Standard or smokescreen? Implementation of a voluntary environmental code

California Management Review

Volumn , Issue 2, 2000, Pages 63-82

  Howard, Jennifer ^a   Nash, Jennifer ^a   Ehrenfeld, John ^a  

^a NONE

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[No Author keywords available]

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EID: 0034404684     PISSN: 00081256     EISSN: None     Source Type: Journal    
DOI: 10.2307/41166033     Document Type: Article

References (53)

1. P. Selznik, The Moral Commonwealth: Social Theory and the Promise of Community (Berkeley, CA: University of California Press, 1992), p. 345.
2. See, for example, S. Schmidheiny, Changing Course: A Global Business Perspective on Development and the Environment, (Cambridge, MA: MIT Press, 1992); B. Smart, Beyond Compliance: A New Industry View of the Environment, (Washington, D.C.: World Resources Institute, 1992).
3. See, for example, S. Schmidheiny, Changing Course: A Global Business Perspective on Development and the Environment, (Cambridge, MA: MIT Press, 1992); B. Smart, Beyond Compliance: A New Industry View of the Environment, (Washington, D.C.: World Resources Institute, 1992).
4. See J. Nash and J. Ehrenfeld, "Code Green: Business Adopts Voluntary Environmental Standards," Environment, 38/1 (1996): 16-20, 36-45; M. Uzumeri, "ISO 9000 and Other Metastandards: Principles for Management Practice?" The Academy of Management Executive, 11/1 (1997): 21-36.
5. See J. Nash and J. Ehrenfeld, "Code Green: Business Adopts Voluntary Environmental Standards," Environment, 38/1 (1996): 16-20, 36-45; M. Uzumeri, "ISO 9000 and Other Metastandards: Principles for Management Practice?" The Academy of Management Executive, 11/1 (1997): 21-36.
6. N. Gunningham, "Environment, Self-Regulation, and the Chemical Industry: Assessing Responsible Care," Law & Policy, 17/1 (1995): 57-108; P. Simmons and B. Wynne, "Responsible Care: Trust, Credibility and Environmental Management," in K. Fischer and J. Schot, eds., Environmental Strategies for Industry: International Perspectives on Research Needs and Policy Implications (Washington, D.C.: Island Press, 1993), pp. 201-226.
7. N. Gunningham, "Environment, Self-Regulation, and the Chemical Industry: Assessing Responsible Care," Law & Policy, 17/1 (1995): 57-108; P. Simmons and B. Wynne, "Responsible Care: Trust, Credibility and Environmental Management," in K. Fischer and J. Schot, eds., Environmental Strategies for Industry: International Perspectives on Research Needs and Policy Implications (Washington, D.C.: Island Press, 1993), pp. 201-226.
8. Hoffman defines greenwashing as the symbolic activities (e.g., public relations campaigns) taken by some companies to demonstrate their environmental commitment, while their underlying practices and values remain unchanged. See A. Hoffman, From Heresy to Dogma: An Institutional History of Corporate Environmentalism (San Francisco, CA: New Lexington Press, 1997).
9. J. Goodstein, "Institutional Pressures and Strategic Responsiveness: Employer Involvement in Work-Family Issues," Academy of Management Journal, 37 (1994): 350-382; C. Oliver, "Strategic Responses to Institutional Processes," Academy of Management Review, 16 (1991): 145-179.
10. J. Goodstein, "Institutional Pressures and Strategic Responsiveness: Employer Involvement in Work-Family Issues," Academy of Management Journal, 37 (1994): 350-382; C. Oliver, "Strategic Responses to Institutional Processes," Academy of Management Review, 16 (1991): 145-179.
11. J. Button and J. Dukerich, "Keeping an Eye on the Mirror: Image and Identity in Organizational Adaptation," Academy of Management Journal, 34 (1991): 517-554.
12. These include Strategies for Today's Environmental Partnerships (petroleum industry), Encouraging Environmental Excellence (textile industry), the Sustainable Forestry Initiative (forest and paper industry), and others.
13. ISO 14001 is an environmental management standard developed by the International Standards Organization (ISO) and patterned along the lines of the quality management standard, ISO 9000. It differs from ISO 9000 in the sense that a company can self-declare ISO 14001 compliance without formal review by a third party.
14. J. Rees, "Development of Communitarian Regulation in the Chemical Industry," Law & Policy, 19/4 (1997): 477-528.
15. Chemical Manufacturers Association, Improving Responsible Care Implementation, Enhancing Performance and Credibility. (Washington, D.C.: Chemical Manufacturers Association, 1993).
16. Ibid.
17. Chemical Manufacturers Association, "A Decade of Performance Improvement," Responsible Care News (December 1998), CMA Web page: http://www.cmahq.com.
18. J. Meyer and B. Rowan, "Institutionalized Organizations: Formal Structure as Myth and Ceremony," American Journal of Sociology, 83 (1977): 340-363.
19. Chemical Manufacturers Association, Text of the Responsible Care Codes, CMA Web page: http://www.cmahq.com.
20. M. Uzumeri, "ISO 9000 and Other Metastandards: Principles for Management Practice?," The Academy of Management Executive, 11/1 (1997): 21-36.
21. In 1997, CMA staff members began to identify firms that were lagging in Responsible Care implementation and 32 companies were contacted and urged to improve.
22. We felt that studying the medium-sized companies would allow us to see most clearly the introduction of practices which were not undertaken for technical or efficiency reasons alone. The largest firms in the industry may have both the public reputation and organizational slack that make a program like Responsible Care both more critical for and more feasible in their organizations. Conversely, the smallest firms may not have the resources necessary to develop a response to Responsible Care and may be able to "free-ride" with a lower chance of being detected. We expected the actions of medium sized firms to most closely reflect responses to the institutional pressures of Responsible Care itself.
23. Because the Responsible Care coordinator interview asked about the impact of Responsible Care on the entire organization, most of the themes were derived from this set of interviews. Supporting or refuting themes from the Plant Manager and Customer Relations interviews were used to help in the final categorization of the companies.
24. Chemical Manufacturers Association. Text of the Responsible Care Codes. CMA Web page: http://www.cmahq.com.
25. Chemical Manufacturers Association, 1994-95 Responsible Care Progress Report, (Washington, D.C.: Chemical Manufacturers Association, 1995).
26. In most cases, these activities went well beyond those required by regulation. The Department of Transportation (DOT) specifies handling and distribution procedures for hazardous materials, and states have regulations on routing of hazardous materials. The Distribution Code goes above and beyond these and other regulations by outlining requirements in five areas: carrier safety, handling and storage, risk management, compliance review and training, and emergency preparedness. Chemical companies are using new management practices not required by regulation (e.g., review and training of distributors, risk ranking of products) to bring the handling and distribution of both their hazardous and non-hazardous materials under one framework. (Personal communication with participant in original study, 1999).
27. National Association of Chemical Distributors, "What is RDP?" NACD Web page: http://www.nacd.com/text/rdp.html, (1997).
28. The results of this analysis are summarized in the table below: It is interesting to note that in the case of Product Development, Research & Development, Marketing, and Sales, Group 3 companies indicated higher impact on these functions than did Group 4 companies. All of these functions are not historically associated with environmental management, but would be important players in the implementation of the newest code, Product Stewardship. We suspect that the Group 4 companies had a more ambitious view of what constituted change in these areas, consistent with their comments that Responsible Care, done right, was extremely far-reaching and required new commitment in areas not traditionally associated with environmental management. The difference in reported impact between Groups 3 and 4 may reflect either the fact that the Group 4 companies measured themselves against a more ambitious standard, or that their prior commitment to environmental management had resulted in earlier changes which had already affected these functions.
29. As a single group, the companies did not show significantly different levels of progress on five of the codes. An Anova was used to test whether the implementation levels differed between the five codes (excluding Product Stewardship). An F-value of 0.6 was obtained (F-critical=2.5), so the hypothesis was rejected. The sixth code, Product Stewardship, had been developed later than the other codes and was introduced three years before our study. Accordingly, the Product Stewardship code showed a significantly lower level of implementation for all companies.
30. The results of F-tests on company groupings and reported stage of implementation of the Responsible Care codes are shown in the table below: Results of F-test on Average Reported Stage of Implementation a Groupings b Code Group 1 Group 2 Group 3 Group 4 F-value Community Awareness and Emergency Response 4.33 5.07 5.33 4.67 0.98 Pollution Prevention 4.17 4.79 4.17 4.33 0.75 Process Safety 3.83 5.00 5.00 4.17 1.68 Distribution 4.17 4.86 4.83 5.00 0.51 Employee Health & Safety 4.17 4.86 4.50 4.67 0.46 Product Stewardship 2.83 3.57 3.83 3.00 0.88 a Stage of implementation ranked on a scale of 1 through 6 (to match the scale used by companies to report Responsible Care progress to the CMA). b F critical = 3.49
31. This analysis was done using the EPA's Toxic Releases Inventory (TRI) which records reported releases of some 300+ toxic chemicals to the air, ground and water by industrial and manufacturing companies. While this data is the best available for measuring changes in a company's production of pollution, it is difficult to reach strong conclusions on the basis of it without knowing about changes in level of production at the factory, or changes in product line (neither of which is readily available). Furthermore, one must be careful to compare "apples to apples" by keeping comparisons within a SIC code. For this analysis we chose the four-digit SIC code which had the best representation of our group of companies (15 of 16) and we compared total releases, unconnected for total production output. Because of the shortcomings noted above, we use the TRI data in this paper as supporting evidence, rather than as a central component of the analysis.
32. These data indicate that the largest change in pollution output was seen for Group 3 companies, whose mean of releases was slightly below that of Group 4 companies in 1994. However, Group 4 companies had also made significant cuts in pollution from a much lower base level. In 1994, the mean of releases by Group 1 factories was a factor of 3.2 greater than the mean of releases for Group 4 factories, and Group 2 mean factory releases were 2.2 times that of Group 4, despite a significant decrease in Group 2 releases from 1988.
33. Goodrick and Salancik define institutional uncertainty in this way. See E. Goodrick, and G. Salancik, "Organizational Discretion in Responding to Institutional Practices: Hospitals and Cesarean Births," Administrative Science Quarterly, 41 (1996): 1-28.
34. Scott defines institutions as "cognitive, normative, and regulative structures and activities that provide stability and meaning to social behavior." W. R. Scott, Institutions and Organizations (Thousand Oaks, CA: Sage Publications, 1995), p. 33.
35. O. Williamson, Markets and Hierarchies: Analysis and Antitrust Implications, (New York, NY: Free Press, 1975).
36. For a theoretical presentation of this argument, see C. Oliver, "Strategic Responses to Institutional Processes," Academy of Management Review, 16 (1991): 145-179. Two empirical studies which support this argument are: E. Goodrick and G. Salancik, "Organizational Discretion in Responding to Institutional Practices: Hospitals and Cesarean Births," Administrative Science Quarterly, 41 (1996): 1-28; and J. Goodstein, "Institutional Pressures and Strategic Responsiveness: Employer Involvement in Work-Family Issues," Academy of Management Journal, 37 (1994): 350-382.
37. For a theoretical presentation of this argument, see C. Oliver, "Strategic Responses to Institutional Processes," Academy of Management Review, 16 (1991): 145-179. Two empirical studies which support this argument are: E. Goodrick and G. Salancik, "Organizational Discretion in Responding to Institutional Practices: Hospitals and Cesarean Births," Administrative Science Quarterly, 41 (1996): 1-28; and J. Goodstein, "Institutional Pressures and Strategic Responsiveness: Employer Involvement in Work-Family Issues," Academy of Management Journal, 37 (1994): 350-382.
38. For a theoretical presentation of this argument, see C. Oliver, "Strategic Responses to Institutional Processes," Academy of Management Review, 16 (1991): 145-179. Two empirical studies which support this argument are: E. Goodrick and G. Salancik, "Organizational Discretion in Responding to Institutional Practices: Hospitals and Cesarean Births," Administrative Science Quarterly, 41 (1996): 1-28; and J. Goodstein, "Institutional Pressures and Strategic Responsiveness: Employer Involvement in Work-Family Issues," Academy of Management Journal, 37 (1994): 350-382.
39. J. Dutton and J. Dukerich, "Keeping an Eye on the Mirror: Image and Identity in Organizational Adaptation," Academy of Management Journal, 34 (1991): 20.
40. Ibid., p. 551.
41. As noted earlier (see note 22), the distribution code practices go beyond what is required by the Department of Transportation and other entities. While the DOT regulates the handling and distribution of hazardous materials, the Responsible Care Distribution code calls for chemical manufacturers to review and train their carriers handling material off-site, and to review and rank the risk associated with all of their products, both those classified as hazardous materials and those which are non-hazardous. In other areas, such as emergency preparedness, the Distribution code calls for manufacturers to exceed regulatory requirements. For example, regulation requires that manufacturers have a 24-hour manned phone line to provide information on materials and respond to emergencies such as spills or releases, but the Distribution code asks that manufacturers also actively engage the local and state emergency preparedness organizations to improve community preparedness and emergency response capabilities. (Personal communication with participant in original study, 1999).
42. The Product Stewardship code had only been introduced in 1992 and our interviews were conducted in 1995. Implementation of this code lagged that of other codes. It is possible that some standard approaches have been implemented for product stewardship, but it is also likely that the approaches would vary with the nature of the product and the type of customer.
43. For information on the Management Systems Verification program see: Chemical Manufacturers Association, "History of Responsible Care," Responsible Care News, February 1999. CMA Web page: http://www.cmahq.com. Of the 16 companies in our study, seven have undergone Management Systems Verification. Interestingly, the highest proportion of MSV participants come from Groups 1 and 4. Two of three companies in each of Group 1 and Group 4 have had verifications performed. Only two of seven companies in Group 2 have had verifications performed, and one of three companies in Group 3 participated in a verification. As verifications are ongoing, with another 30 companies scheduled to perform them over for the next two years, it is difficult at this stage to draw conclusions based on this information.
44. Chemical Manufacturers Association, "Measuring Progress," Responsible Care homepage. 1999, CMA Web page: http://www.cmahq.com.
45. Ibid.
46. Goodstein finds a similar result in his multi-industry study of employer involvement in work-family issues. The extent of an organization's preexisting involvement in work-family issues was strongly related to its subsequent conformity with institutional pressures. See J. Goodstein, "Institutional Pressures and Strategic Responsiveness: Employer Involvement in Work-Family Issues," Academy of Management Journal, 37 (1994): 350-382. Another study has shown a similar link between interpretations of issues and actions on them by demonstrating that top manager attitudes towards time, goals, and customers differed and yielded different approaches to Total Quality Management. See T. Choi and O. Behling, "Top Managers and TQM Success: One More Look After All These Years," The Academy of Management Executive, 11/1 (1997): 37-47.
47. Goodstein finds a similar result in his multi-industry study of employer involvement in work-family issues. The extent of an organization's preexisting involvement in work-family issues was strongly related to its subsequent conformity with institutional pressures. See J. Goodstein, "Institutional Pressures and Strategic Responsiveness: Employer Involvement in Work-Family Issues," Academy of Management Journal, 37 (1994): 350-382. Another study has shown a similar link between interpretations of issues and actions on them by demonstrating that top manager attitudes towards time, goals, and customers differed and yielded different approaches to Total Quality Management. See T. Choi and O. Behling, "Top Managers and TQM Success: One More Look After All These Years," The Academy of Management Executive, 11/1 (1997): 37-47.
48. For a discussion of market-based environmental regulation as opposed to either technology or performance standards, see A. Jaffe and R. Stavins, "Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion," Journal of Environmental Economics and Management, 29 (1995): S-43-S-63.
49. For a discussion of the differential responses of companies to environmental regulation, particularly technology forcing regulation, see N. Ashford, "Understanding Technological Responses of Industrial Firms to Environmental Problems: Implications for Government Policy," in K. Fischer and J. Schot, eds., Environmental Strategies for Industry: International Perspectives on Research Needs and Policy Implications (Washington, D.C.: Island Press, 1993), pp. 277-307.
50. See A. Hoffman, "Technology Strategy in a Regulation-Driven Market: Lessons from the US Superfund Program," Business Strategy and the Environment, 5/11 (1996): 1-11.
51. H. Williams, J. Medhurst, and K. Drew, "Corporate Strategies for a Sustainable Future," in K. Fischer and J. Schot, eds., Environmental Strategies for Industry: International Perspectives on Research Needs and Policy Implications (Washington, D.C.: Island Press, 1993), pp. 117-146.
52. Not least because empirical work on regulatory compliance is extremely challenging given the range of federal, state, county and local regulations a geographically dispersed sample, such as ours, falls under.
53. Other authors have noted that because ISO 14001 does not specify what a company's environmental policy should look like, different policies and standards could be adopted by different facilities or sites even within the same company. See D. Rondinelli and G. Vastag, "International Environmental Standards and Corporate Policies: An Integrative Framework," California Management Review, 39/1 (Fall 1996): 106-122.