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Measuring Operations Performance Measuring Operations Performance
Chiarini Ed.
Andrea Chiarini Editor
Sustainable Operations Management
Advances in Strategy and Methodology
This book presents innovative research on various aspects of sustainability in the field
of operations management and illustrates the potential of sustainability thinking and
practice to improve operations performance and thereby meet customer needs. Par-
ticular attention is devoted to corporate social responsibility and marketing strategy,
knowledge management for sustainability, the role of culture in a sustainable built
Andrea Chiarini
environment, sustainable manufacturing through the application of lean and green con-
cepts, advancing sustainability through ISO standards, and the sustainable supply chain. Editor
The present decade is proving to be a time of change in terms of business strategies
and operations management. Many of the trends are still subject to uncertainty, but an
Sustainable
understanding of the need for, and benefits of, sustainability can give a clear indication
of their trajectory. Consumers and markets in general believe that while implementing
their business strategies, companies should also try to improve society and the environ-
ment and to exercise social responsibility toward their employees. This book provides
insights into how this may be achieved, and it is recommended for researchers as well
as all practitioners and managers dedicated to enhancing sustainability in operations.
Operations
Sustainable Operations Management
Management
Business/Economics
ISBN 978-3-319-14001-8
333005_Print.indd 1 02-01-2015 08:30:30

Measuring Operations Performance
Editor-in-chief
Andrea Chiarini, University of Ferrara, Ferrara, Italy
Series editors
Alok Choudhary, Loughborough University, Loughborough, UK
Adrian E. Coronado Mondragon, Royal Holloway, University of London,
Egham, UK
Pauline Found, University of Buckingham, Buckingham, UK
Sergio E. Gouvea da Costa, Pontifical Catholic University of Parana,
Curitiba, Brazil
Iñaki Heras, University of the Basque Country, Donostia-San Sebastián, Spain
Kerry Jacobs, University of New South Wales, Canberra, Australia
Adina Claudia Neamtu, Constantin Brâncuşi University, Târgu Jiu, Romania
Roberta S. Russell, Virginia Polytechnic Institute and State University,
Blacksburg, USA
Martin Starr, Columbia Business School, New York, USA
Emidia Vagnoni, University of Ferrara, Ferrara, Italy
Jahangir Yadollahi Farsi, University of Tehran, Tehran, Iran
More information about this series at http://www.springer.com/series/13500
Andrea Chiarini
Editor
Sustainable Operations
Management
123
Editor
Andrea Chiarini
Department of Economics and Management
University of Ferrara
Ferrara
Italy
ISSN 2363-9970 ISSN 2363-9989 (electronic)

Measuring Operations Performance
ISBN 978-3-319-14001-8 ISBN 978-3-319-14002-5 (eBook)
DOI 10.1007/978-3-319-14002-5
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Contents
Marketing Strategy, Strategic Planning and Corporate

Social Responsibility: An Exploratory Research . . . . . . . . . . . . . . . . . 1
Andrea Chiarini
Sustainable Knowledge Management and the Outsourcing

of Core Competences—Does that Fit Together? Initial Insights
from a Literature Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Susanne Durst, Ingi Runar Edvardsson and Guido Bruns
The Role of Culture in a Sustainable Built Environment . . . . . . . . . . . 37

Alex Opoku
The Management of Environmental Performance

in the Supply Chain: An Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Enrico Bracci and Mouhcine Tallaki
The Measurement of Environmental Performance in Hospitals:

A Systematic Review of Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Andreia Pasqualini Blass, Sergio E. Gouvea da Costa,
Edson Pinheiro de Lima and Lilian Adriana Borges
How Does Innovativeness Foster Sustainable Supply

Chain Management? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Jury Gualandris and Matteo Kalchschmidt
Sustainable Manufacturing: The Lean and Green Business Model . . . . 131

Andrea Brasco Pampanelli, Pauline Found and Andréa Moura Bernardes
v
vi Contents
Sustainability Through Eco-Design: Shedding Light

on the Adoption of the ISO 14006 Standard . . . . . . . . . . . . . . . . . . . . 163
Beñat Landeta Manzano, Germán Arana-Landín,
Patxi Ruiz de Arbulo and Pablo Diaz de Basurto
Early Adoption of ISO 50001 Standard: An Empirical Study . . . . . . . 183

Maria Wulandari, Iker Laskurain, Martí Casadesús Fa
and Iñaki Heras-Saizarbitoria
Sustainability in Iran’s Road Transport Sector:

Evaluating Strategies and Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
Afsaneh Moradi, Seyed Reza Hejazi and Jahangir Yadollahi Farsi
Marketing Strategy, Strategic Planning
and Corporate Social Responsibility:
An Exploratory Research
Andrea Chiarini
Abstract In the last decades companies have started embracing Corporate Social
Responsibility (CSR) for their Marketing Strategy (MS). Ethical scandals as well as
financial scandals linked to companies and their brands have jeopardized several
companies and consumers have even started boycotting purchases. Moreover,
starting from the 1980s, mass marketing has been transformed into mass cus-
tomisation and markets have been divided into micro-markets and even individual
markets. In such a scenario customers and markets have become very interested in
CSR impacts of the products/services sell by the companies and customers often
compare products using this way of thinking. As a consequence, companies have to
integrate their strategic marketing initiatives with issues such as environmental
management, health and safety for workers, social responsibility and have to take
into account how this can affect sales. To the purpose, this research wants to
investigate what are the methodologies for strategic planning and MS and subse-
quently what are the CSR issues related to it. The research is based on a case study
of four European large manufacturing companies and demonstrates how MS can
change depending on the kind of market and product, even if the budget for MS is
similar.
Keywords Marketing strategy CSR European manufacturing Qualitative

inquiry
1 Introduction
In the last decades companies have been struggling with a relevant change of scenario
concerning their strategies. Companies have been facing new markets, different
consumers and issues such as greening the processes and social responsibility; thence
A. Chiarini (&)
Department of Economics and Management, University of Ferrara, Ferrara, Italy
e-mail: [email protected]
© Springer International Publishing Switzerland 2015 1

A. Chiarini (ed.), Sustainable Operations Management,
Measuring Operations Performance, DOI 10.1007/978-3-319-14002-5_1
2 A. Chiarini
Corporate Social Responsibility (CSR) in general has become over time more and
more important.
Since 1990s many scholars have focused their papers on CSR and how CSR can
pay off the investments (Burke and Logsdon 1996). Strategies for social respon-
sibility are moving companies from philanthropic local initiatives to world-wide
projects and Marketing Strategy (MS) for all the markets (Bhattacharya et al. 2004).
In fact, companies in some way have been forced to embrace CSR for their
Marketing Strategy (MS). Ethical scandals as well as financial scandals bound to
companies and brands have jeopardized several companies (Baccarani 2008) and
consumers have even started boycotting these companies. Moreover, starting from
the 1980s, mass marketing has been transformed into mass customisation and
markets have been segmented in micro-markets and even individual markets
(Kotler 1989). In such a scenario some customers and markets are very interested in
CSR impacts of the products/services sell by the companies (Sen and Bhattacharya
2001; Klein and Dawar 2004; Nan and Heo 2007) and can compare products using
this way of thinking. As a consequence, companies have to integrate their strategic
marketing initiatives with issues such as environmental management, health and
safety for workers, social responsibility and have to take into account how this can
affect sales.
To the purpose, this research wants to investigate what are the methodologies for
strategic planning and MS and subsequently what are the CSR issues related to it.
According to literature review section, several authors have dealt with methodol-
ogies and principles for Strategic Planning and MS but there is a lack concerning
how to integrate CSR issues with theses methodologies and principles. For instance,
it is not that clear what the stages of this integration are, what specific methodol-
ogies are typically employed, what kind of deployment is managed and what
relationships with the customers and the markets are depending on the kind of
product.
As to as, a multiple case study based on four European large companies has been
carried out, trying to investigate the above mentioned issues. The research is for its
nature exploratory and from the research new theory will emerge in an inductive
way. Four European large companies have been observed and information about
CSR and MS has been collected, coded, analysed and discussed in order to get a
theoretical framework.
Therefore the remainder of this paper is structured as follows. Section 2 deals
with Strategic Planning, MS and their principles and consolidated methodologies.
Section 3 reviews some relevant literature concerning Strategic Planning, MS and
CSR, trying to understand what other authors have investigated and claimed so far.
Section 4 deals with the research methodology, its characteristics and its limitations.
The section also explains what kind of companies has been chosen for the research
and the fundamental organisational processes of these companies. Section 5 anal-
yses and discusses the results from the observation, coding the results for achieving
a theoretical framework. Lastly, the conclusions section summarises the findings of
the research, what is the fundamental novelty and the limitations of the research.
Moreover some avenues for further research on the subject are presented.
Marketing Strategy, Strategic Planning and Corporate … 3
2 Strategic Planning Process
A strategic plan is a methodology to guide the work of managers and the organi-
sation as a whole, maintaining them focused on long term objectives, vision and
mission and their deployment. It also aids decisions about the allocation of com-
panies’ resources such as human, technological and financial resources. Strategic
planning can be seen as a rational, formalised approach led by decision makers to
head organisations toward strategic decisions (Mintzberg 1994). According to
Mintzberg (1994), strategic planning can sometimes fail because its assumptions
are completely disconnected from the way persons and organisations learn and
make decisions, including CSR issues. As Mintzberg wrote (p. 321): “Thus we
arrive at the planning school’s grand fallacy: Because analysis is not synthesis,
strategic planning is not strategy formation”.
Having underlined this relevant aspect of strategic planning, the process can be
then divided into specific stages and processes. According to Hillestad and
Berkowitz (2012) there is a fundamental relationship between company strategy
and MS. Figure 1 below shows the loop which links the strategic planning process
to MS.
Thence, MS has a direct link with Mission and Vision statements as well as
strategic goals and objectives which are usually shared through a business plan
(Andrews 1997). In this way the deploying flow process starts with the Mission,
Vision and strategic goals and ends with a periodical review of the marketing plans
and an eventual correction of the flow. Figure 2 synthetically shows this flow
and the main stages. The figure reflects what other authors have claimed so far
(Jocumsen 2004; Wilson and Gilligan 2005; Cravens and Piercy 2008; Lord and
Velez 2013).
Within the second stage there is the fundamental SWAT (Strengths-Weaknesses-
Opportunities-Threats) process (Lymbersky 2008) which leads the company to
evaluate the strengths, weaknesses, opportunities and threats involved in defining
Company strategy
- specifying company’s Mission and Vision
- defining strategic objectives for the company
- defining resources across the board
- deploying strategic objectives
Marketing strategy
- selecting markets and segments
- determining the market mix
- planning how to compete in specific markets
Fig. 1 Relationship between company and marketing strategy

4 A. Chiarini
1. Defining the company’s mission, vision and strategic goals – objectives
2. Identifying threats and opportunities
3. Defining Marketing Strategy plans and actions
4. Budgeting Marketing plans and actions
5. Reviewing objectives, corrective actions
Fig. 2 Deployment from long–period strategies to the periodical reviewing process
market strategies (Ronald 2012). The five stages shown by Fig. 2 have been used in
this paper for analysing and discussing how the companies chosen for the
explanatory research are integrating their CSR strategies.
3 Literature Review
There is plenty of literature dedicated to SM; for the scope of this research just
literature which has a link with CSR has been taken into account. The first interesting
papers dedicated to the integration between SM and CSR dated back to 1990s.
McDaniel and Rylander (1993) wrote a paper in which they argued that (1993, p. 4):
“… green marketing is taking shape as one of the key business strategies of the
future, and that the increasing environmental consciousness makes it incumbent on
consumer marketers not just to respond to it, but to lead the way in environmental
programs. Sets forth the need and recommendations for incorporating environmental
concerns into strategic marketing planning of the organisation”.
McDaniel and Rylander were not the only pioneers in that period. Similar issues
relating to the integration between green marketing and strategies can be also found
in Polonsky (1994), Mendleson and Polonsky (1995) and Straughan and Roberts
(1999).
Other author started investigating CSR in general and its relationships with
strategies, arguing that CSR pays off the investments when well implemented
(Burke and Logsdon 1996). Quantitative inquiries carried out by Brown and Dacin
(1997) and Brown (1998) demonstrated that CSR can also positively affect, directly
or indirectly, consumers’ responses.
Freeman (2001) wrote a paper, taking up again later by Lantos (2001), in which
he claimed that CSR has to become a strategic issue and cannot be just an altruistic
activity. Both the authors concluded that CSR is good for companies and business,
advising that marketing takes a lead role in strategic CSR activities.
The 2000s are consequently dominated by papers where scholars investigated
the role of marketing and MS as a vehicle for CSR and vice versa. McWilliams and
Siegel (2001) argued that for satisfying the developing demand of CSR from
various markets and customers, companies have to put on the market products
which include specific CSR characteristics. MS becomes in this way important for
advertising these particular CSR products as well as a segmentation of markets is
important for analysing how to satisfy the different stakeholders. Du et al. (2010)
underlined the power of communication plans for boosting companies’ messages to
customers; message content and communication channels are the specific factors
that influence the effectiveness of CSR communication.
Piercy and Lane (2009) in their research concluded how relatively little attention
has been devoted to the link between CSR and strategic marketing. According to
the authors there is a need for a defined value proposition that emphasizes how a
company’s CSR strategy adds value for the customer. Moreover they proposed a
new management agenda for marketing strategy that examines CSR opportunities
and risks. However marketing managers need to analyse carefully the market
context as a whole before implementing CSR strategies. For instance Bhattacharya
and Sen (2004, p. 9) demonstrated that it is important for managers to consider CSR
strategies in the light of the firm’s corporate abilities. In fact, it seems that less
innovative companies may be better off financially by avoiding CSR action.
To recap, literature review seems having demonstrated the need of MS for CSR
and even that CSR can, in many circumstances, really help companies in competing
and increasing financial performances. However it is not that clear in what way this
can be done, and what kind of methodologies and principles can be applied for
aiming at this goal.
4 Methodology
Methodology is mainly based on case studies carried out in four European large
manufacturing companies. Inside qualitative inquiries and research design, the case
study represents one of the most used methods especially in the management sector.
In point of fact, some researchers (Stake 1995) argue that a case study is an object
of analysis more than a method. Other authors point out that it is a typical quali-
tative method of inquiry used as an exploration of a ‘bounded system’ (Merriam
1988). According to Creswell (1998), time and place are the boundaries of the case
study and the researcher is supposed to use multiple sources of information.
6 A. Chiarini
When using a case study a researcher first has to take into serious account if the
case can be single or multiple, multi-sited or within-site, focused on a case or on an
issue (Yin 1994). According to Dogan and Pelassy (1990), the use of case studies
cannot generate theories in a definitive way. Case studies must be linked to a
hypothesis that can then be followed by a deductive path. The use of case studies in
this research is justified by the facts that:
• It is possible to obtain outcomes that can be compared with other similar case
studies. As a matter of fact, in the following section it will be demonstrated
how the outcomes of an interview with a senior manager of a company were
compared with the outcomes of other three interviewed managers.
• Case studies typically lead to the use of different methods to collect data such as
interviews, database, questionnaires and observations. Data can be both quali-
tative and quantitative, even though only qualitative evidence is analysed in this
exploratory research.
Case studies by means of qualitative inductive research have received many
criticisms. Anyhow some researchers state that, probably, no predictive theory
exists in social studies or management. Social studies and management have never
led to the generation of context-independent theories and can therefore only take
context-dependent knowledge into account. Campbell (1979) is one of the
researchers who support these statements. A quotation from his 1979 (p. 126) book
can surely better explain his position: “After all, man is, in his ordinary way, a very
competent knower, and qualitative common-sense knowing is not replaced by
quantitative knowing. This is not to say that such common sense naturalistic
observation is objective, dependable, or unbiased. But it is all that we have. It is the
only route to knowledge… fallible and biased thought it be”.
Yin (1994) defines case study research as an empirical inquiry that investigates a
contemporary phenomenon within its real-life context. Thus, case study research
becomes particularly important when the boundaries between phenomenon and
context are not clearly evident and multiple sources of evidence are used.
In order to not introduce bias the four companies which represent the case study
were chosen with different characteristics in terms of marketing approach and kind of
product. Indeed the four companies, hereinafter named A, B, C and D, belong to the
same geographic area but they sell their product in different kinds of markets. Fur-
thermore the companies manufacture standard products and even more innovative
products. Figure 3 shows the strategic approach to the markets related to the four
different companies. In particular company A typically sells standard products for rich
markets. In greater detail A sells power plugs for the European and North-American
markets. B sells innovative products for rich markets, in particular wind turbines for
the European market. While C manufactures standard gas valves for some African
countries and D manufactures medical devices for African and Middle-East countries.
Obviously, the four companies have been chosen for their well-known commitment
and initiatives to CSR and they have similar turnovers.
The researcher has gathered data and information as a neutral observer.
Fig. 3 Marketing strategy
Rich markets
approach of the four
companies
A B
Poor markets C D
Standard product Innovative product
The primary scope of observation is to observe participants in as natural a setting

as possible (Pearsall 1995). Observation has been carried out within a group of
senior managers involved in MS, looking at and discussing their documents and
results.
Each company clearly shows a different way and culture of managing matters
such as MS, CSR and relationships with stakeholders. The observation has been led
in an ethnographic way and direct experience has been chosen (O’Reilly 2005)
within a team in which the group of participants were observed first and then the
findings of the observation were discussed with them. The ethnographer has to
introduce himself or herself in an unfamiliar territory (Denzin 2000).
By conducting observation, the researcher learns about what is going on at the
same time as he or she is building strong and informative relationships with the
group. Observation relies heavily on the researcher’s subjective understanding of
research situations and because of this the researcher must be aware that it requires
a careful balance. The researcher led the observation being both a participant and an
observer. Indeed the researcher acted as a consultant giving details about how to
manage the MS process. The researcher did not interfere with the team dynamics. A
mistake that the researcher tried to avoid was to take notes as the dominant part of
participant observation and this was mainly due to the researcher also acting as
observer-researcher and consultant at the same time.
Data from the observation has been gathered writing down some notes and
recording discussions with the senior managers and the team’s members dedicate to
MS. The practice of coding data (Lofland and Lofland 1995) was used to assign
labels to classify and assign meaning to parts of the information.
8 A. Chiarini
5 Discussion of the Theoretical Results
5.1 Mission, Vision and Strategic Goals
MS starts its flow with the Mission and Vision statement as well as the definition of
the strategic goals/objectives for the company. All the four companies changed in
the past their Missions and Visions in order to communicate to all the stakeholders
their new CSR aim. According to the senior managers who belong to the four
companies, they had to change these strategic documents in particular because they
are public and disclosed to anyone; thus they represent the first tangible sign of this
transformation. One manager declared that if you want to use CSR leverage for you
marketing strategy surely you have to manage a communication plan for stake-
holders and markets in general. And the best way to do this is your Mission and
Vision. This is the reason why all the four companies changed their Mission-Vision.
Anyhow, looking at the strategic goals and objectives, usually written in the
business plans and visions documents, something different depending on the
company has come out. Company C which usually sells standard products to poor
markets seems to prefer CSR external goals and objectives rather than internal ones.
Indeed its goals are more linked to increase customer’s satisfaction and reputation
as an ethical company dedicated to CSR initiatives as well as to be a company
which does not pollute or exploit resources. According to some managers who
belong to company C, exploitation of resources and environmental management are
a fundamental issue for developing countries. Customers and consumers in such
markets want companies, especially world-wide companies, to not have a strategy
of just considering them as an underdeveloped economy. They are suspicious and
tend to consider world-wide companies like companies more devoted to profit than
other issues. This aspect has been also confirmed by managers who belong to
company D, which sells innovative products but once more to poor markets.
On the other hand, company A and company B which are more focused on rich
markets such as Europe and North America have established strategic objectives
which aim to internal issues of the company. In this sense objectives related to
staff’s satisfaction, health and safety and social responsibility towards employees
are preferred. The reasons of this choice are linked to the fact that A and B represent
European companies which sell their products to the same area of belonging or
similar. According to a marketing senior manager, consumers tend to identify
themselves with companies’ employees and they buy products only if the company
fosters CSR especially towards its own employees. Moreover, according to another
senior manager, in advanced and rich markets company’s compliance to issues such
as environment, exploitation of resources as well as the pursuit of positive impacts
on society are taken for granted by consumers.
As a common strategy all the four companies have defined strategic goals
associated to compliance with laws for avoiding accounting frauds. After the
well-known scandals occurred in the last decade, consumers do not want to spend
their money on products manufactured by this kind of companies, irrespective of
the kind of product or market.
5.2 Identifying Threats and Opportunities
All the four companies are used to implementing a SWAT analysis in order to
define MS for their products. Threats and opportunities are typically analysed and
managed on the base of what has been discussed in the previous section. In par-
ticular threats and opportunities are different depending on the market rather than
the kind of product.
Starting from threats, companies C and D which sell products in poor market are
very careful to everything can be linked with exploitation of resources and pollu-
tion. Possible environmental incidents which have hit the headlines are considered
the most terrible threats for the company and its products in the emergent markets.
In this case, according to the senior managers, a particular communication plan has
to be developed specifically for those markets to climb back on the top. On the
other hand, as an opportunity, companies C and D surely promote every kind of
initiative and project which has had a positive impact on the environment and the
consumption of resources, especially natural resources.
Instead, companies A and B, specialised in richer markets, consider as a threat
each scandal related to health and safety issues and social responsibility towards
employees. On the other hand every achievement which increases the satisfaction of
the stakeholder employees is appropriately promoted.
For all the four companies financial scandals are considered one of the most
important threats whichever is the market.
5.3 Defining Marketing Strategy Plans and Actions
Observing how the managers of the companies deal with their marketing strategy
plans and actions, a common flow can be sketched. According to all the managers
usually there are four main steps as described in Fig. 4.
Targeting is the activity where the four companies ask themselves who are their
customers. This derives from the strategies discussed in Sect. 5.1 and the quadrant
in Fig. 3. However, customers have to be further segmented based on a number of
factors. Companies C and D are used, for example, to dividing customers into
dealers and industrial companies. Especially for industrial companies, marketing
efforts in terms of CSR are oriented towards companies which have got an envi-
ronmental management certification (i.e. ISO 14001) or have publicly demonstrated
their commitment towards CSR, for instance issuing a social balance sheet or
introducing a social and ethical performance measurement system. Marketing and
10 A. Chiarini
Fig. 4 Typical marketing

strategy planning stages
Target customers
Distinguish the company from

competitors
Pricing & Positioning Strategy
Sales, distribution and promotion
sales managers of companies C and D usually take care of these industrial cus-
tomers giving them more technical and detailed information about environmental
initiatives of the company and product environmental characteristics; for instance
ISO 14001 certification, compliance with environmental laws and regulations,
recyclability of the products, etc. Above all, customers have to perceive the dif-
ference between products from companies C and D and from their competitors from
an environmental standpoint.
In the same way, companies A and B advertise their efforts for improving
employees’ satisfaction and social responsibility towards them. There is a slight
differences between companies A and B. The managers who belong to company A,
which sells standard products, underlined that it is not that easy to advertise CSR
initiatives through the product. They have typically to reach their customers through
specialised magazines or newsletter; while company B, more focused on innovative
products can also use sponsorship to technical conferences or research. For both A
and B, senior managers confirmed that their customers, usually industries in rich
markets, take for granted internal investments for employees’ satisfaction and they
appreciate a less aggressive marketing on CSR initiatives based on those particular
cultural channels.
Anyhow, all the four companies choose carefully their dealers. Dealers are
considered the direct interface to customers and therefore they have to respect CSR
principles as well.
5.4 Budgeting Marketing Plans and Actions
When the four companies come to the budget for their marketing plans and actions
it is interesting to evaluate whether or not there are differences in terms of money
spent on them. Starting with companies C and D which sell to poor markets, the
senior managers reported that CSR marketing plans can absorb on average 10 % of
all marketing initiatives. Companies A and B, which sell to rich markets, were a
little bit more precise showing some figures. For instance company A in the last
three years spent on average 11.2 % of its entire marketing budget and company B
10.7 %. Considering that the four companies have similar turnovers it can be
assumed that there are not significant differences.
5.5 Reviewing Objectives, Corrective Actions
Marketing objectives are usually reviewed in all the four companies in a typical
monthly management review meeting. All the marketing objectives, including CSR
marketing objectives, are analysed in their performances trying to evaluate if they
meet the targets. It is interesting to notice how all the four companies have adopted
a flexible approach to the reviewing process. As a senior manager reported, CSR for
its nature is particularly linked to laws, regulations and new industry standards,
often different with each other depending on the country or market. Therefore, it
can happen that even though you have set your CSR objectives and targets, you
have to quickly react changing them. This reviewing and changing speed has
become quicker in the last decade due to ethical scandals and the consequent
introduction of new regulations.
5.6 Shaping the Theoretical Framework
From the theoretical results above analysed and discussed, a theoretical framework
can be shaped. With the due limitations related to this particular qualitative case
study, quadrant in Fig. 3 can be completed with the characteristics of the four
companies.
From the model it can be learnt that there is a first fundamental difference
between companies which sell in poor markets and companies which sell in richer
ones. The formers are more linked to external CSR marketing strategy such as
12 A. Chiarini
Fig. 5 The theoretical Technical Cultural
Rich markets
framework communication communication
A CSR internal aspects B

Health & Safety,
Employees’
satisfaction
CSR financial aspects
C CSR external aspects D

Poor markets
Exploitation of resources,
Environment
management
Product communication
Standard product Innovative product
exploitation of resources and environment management, while the latters are more
linked to internal marketing strategy such as health and safety and employees’
satisfaction. For all the company it is fundamental to define and respect ethical
strategies connected to CSR financial aspects.
There are differences concerning how the companies communicate their CSR
strategies and initiatives to customers and markets. For companies which sell in poor
markets it seems that a communication based on the product and its characteristics
could be more suitable. While for richer markets companies prefer a more technical
and cultural communication based on specialised magazine, conferences and
research. Anyhow, communication is the most important CSR marketing leverage.
6 Conclusions
Literature review has demonstrated how message content and communication

channels are specific factors which influence the effectiveness of CSR communi-
cation. Furthermore some authors (McWilliams and Siegel 2001) have drawn
the attention to segmentation of markets as an important aspect for satisfying the
different stakeholders from a CSR point of view.
The theoretical framework which comes out from this research and is shown in
Fig. 5 agrees with these results. The four companies of the case study are intensely
using several communication channels even if they differ each other depending on the
kind of market. Anyhow, communication as well as segmentation is a fundamental
aspect of the MS dedicated to CSR.
As a novelty from this research comes up that the budget and efforts for
advertising CSR strategies and initiatives are similar for all the markets and
products. Just the communication ways are different. It seems that CSR can pay off
companies which sell both innovative and less innovative products. This is in
disagreement with some literature review results (Bhattacharya and Sen 2004)
which consider CSR actions not that suitable for less innovative companies.
Moreover, all the companies, including companies with less innovative products,
invest in CSR initiatives in order to avoid financial scandals.
Another novelty could be related to the reviewing process of the strategic CSR
objectives. The four companies demonstrated that, nowadays, this process can lead
to quick changes in the CSR strategies whereas in the past was more stable.
This research presents some limitations, mainly due to its exploratory nature
using case studies. It is difficult to generalise theoretically results from a qualitative
inquiry like this. Anyhow, this research offers new avenues of research; first of all
scholars should better investigate these results using a quantitative inquiry and a
large sample of companies. Besides, this research is limited only to European large
manufacturing companies; thence the investigation should be enlarged to small and
medium sized companies as well as service industry.
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Sustainable Knowledge Management
and the Outsourcing of Core
Competences—Does that Fit Together?
Initial Insights from a Literature Review
Susanne Durst, Ingi Runar Edvardsson and Guido Bruns
Abstract The issue of sustainability has been frequently discussed in recent years.
Knowledge and its management represent aspects that fit nicely with one of the
underlying conditions of sustainability, i.e. durability. Indeed, proper knowledge
management can help firms in coping with present and future business challenges.
The outsourcing of secondary business functions has become popular with many
firms. What is increasingly present is the outsourcing of knowledge competences
that is the firms’ core competences. This trend means a challenge for both the firms’
knowledge management and their sustainability. Against this background, the
purpose of this paper is to review extant research on the outsourcing of knowledge
competences to establish our body of knowledge and to identify gaps justifying
further research activities. The study is based on a systematic review of peer
reviewed empirical articles on the outsourcing of knowledge competences. This
proceeding proves evidence that there are a small number of papers addressing
outsourcing and its consequences for knowledge management (KM) sustainability.
The recommendations derived from the findings can assist researchers, managers
and consultants to better understand the link between knowledge competence
outsourcing and KM sustainability. This increased understanding can particularly
be useful for managers as better decisions will be possible.
Keywords Outsourcing Knowledge management Knowledge competences

Systematic review
S. Durst (&)
School of Business, University of Skövde, Högskolevägen, 54128 Skövde, Sweden
I.R. Edvardsson
School of Business, University of Iceland, Gimli, 101, Reykjavik, Iceland
G. Bruns
Fagelas Bygg, Landbyn 1, 544 94 Hjo, Sweden

16 S. Durst et al.
1 Introduction
The pursuit of sustainable business development has been subject to an increasing

number of organizations. In contrast to the past, business activities of organizations
reveal a stronger emphasis on societal and environmental issues compared to
economic issues which dominated in many organizations. Research on sustainable
business development has also increased, yet it is still in its infancy (Iasevoli and
Massi 2012). Sustainable development is defined as “development that meets the
needs of the present without compromising the ability of future generations to meet
their own needs” (WCED 1987: 43). In order to do so firms are supposed to adopt
social, economic, and environmental development in their business operations
(Chow and Chen 2012). Thereby these three aspects need to be considered as one
entity rather than as separate entities (Van Kleef and Roome 2007). Bansal (2005)
explained sustainable development using the resource-based view (RBV) and the
institutional based view. The former is primarily interested in developing and
exploiting resources and capabilities for generating rents (Roos 2005). Especially
intangible assets or knowledge resources are associated with the attainment of this
objective (Carmeli 2004), as these resources are more likely of being scarce,
durable, valuable, inimitable, and non-substitutable than tangible assets (Barney
1991; Grant 1991). Investments in sustainable practices are expected to increase
both an organization’s competitive advantage and its operational performance
(Schoenherr 2012; Iasevoli and Massi 2012). Thereby, not surprisingly, perfor-
mance is not only considered in terms of economic performance (for example
savings or profitability) but also in non-economic terms such as eco-efficiency
(Iasevoli and Massi 2012). In order to reach the sustainable goals set, collaboration
with all stakeholders is considered essential (Van Kleef and Roome 2007).
Against this background knowledge and knowledge management (KM) can be
regarded as central to sustainable business development and continuity of organi-
zations (Gloet 2006; Robinson et al. 2006). KM is “a set of procedures, infra-
structures, technical and managerial tools, designed towards creating, circulating
(sharing) and leveraging information and knowledge within and around organisa-
tions” (Bounfour 2003: 156). This definition clarifies that KM has a long-term
orientation and therefore fits nicely with one of the underlying assumptions of
sustainability and sustainable management, which is durability (Chow and Chen
2012). KM practices (such as knowledge creation, knowledge dissemination,
knowledge storage and knowledge application), are expected to support a continued
development of knowledge that is up to date and relevant. Consequently, these KM
practices make sure that organizations are able to address current and future
business challenges (Durst and Edvardsson 2012), which in turn help them in
meeting their aims concerning sustainable business development (Gloet 2006).
Hence, sustainable knowledge management can be regarded as a synopsis of KM
and sustainability; where the primary role of KM is to treat current and future
knowledge resources sustainably by considering social, economic, and environ-
mental aspects (Ansari et al. 2010).
Sustainable Knowledge Management … 17
Outsourcing has become rather common in recent years and organizations

pursue different objectives with this approach. Perhaps the most prominent reason
of organizations for outsourcing is to better focus on their core competences (Wu
et al. 2005). Another widely cited rationale is to gain access to unique resources,
skills and talents, and capabilities possessed by other firms (Howells et al. 2008).
Greater flexibility in managing demand swings and reducing company risk by
sharing it with suppliers are mentioned as other motives (for example Kremic et al.
2006; Di Gregorio et al. 2009; Quinn 1999). In sum, one can argue that all these
reasons for outsourcing are expected organizations on their search for competitive
advantage (Mudambi and Tallman 2010). Despite the possible benefits, there are
also some indications that outsourcing can undermine the knowledge base of
companies, which means that outsourcing might only be beneficial in the short run
(Xia and Tang 2011). Schlosser et al. (2006), for instance, argue that outsourcing
weakens organizational learning as its temporary nature undermines the traditions
and routines associated with a strong organizational culture. Similarly, firms that
outsource their core business functions may lose touch with their technological
know-how that provides opportunities for product and process innovation (Sánchez
et al. 2007). Consequently, if the negative aspects of outsourcing overtake the
positive ones, the knowledge (management) of the firms concerned is at risk, that is
its sustainability is threatened. It can also have serious implications for the firms’
overall sustainable development. Still one can observe that some organizations
(for example pharmaceutical organizations) have started outsourcing parts of their
key business functions (Howells et al. 2008) which may be contradictory to both
sustainable KM and sustainable development. What prompt organizations to out-
source their knowledge competences as well?
Having this in mind, the purpose of this paper is to review extant research on the
outsourcing of knowledge competences to establish our body of knowledge.
Thereby, in this paper outsourcing is defined as the allocation or reallocation of an
organization’s internal activities and services to outside providers. These providers
can operate in the same country (onshore outsourcing) or in another country
(offshore outsourcing). Knowledge competences, on the other hand, refer to a
specific set of abilities that enable organizations to compete and develop in order to
meet current and future business requirements. To the authors knowledge this paper
is unique in three ways: (1) Research has so far neglected the study of knowledge
competence outsourcing, (2) no research has discussed knowledge competence
outsourcing from a sustainable KM point of view, and (3) the intersection of
sustainability and outsourcing in general represents an under researched field of
study (Babin and Nicholson 2011).
The remaining paper is organised as follows. In the next section the related
literature is briefly outlined. Next the method employed is briefly discussed. This is
followed by a presentation of the results. The paper terminates with the conclusion
and implications of the study.
18 S. Durst et al.
2 Literature Background
Much of the existing literature on KM is concerned with how organisations can

capture knowledge from experts within the organisation, and formalise and package
knowledge assets for dissemination and reuse by other employees (Markus 2001).
As over the years the business environment has become more complex organiza-
tions have been forced to expand knowledge capture to external individuals/orga-
nizations as well in order to have access to a broader knowledge base (Majchrzak
et al. 2004). Various mechanisms and structures, often technology-supported, have
been proposed to facilitate this endeavour including Intranets (McKinlay 2002),
discussion forums (Hansen and von Oetinger 2001), lessons learned databases
(Brown and Duguid 2000), expert yellow pages (Storey and Barnett 2000), mentor
groups (Zack 1999) and communities of practice (Wenger et al. 2002). The
emphasis has also been on transferring tacit knowledge into explicit (Nonaka 1991).
Even though certain KM practices, such as knowledge creation, have been
expanded to include external parties as well, when it comes to the core of their
business activities organizations usually prefer to build upon an internal KM
strategy where the focus is on leveraging existing knowledge from within the
boundaries of the organisation. This paper addresses an alternative and less widely
discussed view of KM, referred to here as ‘‘knowledge outsourcing’’ (KO). In KO,
external experts are explicitly contracted to generate knowledge-intensive assets,
which are subsequently internalised by the organisation. Hence, KO exploits
external sources for knowledge creation rather than relying on internal capabilities.
KO might be interesting for organizations that have already developed a compre-
hensive knowledge about outsourcing and thus are willing to go a step further
(Babin and Nicholson 2011). While the general concept of outsourcing is not new,
as evidenced by the wealth of published literature in the area of information systems
(for example McKeen et al. 2002; Lam and Chua 2009) and more detailed in the
following, the study of KO, however, is in its infancy (Tarn and Chien-Chih 2012).
Along with an increased importance of services and knowledge in the economy,
in a number of firms organizational restructuring has been taken place, such as
intensified networking and changes in the supply chain manifested in outsourcing.
Outsourcing has grown rapidly among public and private organizations in recent
years (see Bryson 2007; Di Gregorio et al. 2009; Kakabadse and Kakabadse 2002).
In all cases, outsourcing always requires a third party involvement (Jagersma and
van Gorp 2007).
Outsourcing is a strategic move which involves both sourcing absent activities
that new firms may not have completed in-house in the past, or the substitution of
internal activities by transferring these, in part or whole, to a third party supplier
that performs the task, function, or process (Gilley and Rasheed 2000; Holcomb
and Hitt 2007). Advances in information and communication technologies have
enabled new firms to pursue the outsourcing of value-creating activities such as
software development, engineering, and research and development (Hui et al.
2008). It has also contributed to the development of a new business industry in
countries, such as software outsourcing in India (Jain and Khurana 2013).

Outsourcing projects are highly dependent on knowledge sharing in order to make
them work, thus proper KM systems are crucial (Aydin et al. 2010) which high-
lights the link between outsourcing and KM.
To date, researchers have focused on outsourcing by large, established firms
(Bhalla et al. 2008; McIvor 2009); however, there is evidence that outsourcing
attracts new firms as well. Mills (2002), for example, showed in his study how new
biotechnology firms utilize intermediate markets for a variety of value chain
activities. Why might new firms outsource activities, including value-creating
activities such as research and development, which are known to contribute to the
value-creating potential of firms (Kumar et al. 2009)? Researchers who stress the
integrated view of transaction cost theory (TCT) and RBV argue that by estab-
lishing relationships specifically with well-known firms, new firms can not only
reduce the search and monitoring costs associated with finding a reliable partner but
also acquire recognition and use their established counterparts to draw vital com-
binations of resources such as status and physical resources (Lin et al. 2009). This is
crucial for new firms as they suffer from restrictions such as scarcity of human
capital and operational know-how as a consequence of liabilities of newness and
smallness (Aldrich and Auster 1986; Baum and Oliver 1992; Stinchcombe 1965;
Bhalla and Terjesen 2013). Regardless of the age of companies, one may ask why
organizations would outsource critical knowledge competences as it may reduce the
chance of serving their customers and other stakeholders successfully or of
impacting their long-term success (Howells et al. 2008). Indeed knowledge com-
petences are viewed as the critical resources needed to develop and survive (Parry
et al. 2006) and to deliver value added services and products (Wu et al. 2005). Is it
mainly the hope of short-term gains or is KO the outcome of a well-considered
decision? Given the competitive fierce many organizations are exposed to one may
assume the former may dominate. Additionally, many firms may not be able to
make a clear distinction between core and non-core activities, so as a consequence
they unintendedly outsource core competences.
Outsourcing business activities is mainly found among US and UK organiza-
tions, whereas Italian, French and German firms appear to be more reluctant con-
cerning this approach (Parry et al. 2006). This may indicate that the former are more
short-term oriented (i.e. seeing outsourcing as a means of achieving competitive
advantage) then the latter ones. Or as Xia and Tang (2011: 504) put it “the current
low-cost purchasing/outsourcing strategy comes from the voice to focus on “here
and now” and on survival.” This observation also suggests that US and UK firms
have fewer problems with giving up control. As sustainable development is con-
cerned, it would require an increasing focus on social responsibility concerning
outsourcing in general (Gloet 2006).
To sum up, outsourcing represents a topic that has frequently been studied in
general. Thereby the focus has been on studying outsourcing activities of large and
established companies. Recent developments suggest that outsourcing has started
going beyond secondary (non-core) business functions, but covering core knowl-
edge competences as well. Competences that form the basis of competitive
20 S. Durst et al.
advantage, thus addressing an organization’s core business function(s). This situ-

ation may put the organization at risk, particularly from a viewpoint of sustainable
KM and sustainable business development.
3 Methodology of Literature Review
In our review process, we adopted the principles of a systematic review as rec-

ommended by Jesson et al. (2011) namely:
1. Mapping the field through a scoping review—This means that one establishes
the known and any knowledge gaps.
2. Comprehensive search—This means that one reverts to the different electronic
databases available and start searching within those databases using a number of
predefined keywords as well as other inclusion criteria (for example peer
reviewed articles, English language).
3. Quality assessment—This comprises the reading (that is scanning the abstract
and if necessary more sections of the paper) of the papers identified and the
decision about whether or not to include them in the review.
4. Data extraction—This refers to the collection of relevant data from the selected
papers and the capturing of the data into a pre-designed extraction sheet.
5. Synthesis—This comprises the synthesis of the data from each individual paper
into one sheet in order to show the known and to provide the basis for estab-
lishing the unknown.
6. Write-up—This final stage is about the production of the report about the
review.
In the following we explain how we dealt with the six steps. First, we developed
a research plan comprising the research questions we were interested in answering.
This also involved the keywords, and a set of inclusion and exclusion criteria. We
were interested in the current status of research on outsourcing of knowledge
processes in order to identify promising areas for future research. The questions
formulated, as outlined above, were: (1) Which topics are well researched in
relation to outsourcing and which are not? (2) Which were the main findings of the
studies?
We decided to use multiple keywords to identify relevant studies, such as out-
sourcing, knowledge competence, knowledge-based service. Our inclusion criteria
were: empirical research papers, peer reviewed, English language, ProQuest and
Web of Science databases. We excluded grey literature such as reports and non-
academic research, other languages than English, and other databases than Pro-
Quest and Web of Science.
Additionally, we produced an excel data sheet consisting of key aspects related
to our research aim. In our case these were: name of author(s), year of publication,
research aim/objectives, theoretical perspective/framework, method, main findings,
and name of the journal.
Second, once we had specified all the relevant issues, one of us accessed
ProQuest and Web of Science and searched using combinations of the keywords
set. We looked for combinations of these keywords in the title, keywords and
abstract. The literature review included papers published until 2 July, 2014.
Depending on the combination of keywords used, different numbers of hits were
generated.
Third, each of us manually scanned the abstracts of the respective papers and, if
relevant, more parts of the articles to make sure that they actually fell within our
scope of interest. This reduced the number of articles without duplications to the
final number of 13 articles which fulfilled our criteria and were then analysed.
Fourth, all authors read the 13 papers individually and entered relevant data
regarding our research purpose in the excel sheet.
Fifth, in the next stage we discussed the findings, synthesised the individual data
into one and identified themes. This helped us to establish the current body of
knowledge with regard to outsourcing (and offshoring) of knowledge processes.
Sixth, the final stage of our review process was devoted to the write-up of our
findings.
4 Presentation of Findings
Among the thirteen papers that formed the basis for our analysis, the oldest pub-
lication is from 2006 and the most recent ones are from 2013 (two papers). One
paper was published in 2008, four of the papers in 2009, four papers in 2010, and
one in 2011. No papers were published in 2007 and 2012.
In the sections below we present our analysis concerning the following aspects:
general observations which outline the research methods applied, the research
setting chosen and the journals in which the papers were published. After that, the
study’s main findings according to the themes identified are presented.
4.1 General Observations
With regard to the methodology, the most common method applied is the case
study approach (eight papers). Additionally, surveys (three papers), focus groups,
and secondary data (one each) were used as research methods. We identified two
papers which was longitudinal in nature (Brege et al. 2010; Cheng et al. 2010).
As the national research setting is concerned, the most investigated research
setting is Europe (6 papers). Four studies were found in Asia, one in the US, and
one paper were based on an international setting (dominated by the US). One paper
could not be assigned to any national setting.
The 13 papers were published in 11 different journals. Six of the 13 journals can
be assigned to the field of operations, technology and management, two journals to
22 S. Durst et al.
international business, and the remaining journals address fields such as innovation,
marketing, entrepreneurship and small business management, and organization
studies. This suggests that the topic appeals to a broad readership. It may also
suggest that the topic has not found its strategic home yet.
4.2 Body of Knowledge Regarding the Outsourcing

of Knowledge Competences
We summarized the main findings of the reviewed paper under five broad themes:
• Reasons for and against KC outsourcing;
• Consequences of knowledge competence (KC) outsourcing;
• Contributing factors to the success of KC outsourcing;
• Framework/Theory development;
• Others.
The following sections provide insights into the body of knowledge established
concerning the five different themes.
4.2.1 Reasons for and Against KC Outsourcing
Understanding the reasons and motives why firms outsource specific business
functions has been the focus of four papers (Table 1). Two papers mainly addressed
reasons for KC outsourcing. For example, having studied outsourcing over an
extended period, Brege et al. (2010) study highlighted besides lower costs,
development of core competences, control and flexibility, the potential of out-
sourcing for assisting in business development. Whereas, Howells et al. (2008)
study listed main reasons for R&D outsourcing. These are access to expertise which
is not available in the firm, reduction of development time, time for product launch
and costs, and support for technology change. Lau and Zhang (2006), who studied
both reasons for and against KC outsourcing, concluded that the reasons for out-
sourcing can be found in three areas: economic, strategic and environmental. In the
same vein, Rundquist and Halila (2010) determined that the main reason for KC
outsourcing, as found in successful firms, is the need for knowledge that is missing
in the firm.
The last two papers also presented insights into reasons against KC outsourcing.
Lau and Zhang (2006), for instance, considered the following as hampering factors:
Lack of capable service providers, loss of control, poor transportation and IT
infrastructure, local protection regulations, and lack of overall post-outsourcing
measurement. Rundquist and Halila (2010), on the other hand, stressed strategic
decisions from the board and risk of competence drainage as main reasons against
KC outsourcing.
Table 1 Papers on reasons for and against KC outsourcing
Author(s) Year Research aims/objectives Theoretical per- Method (empirical/ Main findings Journal
spective/ theoretical)
framework
Brege 2010 To describe and analyze Two theoretical Longitudinal case study In addition to low cost, core Strategic
et al. how and why the question approaches: on procurement of tele- competence, control and Outsourcing:
of outsourcing or insourc- transaction cost communications for the flexibility, the paper identi- An Interna-
ing within a specific empir- analysis and core Swedish public sector’s fies business development tional Journal
ical context, competence organizations during the as an additional logic for
telecommunications ser- thinking last 40 years outsourcing and insourcing
vices, has been handled
differently over time
Lau and 2006 To explore the key factors Literature on the A case study approach Economic, strategic, and International
Sustainable Knowledge Management …
Zhang that motivate organizations drivers, obstacles involving six Chinese environmental factors are Journal of
in China to outsource and and problems of companies of three the main drivers to engage Physical Dis-
the obstacles these compa- outsourcing major ownership types in in outsourcing. Lack of tribution and
nies are facing in compari- China (i.e. state-, pri- capable service providers, Logistics
son with the situation in vate- and foreign- loss of control, poor trans- Management
Western developed owned) portation and IT infrastruc-
countries ture, local protection
regulations, and lack of
overall post-outsourcing
measurement are consid-
ered the main obstacles and
problems in the outsourcing
process. The findings are
summarized in a framework
for making outsourcing
decisions in China
Rundquist 2010 To improve our under- Discussion of E-mail survey sent to Most important reason for European
and Halila standing of new product NPD outsourcing Swedish medium-sized NPD outsourcing is the Journal of
(continued)
23
Table 1 (continued)
24
Author(s) Year Research aims/objectives Theoretical per- Method (empirical/ Main findings Journal
spective/ theoretical)
framework
development (NPD) out- from a resource- firms in four industries need for knowledge that Innovation
sourcing. The authors are based perspective (Mechanical, Food, does not exist in the firm. Management
specifically interested in and a transaction Plastic and Rubber, Reasons to not outsource
factors affecting the out- cost perspective Wood and Paper) activities are: strategic
sourcing decisions decisions from the board
and risk of competence
drainage. Personal interac-
tion is an important factor
for the integration of pro-
cess knowledge, this was
found with the best firms
group
Howells 2008 To outline the main reasons n/a Survey of pharmaceuti- The authors present a R&D
et al. for pharmaceutical firms to cal enterprises in the typology of outsourcing Management
outsource R&D UK, 105 responses were factors in relation to R&D.
received The findings suggest that
the outsourcing activities
are mainly found with
regard to applied activities,
i.e. activities that are less
core to the organizations,
e.g. clinical trial activity,
R&D software and applied
research
S. Durst et al.
4.2.2 Consequences of KC Outsourcing
Two papers were assigned to this topic (Table 2). Agndal and Nordin (2009)
highlighted in their paper negative (non-financial) consequences KC outsourcing
can mean to firms (i.e. loss of knowledge and skills). Based on their findings the
authors propose ways to overcome them. In this context, the authors stressed in
particular the relevance of being aware of possible consequences as a critical
starting point for addressing them. Bhalla and Terjesen (2013) showed how KC
outsourcing can help firms in expanding their supplier network and operational
knowledge base. However, to actually benefit from it firms need to develop their
technical, evaluation, relational, entrepreneurial, and integration competencies.
Additionally, the authors’ findings point at the learning opportunity those supplier
networks can trigger. Finally, joint activities with supplier networks can contribute
to reduced relationship specific investments and cost efficiency.
4.2.3 Contributing Factors to the Success of KC Outsourcing
Two papers were assigned to this theme (Table 3). Bustinza et al. (2010) demon-
strated the contribution of learning capacities of firms and their stock of knowledge
resources to the success of outsourcing projects. The authors’ study showed that
both can positively influence the firms’ search for competitive advantage and the
way as to how the relationship with outsourcing partners is managed. On the other
hand, by looking at KC outsourcing from a risk perspective, Mahmoodzadeh et al.
(2009) work, that examined outsourcing in the context of business process man-
agement and knowledge management, identified the following issues possible
hampering the success of outsourcing projects: “(1) dependency on the suppliers
and changing collaborative to opportunistic behavior of the supplier; (2) losing
touch with new technological opportunities for product and process innovations;
(3) communication and coordination problems; (4) cognitive distance between
suppliers and firm therefore makes it more difficult to align decisions and exchange
knowledge; (5) outsourcing functions that should not be outsourced; and
(6) decreasing control over the outsourced functions” (861).
4.2.4 Framework/Theory Development
Three papers can be assigned to this topic (Table 4). These papers aim at providing
theoretical frameworks and development of existing theory in order to progress and
expand our understanding of knowledge outsourcing. Chang et al. (2009) propose
an integrated model consisting of three different theoretical perspectives (i.e.
technological regime, resource-based view and transaction cost theory) as a basis
for the identification of factors influencing outsourcing strategies. By having such
an integrated approach the authors believe that better decisions regarding suitable
outsourcing strategies are possible. Cheng et al. (2010), on the other hand,
Table 2 Papers on the consequences of KC outsourcing
26
Author(s) Year Research aims/objectives Theoretical Method Main findings Journal

perspective/ (empirical/theoretical)
framework
Agndal and 2009 The purpose of this paper Literature Literature review and The study highlights different neg- Benchmarking:
Nordin is to develop a model that on out- focus group involving ative non-financial consequence of An Interna-
enables the study of non- sourcing of experienced senior outsourcing (e.g. loss of knowledge tional Journal
financial consequences of different procurement and skills etc.). In addition many
outsourcing company managers examples are provided as to how
functions the participants tried to overcome
potentially negative consequences
through good business practices or
where such consequences were
perceived as irrelevant due to the
outsourcing context
Bhalla and 2013 To analyse outsourcing by Transaction Case study based on The research reveals that new firms Industrial
Terjesen knowledge-intensive new cost theory data from ten outsourcing to highly-embedded Marketing
firms in supplier networks and resource biotechnology start- suppliers are likely to secure access Management
based view ups and twenty of to a wider supplier network, attain
their suppliers best-in-class operational knowledge,
and avoid supplier opportunism
while facing low levels of relation-
ship-specific investments. New
firms outsourcing to suppliers at the
network periphery are more likely to
realize cost efficiencies, expose
themselves to opportunism, uncer-
tainty, and higher levels of relation-
ship-specific investments but low
levels of operational knowledge.
The authors propose five outsourc-
ing competencies new firms should
S. Durst et al.
develop to realize the benefits

Table 3 Papers on contributing factors to the success of KC outsourcing
Author(s) Year Research aims/objectives Theoretical Method Main findings Journal
perspective/ (empirical/theoretical)
framework
Bustinza et al. 2010 To analyse outsourcing Knowledge- A survey among 204 Findings highlight the con- Journal of
from the point of view of based theory Spanish service firms tribution of the stock of Supply Chain
knowledge management with more than 20 knowledge as a resource and Management
of the firm
and learning employees. Reached of learning capacity to both
a response rate of competitive advantage and
20.4 % the capacity to manage out-
sourcing collaborations
Mahmoodzadeh 2009 To analyse the impact of Literature on A literature review The authors propose a com- Business
et al. business process manage- risks of out- was accompanied by prehensive framework to Process
ment (BPM) and knowledge sourcing and a case study con- help performing each step of Management
management (KM) on outsourcing ducted on MTN the business process out- Journal
reduction of outsourcing models and Irancell sourcing (BPO) lifecycle and
risks and pitfalls frameworks the reduction of BPO risks
and pitfalls using BPM and
KM approaches
27
Table 4 Papers on framework and theory development
28
Author(s) Year Research aims/objectives Theoretical per- Method Main findings Journal
spective/ (empirical/theoretical)
framework
Chang 2009 To examine the strategic technol- Review of factors Case study approach, The authors pro- International
et al. ogy outsourcing of corporate influencing tech- study of four Taiwanese pose an integrated Journal of
ventures from an integrated nology sourcing publicly traded pharma- model that sug- Entrepreneurial
perspective from three ceutical companies gests that the fac- Behaviour and
theoretical per- tors of Research
spectives: techno- technological
logical regime, regimes, resource-
resource-based based view, and
view, and transac- transaction cost
tion cost theory perspective
together affect a
firm’s sourcing
strategy
Cheng 2010 To explore how to transfer Literature on Case study method The authors intro- Strategic
et al. production know-how on the knowledge transfer involving three large duce different Outsourcing:
shop-floor level when Danish manufacturing means for knowl- An Interna-
manufacturing units are relocated. companies. Longitudinal edge transfer and tional Journal
(2 years) classify them
according to their
usages. Addition-
ally a means
framework is pro-
posed to integrate
all the elements
systematically
(continued)
S. Durst et al.
Table 4 (continued)
Author(s) Year Research aims/objectives Theoretical per- Method Main findings Journal
spective/ (empirical/theoretical)
framework
Lam and 2009 The purpose of the paper is to Literature on KM A case study based on The authors pro- Journal of
Chua present the notion of knowledge and IT outsourcing Fenton University pose a general knowledge
outsourcing as an alternative (higher education enter- process model of management
strategy of prise owned by a con- knowledge out-
knowledge management sortium of international, sourcing. They
research intensive draw attention to
universities) three conditions
under which
knowledge out-
sourcing may be a
suitable strategy
for knowledge
management.
Additionally, two
main areas of
knowledge out-
sourcing risk are
identified
29
30 S. Durst et al.
developed an integrated framework based on a classification of different means for

knowledge transfer according to their usages (e.g. through prototypes, documents
or peer-to-peer training). Lam and Chua (2009), on the other hand, regard
knowledge outsourcing as a promising alternative strategy of KM, thus pointing to
a further development in the study of KM. The authors specify certain conditions
which support decision making in favour of knowledge outsourcing. These are
“lack or unavailability of in-house expertise; availability of external knowledge providers
who are able to satisfy an organisation’s knowledge needs; and a favourable business case
in which the cost-benefit of knowledge outsourcing is positive in light of other available
alternative options” (39).
4.2.5 Others
Two papers were assigned to this topic (Table 5). These papers have addressed the
management of outsourcing and the application of outsourcing in a specific
industry. Hamzah et al. (2011) who mainly studied knowledge management prac-
tices as found in an offshoring outsourcing company. Lacity and Willcocks (2013)
studied Legal Process Outsourcing and mainly demonstrated the opportunities
available in this new field of KC outsourcing.
When bringing together these results with the ones from the literature review KC
outsourcing can be determined as a further strategy firms are pursuing in order to
search for competitive advantage. The findings also show that the main focus is on
KC outsourcing in large companies. As reasons against KC outsourcing are con-
cerned, the comparison shows that they are basically in line with general reasons
against outsourcing. Concerning KC outsourcing, however, a stronger emphasis on
Table 5 Papers on other KC outsourcing issues

Author(s) Year Research Theoretical Method (empirical/ Main findings Journal
aims/objectives perspective/ theoretical)
framework
Hamzah 2011 To investigate Literature Kind of case study The findings International
et al. how offshoring on KM and approach involving mainly highlight Journal of
outsourcing offshore interviews and KM practices in Business and
company man- outsourcing observations in an the case company Social
age its knowl- offshoring out- Science
edge resources sourcing support
centre in Malaysia
Lacity 2013 To assess the N/A LPO provider data The LPO providers Strategic
and current legal collected in 2011 provide a variety of Outsourcing:
Willcocks process out- by Orbys, a Euro- services, including An Interna-
sourcing pean sourcing and litigation, intellec- tional Journal
(LPO) provider transformation tual property, cor-
landscape advisory firm porate, compliance,
procurement,
employment, prop-
erty, and consult-
ing services
the long-term consequences can be established, which are addressing a firm’s future
capability of keeping and developing its competitive advantage. Despite this the
findings from the systematic literature review suggest that KC outsourcing has the
potential of helping organizations to pursuit sustainable KM and sustainable
business development as learning from the past and improved collaboration are
possible, which can be ascribed to the long-term perspective of KC outsourcing as
well.
5 Conclusions
The starting point of this paper was to bring together the issues of sustainable KM
and the outsourcing of core competences. As one may argue that the latter presents
a severe damage of the former. Given the fact that an increasing number of firms
pursuit a sustainable development of their organizations, of which sustainable KM
is a critical part, one may wonder why still some firms are outsourcing their core
competences, that is those knowledge assets that are critical for company success
and competitive advantage.
In order to address the situation outlined above, this paper reviewed extant
research on outsourcing and knowledge competences to establish our understand-
ing. We used the method of a systematic literature review to identify relevant
papers. We found thirteen papers that formed the basis of our analysis. The papers
were published in the years 2006–2013, highlighting the topicality of the topic, and
the small number of papers indicates that it is an under researched field of study.
The main findings were summarised in five themes: Reasons for and against KC
outsourcing; consequences of KC outsourcing; contributing factors to the success of
KC outsourcing, framework/theory development, and other issues. Concerning the
issue of sustainable business development as well as sustainable KM, the findings
regarding the consequences of KC outsourcing and contributing factors to the
success are of specific relevance as they are addressing a firm’s long-term position
and therefore underlying assumption of any activities following a sustainable
approach. Indeed the findings suggest that KC outsourcing can be a strategy for
reaching sustainable business development, even though the pros and cons of KC
outsourcing are close together.
From a sustainable point of view, aspects in favour of KC outsourcing are
having access to a stronger and broader network, developing the operational
knowledge base, reduced relationship specific investments and learning. Indeed the
latter can in combination with the knowledge stock at hand contribute to compet-
itive advantage. On the other hand, aspects speaking against KC outsourcing are the
loss of knowledge and skills, for example, the partial or fully loss of a firm’s ability
to perform certain business functions (Agndal and Nordin 2009). This can also be
accompanied by a loss of control over the business activities undertaken meaning
that a firm is at someone else’s mercy.
32 S. Durst et al.
The findings have further suggested that in order to make use of the benefits of
KC outsourcing firms need to develop a new/different set of competencies and must
be aware of and take responsibility for the consequences of their actions regarding
KC outsourcing. Consequently, KC outsourcing is mainly something for firms who
are able to follow a consistent and disciplined approach to KC outsourcing. Against
the background of observable business practices that are characterized by perma-
nent (and often radical) policy changes, this ability will only show in a very small
number of organizations. Therefore, from a practical point of view, this study
provides insights into the usefulness of KC outsourcing in conjunction with sus-
tainable business development. The findings also offer guidance for managers about
the preconditions that must be fulfilled in order to apply KC outsourcing as part of a
sustainable KM strategy. In this context, it might be promising to examine whether
public organizations are better suited for KC outsourcing compared to private
organizations.
The present study is not without limitations. A complete coverage of all the
articles considering the issue of knowledge competence outsourcing could not have
been achieved, given the search proceeding chosen. So it may have left out papers
that also addressed the topic but used a different language. Yet, it seems reasonable
to assume that the review process covered a large proportion of the empirical
studies available.
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The Role of Culture in a Sustainable Built
Environment
Alex Opoku
Abstract The issue of the role of culture in a sustainable built environment is

becoming more important due to the growing impact of the built environment in
achieving society’s sustainable development. Society faces environmental chal-
lenges, including climate change and urban population growth and responding to
these interconnected challenges is at the centre of society’s concerns for its future.
This chapter aims to examine literature to advance this emerging area of research by
mapping the linkages between the concept of culture, sustainable development and
the built environment. A review of a wide-range of relevant literature relating to
culture, sustainability and the built environment is presented. This review focused
on relevant publications in academic literature that provide evidence of the role of
culture in a sustainable built environment. The review of literature highlights the
increasing recognition of culture as powerful and important aspect in fostering
economic, social and environmental dimensions of development. Culture is a key
element in the concept of sustainable development as it frames people’s relation-
ships and attitudes towards the built and the natural environment. Sustainable
development is an integral part of the society and culture; affecting all aspects of
operations in the built environment. This Chapter provides an in-depth insight into
the contribution of culture and places culture as the possible fourth dimension of
sustainability and an integral part of environmental, economic and social dimen-
sions of sustainable development.
Keywords Culture Cultural sustainability Sustainable development

Sustainable built environment
A. Opoku (&)
London South Bank University, London, UK

38 A. Opoku
1 Introduction
Cultural sustainability examines ways to improve human lives and how to leave a
practical legacy for future generations. Society cannot continue with the current
attitude towards resource exploitation if we have the aspiration to provide future
generations with the ability to meet their own needs. Cultural value shape the
society’s way of life and therefore has the potential to bring about the change of
attitudes needed to ensure the achievement of sustainable development. Culture
contributes to the building of lively cities and communities where people can live,
work and play a major role in supporting social and economic well-being. Hawkes
(2001) argue that a sustainable society depends upon the vitality of a sustainable
culture and cultural action arising from the communities as a result of their well-
being and shared sense of meaning and purpose of its members. Cultural sustain-
ability involves efforts to preserve the tangible and intangible cultural elements of
society in ways that promote environmental, economic, and social sustainability
(NZMCH 2006; Duxbury 2012). There is currently a paradigm shift in the
worldview toward sustainability to include cultural sustainability in ways that do
not damage our ecosystem, environment, and social well-being. Hawkes (2001)
recognises that, the three dimensions of economic growth, social inclusion and
environmental balance no longer reflect all the dimensions of our global societies.
The world is not only facing economic, social, or environmental challenges:
creativity, knowledge, diversity, and beauty are the unavoidable basis for dialogue
for peace and progress as these values are intrinsically connected to human
development and freedoms (UCLG 2010). Culture and values are significant
components of society, but each culture’s values are not static; they evolve over
time, thus first shifting society’s view of what defines sustainability and then cre-
ating paradigm shifts in the worldview on sustainability (Fithian and Powell 2009).
The Director-General of UNESCO (Irina Bokova) declared in 2012 that culture is
what makes us who we are, providing answers to many of the challenges we face
today and that we must do far more to place culture at the heart of the global
sustainability agenda (UNESCO 2012a; Hayashi et al. 2013). The introduction and
the integration of culture into the social, environmental, and economic dimensions
of sustainability are vital in delivering a more holistic approach to sustainable
development (Scammon 2012). Culture supports and connects with the other three
pillars of sustainability; social, economic, environmental. For instance economic
sustainability includes the evaluation of maintenance and operational costs of
buildings in specific cultures while environmental sustainability supports the con-
tinuous use of historic buildings; avoiding demolition of historic buildings means
waste materials to landfills are eliminated.
The cultural dimension of sustainability creates solid bridges with the other three
dimensions of development and is compatible with each of them (UCLG 2010).
The application of cultural sustainability can minimize the use of natural capital
through resource management; improve tangible social capital such as public
facilities and infrastructure; and strengthen economic capital by getting more out of
The Role of Culture in a Sustainable Built Environment 39
renewable resources. The global built environment requires urgent improvement in

energy and environmental performance (Grierson 2009) and this could only be
achieved through a cultural change. The rest of the chapter is structured as follows;
literature review on culture and sustainable development is described next. Then the
literature on the contribution of culture on sustainable built environment is pre-
sented. Finally, literature findings and conclusions on the role of culture on a
sustainable built environment are discussed.
2 Research Approach
A research approach is underpinned and bounded by the understanding and

perspective of the researcher. Creswell (2007) stressed the importance of illustrating
the research approach as an effective strategy to increase the validity of social
research. Mackenzie and Knipe (2006) argue that methodology is the overall
approach to the proposed research linked to the paradigm or theoretical framework
to be used while the method refers to systematic modes, procedures or tools used
for collection and analysis of data. The literature review provides a comprehensive
critical analysis of the current thinking, from both an industrial and an academic
perspective in the field of culture and sustainability in the built environment. The
literature was considered in the context of theory so that objective evaluation could
take place (Fellows and Liu 2003). The literature review examined literature on
culture, sustainable development and the link between culture and sustainability in
the built environment. This literature review aims to clearly identify the knowledge
gap on the role of culture in a sustainable built environment. A critical review of
literature developed an understanding of the structure of the subject, identifying
what is known from what is unknown, establishing the significance of the problem
under study, seeking new lines of enquiry and ascertaining the key variables
essential to the issue (Randolph 2009). The chapter therefore presents a review of
literature on the role of culture in a sustainable built environment.
3 Culture and Sustainable Development
Cultural sustainability is equally as important as economic, social and environ-

mental dimensions of sustainable development and should be included as one of the
dimensions supporting sustainability in a holistic approach. Sustainable develop-
ment and culture are connected as culture describes society’s understanding and
appreciation of the natural resources and therefore plays an essential role in the
promotion of economic progress in a fair society. A desired sustainable society’s
focuses on the three dimension of social equity and justice, environmental
responsibility, and economic viability are essential but inadequate to support the
future survival and well-being of humankind and therefore a fourth dimension
40 A. Opoku
(cultural development) is required (Hawkes 2001). Cultural heritage acts as a

possible source of employment, social capital, energy savings and cultural diversity
in attempt to pursue social, environmental and economic issues of sustainability.
Continuous cultural heritage can be achieved when it is used as a tool for economic
development because the acquired development will in turn ensure the sustainable
development (Gunay 2008).
3.1 Sustainable Development
Sustainable development has been defined in many ways but the most commonly
accepted definition of sustainable development is:
Meeting the needs of the present without compromising the ability of future generations to
meet their own needs… A process of change in which the exploitation of resources, the
direction of investments, the orientation of technological development, and institutional
change are all in harmony and enhance both current and future potential to meet human
needs and aspirations (Brundtland 1987: 43).
However, Opoku and Ahmed (2013: 141) provide an alternative definition that
addresses the concept of need and human behaviour as:
The adjustment of human behaviour to address the needs of the present, without
compromising the ability of future generations to meet their own needs.
The definition of Brundtland (1987) aims to be more comprehensive and

addresses the key concept of needs while Opoku and Ahmed (2013) put emphasis
on human behaviour in an attempt to meets their needs. The transition towards
achieving sustainable development require changes in human behaviour, values and
attitudes that will meet human needs.
Sustainable development balances environmental resource protection, social
progress and economic growth and stability now and for the future. A vision of
sustainable development with three dimensions namely: economic growth, social
inclusion and environmental balance was consolidated at the Rio de Janeiro Earth
Summit of 1992 as the paradigm of sustainable development (UCLG 2010).
However, it is believed that these dimensions alone cannot possibly reflect the
complexity of current society. There is now a call from agencies/institutions such as
UNESCO, the World Summit on Sustainable Development, and researchers to
include culture in the sustainable development model, since culture ultimately
shapes what we mean by development and determines how people act in the world
(Fithian and Powell 2009; UCLG 2010). Over the past decade, voices from different
parts of society, from international institutions to academia, began to question the
validity of the current definition of sustainable development. They state that eco-
nomic growth, social inclusion and environmental balance, no longer reflect all the
dimensions of our global societies and propose the addition of the dimension of
culture to policies aiming at sustainable development (UCLG 2010). A Culture of
peace fosters development and social cohesion and sustainable development could
easily be achieved when there is the involvement of the local population at the
centre of the development efforts. Culture is emerging as the fourth pillar of the
sustainability model (Sustainable Development = Environment + Econ-
omy + Social + Culture). Integrating culture within development efforts is crucial to
tackle a large number of these global challenges more effectively and sustainably.
This model recognizes that a community’s vitality and quality of life is closely
related to the vitality and quality of its cultural engagement, expression, dialogue,
and celebration (Fithian and Powell 2009). There is more to sustainability than
environmental practices, economic growth, and equitable social services. Sustain-
ability also includes a community’s values and cultural heritage.
3.2 Cultural Sustainability
Culture play a role in defining human needs and interest making it critical to
sustainable development. Cortese (2003) argues that a cultural shift is required to
achieve a more sustainable society. Culture is central to society and defines people’s
attitudes and goals. It informs our understanding of development and controls our
behaviour in the communities in particular and society in general. Agenda 21 for
Culture (2004) places culture at the heart of the sustainable development processes.
Parodi (2011) describes culture as an aim and a condition of sustainable develop-
ment while Hauser and Banse (2011) believe that the relation between culture and
sustainability is very rich. Whiles Opoku and Fortune (2011) believe that organi-
zational leadership plays a vital role towards achieving sustainability, Taylor (2009)
argues that efforts to change individual organizational leadership behaviour and
attitude towards a more sustainable organization, without a parallel effort to change
the culture within these organizations in which they operate will achieve little or no
results. We need to develop a society where sustainable behaviour is a culture of the
people.
There has been a growing recognition that culture and the environment function
as parts of a single system and that they cannot be understood separately. Culture
can be seen as acting driver of sustainable development since culture-related ini-
tiatives have direct impact in achieving sustainable development (NZMCH 2006;
Fithian and Powell 2009). Culturally embedded processes in diverse settings play a
significant role in sustainable Development efforts. Whenever cultural issues are
considered in sustainability, it has been niched under the umbrella of social sus-
tainability, however Hawkes (2001) advocates for a sustainability model that
incorporates four interlinked dimensions of environmental responsibility, economic
health, social equity, and cultural vitality (well-being, creativity, diversity and
innovation) as illustrated in Fig. 1.
The four-dimension model of sustainability provides a cultural lens in evaluating
the impacts of the environmental, economic, and social strategies being imple-
mented (Fithian and Powell 2009). Nurse (2006) goes further by arguing that
42 A. Opoku
Fig. 1 Proposed four-

dimension model of
sustainability (Source Author
2014)
culture should be the central dimension of sustainable development and should be

integrated fully into the economic, social, and environmental dimensions. He
believes that people’s identities and signifying systems shape how the environment
is viewed. Cultural sustainability supports the other three dimensions of sustain-
ability; social, economic, environmental through the re-use and recycling of
resources on which energy has already been spent (NZMCH 2006).
Culture should be viewed not just as an additional dimension of sustainable
development along with environmental, economic and social objectives because
peoples’ identities, signifying systems, cosmologies and epistemic frameworks
shape how the environment is viewed and lived in (Fithian and Powell 2009).
The cultural dimension of sustainability is becoming increasingly present in the
deliberations on sustainable development, but there are still some confusion
regarding the definition of the term culture (Dallaire and Colbert 2012). Culture
shapes what we mean by development and determines how people act in the world.
Culture shapes what we mean by development and determines how people act in
the world (Nurse 2006). Culture has been described as a set of unique spiritual,
material, intellectual and emotional features of a society or a social group (Hayashi
et al. 2013). Culture is both an instrument for decision-making and implementation
as well as the end result of those policies and of the decisions implemented. Culture
is about creativity, heritage, knowledge and diversity. These values are intrinsically
connected to human development and freedoms (UCLG 2013). Integrating cultural
aspects into research, decision-making and policy frameworks for environmental
sustainability is an important challenge when addressing the cultural and social
consequences of ecosystem change. Culture as a sector embraces tangible and
intangible heritage, cultural and creative industries and cultural infrastructures, has
made towards achieving sustainable development, as evidenced in terms of poverty
alleviation, social inclusion and environmental sustainability (UNESCO 2012a).
Culture is a dynamic reality and constantly shifting process that plays an
important role in sustainable development (Hawkes 2001). Local and indigenous
knowledge systems and environmental management practices provide valuable
insight and tools for tackling ecological challenges, preventing biodiversity loss,
reducing land degradation, and mitigating the effects of climate change (UNESCO
2012a). Culture fosters economic growth, helps individuals and communities to
expand their life choices, improving the resilience of social-ecological systems and
adaptation to change. Duxbury and Jeannotte (2010) describe culture as capital
(both tangible and intangible), a way of life (a system of social relations), a vehicle
for sustainable values and creative expression providing insights on sustainability.
The integration of culture into sustainable development strategies and policies
advances a human-centered and inclusive approach to development in addition to
serving as a powerful socio-economic resource. Culture is transversal and cross-
cutting concern and, as such, affects all the dimensions of development (UNESCO
2012a). Culture is linked to the economy through income generation and
employment, to social programs that deal with poverty, equal rights, and civic
engagement; and culture is linked to the environment through the use of cultural
capital to raise environmental awareness and responsibility (UCLG 2013). The
contribution of culture to a sustainable built environment is discussed in the next
section.
4 Culture and Sustainable Built Environment
Achieving a more sustainable society requires the redefinition of the relationship

between the built and natural environments. The built environment consumes lots
of energy and resources whiles generating large amount of waste. The solution to
this challenge is the design and construction of improved built asset supported by
appropriate management tools and regulatory frameworks that addresses sustain-
able development issues (Grierson 2009). A typical example of such tool or reg-
ulatory framework is the adoption of BRE Environmental Assessment Method
(BREEAM) which sets the standard for best practice in sustainable building design
and measure building’s environmental performance. BREEAM is most widely used
method of assessing, rating and certifying the sustainability of buildings and pro-
vides clients, developers, designers etc. a prove of the environmental credentials of
their built assets.
44 A. Opoku
4.1 The Built Environment
The built environment is literally a hub of economic activities, individuals and

families, as well as society’s cultural heritage. The built environment host economic
activities, protects life and health, psychological and social welfare of its inhabit-
ants, and sustain aesthetic and cultural values (Holm 2003). According to Bartuska
(2007: 5), the Built Environment is defined as:
Everything humanly made, arranged or maintained to fulfil human purpose (needs, wants
and values) to mediate the overall environment with results that affect the environmental
context.
However, Moffatt and Kohler (2008: 249) describe the Built Environment as:
The manmade surroundings that provide the setting for human activity, ranging from the
large-scale civic surroundings to the personal places.
The built environment involves human and cultural issues (why people build),
environmental issues (natural and built context) and technological issues (materials,
energy and financial resources, methods, and systems required to establish inter-
relationships and construct the built environment (Bartuska 2007). Building for
sustainable development involves using design and construction methods and
practices, which strive for integral quality (including economic, social and envi-
ronmental performance) in a very broad (or holistic) way (Grierson 2009). The built
environment is not just about buildings, infrastructure and transport but it also
includes the interaction of people in the local communities and their cultural
experiences (New Zealand Ministry for Environment 2009). An efficient sustain-
able built environment that includes economic and socio-cultural sustainability
supports local economy (Allen 2009).
Hallsal (2011) explains that, the built environment is the physical human created
surroundings such as roads, bridges, and building structures, contrasting that of the
natural environment. The connections between components of the built environ-
ment, such as individual buildings, transport systems, urban landscapes and other
infrastructure are important. The built environment revolves around communities
full of cultural experiences that connect with people and the interaction of these
factors creates a stronger and a more sustainable community with increased psy-
chological well-being Jenkin and Pedersen (2009) believe that the built environ-
ment does not only consist of buildings, infrastructure and transport but it also
includes human community, cultural experiences and interactions of people. The
scope of the built environment consists of the following interrelated components:
products, interiors, structures, landscapes, cities, regions, and Earth (Bartuska
2007). A sustainable built environment should aim at reducing environmental
impacts in terms of energy, carbon, waste or water; this will involve creating a built
environment that produces more than it consumes with environmental, social,
cultural and economic benefits (Jenkin and Pedersen 2009). Cultural aspect of
sustainability should be considered when formulating policies, developing and
implementing development plans and programs for the built environment
(Jeannotte and Andrew 2012). Local and community needs (cultural environment)
should be assessed and properly linked to the built asset project objectives to
achieve a sustainable society (CIDA 1997).
4.2 The Role of Culture in a Sustainable Built Environment
Cultural sustainability and the connection with the built environment involves the
development of building forms, materials and construction methods resonant with
the local culture and expertise (Williamson et al. 2003). Organizations can con-
tribute to achieving sustainability by reducing their negative impact on the natural
environment while increasing the whole life of built asset in the built environment
(Poston et al. 2010). Culture plays an important role as a non-renewable resource
that is a vital part of our cities; the adaptive re-using of the historic urban envi-
ronment adds to the quality of life of their inhabitants by strengthening their sense
of belonging, social cohesion and providing a pleasant environment that mitigates
excessive urbanization (UNESCO 2012b). The problem of climate change and the
impact on a sustainable built environment is no more a question of science but
rather a global issue and dealing with these issues involves different stakeholders of
different socio-cultural perspectives (Holm 2003). This means that tackling the
problem of climate change and the effects on the built environment require the
integration of sustainable development education that can improves society’s
behaviours and attitudes to resources. Culture enables environmental sustainability
at various levels; through the intrinsic links between cultural diversity and biodi-
versity, its influence on consumption patterns, and its contribution to sustainable
environmental management practices as a result of local and traditional knowledge.
Grierson (2009) explain that respect for all people, demonstrated through the
provision of a healthy, functional, accessible and attractive built environment, is
vital in promoting social sustainability. Culture can be an influential driver for
sustainable development with broader social, economic and environmental impacts
on the society as cultural heritage and cultural infrastructure can serve as strategic
tools for revenue generation. Many cities across the world today use cultural her-
itage to encourage sustainable urban development and communities.
Culture contributes to environmental sustainability by conserving the historic
environment and promoting creative design. Cultural heritage and creativity play a
supporting role in achieving urban sustainability and facilitate a better fit between
goals and processes and local conditions in development projects from health to
education and infrastructure (Hosagrahar 2013). For example, Beynon (2010)
observed that cultural sustainability can support the other dimensions of sustain-
ability when buildings get used for new purposes, perhaps offering a socially
sustainable benefit to low-income residents. Using a building for new purposes may
offer an economic benefit because funds are not needed to build new; and it may
also offer environmental benefits because building materials are not disposed
as waste to landfills. Lewis (2012) argues that it takes 35–50 years for an
46 A. Opoku
energy-efficient new home to recover the carbon expended in its construction.

Historic houses are built from brick, plaster, concrete and timber, or even from
mud-brick, which are among the least energy-consuming materials.
The built environment is an integral part of spatial construction, and the history
of building is a history of identity and therefore any alterations to buildings, involve
elements and forms that relate to particular cultural and societal patterns (Beynon
2010). The cultural heritage is a powerful asset for inclusive economic develop-
ment, since it attracts investment and ensures green, locally-based, stable and
decent jobs relating to a wide range of sustainable activities in areas such as
conservation, construction, (Hosagrahar 2013). It is therefore important that culture
is placed at the centre of our development strategies because of the role culture
plays in framing human behaviour and their relationship to others (UNESCO
2012b). Culture contributes to sustainable built environment through the protection
of historic buildings, sustainable urban retrofit schemes, regeneration/urban renewal
programmes, sustainable architecture and smart/sustainable cities within the realms
of the community’s identity. A model of the role of culture in a sustainable built
environment developed from the literature review is presented in Fig. 2.
Culture therefore has an essential role to play in the development of a sustainable
built environment that includes infrastructure that supports neighbourhoods and
cities. Sustainable building design should meet the end users social and cultural
needs while preserving the environment for future generation (Al-Jamea 2014).
Social sustainability
Heritage/Historic Sustainable
Buildings Design/Architecture
Environmental Sustainability
Sustainable Urban
Communities
Retrofit
Economic Sustainability
Regeneration/Urban Smart/sustainable
CULTURAL SUSTAINABILITY Renewal Cities
SUSTAINABLE BUILT ENVIRONMENT
Fig. 2 Culture and sustainable built environment framework (Source Author 2014)
4.3 Cities, Culture and Sustainable Development
Culture has been the underdeveloped component of both conceptual and planning
frameworks for long-term community well-being and sustainability. Historic towns
and the historic parts of cities are valuable for their uniqueness and identity
(Duxbury 2012). Creativity in urban areas has increasingly become part of the
culture-led redevelopment of urban areas in order to bring about improved eco-
nomic returns and increased competitiveness between cities (Hosagrahar 2013).
Landscapes and the components of them have always strongly influenced local
cultural practices, values and beliefs. In urban areas, initiatives such as sustainable
architecture, ecological design, and eco-arts can stimulate creativity and innovation
by linking ecological concerns, well-being and aesthetics (Duxbury et al. 2012).
Cultural considerations should be integrated into sustainable urban and community
planning through strong cultural programs that link intercultural realities and the
local environment. Andrew et al. (2011) argue that, more research is needed to
increase the understanding of the concept of integrating culture into sustainability
planning and policy development.
Today, many cities use cultural heritage and cultural events and institutions to
improve their image, stimulate urban development, and attract visitors as well as
investments (UNESCO 2012a). The cultural heritage is linked to the lives of
communities and is fully integrated into social, economic and environmental pro-
cesses, making it an integral part of people’s daily experience (Hosagrahar 2013).
Maintaining the cultural heritage is also important in addressing risks relating to
natural and human-made disasters. Whiles recent city planning paradigms are
focusing on achieving sustainable cities through sustainability planning initiatives
such as the adoption of sustainability goals for individual communities and regions,
cultural considerations has not been integrated generally into planning; even though
culture has been recognized in urban and community planning contexts (Duxbury
and Jeannotte 2010; Duxbury 2012). When urban development policies and strat-
egies are driven by heritage (culture), it helps contributes to alleviating and adapting
to climate change. For example, in UK, the embodied energy in the construction of
a building is estimated at 15–30 times the annual energy use; which means that it is
more sustainable to conserve the existing fabric of our built environment con-
structed with traditional methods, local materials and skills than demolishing and
reconstructing (Lewis 2012; UNESCO 2012b). Current urbanization policies often
ignore the importance of cultural heritage preservation and promotion and the great
potential of creativity in addressing social, environmental and economic urbani-
zation challenges (Hosagrahar 2013; Duxbury et al. 2012).
Cultural heritage, particularly cultural landscapes and historic cities, can make a
significant contribution to environmental sustainability. Lewis (2012) argues that
replacing a historic building with a new one involves the higher consumption of
energy. Demolishing a historic building means wasting the energy incorporated into
that building, and it requires further energy to take the materials to a landfill and
even more to reconstruct a new building. Cultural knowledge in dealing with the
48 A. Opoku
risks of floods, mudslides, droughts, as well as earthquakes, is valuable in helping to

make communities resilient. In addition, local building technologies and the use of
local materials in heritage structures and the knowledge of ecosystem management
that is inherent in their responsiveness to climate, topography, and available natural
resources are all significant as sources of knowledge and offer a diversity of
solutions for particular conditions (Duxbury 2012; Hosagrahar 2013).
The conservation of historic cities is an effective strategy in reducing CO2
emissions when compared to their replacement by new buildings. New construction
projects have more damaging impacts in short to mid-term, however conserving an
existing building rather than demolishing and reconstructing reduces the demand
for new and saves original energy and CO2 investment (Lewis 2012). Historical
preservation and reuse of old buildings is the most sustainable practice in the built
environment today and a crucial strategy towards encouraging cultural sustain-
ability and counter the effects of global warming.
5 Discussions
The protection, promotion and maintenance of cultural sustainability is vital for

sustainable development that benefit present as well as future generations. Culture
is integral part of sustainable development; however the key challenge is the
understanding of the relationships between culture, sustainability and development.
Culture indeed has role to play towards achieving a sustainable built environment
because culture is a key element in the concept of sustainable development as it
frames people’s relationships and attitudes towards both the built and the natural
environment. Cultural value shape peoples way of life and therefore has the
potential to bring about the change in behaviour and attitude needed to ensure the
achievement of sustainable development. It is argued that economic growth, social
inclusion and environmental balance, no longer reflect all the dimensions of our
current world and a sustainable society could not be achieved without a cultural
dimension. Sustainable development and culture are connected; cultural sustain-
ability is equally as important as the economic, social and environmental pillars of
sustainable development and should be included as one of the pillars of sustain-
ability. Despite the above essential role of culture in a sustainable society, the
cultural dimension of sustainability has not been fully accepted in the academic.
Especially in construction management research, little or nothing has been written
on the link between culture, sustainability and the built environment. Currently
there is a growing recognition that culture and the environment function as parts of
a single system and that they cannot be understood separately. Cultural sustain-
ability also supports the other three dimensions of sustainability; social, economic,
environmental and is becoming increasingly present in the discussions on sus-
tainable development.
A sustainable built environment adopts design, construction methods and
practices that make use of local expertise and experience. Our built environment
operates in a society and local communities full of cultural experiences that connect
with people. Even though current urban policies often ignore the importance of
preserving and promoting cultural heritage, it is important that cultural consider-
ations are integrated into sustainable urban and community planning. Culture
contributes to the building of lively cities and communities where people can live
and work playing a major role in supporting social and economic well-being.
Culture contributes to sustainable built environment through the protection of
historic buildings, sustainable urban retrofit schemes, regeneration/urban renewal
programmes, sustainable architecture and smart/sustainable cities within the realms
of the community’s identity. Cultural aspect of sustainability should therefore be
considered when formulating policies towards sustainable the built environment.
The development of policies towards sustainable development at all levels of
organization and sustainability should integrate cultural beliefs and experiences.
Culture should be placed at the centre of our development strategies because culture
plays an important role in framing human behaviour and their relationship to others.
6 Conclusions
The cultural dimension of sustainability should be integrated into development

policies and the idea of culture as the fourth dimension of sustainability should be
promoted internationally. The chapter recognizes the increasing need to incorporate
culture into sustainable development plans and strategies. Cultural sustainability
projects benefit the environment through the preservation of cultural capital such as
buildings that retain a community’s heritage. The chapter argues that culture should
be viewed not just as the fourth dimension but as the central dimension of sus-
tainable development.
It is noted from the literature review that, the absence of culture from the core
goals and methods used to effect sustainable development was due to the difficulties
in measuring its concrete contribution to development; however this challenge has
been resolved in recent years through the multidimensional measures of human
well-being. This chapter therefore recommends that particular attention should be
paid to measuring the quantitative and qualitative contributions of culture to sus-
tainable development by establishing clear indicators. Cultural well-being occurs
when society and individuals are provided social activities that promote cultural
capital. Cultural sustainability involves efforts to preserve the tangible and intan-
gible cultural elements of society in ways that promote economic sustainability. The
development and the promotion of a sustainable built environment should be car-
ried out in an environmentally, economically, and socially beneficial manner with
culture as the overarching dimension of sustainable development. Cultural sus-
tainability supports and connects the other three dimensions of social, economic
and environmental sustainability. The integration of the cultural dimension of
sustainability should therefore be promoted through education and public policies
towards a sustainable built environment. The implementation of policies,
50 A. Opoku
development plans, and strategies for sustainable cities and communities around the
globe should consider cultural issues because cultural content shapes and
communicates the identity, values and hopes of a society.
In conclusion, sustainability efforts that once were characterized by environ-
mental, social, and economic issues only now see the inclusion of culture as a
holistic benefit to sustainable development. Finally, the literature review provides
the opportunity from an academic perspective to empirically further investigate the
contribution of culture to the understanding of sustainable development and the
built environment in future research.
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The Management of Environmental
Performance in the Supply Chain:
An Overview
Enrico Bracci and Mouhcine Tallaki
Abstract The Environmental Supply Chain Management (ESCM) has become a

buzz-word nowadays. This is in part due to the increasing awareness of companies
that the environmental performances need to be managed beyond the organizational
boundaries. The present paper aims at contributing to the extant literature through a
comparative analysis of some frameworks that attempted to connect the performance
measurement with the ESCM. From a methodological point of view, the paper is
based on a literature review using as keywords the environmental performance
management system and supply chain. Three main frameworks for the performance
measurement ESCM were analyzed, in details: the Beamon Model (Logistics
Information Management 12(4):332–342, 1999), the Hervani et al. (2007) and the
Balanced Scorecard variation proposed by Epstein and Wisner (Balanced Scorecard
Report 3(3):8–11, 2001). In so doing, we suggest possible commonalities and
differences, arguing the need for further research to develop and understand the way
companies manage the environmental performance of their supply chain.
Keywords Supply chain Environmental performance Supply chain

management
The paper can be attributed to the authors in the following manner: Sects. 1 and 2 to Mouhcine
Tallaki, Sects. 3 and 4 to Enrico Bracci.
E. Bracci (&) M. Tallaki

Department of Economics and Management, University of Ferrara, Ferrara, Italy
M. Tallaki

54 E. Bracci and M. Tallaki
1 Introduction
The Environmental Supply Chain Management (ESCM)1 has become a buzz-word

nowadays. This is in part due to the increasing awareness of companies that the
environmental performances need to be managed beyond the organizational
boundaries. The ESCM is derived from the integration of environmental manage-
ment and supply chain management concepts (Srivastava 2007; Thun and Muller
2010; Testa and Iraldo 2010). The environmental management is based on the
principles of prevention, environmental protection, transparency and participation.
Its basic goals are the identification of environmental issues at the enterprise level,
the adoption of best environmental technologies, the reduction of environmental
impacts and the use of prevention systems to avoid and/or treat adequately the
potential environmental hazards due to specific production activities processes.
The supply chain management, instead, is defined as The systemic, strategic
coordination of the traditional business functions and tactics across these business
functions within a particular company and across businesses within the supply
chain, for the purpose of improving the long-term performance of the individual
companies and the supply chain as a whole (Mentzer et al. 2001). This definition
recognizes explicitly the strategic nature of coordination between trading partners
and it explains the twofold objective of supply chain management that are
improving the performance of a single organization and of the entire supply chain
(Gunasekaran et al. 2004; Bratic 2011). The ESCM is a management approach that
has attracted the attention of the scientific community only recently. Srivastava
(2007) pointed out that this approach is gaining increasing attention and interest
among researchers and practitioners engaged in supply chain management and
operations. This is mainly due to the progressive deterioration of the environment,
the decrease in raw material resources, increase of pollution levels and of to the
current issues related to waste management. In addition to attention to the envi-
ronment, the use of ESCM practices could lead to improve economic as well as that
of the environment performance, this justifies their adoption by firms (Srivastava
2007).
However, the ESCM needs to be integrated with the other managerial systems
and in particular the performance measurement system. This is relevant in order to
support managers in the decision-making, in the evaluation of performance and to
assess the efficacy and coherence of output with the strategy. In the literature ESCM
and the performance measurement tend to be studied in a separate way, despite
having several contact points and calls are made to study them in conjunction
(Melnyk et al. 2014).
The present paper aims at contributing to the extant literature through a com-
parative analysis of some frameworks that attempted to connect the performance
measurement with the ESCM. From a methodological point of view, the paper is
1
In the literature ESCM is also referred as Green Supply Chain Management. We are going to use
the two concepts (ESCM and GSCM) as synonymous.
The Management of Environmental Performance … 55
based on a literature review using as keywords the environmental performance

management system and supply chain. Three main frameworks for the performance
measurement ESCM were analyzed, in details: the Beamon Model (1999), the
Hervani et al. (2005) and the Balanced Scorecard variation proposed by Epstein and
Wisner (2001). In so doing, we suggest possible commonalities and differences,
arguing the need for further research to develop and understand the way companies
manage the environmental performance of their supply chain.
The rest of the paper will be structured in the following fashion: the next section
will present a literature review of the ESCM concept. The third section will analyze
the literature related to the performance measurement in the supply chain before
describing the three models proposed to measure the environmental performance,
while the fourth section will compare and discuss the models. The paper will
conclude with some indications for further research.
2 The Environmental Supply Chain Management
Given the relative novelty of the ESCM discipline, there is no exhaustive definition
and nor a consensus on what are the set of practices that can be adopted by
companies (Zhu and Sarkis 2004). The concept of ESCM is considered as part of
the Sustainable Chain Management (SCM) discipline. Seuring and Muller (2008)
defined the ESCM as the management of material, information and capital flows as
well as cooperation among companies along the supply chain while taking goals
from all three dimensions of sustainable development (i.e. economic, environmental
and social), into account which are derived from customer and stakeholder
requirements, In sustainable supply chains environmental and social criteria need
to be fulfilled by the members within the supply chain, while it is expected that
competitiveness would be maintained through meeting customer needs and related
economic criteria. This definition frames the ESCM within the broader Sustainable
Supply Chain Management. The latter has the objective to improve the social
policies and the environmental and economic impact through the supply chain
management, the exchange of information, knowledge and resources and the
sharing of common objectives between the stakeholders involved.
Some authors proposed the concept of Green (or Environmental) Supply Chain
Management (GSCM) (e.g. Srivastava 2007). The GSCM considers the environ-
ment in its traditional functions and processes. In particular those functions related
to supply chain management, plan, source, make, deliver and return (based on the
classification of the Supply Chain Council). Srivastava (2007) highlighted the
importance of the new management approach and the existence of two others
research topics on GSCM: the first focuses on green design, the second instead
emphasizes on the green operations (see Fig. 1).
According to Thun and Muller (2010), the supply chain management implies a
greater inter-organizational cooperation, the concept of the GSCM follows the same
approach. Adding the prefix of “green” this concept includes, then, all the efforts
Fig. 1 Classification based on problem context in supply chain design. Source Authors’
elaboration on data from Srivastava (2007)
that minimize the environmental impact of the company’s products and processes.
Thus, the key element of GSCM and ESCM alike is the integrated design of inter-
organizational processes witch improve environmental efficiency. Hervani et al.
(2005) defined the GSCM as the management of the effects of SCM on the envi-
ronment with the goal to eliminate and reduce waste and environmental impacts
(energy, emissions, chemicals substances and solid waste) along the supply chain.
In particular, the GSCM is defined according to set of activities like green
purchasing, green manufacturing and material management, green distribution,
marketing and reverse logistics. Liu et al. (2011) consider the GSCM as an
advanced system of Corporate Environmental Management. The latter aims to
provide greener products and services through communication and cooperation.
Handfield et al. (2005) proposed a definition of ESCM considering it as an envi-
ronmental system that focused on relationships with suppliers and on the production
of internal and external environmental information.
Therefore, there is not a single definition of ESCM, which sometimes is defined
as GSCM. Some definitions show more than others the importance of appropriate
relations with those involved along the supply chain, and other place attention on
particular initiatives related to the environmental performance (Ninlawan et al.
2010). The initiatives and the extension of ESCM practices inside and outside the
organization depend on many factors. They depend on the goals that are defined
consistently with other business strategies, and also on sharing of these strategies
between different organizations along the supply chain. As well as on the firm’s
ability to select, influence and control their business partners and then to design the
supply chain. These initiatives, as has been identified, should be concentrated to
make processes and products more environmentally friendly and to reduce the
environmental impacts of the organization and the supply chain through strategies
such as Green Design, Green Procurement (or Green Purchasing), Green Manu-
facturing (or Green Production), Green Logistics (or Green Distribution) and
Reverse Logistics (Srivastava 2007).
3 ESCM and Performance Measurement Systems
The implementation of ESCM practices requires its formalization at the strategic

level (Zhu et al. 2008). Because competitive strategies significantly influence the
effectiveness of supply chain integration (Huo et al. 2014). In this way, it is possible
to identify the objectives of reducing environmental impacts, in a perspective of
supply chain, coherent with the other strategies of the company. This enables the
new management philosophy to gain legitimacy in all levels of the organization. To
do that it is necessary to have an unwavering support and commitment of the top
management (Zhu et al. 2008).
The role of the supply chain should be considered by the companies in the
formulation of its strategic plans. The use of outsourcing and de-verticalization
strategies increase the importance of developing appropriate relationships with
suppliers in order to achieve new and efficient forms of coordination. It is, thus,
necessary to measure and define clear goals to be achieved, identify the means and
the time to do so, identify and communicate the various responsibilities, modify the
organizational structure and roles, implement systems that control the achievement
of the objectives also through the choice of appropriate indicators of environmental
performance and adopt a management control able to measure them. In addition, it
will be interesting to balance various qualitative and quantitative, economic-
financial and non-monetary measures, providing information at both management
and operational level.
An ESCM incorporates the traditional mechanisms of management, including
budgeting, performance measurement systems and risk management processes,
which are commonly used in the management, but that are designed to treat and
manage the specific problems and issues relating to the environment (Zhu et al.
2008). These tools are increasingly popular in the environmental strategies of the
organizations to coordinate, monitor and manage the information, thus they rep-
resent an effective management control system (Arjaliès and Mundy 2013). If the
environmental strategy is considered as a new dimension of the supply chain, the
systems that manage the environmental strategy such as environmental manage-
ment systems have to be properly extended and modified to support the new per-
spective embraced by the company. Some authors (i.e. Hervani et al. 2005)
highlighted the need to design performance measurement systems integrated with
the ESCM (Melnyk et al. 2014). However, the consideration of environmental
issues at the strategic level, in particular within the supply chain perspective,
involves a deep organizational change. The control systems needs to be designed
and used to align the organizational behavior towards the achievement of new
strategic objectives.
Management control systems is defined as “the formal, information-based
routines and procedures managers use to maintain or alter patterns in organiza-
tional activities” (Simons 1995). Their use could be expressed through control
levers such as diagnostic, interactive, belief and boundary levers. The use of these
levers together could facilitate the implementation and achievement of the strategic
objectives of the organization (Arjaliès and Mundy 2013).The management control

systems can be used as a means to implement, monitor and discuss the business
strategy relating to Corporate Social Responsibility (CSR). This field of study has
been extensively studied by the scientific community. Not equal attention was given
to the activities of ESCM. Arjaliès and Mundy (2013) used the framework of the
control levers to analyze the way in which 40 companies listed in France implement
and manage strategies of CSR. The authors showed that, for example, the diag-
nostic processes are used to manage the key variables of outcome. The purpose of
the authors was to define and measure key performance indicators of CSR strategy
regarding the internal and external objectives. This purpose is achieved through the
use of CSR reports that manage the activities at the operational level in relation to
the CSR performance activities which considered as critical. According to Arjaliès
and Mundy (2013) management control systems have the potential to contribute to
the achievement of greater sustainability through processes that enable the inno-
vation, communication, reporting and identification of opportunities and threats.
These levers of control could also be used to achieve the objectives defined by
ESCM strategies.
Performance measurement systems have a high importance within companies
because they allow to manage the organization through the analysis of the results
achieved. They also enable to identify the business areas that are below expecta-
tions, and also contribute to their subsequent improvement through the imple-
mentation of corrective actions. Melnyk et al. (2014) argued recently that
performance measurement systems of the future will need to take particular
attention to the new business and organizational models based on extended supply-
chain and networks. They are also important to influence behavior, so these systems
have to be designed to measure, along with others, the results of the ESCM ini-
tiatives and to guide the actions of managers in order to achieve strategies. The
indicators (mainly environmental) that constitute the core of the system could
also be used as interactive tools when they promote dialogue and constant com-
parison (Rodrigue et al. 2013). Several studies made calls to study performance
measurement throughout the supply chain (Melnyk et al. 2014; Bititci et al. 2012;
Gunasekaran et al. 2004). So, Supply chain management is considered as key
strategic factor for increasing organizational effectiveness and for better realization
of organizational goals such as enhanced competitiveness, better customer care and
increased profitability (Gunasekaran et al. 2001). Generally, the adoption of ESCM
practices leads to improved environmental performance and economic performance,
which, in turn, positively impact on operational performance (Green et al. 2012).
Several studies have analyzed the relationship between performance and ESCM.
Rao and Holt (2005) identified that greening the different phases of the supply chain
leads to an integrated green supply chain, which ultimately leads to competitiveness
and economic performance. Zhu and Sarkis (2004), using empirical results from
186 respondents on GSCM practice in Chinese manufacturing enterprises, exam-
ined the relationships between GSCM practice and environmental and economic
performance. The authors argued that GSCM practices tended to have win-win
relationships in terms of environmental and economic performance. Then, being
proactive on environmental issues can bring companies a great number of benefits

that improve their competitiveness and firm performance (Femenias et al. 2013).
According to Handfield et al. (2005), to manage adequately the objective
of improving the environmental performance at the level of the supply chain we
have to link the business strategy with supply strategy for classes of materials,
components and products. The alignment between supply chain strategy and
environmental uncertainty is positively associated with supply chain management
performance (Sun et al. 2009). The idea is to define, at strategic level, the impor-
tance of pursuing an improvement of the environmental performance of the orga-
nization and the supply chain. The strategic formulation would lead to identify the
objectives and general principles that inspire the action of the company and that will
be pursued in the long term. However, these strategic objectives related to the
environment should be declined in strategies at the functional level of business-unit
and then at the operational level. This deployment system (Fig. 2) of the company
strategy, regarding the environmental variable and the supply chain, has to focus
particularly on the environmental performance of suppliers to reduce their envi-
ronmental impacts along the supply chain. The idea highlighted by the authors is
that the company inherits through purchasing decisions, the environment impacts
(and risks) that have occurred along its supply chain. The company could control
Corporate Strategy and Growth , Market Share and other

Business Objectives
technical, process and

environmental specifications,
Functional Product Launch Goals volume and other
Tactical &
Operational Commodity Strategy Process
Define strategy
Importance of Commodoty Environmental
Management
Conduct research develop and system
strategy commodoty Supplier Env.
Databae
Develop strategy and objectives Env. Cost system
Env. Impact
Env. Training
Implement strategy Knoledge base of
team
Monitor Strategy
Evalution of outcomes
Market Share
Growth
Profitability
Fig. 2 Conceptual model of environmental role in supply chain decisions. Source Authors’
elaboration on data from Handfield et al. (2005)
these impacts (with the aim to reduce them) through an appropriate process for
selecting suppliers. Probably, the company that behaves in this way already adopts
technologies and processes that are environmentally friendly. The interaction
between companies and suppliers could potentially develop and implement more
effective solutions to environmental challenges they are facing (Vachon and Klassen
2006). This occurs especially when there is a collaboration between companies
and suppliers. Vachon and Klassen (2006) examined how the environmental
collaborative activities impacts environmental performance. Environmental collab-
oration was defined by the authors specifically to focus on inter-organizational
interactions between supply chain members, including such aspects as joint envi-
ronmental goal setting, shared environmental planning, and working together to
reduce pollution or other environmental impacts. The collaboration also implies
cooperation to reduce the environmental impact associated with material flows in the
supply chain (Bowen et al. 2001; Carter and Carter 1998).
The framework proposed by Handfield et al. (2005) is interesting because it
integrates strategies of supply chain management with environmental management
and it allows to highlight the links between ESCM and business strategy. The
authors propose a system to achieve this objective by introducing the environmental
strategy defined at the corporate at functional and operational levels of business
unit. The objective is to ensure a consistency with all strategies at different levels.
The operational level guarantees the achievement of a greater control of the envi-
ronmental performance of their suppliers, because for each class of materials and
products it has identified the critical level and then actions to better manage rela-
tionships with suppliers in order to reduce environmental impacts and improve
environmental performance.
However, it is clear that companies, who engage in the implementation of ESCM
practices in broad measure, and which also involve their business partners in the
initiative to achieve greater environmental sustainability, need an integrated tools
that allow them to guide the business activities through adequate measurement of
different dimensions of business performance including environmental performance
(possibly also suppliers to express the performance of the supply chain) and that
provide an overview on what has been done towards achieving the objectives
established (Franco-Santos et al. 2007). The PMS allows, if properly designed, to
control the actions of the company by providing managers with the information that
they need to conduct its business decision making (to lead) with reference to the
environmental variable.
The criticisms of the traditional management control systems, which focus
almost on measuring economic and financial performance, led to the development
of advanced measurement and management control systems that consider simul-
taneously different dimensions of corporate performance (Kaplan and Norton 1992;
Atkinson et al. 1997). Economic and financial performance are no longer sufficient
to provide all relevant information to guide action of managers and in particular at
operative level (although still important). Non financial measures include product
quality or product characteristic (Perera et al. 1997) have non-monetary nature, they
are sometimes associated only with the operational level, while they have also
strategic importance (which is usually underestimated), they also impact profit and
profitability. Their operational nature is critical because they are taken into account
for decisions at the operational level, however, the new context requires that this
part of indicators is integrated in the directional systems of information to provide
multidimensional and balanced performance management systems. Companies
have to shift attention from cost and efficiency-based performance measures to ones
which capture and reflect strategies (Perera et al. 1997). The quality characteristic,
flexibility and speed of decision making are increasingly important in the new
competitive environment and therefore these dimensions must also be captured and
reported to management even if they originate at the operational level. This allows
to give a true picture of the current performance and future prospects of the busi-
ness. Among these dimensions we can incorporate also environmental performance.
Given the new dimensions of the competitive environment, organizations should
innovate the traditional performance measurement systems by identifying new
performance measurement systems that meet the multidimensional information
needs. Several authors agree on the importance of new systems of performance
measurement, although some criticize how is vague the concept of PMS (Azevedo
et al. 2013). In fact, the definition of PMS is very general and for this reason they
have been developed different models proposed by various authors to deal with the
problem of performance measurement in a concrete way, identifying indicators,
measures and perspectives of analysis, that have to be appropriate and standardize
for each company. The advanced performance management systems measure and
report a series of multi-dimensional indicators also operational. They should also
report those who have an environmental nature where the environment variable has
a strategic importance for company. Hence the need to adopt a performance
measurement system adequate with the companies needs to have information about
the ESCM. To ensure progress for environmental management, top management
must be fully committed (Zsidisin and Siferd 2001). Support are needed also from
mid-level managers for successful implementation of environmental practices
(Bowen et al. 2001). The cooperation and communication between companies
departments is important to successful environmental practices (Zhu and Geng
2001; Aspan 2000).
The studies on the performance measurement of the green supply chain and of
the ESCM are still relatively few and sparse. At the same time, the principles of
accounting are still far to be perceived by their internal environment variable
(Bracci and Maran 2013). In the next sections we will analyze the main models of
performance management from the perspective of ESCM.
3.1 The Beamon Model (1999)
One of the early works aimed to integrate the environmental variable in the mea-
surement of performance is Beamon (1999). The author highlighted the character-
istics of the extended supply chain or green supply chain. In addition to traditional
links with various subjects involved (suppliers, manufacturers, distributors, retailers

and customers), the author provided other links caused by the set of activities of
recycling, reuse and remanufacturing. With the aim of reducing the environmental
impacts of products and processes, from the raw material extraction to product
disposal, and that allow to the creation of semi-closed loop supply chain. The author
argued that it is important, for the design of the extended supply chain and its
analysis, to develop appropriate performance measures. The measures have to reflect
the dual purpose of the extended supply chain, that is, economic efficiency and
environmental protection. So the traditional measures of supply chain performance
based on cost, flexibility and quality are not sufficient to evaluate and to respond
to companies needs. According to Beamon (1999), a performance measurement
systems that respond to the needs of the extended supply chain have to include
performance indicators related to different environmental categories. In particular,
they should include measures of the quantity of waste generated by the system,
measures about the use of energy resources and other natural resources (raw
materials and other materials). In addition to the existing operational measures,
these measures should be provided with regard to the life cycle of the product and
processes. Figure 3 shows the performance measures identified by Beamon (1999) to
evaluate the extended supply chain or green.
According to Beamon (1999), it is necessary to carry out a series of activities to
implement the extended supply chain (or green). For each product of the supply
chain it is necessary to identify all the inputs, outputs, by-products and resources.
Then, after developing an adequate system of performance measurement, it is
necessary to calculate the composite performance in each phase of the supply chain
processes and for each product, assigning a single or matrix of value to the com-
posite performance. This step serves to identify and determine the priorities of
intervention between the various processes in order to improve the ecological
performance of those with a lower score. From the analysis it should be identified
and selected the improvement actions to be undertaken. Beamon (1999) does not
specify what mean the supply chain processes. So, the author is unclear whether the
identification process and the assignment of a composite measure of performance
should also be extended to the production process (or other processes) of suppliers
and distributors.
The author does not specify also if the analysis has to stop within the organi-
zational boundary and evaluate processes of plan, source, make, deliver and return
that allow to manage the supply chain for that part of activities that are related to the
single company. However, with regard to performance measurement, the author has
the merit to highlight the need for new measures, these measures have to be mainly
related to the consumption and re-use (recovery, recycling, reuse) of the resources
in the system and to be centered in details on the products and processes.
Categories KPI
Resource Total energy consumed

consumption Total material consumed
Time required for product recovery

% recyclable/reusable materials (volume or weight) available at end of product life
% product volume or weight recovered and re-used
Purity of recyclable material recovered
Resource % recyclable materials (weight and volume) used as input to manufacturing
Recovery % product disposed or incinerated
Fraction of packaging or containers recycled
Material Recovery rate (MRR)
Core Return Rate (CRR)
Ratio of virgin to recycled resources
Materials Productivity: economic output per unit of material input
Product Useful product operatingl ife

Characteristics Total mass of products produced
Total toxic or hazardous material used

Waste, Total toxic or hazardous waste generated
Solid waste emissions
Emissions and % product (weight or volume) disposed in landfills
Concentrations of hazardous materials in products and by-products
Exposure Estimated annual risk of adverse effects in humans and biota
Hazard Waste ratio: the ratio of wastes to all outputs
Average life-cycle cost incurred by the manufacturer

Economic Purchase and operating cost incurred by the consumer
Average total life-cycle cost savings associated with design improvements
Eco-efficiency: adding the most value with the least use of resources and the least pollution. Generally,
“The ability to simultaneously meet cost, quality, and performance goals, reduce environmental impacts,
and conserve valuable resources”
Fig. 3 Extended supply chain performance measures. Source Authors’ elaboration on data from
Beamon (1999)
3.2 The Framework of Hervani et al. (2005)
According to Hervani et al. (2005), performance measurement could be a difficult

activity within the organization. When the focus shifts to considering the envi-
ronmental performance of the supply chain, the performance measurement
encounters new difficulties. According to the authors, these difficulties have to be
overcome, because the viability of the company and its future competitiveness
could depend on the effective adoption of performance measurement of ESCM. The
difficulties highlighted by the authors are related to the broad objectives attributed
to the system of Environmental supply chain management and performance mea-
surement (ESCM&PM). In fact, according to the authors, every measure must
assumed a supply chain perspective. Each entity in the supply chain should be
measured and improved according to common goals, all of this requires a very
extensive coordination between organizations and creative effort to design new
measures.
The evaluation of the performance of supply chain is complicated because there

is the need to overcome the distrust with their trading partners, to overcome the
difficulties of control variables that are perceived as not to be influenced, to consider
different organizations’ objectives and measures that some times are not shared
between different organizations, to consider the existence of different information
systems that not integrated. To develop a performance measurement systems that
consider all those variables is necessary to identify effective indicators. These
indicators represent the core of the system of ESCM&PM, and allow to evaluate
the environmental performance of activities, processes, products and services. The
environmental indicators used can be varied and could be related to the emissions,
consumption of energy, other environmental impacts, and also include the results of
activities for recovery, recycling. A special effort is required for the selection of
environmental indicators that measure effectively not only the environmental
impacts of operations but also the results of the activities designed to reduce them
(suggestions for the choice of indicators can be derived from international standards
such as ISO 14001, or from other guidelines such as those of the Global Reporting
Initiative (Chiarini 2013).
Hervani and colleagues underlined that Environmental indicators are plentiful.
Yet, there is a difficulty in determining which to use, when to measure them, and
how to measure them. Many of these issues must be addressed (Hervani et al.
2005). These problems may be encountered in the selection of environmental
performance indicators with reference to a single company. As the authors reported,
the level of complexity is even higher in ESCM PM perspective given the char-
acteristics of inter-organizational and the focus on the life cycle of the product on
which it is focused the system. Many of the proposed measures (Table 1) can also
Table 1 Some measures of environmental performance

• Air emission • Number, volume and nature of accidental or non-
• Underground injection on-site routine release to land, air and water
• Release to land on-site • Costs associated with environmental compliance
• On-site and off-site energy recovery • Major awards received
• On-site and off-site recycling • Total energy use
• On-site and off-site treatment • Total electricity use
• Non production release • Total fuel use
• Source reduction activities • Total water use
• Spill and leak preventions • Total materials use
• Raw material modification • Habit improvements and damages due to enter-
• Process modification prise operations
• Product modifications • Quantity of non-product output returned to
• Pollution prevention opportunity process or market by recycling and reuse
audits • Major environmental, social and economic
• Materials balance audits impacts associated with life cycle of products and
• Employee and participative services
management • Procedures to assist product and service designers
• Management systems pertaining to to create products and services with reduce adverse
social and environmental performance life cycle impact
Source Authors’ elaboration on data from Hervani et al. (2005)
be used beyond the confines of a single organization with reference to the life cycle
of the product, but for this purpose it is necessary to access to data information that
must be provided as input by suppliers and customers. It is therefore necessary to
reach an agreement on the measures to be used and the identification of sources of
data between the main members of the supply chain to create the system. There may
be difficulties to be overcome for the realization of a PM system extended to supply
chain. This system should be refined gradually, as it is difficult for an organization
to develop relationships with their trading partners that allow to immediate access to
all the information that necessary their environmental performance. The indicators
that will measure the performance of the external environment have be defined in
consultation with the most important suppliers, whose activity can generate high
impact on the environment and for which there is greater need to carry out a regular
monitoring of activities. Such data may be derived from the information systems of
the partner or be raised through external audits. Also there is necessity to select the
effective indicators for their processes and internal activities to provide a complete
picture of the environmental performance of the supply chain.
For the authors, the team responsible for the design of the system of ESCM&PM
should not only be inter-functional, that is coming from various internal functions
of an organization. But it is preferably to include representatives of suppliers and
customers and other stakeholders. In designing the ESCM&PM system it should
also consider the environmental management systems of organizations. The system
has to be designed and modified according to the principle of continuous
improvement based on the Deming wheel (Plan, Do, Check, Act) (Fig. 4) as
highlighted by ISO 14031. The team which deals with the design of the system
should, then, make sure that this system has the information necessary for an
accurate assessment of the environmental performance. To respond to different
purposes of external reporting and internal analysis, it may be necessary to modify
and refine the system in continuous improvement. The output of ESCM&PM
system can serve several purposes, such as external communication, internal
analysis or compliance with the regulations. In particular for external communi-
cation, companies take the measures that can be compared over time in order to
show the improvement of their environmental and the supply chain performance.
The performance measurement system in the ESCM identified by Hervani et al.
(2005) focused on environmental issues and in particular on those regarding the
supply chain. It can be separated from the other PM systems within the company. In
fact, question which the top management have to respond in designing the system is
its connection with other internal systems. Then, it could be configured as a model
of inter-organizational performance measurement. The level of sophistication
required by a system is high, and also the efforts to build and manage it, and the
related costs may be particularly high.
This system although is interesting from a theoretical point of view but it might
be difficult to be realized from the practical point of view. Mainly due to the
difficulty of integrating data from different subjects, but good relations with other
subjects involved in the supply chain can help to overcome many of these diffi-
culties. This system is still in early stages, it should to be carried out more research
Vision and goals of External

Internal functions stakeholders
GSCM / PMS
Design GSCM /
PMS
Plan
Selectenvironmentalperformance
indicators
Act Do
Reviewingand improvingGSCM Collectand analysedata, report and
/PMS comunicate results
Fig. 4 Performance measurement system and ESCM. Source Authors’ elaboration on data from
Hervani et al. (2005)
to complete their field of study of inter-organizational performance measurement.

Measurement systems available may still not be adequate for a comprehensive
assessment of ESCM.
3.3 Balanced Scorecard
The model of the Balanced Scorecard (BSC) is suitable for a strategic perspective of
control (Kaplan and Norton 1992, 1996). It can be used also to study the relevance
to the environmental variable. The original formulation of this model goes back to
the early work of Kaplan and Norton (1992). The authors observed that managers in
making decisions and in monitoring the performance of the company do not gen-
erally rely on a single set of indicators (financial) performance. But they need
different types of indicators that relate to different perspectives. So that no one-
dimensional system can provide a clear and comprehensive presentation of the
results achieved by the organization and focus the attention of managers on all areas
and critical dimensions for the future success of the business.
The perspectives may be different and customized for each type of business,
those identified by the authors are the economic and financial perspective, customer
perspective, internal processes perspective and learning and growth perspective.
These perspectives are important for all businesses, which can add other perspec-
tives. The addition of other perspectives is a process that have to be done carefully,
because each perspective is linked with other, and because the indicators and
objectives have to be coherent. The economic and financial perspective is indicative
of the ability of the company to operate according to criteria of cost-effectiveness
and achieve adequate profits. The customer perspective is indicative of the orga-
nization’s ability to satisfy their needs creating value for the same. The internal
process is indicative of the ability of the company to be efficient and to have
adequate manufacturing processes. Learning and growth is indicative of the ability
to develop skills and expertise, new technologies and innovation and is central to
the improvement and growth of other prospects in the long term.
The BSC then serves to compose a balanced framework of indicators to guide
the action of the manager and allows to control the firm’s performance in different
perspectives (all equally important to its future success). For Kaplan and Norton the
BSC is not limited to be a tool for performance measurement, but it is also a
management tool (“a core management system”) that should guide the action of the
management and guidance to organizational behavior (Kaplan and Norton 1996).
The Balanced Scorecard system has to allow the communication of strategic pri-
orities identified, direct the incentive systems (communicating and linking), decline
the strategies into a coherent system of sub-goals to determine the good allocation
of resources (planning and target setting), and to provide a feedback on the results
achieved in all strategic perspectives to guide the process of organizational learning
(strategic feedback and learning) (Kaplan and Norton 1996).
Summarized the main characteristics of the model, we can introduce the envi-
ronmental variable in the discussion. Since the Balanced Scorecard highlights the
importance of the strategic use of the indicators of performance in different per-
spectives (and in doing so it presents itself as a useful tool for the deployment of the
strategy). Organizations, adopting a management approach of ESCM, will integrate
their strategy considering the objectives related to improving the environmental
performance of the organization and its supply chain. The environmental objectives
take on strategic importance and are connected in a coherent way with other
objectives of the company. Epstein and Wisner (2001) argued that the Balanced
Scorecard is an effective tools to translate into action the desire of managers to
integrate greater environmental and social sustainability in the strategy of company.
The Balanced Scorecard is an appropriate instrument to establish clear links
between the resources involved by companies in environmental and social
responsibility initiatives and operating results (Epstein and Wisner 2001). For
Epstein and Wisner (2001) the Balanced Scorecard can be customized according to
the environmental and social objectives of any business, some will have a particular
focus on internal processes (and thus may have environmental indicators within this
perspective), while others may build environmental performance indicators in all

perspectives of the Balanced Scorecard identified by Kaplan and Norton. Other
companies could still be able to create a new perspective of the Balanced Scorecard
dedicated specifically to the environmental and social dimension. In particular, the
adoption of a fifth perspective, according to the authors, is due to the desire to give
even greater emphasis to environmental and social objectives, and will be used by
those companies that identify in the ability to manage an excellent relationship with
the environment the source of possible competitive advantages, or where the
environment variable is critical for the type of activity.
In Fig. 5 we list the environmental indicators to be used in different perspectives
reported by Epstein and Wisner (2001). The characteristics of these indicators and
the objectives to be achieved are also important in the context of ESCM. In the
context of ESCM the importance given to the environmental performance of sup-
pliers is very high. Since the aim is to improve the environmental performance not
only internal but also at the level of the supply chain, through selection of supplier
more environmentally conscious, or through the implementation of environmental
projects in collaboration. The BSC may also incorporate a perspective dedicated to
suppliers, with the introduction of specific indicators that measure the progress
taking place with them. Then, this allows to the evaluation and the subsequent
identification of initiatives (of ESCM) to improve the performance in this sense.
Examples of these indicators could be the number of suppliers with an environ-
mental management system, the number of projects to be implemented with sup-
pliers to improve environmental performance, the number of recycled packaging
from suppliers, the number of production processes reviewed, the number external
audits carried out.
• Green products • % Production and office material recycled

• Customer perception • Certified suppliers
• Product safety • Accidents and spills
• Customer returns • Internal audit scores
• Unfavorable press coverage • Energy consumption and use
• % Products reclaimed after use • % facilities certified &v% Product remanufactured
• Post customer waste recycled • Greenhouse gas emission
• Functional product eco-efficiency • Hazardous material output
Learning and Growth Financial Perspective

• % of employees trained • % Proactive vs. reactive expenditures
• % Renewable resources use & • Capital investments
• Violation reported by employees • Disposal costs
• Employees with incentives linked to • Revenues from green products
environmental goals • Fines and penalties
• Functions with environmental • Cost avoidance from environment actions
responsibilities • Saved from accident reduction
• Product life cycle reviews
• Transfer of best practices
Fig. 5 Example of environmental measures in a Balanced Scorecard. Source Authors’ elaboration

on data from Epstein and Wisner (2001)
The BSC can be an effective tool to deploy the environmental strategy of the
company and to recommend the action to be taken to improve the environmental
performance of the company and its supply chain. It is therefore a useful strategic
tool to support and to implement the initiatives of ESCM. The Balanced Scorecard,
as a tool for deployment of the strategy and performance measurement, allows to
connect the goal of greater environmental sustainability of company and supply
chain management with other business strategies. In doing so, it provides to the
management to indicate what are the strategic objectives on which to focus and the
indicators to be monitored to assess the degree of their achievement. The managers,
after identifying in a clear performance objectives, have to activate the necessary
levers, including the practices of ESCM, to achieve its strategic objectives including
more sustainable environmental impact of the supply chain.
3.4 Integration, Comparison and Considerations About

the Models Proposed
In the previous sections, we introduced the concepts of ESCM and PM and some
model proposed in the literature to meld the tow together. We are now going to
compare and reflect upon the framework based on the BSC and the Hervani et al.
(2005) and by Beamon (1999) model’s. Table 2 summarizes the similarity and
differences among the models in terms of link with the strategy, internal and
external focus and link with other performance dimensions. The table has been
drawn considering the commonalities and diversity of the various models analyzed.
The table shows the differences between the various models respect to four char-
acteristics: links with the strategy, internal focus, external focus and links with other
performance dimensions. While all models give importance to the internal perfor-
mance (internal focus) in a perspective supply chain, only the model of Hervani
(2005) that broadens the scope of measurement also to suppliers. With regard to the
relationship with the business strategy, both the balanced scorecard (Epstein and
Wisner 2001) and the model of Hervani (2005) have tried to measure the perfor-
mance of supply chain considering its relationship with business strategy. With
regard to the relationship with other dimensions such as the financial performance,
Table 2 The ESCM performance measurement models compared

Beamon Hervani Balanced scorecard
(1999) et al. (2005) (Epstein and Wisner 2001)
Links with the strategy No Yes Yes
Internal focus Yes Yes Yes
External focus (i.e. suppliers) Limited Yes Limited
Links with other performance Limited Limited Yes
dimensions
and the customers perspective only the balanced scorecard (Epstein and Wisner
2001) that includes other dimensions in the analysis.
The model proposed by Hervani et al. (2005) focused on the integration of
environmental management and supply chain strategy. To create a green supply
chain it is necessary to adopt a policy of supply chain that also considers the
environment and that it is consistent with other corporate strategies. The authors
answered to how this supply chain strategy have to be designed and realized. This
system is mainly focused on the management of relationships with suppliers, their
selection and evaluation. The model proposed by the authors provides guidance on
how to implement a green procurement strategy consistent with the other objectives
and strategies of organization. The model presented is useful in this context because
it allows to control and better manage the environment variable since the input of
the company through the management and development of suppliers. Several
authors point out that the supply chain management in an environmental perspec-
tive, i.e. the creation of ESCM initiatives, should not be in conflict with other goals
and other strategies of the organization. As reported by Hervani et al. (2005) the
involvement of operational managers, in particular those involved in supply chain
management, in the strategic planning process should lead to the formulation of a
coherent supply chain strategy with the other strategies of the organization. Also the
implementation of the sourcing strategy at the operational level, through the work
of cross-functional team, should allow to consider and balance the needs of the
various functions, and to a focus on management processes which is fundamental in
SCM. Hervani et al. (2005) focused their research on the integration of the envi-
ronmental management and supply chain strategy. Even if they highlighted the
importance of identifying and monitoring appropriate performance indicators, they
do not suggest a specific performance measurement system to be used. Since the
activity of measuring and monitoring are handled primarily at the operational level
by the team responsible of the commodity strategy, the measures for the monitoring
and evaluation of the goals set by the specific commodity strategy have to be
aggregated to show the results to higher management levels. To this end, the use of
other tools such as the BSC could be useful both to support the planning and
deployment of environmental strategy on the supply chain. Also it could be useful
to show the results arising from the management of the various commodity strat-
egies in aggregated level. The BSC could be a “core management system” useful
within the model proposed in the ESCM literature.
As pointed by Epstein and Wisner (2001) the Balanced Scorecard can manage the
environment performance, through which the system of performance measurement
that focuses on the environmental performance of the supply chain could be created.
The authors reported that they are necessary to modify and extend it. However, more
research on the tools for measuring performance in inter-organizational perspective
are desirable. The BSC was not developed to communicate information on envi-
ronmental performance, even less at the level of the supply chain. But it can be
customized and extended through the choice of key performance indicators relating
to the management of the supply chain and different environmental indicators (also
related to internal processes) that could be included in the different perspectives
identified by Kaplan and Norton perspectives. For example in the “learning and
growth” perspective we could include the number of ecological projects undertaken
jointly with the main trading partners, the number of analyzes on the environmental
impacts associated with the life cycle of the products, research and development in
collaboration with the suppliers, the number of hours of training and support pro-
vided to partners on environmental issues. For internal management the BSC can be
useful tool, which can be integrated with some key measures of performance related
to supply chain management and environmental performance. Because it provides
information on the results under different analytical perspectives, including eco-
nomic and financial, which is always important even in the pursuit of reducing
environmental impacts. The measures of the BSC should be limited to give a
balanced and concise on the achievement of strategic objectives, while at the
operational level the measures and information to control and produce should to be
more.
The performance measurement system suggested by Hervani et al. (2005) and
Beamon (1999) could also be used for external reporting and could have an inter-
organizational dimension. In particular the Hervani et al. (2005) model has a spe-
cific external focus, in the sense that each performance indicator should have a
dimension of supply chain. The system of ESCM PM can be separated from other
systems of performance measurement and other corporate information systems, and
it could constitute parallel system to those already used by the organization. The
performance measurement system can communicate with other managerial pro-
cesses, provide relevant information to other systems, or used data and information
generated by other systems. The architecture and the interface of the system have to
be specifically designed by the expert of information systems, according to the
objectives and needs of employers and based on the level of collaboration between
other subjects of the supply chain. Data and information of the supply chain could
be collected by the various operational managers, which also ensure their trans-
mission and sharing, or they could be collected by the company that promote the
system. PM systems can gradually rise to its inter-organizational dimension with
time and with the increase of commitment in environmental management. Also with
the increase of the level of collaboration and integration with other subjects in the
supply chain. To provide a system for measuring the performance of such inter-
organizational it is necessary to have high level of trust, high integration and
collaboration with business partners. The difficulty to manage the system is pro-
portional to the number of subjects involved and therefore depends also on the
length and breadth of the supply chain. At the same time, the performance mea-
surement system integrated with the supply chain management may be affected by
other operational strategy, such as lean production or six-sigma (Chiarini and
Bracci 2013). A system able to generate information about the environmental
performance of the supply chain is certainly a useful tool for companies for the
purpose of disclosure of their level of commitment in the environment conservation.
The information obtained at the level of the supply chain can be communicated
together with the other environmental outcomes in the sustainability reports, which
has become a useful tool to communicate social activity to the stakeholders.
4 Discussion and Conclusions
We can propose some general reflections on the measurement of performance

regarding ESCM. The to ESCM leads companies to reduce the environmental
impacts associated with their products in a supply chain perspective. The choice of
how to achieve this goal can be different from company to company, it’s dependent
on the capabilities and available resources. Some organizations will adopt a broader
spectrum of activities than others (for example, between those of green design,
green procurement, green manufacturing, green distribution and reverse logistics,
and within these categories can accomplish different tasks), while some other may
seek greater collaboration with suppliers or will have a focus on the control and the
imposition of requirements and specifications in their selection and will have other
focus mainly internal, even if the creation of strong relationships with other subjects
in the SC is crucial to embrace this new management philosophy. Thus, some
companies may want to check in detail the environmental impacts of suppliers and
their improvement, to collaborate with them in the design of products and processes
or new technologies. The focus of the measurement and the evaluation of results in
the ESCM system have to be on the environmental performance (but not only), it
can be internal or external depending on the circumstances and objectives. For the
other subjects involved the measurement and evaluation will be based on the
specific relations among them, on the objectives and on the requirements that are
required in the implementation of the green supply chain. Some company will be
interested to develop an inter-organizational system as suggested by Hervani et al.
(2005), while others may decide to control the internal performance, through a BSC
for example, and manage suppliers through the application of standards for pro-
curement and environmental certifications of various types.
We can conclude that the system of performance measurement in ESCM have to
be coherent with the objectives of the organization looking for a fit with the
environment (Melnyk et al. 2014). The extension of this system depends on
the degree of involvement and the level of collaboration between all subjects in the
supply chain. The collection of data on the environmental impacts of all those
involved in the supply chain can be useful mainly for communicating the results of
the supply chain to external stakeholders interested in environmental values. This
allows to improve its reputation, and to measure progress and its improvement.
More research are desirable to propose more considerations on the structure ad
characteristics that systems of PM a supply chain environment are required to have,
as well as their effect and uses (Franco-Santos et al. 2007; Melnyk et al. 2014). The
research should study and analyze the systems used in practice by those companies
that are most committed in the implementation of the ESCM. That organizations
have already integrated aspects of environmental management in their strategic
business. At present, researches have focused study on performance measurement
systems used by companies to manage CSR initiatives, or environmental strategy,
less attention given to the ESCM (Arjaliès and Mundy 2013; Rodrigue et al. 2013).
The main contribution of the paper to the extant literature is the attempt to criti-
cally analyzing the patchy literature on the performance measurement within an
ESCM, proposing the need to look at the two elements in an integrated and connected
way. In so doing, three specific models proposed by the literature were analyzed
stressing the differences and similarities, but calling for a better understanding of their
functioning and use within organization. Further research is thus recommended in
order to understand how organization manage their environmental performance
along the supply chain and the way it is integrated at the strategy level and perfor-
mance management systems. Besides, it would be interesting to focus on the intended
and unintended consequences in the implementation of performance measurement
system to manage the environmental performance along the supply-chain.
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The Measurement of Environmental
Performance in Hospitals: A Systematic
Review of Literature
Andreia Pasqualini Blass, Sergio E. Gouvea da Costa,

Edson Pinheiro de Lima and Lilian Adriana Borges
Abstract For the past 25 years, academics and practitioners have raised concerns
on the measurement of environmental sustainability performance. Addressing these
issues has become paramount for organizations worldwide. In the healthcare sector,
especially in hospitals, measuring environmental performance relates to the
reduction of environmental impact and continuous improvements in the quality of
processes and outcomes. Considering this context, the study seeks to identify how
concerns on environmental sustainability and performance measurement have
pervaded the healthcare operations management literature. A two-tier systematic
review of literature included: (1) a literature review on performance measurement,
environmental sustainability and healthcare operations management; (2) a biblio-
metric review of literature, which evaluated published studies (1988–2013),
focusing on citation numbers, country of origin, main journals, authors and themes.
The study highlighted concerns on the lack of strategic focus of performance
indicators, relevance and robustness of metrics and difficulties for the deployment
of measures within different hierarchical levels. Furthermore, the bibliometric
review emphasized the scarcity of published research addressing the environmental
performance measurement in the healthcare setting, especially in the context of
developing countries. New frameworks are necessary to define relevant and
meaningful indicators for monitoring and assessing environmental performance if
healthcare systems and operations are to be improved.
A.P. Blass (&) S.E.G. da Costa E.P. de Lima

Pontifical Catholic University of Parana—PUCPR, Curitiba, PR, Brazil
S.E.G. da Costa
E.P. de Lima
S.E.G. da Costa E.P. de Lima
Federal University of Technology, Curitiba, PR, Brazil
A.P. Blass L.A. Borges
UNIDAVI, Rio Do Sul, SC, Brazil

76 A.P. Blass et al.
Keywords Healthcare Operations management Environmental performance

Hospitals
1 Introduction
For the last 25 years, organizations have been urged to internalize concerns related
to the use of their productive resources and how to rationalize the impact of their
processes on the environment (Kleindorfer et al. 2005). Environmental sustain-
ability1 has become an important competitive factor that influences strategies,
demanding the adoption of ‘best practices’. Developing robust performance mea-
surement frameworks to evaluate environmental sustainability has become a con-
tinuous learning process. Sustainable development indicators translate sustainability
issues into quantifiable environmental performance measures. Using meaningful
indicators to evaluate performance allows monitoring and reflection on the mea-
surement process (Bourne et al. 2000), since their main goal is to assist with the
search and achievement of superior performance (Scerri 2010).
According to Porter (2010), enhanced improved performance in any sector
depends on the existence of a common goal for the activities and interests of
different stakeholders. In the healthcare sector, this goal is associated with the
definition of value represented by the patients’ health outcomes by the unit of
currency invested in the process. If this value is improved, patients, managers,
service providers and suppliers can benefit from it while the sustainability of the
healthcare system is also improved (Porter 2010).
Performance measures also encompass concerns on the quality of healthcare
services (Kanji and Sá 2003). Quality improvements may lead to less waste of
resources, improved patient satisfaction and medical care effectiveness (Maki et al.
2008). In the past, the incineration of waste in local hospitals was common practice
(Department of Environment (DoE) 1990). New regulations have forced these
organizations to solve this problem through a more systematic and selective manner
(Tudor et al. 2005) to promote environmental sustainability. Nowadays, healthcare
services providers should consider an efficient mobilization of resources in their
blueprints (Vilaça and Oliveira 2008). A healthcare system includes activities and
structures, whose primary purpose is influencing health. The health of the popu-
lation is determined by several factors and among these factors is the provision of
healthcare services. Healthcare organizations that ‘embrace’ environmental sus-
tainability tend to gain significant performance improvements and decrease costs
related to waste disposal (Jarousse 2012). Efforts to improve sustainability indi-
cators may also raise awareness and generate consistent attitudes to preserve
resources.
1
The terms environmental and sustainability are used interchangeably and in combination in the
study.
The Measurement of Environmental Performance in Hospitals … 77
Healthcare indicators correspond to measurable and explicitly defined items

related to the structures, processes and outcomes of the provision of services
(Campbell et al. 2001). They represent statistical instruments that monitor perfor-
mance, analyzing the resources deployment within these systems without neces-
sarily judging value on quality.
The combination of the internalization of concerns on environmental sustain-
ability, the importance of an efficient management of resources and the improve-
ment in service quality raise questions such as:
• How have the concerns on environmental sustainability pervaded the healthcare
operations management?
• What are the main environmental performance measurement frameworks used
within healthcare organizations?
• What are the main themes being discussed in the context of healthcare
organizations?
The study seeks these answers through a systematic review of literature. The
paper is divided in five main sections. Section 2 discusses the research methods and
strategy adopted in the study. Section 3 analyzes the application of performance
measurement frameworks and metrics/indicators used to address environmental
sustainability within the healthcare context. The Brazilian legal framework related
to healthcare and current practices are also briefly evaluated. Section 4 presents the
results of the bibliometric review of literature. Section 5 summarizes final con-
siderations on the study findings while approaching the next steps of the research.
2 Research Methods
Initially, a literature review on performance measurement, environmental sustain-

ability and healthcare operations management was conducted. The main objective
was to identify essential terms that convey knowledge across published studies
(Krauthammer and Nenadic 2004). Moreover, the literature review indicates what
has been learned about the topics and where research gaps are present (Webster and
Watson 2002). After this initial step, the bibliometric technique was chosen as
research strategy. Bibliometric methods indicate research impact (Wallin 2005; Van
Raan 1996; Van Raan and Van Leeuwen 2002). Four databases were selected for
the search: Web of Science®, Medline Complete® (EBSCO), Wiley Online
Library® and Scopus® (Elsevier). Web of Science was chosen due its multidisci-
plinary and comprehensive nature. It includes Science Citation Index Expanded
(SCI-EXPANDED), Social Sciences Citation Index (SSCI), Arts & Humanities
Citation Index (A&HCI), Conference Proceedings Citation Index-Science (CPCI-S)
and Conference Proceedings Citation Index—Social Science and Humanities
(CPCI-SSH). Medline complete was selected for two reasons: (a) focus on Health
Sciences/Biomedical publications that cover healthcare operations; (b) consistent
reputation by being associated with the US National Library of Medicine.
Wiley Online was chosen mainly because of its comprehensiveness; it is regarded

as the world’s ‘broadest multidisciplinary resources’. Finally, Scopus was selected
because of the emphasis placed on the peer-review process of its resources and the
inclusion of articles in press and conference proceedings.
The searches were conducted between January and March of 2013. The com-
bination of terms found in the literature review guided these searches. The fol-
lowing terms were combined: ‘Hospital’, ‘Operations’, ‘Environment*’ (the
asterisk symbol was used to obtain results that included environment and envi-
ronmental), ‘Indicators’, ‘Performance’, ‘Sustain*’ (the asterisk symbol was used to
obtain results that included sustainable and sustainability), ‘Framework’, ‘Quality’,
‘Health’ and ‘Care’ (the terms were combined in the searches, since both Healthcare
and Health Care are found in literature). Papers/articles published between 1988
and 2013 were included (25 years), since the publication of ‘Our Common Future’
(1987) represents an important milestone that defined terms currently used to
approach concerns on the environment and raise awareness on the importance of the
issue (Atkinson 2000; Kleindorfer et al. 2005; Linton et al. 2007). The combina-
tions of terms were used as topics to be found in the Abstracts of the articles.
In order to avoid researcher bias, two independent searches took place: one by
the first author and another by one of the co-authors. The coding of different themes
followed the rationale: Title of the article→Abstract→Keywords. To avoid bias,
the coding process followed the same strategy with two independent analyses.
Similar results were obtained in both cases.
3 The Measurement of Environmental Performance

in Healthcare Organizations
3.1 Performance Measurement and Environmental

Sustainability
The first step for the measurement process refers to the conception of performance
measures. According to Medori and Steeple (2000), Gomes et al. (2004) and Neely
(2004), several frameworks have been proposed in literature:
• The performance measurement matrix (Keegan et al. 1989);
• The SMART model (Cross and Lynch 1989);
• Performance measurement for World Class Manufacturing created by Maskell
(1989);
• The performance measurement questionnaire (Dixon et al. 1990);
• The framework proposed by Beischel and Smith (1991);
• The model based in services of Fitzgerald et al. (1991);
• The Balanced Scorecard (Kaplan and Norton 1992);
• The Business Excellence Model developed by the European Foundation for
Quality Management (EFQM 2013);
• The model of organizational macro processes proposed by Brown (1996);

• The dynamic integrated performance measurement system (Ghalayini et al.
1997);
• The performance measurement record sheet (Neely et al. 1997); and
• The performance PRISM (Neely et al. 2002).
Even though a number of performance measurement frameworks can be found, a
gap between the application and validation of the concepts within these models has
been observed (Pinheiro De Lima et al. 2013). Gomes et al. (2004) found, after an
extensive review of literature on performance measurement, little evidence that
these measures are formalized and connected with organizational strategy and
efficiency. Kaplan and Norton (2004) highlight the need for a correlation between
strategy and performance measurement. Only through a consistent connection
among these elements, strategies can be translated into actions to achieve strategic
goals (Kaplan and Norton 2004; Otley 1999; Wongrassamee et al. 2003) could not
find any specification as how to formulate these goals within known models.
Feng and Joung (2011) searched for an appropriate model to evaluate the three
dimensions of sustainability in manufacturing organizations: economic, social and
environmental. In their study, Feng and Joung (2011) found that the focus tends to
be on the perception of external stakeholders (reporting) rather than in getting
required information for the decision-making to improve performance. Table 1
presents some of these models. The information contained in Table 1 was com-
plemented with additional frameworks reviewed by the authors of the present paper.
Table 1 Frameworks/models for sustainable performance measurement

Frameworks Number of indicators
Corporate Sustainability Index (ISE) 14 criteria
Dow Jones Sustainability Index (DJSI) Index based on 12 criteria
Eco-indicators 1999 Indicator based on three factors
Environment Performance Index (EPI) 19 indices
Environmental Sustainability Index (ESI) 68 indicators
European Union Environmental Pressure Indicators (EUEPI) 60 indicators
Ford Product Sustainability Index (FPSI) 8 indicators
Global Reporting Initiative (GRI) 91 indicators
GM Metrics for Sustainable Manufacturing 30 indicators
ISO 14031 Environmental Performance Evaluation 155 indicators (examples)
OECD Core Environmental Indicators 46 indicators
The Earth Charter 16 principles
The ETHOS Program 7 dimensions
The Global Compact 10 principles
The Millennium Development Goals 8 objectives
UNCSD Indicators of Sustainable Development 96 indicators
Walmart Sustainable Product Index (WSPI) 15 questions
In addition to the models mentioned in Table 1, researchers have suggested the

combination of existing frameworks. For instance, Nikolaou and Tsalis (2013)
combined the Balanced Scorecard rationale with the indicators proposed within the
Global Reporting Initiative (GRI). Nonetheless, after reviewing the frameworks,
some difficulties reported in literature can be cited:
• Deployment of performance measures: studies on sustainable performance
measurement reveal difficulties in considering context-specific features in terms
of the definition of indicators and deployment of performance measures for each
hierarchical level within the organization;
• Prevalence of subjective judgements: in general, the delineation of performance
measures is associated with a significant subjective component. Measures that
are useful for one type of organization may be superfluous for another;
• Scoring methods: Feng and Joung (2011) highlighted the excessive simplicity of
scoring methods proposed in the models. Essential aspects related to corporate
strategy, changes that may occur in the strategic path of a company/business unit
and required trade-offs are consistently disregarded.
3.2 Healthcare Operations and Performance Measurement
Bertrand and De Vries (2005) indicate that a number of characteristics differentiate

healthcare operations from manufacturing settings. Healthcare operations are
regarded as complex and employing performance evaluation techniques used in
manufacturing is described as troublesome. Bertrand and De Vries (2005) highlight
the delicate balance of power among different stakeholders: managers, medical
experts and nurses. Each group has different expectations on organizational per-
formance goals. Service providers are highly trained professionals, who give
instructions and received instructions from final consumers (patients). Healthcare
services are not commodities that can be stored; they are associated with the
management of limited resources. As healthcare organizations are included in more
complex healthcare systems containing hospitals, private clinics, hospices and ca-
rers, the performance measurement task is also magnified (Curtright et al. 2000).
Table 2 summarizes some of these differences.
Table 2 Comparison between manufacturing and healthcare operations (Bertrand and De Vries
2005)
Characteristics Manufacturing Healthcare
Object Materials flow Patients flow
Final product specification Previously specified Subjective and vague
Means of production Equipment/staff Equipment/staff
Protection Inventory/lead time Waiting Time/lead time
Financial goal Profit Control of costs
Market environment Market competition Limited market competition
Yearly, the United Kingdom National Health Service (NHS) produces

600.000 tons of clinical, pharmaceutical, infectious and domestic waste at a cost of
42 million pounds (approx. 64 million dollars) (Coote 2002). The healthcare sector
has been urged to demonstrate efficiency and effectiveness in service provision
(Weir et al. 2009). Healthcare (hospitals, private clinics, etc.) is an open system,
which is subject to several influences: social, economic, political and technological
that can benefit or negatively affect their services (Oliveira 2003). People under-
going treatment, materials and equipment, specialized healthcare services and
supporting activities such as laundry, maintenance, Information Technologies
represent the inputs of this system. The process is composed by the diagnosis and
treatment of patients, that is, activities performed for the provision of medical
services. Treated/cured people, the knowledge acquired through research and
process wastes represent the outputs (Oliveira 2003). In the healthcare sector, the
provision of public and private healthcare services coexists. Healthcare service
providers represent ‘the intermediate’ between those who finance the healthcare
system and those who pay and use these services (Swayne et al. 2006). These
organizations are responsible for managing resources on behalf of those who utilize
their services. Nonetheless, as healthcare operations evolve, much attention has
been paid to the ‘healthcare business’ instead of focusing on quality improvements
(Swayne et al. 2006). Growing pressures for cost reduction and quality improve-
ment have been associated with stricter rules and regulations. This has forced
healthcare professionals and managers to reexamine the way performance is eval-
uated (Castañeda-Méndez et al. 1998).
3.3 Difficulties in Measuring Sustainability—Metrics

and Indicators
In spite of the efforts related to obtaining environmental sustainability in the

healthcare sector, the outcomes of these initiatives have been unsatisfactory
(Phillips et al. 2002). Volumes of waste generated in the healthcare have pro-
gressively risen (Woolridge et al. 2005). Several policy weaknesses have been
highlighted. Tudor et al. (2008) conclude that a more effective participation in the
recycling and waste management in the healthcare sector can be achieved through
the incorporation of sustainability concepts into the organizational policies; a
comprehensive communication plan; training programs and professional develop-
ment; and emphasis on the benefits from sustainable practices.
A profusion of frameworks have tried to overcome the complexity of the per-
formance measurement process. Difficulties related to the quantification of infor-
mation and disregard for performance measurement systems already in place have
been reported by the literature. A multiple stakeholder perspective is indicated as
one of the most important characteristics that contribute to the success of the
application of performance evaluation models given the complexity of the health-
care operations (Tawfik-Shukor et al. 2007).
In addition to existing frameworks, other tools have been proposed for the
evaluation of environmental sustainability. Paju et al. (2010) suggested the use of
the Sustainable Manufacturing Mapping (SMM), which is a combination of Value
Stream Mapping (VSM), Discrete Event Simulation (DES) and Life Cycle
Assessment (LCA). The US Environmental Protection Agency has introduced a set
of evaluation tools that aimed to improve the environmental performance of
American companies (Environmental Protection Agency 2007). Hardi and Pinter
(1995) show that indicators that aggregate heterogeneous dimensions are not
readily available to be considered in the decision-making process. Indicators cur-
rently used by organizations aggregate dimensions that are not comparable and,
when they are, the evaluation based on the perception of stakeholders should be
careful. Moreover, a process for the selection of indicators focused on specific
issues may not compose a balanced view of sustainability issues (Hardi and Pinter
1995). Organizational decision processes guided by a reduced set of indicators may
require substantial structural changes. This restrictive process may lead to the
selection of indicators related to very specific, less meaningful and non-represen-
tative targets. Performance indicators should have specific characteristics to mea-
sure performance and represent a source for benchmarking and strategy planning
(Feng and Joung 2011). Such characteristics include:
• Measurability: an indicator should be capable of measuring quantitatively or
qualitatively multidimensional perspectives;
• Relevance: an indicator should be present an useful meaning for the evaluation
processes;
• Clarity: an indicator should be easily understood by the community, especially
those that are not experts;
• Reliability: information proposed by an indicator should be reliable and useful;
• Data accessibility: an indicator should be based on accessible data;
• Opportunity: the measurement of an indicator should happen with the frequency
that allows an informed and well-timed decision making process;
• Long term view: an indicator should be compatible with an open pattern that
supports the need for recorded information for future generations.
Moreover, the definition of performance indicators depends on the answers to
three fundamental questions (Weir et al. 2009):
• Who should be involved in the development of performance indicators?
• Who is the audience for the performance indicators (stakeholders)?
• What level of performance should be measured?
For instance, despite the wide scope of indicators proposed in the applications of
the BSC in healthcare organizations, environmental performance indicators are not
usually declared. When environmental measures are present, they tend to refer to
existing regulations and/or sustainability programs. These concerns are then asso-
ciated with the framework with no changes/adaptations. In specific cases in Brazil,
some environmental indicators were proposed as reported by Campos and Selig
(2002):
• Number of complaints related to the environmental aspect and placed by the

community (NGOs, neighborhood, supplier, third-parties, etc.);
• Number of complaints related to any environmental factors made by a visitor
divided by the number of visitors per days (percentage);
• Water consumption per person (monthly water consumption divided by the
number of people, including visitors, employees and third-parties);
• Electricity consumption per person (monthly consumption divided by the
number of people per month, including visitors, employees and third-parties);
• All legal parameters of discharge of effluents required by legislation;
• Percentage of inert waste sent to landfills (tons of inert/generated waste);
• Number of legal non-conformities registered per year (fines, contaminations,
violations).
Metrics are vital elements to measure performance, since potential difficulties
can be indicated by the gap metric-standard (Melnyk et al. 2004), especially
regarding issues related to sustainability (Gunasekaran et al. 2001). Nonetheless,
the existence of a framework that deals with the deployment of measures and
metrics in strategic, tactical and operational levels to include tangible, intangible,
financial and non-financial aspects is questioned in the literature (Gunasekaran and
Spalanzani 2012). Metrics mentioned by Zhu and Sarkis (2004) include reductions
of air emissions and waste of water, increased investments in training and ‘green’
purchases, and reduced costs with waste treatment and energy consumption.
Two perspectives should be present to define performance measures: resources
and value (Fiksel et al. 1999). Resources are represented by energy, materials,
water, land, waste, cost and human capital. Value corresponds to the functional
performance of resources such as information content, client satisfaction, envi-
ronmental quality, business competence, human health and social well-being. BP
Amoco™, for instance, uses the production process water discharge as a resource
indicator. Volvo™ evaluates how many managers include lifecycle tools in the
product development process (value).
Townend and Cheeseman (2009) proposed detailed recommendations on how to
measurement environmental performance in healthcare organizations based on (a)
general management; (b) social issues; (c) health and safety; (d) energy and water
use; (e) purchasing and supply; (f) waste management (responsibility, segregation,
storage and packaging); (g) waste transport; (h) recycling and re-use; (i) waste
treatment; and (j) final disposal.
Veleva et al. (2003) used the hierarchy of indicators established by the Lowell
Center of the University of Massachusetts in their study in the pharmaceutical
industry. Level 1 indicators are managed by voluntary initiatives or based on
regulations (ISO and others). The eco-efficiency measures (Level 2) translate the
connection between the environmental performance and savings of financial
resources. The standards and methods for the definition of Level 3 indicators
(environmental impact) have been developed only recently. Organizations tend to
avoid establishing connections between the indicators and competitive advantage,
according to the authors. The reduced influence of the government and stakeholders
in a wider adoption of these indicators was highlighted. Levels 4 and 5 refer,

respectively, to the availability of data on the supply chain participants and col-
laborations with entities outside the organization (Veleva et al. 2003).
Kaplan and Norton (1992) developed the Balanced Scorecard, using four per-
spectives to measure performance: (a) financial, (b) client, (c) internal processes and
(d) learning and growth. Gurd and Gao (2008) studied the adaptation of the Bal-
anced Scorecard indicators to measure performance in hospitals and clinics. Some
examples can be cited:
• Financial perspective: profit growth indicators, productivity indicators;
• Client perspective: patient retention, patient acquisition, patient satisfaction
indicators;
• Internal processes perspective: patient satisfaction, safety and health, produc-
tivity, innovation indicators;
• Learning and growth perspective: human capital, information capital, continu-
ous innovation, organizational capital.
However, considering 22 cases reported in their study, only 77 % included the
client or patient perspective. Health does not seem the central focus of these BSC
applications, the researchers concluded. In the healthcare sector in the US, Mannion
and Davies (2002) recognize the existence of scorecards, service provider profile
evaluation and medical professional profile. A sufficient number of metrics repre-
sents another concern in the performance measurement in hospitals. Multiple
aspects are present in a hospital and trying to measure every single aspect of a
complex system may emphasize metrics instead of concerns on the quality of the
patients and system (Forrest et al. 2006). Regarding environmental performance
measurement in healthcare, it is important to point out the existence of common
indicators from either practice or current legislation. Table 3 presents some of these
common indicators.
Table 3 Performance measurement frameworks in healthcare—common indicators

Indicators related to Campos and Townend et al. Veleva et al. Gurd and
Selig (2002) (2009) (2003) Gao (2008)
Legal nonconformities + + + −
(fines, notifications)
Complaints from the + + − +
community
and clients/patients
Water use/consumption + + + −
Energy use/consumption + + + −
Gas emissions + + + −
Use of renewable energy − + + −
sources/biodiversity
Heavy metal emissions (water) − + + −
(+) Present; (−) Absent
McGlynn (Paju et al. 2010) discusses six actions that are necessary to measure
performance in healthcare:
1. Identify the perspectives of the system stakeholders;
2. Develop a framework of responsibilities;
3. Establish explicit criteria on how the system will be evaluated;
4. Select a subset of indicators for periodical reports;
5. Minimize conflicts between financial and non-financial incentives and quality
goals in healthcare;
6. Facilitate the development of information systems to support quality monitoring.
Indicators should satisfy one or more stakeholder groups (McGlynn 1997).
Learning is a dimension needed in the performance measurement process (Wilcock
and Campion-Smith 1998). Scientific soundness and applicability should be
achieved. It relates to three aspects: reliability, validity and adjustability. Reliability
means that replication of the measurement will produce the same results. Validity
refers to the measurement of quality related to healthcare. And adjustability
involves the use of other factors apart from quality that will influence the mea-
surement final result. Applicability refers to a consistent choice by managers,
covering a number of areas and services. It involves parsimony and comprehen-
siveness (Wilcock and Campion-Smith 1998).
Although a profusion of models and indicators to measure environmental per-
formance have been proposed in literature, initiatives related to the environmental
sustainability tend to lack strategic focus. The main purpose behind these initiatives
has been connected with rules and regulations, accreditation requirements and
elements pertaining to quality programs (e.g. ISO, The Business Excellence
Model). As a consequence of the lack of strategic focus and use of standard
measures, the deployment of measures in different hierarchical levels has become
troublesome (Fiksel et al. 1999). In developing countries such as Brazil, healthcare
operations face major challenges such as the high cost of healthcare services,
limited existence of productive resources, inadequate infrastructure/structure (e.g.
access to clean water, electricity), lack of public investments and strategically
focused governmental policies, which underline the difficulties associated with the
measurement of sustainability in healthcare operations.
3.4 The Brazilian Regulatory Framework
In Brazil, nine normative documents deal directly or indirectly with the control and
disposal of hospital waste. The evaluation of organizations that provide healthcare
services, NA2 Rev. 01 of 6 March 2006, is necessary to acquire Hospital
Accreditation with the National Organization for Accreditation (ONA, abbreviation
in Brazilian Portuguese). The National Environment Council (CONAMA) and the
National Health Surveillance Agency (ANVISA) have specific resolutions. While
the Brazilian Technical Standards Association (ABNT) issued six standards on
hospital waste. The CONAMA Resolution nº 358 (29 April 2005) approaches the
need to treat and dispose of waste from healthcare services. The ANVISA Reso-
lution nº 306 (7 December 2004) addresses the management of waste from these
services. The ABNT legislates on:
• Waste transport (NBR 14652, 11 July 2013);
• Methods for the collection of perforating/cutting materials (NBR 13853, de 30
June 1997);
• Internal and external collection of waste under hygienic and safe conditions
(NBR 12810, 1 April 1993);
• Classification of materials and definition of terms (NBR 12808, 1 April 1993,
and NBR 12807 of 15 June 2013, respectively);
• Required procedures for the intra-establishment management of healthcare
services waste (NBR 12809 of 19 May 2013).
Despite the existence of a legal framework, Da Silva et al. (2005) concluded
from a study on 91 healthcare facilities, including hospitals (2), health centers (48)
and clinical laboratories (22) that in Brazil the practices in most cases do not
comply with current legislation. According to Nazar et al. (2005), the mere exis-
tence of regulations does not guarantee the success of environmental initiatives. In
Brazil, a scarcity of regulations that define the consumption of other resources such
as water, electricity and fuel is noteworthy. Recently, some initiatives have tried to
address the disposal of liquid waste (part of the solid waste category) by creating
Eco-centers and Effluents Treatment Facilities (Vieira and Rodrigues 2013). Con-
cerns on measurement environmental performance are regarded as insufficient and
limited due to a number of issues (La Forgia and Couttolenc 2008).
3.5 Environmental Performance Measurement Frameworks

Used in Brazil
The United Kingdom public healthcare system (NHS) represents one of the most
recognizable performance measurement frameworks described in literature. In the
case of the NHS, a national model of performance evaluation has been applied. A
set of 51 indicators (2002) is divided and classified in the following dimensions:
health improvement, fair access, effective provision of health, efficiency, patient/
carer experience and health outcomes (Woolridge et al. 2005). The environmental
sustainability indicators, in this case, are designed from current government poli-
cies. The EPA 90 (Environmental Protection Act) constitutes the integrative pro-
gram, which guides these initiatives. Local initiatives are also implemented to
promote a sustainable behavior. These programs had a central objective to improve
waste management, establishing goals and indicators for recycling and recovery.
Clinical waste was classified and a number of strategies were developed to motivate
the separation of items. Alternative treatment technologies were proposed whereas
risks for the health of human beings had been observed (Tudor 2007). Potential
benefits from the separation and recycling of waste have been emphasized by
hospitals and other institutions within the British healthcare system. This promoted
new initiatives for efficiency and effectiveness improvements (Tudor 2007).
Regarding solid waste, indicators such as Kilograms per solid waste by patient
bed/day or Kilograms of solid waste per appointment and per day have been
suggested (Oliveira 2003). Indicators are obtained through sampling. There is an
apparent consensus found in literature that it is impossible to define a single
indicator of sustainable development. A substantial number of indicators are nec-
essary to capture all the important aspects of a particular system (Becker 1997;
Bossel 1999). Performance indicators should perform as an integrated information
network and should not be analyzed individually. There are knots that connect or
relate to information and data that can assist in the analysis of a particular system
(Becker 1997; Bossel 1999). These knots are represented by the performance
indicators (factors) built from a referential model proposed for the analysis. Those
with greater importance (more weight/importance according to stakeholders) can be
prioritized in the management actions (Silva et al. 2008). Performance indicators
raise awareness and understanding on issues; inform the decision making process;
and measure the achievement of established goals (Ventura et al. 2010).
The Syrian Lebanese Hospital (HSL) case represents an environmental perfor-
mance measurement framework based on quality programs. Launched in 1998, the
hospital’s environmental management program includes the hospital hygiene ser-
vice, selective collection of waste and different maintenance solutions. Its main goal
is to save resources such as water, electricity and gas. Since its launching, the
program generated yearly savings of one million cubic meters of water and 679 tons
of paper; 19 tons of glass, 23 tons of aluminum and 101 tons of plastic have been
recycled (Bio2 Sustentabilidade 2012). In the hospital, the environmental man-
agement project focuses on two primary objectives: a better utilization of input
material such as water, electricity and gas and the management of waste and reuse
of produced waste. The model developed by the hospital is part of the organiza-
tion’s ‘Quality Management Plan’ constituted by five items: patient safety, health
programs accreditation, integrated management system for workers, campaigns/
projects and the Joint International Commission (accreditation organization on
international quality criteria). The indicators developed for the model focus on
waste generation and consumption of process inputs. Communication and moni-
toring through sustainability reports are regarded as crucial for its success.
The ‘Global Green and Healthy Hospitals Agenda’ represents another example
of framework applied in Brazil. The model was created by the coalition ‘Salud Sin
Daño’ (Health Care without Harm), composed by an international network of
healthcare systems, hospitals, communities, unions and environmental organiza-
tions. Its main goal is to transform the worldwide healthcare service without neg-
atively affecting patient care. It seeks environmental sustainability so that the
healthcare sector is no longer a source of losses for people and environment. The
framework has ten main objectives related to leadership, chemical substances,
waste, electricity, transport, food, pharmaceutical products and facilities (GGHHA
2012). According to numbers related to the initiative, the Brazilian hospitals use
large amounts of electricity that represent more than 10 % of the total of the
commercial energy consumption in the country. By comparison, the UK NHS
carbon footprint represents more than 18 million tons of CO2 per year, which is
equivalent to 25 % of the total of public sector emissions (GGHHA 2012). The
global agenda of the framework presents a comprehensive list of objectives and
actions that can be implemented in the search for performance improvement, but
does not present guidelines on how to find specific indicators. There are recom-
mendations for the development and implementation of measures from documents
that report experiences of hospitals, governmental entities and research in the field.
These documents are available in their website and labelled as ‘Tools and
Resources’.
Current legislation has also been used to compose frameworks for the healthcare
sustainability measurement. That is the case with the Manual of Hospital Accred-
itation (Ministry of Health (MS) 2002). The document was inspired by the Latin
America and Caribbean Hospital Accreditation Manual (Novaes and Paganini
1992). The manuscript, however, represents a very incipient guide to present
meaningful indicators and/or metrics adjusted to the healthcare environmental
measurement. Three main aspects are controlled: general maintenance, waste and
water potability. The existence of indicators is recommended without systematic
guidance.
The framework provided by ISO 14001 (ISO 14031 for performance evaluation)
constitutes another model used in the healthcare services in Brazil. The standard
offers some principles that are periodically verified and evaluated for the re-
accreditation. ISO 14001 aims to promote the environmental accreditation of
organizations. The Environmental Failure Mode and Effects Analysis (EFMEA)
methodology is regarded as a traditional option for the search for flaws in product
and/or process projects within ISO (Zambrano and Martins 2007). Regarding the
standard and environmental sustainability, it corresponds to the calculation of the
risk of the occurrence of a flaw through the multiplication of severity, occurrence
and detection indices. Aspects such as the pollution of waters, lands and air are
considered. In an industrial environmental, for instance, these aspects are consid-
ered: the inputs and outputs of the productive process, the types of flaws that can
happen and existing controls. At the end of the process, the more prevalent risks
and actions are identified. Brazilian Hospital Albert Einstein (HIAE) with its five
units located in São Paulo represents a certified organization. In the organization,
the creation and use of an Environmental Management System has built commit-
ment to environmental issues; a more rational use of water, electricity and resources
has been noticed. There has been an acknowledgement of the organization and its
employees’ environmental responsibility (Sociedade Beneficente Israelita Brasileira
(SBIB) 2012).
The Global Reporting Initiative (GRI) methodology is based on a voluntary
initiative to standardize sustainability reports. Indicators related to the three
dimensions of sustainability are suggested within its guidelines that are also
adopted by HIAE. Regarding the environmental dimension, indicators are listed and
goals are monitored in terms of (1) materials, (2) energy, (3) water, (4) biodiversity,
(5) emissions (6) effluents and waste, (7) products and services, (8) compliance, (9)
transport, (10) overall (expenditure and in investments in environmental initiatives),
(11) supplier environment assessment and (12) environmental grievance mecha-
nisms. As reported by Morhardt et al. (2002), the indicators proposed by GRI
encompass essential aspects of environmental performance. Moreover, GRI
guidelines have been promoted by the United Nations Environment Programme
(UNEP). The framework is regarded as the most prominent reporting guide due to
its focus that goes beyond the environment performance measurement to include a
balanced approach of financial (economic) and social issues leading to
sustainability.
Considering the current use of the five frameworks previously mentioned, that is,
the Balanced Scorecard (BSC), Global Green and Healthy Hospitals Agenda
(GGHHA), the standard established by ISO (ISO 14031) and the Hospital
Accreditation Manual (HAM) for the measurement of environmental performance,
a comparison between these models was made. Table 4 lists key aspects highlighted
in literature as crucial for a meaningful measurement of environmental performance
while looking for a correspondence in these frameworks.
As per the discussion on metrics of environmental sustainability performance
and the analysis of current frameworks, a gap in research can be perceived. Per-
formance metrics should be relevant and incorporate certain characteristics neces-
sary to measure performance in healthcare organizations. The troublesome
Table 4 Key aspects of environmental performance measurement vs. current frameworks

Key aspects GRI ISO GGHHA HAM BSC
Indicators based upon process measures 2 2 1 1 1
(relevance, robustness and applicability)
Performance indicators associated with 2 1 1 1 1
measurability, validity and controllability
Emphasis on the importance of multiple 2 0 2 1 1
stakeholders
Definition of involved actors, target audience 1 1 1 1 0
and level of performance to be measured
A sufficient number of performance indicators 2 2 1 1 1
in order to capture the richness and scope of
the organizational processes
Developed measures present meaning for the 2 2 1 2 1
process being evaluated
An initial step/procedure is included to 1 1 1 1 1
evaluate the current sustainability state
A sufficiently systematic and comprehensive 0 0 0 0 0
methodology is presented, focusing on
required characteristics for indicators and
measures
Scale: 0—‘not at all’; 1—‘a little’; 2—‘some’
deployment of measures and indicators within the strategic, tactical and operational
levels is also underlined. Moreover, two perspectives should be present while
developing measures: resource and value. Resources refer to the evaluation of the
use of productive resources: increase and decrease. Value corresponds to the
functional performance of each resource within its measure. Furthermore, the way
performance data is validated has been discussed. It should involve stakeholders in
the development of metrics to improve understanding and emphasize the impor-
tance of the measurement. Multiple points of view should be considered to define a
sufficient number of performance indicators and metrics. Finally, the robustness of
indicators/metrics is a vital milestone for the performance measurement process.
Such robustness encompasses three main components: reliability, validity and
adjustability. Section 4 describes the main findings of the bibliometric review of
literature.
4 The Bibliometric Review
4.1 Search and Analysis Strategy
As previously stated, four databases were selected for the search: Web of Science,
Medline Complete (EBSCO), Wiley Online Library and Scopus (Elsevier). The
following terms were combined and sought in the Abstracts: ‘Hospital’, ‘Opera-
tions’, ‘Environment*’, ‘Indicators’, ‘Performance’, ‘Sustain*’, ‘Framework’,
‘Quality’, ‘Health’ and ‘Care’. These terms were used due to their high occurrence
identified in the initial literature review. The study analyzed published work
between 1988 and 2013, i.e., 25 years since the publication of the Brundtland
Report (Barkemeyer et al. 2014). Figure 1 represents the search and analysis
strategy.
The combination of the terms: ‘Health’, ‘Care’, ‘Performance’, ‘Indicators’,
‘Environment’, ‘Sustain*’ produced 49 articles that given their comprehensiveness
and focus were regarded as suitable for a more in-depth content analysis. After
removing duplicates, 35 papers2 were selected.
2
It is important to indicate that the set of 35 papers is listed at the end of the list of references and
arranged alphabetically (Abou-Ali and Abdelfattah 2013; Aitken et al. 2011; Andrade et al. 2012;
Boriani et al. 2013; Boyer et al. 2012; Braithwaite et al. 2012; Brown et al. 2013; Chen et al. 2013;
El-Jardali et al. 2011; Freitas et al. 2011; Gajewski and Dunton 2013; Gimelli and Muccillo 2013;
Hao et al. 2012; Harmancioglu et al. 2013; Iacone et al. 2012; Joiner and Coleman 2012; Klazinga
et al. 2011; Koutkias et al. 2012; Lin et al. 2013; Mears et al. 2011; Menikpura et al. 2012; Mutale
et al. 2013; Mutemwa 2005; Olafsdottir et al. 2011; Peterson et al. 2013; Santana-Medina et al.
2013; Seke et al. 2013; Sulku 2012; Tanaka et al. 2013; Tchouaket et al. 2012; Townend 1996;
Tseng 2013; Wakai et al. 2013; Yi and Ma 2010; Yildiz and Demirors 2013). Within the text, the
format author(s) name/year of publication was adopted for easiness.
Fig. 1 The bibliometric

review—search and analysis
strategy
Definition of terms and

timespan
Literature search
(databases)
Remove duplicate
results
Grouping results
through Endnote®
(themes)
Bibliometric analysis of
the results
It is important to underline studies that appeared in more than one combination

of terms: (Chen et al. 2013; Joiner and Coleman 2012; Klazinga et al. 2011; Wakai
et al. 2013) and Gajewski and Dunton (2013) were found twice. Lin et al. (2013),
Tanaka et al. (2013) were found three and four times, respectively.
By revealing impact of research, citation numbers have been considered as
important indications of quality (Bornmann et al. 2008). Four main aspects were
analyzed: (a) country of origin; (b) citation numbers; (c) publication outlets
(journals, conferences); (d) main themes associated with environmental perfor-
mance measurement of healthcare organizations. Table 5 shows the number of
results obtained for each combination of terms (10 in total).
92
Table 5 The bibliometric review –results of the combination of terms

Combination of terms Web of Medline Wiley Scopus Total
Science Complete Online (Elsevier)
(Ebsco) Library
1 Health + Care + Performance 16,595 17,812 1,408 49,849 85,664
2 Hospital + Environment* 13,304 19,099 2,076 32,099 66,578
3 Hospital + Performance 20,873 2,088 2,318 39,495 64,774
4 Quality + Indicators + Health + Care 4,619 4,217 438 20,525 29,799
5 Indicators + Environment* + Sustain* 1,730 1,024 179 2,487 5,420
6 Health + Care + Operations + Performance 516 336 34 1,846 2,732
7 Hospital + Environment* + Indicator 449 313 70 1,090 1,922
8 Hospital + Indicator + Framework 203 213 25 422 863
9 Hospital + Sustain* + Environment* + Framework 24 20 8 49 101
10 Health + Care + Performance + Indicators + Environment* + Sustain* 12 7 7 23 49
A.P. Blass et al.
Regarding country of origin, a certain prevalence of collaborative studies was

noticed. The UK, the US and Turkey are present in more than two occasions.
Nonetheless, the review of the papers does not present sufficient data for an account
of prevalence of a country or research center. Table 6 displays the information on
country of origin.
Given the reduced number of citations found in the first search within Web of
Science, a new data collection effort was made through Google Scholar®. This
search mechanism is regarded as comprehensive by including peer-reviewed
papers, theses, books, abstracts and academic papers published by professional
organizations, pre-publication libraries, universities and other academic entities.
Figure 2 describes the results of both searches.
After comparing the results, a significant increase was perceived. Nevertheless,
the most cited papers remained the same: Mutemwa, Klazinga et al., Aitken et al.
(2011), Andrade et al. (2012). Mumtemwa investigates the effectiveness of Infor-
mation Systems for healthcare management in Zambia. The study was associated
with the Centre for AIDS Research of the University of Southampton in the United
Kingdom. It does not, however, address environment sustainability; it focuses on
the economic and social impact of technology to forge sustainability.
The paper by Klazinga et al. listed a number of themes related to the quality of
healthcare results. The need for more valid and reliable performance indicators was
pointed out in the research. Aitken et al. (2011) focused on human resources and the
internal environment of hospitals in terms of their role to achieve sustainability.
Andrade et al. (2012) explored the physical and social environment of four Por-
tuguese hospitals: two old units and two recently renovated hospitals. The main
purpose behind the study was to develop quality evaluation mechanisms for internal
settings.
Table 6 The bibliometric review – countries of origin

Australia Japan Turkey
Aitken et al. (2011) Tanaka et al. (2013) Harmancioglu et al. (2013)
Australia, Canada, Ireland, Lebanon Yildiz and Demirors 2013UK
South Africa Ei-Jardali et al. (2011) Townend (1996)
Braithwaite et al. (2012) Mexico, France UK, Malasia
Canada Santana-Medina et al. (2013) Olafsdottir et al. (2011)
Tchouaket et al. (2012) Portugal UK, The Netherlands
China Freitas et al. (2011) Mears et al. (2011)
Denmark, Italy Portugal, Italy US
Boriani et al. (2013) Andrade et al. (2012) Boyer et al. (2012)
Egypt Serbia Joiner and Coleman (2012)
Germany, China, Japan Seke et al. (2013) Peterson et al. (2013)
Lin et al. (2013) Sweden, China US, UK
Greece, France, Denmark Tailand Zambia, UK
Koutkias et al. (2012) Menikpura et al. (2012) Mutale et al. (2013)
Ireland Taiwan
Wakai et al. (2013) Chen et al. (2013)
Italy Tseng (2013)
Gimelli and Muccillo (2013) The Netherlands
Citation Numbers
25 23
20
15
12
10
10 8 8
7
6
5
5 4 4 4
3 3 3 3 3 3 3 3
2 2 2 2 2 2
1 1 1 1 1 1 1
0 0 0 0 0 0 0
0
Wakai et al. (2013)
Yildiz and Demirors (2013)

Yi and ma (2010)
Abou-Ali and Abdelfattah (2013)
Aitken et al. (2011)
Andrade et al. (2012)
Boriani et al. (2013)
Boyer et al. (2012)
Braithwaite et al. (2012)
Brown et al. (2013)
Chen et al. (2013)
El-Jardali et al.. (2011)
Freitas et al.. (2011)
Gajewski and Dunton (2013)
Gimelli and Muccillo (2013)
Hao et al. (2012)
Harmancioglu et al. (2013)
Iacone et al. (2012)
Joiner and Coleman (2012)
Klazinga et al. (2011)
Koutkias et al. (2012)
Lin et al. (2013)
Mears et al. (2011)
Menikpura et al. (2012)
Mutale et al. (2013)
Mutemwa (2005)
Olafsdottir et al. (2011)
Peterson et al. (2013)
Santana-Medina et al. (2013)
Seke et al. (2013)
Sulku (2012)
Tanaka et al. (2013)
Tchouaket et al. (2012)
Townend (1996)
Tseng (2013)
Fig. 2 The bibliometric review—citation numbers (Web of Science/Google Scholar)
The publication outlets were also analyzed. In only three cases, publications
were cited more than once within the list. Two papers were published within BMC
Public Health (Impact Factor: 2.32); two articles were published in the International
Journal of Quality in Health Care (Impact Factor: 1.584) and two papers were
published within Water Resources Management (Impact Factor: 2.463). The
information on Impact Factors was collected from their websites. Two of the
analyzed articles were published in conference proceedings: (Freitas et al. 2011;
Tchouaket et al. 2012). Table 7 lists the papers by publication outlet.
As previously stated, the bibliometric review also aimed to analyze the main
themes being discussed in the context of the healthcare organizations. Figure 3
represents the analysis on emerging themes. The coding of different themes fol-
lowed the sequence: Paper title-Abstract-Keywords. Nine main themes were coded
in the analysis. Three studies focused on the development of quality indicators
based on benchmarking. Four papers emphasized the importance of ‘best practices’
in terms of quality improvement in the internal environment of hospitals. Six
articles focused on strategies to improve economic/social efficiency of healthcare
organizations (based on the Balanced Scorecard). One study focused on cleaner
production in general. Economic development, especially at country and city level,
was evaluated in three of the studies. Five papers reported on initiatives to improve
efficiency in healthcare, mainly connected with cost reduction and economic sav-
ings of hospital units. One paper discussed Hospital Accreditation. Two of the
studies were related to the role/impact of Information Systems to improve
Table 7 The bibliometric review—publication outlets (main journals)

7th ISWA International Congress, Informatics for Health & Social Care Yildiz and
Proceedings II Demirors (2013)
Townend (1996)
Academic Medicine
Joiner and Coleman (2012) Freitas et al. (2011)
Advances in Management of International Journal for Quality in Health
Technology, Pt 1 Care
Braithwaite et al. (2012)
Applied Economics Mears et al. (2011)
International Journal of Health Planning and
Management
Applied Energy Tchouaket et al. (2012)
Gimelli and Muccillo (2013) Journal of Biomedical Informatics
Australian Critical Care Koutkias et al. (2012)
Aitken et al. (2011) Journal of Cleaner Production
BMC Public Health Tseng (2013)
Olafsdottir et al. (2011) Journal of Environmental Psychology
Seke et al. (2013) Andrade et al. (2012)
Building and Environment Journal of Evaluation in Clinical Practice
Tanaka et al. (2013)
Ecological Indicators Journal of Health Services Research & Policy
Santana-Medina et al. (2013)
Economic Modelling Journal of Operations Management
Boyer et al. (2012)
European Journal of Emergency Medical Decision Making
Medicine
Wakai et al. (2013)
European Journal of Public Health Plos One
Mutale et al. (2013)
Expert Systems with Applications Quality & Quantity
Lin et al. (2013) Chen et al. (2013)
Frontiers of Environmental Science Science of the Total Environment
and Engineering Boriani et al. (2013)
Hao et al. (2012) Waste Management & Research
Health Policy Menikpura et al. (2012)
Ei-Jardali et al. (2011) Water Resources Management
Health Policy and Planning Harmancioglu et al. (2013)
Peterson et al. (2013)
healthcare performance and quality. And ten of the articles reported on indicators of
the preservation of natural resources, biodiversity and reduction of solid waste.
Production (CP)
Accreditation (HA)
Benchmarking
BM01
Cleaner
Hospital
(BM)
BM02 CP01
HA01
BM03
Development (ED)
Best Practices (BP)
BP01
Economic
ED01
Systems (IS)
Information
BP02
ED02
IS01
BP03
ED03 IS02
BP04
RP01
RP02
BS01
Preservation (RP)
Balanced Scorecard
Efficiency (EF) EF01 RP03

BS02 RP04
Resource
EF02
RP05
BS03
(BS)
EF03 RP06
BS04 RP07
EF04
RP08
BS05
EF05 RP09
BS06 RP10
Code References Code References Code References

BM01 Freitas et al. (2011) CP01 Tseng (2013) HA01 Braithwaite et al. (2012)
BM02 Joiner and Coleman (2012) ED01 Seke et al. (2013) IS01 Mutemwa (2005)
BM03 Klazinga et al. (2011) ED02 Tchouaket et al. (2012) IS02 Yildiz and Demirors (2013)
BP01 Aitken et al. (2011) ED03 Yi and ma (2010) RP01 Abou-Ali and Abdelfattah (2013)
BP02 Andrade et al. (2012) EF01 Gajewski and Dunton (2013) RP02 Boriani et al. (2013)
BP03 Boyer et al. (2012) EF02 Iacone et al. (2012) RP03 Brown et al. (2013)
BP04 Koutkias et al. (2012) EF03 Lin et al. (2013) RP04 Gimelli e Muccillo (2013)
BS01 Chen et al. (2013) EF04 Tanaka et al. (2013) RP05 Hao et al. (2012)
BS02 El-Jardali et al. (2011) EF05 Wakai et al. (2013) RP06 Harmancioglu et al. (2013)
BS03 Mears et al. (2011) RP07 Menikpura et al. (2012)
BS04 Mutale et al. (2013) RP08 Peterson et al. (2013)
BS05 Olafsdottir et al. (2011) RP09 Santana-Medina et al. (2013)
BS06 Sulku (2012) RP10 Townend (1996)
Fig. 3 The bibliometric review—main themes
5 Final Considerations and Further Research
The literature has shown that there is scarce evidence on the formalization of
performance measures across organizations. In many cases, the systems already in
place are ignored when new metrics are established. Regarding performance
measurement frameworks, the lack of guidelines on the development and selection
of performance indicators was also identified in the study. A consistent concern on
the external public was indicated while internally the sustainability indicators are
often composed by dimensions that are not comparable, restrict, and even insig-
nificant. As a result, the application of frameworks for the environmental sustain-
ability measurement has been far from satisfactory. Considering the importance of
performance measurement for the healthcare sector, especially in developing
countries, and the significant impact of its operations, there is a clear need for more
robust/systematic frameworks guided by practice. New models are necessary to
define relevant indicators for monitoring and performance evaluation in the sector.
The search for measures that can raise awareness, continuous improvement and
innovation in organizational processes has just begun. The study represents a
starting point in proposing a meaningful framework to measure environmental
sustainability in hospitals within the Brazilian setting.
Acknowledgment The researchers would like to acknowledge the support of ‘UNIDAVI’

through a PhD scholarship provided to Mrs. Blass.
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How Does Innovativeness Foster
Sustainable Supply Chain Management?
Jury Gualandris and Matteo Kalchschmidt
Abstract Innovativeness refers to an organization’s willingness/ability to change

through architectural/radical innovation of processes, products and management
systems. Existing literature generally supports the importance of innovativeness for
environmental and social sustainability. Open questions, however, still remain: (i) which
mechanisms (i.e., tools and routines) do innovative firms leverage that better assist
the process through which stakeholder pressure is turned into sustainability strategy?
(ii) Which mechanisms do innovative firms leverage that better assist the process
through which strategy is turned into a successful adoption of sustainable supply chain
management (SSCM) practices? To advance our understanding of how innovativeness
fosters SSCM, we leveraged a continuous process of theory generation and data col-
lection through case studies. A set of propositions and a conceptual model were built
that complement prior research and can provide guidance to firms that struggle with
how to deliver new environmental and social standards in their supply chains.
Keywords Innovation
Sustainability Stakeholder pressure Ethical

responsibility Inertia Trade-offs
1 Introduction
Sustainable supply chain management (SSCM) has been advocated as a new

innovation for firms to meet stakeholders’ requirements while raising ecological
efficiency and social responsibility in supply chains (Ahi and Searcy 2013;
J. Gualandris (&)
Michael Smurfit Graduate Business School, University College Dublin,
Carysfort Ave, Blackrock, Dublin, Ireland
M. Kalchschmidt
Department of Management, Information and Production Engineering,
Università degli Studi di Bergamo, Viale Marconi 5, Dalmine, Bergamo, Italy

104 J. Gualandris and M. Kalchschmidt
Gualandris and Kalchschmidt 2014; Zhu et al. 2005). SSCM tackles environmental
and social issues using supply chain management practices and can be viewed at
multiple levels including internal practices (e.g., ISO 14001, OHSAS 18001) and
external practices (e.g., supplier assessment and collaboration) (Darnall et al. 2008;
Gualandris and Kalchschmidt 2014; Zhu et al. 2012). During the last two decades a
growing stream of literature has been studying how SSCM develops (Seuring and
Muller 2008). At a first stage, pressures from primary (i.e., customers) and secondary
(i.e., governments, non-governmental organizations) stakeholders influence a firm’s
set of environmental and social objectives and plans (Ateş et al. 2011; Ehrgott et al.
2011; Sharma and Henriques 2005). At this stage, environmental and social values of
individuals operating at different levels within the organization also play a significant
role, influencing the formulation of a firm’ objectives and plans (Carter and Jennings
2004; Ehrgott et al. 2011; Klassen 2001). At a second stage, once pressure is
accommodated into strategy, effort concentrates on translating objectives and plans
into successful adoption of SSCM practices (Handfield et al. 1997; Maignan et al.
2002; van Tulder et al. 2009).
In the course of the discussion on SSCM, it has also been widely acknowledged
that innovation is of utmost importance along the abovementioned process. Several
studies show that environmental and social harm produced by industrial systems
must decrease 50 times (Isaksson et al. 2010) and be also complemented by positive
or regenerative impacts (Pagell and Shevchenko 2014). Such leaps in performance
demand radical changes in firm’s strategies and operations and prove the crucial
role of innovation for sustainability. Evidence is indeed emerging as regards to the
enabling role of innovativeness in the context of SSCM (e.g., Gualandris and
Kalchschmidt 2014; Klassen and Vereecke 2012; Pagell and Wu 2009). Since the
goal of innovative firms is to create new businesses or generate additional profit
from better products and processes, they are assumed to be best at radically
changing the way they think about products, processes and technologies and “treat
sustainability as innovation’s new frontier” (Nidumolu et al. 2009).
Although existing literature generally supports the importance of innovativeness
for sustainability, there are a number of issues with its role in the context of SSCM.
First, we have a limited understanding of how innovativeness influences the process
through which stakeholders’ pressure is accommodated in a firm’s sustainability
strategy; specifically, which mechanisms (i.e., tools and routines) do innovative
firms leverage that better assist the process through which pressure is accommo-
dated into strategy? Second, it is unclear how maintaining a strong (weak) inno-
vation capability fosters (hampers) the process through which a sustainability
strategy cascades down into successful action; specifically, which mechanisms do
innovative firms leverage that better assist the process through which strategy is
turned into successful SSCM adoption?
In moving a step forward towards filling these gaps in the literature, we have
developed an assessment framework to capture (a) the perceived intensity of sus-
tainability-related pressure, (b) the advancement level of a firm’s sustainability
strategy, (c) the extent of successful adoption of SSCM practices, and (c) the degree
of a firm’s innovativeness. Leveraging such framework in a continuous process of
How Does Innovativeness Foster Sustainable … 105
theory generation and data collection through a series of case studies, we have built
a set of propositions and a conceptual model describing how innovativeness fosters
SSCM. Also, we have identified a set of mechanisms that assist the development of
advanced sustainability strategies and foster the adoption of SSCM practices. We
argue that our findings complements prior research and also provide guidance to
firms that struggle with how to deliver new environmental and social standards in
their supply chains.
2 Background
This section provides details about key terminology and conceptualization of the
factors considered in this paper as implemented by existing literature. We begin by
describing the two-stage process through which pressure for sustainability is turned
into SSCM adoption; main barriers to this process are also summarized. Then, we
discuss the literature that has investigated the relationship between innovativeness
and sustainability.
2.1 From Stakeholders’ Pressure to SSCM Adoption
The literature has isolated the causal relationship that characterizes the way SSCM
develops within a firm. At a first stage, external pressure and ethical responsibility
tend to be encoded in a firm’s sustainability strategy, or in its set of environmental
and social objectives and plans (e.g., Klassen 2001). The role of ‘external pressure’
in inducing/motivating environmental and social sustainability at the firm level has
been widely recognized. As managers seem to not discern the different sustainability
demands coming from different stakeholder groups (Murillo‐Luna et al. 2008),
customers and societal stakeholders (Governments and Non-Governmental Orga-
nizations) were shown to influence a firm’s strategy in similar ways. Escalating
penalties, fines and legal costs have punctuated the importance of complying with
legislation (Bansal and Roth 2000). Non-governmental organizations can leverage
withholding and indirect usage strategies to pressure for environmental and social
improvements (Sharma and Henriques 2005). In a similar fashion, customers’
requests and requirements have been highly regarded by managers so to maintain the
necessary support from these key stakeholder group (Ehrgott et al. 2011; Klassen
and Vachon 2003; Zhu et al. 2007). Ethically motivated firms, then, develop envi-
ronmental and social objectives and plans because it is the “right thing to do” (Bansal
and Roth 2000). ‘Ethical responsibility’, which refers to the genuine intention and
willingness of management and employees in a firm to be engaged in sustainability
management (Carroll 1999), is instrumental to prioritize sets of resources (e.g.,
financial or human capital) for the achievement of sustainability (Klassen 2001).
Pressure can be perceived and accommodated in different ways. When firms

address environmental and social issues, indeed, they face different strategic
options; Some firms decide to pursue a ‘resistant adaptation’ to new regulations and
requirements, whereas others approach the subject more strategically, adopting a
‘total environmental and social quality’ strategy (TESQ) (Handfield et al. 1997; Lee
and Rhee 2007; van Tulder et al. 2009). According to the literature, developing this
last option mainly means (i) considering environmental and social objectives that
go beyond compliance as a top priority for the business, (ii) dedicating important
budgets to improve ecological efficiency, health and safety or avoid sustainability
related risks, (iii) clearly assigning responsibility for environmental and social
matters to one or various people of the firm who are specialized in the matter of
interest.
At a second stage, ‘sustainability strategies’ must cascade down into ‘SSCM
adoption’. Intuitively, as a firm’s strategy moves from ‘resistant adaptation’ to
‘TESQ’, the extent of adoption of SSCM practices is expected to increase (Ateş et al.
2011; Handfield et al. 1997). As said, SSCM tackles environmental and social issues
using different sets of practices. Sustainable process management (SPM) refers to a
firm’s institutionalization of internal environmental and social management practices
that aim to reduce a firm’s direct environmental and social impact. In essence, SPM
entails the joint adoption of environmental management systems (ISO 14001) (Daily
and Huang 2001; Darnall et al. 2008), environmentally friendly eco design (e.g.,
Design for Environment, Life cycle assessment) (Zhu and Sarkis 2004), health and
safety certifications (Robson et al. 2007) and other social practices (e.g., codes of
conduct, corporate social activities) (Zairi and Peters 2002). Practices that include
transactions with supply chain partners have been seen as external SSCM. Since a
firm is ‘as sustainable as their suppliers’ (Krause et al. 2009), research on external
SSCM practices has mainly focused on Sustainable Supply Management (SSM). It
specifically refers to two complementary sets of activities implemented at the firm
level to assess and improve the environmental and social performance of suppliers
(Ageron et al. 2012; Awaysheh and Klassen 2010; Lee and Klassen 2009): supplier
assessment and collaboration. While supplier assessment comprises activities con-
ducted to assess (and control) suppliers’ sustainability performance, supplier col-
laboration entails a direct involvement with suppliers to improve environmental and
social impacts of their products and operations.
The two-stage process depicted above (pressure → strategy; strategy → practice)
provides an initial understanding of firms’ behavior. Recent investigations, however,
suggest that several barriers impede firms to approach pressure strategically and also
hamper the adoption of SSCM practices. For instance, despite pressure and scrutiny
by societal stakeholders (Legislators, Greenpeace, Friends of the Earth), many firms
struggle with how to define and pursue TESQ strategies (United Nation Global
Compact and Business for Social Responsibility 2010). Research suggested that
“static mind-sets”, “rigid organizational structures” and “lacks of supportive culture”
is what prevent firms, especially large organizations, to pursue radical sustainability
innovations and to grasp the idea that environmental and social performance can be
improved while avoiding rebound effects (Ashford et al. 2012; Herring and Sorrell
2009; Pagell and Gobeli 2009) and improving productivity (Pagell et al. 2013;
Porter and Van der Linde 1995; Wu and Pagell 2011). Furthermore, as SSCM
requires lots of effort as well as resource endowments that often cross a firm’s
boundaries, poor employees’ commitment and a lack of supplier relationship man-
agement can hamper the adoption of SPM and SSM (Gualandris et al. 2014; Walker
et al. 2008).
2.2 Innovativeness and Its Role in SSCM
‘Innovativeness’ can be measured at multiple levels: at the product/process level or

at the firm level. At the product/process, in accordance with Garcia and Calantone
(2002), innovativeness refers to the degree of novelty of an innovation or the ability
of an innovation to create a paradigm shift in technology and/or market structure. In
this sense, the authors classify the concept of innovation along a continuum from
incremental innovation (adaptation or marginal improvement of existing products
and processes) to radical innovation (product/process innovation capable of creating
a paradigm shift in technology and/or market structure of an industry). In parallel,
innovativeness at the firm level refers to an organization’s willingness/ability to
change through architectural/radical innovation of processes, products and man-
agement systems (Gualandris and Kalchschmidt 2014; Klassen and Vereecke
2012). In this work, we study innovativeness at the firm level.
Innovativeness is a dynamic capability (Eisenhardt and Martin 2000; Reuter
et al. 2010) that develops over time because of a firm’s ‘future orientation’ and
‘learning orientation’. Future orientation refers to a firm’s inclination to analyze
long-term developments of markets and technologies, as well as their implications
for strategy and competitiveness (Ruff 2006). Such an inclination requires the
organization to open its foresight, which in turn induces fresh ideas and rich
information for an effective management of change (Rohrbeck and Gemünden
2011). Learning orientation refers to extent a firm is committed to learn, create a
shared-vision and enrich its organizational memory (Sinkula et al. 1997). While
commitment to learning means valuing and promoting learning for the long-term
benefit of the system, shared-vision and memory refer to a firm’s routines of
spreading relevant information and knowledge among different departments and
units (Calantone et al. 2002; Hult and Ketchen 2003; Verona 1999).
Limited evidence is emerging that innovativeness is an important capability that
assists firms when turning pressures into successful SSCM adoption. Christmann
(2000), for instance, has found that innovativeness is a complementary asset that
enables companies to overcome the trade-off between costs and respect for the
environment. Christmann (2004) has found that firms that are characterized by a
capacity for innovation, an ability to absorb new information thanks to an educated
workforce, and a widespread involvement of employees in the implementation of
an environmental management system, are in a much better position to adopt
strategies of environmental self-regulation such as the ISO14001 standard. Recent

research has also found that innovative firms are better at sustainability, as they are
able to create and leverage on strong supply chain participation (Bos‐Brouwers
2010; Pagell and Wu 2009). Gualandris and Kalchschmidt (2014) have provided
preliminary evidence that innovativeness enhances a firm’s ability to identify and
respond to emerging customer’s requests and requirements. Likewise, based on
their case studies, Klassen and Vereecke (2012) have found that innovation is a
valuable capability for addressing social issues in supply chain operations.
Besides SSCM literature, nearby fields have developed some understanding of
the relationship between innovativeness and sustainability. For instance, innovation
management research presents several cases of innovative firms that are best at
embracing and combining different sustainable business models (Bocken et al.
2014), thus proactively accommodating stakeholders’ sustainability expectations.
The business ethics literature, suggest that the ability of creating “thinking cham-
bers” where a variety of stakeholders can debate problems and needs for change
allows firms to “detect supply chain innovation opportunities for sustainable
development” (Isaksson et al. 2010). Finally, sustainable entrepreneurship literature
refers to innovative firms as those capable of “creative destruction” (Schumpeter
1934), i.e., they destroy conventional production methods and products, and replace
them with safer and greener operations and services in order to create, deliver and
capture social, environmental and economic value (Schaltegger and Wagner 2011).
The relationship between innovation and sustainability is far from being a novel
subject. However, the role innovativeness plays along the two-stage process
through which sustainability-related pressure is turned into successful SSCM
adoption is far from being completely understood. Indeed, it remains unclear how
innovativeness fosters the development of TESQ strategies and the subsequent
adoption of SPM and SSM. This study, thus, concentrates on the complex inter-
action between innovativeness, pressure, strategy and practice, discerning light on
the specific tools and routines that make innovative firms best at sustainability.
3 Methodology and Case Results
In this study we used case-based methodology for two reasons. First, case studies
are widely considered to be better means of theory building where the relationships
among important constructs are poorly understood. Second, the case-based method
enables to analyze the phenomenon in its natural setting, based on firsthand
observation and examination of numerous factors and nuances; accordingly, recent
literature asked for case-based investigation of the role of innovativeness in the
context of SSCM (van Bommel 2011).
In accordance with Stuart et al. (2002), five methodological steps were per-
formed. First, research questions were identified (see previous sections); then, an
interview protocol was developed; next, field and archival data were gathered;
fourth, interviews were transcribed and analysis performed using an assessment

framework and cross-case comparisons; and finally, results and considerations were
disseminated to improve validity.
3.1 Sample Selection and Data Collection
This study investigates the role of innovativeness along the process through which
stakeholders’ pressures are turned into SSCM adoption. Therefore, case selection
was accurately managed to obtain a sample of firms facing similar pressure but
having different strategies and practices in place. We focused on Italian manufac-
turing firms since they have recently faced increasing local pressure and several
critical environmental and social challenges in the area of hazardous material
substitution, health and safety, as well as recovery and recycling. This focus has
also allowed controlling for potentially confounding factors such as variation in
economic conditions and national culture. Then, we applied the ‘polar types’
sampling approach (Eisenhardt and Graebner 2007); extreme cases in terms of
sustainability strategies were identified by considering the attitude of transparency
on firms’ websites as well as firms’ membership in Italian corporate-social-
responsibility (CSR) networks such as Fondazione Sodalitas (www.sodalitas.it) and
Impronta Etica (www.improntaetica.org). Variance in SSCM adoptions was pur-
posefully created by selecting cases on the basis of firms’ environmental and social
certifications. Table 1 briefly summarizes firms’ profiles.
The unit of analysis for these case studies was the process through which
pressure turns into strategy and then into practice. Case studies were developed by
means of interviews conducted on the basis of a semi-structured protocol (Yin
2009). Such a protocol was designed to explore (i) how external pressure and
ethical responsibility affect/motivate a firm’s sustainability strategy, (ii) the level of
advancement of a firm’s sustainability strategy (resistant adaptation-TESQ), (iii) the
extent of successful adoption of SSCM practices, (iv) a firm’s degree of innova-
tiveness, and (v) innovativeness-related mechanisms (i.e., tools and routines)
enabling a firm to integrate sustainability into its strategy and practices.
Because studying the role of innovativeness in the context of SSCM requires the
inclusion of multiple perspectives, in each firm, at least two individuals were
interviewed (Table 1). All interviews were conducted on site and recorded elec-
tronically. Most of them have lasted for more than 90 min. After each site visit,
each interviewer edited field notes and checked for accuracy. Questions arising
from interview notes have been answered by interviewees through follow-up emails
and phone calls.
Data gathered from different interviews have been triangulated by means of
overlapping interviews, archival documents when available and sustainability
reports. The continuous process of theory generation and data collection was lev-
eraged until external saturation was reached (Yin 2009); during the last three
interviews no new information or new themes were emerging from data analysis.
Thus we stopped at 10 cases.
110
Table 1 Cases
Cases
Items A B C D E F G H I J
Foundation 1955 2000 1966 1870 1964 1975 1836 1988 1899 1956
Industry and ISIC 34 ISIC 29 ISIC 34 ISIC 29 ISIC 29 ISIC 31 ISIC 31 ISIC 31 ISIC 32 ISIC 29
products light-heavy weaving cabs, driver cutting pneumatic domestic network con- network connec- home automa- air cooling
duty cranes systems and units for track machine equipment appliances nectivity sys- tivity systems tion, and medi- and
healed frames loaders tools and for the tems and and circuit cal systems conditioning
solutions energy automation circuit breakers equipment
solutions breakers
Employees 450 545 648 283 383 1000 700 615 472 220
Membership No No No No No Yes Yes Yes Yes No
in CSR
networks
Certifications ISO 9001 ISO 9001 ISO 9001, ISO 9001 ISO 9001; ISO 9001; ISO ISO 9001; ISO 9001; ISO ISO 9001; ISO ISO 9001;
ISO 14001 ISO 14001; OHSAS ISO 14001; 14001; OHSAS 14001; OHSAS ISO 14001
14001; 18001; SA 8000 OHSAS 18001 18001
OHSAS 18001
18001
Archival Sustainable Environment Supplier Corporate Code of Sustainability Sustainability Sustainability Sustainability Energy
documents development obligation questionnaire governance Ethics reports (2001– reports reports (2011); KPI report saving
statement statement (2010) code (2011) (2011) 2011) (2003–2011) sustainability (2010); suppli- brochure
(2011) (2010) KPI indexes ers’ code of (2010)
(2010–2011) conduct (2011)
Interviewees Purchasing Operations Purchasing Operations Plant man- Strategic sourc- Purchasing Sustainability Purchasing Purchasing
manager; manager; manager; manager; ager; ing manager; manager; HR director; supply manager; plant manager;
plant senior buyer R&D senior senior technical affair director chain director. manager R&D
manager manager buyer buyer manager; R&D manager
manager
J. Gualandris and M. Kalchschmidt
3.2 Assessment Framework and Data Analysis
Drawing on the synthesis of earlier research (e.g., Calantone et al. 2002; Handfield
et al. 1997; Klassen 2001), an assessment framework was developed for the field-
work. Tables 3, 4, 5 and 6 respectively provide information about our assessment
framework.
In our framework, each construct comprised a number of lower-level dimensions.
Each lower-level dimension was rated separately on a scale of 1–3 (i.e., low,
medium, high). Then, we calculated the average of lower-level dimensions to assess
the construct of interest. To illustrate, consider ‘SSCM adoption’ (Table 6): we have
two middle-level dimensions (SPM and SSM) and a number of bottom-level
dimensions. For SPM, bottom-level dimensions are (1) hazardous material man-
agement within the product, (2) use of Eco-design (e.g., Design for Environment and
Life Cycle Assessment), (3) building an environmental management system (EMS),
(4) reduction of energy, water use and emission, (5) improving health and safety
(e.g., obtaining OHSAS 18001), (6) improving corporate responsibility through
social campaigns (e.g., codes of conduct, corporate social activities). Scores across
the bottom-level dimensions are averaged based on the assumption that each con-
tributed significantly and more or less equally to SPM. Then, scores for SPM and
SSM are averaged to obtain the ‘overall’ extent of successful SSCM adoption.
Based on data collected from overlapping interviews, archival documents and
sustainability reports, the research team members independently assessed the role of
external pressure and ethical responsibility in inducing/motivating a firm’s sus-
tainability strategy, the type of sustainability strategy, the extent of successful
adoption of SSCM practices, and the degree of innovativeness. Each independent
assessment was then discussed collectively to resolve discrepancies; the final
consensus-based ratings are reported in Table 2.
Data analysis based on our assessment framework was necessary for two main
reasons (Lee and Klassen 2009); first, we wanted to limit interpretation bias in the
single-case analysis and facilitate the process through which different pieces of
Table 2 Single-case reduction and cross-case comparison

Cases 1. Pressure 2. 3. SSCM adoption Innovativeness
Strategy
Overall SP CP ER Overall Overall SPM SSM Overall FO LO
A 2.56 2.67 2.50 2.50 1.00 1.42 1.83 1.00 1.44 1.00 1.89
B 2.50 3.00 2.00 2.50 1.50 1.50 1.50 1.50 1.43 1.20 1.67
C 2.50 3.00 2.50 2.00 1.50 1.67 1.83 1.67 1.69 1.60 1.78
D 1.50 2.00 1.50 1.00 1.00 1.08 1.17 1.17 1.60 1.20 2.00
E 2.17 2.00 2.00 2.50 2.50 2.00 2.17 1.83 1.96 1.80 2.11
F 1.61 1.33 1.00 2.50 3.00 3.00 3.00 3.00 3.00 3.00 3.00
G 1.78 1.33 1.50 2.50 3.00 2.83 2.67 2.67 2.79 2.80 2.78
H 1.72 1.67 1.00 2.50 2.50 2.58 2.67 2.50 2.72 3.00 2.44
I 1.33 1.00 1.00 2.00 3.00 2.92 2.83 3.00 2.90 2.80 3.00
J 1.72 1.67 1.50 2.00 2.00 2.17 2.33 2.17 2.32 2.20 2.44
information coming from different sources (interviews, archives and reports) were
reconnected. Second, having quantitative scores allowed the research team to look
at the big picture without losing detail, thus improving the reliability of the cross-
case analysis. Specifically, Table 2 was useful to assess the coherence of pressure,
strategy and SSCM adoption. Every time misalignment was identified (e.g., firm E
obtaining high score for sustainability strategy, but low score for SSCM adoption),
a meaningful cross-case comparison was conducted to assess the role of
innovativeness.
4 Development of Propositions
Based on the two-stage process presented in Sect. 2, we separated the findings into
two areas: turning pressure into strategy; turning strategy into action.
4.1 Turning Pressure into Strategy
Our analysis informs about the coherence of pressure and sustainability strategy,
and allows assessing the role of innovativeness. Despite the studied cases were
exposed to similar external pressure from primary and societal stakeholders (i.e.,
same industrial context), our analysis has shown that firms perceive and cope with
such pressure differently. In certain cases (A, B, C and D), external pressure was
turning straight into specific environmental and social actions in an attempt to limit
legal liabilities and maintain business with important customers. In such cases,
explicit requests and requirements from primary and societal stakeholders were
seen as an essential source of information, uncovering sustainability meanings and
shedding light on salient environmental and social issues that had be addressed
urgently. Firms A, B, C and D appeared to be myopic: their inability to engage with
stakeholders and predict potential outcomes of alternative strategic options resulted
in a ‘resistant adaptation’ strategy.
In other cases (i.e., F, G and I), request and requirements from primary and
societal stakeholders were not perceived as a salient source of pressure, as firms
were already addressing environmental and social issues. Specifically, we observed
that inclusive approaches based on a two-way communication with external and
internal stakeholders were leveraged to inform the firm’s strategic thinking, thus
anticipating most of stakeholders’ demand. To illustrate, the technical affair man-
ager at firm F highlighted that “interactive dialogs with customers provide ideas
about what to look for in business… when sustainable alternatives in products or
technologies are identified, those are compared with current practices… If a
realignment [of our strategy] is needed, our effort in collecting new ideas from
employees and partners and our effort in keeping on discussions provide arguments
that allow for taking a conscious decision”. Firms F, G and I were good at creating
constructive interactions between customers, suppliers and local communities in a

multi-partite stakeholder cooperation from which stem mutual loyalty as well as
better understanding of reciprocal expectations. It was clear in the mind of the
interviewed managers that virtually no company should innovate on its own; “the
new innovation leaders will be those finding the best way to leverage its network of
stakeholders” (Manager at firm F). A standard routine for such firms was, indeed, to
bring people and ideas together through ‘innovation mall’ and ‘innovation com-
munity’. Firm G and I were circulating a weekly newsletter; a simple tool through
which the firm could post problems and stakeholders could post ideas and solutions
(i.e., innovation mall). Firm F was leveraging a more advanced tool, a blog where
stakeholders could open discussions and discourses as well as offer solutions to
problems posted by the company (i.e., innovation community). Beyond mutual
loyalty and reciprocal understanding, such mechanisms allowed to leverage
stakeholders’ skills and capabilities, initiate market and social changes and finally
deliver environmental and social innovations.
As regards to ethical responsibility, cases existed where it could not be turned
into TESQ strategies (Table 2). In such cases (i.e., cases A, B and C), the diffusion/
proliferation of top management’s and employees’ genuine interest towards sus-
tainability was hampered because occasions for discussion and sperimentation were
missing. Conversely, we observed cases where organizations implemented mech-
anisms that allowed their constituents to manifest their values, thus influencing a
firm’s objectives and plans (i.e., cases F, G and I). To illustrate, within Firm I ‘ideas
competitions’ took place frequently and employees were allowed to use 10 % of
their paid working time to pursue their intents. Employees were also receiving extra
money in the form of ‘reimbursements’ when small investments were required in
order to develop or refine their ideas/solutions. ‘Open meetings’ were also orga-
nized on a frequent-basis to discuss successful and unsuccessful endevours, and
share knowledge within the organization. When firm I realized that social inno-
vations conducted by ethically motivated employees were positively impacting its
economic bottom line, a TESQ strategy with sustainability-related objectives, roles
and budgets was formally constituted.
It is important to highlight that ‘innovation malls’, ‘innovation communities’,
‘innovation ideas competitions’, ‘reimbursements’ and ‘open meetings’ were not
purposefully created to inform a firm’s sustainability strategy or enhance envi-
ronmental and social performance; firms G, I and F were mainly concerned about
maintaining/enhancing their innovativeness. However, because of primary and
societal stakeholders’ self-interest as well as employees’ ethical values, such
mechanisms were often leveraged to discuss and tackle environmental and social
issues. Collectively, our observation leads to the following:
Proposition 1 (P1) As innovativeness increases, a TESQ strategy is more likely to
be formulated and pursued.
P1a. As innovativeness increases, external pressure is less likely to affect a firm’s
sustainability strategy since organizations employ mechanisms (i.e., innovation mall
and community) that allow to anticipate/shape explicit demands from primary and
societal stakeholders.
P1b. As innovativeness increases, ethical responsibility is more likely to affect a
firm’s sustainability strategy since organizations employ mechanisms (i.e., ideas
competitions, reimbursements, open meetings) that allow individuals to manifest,
share and pursue their values.
4.2 Turning Strategy into Action
We found a case where the TESQ strategy could not turn into extensive and
successful adoption of SSCM practices: firm E had defined specific sustainability
priorities, roles and budgets, but SSCM could not be implemented extensively and
successfully (Table 2). Firm E had developed complex internal and external
structures over time (e.g., mechanistic organization, regionally differentiated
product portfolio, globally spread supply base), as a consequence of its interna-
tionalization process and increased size. We observed such structures to be source
of inertia and friction, which impeded taken-for-granted beliefs and ways of operate
to be disrupted for accommodating new operational paradigms (SSCM). For
instance, the firm wanted to adopt new environmental systems and safety measures
along its production lines; such new practices, however, were requiring significant
effort to adjust workers’ routines and skills, thus creating stress and negatively
impacting their productivity. Yet, firm E was making an effort to involve Chinese
suppliers along recycling and eco-design initiatives; cultural differences and com-
munication barriers, however, were impeding the achievement of significant eco-
efficiency gains. After few years, such responsible production and sourcing projects
were still not completed.
Firm I and F had developed similar structures over time; for instance, the plant
manager of firm F told us that “functional managers [in our organization] are
subjected to pressures from different stakeholders and might develop potentially
misaligned goals and practices […] in the past, this was a big source of inefficiency,
especially when the market required quick turn-around and adjustments in products
and operations”. However, as winning such inertia was essential to maintain market
leadership, the firms had leveraged their innovativeness to design the following
mechanisms:
(i) ‘Formal meetings’ involving middle management and employees were
organized to share KPIs trends, lessons learned as well as new short and
middle term objectives;
(ii) ‘Playful activities’ were organized on a regular basis to create organiza-
tional life and cohesion;
(iii) ‘Elaborate posters’ were designed and positioned in recreation areas so as to
provide information on how the job of workers and managers fitted into the
firm’s value chain;
(iv) ‘Collaborative scenario analysis’ and follow-up activities (i.e., joint devel-
opment offinal reports) were organized to promote common goals with supply
chain partners and provide opportunities to improve inter-organizational
coordination;
(v) Supplier questionnaires, typically seen as basic arm’s length instruments to
assess and control behaviors, were instead used as an ‘external knowledge
management tool’ to enhance suppliers’ commitment to work with (rather
than for) the firm. For instance, such questionnaires were having sections
allowing suppliers to share visions about future business developments.
Differently from firm E that imposed a strict top-down process to win rigid
internal and external structures, Firms I and F managed the deployment of their
TESQ strategy as an on-going, cyclical process of continuous improvement and
inter-organizational learning. In this path, the mechanisms listed above were of use
to generate, share and re-exam information over the way their sustainability strategy
should be turned into successful action (Table 2). From this evidence, we propose
the following proposition:
P2 As innovativeness increases, the adoption of SSCM practices is more likely to
be extensive and successful.
P2a. As innovativeness increases, a firm’s sustainability strategy is more likely
to cascade down into successful SPM adoption as the organization employ
mechanisms (i.e. formal meetings, playful activities, elaborate posters) that foster
employees’ commitment and horizontal coordination.
P2b. As innovativeness increases, a firm’s sustainability strategy is more likely
to cascade down into successful SSM adoption as the organization employ mech-
anisms (i.e. collaborative scenario analysis, external knowledge management tools)
that foster suppliers’ commitment and vertical coordination.
5 Discussion
5.1 An Integrative View
Collectively, the overall conceptual model that emerges from our case analysis is
depicted in Fig. 1. In line with previous literature, we have found evidence that
myopia (Porter and Van der Linde 1995) and complex internal and external
structures (Pagell et al. 2013; Walker et al. 2008) impede the development of TESQ
strategies and constrain the adoption of SSCM practices. Most importantly, our
findings complement prior literature on the relationship between innovation and
sustainability (Gualandris and Kalchschmidt 2014; Klassen and Vereecke 2012;
van Bommel 2011), providing a refined understanding of how innovativeness
fosters SSCM (Fig. 1).
First, firms with high innovativeness were best at anticipating pressure as they
created thinking chambers where external stakeholders could share and discuss their
Fig. 1 A conceptual model of how innovativeness fosters SSCM
expectations. We observed that thinking chambers occurred in the form of ‘Inno-

vation mall’ and ‘innovation community’. Such mechanisms allow collecting
information and better assessing future sustainability trends; also, they allow
evaluating the value different strategic options could potentially deliver to stake-
holders as well as the value the firm could ideally retain/capture. Overall, these
thinking chambers were observed to enable the development of TESQ strategies.
This result is in line with González-Benito and González-Benito (2006), which
suggested that the perception of stakeholder pressure and its effect on a firm’s
environmental strategy is dependent on a firm’s managerial attitude. This result also
complements prior research suggesting that strategies for which positive private and
social benefits coincide are usually the result of a constructive process of interac-
tions between the firm and its prominent network of stakeholders (Pagell and Wu
2009; Schaltegger and Wagner 2011).
Then, we observed that high future orientation associates with mechanisms such
as ‘idea competitions’, ‘reimbursements’ and ‘open meetings’. Such mechanisms
were observed to offer concrete opportunities to ethically responsible employees to
manifest and pursue their values through concrete explorative projects. Such projects
were observed to be economically successful, thus providing evidence of how
turning ethical responsibility into strategy could be valuable for the firm. This finding
is in line with prior research suggesting that individuals within organization can be
entrepreneurs (Schaltegger and Wagner 2011) or champions (Ehrgott et al. 2011);
while pursuing their creativity and ambition, such individuals enable and accelerate a
firm’s change for sustainability. This also complements prior literature suggesting
that new forms of work organizations (employee participation) enable the develop-
ment of advanced sustainability strategies (Longoni 2014).
Next, we observed that firms with high innovativeness were best at legitimizing
the adoption of new practices, both internally (SPM) and in their supply chains
(SSM). Prior research suggest that when a new strategy has to be pursued, the
violation of taken-for-granted identity codes, ways of thinking, routines or practices
usually sets off cascades of radical changes that generally require firms to have
sufficient relational expertise (Gualandris et al. 2014; Parmigiani et al. 2011).
Relational expertise is accumulated as a firm designs formal and informal mecha-
nisms to share information, increase commitment, and generate common goals
within and outside organizations (Calantone et al. 2002; Holcomb and Hitt 2007).
Our study complements such studies in suggesting that relational expertise enables
innovative firms to develop specific coordination mechanisms (‘formal meetings’,
‘playful activities’, ‘elaborate posts’, ‘collaborative scenario analysis’ and ‘external
knowledge management tools’) and deploy them along a cyclical process of action
and revision. Along such process, employees and suppliers receive incentives and
support to accept new operational paradigms, thus facilitating the institutionaliza-
tion of SSCM.
5.2 Practical Implications
It is increasingly clear that organizations will need to deal with environmental and
social issues, reducing their harm and increasing regenerative impacts on social and
natural systems (Pagell and Wu 2009). However, turning pressure into strategy,
and strategy into practice is never but easy. Changing stakeholders’ expectations
make it difficult for a firm to understand the boundaries of its responsibility and
evaluate the value of alternative courses of actions, thus hampering the process
through which objectives and plans are defined. Also, the adoption of new SSCM
practices is usually welcomed by employees and supply chain partners with
attrition, as changing consolidated routines and ways of operate can be costly and
stressful.
Based on our case studies, we recommend managers to open their foresight and
improve their learning orientation. Requests and requirements from primary (cus-
tomer) and societal stakeholders (Government, non-governmental organizations)
can be anticipated/influenced by creating thinking chambers and developing strong
communication ties. To this end, we suggest firms to design and deploy the fol-
lowing mechanisms: innovation mail and innovation community, i.e., newsletters
and blogs which functions as market place for problems, ideas and solutions.
Nonetheless, firms are suggested to leverage ethical values and capability sets of
champions or intrapreneurs within their organization. Here, mechanisms such as
‘Ideas competitions’, ‘reimbursements’ and ‘open meetings’ naturally provide
means for valuable employees to manifest their value, promote innovation and help
the firm finding economically-viable strategies to anticipate/meet stakeholders’
expectations.
Then, firms must realize that change management based on hierarchical power
and top-down approaches does not work well in the context of sustainability.
Successful deployments of sustainability strategies are observed when authority is
built upon extensive relational expertise. To this end, we suggest firms to experi-
ence them-selves with the development of ‘formal meetings’, ‘playful activities’
and ‘elaborate posters’. Overall, these mechanisms fosters internal cohesion,
knowledge sharing, and motivation within the organization. Similarly, a successful
adoption of practices that require transactions with suppliers (SSM) is observed
when the firm establishes a cyclical process of inter-organizational learning. To this
end, ‘collaborative scenario analysis’ and other ‘external knowledge management
tools’ (i.e., refined questionnaires) should work at best.
Finally, a valuable contribution stems from our assessment framework (Tables 3,
4, 5 and 6). Our analysis has indirectly proved the effectiveness of this tool in
measuring external pressure, ethical responsibility, sustainability strategy, SSCM
adoption and innovativeness. Thus, we argue that practitioners should purposefully
use it along the process through which pressure is turned into practice. First, it can
serve as a ‘control’ tool; managers can indeed evaluate whether pressure, strategy
and adoption are coherent. Second, the tool can be used to support ‘continuous
improvement’ and ‘communication’ with both internal and external stakeholders.
As it allows identifying misalignments and lacks of innovativeness, it allows better
justification for new investments that could create synergistic effects for innova-
tiveness and sustainability.
5.3 Limitations
Several limitations of this research suggest avenues for future research. First, the
relationship between innovativeness and sustainability is here assumed to be mono-
directional (e.g. innovativeness leads to higher sustainability), while actually it
could be also the other way round (e.g. sustainability leads to higher innovative-
ness) (Nidumolou et al. 2009). Furthermore, some of the constructs studied in this
work (innovativeness, ethical responsibility) are difficult to assess, as they are tacit,
unarticulated, shared across a diverse range of organizational functions, and
developed over time. Future studies are thus suggested to implement longitudinal
analysis to shed more light on how sustainability and innovation evolve and interact
over time.
Second, we found indications that innovativeness is necessary to overcome the
inertia characterizing complex business settings. Future works could focus on the
effect that a misalignment between innovativeness and the complexity of a firm’s
internal and external structures may have on a firm’s environmental and social
performance. Third, some of the firms in our sample are part of important business
groups. Being part of such networks influences a firm’s resources, capabilities and
strategies (Chang and Choi 1988), thus likely affecting the degree of innovativeness
and its role along the process through which pressure is turned into practice. For
instance, recent literature suggests that small and medium enterprises can overcome
their limits in pursuing environmental innovation (i.e., limited resources) (Baylis
et al. 1998) because of their capability to leverage weak and strong ties with other
Table 3 The role of pressures
Specific dimensions for pressure evaluation Evaluation guideline
1 (Marginal) 2 (Medium) 3 (Relevant)
(a) Societal pressure SP (the role of societal –Environmental and social –Environmental and social –Environmental and social
stakeholders in inducing/motivating a firm to laws, their tightening as well as laws, their tightening as well as laws, their tightening as well as
address environmental and social issues the threat of withholding/boy- the threat of withholding/boy- the threat of withholding/boy-
through regulations, laws and withholding/ cotting actions do not motivate cotting actions are in part cotting actions motivate a firm’s
boycotting actions) a firm’s objectives and plan for responsible for a firm’s objec- objectives and plan for sustain-
1. The extent to which environmental and sustainable development tives and plan for sustainable able development
social laws and legislations already in force development
are responsible for a firm’s objectives and
plan for sustainable development
2. The extent to which the prospective
tightening of laws and legislation determines
a firm’s objectives and plan for sustainable
How Does Innovativeness Foster Sustainable …
development
3. The extent to which the threat of with-
holding and boycotting actions might disrupt
the supply chain motivates a firm’s objectives
and plan for sustainable development
(b) Customer pressure CP (the role of main –Request and requirements by –Request and requirements by –Request and requirements by
customers in inducing/motivating a firm to customers to reduce environ- customers to reduce environ- customers to reduce to reduce
address environmental and social issues mental and social impacts of mental and social impacts of environmental and social
through request and requirements) products and operations, and/or products and operations, and/or impacts of products and opera-
1. The extent to which request and require- to produce detailed information to produce detailed information tions, and/or to produce detailed
ments by customers to reduce environmental to assure sustainability compli- to assure sustainability compli- information to assure sustain-
and social impacts of products and processes ance do not motivate a firm’s ance are in part responsible for ability compliance substantially
determine a firm’s objectives and plan for objectives and plan for sustain- a firm’s objectives and plan for motivate a firm’s objectives and
sustainable development able development sustainable development plan for sustainable
development
(continued)
119
Table 3 (continued)
120
Specific dimensions for pressure evaluation Evaluation guideline

1 (Marginal) 2 (Medium) 3 (Relevant)
2. The extent to which customers’ request of
detailed information to assure sustainability
compliance motivates a firm’s objectives and
plan for sustainable development
(c) Ethical responsibility ER (the genuine –Lack of genuine interest –Some individuals (at different –A firm’s organizational con-
intention and willingness of the top manage- toward sustainability issues by a organizational level) within a stituents strongly believe that
ment, middle management and employees in firm’s organizational firm believe that environmental caring about environmental and
a firm to be engaged in environmental and constituents and social issues are important social issues is the right thing to
social management) do, thus ethical responsibility of
1. The extent to which top and middle individuals motivate a firm’s
management in a firm believe that caring objectives and plan for sustain-
about environmental and social issues is ‘the able development
right thing to do’
2. The extent to which a firm’s employees
express genuine interest toward sustainability
issues
Table 4 Type of sustainability strategy
Specific dimensions for sus- Evaluation guideline
tainability strategy evaluation 1 (Resistant adaptation) 2 (Medium) 3 (TESQ)
Sustainability strategy SS (the
set of environmental and
social objectives, plans and
procedures of a firm)
1. The extent to which sus- –A firm sustainability objective –A firm sustainability objective is not –The sustainability objective is one of
tainability represent an order consists of complying with legis- just limited to complying with legisla- the priority objectives of a firm
winner in a firm business lations and accommodating only tions, but rather it also attends to the
salient requests from customers requirements of external stakeholders

(e.g., customers)
2. The amount of time and –A firm dedicates minimum time –A firm dedicates the necessary time –A firm dedicates important budgets
financial resources a firm and/or financial resources to and resources to sustainability perfor- to sustainability for reasons that go
allocates to plan and imple- improve environmental and social mance in order to attend external beyond attending external pressure
ment sustainability-related performance pressure
actions
3. The extent to which a firm –A firm does not have any person –A firm requests the services of external –A firm clearly assigns responsibility
assigns responsibilities for who is responsible for dealing professionals and/or has qualified inter- for sustainability matters to one or
environmental and social with environmental and social nal personnel to take care of sustain- various persons of the organization
matters matters ability matters who are specialized in this matter
121
Table 5 The extent of SSCM adoption
122
Specific dimensions for SSCM Evaluation guideline

adoption evaluation 1 (Low) 2 (Medium) 3 (High)
(a) Sustainable process management SPM
1. Hazardous material manage- –None –Limited consideration of hazardous –Complete elimination of the current
ment within the product material monitoring and elimination and likely-to-be hazardous materials
2. Use of eco-design (design for –None –Limited and/or less important con- –Complete integration of sustainabil-
environment and life cycle sideration of simple criteria regarding ity performance evaluation and mon-
assessment) sustainability performance in the new itoring procedures into the new
product development process product development process
3. Building an environmental –None –EMS implementation in some man- –Completed implementation of an
management system (EMS) agerial processes (e.g., operations) EMS throughout the whole
and obtained environmental organization
certification
4. Reduction of energy, water use –None –Energy and emission reduction –‘reduction at the source’ practices
and emission practices in few operations embedded in every operation
5. Improving health and safety –None –Health and safety improvement –Health and safety improvement
(e.g., obtaining OHSAS 18001) practices in few operations practices in the full-range of firm’s
operations
6. Improving corporate responsi- –None –Some effort is put in the develop- –Established code of conduct/ethics
bility through social campaigns ment of a firm code of conducts/ethics
(e.g., codes of conduct, corporate
social activities)
(continued)
Table 5 (continued)
Specific dimensions for SSCM Evaluation guideline
adoption evaluation 1 (Low) 2 (Medium) 3 (High)
(b) Sustainable supply management SSM (supplier assessment and collaboration)
(1a) Greener part and material –A firm hardly requires or –A firm officially requires its –A firm demands its suppliers to
provide (e.g., harm-free or more considers those factors when suppliers to improve their undertake environmental and social
recyclable products) selecting or evaluating suppliers performance in those elements practices very seriously. Also, the
(1b) A firm-wide environmental portion of environmental and social
management system or criteria in a firm’s procurement
certification process is very substantial
(1c) A firm effort to improve
health and safety in operations
and behave ethically
(2a) Diagnosis and improvement –A firm does not provide any –A firm works with suppliers to –A firm has clear procedure and
of the environmental and social managerial or technical implement such practices, but there is extensively works with a substantial
profile of supplier operations assistance, to its suppliers or a lack of structured procedures and number of suppliers for improving
(2b) Environmental and social even work with them to the collaboration is limited to a small environmental and social
certifications with suppliers implement such practices portion of suppliers performance
(2c) Collaborative greener
product development
123
Table 6 Degree of Innovativeness
124
Specific dimensions for innova- Evaluation guideline

tiveness evaluation 1 (Low) 2 (Medium) 3 (High)
(a) Future orientation FO
1. Dominant paradigm –A firm believes that the future –A firm believes that the future –A firm believes that the future can be
can be known by means of can be known by means of shaped by means of interaction with the
expertise projections and calculations business surrounding environment
2. Perspective –Exploring change –Reacting to change –Understanding and anticipating/shaping
change
3. Foresight process –Collect and compare the opinions –Use quantitative models to –Open and continuous dialogue to lever-
of experts estimate the future (e.g., S- age sense-making and sense-giving
curve) processes
4. Outsiders –Outsiders (experts) are responsi- –Some of the foresight activi- –Strong collaboration with all relevant
ble for both contents and out- ties are outsourced to outsiders stakeholders (in and out-side)
comes of the foresight process which generate foresight
knowledge
5. Output activities –Scarce investments in building –Trend-databases, matrices, –Scenarios, innovation ideas, wild card,
roadmaps, scenarios and Delphi monitoring systems action plans
(b) Learning orientation LO (commitment to learning, shared-vision and memory)
(1a) Perceived importance of the –A firm perceives continuous –Limited consideration of con- –A firm perceives learning as a key
organization’s ability to learn learning as an expense tinuous learning processes investment (not an expense) to guarantee
(1b) The sense associated to organizational survival and competitive
continuous training and learning advantage
by organizational constituents
(2a) Degree of commonality of –A firm misses efficient and –There is communality of pur- –Organizational constituents across levels,
purposes effective mechanisms to share and pose and intent in a firm functions and divisions are committed to
(2b) Degree of agreement on the consolidate its vision throughout the firm’s vision and have a clear under-
organizational vision the organization stand of how their work fits into the value
chain of the firm
(2c) Degree of employees com-
mitment to organizational goals

(continued)
Table 6 (continued)
Specific dimensions for innova- Evaluation guideline
tiveness evaluation 1 (Low) 2 (Medium) 3 (High)
(3a) Degree of organizational –A firm never analyzes unsuc- –Some mechanisms for sharing –A firm always analyzes unsuccessful
conversation cessful endeavors and its members and reexamining information endeavors, has specific mechanisms for
(3b) Degree of organizational do not stress the distribution and are developed which allow sharing lessons learned and maintains
transparency on unsuccessful preservation of knowledge accumulating knowledge organizational conversation to keep alive
endeavors such lessons from history
(3c) Degree to which lessons
learned are shared throughout the
whole organization
125
affiliated firms (Halila 2007). An interesting research avenue, thus, would be to

study the relationship between business group affiliation, innovativeness and
sustainability.
Finally, concerning generalizability, our findings and considerations are based
on case research with only Italian firms operating in manufacturing sectors. The role
and effectiveness of innovativeness and its underlying mechanisms, however, might
vary from country to country since cultural settings matter; a capability for antic-
ipation, for instance, is not equally important in all cultures (Kirkman et al. 2006).
Thus, future research should study if and how cultural differences affect the role of
innovativeness for sustainability.
6 Conclusions
This research was aimed at deepening the understanding of how and through which
mechanisms innovativeness assists a firm in turning stakeholders’ pressure into
sustainability strategy, and then strategy into successful SSCM adoption. An
assessment framework was built and deployed in a continuous process of theory
building and data collection through case studies. A set of proposition and a con-
ceptual model were finally developed that shed light on the relationship between
innovativeness and sustainability. Findings show that, as innovativeness increases,
firms are more capable at (i) anticipation or capturing and leveraging weak signals
from within and outside the organization to anticipate/shape external pressure, and
(ii) legitimization or sharing and re-examining information over the deployment of
sustainability objectives and plans so to overcome the inertia. Anticipation is
enabled by tools and routines such as ‘Innovation mall’, ‘innovation community’,
‘idea competitions’, ‘reimbursements’ and ‘open meetings’, which allow to create
thinking chambers with primary and societal stakeholders as well as leverage
employees’ values and capabilities. Legitimization is enabled by tools and routines
such as ‘formal meetings’, ‘playful activities’, ‘elaborate posts’, ‘collaborative
scenario analysis’ and ‘external knowledge management tools’, which foster com-
mitment within and outside the firm and enact better horizontal/vertical coordination.
Overall, the outcomes of this study complement prior literature suggest future
research avenues and provide guidance to firms that struggle with how to manage
pressure and deliver new sustainability standards in their supply chain.
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Sustainable Manufacturing: The Lean
and Green Business Model
Andrea Brasco Pampanelli, Pauline Found

and Andréa Moura Bernardes
Abstract Over the past few years there has been an emergent trend towards
integrating a lean and green approach with a number of papers and books written, but
most of these take an outside-in approach describing case studies from industry. This
paper differs in that it takes an inside-out approach; describing a Lean and Green
Business Model (L&GBM) developed within a major global engineering company.
It describes the five key principles of a Lean and Green Business Model, (i) a stable
value stream, (ii) identification of environmental impacts, (iii) measurement the
environmental value streams, (iv) improvement of the environmental value streams
and (v) continuous improvement. It further explains how the model applies a Kaizen
approach for improving mass and energy flows of manufacturing environment that
already possesses a basic deployment level in applying lean. Some of the key
findings identified by the researchers highlight that (i) L&GBM has a different
purpose than traditional Lean or Environmental Thinking, (ii) L&GBM covers the
three dimensions of sustainability, (iii) L&GBM has a Lean to Green approach and
(iv) L&GBM is an alternative approach to integrate environmental concerns into
operations management which enhances workplace engagement in reducing the
environmental impact of the manufacturing processes by leveraging the lean
attributes of involvement and empowerment to the environmental functions within
the organization that traditionally have focused on compliance.
A.B. Pampanelli
GKN Driveline Americas, Rua Joaquim Silveira 557,
91060-320 Porto Alegre, Brazil
P. Found (&)
Buckingham Business School, University of Buckingham,
Buckingham MK18 1EG, UK
A.M. Bernardes
UFRGS, PPGEM Doctoral Programme, Av. Bento Gonçalves,
9500, Setor 4, Campus do Vale, 91501-970 Porto Alegre, Brazil

132 A.B. Pampanelli et al.
Keywords Lean Sustainability Lean and green Kaizen
1 Introduction and Purpose
Sustainability has become a legacy for the 21st century. It embodies the promise of
societal evolution towards a more equitable and richer world in which the natural
environment is preserved for generations to come. The quest for economic growth
and social equity has become a major goal for most of the past 150 years. By adding
concern for the carrying capacity of natural systems, sustainability ties together the
current main challenges facing humanity.
Although the issues embodying sustainability are more than a century old, the
concept of sustainable development itself was first described in the late 80s, fol-
lowing The Brundtland Report, a report by the World Commission on Environment
and Development (WCED 1987) that describes the growing global awareness of the
enormous environmental problems facing the planet, and proposes a shift towards
global environmental action. The concern about sustainability encouraged society
to support the development of a significant number of corporate practices, many
applied to manufacturing business, such as Industrial Ecology, Industrial Symbi-
osis, Pollution Prevention, Cleaner Production, etc. with the ultimate goal of the
supporting the sustainability dimensions of (1) profit, (2) people and (3) planet or
the triple bottom line (Elkington 1997). Although all these studies and practices
have contributed to create a new world paradigm, very few were able to contribute
fully to all dimensions of sustainability (Lozano 2012). The term ‘Green’ is used in
this paper and for the model proposed here to cover all concerns for the environ-
mental impact of manufacturing and, in particular, to address the planet dimension
of sustainability.
…manufacturing is the constant game of doing more with less… therefore
manufacturing managers are constantly looking for new approaches to increase
efficiency (Hopp and Spearman 2008). With the purpose of promoting a continuous
improvement culture within the business, the expenditure of resources for any goal,
other than the creation of value for the end customer, is considered to be wasteful.
Lean thinking is one of these strategies that are explored by manufacturing to
increase performance, contributing to the profit dimension, by developing and
respecting people. The logic of lean thinking, with the emphasis on eliminating the
seven classic wastes (Ohno 1988) can be redesigned and integrated to include an
environmental, or green, dimension of sustainability, addressing all three dimen-
sions of profit, planet and people.
…a gram of prevention is better than a kilogram of cure… therefore using less
energy, material, generating less waste is prevention, and so good for the envi-
ronment (Baas 2007). Minimizing waste produced in manufacturing, reducing the
energy use and using the materials and resources in a more efficient way can lead to
financial cost savings and a reduction of environmental impacts. Therefore,
Sustainable Manufacturing … 133
integrating both concepts, lean thinking and sustainability, offers the foundation for
a new business logic, where the pillars of sustainability, social, economic and
environmental, can be understood by manufacturing and therefore supports busi-
ness goals, requirements and needs.
The main objective of this paper is to propose a Lean and Green Business Model
(L&GBM) where the environmental aspect of sustainability is added to the pure
lean thinking concept in order to create a way of thinking that contributes to, and
balances, the three sustainability dimensions of people, profit and planet (Elkington
1997). This model takes the Kaizen (continuous improvement) approach for
improving mass and energy flows in a manufacturing environment that already
possesses a deployment level in applying lean. Figure 1 presents the main role of
the study.
This paper is based on action research developed from 2009 to 2013 by a team of
lean and environmental experts from Brazil and UK. As an overall objective, it aims
to propose a new and integrated way of thinking that:
• Integrates the pure ‘Lean Thinking’ concepts with an environmental, or ‘Green
Thinking’ dimension;
• Contributes to, and balances, the three sustainability dimensions, or triple bot-
tom-line of people (social sustainability) profit (economic sustainability) and
planet (environmental sustainability);
• Uses the Kaizen approach for managing and improving environmental flows of
mass and energy in manufacturing environment.
Green
Dimension
Lean +
Green
Business
Model
Lean
Thinking
Fig. 1 The main objective of the study

To contextualize the subject and support the problem definition, this paper will
be answering the following research questions:
• Can lean manufacturing practices be adapted and used as a strategy to achieve
business environmental sustainability?
• What different frameworks and corporate strategies are needed to support the
three sustainability dimensions?
In order to create the basis for the L&GBM, this paper explores some of the
fundamental building blocks of lean thinking with sustainability and green con-
cepts. It proposes the model structure and dynamics. The paper also reports the
structure of the new model, considering purpose, principles and ways of working,
discussing why it is different from pure green and pure lean thinking.
Action research or participatory action research is a reflective process of pro-
gressive problem solving led by individuals working with others in teams, or as part
of a community of practice, to improve the way they address issues and solve
problems. Action research involves the process of actively participating in an
organization change situation whilst conducting research. Action research can also
be undertaken by larger organizations or institutions, assisted or guided by pro-
fessional researchers, with the aim of improving their strategies, practices, and
knowledge of the environments within which they practice. As designers and
stakeholders, researchers work with others to propose a new course of action to help
their community improve its work practices. According to Gill (2009) an action
research type of study is developed in seven steps: (1) exploratory phase, (2)
understanding the problem, (3) defining the hypothesis, (4) project scope, (5) data
collection and (6) analysis of results. Figure 2 presents the basic framework for the
research structure.
The analysis of the key findings and improvement opportunities related to the
application of the L&GBM were developed in five different moments. Each of these
moments was called an improvement cycle. The objectives of developing these
improvement cycles are:
• Analysis of kaizen results in terms of (1) reduction of environmental impact, (2)
increase the productivity in the use of resources;
Cell Kaizen Literature Analysis of Selecting the Application

Pilot Model Review Pilot Testing Sample of the
Testing and L&GBM
Research Literature
problem
3. Defining Hypothesis
4. Project Scope
5. Data Collection
1. Exploratory Phase
2. Understanding the
6. Analysis of Results
Questions
Fig. 2 Research structure applied for the development of the L&GBM. Source Developed by the
authors
• Analysis of action plan results in terms of cost reduction;

• Confirm model prerequisites;
• Identify other key findings;
• Identify model improvement opportunities.
In this study the L&GBM model was developed, tested and improved through a
series of iterative testing cycles and the analysis of the results of each cycle. Two
methods were applied for developing these analyses: (1) Brainstorm sessions with
participants and specialists and (2) A3 analysis. Brainstorming is a group creativity
technique by which a group tries to find a solution to a specific problem by
gathering a list of ideas spontaneously contributed to by its members. Brain-
storming was developed and coined by Osborn (1963) through the book Applied
Imagination. A3 is a structured problem-solving approach developed by Toyota for
training of engineers, supervisors and managers. The term A3 derives from the
paper size used for the report, which is the metric equivalent to 11 × 17 paper.
Toyota actually uses several styles of A3 reports: for solving problems, for
reporting project status, and for proposing policy changes. The A3 process helps
people engage in collaborative, in-depth problem solving. It drives problem-solvers
to addressing the root causes of problems, which surface in day-to-day work rou-
tines (Sobek II and Smalley 2008).
2 Problem Definition
In order to contextualize the subject and support the problem definition, this paper
discusses the fundamental building blocks of the research, such as the (2.1) the
fundamental aspects of lean thinking, (2.2) the basis for green thinking and (2.3)
the integration of lean and green to develop a model for sustainable manufacturing.
This paper forwards the following propositions:
• The application of pure lean promotes environmental improvement even though
there is no direct intention to reduce environmental impact.
• There are several examples describing the synergy between lean and green
practices but none, so far, have proposed a different way of thinking.
• Most frameworks and corporate strategies do not fully contribute to the core
sustainability dimensions.
• Pure lean thinking contributes to two sustainability dimensions—(1) profit and
(2) people.
• A new way of thinking can be created by integrating one further dimension—(3)
the planet to pure lean thinking.
2.1 The Fundamental Aspects of Lean Thinking
Manufacturing is the constant game of doing more with less (Hopp and Spearman
2008). Therefore, lean thinking is one of the improvement strategies that have
completely changed the way manufacturing has developed over the past decades.
Gordon (2001) states that for decades, lean manufacturing has been considered the
best way to run a manufacturing company.
According to Bicheno (2000) the general purpose of lean thinking can be
described in three main dimensions (1) Quality, (2) Delivery and (3) Cost. It means
that, producing exactly what the customer wants, exactly when (with no delay) at
fair price and with minimum waste is the ultimate goal of a lean enterprise.
Therefore, lean thinking focuses on the optimization of production resources ori-
ented by the customer—time, people, machine, space, etc., and consequently
reduces wastes. Thus, Lean Thinking contributes to the economic, or profit,
dimension of sustainability. In general terms, lean thinking is defined and described
by five key principles (Womack and Jones 1996):
• Specific value: define value precisely from the perspective of the end customer
in terms of the specific product with specific capabilities offered at a specific
time;
• Identify value streams: identify the entire value stream for each product or
product family and eliminate waste;
• Make value flow: make the remaining value creating steps flow;
• Let the customer pull value: design and provide what the customer wants only
when the customer wants it;
• Pursue perfection: strive for perfection by continually removing successive
layers of waste as they are uncovered.
Resource productivity and closed loops provide better services, for longer
periods, with less material, cost and hassle. The logic of lean thinking, with the
emphasis on eliminating the classic seven wastes (Ohno 1988), makes a customer-
defined value flow continuously with the aim of producing less waste. Together
these practices offer the foundation for a powerful new business logic: Instead of
simply selling the customer a product, it is perceived appropriate, to derive what is
desired, considering the quantity, rate and timeliness. Based on the analysis of
customer value, lean presents a set of tools and techniques for continuously
improving processes and eliminating wastes (Rother and Shook 2003).
Due to the relentless drive to reduce all forms of waste, including defects, over-
processing and unnecessary transportation lean contributes to environmental, or
green thinking, inadvertently and this paper supports the proposition that:
• The application of pure lean promotes environmental improvement even though
there is no direct intention to reduce environmental impact.
Table 1 Two major Kaizen objectives

Objectives Description
Develop a problem With a focus on analysis and problem solving by applying
solving culture scientific and structured thinking. Lean philosophy presents a
variety of tools and techniques with the ultimate goal of improving
processes and eliminating wastes. Developing a problem solving
culture is key for deploying the lean thinking (Berger 1997)
People involvement Kaizen relies on ongoing effort and engagement of people - it is
based on the constant effort for involving and integrates people,
from the shop-floor workers to the senior executives. For lean
thinking the key for success is based on the capacity for training
and involving everyone. Based on this idea, human-systems are
considered more successful than software systems for sustaining
the results. This creates a learning environment, with long term
maintenance of results and openness for creativity and
improvements (Berger 1997)
According to Womack and Jones (1996) one of the key building blocks of lean
thinking is Kaizen—a process-oriented philosophy that focuses on incremental
improvements and standardization of the improved system as the building block for
further improvement. Table 1 describes the two major objectives of the Kaizen
(Berger 1997):
Whilst Bicheno (2000) considers that lean is described in the QCD dimensions,
Hines et al. (2004) argues that pure lean thinking not only focuses in one dimension
of sustainability, (1) profit, but also supports another , the (2) people dimension.
Considering scientific methods and the involvement of people as the basis for its
tools and techniques, lean presents a robust methodology for incorporating the
social, people dimension in a system thinking approach. In addition, ‘Respect for
People’ is a key concept of TPS (Sugimori et al. 1977) suggesting that the well
being of employees and their involvement in the process improvements is also
central to lean. The soft issues of lean, which links the importance of people to the
ability to sustain long-term competitive advantages, has been demonstrated in a
number of studies (Beale and Found 2006; Carleysmith et al. 2009; Found et al.
2006; Lander and Liker 2007; Liker 2004; Liker and Meier 2007; Liker and Hoseus
2008; Liker and Convis 2012; Mann 2005). Therefore, according to the authors,
pure lean thinking contributes to two dimensions of the sustainability concept, such
as:
Full contribution to the profit dimension due to its core focus in eliminating the
seven classic wastes and reducing costs and;
Partial contribution to the people dimension, due to its focus on the Kaizen
continuous improvement philosophy for solving problems and involving people,
therefore this paper proposes that:
• Pure Lean Thinking contributes to two sustainability dimensions—(1) profit and
(2) people.
2.2 Basis for Green Thinking
Green Thinking is rooted in sustainability, which is a systemic concept relating to

the continuity of economic, social and environmental aspects of human society. It is
however part of a wider and evolving field of corporate social and environmental
responsibility, which in modern times has its origins in Rachel Carson’s Silent
Spring (Carson 1965) and the Club of Rome’s ‘Limits to Growth’ analysis
(Meadows et al. 1972). The term was first used in 1987 by the Brundtland Com-
mission, which coined what has become the most often-quoted definition of sus-
tainable development:
Sustainable development is development that meets the needs of the present
without compromising the ability of future generations to meet their own needs
(WCED 1987).
The field of sustainable development can be conceptually broken into three
constituent parts: environmental sustainability, economic sustainability and socio-
political sustainability. Figure 3 presents a representative scheme of sustainable
development vectors.
Sustainable development ties together concern for the carrying capacity of
natural systems with the social challenges facing humanity (Zokaei et al. 2010).
Therefore it contains two key concepts: (1) the concept of needs, in particular the
essential needs of the world’s poor, to whom overriding priority should be given;
(2) the idea of limitations imposed by the state of technology and social organi-
zation on the environment’s ability to meet present and future needs. All these
definitions of sustainable development propose understanding the world as a system
—a system that connects space and time. Therefore, the concept of sustainable
development is rooted in systems thinking (Lovelock 1990).
Sustainability is a big umbrella term addressing a host of issues (Hall 2010) not
all of which are limited to environmental, or ‘Green’ issues. Many writers
emphasize only a few aspects of sustaining the planet in a condition to support life,
but the scope of concerns is so broad that it’s difficult—or impossible—to think
Fig. 3 Sustainable
development vectors. Source
Adapted from Elkington
(1997)
about them all at the same time. Consequently, an abundance of separate initiatives
attack some aspect of sustainability; local recycling, alternative energy ventures,
permaculture, green building codes, etc.
2.2.1 Dimensions of Green Thinking
Over the past decades, many different corporate strategies were created proposing
the co-existence of industry, the business, the people, the natural environment and
their interactions in systems thinking approach. Zokaei et al. (2010) provides an
overview of some of these key management strategies proposed to pursue sus-
tainable development, such as Industrial Ecology (Nielsen 2007; Tibbs 1992),
Industrial Symbiosis (Boons et al. 2011), Eco-efficiency (Korhone 2007), Triple
Bottom Line (Elkington 1997; Lenzen 2008), Natural Capitalism (Robèrt 2002a;
Hawken et al. 1999), The Natural Step (Robèrt 2002b).
In fact, the difficulty to make the concept of sustainability and its application
clear is such that many researchers have explored it deeper. Glavic and Lukman
(2007) present a study that summarizes the definition of sustainability and its terms.
The Stern Review (Stern 2007) explored the economics of climate change. Lozano
(2008) identifies the need for many to fully understand the concept, presenting a
study that not only expand the concept of sustainability but also clarifies its
dimensions. In a second study Lozano (2012) presents research that discusses how
company’s voluntary sustainability initiatives contribute to the sustainability
dimensions. Table 2, adapted from Lozano’s study, presents a list of these sus-
tainability/corporate strategies and how they contribute to the sustainability three
core dimensions of (1) Economic (Profit) (2) Environment (Planet) and (3) Social
(People). With different structure and priorities, all these strategies describe con-
ditions for sustainable systems and propose strategies in order to make sustainable
development concept viable.
The conclusion on analyzing Table 2 is that, although all these concepts have
been around for much of the last 20 years, most of the sustainability/corporate
strategies have focused mainly on environmental conservation and compliance. The
majority, as they are proposed, are not integrated, or part of, the fundamental
building blocks of the manufacturing strategies that are pro-active in all dimensions
of sustainability.
Therefore, following this idea it is possible to conclude that:
• Lack of existence sustainability/corporate strategies that are able to contribute
to the core three dimensions of sustainability (people, profit and planet) and that
are fully integrated to the main aspects of the business.
Table 2 Examples of sustainability/corporate strategies and its contribution to the sustainability

dimensions
Sustainability/corporate Sustainability dimensions
strategies Profit/economic Planet/ People/social
environment
Sustainable livelihoods Full Full Full
contribution contribution contribution
Triple bottom line Full Full Full
The natural step Partial Full Partial
Environmental management None Full None
system contribution
Environmental and social Full Full Full
accounting contribution contribution contribution
Life cycle analysis None Full None
contribution
Cleaner production Full Full None
contribution contribution
Design for environment None Full None
contribution
Eco-efficiency Full Full None
Industrial ecology Full Full None
Factor X Partial Full None
Green chemistry None Full None
contribution
Corporate social responsibility None Partial Full
Sustainable reporting Full Partial Partial
Corporate citizenship None None Full
contribution
Source Lozano (2012)
2.3 Integrating Lean and Green Thinking
Lean sees waste as anything that is non-value added to the customer (Bicheno
2000). In the other hand, Green sees waste as extraction and consequential disposal
of resources at rates, or in forms, beyond that which nature can absorb (Lozano
2008). An environmental waste is an unnecessary, or excessive, use of resources or
substances released to the air, water, or land that could harm human health or the
environment (EPA 2006). Environmental waste can occur when the company uses
resources to provide products or services to customers and/or when customers use

and dispose of products (EPA 2006).
There has been debate in the literature whether improving environmental per-
formance would undermine the economic sustainability of an organization and that
many businesses could not afford the cost of meeting their environmental respon-
sibilities (Florida 1996; Found 2009). However, there are many examples where
improving environmental performance has improved the company’s profit
(Maxwell et al. 1993; Porter and van der Linde 1995; King and Lenox 2001; Cobert
and Klassen 2006; Yang et al. 2011).
The US Environmental Protection Agency (EPA 2006) developed this theme
and has reported some key findings: (1) Lean produces an operational and cultural
environment that is highly conductive to waste minimization and pollution pre-
vention; (2) Lean can be leveraged to produce even more environmental
improvement; (3) Some regulatory friction can be encountered when applying lean
to environmentally-sensitive processes; (4) Environmental agencies have a window
of opportunity—while companies are embarking on lean initiatives and investments
—to collaborate with lean promoters to further improve the environmental benefits
associated with lean.
Two recent studies discuss the synergies between pure lean thinking and envi-
ronmental improvement practices. In the first, Biggs (2009) focused on the inte-
gration of lean thinking and environmental improvement. Some of the most
important findings she reported were:
• Traditional approaches to lean is capable of providing environmental benefits
even though there is no direct intention to reduce environmental impact;
• The lean methodology can be used to make environmental improvements as
well as productivity improvements;
• Kaizen/Continuous Improvement (CI) Kaizen blitz and workforce involvement
and suggestions are popularly suggested methods of gaining environmental
benefit from a Lean implementation;
• It is the culture of waste elimination and experimentation, problem solving and
improvement of best practice encouraged by lean that may help companies
make environmental improvements;
• A lean approach can help make the business case for environmental impact
reduction.
In a second study, Dues et al. (2012) discuss how lean practices are catalysts for
greening operations. The authors discuss that the lean and green connection goes
beyond the idea of waste reduction, overlapping in paradigms such as (1) tools and
practices, (2) supply chain relationship, (3) lead time reduction, (4) focus on people
and organization (5) use of techniques for waste reduction. The research findings
indicate that green comes as a natural extension to lean as most of lean practices are
green without the explicit intention to be green and concludes that lean manufac-
turers are greener than non-lean companies.
Following these two studies is possible to conclude that:

• Lean thinking serves as a catalyst to green thinking.
• Lean can be the first stage for a company to become green.
In fact, over the past two decades the lean community has focused on operational
improvements to build a continuous improvement. In the lean model, work is based
on the principles of continuous improvement, or Kaizen. Workers are responsible
for identifying problems found on the production line and, in contrast to mass
production, are able to stop the line for such problems. Floor workers are arranged
in teams, with a team leader performing a coordinating role in addition to assembly
tasks (Rothenberg 2001). A benefit of pollution prevention activities is that they are
often value added for the firm since they reduce costs through material use
reduction or through the avoidance of waste management costs (Florida 1996;
Found 2009).
The next challenge for the lean community is to consciously account for the
environmental issues. Gordon (2001) discusses some ways for integrating lean and
green practices with a focus on cost reduction practices. The fundamental building
block of lean thinking is continuous improvement, Kaizen, with its focus on
problem solving and employee involvement fits with the notion of creating a
greener industry. Therefore, the pursuit of continuous improvement, i.e. Kaizen,
creates substantial opportunities for pollution prevention and waste and emissions
reduction. Figure 4 illustrates the positioning of Lean and Green Manufacturing.
Fig. 4 Level of integration of lean and green with manufacturing processes. Source Developed by
the authors
2.3.1 Integrating Lean and Green in Practice
Although the idea of lean thinking had not been fully explored by many in the
environmental community, a number of articles were published where some of the
lean thinking fundamentals, such as the need for people involvement (Venselaar
1995; Boyle 1999; Stone 2000; Remmen and Lorentzen 2000; Perron et al. 2006)
the idea of learning by doing (Dieleman and Huisingh 2006) continuous improve-
ment (Fresner 1998) and application of problem solving tools (Calia et al. 2009)
were identified as necessary for implementing environmental policies by environ-
mental researchers indicating a connection between lean and green practices.
To the environmental researchers that recognized the existence of lean thinking,
there have been several initiatives discussing positive and negatives aspects of
using lean to support the other dimension of sustainability, the environment, using
different aspects and tools of lean for solving environmental problems and therefore
contributing to a more sustainable business. For example, Chiarini (2014) identified
that whilst Value Stream Mapping, TPM and other lean tools such as 5S and
cellular manufacturing were positively associated with reducing environmental
impact, there were no significant environmental savings as a result of Single Minute
Exchange of Die (SMED). This raised an interesting debate on the typology of lean
tools for different environmental impacts; similar to the Hines and Rich (1997)
argument that there is a typology of Value Stream Mapping tools to identify
production wastes.
Vais et al. (2006) in the study ‘Lean and Green at a Romanian secondary tissue
paper and board mill’, present the development of technical environmental projects
for accomplishing legal requirements and the use of lean tools, such as 5S’s, Kaizen
and autonomous maintenance for developing punctual improvements, optimizing
the use of natural resources and production output.
EPA published The Lean and Environmental Toolkit in December 2006 (EPA
2006) to demonstrate that traditional lean tools can be applied to environmental
wastes. This manual establishes guidelines for using existing lean tools for
improving material flow to reduce the main flows that support the production
process and that can affect the environment (such energy, chemicals, wastes, etc.).
Following these studies is possible to conclude that:
• There are intrinsic linkages between lean and green—not least due to the
relentless focus of lean on waste elimination.
• Lean tools and fundamentals are successful when used for promoting envi-
ronmental improvements.
According to Gustashaw and Hall (2008) an organization in which lean is already
at the heart of its business system, and Kaizen the basis for continuous improvement
culture, could adopt the same strategy for improving production energy and material
flows. Deploying a lean strategy of improving the way that products and materials are
sourced, manufactured, marketed and disposed of at the end of its life-cycle means
that lean thinking can be used for creating a sustainable manufacturing. The authors
state that by applying lean logic, for thermodynamic environmental improvement
of mass-energy balances, the holistic improvement within a factory system boundary

can benefit an existing business model greatly. Although this idea was stated by the
Gustashaw and Hall (2008), no examples where found where pure lean thinking was
expanded to create a new and integrated way of thinking. The examples found focus
only on using and applying lean tools for promoting environmental improvement.
This idea of the existence of a new way of thinking, connecting the business
thinking (such as lean) and the green dimension can also be sustained by analysing
some pure green practices. Many researchers studied and proposed integrated
approaches. Some of them explore the context of green manufacturing whilst others
explore some limitation and success factors of cleaner production, pollution pre-
vention initiatives expressing the need for a strategic approach, leadership support
and integration into the existing business models. Table 3 presents a list of examples.
Building upon the existing work, some of the conclusions are:
• Although lean and green integration was proven by many practical examples
(Vais et al. 2006; EPA 2006) none of these have explored the idea of creating a
new way of thinking.
2.3.2 Dimensions of Lean and Green
Three components make up the ‘triple bottom line’ of corporate sustainability, a

concept coined by Elkington (1998) which can be defined as meeting the needs of a
firm’s direct and indirect stakeholders (such as shareholders, employees, clients,
pressure groups, communities etc.) without compromising its ability to meet the
needs of future stakeholders as well (Dyllick and Hockerts 2002).
In 1999 Hawken, Lovins and Lovins discussed that there is a great potential of
integrating lean thinking with its focus on QCD measures with environmental
sustainability. Until recently lean manufacturing and the application of lean
thinking has concentrated on the economic and some of the social aspects of
sustainability. However, the essence of lean to produce more with less implies that
lean thinking organizations use less resource, in the form of raw materials and
energy. Therefore, lean thinking is green once it proposes the reduction of mate-
rials, wastes and energy that are required by the production; lean is creating a new
manufacturing paradigm, which, inadvertently, includes an environmental sus-
tainability element. Thus a Lean and Green Business Model makes this explicit and
includes a deliberate, intended focus on reducing environmental impact that is
measurable and forms part of a continuous improvement strategy.
According to Hall (2010) although lean thinking already explores some aspects
of sustainability, people and profit, sustainability goes beyond this, including also
the idea of environmental impact—mass and energy flows of everything that enters
and leaves the system. Therefore, extending lean thinking to an integrated lean and
green approach addresses the three core sustainability dimensions (people, profit
and planet). A sustainable manufacturing business has to focus on eliminating
wastes (profit) implementing Kaizen (people) and to explain the movement of mass
Table 3 Articles that explore the idea of integrated approaches to connecting business thinking
(such as lean) and the green dimension
Key Title Authors Year
Articles that propose the need of Cleaner production and Cagno 2005
pollution prevention integration profitability: analysis of 134 et al.
into existing systems industrial pollution prevention
(P2) project reports
Improving cleaner production by Zwetsloot 1995
integration into the management
of quality, environment and
working conditions
New models of pollution Atkinson 1994
prevention technical assistance
Articles that explore the idea of A study of the environmental Hui et al. 2001
integrated approaches to management system
manufacturing—sustainable/ implementation practices
green manufacturing Modeling manufacturing Baldwin 2005
evolution: thoughts on sustainable et al.
industrial development
Material flows and environmental Xue et al. 2007
impacts of manufacturing systems
via aggregated input–output
models
An integrated methodology for Santos da 2009
environmental impacts and costs Silva et al.
evaluation in industrial processes
A system model for green Deif 2011
manufacturing
Articles that explore some Comparative evaluation of van 1994
limitations and success factors of cleaner production working Berkel
cleaner production, pollution methods
prevention initiatives expressing The essential elements for Zwetsloot 1996
the need for a strategic approach, successful cleaner production et al.
leadership support and programmes
integration into the existing
To make zero emissions Baas 2007
business models
technologies and strategies
become a reality, the lessons
learned of cleaner production
dissemination have to be known
Cleaner production: beyond Baas 1995
projects
Limitations of cleaner production Stone 2006
programmes as organizational
change agents I. Achieving
commitment and on-going
improvement
(continued)
Table 3 (continued)
Key Title Authors Year
Limitations of cleaner production Stone 2006
programmes as organizational
change agents. II. Leadership,
support, communication,
involvement and programme
design
Strategic sustainable development Robèrt 2002
—selection, design and synergies et al.
of applied tools
Scenarios in selected tools for Höjer 2008
environmental systems analysis et al.
and energy within and through boundaries (planet) even if these boundaries are
only a production cell, the entire factory or the whole supply chain.
• A new way of thinking can be created by integrating pure lean thinking (1)—
profit and (2) people with the dimension of green thinking (3) planet
Therefore, based on the discussion of the five propositions stated earlier, this
paper aims to propose a new and integrated way of thinking that (1) contributes
and balances the three sustainability dimensions (people, profit and planet) and that
(2) integrates to the pure lean thinking one new dimension, the environmental
sustainability, the green thinking, developing a model that uses the Kaizen approach
for dealing and improving environmental flows of mass and energy in manufac-
turing environment that already possesses a deployment level in applying lean.
2.4 Beyond Sustainability
And what comes after sustainability? Compression thinking (Hall 2010) may answer
this question. With a top-level statement that establishes a sure survival of life and
promotes quality of life using processes that work to perfection with self-correcting,
self-learning systems, without the use of excess resources. With no wasted energy,
no toxic releases and always quality over quantity, compression thinking is based on
the fact that the society is near a turning point, the end of expansion. Population is
expanding on an earth with finite resources. Traditional thinking from the industrial
revolution and financial thinking need to be changed. So, the case for compression
is based on 4 main drivers (1) Finite Resources, (2) Precarious Environment,
(3) Overconsumption, (4) Pushback, as discussed by Hall (2010).
According to Hall (2010) lean thinking breaks a little from traditional thinking
since its practitioners are used to removing waste from processes, not always
represented by costs. But compression thinking has to step beyond this. Physical
Fig. 5 The three vectors of

sustainability viewed from
compression thinking. Source
Adapted from Hall (2011)
actions and their consequences must take priority over financial motivations.
Therefore, compression begs for a fundamentally new economic thinking, looking
beyond financial transactions to see the physical reality of what society and cor-
porations do. Also, compression is not pure environmental. Environmental con-
cerns are only one reason to make systemic changes. It calls for a different mind-set,
for an integrated approach to deal with the increasing complexity of today´s work.
Figure 5 shows how the three vectors presented by the sustainability concept are
viewed based on compression thinking.
Following this, compression thinking brings a new way to see environmental
issues. Differing from the sustainability concept, compression states that this should
be part of bigger system, integrated into the core business model. Although com-
pression has a much wider scope, it is understood that lean thinking is a way to get
to compression.
3 The Lean and Green Business Model
In order to understand the purpose, the principles and the ways of working of the
Lean and Green Business Model (L&GBM) and to explain why it is different than
pure lean and pure green, the methodology section of this paper is divided four
main blocks: The purpose of the model, (3.1); The principles of the model, (3.2);
The ways of working of the model, (3.3) and why lean and green is different from
pure lean or pure green thinking.
3.1 The Purpose of the Lean and Green Business Model

(L&GBM)
Although, according to Bicheno (2000) the general purpose of lean thinking can be
described in three main dimensions (1) Quality, (2) Delivery and (3) Cost, Lozano
(2008), reviews the concept of environmental sustainability, established by several
authors, and states that the green thinking can be quoted as the use of natural
resources without going beyond the carrying capacities of the system and the
production of pollutants without passing the biodegradation limits of the receiving
system. Therefore, the general purpose of environmental thinking can be described
in one dimension (Environment) with two main focuses: (1) Producing with the
maximum productivity in the use of natural resources and (2) with the minimum
environmental impact.
The idea of the L&GBM is using lean thinking to solve environmental problems,
adding one more dimension to the traditional lean thinking, the Environment. In
this context, the main objectives of the model are based on the fundamental
building blocks of environmental sustainable practices:
• Improving manufacturing processes resources productivity by optimizing its
supporting flows performance (materials and energy consumption and wastes
generation);
• Reduce manufacturing processes environmental impact, by reducing all envi-
ronmental wastes generated by production.
Following this, the L&GBM model can be defined as:
Producing exactly what the customer wants, exactly when (with no delay) at a
fair price and with minimum waste and environmental impact by delivering the
maximum productivity in the use of natural resources.
This means that lean and green thinking will be described in four dimensions,
(1) Quality, (2) Delivery, (3) Cost) (4) Environment, linked to the three core sus-
tainability dimension (1) Profit, (2) People and (3) Planet.
Figure 6 presents the position of L&GBM by locating it between pure lean and
pure environmental thinking and illustrates how it integrates the sustainability
vectors, in order drive towards compression. This begs fundamentally for a new
economic thinking and calls for a different mind-set, for an integrated approach
which deals with the increasing complexity of today’s work.
3.2 The Principles of the L&GBM
In general terms, environmental thinking models, such as Industrial Ecology

(Nielsen 2007; Tibbs 1992), Industrial Symbiosis (Boons et al. 2011), Eco-efficiency
(Korhone 2007), Triple Bottom Line (Elkington 1997; Lenzen 2008), Natural
Equity
COMPRESSION
THINKING
L&GBM
SUSTAINTABILITY
CONCEPT
Produtivity in
the use of Maximize
natural financial
resouces & savings &
Impact Reduce waste
reduction
People
Environmental Leadership
Awarenes (Top-Down) &
along the flow Kaizen
of value (Bottom-Up)
GREEN LEAN
THINKING L+G THINKING
Planet Profit
Fig. 6 Positioning the L&GBM
Capitalism (Robèrt 2002a; Hawken et al. 1999), The Natural Step (Robèrt 2002b)
can be generalized by four common key principles:
• Identify environmental aspects and impacts;
• Measure environmental impact and the use of natural resources;
• Identify alternatives to reduce environmental impact and improve resource
productivity;
• Continuous Improvement.
As stated previously, Womack and Jones (1996) offer five key principles for
defining and describing lean thinking:
• Specific value: define value precisely from the perspective of the end customer
in terms of the specific product with specific capabilities offered at a specific
time;
• Identify value streams: identify the entire value stream for each product or
product family and eliminate waste;
• Make value flow: make the remaining value creating steps flow;
• Let the customer pull value: design and provide what the customer wants only
when the customer wants it;
• Pursue perfection: strive for perfection by continually removing successive
layers of waste as they are uncovered.
To operationalize the lean thinking principles, the identification of value streams
is key, to make value flow at the pull of the customer. In lean enterprises, manu-
facturing processes are organized in levels of flow, where:
• The first level is the cell level, the lowest production level in a manufacturing
company organized by lean principals, composed by a finite number of oper-
ations/machines;
• The second level is the factory level, value stream level, composed by several
cells that are part of the same value stream;
• The third level is the extended value stream level, composed by several sites
(external supplier through to customer) that are part of the same value stream.
The leadership, methodology and execution patterns, designed for improving
value stream performance in an organization that applies lean thinking as a strategy
for increasing manufacturing performance, are used in the L&GBM. The difference
here is that, instead of focusing in the flow of product (that is the main goal of
improving manufacturing performance) the focus here is optimizing the use of the
value stream supporting flows performance (mass and energy flows). Following
this, the L&GBM can be described by five key principles:
• Identify a stable value stream (VS): Identify a stable value stream (level 1, 2 or
3). A stable value stream is a value stream that has improved and reduced the
waste along the main dimensions of lean thinking (1) Quality, (2) Delivery and
(3) Cost);
• Identify the environmental impact (E): Identify in the chosen value stream the
environmental aspects and impacts;
• Measure the environmental value streams (EVS): Measure the value stream
environmental impacts and the use of natural resources (the value stream sup-
porting mass and energy flows);
• Improve the environmental value streams (EVS): Identify alternatives to
(1) impact reduction and (2) resources productivity within the value stream;
• Continuous Improvement (CI): Set alternatives for improving the value stream
supporting mass and energy flows.
Considering what was presented, Fig. 7 presents the overall idea of the L&GBM
principles.
Fig. 7 The principles of the 5-step L&GBM. Source Developed by the authors
3.3 The Ways of Working of the L&GBM
The basic and most important idea of the L&GBM is that lean and green approa-
ches will be integrated fully as part of the continuous improvement process of a
manufacturing process, where the lean philosophy and ways of working were
already in place, as described in the session 3.2. Following this, the objects of study
of the L&GBM are the mass-energy flows of the manufacturing processes and the
expected output for model application is the achievement of improvements in these
thermodynamic flows (Materials, Chemicals, Water, Waste, Effluent, Energy)
contributing to improvement of the overall performance.
One fundamental building block of lean thinking is continuous improvement,
Kaizen, with its focus on problem solving and employee involvement, which fits
perfectly with the notion of creating a greener industry. The L&GBM will be using
the Kaizen approach for dealing and improving environmental flows of mass and
energy of a manufacturing a cell and the value stream with the difference that here
the focus is on optimizing the mass and energy flows.
3.4 Why the L&GBM Is Different Than Either Lean

or Green Thinking?
Following the description of the L&GBM developed in sessions 3.1, 3.2 and 3.3,
Table 4 highlights the fundamental differences of the L&GBM compared to pure
green and pure lean thinking in terms of purpose, principles and ways of working of
dealing of the sustainability vectors (People, Profit and Planet).
Considering what was presented in Table 4, L&GBM is different than pure
Green Thinking due to:
• L&GBM prioritizes the customer focus: For being L&GBM it is necessary to be
lean first; Therefore a prerequisite of deployment level in lean is key for Lean
and Green;
Table 4 Table comparing Lean and Green with pure lean and pure green thinking
Green Lean L&GBM
environmental lean thinking
sustainability thinking
General “Use of natural “Producing exactly “Producing exactly what
purpose resources without going what the customer the customer wants,
beyond the carrying wants, exactly when exactly when (with no
capacities and the (with no delay), at fair delay), at fair price and
production of pollutants price and minimum minimum waste and
without passing the waste” (Bicheno 2000) environmental impact
biodegradation limits of and the maximum
the receiving system” productivity in the use
(Lozano 2008) of natural resources”
Main 1. Identify 1. Specific value 1. Identify a stable value
principals environmental aspects 2. Identify value stream (level 1, 2 or 3);
and impacts streams 2. Identify in the flow of
2. Measure 3. Make value flow value the environmental
environmental impact 4. Let the customer pull aspects and impacts
and the use of natural value 3. Measure value stream
resources 5. Pursue perfection environmental impacts
3. Identify alternatives (Womack and Jones and the use of natural
to (1) impact reduction 1996) resources
and (2) resources 4. Identify alternatives
productivity to (1) impact reduction
4. Continuous and (2) resources
improvement productivity in value
streams
5. Pursue perfection—
continuous
Improvement
People 1. Environmental 1. Leadership (Top- 1. Leadership (Top-
awareness in all levels Down) Down)
of the organization 2. Kaizen (Bottom-Up) 2. Kaizen (Bottom-Up)
2. High level of People involvement and 3. Environmental
technical competence creation of solving awareness in along the
for people responsible problems culture flow of value
for environmental
impacts
Profit 1. Equity (economic/ 1. Maximize financial 1. Maximize financial
environmental) savings (revenue) savings (revenue)
2. Reduce waste 2. Reduce waste (for all
sources of wastes
streams)
3. Equity (economic/
environmental)
Planet 1. Productivity in the None 1. Productivity in the
use of natural resources use of natural resources
(mass and energy) (mass and energy)
2. Environmental 2. Environmental impact
impact reduction (3R’s) reduction (3R’s)
• L&GBM identifies and measures environmental aspects and impacts based on

value streams: Traditional green thinking does not focus on the manufacturing
ways of working to do this;
• L&GBM focuses on a top-down and bottom-up approach: for deploying envi-
ronmental continuous improvements;
• L&GBM prioritizes maximizing value and reducing costs: It has an environ-
mental approach, prioritizing financial savings and waste reduction as well.
Considering what was presented in Table 4, L&GBM is different to pure Lean
Thinking due to:
• L&GBM introduces into the traditional lean thinking a new dimension—the
environmental concern aspect: Traditional lean thinking focuses on three
dimensions: Quality, Delivery and Cost. L&GBM introduces the environmental
concern, requiring (i) minimization of the use of resources and (ii) reduction of
environmental impact (iii) the need of environmental awareness along the flow
of value;
• L&GBM focuses on other sources of savings: Traditional lean thinking con-
siders only reduction of the seven classic wastes. With the introduction of the
environmental variable concern along the flow of value, other sources of wastes
may be focused and reduced, maximizing the overall savings.
The overall idea of the L&GBM encompasses the same principles of the lean
thinking that are set in the house of lean, where the stability is the base, the Kaizen
is it main pillar with the ultimate goal of improving performance, that in the case is
based in three dimension, (1) Quality, (2) Delivery and (3) Cost. The difference here
is that one more dimension, (E) Environment will be added to existing model.
Figure 8 presents the idea.
Rich (2006) discusses lean improvement stages from chaos to control to com-
petitive advantage, setting the natural steps to be followed by a manufacturing
process implementing lean principles over a period of time. By concentrating first
on stabilizing processes, where basic discipline, safety and morale is addressed and
followed by improvements in quality, delivery performance and process flexibility,
costs are reduced naturally, creating opportunities for further cost reduction that are
realized in the later stages:
Process stability (Quality + Delivery + Flexibility) → Cost reduction
Perhaps, this logic does not take into consideration the other sources of cost that
are part of the manufacturing process, the environmental wastes (materials and
energy consumption and wastes generation) and that are not considered in the
original Rich’s model. Therefore, the L&GBM is built based on Rich’s model,
adding one extra variable to it:
Process stability (Quality + Delivery + Flexibility) + Environment → Cost
reduction
3+1 Dimensions
”Producing exactly what the
customer wants, exactly when
(with no delay), at fair price,
with minimum waste and
minimum environmental
impact and the maximum
productivity in the use of
natural resources”
Kaizen
Continuous Improvement
Stability
Deployment level in Lean
Fig. 8 The house of lean and L&GBM. Source Adapted from Rich (2006)
4 Results
The model was developed and implemented in a major, global engineering com-
pany that services the automotive and aerospace industries. Initially, the model was
tested in two pilot cells in the automotive production plant in Brazil. These are
termed Cell 1 and Cell 2 that represent two stages of the manufacturing process.
Table 5 presents the basic characteristics of the manufacturing operational cells
where the L&GBM was applied. The pilot Kaizen events were developed at the end
of 2008 and 2010 and followed the five-step model. The Kaizen events each
involved approximately 30 people, including all cell operators, leaders and man-
agers, and maintenance people as well as environmental and lean specialists. The
results of the Kaizen events are presented in Table 6. The main objectives of pilot
testing were (1) confirm the 5 steps proposed and structure for the L&GBM for a
cell before rolling it out for other several manufacturing cells of one manufacturing
business, (2) confirm the prerequisites and participants, (3) analyze potential sav-
ings in terms of environmental improvements and cost reduction after applying the
model, (4) identify model improvement opportunities, were all achieved. Therefore,
the L&GBM for a cell was considered a good strategy for (1) improving manu-
facturing processes resources productivity by optimizing its supporting flows per-
formance (materials and energy consumption and wastes generation) and for (2)
reducing manufacturing processes environmental impact, by reducing all environ-
mental wastes generated by production, the two main objectives of the L&GBM.
The action plans from both Kaizen workshops were not implemented totally
because some of the ideas proposed by the Kaizen teams were considered not to be
viable by technical experts following detailed technical analyses. However as
Table 5 Environmental and manufacturing characteristics of the pilot cells where the L&GBM
was applied, including the application and evaluation of prerequisites
Manufacturing characteristics Cell 1 Cell 2
Kaizen Date November 08 Jun 10
Nature of operations Steel machining Assembly of
manufactured parts
Main Cell Energy Energy
Mass and energy flows Water Waste grease
Chemicals/oils Hazardous wastes
Effluents Cleaning cloths
Metallic waste
Hazardous wastes
Actual state data: energy and materials Energy consumption: Energy consumption:
consumption and wastes generation 261 Mwh/month 11 Mwh/month
Water consumption : Waste grease: 0.2 ton/
1.4 m3/month month
Chemicals usage : Hazardous wastes:
0.6 m3 /month 3 m3/month
Metallic wastes : 55 Cleaning cloths usage:
ton/month 3120 units/month
Hazardous wastes:
60 m3/month
Prerequisities
Level of lean Deployment level Deployment level
+ +
Process stability <90 % <90 %
+ +
Application of employee involvement In place In place
tools + +
Leadership support High High
+ +
Environmental awareness In place In place
+ +
Use of resources High Medium
+ -
Total cost of mass and energy flows (US$/ 1,005,000 483,500
Year)
Major impact in the Cell environmental Metallic waste Grease
cost 68 % 75 %
Table 7 shows they were accepted substantially and generated significant benefits.
Considering that the automotive company where the project is being tested has
approximately 70 cells, if the model is implemented to the same extent in all cells,
the L&GBM will generate a total annual savings of US$1,600,000/year for the
company. Following the pilots, the L&GBM was then rolled out to other manu-
facturing cells. The rollout phase of the L&GBM was further developed in auto-
motive manufacturing operations in Brazil in 2011. The model applied for this
Table 6 Results of Kaizen event: identification of improvement opportunities for the cell mass
and energy flows
Cell impact Cell 1 Cell 2
Energy saving (%) 8 6
General Chemical products consumption 91 1
reduction (%) (oils) (grease in the product)
Water consumption reduction (%) 34 NA
Effluent generation reduction (%) 69 NA
Metallic waste generation reduction (%) 33 NA
Hazardous waste generation reduction (%) 67 45
Cleaning cloths NA 50
Usage reduction (%)
Grease waste generation reduction (%) NA 100a
Average resources reduction (%) 50 40
NA not applicable
a
100 % waste elimination due to 100 % recycling of grease
Table 7 Implementation results

Cell 1 Cell 2
% action plan implemented 94 % 81 %
Examples of improvement To reduce energy usage: To reduce energy usage: All
opportunity ideas that were Motion sensitive and low assembly cell lighting system
identified during the Kaizen energy lights were installed was substituted to 54 W
events that were in low usage areas system that consumes less
implemented To reduce metallic waste energy
generation: Forgings were To reduce grease waste
redesigned for reducing generation: (1) A new
machining and hence system was introduced to re-
metallic waste use the waste grease that was
To reduce contaminated left in the used drums; (2) a
waste generation: Plastic new weighting standard was
wrap containing oil introduced in order to reduce
contamination was the process waste grease
eliminated from the
containers—substantial
savings in disposal costs
% Cost savings by reducing 13 % 3%
cell’s mass and energy flows After implementing the After implementing the
action plans action plans
(1 year) (1 year)
Cost savings US$132,000 US$15,000
(US$/Year) Results after implementing Results after implementing
the action plans the action plans
phase was unchanged from that applied previously. The Kaizen events followed the
same structure as before. In total, through 2011, seven Kaizen events were held.
Each of the seven manufacturing cells had different characteristics in terms of
prerequisites for applying the L&GBM. The important point to highlight is that the
pilot testing for the L&GBM was considered successful and it proved the business
case for the L&GBM, confirming the proposed characteristics and prerequisites.
The L&GBM was then rolled out to other manufacturing cells, including sisters’
cells and for a value stream. Finally, it was applied outside of automotive and tested
in plants in the US and UK.
5 Conclusions
Nature follows a distinct logic. From cradle to grave, the birth and death of every
living thing, the composition of the atmosphere and the soil, the cycling of elements
through air and waterways, and many other ecological assets are all the result of the
evolution of living processes. The human species, while buffered against envi-
ronmental immediacies by culture and technology, is ultimately fully dependent on
the flow of ecosystem services and to the logic of the nature.
Manufacturing also has its own logic. In order to achieve competitive advantage,
to be a lean enterprise, producing exactly what the customer wants, exactly when
(with no delay) at fair price and minimum waste, the process of implementation
follows a distinct logic: Cost reduction is ultimately fully dependent of stability, a
function of quality, delivery and flexibility.
Lean and Green has its logic as well. In order not only to achieve competitive
advantage but also to be a sustainable enterprise, producing exactly what the cus-
tomer wants, exactly when (with no delay) at a fair price and with minimum waste
and environmental impact by delivering the maximum productivity in the use of
natural resources the process of implementation follows a distinct logic: To be lean
and green it needs to first be a lean enterprise. It means that the lean and green
thinking will be described in four dimensions, and not just three, (1) Quality, (2)
Delivery, (3) Cost) (4) Environment, linked to the three core sustainability
dimensions of (1) Profit, (2) People and (3) Planet.
L&GBM aims to (a) reduce environmental impact and (b) increase the pro-
ductivity in the use of resources and observing the manufacturing structure, pro-
duction flows and lean fundamental building blocks. Four key conclusions were
identified while analysing the model. They are:
1. L&GBM has a different purpose than traditional Lean or Environmental
Thinking: It introduces a new way of seeing environmental problems, (a) from
the green side—prioritizing the customer focus, (b) From the lean side—
including a new dimension in the traditional lean thinking—the environment.
2. L&GBM covers the three dimensions of sustainability: Since traditional lean

thinking embodies two dimensions of sustainability (people and profit) L&GBM
extends this and introduces another dimension to pure lean, the respect for the
environment.
3. L&GBM has a Lean to Green approach: L&GBM application should be the
continuation, a second step of a continuous improvement/lean culture already in
place.
4. L&GBM as an alternative approach to integrating environmental concern in
operations management: Since it uses lean fundamentals, L&GBM translates
the environmental technical language to the manufacturing world.
In addition, the L&GBM shows that environmentally sustainable practices can
be considered as an extension to a lean philosophy. Sustainability means meeting
the needs of current generations without compromising the ability of future gen-
erations to meet their needs in turn. Three fundamental impacts, social, environ-
mental, and financial (or People, Planet, Profit) evolved to define business
objectives using the original Brundtland philosophy.
This concludes that lean leads us toward sustainability initiatives. Because it is
much like lean in concept and practice, sustainability can be thought of as lean
expanded to achieve a much broader objective. In a world of uncertainty about the
economy and environment, where most corporate strategies do not contribute
fully to the three pillars of sustainability, the L&GBM demonstrates the case for a
new and innovative way of thinking for supporting the development and the evo-
lution of a sustainable business.
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Sustainability Through Eco-Design:
Shedding Light on the Adoption
of the ISO 14006 Standard
Beñat Landeta Manzano, Germán Arana-Landín, Patxi Ruiz de Arbulo

and Pablo Diaz de Basurto
Abstract The ISO 14006 ecodesign standard was created in 2011 with a view to
complementing the successful ISO 14001 standard for company environmental
management. Although there are a lot of works in literature on the subject that have
analysed the adoption process for this last-mentioned standard, the former has not
actually received so much attention. To try and make a contribution to special
literature, the aim of this article is to carry out an exploratory analysis of how the
ISO 14006 standard has been adopted and integrated within a series of Spanish
companies that have been pioneers in doing so. After analysing the main motives
that have led companies to adopt the ISO 14006 standard, the study then attempts to
shed light on the impact of such adoption both on an operative level and in terms of
company results. A series of conclusions are also gathered in this chapter that may
be of interest both to companies and to other stakeholders.
Keywords Ecodesign ISO 14006 Empirical study Spain
B. Landeta Manzano P. Ruiz de Arbulo P. Diaz de Basurto

Faculty of Engineering, University of the Basque Country UPV-EHU,
Alameda Urquijo S/N, 48013 Bilbao, Spain
P. Ruiz de Arbulo
P. Diaz de Basurto
G. Arana-Landín (&)
Politechnical School College, University of the Basque Country UPV-EHU,
Plaza Europa 1, 20018 San Sebastian, Spain

164 B. Landeta Manzano et al.
1 Introduction
The adoption of Environmental Management Systems (EMSs), notably the ISO

14001 standard (ISO 2004), has grown significantly worldwide over the last two
decades (for a recent review, see Heras-Saizarbitoria and Boiral 2013). Following
this successful path, some other management standards that deal with environ-
mental management aspects have been launched, the ISO 14064 standard for
quantification and reporting of greenhouse gases (ISO 2006a, b, c; Stechemesser
and Guenther 2012), the ISO 14031 standard for environmental performance
evaluation (ISO 2013a, b; Comoglio and Botta 2012), the ISO 50001 standard for
energy management (ISO 2011b; McKane 2010), among many others, and the ISO
14006 standard for ecodesign (ISO 2011a; Arana-Landin and Heras-Saizarbitoria
2011; Rio et al. 2013), between others.
ISO 14006 was created with a view to complementing the ISO 14001 standard
(Cluzel 2012; Savita et al. 2012). It establishes certain requirements governing the
working system that need to be met by the company with regard to activities that
have an environmental impact (ISO 2011a). The main feature of the ISO 14006
ecodesign standard involves the compiling of a series of guidelines regarding
incorporating ecodesign into an EMS, which enables the environmental variable to
be systematically incorporated into the design and development process of products
and/or services (ISO 2011a). Integration of Life Cycle Thinking in company
management is a basic objective of the standard, i.e. integrating the analysis and
assessment of environmental impact caused by products throughout their life cycle
into the design process (Sanyé-Mengual et al. 2014; Salomone et al. 2013).
Taking into consideration these aspects, following this introduction, the article
goes on to a literature review of research related with the adoption process of
ecodesign standards. It later continues in the third section to describe the empirical
study, while in the fourth section, the results are shown. The fifth section contains the
discussion and conclusions of interest to those groups involved in the adoption of
this type of standard, and the references are provided in the sixth- and last- section.
2 Literature Review
The ISO 14006 standard would not appear to enjoy the popularity of other envi-
ronmental management standards (ISO 14001, EMAS or ISO/IEC 27001), due to
the fact that it is a young, very specific standard governing management of a
process—only of interest to those organisations that carry out design activities
(Landeta et al. 2013). Furthermore, ISO 14006 “…does not establish by itself
specific environmental performance criteria, and is not intended for certification
purposes” (ISO 2011a).
This has had an effect on academic literature among which numerous studies can
be found regarding the use of specific ecodesign tools and adoption of environ-
mental management (Sanyé-Mengual et al. 2014; Bovea and Pérez-Belis 2012).
Sustainability Through Eco-Design … 165
However, there are far fewer references regarding the adoption of ecodesign
management standards by companies in comparison to adoption of ecodesign
techniques (Pigosso and Sousa 2011; Knight and Jenkins 2009), and even fewer
that analyse the implications that this entails for companies and the impact on
results (Deutz et al. 2013; Kara et al. 2005; Arana-Landin et al. 2013). Specifically,
with regard to the ISO 14006, available references are extremely rare. Among the
ones existing, attention should be drawn to studies by Arana-Landin and Heras-
Saizarbitoria (2011), Arana-Landín et al. (2012) and Landeta et al. (2013), which,
using case studies, have noted that companies would seem to be satisfied with
having adopted the standard UNE 150301 (the standard used as a reference point
for creating the ISO 14006). This point was shared by previous studies related to
ecodesign tools that had been carried out in manufacturing (Collado-Ruiz et al.
2008; Justel-Lozano 2008) and building (Chen et al. 2010) companies. In particular,
companies maintain they have managed to reduce the environmental impact of their
products, mainly improving the energy efficiency (Muñoz et al. 2009; Arana-
Landin and Heras-Saizarbitoria 2011; Hischier and Baudin 2010; Sanchez et al.
2007), although many aspects that might be improved were not able to be dealt with
owing to the increase in costs that this entailed. Furthermore, in a unique case study
Fernández (2012) point out the company obtained operational improvements after
adopting the standard. Lastly, Knight and Jenkins (2009), for the manufacturing
sector, and Landeta et al. (2013) and Arana-Landin et al. (2012), for the building
sector, state that companies have obtained environmental improvements despite the
fact the customer rejected some of the improvements put forward, as this meant an
increase in the initial cost. Even though the price increase was easily offset if we
take into account the savings gained during the usage phase. This aspect was
pointed out by Luttropp and Lagersted (2006). They emphasized a sustainable and
environmental protection perspective may even have negative effects, if the price
does not vary.
Taking into account these previous studies, the aim of this research has been to
carry out an exploratory analysis, based on the motives behind companies doing so,
of how the ISO 14006 standard has been integrated within their own management
standard, and its operative impact and results.
3 Empirical Research
In order to address the questions raised, an empirical study of a qualitative nature

was designed, based on case studies. This methodology was selected because of its
suitability when analyzing the complex process of ISO 14001 adoption, in which—
as has already been stated—diverse agents and actors interact (Heras-Saizarbitoria
and Boiral 2013).
Research of a descriptive, mainly exploratory, nature was planned, to facilitate
greater penetration in and understanding of the subject, so as identify propositions that
are capable of generalization in relation to the practices observed (Eisenhardt 1989;
Yin 2009). The fieldwork was carried out in Spain, and was developed between
February 2012 and March 2014, and had two main components. First, a series of
semi-structured in-depth interviews were conducted with the managers in charge of
ISO 14006 in the organization. The interviews revolved around a semi-structured
script. This approach proved to be sufficiently open, and was consistent with the
inductive method for analyzing information chosen and, consequently, did not distort
the evidence obtained. Second, the organizations analyzed made a very broad range of
documentation available for research related to the management system and that in
this article we’ll present just very shortly.
A decision was made to study the cases of companies belonging to the four
industrial sectors most present among those certified in ecodesign in the Basque
Country as of December 2011, i.e. furniture manufacturers and firms from the
chemical, electrical-electronic and capital equipment sectors. 13 cases were
developed in total: 3 according to industrial sector, except for those corresponding
to electrical-electronic equipment in which case 4 were developed (Table 1).
Those cases of companies were chosen that have the most proven track record in
ecodesign projects and those that offered the most accessibility to information. An
attempt was also made to maintain a balance between the number of cases analysed
and the capacity for treatment of data and management of information by the
researcher, thus ensuring the information would be sufficient for the purpose of
carrying out a cross-sectional analysis of the cases.
As recommended in specialist literature on the subject (e.g. Yin 2009), the
validity of factors was supported in the course of the research by the use of diverse
sources of information (direct observation, consultation, interviews, and internal
and external documentary information). Internal validity was guaranteed by the
search for common patterns that explain the phenomena, while reliability was
ensured by using semi-structured interviews of the same type and with an assess-
ment protocol of cases against each factor.
4 Results
Below is provided a comparative analysis of the behaviour of the companies subject

to study from the four industrial sectors (chemical, electrical-electronic, consumer
goods and furniture). The cross-sectional comparative analysis carried out in
accordance with the comparison and contrasting techniques proposed by Miles and
Huberman (1994) enabled the extent of compliance with the research proposals to
be ascertained and some conclusions to be drawn for the set of industrial sectors.
Table 2 shows a summary of the results obtained from the case study for each of
the sectors subject to study in terms of the research proposals. In the first column,
from the left of the table, are listed the research proposals, classified into three
groups: motives, the adoption and certification process, and the results obtained.
The other columns refer to key aspects selected from each of the groups according
to the work proposals put forward.
Table 1 Characteristics of interviewed companies
Company Size Type of product Sector Certificates in accordance with
management standards
Akaba SME (small) Office and commercial furniture Furniture ISO 9001, “EKOSCAN”, ISO 14001,
ISO 14006
Ofita interiores SME (medium) Office and commercial furniture Furniture ISO 9001, PECAL 9, ISO 14001,
OHSAS 18001, ISO 14006
Euro seating SME (medium) Seats for communities Furniture ISO 9001, ISO 14001, ISO 14006
international
Inteman SME (small) Chemical and biological products Chemical ISO 9001, ISO 14001, EMAS, ISO 14006
for general industry
Sustainability Through Eco-Design …
A&B laboratorios SME (small) Chemical and biological products Chemical ISO 9001, ISO 14001, UNE 166002,
for general industry ISO 27001, ISO 14006
DTS-OABE SME (micro) Biocides Chemical ISO 9001, “EKOSCAN”, ISO 14006
Soraluce SME (medium) Boring and milling machinery Capital equipment ISO 9001, EFQM (SILVER), ISO 14001,
OHSAS 18001, ISO 14006
Gamesa Large enterprise Wind turbines Capital equipment ISO 9001, ISO 14001, ISO 50001,
ISO 14006
Orona Large enterprise Accessibility and mobility Capital equipment ISO 9001, ISO 14001, ISO 14006
solutions (elevators, escalators…)
BSH Large enterprise Household electrical appliances Electrical-electronic ISO 9001,ISO 14001, EMAS,
electrodomésticos UNE 166002, ISO 14006
Fagor Large enterprise Household electrical appliances Electrical-electronic ISO 9001, EFQM (GOLD), ISO 14001,
electrodomésticos EMAS, OHSAS 18001, ISO 14006
Geyser-Gastech SME (medium) Domestic small water-heaters Electrical-electronic ISO 9001, ISO 14001, OHSAS 18001,
ISO 14006
ABB Niessen Large enterprise Electrical equipment for industrial Electrical-electronic ISO 9001, ISO 14001, ISO 14006
and household use
Source Put together by the authors
167
Table 2 Summary of results obtained from the case study of the furniture, chemical, consumer goods, and electrical-electronic sectors in terms of the work
168
proposals put forward

Proposal Furniture Chemical Capital equipment Electrical-electronic
Motives
1 Customers Meet the needs and require- Growing environmental Growing interest on the Increasingly demanding
ments of environmentally- awareness-raising of part of the market in more market that is concerned
friendly products on espe- customers energy-efficient products with the environmental
cially informed international behaviour of products
markets
2 Product/service Obtain a product that can Reinforce brand credibility Necessary to reinforce the Improve product image
image reinforce the company’s image of quality, efficiency
brand strategy and exemplary environ-
mental behaviour on the
part of the product
3 Company image Differentiating factor within Become detached from the There is a widespread and Improve company image
a highly competitive image of a polluting and permanent need for differ-
environment dangerous sector entiation in terms of
competitors
4 Access new Reinforce exports with prod- New market niches for bio- Approach to sectors which Help to become consoli-
markets ucts that have high added technological products on the make high environmental dated and even access new
value in which the decision European market demands of suppliers markets on which energy
to acquire them is not so efficiency and the cost of
decisive residue management are
becoming competitive
advantage factors
5 Action taken by Promotion of ecodesign on a The drive and technical sup- The drive and technical Attempting to reinforce
public adminis- strategic level by environ- port offered by Ihobe have support offered by Ihobe legislative monitoring in
trative bodies mental and innovation agen- been keys have been keys environmental matters and
cies attached to regional anticipating future envi-
governments ronmental legislation have
been keys
B. Landeta Manzano et al.
(continued)
Table 2 (continued)
6 Improving the Company policy based on Continuous improvement of Ecodesign might be a tool Need to develop new sys-
environmental continuous improvement and chemical and biological to help foster the develop- tems that are more efficient
impact of excellence, not just regarding solutions to ensure they are ment of eco-efficient and innovative
products processes but also the prod- cleaner and safer products
uct throughout its life cycle
(life cycle thinking)
7 Environmental Conservation of the environ- Sustainable development Committed to the develop- Major conviction regarding
awareness- ment is a strategic model for the business which ment a sustainable business a business model that takes
raising commitment entails developing effective model into consideration all
and safe products for the user aspects of sustainability
and the environment

Process
8 Previous experi- Adoption and certification Adoption and certification Previous experience in Previous experience in
ence in processes tradition in accordance with tradition in accordance with adoption and certification adoption and certification
involving adop- international standards gov- international standards gov- in accordance with inter- in accordance with inter-
tion and certifi- erning quality assurance, the erning quality assurance, the national standards govern- national standards govern-
cation of environment and safety at environment and safety at ing quality assurance, the ing quality assurance, the
management work work environment and safety at environment and safety at
systems work has been a key ele- work has been a key ele-
ment in facilitating the ment in facilitating the
process process
9 Difficulties with Difficulties with obtaining Difficulties with obtaining The large amount and Incomplete commercial
identification and initial data from suppliers of initial data from suppliers of diversity of associated data bases and unsuitable
assessment of materials and components in substances in order to assess materials, processes and LCA commercial tools
environmental order to assess environmental environmental impact. Main components has meant a deemed unsuitable for
aspects and impact. Main motives: lack motives: lack of awareness considerable effort required company needs
impact of awareness about the con- about the concept and impli- to put together an inven-
cept and implications of cations of ecodesign, distrust tory; difficulties with using
ecodesign, distrust of and of and difficulties with LCA commercial tools and
169
difficulties with obtaining the their integration with other

(continued)
Table 2 (continued)
170

environmental information obtaining the environmental existing systems in the
required information required company
Results
10 Improvement in The influence of ecodesign Major acceptance of the eco- Ecodesign has helped the Slight reduction in opera-
financial results adoption in operative costs designed product on the company to become con- tive costs, mainly owing to
has not been quantified; mainly European market; the solidated on the market savings in consumption of
widespread belief in an eco-designed product is, and, in the case of Orona, materials and shipment
increase in costs during the generally speaking, more has even resulted in prod-
design and development expensive than a similar ucts being obtained that
phase conventional product, to a have given rise to signifi-
large extent owing to the cant success in terms of
costs of raw materials and the sales
greater effort required in the
product’s design and devel-
opment process
11 Increase in added Contributes towards continu- Constitutes one more inno- Is a suitable innovation Provides another perspec-
value ous improvement of pro- vation tool; it entails taking tool; it fosters improve- tive to product creation,
cesses and products with the other parameters into con- ments in key factors and fosters innovation in
inclusion of the environmen- sideration in design and attached to the product the product
tal variable development which would such as functional nature,
have previously not have reliability or durability,
been the case; the end prod- energy efficiency and a
uct offers greater perfor- reduction in residue
mance features generated
(continued)
B. Landeta Manzano et al.
Table 2 (continued)
12 Improvement in Improves product image, Improves product image and Certification reinforces Reinforces brand image
their product/ser- although international mar- makes it easier to obtain brand image
vice image kets tend towards product ecolabels
certification
13 Improvement in Improves the company Lends support to the message The certificate is a differ- Improves the company
their company image put out by the manufacturer entiating factor within the image and even enables it
image and provides it with credi- market to differ from the
bility in the eyes of the competition
customer; has enabled the
company image to be
improved and to differ from

the competition
14 Anticipation of This is a tool that makes it Has fostered compliance Has entailed anticipation of Has fostered anticipation of
compliance with easier to anticipate future with future environmental compliance with future compliance with future
legislation environmental legislation legislation legal demands both on a environmental legislation
national and international
level
15 Satisfaction with They seem satisfied, except They seem satisfied; provides They seem satisfied; com- They seem satisfied; it is a
results for Orona, which would not another perspective to prod- panies think they have competitive tool for foster-
opt for certification; prefer- uct development (life cycle helped mainly to make ing continuous improve-
ence for product certification, thinking); there is no clear improvements in the crea- ment in the environmental
because the standard does commitment towards tion process and the result behavior of products
not establish a system for demanding that a level of is a product with greater
recognising environmental specific requirement be added value; however,
behaviour of the product established for compliance companies demand that a
based on informing the with ecodesign guidelines in level of specific require-
customer future reviews of the ISO ment be established for
140067 compliance with ecodesign
guidelines in future
171
reviews of the ISO 140067

Source Put together by the authors
However, discussion of results provided below adds data which is not shown in
the table which, although not referring to the work proposals, does nonetheless refer
to other aspects attached to motives, the process and the results obtained from
adoption and certification. In this respect, we should also recall for clarification
purposes that the case study method enables a wealth of data to be captured in detail
about the problem with research, and provides researchers with the flexibility they
need to explore additional issues raised by those interviewed (Soosay et al. 2008).
4.1 Motives
In the chemical sector, obtaining more sustainable products for three of the com-
panies analysed is dependent on obtaining products that ensure maximum safety at
work, as environmental aspects in this sector are closely related to safety, e.g. both
aspects are improved by replacing chemical substances with biological ones.
In the electrical-electronic and consumer goods sectors for instance, the
launching on the market of more sustainable environmental products is linked to a
concern with creating products which are more energy efficient, insofar as this is
actually an aspect that the customer rates highly owing to its impact on the costs of
using the product during its life cycle. Yet for Fagor and ABB Niessen the main
motive was the need to adapt more quickly to increasingly more demanding and
complex environmental legislation within an environment marked by the globali-
sation of markets.
Other motives such as a reduction in operative costs or attempts to better meet
and improve customer expectations also formed part of business culture. However,
adopting a series of strategic commitments in all industrial firms aimed at creating a
new, more sustainable and environmentally-friendly business model of develop-
ment, and improving environmental performance not only of the company but also
of the products they market, were generally speaking noteworthy aspects cited.
4.2 Adoption and Certification Process
The adoption and certification process for the ISO 14006 standard was relatively
simple in all cases. All industrial firms had experience in adopting management
systems (ISO 9001, ISO 14001, EMAS, OHSAS 18001, etc.) which had created a
working culture based on defined, orderly and systematised processes, and inte-
grated ecodesign into the organisation’s management system. This to a large extent
ironed out any possible reticence to adoption of the ecodesign standard among staff
—“this is the customary reaction to the introduction of new management systems,”
they point out at Geyser Gastech. In any event, all the companies highlight the effort
made to convince and motivate everyone in the organisation to gain their support,
which proved essential for the success of the process, although in the chemical
sector, the sales network proved to be especially reluctant—specifically in the larger

organisations such as Inteman and A&B Laboratorios. They did not see the value of
ecodesign as a sales argument. However, ecodesign was linked to giving up using
certain chemical products, thus increasing safety, and this aspect started to attract
the sales network.
In this respect, management involvement in all companies proved very impor-
tant, albeit not on the same level in all cases. Attention should be drawn to the
greater involvement in especially innovative companies—those from the chemical
and furniture sectors.
The management was responsible for providing tools and people to ensure the
project would be successful, appropriately choosing those in charge of the standard
adoption process and providing any external assistance deemed necessary with
contrasting experience for preparation and advice throughout the process. All
companies point out that such advice had been the key throughout the process. At
Gamesa they also added that they had missed the support of certifying bodies less
and stated that the experience gained by certification of the UNE 150301 (AENOR
2003) ecodesign standard remained insufficient. Moreover, the fact that the standard
had not been created for certification purposes raised doubts, especially among
companies, but also among the different interest groups.
Another major difficulty that companies have had to overcome and are still
working on—especially in the electrical-electronic and consumer goods sectors—
has been the lack of staff training, in particular in the most involved areas such as
design and development. There were doubts and uncertainty that made it difficult to
adopt environmental criteria during the design and development phase and, in the
opinion of companies belonging to the consumer goods sector, the job market has
not responded to the demand for professionals with a command of ecodesign.
Companies highlight the discovery of Life Cycle Assessment (LCA) as a
methodology for assessing the environmental impact of the product throughout its
life cycle, which has proved a very useful discovery for design and development
technicians. It enables them to improve the product’s integral perspective and
ascertain the environmental influence of their decisions throughout its entire life
cycle.
As regards this analysis, the main problems refer to calculation of the product’s
environmental impact. One of them is the absence of initial data to enable the
impact of the product of reference to be assessed, especially in the first experience
in ecodesign. Both then as now, all companies would experience serious difficulties
with obtaining the information required of its suppliers in order to put ecodesign
into practice. In this sense, consensus exists when pointing out that it is genuinely
difficult to achieve traceability of data regarding the environmental aspects of
materials and components (inputs).
Normally these are small firms with a limited capacity for attending to the
information needs required of them with regard to design. Furthermore, at this time
of the current serious crisis, they generally have fewer resources at their disposal to
enable them to do so, and with suppliers confining themselves to complying with
the legislation applicable to them. The smaller companies subject to study, such as
Akaba and DTS OABE, add that the relatively small volume of purchases from
certain suppliers implies that they are unable to exert a major influence over them.
This problem would seem to be less important in large companies such as Gamesa,
BSH and Fagor. In such cases, the influence they exert on suppliers in demanding a
greater environmental commitment proves to be a determining factor—even more
so if this is a widespread trend on the market.
Companies from the chemical sector have been especially active in developing
data bases and LCA tools, except for DTS OAB, which is perhaps restricted owing
to availability of resources. This is a sector in which over 100,000 chemical sub-
stances are marketed in Europe and commercial data bases only have a really small
proportion of substances with environmental data at their disposal.
The second problem linked to the calculation of environmental impact is the
absence of a flexible and truthful tool for doing so. Apart from Inteman and A&B
Laboratorios, both chemical firms, only Orona from the consumer goods sector has
developed LCA software specifically for environmental indicators. This has
enabled its ecodesign tools and the ecodesign process itself to be better integrated
into activities associated with the area of product design and development.
The other companies have opted to use data bases and commercial LCA tools,
although have experienced integration problems with the tools used by the area of
product design and development. In some cases, it is shown that ecodesign is not
fully integrated into company activities, as in the case of Fagor, where it was
applied in certain projects but in practice has not been internalised in the working
system within the area of design. Most companies have changed LCA software on
more than one occasion so as to ensure greater integration into their design system
and adaptability to their requirements.
Moreover, all companies stress that the ISO 14006 standard determines how
environmental improvements can be quantified—each manufacturer can choose the
comparative reference and methodology and calculation tools as they see fit, in
accordance with their own criterion. The criterion used to choose the basis for
comparison is an open one, as the environmental balance may prove to be positive
or negative depending on the model chosen. Neither does it establish mechanisms
for controlling the effectiveness of the ecodesign methodology for products applied
by the company, which implies that the overall environmental impact of the product
will vary. As no common comparative reference exists, companies face a problem
when trying to highlight ecodesign on the market. The chemical firms Inteman and
A&B Laboratorios—two of the most active in terms of the continuous development
of their external communication methods—created their own label to identify the
eco-designed product and a classification system for the product’s environmental
impact, very similar to the energy label used in the case of Inteman for taking
advantage of the fact that customers had been familiarised with it and found it easy
to understand. Likewise, this is the main reason that would seem to encourage
companies from the chemical and furniture sectors to opt for environmentally-
friendly labels for their products. They state that this is the trend on international
markets and represents a form of recognition for those products.
Another limitation of the standard refers to the margin for environmental

improvement in the re-design of eco-designed products. Companies are facing the
challenge of updating eco-designed products and the margin for environmental
improvement has been considerably reduced, making it more difficult for the
product to achieve this.
4.3 Results Obtained
The introduction of ecodesign standard guidelines in the company’s management

system has made a series of contributions, among which special attention should be
drawn to the obtaining of products with greater added value and the assistance
provided in anticipating compliance with future environmental legislation, as was
the case with the REACH regulations in the chemical sector or the ErP Directive in
the electrical-electronic sector.
In addition, it has enabled them to gain greater power of innovation over the
design and development of products and associated processes (supply chain, man-
ufacturer, shipment, installation, operation and maintenance, etc.). Some companies
highlight the introduction of LCT (Life Cycle Thinking) in the product design and
development systems in organisations. In any event, practically all companies
maintain that it provides another perspective of the process, enabling environmental
impact to be improved—in some phases more than others, according to sector and
product. Only in the case of the furniture sector would Ofita seem to distance itself
and state that it has not detected any innovation as a result of ecodesign.
At the same time and despite the fact that it provides another perspective in
creating new products, A&B Laboratorios and DTS OABE stress that ecodesign
adoption also means to a certain extent less freedom when creating such new
products.
All companies share the opinion that ecodesign is a competitive tool although,
with the tools at their disposal, it is difficult to showcase it from a commercial
standpoint—they highlight the major effort made in launching eco-designed
products on the market. Yet markets have so far not taken into consideration the
environmental impact of products in their purchasing criteria, and in any event, the
companies interviewed point out that public administrative bodies need to promote
measures to foster the development of green markets. Their role is an essential one.
Despite being both extensive and restrictive, current legislation needs to improve
and bring itself up-to-date with the state of business techniques and practice—
companies unanimously suggest the development of legislation governing envi-
ronmental matters. Prominence needs to be given to the most environmentally-
efficient products or those that evidence the worst behaviour should be taxed
accordingly—not to do so would create a situation of unfair competition, as many
companies would make no effort to innovate their products. Rather, they manu-
facture less efficient ones that have greater environmental impact but at lower cost.
However, one direct consequence of applying ecodesign in practically all com-

panies has been a slight increase in the cost of the product during the design phase for
several reasons, which has in turn been reflected in a slight increase in its end price.
As regards the latter, Inteman add that “offering it at the same price as its traditional
equivalent would detract from the eco-designed product.” It has greater added value
and, broadly speaking, has helped to improve the product’s quality. Despite this,
operative costs are also higher in the case of all sectors, even where the standard has
enabled management control of the product to be improved, and this is due to greater
investment in time and resources during the product’s design and development
phase. In addition, materials and components are in general slightly more expensive,
this being most apparent in the chemical and consumer goods sectors.
In any event, none of the companies subject to study say that they have mea-
sured the influence of adopting the standard either on general costs or on business
results. Adopting the standard has not entailed any noteworthy reduction in costs,
given that cost reduction has traditionally been a maxim in company activities—and
it is precisely the pressure of costs that is a determining factor in the margin for
environmental improvement of the product, due to a cost reduction policy for the
product imposed by highly competitive markets.
Nonetheless, in the chemical, electrical-electronic and consumer goods sectors in
particular, in many cases cost saving in some or other of the subsequent phases of
the product’s life cycle (shipment, use and management at the end of the life cycle)
is greater than the increase in the cost of acquiring the eco-designed product over
the non-eco-designed one.
Despite all the above, companies think the ecodesign certificate will help them to
meet the requirements demanded by both public and private customers, and to
ensure they have a privileged position in green purchasing processes. The certificate
essentially provides credibility and companies estimate that they will have gained in
terms of brand and company image with certification. This has enabled them to
differ from the competition and gain certain consumer confidence.
In any event, the chemical and furniture sectors would seem to opt for product
recognition or certification systems. This is a trend that appears to be prevailing on
international markets even in cases—as they point out—where the large number of
systems used to assess environmental impact of products, certificates, brands and
environmentally-friendly labels confuse the consumer and make it difficult to
compare environmental behaviour among products with similar features. None-
theless, they advocate this form of recognition because it enables them to compete
on the same level internationally as other products from the competition. In the case
of the other industrial sectors, i.e. the consumer goods and electrical-electronic
groups, companies would seem not to opt for this form of recognition, because
either no environmentally-friendly label exists for their products or because, as they
state at BSH, such recognition systems are very costly. In both cases, companies do
not directly use ecodesign as a marketing argument because they are unable to
provide the customer with 100 % reliable information about the product’s envi-
ronmental behaviour, and try to highlight graphically and intuitively the product’s
functional features and environmental improvements using labels on the product.
5 Discussion and Conclusions
Diverse motives behind encouraging industrial firms to adopt and certify ecodesign
management systems exist. Among them, the growing interest on the market in more
environmentally-sustainable products, the search for new innovation tools, and
differentiation in terms of competitors are motives shared by all companies, although,
they do not stand out as the main ones. In any event, in all cases, environmental
awareness-raising of individuals from the organizations themselves would seem to be
the common denominator that fosters the search for tools to improve the environ-
mental behaviour of their activities and the results deriving from them.
As for the results obtained from the implementation of ISO 14006, the com-
panies subjected to analysis point out a major lack of awareness on the market of
the ecodesign standard and of the implications that the certificate entails for the
organization and its products. The customer assesses mainly those features of the
product that best meet their needs and considers environmental behaviour as an
extra. The customer does not consider improvement in the product’s environmental
behaviour as a reason for purchasing more in itself. However, signs of an increasing
concern on the part of consumers with climate protection are occurring; although it
is also true to say that this is still too small to have any effect on so-called green
markets. Meanwhile, at these times of crisis, the price is proving to be a more
determining purchasing factor than ever.
Regardless of the effort made to highlight more environmentally-sustainable
products, in all companies has been improved internal and external communication,
owing partly to the importance given to this chapter in the standard and as many of
the companies confirm, companies are still having problems with employees
adopting the new strategies. This has translated into the design and setting in
motion of courses of action and initiatives aimed at improving external commu-
nication with customers, suppliers, the sales network and other interest groups, and
also at the heart of the organisation—their being convinced of the need on the part
of the people within the organisation themselves to note the result of their efforts
and internalise environmental improvement in the product as a constant feature of
their activity.
The companies subject to study confess that such environmental improvement in
the product is easy to manipulate—some results or other are obtained depending on
the data base and/or software used to assess impact. It is also possible to take an
initial reference using a severe environmental impact that may facilitate imple-
mentation of environmental improvements with minimal effort, and this situation
raises doubts in the companies analysed in all sectors. Conversely, some companies
from the chemical and consumer goods sectors warn that if the ecodesign standard
were less flexible and contributed towards better development and precision, this
would restrict company freedom and therefore creativity, thus making it difficult to
use as an innovation tool.
They also maintain such flexibility can facilitate the standard’s dissemination
and spread the word about ecodesign internationally. It is precisely dissemination
that is one of the areas about which all companies express doubts. They hope that in
the future customers will ask for the ecodesign certificate just as they do now with
other management certificates in accordance with standards, although they also fear
this not to be the case insofar as there is an open debate about the possibility of
being able to become certified in accordance with this, given that it has no certi-
fication purpose.
This circumstance and the fact that public administrative bodies are not carrying
out more active work to develop green markets may affect dissemination of the
ecodesign standard, even bearing in mind that ISO 14006 is an international
standard. Despite this, companies appear satisfied with adoption and certification of
the ecodesign standard, as it is a tool that improves and complements the suitable
management of processes in the company by providing a very useful system that
may help to streamline day-to-day procedures.
Finally, regarding the limitations of the research, it is necessary to mention those
limitations of the case study methodology. A major limitation lies in the problems
associated with the generalization of the results obtained through a limited number of
cases, an aspect that has been criticized in the past, but the modern case study has
overcome. The results of a case study do not allow for statistical generalizations,
however, it is necessary talk about the analytical generalization, i.e. generalize a
particular set of results of a case similar to others representing theoretical conditions.
Furthermore, Eisenhardt (1989) suggests that for analytical generalization, per-
forming a cross-case with four to ten cases of study. Nevertheless, in the case study
carried out in all sectors (except electrical-electronics) has not been able to have
more than three cases. However, in this regard Eisenhardt (1989) also states it is
necessary to limit the number of cases reaching a point of theoretical saturation.
Other authors such as Yin (2009) note that the number of cases depends on the
certainty desired on their performance and ability to predict similar results for the
existence of predictable reasons. In the light of the results, in the present research, it
has reached a point of theoretical saturation in the chemical and capital goods
sectors. This means it will be necessary to seek further evidence to corroborate and
appropriately generalize the results in other two sectors, furniture and electrical-
electronics.
Therefore, the cases results could be generalized to other companies in the same
sector or even some of the results could be generalized to the industry in general,
taking into account the nuances and the conditions for doing so.
Another aspect that should be noted about the research topic addressed in this
paper is that, since the ISO 14006 standard is in its early stages of diffusion, many
issues still need to be undertaken and its analysis can be of great interest to the
world academic and different interest groups that participate in the process of
adoption and certification. Among them, attention should be drawn to the analysis
of the keys to regional and inter-sector dissemination of the standard, the role that
will be played by Ecodesign Management Systems for companies and its value on
the market—bearing in mind that it has no certification purpose—and, especially
the long-term influence of Ecodesign Management on financial results and com-
pany sustainability. Indeed, the number of certified companies grows gradually,
allowing the combined application of quantitative and qualitative research meth-

odologies that enrich and extend the existing knowledge of the phenomenon under
study. Also, access to staff not involved in the adoption process will be a key issue
in future research that it will be worked especially in order to obtain results that
provide a more objective understanding of the phenomenon.
Acknowledgments This article is a result of a Research Group funded by the Basque Autonomous
Government (Grupos de Investigación del Sistema Universitario Vasco; GIC12/158 - IT763/13).
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Early Adoption of ISO 50001 Standard:
An Empirical Study
Maria Wulandari, Iker Laskurain, Martí Casadesús Fa

and Iñaki Heras-Saizarbitoria
Abstract The adoption of international standards for Environmental Management

Systems (EMSs) has grown significantly over the last years. Following this suc-
cessful path some other management standards which deal with environmental and
energy management issues have been launched as well. This is the case of ISO
50001, a certifiable international standard to adopt an Energy Management System
(EnMS), which was launched in 2011 by the International Organization for Stan-
dardization (ISO). From then on, ISO 50001 certifications have experienced a huge
growth: from 459 in 2011 to 1981 in 2012, with a total annual growth of 332 %.
Regardless of the huge growth, within the scholarly literature only case-based
studies have been published on the early adoption of this standard. In order to fulfill
this gap this contribution summarizes some of the preliminary results of an
empirical study carried out in Spain with the participation of a total of 57 early ISO
50001 certified organizations, aimed at analyzing the early adoption of ISO 50001
standard. The findings facilitate the characterization of ISO 50001 certified orga-
nizations and anticipate benefits of the adoption of the standard.
Keywords ISO 50001 Energy management Environmental management

Survey Spain
M. Wulandari M.C. Fa
Departament D’Organització, Gestió Empresarial I Disseny Del Producte,
Escola Politècnica Superior, University of Girona, Campus de Montilivi,
17071 Girona, Spain
M.C. Fa
I. Laskurain I. Heras-Saizarbitoria (&)
Department of Management, University of the Basque Country UPV/EHU,
Plaza Oñati 1, 20018 Donostia-San Sebastian, Spain
I. Laskurain

184 M. Wulandari et al.
1 Introduction
Since it was created in 1987 the International Organization for Standardization

(ISO) has launched various management systems standards. Known as meta-stan-
dards (Heras-Saizarbitoria and Boiral 2013a), they are in many respects different
from the technical standards or regulations, which provide the requirements which
certain products or processes need to meet. To name a few of the most well known
meta-standards, for instance ISO 9000 family—quality management, ISO 14000
family—environmental management, ISO 26000—social responsibility and ISO
50001—Energy management standard. Although there are plenty meta-standards,
this contribution is focused on one specific management system, namely ISO 50001
EnMS standard. Referring to the standardization of very diverse aspects of business
activities, ISO 50001 standard contains similarly-structured models of management
systems specific to a particular organizational function or stakeholder.
Energy is crucial for the survival of human being; therefore it is not a surprise
that energy supply chain, from production to consumption is one of the most
important activities of human life. With the rising of energy prices and the situation
where energy is an organization’s most significant environmental impact, the
energy management has emerged as a crucial field. This is where ISO 50001
standard found its niche. ISO 14001 helps to identify all environmental impacts in
the broad sense while ISO 50001 focuses on the continual improvement of energy
performance, efficiency and consumption. ISO established ISO 50001 standard in
order to support organizations to save money by using energy efficiently as well as
helping to conserve resources and deal with climate change (Eccleston et al. 2011).
ISO 50001 is expected to give a big impact in energy management in the present
and in the future. “This standard established a framework, not only for industrial
plants but also for commercial, institutional, governmental facilities; and entire
organizations to manage energy. Targeting broad applicability across national
economic sectors, it is estimated that the standard could influence up to 60 % of the
world’s energy use” (ISO 2011b).
Since the day it was established, ISO 50001 has been adopted in various
industrial and commercial activities. The certification of ISO 50001 standards
grows rapidly in only one year, from 459 on 2011 to 1981 on 2012, with total
annual growth of 332 % (ISO 2013a). According to ISO 50001 certification world
share, Europe has the highest world regional share followed by East Asia and
Pacific. The ISO 50001 certification share of Europe 79 and 89 % for 2011 and
2012 respectively. Beside covering the highest ISO certification worldwide, Europe
also showed an enormous growth of 383 % on ISO 50001 certification, followed by
North America and East Asia and Pacific respectively. In Europe, the highest share
of ISO 50001 comes from Germany with 1,115 certificates, followed by Spain,
Denmark, Sweden, Italy, Romania, France, Ireland, Austria and United Kingdom
respectively. In spite of the high quantity of certificates around the world, especially
inside Europe, it is surprising to see that in the specialized literature only several
Early Adoption of ISO 50001 Standard: An Empirical Study 185
case studies found (Chiu et al. 2012; Wessels 2011; Velázquez et al. 2013; Lambert
2013; Straughan 2013).
In order to fulfill this gap this contribution summarizes some of the preliminary
results of an empirical study aimed at analyzing the early adoption of ISO 50001
standard. Specifically investigated in the survey were the motivations, the resources
used, the difficulties faced, and the benefits achieved by the adoption of ISO 50001
energy management standard. In this chapter a fairly basic and descriptive analysis
is provided, structured around the main topics of the questionnaire answered by the
responding organizations. This rest of this contribution is arranged in the following
manner. A detailed explanation regarding the structure of ISO 50001 is explained in
the next section. Subsequently in the following section, the methodology of
the survey and the survey profile are explained. Afterwards, the main results of the
survey are presented in section number four. And finally, the overall results are
recapitulated in the final section of conclusions.
2 Structure of ISO 50001
Before ISO 50001 was issued on June 2011, EN 16001:2009 has already been
applied in Europe. EN 16001 was issued on July 2009 and it is now superseded by
ISO 50001 and withdrawn on April 2012. The structure of ISO 50001 is designed
according to other ISO management system standards, in particular ISO 9001
(Quality Management Systems) and ISO 14001 (Environmental Management
Systems). Since all three management systems are based on the PDCA cycle, ISO
50001 can be integrated easily to these systems. The structure comparison between
ISO 50001 with EN 16001 (Duglio 2011) and ISO 140001 is shown in Table 1. The
novel parts in ISO 50001 standard compared with EN 16001 and ISO 14001 are
shown in bold letters.
It can be seen that ISO 50001 and 14001 have similar structure of Scope and
Normative references, while EN 16001 does not. However, between EN 16001 and
ISO 50001, beyond some differences, which does not change substantially the
contents, there are four steps of greater distinction:
1. The scope of ISO 50001 refers to continual improvement of energy perfor-
mance, including energy efficiency, energy use and consumption while EN
16001 only focuses on energy efficiency.
2. The Management responsibility (in 4.2) and the subsequent subsections of the
ISO 50001, absent in the EN 16001 and ISO 14001. ISO 50001 emphasizes the
fundamental role of the so-called Top Management. It’s a strategic actor, which
defines policy, objectives and, consequently, allocates resources and defines
operational roles (Duglio 2011).
3. The third aspect is present in the Plan phase where ISO 50001 adds some
concepts (in 4.4.3—Energy Review, 4.4.4—Energy Baseline and 4.4.5—
Energy performance indicators). Coming to the second aspect, in the Plan phase
Table 1 Structure comparison of ISO 50001 with EN 16001 and ISO 14001
Index EN 16001 Index ISO 50001 Index ISO 14001
1 Scope 1 Scope 1 Scope
2 Normative 2 Normative
referencesa references
2 Terms and 3 Terms and 3 Terms and
definitions definitions definitions
3 Energy management 4 Energy manage- 4 Environmental
system requirements ment system management
requirements system
requirements
3.1 General 4.1 General 4.1 General
requirements requirements requirements
4.2 Management
responsibility1
4.2.1 Top management
a
4.2.2 Management
representative1
3.2 Energy policy 4.3 Energy policy 4.2 Environmental
policy
3.3 Planning 4.4 Energy planning 4.3 Planning
3.3.1 Identification and 4.4.1 General require- 4.3.1 Environmental
review of energy ments a aspects
aspects
3.3.2 Legal obligation and 4.4.2 Legal and other 4.3.2 Legal and other
other requirements requirements environmental
requirements
3.3.3 Energy objective, 4.4.3 Energy review a 4.3.3 Objectives, tar-
targets and pro- gets and pro-
gramme(s) gramme(s)
4.4.4 Energy baseline a
4.4.5 Energy perfor-
mance a indicators
4.4.6 Energy objectives,
energy targets and
energy manage-
ment action plans
3.4 Implementation and 4.5 Implementation 4.4 Implementation
operation and operation and operation
3.4.1 Resources, roles, 4.5.1 General 4.4.1 Environmental
responsibility and aspects
authority
3.4.2 Awareness, training 4.5.2 Competence, 4.4.2 Legal and other
and competence training and environmental
awareness requirements
(continued)
Table 1 (continued)
Index EN 16001 Index ISO 50001 Index ISO 14001
3.4.3 Communication 4.5.3 Communication 4.4.3 Communication
3.4.4 Energy management 4.5.4 Documentation 4.4.4 Documentation
system
documentation
3.4.5 Control of 4.5.5 Operational 4.4.5 Control of
documents control documents
3.4.6 Operational control 4.5.6 Design a 4.4.6 Operational
control
4.5.7 Procurement of 4.4.7 Emergency
energy services, preparedness
products, equip- and response
ment and energy a
3.5 Checking 4.6 Checking 4.5 Checking and
corrective action
3.5.1 Monitoring and 4.6.1 Monitoring, mea- 4.5.1 Monitoring and
measurement surement and measurement
analysis
3.5.2 Evaluation of 4.6.2 Evaluation of legal 4.5.2 Evaluation of
compliance requirements and compliance
other requirements
3.5.3 Nonconformity, cor- 4.6.3 Internal audit of 4.5.3 Nonconformity,
rective action and the EnMS corrective and
preventive action preventive
actions
3.5.4 Control of records 4.6.4 Nonconformities, 4.5.4 Records
correction, correc-
tive, and preven-
tive action
3.5.5 Internal audit of the 4.6.5 Control of records 4.5.5 Internal audit
energy management
system
3.6 Review of the 4.7 Management 4.6 Management
energy management review review
system by top
management
3.6.1 General 4.7.1 General
3.6.2 Inputs to manage- 4.6.2 Input to manage-
ment review ment review
3.6.3 Outputs from 4.6.3 Output from man-
management review agement review
a
Novel parts of ISO 50001 Standard
Source put together by the authors based on the ISO standards
it’s interesting to analyze the concept of energy analysis (4.4.3—Energy

Review). A section is entirely dedicated to this concept because thanks to it the
organization should establish reference energy data (4.4.4—Energy baseline).
The span of time is decided by the organization itself and the purpose is to be a
basis for comparison of changes in the organization’s energy performance,
measured through appropriate indicators (4.4.5—Energy Performance
Indicators).
4. Finally, the Do phase of ISO 50001 system has been added two new paragraphs
(4.5.6—Design and 4.5.7—Procurement of energy services, products, equip-
ment and energy). Regarding the latter ones, the methodologies are not indicated
for the selection of indicators, but the single organization can define method that
will be assessed during the visit of the certification body.
In order to provide compatibility and integration opportunity between different
ISO meta-standards, ISO 50001 uses the same method of continual improvement
Plan-Do-Check-Act cycle as employed in ISO 14001 and ISO 90001 (Fig. 1).
There are several activities that need to be conducted to implement ISO 50001.
The activity list of Plan-Do-Check-Act cycle of ISO 50001 is shown in Table 2
below. The novel activities in ISO 50001 are shown in bold.
The novel parts of ISO 50001 are located in Energy Planning and the Imple-
mentation and Operation. Energy planning at minimum includes the specific pro-
cesses to improve energy performance. The schema of energy planning process
according to ISO (2011a) is shown in Fig. 2.
Continual Improvement
Energy Policy
PLAN
Energy
Planning
Management ACT
Review
DO Monitoring,
measurement and
Implementation analysis
and operation
Checking
CHECK
Internal audit of the

Nonconformities, correction,
EnMS corrective and preventive
action
Fig. 1 Plan-Do-Check-Act Cycle of ISO 50001

Table 2 Activity List of ISO 50001

No Cont. Activities Energy Person in charge
improvement management
document
output
1 PLAN Establish energy policy Energy policy Top management
2 Appoint energy manager – Top management
3 Form energy management – Energy Manager
team
4 Conduct energy reviewa Energy review Energy manager
5 Establish energy baseline Energy and energy
baseline management team
6 Establish energy perfor- EnPIs
mance indicators (EnPIs)
7 Establish energy objectives Objectives
and targets and targets
8 Establish and action plans Action plans
9 DO Ensure competent, training, –
awareness
10 Communicates internally –
11 Documentation EnMS
documentation
12 Operational Control –
13 Design –
14 Procurement energy –
services, products and
equipments
15 CHECK Monitor and measure –
processes and key
characteristics
16 Evaluation of compliance –
with legal requirements and
other requirements
17 Internal audit of the EnMS –
18 Review and make correc- –
tions, corrective action, and
preventive action.
19 Establish and maintain –
records
20 EnMS management review Changes of Top Management
EnMS
documentation
21 ACT Take actions to continually Energy manager
improve energy performance and energy man-
agement team
a
Novel activities of ISO 50001 Standard
Source put together by the authors
Energy Planning Process
Inputs Energy Review Outputs
Past and present 1 - ANALYZE ENERGY USE

energy uses AND CONSUMPTION
ENERGY BASELINE
Relevant variables 2 – IDENTIFY AREAS EnPI(s)
affecting significant OF SIGNIFICANT
energy use ENERGY USE AND OBJECTIVES
CONSUMPTION TARGETS
Performance
ACTION PLANS
C - IDENTIFY
OPPORTUNITIES FOR
IMPROVING ENERGY
PERFORMANCE
Fig. 2 Energy planning process concept diagram
• Energy review
Energy review is the determination of the organization’s energy performance
based on data and other information, leading to identification of opportunities
for improvement (ISO 2011a). It is a review of the organization’s processes
which affect energy use and consumption.
• Energy baseline
Energy baseline is quantitative reference(s) providing a basis for comparison of
energy performance (ISO 2011a). While according to Reichl and Kollmann
(2011) the energy baseline is the energy consumption that would have occurred
if no direct measures had been taken to influence energy consumption. The
changes in energy performance shall be measured against the energy baseline
(ISO 2011b).
• Energy Performance Indicators (EnPI)
Energy performance indicator is quantitative value or measure of energy per-
formance, as defined by the organization (ISO 2011a). It should be identified to
assess energy performance and to subsequently evaluate progress towards
objectives and targets. It could be expressed as a simple metric, ratio or a more
complex model, depending on the organization need.
• Objectives and Targets

Energy objective is specified outcome or achievement set to meet the organi-
zation’s energy policy related to improved energy performance (ISO 2011a).
Energy target is detailed and quantifiable energy performance requirement,
applicable to the organization or parts thereof, that arises from the energy
objective and that needs to be set and met in order to achieve this objective (ISO
2011a). Energy objectives and targets shall be established and implemented
at the relevant processes and facilities within the organization inside the
established time frames.
• Action plans
According to ISO (2011a), the action plans shall include:
– designation of responsibility;
– the means and time frame by which individual targets are to be achieved;
– a statement of the method by which an improvement in energy performance
shall be verified;
– a statement of the method of verifying the results.
After the energy action plan is prepared, it must be communicated to all the
persons in charge in its implementation.
Those documents are to be developed by energy manager and energy manage-
ment team. The energy management team must consist of professional from various
technologies and discipline (Eccleston et al. 2011).
Regarding the other novel part, Implementation and Operation, in this part, the
organization needs to conduct the entire plan that has been developed by energy
manager and energy management team. ISO (2011b) requires an organization to:
• ensure that any person(s) working for or on its behalf, related to significant
energy uses, are competent;
• provide training to meet these needs;
• communicate internally with regard to its energy performance and EnMS;
• establish, implement and maintain information;
• identify the operations and maintenance activities which are related to signifi-
cant energy uses;
• consider energy performance improvement opportunities and operational control
in the design of new, modified and renovated facilities, equipment, systems and
processes;
• establish and implement the criteria for assessing energy use, consumption and
efficiency over the planned or expected operating lifetime when procuring
energy using products, equipment and services.
3 Methodology of the Survey
In order to investigate the motivations and benefits of organizations who have

adopted ISO 50001 standard a survey was planned. A questionnaire was designed on
the basis of a comprehensive literature review. First, it was conducted a literature
review about ISO 50001, the search resulted in several case studies (Chiu et al. 2012;
Wessels 2011; Velázquez et al. 2013; Lambert 2013; Straughan 2013), with no
empirical studies found. Afterward, as a basic reference, it is considered the
researches about ISO 9001 and ISO 14001 (Corbett et al. 2002; Liyin et al. 2006;
Williams 2004; Gavronski et al. 2008; Karapetrovic et al. 2006; De Oliveira et al.
2010; Psomas et al. 2011) since it is logical to believe that the adoption of ISO 50001
will follow the same reasoning valid for the adoption of ISO 9001 and ISO 14001.
Based on the basic reference, it was formulated the concepts and the various vari-
ables affecting it. In this way, it was established the relation between questions and
analyzing categories in respect with motivations, implementations and benefits of
the early adoption of ISO 50001. The literatures referring to similar and identical
concepts were aggregated, generating a list of concepts and references. The survey
contained four sections: (1)—organization data, (2)—organization input prior, (3)—
implementation process of ISO 50001, and (4)—output of ISO 50001 adoptions.
Each section has different content, as shown more detail in Tables 3 and 4.
A total of six pages of questions were employed using a combination of the one
to five Likert scale and open-ended answers. The Likert scale provides five alter-
natives with different degrees of agreement: (a) completely agree, (b) partially
agree, (c) do not agree nor disagree, (d) partially disagree, and (e) completely
disagree. The survey was disseminated through internet (Survey Monkey) and
through paper questionnaire to 87 organizations of the total 120 organizations based
Table 3 ISO 5000 survey

sections Chapter Contents
1. Organization data Organization classification
International scope
2. Input Motivations
3. Implementation Commitment leadership
Human resource
Other resources
Time and cost
Difficulties
Integration
4. Output Operational benefits
Financial benefits
Innovation
Table 4 Profile of the ISO 50001 studied organizations

Study date October 2013–January 2014
Study population 120 ISO 50001:2011 certified organizations based in
Spain in November 2013
Study sample 87 organizations
Number of responses 57 organizations
Response rate 65 %
in Spain that were registered to ISO 50001. The envelope and the cover letter were
addressed to the responsible person for energy and environment or quality of the
company. The survey was carried out from October 2013 to January 2014.
4 Results
This section provides a very short discussion of the main results of the empirical
work that we carried out. Regarding ISO 50001 standard in organization stemming
from the 2014 survey (for a more detailed analysis of the survey can be found in
Wulandari et al. 2014). The first factor relates to the motivations for the adoption of
the ISO 50001:2011 standard. Afterward, an analysis of the implementation of this
process, specifically the commitment leadership, human resource, time and cost,
difficulties and integration with other standards, are illustrated. And finally, an
analysis of the outputs of this process, in term of operational benefits including
energy saving and environmental benefits, and financial benefits are described.
From an empirical perspective Bansal and Hunter (2003) propose three types of
motive that lead organizations to implement ISO 14001: competitiveness, legiti-
mation, and ecological responsibility. Similarly, Neumayer and Perkins (2005)
underlined two main sources of motivation that lead organizations to implement
ISO 14001: internal motives related to efficiency and, on the other hand, external
motives related to the social pressure exerted by different agents to persuade
company managers to adopt certain practices. In the same vein, Boiral and Roy
(2007) has also stressed that the adoption of ISO 14001 can be driven by external
pressures and the search for organizational legitimacy in the eyes of various
stakeholders (e.g., clients, public authorities, environmental groups), or by internal
motivations to improve environmental practices. While González-Benito and
González-Benito (2005) differentiated the following four drivers for the adoption of
EMSs: operational competitive motivations (costs, productivity), commercial
competitive motivations (market, image, customers), ethical motivations, and
relational motivations (regulators, local organizations). Figure 3 shows the moti-
vation to adopt ISO 50001 and its importance attached to each, demonstrated by the
answers obtained from Part II of the questionnaire “Motivation of ISO 50001”.
Pressure from professional association 2.30

Incentive gven by public administration 2.19
Image improvement 3.67
The impacts of climate change 3.0
The rise of energy prices 3.67
Employee initiative 2.82
Leader's initiative 3.75
Government's regulations/legal 2.68
Clients' requirements 2.67
Competitors pressure 2.51
Enhance employee energy awareness 4.02
Reduce the greenhouse gas effect 3.49
Improve energy efficiency 4.42
Improve internal coordination 3.45
Other reason 1.88
1.00 2.00 3.00 4.00 5.00
I M P O R T A N C E
Fig. 3 Motivation for adopting ISO 50001 standard Source put together by the authors
By a long run, the most important factor to adopt ISO 50001 was the
improvement of energy efficiency, with the median importance level of 4.42 out of
5. The second most important motivation was an issue related with enhancing
energy awareness between employees, with the median of 4.02. These two are
followed by leader’s initiative (3.75), image improvement (3.67) and the rise of
energy prices (3.67). And it seems that the drivers such as clients’ requirements
(2.67), government’s regulations/legal (2.68), competitor’s pressure (2.51), pressure
from professional association (2.30) and incentive given by public administration
(2.19) were not deemed as essential as the previously mentioned drivers.
In Fig. 4 the difficulties perceived in ISO 50001 adoption. The most evident
difficulty perceived is the necessity of “Continuous measurement instruments” with
Norm complexity 2.30

Benefits uncertainty 2.70
Lack of Leadership commitment 2.32
Lack of economic resources 3.08
Data complexity 3.19
Continuous measurement instruments 3.42
Internal communication 2.45
Changing mindset 2.91
1.00 2.00 3.00 4.00 5.00

I M P O R T A N C E
Fig. 4 ISO 50001 implementation difficulties Source put together by the authors
Norm complexity
Benefits uncertainty
Lack of Leadership commitment Not important
Lack of economic resources Little important
Data complexity Important
Continuous measurement… Very important
Internal communication Totally important
Changing mindset
0% 20% 40% 60% 80% 100%
Fig. 5 Distribution of ISO 50001 implementation difficulties Source put together by the authors
the median of 3.42, while the second most important is “Data complexity” (3.19).
They are followed by “Lack of economic resources” (3.08), “Changing Mindset”
(2.91), “Benefits uncertainty” (2.70), “Internal communication” (2.45), “Lack of
leadership commitment” (2.32).
Regarding the main obstacles or pitfalls Fig. 5 illustrates the distribution of the
difficulties in ISO 50001 adoption. The higher degree of importance is symbolized
with darker color; with the darkest indicate the most important difficulties. Seeing
the little distribution of the dark color, it can be concluded that the adoption of ISO
50001 does not pose high difficulties. “Norm complexity” seems to be the least
difficulty faced during the adoption, while “Continuous measurement instruments”
is the highest difficulty faced by certified organizations. “Norm complexity” is
perceived as the least difficulty because the parts and structure of ISO 50001 is
similar with previous meta-standards, namely quality (ISO 9001), environment
(ISO 14001), environment technology service (ISO 20000), corporate social
responsibility (ISO 26000), information security (ISO 27000) and supply chain
security (ISO 280001). And in line with Wessels (2011), the necessity of “Con-
tinuous measurement instruments” is the most difficult challenge in adopting ISO
50001.
Figure 6 illustrated the operational benefits obtained after adopting ISO 50001
and its importance attached to each. The most significant benefit resulted from the
adoption of ISO 50001 is “Energy saving” with the median importance level of
4.43. This finding is in line with the study of Psomas et al. (2011) in Greek
organizations with ISO 14001. It was shown that “Decrease of energy consump-
tion” is among the benefits of higher importance after the ISO 14001 adoption. The
following benefits are environmentally-related, namely “Improve environmental
performance” with the median level of 4.02, increase of energy and environmental
awareness with median of 3.62. The other benefits are related with day to day
operation such as “Process optimization”(3.51), “Overall productivity” (3.06) and
“Plant safety” (2.49). Unsurprisingly, the benefits of lowest importance are product
related, namely “Improve product quality” (2.45) and “Improve product perfor-
mance” (2.40).
Increase of energy & environmental awareness 3.62

Improve product quality 2.45
Improve product performance 2.40
Improve environmental performance 4.02
Energy saving 4.43
Process optimization 3.51
Overall productivity 3.06
Plant safety 2.49
1.00 2.00 3.00 4.00 5.00
Fig. 6 ISO 50001 operational benefits Source put together by the authors
Increase of energy & environmental awareness

Improving environmental impact
Improve product quality
Not important
Improve product performance
Little important
Improve environmental performance
Important
Energy saving
Very important
Process optimization
Totally important
Overall productivity
Plant safety
0% 20% 40% 60% 80% 100%
Fig. 7 Distribution of ISO 50001 operational benefits Source put together by the authors
Figure 7 illustrates the distribution of the operational benefits for adopting ISO
50001. The higher degree of importance is symbolized with darker color; with the
darkest indicate the most important benefits. It is can be concluded easily that
“Energy saving” is the most important benefit while “Improve product perfor-
mance” is the least important operational benefits. As the highest importance of
operational benefits is “Energy saving”, it is interesting to identify how big is the
quantity of energy saving encountered after the adoption of ISO 50001 shown in
Fig. 8.
Half of the organizations adopting ISO 50001 achieved 1–5 % energy saving
while the rest of the organizations achieve higher quantity of energy saving. For
instance 29 % of the organizations achieved 6–10 % energy saving, 11 % achieved
11–15 % and 10 % achieved 16–20 %. This is in line with a study from United
States Department of Energy of Superior Energy Performance (SEP) certification
resulting that energy saving in the first year after SEP training is 3.8 % and 10.1 %
in the first half of the second year (Therkelsen et al. 2013). The quantity of energy
saving gained is ranging from 1–5 % and 6–10 % in accordance with energy
Fig. 8 Quantity of energy

saving
10%
1%- 5%
11%
6%- 10%
50%
11%- 15%
29% 16-20%
management “rule of thumb” from Capehart et al. (2006) saying that typical energy
savings of first year energy management program is around 5–10 %.
The financial benefits vs adoption cost after the adoption of ISO 50001 is
presented in Fig. 9. As can be seen, majority (51 %) responded that the benefit is
bigger than the cost, 16 % responded that the benefit and the cost are similar, while
17 % responded that the adoption cost are bigger than the benefit and 16 % do not
know yet.
However, the finding from the present study revealed that the response is not
extremely high, only 51 %. A research by Carbon Trust Advisory Services (2013)
shown that the average payback (a point in time when the cost spent and the profit
gained is equal) of energy efficiency investment is one until 5 years. Considering
that ISO 50001 was launched on July 2011, thus the adoption time in organizations
so far ranges from 1–3 years, thus it is logical that some of the organizations which
adopted ISO 50001 have not reached their payback. In the same vein, Psomas et al.
(2011) in Greek organizations with ISO 14001 adoption pointed that it takes an
extensive period, which seems more than five years, of ISO 14001 adoption to
realize a better environmental performance. Therkelsen et al. (2013) constructed an
arithmetic model based on case studies in nine facilities adopting SEP certification
stating that SEP participation is expected to have less than 2-year payback for
facilities with an annual energy consumption level greater than 0.27 TBtu, and
shorter payback time with greater annual energy consumption.
15% Yes, the benefit is bigger than the cost
The benefit and the cost are similar.

19%
51% The adoption cost are bigger than the benefit.
15% We don't know.
Fig. 9 Financial benefits vs cost after the adoption of ISO 50001 Source put together by the
authors.
100%
79%
80%
60%
40%
20% 15%
6%
0%
Innovation No innovation We don't know
benefits benefits
Fig. 10 Organization responds of innovation benefits for adopting ISO 50001 Source put together
by the authors.
Figure 10 demonstrated that besides giving operational benefits and financial

benefits, ISO 50001 also gives innovation benefits. Majority of organizations
adopting ISO 50001 responded “Yes” that they reaped innovation benefits for
adopting ISO 50001, while 15 % responded “No” and 6 % responded ‘We do not
know”.
The highest innovation benefit for adopting ISO 50001 is “Innovative strategies”
with the median importance level of 3.86. It is closely followed by the second highest
innovation benefit namely “Process innovation” with the median of 3.58. They are
followed by “Primary material innovation” (2.33) and “Final product innovation”
(2.19). The finding is in line with Halila (2007) in Sweden SMEs with ISO 14001. He
mentioned that corporate environmental strategy has progressed from compliance
(i.e. reacting to environmental regulations) to innovative and proactive strategies (i.e.
doing more than required by the regulatory authorities) Fig. 11.
Finally, Fig. 12 shows general satisfaction with the adoption of ISO 50001,
which as well situated in the last part of the questionnaire to rate the satisfaction.
The respondents were given multiple choices between “Very Satisfied” scored 5,
until “Very unsatisfied” scored 1. The median importance level is 4.36 out of 5,
significance “Very satisfied”. The majority of respondents (55 %) respond “Satis-
fied” while 42 % respond “Very satisfied”, leaving only 2 % responded “Little
satisfied”, 2 % of “Less satisfied” and 0 % of “Very unsatisfied”.
Final product innovation 2.19

Primary material innovation 2.33
Process innovation 3.58
Innovative strategies 3.86
1.00 2.00 3.00 4.00 5.00
Fig. 11 Innovation benefits obtained for adopting ISO 50001 Source put together by the authors.
Fig. 12 ISO 50001 general Less

satisfaction Source put satisfied; Very
together by the authors 2% unsatisfie
Little d; 0%
satisfied;
2% Very
satisfied;
42%
Satisfied;
55%
5 Conclusions
Our findings based on the survey have revealed the motivations and benefits of the
early adoption of ISO 50001. The three most significant motivations to adopt ISO
50001 were the internal drivers such as “improving energy efficiency”, “enhancing
energy awareness between employees” and “leader’s initiative” respectively. In our
study it was concluded that internal drivers rather than external drivers motivate the
implementation of ISO 50001. Based on the result obtained from the questionnaire,
the adoption of ISO 50001 does not pose high difficulties. “Norm complexity”
seems to be the least difficulty faced during the adoption, while “Continuous
measurement instruments” is the highest difficulty faced by certified organizations.
“Norm complexity” is perceived as the least difficulty because the parts and
structure of ISO 50001 is similar with previous meta-standards. And in line with
Wessels (2011), the necessity of “Continuous measurement instruments” is the
most difficult challenge in adopting ISO 50001. According to the survey summa-
rized in this contribution, the process benefits among the organizations adopting
ISO 50001 are “energy saving”, “environmental performance improvement” and
“increase of energy and environmental awareness” are most frequently mentioned
as the main benefits to adopt ISO 50001 standard compared to product benefits of
“product performance” and “product quality”. This confirmed that the adoption of
ISO 50001 gives process benefits rather than product benefits.
This is in line with the study of De Oliveira et al. (2010) regarding ISO 14001
adoption at industries in São Paulo, Brazil that ISO 14001 adoption contributes
especially to the reduction of energy consumption in the production process. In
addition, the finding from the study of Psomas et al. (2011) in Greek companies
with ISO 14001 is in line with findings from present survey. It was shown that
“decrease of energy consumption” is among the benefits of higher importance after
the ISO 14001 adoption.
Moreover, the majority of energy saving gained is ranging from 1–5 % and
6–10 % in accordance with energy management “rule of thumb” from Capehart
et al. (2006) saying that typical energy savings of first year energy management
program is around 5–10 %. However it is interesting to note that several
respondents have gained 11–15 % and 16–20 % energy saving. This is possibly
because they are the first organizations/companies who applied ISO 50001 or they
have energy management program already in place for long. It is found that half of
the respondents opinionated that the direct financial benefits of ISO 50001 adoption
is bigger than the adoption cost. However, the finding from the present study
revealed that the response is not extremely high and there exist a small finding
where the respondents said that financial benefits are equal or even lower than the
adoption cost. A research by Carbon Trust Advisory Services (2013) shown that the
average payback (a point in time when the cost spent and the profit gained is equal)
of energy efficiency investment is one until five years. Considering that ISO 50001
was launched on July 2011, thus the adoption time in organizations so far ranges
from 1–3 years, thus it is logical that some of the organizations which adopted ISO
50001 have not reached their payback. In the same vein, Psomas et al. (2011) in
Greek companies with ISO 14001 adoption pointed that it takes an extensive
period, which seems more than five years, of ISO 14001 adoption to realize a better
environmental performance. Furthermore, it is found some percentages of the
respondents who are not familiar if the financial benefits are bigger than the
adoption cost or not. This is perhaps due to the complexity of organization/com-
pany where some people only understand some part of the organizational activities
and also due to lack of coordination inside organization/company.
The implications of these findings will be of great interest to the main stakeholders
involved in the adoption of ISO 50001, especially for managers, consultants, certified
bodies and the policy makers. In the specialized literature of the field internal factors
of motivations to adopt management systems have been connected to higher
internalization of the standard, or, in other words, to a more substantive adoption of
meta-standards, while external drivers are more related to symbolic adoptions (e.g.,
Heras-Saizarbitoria et al. 2011; Neugebauer 2012; Heras-Saizarbitoria and Boiral
2013b), in other words, aimed at improving corporate image and legitimacy among
stakeholders (Boiral 2007; Boiral 2011, 2012; Heras-Saizarbitoria and Boiral 2013a).
Then, this evidence leads us to conclude that the adoption of ISO 50001—a more
technical and specific meta-standard, which has, so far, a lower brand value for
adopting organizations compared to a more disseminated and popular standard such
as ISO 14001—, could be more aimed at gaining specific energy efficiency perfor-
mance improvements than at other objectives.
Apart from the descriptive analysis, the success of this study is shown by
the high response rate obtained in the survey and case studies of ISO 50001. The
questionnaire was disseminated to 87 organizations of the total 120 ISO 50001
certified Spanish organizations (ISO 2013a), out of which 57 responded. The
highest appreciation is given to 57 organizations who have expressed their expe-
rience and opinion in survey study.
Finally, possible limitations to this pioneering survey and possible avenues for
future research should be mentioned. The methodology used to obtain the quantitative
information on the adoption of ISO 50001, as is based on the perceptions of
specialized managers in charge of the process, could suffer from social desirability
and other related bias (Heras-Saizarbitoria and Boiral 2013a). Similarly, as underlined
by Boiral and Roy (2007), reverse causality bias could be a problem, since the
outcomes of ISO 50001 adoption could influence the perception of its drivers.
Besides, this study is a static study measured in one point in time from one meta-
standard that is still very young and thus the reality of ISO 50001 adoption may
change in the future following the maturation of the standard itself. Also, although the
main characteristics of the process of adoption of meta-standards does not differ much
from one region to another, since the organizational field in which these kind of
standards have been disseminated is a global one, specific conditions in other
countries and regions may alter the findings (Heras-Saizarbitoria and Boiral 2013a).
In any case, this explorative study serves as a stepping-stone for a more detailed and
more comprehensive study to be conducted in the future. Future surveys might, on the
one hand, collect, analyze and triangulate information from various information
sources and on the other hand, collect sample from various countries to analyze the
influence of the geographical variable.
Acknowledgments The authors wish to deeply thank Universitat de Girona and Erasmus
Mundus Action 2 Techno Scholarship for funding this research. Likewise, this contribution is a
result of a Research Group funded by the Basque Autonomous Government (Grupos de investi-
gación del sistema universitario vasco; IT763-13 /GIC12-158).
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Sustainability in Iran’s Road Transport
Sector: Evaluating Strategies and Policies
Afsaneh Moradi, Seyed Reza Hejazi and Jahangir Yadollahi Farsi
Abstract Sustainable development is becoming increasingly important in the

development of business strategies. Consequently, transport activities come under
particular attention due to its significant role in economic development process and
its impacts on the environment. Achieving sustainability in transport sector becomes
more challenging given the growing demand for any kind of transport activities. The
main aim of this paper is to explore the Iranian transport sector’s sustainability
barriers, and evaluate the efficiency of implemented policies and strategies in order to
identify the potentials of improvement. For this purpose, an overview of the country
and its transport sector in terms of energy consumption and pollutant emissions,
which are two main recognized sustainability issues in Iran, will be discussed at first.
Then, sustainability barriers are identified. To that end, the case study approach is
used, and data are collected through documents analysis and interviewing transport
planning and environment management experts. Then, the detected policies and
strategies and their efficiency are discussed using the view point of transport and
environment management experts by Delphi technique. The research revealed that
the growing rate and the age of road vehicle fleet, outdated manufacturing standards,
wasteful consumption patterns, traffic and inefficiency of public transport system are
the main obstacles in the way of achieving a sustainable transport system in Iran. In
addition, according to the viewpoint of experts, renovating deteriorated passenger
cars, obligatory vehicle inspections, expanding subway system in metropolitans,
renovating public transport vehicles and motivating private sector for investment in
public transport were policies who considered having better performance. It is
concluded that a sustainable transport system in Iran will be achieved only in case of
changing the vehicle production and fuel consumption patterns. Also passenger
travel and freight distribution should be shifted to other transport mode.
A. Moradi (&) S.R. Hejazi J.Y. Farsi

Entrepreneurship Faculty, University of Tehran, Tehran, Iran
S.R. Hejazi
J.Y. Farsi

204 A. Moradi et al.
Keywords Sustainability Road transport Strategy Pollution Emission

Evaluation
1 Introduction
Supply and proper use of energy is one of the most important issues that signifi-
cantly influence sustainable development goals. For this goal, resource conservation
and management, administrative use of new and renewable energies and reducing
the environmental impacts of energy consumption is very important.
Transport sector has major share of energy consumption in any country and it
has a key role in development process. Developing countries are facing unprece-
dented challenges towards sustainable societies in the sense that they have to
balance economic growth and environmental consideration even though they are
not major contributors to environmental loads (Fujiwara and Zhang 2005). These
countries face a high rate of industrialization in a short period of time, as a con-
sequence the demand for freight and passenger transport grows with an accelerated
pace while the existing infrastructures are not able to meet the growing needs of
development process. For this goal, policy makers may not pay enough attention to
the context of sustainable development considering that achieving sustainability
goals needs comprehensive planning in all aspects. In a developing country like
Iran, current patterns of transport lead to unexpected environmental, social and
economic costs. In this regard, some problems have been raised, including
increased energy and fuel consumptions, road traffic, road safety, emissions and
pollution and health impacts of road transport. Studies indicate that the environ-
mental and social costs, in terms of local air pollutants, traffic accidents and con-
gestion, can add up to nearly or over 10 % of a region or country’s GDP (UNEP
2011; Creutzig and He 2009).
Transport sector’s planning is one of the main one contributing in green growth
agendas. According to Perkins transport sector’s relevance for sustainable devel-
opment has two main reasons: first, transport has major environmental impacts in
terms of greenhouse gas emissions, local air emissions and noise. And managing
congestion more effectively is part of the broader agenda for more sustainable
development and better use of resources invested in infrastructure. Second, a large
part of public expenditure to stimulate green growth is directed at transport sector
industries. This concerns most notably alternative vehicles, and particularly electric
cars, a key part of strategies to decarbonize transport.
In Iran a series of development plans has been defined for a period of 5 years
each. Just after the end of the war, in 1989, government’s strategies and policies in
favor of a liberalized economy were formed in a series of new five-year develop-
ment plans (FYDP). In recent years, policy makers try to face the challenge of
economic growth and sustainability by modifying consumption patterns, and for
transport sector some solutions are related to: improving infrastructure, developing
Sustainability in Iran’s Road Transport Sector … 205
appropriate and alternative modes of transport, upgrading and modernizing vehicle

fleet, solving traffic problems, promoting the use of public transport, using cleaner
fuels and avoiding unnecessary trips.
This paper aims at discussing sustainability barriers in Iran’s road transport
sector. Firstly, the current situation and emerging trends will be explained by the
help of statistics and secondary sources analysis. The statistics and information are
collected from national and international databases, such as World Bank, Iran’s
national accounts, annual transport books and reports, energy balance sheet etc.
Secondly, semi structured interviews are conducted to collect information about the
existing problems, plans and policies. The research revealed that there are two main
critical issues in Iran’s transport sector in the way of achieving sustainability goals:
1. The high share of energy and especially petroleum products consumptions in
transport sector;
2. The high rate of air pollutant and CO2 emissions from transport activities.
The paper is structured as follow: next section is related to a literature analysis
about sustainability in transport sector and the country’s profile monitored in two
aspects; fuel consumption and pollution emission; after the methodology, the research
observation and findings will be described based on transport and environment
planning expert’s opinions about the main challenges and problems which make
difficulties for achieving sustainable development goals in transport sector. After that
the effectiveness of policies and decisions will be evaluated with the application of
Delphi method. At the end the policies are sorted based on the obtained scores and the
reasons for the worst performance of policies which had the lowest scores will be
explored.
2 Literature Review
2.1 Sustainability in Transport Sector
The term, sustainable development, gained the attention of international society in

Our Common Future, which also known as the Brundtland report, published by the
World Commission on Environment and Development in 1987, although sustain-
ability issue had been noticed by some scholar before (Solow 1974; Hartwick 1977;
Solow 1986). According to the World Commission on Environment and Devel-
opment sustainable development is one that meets the needs of the present without
compromising the ability of future generations to meet their own needs.
Sustainable development has proven an enduring and compelling concept
because it points policy in a clear, intuitive direction, yet is flexible enough to adapt
to emerging new issues, technological and economic conditions, and social aspi-
rations. It is appealing to advocates and scholars alike because it implies a systemic
view of economy and ecology, and requires comprehensive solutions that protect
the interests of future generations. Some scholars who have written about sus-
tainable development believe that in order to achieve more sustainable development
patterns, the economic approach should be shifted to the environment and social
problem solving approach (e.g. Jacobs 1991; Common 1995; Roodman 1998). Daly
defines sustainable development as one that satisfies three basic conditions:
(a) Use of renewable resources does not exceed the rates of regeneration;
(b) Use of non-renewable resources do not exceed the rate at which sustainable
renewable substitutes are developed; and
(c) Rates of pollution emission do not exceed the assimilative capacity of the
environment.
Transport sector has proven to be particularly difficult territory for the
advancement of sustainable development policy. Transportation is a complex and
porous social, technical, and economic system, difficult to address comprehen-
sively. To the extent that policy guidance has been developed to address sustain-
ability issues in general, it usually has only touched on a fraction of the myriad
ways that transportation is integrated into larger systems of human activity.
Meanwhile, current trends are not encouraging.
Transport sector has a main part of economic activities. Transportation plays a
significant role in all economic activities from the beginning of production process
to delivering final products to the market. It serves increasingly as a prerequisite to
maintaining and developing the productivity of other sectors of society. In devel-
oped countries, special attention is being given to the sustainability of current and
emerging land use and transportation patterns. This focus reflects both the signif-
icant impacts that current patterns of transportation have on the environment and
the complex interactions between transportation, land use, and activity systems. In
this context, sustainable transportation is seen as transportation that meets mobility
needs while also preserving and enhancing human and ecosystem health, economic
progress, and social justice now and for the future. Planning for sustainable
development aims to attain all three objectives simultaneously and in a just manner,
considering access as well as mobility in the process (Deakin 2003).
A more sustainable approach to transportation will lead to less environmental
damage before it occurs rather than as a reaction to the damage that results from
vehicle emissions (Fergusson and Skinner 1991). There are two important aspects
of environmental damage: the first is CO2 emissions that cause climate change and
the second is other emissions that contribute to air pollution and subsequent health
effects. These two problems are exacerbated by the increasing trend for private
vehicles. The trend calls for more vehicles on the road which means more vehicle
emissions and thus more deleterious environmental effects. If public transportation
is used more frequently, this can serve as a way to reduce the number of vehicles on
the road and subsequently reduce emissions.
Considering co-benefits of sustainable transport and especially carbon mitigation

policies, it can be argued that carbon mitigating policies and in general climate
change policies have both side effects with sustainable transport planning. Many
authors stimulate consideration of low-carbon, climate-resilient transport strategies
and infrastructure planning from a “co-benefits” perspective. This enables the cli-
mate agenda to advance through synergies with more prominent policy goals since
sustainable transport can generate social, economic and environmental co-benefits
(Bollen et al. 2009a, b; Corfee-Morlot et al. 2009; Leather 2009; Viguié 2011; GIZ
2012; Zusman et al. 2012).
According to OECD, GHG emissions from transport sector will have to be
significantly reduced (OECD 2009). Looking at the global trends, transport is the
second largest contributor to global GHG emissions, causing 23 % of global carbon
dioxide (CO2) emissions from fossil-fuel combustion and about 15 % of global
GHG emissions (Ang and Marchal 2013). In the absence of new policies, transport-
related global CO2 emissions are expected to double between 2010 and 2050,
largely driven by emerging and developing countries (OECD 2012; IEA 2013).
Reducing emissions from transport sector is one of the main challenges that
developing countries face in the way of achieving sustainable development goals.
Generally transport demand has dramatically been increasing for many years
throughout the world. Traffic levels are doubled in many car-depended countries in
the period of 1975–1995 (Banister et al. 2000 and Banister 2000).
In Iran road transport has a considerable share of GHG and other pollutants in
comparison with other subsectors as it’s responsible for 92 % of NOx, 85 % SO2,
99 % CO and 93 % CO2 emissions, these statistics shows the need for urgent
planning in order to limit the side effects of the growing rate of industrialization and
urbanization in order to achieve sustainability in road transport sector. In addition,
considering that the economic activities are highly depended to transport activities
and transport sector is a main contributor of economic growth, it is forecasted that
transport demand will be increased in future. Taking into account that Iran is an
example of those countries that face several environmental and economic growth
problems as the consequences of rapid urbanization the need for more studies in
order to choose the most effective policies and the appropriate scales and instru-
ments for measuring policy performances is emphasized.
2.2 Country Profile
Iran is a developing country located in a unique geopolitical region of south-west

Asia (Middle East).Comprising a land area of 1,648,195 km2 (636,372 sq mi), it is
the second-largest nation in the Middle-Eastand the 18th-largest in the world; with
78.4 million inhabitants, Iran is the world’s 17th most populous nation (Encyclo-
pedia Britannica 2012).
According to the International Monetary Fund, Iran is a “transition economy”,
changing from a planned to a market economy (Jbili et al. 2007). Although the
country is one of the world’s major oil and gas producers, the oil sector accounts
only for 25 % of GDP. The largest contributor of GDP is services sector (around
50 % of total output) (CBI 2012).
Transport in Iran is mainly road based. Road transport has the main share of
passenger and freight displacement in Iran and is considered as the dominant mode
in Iran’s transportation sector with a share of 7 % in Iran’s GDP and share of
90.5 % in passenger transport in 2011 (National Account of the Central Bank of
Iran) Despite the major importance of this sector of transport in Iran, little resear-
ches have been done in this sector. The total road network length in Iran at 2011
was 229,057 km according to World Bank data that 74.3 % of them are paved.
National railway systems have often been used to reduce congestion and pol-
lution, provide access to remote and small communities, or to support economic
development and trade (OECD/ITF 2008) but in Iran the share of railway system in
passenger and freight transport in negligible, government plans to transport 3.5 %
of the passenger volume and 8.5 % of the freight volume by rail. The railway
network expands by about 500 km per year according to the Ministry of roads and
transportation (Abbaszadeh et al. 2010).
2.2.1 Energy Production and Consumption Trends
Iran has the fourth largest oil reserves and the world’s second largest natural gas
reserves (BP Statistical Review 2013; EIA 2013). The Iranian economy is highly
depended on natural resources like oil and gas; the country was on a fast track
before the global economic crisis erupted in 2008, averaging near 7 %. During this
pre-crisis period, Iran’s economic growth has been robust and its external position
had strengthened on the back of rising international oil prices and pro-cyclical
policies. The economy more than doubled from 2003–2004 till the end of 2008–
2009 reaching USD 350 billion (eco trade and development bank 2014). After the
economic crisis the global demand for oil and its by-products dropped, so the
country lost an important part of its income, along this, the political situation
intensified this reduction by reducing the country’s supply share. Iran’s oil pro-
duction has substantially declined over the past few years, and natural gas pro-
duction growth has slowed. International sanctions have profoundly affected Iran’s
energy sector (EIA 2014).
Natural gas and oil accounted for almost all (98 %) of Iran’s total primary energy
consumption in 2012, with marginal contributions from coal, hydropower, nuclear,
and non-hydro renewable (Fig. 1). Iran’s primary energy consumption has grown
by more than 50 % over the past 10 years (EIA 2014). As it can be seen in this
figure the natural resources share in energy consumption is about 98 % while the
share of renewable energies is really negligible (less than 1 %), considering the
world average of 67 % for natural resources and 3.4 % for renewable energies it can
be argued that the first challenge in the way of achieving sustainable development
goals for Iranian government it to limit the use of natural resources.
Fig. 1 Iran’s energy 1% Coal <1% Non-

1% Hydro <1% Nuclear
consumption (EIA 2014) Hydro
Power renewables
37%
Petroleum
61%
Natural Gas
Table 1 GHGs and air pollutant emissions caused by energy production and consumption (tons)
Year NOx SO2 SO3 CO SPM CO2 CH4 N2 O
2007 1,378,957 1,424,973 14,951 8,456,502 367,239 492,264,957 43,001 11,525
2008 1,808,553 1,598,617 15,853 8,973,628 386,757 523,293,617 46,214 12,101
2009 1,836,265 1,678,078 16,953 8,651,070 393,399 538,527,894 50,314 12,147
2010 1,805,823 1,355,656 13,896 8,201,223 655,600 532,324,843 52,236 11,967
2011 1,843,831 1,425,800 13,471 8,033,989 393,055 547,014,571 53,307 11,283
2012 1,861,374 1,540,500 13,636 8,523,752 400,983 556,866,442 57,049 11,609
Source Iran’s energy balance sheet 2012
2.2.2 Pollution and Emission Trends
Energy production and consumption have negative impacts on environment. Air

pollution is the most critical energy-related problem in Iran’s big cities. According
to world health organization, four cities in Iran make the top 10 list of most polluted
cities in the world. Table 1 shows the trends of GHGs and air pollutant emissions
caused by energy production and consumption between the years 2007 and 2012.
It’s clear that the share of CO2 is more than any other pollutant.
The rapid urbanization, population increase, growth of the industry and trans-
portation sectors, and the inefficient consumption patterns have increased concerns
with regard to the emission of pollution. The urban environment of Iran is becoming
increasingly polluted, with adverse impacts on the health, welfare and productivity of
the population. Pollution in Tehran, where 20 % of Iran’s population lives, has well
exceeded safe levels (Masjedi et al 1998; Asgariet et al 1998 and EIA 2000). Rural
areas are threatened by over-exploitation, soil erosion, pollution from agrochemicals
and inappropriate land use and management practices (Rostamihozori 2002).
3 Research Methodology
This research is an empirical exploratory case study which is used to explore those
situations in which the intervention being evaluated has no clear, single set of
outcomes (Yin 2003).; the main aim of research is to look for sustainability
problems in Iran’s road transport sector. After explaining the country’s situation
and emerging trends with statistics and secondary resources, 21 semi structured
interviews conducted to collect necessary information about the existing problems,
resolving plans and policies.
The statistics and information are collected from national and international
databases, such as World Bank, Iran’s national accounts, annual transport books
and reports; Energy balance sheet, etc. The interviewees have been chosen by the
selective sampling method from transport planning experts and managers. The
interviewees asked to give their idea about transport sector’s barriers for achieving
sustainability goals, current and future policies or plans for resolving those prob-
lems. The answers have been analyzed and the problems that have been mentioned
by at least 12 interviewees (more than 50 % of interviewees) considered as the
country’s main challengers for achieving sustainable transport. The identified
problems have been examined by supporting statistical data. Then the effectiveness
of policies and plans has been analyzed based on Delphi method by a panel of
experts who asked to answer the questionnaires in two rounds. They have been
asked to weight the list identified policies (in order to find out which policy is
preferred) and give their opinion about the effectiveness of the selected policies and
plans by giving a number between one and ten according to the efficiency of each
policy. At the end the average score is calculated for each policy and the policies
and been sorted according to the obtained score.
4 Observation and Discussions
4.1 Sustainability Barriers in Road Transport Sector
According to transport planning experts in Iran, the rapid rate of urbanization,

growing rate of petroleum products consumption as a consequence of growing
number of vehicles in the roads, the age of vehicle fleet, manufacturing vehicles
with abolished fuel consumption standards, the inefficiency of public transportation
system, the low price of petroleum products are among the obstacles of achieving
sustainable transport system in Iran. Here the problems will be explained with the
support of statistical data and other researches achievements:
1. The growing rate of road vehicle fleet
In Iran, about 90 % of passenger and freight are moved by road transport.
General road transport fleet including truck, bus, minibus and passenger cars is
the key element of the transporting passengers and cargo on the roads. Between
the years 2001 and 2011 the number of vehicle freight shows an annual growth
rate of about 12.39 %whilst the average growth rate for passenger cars in the
world is 2.9 % and for heavy duty vehicles is 4.52 %.
Beside vehicle fleet, another problem is the number of motorcycles which came
into the market without considering any environmental standard. The motorcy-
cles fleet also rose with an accelerated pace of annual growth rate about 21.96 %
between 2001 and 2011.
2. Vehicle fleet age

In Iran vehicles are used more than their optimal life due to the high ratio of
vehicle to fuel prices and this cause the vehicle fleet age raise (Salahi and
Kashani 2008). From 1990s many countries around the world took incentive or
mandatory policies for phasing out old vehicles. In Iran, there were incentive
strategies for replacing old passenger cars by the new ones after the year 2000.
The average age of buses, trucks, taxi and personal vehicles was 22,19 and
15 years in 2005, and by removal of 758 trucks, 5,502 buses and minibuses and
147,475 taxi and the obligation from government along with loan and financial
aid, the average age of these vehicles have reached 19, 13 and 15 years. But
there is a need for more investments for replacing medium and heavy duty
vehicles, as the majority of those vehicles are still above their optimum lifetime.
The lack of investment for medium and heavy duty vehicles resulted in reducing
the effectiveness of renovating light duty vehicle fleet by increasing the share of
old heavy duty vehicles in fuel consumption and pollution emissions. The
statistics confirms this statement by representing that 80 % of light duty vehicles
has the ages less than 10 years, while 60 % of medium duty passenger vehicles
and heavy duty trucks still working with more than 20 years old. Considering
that the amount of pollutants emitted by old vehicles is many times more than a
normal one, the necessity of renewing medium and heavy duty vehicle fleet
could be emphasized.
3. Manufacturing vehicles with abandoned or outdated fuel consumption
standards
Several EU transport emission-related policy measures, such as fuel quality and
ever tighter vehicle emission ‘Euro’ standards for certain new vehicles, have
significantly reduced emissions from the transport sector (EEA 2010). In Iran
most of the manufactured vehicles have been out of Euro emission standard
scopes and those which were in accordance with Euro emission standards,
couldn’t obtain more than Euro 4 standard. Considering the combined fuel
consumption standards, vehicles in Iran are generally consume more than 6, 5 l,
and even sometimes about 14 l per 100 km in full circulation. Although there are
obligatory regulations for technical inspection of vehicles and heavy fines for
those who do not obey, but the vehicle manufacturing companies in Iran
couldn’t or didn’t want to adapt themselves with global trends.
4. Wasteful consumption patterns due to low fuel prices
The energy market in Iran is a monopoly. The government, as the only supplier,
sets the prices of energy carriers. The government has historically set prices low.
Taking into account its average price in Persian Gulf to be almost 4 US$, it can
be concluded that it was being supported by government subsidiary (Rasouli
Rasouli 2009).Generally speaking; the government froze energy carriers’ prices
from 1978 to 1996. By 1996, given the inflationary state, the price freeze
depreciated energy prices. The resulting distortion in energy prices in Iran has
had a two-fold effect:
(a) Energy prices are generally far below the competitive global market price;
and
(b) The relative prices of energy carriers are distorted with respect to each
other.
In 1996 government started a gradual price reform on energy carriers (Sab-
etghadam 2006). The first phase of the reform was enacted in late 2010, and
phase two was initiated in early 2014 (EIA 2014).This reform aimed at cor-
recting the relative prices of oil products and their relationship to the general
consumer price index. However because of the gradual and insufficient increase
in the price of energy, the policy has not been effective (Sabetghadam 2006).
5. Traffic
In many countries, the exclusive concentration on a simple extension of the road
based transportation network led to growing individual car traffic hence to
additional demand for roads and striking external effects of transport (Arndt and
Doge 2013).
Traffic is the main source of fuel consumption and pollution emissions espe-
cially in urban areas. Most of the Iranians prefer to use private cars due to
inefficiency of public transport system. Private cars number shows the annual
growth rate of 12.06 between the years 2001 and 2011, while the annual growth
rate for taxies, buses and mini buses was 10.32, 5.72 and 1.30 respectively. In
addition stable traffic flows in big cities increases the fuel consumption and
pollution emission in certain hours of the day.
6. Inefficiency of public transport system
The annual growth rate for the use of public bus and mini buses in Iran has a
minus trend. According to Transport and Energy Data Book, the annual growth
rate for the use of private cars, taxies, buses and mini buses in Iran between the
years 2001 and 2011 was respectively: 12.06, 11.38, −2.43 and −5.22 %. This
statistics shows that people do not have tendency to use public transport system.
This may be because of inadequate public transport vehicles and infrastructures,
time consuming journeys with public transport and traffic conditions in big
cities. Figure 2 shows the trends of private car use in comparison with public
transport vehicles. As it is clearly shown in Fig. 2, people in Iran prefer to use
private cars instead of public transport, although public transport is much
cheaper than other countries in the world.
4.2 The Main Challenges for Achieving Sustainable

Development in Transport Sector
The problems described above have some macro-level consequences which cause
two main challenges for sustainable transport system in the country. These challenges
are:
3000
2500
veh/km per person
2000
private car
1500 taxi
bus
1000
mini bus
500
0
2000 2002 2004 2006 2008 2010 2012
year
Fig. 2 Trends of private car use in comparison with general public transport vehicles. Source
transport and energy data book

transport sector;
The challenges trends can be monitored by the statistical data obtained from
national resources. The government took some policies and strategies for resolving
these problems. In the next part, the policies and their efficiency evaluated by the
transport planning experts will be discussed.
4.2.1 Transport Sector’s Higher Share of Energy Consumption
Transport sector is one of the foremost primary energy consumers of fossil fuels,
especially petroleum products, and is a major contributor to environmental degra-
dation (Wen and Yan 2010; Serrano et al. 2012). Transport sector emissions are a
main component of sustainability problems like air pollution and climate change.
As previously mentioned, transport sector is one of the main objective sectors in
planning for sustainable development. In transport sector the main energy con-
suming subsectors are road, air and marine transport (Dincer et al. 2004). The
growing number of private cars, buses and motorcycles on the road subsector on one
side, and improving the airplane, aircraft and cargo ship’s quality in air and marine
subsectors on the other side, increases the energy consumption of this sector (Wen
and Yan 2010). The consequence of transport sector development is the depletion of
natural resources, and the increased greenhouse gases emissions, which attracts the
attention of both the scientific community and policy makers (Ozan et al. 2011).
In Iran road transport accounts for about at least 25 % of total energy con-
sumption and has the highest share of consuming petroleum products. Table 2
Table 2 Energy consumption in transport and other sectors, 2001–2010

Year Transport share of energy Petroleum products consumption
consumption (%) in transport sector (%)
2001 28.5 99.98
2002 28.6 99.98
2003 28.7 99.98
2004 28.2 99.75
2005 28.2 99.22
2006 27.1 98.75
2007 24.5 97.49
2008 25.3 95.83
2009 26.5 92.93
2010 26.1 88.29
Source Electricity and energy general planning office, ministry of energy, Iran
shows the energy and petroleum products consumption in transport sector com-
pared with all other sectors between the years 2001 and 2010.
4.2.2 Pollution and Emissions in Iran’s Transport Sector
In Iran transport sector has the main share of any gas emission between all energy
consumers. It should be emphasized that transport sector is the second largest
contributor to CO2 emissions after power plant sector. As it’s shown in Table 4 again
CO2 emissions in road transport sector is more than any other pollutant (Table 3).
Iran is one of the highest carbon emission-intensive countries in the world.
According to World Bank data, Iran ranked 10 for CO2 emissions in the world and
in the most recent data published by IEA at 2013, the country become 8th CO2
emitting country in the world. Beside this, at 2011 the CO2 emission per capita in
Table 3 The percentage of GHG and other pollutant emissions in energy producing and
consuming sectors (%), •: data are not available
NOx SO2 SO3 CO SPM CO2 CH4 N2O
Total energy consuming sectors
Residential, 5.76 3.49 4.50 0.53 2.62 22.92 7.05 4.46
commercial
and public
sector
Industry 9.03 13.15 21.97 0.17 4.30 16.99 3.64 2.40
Transport 48.12 25.83 31.73 97.22 78.48 23.49 80.07 51.08
Agriculture 3.27 4.06 2.79 0.17 6.64 2.26 1.14 35.65
Energy producing sectors
Refineries • • • • • 2.98 0.62 0.39
Power plants 33.81 53.46 39.01 1.90 7.97 31.37 7.49 6.01
Table 4 GHGs and air pollutant emissions in Iran’s road transport sector (tons)
Year NOx SO2 SO3 CO SPM CO2 CH4 N2O
2007 780,647 325,172 3,456 8,268,940 258,318 106,983,905 32,416 5,159
2008 816,610 340,749 3,623 8,619,911 270,677 113,235,805 35,293 5,389
2009 807,245 340,992 3,642 8,312,710 270,761 115,820,357 39,526 5,364
2010 801,994 346,931 3,737 7,849,053 275,266 117,470,093 41,575 5,254
2011 798,551 347,584 3,752 7,707,863 275,729 117,951,801 42,390 5,212
2012 828,475 356,394 3,831 8,208,263 282,824 123,858,601 45,595 5,430
14
12
10 Iran, Islamic Rep. IRN
Middle East & North

6
Africa (developing
only)
4
OECD members
2
0
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Fig. 3 The rate of CO2 emission trends in Iran, with Middle East developing and OECD
countries. Source World Bank development indicators
Iran was 7.32 tons per person which is a considerable amount. The CO2 emissions
in Iran dramatically rose in 10 years; between 1998 and 2008 the country’s CO2
emission amount get almost doubled (Fig. 3). Iran has the highest rate of CO2
emissions in the region and the country’s share is more than all developing
countries in Middle East and North Africa.
4.3 The Existing Policies
Iranian government has special policies for improving transport sector efficiency,
especially in line with the main challenges mentioned above; energy consumption
and pollutant emissions. Different organizations and ministries asked to cooperate
for solving the problem of air pollution which is now a critical problem in the
country. Also some organizations established especially for these goals like the Fuel
conservation organization (IFCO) that was established at 2000 to help promote
energy efficiency and conservation. IFCO studies energy consumption standards
and conducts research on ways to apply such standards.
Table 5 The main policies for facing the challenge of high air pollution and fuel consumption in
Iran
Main goal Existing policies
Transport supply Transport integration
management Shifting freight and passenger transport demand to other
transport modes
E-governance
Improving roads, highways and other transport infrastructures
Fuel consumption Vehicle technology improvement
management Gradual elimination of fuel subsidiaries
Using alternative fuels like CNG
Renovating deteriorated cars
Duty-free fuel efficient and electric and hybrid vehicles
Air pollution reduction Monitoring air pollution in cities
Vehicle technical inspection
Electric motorcycles
Traffic management Traffic restricted areas in metropolitans
Expanding subway system in big cities
renovating public transport vehicle fleet
motivating private sector to invest in public transport
Bus rapid transit lines
Parking supply management
The existing policies include different plans and strategies from fuel consump-
tion management to transport modal shift strategies and vehicle maintenance and
mandatory inspection regulations. The main strategies mentioned by the intervie-
wees are classified and summarized in the Table 5 which was given to Delphi panel
experts to be weighted.
They have been asked to weight the list identified policies (in order to find out
which policy is preferred) and give their opinion about the effectiveness of the
selected policies and plans by giving a number between one and ten according to
the efficiency of each policy. At the end the average score is calculated for each
policy and the policy according to weighted average equation:
Pn
i¼1 W E
Ps ¼ P
W
where in it:
Ps Policy Score
n the number of Delphi panel participants
E Policy effectiveness
W Policy weight
Table 6 The performance of existing policies adopted for reduction of air pollution and fuel
consumption in Iran’s transport sector
Policy Policy scores
Renovating deteriorated cars 7.09
Vehicle technical inspection 7.05
Expanding subway system in big cities 6.64
renovating public transport vehicle fleet 6.54
motivating private sector to invest in public transport 6.52
Using alternative fuels like CNG 6.35
Bus rapid transit lines 5.88
Duty-free fuel efficient and electric and hybrid vehicles 5.30
Parking supply management 4.94
Electric motorcycles 4.91
Monitoring air pollution in cities 4.85
Improving roads, highways and other transport infrastructures 4.77
E-governance 4.50
Transport integration 4.20
Shifting freight and passenger transport demand to other transport modes 3.85
Traffic restricted areas in metropolitans 3.55
Gradual elimination of fuel subsidiaries 3.24
Vehicle technology improvement 3.05
The policy score obtained in this formula shows that which policies have been
more effective in Iran. It is not necessarily means that the policies with higher score
are better, but those policies had better performance in achieving sustainable
transport system goals in Iran. Table 6 shows the policies sorted based on the score
obtained in weighted average equation.
As it as shown in Table 6, according to Delphi panel experts; renovating pas-
senger cars, vehicle technical inspection and expanding subway system in metro-
politans were the most effective policies in reducing air pollution and fuel
consumption in Iran. The experts believed that the vehicle technology improve-
ments, elimination of fuel subsidiaries and traffic restricted areas were not suc-
cessful policies. This doesn’t mean that these policies shouldn’t be applied any
more, but what is evaluated in this paper is the policy performance in Iran during
the 10 years between 2001 and 2011 and indeed there were some reasons for
limiting the performance of the strategies and policies.
So at the second round of Delphi method the results of the analysis has been
given to the panel members and they asked to give their opinion about the reasons
of ineffectiveness of the last five policies listed in Table 6.
The main reasons that prevent the policies to be effective are listed in Table 7.
Table 7 The main reasons of policy ineffectiveness

Policy The main reasons for low performance
Transport integration Last efforts for modifying land use patterns in
Tehran and some other big cities was not successful
Residential areas around cities do not have suitable
access to the city centers
Low taxi fares caused people do not have the
tendency to use other means of public transport like
bus and subway system
Shifting freight and passenger transport The rail network coverage in the country is not
demand to other transport modes suitable
Air transport does not have enough capacities to
handle the burden of more passenger or freight
transport
Traffic restricted areas in metropolitans there is a possibility to buy the traffic authorization
to enter the restricted areas, the process is not
preventive
Gradual elimination of fuel subsidiaries Since the consumption behavior and the vehicle
consumption amounts are not modified this policy
wouldn’t be effective
Vehicle technology improvement The improvement in vehicle technology is not
according to the updated standards in the world
Due to the high prices of passenger cars, customer
are reluctant to pay more for advanced technologies
5 Conclusion
Achieving sustainable transport system in developing countries is a challenging

process. As these countries experience high urbanization rates in a short time, the
transport infrastructures are not adapted to the pace of urbanization, on the other
side, the growing number of economic and business activities are highly depended
to the transport activities. As a result, transport system grows without considering
the structural issues. Iran is an example of those countries that face several envi-
ronmental and economic growth problems as the consequences of rapid
urbanization.
This research aimed at identifying sustainability barriers in Iran and evaluating
the implemented policies for resolving those problems, the research revealed that
the high growth rate of vehicle fleet and the fleet age, outdated production stan-
dards, wasteful consumption patterns, traffic and inefficiency of public transport
system are the main problems in the way of achieving sustainability goals in
transport sector. The main macro level consequences of those problems are:
transport sector;
Monitoring the trends of those macro-level challenges showed that the country is
in a critical situation now and there is an urgent need for a comprehensive planning
in order to reduce the consumption of natural resources and air pollution emissions.
The main policies implemented by the government in the studied period (2001–
2011) identified by interviewing transport and environment planning experts and
managers. Then the policies were given to the panel of experts they asked to weight
the policies according to their importance and score the performance of those pol-
icies. The weighted average for each policy was calculated based on the scores was
given by the experts, and then the policies were sorted according to the obtained
score. The list of policies and the main aim of applying those policies are presented
in Table 5. The sorted list of policies based on policy scores can be seen in Table 6.
Although all policies listed in Tables 5 could contribute in making transport
more sustainable, at least they can contribute to solve one of sustainability obstacles
that were mentioned in Sect. 4. However, if the policies or strategies could not be
managed properly like the elimination of fuel subsidiaries, their effect will be
limited as the transport and environment sectors experts claimed at the second
round of Delphi questionnaire. Consequently, there should be predefined metrics
and objective goals to measure the policy effectiveness while in Iran there is no
clear objective for evaluating the effectiveness of implemented policies. Another
problem is that some of those policies implemented in a certain period of time and
after that they have been abandoned or excluded due to the changes in the top
management level as a consequence of government changes.
Ultimately a sustainable transport system in Iran will be achieved only in case of
changing the vehicle production and fuel consumption patterns. Also passenger
travel and freight distribution should be shifted to other transport mode. The
research showed that if the policy chosen based on the comprehensive study of
future effects and well managed during the time of the application, they could be
introduced as part of broader strategies. Ultimately, it is likely that only through
such a broad approach, alongside the policy instruments above, the transport sector
will be able to achieve sustainable development objectives.
The practical conclusion of this research consists in the necessity to optimize
public transport fleet and infrastructure, choosing the best policies for limiting the
use of private cars, reforming vehicle manufacturing industry and Selecting policies
and strategies based on the scientific decision making process instead of choosing
available possibilities. Government and public administration has to play a key role
in this respect, thus the paper tries to underline the importance of choosing the
effective policies and evaluating the effectiveness of applied policies and strategies.
Another important issue is that people should be informed about the consequences
of pollution and Indiscriminate consumption of fuels. They should be motivated to
voluntarily cooperate in implementing the strategies.
In Iran many researches had been done for studying the air pollution in Tehran
metropolitan area (Asadollah-Fardi 2001; Abbaspour and Soltaninejad 2004; Mo-
radi et al 2010; Torkian et al 2012), however more research is needed with the
whole country vision considering that at least two or three other cities (like Ahwaz
and Kermanshah) ranked among the most polluted cities in the world.
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Measuring Operations Performance Measuring Operations Performance

333005_Print.indd 1 02-01-2015 08:30:30

ISSN 2363-9970 ISSN 2363-9989 (electronic)

Library of Congress Control Number: 2014957399

Springer Cham Heidelberg New York Dordrecht London

Printed on acid-free paper

Springer International Publishing AG Switzerland is part of Springer Science+Business Media

Marketing Strategy, Strategic Planning and Corporate

Sustainable Knowledge Management and the Outsourcing

The Role of Culture in a Sustainable Built Environment . . . . . . . . . . . 37

The Management of Environmental Performance

The Measurement of Environmental Performance in Hospitals:

How Does Innovativeness Foster Sustainable Supply

Sustainable Manufacturing: The Lean and Green Business Model . . . . 131

Sustainability Through Eco-Design: Shedding Light

Early Adoption of ISO 50001 Standard: An Empirical Study . . . . . . . 183

Sustainability in Iran’s Road Transport Sector:

Keywords Marketing strategy CSR European manufacturing Qualitative

© Springer International Publishing Switzerland 2015 1

2 Strategic Planning Process

Fig. 1 Relationship between company and marketing strategy

1. Defining the company’s mission, vision and strategic goals – objectives

2. Identifying threats and opportunities

3. Defining Marketing Strategy plans and actions

4. Budgeting Marketing plans and actions

5. Reviewing objectives, corrective actions

Fig. 2 Deployment from long–period strategies to the periodical reviewing process

Fig. 3 Marketing strategy

Standard product Innovative product

The primary scope of observation is to observe participants in as natural a setting

5 Discussion of the Theoretical Results

5.1 Mission, Vision and Strategic Goals

5.2 Identifying Threats and Opportunities

5.3 Deﬁning Marketing Strategy Plans and Actions

Fig. 4 Typical marketing

Distinguish the company from

Pricing & Positioning Strategy

Sales, distribution and promotion

5.4 Budgeting Marketing Plans and Actions

5.5 Reviewing Objectives, Corrective Actions

5.6 Shaping the Theoretical Framework

Fig. 5 The theoretical Technical Cultural

A CSR internal aspects B

C CSR external aspects D

Standard product Innovative product

Literature review has demonstrated how message content and communication

Susanne Durst, Ingi Runar Edvardsson and Guido Bruns

Keywords Outsourcing Knowledge management Knowledge competences

© Springer International Publishing Switzerland 2015 15

The pursuit of sustainable business development has been subject to an increasing

Outsourcing has become rather common in recent years and organizations

Much of the existing literature on KM is concerned with how organisations can

countries, such as software outsourcing in India (Jain and Khurana 2013).

advantage, thus addressing an organization’s core business function(s). This situ-

3 Methodology of Literature Review

In our review process, we adopted the principles of a systematic review as rec-

4.1 General Observations

4.2 Body of Knowledge Regarding the Outsourcing

4.2.1 Reasons for and Against KC Outsourcing

4.2.2 Consequences of KC Outsourcing

4.2.3 Contributing Factors to the Success of KC Outsourcing

4.2.4 Framework/Theory Development

Author(s) Year Research aims/objectives Theoretical Method Main ﬁndings Journal