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Lund University School of Economics and Management MSC Managing People, Knowledge and Change BUSN49 Degree Project The Process of Making Change Stick for Corporate Sustainability by Doreen Tan and Nils Maurice 20 th of May 2016

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Page 1: Introduction - Lunds universitetlup.lub.lu.se/.../record/8881293/file/8881295.docx  · Web viewThe word ‘credible ... either you or someone in the supply chain wants ... These

Lund University School of Economics and Management

MSC Managing People, Knowledge and Change

BUSN49 Degree Project

The Process of Making Change Stick for Corporate Sustainability

by

Doreen Tan and Nils Maurice

20th of May 2016

Supervisor: Stefan Sveningsson

Examiner: Sverre Spoelstra

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Acknowledgement

First and foremost, we would like to thank our supervisor Stefan Sveningsson who not only

guided us through the process of writing this master thesis, but also provided constant support to

circumnavigate the various difficulties and uncertainties which arose on the way. Thank you

Stefan, our meetings with you have been the funniest part in this process!

Moreover, we want to express our gratitude to the first and second F Pak interviewees, who not

only took the time to explain various concepts and provide insightful descriptions of their work

situations, but helped to pave the way for more interviews with other colleagues. We truly

appreciate this support!

Many thanks as well to all the other interviewees, without whose experience and candor this

research would not have been possible.

Doreen & Nils

I personally want to thank Doreen for being the best thesis partner I could wish for. Your

prudence, your experience and academic creativity provided me with clear guidance along the

way. Thank you for your sustained support, clear feedback and the good food! I am looking

forward to see you back in Singapore!

Nils

I would like to thank you Nils for being a great thesis partner and the wonderful person that you

are. You have been ever supportive, proactive and attentive. We work hard and play hard

together. All these made the thesis journey not just bearable, but also enjoyable. I look forward

to our continuing friendship in the years ahead.

Doreen

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Abstract

Nowadays companies need to consider sustainability issues if they wish to operate in harmony

with society and the environment and to leverage their resources efficiently in the long run.

Sustainability issues often become the drivers for organizational change due to external pressures

and demands. As it takes time for sustainability efforts to bear fruit, companies need to remain

committed to the cause for the long haul. However, not many companies are able to persevere till

the end of the journey allowing change to stall or relapse. Our research aims to find out how

organizations engaged in corporate sustainability ensure that changes stick. We first established

the theoretical linkage between organizational change and corporate sustainability, and described

possible ways to make change stick. Thereafter, we examined what actually happens during the

implementation of corporate sustainability change by conducting in-depth interviews with

managers involved in environmental sustainability work using an interpretive approach. The

empirical data was hermeneutically interpreted and the findings derived with a critical twist. The

interviewed company seems to fulfil the theoretical conditions for environmental sustainability

change to stick but tends to leverage more heavily on structures and processes for change

implementation. This top-down approach is exacerbated by the obligatory usage of the Kotter

model for change management in the company. Although structures and processes facilitate

management control and the eventual embedding of change, they also result in inflexibility and

reduced agility. The company needs the right balance between rigor and speed to attain

environmental excellence and business viability in the long run.

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Table of Contents

1. Introduction..............................................................................................................................6

1.1. Background.......................................................................................................................6

1.2. Research purpose..............................................................................................................7

1.3. Research approach............................................................................................................8

1.4. Thesis outline....................................................................................................................8

2. Theoretical and Literature Review.........................................................................................10

2.1. Organizational change is difficult...................................................................................10

2.2. Corporate sustainability change is even more difficult...................................................12

2.3. Making change stick is the ultimate aim.........................................................................15

2.4. The process of making sustainability change stick.........................................................18

2.5. Summary of theoretical and literature review.................................................................22

3. Methodology..........................................................................................................................23

3.1. Meta-theoretical starting point........................................................................................23

3.2. Data collection................................................................................................................23

3.3. Data analysis...................................................................................................................25

3.4. Reflexivity.......................................................................................................................26

3.5. Limitations......................................................................................................................27

4. An Actual Change Sticking Process.......................................................................................30

4.1. The company in focus: F Pak..........................................................................................31

4.2. The path to environmental sustainability........................................................................33

4.2.1. A natural extension of the business.........................................................................33

4.2.2. All eyes on you: external drivers.............................................................................34

4.2.3. Ascension to core business strategy........................................................................36

4.3. Designing for environmental sustainability....................................................................38

4.3.1. Looking at the long-term.........................................................................................39

4.3.2. Having a macro, systemic view...............................................................................40

4.3.3. Believing in Kotter..................................................................................................42

4.4. Implementing environmental sustainability....................................................................44

4.4.1. Heavy emphasis on structures and processes..........................................................45

a) Do it only when it adds value......................................................................................45

b) Senior-management approval needed.........................................................................46

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c) Constant monitoring and compliance..........................................................................48

4.4.2. Working with people is key.....................................................................................50

a) Clarifying communications and training.....................................................................50

b) Behavioral motivation and signaling...........................................................................51

c) Early involvement and demonstration.........................................................................52

4.5. Post-environmental sustainability change.......................................................................53

4.5.1. This is really the end (of the project).......................................................................53

4.5.2. Learning and tweaking............................................................................................54

4.6. Summary of findings.......................................................................................................54

5. Analysis & Discussion...........................................................................................................56

5.1. Conditions are right for change to stick but …...............................................................56

5.2. The Kotter trap................................................................................................................62

5.3. Summing it up.................................................................................................................66

6. Conclusion..............................................................................................................................67

6.1. Fulfilling the research aims and objectives.....................................................................67

6.2. Key research findings......................................................................................................67

6.3. Theoretical contribution..................................................................................................68

6.4. Practical contribution......................................................................................................69

6.5. Recommendations for future research............................................................................69

6.6. The final wrap-up............................................................................................................70

References......................................................................................................................................71

List of Figures................................................................................................................................77

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1. Introduction

1.1. Background

Corporate sustainability is an issue that is high on CEO’s agendas today (McKinsey, 2014);

46 percent of CEOs agree that the global megatrends of climate change and resource

scarcity will transform how their businesses will operate (PwC, 2014). People are

increasingly aware and demanding that business entities act responsibly with respect to the

communities they operate in and the resources that they consume so as to minimize any

undesirable impact to Mother Earth. Governments, non-governmental agencies (NGOs) and

business partners likewise are putting increasing pressure on companies to conform to good

practices and benchmarks when it comes to corporate sustainability. Therefore, for

companies to advance successfully into the next decades, they need to take corporate

sustainability into serious consideration. They need to redesign their business such that it

results in a balanced and reciprocal relationship with its operating environment and

stakeholders, one in which “humans can live and work in ways … without depleting or

causing harm to our environmental, social and economic resources” (Doppelt, 2003:40).

For companies to achieve this balanced relationship, they need to make changes at the

organizational level and maintain an enduring commitment to environmental sustainability.

Even though many companies embark on the corporate sustainability journey, few are able

to persevere till the end (Doppelt, 2003). Some companies allow their corporate

sustainability initiatives to go into low-key maintenance mode or to fall back to the former

operations after the corresponding management fashion or initial hype of the launch wears

off, and attention and efforts dedicated to the subject matter wanes. Other companies simply

do not have the patience for such a long-term undertaking; it takes time for sustainability

efforts to bear fruit. Such inaction or rollback of action could be detrimental to a company’s

reputation and destroy the trust that people have in them. In today’s world where

information travels at warp speed, companies cannot afford the snowball effect of negative

public opinion and the subsequent lobbying protests or product boycotts that may ensue.

Therefore, it is important for companies not only to do corporate sustainability but also to

ensure that the changes and improvements that they make are maintained.

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1.2. Research purpose

The background understanding of this contemporary issue led us to develop our thesis

question. It seems that engagement in corporate sustainability is essential to the long-term

survival of companies; it needs to be done to assuage the concerns and expectations of

external stakeholders. Nevertheless, few companies are able to achieve the desired changes

required, not to mention the possibility of making the change stick. In fact, 70 percent of all

change initiatives fail (Beer & Nohria, 2000). For those companies currently engaged in

corporate sustainability and have achieved some change success, we are curious to find out

how they managed to accomplish this difficult feat.

This leads us to our research question: how do companies engaged in corporate

sustainability ensure that changes stick? We would like to find out the change process that

companies go through to ensure that the improvements they initiate are maintained in the

long run. Activities to make change stick must start in the early phases of a change process

and not wait till the change is in place (Roberto & Levesque, 2005); “a lot has to do with the

cumulative effects of actions during the change process” (Palmer, Dunford & Akin,

2009:359). Currently, there is a lot of research on corporate sustainability and change

management individually, but a lack of “linkages between these two concepts and empirical

research of the effectiveness of organizational change practices for corporate sustainability

is needed” (Appelbaum et al, 2016:133). From a theoretical viewpoint, it seems that research

typically delves into the conceptual design of the corporate sustainability change process but

pays less attention to what actually happens during the implementation of the change.

Through this research, we hope to jointly explore and provide linkages between the concepts

of corporate sustainability and change management. Additionally, we also hope to contribute

empirical data that will throw some light on the change process for corporate sustainability

in real-life companies. From a practical viewpoint, the results of this study would likely

benefit companies undergoing their corporate sustainability journey as they would be able to

cross-reference the good practices and lessons learnt from an experienced predecessor, and

perhaps incorporate them into their own organizations after contextualization.

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1.3. Research approach

In order to answer the research question, we plan to conduct a review of relevant theory and

research, and complement this with the collection of empirical data from companies

involved in corporate sustainability work. With regards to the theoretical and literature

review, we aim to examine the dual concepts of organizational change and corporate

sustainability and establish corporate sustainability as a type of organizational change.

Therefore, we will overlay the change management approaches onto corporate sustainability

implementation, demonstrate the importance of change sticking, and thereafter derive

factors that may improve the change process leading to change sticking. For the empirical

data, we plan to do a qualitative study by working with a medium to large company that was

already in the midst of their sustainability journey and preferably achieved some success in

it. This will lay the foundation for organizational access to a greater pool of people who

were involved in corporate sustainability change programs, from which we will request for

interviews to find out what actually takes place during the change implementations. The

interpretation of these meaningful conversations would help us have a better sense of the

process determinants for change entrenchment. Thereafter, we will compare the theoretical

review output with the empirical findings to determine if the theory holds in practice and

highlight any salient discoveries. As organizations sometimes relay the more positive

aspects of their past experiences and operations to outsiders in order to preserve their

external image, we hope to balance their sharing with a more critical bent by “breaking

away from consistency” (Alvesson & Skoldberg, 2000:270) and presenting the potential

flipside to their often rosy descriptions. Lastly, we look forward to deriving some

recommendations for the interviewed company’s considerations.

1.4. Thesis outline

This thesis document begins with the current introduction of the research background,

purpose and outline in Chapter 1. It then goes on to lay out the results of the theoretical and

literature review for concepts related to the research question in Chapter 2. This is followed

by a description of the methodology used to conduct the research in Chapter 3. Next, Chapter

4 lists the interpreted and categorized findings that were derived using the methodology. This

is followed by the analysis and discussion section in Chapter 5 where we try to relate the

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findings to the theoretical and literature review, highlight any significant differences and

discoveries, and what they may mean. The document ends with a conclusion section

summarizing the key findings and research contributions in Chapter 6.

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2. Theoretical and Literature Review

Before we delve into the research findings and analysis, we first seek to understand the key

concept of organizational change, and how the combination of perceived triggers and

management approach culminate in high possibilities of failure. Thereafter, we move on to

the concept of corporate sustainability which is a complex type of organizational change. It

results from external triggers that demands senior management attention, and requires multi-

functional coordination and core business integration. The chance of change failure is likely

higher for corporate sustainability programs due to their complexity but companies continue

to pursue them and try to make corresponding changes stick because they wish to be seen as

good corporate citizens and companies. The next section illustrates that the final stage of

change management is to make change stick and some companies have successfully

embedded corporate sustainability into their corporate DNA. However, these companies

belong to the minority. This literature review concludes with a description of different

approaches that may improve the change process and lead to sustainability change sticking.

We will use these as the basis of comparison against our empirical findings.

2.1. Organizational change is difficult

According to Jones (2013:4), organizational change is defined as “the process by which

organizations move from their current state to a desired future state to increase their

effectiveness”. The goal is to improve an organization’s usage of its resources and

capabilities for increased value creation. Jones (2013) also noted that organization-level

changes often require alterations in organizational culture and structure in order to leverage

human and functional resources for the exploitation of technological opportunities. In

today’s fast-paced environment, organizations have accepted that “they must either change

or die” (Beer & Nohria, 2000:133) and are motivated by a mixture of different reasons to

change.

Triggers for organizational change can be external or internal (Palmer, Dunford & Akin,

2009). Accordingly, organizations are often driven by environmental pressures to change.

They may pursue mimetic isomorphism for legitimacy or success imitation reasons.

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Alternatively, they may embark upon change due to a need to follow the latest management

fads. In some cases, organizations change due to mandated pressures such as enacted laws

and policies or as a result of the specific geographical and political conditions in the

countries that they operate in. The same authors also observed that it is quite common for

organizations to rejuvenate themselves in order to remain relevant in declining markets.

Hyper-competition likewise drives change as organizations struggle to keep up with the

latest innovations and not get left behind. In addition, Fombrun & van Riel (1997) argue that

any threats to an organization’s reputation and credibility will result in organizational

changes as these are intangible assets that signal how well it can perform.

Internal triggers for organizational change can include maturing priorities as a result of

growth, the need to work collaboratively in order to reap economies of scale and benefit

from diversity as well as standardization (Palmer, Dunford and Akin, 2009). Further, the

wish to increase employee engagement and improve organizational image and identity

similarly lead to change. Leadership turnover, power conflicts and political struggles are

other possible reasons that Palmer, Dunford and Akin (2009) have pointed out for

organizational change.

Depending on the change triggers, there are many ways to manage change. One can manage

change based on the desired change outcome and leadership style. This is exemplified by the

the ‘e’ (economic) and ‘o’ (organizational learning) theories of business change purported

by Beer and Nohria (2000). Accordingly, organizations embark on change either because

they want to satisfy stakeholders’ economic expectations or they want to improve the

organization’s learning capability so that it can continuously adapt to changing external

demands. Theory ‘e’ employs a top-down approach led by a commander-style leader

implementing programmatic solutions designed by external consultants emphasizing

structure and system. On the other hand, theory ‘o’ is characterized by an emergent

approach supported by consultants with bottom-up participation focusing on the

development of corporate culture and long-term employee commitment. Organizations need

to employ the right combination of both theories to achieve fruitful change.

Looking from a different perspective, change can also be managed based on scale. First-

order change consists of continuous (Weick & Quinn, 1999) “small-scale, incremental and

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adaptive” adjustments (Palmer, Dunford & Akin, 2009:86) and does not disrupt the status

quo by making fundamental changes (Newman, 2000). Second-order change is episodic

(Weick & Quinn, 1999), large-scale and disruptive (Palmer, Dunford & Akin, 2009), and is

“transformational, radical and fundamentally alters the organization at its core” (Newman,

2000:604). It is not so clear-cut which changes are first-order and second-order and when

they are needed. This depends very much on the perception of the people involved (Palmer,

Dunford & Akin, 2009; Weick & Quinn, 1999) which affects the way change is managed.

Similar to the usage of combined ‘e’ and ‘o’ theories recommended by Beer and Nohria

(2000), we believe that experienced organizations likely use a more practical and middle-of-

the road approach when planning for and implementing change. They make change

decisions by constantly scanning for and evaluating environmental changes and responding

accordingly (Lengnick-Hall & Beck, 2005). Any implemented change is expected to be

achievable and significant enough to overcome current inertia but does not destroy the

organization’s identity in the long-run and is cascaded across the organization in a least

resistant manner (Reger et al, 1994).

The different triggers of change blended with an organization’s chosen change management

approach produce organizational change initiatives that are individually unique (Beer &

Nohria, 2000), meaning there is no one formula for change success. Even though

organizations adapt continuously (Weick & Quinn, 1999) and contextualize their change

management approach to fit both their external environment and internal circumstances,

achieving the change is often not straightforward because “organizations are always in

motion” (Kanter, Stein & Jick, 1992:12). In practice, change is “messy and usually involves

movement backwards, forwards, up and down” (Doppelt, 2003:87). Implementing change is

often a challenging endeavor. Success does occur occasionally but “the brutal fact is that

about 70 percent of all change initiatives fail” (Beer and Nohria, 2000:133). This means that

the chances of organizational change sticking are less than 30 percent.

2.2. Corporate sustainability change is even more difficult

In order to achieve [corporate] sustainability, it should be viewed as an organizational

change initiative (Appelbaum et al, 2016). Corporate sustainability initiatives are often

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complex organizational changes that require a fundamental re-thinking of how an

organization works (Hendersen, Gulati & Tushman, 2015). Unlike other problems,

sustainability changes cannot be considered and solved on its own because of its pervasive

nature (Hunting & Tilbury, 2006) and systemic effects (Doppelt, 2004). Instead, they

involve close collaboration with multiple stakeholders during planning and implementation

as these people “have the resources to make the implementation of the sustainability

initiative successful” (Freire-Suarez, 2014:57). Corporate sustainability is defined as a:

“business approach that creates long-term value to society at large, as well as

shareholders by embracing the opportunities and managing the risks associated with

economic, environmental and social development; and builds this into corporate

purpose and strategy with transparency and accountability to stakeholders”

(Cranfield, 2012:3).

Unlike other organizational change programs, corporate sustainability initiatives are usually

triggered by external factors or stakeholders (Freire-Suarez, 2014). In the early 1990s,

companies embarked upon sustainability due to “eco-efficiency” benefits - the money to be

made or saved due to more efficient use of natural resources and pollution reduction

(Elkington, 2013). More recently, the general public has become more aware of

sustainability issues due to international media coverage. According to Walters (undated

web page), “articles referencing sustainability went from being largely non-existent in 1990

to appearing in nearly every other issue of daily newspapers around the world by 2010”.

Companies are now often pressured to act in a more sustainable manner due to public

perception and expectations. According to the findings of Hendersen, Gulati & Tushman

(2015), companies originating from or working in countries where the environmental and

social themes are high on the agenda are likely to have sustainability programs in place.

Additionally, prominent multinational companies that have been conducting activities for

the public good are expected to continue doing so. These companies are more susceptible to

social movements and public opinion to do good. This is aligned with the survey results

from McKinsey (2014) that 36 percent of participating companies pursued sustainability as a

form of reputation management. Companies embraced sustainability because it signaled that

they were good and ethical corporate citizens interested in building long-term relationships.

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This is especially important for companies wishing to enter new and emerging markets.

Sustainability initiatives allowed them to create a good first impression and have a foot-in-

the-door (Hendersen, Gulati & Tushman, 2015).

On the other hand, companies are sometimes compelled to change due to mandated pressure.

For instance, all the world’s governments adopted the 2030 sustainable development goals

developed by the United Nations in Sep 2015. Companies operating within these countries

will be expected to support the achievement of these goals. Proactive engagement will be

rewarded, and non-compliance may result in penalties for companies such as fines, workers’

compensation cases, criminal conviction and payment of clean-up costs when they do not

address social and environmental requirements appropriately (Dunphy, Griffiths & Benn,

2003). Today, many companies begin to embrace sustainability because they “realized that

many of the social and environmental challenges can be considered opportunities rather than

threats” (Freire-Suarez, 2014:48).

With increasing social and legislative pressure to do business the ‘right’ way, it is no wonder

that sustainability is getting increasing attention from corporate executives and constantly

included in discussion agendas (Freire-Suarez, 2014). In PwC’s 17th Annual Global CEO

Survey, 75 percent of CEOs agree that satisfying societal needs beyond those of investors,

customers and employees and protecting the interests of future generations is

important. Besides focusing on making financial returns, organizations are becoming more

aware of their role as a member of society (Hendersen, Gulati & Tushman, 2015). They also

need to consider environmental sustainability and organizational sustainability when doing

business. Organizations realize that they should focus on a long-term view of how they

make their profits (Cranfield, 2012), such that they can reduce their impact on natural

resources and the climate, and enable business continuity and a favorable relationship with

stakeholders including customers, suppliers, employees and the public (Hendersen, Gulati &

Tushman, 2015). The joint consideration of financial and social logics was popularized by

Elkington (1998) when he developed the concept of the “triple bottom line” which describes

sustainable businesses as ones that took into account economic prosperity, environmental

quality and social justice. The triple bottom line is not only applicable to large transnational

companies, but its impact is being cascaded in waves down to downstream suppliers and

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contractors. “To refuse the challenge of the triple bottom line is to risk extinction”

(Elkington, 1998:2).

Many organizations today are already on the corporate sustainability bandwagon, but to

different extents. McKinsey (2014) indicates that 43 percent of 2,904 executive respondents

seek to align sustainability with their overall business goals, mission, or values. This trend is

in line with what academics had hoped for; that “corporate sustainability be built into

business purpose and strategy and … translated into each part of the business. [It] cannot

just be a series of ‘initiatives, a ‘bolt-on’ to operations” (Cranfield, 2012:17). To be

sustainable, companies have to fundamentally rethink how they conduct business. They need

to forgo the traditional linear take-make-waste model and adopt a circular borrow-use-return

mind-set (Doppelt, 2003) so as “to contribute to sustainable economic development and the

protection and renewal of the biosphere” (Dunphy et al, 2000:6). This is also to enable the

building of “human capability and skills for sustainable high level organizational

performance and for community and societal well-being” (Dunphy et al, 2000:6).

The external demands for responsible corporate behavior continues to propel the corporate

sustainability agenda up the corporate ranks. According to the Edelman Trust Barometer

2016, 80 percent of the general public expect that businesses can both increase profits and

improve economic and social conditions in the communities in which they operate. In other

words, involvement in sustainability activities would positively boost a business’s

reputation. As a matter of fact, sustainability-based reputation management would result in

the highest value-creation potential in the next five years (McKinsey, 2014). Implementing

corporate sustainability to some extent within business seems inevitable then. Changes need

to be made at the organizational level to support this. However, these cannot be

accomplished in a straightforward manner due to the interconnecting web of multiple

stakeholders and business functions involved. The complexity tends to decrease the chance

of change success. Research by Doppelt (2004) indicated that ‘most sustainability efforts

struggle to get off the ground, peak early or fail outright”. Nevertheless, sustainability

change has to proceed because companies want to be perceived as good corporate citizens

and upkeep their positive image. In fact, public scrutiny creates added pressure for

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organizations not only to adopt corporate sustainability but for corresponding changes to

stick because it is much more difficult to get away with reneged promises.

2.3. Making change stick is the ultimate aim

The idea of making change stick originated from the last stage of Kurt Lewin’s widely

quoted theory of change (cited in Weick & Quinn, 1999), whereby he describes change as

unfreeze, change and refreeze. As Winsemius and Guntram (2002:122) put it, “the purpose

of change management is to induce and stabilize a desired organizational behavior”. The

ultimate goal of implementing organizational change is to shift people from an old way of

doing things to a new one, and making sure the new way sticks. This is illustrated in

Kotter’s (2007:99) eight-step transformation model whereby the last step is

“institutionalizing new approaches” attained by “articulating the connections between the

new behaviors and corporate success” and “developing the means to ensure leadership

development and succession”. Along the same line of thinking, Beer, Eisenstat & Spector

(1990:164) indicate that it is important to “institutionalize revitalization through formal

policies, systems and structures” when the new approach has been successfully put in place

and institutionalization ensures that the change will endure even if the current manager

moves on. Similarly, Kanter, Stein and Jick (1992) describe the last of his ten change

commandments as “reinforce and institutionalize change”. Change managers need to show

high commitment to the change process, develop corresponding reward systems for risk

taking and “incorporate new behaviors into the day to day operations of the organization. By

reinforcing the new culture, they affirm its importance and hasten its acceptance” (Blum,

2012). Generic change management models such as Kotter’s above are “fully transferrable

to sustainability transformational programs” (Freire-Suarez, 2014:56). Mapping of the

Kotter model to sustainability programs were found in Mousa (2015) and Speck (1995), and

its usage is further supported by this paper’s findings.

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Figure 1: Change management goal

The nirvana state of embedding change was also observed in specific change models related

to corporate sustainability. As described in Dunphy, Griffith and Benn’s (2003)

sustainability phase model, companies often progress through six distinct phases in their

quest for corporate sustainability – rejection, non-responsiveness, compliance, efficiency,

strategic proactivity and the sustaining corporation. By the time an organization reaches the

last stage, it should have internalized and integrated sustainability practices into its

operations and values. It should also morph into a thought leader that actively promotes

sustainability practices to the outside world. A similar five-stage sustainability maturity

model is described in Cranfield (2012) - denier, complier, risk mitigator, opportunity

maximizer and champion or civil corporation. An organization at the more mature stages

would treat sustainability as the de-facto way of conducting business (Cranfield, 2012).

From the above, it seems reasonable to conclude that organizations undergo change so that

the new practices, behaviors and values will eventually be institutionalized and internalized,

“rather than [just for] mere compliance” (Hendersen, Gulati & Tushman, 2015:1). When it

comes to corporate sustainability, Doppelt (2003:36) purports that “ultimate success … is

found when sustainability-based thinking, perspectives and behavior are incorporated into

the everyday operating procedures and culture of an organization”. These are demonstrated

in the real-life cases of Volvo, Patagonia, Sony and SJ Rail (Rowledge, Barton & Brady,

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1999). In other words, corporate sustainability becomes embedded in the organization; it

becomes what the organization is, not only what it has.

Despite such exemplary companies which have successfully embedded corporate

sustainability, entrenching sustainability changes remains challenging for the majority of

organizations. The McKinsey 2014 global results survey highlighted that companies did

well in terms of cultural development and direction setting, but struggled with program

execution. Therefore, it is not surprising that many sustainability change efforts “plateau

after a short time and fail to ascend to the next level of excellence” (Doppelt, 2003:16) and

“leaps into the future can slide back in the past (Kotter & Cohen, 2002:161)”. In reality,

sustainability initiatives “often get watered down and become essentially a website

sustainability effort – it looks good on paper but not much is actually happening” (Doppelt,

2003:212). Indeed, “successful change is more fragile than we often think” (Kotter &

Cohen, 2002). Companies need to find ways to ensure that backwards evolution does not

occur so that efforts are not wasted and people continue to act in new ways (Kotter &

Cohen, 2002). They need to think of extending the longevity of the change and maintaining

the performance improvement after the change is implemented (Longenecker & Rieman

(2007). The next section explores some perspectives and approaches that may serve as

components to the corporate sustainability change process and eventually enable change to

stick.

2.4. The process of making sustainability change stick

In order to make change stick, an organization needs to have the right perspective of

corporate sustainability from the start - at the conceptualization and planning stages. It needs

to recognize that organizations are systems made up of interconnected parts and sub-systems

(Kanter, Stein and Jick, 1992). A change in one part of the system will impact other parts of

the system. This is especially reflective of sustainability initiatives which involves a whole

spectrum of stakeholders and cuts across many different levels and functions within the

organization. In order to make a change stick in the long term, the sustainability change

efforts need to be considered and implemented from a systemic perspective. This is

exemplified in the Change Wheel developed by Kanter (2001), which describes change as

continuous and happening at the same time in different parts of the organization. Change

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initiators should pay attention to the ten interconnected elements on the spokes of the Wheel

to achieve change success, not only within their own change initiative but also to other

change initiatives that may be ongoing. This widened perspective ensures less friction with

ongoing and related initiatives and improves the chance of the envisioned change outcome

sticking.

Moving into corporate sustainability implementation, we surmise after reviewing the

literature that organizations generally use two joint approaches to make change stick:

institutionalization (the ‘hardware’) and internalization (the ‘heart-ware’).

Institutionalization (‘hardware) entails the creation of the right organizational setting

(Schneider, Brief & Guzzo, 1996), that promotes adherence to the changed practices and

ways of working on a day-to-day basis. For this, Doppelt (2003) recommends rolling out

supporting policies, procedures and routines. In addition, new roles should be created and

the organizational chart aligned to fit. Employee performance criteria should also be

adjusted so that they can be held accountable for their actions and contributions toward the

change. It is further advised that reward and recognition systems be adapted to reinforce the

‘right’ behavior and penalize the ‘wrong’ ones. Metrics systems should be incorporated

because ‘what gets measured gets done’. Training often complements these measures to

ensure that those involved in change programs have the appropriate knowledge and skills for

enactment. According to Doppelt (2003), all these need to be underpinned by a

corresponding governance system that enables the correct information flow to the right

people, facilitates decision-making that does not contradict change efforts and makes certain

that adequate resources are allocated to sustainability initiatives during both change

implementation and maintenance phases. With such structural formalization that signal the

type of work that organizational members should do, how they should behave and use their

time, organizations hope to reduce the likelihood of old thinking and behavior re-emerging

and thus undoing the change (Doppelt, 2003; Roberto & Levesque, 2005).

Institutionalization also means that the change will continue beyond the reign of the current

change leader (Beer, Eisenstat & Spector, 1990).

Organizations are made up of people; “if the people do not change, there is no

organizational change” (Schneider, Brief & Guzzo, 1996:7). Hence, besides formal

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measures, organizations need to focus on the ‘heartware’ - getting the emotional and

psychological buy-in of the people involved (Roberto & Levesque, 2005; Kotter & Cohen,

2002; Spiker, 1994) if they want the sustainability change to stick. Roberto and Levesque

(2005) contend that this is accomplished by first ensuring that change recipients perceive the

process of change formulation as fair by consulting them and incorporating their opinions.

The change process should be legitimate and not contravene current company values and

how work should be done. This is supplemented by regular communications via credible

change proponents for the proposed change to eventually sink in and be internalized.

Drawing on Weick (1995) as well as Bushe and Marshak (2009), organizations achieve

change by appealing to people’s senses and emotions, influencing their perceptions and

reframing their minds to look at things differently. Once the change gets rooted inside one’s

mental paradigm, a guided change in behavior will subsequently follow. People convinced

of the change will help to convert others to their way of thinking via social interaction and a

“shared sense-making process” (Schneider, Brief & Guzzo, 1996:18). If the overall frames

of reference of a substantial mass of people can be altered to support the change, change will

happen (Doppelt, 2003). The more the meaning-making frames of people converge in one

direction, the more they will interpret and filter information in the same way, leading to the

development of new norms and values, and eventually commitment to a new culture (Hardy,

1996). “The stronger the culture, the more consistent the filtering process” (Hardy,

1996:S6), therefore the more consistent the group behavior or the more un-acceptable a

counter-behavior (Kotter & Cohen, 2002). This means that a fundamental shift in

organizational culture will enable genuine and a more permanent behavioral alteration

enabling sustainability change to stick. The mindset transformation process is often

supported by implanted sense-making “cues” (Mills, 2003; Weick, 1995) such as the

institutionalization measures described before and also employee orientation and repeated

storytelling that aims to demonstrate the benefits of the change and to let the change sink in

(Kotter, 2002). This is because people will only shift their thinking “after new behaviors

have led to results that matter” (Katzenbach, Steffen & Kronley, 2012:117). Ethical

behavioral change such as that concerning sustainability issues in companies can also be

influenced by the national culture in some countries including Sweden (Svensson et al,

2009; RobecoSAM’s, 2013).

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In addition to influencing the change recipients within an organization, no less attention

should be focused on change implementers, who most of the time, are middle managers

(Kanter, Stein & Jick, 1992). Middle managers are the “connectors between an

organization’s strategic and operational levels” (Cranfield, 2012:187) and often hold the key

to establishing daily work practices and rewards. Their full understanding and continued

commitment to higher-level change goals are essential for the change to work and prevail

(Schneider, Brief & Guzzo, 1996). Only when they are convinced will they play the role of

sense-makers and eventual executors of sustainability practices effectively. If these change

agents are not convinced of their company’s commitment to sustainability, believing them to

be “window dressing” (Alvesson, 2013) or “green-washing” (Hendersen, Gulati &

Tushman, 2015:2), they will not wholeheartedly assist in the reframing of the change for

acceptance by those down the line and will relegate sustainability issues to a lower priority

(Winsemius & Guntram, 2002).

Middle managers require the support of senior management to function successfully as

change agents for sustainability initiatives. First of all, senior management must ensure that

sustainability is integrated with core business strategies and processes (Dunphy, Griffiths &

Benn, 2003). This will reduce the chance of any corresponding change outcome backsliding

as business fundamentals often do not vary as much over time. Senior management should

also lead or have an oversight of sustainability initiatives and plans so as to ensure that all

the moving parts of people, process and systems are aligned and coordinated (Schneider,

Brief & Guzzo, 1996). Organizational change takes time. “Experience with individuals and

organizations suggests that individuals undergoing significant change may take between 18

and 24 months to complete the transition phase” (Young & Lockhart, 1995). In order for the

sustainability-related change to settle down and sink in, senior management should advocate

realistic timelines and allow sufficient time for effective transitions. In addition, their own

behaviors need to signal to others that the change is serious and here to stay. According to

CEO Kevin Ryan from Wesley Jenssen: “What really makes change stick is a leader’s

ability to inspire his organization to embrace the need for change, and the perseverance in

translating the vision into decisions and behaviors that net results” (Roger, Pace & Wilson,

2002:7). Senior management needs to live the change themselves by not only role-

modelling, but also by listening to feedback and demonstrating earnestness in learning and

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changing their own behavior in line with any new practices or systems (Longenecker &

Rieman, 2007; Smith, 1996). They should demonstrate that the sustainability initiative is

connected to real work and will improve work performance. At the same time, senior

management should advocate the creation and promotion of an atmosphere of hope and

positive enthusiasm for the change. Fear should not be used as a change motivator

(Longenecker & Rieman, 2007; Smith, 1996). All in all, senior management is expected to

create the right conditions for change to take place. However, 15 percent of the population

will resist the change no matter what (Smith, 1996). When it comes to recalcitrant resistors

who simply do not want to accommodate the change, senior management should to ask them

to leave because “having someone – at whatever level – undermine your efforts is poison”

(Smith, 1996:27).

After corporate sustainability is implemented and an organization has achieved its intended

sustainability change objective, it can seek to maintain stability and make change stick via

feedback (Doppelt, 2004) and adjustments over time (Schneider, Brief & Guzzo, 1996). By

continuing to monitor the external environment and emerging stakeholder interests around

issues of sustainability, it can prevent itself taking a u-turn (Dunphy, Griffiths & Benn,

2003). Feedback mechanisms that foster learning, adaptation and innovation should be set

up to facilitate the adjustments. Small improvement-oriented changes can be made to re-

establish stability so that the overall state of change remains the same (Palmer, Dunford &

Akin, 2009). Sometimes local modifications and small tweaks to fit the native business

environment are required and useful to reduce natural resistance and aids in the acceptance

of the change (Kanter, Stein and Jick, 1992). Overall, sustainability change managers must

be equipped with a repertoire of corrective mechanisms on-hand to adapt “to the perceptions

and work situations of the people in the organization” (Heijden et al, 2012: 555) if they want

change to stick.

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2.5. Summary of theoretical and literature review

Figure 2: Summary of theoretical and literature review

In summary, the probability of achieving organizational change and making change stick is

less than 30 percent. This likelihood reduces further when the change is related to corporate

sustainability due to its complex and systemic nature. All change initiatives, including those

relating to corporate sustainability, aim for the change outcome to stick and be embedded

but organizations that achieve this nirvana stage are few and far between. Literature and

research suggest some ways that organizations can consider to help them make sustainability

change stick including the possession of a long-term systemic perspective, the right

hardware and heart-ware, management support and the ability to make continuous

adjustments.

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3. Methodology

3.1. Meta-theoretical starting point

For our research, we decided to adopt the interpretivist paradigm as we consider it most

suitable to answer our research question on:

How do organizations engaged in corporate sustainability ensure that changes stick?

The paradigm states that social reality “is the product of the subjective and inter-subjective

experience of individuals” (Morgan, 1980) and aims to understand the fundamental nature of

the world as it is (Burrell & Morgan, 2005). This is important for us to consider as

“sustainability is a complex, subjective topic about which people have multiple, different

interpretations and understandings” and which is developed through individual sense-

making (Cranfield, 2012:184). As we will interview managers involved in environmental

change processes, we seek to understand how they make sense of the change they are

involved in. In line with the interpretivist paradigm, we thus accept “human interpretation as

the starting point for developing knowledge about the social world” (Prasad, 2005) and “that

meaning is socially constructed by individuals in interaction with their world” (Merriam,

2002:3).

We aim to gain deeper insights into changes of corporate sustainability by making sense of

our empirical research data, and our personal understanding by reading between the lines.

We are aware that we as researchers act as primary instruments for the data collection and

analysis (Merriam, 2002), and are ourselves subject to constructing knowledge and meaning

out of our individual comprehension of the gained insights. This standpoint influences and

determines our research design and the way we carry out our research (Merriam 2002). We

do not take information we get for granted.

3.2. Data collection

In order to conduct our research, we first looked for a suitable collaboration with a company

that is involved in corporate sustainability change processes. The plan was to interview

managers who were involved in change procedures from different perspectives in order to

gain comprehensive understanding of the overall change process. The interviews were semi-

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structured, as we asked prepared questions but also reacted to answers we got and requested

the interviewees to give examples of their personal working experience (Merriam, 2002).

The answers we got provided the context for follow-up questions that enabled further

elaboration and a higher degree of interpretation (Kvale, 1996) which did add especially to

our understanding of how the company makes sustainability changes stick. During this

process, we did not aim to make definitive judgements about the researched phenomenon,

but to create knowledge and meaning by social and contextual understanding, and to

comprehend the research phenomenon from the participants’ perspective (Merriam, 2002).

The data analysis was conducted in parallel with data collection. The output was initially

interpreted based on our pre-understanding of the topic and our personal experiences, yet we

sought to delve deeper into the research phenomenon by gaining further understanding of

our empirical data. We did revisit our literature review in case we discovered a gap during

this process. In line with the hermeneutics tradition, this allowed us to go back and forth

between part and whole, pre-understanding and understanding. Such re-iteration allowed us

to validate and eventually gain a deeper understanding of our research topic, instead of just

making causal connections (Alvesson & Skoldberg, 2000). In addition, we constantly

checked our own biases and pre-conceptions so that they would not affect our findings, and

have been open to alternative interpretations as interviewers’ realities are also socially

constructed (Alvesson & Skoldberg, 2000).

We planned to conduct eight to ten interviews in order to obtain sufficient data and to author

a credible study. As we aimed to gain new insights into this particular field yet only conduct

research with one company, we followed an abductive reasoning which allowed us to

interpret a single case “from a hypothetic overarching pattern” (Alvesson & Skoldberg,

2009:4).

For our research, we interviewed the following people:

Mr. D. C., employed at F Pak since 1996, is Director of Environmental Technologies and

mainly responsible for the company’s Environmental Management Systems and Life Cycle

Assessments. He was the first person of the company we had contact with, and the first one

we met for an interview. Mr. C. took us to the Environment Showroom of F Pak which is

usually used to give presentations to clients on F Pak’s environmental sustainability

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development and innovative solutions. During the meeting, Mr. C. not only answered our

questions, but also provided us with F Pak’s history of sustainability development in a

chronological context. This helped us immensely in understanding F Pak’s advancements in

environmental sustainability, its corresponding triggers and accomplishments.

Our second interviewee was Mr. K. J., Director Human Resources. Among other things, he

is responsible for the areas of change management, talent management and performance

management. Mr. J. welcomed us in the HR department and gave us a detailed presentation

about F Pak’s change management practices. This presentation was crucial for us to

understand F Pak’s change management approach and overall attitude to change in general

and environmental sustainability change in particular.

Mrs. V. Z., F Pak’s Environment & Sustainability Communications Manager and our third

interviewee is mainly responsible for the companies’ internal and external communication of

environmental sustainability. We conducted the interview via an F Pak WebEx call as Mrs.

Z. is based in Athens, Greece. The interview with her was particularly interesting for us as

she outlined her approach to make environmental sustainability more tangible for the

workforce in order to increase the chances of success for F Pak’s change processes.

Mr. E. L., our fourth interviewee is Director Environment Market Companies Nordics &

North West Europe. His field of expertise includes Environment Market Strategy and

Change Management. We were able to interview him in his Stockholm-based office where

he outlined his involvement and understanding of change management within the field of

environmental sustainability. Working closely with F Pak’s sales department, he considers

his department to be a major driver of environmental sustainability change.

3.3. Data analysis

In order to analyze our gathered data, we followed an inductive approach that would lead to

the development of concepts and theories on how to make change stick (Merriam, 2002).

We started our data analysis by sorting and organizing the notes we took during the first

interviews and printed these. As more interviews would be conducted in the upcoming

weeks, our “data analysis was iterative and dialectic, meaning there were not clearly defined

stages between collecting data and analyzing data but instead these processes overlapped”

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(Sullivan, 2007). This was beneficial, as it allowed us to make subsequent changes during

the data gathering and enabled us to seek repeating themes which ultimately led to a higher

reliability and validity (Merriam, 2002) of our analysis.

The first round reading our transcripts was done without any coding as the interviews have

been quite comprehensive and we wanted to get a good recap of the information. During the

second round of cautious reading, we applied open coding in order to identify potential

themes and sub themes. We used colored markers and notes to identify tentative categories.

In additional rounds of reading we further tried to identify specific terms, repetitions and

metaphors as these are a quick and effective way to indicate themes as well (Ryan &

Bernard, 2003). While we read and re-read our transcripts, we strived “to understand the

meaning people have constructed about” […] their experience” (Merriam, 2002:4). As much

can be discovered by what was intentionally or unintentionally not been mentioned during

the interview, we also looked for potential missing data (Ryan & Bernard, 2003).

In order to narrow down and consolidate our findings, we cut all potential themes into pieces

and arranged them thematically. This resulted in initial themes such as (1) external drivers,

(2) environmental sustainability is necessary and beneficial, (3) awareness of systemic

impact and (4) senior management support. With the aim of ensuring the suitability of the

derived themes, we kept asking ourselves the question: “What is this expression an example

of?” (Ryan & Bernard, 2003:87). To further be sure that themes we identified would not just

be relevant according to one of the interviewees, we continuously cross-compared our

findings with all interviews we conducted. This resulted in the development of four main

findings categories that were arranged according to the time sequence that environmental

sustainability was introduced and later implemented in F Pak.

3.4. Reflexivity

The following section deals with the concept of reflexivity and displays how we applied it

during the course of our thesis work. According to Hughes (2014, cited in Darawsheh, 2014)

reflexivity stands for the process of self-reflection which facilitates researchers’ awareness

about their own feelings, actions and biases. Hence, reflexivity was an essential part of our

research as it allowed vital interpretation of our gathered empirical material and the drawing

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of insightful conclusions (Alvesson & Skoldberg, 2008). As we conducted a qualitative

research study, our thesis contains a great amount of information which gives rise to

subjective interpretation and comprehension. By maintaining a skeptical approach and

remaining open-minded to our findings, we were able to creatively interact with the

empirical material (Alvesson & Skoldberg, 2008) in order to eventually come up with our

own opinion about change processes in F Pak’s environmental sustainability engagements

and add a critical twist to the analysis. We therefore did not take the empirical data for

granted, but considered the subjective takes and assumptions of the interviewees, as well as

our own (Merriam, 2002). Being reflective, we thus satisfied the fact that all data are the

result of interpretation (Alvesson & Skoldberg, 2008). Alvesson and Skoldberg (2008:6)

define this process as “the interpretation of interpretation and the launching of critical self-

exploration of one’s own interpretations of empirical material.”

Conducting our research in a reflexive manner therefore increased the transparency of our

subjectivity-based research, and eventually increased the credibility and rigor of our findings

about the environmental sustainability change processes (Gilgun, 2006, cited in Darawsheh,

2014). We were convinced that by constantly reflecting and making sense of our empirical

material, we were able to control our biases and decrease our preconceptions to a minimum

in order to author this master thesis.

3.5. Limitations

Being researchers and authors of this master thesis, we did our utmost to answer the research

question by crafting a credible and informative theoretical study which brings forth the

concept of environmental sustainability change. However, as each study faces limitations,

our research was also affected by certain constraints.

The most bounding limitation of our study was the delimited access we as researchers had to

the required empirical data in the form of interview quantity. Different to the potential eight

interviews which the company had held out in prospect at the beginning of the collaboration,

we were only able to conduct four interviews due to the busy operations of the company.

Although the HR Director of the company tried hard to provide us with as many as six to

eight interviews, four interviews were the maximum he could manage. What was most

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unfortunate about this circumstance is the fact that over a period of several weeks we have

been temporized with the prospect of upcoming interviews, which just did not materialize.

The final number of interviews was certainly a setback for the credibility and validity of our

thesis. However, in return this gave us the opportunity to analyze the four interviews in more

detail and derive much deeper insights.

Related to this constraint, one could claim time to be a limitation of our study. Indeed, the

time period for writing the thesis was not a limitation if everything had gone as planned.

Unfortunately, F Pak was not able to arrange more than four interviews within the given

time frame. This ultimately made time a limitation to our study, as we might have been able

to conduct more interviews during the weeks after our deadline which would have

contributed to the overall credibility of our study.

Another factor we fear to be a limitation to our study is the narrative style of our

interviewees. Their degree of openness to sharing both the positive and negative aspects is

likely tending towards the positive. An explanation for our assumption is indicated by Mr.

K. J., the HR Director:

Asking a company about their change programs is like asking someone for

permission to look over his dirty laundry bag. K. J.

In addition to that, the Environment & Sustainability Communications Manager told us:

I don’t have a negative story […] It’s not a matter of me not wanting to say

something negative, it’s just that nothing comes to my mind at the moment. I am sure

that there is stuff that has not worked, I have just heard of the stuff that worked. I

have a very selective memory. V. Z.

These statements give reason for our concern that this is a limitation of our study. Although

it was agreed on to rename the company and thus to anonymize its identity, it is our

impression that the interviewees did not want to touch upon aspects which would possibly

cast a slur on the company.

Furthermore, we have some reservations with regards to the general validity of our

empirical material. Our interviewees all worked on a director level and represented a macro

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perspective in their narratives and thus mainly presented the big-picture operations of F

Pak. Therefore, our research might lack the operational perspective as we barely got

information about shop floor processes.

Finally, we are also aware of our own interpretations, biases, preconceptions and culture as

a limitation to this study. Indeed, “nothing means anything on its own” but needs to be

produced and created by individual interpretation (Steedmann, 1991, cited in Alvesson &

Skoldberg, 2008). Yet, our study outcomes are influenced by our subjective sense-making,

interpretation and previous knowledge of the research topic.

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4. An Actual Change Sticking Process

Figure 3: How the chapter flows

This chapter aims to bring you through the myriad empirical findings that we have collected

and sorted in relation to the research question. It starts off with an introduction of the

interviewed company F Pak in section 4.1, briefly describing its goals, ambitions and

approach towards environmental sustainability work. This is followed by the depiction of

how F Pak officially embarked upon the environmental sustainability journey in section 4.2,

supported by its company culture, pressured by external environmental triggers and

formalized in its corporate strategy. Section 4.3 then moves on to talk about the required

mindset and preparatory steps that F Pak took before implementing environmental

sustainability in a more structured manner. The next section 4.4 goes into the details of how

environmental sustainability change is operationalized via structures, processes and people

that help change to stick. Lastly, section 4.5 describes what happens after environmental

sustainability change is implemented; the activities that foster change maintenance. The flow

from section 4.2 to 4.5 describes environmental sustainability change as a deliberate and

guided change process that F Pak has put in place to ensure that change sticks.

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4.1. The company in focus: F Pak

Figure 4: Company background

F Pak specializes in the provision of complete food processing, packaging and distribution

solutions as well as corresponding services in more than 100 countries (F Pak, 2016b). It has

its headquarters in Stockholm. Its vision is to make food safe and available, everywhere. It

was founded in the first half of the 20th century and has since expanded to employ more than

15,000 people in multiple countries to become a world leader in the packaging and food

processing industry (F Pak, 2016e). In line with its pervasive spirit of innovation, F Pak

invented one of the world’s most cost-efficient filling machine. Today, overall sales exceed

100 billion sold units (F Pak, 2016a).

The company continues to stay ahead of its competitors by offering the broadest portfolio of

products in the industry and adhering to its founder’s foundational principle - the package

should save more than it costs. It aims to remain the customers’ first choice when it comes to

food packaging and processing solutions by offering the latest innovations and integrated

systems together with the respective support services (F Pak Group, 2014/2015). This

ambition is supported by the company’s culture which promotes a climate of relaxed

professionalism and initiative taking (F Pak, 2016d).

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F Pak is involved in several aspects of corporate sustainability but this thesis will concentrate

on environmental sustainability as the interviews conducted revolved around this topic. In

terms of environmental sustainability, the company is committed to run its operations by

taking a long-term and life-cycle view. It pursues the UN Millennium Development Goal of

Ensuring Environmental Sustainability: “We drive environmental excellence throughout our

value chain, setting ambitious targets to spur responsible sourcing and innovation, combat

climate change and increase recycling” (F Pak, 2016c). Lowering the companies’

environmental footprint and thus reducing the environmental impact are central for achieving

this goal.

F Pak’s efforts to drive environmental sustainability throughout the entire organization are

motivated by various triggers. Intensified public awareness and interest in sustainability exert

pressure on F Pak to adopt sustainable practices so as to maintain their credibility. In

addition, F Pak treats environmental sustainability as an opportunity to maintain their strong

global market position and as a source of competitive advantage. In the end, weaving

environmental sustainability into the operations was a logical step for F Pak to take. The

fundamental sustainable understanding which the company possessed from the start coupled

with the long-established affiliation with nature within the Nordic countries set the stage for

F Pak to take up environmental sustainability.

With these factors as the backdrop, F Pak began engaging in environmental sustainability

activities during the early 1990s. At that time, related decisions were made on an ad hoc basis

and consensus for action was quickly reached. However, in 2010 the importance of

environmental sustainability for F Pak increased distinctly. Recommended by an internal

task-force, the senior management of F Pak decided that environmental sustainability was of

strategic importance to the company and thus added it as a fourth core business strategy. This

did not only elevate environmental sustainability to a new level, but also made clear it that

from this point on it would play an important role in each of F Pak’s business operations.

F Pak aims to achieve the necessary operational changes including those relating to

environmental sustainability by relying exclusively on the Kotter change model. Since 2010,

the company has made sure that everyone applies the exact same steps during change

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processes through extensive trainings and workshops. This is F Pak’s formula for change

success and is a supposed guarantor for making change stick.

4.2. The path to environmental sustainability

F Pak’s decision to embark on environmental sustainability was made easier because it

aligned with the way the business was conceptualized from the very beginning. The

company and likely national culture further supported its subsequent integration into the

business. The pace of environmental sustainability uptake was also hastened with increased

global public attention and awareness of corresponding issues. F Pak needed to adapt the

way it does business so as to maintain its credibility and good reputation with regards to its

stakeholders. It saw this as a great opportunity to retain its competitive advantage and

remain a market leader. In 2010, with the support of senior managers across the company,

the strategic importance and positive potential of environmental sustainability were

confirmed and this resulted in F Pak adding environmental excellence as a fourth dimension

to its existing three core goals. Thereafter, environmental sustainability was no longer an ad

hoc activity but needed to be integrated into everything that F Pak does.

4.2.1. A natural extension of the business

From its beginnings, F Pak was looking at innovation to develop packaging that would

reduce material and food wastage and thus reduce the company’s carbon footprint.

Therefore, environmental sustainability was a natural extension to the company’s

fundamental business philosophy and gels well with the current emphasis on

environmental protection.

Starting from the very beginning, when the founder said that the packaging

should save more that it costs, he was not only talking about food waste, but

about using less raw materials and increasing efficiency during transportation.

These are notions that are very key to what we define as sustainability nowadays.

So it has been ingrained in company culture from the very beginning - VZ

I was thinking in a way, underneath everything else is the whole concept and

idea of a cheap efficient package that can protect the product. It links you

towards being able to tell a good story in the sustainability space…. Everything

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was about making it a fashion, which went with reducing environmental impact.

And so the two often go hand-in-hand.- DC

Moreover, there was less of a need to convince people that environmental

sustainability was something that needed to be done and would bring substantial

benefits to the company. It was in-built into the company since its founding and has

been part of the culture ever since.

On the environment. That was already built into the genes when I came here. …

there was a very strong feeling that it was part of the way we do things.” – DC

Environment has been one of the key ingredients of F Pak since the beginning,

and then sustainability as a term came a lot later. If you go back in F Pak’s

history, sustainability was there even before the term was conceived. - VZ

The national culture within Sweden which F Pak operates also likely supported the

momentum for environmental sustainability within the company.

A lot of it came right from the roots, it was a Swedish company and … there was

this feeling that people in Sweden care for the environment and it was in the

genes of the company. And that certainly seemed to be true. – DC

4.2.2. All eyes on you: external drivers

As a profit-oriented private enterprise, it is essential that F Pak moves with the times and

takes into account the larger environment in which it is operating and customer interests

as it progresses forward. Based on regular research conducted every few years with

consumers, opinion leaders and customers, environmental sustainability ranks high on the

priority list. People now understand the dire effects of their own activities on the

environment and want to do more to preserve it. F Pak has incorporated this concern into

how it operates its business in their bid to constantly improve to serve their customers

better. The company takes in stakeholders’ views on environmental trends and

requirements when planning for their business operations.

First and foremost, it is business sense! There is demand from the customers, who

are looking for more sustainable products, they have their own sustainability

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agenda and we need to make sure that we align with these agendas and that we

do whatever is necessary to help them to achieve their own goals. And of course

our customers are dependent on the consumer – and there is a growing demand

from consumers, and we see this throughout a number of studies and researches,

showing that consumer are more and more looking for environmental products,

they are looking for environmental information on the products they buy, they

want to buy products that are recyclable, they want to buy products that do not

damage the environment – and all this is passing on to the customers and

customers are passing on the demand to us - VZ

A key reason for F Pak to assimilate environmental sustainability into its core

business practices is because it wants to look credible to its stakeholders. The word

‘credible’ appeared 8 times in DC’s interview. F Pak wants to be seen as a credible

partner to its stakeholders, no matter customers, suppliers, brand owners or NGOs. It

wants to demonstrate this credibility by actualizing environmental sustainability

change. It is not just greenwashing. Doing what customers consider as right helps it

upkeep its ethical company image.

We wanted to be credible … that means being a credible partner to our customers

as well, and a credible partner when we are talking to legislators, we need to be

able to demonstrate it. … We hope to do that so that it’s not greenwash. I was

talking to the EU yesterday. They are prepared to give you space to say

something because you’ve got a track record. – DC

It’s definitely not about marketing, it’s about the way we run our business,

because we understand that if we don’t handle this the right way, … it’s not good

for our business and our viability. – VZ

One way that F Pak demonstrates credibility and transparency is by publishing

sustainability reports on its website annually since 1999. Through these reports, F Pak

seeks to convince stakeholders that the company is indeed working on corporate

sustainability and provides proof to support that. To ‘prove’ and ‘convince’ stakeholders

of the good work done is highly important as the words appeared 7 times in DC’s

interview. This links back to the point of wanting to be seen as credible by stakeholders.

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So we could tell people nice stories with lots of great case stories about things.

How are we doing, are we really doing that well across everywhere? Are we

managing the right things? Have we got the emphasis in the right place? If we

are challenged, can we defend what we are doing? Can we defend the money we

are spending on ourselves? - DC

Public awareness and media attention often serve as important external drivers for

companies to embark on environmental sustainability. However, another key reason for F

Pak to embrace environmental sustainability is because it directly impacts their business.

Non-compliance to environmental sustainability benchmarks means losing out to

competitors and forgoing lucrative business.

There are all these external drivers … you’ve got to do it in a way where people

appreciate that we are doing it in a good way because if we don’t, we will get

choice edited by retailers and we’ll get cut out. … We don’t sell so much directly

to Walmart, but huge amounts of stuff that we sell to other people end up in

Walmart. And Walmart came out round about 2005 and said, no longer will you

tell us how good you are, but we will tell you. So they had a packaging scorecard

measuring how good people’s packaging was on their products – DC

All these triggers coupled with the global focus on environmental issues made F Pak

realize that it will need to rely on environment sustainability to compete successfully and

maintain its competitive advantage in the future. Environmental sustainability was

necessary to drive product and process innovation so that the company can remain on the

forefront of the industry.

If you suddenly realize, my goodness, in order for us to, we don’t just need to do

this to crawl up to a level to qualify, we need to be able to compete on these

things. With the customers and the brand owners. We really need to have

innovative products to be a step ahead. We really need to be able to compete well.

– DC

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4.2.3. Ascension to core business strategy

F Pak embarked upon environmental sustainability quite early on in the 1990s. The ISO

14001 standard for environmental management systems was implemented on the first F

Pak site in 1995.

From the environmental point of view, you make a product from the extraction of

raw material all the way through end-of-life. So rather than just looking at your

site, you look all the way upstream and all the way downstream. F Pak was very

early in that work. They’ve been in fact really quite early. - DC

During that period of time, corresponding initiatives were not known as environmental

sustainability and were implemented on a more ad hoc basis. There were positive results

and good stories to tell from environmental sustainability projects scattered here and

there in the company, but there was no overall coordination and concerted effort at the

organizational level. In fact, there were 18 to 20 environmental goals in total. As it

became clearer and clearer that reducing environmental impact was closely related to

how F Pak should be doing its business, senior management decided that environmental

sustainability efforts should be targeted at a few selected goals.

We can’t have 18 or 20 goals. - DC

This line of thinking was further corroborated by a high-level taskforce which looked into

the future direction of the company. It confirmed that environmental sustainability was of

strategic importance and successfully lobbied for its elevation up the strategic agenda

across the global company:

They pulled together teams of extremely senior managers and got them to look at

issues that are coming up, making sure we are doing the right things. One of

these teams were given a task to look at, still called ‘environment’ at that time,

some elements of sustainability came into it. And they came back with a

recommendation that environment got moved up to industry strategic priority. –

DC

This was a turning point for those championing environmental sustainability in F Pak.

Senior management as a whole realized that they needed to alter their perspective of

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environmental sustainability; from short-term operational view to a long-term strategic

one that would enable sustained competitive advantage.

Senior management realized that they needed to make it strategic, no longer be

just managed at the operational level, really needed to be built into the strategies

that we did to be able to perform well. So that’s when environment got elevated to

the strategic level. And that helped drive these more ambitious goals. – DC

If environmental sustainability was done well, for example by maintaining 2010 emission

standards till 2020, it would lead to many other corresponding benefits including the

reduction of waste, energy and water. At the same time, it would act as a signal of good

corporate citizenship and environmentally-responsible products for customers and

partners alike.

If we manage climate well, many of the other impacts follow climate for us, what

drives our impact, so if we bring them climate, that will be lead indicator for

many other things. - DC

In 2010, environmental excellence was added as a fourth core business strategy of the F

Pak group. Before that, F Pak focused on only three core strategies. In addition, the 18 to

20 environmental sustainability goals were re-focused to three main ones.

Up until before 2010, we had 3 circles; our corporate strategy was 3 circles. In

2010, we say we’ve got to add environment to that, so environment became a

strategic goal of the company. … We’ll have reducing environmental footprint,

sustainable products, and we’ll do recycling. – DC

4.3. Designing for environmental sustainability

For environmental sustainability to work, F Pak understands that it should take a long-term

view because business benefits may not be immediately apparent. Profits should not be the

primary driver of environmental sustainability programs. Plans should be set for a time

horizon of five years or more, the end goal should be clear and each step along the

environmental sustainability journey should count and set the foundation for the next one.

Furthermore, F Pak needs to adopt a systemic perspective when dealing with environmental

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sustainability issues due to the variety of stakeholders and business functions involved. This

is especially so now that environment has been included as the fourth core business strategy.

A change in the heart-center of the organization will impact other parts and require re-

alignment accordingly. Such adjustments take time and require patience. To get everyone on

board the same boat of change, F Pak chose to embrace a single change management

methodology developed by Kotter. The Kotter model is considered the ‘best-in-class’ and F

Pak firmly believes that its usage will lead to change success. F Pak employees are trained in

its usage and internal Kotter gurus are deployed to ensure that the model is religiously

followed in the course of bigger business transformation projects.

4.3.1. Looking at the long-term

F Pak now treats environmental sustainability as something that needs to be done if it

wants to sustain and grow its business into the future. The company knows that focusing

on profits alone will not achieve that; a long-term view is required to reap the full

benefits of environmental sustainability programs.

The minute they put environment as one these top 4 circles in the strategy, that

was when they realized that it was not just money to be made. But if you want to

grow your business, this is one of the things you can do. And for our company, it

was a really big step. Maybe not for other companies. But for our company, this

was a good way. The right way to put ourselves in the right place to be; to do the

right thing. – DC

In line with the long-term thinking, F Pak has included ‘environment’ as one of its top

strategic goals in the last two rounds of strategy development exercises. This indicates

clearly that environmental sustainability is the way to conduct business moving forward

and will remain a key business priority till at least 2020.

Our strategy has stayed the same. The strategy that we set in 2010, from 2010 to

2020, it is still valid. We are sticking to that. As it is. So if it was the right thing in

the first place. – DC

F Pak also facilitates the long-term realization of environmental sustainability goals by

being less profit-oriented in the short-run.

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Maybe it did not have the financial rate of return that other investment decisions

would need, we were given a lower hurdle because people realized it was the

right thing to do. – DC

The direction to move towards and the desired end state for environmental sustainability

in the long term are also clearly spelt out. All business functions are expected to find

ways and act in tandem to make the vision into a reality.

So for the environment, the desired state would be if we could take this carton

and we can recycle every element of it - so it is like newspaper. You can use all of

it again. We are not there yet. Even we cannot do it yet, we still need to have it as

the compelling mission. – KJ

We knew what we were doing, we’ve got targets, we knew where we’re going,

where we’re now on that. - DC

Such long-term and consistent corporate planning on the part of F Pak sets the stage for

environmental sustainability to be progressively actualized in the company. Foundational

changes need to be maintained so as to support further improvements. Investment of

resources to reach the long-term envisioned environmental sustainability goal need to be

accounted for and this therefore makes it less likely for any changes to revert or slip

backwards.

You assign people, you assign activities, you assign resources to work with it if

you decide that this should be addressed. – KJ

So our company, historically, when we set this clean goal somewhere in here, we

had to show how the goal would be reached, and how exactly, in which country,

what would be done, how much would it cost. All needed to be shown. - DC

4.3.2. Having a macro, systemic view

Implementing environmental sustainability into the business is often not a piecemeal

affair. F Pak needs to consider environmental sustainability from a systemic perspective

including its impact across the value chain when planning for its implementation.

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From the environmental point of view, you make a product from the extraction of

raw material all the way through end-of-life. So rather than just looking at your

site, you look all the way upstream and all the way downstream. – DC

This goes across the value chain. It not only covers our own operations, it covers

our supplier, our customers – our biggest source of environmental impact –

because this is where equipment is in operation. When we are talking about

climate impact, we are talking about our impact across the value chain. - VZ

This is especially apparent in F Pak whereby environmental sustainability is one of the

top four strategic goals. Therefore, any changes or improvements in this core business

area would have wide-ranging impact on other parts of the business. For instance, a bid

to reduce the environmental footprint will affect the entire value chain of the packaging

manufacturing process, sourcing and packing as well as shipping arrangements.

Reduce environmental footprint across the value chain. Typically, what we do

strategically is to reduce carbon footprint in a factory where we produce the

material. We have plants across the world, and you try to put them close to

centres of production. We try not to ship things as it is done in many other

industries. It is relatively cheap still to put things on a boat and then you ship it

somewhere. We want to be a bit more environmentally friendly. It has a big

impact, and you save a lot on environmental expenditure, if you keep your

logistical effort to a minimum. - KJ

As a core business strategy, environmental sustainability needs to work hand-in-hand

with the other three core strategies for the company’s integrated success. Certain

obligatory processes are embedded into all business units to ensure this:

[the four core strategies] are equal which is a point in itself. No one of them can

exist at the expense of another. But as a company we cannot be successful on the

long term, if we don’t meet objectives in all these areas. So also on a unit level

you will have activities - which we usually call ‘must do’s’ that are related to this.

– KJ

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In addition, F Pak should involve both internal and external stakeholders in its

environmental sustainability programs in a holistic manner. Not only do internal

stakeholders need to be convinced of the operational benefits of participating in such

initiatives, external stakeholders also need to be persuaded of potential benefits or even to

take a leap of faith sometimes. The entire eco-system needs to be aligned in its pursuit of

environmental sustainability goals and this takes time.

You want to change your product so they have attributes, but to get those

attributes you have to pay more money for them. Then you’ve got to convince

somebody, that either you or someone in the supply chain wants to have a lower

profit margin. Or you’ve got to convince them they will sell more or they can sell

at a higher price. – DC

Even though we do not own or operate any recycling facilities and we do not

have collection infrastructure, … We try to raise awareness in recycling across

the globe wherever we have operations, support recycling entrepreneurs so that

they have good enough reason to open up recycling plants and try to make sure

that there are enough product solutions that can be made out of recycled

beverage cartons. - VZ

4.3.3. Believing in Kotter

In order to transition from a state where environmental sustainability is conducted on an

ad hoc basis to a more structured approach, it was important for everyone in F Pak to

speak the same change language and have the same change thinking. For this purpose, F

Pak has chosen John Kotter’s eight-step methodology as the change management

ideology since 2010. Within F Pak, Kotter’s change management model is the preferred

and only model used for change management purposes including environmental

sustainability projects. It was selected because it was considered the ‘best’ model around.

Well, this one is Kotter per se - this is good in practice for running projects.

Kotter is the only sanctioned model for overarching change management. … can

be Bain Consulting, McKinsey, it is most big companies which do that. They look

at what’s the industry practice / golden standard or whatever you call it - and

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then you adopt it. Just like we took Kotter and try do it in the business

transformation process. And this whole process is of course change management.

- KJ

Due to the belief in the Kotter model in achieving change management success, F Pak

invests a lot of efforts to ensure that leaders and those involved in change management

are thoroughly trained in the Kotter methodology. Such training is done on a continual

basis so that there is always enough people who know the Kotter method to enable

change.

The company did train tons of people after the 2010 start of this journey. Change

situations have been trained in workshops, and you got massaged with Kotter

information. People get a Kotter book, the basic book and the case studies. When

we do a new change, at least in my experience, there are enough people, a

critical mass that will be more or less aware of what is this and why do we do

this, and what is this in terms of a tool ... basically we do it as Kotter says. - KJ

The Kotter change methodology seems to be somewhat of a religion in terms of change

management practices within F Pak. It is consistently practiced for all kinds of corporate

changes, cutting across all levels, even if some people do not realize its origin. There is

absolute faith in it leading to project success and enabling change to stick.

Making it stick is what you want to do. So I think this is also why the model was

chosen. It is good enough. If you bring a consultant to help us, it will still be

Kotter. And some people maybe even don’t know it is called Kotter, but they can

recognize the steps. What makes it difficult to go back is this [Kotter] business

transformation model. Cause, if you have put all the stuff into the system – it’s a

bit like your fingers stick to it, you cannot pull them out again. - KJ

Earlier success with the Kotter model has further reinforced its usage within F Pak. The

company now practices it with rigor and strict adherence to the prescribed steps and

usage of templates. It seems that the people in F Pak truly identify with the model and are

absolutely passionate about it.

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We love the Kotter Model. It works, why make it more difficult. … We are a bit

repetitive rigorous about this, so we have a million templates for how to do these

things…. We love templates! … We also have a whole web page for that. We have

a team site for F Pak where you can find more information. And when you look at

the type of documents we have, you can see a lot of support slides for all sorts of

things. … For each step you can find more information” - KJ

This is especially so for business transformation projects whereby coaches are assigned to

ensure adherence to the Kotter methodology and audits are conducted after the project to

make sure that all the steps and templates are being followed.

If it is a big enough project, you assign a business transformation coach from the

center - so they will make sure that you stick to the process. But if it is not so big

you will do it yourself, following the material. So if it is example a big recycling

project, which has a big impact - you can be sure that there are coaches offering

their help and make sure that we stick to the plans. And that is about compliance

and that we can survive an audit. – KJ

In view of the devoted observance of Kotter in all change projects, it is no wonder that the

word ‘Kotter’ appeared 19 times in one of the interviews about change management. Kotter

seems to be the cure-all and hero of the day when it comes to change management in F Pak.

4.4. Implementing environmental sustainability

Being one of the top four corporate strategies means that environmental sustainability

requires a higher level of formalization in terms of structure and processes. Although F Pak

is armed with the mandate of achieving environmental sustainability, it does not begin any

project until it has proven its worth and potential benefits. The Finance and Business

Transformation division ensures that all environmental sustainability projects above

€100,000 are justified and will yield the required impact compared to the effort put in. These

projects should ideally result in improved efficiencies and help F Pak leapfrog its

competitors so as to stay at the forefront of the industry. In F Pak, the push for

environmental sustainability changes is mostly driven by senior management. Senior

management presence and endorsement are essential due to the multiple stakeholders and

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politics involved. Their approvals are often necessary during project milestone clearance and

sign-offs. Such attention puts environmental sustainability constantly on senior

managements’ line of sight, but it also slows things down considerably due to their jam-

packed time schedules. F Pak institutes control mechanisms to enable better decision-

making, progress monitoring and collection of data for external reporting. Progress

improvement metrics are also linked to individual performance evaluation and rewards to

ensure that staff do not fall back to old habits. Such measures mean that areas of

improvement can be more easily spotted and corrections made. But it also leads to the

system becoming less flexible in that changes previously made will likely stay but it is

harder to introduce additional changes. For environmental sustainability change to actualize,

people need to understand the change rationale and be equipped with the right skills and

knowledge via training. They should also be encouraged to adopt a change-oriented mindset

geared towards continuous improvement. F Pak tries to motivate employees to embrace

change via storytelling, envisioning exercises and highlighting earlier wins. Simultaneously,

it attempts to increase employee’s buy-in via project involvement, role-modelling and

demonstrating alignment with purported changes.

4.4.1. Heavy emphasis on structures and processes

a) Do it only when it adds value

Having the right conditions, perspective and armed with the Kotter arsenal, F Pak is now

ready to embark on its environmental sustainability journey. Like other private

businesses, the company does not take on environmental sustainability projects unless it

can fulfil certain criteria and produce outcomes that benefit the business. This is most

apparent when the approval of business transformation projects valued above €100,000,

including those of environmental sustainability, needs to be obtained from the Finance &

Business Transformation division which reports directly to the CEO. Any environmental

sustainability project that falls within this category requires monetary and resource

investment, and hence needs to justify its investment in terms of fulfilled outcomes. Only

when a project is considered worthwhile and demonstrates tangible benefits will F Pak

embark upon it because resources are limited. The projects should ideally lead to reduced

costs and improved efficiencies for the company, and overall business growth.

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Organizationally, we have a unit called ‘Finance & Business Transformation’.

The combination of Finance and Business Transformation is a strong signal that

change is money.… so if you do this, what kind of an impact it will have. So if it is

difficult, but does not have an impact, don’t bother. It’s both what is making a big

change, and what is possible to do. Cause as always you have only so many

hours, so many people, so much money. It has to be worth it. Otherwise it is

difficult. – KJ

There is a lot of environmental things which go hand-in-hand with producing

costs. At the operational level, a lot of it is about improving efficiencies. – DC

Furthermore, the goals of the environmental sustainability projects need to be tightly

linked to business performance, stakeholder requirements and real business needs. The

end products should be innovative enough to leapfrog competitors and help F Pak

develop new products and services for its customers.

You can say that we have been market leading for many years … we need to sell

more service and products that are historically not seen as the core business, yet

it is still critical for the customer side. Then innovation, what we want is more

environmental friendly technology. – KJ

Most importantly, innovations in environmental sustainability should result in F Pak’s

continued competitive advantage over the rest of the industry. Although it is a market

leader today, there is still a lot more that could be done in order to stay ahead of the pack.

We were looking at what competitors were doing. And what competitors could do.

If we do nothing, and if everybody else does what we could do, where would we

be right? So then it was ‘oh my god’, to compete, … we’ve got to move our

performance up by something like a factor of times 10. Hasn’t happened yet. We

are still ahead. But if we want to stay ahead, we are gonna have to do a lot. - DC

b) Senior-management approval needed

Environmental sustainability is consistently on F Pak’s corporate agenda due to its

strategic status. Senior management were convinced of the need and importance of

environmental issues very early on, and have been consistently involved in its planning

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and rollout in the company. In F Pak, the management focus on environmental issues

started way ahead in the 1990s with the setup of the Environmental Council.

We had this Environmental Council. It had 4 or 5 people, 4 people, from the

GLT (global leadership team), the top management group of the company on the

Council, which was more than on any Councils. It was the top members from

GLT, the top managers from each division was in there and then the top people

from each of the regions. A very, very powerful group of people. And each

division and each region also had a top environmental person. - DC

Following this trend, environmental sustainability change in F Pak is now primarily

driven from the top as part of the core business strategy, cascaded downwards and

acted upon in all downstream functions. Such a top-down approach is deemed

necessary for complete follow-through and achievement of environmental

sustainability goals. Senior management endorsement is also essential due to the

multiple stakeholders and politics involved.

It is a top-down approach. We have the setting of corporate strategy, and then the

strategy translates into actions for functions or business unit throughout the

company and throughout different levels. I think you need to have top guidance to

make sure that you follow it through to the rest of the company. – VZ

Extremely senior managers recommended that environment get moved up to

industry strategic priority. If we in the technical environment group pushed that,

you get pushed back from all over. Probably from the same people. – DC

Today, leaders from all levels in F Pak are involved in the implementation of

environmental sustainability initiatives. Senior management often sponsor or initiate

the project and have oversight of project progress. They are also the ones who would

approve important project milestones and do the final sign-offs for them.

So the sponsor probably for this environmental project is in the most senior

leadership team which is in F Pak language called the Global Leadership Team.

And then below that level you would have the Leader for Environment. They are

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always in the change, because if you don’t have it, you would never get their

sign-off - KJ

It is great the environmental issues now merit senior management attention in F Pak.

However, management endorsement also means that many environmental

sustainability projects of a top-down nature do not move as fast as desired and F Pak

is well-aware of the trade-off.

It is very heavy to do it with all these senior guys because you cannot book them

like ‘come here and have a look at my idea’. Maybe if you hover around the

meeting room where this person is. But if you want to have a quality discussion, it

can be a month before you have a meeting. So the trade-off for rigor is speed! -

KJ

c) Constant monitoring and compliance

When F Pak started rolling out environmental sustainability projects, things were more ad

hoc with different business units rolling out different things in a not so coordinated

manner. These days, with environmental excellence being one of F Pak’s core strategies,

things have gotten more structured. In line with the need to show value for approved

investments and projects, there is now a lot of emphasis on governance, including audits

and certifications.

We said there’s a lot of good things going on, but we’ve got to get more

structured. So we went through that phase where we moved from good ad hoc

things going on to saying that we should get things more structured. And some of

the other bits of sustainability have to do with governance. And there is a whole

massive, massive structure on governance, very strong, very visible… lots of

audits and external certifications - DC

Actual environmental roles have also been created to oversee the exercise of related

activities across F Pak. These roles originated in the 1990s on a somewhat less formal

basis, but have since evolved such that there is someone looking after sustainability

issues in every company and market.

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In the evolution of the sustainability work we have introduced certain roles

(organizational development, expertise, CSR, recycling…) Basically, [the

Director of Environment] will have counterparts in the 5 regions of F Pak and

then under theses clusters you have 35 market companies - And in each region

and market company you have someone working in sustainability. – KJ

Structure and processes are necessary for the improved coordination of business activities

and allocation of resources. They also facilitate the collection of data and information to

be used by senior management for better decision making and progress monitoring. The

collection of such details enables the publishing of external reports which demonstrate

transparency to social stakeholders on the handling of sustainability matters.

But how do we at the higher level know what’s going on. So then we start to do

things, we say ok, like we’ve got to have standards KPIs, environmental KPIs,

environmental measures, everybody has to report. We need to know what’s going

on. We need that for ourselves. So are we doing the right things on our sites and

driving the right things. And we need to do that so that we can being to think

about reporting externally. - DC

Having a monitoring system in place also enables measurement of results which is

needed to justify the investment made. Continuous monitoring of performance outcomes

instils discipline in people involved in long-drawn projects such as environmental

sustainability to constantly improve the current state of affairs. It also creates the

conditions for previous implemented changes to stick and not revert.

We want to get performance of some kind so all is measureable, money, time,

savings, etc. … So if the rating is 3 out of 10 when we start. And the next time is

still a 3 - we haven’t really managed, then oh it’s a four, we are getting there. So

we do this in quite a lot of our work to see if its incremental positive change

which is also in a way partially answering the question ‘how do we make change

stick’ because if it is a journey you need to know that you created the conditions

for the change to not just go away. – KJ

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Progress improvement metrics are also linked to individual performance evaluation and

rewards to further prod people to practice and accept the change. This ensures to some

extent that the implemented change does not suffer a backward evolution and

performance improvement is maintained. Performance measurement signals to people

where to focus their efforts and what to improve.

We even metricize the KPI’s. So if I make my target, I will be awarded with let’s

say 100% of my bonus, but if we don’t make it, then I get less. – KJ

Monitoring and compliance is enacted in very practical ways in F Pak such as action

follow-up. Non-compliance of set processes or non-fulfilment of performance targets can

be easily detected when staff report back on their project progress. From there,

corresponding remedial actions and improvements can be taken.

You measure it, and then you report it, then you look at the progress over the

years. This is one way of implementing it and making sure that everyone’s

following the same guidelines. - VZ

So it’s the usual action-follow up. That’s the only way you can really do it. You

have to have a very practical hands-on way of looking at it. If you have a

repository on the web like an action list, in which you fill in what you have done

already, then you pull reports with graphs and blow some whistles and then you

can get feedback. - KJ

With the implementation of more stringent structure and processes though, it is now not

so easy to implement new things or make changes in F Pak. Previously one had only to

know the right person to talk to, convince him of the purpose and rightness of the

proposed environmental sustainability project and the go-ahead would be given. Today,

the approval process is much more challenging.

Now we are all processes. And you need lots of committee to buy in. Much much

harder. So things are different now from then. We are much more process-

oriented. – DC

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4.4.2. Working with people is key

a) Clarifying communications and training

Organizations are made up of people. In order for environmental sustainability change to

happen and stick, F Pak needs to make sure that first and foremost, people understand

why environmental sustainability needs to be done, what it entails, how it impacts their

day-to-day operations, the outcome the company is working towards and the benefits

they can expect. F Pak should provide the necessary training for people to take on the

new tasks and integrate these tasks into existing daily business routines so that people are

less fearful of the change.

The most important thing is to make people in the organization understand what

it is they are working for. It translates from the strategic priorities all the way

down to individual tasks that people do every day. People within the company

need to embrace the concept of why they are doing it. – VZ

Change is a journey. and if you want to end up at the same point, you need to

make sure everyone is with you. The first sell is to our colleagues You need to

connect the benefit to the pain. You need to create an appetite, an interest, a need

and an urge to change. We have to show them the benefits of focusing more on

environment, and that it actually makes us stronger. - EL

Environment is going to integrate everything we’re doing. For instance,

environment is integrated into the sales management processes. Environment

becomes one of the values that we sell. We’re making sure that environment is

integrated into everything. And that we help people by training them do what they

want to do. - DC

b) Behavioral motivation and signaling

In addition, F Pak tries to reduce people’s resistance to change by encouraging them to

adopt a change-oriented mindset, an essential ingredient for innovation and improvement

and key to F Pak’s business success. Only with such a mindset can people persevere in

the face of setbacks and resistance, and believe that change is possible. Many things are

perceived as fixed or the current state of things are simply taken for granted. A mindset

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change in people is crucial for breakthroughs to happen. However, this is often difficult

to achieve.

When it comes to remove barriers if we have a history of saying that you can

never separate aluminum from plastic and carton, then it is the truth. But if you

say well actually have we tried it hard enough? And then all of a sudden you can

do it. It’s a bit like - what you thought would be impossible - now you can do it.

LG and Samsung said, they should have a TV screen on paper 20 years ago,

everybody laughed but now we have it and you can even bend it. It is the same

thing. You can overcome technology quite easily, but people’s mind-sets are very

difficult. – KJ

Although getting people to change is often an uphill task, it is important to get the ball

rolling by providing them actual examples of change, painting visions of what could be,

thereby stimulating innovative thoughts and setting the stage for potential change. F Pak

also uses quotes, case studies and stories to remind and convince people that change is

necessary for improvement.

Maybe you make this top (bottle cap) green, to imply something, you make people

think, or you add one bin next to other bins, maybe there is not yet the readiness

for actual recycling of everything, but you start the thinking. … We often have the

quote, by Albert Einstein of insanity. Doing the same thing over and over again,

and expecting a different outcome is the definition of insanity. Companies they try

and do what they are good at and they expect that all of a sudden it will be very

different. Almost like a sports team, playing with the same players, with the same

tactic, and they don’t win any games - so why would they win the next one? – KJ

The use of previous success stories also makes it less difficult to actualize the next wave

of change. People tend to buy in to the new environmental sustainability ideas more

readily if earlier change efforts had met with success and the fruit of earlier labor have

been enjoyed.

And those worked. Put out 14001 on every single operational site across the

company. And introduced the same across the whole development body. – DC

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c) Early involvement and demonstration

It is often easier to accept change if it is not forced down your throat. It is quite common

for F Pak management to test initial ideas first with a select group of people across key

functions and obtain their feedback or consensus before taking further substantial steps to

make changes.

So when there has been some initial thinking I would go another unit and say:

‘look, we are thinking about doing this, what do you think about it?’ And then you

test a little bit for the areas for which you either don’t know yourself or the areas

you are dependent on. – KJ

To get there, these teams worked by building consensus across the people,

different parts of the organization. -DC

For the case of F Pak, besides senior management’s role modelling in terms of their

active involvement and oversight of environmental matters, the company also walks the

talk through other practical outreach channels. Such actions signal to the people that

environmental sustainability is not just a nice concept written on paper, but something

that the company embraces and acts on.

So it’s to make people walk the talk. If we have an environmental approach, it

will not look good if you go to the canteen to have lunch and you have the wrong

kind of detergent, or if you did not separate all the waste. Well then you lose it.

Because if you don’t do it yourself, then how can it happen. And I think many

companies forget that, they talk about ‘oh we are so good at this and that’, but

then they pollute or use methods that are not okay. - KJ

4.5. Post-environmental sustainability change

After putting in place the changes related to environmental sustainability, the probability of

it sticking increases when the project concludes with an effective handover-takeover

process. This ensures that the receiving business unit can function independently thereafter.

The handover-takeover process often encompasses a post-project review that captures

lessons learnt for further fine-tuning and future improvements.

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4.5.1. This is really the end (of the project)

After environmental sustainability change has been implemented, the change

management team needs to hand over the project to the receiving business unit. The

business unit has to take over the running of day-to-day operations thereafter. This

handover-takeover process has to be handled carefully for the change to stick. Not only

does the receiving business unit have to be properly trained on any new processes, it also

has to be gradually weaned off its dependency on the change management team.

If you support the change management, you kind of hand over the keys and pull

out the support people and mechanisms when the change is live. If you don’t say

‘now it’s done’, you never get away from the dependency. But if you are subject

to the change, if you receive the change, then you must promote it as the

beginning. It’s a bit schizophrenic nature of driving change - more like a mental

switch. - KJ

4.5.2. Learning and tweaking

As part of the handover-takeover process, all the people involved in the environmental

sustainability change project will go through a lessons learnt process where they discuss

and document what went right and wrong during the project implementation. Such

lessons are then used to tweak existing implementations and serve as learning points for

future projects. Improvements made in this way increases the chance of success for such

projects, and the probability of the project outcomes being accepted the next time round:

When we have done it, we evaluate it and then we adjust what was not so good,

and then we moved on. Most projects have a fairly rigorous ‘lesson learnt’ that

follows (like a template). You can check what happened in these different phases

and business transformation steps. Sometimes you don’t have a story for every

item, but if you learn a bit, the chances are that you can do better next time. And

if it was very good, of course you want to maintain it. – KJ

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4.6. Summary of findings

Figure 5: Summary of findings

These findings clearly demonstrate F Pak’s environmental sustainability implementation

journey, its triggers and methods applied. From the beginning, the company understood the

implementation of environmental sustainability as a natural extension of its business

philosophy and an integral part of its culture. The adoption of environmental sustainability

was later propelled by its desire to be seen as a credible and reputable business entity. It also

recognized that environmental sustainability would enable it to drive innovation and

leverage on new business opportunities, thereby maintaining its competitive advantage.

The above factors facilitated the transformation of environmental sustainability work from

ad hoc and short-term with little or no coordination, to a strategic approach with long-term

focus in 2010. In this year, F Pak integrated environmental sustainability into their core

business strategy. In order to successfully implement environmental sustainability company-

wide, F Pak assumes a systemic perspective to manage the complexity of incorporating

changes into the entire business operations and to meet the demands of all internal and

external stakeholders involved. The company also chose to rely on the eight-step Kotter

model for change planning and implementation starting 2010. Using a single model for

change, it ensures that all employees have the same understanding of the change process. F

Pak has unabated trust in this prescriptive step-by-step-model to help them manage

organizational change and depend upon it for change success.

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When implementing environmental sustainability change, F Pak makes sure that people

adhere to set policies and procedures. All corresponding projects need to be outcome-

justified and add value. Senior management is actively involved in the initiation and

sponsorship of environmental sustainability projects. Their approval is needed for project

progression and closure. Many measurement activities are also in place to ensure

compliance, monitoring and control. The combined use of a top-down approach and strict

regulation means there is a trade-off between rigor and speed.

The success of environmental sustainability change is highly dependent on F Pak’s

workforce. It encourages a change-oriented mindset amongst staff. Communications and

sense-making cues such as previous success stories are deployed to motivate and support

change adoption. New job roles are created to support environmental sustainability and

signal its permanent incorporation into the business. In addition, project handover-takeover

is facilitated to ensure the change-receiving unit is sufficiently independent to operationalize

the new practices, and lessons learnt are captured and used to make adjustments and future

improvements.

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5. Analysis & Discussion

5.1. Conditions are right for change to stick but …

The environmental sustainability programs that F Pak implement are triggered by the global

emphasis on environmental protection, external stakeholder expectations from end

consumers, business partners and NGOs, as well as legislative demands. In order to uphold

its reputation as a good and responsible corporate citizen that can meet the triple bottom line

and leverage on environmental sustainability as an innovation driver, it tries to ensure that

changes made to reduce environment impact are implemented and sustained within the

organization. These factors together with F Pak’s inherent affinity with environmental

sustainability and subsequent developed culture created the launch pad and cultivation

conditions for more structured environmental programs to take place. The elevation of

environmental issues to the highest strategic level within the company in 2010 opened up a

much wider pathway for F Pak to achieve its environmental sustainability goals. At the

same time, this increased visibility on the senior management level means that efforts will

be taken to ensure changes made do not fail and are sustained.

For change to stick, the literature review (see section 2.2 & 2.4) indicates that F Pak needs to

have a long-term, systemic perspective when considering environmental sustainability

issues. Profits should no longer be the key driver if the business wishes to enjoy extended

longevity. It needs to consider the inter-connecting factors and players, their inter-

dependency and knock-on effects from localized adjustments in the entire business system

when making changes. F Pak has demonstrated that it is well aware of this in the Findings

(see section 4.3). The company enacts long-term, systemic thinking by having environment

as a core strategy from 2010 to 2020, involving different stakeholders in their environmental

scanning, consultation and implementation activities, lowering the financial rate of return for

environmental-related investments and trying to integrate the environmental theme into all

aspects of its business.

Another pre-condition for change to stick is institutionalization (see section 2.4) – having

the right organizational setting that fosters lasting change in work practices and ways of

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working by signifying desired behavior and where efforts and energy should be focused on.

This is reflected in the numerous structures and procedures that F Pak has put in place.

So basically we are extremely organized and regulated. – KJ

Business transformation was added to the responsibilities of the F Pak Finance department

to signal the importance of change and the associated accountability required for change

activities which consume the company’s resources. There is active involvement from senior

management in terms of project initiation and sponsorship. Approval matrices often involve

senior management who endorse change project milestones and sign-off projects. All these

ensure that people are kept on their toes and continue moving in the direction that they had

planned. Audits are conducted to address compliance to changed practices. New job roles

have been created to oversee and support the propagation and maintenance of corporate

sustainability, including those for environment. Measurement metrics and performance

criteria have been linked to environmental sustainability targets. Data is systematically

collected for internal progress monitoring and external reporting. Templates are now used to

document each step of a change and lesson learnt activities are systematically performed

after the conclusion of each environmental sustainability project to allow for tweaks and

improvements. Handover-takeover procedures are managed so that the receiving division

can enact the change independently after completing the project. All these structures and

processes serve to create an organizational environment that emphasizes the seriousness of

change, discourages deviations from planned changes, hence enhancing the attainment of

change and its eventual entrenchment.

When there is a process in place, that is commonly agreed that this is the way we do

it, if we follow it, the implementation of the change will of course be easier than if

you don’t. If you try to bypass the process, then someone can always come later and

say hang on, you have not done this and that. I think following the process will

increase the likelihood of change being maintained. - EL

In line with the literature review (see section 2.4), an emphasis on working with and

influencing people to achieve environmental sustainability change and continuation is

apparent in F Pak. However, we believe that perhaps less efforts were expended in this area

compared to other companies because of the natural resonance between its core business

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philosophy and the principles of environmental sustainability. They make a good story

together and open up further opportunities for business innovation. Moreover, F Pak being a

Swedish company also means organizational members were more likely to embrace

environmental sustainability. In fact, the interviewees claimed that care for the environment

was in the genes and corporate DNA of the company.

Environment has been a very big part of the corporate strategy for the longest time.

It’s incorporated into pretty much in everything we do. So it’s pretty much part of the

corporate DNA and the corporate strategy. - VZ

Influencing and engaging people to adopt environmental sustainability changes take on a

few major forms in F Pak. Firstly, the company ensures that people understand the rationale

for the change and how it will affect their daily work activities. This is supplemented by

required training so that employees can learn about their new roles and perform the

associated tasks. It also tries to encourage the adoption of a change-oriented mindset via

sense-making cues such as quotes, case studies, inspiring visions and success stories of

change. F Pak takes care to align advocated actions with actual sustainability practices

including role-modelling by senior management, and attempts to involve employees in the

early trial phases before an actual change is rolled out.

In view of the above, F Pak seems to have put in place the right conditions and processes to

facilitate behavioral and procedural transition (Roberto & Levesque, 2005) for

environmental sustainability change to stick. Assuming that everything works out as

intended, whatever improvement and benefits that accrue from the change should stay put.

Indeed, this is good news for F Pak because all the resources and efforts invested will not go

to waste.

However, viewed from the other end of the spectrum, the deep embedding of change may

prove to be a double-edged sword. The very same factors that allowed change to become

entrenched may impede future improvement leaps and advancement to the next level of

environmental sustainability excellence. The bureaucratic red tape and processes one has to

surmount to realize a significant environmental sustainability change can be lengthy and

intimidating. First, you need to convince senior management that what you want to do is

aligned with the corporate direction and 10-year strategic plan, and they may not have the

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time to meet you when you want them to. Unfortunately, most of the environmental change

initiatives in F Pak are driven from the top and that translates to change trickling down the

organizational levels at a gradual pace considering its size and geographical reach.

And when it comes to sustainability and environmental work, we have chosen to do

more of the top-down. – KJ

The corporate strategy is formed by the strategic council which is at the top level of

the hierarchy, so they set the strategy and then the strategy cascades down to all the

departments and functions. It’s a headquarter thing; it’s a global decision. You take

it down to different levels until it reaches everyone. - VZ

In addition, you need to fulfil the project criteria set out by the Finance & Business

Transformation department. Simultaneously, you need to get consensus and buy-in from

other organizational members and perhaps external stakeholders. Consensus will probably

not occur quickly due to the many parties involved. It may also be slowed down because

conflict is seldom resolved by hierarchical power, but by negotiation and compromise in

Sweden (RobecoSAM, 2013). When doing the project, you need to obtain senior

management approval for progression, fill in lots of templates and strictly follow the

designated Kotter model for change management. After the project, you need to do proper

handover and conduct a lessons learnt exercise. All these processes take time, involve a lot of

effort and slow down the change momentum.

Although governance, processes and systems allows for management, accountability and

monitoring, too much of it will choke up the innovation pipeline. F Pak probably has been

able to achieve a good balance between a continued quest for improvement and making

change stick by having a long-term plan - past changes form the basis for the next set of

changes. However, it may wish to keep in mind that paradoxically the management tools

used to decrease uncertainty may also lead to inflexibility and non-agility when it comes to

required radical change.

We would like to see ourselves to be quick in learning, the problem again is speed.

Because if you want to go over the whole thing again, you’re like the public service -

it takes too much time. But since we are world leading and market dominant I think

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we sometimes allow ourselves to do it, which I guess has positives and negatives. –

KJ

F Pak certainly does not want to be caught in a situation whereby the processes are made so

air-tight and regimental that its ends up being trapped in a procedural bind that it created

itself – one where there is no space for further adaptive maneuvers and it can only simply go

forward according to the step-by-step plan. In cases where the company is compelled to

continue working on a failing course of action, it will be in danger of an escalation in

commitment (Brockner, 1992).

Ironically, it seems that creating the conditions and processes to make current change stick

inadvertently deters the introduction of new changes. F Pak often wants business partners to

take a leap of faith by trying out novel inventions such as bio-based caps made from sugar-

cane, but the current process-driven system does not seem to encourage that very same

intuitive and ground-breaking spirit.

[Previously]… I ended up reporting to a very senior guy who said ‘let me know when

you need something, what are your top three priorities. You’ve got 20 minutes to tell

me’. I tell him and he’d say ‘Those 2 sound good. Let’s do those 2, you can have the

money to do it’. You can’t do that now. Now we are all processes. - DC

For F Pak which values fast response to the market and continuous improvement, a focus on

structures and processes may detract them from realizing rapid innovative breakthroughs that

would further strengthen their industry leadership. It would be a pity if formalization and

hierarchy in F Pak were allowed to dwarf the potential capabilities of its people network.

Instead of following the steps of a standard operating procedure, perhaps a spontaneous

conversation with knowledgeable colleagues would help to generate new ideas or resolve

gritty issues more quickly. The people component in the environmental sustainability

formula may need to be re-emphasized because the shared meaning of sustainability and the

ensuing mindset change is propagated via human relationships and networks (Schneider,

Brief & Guzzo, 1996; Doppelt, 2003; Weick, 1995):

Actually a lot of what we do is through networks [previously]. … we worked with

people … we called them champions a lot of the time … we had these informal

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networks. … But round about here. This was when processes started. And now we are

all process … In the old days, speaking to the right person. You had to know who to

speak to make things happen. Now you need to be in the processes. - DC

People are often the key failure or success factor for any change initiative. F Pak should

persist in the good work that it has done so far in encouraging their employees to have a

change-oriented mindset because it is a change in their individual behaviors that will

cumulate in eventual organizational change (Cable, 2012). It should also continue to

emphasize the benefits and importance of doing environmental sustainability work as

something that not only benefits the company, but its employees as well in the long term.

What’s more, it should try to mobilize employee’s existing knowledge of environmental

sustainability and fundamental desire to do something good by providing them with

opportunities and platforms to begin bottom-up initiatives. This will hopefully speed up the

rate of adoption and embedding of environmental sustainability changes because “people

support what they help create and resist what is forced upon them” (Spiker, 1994:45).

Instead of constantly pushing for environmental sustainability to be accepted at the

organizational level, F Pak could perhaps complement the former by using such pull tactics

at the local levels. As Kotter (2014) puts it, more employees should be afforded the

autonomy to initiate change in a coordinated manner, rather than just carrying out orders

from a higher authority. In fact, this is exactly what is happening at the moment. F Pak has

recently renewed its interest in bottom-up approaches and is now conducting more

experiments in this area of work.

When it comes to sustainability and environmental work, we have chosen to do more

of the top-down, having done bottom-up before. Right now we’re experimenting with

more bottom up - you can call it like a guerrilla activity. - KJ

As an end note to this section, F Pak seems to have employed multiple push factors

especially in the form of structures and processes to move the environmental sustainability

agenda and provide stability to implemented changes. Such institutionalization helps F Pak

attain the ‘refreeze’ state of Kurt Lewin’s change theory and change is able to stick.

However, in today’s ever-changing world where re-organizations typically take place every

two to three years as a result of fluctuating environmental circumstances, rigid freezing is

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probably not the best way to move fast and advance forward (Child, 2005). F Pak needs to

maintain a certain degree of flexibility and buffer for continuous change in the form of its

people. In other words, let change stick but have the ability to get it unstuck when needed.

5.2. The Kotter trap

Like all other business organizations today, change is a constant and change is a must.

However, the majority of change projects end in failure. To minimize the risk of project

failure, organizations attempt to equip themselves with the knowledge and tools to manage

change. F Pak is no exception. In its case, the company has chosen to adopt the eight-step

change management model developed by Kotter in 1996 (see Figure 1) to facilitate all its

change management/ business transformation work. The choice of the Kotter model is a

further attempt to reduce the rate of change failure. This is because it is one of the most

well-known approaches to organizational transformation (Mento, Jones & Dirndorfer,

2002). When the model was first introduced, it was an instant hit and his book ‘Leading

Change’ released in 1997 remains a key reference for researchers in the change management

field and is presented in many textbooks today (Appelbaum et al, 2012). Therefore, many

leading consultants tout it as a best practice for change management. The resulting Kotter

discourse has led many organizations to have high expectations of the Kotter model and

subsequently use it themselves. Such Kotter implementation trends likely also drove F Pak

to apply Kotter in a bid to simulate the behavior and success of other companies.

Today, the Kotter model is the only sanctioned model for change management within the

company. In 2010, F Pak started training its employees on the use of the Kotter model for

change management. Re-training is conducted whenever needed. Basically, there is always

an adequate amount of people in the company that understands the model’s rationale and

ensures its proper usage and implementation.

When we do a new change, at least in my experience, there are enough people, a critical

mass that will be more or less aware of what is this and why do we do this, and what is

this in terms of a tool. - KJ

In-house Kotter gurus have been cultivated to ensure adherence to the model. The Kotter

change management principles and approach are used no matter the size or nature of the

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project. This ensures that everyone speaks the same change management vocabulary and

uses the same change management tools and templates. There is less likelihood of

misunderstanding. Tools and templates can be reused and re-taught. Terms and

abbreviations are standardized. There can be undisrupted continuation and easy cross-

reference between the documented happenings of each project and project phase, back and

forth on the organizational timeline. Data can be easily collected because one can just pick

them from the exact same place on the same form irrespective of which project. Reporting

and monitoring is so much easier because all projects go through the same phases. Hence,

anchoring the change management methodology reduces management uncertainty of the

unknown and implies administration efficiencies, better control and good knowledge

management.

One could rightly speculate that the Kotter model is relatively entrenched within F Pak. In

fact, it is one of the major changes that has managed to stick since its introduction in 2010.

This can be attributed to its alignment with the company culture and its push for a more

process-driven business approach. The step-by-step model allows each change management

project to be carried out as an end-to-end business process with clear outcomes and

promotes compliance through the easy identification of outlier activities. Moreover, the step-

by-step nature of the Kotter model blends in well with how the majority of F Pak employees

think and work; ‘the way we do things around here’. As a manufacturing business, F Pak’s

workforce is dominated by rational and scientifically-grounded engineers. Therefore, a

logical model like Kotter’s would appeal to their innate reasoning and this very likely

accelerated their adoption. From our findings, F Pak’s widespread application of the Kotter

model seem to bring about many benefits but we would like to view the situation with a

more critical eye and present some possible drawbacks next.

Firstly, the singular usage of the Kotter model prevents the application of more suitable

change management models. Every change situation is different and requires the right

change management approach for it to succeed. In fact, “no single model can provide a one-

size-fits-all solution to organizational change” (Sikorko, 2008:316). The selection of the

change management method needs to be contextualized and implementation needs to be

modified based on local conditions. Application of the Kotter model which advocates the

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completion of all eight steps in the prescribed sequence may not work for all situations. F

Pak needs to increase its capacity to know, accept and have the ability to apply more suitable

change management models when the need arises. Unfortunately, F Pak has deprived itself

of such flexibility by pledging its allegiance to only one change management model. The

long-term devotion to the Kotter model has made it difficult to switch to alternative models.

Kotter is now built into F Pak’s business practices and routines. Users are now trained to roll

out change based on the Kotter perspective only. They now habitually follow the Kotter

method for every project, doing it the same way again and again. This blinds them to other

perspectives and may lead them to overlook better ways of conducting change. The Kotter

model may help them surmount some change management obstacles, but it is definitely not

a panacea for all situations (Appelbaum et al, 2012). The passion for the Kotter model

expressed by one of the interviewees suggests that the Kotter model is likely here to stay

since F Pak loves it so much. However, the over-reliance and perhaps addiction to the model

brings F Pak dangerously close to the edge of functional stupidity (Alvesson & Spicer,

2012) – doing it without too much thinking.

Secondly, change especially that relating to environmental sustainability is not

straightforward. The resolution of environmental sustainability issues cannot be isolated and

treated on their own due to its pervasive nature (Hunting & Tilbury, 2006) and there is

concurrent impact on different stakeholders when a change is enacted. Unfortunately, we as

humans are often not able to have a systems perspective and see effects across time and

space boundaries. Neither are we able to see the immediate impact of our actions due to

delays in the system (Doppelt, 2004). We often try to resolve the problems by a divide and

conquer approach; focusing on a specific person or a single issue without having sufficient

consideration of the system’s interconnectedness. This is also reflected in how organizations

try to handle systemic change by parceling out different aspects of required changes into

separate, more digestible projects on the operational level. In this case, F Pak seems to be no

exception. All kinds of changes, including those of environmental sustainability, are treated

as some kind of project and the Kotter model is applied to each of these.

So this is basically how we do it. Even if you have seen probably most of it in one way

or the other, this is the [Kotter] framework in which we try to do the change. … But

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all we do, if it is development, or sales - it is some kind of project. And then we

typically use this [framework], even if it is not change. It stays sort of the same

approach. - KJ

The application of the Kotter model amplifies the segregated treatment of environmental

sustainability change as linear and episodic projects because the model starts with

establishing the need for change and ends with embedding the change; it advocates a

definite start and end to the change. This micro focus on the operations level makes it easy

to lose sight of the helicopter view and the envisioned end state for environmental

sustainability in F Pak. The company should keep in mind the need to coordinate ongoing

and related initiatives (Dunphy, Griffiths and Benn, 2003) and not allow the individual

Kotter-based projects to detract it from the macro-level, holistic systems perspective.

Lastly, we ask ourselves whether complex, systemic organizational change such as

environmental sustainability can really be managed by the step-by-step Kotter model? Is

such a prescriptive, force-fed method the right and only way to go moving forward?

According to Kanter, Stein & Jick (1992:12), “organizations consist of multiple stakeholders

conducting multiple but overlapping activities, … even coordinated actions do not

automatically produce intended results”. The systemic nature of environmental-related

change implemented within an organization setting present innumerable change

possibilities. It is viable to cater for only one change variation at a time based on best

guesstimates and subjective assessment of prevailing environmental conditions. The chance

of getting the formula wrong is 70 percent (Beer and Nohria, 2000). Therefore, believing

that the Kotter model can achieve change success in every instance is perhaps a manager’s

best hope and dream when it comes to executing change. The application of the model in F

Pak can perhaps be interpreted as an attempt to reduce management’s anxiety and regain a

sense of control over highly unpredictable activities that they need to account for. However,

it does not necessarily increase the likelihood of change success. In order not to have all

their eggs in one basket, F Pak may wish to consider the gradual adoption of other change

management models and empower organizational members to pick and choose the most

appropriate one when tackling change at the local level. This should be part of an

incremental organizational development approach that aims to nurture the right values, skills

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and practices in organizational members so that they can respond to changing situations and

grow in tandem with the organization’s progression (Palmer, Dunford & Akin, 2009). The

improvement of F Pak’s organizational learning capability (Beer & Nohria, 2000) should be

balanced with its emphasis on process compliance to achieve fruitful sustainability change

in the long term.

5.3. Summing it up

Consolidating the two discussion points above, F Pak seems to rely heavily on structures and

processes to implement and embed environmental sustainability change. This includes the

company-wide adoption of the Kotter model as a change management process at the

beginning of the strategic environmental excellence journey in 2010. The use of

institutionalization measures makes it easier for people to follow the same steps, avoid non-

conformance repercussions, possibly replicate previous successes and increase the incidence

of change sticking. On the management front, pre-determining the steps and operations

boundaries also seemingly renders the change transition more controllable and predictable.

While F Pak believes that such measures smoothen change implementation and result in

change entrenchment, strict adherence to them actually hampers the innovative search for

alternative and better solutions and reduces the speed and agility for rapid response. F Pak’s

preference for rigid structures and processes essentially deprives it of the required flexibility

for continuous improvement and change. Its faith in the use of structures and processes to

overcome the multiple change possibilities is most likely misplaced as there is no definite

formula for change success. However, structures and processes are a regular feature of

organizational life today. Speed is often sacrificed in the name of rigor. And F Pak may have

just enclosed itself more firmly into the process trap by enforcing the singular usage of the

Kotter model right from the start. It needs to retain its adaptive capability and agility by

continuing to engage and develop its people.

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6. Conclusion

6.1. Fulfilling the research aims and objectives

The aim of this dissertation was to find out how a company successfully manages to

entrench corporate sustainability change permanently into its operations. Therefore, we

came up with the research question of: How do companies engaged in corporate

sustainability ensure that changes stick? We decided to conduct this qualitative study as we

realized that there was a lack of previous research that consider the linkage between change

management and corporate sustainability. Thus, this is the first study, to our knowledge,

which contemplates both concepts together and accords more attention to what actually

happens during the implementation of sustainability change. In order to collect the required

empirical data, we collaborated with the Stockholm-based food processing and packaging

company F Pak and interviewed four of their managers who are involved in environmental

sustainability change. We then compared our empirical findings to the literature review

contents in order to understand similarities and detect differences between theory and

business practices. We were able to derive some interesting insights that were peculiar to F

Pak and suggest some improvement areas for the company’s consideration.

6.2. Key research findings

The interviews with F Pak revealed that it possessed the right cultivating conditions for

environmental sustainability to flourish from the start. External triggers and subsequent

management endorsement eventually pushed environmental sustainability to be embraced as

a core business strategy in 2010. F Pak was able to achieve environmental sustainability

change success because it had the right mindset and put in the right supporting structures and

processes. The company also seems to be able to motivate their people to accept the

purported changes, and further enhanced change entrenchment via post-implementation

reviews and handover procedures. In other words, the activities that lead to change sticking

in F Pak are aligned largely with the proposed approaches in the theoretical and literature

review.

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However, we also made some surprising findings which we believe may not be peculiar to F

Pak. There is heavy reliance on structures and processes for change to stick. The steps for

environmental sustainability change to get embedded have been intricately designed and

reinforced such that they inter-lock and making roundabout turns during and after the change

process is extremely cumbersome, if not impossible. There is decreasing leverage on people

interactions and networks for work implementation and innovation but a comparatively

larger requirement for them to follow processes and comply to standards. Push rather than

pull factors are being employed to prevent the back-slipping of change. Such regimental

institutionalization of change increases the likelihood of change sticking, but inadvertently

reduces the flexibility and agility for the company to achieve further rapid change in future.

While getting change to stick, F Pak also needs to build the capability for change to get

unstuck when needed.

As part of its push strategy for change, the Kotter change model was introduced as a

compulsory approach and process for all business transformation projects in F Pak. The

singular use of the highly-acclaimed Kotter model improves knowledge sharing and enables

administrative efficiencies. The step-by-step model also resonates well with the logic-driven

nature of engineering work in F Pak. However, devotion to the Kotter model prevents F Pak

from switching to alternative change management solutions that may be more appropriate

and brings it dangerously close to the edge of functional stupidity. The definite start and end

nature of the Kotter model also promotes a piecemeal project approach to environmental

sustainability, possibly preventing F Pak from adopting a holistic view required for

sustainability changes. F Pak likely employs the Kotter model to instill a tighter degree of

management control for change anxiety reduction, but this does not realistically improve the

chance of change success. F Pak can perhaps consider learning other change management

models to broaden their long-term environmental response repertoire instead.

6.3. Theoretical contribution

When conducting the literature review for this study, we noticed that previous research had

revolved around the individual concepts of change management and corporate sustainability,

but not too much was done to show linkages between both concepts. We tried to make a

theoretical contribution by establishing corporate sustainability change as a form of

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organizational change, and overlaying the change management approaches onto corporate

sustainability implementation. In doing so, we established that corporate sustainability

change is a process that aims for eventual change entrenchment that is generally in line with

Kurt Lewin’s unfreeze-change-refreeze theory. Furthermore, we were able to highlight

relevant perspectives and approaches in the corporate sustainability change process that will

lead to change sticking. The comparison of theoretical findings against the empirical data

strengthened the theory in some aspects, but also resulted in salient points that questioned

the relevance and effectiveness of change institutionalization in today’s world. We hope our

findings will provoke later research in the combined area of corporate sustainability change.

6.4. Practical contribution

By conducting this study, we hoped to surface helpful practices that could be used for

environmental sustainability change work. Even though every change management

initiative is unique, we think our findings can serve as lessons learnt or cross-reference

points for other organizations which have embarked on their environmental sustainability

change journey.

Our research reveals the conditions and factors required for achieving environmental

sustainability change. It is a process that needs to be paved for smooth implementation. The

use of set structures and processes which staff can fall back on guarantee a unified change

approach and help to prevent the backslide to pre-change procedures. We suggest to closely

involve the workforce in the change process as they need to embrace the change and

understand the sense and importance behind it so that they can act in concert for its success.

Here, communication is crucial.

Although it may be advantageous for a company to follow a single sanctioned change

management approach in some aspects, we want to stress that the application of one

solitary change model may be a mixed blessing. Working with default steps in the change

model and filling in templates for each action taken ensure consistency during the change

process. However, as each change is different, applying the same model over and over

again may not live up to individual change requirements and can consequently turn out to

be a disadvantage for the company.

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6.5. Recommendations for future research

Although we managed to derive some deep insights from the four interviews conducted

within F Pak, we recommend conducting more interviews in future. This will provide further

substantiation for the ensuing discussions and arguments, thereby increasing the credibility

of our research. Further, as the interviewees involved in this research were managers and

mostly of the Director level, we think it will be useful to supplement their macro views with

those from people actually involved in ground-level change operations. The findings from a

wider spectrum of people would likely produce a more balanced perspective of what is

actually happening in terms of environmental sustainability change within the company.

It may also be worth considering extending the interview target audience externally by either

collaborating with more companies or having meaningful conversations with external

stakeholders. Empirical data from more companies will improve the reliability of resultant

insights and enable the development of more substantial generalizations. On the other hand,

working with external stakeholders offers an alternative but important perspective to the

research question, as they are often either the source or recipient of environmental

sustainability change.

6.6. The final wrap-up

We set out to answer the research question by firstly determining the theoretical factors that

made up the corporate sustainability change process that would lead to change

entrenchment. Thereafter, we collaborated with the company F Pak which is in the midst of

their environmental sustainability journey and found that their change process formula is

largely in line with the reviewed theory. The components in the formula include the right

cultivating conditions and triggers for environmental sustainability change, the possession of

a long-term and systemic perspective, corporate-wide training in the Kotter change

methodology, the implementation of structures and processes, as well as people engagement.

Out of the four components, we observed that F Pak tended to rely more on structures and

processes to achieve and embed change as this facilitated better management control.

However, the drawback is reduced flexibility and agility for spontaneous innovation and

rapid improvements. The adoption of the Kotter model further increases the process rigidity

and reliance. As a company constantly looking into new and better ways of doing things to

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maintain their leading market position, F Pak needs to deliberate if the current preference for

structures and processes is beneficial for their business operations in the long term.

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List of Figures

Figure 1: Change management goal..............................................................................................16

Figure 2: Summary of theoretical and literature review................................................................22

Figure 3: How the chapter flows...................................................................................................30

Figure 4: Company background....................................................................................................31

Figure 5: Summary of findings......................................................................................................54

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