Grantee Research Project Results
Final Report: Regulation, Business, and Sustainable Development: The Management of Environmentally Conscious Technological Innovation Under Alternative Market Conditions
EPA Grant Number: R824748Title: Regulation, Business, and Sustainable Development: The Management of Environmentally Conscious Technological Innovation Under Alternative Market Conditions
Investigators: Sharfman, Mark , Meo, Mark , Ellington, Rex
Institution: University of Oklahoma
EPA Project Officer: Hahn, Intaek
Project Period: October 1, 1995 through September 30, 1997 (Extended to March 31, 1999)
Project Amount: $244,955
RFA: Incentives and Impediments to Pollution Prevention (1995) RFA Text | Recipients Lists
Research Category: Sustainable and Healthy Communities , Pollution Prevention/Sustainable Development
Objective:
1. Develop a theoretical framework that explains the management of technological innovation when subject to different levels of environmental regulation;
2. Conduct several case studies of environmentally conscious technological innovations at DuPont and Conoco that explore the relative influence of environmental regulation on innovation. Case studies will be undertaken in areas that range from a high level of environmental regulation (e.g., CFC substitutes and reformulated gasoline), to areas subject to a lower level of regulation (e.g., polymers, fibers);
3. Refine the theoretical framework through indepth interviews at DuPont facilities and test the theory through survey data collection at DuPont, its customers, its regulators, and its suppliers;
4. Further refine the survey instrument based on the results of the first administration and use it with a broad sample of manufacturers for whom environmental management is a stated priority;
5. Test the theory on the broader sample of firms in order to better generalize the results; and
6. From the results of the project, develop a management tool that can be used by corporate decision makers as a guide for practical management of innovation that is subject to environmental regulation.
Summary/Accomplishments (Outputs/Outcomes):
The key result of this project is how firms use innovation to react to regulation. As we saw in the two case studies, Conoco innovated environmentally to get out from under regulations (in the Vapor Recovery case) and to provide their customers an escape from potential regulation (in the Biodegradable Lubricants case). In the survey data, we see that while even in our small sample some of our predictions were supported in the low regulation context, in the high regulation context our predictive model received no support. While the lack of support in the high regulation context may be a sample size issue, we believe there is something else going on. Our experience suggests that, in general, regulations are becoming stricter. While there is an increasing number of voluntary initiatives in place, the standards firms are expected to meet keep increasing. And even when the standards are voluntary, once the firms in our study accepted those standards, they seem to have the same effect as legally imposed regulations. In both cases, meeting (or escaping from) the standards becomes the overarching goal. In such cases, regulation seems to have the intended effect (i.e., better environmental performance), but only as the result of firms trying to get out from under the strictures of the relevant standard.As such, the general impression we received from our data was that regulation was a burden to be lifted and innovation represented a method of doing so. As the cost of compliance has risen, firms have greater and greater incentives to innovate out from under from increasingly strict regulation. While the improved environmental performance that we have seen from innovations is desirable, the adversarial situation that results from stricter and stricter regulation is not. Our data provide limited support for the idea that positive relationships with regulators lead to more effective innovations. When regulation is seen as a burden to be lifted, such positive relationships are not very likely.
The case studies revealed several helpful insights for organizations attempting to develop environmental innovations. First, a supportive corporate culture is necessary. The corporate culture within Conoco was explicitly oriented toward improving the company=s environmental performance and this contributed to the success of the innovations under study. In fact, the company was clear that a zero emissions goal was desirable and achievable. In order to motivate a higher awareness of environmentally conscious technology, the company held an internal competition each year to select the most outstanding environmental innovation that the staff had developed. Second, as we mentioned above, the cases revealed the necessity of building multidisciplinary teams to successfully tackle environmental challenges. In both cases, teams were assembled that could focus on the problem from a variety of perspectives, and were thus able to design and develop an effective approach toward a solution (even after repeated failures). Third, the need for organizational flexibility was noted in both case studies. While adequate room was needed for the teams to operate, they also needed and received continuous support from upper management to carry on with their quests. Fourth, the cases revealed the importance of internal and external communication. The details of environmental technologies are often difficult to understand, and the ability of people trained in various fields to understand the mix of issues germane to each environmental problem can be a limiting factor in their ability to be supportive of new ideas or ways of doing things. In order to attain success, it was imperative for the team leadership to assume the burden of keeping a large number of people inside and outside of the firm aware of what was being done and why. (It should be noted that the results in this summary do not reflect the two DuPont case studies because as of this writing the investigators had not received permission to release these data.)
Journal Articles on this Report : 2 Displayed | Download in RIS Format
Other project views: | All 8 publications | 3 publications in selected types | All 2 journal articles |
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Type | Citation | ||
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Sharfman M, Ellington RT, Meo M. Conoco and the Vapor Recovery Project: Using innovation to preserve autonomy. Journal of Industrial Ecology 1999/01//;3(1):93-110 |
R824748 (Final) |
not available |
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Sharfman MP, Meo M, Ellington RT. Regulation, business, and sustainable development - The antecedents of environmentally conscious technological innovation. American Behavioral Scientist 2000;44(2):277-302 |
R824748 (Final) |
not available |
Supplemental Keywords:
innovative technology, waste reduction, surveys, case analysis., RFA, Scientific Discipline, Economic, Social, & Behavioral Science Research Program, Sustainable Industry/Business, cleaner production/pollution prevention, Economics, Corporate Performance, Social Science, behavioral effects, corporate decision making, environmental performance, cleaner production, sustainable development, Dupont, waste minimization, waste reduction, case studies, incentives, industrial ecology, alternative market conditions, Conoco, pollution prevention, regulations, technology research, corporate culture, corporate environmental behavior, alternative market conditionProgress and Final Reports:
Original AbstractThe perspectives, information and conclusions conveyed in research project abstracts, progress reports, final reports, journal abstracts and journal publications convey the viewpoints of the principal investigator and may not represent the views and policies of ORD and EPA. Conclusions drawn by the principal investigators have not been reviewed by the Agency.