requests and impending legislation raised this issue to a high level of urgency.

It appeared that the solvents were used most frequently in the component cleaning process. As

such, the facility engaged in a large-scaled, formal study of alternative cleaning systems which

lasted approximately 1.5 years and was led by Process Engineering.

After this period of study, Process Engineering settled on a new technology that appeared

to meet the goals of the project. The cost was estimated at $200-300K for the replacement of the

cleaning process. This proposal had to go for approval from the facility to U.S. headquarters to

Japanese headquarters, and then back through the same channel. During this evaluation process,

the environmental manager maintained involvement by monitoring regulatory issues, fielding

customer requests for information, coordinating efforts between engineering groups, and

providing periodic progress reports to headquarters in the U.S. and in Japan. In this case,

approval was received approximately 3 months after the proposal was submitted.

The change process was expected to have a disruptive impact on operations and the

workforce. Because of the operational implications, involving a brand new process technology,

a cross-functional team involving operations, environmental affairs, and process engineering led

the implementation effort. After implementation, some contamination problems arose and were

reported by customers to the Quality Department. These were referred to Process Engineering

for additional work. At this point, the level of success of this project is not entirely clear. The

project took a long time and went over budget, but the use of solvents has declined enormously.

The biggest lesson learned had to do with increasing communications among managers as the


31

project continued forward. Also, some technical lessons were learned as a result of the

contamination issues that came up.

Facility D. Facility D described an environmental change process in which chrome

scrubbers were installed on the roof in response to federal regulations. The environmental

manager explained that testing of chrome emissions showed that the facility was under the

allowable limit established by the new regulations. However, the regulatory affairs department

considered the existing scrubbers to be in a state of disrepair, and were concerned about the

impact on the facility’s reputation of the roof’s greenish tint, which was evident to anyone who

drove by. Interestingly, the environmental manager viewed the problem to be clearly defined -

from the very beginning, the only alternative considered was the installation of new chrome

scrubbers.

Because of the concerns over corporate image, the issue was viewed as of high urgency

and high feasibility. A small, but formal study was undertaken not so much for the purposes of

determining the correct action to take, but more to evaluate the technical designs available for the

project. The total funding required was approximately $250K over a nine-month period. This

amount was requested from the Capital Steering Committee, and the proposal was approved

when it was first submitted.

The magnitude of change required for general operations was relatively small, and the

level of involvement in implementation was relatively narrow. The implementation effort was

led by the mold shop employees, but an engineering consultant (from corporate headquarters)

and the environmental manager attended monthly design review meetings. This project was

viewed as a very big success by the environmental manager not only because it was well

managed, but because it was the first time that a department had taken responsibility for the

development and implementation of an environmental change within the organization.

CONCLUSION


32

This paper develops and applies a decision framework for the process of environmental

change. First, a detailed literature review led to the development of a conceptual framework

outlining the factors which have been found to influence environmental change within business

organizations. This conceptual framework indicates that environmental change impacts many

aspects of performance, as well as an organization’s ability to learn. The framework also

suggests that most of the literature to date has focused on the content of environmental change,

without providing much insight into the environmental change process.

The second part of this paper outlines an empirical approach to addressing this

knowledge gap. As part of a larger research effort, interviews were conducted with several

managers in four different manufacturing facilities located in Central Pennsylvania. These

interviews resulted in the development of a two-part decision framework for environmental

change. The first part of this empirically-derived framework focuses on the pre-approval

process, during which time an external pressure relating to the environment is recognized,

understood, and an approach to addressing the problem is determined. The second part of this

framework focuses on the post-approval environmental change process, during which time

consideration is given to the magnitude of change and level of involvement required for the

change. These considerations determine the design and management of the project, and result in

different types of performance and learning outcomes.

We believe that adopting the comprehensive perspective of environmental change

outlined in this paper will permit researchers to improve their understanding of the factors which

affect what environmental changes are attempted and how they are successfully implemented.

Applying the results of such studies can contribute to improvement of the environmental

performance of business organizations.

REFERENCES

Angell, L.C. 1996. Consumer products manufacturing and the German Packaging Ordinance. Unpublished dissertation, Boston University Graduate School of Management.


33

Arnfalk, P. & Thidell, A. 1992. Environmental Management in the Swedish Manufacturing Industry: Fact or Fiction? Sweden: Lund University, Department of Industrial Environmental Economics.

Armenakis, A.A., Harris, S.G., & Mossholder, K.W. 1993. Creating readiness for organizational change. Human Relations, 46 (6): 681-703.

Barry, J., Girard, G., & Perras, C. 1993. Logistics planning shifts into reverse. The Journal of European Business, September/October: 34-38.

Bartunek, J.M. & Moch, M.K. 1987. First order, second order and third order change and organizational development interventions: A cognitive approach. Journal of Applied Behavioral Science, 23 (4): 483-500.

Black, H. 1997. ‘Green’ manufacturing: One part at a time. Env’l Science & Technology, 31(2): 90-91A. Bowman, R.J. 1995. Green logistics. Distribution, June: 48-51. Brenner, M., Brown, J. & Canter, D. 1985. The Research Interview: Uses and Approaches. London: Academic

Press. Brown, R.L. & Fryxell, G.E. 1995. Changes in toxic air releases and financial correlates: An empirical study of

environmental strategies for the petroleum industry. Paper presented at the annual meeting of the Academy of Management, Vancouver.

Burke, W.W. & Litwin, G.H. 1992. A causal model of organizational performance and change. Journal of Management, 18 (3): 523-545.

Byrne, P.M. , & Deeb, A. 1993. Logistics must meet the ‘green’ challenge. Transportation & Distribution, February: 33-37.

Clair, J.A., Milliman, J., & Mitroff, I.I. 1995. Clash or cooperation?: Understanding environmental organizations and their relationship to business. Research in Corporate Social Performance and Policy, Supplement 1: 163-193.

Cordano, M. 1993. Making the natural connection: Justifying investment in environmental innovation. Paper presented at the Annual Meetings of the International Association for Business and Society, San Diego, CA.

Dambach, B.F. & Allenby, B.R. 1995. Implementing design for environment at AT&T: Organizational and cultural changes. Paper presented at the Fourth International Conference of the Greening of Industry Network, Toronto.

D u tton, J.E. & D unc an, R.B. 1987. T h e c reation of m om entum for c h ange th rou gh th e p roc ess of strategic issu e diagnosis. S trategic M anagem ent Jou rnal, 8: 279-295.

Eckel-Kaechele, D. 1995. Environmental management systems and the European Union’s eco-audit ordinance: An industry perspective. Paper presented at the annual meeting of the Academy of Management, Vancouver.

Gabel, H.L. & Sinclair-Desgagne, B. 1994. From market failure to organisational failure. Business Strategy and the Environment, 3(2): 50-58.

Girard, G. & Perras, C. 1994. Green supply chain management: From Europe to the U.S.. Paper presented at the spring meeting of ORSA/TIMS, Boston.

Gladwin, T.N., Kennelly, J.J. & Krause, T.-S. 1995. Shifting paradigms for sustainable development: Implications for management theory and research. The Academy of Management Review, 20(4):874-907.

Gouldson, A. 1994. Fine tuning the dinosaur? Environmental product innovation and strategic threat in the automotive industry: A case study of the Volkswagen Audi group. Business Strategy and the Environment 2(3): 12-21.

Grant, L. 1997. Monsanto’s bet: There’s gold in going green. Fortune, April 14: 116-118. Halme, M. 1996. Shifting environmental management paradigms in two Finnish paper facilities: A broader view

of institutional theory. Business Strategy and the Environment, 4: 94-105. Hanna, M.D. & Newman, W.R. 1995a. Operations and environment: An expanded focus for TQM. International

Journal of Quality and Reliability Management 12(5): 38-53. Hanna, M.D. & Newman, W.R. 1995b. Operations strategy and the greening of manufacturing. Paper presented at

the annual meeting of the Academy of Management, Vancouver. Hart, S.L. 1997. Beyond greening: Strategies for a sustainable world. Harvard Business Review, January-

February: 66-76. Hart, S.L. 1995. A natural-resource-based view of the firm. AMR, 20(4): 986-1014. Hart, S.L. & Ahuja, G. 1994. Does it pay to be green?: An empirical examination of the relationship between

pollution prevention and firm performance. Michigan Business School Research Paper #9550-09, September: 1-25.


34

Hass, J.L. 1996a. Environmental (‘green’) management typologies: An evaluation, operationalization and empirical development. Business Strategy and the Environment, 5.

Hass, J.L. 1996b. ‘Greening’ the supply chain: A case study and the development of a conceptual model. In J.P. Ulhoi & H. Madsen (Eds.), Industry and the Environment: Practical applications of environmental management approaches in business, The Aarhus School of Business: 79-92.

Hayes, R.H. & Wheelwright, S.G.. 1984. Restoring Our Competitive Edge: Competing Through Manufacturing, Wiley, New York.

Henriques, I. & Sadorsky, P. 1995. The determinants of firms that formulate environmental plans. Research in Corporate Social Performance, Supplement 1: 67-97.

Hoffman, A.J. 1994. Organizational change and the greening process at Amoco. Total Quality Management, Autumn: 1-21.

Hunt, C.B. & Auster, E.R. 1990. Proactive environmental management: Avoiding the toxic trap. Sloan Management Review, 31(2): 7-19.

Jackson, S.E. & Dutton, J.E. 1988. Discerning threats and opportunities. Administrative Science Quarterly, 33: 370-387.

Jaffe, A.B., Peterson, S.R., Portney, P.R., & Stavins, R.N. 1995. Environmental regulation and the competitiveness of U.S. manufacturing: What does the evidence tell us? Journal of Economic Literature, 33: 132-163.

Jose, P.D. 1995. Greening through strategic adaptation: A process study of selected firms from the Indian industry. Paper presented at the annual Greening of Industry conference, Toronto, Canada.

King, A. 1995. Avoiding ecological surprise: Lessons from long-standing communities. The Academy of Management Review, 20(4): 961-985.

King, A. 1994. Improved manufacturing resulting from learning-from-waste: Causes, importance and enabling conditions. Paper presented at the annual meeting of the Academy of Management, Dallas, TX.

King, A. 1993. Punctuated and incremental responses to environmental regulation. Paper presented at the annual meeting of the Academy of Management, Atlanta, GA.

Kirchgeorg, M. 1995. The circular economy: New challenges to the competitive strategist. Working paper #92, Institute for Marketing, Westf‰lische Wilhelms-Universit‰t, Germany.

Klassen, R.D. & McLaughlin, C.P. 1996. The impact of environmental management on firm performance. Management Science, 42(8): 1199-1214.

Klein, J.A. & Miller, J.G. (eds.) 1993. The American Edge: Leveraging Manufacturing’s Hidden Assets. New York: McGraw-Hill.

Knight, K. 1992. Proactive and responsible: One company’s path from green policy to green practice. Business Strategy in the Environment, 1(4): 41-45.

Labatt, S. 1995. Corporate response to environmental issues: A case study of packaging. Paper presented at the Growth and Change Conference.

Lawrence, A.T. & Morell, D. 1995. Leading edge environmental management: Motivation, opportunity, resources, and processes. Research in Corporate Social Performance and Policy, Suppl. 1: 99-126.

Lober, D.J. 1996. Evaluating the environmental performance of corporations. Journal of Managerial Issues. 8(2):184-205.

Lund, R.T. 1993. Remanufacturing. In J.A. Klein & J.G. Miller’s (Eds), The American Edge: Leveraging Manufacturing’s Hidden Assets: 225-240. New York: McGraw-Hill.

Lundberg, C.C. 1989. On organizational learning: Implications and opportunities for expanding organizational development. Research in Organizational Change and Development, Vol. 3: 61-82.

Magretta, J. 1997. Growth through global sustainability: An interview with Monsanto’s CEO, Robert B. Shapiro. Harvard Business Review, January/February: 79-88.

Meffert, H. & Kirchgeorg, M. 1994. Market-oriented environmental management: Challenges and opportunities for green marketing. Working paper #43, Institute for Marketing, Westf‰lischen Wilhems-Universit‰t, M¸nster, Germany.

Melnyk, S.A. & Tummala, R.L. 1996. Environmentally responsible manufacturing: Research tools, issues and opportunities. Paper presented at the spring INFORMS meeting, Washington D.C.

Moors, E.H.M., Mulder, D.F., & Vergragt, P.J. 1995. Transformation strategies towards more sustainable industrial production systems: A case study of the zinc production industry. Paper presented at the fourth international conference of the Greening of Industry Network, Toronto.


35

Murhpy, P.R., Poist, R.F., & Braunschweig, C.D. 1996. Green logistics: Comparative views of environmental progressives, moderates, and conservatives. Journal of Business Logistics, 17(1): 191-212.

Parker, W.H. & Wallace, A. 1995. EG&G global strategy for environmental excellence. Paper presented at the fourth international conference of the Greening of Industry Network, Toronto.

Porter, M.E. & van der Linde, C. 1995. Green and competitive: Ending the stalemate. Harvard Business Review, September/October: 120-137.

Post, J.E. 1993. The environmental advantage. In J.A. Klein & J.G. Miller’s (Eds), The American Edge: Leveraging Manufacturing’s Hidden Assets: 205-224. New York: McGraw-Hill.

Post, J.E. & Altman, B.W. 1992. Models of corporate greening: How corporate social policy and organizational learning inform leading-edge environmental management. Markets, Politics, and Social Performance: Research in Corporate Social Performance and Policy, 13: 3-29.

Roome, N. 1992. Developing environmental management strategies. Business Strategy and the Environment, 1(1): 11-24.

Rothery, B. 1993. BS7750: Implementing the Environment Management Standard and the EC Eco-Management Scheme. Vermont, Gower Press.

Sarkis, J. 1995. Supply chain management and environmentally conscious design and manufacturing. International Journal of Environmentally Conscious Design and Manufacturing, 4(2): 43-52.

Shrivastava, P. 1995a. Environmental technologies and competitive advantage. Strategic Management Journal, 16: 183-200.

Shrivastava, P. 1995b. The role of corporations in achieving ecological sustainability. The Academy of Management Review, 20(4): 936-960.

Shrivastava, P. 1992. Corporate self-greenewal: Strategic responses to environmentalism. Business Strategy and the Environment, 1(3): 9-21.

Starik, M. 1995. Research on organizations and the natural environment: Some paths we have traveled, the ‘field’ ahead. Research in Corporate Social Performance and Policy, Suppl.1: 1-41.

Starik, M. & Rands, G. P. 1995. Weaving an integrated web: multilevel and multisystem perspectives of ecologically sustainable organizations. The Academy of Management Review, 20(4): 908-935.

Stead, J.G. & Stead, W.E. 1994. “Implementing sustainability strategies: What are organizations doing?. Paper presented at the Annual Meetings of the International Association for Business & Society, Hilton Head, SC..

Stead, W.E. & Stead, J.G. 1995. An empirical investigation of sustainability strategy implementation in industrial organizations. Research in Corporate Social Performance and Policy, Supplement 1: 43-66.

Swinth, R.L. & Vinton, K.L. 1992. Strategies for environmental performance in small organizations: An international comparison. International Association of Business and Society Conference Papers, Leuven, Belgium.

Tattum, L. 1993. Product stewardship: Old practice, new theory. Chemical Week, July 7/14: 125-126. Taylor, G. & Welford, R. 1993. An integrated systems approach to environmental management: A case study of

IBM UK. Business Strategy and the Environment 2(3): 1-11. Turcotte, M.F. 1995. Conflict and collaboration: The interfaces between environmental organizations and business

firms. Research in Corporate Social Performance and Policy, Supplement 1: 195-229. Wackernagel, M. & Rees, W. 1996. Our Ecological Footprint: Reducing Human Impact on the Earth. British

Columbia: New Society Publishers. Welford, R. 1992. Linking quality and the environment: A strategy for the implementation of environmental

management systems. Business Strategy and the Environment 1(1): 25-34. Winn, M.I. 1996. A resource-based model of strategic factors affecting responses to mandated change: Corporate

responses to the German packaging law. Unpublished dissertation, University of California, Irvine. W oodm an, R.W . 1989. O rganizational c h ange and dev elopm ent: New arenas for inqu iry and ac tion. Jou rnal of

M anagem ent, 15 (2): 205-228. Y in, R.K . 1989. C ase stu dy researc h : D esign and m eth ods. A p p lied S oc ial R esearc h M eth od S eries, V ol. 5. S age

Pu blic ations, New Y ork. Y ou ng, W . 1997. G reenh orn engineering: H ow to avoid environm ental q u ic k sand and oth e r m istak es. T h e

A m eric an C eram ic S oc iety B u lletin, 76(3): 57-63. Zuckerman, A. 1996. Designed for the environment: Don’t rush into ISO14000. Machine Design, January 11: 38-

44.


36

APPENDIX 1

Preliminary Interview Instrument Background Information re: Firm (5 minutes) 1. What are the main products produced at this facility? 2. Can you briefly describe the basic process steps in your operation? (job shop, batch, assembly line, continuous flow) 3. How many employees work at this facility? 4. What is this plant’s affiliation with ‘the corporation’? (How many plants in corporation? subsidiary status? how similar is this plant to the other facilities?) 4a. How would you characterize the key management practices in this firm? Environmental Management Program (20 minutes) 5. Could you briefly describe the way your environmental management program is

organized? (staff, structure, when organized, background, duties) 6. What is the nature of your relationship to the production/operations function? 7. What tools and procedures do you use in environmental management? (ex. conducting env’l audits, life cycle analysis, environmental accounting...) 8. Relationship of environmental program to quality programs? Environmental Change Activity: Content (5- 10 minutes) 9. A major focus of our study is the implementation of new environmental

activities/programs. Could you please think back and describe a major environmental change that your company has undertaken in recent years?

(what activity? purpose? what was involved? timeframe?) Drivers (Events/Pressures/Trends) (2-5 minutes) 10. What led you to undertake this effort? (why?) Environmental Change Activity: Process (15-20 minutes) 11. Could you please tell us how you went about implementing this change? (who was involved? roles played? where in org. implemented? and how?)


37

12. What resources were available to you during the implementation of this change? (money, staff time, experts, equipment, technology, consultants, top management support?...)

13. What were the major barriers that were encountered? How were they overcome? Performance Implications of Change (5-10 minutes) 14. How has this change impacted environmental and operational performance? (cost,

quality, service, flexibility, competitiveness, regulatory relationships) 15. On balance, would you say that this change was successful? Why or why not? Learning Implications of Change (5-10 minutes) 16. What did your organization learn from this change effort? 17. How have you been able to apply what you’ve learned to other situations or facilities?

(has it been institutionalized? if so, how?) 18. In retrospect, if you could do anything differently, what would it be? Concluding Question (10-15 minutes) 19. What have we missed? What haven’t we asked about? What other knowledge do we

need to really understand this change effort?


External PressuresRegulations Customers

Competitors Resources

Public Other

Organizational Boundary

Business Context

(Including Resource

Availability)

Organizational Characteristics

Environmental Management

Program Characteristics

General Management

Systems

Environmental Change

Content (what?) &

Process (who, when,

where, why, how?)

PerformanceEconomic,

Operational, Environmental,

Other

Organi- zational Learning

FIGURE 1 Conceptual Framework

Internal Drivers

and Barriers


FIGURE 2: Decision Framework for Environmental Change: Part 1, Pre-Approval Process

Existence of Environment-

Related Problem or

Pressure

Recognized

Not Recognized

Problem Definition

(Env'l Attributes,Technical Options)

Clearly Defined, Cause/Effect

Relationships Understood,

Types of Responses

Seem Obvi ous, Workable Response

Alt. Exists

Ill Defined, Cause/Effect Relationships

Unclear, Range of

Responses Unknown,

No Workable Response

Readily Available

Assessment of Issue's Urgency & Feasibility*

Problem Recognition

High Urgency,

High Feasibility

Consideration of Options

Formal (Sm. Scope)

Formal (Lg. Scope)

Informal

Table the Issue

Formal Study: Must hav e approval to proceed with study. Informal Study: Recomm endation for action can be delivered up front. * Clair, Milli man, & Mitroff , 1995; Dutton & Duncan, 1987.

Cost of Desired Option

High

Low/ Moderate

High

Low

High

Low/ Moderate

Broaden Scope? Continue Study? Recommend Approval So-So

Recommend Approval Likely

No Recommendation Made

Implement w/o Approval

Continue Study? Approval Iffy if Recommended

Recommend Approval Likely

ModerateImplement with Approval

Low Urgency,

High Feasibility

High Urgency,

Low Feasibility

Low Urgency,

Low Feasibility


FIGURE 2: Decision Framework for Environmental Change: Part 2, Post-Approval Process

Approval of an Environmental

Program Recommendation

Nondisruptive /Minor

Recommendation of Response Option

Magnitude of Change for Operations/ Workforce*

Disruptive/ Major

Narrow Involvement

Broad Involvement

Narrow Involvement

Broad Involvement

*Level of Involvement

in Implementation

Individual/ Department

Team; Fast Pace

(Low Profile)

Design & Management of Project

X-Functional Team;

Medium Pace (Initially Good, Later

Inefficient?)

Individual/ Department

Team; Slow Pace

(Resistance)

Cross- Functional

Team; Slow Pace

(Generating Support)

Performance & Learning

Routine Process, Good Performance, Quick & W ithin Budget, Little Broad Ownership, Individual & Firm-level Learning

Smooth Process, Good Performance, On-Time & W ithin Budget, Broad Owner- ship, May Lead to Group/Firm Lear ning

Painful Process, Resistance Can Lead to Failure, Slow & Over Budget, Low Ow nership, Learning: Backsliding or Broader Involvement

Intense Process, Potential for Failure OR High Performance, Slow & At/Over Budget, Broad Ownership Likely, Will Lead to Org. Lea rning

Assumption: This model assumes adequate resources/budgets as we ll as specialist, technical, and management skill levels . Note: This process will be moderated by the strength or degree of the impact of the issue on the company. * Clair, Milliman, & Mitroff, 1995; Dutton & Duncan, 1987.

toward a process framework of environmental …

Documents