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Knowledge and the Climate Change Issue: An Exploratory Study of Cluster and Extra-Cluster Effects

Journal of Business Ethics volume 125, pages 11–25 (2014)Cite this article

Abstract

Climate change, while potentially impacting many industries, appears to have considerable significance to the wine industry. Yet little is known about how firms acquire knowledge and gain an understanding of climate change and its impacts. This study, exploratory in nature and studying firms from the wine-producing region of Tasmania, is one of the first in the management literature to use cluster theory to examine the climate change issue. Firms are predicted to exchange knowledge about climate change more readily with other firms internal to the sub-cluster than with those external to the sub-cluster. The hypothesis does not find support. The study also proposes that the different characteristics of knowledge can either increase or decrease their flows in and around clusters. Specifically, “public” knowledge about climate change is predicted to flow more freely than “private” knowledge about climate change. The hypothesis does not find support. Finally, firms are expected to acquire knowledge about climate change from sources other than cluster-entrenched firms, and in particular peak national industry bodies. The hypothesis finds partial support. A discussion of the findings is presented along with future research directions.

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Fig. 1
Fig. 2

Notes

  1. Information on California’s sub-clusters available at http://www.iwineinstitute.com/CALAVABYNAME.ASP.

  2. As a good example of sub-cluster climate effects, the Overberg, Stellenbosch, and Paarl wine sub-clusters in South Africa experience up to a 6 °C difference in temperature, even though there is as little as a 40 km distance between them (Deloire et al. 2009).

  3. The seven sub-clusters include Coal River Valley, Derwent Valley, East Coast, Huon/Channel, North West, Pipers River, and Tamar Valley. This designation was determined by several factors, including historical evolution of the region, categorizations by Wine Tasmania, the industry association that oversees the affairs of Tasmanian wine producers, and government classifications. Such sub-cluster designations are consistent with other wine-producing regions around the world, including regions in Chile (Giuliani and Bell 2005), South Africa (Deloire et al. 2009), and the United States (Cross et al. 2011).

  4. The reason for choosing a four-point scale was twofold. First, the scale was used to get a sense of the intensity level of exchanges, which follows the work of Giuliani and Bell (2005). Second, the present study serves as the foundation for a larger national study; therefore, scales were able to be assessed for validity and reliability for future research efforts.

  5. To calculate proportions, a 36 × 7 matrix was created that contained each individual firm and the seven sub-clusters. For any given firm, if there was evidence of any level of exchange, either within the sub-cluster or to other sub-clusters, this was counted as a 1. Counts were then divided by the total number of firms within the sub-cluster, which provided a proportion of exchanges. This process was repeated for each sub-cluster to derive an average proportion of the sub-cluster exchanges, which was then used to calculate an overall averaged proportion for the whole sample. The process was repeated again for each level of intensity of knowledge exchange.

  6. Individually, only two sub-clusters demonstrate knowledge exchange proportions above 0.50 (Derwent Valley and East Coast). That is, more than half of the firms in these two sub-clusters are exchanging knowledge about climate change. As can be seen in Appendix 2, Tasmania is a relatively isolated regional wine-producing cluster and within the region itself, sub-clusters are geographically separated. Hence, within the Tasmanian wine region, any knowledge exchanges among sub-clusters faces the issue of geographic distance.

  7. Note: North West was not calculated as no exchanges were indicated by these firms.

  8. Note: North West was not calculated as no exchanges were indicated by these firms.

  9. For a related exception, see Etzion and McMahon (2012). They study the environmental performance of industry clusters. However, their study is not exclusive to climate change.

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Acknowledgments

This research was supported by a Linkage Grant from Curtin Business School, Curtin University.

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Authors and Affiliations

  1. Curtin Graduate School of Business, Curtin University of Technology, 78 Murray Street, Perth, WA, 6000, Australia

    Jeremy Galbreath & Des Klass

  2. European Policies Research Centre, School of Government and Public Policy, University of Strathclyde, 40 George Street, Glasgow, G1 1QE, UK

    David Charles

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  1. Jeremy Galbreath
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Correspondence to Jeremy Galbreath.

Appendices

Appendix 1: Knowledge Type Items Used in the Questionnaire

“Public” Knowledge

  1. (1)

    Technical knowledge Insight on technologies, technical enhancements, vineyard, and/or winery techniques that relate to climate change.

  2. (2)

    Industry knowledge Know-how gained from peak industry bodies, specialist sources, or employees/peers on addressing industry requirements or government policies on climate change.

  3. (3)

    Market knowledge Knowledge about the size of opportunity for consumer markets sensitive to producers’ environmental credentials, how competitors are responding to climate change, impacts of climate change on grape yield, quality, and price.

“Private” Knowledge

  1. (1)

    Organisational knowledge How your company has coordinated and supervised organizational resources and processes so that climate change impacts are addressed efficiently and effectively.

  2. (2)

    Marketing knowledge How your company specifically addresses customer preferences, marketing and branding, and new product development as they relate to any climate change requirements.

  3. (3)

    Strategy knowledge Insight on your company’s strategy, planned competitive moves, long-term business plans, and ability to manage change related to climate change.

Appendix 2: Geographic Maps of Wine Production

See Figs. 3, 4 and 5.

Fig. 3
figure 3

Global wine regions (colored areas)

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Fig. 4
figure 4

Australian wine regions (colored areas)

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Fig. 5
figure 5

Tasmanian wine sub-clusters

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Galbreath, J., Charles, D. & Klass, D. Knowledge and the Climate Change Issue: An Exploratory Study of Cluster and Extra-Cluster Effects. J Bus Ethics 125, 11–25 (2014). https://doi.org/10.1007/s10551-013-1901-1

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Keywords

  • Australia
  • Climate change
  • Clusters
  • Knowledge
  • Knowledge exchange
  • Wine