The Role of Organizational Culture on Green Marketing

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FACULTY OF EDUCATION AND BUSINESS STUDIES

Department of Business and Economics Studies

Master Programme in Business Administration (MBA): Business Management 60 Credits

The Role of Organizational Culture on Green Marketing

Lucia Gido Chuwa Ukpemeobong Usen Ibokette

June 2020

Student Thesis, Master Degree (One Year),15 Credits Business Administration

Master Programme in Business Administration (MBA): Business Management 60 Credits Master Thesis in Business Administration 15 Credits

Supervisor – Dr. Daniella Fjellström Examiner - Dr. Maria Fregidou-Malama

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ABSTRACT

Title: The Role of Organizational Culture on Green Marketing Level: Final Thesis for Master‘s Degree Program

Authors: Lucia Gido Chuwa and Ukpemeobong Usen Ibokette Supervisor: Dr. Daniella Fjellström

Examiner: Dr. Maria Fregidou-Malama Date: June 2020

Aim: The aim of this study is to explore the influence of organizational culture on green marketing.

Method: This study applies a qualitative research approach on seven selected companies in Sweden and Nigeria. We interviewed seven people using seven semi- structured interview questions and we carried out thematic data analysis by grouping the findings into common themes to guide our discussion.

Result & Conclusions: This study concludes that organizational culture influence implementation of green marketing as it dictates what happens within the organization and how it happens. The organization that embraces environmental values in its culture needs to disseminate it to all employees to create common understanding and commitment towards its implementation. We also discovered a lower level of customer awareness on green marketing which requires more efforts by organizations and stakeholders to create this awareness or advocacy which will help firms investing on green marketing to sell their products.

Suggestions for future research: We suggest a future study which could complement this study using a bigger sample size. We also propose a comparative future study which may help to highlight how implementation of green marketing in developed countries like Sweden differs from the developing countries like Nigeria.

Furthermore, we suggest an explorative study on how best the customer awareness on green marketing can be enhanced so that to support green marketing.

Contribution of the thesis: This study contributes to the body of knowledge about organizational culture, environmental sustainability and green marketing through highlighting how organizational culture influence implementation of different components of green marketing mix, which was an underexplored area. We also contribute that customer awareness is an important aspect to encourage green marketing

Key words: Green marketing, green marketing mix, organizational culture, Sweden, Nigeria, environmental sustainability and Natural Resource Based View Theory.

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Acknowledgement

We would like to extend our gratitude to all who have helped us accomplish this work in one way or another. Firstly, we would like to thank our Almighty God for giving us the strength and inspiration of writing this study. We dedicate this project to the Swedish Institute for the Funding and support provided helping us to carry out this study. We also give special thanks to our Supervisor Dr. Daniella Fjellström along with Dr. Maria Fregidou-Malama and Dr. Ehsanul Huda Chowdhury for their encouragement and constructive feedbacks during the entire process. Special thanks to Michelle Rydback for her encouragement and support when we faced difficulties on finding companies. We would also like to thank our families for their love and encouragement during the process. Finally, we would like to thank all MBA students including all groups that opposed any part of our work; we thank you for your cooperation and valuable contributions to help us perfect our work.

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1. INTRODUCTION

This chapter provides the general background of the research subject, motivating its importance and relevance followed by description of the research purpose and the research question. The chapter ends by highlighting certain limitations of the study and disposition of the structure of the study.

1.1 Background

Over the past few decades there have been increasing environmental concerns which push organizations to consider environmental issues in their business strategies (Dangelico & Vocalelli, 2017). The significance of green marketing is increasing due to increasing concerns about environmental degradation and climate change specifically due to air pollution, water pollution, depletion of Ozone layer and global warming (Mishra, 2014). Such factors cause firms to reconsider their behavior and approaches and seek to run their businesses in more sustainable ways (Kardos, et al., 2019).

The concept of green marketing can be defined as a way of managing exchange relationships and marketing approaches which simultaneously satisfies customer‘s needs and business objectives while minimizing negative impact to the natural environment (Chamorro & Bañegil, 2006). Green marketing thus seeks to develop ways to run businesses in a manner that maximizes both customers and business objectives while minimizing negative consequences to the environment (Kardos et al., 2019). This concept can be traced as far back as in 1970s where it was first defined, initially addressing those industries that caused much environmental hazards (Baker, 2012) and (Dangelico & Vocalelli, 2017). Since then the subject has attracted great attention among scholars and stakeholders. Governments and Intergovernmental organizations like the United Nations play moderating roles to encourage environmental sustainability and green marketing. For example the Earth summit held in Brazil in 1992, provided a platform for developing a plan of action to tackle and overcome the most pressing environmental health and social problems facing the planet (Sitarz, 1993). Furthermore, the Sustainable Development Goals (SDGs) that were agreed in 2015 by the United Nations includes a global commitment towards environmental sustainability which pushes firms to operate more sustainably (Pimonenko, et al., 2020). Over the years this subject has advanced and new related concepts like environmental marketing and

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sustainability marketing have emerged and are being used interchangeably in the literature.

Given that environmental issues influence all human activities, there has been increased advocacy and reorientation on the need to ―go green‖ in virtually all aspect of human endeavor Polonsky, (1994). Among the factors that drive green marketing is the need for global environmental sustainability. Global sustainability refers to the ability to meet current needs without compromising the capability of meeting the future generation‘s needs. There is increasing tendency for companies to adopt environmental friendly approaches through popular mottos of ―reduce, reuse, and recycle‖ (Wild & Wild, 2016, pp 36). Fraj, et al., (2013) support that sustainability is the main driver towards environmental oriented strategies. Mahamuni & Tambe, (2014) mention other factors as uncontrollable and controllable factors. They describe uncontrollable factors as rules and regulations while controllable factors as business opportunities and moral obligations towards corporate social responsibilities. Furthermore, Junsheng, et al., (2020) discuss about institutional theory and explain how institutional environment such as legal frameworks, cultural values and ethics influence firms to adopt green marketing. Papadas, et al., (2019) also assert that pressure from environmental stakeholder and the need to gain competitive advantage influences adoption of green marketing. Dabija, et al., (2018) also supports the increasing pressure from stakeholders especially customers, causes firms to rethink their business strategies and seek to integrate eco-friendly approaches.

Green marketing emphasizes on developing products that satisfy customers‘ needs in an environmental friendly way. Camino, (2002) states that green marketing can be operationalized though adjusting of the marketing mix to adopt green approaches through green products development, packaging redesigning, distribution, pricing and green promotion. Kardos et al., (2019) also explains that firms are increasingly adopting green marketing strategies through developing green products, repackaging of their products in environmental friendly packages, green promotion through the use of eco- labels etc.

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Based on the Natural Resource Based View (NRBV) theory, implementation of green marketing requires firms to possess unique resources and capabilities that are highly valuable, rare to find, difficult to imitate and not substitutable Barney, (1991). The organizational culture which incorporates environmental aspect is considered an important resource that can provide competitive advantage to the firm in accordance to NRBV theory (Srivastava, et al 2013). Chen et al., (2020) describes organizational culture as a set of shared collective behavior and assumptions guiding the organization‘s perception, thinking and feeling and it comprise; values, beliefs, principles, vision, norms, systems, symbols, language, assumptions and habits. Wang, (2019) further confirms that organisational culture that integrates green values is a valuable asset that can translate into significant competitive advantage of the firm. Papadas, et al., (2019) also support that enhanced corporate environmental culture is considered as among valuable resources with the potential to provide competitive advantage and sustainable development. Fraj, et al., (2013) asserts that the ability of the organization to respond to the environmental concerns and come up with innovative solutions is influenced by green orientated organizational culture.

Management and employees values can enhance green marketing through social accountability and environmental stewardship (Leonidou, et al., 2015). Manager‘s values plays a big role in decision making processes and can impact the environmental orientation of the organization. Top managements plays greater role on encouraging green organizational culture through implementing environmental recognizant policies, programs, reward mechanisms and proper communication and addressing of environmental related matters. Employees involvement in eco-friendly initiatives is positively correlated with effective support and implementation of such initiatives (Fraj, et al., 2013). Awareness of environmental values to internal stakeholders is very important as they are the ones that plays the role to implement the relevant strategies (Papadas, et al., 2019).

1.2 Motivation

We consider issues bothering with environmental sustainability of utmost importance as all human activities are centered on the environment. Yeshodhara (2005) describes that humans are responsible for altering almost all the other elements of the environment.

We have personally witnessed and experienced the effects of unsustainable business

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practices and over exploitation of resources at different levels. This is an alert that something needs to be done on running operations sustainably, thus meeting current demands without harming the environment for future generations. These issues together with the knowledge from our academic courses such as Marketing Theories, International Business Strategy and Comparative Management Culture ignited our passion to carry out this study. Wild and Wild, (2016, pp 37) provide insights on the issues of global environmental sustainability and green marketing and explain that the quest for natural resources draws many companies into the international market. We also considered ideas from cultural studies to explore how culture can be observed in the organizational setting. This is consistent with Baumgartner, (2009) who discusses that organizational culture is deduced from incorporating cultural values, beliefs, attitude and logical processes to an organizational setting. This triggered us to explore the realities of such cultural values in the organizations.

Studies show that in addition to preserving the environment, green marketing is associated with a number of advantages and opportunities for the business. As discussed by Leonidou, et al., (2015) green marketing presents lucrative business opportunities which may lead to cost efficiencies and product differentiation possibilities. They discuss that green marketing can help firms to come up with innovative technologies and offer differentiated eco-friendly products. Dangelico and Pujari (2010) acknowledges that organizations engaging in green product innovation are at advantage as is a key factor to achieve growth, environmental sustainability and a better quality of life. Papadas et al., (2019) also support that green marketing enables firms to offer differentiated products and achieve cost efficiencies due to decreased resource consumption and recycling opportunities. Green marketing is increasingly becoming the means to provide competitive advantage and enhancing corporate image of firms globally (Dabija, et al., 2018). It is also generally observed that integrating marketing strategies with environmental aspects leads to society‘s wellbeing and improved quality of life (Kardos et al., 2019). Kemper and Ballantine, (2019) also asserts that there is a possibility to influence sustainable lifestyles through implementation of green marketing.

Based on the above we became interested to study this phenomena on how organizational culture influences green marketing. We intend to become experts and

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consultants on the implementation of sustainable business practices where activities of organizations today will not negatively impact the environment and future generations.

1.3 Problematization

Despite the volume of researches on green marketing, studies show that they are not exhaustive. Kemper & Ballantine, (2019, pp 277) provide detailed analysis of the meaning and trend of sustainability marketing researches and specifically states that the subject is ―still overwhelmingly understudied‖ (Kemper & Ballantine, 2019, pp 281).

This provides room for further studies in this subject. Leonidou, et al., (2015) also suggest further studies on green marketing strategies especially from the perspective of international organizations as fewer studies have addressed that context.

Existing studies pay little attention on the role of organizational culture on implementation of green marketing. Fraj, et al., (2013) studies this relationship from a perspective of business to business (B2B) and concludes that strong environmental culture is required for effective implementation of green marketing strategies. However, they recognize the need for further studies as they proposed more case studies to explore how the intra-organizational shared vision and knowledge influence proactive green marketing approaches. The study by Papadas, et al., (2019) explored the strategic perspective of green marketing and concludes that internal organizational green values moderates a positive relationship between strategic green marketing orientation and competitive advantage. In this case green organizational culture was studied as a moderating variable and the authors propose further studies from different perspective or firm types or industrial sector.

In addition, the existing studies show varying findings; some show a positive relationship as seen above while others show negative relationship between organizational culture and green marketing. Bae & Grant, (2018) provide that organizational culture has no impact on environmental collaborations either internally or with customers or with suppliers. The relationship in this study was also indirect hence the authors propose further studies to get more understanding of the variables. More recent studies such as Wang, (2019) also demonstrate significant lacking on researches in relation to the effectiveness of organization green culture and related strategies.

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The above studies demonstrate the research gap that exists on the subject. This study intends to fill that gap through studying the influence of organizational culture to the implementation of green marketing through the four marketing mix.

1.4 Aim

The aim of this study is to explore the influence of organizational culture on green marketing.

1.5 Research question

We have developed the following research question in order to fulfill our aim of study.

RQ1 – How does organizational culture influence green marketing strategies?

1.6 Scope and delimitation

Extant researches have proven that achieving environmental sustainability is filled with intricacies. This study specifically explores the unique role of organizational culture in influencing green marketing. This study was conducted on selected Swedish and Nigerian companies which had demonstrated some aspects of green marketing mix as highlighted under Section 3.6 of this report. We carried out a case study using seven companies from both Sweden and Nigeria as sources of evidence to understand the realities of this phenomenon in those organizations. We used semi-structured interviews on the selected participants.

Saunders, Lewis and Thornhill, (2009) assert that a research project is not without limitations. The first challenge was on getting organizations to cooperate with us due to Covid-19 virus outbreak and high sensitivity of the subject. These factors stalled our access to most organizations and thus we were able to get only seven companies and only one person in each organization. We think more respondents could help in substantiating our findings. Furthermore, due to prevailing social distancing we were not able to carry out face to face interviews rather we carried out zoom interview in which we faced some technical challenges along the process. We believe the process could have been smooth if we could get opportunity to carry out personal face to face interviews.

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7 1.7 Disposition

This study is made up of 6 (six) chapters and it will assume the following order:

Chapter 1 - Introduction; This chapter describes in details the background of the study, the motivation, gap identified, the research question, and the limitation of the study.

Chapter 2 - Literature Review: This chapter captures previous theories and studies done on the subject and from there builds a framework for this study.

Chapter 3 - Methodology: This chapter, houses explanation of philosophical perspectives of researchers and further describes research approaches, strategies, design and methodology adapted and reasons behind such adoption.

Chapter 4 - Empirical Finding: This chapter is dedicated to the presentation of data gathered from the field.

Chapter 5 - Findings and discussion: On this chapter, inferences are drawn from the data collected in relations to the theories.

Chapter 6 - Conclusion: This chapter houses the answers to the research question, contributions of the study, limitation of the study as well as recommendations for future studies.

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2. THEORETICAL FRAMEWORK

Theoretical framework describes the main theories used in our work in line with our research purpose and research question. This chapter majorly presents the theoretical and critical discussion on relevant concepts bothering on green marketing and organizational culture. At the end of this chapter a conceptual framework is developed to guide our study.

2.1 Environmental sustainability

Goodland (1995), exhaustively describes the atmosphere, water, and soil as the components of the environment which humans live, affirming that the environment houses the life support system without which neither production nor humanity could exist. According to Yeshodhara (2005), humans are the most adventurous and dynamic elements in the eco-system, they literally are responsible for altering almost all the other elements of the environment. Dangelico and Vocalelli (2017) explains further that the quest for accomplishing economic and industrial development over the ages has revolved around the elements of the earth‘s environment leading to unparalleled scientific and technological revolutions which have brought about disastrous changes in the environment. The man induced changes in the environment have culminated to a series of environmental degradation of global magnitude, comprising of population explosion and exploitation of raw materials and environmental pollution (Dangelico and Pujari, 2010). This environmental degradation has become a serious issue as it threatens the serenity of people‘s existence as well as their health, this has led to substantial attempt by policy makers, NGO‘s, companies and consumers to enhance environmental sustainability Yeshodhara (2005), Morren and Grinstein (2016).

From the above analogy, it can be deduced that there is need for advocacy for environmental sustainability, being aware that over exploitation of one component in the eco-system will lead the malfunctioning of another component. Morelli (2011) defines environmental sustainability as the condition of equilibrium, flexibility and interconnectedness that permits human society to satisfy its needs while neither exceeding the capacity of its supporting eco-system to keep on regenerating the services necessary to meet those needs nor by our actions diminishing biological diversity.

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Sutton (2004) simply defines environmental sustainability as the ability to maintain elements or qualities that are of value in the physical environment. He further stresses that environmental sustainability programs comprise of intentional acts to reduce the use of physical resources, the redesign of production processes and products to abolish the creation of toxic materials and the production and refurbishment of natural habitats and environments valued for their livability and beauty. Environmental sustainability strives to sustain global life support systems for the foreseeable future principally maintaining human life Goodland (1995). It stands for the ability to meet current needs without compromising the capability of meeting the future generation‘s needs (Wild &

Wild, 2016). It is on this notion and with increased awareness of consumers and advocacies from intergovernmental agencies that organizations have integrated concepts of environmental sustainability to its functional units.

Szabo and Webster (2020) explains that majority of organizations try as much as they can to improve their environmental positions by showcasing its environmental efforts to the public, they get this done by applying green marketing strategies to help gain competitive advantage as well as appeal to ecologically conscious consumers. Danso et al., (2019) affirms that environmental sustainability awareness has a positive influence on performance outcome of organizations. According to Dangelico and Vocalelli (2017), in order for consumers to understand a firms input in ensuring environmental sustainability, marketing plays a vital role since activities from marketing are essential and geared towards defining product concept and design. Efforts of the business will be hampered if after engaging in environmental sustainability it fails to get widespread in the market. Dangelico and Pujari (2010) acknowledges that organizations engaging in green product innovation are at advantage as is a key factor to achieve growth, environmental sustainability and a better quality of life. However Szabo and Webster (2020) point out that some firm‘s claims on green marketing are not a true portrait of their environmental conduct. While some companies genuinely decreased their environmental footprints, others simply claim to be environmentally responsible when they not. But despite this, businesses are faced with increasing demand to actively reduce environmental burden effectively and to help achieve environmental sustainability (Figge and Hahn, 2012).

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2.2 The Natural Resource Based View (NRBV) theory

The natural resource based view theory is an offshoot of the Resource Based View theory. We will henceforth address them as NRBV and RBV respectively. The RBV best describes matters concerning with competitive advantage of firms where major emphasizes is placed on the organizational resources (Cucciella, et al., 2012). This concept was originally championed by Wernerfelt, (1984) who asserted that an organization is made up of resources which are derived from its activities over a long period of time, and that not necessarily its products determines its competitive advantage. However, Barney, (1991) states that the organizational resources that may lead to sustained competitive advantage are those that are valuable, rare, difficult to imitate and non-substitutable. This is in line with the assertion of Hitt et al., (2016), that strategic management requires an organization to try as much as they can to differentiate themselves as well as its processes from rivals to earn a sustained competitive advantage.

According to Song et al., (2015), natural resources are described as being advanced for millions of years before humans considered exploring and maximizing them, those resources were ably endowed in rich bio-diversity and geo- diversity. They further explains that the explosive growth of human population, industrialization processes, huge consumption of natural resources is predicted to adversely affect the global eco- system, industry and commerce. This is in tandem with Brundtland, (1985) that many current approaches to environment are not working and are unsustainable. However Cuerva et al., (2014) explains that in recent times, in order to achieve environmental sustainability, there have been increased concerns and pressure on firm‘s innovative activity which has led in some way to innovations in product, processes or business models, leading the company to higher levels of environmental sustainability. Despite the wide acceptability and operationalization of the RBV, which mainly focused on the internal capability of the organization, it failed to integrate components of the physical environment, and this led to the development of the NRBV by Hart (1995).

According to Hart, (1995), the NRBV is described as a theory of competitive advantage which centers on a firm‘s relationship to the natural environment. Given the ever increasing, multi-dimensional magnitude of ecological problems, The NRBV serves as an answer to how businesses could integrate the natural environment to its processes

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leading to a firm‘s sustained competitive advantage. Hart (1995) further explains that the NRBV requires organizations to be sensitive to environmental challenges through the development of new resources and that the challenges posed by the bio-physical environment serves as drivers of new resources and capability. It can then be deduced that NRBV of the firm is an adaptation of RBV of the firm made possible by the demands imposed by the natural environment (Menguc and Ozanne, 2005). Hart (1995) describes that the NRBV consists of 3 interconnected strategies which are pollution prevention, product stewardship and sustainable development.

 Pollution prevention strategy: This strategy is aimed at reducing emissions using continuous improvement methods; it is viewed as a casually complex pattern that can make an organization‘s unique cost reduction its competitive advantage (McDougall et al., 2019).

 Product Stewardship: Hart (1995) postulates that a firm‘s engagement with the environmental staff as well as its marketing staff is of utmost importance. Activities under this category is believed to bring about green product development and external stakeholders validation. Miemczyk et al., (2016) and McDougall et al., (2019) agrees that firms become sensitive by assuming an environmentally proactive stance towards its usage of raw materials and its ultimate suppliers, this according to them is targeted at minimizing the environmental impact of the ent ire system.

 Sustainable development: This strategy postulates the need for organizations to envision its future through minimizing its environmental footprint and developing a shared vision as well as demonstrating sound leadership with its external stakeholders which according to Cucciella et al. (2012), will open up future opportunities and gains for long term competitiveness. In the course of time, extant literature had failed to ascertain how the sustainable development dimension of the NRBV can be measured. This led to the Hart and Dowell (2011) splitting the sustainable development dimension into Clean technology and base of the pyramid dimension.

 Clean technology is operationalized as a means an organization adapts new competencies for competitive advantage as their industries evolve (Hart and

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Dowell, 2011). McDougall et al., (2019) further buttress this component as seeking to achieve reduced material and energy consumption. The firm is believed to have the responsibility of understanding which resources and capabilities are linked with effective clean technologies (Hart and Dowell, 2011). In the nutshell clean technology deals with production processes of organizations and further advocates for greener approaches in product development.

 Base of the pyramid component in the newly conceptualized NRBV in Hart and Dowell (2011), takes into consideration the role an organization plays in alleviating poverty for the poorest of the citizen. The base of the pyramid components advocates against firms in developed worlds exploiting the environment in emerging markets. It promotes avenues firms could maximize the opportunities at the base of pyramid. McDougall et al., (2019) concludes that the NRBV responds to the growing need for ecological and sustainable development in business operation. The new NRBV is further explained in table 1 below.

Strategic Capability

Societal Driving Force

Key Resource

Competitive Advantage

State of Research Development

Pollution prevention

Minimize emissions, effluents, and waste

Continuous

improvement Lower costs Strong empirical evidence in favor of NRBV

Product stewardship

Lower product life cycle cost

Stakeholder integration

Reputation/

legitimacy

Growing area of research

but much to be

Accomplished Clean

technology

Make

quantum-leap improvement

Disruptive change

Future

position Little research to date

Base of the pyramid

Meet unmet needs of the poor

Embedded innovation

Long-term growth

Growing body of

practitioner-oriented

research, but academic attention needed

Table 1: The NRBV strategies

Source: Hart and Dowell, 2011, pp 1472

Aken (2010) explains that the NRBV suggest that top management sensitivity to the environment and their corresponding investment in indoctrinating its human capital to support environmental initiative can lead to improved financial performance. However

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McDougall et al., (2019) views the NRBV of the firm as responding to the growing need for ecological and societal development in business operation. Alsaifi et al., (2020) puts it holistically by portraying the NRBV as a theoretical lens on how environmental practices are associated with financial performance of firms. They imply that a firm‘s capability ought to be conveyed to its stakeholders in manner that is open, consistent and accessible in order for it to have an overall impact on competitive advantage.

2.3 Organizational culture

Culture has been described by many researchers as a complex phenomenon which stem from anthropology, sociology and psychology discipline and which till date has no consensus on its definition (Linnenluecke and Griffiths, 2010). Tung et al., (2008) define culture as an ever progressing set of shared beliefs, values, logical processes and attitudes that provide cognitive maps for people to perceive, reason, think, act, react and interact. Hofstede et al., (2010 pp.6) tends to offer a more holistic view of culture to be the collective programming of the mind that differentiates the member of one group or class of people from others. With this in mind cultural perspectives and patterns can be drawn and analyzed wherever there are humans distributed in groups, organizations or by location, as culture helps to give an insight into factors distinguishing one person or group from the other.

Organizational culture can be deduced as incorporating the components of beliefs, values, attitude and logical processes to an organizational setting for the purpose of achieving a distinguished status in its overall operations (Baumgartner, 2009).

Organizational culture as a concept in the field of management has witnessed constant debate as to which direction is most appropriate for a firm to engage. Kotter and Heskett, (1992 Pp. 4) describes organizational culture as values that are shared by the people in a group and that tend to persist overtime even when there is alteration on group membership. They explain further that it represent the visible behavior and style of an organization which without much effort new entrant (employees) can automatically acclimatize to the laid down settings. For the purpose of our study we consider and adopt the definition postulated by Schein, (2010 pp. 17) that organizational culture is a pattern of basic assumption invented, discovered or developed by a given group as it learns to cope with its problems of external adaptation and internal integration that has worked well enough to be considered valid and

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therefore to be taught to new members as the correct way to perceive, think and relate to those problems. According to Schein, (2010, pp 1), once culture is deduced to an organizational setting, it becomes crystal clear how culture is created, embedded, evolved or misconstrued. They explain how culture provides structure and meaning to the group members and how it constrains or stabilizes.

Balmer and Wilson, (2001) explained three major perspective of culture as;

1. The integrative perspective: This represents a dimension where the cultural values are strongly shared within the organization as there is a wide consensus and consistence among the organizational members.

2. The Differentiation perspective; under this dimension, the organization is pictured as having the possibility of a differentiated subculture which may co- exist in harmony within organization.

3. The fragmented perspective is observed when the consensus and dissension of the above explained dimensions co-exist constantly in a fluctuating pattern as influenced by certain events or decisions.

Schein (2010, pp. 25-36) identifies levels or degrees of culture to which a cultural phenomenon of a group is visible to the observer as ranging from the very tangible, deeply embedded to the unconscious. He names these three levels as artifacts, espoused values and underlying assumptions respectively.

 The artifact – According to Schein (2010) artifacts represent visible organizational structures, processes and logos. These are explained as phenomenon that can be seen, felt or heard when one has access to a group of people and could be depicted by the building or language (Baumgartner, 2009). Schein, (2010) further argues that regardless of the easiness to see these artifacts it is not always easy to conclusively decipher them.

 The espoused beliefs and values - Schein, (2010, pp 28) describes espoused values as original values which demonstrate ―what ought to be‖ in the organization, they include; business strategies, goals and philosophies of the organization. He explains that espoused values and beliefs have to do with top management‘s role in ensuring its proposed beliefs and values are followed through by organizational members.

Davis & Boulet, (2016) and Baumgartner, (2009) further assert that all group

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learning always reflect an individual‘s original belief, values, their idea of what ought to be different from what is.

 The underlying assumptions - According to Schein, (2010, pp 31) the underlying assumptions comprise of beliefs, perceptions, thoughts and feelings that form the ultimate source of values and conduct within the organization. He further provides that managements deliberately emphasize certain beliefs to its employees to achieve unconscious conformity by people overtime which makes any conducts against such beliefs as “inconceivable‖. Thus this is considered as the unconscious level of organizational culture which results when a solution to a problem works well repeatedly such that it becomes common (Linnenluecke and Griffiths, 2010).

The figure below gives an overview of the levels of culture.

Figure 1: Components of organizational culture Source: Schein, 2010, pp. 26.

The above analysis of literature emphasizes the unique role of organizational culture.

Balmer and Wilson, (2001) affirm that organizational culture plays a key role for a

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successful corporate marketing process. Fregidou-Malama and Hyder, (2015) further confirm that culture plays a pivotal role, especially when decisions on how services are to be presented to a local market are in perspective. Taking it further, Linnenluecke and Griffiths, (2010) argue that for an organization to respond and integrate environmental and social issues, they have to undergo significant cultural change and transformation, emphasizing that organizational culture which harbors the underlying values and ideology of management, helps in hindering or fostering the implementation of managerial innovations. Firms with open systems culture place more emphasis on innovation for achieving ecological sustainability (Linnenluecke and Griffiths, 2010).

Junsheng et al. (2020) affirm that a firm‘s organizational culture plays an enabling role of environmental collaboration.

2.4 Green marketing

Over the past few decades the world has experienced serious environmental concerns such as air pollution, water pollution, depletion of Ozone layer and global warming (Mishra, 2014). Ariffin, et al., (2019) state that about 70% of the pollution is caused by manufacturing firms. This has triggered global commitments to preserve the environment and promote sustainable development (Junsheng, et al., (2020). There have been several initiatives to encourage global sustainable behaviors and conducts such as the United Nations Sustainable Development Goals (SDGs) agreed in 2015 include strong commitments towards that path (Pimonenko, et al. 2020).

The concept of green marketing can be traced as far back as in the 1970s. Back to that time it was referred as ecological marketing which was firstly defined in 1976 as a marketing approach that is “concerned with all marketing activities that have served to help cause environmental problems and that may serve to provide a remedy for environmental problems” (Dangelico & Vocalelli, 2017 pp. 1274). The concept was initially triggered by the concerns on the industries which caused severe environmental damages. The interest was to find technologies that could solve such environmental challenges which also triggered marketers to integrate environmental aspect into marketing theories (Baker, 2012). Over the years this subject has advanced and new related concepts such as environmental marketing and sustainable marketing are observed in the literatures (Kardos et al., 2019).

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The evolution of green marketing can be explained in three phases. The first phase was called ecological marketing which occurred from 1970s to late 1980s followed by second phase called environmental marketing up to early 1990s. The third phase was referred as sustainable marketing and was prominent from late 1990s (Mishra, 2014) and (Baker, 2012). All these concepts can be used interchangeably as they refer to the same phenomena (Kardos et al., 2019). Over the years, several scholars have attempted to provide definitions for green marketing. We provide below the definitions that we have applied in this study mainly because they include basic variables that we want to investigate in a sense that they integrate values, management actions, planning, policies, procedures and approaches that facilitate exchange of products and services in attempt to maximize both customers‘ needs and company‘s objectives while minimizing negative impacts to the environment.

“a way of understanding exchange relationships consisting of planning, implementing and controlling a policy of product, price, promotion and distribution that simultaneously satisfies customer needs and the objectives of the organization, minimising any negative effects caused to the natural environment‖ (Chamorro & Bañegil, 2006 pp. 12).

―degree of integration of environmental values within the strategic management process and marketing activities‖ (Fraj, et al., 2013 pp. 398).

“the holistic management process responsible for identifying, anticipating and satisfying the requirements of customers and society, in a profitable and sustainable way” (Papadas et al., 2019 pp. 5).

―policies, practices, and procedures that are aligned with ecological responsiveness and/or that eliminate or reduce adverse impacts on the planet and people‖ (Khan, et al., 2020 pp. 5).

All of the above definitions demonstrate the fact that green marketing involves integration of environmental values into marketing practices, management efforts, values, strategic plans, policies, processes and procedures in a manner that satisfies

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customer‘s needs and business‘s objectives while minimizing negative consequences to the environment.

The need for global sustainability has been the main driver towards environmental friendly business approaches. There is increasing tendencies for companies to adopt environmental friendly approaches through the popular mottos of reduce, reuse, and recycle (Wild and Wild, 2016). Global commitment on implementation of SDGs pushes firms to operate more sustainably (Pimonenko, et al. 2020). Fraj, et al., (2013) and Mishra, (2014) discusses this assertion by describing that there is increased sensitivity and awareness among business firms and customers to switch to non-toxic, recyclable and environmentally friendly products. Martin and Schouten, (2014) opined that as members of society becomes more interested and concerned with the natural environment, organizations have equally begun to upgrade and modify its behavior in an attempt to address society‘s new concern and run their businesses in more sustainable ways (Kardos et al., 2019).

Some other factors for green marketing have been discussed in the literature. Mahamuni

& Tambe, (2014) demonstrate how pressure from both controllable and uncontrollable factors pushes firms to adopt environmentally friendly strategies. Uncontrollable factors arise from government rules and regulation while controllable factors are driven by firm‘s economic motives and moral obligations on corporate social responsibilities.

Papadas et al., (2018) affirm that pressure from environmental stakeholder and opportunities for competitive advantage are among factors influencing adoption of green marketing. Dabija, Chebeň, & Lančarič, (2018) agrees that there is increasing pressure from customers for firms to integrate sustainability and green thinking in their business strategies. Mishra, (2014) asserts this as he mentions factors for firms to adopt green marketing to include; competitive advantage, government pressure, competitor‘s pressure, moral obligation for social responsibility and cost saving potentials. Junsheng, et al., (2020) discuss about the institutional theory and explain how institutional environment such as legal frameworks, cultural values and ethics influences firms to adopt green marketing approaches.

Green marketing can serve as a means through which the company can add value to the products and hence offer differentiated products. Also efficient use of resources and

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recycling techniques could lead to cost efficiencies thus enable a cost leadership business strategy (Leonidou, et al., 2015). Mishra, (2014) affirms that green marketing provides opportunity for firms to have competitive advantage and can help achieve cost savings. Dangelico & Vocalelli, (2017) agrees with this understanding as they mention that green marketing offers competitive advantage and can translate into increased corporate reputation. Ariffin, et al., (2019) further discusses about a growing demand for green products which provides opportunities for firms to increase their market share.

2.5 Green marketing and organizational culture

Several researchers have attempted to explore the relationship between organizational culture and green marketing but the subject is still understudied. Chen et al., (2020) describes organizational culture as a set of shared collective behavior and assumptions guiding the organization‘s perception, thinking and feelings. They explain that organizational culture includes; vision, values, beliefs, principles, norms, systems, symbols, language, assumptions and habits. Fraj, Martínez, & Matute, (2011) affirm that the extent to which the organization has incorporated environmental values within the organization can be demonstrated by formal and informal norms and values that govern firms routines such as by mission statements, policies, procedures, training, communication and knowledge sharing.

According to Pham, et al., (2018) environmental focused mission, vision, policies, top managerial support and priorities help to influence the willingness of employees to adopt eco-friendly behavior and activities. Fraj et al., (2013) affirms the fact that environmental culture as demonstrated by shared vision, mission, policies and procedural statements encourages value learning, creativity and employees support to environmental friendly strategies. Papadas, et al., (2019) further provide that green marketing orientation arises from incorporating environmental values in the organizational or corporate values. They states that environmental friendly ethics represents superior corporate culture which helps firms to improve their environmental marketing strategies. They further describe that incorporating green initiatives as part of organizational culture is important in achieving green performance.

Junsheng, et al., (2020) provides that green environmental ethics relates to regular customs that establishes moral obligations for individuals to act in a manner that is

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environmentally friendly. They describe that the ethical frameworks with environmental friendly policies and ethics need to be implemented at all levels of the organization from top to lower level as it creates responsible behavior in protecting the environment. This helps employees to be environmentally sensitive and enhance green performance as they perform their activities. Chen, et al., (2020) discusses that corporate environmental concepts, values, plans, processes, strategies and approaches enhance firms to achieve its environmental goals and innovative technologies while reducing waste and pollution.

They further linked green shared vision and environmental organizational culture with green approaches such as green absorption capacity and green product development.

In accordance to Junsheng, et al., (2020) concerns for environment by top management has been part of organizational culture in many organizations. Cultural values of top management in an organization, influences adoption of pro-environmental values and behaviors. They propose that leader‘s descriptive norms, leadership values and pro- environmental behavior has significant role in adoption of green marketing. Fraj et al., (2013) affirm that manager‘s ethical values, ideas, knowledge, personal characteristics and lifestyle influence their behavior and decision making and thus determine the extent of implementation of environmental orientation. They describe that individual commitments of managers, owners or founders influence green practices in the organization. They describe this managerial support as a catalyst for integration of green values in the organization and that, it positively correlate to employee‘s willingness to implement environmental friendly approaches. They describe that organization green culture is highly determined by the values of those managers. However, they alert that it depend on the level of influence those managers can exert. Papadas, et al., (2019) also affirm that top management plays significant roles in promoting environmental friendly policies, promotion, rewards and other eco-friendly mechanisms.

Pham, et al., (2018) provides that an organization with cultural values that supports environmental friendly practices, needs to train its employees in order to instill these values in them. This motivates employees to voluntarily participate into green initiatives and practices. Junsheng, et al., (2020) also provide that green values need to be shared with other employees as well in order to shape their behaviors towards organizational green goals and objectives. Papadas, et al., (2019) also support this view that green organizational cultural values need to be disseminated and understood by employees for

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successful implementation. They suggest that these values can be shared through trainings, knowledge sharing and other internal communications. They thus emphasize that corporate environmental values need to be understood and assimilated effectively within the organization. According to Pham, et al., (2018) green organizational climate increases employee‘s commitment encouraging them to voluntarily participate in pro- environmental behavior. Fraj et al., (2013) also discusses that dissemination of knowledge on green organizational culture across the organization allow firms to have coordinated implementation of environmental practices. Fraj, et al., (2011) also supports that strong environmental oriented culture disseminated and shared across all levels and departments‘ influences consistent routines and capabilities.

Organizational culture plays significant role in influencing green business behavior and approaches as affirmed by several scholars. Fraj, et al., (2013) concludes that employees green values supports effective implementation of eco-friendly approaches.

Leonidou, et al., (2015) asserts that management and employees values can enhance social accountability, environmental stewardship, sustainability and green marketing approaches. Papadas, et al., (2019) further provides that environmental values for both top management and employees plays important role in implementation of eco-friendly strategies. Wang, (2019) also confirms a positive relationship between organization green cultures with green performance as it instill environmental sensitivity on manager‘s values on efficient use of resources, energy consumption and minimization of waste. Junsheng et al., (2020) affirms that a firm‘s organizational culture plays an enabling role of environmental collaboration.

Generally, existing researches have based only on some components of organizational culture and green business strategy in general with little focus on implementation through the green marketing mix. There are limited studies on how organizational culture influences adoption of green marketing through the fundamentals marketing mix. Therefore, this study explores how organizational culture with environmentally friendly values (green organizational culture) influences implementation of green marketing through the green marketing mix.

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Implementation of green marketing is enhanced through restructuring of the four marketing mix; product, promotion, place and price to incorporate environmental agenda (Kardos et al., 2019). Madeira, (2019) describes that firms that promote green marketing seek to restructure the fundamental elements of the marketing mix to focus on sustainability pillars of reduce, reuse, recycle and a circular economy. We were not able to find the composed definition of green marketing mix but based on the descriptions on what it entails we can define green marketing mix as the approach to reconceptualize the fundamental marketing mix of product, price, promotion and place in a way that integrate environmental sustainability.

According to Dangelico & Vocalelli, (2017) the level of adoption of green marketing Ps depends on the sustainability orientation of the firms which can be categorized into four groups; lean green, defensive green, shade green and extreme green. Lean green adopt only green products while defensive green adopt both green products and promotion.

Shade green adopts the marketing elements except the ―place‖ while the extreme green adopts all the marketing elements. They further mention that the most adopted elements are green products and promotion.

2.6.1 Green Products

Green product advocates the need to reconsider product designs, models and production processes to create environmentally friendly products and technologies; the concept named ―design for environment‖ by Baker, (2012). Several researchers have attempted to define green products. Dangelico & Vocalelli, (2017 pp. 1271) defines green product as a product that ―strives to protect or enhance the natural environment by conserving energy and/or resources and reducing or eliminating use of toxic agents, pollution, and waste‖. They provide attributes of green products to include; reusability, reduced resources, recycling, efficiency, durability, reparability, compostability, safe shipment and health benefits. Mishra, (2014) provides that green products are products that are grown naturally with natural ingredients, eco-friendly packaging, can be reused, recycled or biodegradable and do not result into toxic materials that can pollute environment. Madeira, (2019) affirms that green product is the product that can be reused or recycled, uses effective production processes, is biodegradable, minimizes usage of natural resources and have minimum environmental impact. Ariffin et al.,

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(2019) further describes that green product is the one that is being produced with fewer resources, less energy and reduced emissions. Leonidou et al., (2015) provides that green product involves adding ecological dimension to the products through the use of recyclable packaging, biodegradable and toxic free materials. Siti Jahroh, (2019) also discusses that green product is a product that can be recycled and does not contain ingredients hazardous to the environment.

Redesigning the products requires greater coordination and communication across the organization; cross-functional units, employees and top managements (Siti Jahroh, 2019). It involves reconsideration of the product from the two dimensions, the first one being physical attributes such as durability, recyclability, reusability and efficiency. The second dimension is the processes of creation and delivering of both the core product and augmented products (Baker, 2012). Green products needs not only be valuable but also be perceived so by customers. Any gap between perceived qualities and the actual qualities of green products need to be resolved through marketing communications (Dangelico & Vocalelli, 2017).

Green packaging is part of green product (Siti Jahroh, 2019). The need for sustainable packaging has been highly demanded consistent with green products. Packaging has for long been the starting point for green marketing approaches as the piling up of non- degradable packaging materials have devastating impact to the environment. It is also considered easier and more convenient to redesign the packaging materials as it does not necessarily need the redesigning of the entire product (Baker, 2012). Green packaging involves effective and efficient use of environmental friendly materials which are; renewable, recyclable, non-toxic and non-polluting materials in a way that leaves minimum impact to the environment (Dangelico & Vocalelli, 2017). Green packaging requires effective communication to assure the customers that the reused or recycled packaging does not impact product qualities (Baker, 2012).

2.6.2 Green promotion

Green promotion includes ways firm communicate with customers on its efforts, commitments and performances with regard to environmental preservation. It communicates to customers that the products are sustainable and environmentally friendly and encourage them to purchase (Ariffin et al., 2019). It involves various forms

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such as personal selling, emails, advertisement and publicity campaigns aimed at presenting the green image for the company and its products. Personal selling can be very effective but requires the sales-force to be well knowledgeable of the products benefits so that they can explain to customers. Eco-branding is highly effective as it enables customers to associate with brands which symbolize green attributes (Baker, 2012). Madeira, (2019) also discusses that promotional messages can be conveyed through advertisement, signage, public relations or coupons which reflect green values of the product or the company. Another strategy used by firms is developing alliances and collaborations with non-profit organizations that promote environmental conservations in their publicity campaigns as these are more appealing to customer (Dangelico & Vocalelli, 2017). Sponsorship on environmental related causes is also seen to be an effective strategy (Baker, 2012). Kumar, (2019) provides that loyalty promotional programs linked to environmental cause is likely to become more effective as about 87% of people would buy from companies that promote issues which they care, including environmental issues.

Green advertisement is a big aspect of green promotion. It helps to offer descriptions of product‘s benefits and minimize information asymmetry and thus promote brand image and sustainable lifestyle (Dangelico & Vocalelli, 2017). Companies need to ensure that the products has real environmental benefits and such benefits are well described with specific data, well defined technical terms and sufficient information to help customer make informed purchase decisions (Baker, 2012). The messages need to be clear and easy to understand and should not be confusing to customers (Ariffin et al., 2019).

Dangelico & Vocalelli, (2017) also affirm that green advertisement need to provide;

detailed, complete, easy, understandable and clear information of the green product.

Mishra, (2014) asserts that green promotional messages need to be educative, interesting, entertaining and compelling to customers. Poor or incorrect communication can result into information asymmetry, ambiguity and confusion to customers (Dangelico & Vocalelli, 2017). Studies show that some companies are not trustworthy as they tend to portray green image which they do not possess, a tendency called greenwashing or green hype (Baker, 2012). Madeira, (2019) also discusses about the danger of misleading information through greenwashing. He provides that it is important that the company lives the brand image it portrays and the expectations it

The Role of Organizational Culture on Green Marketing

FACULTY OF EDUCATION AND BUSINESS STUDIES

The Role of Organizational Culture on Green Marketing

Lucia Gido Chuwa Ukpemeobong Usen Ibokette

June 2020

Table of Contents

1. INTRODUCTION

2. THEORETICAL FRAMEWORK