Environmental Challenges In Organizations Research Paper

1. The ‘Environment’ In Organizational And Management Studies

The environment in organizational and management studies has historically been treated as an organizational contingency. The environment was synonymous with the organizational environment, something abstract and a-temporal, having little to do with the natural environment (Shrivastava 1994). The main concern of theories of organizations in the 1960s was the restriction that the external environment imposes on the survival of organizations, rather than the environmental burdens that organizations cause to the natural environment.

The pervasive assumption in both research and management practice that organizations had a capability, and indeed should, control their environments was questioned in the work of the population ecology perspective. The title suggests that the organizational ecology (as it is also known) is an ecological theory of organizations. In fact, it represents the transplantation of concepts and calculus techniques from the discipline of ecology to the world of formal organizations. The application of biological models to the analysis of the ‘ecology of organizations’ has nothing to do with the natural environment. The use of the concepts of ‘environment’ and ‘ecology’ as metaphors to express the ‘organizational environment’ or ‘the ecology of organizations’ was not an intentional strategy to deny the importance of environmental issues in organization studies. The all-encompassing meaning of the terms themselves is what could mislead one to think the opposite. Nonetheless, what makes these perspectives vulnerable to criticism is the dominant epistemological position about research in organization studies that they tend to assume. The positivistic rigidity that dominated organizational studies until the late 1970s resulted in a scope of research that did not allow much space for its own reflexivity.

The emergence of new metaphors and paradigms for organizational analysis in the late 1970s undermined the historic hegemony of functionalist perspectives. These new theoretical approaches questioned some taken for granted assumptions about research and management, transforming organization studies into a ‘contested terrain’ (Clegg et al. 1996). The acknowledgment that the external environment affects organizational action in the same way that organizations impact on the natural environment began to appear in early 1990s, giving rise to the development of research and theories on organization and environment.

Implicit in the studies about environmental issues in organizations is the assumption that a theoretical imperfection allows companies to externalize their environmental and social costs on to society. Market prices do not always reflect total costs of products (Hawken 1993). There is a discontinuity between empirical outcomes and theoretical representations of organizational action. Environmental and social costs that occur during the life cycle of products—the extraction of raw materials, manufacturing, use, and final disposal or recycling—are not considered in most companies’ accounting systems (Grey et al. 1993). Increasingly demanding regulatory measures, public demand for environmental protection and compensation, and consumer demand for cleaner processes and products, constitute some of the current environmental challenges requiring organizations to eliminate or internalize these costs. Firms responded to these challenges by developing novel environmental strategies and management practices, described in the next section.

2. Organizational Responses To Environmental Challenges

Until the 1970s it was common for companies to avoid compliance with environmental regulations. From 1970 to 1985 the general attitude of companies was to go only as far as to comply with centralized regulatory measures that commanded them to internalize environmental costs—normally achieved by installing pollution-control equipment. Typically, firms resisted the command and control type of regulation because it did not generate incentives for them to assume higher levels of environmental responsibility (Fisher and Schot 1993).

From 1985 to the mid-1990s, dialogue between legislators and industry resulted in business accepting some responsibility for solving environmental problems, at the same time that new regulatory mechanisms were being proposed as alternatives to the command and control approach. Industry associations, in partnership with governments and other interest groups, responded to the consumer and public demand for environmental protection, and shareholder rejection of environmental risks by instituting voluntary business codes of environmental practice. The standardization of environmental management systems such as the European Eco-Management and Audit Scheme (EMAS) and the International Organization for Standardization (ISO) 14000 environmental series constituted another type of voluntary program developed in the 1990s. Eco-labeling programs have also been put into practice, aiming to inform consumers whether manufacturers’ products meet certain criteria for environmental impacts during the various stages of a product’s life.

Pollution prevention was the basic principle guiding these initiatives, which focuses on minimizing or eliminating waste before it is created by production processes. As a whole, voluntary schemes have not generated significant improvements in corporate environmental practices, and regulatory approaches based on extended producer responsibility are expected to emerge in the early decades of the twenty-first century. Corporations will be required to develop product stewardship strategies to minimize pollution not only during manufacturing but also to reduce environmental costs associated with the entire life cycle of their products (Hart 1997).

Economic incentives for the incorporation of ecological issues into business practices became more evident in the environmental management literature in the second half of the 1990s. Increasing costs of pollution control, the development of new technologies for pollution prevention, and cost-savings from waste reduction, emerged as driving forces for proactive corporate environmental management (also known as beyond compliance environmental practices). Ecological requirements started to be seen as an integral part of quality management principles and potential sources of competitive advantage. Porter and van der Linde (1995) asserted that environmentally friendly regulation could act as an incentive for companies to innovate and use resources more efficiently. The result would be a gain in both corporate profits and environmental improvements—a double dividend or win–win scenario. Support for this approach, however, has not been unanimous. Empirical evidence questions the extent to which one can generalize the results of specific case studies to the entirety of commerce (Howes et al. 1997).

Finding hidden opportunities for organizations to profit from environmental strategies became an appealing theme for both business and academic communities. Nonetheless, the double dividend debate inspires a more crucial issue in the study of organization and environment: the role of business in promoting sustainable development. Are corporate environmental management practices conducive to ecological sustainability? Can incremental improvements lead modern industrial societies to sustainable patterns of production and consumption? Are radical changes imperative to ecologically sustainable societies?

3. Research On Environmental Management And Ecological Sustainability

Research on organizational responses to environmental challenges as well as the identification of necessary changes for the creation of ecological sustainable organizations and societies frame the focus of current use of the ‘environment’ in organizational and management studies. Typically, the literature adopts one or other of radical or reformist approaches (Egri and Pinfield 1996). Radical studies normally have their foundations in areas such as deep ecology, social ecology, and eco-feminism, which consider biospecies egalitarianism a prerequisite for economic advancement in harmony with nature. In this view, radical changes in the values guiding organizational actions are required. Conversely, reformist approaches stress the necessity of working within the rules that currently guide managerial action. The studies assume that organizations—and more specifically, business enterprises—are both the responsible agents, and the ones most likely to be sufficiently powerful to promote environmental reform and lead modern societies towards Natural Capitalism—a term proposed by Hawken et al. (1999) to simplify the arguments favoring organizations to value ecosystems services by internalizing environmental costs.

The lack of evidence that organizations will change their behavior out of altruistic motives leads reformists to assume that incrementalism is the guiding principle of organizational change. The gradual incorporation of ecological values into corporate strategies and practices would happen over time, they argue. Incrementalism is the basic principle of technical approaches from the natural sciences to environmental management, and most corporate responses to environmental challenges, described in the previous section, are exemplars of this perspective.

By the end of the 1990s the number of publications in organization and environment remained small, compared with traditional areas of research, but the natural environment gradually gained ground in the study of organizations. Environmental issues entered research through traditional areas of organizational studies such as institutional theory and resource-based theory. Together with the (technical) area of environmental management, the majority of these studies tended to be reformist in nature, urging scholars to attend to the difference between practices of environmental management and research, education, and management for ecological sustainability (Roome 1998).

Environmental management practices in corporations are expected to reduce the impact caused by industrial and commercial activity, but whether these practices are conducive to sustainable development remains uncertain. In practical terms, the business community tended to equal the concept of ‘sustainable development’ with ‘eco-efficiency’—an extension of environmental management techniques in corporations. Theoretically, from the reformist perspective, there is still a notable lack of understanding whether incremental innovations in systems of production and consumption are conducive to ecological sustainability. Conversely, from the radical-perspective, if a biocentric world is to be achieved, such environmentalists have yet to develop a theory to make this transition feasible.

4. Future Directions For Theory And Research In Organization And Environment

In the context of the social sciences, particularly in organizational and management studies, environmental challenges increasingly demand consideration of interdependencies between natural and artificial (social, economic, technological) systems. In the emerging area of organization and environment the importance of corporations as the principal agencies responsible for environmental disruptions is acknowledged. Radical theorists demand a complete revision of the values guiding business: only a cultural revolution can lead to ecologically sustainable societies, they suggest. Reformists assume that ecological modernization of systems of production and consumption is the only viable alternative in the quest for sustainable development (Spaargaren and Mol 1992).

There is already widespread acceptance that ‘sustainability’ cannot be confined to the realms of focal organizations but requires co-ordination of economic, social, and environmental prerequisites at the industry and societal levels. Human rights issues, such as equity in trade and empowerment of minority groups, are seen as integral elements of ecologically sustainable organizational strategies and practices (Welford 1997). Economic globalization makes boundaries between social, economic, and environmental systems more diffuse and the development of interdisciplinary studies and cross-level analysis increasingly necessary.

The expertise accumulated in organizational and management studies, used in conjunction with disciplines such as engineering, economics, and sociology, can be expected to generate knowledge about current systems of production and consumption as well as alternative models for their reorganization. The mechanisms for the integration of ecological principles into business strategies and practices that foster or inhibit organizational learning and change need further research (Roome 1998). Understanding structural and behavioral prerequisites that might increase the pace of environmental innovations and inter-firm collaboration is also crucial for the creation of more efficient industrial systems, and consequent dematerialization of the economy. In sum, research about organizational strategies and practices that can lead to ecologically sustainable systems of production and consumption, constitute the main environmental challenge for organizational and management studies in the early decades of the new millennium.

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