Organizational Inertia in Sustainability: The Influence of Uncertainty on the Effectiveness of Sustainability Initiatives

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Organizational Inertia in Sustainability: The Influence of

Uncertainty on the Effectiveness of Sustainability Initiatives

Master Thesis, MSc Supply Chain Management University of Groningen, Faculty of Economics and Business

June 22, 2018

Moniek Tienken

Student number: S2732289 E-mail: m.tienken@student.rug.nl Supervisor: dr. K. Peters Co-assessor: dr. X. Tong ACKNOWLEDGEMENTS

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ABSTRACT

In the light of present sustainability challenges, multinational corporations (MNCs) are increasingly addressing these challenges by setting up corporate sustainability programs. However, according to recent research these efforts are not enough to meet global warming targets. It seems that firms are still struggling to move towards true sustainability. Previous research has pointed to the role of employees in successfully implementing sustainability initiatives. Little research, however, has addressed the role of bottom-up sustainability initiatives in corporate sustainability. By means of an in-depth single case study of a bottom-up sustainability initiative at an MNC that is considered as a leader in sustainability, this paper addresses the question of what factors influence the effectiveness of bottom-up sustainability initiatives. The findings reveal several dynamics at management, employee and initiative level that encourage exploitative but inhibit explorative modes of learning accumulating in so-called ‘inertia’, i.e. a lock-in of organizations into business as usual when it comes to sustainability. These insights provide clear contributions for both theory and practice.

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INTRODUCTION

As our society is approaching planetary boundaries and climate change is a widely accepted fact (Steffen et al., 2015), most multinational corporations (MNCs) have recognized environmental sustainability as a key topic that cannot be ignored any longer. Many corporations have promised commitment to sustainability, e.g. through the UN Global Compact (Lacy, Cooper, Hayward, & Neuberger, 2010; United Nations Global Compact, 2017), and oftentimes publish sustainability reports. Nevertheless, looking at ecological analyses, both practical and scientific efforts so far seem not to be enough to meet global warming targets and depict an alarming state of affairs (Raftery, Zimmer, Frierson, Startz, & Liu, 2017; Whiteman, Walker, & Perego, 2013). In addition, many of the corporate sustainability reports tend to stay vague in how sustainability goals will be achieved on an organization-wide basis. Overall, it seems that sustainability is difficult to fully embed across the entire organization (Fortis, Maon, Frooman, & Reiner, 2016). Because this is critical in becoming a truly sustainable organization, i.e. an organization that eliminates unsustainable practices instead of just being less unsustainable (Shevchenko, Lévesque, & Pagell, 2016), this paper will shed light on what factors determine the effectiveness of sustainability initiatives and why advances in corporate sustainability are still moving quite slowly. Research has identified employees as being key determinants in successfully implementing sustainability in organizations and has established several guidelines on how to improve involvement of employees in sustainability initiatives (Haugh & Talwar, 2010; Lamm, Tosti-Kharas, & King, 2015; Montabon, Morrow, & Cantor, 2016; Ramus, Catherine A. Steger, 2000). Several factors have been identified as antecedents for so-called environmental citizenship behavior or “green” behavior such as organizational and management support, rewards and employees’ personal views (Lamm et al., 2015; Montabon, Morrow, et al., 2016; Norton, Parker, Zacher, & Ashkanasy, 2015). Consequently, quite some attention has been paid to the role of employee behavior towards sustainability as important driver for embedding sustainability in organizations.

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practices. This, however, appears to be short-sighted as research generally agrees upon the fact that corporate sustainability is a complex concept that “produces a decision-making context with highly ambigous signals” (Hahn, Preuss, Pinkse, & Figge, 2014: 465). This ambiguity at the same time creates uncertainty regarding the response of firms, a factor that is rarely considered in existing literature, but has been found to influence decision-making processes about sustainability actions both on an organizational as well as a supply chain level (Hahn et al., 2014; Wu & Pagell, 2011).

Considering other recent findings in the related field of green product innovation (GPI), “green uncertainty” has been identified as key factor when it comes to how firms engage in development of new “green” products (Peters & Buijs, 2018). Given that GPI is one of the ways how corporate sustainability is integrated in the company, it appears to be likely that uncertainty also plays a significant role for the implementation and adoption of local bottom-up sustainability programs. Therefore, this paper addresses the question whether uncertainty about sustainability might be a factor that inhibits the knowledge transfer and empowerment that bottom-up sustainability initiatives strive towards.

By addressing this gap, this paper makes several contributions. First, it inductively develops an understanding of the factors that might inhibit the effectiveness of bottom-up sustainability programs and especially on what the role of uncertainty is in that. Second, it explores by means of a single case study how uncertainty influences personal perceptions about sustainability and responses to sustainability programs of employees and managers. The case study was conducted at a site of a large MNC in the industry of domestic appliances which is widely recognized as a leader in sustainability. An internal bottom-up sustainability initiative was the focus of this empirical research. Finally, the paper provides insights on how different modes of organizational learning can explain the phenomenon of organizational inertia around bottom-up sustainability initiatives. These contributions offer highly relevant implications for both theory and practice.

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THEORETICAL BACKGROUND

This chapter outlines the existing concepts that are used as theoretical lenses for this study. Next to that, it identifies and explains the theoretical gaps on which the research is built.

Corporate Sustainability

It is a generally agreed upon fact that sustainability is a broad and changing concept that lacks a uniform definition. Most existing definitions are based on the principles of the Brundtland Commission that defined sustainable development as meeting “the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987: 16). This definition, however, remains vague and does not include an indication of the role of planetary boundaries in pursuing sustainability as defined in the natural sciences (Griggs et al., 2013; Steffen et al., 2015). For this reason, Griggs et al. (2013) proposed an adaptation to the Brundtland definition by defining sustainable development as “development that meets the needs of the present while safeguarding Earth’s life-support system, on which the welfare of current and future generations depend” (p. 306). What the Earth’s life-support system constitutes and how it can be safeguarded is described in the Planetary Boundaries framework, which seeks to “define a safe operating space for human societies to develop and thrive, based on our evolving understanding of the functioning and resilience of the Earth system” (Steffen et al., 2015: 737). This framework has recently received increasing attention also in the business literature.

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aspect of the TBL (Montabon, Pagell, & Wu, 2016). Montabon et al. (2016) call this logic “instrumental logic” as it places economic interests above environmental and social interests which will not lead to true sustainability. As an alternative they propose an “Ecologically Dominant Logic” which adopts a nested approach on the TBL in which environmental should be satisfied before the social, and social before the economic component (Griggs et al., 2013; Montabon, Pagell, et al., 2016) (see Figure 1).

Figure 1. Ecologically dominant logic (from Montabon, Pagell, et al., 2016)

Following this discussion, when referring to sustainability, environmental sustainability and the trade-off view between the three dimensions of the TBL ((Hahn et al., 2010) will be applied as main focus in this study.

Implementation and Adoption of Sustainability

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feel more psychologically empowered and eventually engage more in (voluntary) environmental citizenship behaviors (Lamm et al., 2015). Additionally, rewards, formalization (e.g. setting explicit environmental goals the company strives towards) and direct supervisory support are beneficial for such employee behavior (Cantor, Morrow, & Blackhurst, 2015; Montabon, Morrow, et al., 2016). Nevertheless, personal views employees hold about sustainability were found to still strongly influence the degree to which they engage in sustainability behaviors in their job (Montabon, Morrow, et al., 2016).

Other work points to the importance of communication when it comes to sustainability integration in the organization (Brunton, Eweje, & Taskin, 2017; Burström von Malmborg, 2002; Ramus, 2001). Effective communication has been found to be a critical root of awareness towards sustainability on the employee side (Brunton et al., 2017). However, simple one-way communication about sustainability initiatives seems not to be sufficient. Instead, organizations would need to embed awareness about sustainability into their organizational culture in order to increase awareness and empower employees (Brunton et al., 2017).

These results give the impression that the most important issue for firms lies in finding ways to convince their employees to adopt sustainability initiatives by for instance providing support and rewards for employees that engage in sustainability. This view seems to hold behavior of managers and employees responsible for less effective sustainability initiatives, but does not look at the characteristics of these initiatives and the internal dynamics themselves. For instance, no study could be found that looks at the difference between bottom-up and top-down sustainability initiatives, although these initiatives are increasingly found in organizational contexts. Even though sustainability has been recognized as a complex, evolving construct that lacks a clear definition (Hahn et al., 2014; Montabon, Pagell, et al., 2016), most studies still treat it as a well-defined concept that can be implemented by following the right communication strategies and best practices.

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2 degrees Celsius warming will be reached by 2100 (Raftery et al., 2017). This leads to the question of why progress in corporate sustainability is still slow.

Uncertainty and Corporate Sustainability

One factor that might partly explain this, but has often been overlooked in earlier studies, is uncertainty. Notwithstanding limited research in general, a small group of scholars has investigated uncertainty in relation to sustainability and point to the relevance of this aspect for further research (Hahn et al., 2014; Peters & Buijs, 2018; Wu & Pagell, 2011). It has been found for instance that decision-making in sustainable supply chain management is significantly influenced by uncertainty and a lack of sufficient information around, for example, environmental outcomes and future regulations (Wu & Pagell, 2011). Due to this uncertainty managers tend to make decisions based on short-term (economic) rather than on long-term considerations, even though sustainability is a long-term goal (Wu & Pagell, 2011).

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paradoxical frame which accepts tensions between the three dimensions and seeks to accommodate the conflicting and concerns of these (Hahn et al., 2014). Although these cognitive frames lead to different kinds of decisions by managers regarding sustainability, they explain why managers do not push for radical solutions when faced with uncertainty. Managers with a business case frame avoid radical solutions because they do not align with economic performance and managers with a paradoxical frame do not reach radical progress as they are held back by a prudent, careful stance (Hahn et al., 2014).

Finally, another study recognizes the influence of uncertainty on organizational inaction towards climate change by means of a multi-level framework (Slawinski, Pinkse, Busch, & Banerjee, 2017). It revealed that uncertainty avoidance and short-termism - concepts from psychology, sociology and organization theory - can explain organizational inaction on three levels: individual, organizational and institutional, resulting in a vicious circle. The interactions between these levels reinforce each other and create a sort of lock-in explaining little action or only incremental solutions for mitigation climate change (Slawinski et al., 2017).

These insights indicate that uncertainty plays an important role within corporate sustainability and therefore it is likely that it also influences how firms deal with bottom-up sustainability initiatives on a site-level within organizations. A level that will be addressed in this research and is missing in previous studies is the employee level.

Organizational Learning and Organizational Inertia

Further, when looking at why there appears to be slow progress in corporate sustainability, organizational learning theory could provide a useful theoretical lens. Some scholars have identified the importance of organizational learning concepts in understanding corporate sustainability (e.g. Fortis et al., 2016; Maletič, Maletič, Dahlgaard, Dahlgaard-Park, & Gomišček, 2014; Siebenhüner & Arnold, 2007; Smith, 2012). Integration of sustainability into processes within organizations requires challenging existing operations and the generation of new knowledge (Siebenhüner & Arnold, 2007).

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generally related to refinement, efficiency, implementation and execution and focus on the use of existing resources (March, 1991). Looking at sustainability specifically this refers to incremental improvements such as reduction of energy and water usage (Maletič et al., 2014). Exploration activities, by contrast, are supposed to challenge the frameworks on which exploitation is built and include experimentation, risk taking and discovery (Levinthal & March, 1993; March, 1991). These are usually focused on finding long-term solutions for organizational problems by generating new knowledge (Benner & Tushman, 2003; March, 1991). In a sustainability context, this implies fostering creativity to overcome existing mental models and develop more radical improvements that may lead to true sustainability (Lozano, 2014).

Ideally, firms should engage in both types of activities in order to satisfy both short-term and long-term goals (Levinthal & March, 1993; March, 1991). Although both modes of learning are necessary for firm’s survival, these activities are contradictory and often compete for the same resources (March, 1991). A phenomenon that may distort the simultaneous use of both types of learning is organizational inertia (Benner & Tushman, 2003). It can be divided into two categories: resource rigidity, i.e. the inability of a firm to change resource investment patterns and routine rigidity, implying a failure of an organization to change processes that use these resources (Gilbert, 2005). Accordingly, firms tend to focus mainly on short-term goals and thus on exploitation activities resulting in business as usual (Levinthal & March, 1993). Discounting exploration efforts can, however, have severe consequences, especially on firms operating in rapidly changing and uncertain contexts. It has been found that the more complex and threatening a firm’s environment is, the more it should engage in exploration activities (Van Grinsven & Visser, 2011).

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The previously discussed theories form the theoretical basis for the single case study that was conducted. Following the theoretical discussion, the purpose of this paper will be to explore the following research question: What factors influence the effectiveness of bottom-up sustainability initiatives? Related to this, two sub-research questions were formulated:

a. How does uncertainty influence the effectiveness of bottom-up sustainability initiatives?

b. How do different modes of organizational learning influence the effectiveness of bottom-upon sustainability initiatives?

METHODOLOGY

Research Design

The purpose of this study is to understand how MNCs implement local sustainability initiatives and what factors influence the effectiveness of these. To investigate this, a qualitative study was conducted in the form of a single case study (Yin, 1989). An exploratory approach is needed as local bottom-up sustainability implementations are a rather unexplored phenomenon (Voss, Johnson, & Godsell, 2016). The case company that was selected for this purpose is a site of a large Dutch multinational which is considered a leader in sustainability and produces different domestic appliances.

Case Context

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The green site initiative was set up in 2011 and started as a bottom-up initiative by several enthusiastic employees with the goal to create a more sustainable work environment for all employees at the site that would be recognized by employees, management and society. The initial goal was to create awareness about sustainability, inspire and empower employees to put green actions in place with support from the management. Another, more long-term, goal was to initiate behavioral change among employees, i.e. to make sure people would embed sustainability in their daily actions on the work floor.

To reach this goal, several sustainability programs and projects were set up such as a health and sustainability week and a green award election (description see Table 1). Additional projects included the promotion of electric driving by building electricity poles, building gardens to protect biodiversity and social actions such as supporting the food bank. The team that coordinates the green site initiative consists of eight people from different backgrounds and departments, who work on average four hours per week for the team. The initial idea was to establish a self-maintaining initiative that would guide itself through around 70 “ambassadors” who were willing to implement different programs and support employee actions. The results of the different projects that were implemented under the umbrella of the initiative display successes but also less successful outcomes.

Health and sustainability week

The health and sustainability week is a yearly event that among other initiatives consists of a market session, at which different booths sell or present sustainable products. Employees can for instance buy honey made at the site or try out electric cars or bikes. Next to that different workshops are held related to health and sustainability topics. The purpose is to increase awareness about sustainability and inspire people to for instance buy an electric car or bike or to install solar panels at their homes.

Green award The green award is conferred on employees who started a sustainable initiative inside or outside their work. Every employee at the site can nominate a co-worker for this award. After that, all employees are invited to vote for one of the nominees online or offline. During an event the award is handed to the winner. An example of a winner is a production worker, who in her free time creates bags and other accessories from old clothes. The purpose of the project is to reward good initiatives and to create visibility.

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Following this description, it becomes clear that the case at hand presents a unique opportunity to study the research question as it provides the possibility to collect rich data from various informants which should help to understand the factors that play a role in the effectiveness of sustainability initiatives. The unit of analysis in this case study is the whole bottom-up sustainability initiative. Despite clear benefits, as with other single case studies, this study also results in limitations when it comes to generalizability of the findings. These will be further addressed towards the end of this paper.

Data Collection

Empirical data collection occurred primarily through a set of semi-structured interviews with different key informants at the site. Additional data were an internal newspaper article of the site about a sustainability project, internal information documents about the sustainability programs that were rolled out as well as annual reports of Domestic Appliances to ensure triangulation and construct validity (Yin, 1989). Next to that, site visits were executed by the researcher, including a tour of one of the production lines, attendance of a brainstorm meeting regarding the content of the next health and sustainability week and several informal conversations with employees. All empirical data was collected in April 2018.

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Job/department Years working for Domestic Appliances

Involvement/participation in green site initiative

Job related to sustainability

1 Translator/packaging department 33 years Active (garden team) partly

2 Technical designer/packaging development

18 years Active in beginning, less

now

partly

3 Function development 10 years Active (electric driving) no

4 Production system architect 23 years Active (solar energy) partly

5* Chemical engineer/ Tech department

25 years No partly

6 Project leader sustainability (site) 36 years Yes yes

7 Team leader/ Engineering department

26 years No (only health part) no

8 Employee/ New product

introduction

18 years Sometimes no

9 Communication manager 12 years Sometimes partly

10 Assistant production manager/ shaver production

5,5 years Sometimes partly

11 Process engineer Metal forming/ New product introduction

8 years Sometimes partly

12 Project leader material selection 11 years Yes yes

*no recordings (request of the interviewee), only notes taken

Table 2. Overview of interviewees

The interviews were all conducted in Dutch to facilitate the process for respondents. Quotes in the findings section are translated into English. The sample selection was purposeful as the respondents were selected based on their relation to the green site initiative. Some were not involved in activities at all, several respondents continuously actively participated and even initiated activities and the majority partly participated or participated in the beginning but not anymore. Additionally, it was made sure that employees from a wide spread of departments at the site were represented. Invitations to the interviews were sent out by members of the green site initiative team via email.

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perspective on sustainability concluded the interview. The protocol was adapted partly to the expertise of the individual interviewees but kept its basic structure (Gioia, Corley, & Hamilton, 2012). All interviews were recorded and transcribed verbatim, except interview 5, in which the respondent refused permission for a recording. For this interview, only notes could be taken.

Type of validity or reliability Procedures

Construct validity  Use of multiple sources of evidence (13

interviews and additional documents)  Use of academic papers

 Presentation to key informants for review

Internal validity  Consistent data analysis (pattern matching)

External validity  Theoretical ground for research

Reliability  Use of interview protocol

 Audio recording and verbatim transcription of interviews

Table 3. Validity and reliability of research

Data Analysis

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explained by linking them to existing concepts from literature and enhancing these (e.g. short-termism) or by developing completely new concepts and categories (Gioia et al., 2012). The resulting data structure is presented in Figure 2. In this data structure not all first-order categories are included as many of them overlapped or could be summarized. Instead, it entails the most frequent and thus most relevant codes. A coding tree including example quotes is presented in Appendix C, which should further clarify the data analysis process of this research. As a final step, the findings were complemented in a theoretical model showing all relationships and dynamics between the discovered dimensions (Gioia et al., 2012) displayed in Figure 3.

FINDINGS

From the data-analysis five overarching dimensions were identified, which explain the dynamics that influence the effectiveness of a local, bottom-up sustainability initiative: limited effectiveness of bottom-up sustainability initiative, short-termism of management, prioritization of sustainability, uncertainty/complexity of sustainability and concreteness/tangibility as sustainability motivators (see Figure 2). These dimensions can be organized along three levels: the initiative level, which focuses on the characteristics of the sustainability projects implemented or promoted under the umbrella of a bottom-up sustainability initiative. Second, management level including the site management as well as the top-management and third the employee level, on which the behavior of employees and the way they are motivated play a role.

Initiative Level Factors

Limited effectiveness of local sustainability initiative

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 confrontation with sustainability raises awareness  continuous awareness creation necessary

 company: profit is priority

 economic system: short term goals vs. sustainability: long-term goals

 short pay-back periods inhibit sustainability  strong influence of shareholders

 sustainability not priority

Awareness creation through activities

Emphasis on short-term profit  impact does not go much further than awareness

 slow, step-wise change

 LCA: site-activities already quite efficient  limited impact on employees

 difficult to measure impact

Small and slow impact creation

 lack of decision-making power of bottom-up initiative  money is missing for initiatives

Limited opportunity for action

Limited effectiveness of bottom-up sustainability

initiative

First-order categories Second-order themes _{Overarching dimensions}

 contracts on higher level inhibit sustainability  support from direct supervisors missing  limited support from management

Limited support from middle and

top-management  sustainable actions to save money

 sustainability for reputation purposes

Utilization of sustainability for profit-maximization

Short-termism of management

 different sustainability initiatives not connected  limited collaboration between parties

 inconsistent execution of sustainability (e.g. waste recycling)

Missing consistency in sustainability actions  people have no time for activities

 topics should be related to own discipline  limited formalization of sustainability

Sustainability external to regular work

Prioritization of sustainability

 communication not through enough  initiative appears as volunteering  unclear what initiative stands for

Uncertainty about purpose  successes not communicated enough

 consequences of climate change not visible  lack of visibility of impact

Limited visibility  sustainability topic too far away

 new business models needed for real change  broad definition of sustainability

Broad view on sustainability

Uncertainty/complexity of sustainability

 focus on energy and waste recycling  one-issue focus

 difficult to keep people involved  abstract goals demotivate employees

 vague sustainability goals should be concretized  sustainable behaviour out of conviction

Concreteness/tangibility as sustainability

motivators Motivation of employees

through tangibility Narrow focus of activities

Personal motivation to work with sustainability

In it ia ti v e l e v e l M a n a g e m e n t le ve l E m p lo y e e l e ve l

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However, reflecting upon the formulated purpose of the green site initiative, namely to also empower employees to start own sustainability initiatives and to foster behavioral change, the impact was described by most respondents as limited, small and slow.

I don’t know if the big events have a lasting impression on the people, who go there. Of course, there are people, who are triggered also by electric cars and then think, okay this is indeed at this point so good, that I want one as well […]. Look, it is not that you suddenly change everything for everyone. Yes, there is an impact, but how big is difficult to estimate. I think it is mainly on the initiatives that grow from the green site a bit and the longer trajectories, that are triggered by the presence of the green site. (Employee function development [3])

Next to the fact that impact was described as small and slow, most interviewees also mentioned a limited opportunity for action of the initiative. Due to missing resources and decision-making power, it would be hard to create an effective initiative:

I think that everyone here knows what they [the green site initiative] do. So that’s okay. I think the green site has to work with what they have. They only have very limited resources. That’s a pity in my opinion, because it could be done much better. (Employee New Product Introduction [8]).

Management Level Factors

Short-termism of management

Turning to management-related factors a lack of organizational support for activities of the green site initiative was mentioned by most interviewees. One example that was repeatedly called by both members of the team and employees is that solar panels would not be placed on roofs of the buildings at the site because corporate instructions about payback periods would inhibit this development. It appeared that regular payback periods were one and a half years and for sustainability investments extended to five years. Solar panels, however, would require longer payback periods according to different interviewees. Therefore, they were not yet installed on roofs although this was one of the goals of the green site initiative. Also, the focus on satisfying shareholders was mentioned as inhibiting factor because they would for a large part determine the strategy of the organization.

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This shows, that management seems to perceive sustainability rather as a mean to an end, namely to earn money with it rather than a mean on itself.

Accordingly, a pattern can be retrieved from the data implying that on the one hand sustainability activities such as energy savings and waste reduction and recycling are supported by management because they serve economic ends. On the other hand, however, riskier and more long-term investments such as solar panels or including sustainability as a purchasing criterium, tend to be avoided by management. There appears to be a clash between sustainability which is a long-term goal and actual actions by management that serve mainly short-term ends because the long-term seems uncertain and unpredictable. This pattern can be described as short-termism on the part of the organization, a term identified by previous studies (Slawinski et al., 2017).

Prioritization of sustainability

Next to that, the data revealed a limited prioritization of sustainability in general. Most activities of the green site initiative aim at employees and their actions outside of work at Domestic Appliances. The health and sustainability week, for instance, focuses mainly on actions employees can do at home to become more sustainable such as installing solar panels, riding a bike to work or buying an electric car. The logic behind this is, according to the team, that through green behavior at home, employees would continue this also at their workplace. However, from the interviews it becomes clear that this is not necessarily the case. One issue that was identified as inhibiting such behavioral change is a lack of formalization of sustainability. This means that employees tend to have little time to attend or contribute to sustainability initiatives because they would have to do this outside their regular hours:

[…] it [sustainability] is not a formal part of people’s work, it is not always possible. There is no formal intermediate. We all need to register our hours. There is no box saying ‘sustainability’ […]. Well, what will you be judged on? That’s not sustainability, that are other things. (Employee Function development [3])

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introduced in one part of the site – the site consisted of two locations - and not executed consistently:

What I once heard is that the waste separators are picked up by the cleaners and then all thrown into one bag. That is of course very stupid, the company needs to do it right. […] In that sense, it is practice what you preach. […] That works demotivating, I think. […] It affects the whole image, your whole sustainability image. (Communication manager [9])

Employee Level Factors

Uncertainty and complexity of sustainability

This dimension describes the uncertainty that employees perceive when asking about the purpose of the green site initiative as well as the uncertainty around the topic of sustainability itself which are both closely related. According to many respondents the purpose of the initiative is not clear, and the success or impact is not directly visible. During the interview with the team behind the initiative itself it also became clear that the purpose changed over time and is rather vague:

Last year we thought about what is now really our goal? And we said we want to help sustainable employees to execute sustainable actions. […] But still there is the motivating thought and setting an example that it can be fun and easy. But we want to focus on already motivated colleagues. (Team green site initiative)

When asking respondents about the definition for sustainability, most people gave a broad definition similar to the one by the Brundtland Commission (WCED, 1987). One example definition was for instance:

Sustainable is making sure we can continue living healthy and that we can pass on this earth to the next generation without ruining it. (Translator it Packaging department [1]).

Additionally, quite some interviewees mentioned the need for more radical solutions such as new business models to reach true sustainability, but cannot be initiated by the green site initiative. A reason given by several employees for why change is going so slow in terms of sustainability was that the concept would stand “too far away” and that consequences of climate change are not yet visible. From this it can be concluded that the uncertainty surrounding the concept of sustainability is seen by the employees but it at the same time also leads to unclarity about the purpose of the green site initiative.

Concreteness and tangibility as sustainability motivators

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that over time the motivation of employees decreased because no or only limited visible results were achieved by the green site initiative:

What also plays a big role here is, that people want to make it concrete. From the sustainability team you get then for example that we want to emit zero kilos CO2 until 2020. But people say then: how? […] And then you often get the reaction of this is never going to work, because it is not possible in two years’ time. (Production system architect [4])

The green site initiative seems to play towards this idea of concreteness as activities are mainly focused on concrete areas of action such as waste recycling and energy saving. Further, data reveals that this motivates some employees, for instance, an interviewee that is working on a concrete project that was focused on energy-reduction in the factory:

And yes, what can happen with such a sustainability team is that people will see through it. Try to see, with those actions we don’t achieve anything yet. […] That they think distributing apples at the gate, what do you achieve with that? (Process engineer Metal forming [11])

On the other hand, however, other employees perceive exactly these concrete actions such as energy saving as too simple. According to the project leader material selection (Interview 12), who works on building products from recycled material, CO2-reduction and energy

reduction are already quite optimized according to lifecycle analyses and there are only small improvements still possible there. He argues that to reach true sustainability the green site initiative should not focus on small, concrete actions only.

This implies that for some employees, concrete, despite small actions are motivating while for other employees, who see the bigger picture, this breaking down of sustainability into small pieces works rather demotivating.

A Model Explaining Organizational Inertia in Sustainability

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Short-termism of management Limited prioritization of sustainability Concreteness as sustainability motivators leads to Uncertainty of sustainability Paradox sustains

Management level Initiative level

Employee level Exploitation drives Exploration Inertia (i.e. limited effectiveness of sustainability initiative) reduces impedes inhibits encourages reinforces

Figure 3. A model explaining the dynamics of bottom-up sustainability initiatives

Different factors contribute to this. First, management appears to have a substantial influence on the realization of projects coming from a bottom-up sustainability initiative. A short-term orientation on a management level inhibits the prioritization of sustainability putting this topic at the very bottom of managers’ agendas. The reason for this is that many of the solutions in sustainability require investments that do not directly generate a profit.

And again, sustainability is just very difficult, because it is at the very bottom of the functional spectrum. On quality, on costs, on market impact, it is at the bottom. (Project leader material selection [12])

It was found that this missing prioritization of sustainability within management also results in limited effectiveness of bottom-up sustainability initiatives, because many ideas cannot be realized without management support. Eventually, limited effectiveness of sustainability initiatives reinforces short-termism of management because the initiative cannot produce sufficient results and therefore does not question the short-termism and uncertainty avoidance of the organization. This creates a vicious cycle and does not lead to real progress in terms of sustainability. Two formal propositions can be formulated from this:

Proposition 1. The higher the short-termism of management is, the lower the prioritization of sustainability is in corporate agendas.

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At an employee level, it appears that there exists a paradox between the uncertainty of sustainability and the concreteness and tangibility as sustainability motivators. On the one hand, most respondents understand that sustainability has a broad definition, goes beyond pure energy saving and waste reduction and has a long-term orientation. They also recognize that this uncertainty creates room for development of a bottom-up initiative like the green site initiative. On the other hand, however, exactly this uncertainty and unclarity demotivates employees to get involved as they do not see results rights away. Most employees seem to prefer concrete actions and visible results of initiatives to stay motivated. This, however, clashes with the long-term goals of sustainability which cannot be achieved within the short-term.

Further, this paradox inhibits strong commitment of most employees towards to the actions of a bottom-up sustainability initiative. On one side, employees think that actions of the sustainability initiatives do not achieve enough and are not sufficient to achieve true sustainability as they address mostly small areas only. Nevertheless, employees also prefer the concrete actions that present direct results such as saving energy and waste recycling. As a result, many employees think their impact is too small and therefore they tend to not start own initiatives, i.e. empowerment of employees stays limited or does not happen at all. On the initiative level, the dynamics on the management and the employee level influence the way bottom-up sustainability initiatives operate. The short-termism and limited prioritization of sustainability of management limits the possibilities of actions of the initiative because employees engaged in such an initiative often lack decision-making authority and would require support from management:

Things like material usage, electricity usage […]. You can maybe try to stimulate, that people think about it, but the green site does not do the actual realization. […] People don't sit in positions, in which you have much influence. They are not in the position to influence the design of a product or to buy another machine. (Production system architect [4])

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section also further encourages this exploitative focus of activities and inhibits exploration. From this, additional propositions can be formulated:

Proposition 3a. Limited prioritization of sustainability at management level drives exploitative modes of learning within a bottom-up sustainability initiative.

Proposition 3b. Limited prioritization of sustainability at management level impedes exploratory modes of learning within a bottom-up sustainability initiative

Proposition 4a. The paradox between uncertainty and complexity of sustainability and concreteness and tangibility as sustainability motivators encourages exploitative modes of learning within a bottom-up sustainability initiative.

Proposition 4a. The paradox between uncertainty and complexity of sustainability and concreteness and tangibility as sustainability motivators inhibits explorative modes of learning within a bottom-up sustainability initiative.

Proposition 5. Mere focus on exploitative modes of learning limits the effectiveness of bottom-up sustainability initiatives and leads to inertia.

The problem that might result from a focus on a exploitative mode of learning is that new activities of the bottom-up sustainability initiative are not taken off the ground. They remain within existing boundaries and are repeated. The interview with the team behind the green site initiative unveiled that at the start of the bottom-up sustainability initiative, i.e. in 2011, there were many ideas developed and implemented resulting in increased enthusiasm within the team and outside. Setting up a bottom-up sustainability initiative can be described as an explorative activity as it resulted in a completely new concept. From the interviews it appeared, however, that after the first exploratory phase different activities emerged that still exist. Examples are the health and sustainability week and the green award, which are held each year in a similar manner. Experimenting with new activities and projects declined over time resulting in fewer participants as one interviewee explained:

In the beginning, the first year, we had quite a lot of run-up, but I see that it decreases. So, we need to think about that, how we are going to fill that up. (Project leader material selection [12])

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Towards resolving inertia

Having explained the factors that limit the effectiveness of bottom-up sustainability initiatives and result in inertia, the data also gave some hints about how this inertia could be resolved or at least be reduced. Arguing from theory, it might be useful to engage more in explorative activities as this would create new opportunities and could eventually lead to higher order organizational learning (Van Grinsven & Visser, 2011). Several interviewees had ideas that could contribute to a more explorative mode of learning:

If you look at another part of sustainability, the social aspect, everyone in the organization has one day per year that they can use to do volunteer work. […] So, we already got the ‘people’, you have 8 hours for ‘people’. Set another 8 hours for ‘planet’ that people can spend on sustainability. That is low threshold enough for people who do not care much about sustainability. Those can just go a morning or afternoon to some talks or follow an online course about sustainability. And for people, who really want to do something, they get the permission to do something with these 8 hours. (Employee function development [3]).

This would imply that employees get more time to experiment with new ideas they might have. Hence, the sustainability initiative becomes more integrated into people’s work which might increase motivation of employees. This can be summarized in a last proposition:

Proposition 6. Inertia of a bottom-up sustainability initiative can be reduced by engaging in more explorative modes of learning.

Nevertheless, only giving employees additional time would not resolve the management level issues such as a low prioritization of sustainability. So, to foster more exploration, change needs to occur on all levels.

DISCUSSION

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initiatives. This finding supports earlier studies that argue that short-term orientation of management inhibits true sustainable development (Slawinski et al., 2017; Wu & Pagell, 2011) and extends the concept of short-termism to a local, bottom-up context. Furthermore, factors such as management support, supervisory support and formalization from previous research (Montabon, Morrow, et al., 2016; Ramus, 2001) were also identified as important for the effectiveness of bottom-up sustainability. However, the findings of this study reveal that management support for sustainability activities depends on the mode of learning the activities strive towards.

Incremental, exploitative activities that use existing resources and are deemed to be profitable in the short run (e.g. energy saving and waste reduction) are generally supported and encouraged by management according to the findings of this study. More exploratory activities such as implementing new business models or adding sustainability as a job performance measure, however, that aim at long-term changes tend to be avoided by management. A similar pattern was found in the context of green product innovation (GPI) (Peters & Buijs, 2018). Their study revealed that management focused mainly on exploitative GPI resulting in limited green improvements.

While most previous studies that identified a short-term oriented view as a factor delaying true sustainable development focus on managerial decision-making (Hahn et al., 2014; Peters & Buijs, 2018; Slawinski et al., 2017; Wu & Pagell, 2011) this study extends the knowledge in this area to an employee level. Although several studies have addressed this level and for instance found that personal views influence an employee’s commitment to sustainability (e.g. Montabon, Morrow, et al., 2016), these studies do not address the influence of uncertainty in sustainability. In an attempt to fill this gap, the findings of this research suggest that for many employees there exists a paradox between how they perceive sustainability and what actions would motivate them to engage in sustainability. While sustainability is recognized as an uncertain and complex concept, exactly this uncertainty demotivates employees and many prefer concrete actions when it comes to sustainability. This preference for concreteness in sustainability also further encourages exploitative activities and inhibits explorative modes of learning resulting in inertia.

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approach suggesting that collaboration between different levels at the same time contributes to the effectiveness of a bottom-up sustainability initiative.

Another important contribution this study makes to existing theory is the focus on the initiative level, i.e. looking at the characteristics of the sustainability initiative itself. This lens is completely missing in existing research, but organizational learning theory (Levinthal & March, 1993; March, 1991) provides a useful frame for explaining the dynamics at this level. Although actions by employees and management significantly influence the effectiveness of a bottom-up sustainability initiative, findings suggest that inertia also emerges from the initiative itself. It has been found that while the bottom-up initiative at hand started with an exploratory approach, i.e. it experimented with new project ideas and launched new programs, over time activities were repeated and only few new ideas were added resulting in a focus on exploitative modes of learning. Looking at organizational learning theory, it becomes clear that in a context of innovation this pattern can be described as organizational inertia which inhibits continuous organizational learning (Benner & Tushman, 2003). To resolve such inertia, the initiative needs to engage more in exploratory activities to continue its learning process which eventually might also convince management and employees to embrace these types of activities even though they might not immediately lead to profitable and visible results.

Managerial Implications

This study provides several implications for managers and organizations. First, it shows that if organizations want to promote bottom-up sustainability initiatives together with top-down programs, they need to support these more. This implies that they should not only foster exploitative activities but also encourage explorative activities by providing resources and ease restrictions such as strict pay-back periods. Even though these activities might not directly result in profitable outcomes, this is the only way bottom-up sustainability initiatives can help the organization to generate continuous organizational learning about sustainability (Levinthal & March, 1993).

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models and the creation of new knowledge (Lozano, 2014). Creation of new knowledge and experimentation with new ideas could eventually lead to new initiatives (empowerment) which would create a continuous learning environment potentially resulting in a long-term integration of sustainability within the corporate culture (Brunton et al., 2017).

Limitations and Future Research

Despite the clear contributions, this study has several limitations. First, as mentioned earlier the focus on a single case in just one MNC limits the external validity and thus the generalizability of the findings of these results. Other factors specific to this case context, e.g. organizational culture, size and industry of the organization, could have influenced the findings. To increase external validity, future research could replicate the study to different company contexts that implemented similar bottom-up sustainability initiatives.

Another limitation of this study is that it has a retrospective focus in some parts. Interviewees were asked in 2018 about the status quo of a sustainability initiative which was set up in 2011. Assessing effectiveness of the initiative required respondents to compare the historical situation to the current which could lead to post-rationalization, i.e. events could be interpreted in a different manner than they would have been interpreted at the time. Therefore, future research could opt for a longitudinal case study design that specifically looks at behavioral change among employees in terms of sustainability over time. This could also be useful given the fact that corporate sustainability is a long-term goal.

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CONCLUSION

This paper presents a qualitative analysis of factors that influence the effectiveness of bottom-up sustainability initiatives. The results of this study reveal that a multi-level view is necessary to understand the dynamics that impact the effectiveness of bottom-up sustainability initiatives. Despite the narrow focus of this study and the limitations regarding its generalizability, it reveals clear contributions for research and practice. It emphasizes that uncertainty around the concept of sustainability clearly influences how managers but also employees approach this topic. Therefore, it is important that this uncertainty is considered for future research in corporate sustainability. Finally, this study underlines organizational learning theory as useful framework to study integration of sustainability within organizations. The simultaneous use of exploitative and explorative modes of learning within bottom-up sustainability initiatives appears to be essential to avoid organizational inertia in sustainability.

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APPENDIX

Appendix A. Interview Green Site Initiative

1. How many people work at the green site initiative team? 2. What were your personal motivations to work for this team?

3. What are the exact goals of the initiative? What are you doing exactly? 4. Green Award:

a. What was the purpose of this activity?

b. Why do you think an activity like this contributes to a “greener” organization?

5. Health & Sustainability week:

a. What was the purpose of this event?

b. What kind of activities were offered during this week and with what goal? c. Do you have an idea, why certain people participated and others not? 6. What other activities did you organize so far?

7. What are your plans for the future of the initiative?

8. What would be an ideal picture of what the initiative should achieve eventually? 9. What needs to be changed in your opinion to achieve this ideal picture?

10. What is your personal definition of sustainability?

Appendix B. Interview Protocol Employees Introduction

 Introduce self  Introduce research:

o Main aim of the research is to find out more about factors that influence the effectiveness of sustainability initiatives. As an example, we use the Green Site Initiative at your company.

 Use of the results:

o The information provided by you will be treated anonymously and confidentially

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Interview

General questions about the interviewee

1. What is your job at Domestic Appliances? a. Department, position

2. Since when do you work at Domestic Appliances? 3. Is your function related to sustainability?

a. If yes, in what way?

General questions about green site initiative

1. Are you aware of the green site initiative that employees of Domestic Appliances have set up at this site?

2. What are the goals of this initiative in your perception? 3. What is your opinion about this initiative in general?

a. Do you think it is useful? Why or why not?

4. Do you think the activities of the Green Site Team encourage you as an employee to engage in own sustainable decisions?

Specific questions about green site initiative

[Give examples of programs and projects: Health & Sustainability Week, Green Award etc.]

1. What do you think about these programs? 2. Did you participate in any of these programs?

a. Why or why not?

3. How do you perceive the general impact of these programs? 4. What did you learn from participating in these programs? 5. What are you doing with the gained knowledge?

6. Do you think projects like this contribute to making the organization more sustainable?

7. Do you think the content and concept are useful to make the organization more sustainable?

8. Would you participate in a similar project again in the future? Why or why not? 9. Do you think in general enough people participate in the projects/programs? Why

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Perception of sustainability

1. What do you personally see as sustainability?

2. To what degree do you think you can personally contribute to sustainable development?

a. In your daily life? b. At work?

3. Can you make sustainable decisions in your daily work? a. If yes, do you do so? Why or why not?

b. What is the role of management and coworkers in this? (facilitation, resistance)

4. There are often three dimensions mentioned that belong to sustainability: People (social), Planet (environmental) and Profit (economic).

a. How would you rank these in terms of importance? Why?

b. How do you perceive does Domestic Appliances in general rank these? 5. Would you say that your personal perception of sustainability played a role in

whether you contributed/participated in the green site initiative? If yes, how? 6. Do you think sustainability initiatives such as the green site initiative are a useful

development towards more sustainable organizations? a. What works well?

b. What needs to be changed or made clearer in your opinion?

Closing

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Appendix C. Coding Tree

Illustrative quotes 1st_{order categories} ₂nd_{order categories} _{Overarching dimensions}

“Yes. I think that the awareness for it [sustainability] is increased by it. I think that the topic was not so much top of mind when the green site started. That club has definitely cranked up something. And I think that with that initiatives on the other side of the street got started. And the green site is simply a stimulant to do something.” (Translator packaging department [1])

 Confrontation with sustainability raises awareness

 Continuous awareness creation

Awareness creation through activities

Limited effectiveness of bottom-up sustainability initiative

“I don’t know if the big events have a lasting impression on the people, who go there. Of course, there are people, who are triggered also by electric cars and then think, okay this is indeed at this point so good, that I want one as well […]. Look, it is not that you suddenly change everything for everyone. Yes, there is an impact, but how big is difficult to estimate. I think it is mainly on the initiatives that grow from the green site a bit and the longer trajectories, that are triggered by the presence of the green site.” (Employee function development [3])

 Impact does not go much further than awareness  Slow, step-wise change

 LCA: site-activities already quite efficient  Limited impact on employees

 Difficult to measure impact

Small and slow impact creation

“Things like material usage, electricity usage […]. You can maybe try to stimulate, that people think about it, but the green site does not do the actual realization. […] People don't sit in positions, in which you have much influence. They are not in the position to influence the design of a product or to buy another machine.” (Production system architect [4])

 Lack of decision-making power of bottom-up initiative

 Money is missing for initiatives

Limited opportunity for action

“So, if you have an energy saving, then the payback period is often looked at. Imagine, you have to invest in order to realize that energy saving, then it has, and that also goes for other improvements, it has to be earned back within 1,5 years. So, and if that: yes, we save energy, but we need to invest additional money, then it won’t happen so soon. But I think, that this for example a reason for why the roofs [of Domestic Appliances] are not yet full of solar panels. Those you don’t earn back within 1,5 years and that is how they’re put together.” (Employee new product introduction [8])

 Company: profit is priority

 Economic system: short term goals vs. sustainability: long-term

 Short payback periods inhibit sustainability  Strong influence of shareholders

 Sustainability not priority

Emphasis on short-term profit

Organizational Inertia in Sustainability: The Influence of Uncertainty on the Effectiveness of Sustainability Initiatives