How organizational culture can influence the implementation of environmental practices? Master Thesis

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How organizational culture can influence the implementation

of environmental practices?

Master Thesis

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Supply chain management

University of Groningen, Faculty, of Economics & Business

Author: Nikos Fragkos

Student Number: S3754286

Supervisor: dr. C. (Chengyong) Xiao

Co-supervisor: dr. ir. S. (Stefania) Boscari

Acknowledgment

I thank Chengyong Xiao for helping me, motivating me, and teaching me how to deal with a research project. I am especially thankful for his feedback obtained during the

whole process of writing my thesis. I am also thankful for the support from my family. Finally, I thank the companies that participated in this study for the time

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Abstract

Purpose: The aim of this thesis is to examine how organizational culture influences the implementation of environmental programs.

Design / Methodology / Approach: In order to accomplish the purpose of this work, a multiple case study was conducted consisting of 4 companies in Greece and 2 companies in Netherlands. Seven qualitative semi-structured interviews were conducted with seven managers who are involved in the implementation. The abduction approach was used in this dissertation as it first uses a solid model, namely CVF, as a basis for collecting empirical material. Later, an inductive approach was adopted in order to identify other influencing factors of sustainability. Thus, the approach of this work is to move and move between the two approaches to reach the final conclusion. Moreover, an organizational culture effectiveness (OCAI) test was performed to diagnose culture (Greek companies) in quantitative level.

Findings: The results revealed that an organizational culture that emphasizes on collaboration, trust among employees, and it has a family orientation (Clan culture) will facilitate the implementation process. Additionally, market culture consisting of competitiveness, goal-setting and cost-efficiency characteristics will support sustainability. However, there was a lack of adhocracy characteristics on the data of this research while hierarchy culture can play a role especially during the implementation of standard requirements such as ISO 14001. The findings confirmed that adhocracy characteristics was difficult to be identified in companies and hierarchy type can play a role on integration of green practices.

Practical implications: This study has an impact on the executives of companies: It provides managers with an understanding of how their organizational culture can influence the integration of sustainability. It provides information on the challenges that companies may face as a result of the lack of certain cultural characteristics and provides clues as to what features are useful for developing or implementing into organizational culture to help integrate sustainability.

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4 Keywords: environmental practices, organizational culture, competing value

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1. Introduction

Globalization has opened the window for many changes in current markets since the free trade promotes global economic growth, create job opportunities and provide the tools for making companies more competitive. However, (Figge, Oebels, & Offermans, 2017) argued that environment has been degraded due to the negative impacts of globalization. Thus, firms are obliged to implement more environmentally sustainable practices, partly due to pressures exerted by external stakeholders, NGOs, or governmental policies (Walker, Di Sisto, & McBain, 2008). Companies have changed their policies, products and their processes in order to reduce their resource consumption, minimize pollution and improve the relationship with their stakeholders (Crane, 2000), but these shifts are not sufficient to create sustainability among firms and industries (Hart & Milstein, 1999; Senge & Carstedt, 2001). Firms need to adopt more environmental practices to improve their environmental performance. Adoption of environmental practices not only improves the environmental and social performance of organizations and their supply chain, but also provides opportunities for organizations to acquire a new set of competencies that can help them achieve a competitive advantage (Saeed, Waseek, & Kersten, 2017). Prior studies have pointed out that the implementation of environmental programs can be influenced by multiple internal and external factors, such as organizational culture (Schrettle, Hinz, Scherrer-Rathje, & Friedli, 2014).

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7 Multiple case studies approach is going to be conducted, using data through semi-structured interviews with companies which follow specific environmental strategies. The topic of environmental sustainability brings crucial changes in organizations, hereby case studies helps to explain how this transformation occurs (Pagell & Shevchenko, 2014). Thereby, the aim of this study is to examine how organizational culture influences the implementation of environmental programs. Thus, this paper is trying to address “How does organizational culture influence the implementation of

environmental practices?”

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8 preferable compared with the other models since it contains few dimensions but various implications, it has already been used in cross-cultural research, it is brief and concise and it is also suitable for qualitative research (Yu & Wu, 2009).

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2.Theoretical Background

2.1 Organizational Culture

In most organizations, there are differences among employees regarding national origin, personalities and cultural heritage. In a workplace, employees with different characteristics are brought together and over time, business-related functions, communications, and routines are starting to appear. Organizational culture can be defined as the system of beliefs in which its members can share the same ways of working and thinking, traditions, stories, and a specific method that they will pursue in fulfilling their goals (Calori & Sarnin, 1991; Flynn & Saladin, 2006; Hofstede, 2001; Schein, 1990). In addition to the definitions of organizational culture mentioned above, several researchers define the culture of an organization as a system. A system that can incorporate the values, behaviors, beliefs and ideas used by people in the organization and provides guidance on how the organization operates (Cameron & Quinn, 2011; Schein, 2004).

2.1.1 Competing Value Framework

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10 requirements affect the environment in which it operates (Linnenluecke & Griffiths, 2010; Goodman, Zammuto, & Gifford, 2001). Together, these dimensions create a grid that divides the organizational culture into four types, each with its own set of specific characteristics.

2.1.1.1 Clan Culture

Clan culture is characterized by a high degree of internal focus and flexibility and is widely associated with ethics and human relationships (Goodman et al, 2001; Linnenluecke & Griffiths, 2010). Due to the growing concern for human relationships, organizations with a clan culture tend to prioritize social interaction, employee engagement and participation (Linnenluecke & Griffiths, 2010). The members of the organization could be considered as one big family and cooperation, trust and dedication are important (María del Rosario et al, 2017). Emphasis is placed on the development of human resources, training and decentralized decision making, and this is achieved through open communication and teamwork (Goodman et al, 2001; Linnenluecke & Griffiths, 2010). Lee & Kim, (2017) further emphasize the importance of family relationships, shared values, and concern for others as characteristics of clan culture. Previous studies on culture and the application of TQM / Six Sigma have revealed that such practices have a positive impact especially on the clan culture environment (Naor, Linderman, & Schroeder, 2010; Prajogo & McDermott, 2005; Zu, Fredendall, & Robbins, 2006).

2.1.1.2 Adhocracy culture

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11 flexible organizational structure (Tong & Arvey, 2015). Communication is characterized by a horizontal flow and leadership style tends to be visual, encouraging an environment of experimentation and innovation. The innovative climate contributes to the creation of new knowledge beyond innovative products and services that can be a source of organizational and market development (Linnenluecke & Griffiths, 2010; Cameron & Quinn, 2011; Goodman et al., 2001).

2.1.1.3 Hierarchy Culture

Hierarchy culture has the characteristics of stability, control and efficiency (Quinn & Cameron, 2011). Some researchers characterize the culture of the internal process as formal and hierarchical (Linnenluecke & Griffiths, 2010; Helfrich et al, 2007). Organizations characterized by hierarchy culture tend to have an internal focus and structure on work routines. Information and guidance circulate vertically, so principles are treated with respect and compliance (Tong & Arvey, 2015; Linnenluecke & Griffiths, 2010; Helfrich et al, 2007). The internal organization of processes reflects a unified acceptance of the rules and regulations, which in a stable external environment can benefit the production of goods and services. Possible limitations in a hierarchy culture are related to standardization processes, which can prevent valuable employee ideas from being exploited (Cameron & Quinn, 2011). Previous studies on TQM and rigid practices have shown that the implementation and sustainability of these programs have been developed in companies with a hierarchical image (Valmohammadi & Roshanzamir, 2015; Paro & Gerolamo, 2017; Prajogo & McDermott, 2005).

2.1.1.4 Market Culture

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12 setting and planning for the whole organization and individuals (Cameron & Quinn, 2011; Linnenluecke & Griffiths, 2010). Managers in organizations with a strong market culture are very demanding and tough with their employees and their role in market organizations is described as drivers, producers and competitors (Cameron & Quinn, 2011). Zu, Fredendall, & Robbins, (2006) argued that firms focusing on market culture as well as group and developmental culture rather than hierarchy culture when applying Six Sigma specific practices would achieve greater results.

Table 2.1: CVF overview including characteristics of cultural dimensions

Adapted by Cameron & Quinn (2011)

Clan culture Characteristics Trust Engagement Empowerment Teamwork Aiding Commitment Training Open communication Self-management Participative decision-making Adhocracy culture Characteristics Innovation Entrepreneurship Future vision Agility Transformation Visionary communication Continuous improvement Creativity Risk-taking Growth Adaptable decision-making Hierarchy culture Characteristics Monitor & control Formalization & rules

Coordination Stability Top-down hierarchy

Internal efficiency Consistency & uniformit Precise communication Market culture Characteristics Competitiveness Productivity Profitability Goal achievement Performance- orientation Centralized decision-making Instructional communication Involving suppliers & customers FLEXIBILITY

STABILITY AND CONTROL

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2.2 Factors influencing corporate culture

Besides CVF framework this research is going to investigate some aspects which are closely related with employees and consequently with the organization’s structure. Employees’ feedback, knowledge/information sharing, training of employees and frequent meetings are some factors which enhance organizations to achieve their goals and be sustainable.

Whitten, Bentley, & Dittman, (2007) argued that when people, data and processes interact daily in order to enhance operations, problem solving and decision making in a company create an information system. Furthermore, leadership, people, information systems, processes, reward systems and organization structure can be considered the organization’s culture categories (Gupta, Iyer, & Aronson, 2000). The traditional model of knowledge management used to focus on technology or the capabilities to create systems in order to efficiently process and gain knowledge. On the other hand, the new model of knowledge management emphasizes on people and actions supporting a knowledge sharing environment (Al-Alawi, Al-Marzooqi, & Mohammed, 2007). Hereby, it can be seen that knowledge sharing is a crucial mean for companies in order to achieve their goals and their objectives. Sharing information among employee’s can be recognized as an important function within a company (Jreisat, 1999).

Training is another substantial factor for the efficient operation of a firm. The organizations implementing training in their structures can leverage knowledge and acquire skills which make them special (Burke & Baldwin, 1999). Moreover, the commitment of the top management to the training can be seen as a crucial aspect for meeting organizational objectives. Employees have to actively participate on the delivery and planning of the training in order to assure its effectiveness (Facteau, Dobbins, Russell, Ladd, & Kudisch, 1995).

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14 Employees during the meetings can be informed about the company’s mission, while management can clarify the employees’ roles and expectations (Cameron & Quinn, 2011). Some positive work attainments, such as performance enhancement and goal achievement, can be facilitated when employees seek feedback (Chen, Lam, & Zhong, 2007).

2.3 Environmental Programs

The industrial activities of the last half century have created serious environmental problems, such as global warming, ozone depletion, biodiversity loss, resource depletion and infections (Shrivastava, 1995). In this context, environmental management has emerged as a key issue in the production strategy, as production plants have to reduce their impact on the natural environment. Environmental practices are divided into internal and external ones.

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15 However, environmental management has already been expanded to include previous and next step activities to mitigate the environmental impact of these activities (Golicic & Smith, 2013; Lund-Thomsen & Lindgreen, 2014). These practices are referred to as external environmental practices and include supplier evaluation and development for sustainability (Gimenez & Tachizawa, 2012) Apart from these, external environmental practices include, certification achievement, sustainable collections, audit based on structured vendor rating. External sustainability programs also providing design specification to suppliers that include environmental requirements for purchased item, cooperation with suppliers for environmental objectives, suppliers’ ISO14000 certification, evaluation by the customers for cleaner production and green packaging (Zhu & Sarkis, 2004).

2.4 Organizational Culture and Environmental Management

Many studies have been conducted on the basis of the assumption that organizational culture has important social characteristics that affect the behaviors of individuals and groups. Influencing the workers’ attitudes and behaviors (Smircich, 2018) relies on the agreement of their collective values and beliefs. Additionally, it promotes a sense of belonging, similar to being part of a family (Schein, 1992). Therefore, the type of culture can influence the way employees think about and understand sustainability programs within an organization (Linnenluecke & Griffiths, 2010). These sustainability programs should align with an organization’s culture to promote the organization’s performance.

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16 dominant hierarchy can impede the effective implementation of environmentally friendly practices (Sugita & Takahashi, 2015).

The focus of this study is to search in depth the role of culture on the implementation of environmental programs while the previous studies have mainly investigated the culture and its effects on firm performance or environmental firm’s performance. Several authors have mentioned that organizational culture and the implementation of lean and quality practices are interconnected. For instance, Ahmad et., al (2013) supported that many manufacturing companies overlook the crucial role of culture and the importance of building the right culture for the implementation of lean techniques. Therefore, these companies cannot acquire to the higher level the benefits of lean. On the same hand, specific characteristics of organizational culture in lean plants influence the successful and frequent implementation of soft practices (Bortolotti, Boscari, & Danese, 2015). Moreover, Pakdil & Leonard, (2015) suggested that organizational culture is related with lean effectiveness. Literature has shown that the implementation of lean operations can directly influence firm’s performance but, it is also related with green programs since several green elements (such as waste reduction) are included in lean (Bergmiller & McCright, 2009). Pampanelli, Found, & Bernardes, (2014) designed a new model, the lean & green model in which environmental sustainability is a major part of lean approach. The findings indicated that this model increased firm’s performance and also reduced its environmental impact.

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3.Methodology

3.1 Research Design

A case study is a qualitative method that uses tools such as interviews and observations to collect data (Ghauri & Grønhau, 2010). The case study approach is appropriate to address the 'how' and 'why' questions (Yin, 2014) and therefore this approach is appropriate in this dissertation, as the purpose deals with how organizational culture influences implementation of environmental programs. This paper uses a multiple case study, meaning that more than one business is being studied, as it offers the advantage that there is more data that allows authors to draw more generalizable conclusions (Karlsson, 2016). We use a multi-case study of six companies to gather the rich and in-depth information needed for this dissertation. The organizational culture effectiveness test (OCAI) was used to complement the qualitative data. It is suitable tool to measure culture (based on the CVF) since its validity and reliability have been proved by previous empirical studies (e.g. Suderman 2012; Pereira & Gerolamo, 2017).

As the purpose of this paper examines the integration of sustainability into manufacturing companies, the authors selected companies that are currently integrating sustainability into their activities. As these companies have experience of integrating sustainability, the information collected may contain more valuable information on how organizational culture influences the integration process.

3.2 Research Setting

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19 external validity of this research. The case selection was based on two criteria: Several environmental economists and policy makers have argued that industrial activity positively related to pollution (Cole et. al., 2005) thus, manufacturing firms were selected. Secondly, companies which apply an eco-friendly strategy in order to ensure that sustainable programs and initiatives are implemented (Baumgartner & Ebner, 2010). Seven managers (Table 3.2) who are involved in the integration of environmental programs within a firm were selected for the interviews, since, by interviewing managers, it is possible to create a better overall picture of the firm and its evolution towards. The sample consists of seven interviews (Table 3.2) with seven managers from Greek and Dutch companies.

Table 3.2: List of cases

Case Organization A Organization B Organization C Organization D Organization E Organization F Size 150+ employees 230 employees 550+ employees 5700 employees (globally) 112 employees 110 employees 45.0000 employees (globally)

Industry Packaging Quarry,

concrete Smart grids

Rubber sheet for conveyor belt Window frames Cardboard & plastic packaging Business type Business to business (B2B) Business to business (B2B) Business to business (B2B) Business to business (B2B) Business to business (B2B) Business to business (B2B) Buyer

markets Food Industry Construction

Multiple types of markets

Cement,

Mining Construction

Food & other packaging’s

Number of

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20 Interviewees ’ functions Project manager QHSE manager Mechanical equipment technician, QHSE manager, electrical engineer Quality manager, Chemical engineer 1)Process manager, 2)Strategic marketing manager QSHE Manager

3.3 Data Collection

To fulfill the purpose of this thesis, the authors collected primary data. Different ways of collecting primary data exist and include techniques such as interviews, surveys and observations (Ghauri & Grønhau, 2010). In this study, primary data were collected through qualitative semi-structured interviews with employees responsible for environmental and business sustainability issues. The interviews with Greek companies were conducted via Phone calls and Video calls (Skype software) while interviews with Dutch firms were conducted on site. The purpose of structured interviews is to categorize the dominant cultural types of business. This in turn provides a structure for the analysis of findings from semi-structured interviews.

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21 interviewees to share stories on the implementation of environmental programs. Following the Glasser & Straus (1967) approach, the interview protocol was updated after each interview due to new insights. Through developing in-depth understanding of the implementation processes, we aim to tease out the effect of organizational culture in the implementation of different environmental programs.

However, the choice of method has limitations. What can be difficult with semi-structured interviews is that they require a solid knowledge base on the topic covered by the interview (Ghauri & Gronhaug, 2010). To minimize the impact of this challenge, the authors decided to conduct the interviews only after finalizing the theoretical framework, since this basis can provide an extensive knowledge base. Another limitation of this method concerns biased social desire, which makes it difficult to obtain true answers, especially if the questions are considered to be somewhat sensitive to the respondent (Ghauri & Gronhaug, 2010). In an effort to minimize this, the authors assured anonymity for each individual involved in the study.

Quantitative data were also collected through the OCAI test (appendix C) in order to support the qualitative data. After the interviews an e-mail was sent to each interviewee in order to fill the questionnaire (OCAI test). This test consists of six questions with four possible answers and each participant was asked to distribute 100 points among these choices. The Excel software was used for the analysis. Cameron & Quinn (2011) supported that OCAI assessment is a suitable tool to understand the structure and the values characterizing an organization.

3.4 Data Analysis

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22 environmental programs were coded on an aggregated level because data presented mainly ‘’internal’’ practices. A typical example of the deductive approach is: ‘’

employees are working for many years together and we have great cooperation between us, made the things easier during this procedure’’. The above quote was coded as collaboration of employees among different departments (1st_{order code) because the} employees believe that their collaboration make the sustainability tasks to feel easier. The collaboration of employees among different departments (1st order) later was grouped as Clan culture dimension (2nd_{order). To continue, an inductive approach was} also used for quotes that were not directly related with the existing characteristics of CVF dimensions, but they are also relevant with the topic since influence employee’s attitudes regarding sustainability. For example, the: ‘’ Our main activity is providing

training for employees. When employees start working here a training is provided where environmental sustainability is a subject ‘’ quote was coded as employee’s

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23 implementation of environmental practices. This internal case analysis contributes to the internal validity of the study. A cross case analysis were then conducted to look for patterns in the overall data and further the external validity of the findings. Looking for patterns between different organizations provides an external validity in the research. The fact that different cases were used in this study make it generalizable beyond the immediate case (Tellis, 1997).

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4. Findings

The findings of this thesis are presented as follows: Initially the section 4.1 presents a within case analysis. In this section both quantitative data (OCAI test) and qualitative interviews were used in order to identify relationships between cultural types and environmental programs in six different cases. Then, in section 4.2 a cross-case analysis is conducted in order to identify commonalities and differences among these cases.

4.1 Within case analysis

4.1.1 Cultural characteristics on implementation of environmental

practices

The table 4.1 presents the cultural profile in each (Greek) case. These cases/companies show several different cultural characteristics connected with the existing theoretical types of culture. However, all these cases have a dominant type. Clan is the prevailing type in case 1 & 4, hierarchy is the dominant type in case 2 and market culture in case 3. Two more Dutch cases were analyzed but only in a qualitative way.

Table 4.1: OCAI test analysis

Case 1 Case 2 Case 3 Case 4

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Market 26 25,83 26 26,33 38 38 26 25,5

Hierarchy 13 12,5 42 42 20 19,66 28 27,5

The following graphs show the cultural profile of these cases:

Figure 4.1.1: Case 1 Figure 4.1.2: Case 2

Figure 4.1.3: Case 3 Figure 4.1.4: Case 4 Flexibility & discretion Adhocracy External focus Market Stability & control Hierarchy Internal focus Clan 0 10 20 30 40 Flexibility & discretion Adhocracy External focus Market Stability & control

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26 The quantitative tool (OCAI test) is compared with the qualitative interviews in the first four cases while in fifth and sixth cases only qualitative data have been used. Case A: It can be observed that the dominant type is Clan culture. Both the OCAI test and the semi-structured interview conducted with the project manager confirm it: ‘’ We

are working together as a family. The most employees are working here for many years and thus they can do their tasks effectively. There is collaboration between the different departments and there is freedom to take some action during our tasks’’ and ‘’ employees are working for many years together and we have great cooperation between us, made the things easier during this procedure’’. The above quotes show that

collaboration and teamwork are the prevailing aspects of this firm. Additionally, the type of change can indicate some cultural aspects. For instance, the quote ‘’ I think that

it is a huge change for us because we are used to do incremental changes in our company which have slow but effective outcomes for us. And I am afraid that it is rather difficult or we will need more time to be implemented’’ shows that incremental changes

related to internal efficiency and then to internal focus. Trust between management and employees is another aspect which support sustainability: ‘’Generally we have the

flexibility and the technical freedom to choose the materials we want. The management trust people, who run these projects, and this give us extra motivation’’. It shows that

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27 employees are feeling motivated and consequently more productive as far as environmental projects.

The second type is the market culture. The project manager clearly mentioned that ‘’the

main reason for adding this new regeneration machine was for financial and technical reasons’’. It indicates that the main reason they adopted this recycling tool is the high

productivity and profitability. Moreover, the company A indicates a cost-efficiency profile which can also have an impact on minimization of CO2 emissions: ‘’we can also

transport less quantities which means less weight for a pallet, less weight for a container and then less transportation cost both for us and our customers. By doing that we managed to decrease our co2 emissions for us and our customers’’.

The adhocracy type can be seen in this organization. ‘’ we have already implemented

another innovative project in our business. We managed to create a label in a product which has low permeability of oxygen. This is a full cover label, there is a label even in the bottom of the product. This label with low permeability of oxygen lengthen the life cycle of the product in two extra months. Thus, implementing this technique we can drop significantly the food waste. We were awarded for this package and we are proud as a company for this achievement’’. It shows that they have an innovative way of

thinking as far as the reduction of plastic which is their basic component. Hierarchy culture could not be identified in qualitative data but the OCAI test showed that the there is a small percentage of that type of culture incorporated on the firm’s values. Additionally, the qualitative interview showed that some other characteristics can enhance the implementation of some environmental programs such as employee’s training. ‘’ This shift brought some changes in our production, for instance we trained

our employees in the shop floor in order to be capable to operate these new machine’’.

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developed on environmental issues and in turn people and specifically employees do not have the attitude and the education on crucial environmental issues. I think that is the main problem regarding employee’s attitudes’’.

Case B: The qualitative interview supported by the OCAI test indicated that the dominant cultural type is the hierarchy culture. The quote ‘’By monitoring very often

the indicators and the employees who are responsible for the daily ‘’checks’’, the company has reduced the possibilities for mistakes’’ demonstrates that the monitor &

control is the main mean to achieve internal efficiency in the organization B since it minimizes the possibility of mistakes. Moreover, it can be seen that rules & formalization are two characteristics that also prevail in this company. ‘’ Well, the ISO

systems have standardized rules and steps. Employees cannot deviate from these procedures and I think that there is limited space for initiatives and innovative ideas. You do, what you have to do’’. These standardized steps assure the effectiveness of ISO

14001 since they make clear the goals and objectives to employees. The mean for implementing the rules and a formalize structure is the precise communication from the top of the hierarchy to the downstream shop floor employees: ‘’ every employee in every

position has a specific set of instructions that should be followed, and they do it in most of the times, they follow the standardized procedure’’.

The second type is market supported both by OCAI test and semi-structured interview. ‘’ In order to be competitive on concrete you cannot trash your garbage everywhere

you should have an environmental consciousness. The environmental issue is one of the concerns of our company’’. This quote indicates that competitiveness is another cultural

aspect of the company B and the company should consider carefully its environmental impact in order to take a competitive advantage among their rivals and attract more customers. Adhocracy and clan culture cannot be observed through the qualitative data but OCAI test showed some relevance (table 4.1).

Management embedded some actions that lead to effective implementation of several environmental practices. Penalties in case of non-compliance is one of them: ‘’Only

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make repetitive mistakes I can impose a penalty’’. Rewards were also used as another

mean to engage employees in organization’s targets. ‘’Ohhh, yes the management

organize something like a big party for the employees in case we achieve our targets at the end of the year’’. Moreover, employee’s feedback is another influencing factor that

supports sustainability: ‘’for instance, if a truck driver says that ‘’I identified a closer

route for this trip’’ for me as a responsible for these issues is a great success’’. This

feedback is very important for the manager since now has the chance to decrease the co2 emissions of the company by identifying a closer route.

National culture observed as a challenge for the company since employees need more

time to implement environmental attitude in their culture and company had to make a great effort to accomplish it. ‘’Especially in our country where environmental practices

are not embedded in our culture. The company should monitor and control the employees frequently’’.

Case C: The main type is market. The qualitative interview supports the quantitative test: ‘’ we have to minimize the environmental footprint of our plant. An eco-friendly

image helps us to be competitive and attract more and more customers every year. Additionally, we protect the environment from the waste materials and the pollutant emissions’’. The above quote demonstrates that being competitive is aligned with being

environmental-friendly. The fact that company C aims for a higher share in the market by attracting more customers comes in congruence with being eco-friendly. It happens because customers nowadays are more responsive to changes on sustainability. Another characteristic which confirms this type is cost-efficiency, interviewee said: ‘’ Apart

from the use of chemicals in our production we use big quantities of metal, so we have a lot of scrap in our production. These scrap costs a lot of money for that reason we sell this left over which are 100 % recycling material’’. It shows that the company come

up with some techniques to decrease its cost and consequently being sustainable. The company can also be characterized as a performance-oriented company: ‘’ We also

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they create a chapter for the company’s environmental behavior at the end of every year’’. The above quote states that this cultural characteristic supports an environmental

attitude because the company monitor very often its environmental indicators and then creates consciousness towards sustainability.

The second type is adhocracy triggered by OCAI test while the qualitative data showed that the second dominant type is clan. The quote ‘’ Well, the decisions are taken

collectively in this team. We arrange some meetings in which all the five members are participating and discuss about the environmental issues that have been emerged the specific period. We have to work together in order to achieve our goals and minimize our environmental footprint’’ shows that collaboration among employees of this

environmental team is necessary tool in order to minimize the company’s environmental footprint. Additionally, family-orientation is another characteristic of this company which endorse sustainability. ‘’It is a fact that old employees are

responding faster and easier than the new ones regarding sustainability. The old employees are connected emotionally to the firm’’. This contradiction between

quantitative test and qualitative data could be explained by the fact that the company is an innovative multinational company which manages the energy. It is one of the leaders in the market and follows an environmental-friendly strategy applying various innovative projects. Furthermore, the ownership of this factory has changed several times through these years, and the interviewee have experienced several changes. However, he has developed an emotional relationship with the factory: ‘’ I am working

here in this factory since 1988. The ownership has changed all these years, but now we belong to company C’’. The above quote indicates the previous statement.

The hierarchy culture presented a 20% on OCAI test and it can also be confirmed by the qualitative data: ‘’these instructions and rules imposed to every plant by this

‘’office’’. These rules are complied with the national rules and legislation’’. The above

quote shows that company follows specific rules and procedures regarding sustainability. However, no evidence could be found in order to explain their influence. Furthermore, some other factors that affect the green programs identified by the qualitative data. Employee’s feedback support managers to take initiatives regarding the environmental practices: ‘’For example, if I observe an issue about the water

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is coming from the employees. This quote shows that shop floor employees inform

managers as far as the water consumption of the production line. Employees training is another factor that helps employees to execute effectively these programs. ‘’The

managers of each department are responsible to transfer the information through training to the downstream employees’’. However, company C has to deal with a

challenge regarding sustainability. ‘’The main difficulty I think is to create an

environmental attitude in a company especially in a country like Greece’’. It proves

that Greek national culture is a barrier as for the adoption of green practices.

Case D: The dominant type is clan culture both supported by OCAI test and semi-structured interview: ‘’ I trust my colleagues there is no need to control them all the

time’’. The above quote shows that company trusts its employees during the

implementation of a task and environmental programs is not an exemption. Another example of this characteristic is that ‘’ our employees have a responsible mindset and

so they follow our instructions very well’’. Family orientation is another characteristic

that this company possesses supported by the qualitative data: ‘’We are discussing with

management as far as these issues and we have the freedom to take some initiatives. We are a small family business so we have close relationship with the board and our colleagues. I think that this kind of attitude makes us feel productive and the most employees see organization as their own company’’. The above quote shows that

employees are directly involved with environmental practices since they feel as important stakeholders.

Hierarchy and market are the second and third prevailing types on this company based on OCAI test holding 27,5% and 25,5% respectively. Qualitative data can also show relevance of these types of culture. Rules & formalization is a hierarchy characteristic that emerged by the interview: ‘’ we are trying to familiarize our employees with the

company’s rules and procedures. We do that in order to make clear our targets’’.

Competitiveness observed as the main characteristic of market type showing that company D is complying with customers’ needs in order get a greater share in the market: ‘’ We certified with ISO 14001 because it is a necessity for every serious

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32 be found in the qualitative interview, confirming their low presence on OCAI test (6,5 %).

Employees can share their problems with supervisors through feedback. Thus, it seems a crucial factor for sustainability: ‘’ Yes, our employees can share their problems with

their supervisors’’. However, Greek national culture is a barrier that impedes the

adoption of the environmental programs ‘’the only problem we faced is you know on

‘’Greek attitude’’.

Case E: The main type of this organization is clan. It can be reflected by the qualitative interview conducted to the process manager of company E: ‘’ we are a flat

organization hence I can give direction to my own projects. So, I can choose projects by myself. This is a real motivator to work on projects which are developed by myself. The project I am doing know is to improve the environmental impact of our production facilities’’ The above quote demonstrates self-management and family orientation

characteristics which enhance sustainability by motivating employees to work on these projects. Collaboration among downstream and upstream employees is another influencing factor supported by the qualitative interview: ‘’ we have waste in our

process and we use this as energy to heat up this building, which was an idea of an employee. He told the idea to his manager and he took it up’’. The mean to achieve

their goals and targets regarding sustainability is the open communication: ‘’ We have

a very open culture, so everyone can ask everything to anyone. You can just walk to his office or desk and ask him or her’’.

Adhocracy is the second type supported by the qualitative data: ‘’ So we also contact

with our suppliers and new suppliers or other organizations. Now they know we are doing these kinds of projects and you never know where this can lead to’’. The above

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employees of different departments. This project group came up with the idea to do something with the material waste of our production process. They developed a bird house with these waste materials’’.

Additionally, market evidence can be identified by the qualitative interview to the marketing manager of company E and the main characteristic is the competitiveness: ‘’

We have the job to promote our product and show that it’s better than plastic, by focusing on the sustainability aspect’’. It indicates that marketing strategy of this firm

based on its sustainable products and promotes its sustainability image. Goal-setting orientation is an important aspect for company E. It helps them to make clear the objectives of the sustainable project and prioritize the tasks and the procedures: ‘’we

start with looking what the requirements are within the project. So, what is the goal and what do we need. Then the idea is further developed and implemented’’. Another

example of it is that being sustainable is closely connected with being profitable: ‘’another problem is that being sustainable have to lead to earning money. Otherwise

is the project not sustainable for the long term’’. Hierarchy culture could not be

identified in the semi-structured qualitative interview.

The company indicates awareness regarding the environmental issues. They provide training to employees and make them aware about green programs: ‘’We are doing this

by plenary sessions about sustainability, trainings, two times a year we have a session with the whole organization’’. Moreover, the firm cooperate with other organizations,

schools, universities and social groups to get more knowledge about sustainability. These initiatives can enhance employee’s awareness and build an environmental-friendly culture: ‘’Furthermore, within projects we also work with universities and

other organization. This is because we sometime lack knowledge or don’t have the resources or time to investigate things’’. The above quote confirms this statement. On

the other hand, the lack of resources such as time and money can be seen as a serious barrier for sustainability: ‘’ I think everyone wants to work on environmental projects,

but it must not be too expensive in terms of money and time. I think management, but also colleagues, think the same about this’’. The political landscape noticed as another

challenge by the marketing manager of company E, since the state has a wrong perception about the sustainability and consequently it is transmitted to people: ‘’ there

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believe in climate change. Even in our company. These barriers occur because of our political landscape and its influence’’.

Case F: The dominant type is market resulted by the qualitative data: ‘’environmental

sustainability is very important for my function. Every year we develop a year plan or multiple year plans for these subjects’’. It shows that company is setting goals every

year about its environmental performance presenting awareness about these issues. To continue, competitiveness is another characteristic that foster sustainability since nowadays customers are more demanding regarding the CSR: ‘’Furthermore, if we

attempt to get new customers, we use the key accounts and our certificates to show what we, as a company, are capable of ‘’. Company F measure its performance very often in

order to be capable to make improvements and notice common pitfalls. So, they also monitor environmental meetings: ‘’We also measure this behavior, for example

measuring how many times they discuss sustainability during the meeting, how many ideas are developed within his group, how many safety rounds and audits he did, how many incidents regarding sustainability there where, etc’’. The above quote presents a

performance-orientation regarding green culture.

The second type is clan culture reflected by qualitative interview: ‘’ We also have teams

which are participating in this project and they can communicate and collaborate’’.

The above quote indicates that collaboration between departments are necessary in order to achieve the environmental goals. Additionally, company F tries to motivate employees to participate on sustainability projects by providing freedom and let them take initiatives. This technique can also empower and support other employees in the organization to obtain a sustainability attitude: ‘’ I think it is very important to let

employees participate in project, which are motivated. This can affect others which were first not really interested in sustainability, but when they see other participating in interesting projects, they also become more motivated’’. Participative

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employees participate in environmental sustainability projects and provide them with opportunities to come up with new ideas. I think this will decreases their resistance to these projects. They can just go to their manager and tell them the idea, but they also can make use of the ‘idea box’ we have’’. Hierarchy and adhocracy cannot be observed

through the qualitative data.

Some other influencing factors can be observed that influence the implementation of environmental programs. Training and e-learning opportunities are two of them: ‘’Our

main activity is to provide training to employees. When employees start working here a training is provided when environmental sustainability is the subject’’. Another

action taken by the company regarding sustainability is the planning of frequent meetings in order to discuss their performance and identify new ideas: ‘’ We also have

certain sessions where the whole organization is participating in. Then we communicate about the current situation, so what are we doing, which project do we execute, which improvements are made and what is coming to us in the future’’.

However, there are some obstacles this company face regarding the implementation such as the lack of resources (time, knowledge and money): ‘’Another barrier is the

time and resources, specialized knowledge and thus employees, needed to develop and implement these projects properly.

4.2 Cross case analysis

Table 4.2.1: Cultural types matrix based on the findings

Case 1 Case 2 Case 3 Case 4 Case 5 Case 6

Clan

    

Adhocracy

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36 Market

     

Hierarchy

  

4.2.1 Comparison of cultural types among cases

Clan: The clan types observed in all cases apart from case B showing that it can play a crucial role on the implementation of environmental programs. Specifically, identified as a dominant type in cases A, D and E. The characteristic of this type which was noticed during the analysis most of the times is collaboration (Cases A,C,E,F): ‘’People

have the freedom to participate or not. Of course, are people collaborating within the project team which can give some value to the project. So engineering, process and production are often participating in this project. But sales and marketing are also participating’’ (Case E_interview b).

Family-orientation (Cases C,D,E) was another common influencing aspect for sustainability: ‘’It is a fact that old employees are responding faster and easier than the

new ones regarding sustainability. The old employees are connected emotionally to the firm’’ (Case C) indicating that employees who feel the company as their own business

can be creative and respond quickly on environmental changes. According to the qualitative data trust was another characteristic of clan culture observed in cases A and D. Management of these firms show trust to their employees regarding green projects and with this way they manage to keep their personnel motivated.

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37 Hence, companies which want to attract more customers and be competitive try to move towards sustainability.

Furthermore, cost-efficiency was another characteristic observed in cases A, C, F. For instance: ‘’ ’we can also transport less quantities which means less weight for a pallet,

less weight for a container and then less transportation cost both for us and our customers. By doing that we managed to decrease our co2 emissions for us and our customers’’ (Case A). The logic behind this is that companies firstly try to identify ways

to decrease their functional costs and at the same time they can decrease their emissions. In case A management managed to decrease co2 emissions by decreasing their logistic costs and company C start selling the scrap metal instead of wastes it since these scraps are costly for the company. These initiatives are known as Lean practices and focus clearly on efficiency and productivity.

The goal-setting orientation identified in cases E, F as a critical characteristic considering that they use several indicators and they monitor them frequently in order to improve their environmental performance or identify factors which hinder the implementation: ‘’ Normally then we start with looking what the requirements are

within the project. So what is the goal and what do we need. Then the idea is further developed and implemented’’ (Case E_ interview b). These indicators are also known

as KPIs.

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38 external factors to reduce their wastes: ‘’we are creating plastics packages thus we have

the responsibility to protect the environment from the waste plastics. Additionally, there is a trend for protecting the environment from plastics in general’’ (Case A).

Furthermore, they are pressured by external factors to reduce their wastes: ‘’we are

creating plastics packages thus we have the responsibility to protect the environment from the waste plastics. Additionally, there is a trend for protecting the environment from plastics in general’’ (Case A).

The only exception was company E which presented some adhocracy characteristics. For instance, the company showed future vision regarding the implementation of green programs by creating a group of employees responsible for moving their company forward as far as sustainability: ‘’ We have a group which is called the ‘new builders’,

which is thinking in advance about where the industry should go and we hope this will lead to faster innovations’’. But no evidence of adhocracy type was identified in all the

other companies during the adoption of environmental programs.

Hierarchy: This type observed as the main dimension in case B while cases C and D showed some hierarchy characteristics. No evidence observed in the other cases. Rules & formalization was identified as hierarchy common aspect on cases B, C, and D. For instance: ‘’Well, the ISO systems have standardized rules and steps. Employees cannot

deviate from these procedures and I think that there is limited space for initiatives and innovative ideas (Case 2).’’ This characteristic is playing a crucial role and affect the

implementation process especially when companies adopt the ISO 14001.

4.2.2 Other influencing factors

Table 4.2.2: Other influencing factors based on findings

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39 Employee’s Training      Meetings related to sustainability    Employee’s Feedback    Knowledge sharing about sustainability   

There are some other factors identified by the qualitative data that facilitate the implementation of environmental practices. These factors are closely related with employees and how firm manages them. Consequently, it will affect organization’s culture since employees are important stakeholders for a firm and the way organization treats them determines the company’s culture (Schein, 1990).

The training of employees regarding sustainability observed in all cases apart from case B showing that trained employees can execute effectively their tasks during the implementation: ‘’This shift brought some changes in our production, for instance we

trained our employees in the shop floor in order to be capable to operate these new machine (Case A)’’. Employee’s feedback can be recognized as another aspect that

affect sustainability. This factor was observed in cases B, C, and D. The shop floor employees are executing these programs hence they can observe possible problems and report them to their supervisors: ‘’For example, if I observe an issue about the water

consumption I need to figure out a way to decrease it, the first information that I will receive is coming from the employees (Case 2)’’.

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40 for the decision making can set some goals: ‘’We also have certain sessions in which

the whole organization is participating. Then we are communicating about the current situation, so what are we doing, which project do we execute, which improvements are made and what is coming to us in the future (Case 6)’’. Moreover, there is a tendency

to share information among employees of different departments in order to make the environmental objectives and consequences clear: ‘’ the philosophy of this firm is that

we should share every information with our employees even the minor ones in order to have our employees informed and to be conscious why they do this job in that way (Case C)’’ and also sharing knowledge with other organizations, universities and social

groups identified as facilitators for the implementation process: ‘’ Furthermore, within

projects we also work with universities and other organization. This is because we sometime lack knowledge or don’t have the resources or time to investigate things (Case E interview_ b)’’. It was observed in cases B, C and E.

On the other hand, national culture and the proper allocation of resources (time, money and knowledge) identified as aspects which hinder the implementation process and can also be related with organizational culture of a company. In cases A, B, C, D (Greek companies) was observed that the employees lack of sustainability attitude since Greek society in general lack of environmental consciousness and this makes the implementation of green programs even harder: ‘’Especially for our country where

environmental practices are not implemented in our culture. The company should monitor and control the employees frequently (Case B)’’. The lack of resources is

another factor which hinders sustainability. It was noticed in cases E and F: ‘’ This is

really a challenge to balance the time and thus money spend on that kind of projects and on your regular work (Case E_ interview b)’’. It shows that companies should

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5. Discussion

This thesis studied the role of the organizational culture on the implementation of environmental practices by using the CVF framework. It analyzed primary data related to environmental initiatives while OCAI test was used to demonstrate the cultural profile of four Greek companies. This research presents several ways in which organizational culture can influence the implementation of environmental programs and suggests some prepositions to clarify this impact.

Clan culture

Almost all the interviews confirmed that clan dimension influence the adoption of sustainable practices. Clan groups emphasizing characteristics such as collaboration, family-orientation and trust (Cameron & Quinn, 2011). It was observed that collaboration among different departments and collaboration between employees of the same department can lead to a greater environmental outcome. Additionally, the results showed that by creating inter-disciplinarian teams, people could learn from each other and help each other when a problem emerged. It is supported by literature defining that organizations can achieve greater environmental development when collaborating with multiple groups of stakeholders (Fernadez et., el 2003).

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42 Proposition 1a: Collaboration among employees is necessary during the implementation of environmental practices since cross-disciplinary teams of employees can cope with problems effectively and support each other when problems emerge. Proposition 1b: Employees emotionally connected with the organization respond faster to the environmental challenges.

Market culture

The findings presented that market dimension emerged in all six cases. The market characteristics emphasize on competitiveness, cost-efficiency, and goal-setting orientation (Cameron & Quinn, 2011). It was identified that the main motive for being sustainable is competitiveness. The customers press enterprises to supply them with sustainable products and companies which focus on attracting more customers and get a higher share in the market are obligated to follow an environmental-friendly strategy. Additionally, (Bernal-Conesa, de Nieves Nieto, & Briones-Peñalver, 2017) supported that CSR can positively be influenced by the competitiveness and the financial performance of technology companies, confirming the findings of this research. We can see that competitiveness based on instrumental logic in which financial benefits are prioritized when making sustainable decisions (Montabon, Pagell, & Wu, 2016). Another interesting observation for market groups was that cost-efficiency characteristic facilitates the implementation of green programs. For instance, a company try to identify ways to increase their truck loads in order decrease the routes and then decrease their transportation cost. But, it has also an indirect environmental impact because co2 emissions can be dropped significantly along with the reduction of transportation cost. Previous studies on green-lean manufacturing have also mentioned that targeting on zero waste and producing the quantities you need can bring long-term benefits in an organization (Johnsen, Miemczyk, & Howard, 2014; Shah & Ward, 2007). Market groups are also based on instrumental logic in which the financial dimension favoring of social and environmental (Montabon et al., 2016) but still has an indirect impact on environment.

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43 indicators which are also known as KPIs, are used in order to identify room for improvements on environmental firm’s performance and discover factors that hinder the implementation process. The current literature confirms this view by using the concept of sustainability performance management as a tool to support companies to become sustainable (Schaltegger & Wagner, 2006). Hence, we are leading to:

Proposition 2a: Competitive organizations support environmental strategies since they are more responsive to market changes on sustainability.

Proposition 2b: Companies focusing on cost-efficiency indirectly influence their environmental impact by using lean practices.

Proposition 2c: Goal-oriented companies facilitate the implementation of environmental practices by using indicators which measure their performance and identify obscured problems.

Hierarchy culture

The results indicated that hierarchy characteristics were difficult to be diagnosed. In congruence with that Lee & Kim (2017) suggested that that hierarchy culture focuses on short-term outcomes, which may prevent the adoption of environmentally responsible practices. However, there were some relevant conclusions. The rules & formalization observed as a necessary aspect when implementing the ISO 14001 since these standardized steps make clear the goals and objectives of the ISO to employees. Moreover, (Boys, Karapetrovic, & Wilcock, 2004) argued that the successful implementation of standard requirements cannot be achieved without understanding sector’s rules while (Balzarova, Castka, Bamber, & Sharp, 2006) argued that a company should define a formal structure and policy in order to channel ISO’s goals and transmit them to employees.

Adhocracy culture

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44 be good at creating new approaches to solving social and environmental problems. Linnenluecke & Griffiths (2010) explain how organizations characterized by an adhocracy culture have a high external focus, which recognizes the need to let the external environment influence internal behavior. Nevertheless, in this research it was also difficult to diagnose adhocracy characteristics mainly because the specific companies that were collected have not developed yet ‘’truly’’ sustainable techniques. However, there were some relevant conclusions. For example, a company has created a team of employees in which people make plans about the future of the company regarding sustainability and they are trying to find out ways to move their company forward. This example is related with the future vision characteristic of adhocracy groups (Cameron & Quinn, 2011).

Training of employees

The findings showed that employees training on eco-friendly projects was observed as another influencing factor. Training can offer specialized knowledge to employees on these issues and allows them to execute their tasks more efficiently. It was also identified as a method to empower other employees or generally stakeholders and motivate them towards sustainability. E-learning identified as another way of training which can take place either at the work or at home. These e-learning sessions can explain the objectives of sustainability in the company and make clear the roles of the employees. Literature is confirming training as a mean to be sustainable. Increasing awareness and knowledge of processes should be accompanied with an improvement on employee’s abilities during the implementation of preventative environmental management approaches (Fernadez et., el 2003). In addition, (Banerjee, 1998) highlighted that the most environmentally developed companies provide training to all company’s employees.

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45 Employee’s Feedback

Environmental practices are executed mainly by the shop floor employees. Consequently, employee’s feedback is a significant aspect in order to identify quickly possible failures. The managers need to be informed about the problems occurring on the production line and the employees are able to recognize the prevailing situation on the production line. (Kitazawa & Sarkis, 2000) argue that organizations have to develop inter-functional communication channels when operating preventative environmental programs. Additionally, Fernadez et., el, (2003) mentioned that a qualitative research should be carried out in order to investigate further the feedback mechanisms on environmental practices.

Proposition 4: Employees’ feedback facilitates the adoption of green practices since potential failures can be prevented.

Meetings regarding sustainability issues

The findings showed that companies frequently plan meetings to discuss about their environmental performance. All the employees are involved in the implementation of these practices participate on these meetings. The future development is always a topic for discussion and the employees are free to express their opinion. To continue, (Cascio, J.; Woodside, G.; Mitchell, 1996) comes in congruence with the above view saying that future plans, policies and most importantly how these can influence employees and the company, can be achieved through a suggestion system and the arrangement of periodical open meetings.

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46 Knowledge/Information sharing

Another interesting finding is that organizations have developed information systems in order to transfer the knowledge among different departments or even different production locations. Furthermore, they also collaborate and share knowledge with other organizations, universities, and social groups because sometimes they lack knowledge or they do not have the required resources. Current literature suggests that the advanced environmental companies facilitate a two-way process communication and transfer of information as an alternative to downstream communication. On the other hand, many organizations avoid sharing information with their personnel even though employees nowadays are more educated compared to the previous years (Fernadez et., el, 2003).

Proposition 6: Sharing information is a useful method to support sustainability when a company lack the resources and/or the knowledge.

How organizational culture can influence the implementation of environmental practices? Master Thesis