Stakeholders, the Environment and Society NEW PERSPECTIVES IN RESEARCH ON CORPORATE SUSTAINABILITY Series Editors:Sanjay Sharma,Professor ofPolicy and Sustainability,School of Business and Economics,Wilfrid Laurier University,Canada and Mark Starik, Associate Professor ofStrategic Management and Public Policy,School ofBusiness and Public Management,The George Washington University,USA The complex interactions between organizations,the natural environment and society within the context of corporate sustainability is the central theme of this unique series.Each volume will focus on a particular issue and will consist of original contributions from leading scholars on the three sectors of interest (business,governments and non-profits).Topics will include corporate sustainability and performance;stakeholders;organizational change;strategy; small businesses and sustainability;government policy;alliances,networks and partnerships;and multi-level sustainability interactions. Research in Corporate Sustainability The Evolving Theory and Practice of Organizations in the Natural Environment Edited by Sanjay Sharma and Mark Starik Stakeholders,the Environment and Society Edited by Sanjay Sharma and Mark Starik Stakeholders, the Environment and Society Edited by Sanjay Sharma Wilfred Laurier University,Canada Mark Starik The George Washington University,USA NEW PERSPECTIVES IN RESEARCH ON CORPORATE SUSTAINABILITY Edward Elgar Cheltenham,UK • Northampton,MA,USA © Sanjay Sharma and Mark Starik,2004 All rights reserved.No part of this publication may be reproduced,stored in a retrieval system or transmitted in any form or by any means,electronic, mechanical or photocopying,recording,or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited Glensanda House Montpellier Parade Cheltenham Glos GL50 1UA UK Edward Elgar Publishing,Inc. 136 West Street Suite 202 Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library Library ofCongress Cataloguing in Publication Data Stakeholders,the environment and society/[editors],Sanjay Sharma, Mark Starik. p. cm.— (New perspectives in research on corporate sustainability) Includes bibliographical references and index. 1.Sustainable development.2.Social responsibility of business. 3.Corporations—Environmental aspects.I.Sharma,Sanjay. II.Starik,Mark,1951– .III.Series. HC79.E5.S8635 2004 658.4’083—dc22 2004050642 ISBN1 84376 459 8 Printed and bound in Great Britain by MPG Books Ltd,Bodmin,Cornwall Contents List of figures vii List of tables viii List of appendices ix List of contributors x 1. Stakeholders,the environment and society:multiple perspectives,emerging consensus 1 Sanjay SharmaandMark Starik 2. Stakeholders and the management of freshwater resources in New Zealand:a critical commons perspective 23 P.Ali MemonandJohn W.Selsky 3. Influential environmental stakeholders:a grounded model of processes for effecting change 62 Jamie R.Hendry 4. Stakeholder influence strategies for smarter growth 93 Duane Windsor 5. Toward stakeholder responsibility and stakeholder motivation: systemic and holistic perspectives on corporate sustainability 117 Nikolay A.Dentchev and Aimé Heene 6. Who speaks for the trees? Invoking an ethic of care to give voice to the silent stakeholder 140 Linda M.Sama,Stephanie A.Welcomer and Virginia W.Gerde 7. Managing organisational project risks of stakeholder demands in industrial investments 166 Rianne de Leeuw and Joram Krozer 8. Organizational innovation as an opportunity for sustainable enterprise:standardization as a potential constraint 185 David Wheeler and Michelle Ng v vi Stakeholders,the environment and society 9. Contributions of product-oriented environmental management to corporate sustainability 212 Frank G.A.de Bakker 10. Institutional pressure and environmental management practices 230 Magali A.DelmasandMichael W.Toffel 11. Environmental management systems and sustainability: a framework for understanding stakeholder influence 246 Deborah Rigling Gallagher 12. The ecological modernization of organizational fields: a framework for analysis 270 Renato J.Orsato Index 307 Figures 3.1 Process model:issues,industries,tactics and targeted firms 71 4.1 Ecological and social destruction scenario 97 4.2 Smarter growth scenario 97 4.3 Collaboration and implementation network for value creation and performance improvements 102 4.4 Influence networks affecting performance improvements 103 5.1 Stakeholder motivation process 128 8.1 Importance of providing environmental performance data to stakeholders compared with demand:perceptions of environmental managers of ISO 14001 certified companies in Ontario 196 8.2 Level of willingness of ISO 14001 certified companies in Ontario to provide basic data or full reports on environmental,social or economic performance in the future 197 10.1 A model of institutional pressures moderated by parent company and plant characteristics 234 11.1 Effect of stakeholder influence,facility culture and experience on facility EMS design 261 12.1 The ecological modernization framework (EMF) 276 vii Tables 2.1 The Resource Management Act:functions by levels of government 35 3.1 Comparison of ENGOs studied 67 3.2 Stories told by ENGO representatives 69 6.1 Comparing the ethic of care model with the traditional stakeholder model 156 7.1 Simulation of the costs of extra risk and delays on repayment of a loan connected with non-compliance with stakeholders’demands 170 7.2 Chance of liability caused by stakeholder demands 176 7.3 Main environmental impacts of magnesium production and possible solutions 176 9.1 Main stimuli for engaging in POEM 220 9.2 Main barriers to engaging in POEM 221 11.1 Key influences on facilities designing EMSs 251 viii Appendices 2.1 Canterbury dairying arena:stakeholder groups and perspectives 52 7.1 Overview of the demands of stakeholders 180 10.1 Examples of environmental management practices 241 ix Contributors Frank G.A.de Bakkeris an Assistant Professor in Strategic Management at the Faculty of Social Sciences of the Vrije Universiteit,Amsterdam,the Netherlands. He obtained his PhD at the University of Twente. His PhD research focused on organizational aspects of product-oriented environ- mental management.Insights on capability building processes,stakeholder theory and ideas on continuous improvement and total quality manage- ment were combined in that research. His work has been published in Business Strategy and the Environment,Journal of Industrial Ecology,and Journal of Cleaner Production, among others. At present, his research is focused on corporate social responsibility,institutional change and social movements. Rianne de Leeuw is a Research Associate at University of Twente, CSTM/Cartesius Institute,the Netherlands.Her research focuses on envi- ronmental and social interests in business investment decisions.She is pro- gramme manager of the international ‘Master of Environmental Business Administration;Environmental and Energy Management’.This is a joint programme of the Centre for Clean Technology and Environmental Policy (CSTM), the Cartesius Institute and the Technology and Development Group (TDG) of the University of Twente. Magali A. Delmas is an Assistant Professor of Business Strategy at the Donald Bren School of Environmental Science & Management at the University of California Santa Barbara.She received her PhD from HEC Graduate School of Management in Paris and previously studied at the Institut d’Etudes Politiques of Paris. Prior to embarking on an academic career, Magali Delmas worked in Corporate Strategy at Framatome, a nuclear engineering company. She subsequently worked at the European Commission at the Directorate General for Industry where she was the eco- nomic advisor of the Director General.She was also a consultant in Public Policy Evaluation and Strategic Management at CM International,Paris. Magali Delmas’ research is on the interaction between regulation and firms’ competitive strategies. She is currently analysing how alternative forms ofenvironmental regulations,such as voluntary agreements and self- regulation, can impact firms’competitive advantage. Magali Delmas has x