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What Drives Substantive Versus Symbolic Implementation of ISO 14001 in a Time of Economic Crisis? Insights from Greek Manufacturing Companies

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Abstract

This paper analyses the role of external pressures, internal motivations and their interplay, with the intention of identifying whether they drive substantive or instead symbolic implementation of ISO 14001. The context is one of economic crisis. We focus on Greece, where the economic crisis has weakened the country’s institutional environment, and analyse qualitatively new interview data from 45 ISO 14001 certified firms. Our findings show that (a) weak external pressures can lead to a symbolic implementation of ISO 14001, as firms can defend their legitimacy without incurring the costs of internalization in the local market; (b) weak external pressures can lead to substantive implementation of ISO 14001 when firms have strong internal motivations seeking to strategically differentiate from competitors in international markets. Firms internalize ISO 14001 so as to restore their legitimacy and reputation in foreign markets and stimulate their competitiveness; and (c) strong internal motivations pave the way for companies to stimulate their competitiveness by enhancing their efficiency, as some companies might strengthen their position in the local market by implementing ISO 14001 substantively. The contribution of this paper to the literature on ISO 14001 internalization lies in refining existing theory on the importance of internal motivations for the substantive implementation of ISO 14001 in the context of economic crisis. In addition, this paper extends current theory by challenging studies that dismiss the importance of external pressures. We argue that the intensity of external pressures influences the internalization of ISO 14001, but propose that this relationship might not be linear.

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Notes

  1. A ‘discontinuity’ is “a temporary or permanent, sometimes unexpected, break in a dominant condition in society” (van Notten et al. 2005, p. 179). It is an abrupt or sudden change that can be triggered, for example, by “unexpected discrete events, such as the oil shocks of 1973 and 1979…” (van Notten et al. 2005, p. 179).

  2. On one hand, companies may implement ISO 14001 so as to generate eco-innovative products and services (Kesidou and Demirel 2012) that will serve consumers willing to pay a premium for environmental quality (Arora and Gangopadhyay 1995). On the other hand, companies may use ISO 14001 to ‘signal’ to the market their environmental commitment and thus improve their reputation. The strategic goal in both cases is to increase the company’s competitiveness by differentiating it from other competitors. In the first case, ISO 14001 is used in conjunction with other investments that seek to improve the environmental quality of the company’s products or services, whereas in the latter case ISO 14001 is used to improve the image of the company.

  3. Strong institutional environments are characterized by stringent regulation for environmental protection, the existence of watchdog groups, activists and a strong responsible investment movement.

  4. From 2009 onwards, Greece’s GDP has contracted by 25 %, unemployment has rocketed to more than 25 %, real wages have fallen by 30 per cent and industrial output has declined by 35 % (Lapavitsas 2014).

  5. On one hand, formal institutions are enfeebled due to deregulation, increasing corruption and judicial bias. On the other hand, informal standards such as norms, values, reputation and trust are also affected by the negative impact of the economic crisis on social cohesion.

  6. National accreditation bodies are the sole national agencies licensed by their governments to provide various accreditation services to certification bodies. Examples are the United Kingdom Accreditation Service (UKAS), the Japan Accreditation Board (JAB), the German Accreditation Body (DAkkS) and the Hellenic Accreditation System (ESYD).

  7. Ethical motivations and employee motivation were also considered as potential factors driving ISO 14001 internalization, but it became apparent from the first interviews that they were not significant. This could be because such motivations are not a priority for firms in time of crisis.

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Acknowledgments

The authors would like to thank the associate editor of the Journal of Business Ethics, Julia Roloff, and the two anonymous reviewers for their insightful comments. We are also grateful to Emmanuella Plakoyiannaki for her useful comments on an earlier version of the manuscript.

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  1. School of Management, University of Bath, Claverton Down, Bath, BA2 7AY, UK

    Konstantinos Iatridis

  2. Leeds University Business School, University of Leeds, Maurice Keyworth Building, Leeds, LS2 9JT, UK

    Effie Kesidou

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Iatridis, K., Kesidou, E. What Drives Substantive Versus Symbolic Implementation of ISO 14001 in a Time of Economic Crisis? Insights from Greek Manufacturing Companies. J Bus Ethics 148, 859–877 (2018). https://doi.org/10.1007/s10551-016-3019-8

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