dark side_2015
TRANSCRIPT
Introduction (1/2)
Since 1996 more than 250,000 organizations worldwide have certified their EMS to ISO 14001
Research focused on its benefits:
Delmas (2001; 2002)
Darnall (2006); Darnall & Edwards (2006)
Potosky and Prakash (2005)
Russo (2009)
…
Introduction (2/2)
What about its disadvantages???
Drawing on RBV, TI and TCT, we discusses the negative side of ISO 14001
What about profitability and
symbolic adoption of ISO 14001???
1) To review theoretically main criticisms of ISO 14001
2) To analyze the links between thecriticisms of ISO 14001 and…
Environmental performance
Business performance
Objectives
Resource-based View (1/2)
Competitive advantage as an outcome of the development of valuable organizational capabilities
(Barney, 1991; Wernerfelt, 1984)
ISO 14001 represents an intangible and valuableresource due to the development of:
commercial skills
organizational skills
stakeholders-related skills
But… what about environmental skills??
IMPROVEMENTS IN ENVIRONMENTAL
PERFORMANCE
CRITICISM 1
Since the standard is processes-focused(instead of performance-focused), ISO 14001
adoption could be not usually associatedwith the development of abilities that allow
organizations to achieve significantreductions in environmental impacts
Resource-based View (2/2)
The influence of institutions exerts onorganizations and persuade them to behaveaccording to several formal and informal rules
(DiMaggio y Powell, 1983; Meyer and Rowan, 1977).
The ISO 14001 adoption is mainly motivated bynormative pressures signaling, legitimation.
But… what about symbolic adoption???
Institutional Theory (1/2)
CRITICISM 2
The exclusive purpose of legitimate businesspractices could generate a superficial or
symbolic adoption
Institutional Theory (2/2)
Signaling: activities that attempt to demonstrate that the firm owns specific features that are otherwise hidden to external parties (Spence, 1973)
Asymmetric information: when the information about a transaction between a supplier and a buyer is not provided equally (Akerlof, 1970)
ISO 14001 is considered as a way to solve the problems of asymmetric information by means of signaling.
But … ISO 14001 as a reliable sign??
Transaction Cost Theory (1/2)
CRITICISM 3
Symbolic adoption affects negatively thelegitimacy of ISO 14001 as a signal,
especially when this symbolic adoption isnot accompanied by improvements on
environmental performance
Transaction Cost Theory (2/2)
Our Classification
Ferrón, Darnall and Aragón
(Forthcoming)
Resource-based View
Low
comprehensive
High
comprehensive
Institutional
Theory
&
Transaction
Cost Theory
High
Visibility
Wannabes
(symbolic
approach)
Movers and
Shakers
Low
VisibilityPassivists
Backroom
Operators
Hypothesis 1
• Symbolic adoption is strongly associated withwannabes
• Backroom operators are mainly focused on legal environmental requirements
• Movers and shakers are interested not only in appearing environmentally responsible, but also in effectively being
Compared to passivists, movers and shakers
are more likely to be associated with
reductions on environmental impacts
than wannabes or backroom operators
Hypothesis 1
Hypothesis 2
• Due to their less comprehensive adoption, wannabes could not benefit from the internalimprovements of ISO 14001
• As backroom operators are not certified firms, they could not benefit from the reputationaladvantages of ISO 14001
• Movers and shakers have developed both theefficiency-related abilities as well the reputationalskills
Compared to passivists, movers and shakers are
more likely to be associated with positive
business performance than wannabes or
backroom operators.
Hypothesis 2
Data: OECD Survey (response rate = 24.7%)
n = 652 facilities
Dependent variable H1: Reductions on negativeenvironmental impacts (i.e., environmental performance)
Dependent variable H2: Business performance
Explanatory variables: Wannabes, Backroom Operators, Movers and Shakers (Passivists is the reference category)
Control variables: size, country, sector
Instrumental variables: STAKEHOLDERS’ INFLUENCES + other control variables.
Method (1/3)
Method (2/3)
Empirics: Multivariate probit estimation
H1 Eq. 1: (prob reduction on environmental performance
= 1) = ƒ (Wannabes, BRO, M&Sh, control variables, εi1 )
Eq. 2: (prob Wannabes = 1) = ƒ (Stakeholders’ influences,
control variables, εi2 )
Eq. 3: (prob Backroom = 1) = ƒ (Stakeholders’ influences,
control variables, εi3 )
Eq. 4: (prob Movers = 1) = ƒ (Stakeholders’ influences,
control variables, εi4 )
Method (3/3)
Empirics: Multivariate probit estimation
H2 Eq. 1: (prob positive business performance = 1) = ƒ
(Wannabes, BRO, M&Sh, control variables, εi1 )
Eq. 2: (prob Wannabes = 1) = ƒ (Stakeholders’ influences,
control variables, εi2 )
Eq. 3: (prob Backroom = 1) = ƒ (Stakeholders’ influences,
control variables, εi3 )
Eq. 4: (prob Movers = 1) = ƒ (Stakeholders’ influences,
control variables, εi4 )
Results
Use of Natural
Resources
Wastewater
effluentsAir pollution
Business
Performance
Wannabes .937 .418 .249 .329
Backroom operators .364 .338 -.162 -.096
Movers & Shakers 1.618*** 1.334*** 1.243*** .583**
Use of Natural Resources Wastewater effluents Air pollution Business Performance
Wannabes BRO M&S Wannabes BRO M&S Wannabes BRO M&S Wannabes BRO M&S
Internal
Stakeholders .247* .026 .369*** .256** .041 .353*** .245** .035 .318*** .242* .030 .330***
Value chain
Stakeholders -.045 -.007 .129* -.072 .019 .110 -.041 .025 .041 -.044 .008 .149*
External
Stakeholders .069 .199* -.074 .082 .188** -.055 .057 .181** -.032 .080 .235** -.132*
Regulatory
Stakeholders -.026 .006 .011 -.021 .001 .017 -.024 .003 .015 -.020 .007 .006
Hypothesis 1 issupported
Hypothesis 2 issupported
For Academia:
Novelty!! Symbolic adoption is not related topositive business performance
For Managers:
What about updated version of ISO 14001??
Under symbolic adoption, trust on certifiers??
Contributions
Regulators are encouraging firms to certify their environmental practices
BUT …
… our findings show that certification may not be enough to improve environmental performance
Implications for Public Policy
Even, in some instances, regulators are reducing environmental fines if firms adopt these VEPs
The weaknesses of external audits
Other criticisms of ISO 14001 which are notdirectly related to firms, such as voluntaryprograms under corruption environments
????
Future Research
Please!! Comments and Suggestions
are welcome
Vera Ferrón Vílchez
University of Granada (Spain)
http://veraferron.wordpress.com