Running head: CASE STUDY ON GREENHEART

Case Study: Greenheart and the Quest for Corporate Environmental Sustainability

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April 12, 2012

Abstract

Greenheart has greatly reduced in promoting environmental sustainability after a change of ownership and some financial difficulties brought by the environment. With this, its leader should remember that the greatest promoter of power is people. By increasing the number of internal stakeholders and supporting their coordinators, the company can again revive their lost power and ambiance and bring back again the gains and the resources that were once lost.

Case Study: Greenheart and the Quest for Corporate Environmental Sustainability

Introduction
Greenheart is a multinational food producer stated in Netherlands since 1900s. It has long sought environmental sustainability through ample means of reducing its environmental impact. However, with the change of ownership and some economic difficulties, environmental issues became merely of secondary importance, taking them more in a structured, integrative, and “realist” basis. The new owner had a singular approach and would rather focus more on the marketing issues, with some shifts in corporate values and corporate mission statement. After 2002, the vision statement no longer mentioned the environment but rather the initiative to be a world leader in the food industry by creating quality products for long-term sustainability. By this, Greenheart has taken a major shift in its corporate vision and mission, while experiencing some important relevant issues because of the changes that have taken place over the years.
This paper centers on the case of Greenheart and its quest for corporate environmental sustainability. It shall reveal three important issues that the company has been facing: (1) shifts in corporate values; (2) changes in corporate structure; and (3) shifts in corporate norms. It shall reveal the decision strengths and weaknesses, as based on the three relevant issues that were mentioned. In the end, it shall be emphasized how the situation can be remedied and improved in terms of corporate management and stronger, more wide-ranging decision making.
Main Body • Relevant Issues
First Issue: Shifts in corporate values. For 25 years, Greenheart was run by a chief executive officer, who had a religiously-inspired conviction of saving the earth. This shifted considerably in 2001, when the company was run by a foreign company that did not share the drive for environmental sustainability (Wijen, 2009, p.1). Corporate values centered more on its marketing structure and the profit potential in which sustainability was attached not just to the environment but the society as a whole. Having lived in a more “uncertain” world, the company has decided to deny this uncertainty and focus more on what will or did happen to the company if they decide not to focus on marketing structure and profit potential. The company has undergone a very difficult situation in which the economy plunged deeper and the resources were more scant. With this, the values centered more on certain matters, as an effect of the theory that “people find it easier to act as if the world were certain and deterministic rather than uncertain and often unpredictable” (Messick & Bazerman, 1996, p.11). With an uncertain world, judgment was at risk, driving the company to be more centered on more immediate matters, shifting sustainability to things that are more precise.
It can be said that the shift in corporate values was the effect of some risk trade-offs, wherein the uncertainty and the risk produced ethical dilemmas that concerned important matters, such as the environment. Dilemmas were produced, creating an illusion that it should create a riskless world—one that will never take place at any time. For the purpose of creating this type of world, the company shifted its corporate values towards a more certain and determinist matter—one that can be counted like the amount of profit. Thus, corporate values shifted together with sustainability on the belief that it would increase in productivity and gain.
Second Issue: Changes in corporate structure. The shift in CEO was the biggest factor that had led to the changes in the corporate mission to environmental sustainability. First and foremost, the new CEO was foreign and would thus, generate less sensitivity in terms of the country’s environmental issues, with a mission that is mainly centered on more productive corporation. Also, the change of ownership has led to a more structured, integrative approach that centered not on environmental issues but on increasing gains in a competitive market. Likewise, there is a shift in corporate structure in which a dramatic increase in sales and employees has led to a more complex and multi-faceted decision making. With a bigger corporation, there is the uniqueness of individuals, making way for ideographic inconsistency with a more intricate decision making.
Bigger corporations usually face difficulties when it comes to decision making. With a context that is multifaceted, the decision makers had difficulty finding or identifying common characteristics between themselves, which led to subjective rationality among the members. Their environmental stimuli appeared to be diverse, affecting their attitudes and their behaviors. Likewise, because of a more intricate environment, there was a tendency to base organizational decisions on what attracted the management’s attention rather than what was being influenced by the objective reality. As business decisions frequently made use of input information that are mostly biased or manipulated (Input bias, 2003, p.1), it affected input information and business decisions through the complexities found in the corporate structure. For this, Schweitzer and Chinander have stated that “the relationship between inputs and outputs [should be] direct, consistent and unbiased” (Input bias, 2003, p.2). If this is the case, then decision making would become painless by finding a common goal in which members of the corporate structure agrees and decides upon. With a bigger corporate structure comes a more complex framework.
Third Issue: Shifts in corporate norms. Changes in corporate structure make way for some shifts in the corporate norms as well. In the case of Greenheart, the subsidiary environmental coordinators were the ones in charge of implementing the corporate environmental strategy set by the operational staff. However, it was in 1999 that a subsidiary environmental coordinator of Greenheart has stated the following words: The main purpose of almost anyone in the production organization is to produce. When we come with our environmental activities, a choice has to be made… The choice, then, is made quickly: let the person make [a high volume of our products]. (Wijen, 2009, p.4)

From here, it is evident that the corporate norms have largely shifted from what it was back in 1995 when the main concern was centered on caring for the environment and reducing the impact to a sustainable level. As the corporate norms shifted, the decisions were being diverted towards a new aspect that centered more on new structured, integrative matters.
From here comes the rationality of the decision making process, wherein members of the corporation are bound to make ethical decisions that would create and reflect the corporate norms. As Hill (1986) mentions, there is the reliance on ethical rule, principle, standard, or norm, which drives a person to make a decision for whatever purpose he or she may find significant (p.36). Reasons may have been based on ethical principles or other matters like “business efficiency, class or national self-interest, or even personal advantage” (Hill, 1986, p.36). Having believed the decision as ethical, the person is driven towards a conduct that the person believes to be rational and ethical. Ethics is said to be a quest for truth (Lillie, 1969, p.6), making it the approach to the advancement of knowledge. With this however, comes the reality that ethics can lead to a detrimental state in which choice becomes a matter of belief and conviction. Corporate norms are being shifted towards a different credence or belief, making way for a large shift in corporate norms that would significantly affect the decision making. • Decision Strengths and Weaknesses
There are a number of strengths that can be distinguished behind the decisions made by the new CEO of Greenheart, which led to a more dynamic corporate environment. First of all, focusing more on structured and integrative matters can still improve the financial state and capability of the company, since it centers more on more immediate matters critical with a plunging economy. Second, being a larger, more diverse corporation allows it to gain access to more resources with higher degree of knowledge, which could alleviate the current state of the company. Third, its tradition of implementing open communication with the outside world gives a large benefit that leads to more power, resources, and financial gains. Fourth and final, its title of being one with environmental awareness gives them support in strategic forums and corporate training programs, making them more powerful and influential in the industry arena.
There are, however, some weaknesses found in the company, which can make way for its complete downturn. First of all, not sharing the former CEO’s drive for environmental sustainability can alter the reputation of the company, especially when it comes to the environmental organizations and unions. Second, the shift in corporate values and norms decreases corporate stability, especially since the company has succeeded in establishing environmental sustainability for decades. Third, the conflict of interest in the subsidiary level negatively separates blue-collar personnel and white-collar employees, which creates tension and can affect corporate unity and stability. Fourth and final, the new owner’s “lean and mean” philosophy has halted the company-wide environmental activities, shifting its state from an environmentally-focused company to one that is centered mainly on financial stability. As Greenheart shifts from idealism to realism, the question centers on what should be done for the situation to be remedied and bring back the gains and the resources that time has taken away. • Recommendation
Leaders usually have a tendency to stimulate and apply “decision decisiveness,” wherein they tend to make decisions first before having the chance to assess the situation logically. They have a tendency to apply “perceptual filtering” in that they screen out the negative information in order to protect their self-esteem, their confidence, and their name. From here, it is evident that the basic problem of Greenheart starts from the topmost authorities starting with the new CEO. The subsidiary environmental coordinators of Greenheart had taken matters into their own hands, formulating their own targets and reconciling their objectives (Wijen, 2009, p.6). Perhaps, what the new CEO should do is to listen to these subsidiary environmental coordinators and begin formulating environmental activities again so as to convert losses to gains. By relieving the company’s name of being one with the earth, they would again bring back the gains and the resources by means of cooperative activities centered on saving the earth.
However, it is said that “many senior executives take listening skills for granted and focus instead on learning how to articulate and present their own views more effectively” (Ferrari, 2012, p.2). They tend to focus more on their speaking skills while ignoring the fact that their ability to listen effectively would be the front end of their decision making process. By listening effectively, they can revive their environmental sustainability and improve the reputation of the company, while relieving the tension and subtracting the “lean and mean” philosophy. They do not have to shift again to idealism. They would just have to implement more environmental activities so as to revive again the sustainability of the company centered on saving the earth. Through personal framing, the topmost leaders of Greenheart can begin to see the relational images of the external world, bringing considerable information that would help them understand and navigate their environment in spite of the challenges.
Conclusion
In the latter years, Greenheart positioned itself in the marketing industry by embracing sustainability, rethinking its business practices, and being open to a variety of external stakeholders, with means of relentlessly reducing its environmental footprint. However, the new code has led their boots to plunge deeper into financial difficulties, with less resources and a bigger corporation that significantly altered their strength. With a change of ownership and a more restricted means of interpreting sustainability, the company has shifted their environmental budget to more definite and predictable matters, which in a way reflected realism. However, they should also understand that power belongs to people and what better means could there be than to use the most immediate source of power in the company: their partners and employees. By increasing the number of internal stakeholders and supporting their coordinators, the company can again revive their lost power and ambiance even without shifting back to idealism.
Corporate management is centered on the social variables that affect individual behavior, attitudes, perceptions, and motives (MUU Lecture 8, 2012, sl.5). It is influenced by the interactions between people and the way they perceive the information that affect their decisions. With this, the decision making process is largely influenced by people in the environment through norms and social roles that highlight the person’s conformity to social expectations. It is important therefore, to understand that the most effective means to regaining power and strength is the people in the environment. By being attached to people, Greenheart can again revive their name as one of the most influential companies when it comes to environmental sustainability.

References
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