A learning and knowledge approach to sustainable operations
Introduction
For many companies, environmental performance is becoming an important competitive criterion. However, long-term competitiveness is only possible by improving environmental performance simultaneously with other competitive criteria. Nevertheless, despite the effort of the public environmental policies (Ashford, 1993) and the claim that it pays to be green (Porter and van der Linde, 1995), many companies are still far from implementing environmental technologies and being competitive at the same time (Elgin, 2007).
The decision of investment allocation among environmental technologies can affect this relation between having environmentally sustainable operations and being competitive (Choi and Chiu, 2012). However, budget for investments in environmental technologies in manufacturing plants is also a limited, scarce resource. For this reason, plant managers must choose where to invest. Previous research has shown that some environmental technologies (namely, pollution prevention) are related to financial performance (King and Lenox, 2002). Under no restrictions, a rational manager would then always choose to invest in pollution prevention, and other forms of environmental investments would not exist. However, there is empirical evidence, in this work and others (e.g., Klassen, 2000), that managers do not allocate their entire environmental budget to pollution prevention technologies. To what conditions is the choice of allocation of environmental investments bounded? One possibility is that managers are subject to bounded rationality (Simon, 1947): they simply do not know that pollution prevention is more efficient. As March (1991) points out, the explicit choices are found in calculated decisions about alternative investments and competitive strategies, but the implicit choices are buried in many features of organizational forms and customs. Therefore, March's reasoning prompts an unaddressed research question: is the choice of environmental technologies related to the organizational learning in the plant? In this paper, we propose that organizational factors explain the choice of the environmental technologies, namely the organizational learning and knowledge system.
This research sheds light in one very important environmental management decision: the choice of environmental technologies. Consistent with the behavioral theory of the firm (Cyert and March, 1963) we claim that managers, under scarce resources, such as the budget for environmental investments, will have to make decisions, and these decisions are contingent to the tangible and intangible resources available to the manager (Grant, 1996). We investigate the extent to which the organizational learning and knowledge system influence the choice of environmental technologies. We empirically test our hypotheses on a sample of manufacturing firms. The structure of this paper is as follows: in Section 2, we provide the theory that links organizational learning and knowledge to the choice of environmental technologies, and provide our hypotheses. In Section 3, we provide the methodological procedures deployed in this paper. Following, in Section 4 we provide the analyses and results. Section 5 closes the paper by providing the discussion of the results and the conclusions of the paper.
Section snippets
Organizational learning and knowledge management
Organizational learning and knowledge management are related concepts, but derive from different research streams (Chiva and Alegre, 2005). In order to measure the impact of the organizational learning and knowledge system on the environmental technology choice, we provide some definitions that allowed us to unambiguously measure and test these constructs. Organizational learning is a topic researched mainly in organizational behavior and human resources fields, while knowledge management is a
Overview of the research process
We gathered data from a sample of Canadian manufacturing plants in the following industries: fabricated metal products, machinery, electronics, and electrical appliances (NAICS codes 332, 333, 334, and 335). The data collection took place in 2007. To test our hypotheses, we measured both the organizational learning constructs and environmental technologies with previously validated scales. We used a survey questionnaire, addressed to the plant manager, operations manager, or equivalent decision
Analyses and results
We assessed the psychometric properties of the scales of the organizational learning and knowledge using Churchill's (1979) method. From the original scales, we had only to purify the external knowledge transfer scale. We dropped 2 items from that scale: parent company and tracking new market trends in industry as source of learning. The former item, despite the fact that parent companies are very important sources of external knowledge in multinational corporations (Gupta and Govindarajan, 2000
Discussion
The purpose of this research was to identify the organizational learning and knowledge predictors in a model of the managerial choice of environmental technologies. We developed this model by first defining the organizational learning antecedents, organizational learning processes, and environmental technologies. We then connected these variables conceptually and empirically. Finally, we tested these connections, using a sample of plant managers to assess their managerial choice to allocation
Acknowledgments
The Social Sciences and Humanity Research Council (SSHRC) of Canada, HEC Montreal, and the National Council for Research (CNPq), Brazil provided financial support for this study.
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