PURCHASING AND ENVIRONMENTAL MANAGEMENT: INTERACTIONS, POLICIES AND OPPORTUNITIES

Business Strafegy and the Environment, Vol. 5, 188-197 (1996)

PURCHASING AND ENVIRONMENTAL MANAGEMENT: INTERACTIONS, POLICIES AND OPPORTUNITIES Ken Green, Barbara Morton and Steve New, CROMTEC, UMIST, Manchester, UK

The mechanisms are examined by which environmentally informed business practices and technologies may diffuse through industry as a result of the 'greening' of purchasing and supply. The efforts of official bodies in the UK to raise environmental awareness among industrial purchasers are reviewed. It is then argued that the supply chain model is an important way of interpreting the industrial landscape from a green perspective and that it is in some ways a more hopeful and positive starting point for achieving industrial transformation. The results of an analysis of some UK companies' practices in using their purchasing policies to 'green' their supply chains are presented and opportunities for further research indicated.

CCC 0964-4733 / 961 03018&10 0 1996 by John Wiley & Sons, Ltd and ERP Environment.

INTRODUCTION

his paper describes an emergent line of research which may prove to be one of the T most fertile for those concerned with the

'environmental' transformation of industrial economies. It explores the mechanisms by which environmentally informed business practices and technologies may diffuse through industry and highlights how these are related to broader developments in inter-corporate relationships. The paper begins with a brief review of developments in purchasing and supply, and efforts by official bodies to raise environmental awareness among industrial purchasers. It then argues that the supply chain model is an important way of interpreting the industrial landscape from a green perspective and is in some ways a more hopeful and positive starting point for achieving industrial transformation. The final part of the paper presents the results of an analysis of some UK companies' practices in using their purchasing policies to 'green' their supply chains and points towards opportunities for further research.

WHAT IS GREEN SUPPLY?

Green supply refers to the way in which innovations in supply chain management and industrial purchasing may be considered in the context of the environment. It is the fusion of three trends described in the following sections.

Increased Awareness of the Strategic Importance of Purchasing

In many organizations, purchasing represents in

BUSINESS STRATEGY AND THE ENVIRONMENT

K. GREEN, B. MORTON AND S. NEW

Table 1. Principles of buying into the environment.

1 Understand the business reasons Examine the implications of legislation, market opportunities and pressures, supply chain risks, community needs

2 Know your environment Understand: environmental responsibilities, policies and issues, improvement targets and programmes

3 Understand your supply chain Rank key suppliers based on environmental issues and risks. Develop environmental purchasing policy and processes

4 Adopt a partnership style Communicate openly and clearly. Explore areas of co-operation for mutual benefits

5 Collect only information needed

6 Validate supplier‘s performance

7 Set a timetable for improvement

Identify key questions and define information needs. Select suitable collection methods Select, where necessary, a suitable method to validate information and management systems Discuss and agree improvement targets with environmental managers and suppliers

From BIE/CIPS (1993).

excess of 50% of all expenditure; in some assembly- oriented manufacturing firms, the figure may exceed 90%. Recent years have seen an increased profile for purchasing activity within corporations and also within academia (Kraljic, 1983; DTI, 1991). As organizations have become focused on ’core competencies’ and followed a general trend to vertical disintegration and outsourcing of non- core activities, the significance of commercial relationships with suppliers has become more apparent. It has become common for organizational theorists to seize on the inter-organizational net- work as the key unit of competitive analysis (Axelsson and Easton, 1992; Karlsson, 1992).

New Focus on Co-operative Buyer-Seller Relationships

Recent years have seen significant developments in the field of industrial purchasing and supply. Following a number of influences (New, 1996), the concept of co-operative, partnership-style relationships has emerged as a neo-orthodoxy, replacing traditional views of adversarial trading in which buyers and suppliers were locked in a zero-sum struggle. So, instead of using the threat of substitu- tion to ensure that suppliers provide value, buyers work in long-term relationships with vendors with mutual commitments to continuous improvement and the sharing of benefits reaped from collaborative activity (Johnston and Lawrence, 1988; Macbeth and Ferguson, 1991). In manufacturing industries, this inter-dependent relationship allows the close integration of operational systems and facilitates innovations such as just-in-time delivery and early supplier involvement in new product development (Schonberger, 1983, 1990; Kay, 1993; Lamming, 1993).

Awareness of the Connection Between Purchas- ing Decisions and Environmental Performance

In the UK, this has resulted in a major initiative entitled ‘Buying into the Environment’, a collaboration between the Chartered Institute of Purchasing and Supply (CIPS) and Business in the Environ- ment (BIE), an offshoot of Business in the Commu- nity. This has resulted in a series of practitioner- oriented workbooks (CIPS/BIE, 1993; BIE, 1995) which are designed to help organizations put environmental considerations on the purchasing agenda. The main recommendations of the first workbook are summarized in Table 1.

WHY IS GREEN SUPPLY IMPORTANT?

A criticism which can be levelled at some green writing is a simplistic construction of the concepts of industry and consumers. ‘Industry’ is often construed as a singular and monolithic entity, the cause of the environmental woes of the world (see North, 1995, for a discussion of this). One world view has consumers as unwitting pawns in the industrial system, complicit with ‘industry’ in the destruction of the planet: in this view, consumption and the free market are the key problems. Alter- native views have consumers and markets as being potential agents of change in that choices in private purchasing decisions may be persuaded to favour environmentally sound products and firms. By increasing the awareness of consumers it is possible to use the free market to persuade ‘industry’ to become greener (see Adams, 1990, 1993; Charter, 1992). Thus consumer pressure joins legislation and influences from stakeholders as a motivation for change.

This model, however, is an inadequate reflection

BUSINESS STRATEGY AND THE ENVIRONMENT 189

PURCHASING AND ENVIRONMENTAL MANAGEMENT

of industrial economies. The idea of green supply is important because most purchase decisions are to do with inter-corporate trade; commercial buying dwarfs consumer spending. (Consumer expenditure in the UK in 1993 was approximately €400 billion; the Chartered Institute of Purchasing and Supply estimate that organizations with purchasing and supply managers - that is, excluding the vast number of very small firms - have an annual spend in excess of €750 billion.) If industry is seen as a complex web of buying and selling, then the opportunities for environmental considerations to be brought into play are much greater than they are for individual consumers in the supermarket. In the green supply paradigm, each stage has to consider not just the pressure which may be exerted by the immediate customer, but the likely pressures from the customer’s customers and so on. Similarly, firms need to be cognisant of legislative issues throughout the chain, not just at the immediate link (Hampson and Johnson, 1996). Firms which behave proactively on environmental issues might be able to reap strategic advantage by foreseeing opportunities and problems throughout the entire chain.

The emergence of green supply, therefore, is important because it provides a more powerful mechanism for the so-called ’greening of industry’ to be grounded in non-altruistic market principles. Were it left to the influence of consumers at the end of the supply chain, it is likely that the market would be a poor mechanism for introducing change: consumers may be too susceptible to cosmetically ’green’ products, too swamped with advertising and too starved of reliable information. From the supply chain perspective, the market becomes a more plausible means of environmental improvement.

If this is so, it is clear that a major research area is the means by which environmental progress may be achieved along supply chains. If the methods adopted by buying and selling firms to influence each other’s behaviour can be identified, this will have immediate ramifications, not only for individual firms, but for governments’ policies for achieving improved environmental performance. (One of the few governments that has appreciated this is that of the Netherlands in its concept of ’integrated chain management’; see Cramer, 1996.) Although there are many anecdotal accounts of companies’ green purchasing policies (see, for example, Business and the Environment, 1995), there are few comparative studies (Christie and Rolfe, 1995, is a brief study).

EXAMINING SUPPLY CHAINS

The impacts of purchasing decisions can be illustrated

by considering the stages of the total procurement process (see Figure 1). Environmental impacts, either actual or potential, are distributed throughout the chain including in design/specification, through tendering, purchasing and distribution, rather than just in production and although the product is in use or being disposed of. The potential influence of each ’stage’ in the process may be summarized as follows.

Design and Specification

As Drury (1992) points out, up to 80% of the whole life cost of a product or service is committed in the design stage of the life cycle. Many companies and their suppliers (certainly in those cases we have examined) have begun to recognize the importance of design and specification, as careful consideration allows many (potential) environmental impacts to be ‘designed out’.

Qualification and Tendering

It is important that supplier qualification procedures reflect the policies and practices of the companies in which they are used. Where environmental management systems are already in place, this process is likely to be relatively straight- forward. More difficulties might be encountered by companies striving for environmental improvement in the supply chain in the absence of an environmental management system.

Purchasing

Companies have begun to integrate environmental criteria into their purchasing policies and procedures. This involves designing management information systems and supplier assessment procedures which take account of supplier environmental performance and changes in performance over time.

Receipt and Distribution

The environmental impact of storage facilities and transport operations are often overlooked. As a result, environmental assessment should be an aspect of logistics decision-making.

Use and Disposal

The impacts of products in use require examination from a wider perspective than has traditionally been used by many organizations. This raises the issue of the linkage of one supply chain with another and poses the question: to what extent can

190 BUSINESS STRATEGY AND THE ENVIRONMENT


“Manage out” environmental impacts

\ Supplier environmental Qualification and appraisal systems

Supplier assessment, management information

/ I r \

feedback into design specification in environmental manage me nt

The role of procurement

\ J

‘full cost accounting’ and ‘whole life costing’

Waste management, re-use, recycling

\

Product handling and logistics

Figure 1. Role of procurement in environmental management.

an organization be active in shaping the environmental policies of its customers as well as its suppliers? In addition, companies are increasingly having to re-define ’waste’ in the light of both environmental legislation and regulation and the drive towards cost reduction throughout the production process. Traditional ‘end of pipe’ solutions are giving way, in many cases, to innovative approaches to managing waste at source (Green and Irwin, 1995).

Accounting

Many companies have started to investigate the opportunities offered by full-cost accounting and whole-life costing techniques. Significant changes in the nature of accounting may be brought about by the consideration of environmental factors in the corporate environment, leading, for example, to the development of green accounting. The data emerging from the use of these techniques need to be fed back into the procurement decision-making process, especially at the design and specification stage, where it will have greatest impact.

Discussion

The various initiatives in this area have provided a s ighcant boost to environmental awareness

among purchasers and have received widespread ‘in principle’ support from many major companies. As yet, however, it is unclear to what extent the initiatives have really made a difference in firms’ behaviour. One limitation is that guidelines for green purchasing that have been issued (e.g. by CIPS/BIE) have been developed in a pragmatic way by accumulating apparent ’best practice’ and translating these into normative injunctions. As yet, there is a dearth of both clear theoretical frameworks which explain the commercial and industrial logic of ‘green supply’ and which allow varying strategies to be compared, and of empirical information on what companies are actually doing.

CASE STUDIES

We have been investigating what UK firms are doing and planning with respect to the greening of their supply chains. So far we have examined, through interviews with the appropriate managers and consultation of company documentation, six large firms operating in the UK. In addition, we have examined a further nine companies that are suppliers to the ’main’ six. The companies are in no way a random selection: they were chosen because we knew, from professional contacts, that they were giving considerable thought to what policies they



should adopt towards their suppliers in the setting of green criteria for their purchases. Table 2 presents some basic information about the six main companies with respect to their activities, environmental and purchasing policies.

Environmental Policies

Table 2 shows that the companies are mostly very large (the smallest, selling scientific and engineering equipment and consultancy, has a turnover of €250 million with 4000 employees) and cover a wide range of industrial products and services. They all have formal environmental policies (though of varying vintages).

Analysis of these policies reveals the forces driving companies to seek to improve their environmental performance: legislative and regulatory compliance, minimization of risk, identification of cost reduction opportunities, resource minimization, pressure from investors and customers, and environmental management as part of a quality system. This list confirms those of many other studies concerning the dominance of regulatory/ legal compliance and cost reduction potential (Green ef a]., 1994; IoD, 1995) as factors in pressing companies to take note of environmental issues.

The importance of investor pressure in our companies may reflect changing investor percep- tions of environmental risks, as illustrated by the new investment policies of many banks and financial institutions. Eight of the 15 companies studied indicated the importance of pressure from investors in the development of ‘group’ environmental policies. This has led to the incorporation of group policy into company environmental policy. The research also examined the environmental policies of the six main companies and nine suppliers in an attempt to identify the environmental issues covered by such policies.

The factors mentioned may most commonly be summarized as commitment to environmental values, the need for legislative compliance, the advantages of resource minimization, the benefits of waste minimization, energy efficiency and a commitment to recycling. There is a tendency for companies to claim environmental improvement through initiatives introduced for other reasons, as in the case of energy management. Similarly, more stringent waste management regulations and associated costs will drive companies towards more innovative approaches to the minimization of waste.

There are some significant factors mentioned specifically by a number of companies, including ‘good neighbour’, emission reduction, favouring suppliers with ’greener’ products and/ or processes,

impact assessment, provision of information to employees, customers and investors, and training of staff in environmental matters. This demon- strates the considerable variety in the factors as experienced by each company. The differences in emphasis between firms’ environmental policies is partly attributable to the sector in which they operate. Emission reduction is prominent in the environmental policies of plant and equipment manufacturers, for example. Impact assessment is mentioned particularly by companies supplying packaging to the healthcare products sector. It is especially interesting to note that companies with relatively well-developed supplier assessment systems (Companies C and D, for example) are those whose environmental policies indicate preferences for suppliers with ’greener‘ products and processes. This suggests that pressure is being exerted by corporate customers on their supplier base. The extent to which environmental improvement may be brought about in the opposite direction -that is, by suppliers influencing customers - is much less certain, however. ’Good neighbour’ pressures are quoted by five companies, reflecting concern for the immediate surroundings in which these companies operate and their interest in minimizing disruption to local communities.

The need for training of staff in environmental issues, together with the provision of information to staff, customers and investors reflect the increasing demands on companies for greater openness in environmental matters.

Environmental Management Systems

In addition, they have all given great consideration to whether they should adopt formal environmental management systems: two (Company C and Company D) are very likely to obtain BS 7750 certification and Company A intends to seek it. Company F is currently considering its approach. However, two companies are unlikely to seek BS 7750 or EMAS certification as they have adopted different approaches: Company B has its own internally developed system and Company E includes environmental criteria as part of its very well-developed quality management system.

The role of environmental management systems in effecting performance improvement in supply chains is far from clear, however. At least one of those organizations most active in the UK in greening its supply chain, DIY retailers B&Q, has moved away from requiring its suppliers to be certified to BS 7750, for example. B&Q has been conducting environmental audits of its suppliers since 1991. The company’s view is that certification to BS 7750 cannot be taken at face value as evidence


Tabl

e 2.

Det

ails

of t

he c

ase

stud

y co

mpa

nies

.

A

B C

D

E

F

Indu

stry

sec

tor

Elec

trici

ty su

pply

H

ealth

care

pro

duct

s m

anuf

actu

re

Elec

troni

c eq

uipm

ent

Scie

ntifi

c and

A

utom

obile

man

ufac

ture

Pr

ivat

ized

(f

or te

leco

ms)

en

gine

erin

g se

rvic

es

Utility

Tur

nove

r c.

€1.5

bn

(VK

)

7500

c. €0

.25 b

n c.

E2bn

c.

E735

m

c. €1

bn 0

(W)

0

0

No.

of

empl

oyee

s in

UK

10

,000

4000

55

00

5300

Com

pany

has

env

iron

men

tal

polic

y? (d

ate)

Y

es

1991

Y

es

1990

Y

es

Yes

19

93

c. 19

90

Yes

19

94

(rev

ised

)

Yes

Com

pany

seek

ing

BS 7

750

or

EMA

S ac

rred

itatio

n?

Yes

(e

vent

ually

) N

o (h

as o

wn

syst

em)

Yes

Y

es

No

Und

er

(BS

7750

imm

inen

t)

(BS

7750

imm

inen

t) (E

nvir

onm

enta

l man

agem

ent,

cons

ider

atio

n an

asp

ect o

f qu

ality

m

anag

emen

t

No.

of

supp

liers

reco

rded

?

5000

(B

eing

redu

ced

from

) 20

0+

(90%

own

40-5

0)

42,00

0 35

00

Com

pany

has

a s

uppl

ier

appr

aisa

l sys

tem

? Y

es

Yes

Y

es

(ven

dor p

erfo

rman

ce

revi

ew)

Yes

Y

es

Yes

Com

pany

has

a su

pplie

r as

sess

men

t sys

tem

? Y

es

Yes

Y

es

Yes

Y

es

Dev

elop

ing

Purc

hasi

ng p

olic

y in

clud

es

envi

ronm

enta

l fac

tors

? N

o (b

ut in

tend

ing

to)

No

(but

inte

ndin

g to

) Y

es

Yes

N

o Y

es

(par

t of

qual

ity sy

stem

) (r

ecen

tly)

Join

t wor

king

with

sup

plie

rs

over

env

iron

men

tal f

acto

rs?

No

Yes

Y

es

Lim

ited

Proc

ess h

as

(eg.

ove

r wat

er-b

ased

pai

nts)

be

gun

Join

t wor

king

with

cus

tom

ers

over

env

iron

men

tal f

acto

rs?

No

No

(but

inte

ndin

g to

) Y

es

Yes

N

o (o

ne m

ajor

cus

tom

er)

(but

in ‘e

nviro

nmen

t bu

sine

ss’ a

nyw

ay)

Lim

ited

‘J4


of good environmental performance. Therefore, suppliers to B&Q will not be pushed into gaining certification in the foreseeable future (ENDS Report, 1995a). The company’s second environmental review indicates that such progress is not dependent on BS 7750 certification and, indeed, that progress may be hindered by the time and effort required to achieve certification. (B&Q, 1995) All of this brings into question the influence of environmental management systems standards on environmental progress.

A similar trend has been detected in the approach taken by BT (British Telecom), one of those organizations most active in seeking environmental improvement through the supply chain (ENDS Report, 1995b). BT has redesigned its supplier assessment scheme which aims to ’green‘ its supply chain of 20,000-30,000 regular and 50,000 occasional suppliers. The scheme uses BT’s own generic impact standard, which is being adapted to focus on areas of highest impact. The second revision of BT’s system concerns the scoring system, which is being targeted on revealing significant environmental impacts which may have been ‘hidden’ previously. The drive towards greater visibility of environmental effects and of real environmental improvement will be reinforced by those suppliers to BT and others who adopt similar supplier assessment systems.

So, although some corporate purchasers may attempt to use environmental management systems standards as an indicator of environmental progress, those who have most experience in greening corporate supply chains appear to see a need for both increased visibility of environmental effects and evidence of real environmental improvement.

Environmental Purchasing and Collaboration

All of the case study companies have large numbers of suppliers (varying from 200 to 42,000!) and are actively seeking to reduce this number; they all have formal purchasing policies concerned with selecting, reviewing and appraising their suppliers. However, the systems are different (as, of course, are the types of suppliers, given the differing industrial sectors in which they operate), especially in the degree to which they include environmental criteria in the selection of suppliers. Indeed, only Companies C and D (those with BS 7750-type environmental management systems) already include such criteria formally in their selection and assessment procedures and one other (Company A) intends to. Company F has recently begun to develop a system for integrating environmental criteria into its purchasing process.

Companies B and E do not include environmental

criteria in purchasing, though E argues that, because of the nature of its activities (making automobiles), internally generated engineering solutions to its environmental problems have a higher priority than greening its suppliers.

As we have mentioned, it is a neo-orthodoxy that buyers are increasingly working in long-term relationships with vendors for the purpose of continuous improvement. Such collaborations have, of course, tended to concentrate on improving the quality of components and achieving more predictable delivery dates. The purchasing policies of five of the main companies advocate ’partnership’ with suppliers. However, only two companies (C and D) have included environmental competencies in their joint working with suppliers. In addition, Company B has an alliance with another firm to develop new technologies and procedures for recycling infectious medical waste in the USA. The company is currently investigating the potential for collaboration with UK partners in waste disposal and management. Company E did engage in a joint project with one of its suppliers over the development of water-based paints, but this was an atypical collaboration. Company F has begun to introduce environmental matters into its dialogue with suppliers. Companies A and C have not (yet) collaborated with suppliers over environmental improvements of supplied materials.

In conclusion, only one of the companies (Com- pany C) has developed collaborative projects with its (institutional) customers. In C‘s case, the customer is BT, which has an advanced environmental management system and is keen to collaborate with its suppliers. In this case, the change of emphasis in BT’s environmental supplier management system is likely to prove crucial in influencing the direction of supply chain environmental improvement.

Company B is beginning customer collaboration, although environmental pressures have been felt less strongly to date in its major market (the healthcare sector) than in many other sectors. Company D sells environmental services and is de farto engaged in environmental collaboration with its customers. A recently formed Purchasing Forum for the sector is considering the potential for joint working in achieving environmental improvement.

Conclusions

From this condensed account, some lessons may be drawn. Firstly, there are a wide range of drivers for the emergence of green supply - though the motivations of legislative compliance and cost reduction are common, and possibly universal. This means that efforts to promote environmental awareness in purchasing or to understand its


development and impact need to account for this variety. It is not likely, therefore, that green purchasing can be usefully packaged as a 'one-size- fits-all' programme which firms can be enjoined to adopt. The BIE/CIPS guidelines appear to be an excellent starting point for firms, but there appears to be limited scope for developing them if we are to accommodate the contingent complexities of particular business settings. Some of the companies here (such as Company B or E) have their own systems, reflecting their own histories and industrial sectors; such systems have 'grown' over time and could well have environmental considerations grafted onto them. The ultimate decider is: what works? Unfortunately, methods of evaluation of the effectiveness of any environmental purchasing system are seriously underdeveloped.

Secondly, it does not seem to be the case that real progress on environmental purchasing necessarily follows when firms have active environmental programmes in other areas. In other words, it is possible for firms to have established green activities - substantive or for public relations purposes - and to have missed opportunities in the purchasing area. However, in our (biased) sample only two companies (C and D) could be judged as (almost) reaching the standards advocated by BIE. We infer that a broader environmental awareness is a necessary (if not sufficient) factor in developing green supply.

Thirdly, firms which are already good at formal approaches to the selection and assessment of suppliers (through such systems as Vendor Per- formance Review and Supplier Quality Assess- ment, as used by Companies C and D) tend to be those who find it easiest to incorporate environmental factors. However, although this means that firms may be good at diffusing green practices through their supply base by this mechanism, it is not a guarantee that firms will be good at collaborating with trading partners on specific environmental initiatives.

Fourthly, environmental purchasing and supplier development is only one aspect of environmental supply chain management. Customers need also to be made 'green-appreciative'; joint working initiatives are urgently needed in some industries where customers are, for many reasons, environmentally unaware or conservative.


supply rather than green consumerism may be the key driving force for improving the environmental performance of industry. Efforts to raise conscious- ness among consumers are important, but are not the only means of using the market for improvement.

Firms have a range of opportunities in greening their supply chains beyond exerting vague pressure on suppliers to achieve certification to a particular standard. Although there has been considerable interest in the emergence and impact of BS 7750 and EMAS, the rush to become a 'certified supplier is only one of the many mechanisms which may be in operation. Indeed, companies wishing to assure themselves of the environmental soundness of their supply chains may need to look beyond requiring certification to a standard, towards obtaining evidence of real environmental improvement through supplier environmental appraisal systems. Further- more, the green supply paradigm provides a language in which it is relatively easy to make an economic case for organizations throughout industry to examine green practices, not just those firms with direct contact with fickle and easily misled consumers.

Understanding the structures and practices of industry from a supply chain perspective allows legislation and pressure group activity to be more precisely targeted. Green supply is an important concept and one with which 'hard-nosed industry is willing to engage. Although the management practices associated with supply chain management may not necessarily have socially positive effects (New and Ramsay, 1995), the appreciation it brings of the importance of commercial relationships in the inter-corporate economy is valuable. Research into the mechanisms and dynamics of these activities is therefore a priority. Three themes are suggested.

CONCLUSIONS

The green supply approach, taken with the various mechanisms for supply chain improvement, has several important consequences for research and practice in environmental management, Green

(i) It is necessary to examine how differences in supply chain structure and inter-corporate power affect the diffusion of green supply. There are likely to be considerable differences in the mechanisms and effectiveness of green supply policies between chains that have different 'main driver' companies; for example, between those in which an end-retailer is the main driver (e.g. Tesco, BSrQ), those in which the manufacturer of equipment supplied to a large, relatively uninterested customer is the main driver (e.g health equipment supply to state health services), those in which the distributor is the main driver (e.g. utilities) and those in which a large customer is the main driver (e.g. in telecoms equipment to BT).

(ii) The study of the impact of green supply has



(iii)

sigruficant theoretical importance for understanding the mechanics of inter-corporate behaviour and the management of supply chain relationships. There are clear parallels between green supply and the development of quality, process improvement and operational integration initiatives associated with lean production. (Recent research at M I S T has begun to develop taxonomies and models of the diffusion of best practice and the management of collaborative improvement projects; New, in press; Burnes and New, 1996, in press). Environmental signals in a firm‘s purchasing policies can stimulate suppliers to innovate, either on their own or in partnership with the purchasing firm, elucidating the mechanism of intra-organizational innovation. The eco- nomics of technological innovation literature has explored in detail the influences of the market and other ‘selection environment’ factors in inducing firms to innovate. (Green et al., 1994; Dodgson and Rothwell, 1994). However, the exact mechanisms inside firms by which such signals are received from environmental purchasing policies, under- stood by marketing and R&D departments and then translated into practical innovative product /process development need to be explored.

ACKNOWLEDGMENTS

An earlier version of this paper was presented at the Fourth Greening of Industry Conference, Toronto, Canada, November 1995. The research for this paper was supported by the Economic and Social Research Council’s Global Environmental Change Programme. Acknowledgements are made to them and to the managers in the companies who participated in the project.

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K. GREEN, 8. MORTON AND S. NEW

BIOGRAPHIES (CROMTEC), Manchester School of Management, UMIST, PO Box 88, Manchester M60 lQD, UK. Tel.: t44 161 200 3401. Fax.: t44 161 200 3505. E-mail: barbar- a*morton@umist*ac*uk.

Steve New, Lecturer in Operations Management, Hertford College, Oxford OX1 3BW, UK. Tel.: t44 1865 279 400. Fax.: t44 1865 279 437. E-mail: stephen.new@ hert.ox*ac.uk*

Ken Green, Senior Lecturer in Innovation and Technology Management, Manchester School of Management, UMIST, PO Box 88, Manchester M60 lQD, UK. Tel.: t44 161 200 3432. Fax.: t44 161 200 3505. E-mail: ken.green@ umist.ac.uk

Barbara Morton, Research Fellow, Centre for Research on Organisations, Management and Technical Change


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PURCHASING AND ENVIRONMENTAL MANAGEMENT: INTERACTIONS, POLICIES AND OPPORTUNITIES