Greening Chinese Business Barriers

Greening Chinese Business will aid readers to understand how: Chinese managers perceive and react to the increasing (more external than internal) pressure to improve environmental protection; understand the regulatory, public and business environment in which Chinese managers make decisions about environmental protection; understand the potential for improvement of this regulatory, public and business environment, either as a manager or an external stakeholder and develop strategies that lead to improved stakeholder relationships and, consequently, to competitive advantage; understand the urgent need to develop environmental management practices in Chinese companies in areas such as EMSs and supply chain management; and identify the resources available for management development in China.

List of figures and tables
Acknowledgements
Foreword
Axel Hebel, United Nations Educational, Scientific and Cultural Organisation (UNESCO) Office, Beijing

2. Survey research: managers’ views on environmental legislation
and management

3. Recommendations for the development of training materials and programmes on environmental management

Appendix 1: The seven hypotheses
Appendix 2: Distribution of the questionnaire sample
Appendix 3: Distribution of the interview sample
Appendix 4: Questionnaire
Appendix 5: Statistical model used
Appendix 6: Response variables and factor clusters used for data analysis
Appendix 7: Interview questions and guidelines
Appendix 8: Recategorised data
Appendix 9: Data analysis: models and tables
Appendix 10: Interview analysis

Glossary
List of abbreviations

Ulrich Steger is Alcan Professor of Environmental Management at the International Institute for Management Development (IMD), Switzerland, and Director of IMD’s Forum for Corporate Sustainability Management and Corporate Governance Research Initiative. He directs major partnership programmes with DaimlerChrysler and Allianz. He holds an Honorary Professorship for International Management at the Technical University Berlin and was formerly a professor at The European Business School (Germany), a Harvard University Fellow (USA) and guest professor at St Gallen University (Switzerland). Elected to the German Bundestag (1976–84), he was Minister of Economics and Technology for Hesse. As a board member of Volkswagen, he was in charge of environment and traffic matters and the implementation of a worldwide environmental strategy. He has published extensively, most recently Corporate Diplomacy: Strategies for a Volatile World (John Wiley, 2002).

Fang Zhaoben is Dean of the Business School and Professor of Finance and Statistics at the University of Science and Technology of China and former Dean of the Mathematics Department. He has led and chaired many research projects funded by international organisations and the China National Science Foundation. He is a member of the American Statistics Association and Institute of Mathematical Statistics. He is the author of more than ten books and many papers published in China and abroad.

Lu Wei is Associate Professor at the University of Science and Technology of China Business School. He is active in management consulting and corporate training and has been involved in many international projects including the ‘Renewable Energy Business Development Training in China’ programme, sponsored by the W. Alton Jones Foundation and the World Wide Fund for Nature. He was formerly a management consultant at Anhui Management Development Centre, which was sponsored by the Canadian International Development Agency. Lu Wei has written and translated extensively, and has recently translated Ulrich Steger’s The Strategic Dimension of Environmental Management (USTC Press, 2002).



	Greening Chinese Business Barriers, Trends and Opportunities for Environmental Management Ulrich Steger, International Institute for Management Development, Lausanne, Switzerland, and Fang Zhaoben and Lu Wei, University of Science and Technology of China (USTC) August 2003 \| 191pp \| 234 x 156mm \| Hardback \| ISBN 1 874719 58 6 \| £40.00 US$75.00
	VIEW CHAPTER 1. Executive summary (78K PDF)


ENVIRONMENTAL REGULATION IN CHINA is not really different from that in the rest of the world, except that environmental authorities are relatively new and less established. In order to understand why corporate environmental performance has hardly improved despite the existing regulatory framework, empirical research on high-level executives’ perceptions of environmental protection is essential. This unique book analyses and interprets Chinese managers’ perceptions of environmental management and regulatory enforcement practices in Chinese enterprises. Most importantly, it identifies the bottlenecks to environmental protection in Chinese firms. It includes a detailed analysis of the needs for management training (for example, CEO and executive development and MBA education) in China and presents a roadmap of how they can be met. Finally, it presents two case studies that illustrate how Chinese corporations currently react to a wide range of different environmental challenges, including hardening regulatory pressure, competition and lack of capital. Based on an innovative research project sponsored by the UNESCO/UNDP offices in Beijing and undertaken by the Institute for Management Development (IMD), Lausanne, Switzerland and the Business School of the Academy of Science and Technology (USTC), Hefei, China, Greening Chinese Business provides the first hard empirical evidence of how Chinese managers view environmental protection. Over 300 companies—both state-owned enterprises and SMEs—took part in the research. Key findings include Around 70% of managers surveyed admit moderate or even heavy environmental impact (this is a subjective assessment without an external benchmark). Furthermore, they indicate that the lack of environmental performance is primarily due to insufficient managerial expertise, capital and employment-related protectionism. Managers hesitate to take necessary action to upgrade technical equipment, because, although decreasing pollution, upgrading would lead to lay-offs that, in turn, would diminish social stability. Since the latter is first priority in China, managers fear loss of their companies’—and, attached to that, their personal—image, which plays a very important role in Chinese culture. Regulative enforcement has been strong enough to put environmental management on the ‘to do’ lists of Chinese managers. Nevertheless, managers criticise existing enforcement practices as being too lax and untransparent (due to local protectionism, bribery and lack of expertise in the enforcement institutions). Managers consider environmental functionaries—the Chinese equivalent of an environmental protection agency—and the government to be the most important environmental stakeholders. This is a clear sign for their predominantly reactive attitude towards environmental protection: few Chinese companies are going beyond compliance and pioneering integrated approaches to pollution prevention. The research shows similarities between current Chinese company approaches and the ‘state of the art’ in industrial centres of OECD countries such as Germany in the 1960s. Apart from a lack of capital, managers cite a lack of expertise—managerial more than technical—as the main obstacle to ‘greening’ their organisations. Environmental management programmes need to be developed: competence-building should start with CEOs and executives. Greening Chinese Business will aid readers to understand how: Chinese managers perceive and react to the increasing (more external than internal) pressure to improve environmental protection; understand the regulatory, public and business environment in which Chinese managers make decisions about environmental protection; understand the potential for improvement of this regulatory, public and business environment, either as a manager or an external stakeholder and develop strategies that lead to improved stakeholder relationships and, consequently, to competitive advantage; understand the urgent need to develop environmental management practices in Chinese companies in areas such as EMSs and supply chain management; and identify the resources available for management development in China. Back to the Top Reviews With China’s recent entry into the WTO and its rapidly growing economy, Greening Chinese Business is a timely look at corporate sustainability in the country - with a focus on environmental management rather than labour or human rights issues. It is based on comprehensive research which explored the views of around 300 of China’s top managers. For those not academically inclined the book can be rather hard going - but the executive summary provides a good overview. Sustainability Radar, December 2003 Joining the scant ranks of books devoted to China’s approaches to sustainable development comes a valuable new work by an international collaborative of researchers. The first detailed investigation of current attitudes and approaches to, and knowledge of, environmental management in China, Greening Chinese Business sets out the research process, findings and conclusions of a project which brought together the UNDP, the School of the Academy of Science and Technology (USTC) in Hefei, China and the Institute for Management Development (IMD) in Lausanne. Of course, on first reading there is plenty to confirm current external perceptions: managers in Chinese businesses acknowledge they have a considerable negative environmental impact but feel their hands are largely tied. Environmentally-focused process improvements compete for scarce investment, and there is an absence of the environmental management expertise necessary to integrate such priorities into company processes, which leads to an emissions-focused, ‘end of pipe’ solution bias. The case for environmental management training is made loud and clear. The research produces some interesting vignettes of the complexity to be faced. Many managers cite the fact that better, environmentally-friendly technology will result in large-scale employee redundancy in their factories as a reason forcing them to hold back on environmental improvements. Before the bickering between the Triple Bottom Liners and the Double Bottom Liners gets out of hand, however, it is worth observing that managers (different ones, perhaps) also identify employee health as a key criterion driving their adoption of higher environmental standards. Inevitably, the first wave of stakeholder engagement will take place through regulators and this has managed to place environmental management on the management to-do list, but enforcement remains patchy. An interesting clue to where the greatest driver for change might emerge, however, was the finding that managers in smaller companies in which executives are personally involved in reviewing environmental impacts tend less frequently to cite economic reasons as obstacles to the adoption of higher standards. Perhaps facilitating such empathy will prove more productive than urging China to join those drowning in the whirlpool circularity of the business case argument. Andrew Newton, Ethical Corporation Back to the Top Contents List of figures and tables Acknowledgements Foreword Axel Hebel, United Nations Educational, Scientific and Cultural Organisation (UNESCO) Office, Beijing 1. Executive summary (78K) 1.1 Research objectives and methodology 1.2 Findings from the questionnaire 1.3 Findings from the interviews 1.4 A managerial view of the environmental ‘to do’ list 1.5 Recommendations for the development of training materials and training programmes on environmental management 1.6 Two case studies 2. Survey research: managers’ views on environmental legislation and management 2.1 Research objectives 2.2 Research design: methodology and database 2.3 Findings from the questionnaire 2.4 Data analysis 2.5 Data interpretation 2.6 Findings from the interviews 2.7 Conclusion 3. Recommendations for the development of training materials and programmes on environmental management 3.1 Training capacity 3.2 Demand 3.3 Key areas of learning 3.4 Training institutions 3.5 Curriculum and case study development 3.6 Additional needs 4. Two case studies 4.1 Automobile company: ‘environmental protection is a responsibility’ 4.2 Fertiliser company: ‘no alternative but to proceed’ Appendix 1: The seven hypotheses Appendix 2: Distribution of the questionnaire sample Appendix 3: Distribution of the interview sample Appendix 4: Questionnaire Appendix 5: Statistical model used Appendix 6: Response variables and factor clusters used for data analysis Appendix 7: Interview questions and guidelines Appendix 8: Recategorised data Appendix 9: Data analysis: models and tables Appendix 10: Interview analysis Glossary List of abbreviations Back to the top About the authors Ulrich Steger is Alcan Professor of Environmental Management at the International Institute for Management Development (IMD), Switzerland, and Director of IMD’s Forum for Corporate Sustainability Management and Corporate Governance Research Initiative. He directs major partnership programmes with DaimlerChrysler and Allianz. He holds an Honorary Professorship for International Management at the Technical University Berlin and was formerly a professor at The European Business School (Germany), a Harvard University Fellow (USA) and guest professor at St Gallen University (Switzerland). Elected to the German Bundestag (1976–84), he was Minister of Economics and Technology for Hesse. As a board member of Volkswagen, he was in charge of environment and traffic matters and the implementation of a worldwide environmental strategy. He has published extensively, most recently Corporate Diplomacy: Strategies for a Volatile World (John Wiley, 2002). Fang Zhaoben is Dean of the Business School and Professor of Finance and Statistics at the University of Science and Technology of China and former Dean of the Mathematics Department. He has led and chaired many research projects funded by international organisations and the China National Science Foundation. He is a member of the American Statistics Association and Institute of Mathematical Statistics. He is the author of more than ten books and many papers published in China and abroad. Lu Wei is Associate Professor at the University of Science and Technology of China Business School. He is active in management consulting and corporate training and has been involved in many international projects including the ‘Renewable Energy Business Development Training in China’ programme, sponsored by the W. Alton Jones Foundation and the World Wide Fund for Nature. He was formerly a management consultant at Anhui Management Development Centre, which was sponsored by the Canadian International Development Agency. Lu Wei has written and translated extensively, and has recently translated Ulrich Steger’s The Strategic Dimension of Environmental Management (USTC Press, 2002).