«PROACTIVE ENVIRONMENTAL STRATEGIES IN SMALL BUSINESSES: RESOURCES, INSTITUTIONS AND DYNAMIC CAPABILITIES Jan Lepoutre Promotor: Prof. Dr. Aimé Heene ...»
beyond legal requirements in green production, it runs counter to the strong regulative, normative and cognitive resistance to do so. Members that strive to minimize their environmental impact and be transparent about it, receive criticism for being too open, and for stimulating the government to install additional constraining regulations. Also, given that there are neither external stakeholder pressures, nor market incentives to adopt PES, such organizational postures represent a substantial deviation from the isomorphic pressures in the sector. Finally, the limited and decreasing membership of VMS in the sector shows that neither proactive environmental strategies, nor disclosure about organizational impact on the environment has become institutionalized in the sector. As a result, we used VMS membership as a proxy for institutional non-conformity. Furthermore, we used the VMS score as a proxy for whether the firm not only had the intention to go against the institutionalized expectations and practices in the sector, but had also been able to deploy the institutional nonconformity into actual activities.
When analyzing the cases, we first compared matched-pair polar types, one successful and one unsuccessful, and then used a replication logic to see whether the emerging findings were confirmed or refuted by the rest of the cases (Eisenhardt, 1989a; Yin, 2003). We looked for similar constructs emerging from the data, using tables and charts to facilitate comparison (Miles & Huberman, 1994). The iterative process between data analysis, literature enfolding and writing resulted in a number of propositions that explain successful institutional nonconformity in small businesses.
7.4.1. Interaction Scope with the Organizational Field In chapter 6, we identified “the building and attracting of networks rich with complementary resources and capabilities” as an important predictor for a better ability to realize the proactive environmental intentions of the firm. In this section, we will further explore the specific function that these networks played in enabling the firm to go against the institutional expectations of the ornamental horticulture sector. Emerging from the reflection of our findings with the literature in this perspective was the particular interaction scope with the organizational field that a firm’s network yielded.
Institutional theory assumes that organizations operating at the fringe location of an organizational field have fewer connections to other organizations in the field and will therefore experience fewer barriers for non-conformity than organizations operating centrally
in the field (DiMaggio & Powell, 1983; Leblebici et al., 1991; Haveman & Rao, 1997; Kraatz & Moore, 2002). On the other hand, centrally located organizations would be able to use their legitimacy to sell the deviance of the institutionalized practice to the stakeholders in their field (Sherer & Lee, 2002; Greenwood & Suddaby, 2006). Consistent with Greenwood and Suddaby (2006), our findings indicate, however, that it was not network location that determined the organization’s ability to go against institutional norms, but a lower embeddedness of the organizations in the organizational field. We found that both the adoption of multiple roles in the organizational field and the exposure to alternative institutional logics were important in this perspective.
Table 7.1 summarizes the firm’s field location, their positions in the organizational field and its exposure to alternative institutional logics.
We determined field location as “Central” when the firm was highly connected to, active or represented in the bodies that sustained and reinforced the institutional logic of the ornamental horticulture industry (especially traders and professional associations). In contrast, a firm was labelled “Peripheral” when it was – either deliberately or not – isolated from the core actors of the organizational field. We coded the interviews for the positions the owner-managers assumed in their organizational field by looking at the type of connections they had and with whom.
Subsequently, we quantitatively measured the number of roles assumed by recording each unique role that was mentioned by the respondent. Similarly, we probed the interviews for exposure to alternative institutional logics, by looking at the firm’s history in the organizational field and with specific focus on how and when they had entered the institutional field.
Multiple roles. As Table 7.1 indicates, the data suggest that the adoption of multiple roles in the organizational field was associated with higher VMS scores and therefore with successful institutional non-conformity. For example, the Panamarenko case illustrates the link between the adoption of multiple organizational field roles and successful institutional non-conformity in a peripheral field location. Panamarenko’s owner-manager was not only a producer of plants, but he also took up positions in the organizational field as retailer, salesman and product developer. Since part of the production was sold on site in the firm’s own garden center, he took up the position of a business-to-end-consumer retailer. Such a widened interaction scope was important to Panamarenko because a strict barrier is usually maintained between traders and producers, and information about consumer preferences and sensitivities is kept secret by traders and retailers in the industry. By acting as a retailer, however, Panamarenko had access to different perspectives on his product. For example, by
selling part of his plants directly to the end-consumer, he was exempt from the export obligation to chemically clean plants from any potential pest or insect. As a result, he could experiment with selling plants to customers that were not treated in this way, and with success. In addition, he served as the company’s own salesman for the part of the production that was exported from the firm to international customers and larger retailers. To this purpose, he developed the same practices as large trade businesses, by renting costly promotion booths on large trade fairs, looking for customers in the international market.
Panamarenko’s owner-manager said that this was necessary due to the institutional tendencies of traditional traders: “they can sell an Azalea or a pot plant, but they don’t go further than that”, and “those people don’t get my plants sold, so I have to do it myself!” (owner/manager Panamarenko) As a result, he was a lot less dependent on the larger traders like most businesses in the industry and less constrained by their expectations. Importantly, although he encountered the same institutional resistance to green production in his various roles, he
seemed insensitive to them:
“when I go to [a famous trade fair], then I talk about it [about VMS], because I bring my sign, my VMS-sign. And then sometimes they say, ‘well, well, are you into that … it’s so much work and this and that. We just spray and we win a lot of time with it.’ But I don’t listen to them, because I’m convinced that that is the future.” (ownermanager Panamarenko).
Finally, he was involved in a program to support young plant businesses in their R&D for the production of new plant innovations with license protected varieties. The exposure to this multitude of roles in the organizational field made Panamarenko aware of how to position the firm in ways of which other companies were not aware.
In contrast, the less successful firms were only active in a limited number of roles in the organizational field. Rubens, for example, was only active in the sector as a producer. All the plants that were grown at the firm were bought from larger suppliers and plant propagators, to whom he sometimes had to pay a license fee in return for the ability to grow the plant. Furthermore, the owner-manager of Rubens was very reluctant to assume multiple roles in the sector. He explained this by referring to his late father, who had been an active leader within the professional associations: “he put so much time into that, and when he got [terminally] ill, he didn’t get anything in return” (owner-manager Rubens). This made the existing owner very reluctant to take on leadership roles in local guilds and act more on his own.
Alternative institutional logic exposure. The exposure to alternative institutional logics emerged as a distinct, yet related feature from our data. Whereas the adoption of multiple roles acted as an exposure to multiple perspectives within the Belgian ornamental horticulture, the alternative institutional logic exposure brought firms into contact with alternative perspectives outside the Belgian ornamental horticulture. Table 7.1 shows that the alternative institutional logic exposure was an important factor in yielding the ability to successfully execute non-conformity. Again, Panamarenko is a particular example where the alternative institutional exposure made him less sensitive to institutionalized behaviors and expectations. Having essentially no training in the ornamental horticulture, and having acquired the firm at later age, he was not “born” in the sector as many other owner-managers in the sector that had acquired their firms from their family.
“in the plant world, I’m sort of a maverick. (…) most here are generation to generation. (…) I’m glad that I have a neutral view on those things. (...) VMS, for example, they were not 100% in favor of it. Whereas I am all for it! And that I think to myself: environmentally friendly ornamental horticulture is so important! You have an overview of what you’re doing, and how you’re dealing with things. And you have a totally different view of this whole world.” Yet the owner-managers from Fabre, who did acquire the firm from their parents, are an example that alternative institutional exposure was possible in many other ways. Through their contacts with companies all over Europe, they were exposed to alternative technologies and practices that other firms did not see and therefore question the local institutionalized practices.
In contrast, the unsuccessful firms mostly stayed within their own organizational field.
As a result, they found little technical and technological support that could enable them to achieve their proactive environmental strategies. For example, Jordaens was aware himself of the limits of his embeddedness.
“For example, you’re stuck with a severe aphid infection and you call and ask ‘I’ve got an aphid infection here, what should I spray?’ DDVP! Of course, what does the pesticide vendor know about MPS? Nothing! He just says ‘DDVP is the best product’.
And there you go! (…) It’s something else when that pesticide vendor lives in the Netherlands, he’ll know ‘I can’t sell this product to florists, because it results in bad points for them.’ The whole system there works on MPS, so everybody has experience with it, same with suppliers and all…” (owner/manager Jordaens)
Together, we propose:
Proposition 1a: Small businesses that assume multiple roles which are normally structurally separated in the organizational field will decrease the institutional embeddness that inhibits successful institutional non-conformity.