6. Research Findings
6. Research Findings
To achieve the research objective and to develop a best practice template that supports business managers to be more successful in strategy selection and implementation, a theoretical proposition was developed:
Understanding the present status of CSR filter factors will enable managers to select more appropriate strategies and develop plans for implementation to overcome threshold levels.
Two hypotheses were developed and were to be tested by the collected field research data.
This chapter is a discussion and interpretation of the findings in the field research relevant to the research objective. During the discussion references to the literature review in part 2 are made.
The two hypotheses are directed towards strategy selection and strategy implementation.
6.2 Strategy Development and Selection
The field research shows that:
“Nearly all (91%) business managers address customers, suppliers and creditors in their stated vision or mission, but only few (19%) do it with the intent to do more profitable business”.
The hypothesis to be tested by the research questions is:
(1) Vision, mission and strategic intent is heavily influenced by the competitive forces and motives in the sense making process.
6.2.1 Stakeholder management
The research question (1a) was to test if differences in industry competitive attractiveness strongly influence stakeholder focus.
A relationship between perceived positive industry support factors and objectives of a more philanthropic nature (owners’ interest in environment) was determined. This is in line with the findings in literature review where leadership (Carlson & Perrewe, 1995; Ciulla, 1999; Parry & Proctor-Thomson, 2002) and personal motivation by “enlightened self-interest” (Vogel, 2006 p18) are described as major drivers of CSR initiatives.
However, it was also determined that the businesses backwards in the value chain perceived support from customers and suppliers to be low.
To discuss and clarify the influence of position in the value network, research question (1d) was to test if there was a relationship to strategic intent.
It was determined that the further away from the consumer in the value network the more likely companies are to address business profit objectives. Due to the difference in level of internationalisation in the value network, it seems appropriate to include the findings from the research question (1c) regarding influence of internationalisation on strategic intent in a discussion of value network versus internationalisation.
It was determined that international companies are more likely to address environmental objectives to create stakeholder satisfaction. This seems to fits well with the findings in literature (McMillan et al, 2004 p22).
In the former description of the data composition, the increasing level of internationalisation backwards in the value chain was determined. This means that it is difficult to determine if it is internationalisation or value network position (or both factors) influencing the raw-material producers.
From one viewpoint international companies seem to be more affected by political, social and environmental issues (McMillan et al, 2004 p22).
From another viewpoint the difference in objectives could be perceived to be based on lack of customer and consumer knowledge. This view could be supported by the identified difference in perceived customer support (1a).
From a third viewpoint the difference in objectives could also be due to pressure from powerful suppliers. This would fit with the finding regarding the negative support from suppliers related to raw-material producers (1a).
From a fourth viewpoint the difference between levels in the value network could also be due to the apparent lack of environmental objectives in the construction group (1d), despite their recognition of consumer support (1a).
But it could also be questioned if the industry actually is a cluster of related industries sharing goals, resources and knowledge or just isolated industries competing in the industry (Porter & Kramer, 2002 p36).
6.2.2 Strategy Selection
The different generic competitive strategies were researched (1e), and it was found that there was no strong influence on environmental objectives. This is contra dictionary to the view of Werther & Chandler (2006 p65), but in line with Smith (1994 p168) and Vogel (2006 p33). The explanation here could be that the customer is king, and that nearly all constructions are done by special request. This view could be supported by the high level of “Differentiation Stra-tegy” responses.
The competitive perspective in cooperative and competitive motives was researched (1b) for influence on environmental objectives. It was found that cooperative motives influence more philanthropic objectives and competitive motives influence business profit objectives. This seems to be in line with findings in the literature review, where Laszlo (2005 p46-47) and Goodstein & Wicks (2007) highlight the importance of cooperation and partnerships.
As initially stated in this chapter the main focus in vision and mission is the value network businesses. But based on the findings in different perceptions regarding supporting factors (1a) and initially stated low level of environmental business profit objectives, it could be questioned if innovative environmental improvements are likely to be prioritised and implemented.
How are the businesses to set up a clear strategy that gives direction of how the needs of stakeholders are to be satisfied (Werther & Chandler, 2006 p61), if they are not able to determine the relevance to business profitability and thus shareholder value.
6.2.3 Threshold Levels
If different levels of utilisation of employees and partners competence and resources influenced the strategic objectives was researched (1f), and it was determined that there was no strong influence.
However, the field research also determined that if not cooperating with partners there was a greater need for supporting capabilities, and that differences in cooperative or competitive motives may relate more to personal functional beliefs than business intent.
It is widely supported in literature (Pfeffer 2005 p128) that the sensemaking process influences the CSR character (Basu & Palazzo, 2008 p124), defined as our perception of “how we perceive the world” and “how we see ourselves in the world”.
This could indicate that personal perceptions are influenced by internationalisation, position in the industry and functional position in own organisation influence on selection of strategic environmental objectives, rather than overall business objectives and strategies. This point seems to match Macover’s view (1994 p22).
Another view could be that managers with clear business profit objectives are more likely not to cooperate (1b), while managers without clear objectives are less restrained and thus allowed to share knowledge and resources with others.
One apparent issue is the data output classifying managers within finance as the least cooperative. It seems necessary to secure their cooperation to secure the formulation of valid business-cases for environmental strategic objectives and improvements.
6.3 Strategy Implementation
81% of managers state they have environmental initiatives within energy and waste reduction, and nearly all follow up in business reports.
The hypothesis to be tested by the research questions is:
(2) Outcomes of strategic intent are heavily influenced by allocation of investments, resources and performance management practice.
6.3.1 Initiatives and Outcomes
The research found that 84 managers follow up on environmental initiatives and outcomes, while just 31 state they have business profit objectives (5.2.3).
Business profit objectives were found to drive energy, waste and risk reduction initiatives rather than market development and change of industry. This fits well to the lesson learned in the literature review (Vogel, 2006 p126) that reducing costs is the easiest way to demonstrate serious commitment to reduce emissions.
Brand and product development seemed to be more related to other factors than environmental objectives. The fact that managers, despite lack of objectives, manage outcomes of environmental initiatives and reports their progress seems to be documented by the research data. It could be seen as good news that managers do more good than expected, but it could also be questioned if they just act on their own.
How are managers prioritizing resource allocation, if not lead by direction of objectives? Based on the high level of initiatives it seems unlikely that investments and resource allocation should constrain execution of strategic objectives. There seems to be either lack of direction or drift in management focus.
6.3.2 Design, Select and Sustain Value Capture
The research question (2a) was to test if differences in priority of Key Success Factors strongly influence outcomes defined as present environmental initiatives and projects.
It was found that there was no strong influence of Key Success Factors on the present environmental initiatives. As Danish businesses are forced to interact on international markets (Hopkins, 2003 p133) the Key Success Factors in the industry could be aligned to high national threshold levels.
The need for at tool box was analysed (2b), but there was no clear influence of present capabilities on present environmental initiatives and projects. In literature Danish companies are known for a high level of environmental responsibility (Hopkins, 2003) and this could support that the capabilities are present, and thus do not influence the scope of initiatives or projects. As brand and culture was determined to be at a high initiative level this could support this view.
Neither did the strategic focus (2c) prove any tendencies or relationships to environmental initiatives or projects, but there was found strong influence (2d) of performance management, quality management and annual reporting on environmental initiatives and projects.
However, it could have been expected that there was a clear tendency to focus on specific initiatives or projects that actually relate to the defined focus areas. In example managers were selecting initiatives regarding “changing the environmental standards in the industry”, without clear reference to the strategic focus of either “minimize company risk” or “create new opportunities for the concrete industry and construction”.
It seems that creating a better focus could perhaps allow managers to be more successful in resource allocation, but to focus there also needs to be clear objectives.
Focusing does not create progress, but measuring success of outcomes for both the business and the stakeholders seem to be an important issue in literature as well (Handy, 2002 p81; Makover, 1994 p21; Laszlo, 2005 p107; Kaku, 1997, p122).
Sticking to an old phrase restated by Laszlo (2005 p31) “what gets measured gets managed”, seems to be well in line with the results of the field analysis.
One possibility for managers to “self motivating” in selecting initiatives could be the high level of environmental reporting according to industry threshold levels and lack of stated and communicated objectives regarding environmental improvement.
The levels of follow up and reporting seem impressing, and might underpin the previous assumptions about Denmark as being in the global top of environmental responsibility.