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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
20th of May 2016
Supervisor: Stefan Sveningsson
Examiner: Sverre Spoelstra
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
19
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).
20
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
21
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.
22
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.
23
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-
24
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
25
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”
26
(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
27
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
28
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
29
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.
30
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.
31
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).
32
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
33
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
34
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
35
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.
36
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
39
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
45
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
47
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.
73
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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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