Journal of World Business 37 (2002) 151164

Encouraging innovative environmental actions: what companies and managers must do

Catherine A. Ramus*
Donald Bren School of Environmental Science and Management, University of California, Santa Barbara, CA 93106-5131, USA

Abstract Increasingly environmentally proactive rms are interested in nding ways to encourage employees to take environmental actions that will improve the environmental performance of company operations, products and services. Results of an employee survey show that both environmental policies and supportive supervisory behaviors can increase the probability that employees will try environmental initiatives. We describe environmental policies and supervisory behaviors that exist in rms that are committed to sustainable development and employee environmental initiatives. From the survey results, we draw some lessons for managers and organizations that would like to support employee participation in sustainable development activities. # 2002 Elsevier Science Inc. All rights reserved.

1. Introduction Many corporations have embraced the mantra of sustainable development, committing to policies of environmental protection in an attempt to move their organizations toward the ill-dened goal of sustainability.1 Managers believe that environmental innovations are necessary to transform businesses into sustainable enterprises (Davis, 1991; Fussler, 1996), but it is not always apparent to managers how to encourage creative environmental ideas to help the business move toward this goal. Employee creativity is an important environmental problem-solving resource for companies (Beard & Hartmann, 1997). Since innovations, by denition, are creative ideas from individuals or teams that have been implemented (Amabile, Conti, Coon, Lazenby, & Herron, 1996), it follows that companies that want innovative solutions to
Tel: 1-805-893-5057; Fax: 1-805-893-7612. E-mail address: ramus@bren.ucsb.edu (C.A. Ramus). 1 Sustainable development is dened as ensuring that we meet the needs of the present without compromising the ability of future generations to meet their own needs (World Commission on Environment and Development, 1987). No rm is yet sustainable, but environmentally proactive rms have attempted to prevent pollution, to minimize resource use, and to redesign products and services so they have less impact on the natural environment, in order to move toward sustainable operations. Currently the movement toward sustainability is a process rather than a discrete end.
*

improve their environmental performance need to develop effective systems to support employee actions. But which types of support from the organization are effective and which are not? This is a difcult question. Especially since organizations are not always supportive of employees' ideas and innovation in general (Peters, 1990, 1991; Van de Ven, 1986; Wagner, 1991; Zaltman, Duncan, & Holbek, 1973). Part of the difculty with developing organizational support is that environmental management is not the focus of many line managers attention. Even in rms with a stated commitment to environmental sustainability, and with sustainability policies in place, managers still do not give the same level of support and attention to employee environmental activities as general management related tasks (Ramus & Steger, 2000). Having the sustainability policies is a rst and important step for rms. These policies show line management and employees that the rm expects and desires environmental ideas and actions. Supervisors' behaviors that demonstrate support for environmental actions also provide an important message to employees. In general, higher levels of employee creativity and innovation result from managerial behaviors that support employee actions (Bowen & Lawler, 1992; Kanter, 1989; Redmond, Mumford, & Teach, 1993; Spreitzer, 1995). The results of our survey show that employees need a clear signal of organizational support (environmental policies) and supervisory support (daily behaviors aimed at encouraging environmental actions) in order to focus their creative energy on environmental problem-solving.

1090-9516/02/$ see front matter # 2002 Elsevier Science Inc. All rights reserved. PII: S 1 0 9 0 - 9 5 1 6 ( 0 2 ) 0 0 0 7 4 - 3

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The purpose of this paper is to provide managers in business organizations with a detailed description of the environmental policies and supervisory behaviors that exist in environmentally proactive, European headquartered rms. And to show which of these factors have the most important (signicant) impact on employee willingness to try environmental initiatives. The descriptions of policies and of behaviors, as well as lessons draw from the survey results, provide practical information, which companies that want to strengthen their environmental management programs can use to transform their current operations. The unique contribution of this paper to the current literature is that it provides a blueprint for businesses that want to encourage employees to try environmental initiatives. First we provide a brief description of employee eco-initiatives in rms and possible inuences on employee environmental actions. And then we describe the environmental policies and supervisory behaviors that employees perceive to have a direct or indirect impact on their willingness to promote environmental initiatives. This rst part of the paper provides lists and descriptions so that managers can visualize the types of organizational factors they could put in place to encourage employee environmental actions. Then we describe the purpose, methodology and results of an employee survey that consisted of the policies and supervisory behaviors.2 In this second-half of the paper, we use the results of the survey to determine possible priorities for companies interested in engaging employees and line managers in efforts to improve the environmental sustainability of the rm. 1.1. What are employee eco-initiatives? Employee environmental innovations (eco-innovations) exist in companies today. They are actions (or initiatives) taken by individuals and teams that improve the environmental performance of companies.3 For example, an employee who implemented a new recycling program may have borrowed the approach from another company, but the program was innovative in the new setting. Ecoinitiatives occur at all levels within companies, resulting from creative ideas from managers, ofce personnel, bluecollar workers, or other types of employees. In practice, we observed three types of environmental initiatives: those that decreased the environmental impacts of the company, those that solved an environmental problem for the company, and those that developed a more eco-efcient product/service.
2 Note that the author has published the empirical data and results of the survey in a separate article where the measures, results, and validity of the survey are explored in detail (Ramus & Steger, 2000). 3 Many companies today measure the environmental impacts of their businesses against a set of goals, much like they measure their nancial performance against a set of nancial goals. Thus, we call measurement of this progress against environmental goals, environmental performance.

Examples of employee-lead environmental initiatives abound. Employees at GE Plastics Europe's Bergen Op Zoom facilities in The Netherlands took responsibility for developing innovative waste reduction and recycling programs as part of company-wide efforts to decrease environmental impacts (Ramus, 1997). At the Allentown, Pennsylvania Lucent Technologies manufacturing facility, a team of employees developed a microchip cleaning process which replaced a hazardous volatile organic compound with water, thus eliminating an environmental problem for the company (Ramus, Steger, & Winter, 1996). A team at Neste's research laboratory in Porvoo, Finland developed a cleaner diesel fuel, which was marketed with great success, adding to the company's protability while resulting in cleaner air in Helsinki where it rst was sold in fuel stations (Neste, 1997).4 1.2. What inuences employees to try eco-initiatives? Both organizational and individual factors can affect employee willingness to eco-innovate (Hostager, Neil, Decker, & Lorentz, 1998). The rm can signal desirability for and provide organizational incentives for employees to take environmental actions. For example, environmental policies and supportive behaviors from supervisors can signal organizational support. In addition, individual employees may have skills and competences that enhance their abilities to participate in environmental initiatives. Employees can bring these skills when they accept employment, and/or they can develop environmental skills on the job. And as importantly, employees may come to companies with intrinsic motivation and values that motivate them to take actions to protect the natural environment. These preexisting skills and values are not tested in our study. Rather we focus on measuring the set of organizational factors, which could inuence employee actions, since these are the factors that managers can inuence. For example, we measure employee perceptions of supervisory behaviors that encourage environmental competence building, but we do not try to measure the existing environmental competencies of employees at the time of employment. 2. Environmental policies and supervisory behaviors: best practices Amabile et al. (1996) found that organizational and supervisory factors encourage employee creativity. We wanted to discover which forms these two categories of factors might take in rms that were committed to supporting employees' environmental creativity. From structured interviews with managers and employees, we discovered
4 This example was presented by Juha Kiljonen, Business Development Manager, Fortum Oil, at IMD International's MIBE Forum, in November 1999. The oil and gas divisions of Neste Oy became Fortum Oil just prior to his presentation.

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that 13 environmental policies and six categories of supervisory behaviors existed in companies who were trying to support employee eco-initiatives. The companies were selected because they stated they were committed to environmental sustainability, demonstrated this through having environmental policies, and had had some success in supporting employee environmental actions. We describe the sustainability policies and supportive supervisory behaviors found in these companies. These two sets of factors form the basis for the survey discussed later on. 2.1. Corporate environmental policies Since the United Nations Conference on Environment and Development in Rio de Janeiro, Brazil in 1992 many companies have gone beyond the publishing of an environmental policy stating their intent to reduce environmental impacts. Many global corporations have adopted a set of environmental policies aimed at integrating environmental considerations throughout the company. Many of these policies go beyond compliance and environmental impact reduction and stretch the company toward sustainability goals. Which policies are some proactive companies adopting to move their businesses toward sustainability? Managers from 12 international companies in the MIBE project at IMD created a list of 13 sustainability policies they had in their companies.5 These policies ranged from having a written environmental policy to having use-reduction policies in the areas of fossil fuels, toxic chemicals, etc. (Table 1 contains a list of the 13 environmental policies.) 2.1.1. Written environmental policy In a company, a written environmental policy forms the backbone and skeletal framework from which all other environmental components are hung, including the environmental management system (EMS), audits, assessments, and reports (Brophy, 1998). It indicates to internal and external stakeholders that the company intends to take environmental protection seriously. And, it tells employees that the company will take a responsible approach to environmental issues. The written environmental policy often acts as a guide for employee actions when it provides environmental targets and objectives. Having a written policy in itself does not make a company proactive or sustainable. Rather, it is a necessary prerequisite for sustainable development.
5 MIBE is the environmental management research project at the International Institute for Management Development (IMD) sponsored by companies who see environmental management as a source of competitive advantage. In 1996, a group of 12 environmental officers sat together and developed a list of environmental policies that existed in their companies. Not all of the policies existed in all of the companies, but the managers agreed that the trend was to develop such a set of sustainability policies that cut across departments and managerial responsibilities.

Table 1 List of environmental policies which exist in environmentally proactive rms 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Written environmental policy Specific targets for improving environmental performance Publication of an environmental (sustainability) report Environmental management system Environmental purchasing policy Environmental training and education Employee responsibility for environmental performance Life cycle analysis (assessment) policy Management understands sustainable development Fossil fuel use reduction policy Toxic chemical use reduction policy Policy of reducing use of unsustainable products Same environmental standards at home and abroad

2.1.2. Specic targets for improving environmental performance At a minimum environmental targets set goals for improving company environmental performance. But companies can take the target setting exercise further by developing a system to measure environmental impacts across the life cycle of the company's products and services. Once the impacts have been quantied, an environmental index can be created to lay out targets for facilities, business units, and overall corporate performance (Epstein, 1996). Without targets, environmental progress is seldom made. By taking a comprehensive, life cycle approach to setting targets across all activities and for all products and services, the company can move itself toward sustainability. 2.1.3. Publication of an environmental (sustainability) report Since 1992 there has been a strong increase in the number of companies that have been publishing their environmental performance for stakeholder review (Sustainability & United Nations Environmental Program, 1997). In 1997 a survey of 596 companies from Fortune 500 and Standard & Poor 500 showed that 108 produced environmental reports. Companies produce environmental reports in order to present the environmental objectives of the organization and its performance against explicit targets. Environmental reports are written for both internal and external audiences, with many companies stating that external stakeholders are of secondary concern when they publish their environmental report. Many companies use the report primarily as a tool for increasing employee involvement in environmental management, increasing employee morale, and winning top management support (Lober, Bynum, Campbell, & Jacques, 1997). A new trend for proactive companies is to move toward ``sustainability'' reporting, incorporating aspects of social, economic and environmental performance in a single report. For example, the Body Shop and British Telecom produce sustainability reports.

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2.1.4. Environmental management system Environmental management systems are in vogue. Since the mid-1990s, a signicant number of companies have applied these systems. Broadly dened, an EMS is a transparent, systematic process for implementing environmental goals, policies and responsibilities, and auditing these elements (Steger, 2000). Thus, EMS's provide a tool for employees and managers to take environmental impacts into consideration when performing daily job functions. The implementation of an environmental management system, like International Standards Organization's (ISO) 14001 or the European Union's Environmental Management and Auditing Scheme (EMAS), is a necessary but not a sufcient condition for reaching ecological sustainability for business activities (Roome, 1992; Welford, 1993). (Note: The adoption rate of the ISO 14001 certied EMS is far lower in the United States than in Europe where there are institutional incentives for implementing environmental management systems (Delmas, in press).) 2.1.5. Environmental purchasing policy Many companies include in their environmental policy a statement that they intend to work with suppliers to minimize impacts on the environment. Proactive companies often partner with and/or apply pressure on their suppliers to this end. One mechanism companies use is the requirement that suppliers have a certied environmental management system. Another is using a comprehensive questionnaire asking about the supplier's environmental practices and performance. Scott Ltd. in the United Kingdom dropped the worst 10% of their suppliers after such an environmental performance assessment (Hutchinson, 1998). Beyond looking up their value chain to their suppliers, some companies, which care about the sustainability of their activities, now look down the value chain too. They work to reduce the environmental impacts of their distribution networks and to improve the useful life and recyclability of their products and services. 2.1.6. Environmental training and education Environmental training, education and skill development improve employees' abilities to give high quality contributions to environmental activities. The capacity of employees to participate in environmental problem-solving as well as the motivation to do so can both be improved if a company has a strong environmental training program in place (Wehrmeyer, 1996; Welford, 1998). Some corporations try to integrate environmental considerations into most or all of their training programs for different levels of employees and managers; others offer programs that are focused on environmental, health and safety subjects alone; other companies use external education opportunities such as job rotations, outside courses, and site visits. The success of environmental training is not solely dependent upon the quality of the programs or the stated corporate intent to train employees. Supervisory encouragement for employee participation in

environmental capacity building activities is important, and often missing.6 2.1.7. Employee responsibility for environmental performance The successful implementation of corporate environmental policies and management systems depend on environmental responsibility being shared with employees and managers at all levels of the company (Hutchinson, 1996). While there may not be an explicit written policy stating that employees are responsible for environmental performance, it is clear to employees whether or not the company expects them to help reach the company's environmental goals. 2.1.8. Life cycle analysis (assessment) policy Originally, companies used life cycle analysis (LCA) (sometimes called ``life cycle assessment'') as a tool for designing products and services with reduced environmental impacts, but now it is also used for assessing and minimizing environmental impacts of company business processes. LCA can be an effective tool for aiding companies who want to achieve sustainable development (Welford, 1998). For example, a company who tries to minimize environment impacts across the life cycle of all its processes including purchasing, manufacturing, distribution, product/service use and disposal can truly improve its environmental performance. This is especially true since the largest environmental impact for many products comes during the use of the products and at the end of their life (i.e., at disposal). 2.1.9. Management understands sustainable development There is an active movement within many companies today to take responsibility for the sustainable development of their enterprises. But how effective are companies with sustainable development goals at sharing responsibility for these with managers? Do managers in companies with proactive environmental policies really understand the wider issues of sustainable development? Are managers taking steps to address sustainable development in these enterprises? It is clear that managers have an important role to play in bridging the gap between traditional business processes and those necessary for the transformation into a sustainable enterprise. Some companies make line managers explicitly responsible by incorporating environmental targets into performance evaluations and linking bonuses to fulllment of these environmental targets. In addition to these general environmental policy questions, there are a number of specic sustainability policies that some companies are embracing. The Natural Step, an international organization, begun by Karl H. Robert in Sweden, delineated a number of systems conditions necessary for enterprises to attain sustainability. Reduced use of unsustainable sources of
6 We found that even in our sample of environmental proactive companies, managers were often weak at supporting employee environmental competence building (see Ramus & Steger, 2000).

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energy, persistent chemicals, and natural resources, as well as environmental equity are the four system conditions outlined by The Natural Step (Robert, 1989). Some proactive companies have adopted these four policies. 2.1.10. Fossil fuel use reduction policy Companies, which truly want to move toward sustainable development, must focus on using renewable energy sources. 2.1.11. Toxic chemical use reduction policy Persistent toxic chemicals, because of their negative and long-term impacts on the natural environment, must be replaced by more benign substitutes if an enterprise wants to become sustainable. 2.1.12. Policy of reducing use of unsustainable products Products, whose harvesting and use do irreparable damage to eco-systems and the natural environment, must be replaced with sustainably harvested substitutes. For example, unsustainably harvested sh can threaten species diversity, which is seen as causing irreparable damage to eco-systems on which humans and animals depend. 2.1.13. Same environmental standards at home and abroad A central tenant of sustainable development is that a company should use the same high standards to protect human health and the environment in all places that a company operates. Thus, the higher standards that are enforced by law in developed countries in North America and Europe would be automatically applied in sustainable enterprises that operate globally. In conclusion, there is evidence that environmentally proactive companies are increasingly adopting environmental policies that go beyond pollution reduction. Many rms are beginning to endorse policies that focus on pollution prevention and environmentally sustainable actions. 2.2. Supervisory behaviors that support employees eco-initiatives Supervisory behaviors can also have an effect on employee willingness to try eco-initiatives. Learning organizations, or organizations that support the continuous learning and knowledge creation of all their employees, so the organizations can grow, change and innovate (Cavaleri & Fearon, 1996), often have managers who are good at empowering employees (Bowen & Lawler, 1992; Garvin, 1993; Kimberley & Evanisko, 1981; Pearn, Roderick, & Mulrooney, 1995; Redmond, Mumford, & Teach, 1993; Senge, 1990). We looked at those supervisory behaviors that exist in learning organizations, as well as those that existed in companies who had successfully supported employee ecoinitiatives and found them to be similar. What types of supervisory behaviors exist in rms that are good at supporting eco-initiatives? This was a question we asked ourselves when developing our employee survey. We

Table 2 List of categories of managerial behaviors found in rms that support environmental initiatives by employees 1. Innovation: Encouraging new ideas, experimentation, and learning 2. Competence building: Supportive of training and education activities 3. Communication: Encouraging employees to communicate their suggestions, thoughts, and critiques 4. Information dissemination: Sharing important company information with employees 5. Rewards and recognition: Using formal rewards and informal praise to recognize and reinforce desired employee behaviors 6. Management of goals and responsibilities: Using quantitative and qualitative measures to share goals and responsibility for performance with employees

interviewed 50 employees at ve companies with reputations of supporting employee environmental creativity, and asked them which of their supervisors' behaviors support or failed to support their environmental actions. From this starting point we developed an empirical tool measuring six categories of behaviors. (Table 2 contains a list and brief description of the six categories.) The characteristics of managers who used learning organization behaviors to support environmental innovation are detailed as follows. 2.3. Behaviors that support eco-initiatives 2.3.1. Innovation What are some of the things that managers do to encourage environmental innovations on the part of employees? They make it acceptable to take risks. They implement employees' suggestions. They see mistakes as learning opportunities. They encourage experimentation to develop new processes. They learn from both inside and outside of their own organization. They use assignment rotations as learning tools. They quickly implement changes. They partner with other departments to implement new ideas. In essence, managers who want to support employee innovation have a set of skills that encourage new ideas, experimentation, and learning from a myriad of people, departments, business units, and other organizations. These managers signal through their behaviors that they are open to new environmental ideas. For example, these managers are good at asking employees regularly for creative environmental ideas, designing teams to work on environmental problemsolving or product/process development, and providing resources and other support for environmental projects. 2.3.2. Competence building What do managers who want to support employee environmental competence building do? They use training and education to foster innovation. They look for learning situations for employees, like courses, mentors, site visits, etc. They ensure that employees get training on new skills

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that will help the employees engage in environmental activities. They realign employee responsibilities to allow the employee time for training, site visits, and exploring new techniques for doing his/her job. They spend time with each employee developing and implementing an environmental learning plan. These managers nd ways to focus time and resources on employee development in the environmental area. In doing so, they signal clearly that they, and the organization, care about giving the employee the necessary knowledge and competences to engage in environmental problem-solving. For example, these managers use regular performance evaluation meetings to discuss the employees' environmental training needs. 2.3.3. Communication What do managers who want to create an open environment for employee communication on environmental management issues do? They discourage organizational hierarchies and ``we'' vs. ``they'' thinking in the organization. They encourage individuals and groups to communicate on problems and to propose solutions. They develop open and direct styles of communication. They are good listeners. They encourage employees to express concerns about company decisions and policies. And, they openly discuss employees' concerns. They answer questions honestly even if the answer is not what the employee wants to hear. They value the inputs of managers and employees from all parts of the company. They accept criticism of ideas (and even of themselves) and dissent. In general, we found that managers who have democratic and participative styles (Lawler, 1986) of communication are very good at supporting employee environmental innovation. They foster employee trust through open communication, and by doing so they create a work environment where employees contribute their creative environmental solutions. For example, these managers are not threatened or defensive about employee criticisms or comments, but rather listen with an open mind to environmental communication, and encourage employees to share their ideas with other managers and business units within the company. 2.3.4. Information dissemination What do managers do to encourage the ow of information in order to help environmental problem-solving? They provide clear, accurate, easily accessible information to internal and external audiences, like environmental reports, environmental targets, chemical release data, site expansion plans, etc. They use information systems like email, electronic bulletin boards, etc. to share information amongst employees. They inform employees about changes in company vision, policies, and progress toward goals. They forewarn employees about signicant changes. They inform employees of what they need to know and where to get information they want. In learning organizations, managers give information that affects employees' decision-making. This top-down,

manager to employee dissemination of information is supposed to help employee to nd environmental solutions as it keeps the employees informed of the company environmental vision and goals. 2.3.5. Rewards and recognition What do managers do to reward and recognize employee environmental problem-solving? They look for opportunities to publicly praise good ideas. They never publicly reprimand an employee for a failure or a mistake, but rather, in private, use it as a learning opportunity. They reward their team for good efforts and for progress toward goals. They use company bonus systems and other monetary awards to reward employees who achieve and surpass their environmental goals. These managers use formal award systems, but also look for daily opportunities to give feedback and praise in order to help motivate employees to nd solutions to environmental problems and to develop less polluting products and services. They always recognize environmental ideas by employees, even if they aren't implemented. For example, these managers feature environmental successes during regular staff meetings. 2.3.6. Management of goals and responsibilities How do managers use goal setting and responsibility sharing as tools to motivate employee environmental participation? They seldom delegate tasks, but rather look for ways to share ownership for overarching goals. They talk regularly with employees to assess progress toward goals and to offer help. They use both qualitative and quantitative measures to assure individual contributions to company environmental targets. These managers are good at using the performance evaluation process and regular review meetings to share responsibility for environmental goals with employees. They instill ownership while at the same time providing guidance to facilitate employee success in environmental activities. In conclusion, we learned from our interviews with employees which managerial behaviors the employees felt encouraged their environmental activities. Our empirical study tested which of these categories of behaviors had a signicant impact on a large number of employees in different rms. Note that these six categories correspond to those dened in the learning organization literature (Campbell & Cairns, 1994). 3. Employee eco-initiatives survey7 Research on employee creativity and innovation in rms, as well as the literature on learning organizations, indicate
7 For a complete discussion of the measures, data analysis, validity, and limitations of the study, see the article in the Academy of Management Journal by Ramus and Steger (2000).

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that organizational and supervisory support will increase employee willingness to take actions. The environmental management literature assumes that the factors that effect creativity and innovation in general will also be the factors that will affect environmental creativity and innovation. Prior to our survey research there was no empirical test of which factors were effective in supporting employee environmental initiatives. We tested two hypotheses. The hypothesis that environmental policies signal organizational priorities and, if effectively communicated, could focus employees on environmental problem-solving. And, the hypothesis that supportive supervisory behaviors were of paramount importance in enticing employees to try ecoinitiatives (Milliman & Clair, 1995; Shrivastava, 1996; Stern, 1992; Storen, 1997). Our research shows that companies with a commitment to environmentally sensitive business development have a number of environmental policies to communicate these sustainability goals. In fact, many leading-edge rms had up to 13 environmental policies, directed at different environmental improvements, as discussed above and shown in Table 1). Using data from an employee survey, we identied which of the 13 environmental policies, when perceived by employees, resulted in a greater probability that the employee would take an environmental initiative. We found that if the employee believed the company was committed to a written environmental policy it more than doubled the probability (from 19 to 50%) that the employee would have tried an environmental initiative. Other policies had no direct positive effect on employee eco-initiatives. Environmental management researchers have assumed that supportive supervisory behaviors, which are found in so-called ``learning organizations'', encourage employee environmental initiatives. We made an empirical test of which behaviors resulted in increased probability of employee environmental initiatives and which had no signicant impact. Of the six categories of supervisory behaviors that we found could signal to employees the desirability of environmental actions (described above and listed in Table 2), we found that ve of the six categories of behaviors had a signicant impact on employee willingness to try eco-initiatives. The sixth category, sharing of environmental information, which was assumed to effect employee eco-innovation, had no signicant impact. Some of our ndings conrm the assumptions that those factors that support innovations in general also improve the likelihood that employees will eco-innovate, and some of our ndings run counter to these assumptions. Thus, we offer a revision of the theories we tested. In addition, we offer lessons for managers who want to support employee environmental participation. 3.1. Method As described above, we developed an understanding of policies and behavioral factors that could impact

employee environmental actions through interviews with employees in environmentally proactive rms. Then we developed a questionnaire to test which of these two types of factors had an important positive relationship to employee eco-initiatives. The respondents answered 13 policy questions (like ``my company publishes an environmental policy'', and ``my company makes employees responsible for company environmental performance'') using a 5-point scale (Strongly Agree, Partially Agree, Don't Know, Partially Disagree and Strongly Disagree).8 When answering questions related to their direct supervisor, respondents selected the most typical daily behavior from a list of 710 rank-ordered behaviors in the six categories (innovation, competence building, communication, information dissemination, rewards and recognition, and management of goals and responsibilities). For example, in the category of competence building, the behaviors ranged from the least positive ``refuses to commit resources and employee time for training and education activities'' to the most supportive ``spends time discussing and implementing a learning plan with each employee.'' They selected one behavior to describe the supervisor's most typical behavior related to general management, then from the same list, they selected one behavior to describe the supervisor's most typical behavior when managing environmental issues. 3.2. Data sources Middle and low-level employees from 12 countries (Austria, Belgium, Canada, Finland, France, Germany, Italy, The Netherlands, Norway, Spain, the United Kingdom, and the United States) who were employed by six companies with proactive environmental policies were the focus of our empirical investigation into these questions. In order to obtain a diverse sample of employees, we sent our survey questionnaire out in four languages. We received responses from 353 employees in 1996 and 1997. (This was a 24% response rate; 1,465 surveys were distributed). The respondents all worked for large European headquartered companies with all or most of the 13 environmental policies.9 To ensure respondents of condentiality, all questionnaires were returned directly to the author for processing and only aggregate results were reported back to the companies.
8 Here we are measuring employee perceptions of company commitment to environmental policies, not whether the company says it is committed to such policies. What is of interest for our study is the effect that perceived commitment to environmental policies has on employee willingness to try environmental initiatives. 9 Each of the six companies was listed in the top 200 in terms of sales in the countries where they were headquartered. They employed between 1,500 to 41,000 people, and represented a number of industries including: chemical, entertainment, manufacturing, medical devices, oil and retail.

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Table 3 Descriptive statistics and correlation table for environmental policies

Independent variables 1. Published environmental policy 2. Specific targets for environmental performance 3. Publishes annual environmental report 4. Uses environmental management system 5. Environmental considerations in purchasing decisions 6. Employee environmental training 7. Employees responsible for company environmental performance 8. Life cycle analysis 9. Management understands/addresses issue of sustainable development 10. Systematically reduces fossil fuel use 11. Systematically reduces toxic chemicals use 12. Systematically reduces consumption of unsustainable products 13. Applies same environmental standards at home and abroad Mean 1.61 1.46 1.08 1.22 0.75 0.58 0.86 0.21 0.66 0.14 0.73 0.40 0.64 SD 0.73 0.71 1.01 0.91 1.05 1.22 1.20 0.99 1.01 1.27 1.15 1.12 1.09 1 0.48*** .41*** 0.47*** 0.37*** 0.51*** 0.45*** .36*** 0.45*** 0.33*** 0.38*** 0.25*** 0.36*** 0.35*** 0.32*** 0.35*** 0.25*** 0.34*** 0.33*** 0.37*** 0.37*** 0.53*** 0.18*** 0.23*** 0.29*** 0.21*** 0.37*** 0.28*** 0.31*** 0.32*** 0.30*** 0.35*** 0.34*** 0.39*** 0.31*** 0.41*** 0.39*** 0.08 0.23*** 0.14** 0.31*** 0.27*** 0.15*** 0.28*** 0.25*** 0.30*** 0.17*** 0.29*** 0.18*** 0.22*** 0.31*** 0.05 0.13** 0.21*** 0.35*** 0.34*** 0.19*** 0.23*** 0.21*** 0.20*** 0.40*** 0.16** 0.25*** 0.37*** 0.36*** 0.51*** 0.59*** 0.19*** 0.24*** 0.17*** 0.19*** 0.26*** 0.31*** 0.25*** 0.18*** 0.27*** 0.03 0.14** 0.13* 2 3 4 5 6 7 8 9 10 11 12

Scale: Strongly Agree (2), Partially Agree (1), Don't Know (0), Partially Disagree (1), Strongly Disagree (2).
*

0:05;

**

0:01;

***

0:001.

3.3. Data analysis The objective of our analysis was to examine the relationship between environmental policies and employee environmental initiatives, and the relationship between supervisory behaviors and employee environmental initiatives. Employee willingness to try an environmental initiative is the dependent variable. To examine these relationships we used logit analyses and likelihood ratio tests. We also wanted to nd out if employees perceived that their supervisors were as supportive of environmental activities as other general management activities. We used Chi-square tests

of differences for this comparison. The results of the statistical tests can be found in Tables 37. (These tables are reprinted from Academy of Management Journal by Ramus & Steger (2000).) A complete discussion of the research methodology, statistical tests and results of the data analysis can be found in an article by Ramus and Steger (2000). We have summarized these empirical results below to demonstrate those factors that have the greatest impact on employee environmental initiatives. We believe that these results can be helpful to managers who are thinking of making changes to their environmental management programs.

Table 4 Logit analyses of dependent variable on environmental policy independent variables Constants 1 2 3 4 5 6 7 8 9 10 11 12 13 0.74 0.31 0.33 0.13 0.14 0.20 0.14 0.14 0.19 0.15 0 0.07 0.23 p-values for constants 0.01* 0.21 0.04* 0.46 0.29 0.10 0.30 0.20 0.14 0.16 1.00 0.54 0.07 Independent variables Published environmental policy Specific targets for environmental performance Publishes annual environmental report Uses environmental management system Environmental considerations in purchasing decisions Employee environmental training Employees responsible for company environmental performance Life cycle analysis Management understands/addresses issue of sustainable development Systematically reduces fossil fuel use Systematically reduces toxic chemicals use Systematically reduces consumption of unsustainable products Applies same environmental standards at home and abroad Coefficients 0.37 0.13 0.19 0 0.02 0.13 0.02 0.08 0.09 0.18 0.17 0.16 0.15 p-values 0.02* 0.40 0.08 1.00 0.81 0.15 0.78 0.47 0.38 0.04* 0.07 0.11 0.12

Dependent variable: employee environmental initiatives. * p 0:05.

C.A. Ramus / Journal of World Business 37 (2002) 151164 Table 5 Descriptive statistics and correlation table for supervisory behaviors
Independent variables 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Environmental innovation Environmental competence building Environmental communication Environmental information dissemination Environmental rewards/recognition Environmental management goals/responsibilities General innovation General competence building General communication General information dissemination General rewards/recognition General management goals/responsibilities Mean 6.02 5.70 6.26 6.95 5.93 5.85 6.49 5.84 6.28 7.09 6.00 6.21 SD 2.30 1.79 2.08 2.13 2.25 2.60 2.21 1.79 2.18 2.31 2.54 2.67 1 0.31*** 0.41*** 0.33*** 0.30*** 0.35*** 0.51*** 0.22*** 0.24*** 0.26*** 0.27*** 0.28*** 2 3 4 5 6 7 8 9 10 11

159

0.41*** 0.43*** 0.40*** 0.38*** 0.25*** 0.50*** 0.33*** 0.37*** 0.26*** 0.29***

0.51*** 0.47*** 0.54*** 0.38*** 0.32*** 0.58*** 0.40*** 0.38*** 0.43*** 0.45*** 0.50*** 0.27*** 0.31*** 0.42*** 0.68*** 0.36*** 0.43*** 0.54*** 0.27*** 0.37*** 0.42*** 0.37*** 0.71*** 0.39*** 0.38*** 0.29*** 0.41*** 0.40*** 0.38*** 0.65*** 0.23*** 0.34*** 0.27*** 0.29*** 0.38***

0.32*** 0.39*** 0.35*** 0.34***

0.48*** 0.40*** 0.41***

0.37*** 0.47***

0.42***

Scale: maximum 10; minimum 1. *** p 0:001.

Table 6 Logit analysis of dependent variable on supervisory behaviors independent variables Constants 1 2 3 4 5 6 7 8 9 10 11 12 0.79 0.98 1.09 0.61 0.93 0.81 0.77 0.42 0.67 0.70 0.81 0.77 p-values of constants 0.01** 0.01** 0** 0.10 0** 0** 0.02* 0.25 0.05* 0.05* 0** 0.01** Independent variables Environmental Environmental Environmental Environmental Environmental Environmental General General General General General General innovation competence building communication information dissemination rewards/recognition management goals/responsibilities Coefficients 0.11 0.15 0.16 0.07 0.13 0.12 0.10 0.05 0.08 0.08 0.11 0.10 p-values 0.02* 0.01** 0** 0.17 0.01** 0.01** 0.05* 0.39 0.09 0.09 0.01** 0.01**

innovation competence building communication information dissemination rewards/recognition management goals/responsibilities

Dependent variable: employee environmental initiatives. * p 0:05; ** p 0:01.

Table 7 Chi-square test of the differences in answers to environmental and general management concerning supervisory behaviors Environmental vs. general Chi-square value Empirical Innovation Competence building Communication Information dissemination Rewards/recognition Management goals/responsibilities
***

p-value Theoretical 16.92 12.59 15.51 15.51 15.51 16.92 0.006*** 0*** 0.001*** 0*** 0*** 0.001***

23.02 24.58 27.17 29.70 40.43 28.07

0:001.

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4. Results and discussion Our study showed what many rms might have suspected, that line managers, even in environmentally committed companies, are less supportive when managing environmental activities than other activities. When employees are aware that the company is committed to a written environmental policy statement, they are more likely to try environmental initiatives. Other environmental policies (like environmental purchasing, environmental reporting, having an environmental management system, for example) had no signicant direct impact on employee environmental actions. Employees who felt their supervisors were supportive of environmental actions were more likely to try environmental initiatives than those who did not feel their supervisors used supportive behaviors. Managerial behaviors that supported environmental innovation, environmental education, environmental communication from employees, rewarding and recognizing environmental actions, and managing environmental goals and responsibilities have a positive effect. But, dissemination of company environmental information had no signicant effect on employee willingness to eco-innovate. (See Section 5.7 for an explanation of this counter-intuitive result.) A summary of the employee survey results is shown in Fig. 1. We looked at direct impacts of each environmental policy and each supervisory behavior on the dependent

variable (employee eco-initiatives). One of the 13 policies and ve of the categories of supervisory behaviors had a direct positive effect on employee willingness to ecoinnovate. Clearly, communicating company commitment to an environmental policy statement more than doubled the probability that an employee tried an eco-initiative, increasing it from 19 to 50%. But, 11 of the other 12 environmental policies had only an indirect impact on employee ecoinnovation. Indirect impacts, meaning that the respondents who perceived the existence of policies were more sensitive to supportive or unsupportive behaviors on the part of their supervisors, existed in all cases except in the case of the fossil fuel policy. When employees perceived these 12 environmental policies (including having a written environmental policy), they were more likely to eco-innovate if their supervisor used learning organization support behaviors directed at environmental activities, and less likely to eco-innovate if their supervisor used behaviors that were perceived to be less supportive of environmental actions. Policies like, having an environmental management system, publishing an environmental report, etc. are important because they sensitize employees to support from their supervisors. An interesting exception in our results exists for policy 10. Having a fossil fuel use reduction policy had a signicant negative impact on employee eco-initiatives. We found that

Fig. 1. Environmental policies and supervisory behaviors which support employee environmental initiatives.

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the majority of the rms in our survey did not have this policy. (Only two of the six rms had a fossil fuel use reduction policy.) The data showed that those employees who perceived that the policy did not exist were those who were more likely to eco-innovate. One possible interpretation of this result is that knowledge of which policies exist has a direct affect on employee eco-innovation. Our study seems to indicate that those employees who are more knowledgeable about the policies are also those who are more likely to try environmental initiatives, but other interpretations of this result are possible since energy policy in companies is not only motivated by environmental concern.10 (Note that we did not observe an indirect effect between fossil fuel policy and supervisory behaviors.) In general, we found that having line managers who use learning organization behaviors when managing environmental activities increased the probability of employees trying eco-initiatives. For example, when employees perceived supportive environmental communication behaviors from their supervisors it more than doubled the probability that they would have tried environmental initiatives (from 28 to 62%). Companies, which have line managers who used supportive behaviors, are also those that beneted from a larger number of eco-initiatives. The following is a rankordered list of the results, with the categories of supervisory behaviors that had the strongest impact at the top of the list. 1. Environmental communication: Participative environmental management style, including use of a democratic, non-hierarchical approach to encouraging communication from employees. 2. Environmental competence building: Encourages environmental competence building by employees, including allocating time and resources. 3. Environmental rewards and recognition: Using daily praise and company awards to reinforce environmental successes and problem-solving. 4. Management of environmental goals and responsibilities: Shares environmental goals and responsibilities with employees. 5. Environmental innovation: Shows openness to new environmental ideas and encourages employees to experiment to nd solutions to environmental problems. The companies selected for our survey all stated they had a commitment to sustainable development, yet we found that line managers in these rms consistently used less supportive behaviors when managing environmental activities than other general management activities. This demonstrates how
10 Energy policy can be motivated by non-environmental issues like cost concerns (e.g., in the airline industry fuel consumption is one of the biggest expenses) or the products/services being produced (e.g., an oil production company may not be committed to reducing the use of the major commodity that they produce). Therefore, there may be a hidden factor that can explain these results.

difcult it is for rms to make environmental management a priority for managers. 5. Lessons for companies and for managers 5.1. Companies need an environmental vision and policies Employees are more likely to engage in environmental problem-solving in rms that clearly communicate their environmental vision through policies. Our study shows that having environmental policies on the books is not enough. Most of the 13 policies of sustainability existed in the companies for which the employees in our survey worked. Yet, only where the company had communicated a clear environmental vision using these policies did we see an increased probability of employee eco-initiatives. A written environmental policy has the most signicant impact on employee actions, but the indirect impact of other sustainability policies is also important. Employee awareness of these other policies makes them ripe for environmental actions. But, if they sense that their supervisor does not want them to engage in environmental problem-solving, then they do not take actions. The implication is that companies should prime their managers to be supportive of environmental activities prior to communicating environmental policies, or the communication of these policies can back reresulting in a decrease in eco-innovation. (And possibly an increase in employee dissatisfaction with the company and its management.) 5.2. A participative communication style applied to environmental management Of the six categories of learning organization behaviors, the most important was environmental communication. Line managers in rms who embrace democratic approaches when managing employees are more likely to reap the full benets of employee environmental problem-solving. We all know that managers should listen to their employees, but our result indicates that it is important for managers to listen to and elicit employees' environmental ideas. Employees are more likely to be creative when their environmental ideas, criticism, or suggestions are heard and acknowledged. The energy it takes for a manager to give an employee feedback on environmental ideas is well spent, since it seems to lead to increasing numbers of environmental initiatives. Sometimes an employee from one area will have the solution to an environmental problem in another area of the company. A manager who takes a non-hierarchical approach will encourage the employee to communicate directly with the other business area. But, we nd that in an organization where managers don't listen and don't care, these environmental solutions are unspoken. Thus, just as every company knows it should listen to its customers, companies can benet from encouraging managers at all levels to listen

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to the environmental ideas of their employees. Our research shows that this change alone will lead to more environmental problem-solving from employees. 5.3. Competence building provides the environmental problem-solving tools Environmental education supports employee eco-innovation. All of the companies in our survey had environmental training programs. But often line management do not make it a priority to send employees on courses, site visits, assignment rotations, and other opportunities for building environmental problem-solving know-how. The most frequent response was ``my manager neither encourages nor discourages environmental competence building.'' Thirty-eight percent of the respondents selected this behavior to describe their managers' most typical daily behavior. From employee written comments on the questionnaires, it is clear that companies have trouble nding time to train employees. Even when resources are available, employees often fail to get management support for learning activities. The emergency of the day and getting daily tasks accomplished is seen as more pressing than building competencies that can be advantageous for the future. This appears to the employees to be especially true of environmental skills and knowledge development. Since many managers have difculty seeing the advantage of managing environmental activities, they seldom make it a priority to develop and implement environmental learning plans with their employees. How can companies encourage managers to allocate time and resources to employee environmental education? The rst step is to provide line management with environmental/ sustainability training. If managers see the value of this type of training rst-hand they will be better able to envision its value to their employees. 5.4. Reward and recognize environmental actions From our results we can see that a word of praise directed at an environmental effort can go a long way in encouraging employee participation. It is not surprising that employees who found their managers to be good at using rewards and recognition in the environmental area were those who tried environmental innovations. Making environmental awards, bonus pay, gift certicates, etc. available for managers can be a rst step in creating an awareness in line management of the need for daily feedback on environmental actions. One example is a company that gave line managers discretion over giving dinner vouchers at local restaurants to reward environmental initiatives. The managers could give the vouchers on the spot whenever they observed a positive environmental action. Systems like these can multiply environmental actionsnot because of the value of the awardbut rather because of the value of being praised! In this company line managers

learned to look for environmental initiatives, and employee environmental creativity blossomed under the attention. 5.5. Share environmental responsibilities with everyone Our research shows that employees eco-innovate when they ``own'' part of the corporate environmental targets. The success of line managers in sharing goals is directly correlated to employee eco-innovation rates. Without environmental goals, environmental problem-solving seldom occurs. Thus, companies who have managers who are good at instilling responsibility in employees for environmental solutions are those managers who have a greater probability of having employees who eco-innovate. For example, in one company we studied, every line manager was evaluated in their performance review against specic environmental targets. The only way for these managers to reach their targets was to share responsibility with their subordinates. Most of the employees in this company reported that they felt their managers were good at sharing environmental performance goals, and were supportive of environmental initiatives. 5.6. Developing managers who believe in environmental value creation Our research shows that supervisors who are open to new environmental ideas, experimentation, and innovative approaches to problem solving are good at encouraging employee eco-innovation. These behaviors, like some of the other learning organization behaviors discussed above, might be difcult to instill in line managers. If your company wants to have employee eco-innovation, but your managers are not using supportive behaviors, what can you do? Start over? Maybe yes. One implication of our results is that becoming an ``environmental'' learning organization requires line management to care about environmental values; otherwise the evidence shows that they will not support environmental management (Rands, 1990). One possibility is to start screening potential hires for environmental values. Another is to invest in instilling these values into existing line management through training, coaching, 3608 feedback, performance evaluation targets, and other management development tools. Doing both simultaneously will show that the company really cares about achieving its sustainability vision, and cares about supporting employee participation in eco-initiatives to move toward sustainable development. For example, one company required its line managers to take environmental leadership training. The result was a greater commitment to progress toward the company's sustainable development goals. 5.7. A counter-intuitive result: information dissemination One interesting result was that environmental information dissemination did not have a signicant effect on employee

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eco-innovation. (The category of information dissemination included behaviors that supported/failed to support topdown (manager to employee) information sharing like information on policies, performance, and, changes within the company. This is in contrast to the highly signicant communication category that included behaviors that supported bottom-up (employee to manager) dialogue and sharing of ideas.) We asked ourselves if the lack of signicance was because environmental information was an unnecessary driver. We believe from our interviews in companies and from evidence in the survey that environmental information can be highly important. For example, employee perceptions of company commitment to a written environmental policy had an important impact on environmental actions. So we looked for another explanation. One alternative is that managers poorly disseminate environmental information. Possibly, managers are not currently communicating environmental information, like progress toward company environmental goals, to employees in a way that the employees can associate this information with their personal actions. And managers may not be giving employees environmental information of any kind regularly. It is difcult to know the correct explanation for this result, but it may be important for companies to ask themselves: do our line managers have pertinent environmental information to share with employees (for example, qualitative and quantitative information disaggregated to the business unit level)? And if so, are they disseminating it effectively? 6. Conclusions Prior to our research no empirical work had been done to demonstrate which organizational and supervisory factors have an important impact on employee environmental actions. This paper denes the policies and supervisory behaviors that employees in companies say could have a positive effect on their willingness to try environmental initiatives. Then it shows which of these factors have a signicant impact on employee willingness to take environmental actions. The learning organization literature tells us that all six behavioral categories (innovation, competence building, communication, information dissemination, rewards and recognition, and management of goals and responsibilities) should have a signicant impact. We discover that in the environmental management case one of these six, information dissemination, does not to date have an important impact on employee actions. We also nd that a well-communicated written environmental policy is the single most important policy driver. Furthermore, environmental policies are important because they make employees sensitive to the signal (supportive or unsupportive) that they receive from their line manager. For companies that want to improve the sustainability of their operations, our research indicates a number of possible lessons. Sustainable development of businesses requires

both corporate commitment to a written environmental policy statement and line management support for employee environmental initiatives. Sustainability policies that leading-edge companies have developed, when communicated clearly, make employees more sensitive to managerial support for eco-initiatives. Thus, we argue that companies need more than just a clearly communicated set of policies aimed at sustainable development. They also need line managers who use a set of behaviors that show they care about environmental value creation. Managers can be trained to be good at encouraging employee environmental idea generation, and it may be expedient for rms to start hiring managers who already use learning organization behaviors and value environmental protection.

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