INTOUCH : Ted Zorn asks: is green the new black?

While the debate rages over the use of SUVs in cities, the major car manufacturers are launching hybrid versions of their gas guzzlers in the expectation that the lucrative consumer love affair with the giant offroader will continue unabated. Ford, General Motors and Toyota all have hybrid SUVs on the market for 2007, and are hoping the move will head off growing criticism of the vehicles’ environmental impact.
Yet for all the green talk, Ford still languishes at the bottom of the fuel economy rankings for the major US car manufacturers, while GM has been slated for its marketing campaign in Florida and California, offering year-long petrol subsidies to purchasers of large (non-hybrid) cars and SUVs.
All across the planet, companies are signing up in droves to green initiatives, corporate social responsibility (CSR) and sustainable business – even if the PR spin doesn’t quite match the reality. And when major car manufacturers jump on the green bandwagon, you know something’s afoot.
Many of us would like to believe it’s sign of changing values, recognition that business must take account of its social and environmental as well as economic and financial impacts. But is it simply the latest in long line of management fads and fashions?
Remember Management By Objectives (MBO), Quality Circles, Total Quality Management (TQM) and Business Process Engineering (BPR)? In their time, these management trends were promoted by business schools, sold by consultants, hyped by the business press, and wholeheartedly embraced by companies. They were seen as panacea for organisational maladies; today, however, they’re no longer the buzz.
That doesn’t mean to say they haven’t had an impact – TQM has morphed into currently popular programmes such as ISO certification and Six Sigma management, and quality management inititatives still generate substantial consultancy business for organisations such as the Juran Institute and the major international consulting firms. And many argue that quality management has simply become standard practice – competitive necessity rather than competitive advantage.
CSR and sustainable business may be following similar trajectory. Researchers in the field of management fashion theory have found that fashions share number of characteristics. Firstly, there must be some identifiable management technique, practice or concept at its heart – think triple bottom line accounting, social (or sustainability) reporting, and stakeholder engagement.
There also has to be belief that the new practice will increase organisational performance. Interestingly, although the jury’s still out on whether this is in fact true of CSR or sustainable business, every single consultant or association advocating CSR/sustainable business makes this claim.
Take Fortune’s annual accountability ranking, which ranks the world’s largest companies on the extent to which they’ve integrated CSR practices. The magazine explicitly describes it as business ranking, not moral one.
Other identifiable characteristics of management fad are that it must have its own distinctive lexicon, with easy-to-remember terms, it must be actively disseminated by the management fashion industry (consultants, business schools, the business press – the article you’re reading now), it must resonate with prominent concerns of the time (climate change, peak oil, work-life balance, the increasing gap between rich and poor), and it must appear to be academic. Research into CSR/sustainable business has increased dramatically since 1991, and growing number of business schools now require their students to take courses on sustainable business.
So far, the evidence shows that CSR/sustainable business meets all the criteria for management fad. But the crucial test has yet to come. We’ll have to wait and see if interest peaks and then tails off in classic bell-shaped curve. Fads come and go, and right now we’ve only had the incoming curve. In line with previous management fashions, we might expect interest to be sustained for around 10 to 15 years before petering out.
But what really matters is whether CSR and sustainable business have lasting impact. With any management fashion, there’s lot of cultural capital to be gained by adopting it. Every business wants to be seen as leading-edge company. But there’s always question mark over what company actually does to adopt the new practice.
When TQM was all the rage, many companies simply renamed their existing management structures using TQM-speak. But it’s perhaps more worrying when the big car manufacturers similarly adopt the language of CSR and sustainable business while continuing to produce and sell products that undermine the whole concept of sustainability.
The biggest risk of CSR/sustainable business being merely fashionable is that it may encourage and legitimise incremental change and perpetuate harmful business-as-usual practices.
We’ll know Ford and GM are serious about sustainability when they start leading the way in developing alternative fuels and selling fewer gas guzzlers by choice.
•Ted Zorn is assistant dean of academic staffing at the University of Waikato Management School – and an interested observer of management fads.