Greening the Corporation

Strategy Paper

Greening the Corporation

Management Strategy and the Environmental Challenge

April 15, 2008

Prepared

By

Victoria Robinson

Aletha Smith

Julie Sumpter

For

Dee Griffin Flaherty, MS, PhD

Carlow University

MBA750

Professional Seminar: Critical and Current Issues

Introduction

Research and development during the twentieth century resulted in the creation of approximately ten million chemicals. Many of these chemicals were toxic. The end-products that were created presented corporations with environmental and social challenges such as air pollution, hazardous waste, freshwater pollution, loss of land resources (e.g. soil loss, trees), degradation of marine resources by the release of pollutants into rivers, biotechnology (i.e. genetic engineering), and biodiversity (i.e. diversity is important to sustaining life and corporations must ensure that economic development doesn't result in further loss, like clearing of tropical rainforests for cattle production) (Robbins, 2001). During this period, corporations paid little attention to the environmental impact of their business practices.

In the 1980's, a trend emerged which resulted in some corporations viewing the environment as a business opportunity and they pursued a "green market". Other corporations developed business practices which considered environmental and social concerns. This trend was referred to as "greening the corporation". The book, Greening the Corporation, Management Strategy and the Environmental Challenge by Peter Robbins examines the corporate management styles and cultures of four corporations in their response to environmental challenges. These corporations are Atlantic Richfield Corporation Chemical Company (ARCO), a subsidiary of British Petroleum (BP), the Royal Dutch/Shell Group of Companies, (Shell), The Body Shop International plc (The Body Shop), and Ben & Jerry's Homemade, Inc. (Ben & Jerry's). The companies are based in the United States and the United Kingdom, are involved in industries ranging from the extractive/energy sector (i.e. extracting and refining oil, gas, chemicals, coal, metals) to retail/agriculture (i.e. cosmetics, manufacturing of premium "all natural" ice cream and frozen yogurt) , and represent large, old, small, young corporations.

Robbins' analysis of these companies suggests that there are four environmental management styles (i.e. compliance, preventive, strategic, and sustainable development). These styles are considered in terms of a "green spectrum analysis" which suggests that corporations become more progressive and move towards a more "green" approach as they move through the spectrum. The green spectrum ranges from brown (compliance), to light green (preventive), to green (strategic), and dark green (sustainable development). Robbins also suggests that there are two environmental corporate cultures (i.e. traditional and social-environmental). Traditional corporate cultures are primarily concerned with traditional business practices of providing shareholder return, maximizing profits, and some corporate philanthropy (i.e. approximately 1% of pre-tax dollars goes towards charity). To maximize returns, their environmental focus is primarily on saving money and avoiding costly fines. Social-environmental cultures are more proactive in their response to environmental challenges as they are highly active in social and environmental issues, contribute significant funds to these areas, and innovatively approach environmental issues. Social-environmental cultures may have a more positive impact on the environment (Robbins, 2001). Robbins' analysis further suggests that "green" management styles and cultures are linked and help to determine how corporations respond to environmental challenges. ARCO and Shell represent traditional corporate cultures. The Body Shop and Ben & Jerry's represent social-environmental corporate cultures.

Finally, his analysis highlights that there are contradictions which exist between the pursuit of environmental and social goals, while maximizing profits. Both cultures have a challenge with balancing the need to respond to environmental challenges with the need to generate profits. Overall, Robbins' book provides some insight into the management styles and cultures that highlight good environmental practices.

Greening the Corporation

Greening the corporation is a growing trend. In order to provide the class with a greater understanding of this term, highlight current information, and identify how businesses and individuals can be a part of the solution, the team will:

* Provide the class with an opportunity to play an online game entitled "The Planet Green Game". The class will be encouraged to play the game prior to class. Each individual's score will be recorded at the beginning of the class and a certificate will be awarded to the person with the highest score. This game will provide the class with ways to be a part of the solution in order to begin to address environmental issues.

* Present a short two minute video entitled, Going Green: Big Corporations Think Environment, to increase the class' understanding of this term. This video will be shown at the beginning of the class and prior to the start of the actual presentation.

* Provide a poster for each individual that can be utilized either at home or in the office entitled, 10 Steps to a More Sustainable Office. This poster will provide the class with ways to be a part of the solution both individually and at the office.

* Provide the following articles to be read prior to class:

* State of Green Business 2008 - highlights the "green" growth in 2007 and identifies that the state of green business is slowly improving.

* Will Going Green Keep You in the Black? - highlights the difficulties with showing a benefit to the bottom line.

* The Greening of American Capitalism