Strengthening B2B brands by signalling environmental sustainability and managing customer relationships

Resource depletion and environmental pollution concerns are forcing manufacturers to pay greater attention to environmental sustainability. This is especially so for business-to-business (B2B) manufacturing firms who intensively use natural resources in their operations and are blamed for observable impacts on the environment. Despite investments in environmental sustainability practices by B2B manufacturers, studies provide little explanation about the extent B2B manufacturers obtain a positive brand image and superior market performance through environmental sustainability. Furthermore, research has not identified organisational practices that strengthen the path from environmental sustainability to market performance. Drawing on signalling theory, the customer relationship management (CRM) literature, attitude theory, and data collected from B2B manufacturers and their customers, we show that environmental sustainability practices provide positive benefits to B2B manufacturers' brand image, which, in turn, impacts market performance. Further, effective CRM and working with business customers with positive environmental attitudes are essential boundary conditions that strengthen the path from environmental sustainability practices to market performance.     

Sustainability and branding: An integrated perspective

Sustainability is increasingly drawing the attention of scholars, policy makers, and companies, as the latter are recognizing the necessity and opportunities of implementing sustainable practices in their operations. Marketing plays a substantial role in both applying such initiatives and promoting them, which can be greatly supported through brands. We suggest that firms can use their brands to promote the value of sustainability to their industrial customers, consumers, and other stakeholders. This may be achieved through branding activities that emphasize the firm's sustainability practices and their impact on stakeholders. Expressing sustainability actions as the measurable and relatable outcomes they yield and associating them with brands have the potential to further facilitate this integration of sustainability and branding. A framework and guidelines for sustainability practices that may be employed in this process of integrating operations and marketing are discussed.     

Developing Sustainable New Products in the Textile and Upholstered Furniture Industries: Role of External Integrative Capabilities

Environmental sustainability has become one of the key issues for strategy, marketing, and innovation. In particular, significant attention is being paid by companies, customers, media, and regulators to development and consumption of green products. It is argued that through the efficient use of resources, low carbon impacts, and risks to the environment, green products can be essential to help society toward the environmental sustainability targets. The number of green product introductions is rapidly increasing, as demonstrated by the growing number of companies obtaining eco‐labels or third party certifications for their environmentally friendly products. Hundreds of companies representing most of the industries, such as Intel, SC Johnson, Clorox, Wal‐Mart, and Hewlett–Packard, have recently introduced new green products, underlining the need to develop products that create both economic and environmental values for the firm and customers. A review of the literature shows that academic research on green product development has grown in interest. However, to date, only a few empirical studies have addressed the challenge of integrating environmental issues into new product development (NPD). Previous empirical works have mainly focused on a set of activities for the green product development process at the project level. After years of paying no or marginal attention to environmental sustainability issues, most of the companies now generally realize that it would require knowledge and competencies to develop green products on a regular basis. These knowledge and competencies can be varied, such as R&D, environmental know‐how, clean technology/manufacturing process, building knowledge on measuring environmental performance of products, etc., that may be developed internally or can be integrated through external networks. Adopting a resource‐based view of the firm, this article aims at (1) investigating the role of capabilities useful for companies to integrate knowledge and competencies from outside of the firm on green product development in terms of both manufacturing process and product design and (2) understanding whether green product development opens new product, market, and technology opportunities, as well as leads to better financial performance of NPD programs. To this end, a survey was conducted in two Italian manufacturing industries in which environmental issues are becoming increasingly important, namely textiles and upholstered furniture. A questionnaire was sent to 700 firms, and 102 useable questionnaires were returned. Results show that (1) companies engage in developing external integrative capabilities through the creation of collaborative networks with actors along the supply chain, the acquisition of technical know‐how, and the creation of external knowledge links with actors outside the supply chain; (2) external knowledge links play a key role in the integration of environmental sustainability issues into the manufacturing process, whereas capabilities such as the acquisition of technical know‐how and the creation of collaborative networks prove to be more important for integrating environmental issues into product design; and (3) the integration of environmental sustainability issues into NPD programs in terms of product design leads to the creation of new opportunities for firms, such as opening new markets, technologies, and product arenas, though not necessarily leading to improved financial performance of the NPD programs.     

Toward sustainable practices in technology education

This paper discusses the problematic relationship between technology education, consumption and environmental sustainability. The emerging global sustainability crisis demands an educational response that moves beyond mere ‘tinkering’ with classroom practices, toward technology education which embraces life cycle thinking and ‘eco-innovation’. It will argue that the urgent transformation to technology education for sustainability citizenship must begin with a critical examination of existing practices and assumptions which underpin unsustainability. The initial context for this discussion will be technological education in Canada and the United States, in particular a recent national report on the assessment of technological literacy. The paper concludes by suggesting several ‘new paths’ forward to move technology education toward more sustainable practices and more relevance for young people.     

The long‐term benefits of organizational resilience through sustainable business practices

Research summary : Prior work on the benefits of business sustainability often applies short‐term causal logic and data analysis. In this article, we argue that the social and the environmental practices (SEPs) associated with business sustainability not only contribute to short‐term outcomes, but also to organizational resilience, which we define as the firm's ability to sense and correct maladaptive tendencies and cope positively with unexpected situations. Because organizational resilience is a latent, path‐dependent construct, we assess it through the long‐term outcomes, including improved financial volatility, sales growth, and survival rates. We tested these hypotheses with data from 121 U.S.‐based matched‐pairs (242 individual firms) over a 15‐year period. We also tested, but did not find support for, the relationship between SEPs and short‐term financial performance. Managerial summary : Most managers look for short‐term financial benefits to justify socially responsible or sustainable practices. In this article, we argue that such practices also help firms become more resilient, which helps them avoid crises and bounce back from shocks. However, it is difficult to measure the avoidance of shocks, so we analyzed long‐term outcomes. We show that firms that adopt responsible social and environmental practices, relative to a carefully matched control group, have lower financial volatility, higher sales growth, and higher chances of survival over a 15‐year period; yet, we were unable to find any differences in short‐term profits. We hope this research provides good reasons for firms to practice sustainability beyond the pursuit of short‐term profits. Copyright © 2015 John Wiley & Sons, Ltd.     

Resource Dependency,Innovative Strategies,and Firm Performance in BOP Markets

Low‐income markets have attracted the interest of academics, politicians, and business leaders alike. In recent years, numerous companies such as Unilever, Cemex, Tetrapak, and Vodafone have provided evidence that low‐income markets offer commercial business opportunities and that private companies can realize profitable business activities while simultaneously contributing to the alleviation of poverty. However, companies are challenged by constraining conditions such as poor infrastructure, nonexistent distribution channels, illiteracy, corruption, lack of enforceable legal frameworks, and violent conflicts when entering those markets. In order to succeed, companies develop new strategies, introduce innovative business models, and develop novel capabilities. Three innovative practices are commonly named in the literature that should enable companies to operate successfully in low‐income markets: (1) integrating the local population and local entrepreneurs to cocreate products; (2) cooperating with nontraditional or fringe stakeholders; and (3) building local capacity, which means improving the market conditions of low‐income markets. This study applies a resource dependence perspective as it provides valuable explanations on the interaction between companies and their environment, how companies cope with environmental constraints, and how the environment and different strategies affect business outcomes. By integrating a resource dependence perspective, the study theoretically frames the strategic recommendations of the literature and answers the underlying research question of whether environmental conditions of low‐income markets cause the execution of innovative practices and whether such practices influence the outcome of companies operating in low‐income markets. The research hypotheses are tested in a structural equation model against data of 103 firms operating in low‐income markets. The study reveals that companies integrate local actors to cocreate products and cooperate with nontraditional and fringe stakeholders to reduce resource dependency. Local capacity building, which means improving the local environment, is only applied by companies when strong partnerships with nontraditional and fringe stakeholders are established. Finally, the study shows that partnerships with nontraditional and fringe stakeholders as well as local capacity building have a positive effect on organizational performance. Thus, when companies aim to enter low‐income markets, they should not follow the recommendation of the transaction cost theory and internalize resources, but rather cooperate with nontraditional partners and invest in the local environment. Moreover, the study shows that market entries into low‐income markets require long‐term commitments to engage in partnerships with regional authorities, local community groups, and nongovernmental organizations. Without these partnerships, it is not possible to reduce high resource dependencies and to establish successful businesses in low‐income markets. Thus, governments should create general conditions that facilitate the creation of partnerships between nontraditional actors and companies, and assist them to improve environmental conditions in these markets.     

Product Development and Management Association's 2012 Comparative Performance Assessment Study

Results of Product Development and Management Association (PDMA)'s Comparative Performance Assessment Study are presented from 453 companies. In addition to baseline questions from previous studies, new sections on culture, social media, services, sustainability, open innovation, and global product development practices are introduced. Extensive comparison between the best performing companies and the rest of the sample reveal numerous practices that lead to higher product performance in the market. Comparisons are also made between this study and previous PDMA best practices studies. In addition, geographic differences among North America, Europe, and Asia are explored. Practices leading to higher commercial performance are identified.     

Strategies for Integrating Stakeholders into Sustainability Innovation: A Configurational Perspective

Sustainability is a key driver of innovation for products, services, and business models. Sustainability innovations are aimed at improving the environmental, social, and economic performance of the innovated solution. Given the complexity of many sustainability challenges, leading innovators may seek to boost their innovation capacity by tapping into the ideas, knowledge, and expertise of their stakeholders. In doing so they need to consider how many and which stakeholders to integrate into new product development (NPD) processes, and at what stage. This study investigates stakeholder integration strategies associated with high sustainability performance of innovation. Building on the literatures of sustainability innovation and stakeholder integration in the context of NPD, this study developed a configurational model to analyze stakeholder integration strategies. The empirical data consisted of 80 interviews and documents from 13 medium to large companies and their stakeholders in Europe. Using the fsQCA method, it was found that there is not just one effective strategy but three stakeholder integration strategies for high sustainability performance of innovation. The results imply that deep organizational engagement with stakeholders is necessary for the achievement of high performance. Otherwise, the three strategies range from progressive openness, which allows stakeholders to exert a fundamental influence on the sustainability innovation, to limited openness toward stakeholder integration. With the early secondary strategy pointing to progressive openness, companies integrate secondary stakeholders early on and so maximize the influence of different views on the innovation. As to limited openness, companies following the selective strategy limit the number of stakeholder groups in NPD but are indifferent to the timing of these groups’ inputs. Finally, the fine‐tuning strategy is least open to atypical views as it restricts the share of secondary stakeholders and only allows external inputs after the fuzzy front end phase when key decisions regarding the innovation have been made.     

Sustainability and business-to-business marketing: A framework and implications

Researchers in several business disciplines have convincingly argued that environmentally responsible strategies can contribute to competitive advantage and superior financial performance. While debates on ecological conservation and environmental practices within marketing have raged for over three decades, much of the focus has been on identifying and targeting the environmentally-conscious consumer. Less attention has been given to marketing's role in a green supply chain and its interface with environmentally-friendly manufacturing and operations. We integrate disparate streams of research and develop a broader framework to understand the appropriate role and focus of business-to-business marketing in the supply chain for achieving environmental sustainability objectives. We identify three major strategies - the reduction of surplus supply of products, reduction of reverse supply, and internal marketing - where marketing's role in environmental sustainability is crucial for achieving superior competitive advantage and financial performance.     

Sustainably superior versus greenwasher: A scale measure of B2B sustainability positioning

Business-to-business (B2B) buyers are finding it increasingly difficult to judge the true sustainability of supply chain partners (Oruezabala & Rico, 2012). Yet three-quarters of buyers in the OECD report they will dismiss potential supply chain partners who fail to meet sustainability criteria (Pierre, 2008). B2B firms then, cannot afford any confusion over their sustainability practices and positioning. Unfortunately, there are no sustainability positioning measures for firms to assess this, and there is no agreed upon operationalization of a highly sustainable firm vs a weakly sustainable firm. As such, this research creates a B2B sustainability positioning scale and taxonomy. First, interviews with buyers and marketing managers determine perceptions of supplier sustainability practices and defines B2B levels of sustainability. Second, exploratory and confirmatory scale development studies are conducted with 578 experienced industrial buyers. The resulting B2B sustainability positioning scale shows that a sustainably superior positioning for B2B addresses five key factors: (1) sustainability credibility, (2) concern for environmental impact, (3) a careful consideration of stakeholders, (4) resource efficiency, and (5) a holistic philosophy. This scale is intended as a tool to help B2B marketers understand and better leverage their sustainability practices and communications around sustainability.“We're trying to be cleaner and greener: We recycle waste and switch things off. We use paper from responsibly managed forests whenever possible. We ask our printers to actively reduce waste and energy consumption. We check out our suppliers' working conditions...”– The back jacket of books from DK Publishers, 2018.     

Stakeholder influences on sustainability practices in the Canadian forest products industry

We examined how managers' perceptions of different types of stakeholder influences in the Canadian forestry industry affect the types of sustainability practices that their firms adopt. Both influences involving withholding of resources by social and ecological stakeholders and those involving directed usage of resources from economic stakeholders were found to drive such practices. We found that the industry and its stakeholders have moved beyond a focus on early stages of sustainability performance such as pollution control and eco‐efficiency. However, more advanced practices, such as those involving the redefinition of business and industrial ecosystems where firms locate in a region so that they can exchange and utilize wastes generated by other firms, are in their infancy. Stakeholders and firms in the industry are focused on the intermediate sustainability phases involving recirculation of materials and redesign of processes including sustainable harvesting of lumber. Copyright © 2004 John Wiley & Sons, Ltd.     

Green logistics at Eroski: A case study

In today’s highly competitive environment, green logistics issues are gaining interest. This paper analyses how logistics managers could lead the initiative in this area by incorporating environmental management principles into their daily decision-making process. A case study is given to show how they can turn practices into green while simultaneously meet the efficiency objectives. We have chosen one of the leader companies of the Spanish food distribution sector to check this hypothesis. The study covers the introduction of several changes into its fleet management and the implementation of a methodology to solve vehicle routing problems with environmental criteria minimisation.     

The Fundamental Challenge of Product Design

Product design practice is an evolving art form. We have made tremendous improvement in methods for and execution of the process in recent years. Yet the challenge of environmental sustainability of products is one area where design practice remains largely in the dark ages. This essay argues that we need to embrace the imperative of design for environment and must evolve design practices to address this challenge.     

Feel free to feel comfortable—An empirical analysis of ergonomics in the German automotive industry

The purpose of this paper is to examine ways to improve ergonomics on the manufacturing shop floor. In particular, the impact of certain ergonomic practices on companies' economic and social objectives is investigated empirically. In order to do so, a survey has been conducted among manufacturing managers of 55 companies in the German automotive industry. The managers have been asked about their estimations on harmful tasks within the production process and on the effectiveness of various practices in the context of ergonomics and health. Worker-oriented and work-oriented practices of ergonomics are operationalized using factor analysis. By means of a cluster analysis, companies with a high degree of implementation of ergonomic practices are identified. The analysis shows that plants with a higher implementation degree of ergonomic practices show a better performance in terms of economic and social objectives. Furthermore, the results reveal that work-oriented practices lead to better performance with respect to the investigated economic and social objectives, whereas worker-oriented practices play a supporting role only. Finally recommendations for manufacturing companies with regard to the field of ergonomics are derived from the empirical results.     

Environment, Corporate Ideology, and Employee Involvement Programs

Corporations are implementing employee involvement programs in both union and nonunion settings in response to growing environmental pressures. This study examines the relationships among environmental pressures, corporate ideology, and participative practices in union and nonunion settings and tests two industrial relations models. Questionnaires measuring environmental pressures, corporate ideology, and participation were completed and returned by the Vice President of Human Resources (or similar corporate executive) in 159 of the largest manufacturing companies in the United States. Multiple regression results show that environmental pressures exert little effect on corporate ideology, but ideology has a significant effect on participative practices in both union and nonunion settings.     

Environment, Corporate Ideology, and Employee Involvement Programs

Corporations are implementing employee involvement programs in both union and nonunion settings in response to growing environmental pressures. This study examines the relationships among environmental pressures, corporate ideology, and participative practices in union and nonunion settings and tests two industrial relations models. Questionnaires measuring environmental pressures, corporate ideology, and participation were completed and returned by the Vice President of Human Resources (or similar corporate executive) in 159 of the largest manufacturing companies in the United States. Multiple regression results show that environmental pressures exert little effect on corporate ideology, but ideology has a significant effect on participative practices in both union and nonunion settings.     

Resource-constrained product development: Implications for green marketing and green supply chains

While academic debates and practical approaches to green marketing have matured over the past few decades, one central conundrum that has remained unresolved has been the trade-off between the higher prices of green products and the objectives of environmental sustainability. In general, it has been observed that green products are priced at a premium to account for their environmentally friendly consumption and use. We argue that resource-constrained product development approaches (alternatively labeled jugaad) that are observed in emerging countries such as China and India have the potential to change the traditional models of green product development. In addition to the competitive advantage that resource-constrained product development approaches provide, we suggest that these practices have sustainability and supply chain benefits. We show that the innovation process relies primarily on frugal engineering that reduces material use (thereby reducing burden on supply chain) and meets green marketing objectives at much lower, and therefore, more affordable prices. We draw out several implications for theory and practice.     

Sustainable value co-creation in business networks

Even though the Service Dominant Logic (SDL) paradigm has contributed to the conceptualization of “value co-creation”, no academic study has further investigated the role played by sustainability in business-to-business (BtoB) value co-creation.Using case studies, we examine how BtoB companies embrace the concept of sustainability to co-create value. We determine that such a co-creation of value entails a two-stage process: first, suppliers co-create value with their customer's customers or end users by analyzing or co-creating sustainability awareness. Second, by integrating this behavioral knowledge, suppliers co-create with their direct customers, either a sustainable hybrid offering (a service bundled with a product) or an extended sustainable service. Such a service proposition enables suppliers' direct customers to increase performance (sustainability is at the core of value creation) or to integrate sustainability into their supply chain (sustainability is an incremental element of value creation).Our research enriches the SDL paradigm by demonstrating the role of sustainability in reinforcing or extending the service proposition in a value co-creation process that links the supplier and customer networks.     

Board reform versus profits: The impact of ratings on the adoption of governance practices

Research summary: External stakeholders frequently attempt to influence organizations' adoption of new practices through the creation of public ratings. Based on the insights of performance feedback theory, we develop the theory of organizational reactions to external ratings to explain how firms' behaviors depend on their rating scores and their profitability. A central issue in our theory is the conflict between established internal goals and goals introduced by public ratings, with public ratings receiving lower priority than established profitability goals. Our theory suggests that, contrary to the expectations of the external stakeholders, firms targeted for criticism by ratings become less likely to adopt corresponding practices when their profitability is below aspirations. These arguments are supported in data on the diffusion of corporate governance practices in Canada. Managerial summary: Firms and their products are rated and ranked by external agencies ranging from Consumer Reports to magazine rankings of admired, environmental, or well‐governed companies. We investigate whether such ratings affect firm behaviors, and especially whether they can incentivize poorly rated firms to improve their ranking when these firms' profitability is also low. Using the leading corporate governance ranking in Canada, we find that rankings could have adverse effects: when firms have both poor governance ranking and poor profitability they are less likely to adopt governance practices, contrary to the ranking creators' intentions. The findings show that there is a hierarchy of firms' goals, where the goal of profitability comes ahead of other goals imposed by external agencies through ratings and rankings. Copyright © 2016 John Wiley & Sons, Ltd.     

What is this thing called organic? – How organic farming is codified in regulations

Organic farming is one of the fastest growing sectors of world agriculture. Although it represents only 1% of world agricultural area, organic is one of the most recognized food labels and most people in developed countries consume some amount of organic food today. There is a wide range of interpretations of what organic means by different actors in the sector. Here we examine eight different organic regulations from across the world to understand how they have codified the large diversity of ideas inherent in organic agriculture. Our analysis shows that organic practices and regulations do not differ substantially between countries – across the board organic regulations define organic mainly in terms of 'natural' vs. 'artificial' substances that are allowed (or not) as inputs. This interpretation of organic as “chemical-free” farming, largely void of broader environmental principles, does not fully incorporate the original ideas of organic theoreticians who conceived it as a holistic farming system aimed primarily at improving soil health, thereby leading to improved animal, human, and societal health. This narrow focus of organic regulations can be explained by the interest of organic consumers who predominantly buy organic because they believe it is healthier and more nutritious due to the absence of harmful substances. Organic regulations need to place more emphasis on environmental best practices in order to ensure that organic agriculture can contribute to sustainability objectives.