Sustainable business: learning – action networks as organizational assets

Business Strategy and the EnvironmentBus. Strat. Env. 8, 296–310 (1999)

SUSTAINABLE BUSINESS:LEARNING – ACTIONNETWORKS ASORGANIZATIONAL ASSETS

Sarah Clarke1 and Nigel Roome2*

1York University, Ontario, Canada 2Tilburg University, The Netherlands

This paper develops the concept thatsustainable development is a process thatcentres around a complex series ofcontinuously negotiated business and socialprojects or experiments. This processinvolves different parts of the business andindustrial system, including many of a firm’sstakeholders in continuous learning, actionand change. Processes of this kind can beviewed as multi-party, learning – actionnetworks that span business organizationsand stakeholders in society. This paperpresents a case study of a Canadiancompany, acknowledged as a leader inenvironmental management. It outlines howthe company responded to demands formore sustainable practices. It describes howthe company’s approach to strategicplanning identified and responded to theseissues, how its approach was progressivelyrefined and redefined, and the way that theorganization’s culture and strategic processesinfluenced its willingness to learn and actwith a network of internal and externalstakeholders. Based on case findings, thepaper identifies the critical role forlearning – action networks in the transitionto more sustainable business organization

CCC 0964-4733/99/050296–15 $17.50Copyright ? 1999 John Wiley & Sons, Ltd and ERP Environment.

and the need for these networks to besupported by appropriate organizationalculture and processes. Copyright ? 1999John Wiley & Sons, Ltd and ERPEnvironment.

Accepted 18 June 1999

INTRODUCTION

T his paper presents a study of the learning –action network that influenced the environ-mental management and sustainable

development practices in a Canadian companyacknowledged as a leader of environmental man-agement practice in the 1990s. During the study,the company also began to distinguish betweenits commitment to environmental managementand the broader, emerging concept of sustainabledevelopment. This research follows from theexperiences of one of the authors in environmen-tally driven, multi-party collaborative initiativesin the UK during the mid- to late 1980s (Vitteryand Roome, 1989). These initiatives were devel-oped by environmental non-government organiz-ations (NGOs) as part of their policy response tothe World Conservation Strategy (IUCN, 1980),which argued for new organizational forms thatcut across existing sectors, functions and disciplin-ary boundaries. These and similar initiatives aredescribed by Carley and Christie (1993). Oper-ationally these initiatives linked organizations thatshared a physical space (e.g., river basin or indus-trial area) in new ways to address environmentalconcerns. These partnerships involved joint action

Correspondence to: Professor Nigel Roome, Chair ofEnvironmental Management, Faculty of Economics andBusiness, Tilburg University, PO Box 90153, 5000 LE Tilburg,The Netherlands.

LEARNING – ACTION NETWORKS

to resolve problems inherent to systems(O’Riordan, 1971) or that arose from turbulence inorganizational domains (Emery and Trist, 1965,1973). They involved the establishment of col-laborative structures to develop shared percep-tions of problems and to determine and undertakeagreed courses of action (Gray, 1989). Many ofthese initiatives involved companies, but theywere invariably led by NGOs (Hartman andStafford, 1998).

In the late 1980s, the shift in corporateenvironmental management from traditional non-strategic, reactive approaches to more strategic,proactive stances (Hunt and Auster, 1990), pro-vided the possibility that companies mightengage in multi-party collaborative initiatives tolink their business and environmental concerns.From a sustainable development viewpoint, thisapproach is advocated in the Brundtland Report(1987) and Agenda 21 (Earth Summit, 1992), andthe importance of inter-organizational and intra-organizational links and networks to corporateenvironmental management and sustainabledevelopment has been discussed in the literature(Roome, 1994; Clarke and Roome, 1995; Clarke,1998).

The central ideas of this study were thefollowing.

(i) Environmental management and sustainabledevelopment require companies to acquireknowledge that is not ordinarily found intheir existing repertoire or experience.

(ii) Environmental management and sustainabledevelopment require companies to partici-pate in collaborative action that linkstraditional business issues to a set ofenvironmental and social concerns.

(iii) The development of this knowledge andaction involves a broad set of actors with aninterest in a company’s activities includingstrategy, technology management, environ-mental management and sustainabledevelopment.

(iv) A multi-party mechanism to bring about thedevelopment of knowledge and provide theground for collaborative action for environ-mental management and sustainable devel-opment is a learning – action network.

A learning – action network is defined as a set of‘relationships which lay over and complement

Copyright ? 1999 John Wiley & Sons, Ltd and ERP Environment.

formal organisational structures linking individ-uals together by the flow of knowledge, informa-tion, and ideas’ (Clarke and Roome, 1995). Thesenetworks ‘are embedded in the complex oforganisational and social relationships, manage-ment structures and processes that constitutebusiness and its social context’ (Clarke, 1999).Companies that seek to develop knowledge andaction through learning – action networks whichspan their internal and external stakeholders havebeen termed ‘meta-textual’ organizations (Roome,1997).

The research presented here is part of a largerstudy (Clarke, 1999) initiated in 1992/3 prior tothe publication of the theoretical literature oncorporate environmental and sustainable develop-ment. This literature focuses on multi-actor in-itiatives compatible with the learning – actionnetwork notion including ecologically sustainableorganizations (Starik and Rands, 1995), strategicbridges between business and environmentalorganizations (Westley and Vredenburg, 1991;Sharma et al., 1994; Stafford et al., 1999), institu-tional perspectives of inter-organizational learning(Jennings and Zandbergen, 1995) and adjustmentsin the structure of industrial networks in responseto external environmental change (O} stlund,1994). More recently, Rowley (1997) has contrib-uted to the discussion on stakeholder interactionsby developing a stakeholder network theorybased on the concepts of network density and thecentrality of an organization in its stakeholdernetwork. Others, notably Hart (1995), haveaddressed the demands on organizationalresources and capabilities arising from thesemulti-actor relationships.

The research design used in this study involvedethnographic methods. These permit an intimate,detailed observation of the interaction betweenthe learning – action network that surrounds acompany’s formal approach to environmentalmanagement and sustainable development. Theresearch used a grounded-theory approach;accordingly, it formulated propositions ratherthan tested hypotheses derived from existingtheory (Strauss and Corbin, 1990).

The paper is organized in four sections. Thefirst section sets out the background and researchmethods. The second section describes the com-pany and presents the findings of the case analy-sis. The third section discusses these findings in

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S. CLARKE AND N. ROOME

the light of previous and subsequent research. Italso draws on the authors’ emerging ideas abouthow corporate environmental management andsustainable development oblige the developmentof highly networked or meta-textual organiz-ations as a basis for learning and action. Itconcludes by offering a set of propositions forfuture research.

BACKGROUND AND METHOD

This paper examines how a publicly listedCanadian utility, known in this paper as ‘SysTec’(pseudonym), used networks of learning andaction to define its approach to environmentalmanagement and sustainable development prac-tice. It specifically focuses on how SysTec’s inter-nal strategic process and personnel supported themove toward an increasingly open approach tostakeholders within the corporation. The paperanalyses the characteristics of SysTec’s approachand its ability to identify and act on elements ofthe environmental and sustainable developmentagenda. The case study forms part of a largergrounded theoretical study undertaken between1993 and 1995 of the move toward more sustain-able technology management in three relatedcompanies in Canada and the UK including‘EngTec’ and ‘HiTec’ (pseudonyms). These com-panies were connected in many ways, throughthird-party organizations, such as an industryassociation or direct relationships betweenemployers of, say, EngTec and SysTec. The com-panies were also connected through the productsand services they each provided one another. Thepresent study reports on only SysTec and part ofthis learning – action network. This network wasnot apparent to its members, and only revealedthrough the inquiry process used in the research.The learning – action network is dynamic and has‘fuzzy’ boundaries. Its overall shape changes asnew needs arise and as responses are made bynetwork members. While some parts of the net-work were highly structured around existingorganizational structures and relationships, othersparts were very informal, involving personalcontacts.

This study draws on interviews with more than35 members of SysTec’s learning – action net-work, identified using a ‘snow-balling’ technique


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(Jorgensen, 1989). These key informants includedSysTec senior managers, environmental specialistsand engineers and additionally members of thewider external network identified by SysTecemployees as influential in the changes takingplace in the company. Informants were asked toidentify other individuals who were influential inshaping the company’s strategy, environmentalperformance, practices and technology (Clarke,1997). Documentation available in the publicdomain was also included.

CASE STUDY AND EMPIRICALFINDINGS

This case study describes SysTec and the inter-action between the company’s strategic manage-ment processes, its environmental initiatives andthe learning – action network. The case study isset out in four parts. SysTec’s business and itscontext are described. SysTec’s approach to stra-tegic management connected with the company’senvironmental thinking and practice is presented,highlighting the role of interpersonal networks inthe emergence of corporate environmental prac-tice. SysTec’s evolving response to the environ-ment and sustainable development agendasis reviewed, and, finally, the implications forsustainable development are described.

SysTec’s business and context

Founded over 150 years ago, SysTec’s business isto distribute a non-renewable resource. It operatesin specific (franchise) areas, where it is responsiblefor storing, transmitting, distributing, selling andsupplying this resource. It is a relatively smallCanadian company with 3000 employees, relyingheavily on externally contracted research anddevelopment. The company is known for itsstrong commitment to the communities it serves.Within the company, there is a ‘culture’ of indi-vidual responsibility grounded in an ethic ofcorporate citizenship (Annual Report, 1993) thatunderpins all corporate actions and attitudes of itspersonnel. It has an organizational philosophy tobe a ‘role model for others’ (Earth Day AnnualReport, 1993) and a belief that it is ‘part of thesolution’ for an environmentally sustainable future(Our Resource and the Environment, 1990).

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SysTec operates in a regulated industry withrate and profit distribution controls. SysTec has topresent an annual case to the regulator thatjustifies its rates against a planned programme ofactivities. The regulator (who evaluates SysTec’sinterests against community and environmentalinterests) makes strict demands on its environ-mental initiatives and research programmes. Thisregulatory regime means that any action by othercompanies in SysTec’s franchised area to varytheir rates, community practices or environmentalinterests can have implications for SysTec and itscompetitors. While the company has not purpose-fully sought this leadership position, companiessolicit SysTec’s advice and leadership in environ-mental matters. Accordingly, SysTec’s activitiescan influence industry standards.

SysTec enjoys a cooperative relationship withother companies supplying the same resource inother franchise areas. They share ideas, particu-larly in relation to environmental concerns, infor-mally through one-on-one contacts and formallythrough research partnerships, industry associ-ation initiatives and community-wide projects.Relationships with companies that supply sub-stitute non-renewable resources in SysTec’sfranchise area, however, are less harmonious.

Strategic planning, environmental management andsustainable development at SysTec

Prior to 1989, SysTec’s environmental activitiesinvolved a loose set of initiatives required bylegislation, voluntary initiatives originated fromemployee interests such as waste managementand office recycling and general ‘housekeeping’initiatives and programmes designed to improveoperational efficiencies. During the late 1980s,SysTec encountered rising concern about environ-mental issues and demands for environmentallysound corporate behaviour from the general pub-lic and its regulators, including environmentalissues provoked by the Montreal Protocol onozone depletion, and more broadly, global climatechange. There were also concerns for betterresource and product stewardship. These press-ures were supported by a pull from within thecompany, as employees sought to contribute toenvironmental improvement, consistent with thecompany’s social responsibility ethic.


These factors prompted SysTec to develop amore systematic approach to environmental con-cerns. In 1989 an environmental strategy com-mittee (ESC) was formed (comprising seniormanagers from across the company, including itsenvironment department) and a process of organi-zational change was begun. An environmentalmanagement system (EMS) resulted, which, by1994, was an integral part of the company’sstrategic decision making processes.

SysTec’s approach to environmental manage-ment was underpinned by four principles duringthis period: (i) it was ‘low key’; (ii) it led byexample; (iii) it worked with stakeholders and(iv) the approach was strategically oriented. A‘low key’ approach meant the company didnot actively seek highly visible recognition ofits environmental programmes or communityprojects. For example, one environmentalmanager noted

I think because we’re regulated we can’tthrow gobs of money at it [communityprojects]. Our level of sponsorship is basically$5000 or less . . . And our demands forrecognition are usually low key and subtle . . .There is a recognition [in the EnvironmentalServices Department] that we try to do theright thing for its own value, not necessarilybecause we see it as part of a larger marketingstrategy . . . We don’t necessarily need to bebroadcast to everyone as saviours of theworld (interview III).

SysTec believed it had a responsibility aspart of the solution to society’s environmentalproblems. Consequently, the company ‘led byexample’, seeking to put its own house in order(Environmental Plan, 1994, p 1) and by acting onnational and international environmental initia-tives, such as climate change. The rationale behindthis approach is that

If you say that you are part of the environ-mental solution . . . that implies an obligationthat . . . your own operations will be beyondreproach. But to me it also implies an obliga-tion that you will also help develop what is asolution to the concerns before [you] and youcan’t do that alone, you have to do that aspart of a larger society (interview III).

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Partnerships and stakeholder involvement wereimportant aspects of SysTec’s environmental phil-osophy. Further, the company emphasized theneed for improved mechanisms for communi-cation with stakeholder groups and placed impor-tance on environmental education for employeesand the general public.

. . . [when] we develop partnerships [wedevelop] the ability to be able to sit down andlisten to these people and get a better under-standing of what their interest is, their per-spective and, in terms of a company doing itsstrategic planning, . . . how it should approachthe environmental issues, that kind of grassroots polling as it were, building trust . . .(interview III).

SysTec solicited the perspectives of its manystakeholders rather than seek to influence ordominate their opinion. It used insights fromthese interactions to review and improvecorporate environmental programmes andactivities.

SysTec’s process of strategic planning anddecision making was also a key to its ability torespond to changing circumstances in the businessenvironment. It enabled the company to identifyissues in its business environment, to assess theircorporate implications, and to initiate and imple-ment appropriate programmes. This supportedthe changes made in corporate environmentalactivities over a relatively short time period.SysTec’s strategic management process contrib-uted to the ‘continuous improvement’ of itsenvironmental programmes, through the identifi-cation of new environmental concerns, the imple-mentation of new environmental activities and therevision of existing approaches.

SysTec’s strategic planning process wasdesigned to identify factors in the businessenvironment that would shape the company’sactivities in the coming year. These factors aredescribed by senior management as ‘key strategicdrivers’ (interview I). This strategic planning pro-cess predated the emergence of environment andsustainable development on SysTec’s corporateagenda. Since 1989, successive ‘environmental’components were identified by this planningcycle. Part of the strategic organizational responseto environmental concern was to integrate the


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company’s EMS and the Due Diligence Program(DDP), required by law, into its planning process.

A diagrammatic representation of the stages inSysTec’s annual strategic planning process isshown in Figure 1. This outlines the process thatoperated after 1994 described by informants. Itindicates how environmental management,through EMS and Due Diligence, became integralto the SysTec’s business planning cycle. Thefigure shows the linkages between the EMS andDDP to the overall process.

SysTec’s strategic planning process required alldepartmental directors to produce a ‘scan of thebusiness environment [context]’ to identify issuesof strategic importance. Directors discussed thesebusiness scans formally within strategic planningworking groups (SPWGs) and informally throughtheir day to day operational relationships. Thisprocess was designed to ensure that each depart-ment was aware of the issues identified by otherdepartments. It provided department heads with acomplete range of factors in the business contextthat were affecting SysTec’s departments, not justthose specific to their department. In practice,several departments identified environmentalissues as critical business concerns. A team of VicePresidents (VPs) and senior managers, who aremembers of the strategic planning committee(SPC), reviewed these business scans. This com-mittee decided which strategic drivers would beused to guide company activities.

Responsibility for the DDP process rests with adue diligence task force (DDTF) drawn from man-agers across the company. It considers all aspectsof the company’s operations and areas of potentialenvironmental risk, and determines whetherSysTec’s existing procedures are adequate. DDPkeeps abreast of activities in the industry, ‘notnecessarily to be ahead of the pack, but certainlythat [they’ve] got a plan in place to handle it, justin case something happens’ (interview II). The duediligence exercise occurs before the businessplanning cycle, allowing departments to

[R]ead it, assimilate it, ask questions and thensit down to decide what should I andmy department be doing in terms of costeffectiveness, productivity, environmentalprotection, customer service? (interview III).

The DDP ensures that environmental risks arecontinuously assessed and integrated into the

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Figure 1. Relationship between strategic planning process and EMS at SysTec

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business planning cycle, even if environmentalissues do not emerge as specific strategic drivers.

The environmental planning and DDP loopsshown in Figure 1 form the basis of the com-pany’s EMS. The strategic planning process en-velops the company’s EMS. Taken together thesethree management processes shown in Figure 1facilitated the integration of environmental con-cerns and responses into all levels of SysTec’sdecision making, from strategic to operational. Asone environmental manager described it,

[W]e try to use existing business planningprocedures, so we don’t reinvent the wheel,but we try to embellish and enhance theexisting ones so that they have the environ-mental factor . . . at the end of the strategicplanning process . . . [senior managers] comeup with the strategic themes that they thinkare important, [that] the business managersshould think of. In the last few years, environ-ment has been one of those. Now it doesn’thave to be there all the time . . . But at least itgets fair weight. [The Environment Director]is very much involved in that process. So it’san opportunity to directly make presentationsas to what environmental issues are before us,pressures, opportunities, threats that weshould factor in (interview III).

Once strategic drivers are established, eachbusiness department brings forward its own busi-ness plans detailing the environmental activitiesthat are guided by the company’s DDP. Membersof the environment department compile the com-pany’s annual environmental plan from theseinitiatives. They assist in programme develop-ment and monitor and review the company’senvironmental performance. The EnvironmentalDirector is responsible for reporting progress to aSpecial Committee of the Board of Directors,which reports to the full board (Annual Report,1991, p 13).

The outcome of these processes is that theenvironment emerged as a strategic driver for thecorporation in 1991 and 1992, but not in 1993, asthe initial response to the 1991 and 1992 agendahad been operationalized. Several key informantsreferred to this as the process through whichenvironment was embedded in the company’sculture and operational activities. Although


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environment was not a strategic driver in 1993, itwas identified as an important company perform-ance measure. Consequently, departments beganto include environmental performance in theirbusiness plans to measure success in meetingSysTec’s environmental commitments, as set outin the company’s environmental policy andenvironmental principles. In 1994, environmentagain emerged as a strategic issue under theumbrella of corporate responsibility and citizen-ship along with employee development, marketshare and growth targets and financial goals.

In 1994, the ESC established a set of corporateenvironmental priorities, ranging from low prior-ity actions (e.g., waste management and environ-mental manuals) to high priority actions (e.g.,environmental training and environmental part-nerships). These action areas led to the develop-ment of an enhanced set of environmentalperformance objectives with targets and measuresdesigned to ensure that the company continu-ously improves its environmental performance(Environmental Plan, 1994, pp 23–24).

SysTec’s emerging approach to sustainabledevelopment

SysTec’s recent environmental commitment isfocused around values and goals that support theethic of corporate responsibility that has guidedthe company throughout its history. Theseemphasize sensitivity to customer and employeeneeds, local community concerns and environ-mental implications. In its Annual Report, thecompany acknowledges its responsibility toenhance shareholder value, but sees this as onlyone of its goals. SysTec’s environmental pro-grammes are influenced by its unique regulatorycircumstances, with its expectation that the com-pany will continue to promote new and improvedapproaches to environmental protection andmanagement.

SysTec’s environmental position is also shapedby the environmental impact of the resource itsupplies. This requires the company to be con-scious of health and safety responsibilities, aroundthe efficient and safe use of the resource. SysTec,with other members of its industry, views itsproduct as part of today’s solution to society’ssearch for a more sustainable future. The productis widely acknowledged as having significantly

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less environmental impact than commerciallyavailable substitutes. In company literature,SysTec promotes its resource as ‘[N]ot perfect buta great step in the right direction’ (Our Resourceand the Environment, 1990) while acknowledgingthat ‘[S]tewardship of the environment is every-one’s responsibility’ (Environmental Initiatives,1991). SysTec also sees itself as ‘part of thesolution’ to more environmentally sustainablefutures (Our Resource and the Environment, 1990).

SysTec was an early signer to the InternationalChamber of Commerce’s (ICC’s) Business Charterfor Sustainable Development. According toSysTec: ‘The Charter comprises sixteen principlesfor environmental management which, for busi-ness, are vitally important aspects of sustainabledevelopment’ (Environmental Plan, 1994, p 2).However, apart from this commitment, and apassing reference to sustainability under thecompany’s list of strategic priorities in 1994(Environmental Plan, 1994, p 23), there are noexplicit references to sustainability in companydocuments that either define sustainable develop-ment or provide related implications for thecompany.

SysTec’s approach was initially consistent withthe emphasis in the ICC charter on the manage-ment of environmental effects and the notion thatits overall business provides a bridge from anunsustainable past to a more sustainable future.However, SysTec’s environmental managementapproach has become more sophisticated andincreasingly consistent with broader sustainabledevelopment. While SysTec’s approach toenvironmental policy in 1989 (Statement ofEnvironmental Principles, 1994) emphasized a com-mitment to conduct operations in an environmen-tally sensitive manner, promote employee andpublic awareness of environmental issues, encour-age use of its product as the environmentallypreferred choice and develop technology toimprove efficiency in resource utilization, by1994, SysTec had a Statement of EnvironmentalPrinciples that read

[SysTec] recognises the intrinsic value ofnature and is committed to conducting all ofits operations in an environmentally respon-sible manner, with a view to protect andmaintain the environment for future genera-tions. This Statement of Environmental


Principles guides the Company in achievingits commitment to environmental protectionand citizenship. It is the obligation ofevery employee to understand his or herenvironmental responsibilities . . . .

This document does not specifically referencesustainable development but the explicit recogni-tion of the ‘intrinsic value of nature’ and ‘citizen-ship’ together with the company’s commitment toenvironmental stewardship, partnership and learn-ing with others suggests an approach that goesbeyond conventional corporate environmentalmanagement. It certainly presents a step beyondthe company’s earlier identification of itself as‘a responsible corporate guardian of a non-renewable resource’ (Environmental Plan, 1991).The emphasis on understanding different stake-holder values, sharing ideas and working coopera-tively with different groups implies an embeddedunderstanding of the corporate value of engagingin relationships that bring about organizationaland social learning and change.

Characteristics of SysTec’s Approach toMore Sustainable Practices

Some aspects of SysTec’s approach to environ-mental management and sustainable developmentare described next. Table 1 pinpoints major mile-stones in SysTec’s environmental managementapproach during the period between 1989 and1994. It identifies the process of change and theoutcomes that are linked to SysTec’s learningabout sustainability. These changes can be cat-egorized as management structures and processes,communication activities and partnership andcollaborative initiatives. Each is discussed below.

Management structures and processes at SysTecundertook environment as a strategic driver. Asnoted earlier, the strategic planning process, EMSand environmental committee structure ensuredthat all levels of personnel were involved in thedevelopment of environmental programmes andthe shaping of environmental thinking within thecompany. A company-wide training programmewas begun in 1994, to ensure that the company’senvironmental commitment was fully understoodand that roles and responsibilities were clearlyidentified. This training programme comple-mented the management process. In addition, the

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company made environmental information avail-able through an in-house electronic bulletin board.

SysTec suggests that the strategic processincorporated the new environmental managementand sustainable development agenda in a numberof ways. This involved

(i) problem identification – where environmentwas picked up as a strategic driver,

(ii) operationalization – where environmentwas integrated into existing activities withnew systems adopted and routinized,including additions to the strategic planningprocess itself – and

(iii) redefinition – where environment wasdropped as a stand-alone strategic driver tore-emerge under the umbrella of a newstrategic driver described as ‘corporateresponsibility and citizenship’.

The ability of the strategic process to recognizeissues and to create the ground for integration isseen as important.

Integration took place on a number of levels.First, separate strands of the ‘environmental


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agenda’ before 1989 were integrated into a singlestrategic issue at the beginning of the 1990s, andan overall organizational response was formulatedto the environmental agenda. By the end of thecase study, the newly fashioned strategic term‘environment’ was recast and integrated as part ofa wider issue connected to corporate social rela-tionship. This helped SysTec move its conceptionof its environmental impacts and activities fromenvironmental protection and managementtoward a broader notion of sustainable develop-ment. Second, SysTec learned how to integratethese issues within its organizational structure andits strategic planning processes that informedorganizational change. Finally, the overall ‘iden-tity’ of the organization – the connection betweenits culture, values and strategic process, tech-nology and resource base – was able to integratethese new ideas about environment and sustain-able development. In particular, this is seen in thecompany’s predisposition to communication andpartnerships.

Communication activities were important toSysTec. SysTec communicated its approach to the

Table 1. Major environmental milestones at SysTec

Period Philosophy Major milestones

1989 Environmentalresponsibility &protection

● Environmental strategy committee formed● Environmental policy endorsed● Annual environmental planning process initiated and first environmental plan

produced1990–1993 Form

environmentalprotection toenvironmentalstewardship

● Environmental Services Department established● Code of environmental ethics added to policy● Corporate environmental logo launched & a set of informational pamphlets

produced about global environmental issues and SysTec’s responses to theseconcerns

● Environmental management system (EMS) and Due Diligence Program (DDP)introduced

● Environmental audit process initiated● Waste management target surpassed and redefined● Partnerships established, interest group meetings held, environmental research

collaborations inititated● Collaborative projects developed in response to regulatory requirements● Earth Day Committee set up and annual Earth Day activities launched

1994 Environmentalstewardship andcitizenship

● Statement of environmental principles replaced code of environmental ethics● Environmental plan revised as a more strategic document● EMS and DDp strengthened and independent assessment of environmental

activities commissioned● Environmental priorities established and additional environmental targets set● Comprehensive training programme launched● Partnership and collaborative activities continued

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environment with internal and external constitu-encies to share ideas with different stakeholdersand gain their views. SysTec published edu-cational leaflets on specific environmental issues,which affected the company and its industryin general. This was combined with publicinformation sessions and displays together withenvironmentally related community projects tocommunicate the company’s position and to raiseenvironmental awareness.

The company’s belief that it was ‘part of thesolution’ to environmental problems meant it didnot feel defensive about its environmental posi-tion and it also ensured that all sides of anenvironmental issue were addressed. Conse-quently, various environmental NGOs wereencouraged to meet with the company to discussconcerns. The purpose of these meetings was notto give a ‘‘‘dog and pony show’’ where we wouldtell them how wonderful we were and what wewere doing’ (interview I). Instead, environmentalactivists were invited to meet with a number ofdepartmental directors to discuss what theirgroups were planning, their strategies for thefuture and how they saw the company’s positiondeveloping. Before adopting this approach seniormanagement, with the exception of environ-mental managers, had only met interest groups inadversarial settings, such as at regulatory hear-ings. The environment managers at SysTecplayed an important role in establishing the trustthat enabled representatives of the stakeholdergroups to meet together with departmental direc-tors. One environmental manager said of thesemeetings

It provides an opportunity for an outsidegroup, not necessarily to see us as a black boxbut to see other places. It gives an oppor-tunity for a lot of other people in . . . [SysTec]to hear first hand what a group is, instead ofhaving it distilled through me. It gives them achance to raise their own questions as well . . .(interview III).

This same manager described it as a mutuallearning process where each side was able toexplain their position. Critically he noted

There’d be areas where we agree to agree andareas where we agree to disagree and areas


where we have opportunities to worktogether and areas where we need to worktogether towards resolving our differences.

These meetings helped to replace stereotypesheld about one another. In these stereotypes thebusiness managers were portrayed as ‘older men,with well pronounced bellies, smoking cigars’,with environmentalists characterized as ‘formerhippies with torn blue jeans’ (interview III). Out-comes of these meetings were that the companydeveloped a better understanding of interestgroups’ expectations and a clearer picture of whatstakeholders believed SysTec should be doing, ifit were to meet its claim as part of the solution tosociety’s environmental problems. Moreover,SysTec gleaned important insights into the phil-osophy and tactics adopted by environmentalgroups.

These activities reinforced SysTec’s commit-ment to environmental concerns and enabled awide range of external perspectives and valuesto be merged in their response to those con-cerns. This was strengthened by the company’semphasis on partnerships and collaborativeinitiatives.

Partnerships and collaborative initiatives were asignificant part of SysTec’s approach to sustain-able development. SysTec actively engaged incollaborative initiatives with many of its stake-holders: the general public, interest groups, indus-try members and industry associations, researchassociations and universities, regulatory and gov-ernmental agencies and competitors. The rationalefor these partnerships was the realization that thedays of ‘command and implement’ managementstyles were over (interview III). SysTec increas-ingly recognized the need to find alternative waysto resolve issues of conflict.

Through more inclusive styles of management,they were able to gain a better understanding ofthe expectations of their customers, governments,regulators and special interest groups.

Aside from holding dialogue sessions withdifferent interest groups, SysTec sponsored smallenvironmental projects, such as the local zoo’s‘adopt a pond programme’ to complement com-munity activities. SysTec also became an activesupporter of Earth Day to educate the company’semployees and customers about SysTec’senvironmental commitment.

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Partnerships were a key mechanism for SysTecto promote the use of its products as the environ-mentally preferred choice and to develop tech-nology that would support this goal. SysTec hadno in-house, ‘state of the art’ research facility.Instead it had a relatively small technology anddevelopment (T&D) department, which focusedon the development aspects of the continuumfrom ‘basic research’ to ‘product development’.SysTec developed the capability to leverage itsbasic research needs through partnerships withexternal research organizations. Moreover, part ofT&D’s charge was to modify the products usedby the company’s customers by encouragingmanufacturers to undertake technology develop-ment. If the technological base was missing, itpromoted research to fill the gap. Consequently,SysTec was involved in a large number ofresearch collaborations with local, national andinternational industry associations, researchorganizations and universities. It was involved inprojects that spanned a variety of issues fromindustry specific technological concerns aboutoperational equipment and their environmentalimplications, to more generic global environ-mental issues, such as climate change, involvingbasic research in, for example, atmosphericchemistry.

SysTec was actively involved in persuadingother industry players to have greater involve-ment in environmentally related projects outsidethe industry’s ‘traditional’ areas of research. Thecompany spearheaded several industry associ-ation collaborative initiatives, such as a hand-book of environmentally related, industry-wideresearch, an annual conference on environmentalissues affecting the industry and environmentaltraining. SysTec was a key contributor in theformulation of an industry level environmentalresearch policy through its committee member-ships. Senior personnel were assigned tomulti-stakeholder collaborative initiatives: forexample, a scheme to ‘green’ the city in whichit had its headquarters, involving representativesof environmental groups, engineering firms, gov-ernment, management consultancies and business.

SysTec had strong relationships with its regu-lators as well as government departments andagencies at municipal, provincial and nationallevels. The regulator required SysTec to take partin two collaborative initiatives. One explored


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ways of internalizing environmental costs in theindustry, and the other encouraged demand-sidemanagement programmes to minimize environ-mental impacts. These initiatives also assumed theform of multi-stakeholder consultative and col-laborative groups, which brought competitors,environmental interest groups, consumer groupsand governmental representatives together toaddress their fundamental differences. This pro-cess compelled SysTec to rethink its approach todealing with its stakeholders, with senior man-agers becoming aware that they could not forcethese processes, the details of the agenda or theoutcomes that emerged. They saw the need tobuild consensus around shared understandings,with environmental groups demanding greater,more radical, action than most of the participatingcompanies were prepared to undertake.

DISCUSSION

The findings from the study provide strongsupport for the importance of learning – actionnetworks in the acquisition of new knowledgeand the development of collaborative structuresto bring about corporate environmental manage-ment and more sustainable forms of businessactivity, but, before discussing the characteristicsof SysTec’s approach to the development andacquisition of new environmental knowledge, it isimportant to address the overall embedding ofenvironmental management thinking and practicein SysTec’s existing processes as it adjusted tonew environmental concerns and realities. It isalso important to draw attention to the overallalignment between SysTec’s values, strategic pro-cess and managerial attitudes, which providedorganizational pre-conditions that influenced, andwere influenced by, its emerging practice ofenvironmental management. For example, SysTecoperated around values that related to corporatecitizenship and were widely accepted in the com-pany. They were consistent with the company’sopen, participative strategic processes enablingenvironmental issues to be identified andaddressed, and then incorporated within thatprocess. The newly adopted environmental prac-tices were informed by principles, such asenvironmental stewardship and responsibility andby openness to the ideas and contributions of

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external stakeholders. These environmental man-agement principles and processes were consistentwith the pre-conditions at SysTec.

SysTec engaged in mutually iterative learningand change. For example, its organizational pre-conditions were adapted as a result of newenvironmental management ideas. Environmentalmanagement ideas were changed also in light ofthe now modified organizational pre-conditions.The overall openness to ideas easily permittedorganizational learning and change to take place.

SysTec’s strong commitment to learning, tospecific corporate values and its process of stra-tegic planning meant that its was readily able toundertake change, enabling SysTec to incorporateenvironmental management into its organiz-ational routines. Many companies appear to havefound this difficult. Yet, SysTec rapidly developednew knowledge not found in its existing reper-toire or experience. In other words, SysTec wasreceptive to and capable of acquiring this newknowledge.

In particular, SysTec’s managers’ abilities towork with a range of new stakeholders simplyextended the approach to collaboration which hadbeen a part of its traditional way of operating inT&D or supply chain activities. In those areas, thepartners with whom SysTec sought to learn andtake action were new to most of the managers inthe company necessitating learning. SysTec didnot need to learn new ways to learn with others;it only had to adapt its established ways oflearning to working with new partners.

Environmental managers were specificallyresponsible for bringing members of their widernetworks of environmental interests into contactwith a number of senior corporate managers anddepartment heads. Rather than retaining thesenetworks exclusively, the environmental manag-ers sought to spread the knowledge from theirnetworks widely into the internal corporatestructure of SysTec.

These observations can be related to theliterature on strategic bridging (Westley andVredenburg, 1991), stakeholder networks(Rowley, 1997) and organizational resources(Hart, 1995). In the case of strategic bridges, asmechanisms that enable the exchange of environ-mental knowledge between organizations such asenvironmental groups and companies, the studyof SysTec indicates the importance of establishing


multiple bridges between people who work indifferent organizations. The metaphor of the stra-tegic bridge, therefore, does not appear totallyappropriate to the relationships found at SysTec.These are better represented as a rather fluid,network-like structure that involves learning andaction by many people in the company and bymany people and organizations in a company’s‘stakeholder field’. SysTec was not involved inestablishing a single ‘strategic bridge’. It wasengaged in developing multiple points of contactfor learning and action. This ‘strategic network’provides the ground within which more formal‘strategic bridges’ could arise between stakehold-ers and different parts of the company. Thisimplies that SysTec was simultaneously involvedin the development of strategic bridges, as formalcollaborations, and in advancing a less formalnetwork of interactions between the companyand its stakeholders, of the kind envisioned byRowley (1997), but, in contrast to the emphasisRowley places on the concepts of network den-sity and organizational centrality, the experienceat SysTec reveals the importance of organiza-tional pre-conditions and interpersonal capabilitiesin developing the potential of the learning –action network as an organizational asset.

The study identifies the crucial role of environ-mental managers in facilitating the process ofnetwork development and as the architects ofmultiple bridges. This function was enhanced bythe organizational support for the process ofbridge building. This support, or legitimacy,derived from SysTec’s longstanding values andapproach to collaboration, which enabled Sys-Tec’s environmental managers to develop thespace to build new bridges and broker newrelationships. These then helped inform organiz-ational processes such as strategic planning orT&D management.

The study of SysTec reinforces Roome’s (1994)contention that environmental management andthe environmental dimension of technologydevelopment require new, more open, mechan-isms for collaboration and learning. It extendsHart’s (1995) proposition that capabilities, indrawing external stakeholders into dialogue withthe company, are an important asset for com-panies involved in environmental management,but, it contradicts his later suggestion that thesemechanisms should be used to encourage learning

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by stakeholders (Hart, 1997). Overall, the experi-ence at SysTec identifies serious limitations withthis view.

SysTec’s experience shows that networks arenot just for communicating a set of companymessages to stakeholders. Instead they provided amechanisms for mutual learning and action by thecompany (and its managers) and its stakeholders(organizations and individuals). This implies thatlearning is two way. For example, stakeholderinputs could lead to the revision of SysTec’scorporate strategy or to the establishment of newmulti-party business and environment initiatives.In this sense, SysTec’s strategy did not define thenature and direction of collaboration with thecompany’s network of stakeholders. As a conse-quence of the company’s culture and attitudesSysTec’s strategy was flexible and responsive tostakeholder issues and interests.

The study suggests a complex process ofnegotiation, learning, action and change betweenthe company and its stakeholders was takingplace to integrate environmental ideas into Sys-Tec and to progress sustainable development.This involved the managers of the company andits dynamic network of stakeholders in a processof continuous mutual adjustment.

This process of learning and action is notsimple. SysTec’s networks with stakeholders werecharacteristic of its industry, technologies, organ-ization, personnel, culture and history. Not onlyare these networks dynamic, they contain adiverse array of values, experiences, interests andideas within which a myriad of contested inter-pretations of environmental and sustainabledevelopment concepts are played and acted out(Myerson and Rydin, 1996; Clarke, 1997). Oftenthese differences are found in the specializeduse of language within different (stakeholder)communities (Roome, 1997). This impliesthat those responsible for facilitating learning,action and change using networks must havethe capability to bridge these different communi-ties or islands of knowledge and language (Clarke,1997). The capability of these boundary-spanners(Mylonadis, 1993) or network champions(Roome, 1997) or catalysts (Clarke, 1999) topromote learning, action and change throughnetworks appears a critical, yet under-researched,aspect of environmental management and sustain-able development practice. It is suggested that


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SysTec was assuming the character of a meta-textual, highly networked organization, engagedin the development of knowledge and collabora-tive action through interaction with many internaland external stakeholders as a way to bring aboutenvironmental management and sustainabledevelopment.

CONCLUSIONS

A number of conclusions are drawn from the casestudy. SysTec’s acknowledged leadership inenvironmental management is traced to the con-text, business and established values that provideit with a set of organizational pre-conditions. Theregulatory setting and the Canadian approach tomulti-party dialogue create a context in whichit is legitimate for businesses to forwardenvironmental responsibilities. The resources sup-ported this and technologies of SysTec’s corebusiness and enabled SysTec’s positioning asenvironmentally friendly.

SysTec then drew on a number of internalpre-conditions that enabled it to learn and changeto develop its environmental management capa-bility and sustainable development potential.Important pre-conditions include the values thecompany operates by and its strategic processes,which identified environmental issues as a futurestrategic driver. This process was open, participa-tive and flexible enough to adapt the organizationto these concerns. SysTec’s strategic planningprocess can be viewed as an organizational spiral,collecting issues from across the company, ratherthan the more narrowly defined, planned,hierarchical, closed process used by manyorganizations for strategic planning.

Proposition 1. Corporate effectiveness in developingresponses to environmental concerns and sustainabledevelopment is critically influenced by context andorganizational pre-conditions that pre-dispose anorganization to mutual learning and change with otherstakeholder groups. The internal process at SysTecsupported increasingly close relationships with itscustomers, regulators and the communities inwhich it operated. This was supported bySysTec’s willingness to be open, to view com-munication as listening as well as talking, toengage in many different opportunities to learn

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and act together with a wide range of stakehold-ers and to broaden their points of contact withinthe company. SysTec was able to make effectiveuse of a rich network of knowledge.

Proposition 2. Companies that are open and respon-sive to multiple perspectives are more disposed toacquire new knowledge and take actions that meetenvironmental management and sustainable develop-ment needs than those that develop knowledge and actwithin their existing resources. SysTec’s environ-mental managers played an important role infacilitating settings in which learning was devel-oped and translated into joint actions. Theyeffectively bridged internal and external networks.

Proposition 3. Companies that acquire knowledgethat contributes to effective environmental managementand sustainable development have access to managerswith highly developed networks, networking skills andcapabilities in facilitating change through those net-works. SysTec developed a learning – action net-work form of organization. This provided a frameor sounding board that influenced the company’sability to develop novel ways to meet challengesconfronted in the economy, environment andsociety. Relevant networks provided feedbackthat enabled SysTec continuously to re-definethe problems of environment and sustainabledevelopment and to shape and reshape itsresponses to old and new issues. It continues toprovide opportunities for SysTec to act withstakeholders to address the fundamental changesin socio-technical context.

Proposition 4. Effective environmental managementand sustainable development require companies to usenetworks of stakeholders as a means to inform, confirmand validate their approach to environmental manage-ment or sustainable development. Despite SysTec’sacknowledged success in shaping its response toenvironment and sustainable development withinits business, a number of issues remain. Forexample, there are questions about the extent towhich SysTec was able to respond to the more farreaching demands of stakeholder networks and todevelop collaborative initiatives and projectswhile respecting fundamental differences of per-spective that could not yet be bridged. SysTecwas also aware that it had to learn, act andnegotiate with many different stakeholders, yet ithad begun to encounter problems; in particular,SysTec’s managers encountered contested mean-ings and values and problems over the different


uses of language in the learning – action network.These problems were beginning to influence theimplementation of joint projects.

Proposition 5. Effective environmental managementand sustainable development involve inclusive networksfor learning and action. The more inclusive a network is,the greater the demands on the ‘process skills’ of man-agers to reconcile the problems that stem from thedifference of perspective and language used by networkmembers. There was evidence that SysTec’s com-petitors were beginning to imitate SysTec’s pro-grammes and activities rather than undertakingchange in the organizational culture, attitudes andprocesses that provided the pre-conditions forSysTec’s success. The case study suggests theneed for all the strategic aspects of a company tobe open to new knowledge and new opportuni-ties for collaboration through the mechanism oflearning – action networks. The challenge for cor-porate strategists, technology managers andenvironmental managers is to synchronize the‘soft inputs’ from learning – action networks withmore analytical skills of strategy formulation ortechnology development and management.

Proposition 6. Effective environmental managementand sustainable development involve highly developedskills in facilitating inputs from multi-stakeholder net-works at all levels of a company – strategic, environ-mental and technological as well as operational.

ACKNOWLEDGEMENT

The Authors would like to thank the Erivan K.Haub Program in Business and Environment,Schulich School of Business, York University,Canada, for its financial support of this research.The accuracy of the content of this paper remainsthe responsibility of the authors.

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BIOGRAPHY

Sarah ClarkeSchulich School of BusinessYork University4700 Keele StreetNorth York M3J 1P3OntarioCanada.Professor Nigel RoomeTilburg UniversityPO Box 901535000 LE TilburgThe Netherlands.Tel.: +31 134 662 337.Fax: +31 134 662 875.Email address: [email protected]

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Sustainable business: learning – action networks as organizational assets