MSc Thesis Management Studies (MME) Implementation of ...

MScThesis

ManagementStudies(MME)

ImplementationofCorporateSustainabilityAcasestudyofForFarmers

BartGrobbenMarch3rd,2016

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MScthesisreport BartGrobben March3rd,2016

Title ImplementationofCorporateSustainability‘AcasestudyofForFarmers’

Student/author BartGrobben([email protected])

Studentno. 890610279130

University WageningenUniversity

Chairgroup MME

Specialization Management

Coursecode MST-80433

Supervisor JosBijman([email protected])

Co-reader ValentinaMateria([email protected])

Hostcompany ForFarmers

Externalsupervisor NickMajor,CorporateAffairsDirector([email protected])

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Abstract

Largecorporationshavetakenagrowinginterestinmakingtheirbusinesspracticesmoresustainableoverthepastyears.Effortsmadebycorporationstomaketheirbusinesspracticesmoresustainablearealsoknownascorporatesustainability.Theobjectiveofthisresearchistoobtainmoreinsightsinthe implementation process of a corporate sustainability strategy in a corporation. The aim is toidentify the main challenges and approaches for the implementation of a corporate sustainabilitystrategy. The research consistsof two researchmethods, a literature reviewanda case study. Theliterature review focusseson threebodiesof literature related to the implementationof corporatesustainability.Theseare ‘frameworks for implementationof corporate sustainability’, ‘managementof change’ and ‘corporate sustainability for international corporations’. The insights from theliteraturereviewareusedtocomposethetheoreticalframework.Thetheoreticalframeworkconsistsofeightpropositionsthatgivedirectiontothedatacollectionandanalysis.Thecasestudyisexecutedat the company ForFarmers bymeans of eight interviews. ForFarmers is an international companythatproducesanimalfeedandtheyarethemarketleaderintheEuropeanmarket.Theinternationalcharacterofthecompanyandthefacttheyareoperatinginthefarmfeedsectorarebothtakenintoaccount in the research. From a general perspective two challenges with regard to implementingcorporate sustainability were found: creating awareness and commitment throughout the entirecorporationandaligningtheincentivesfortheemployeesinordertomakesustainabilityacommongoal.Withregardtointernationalcompanies,itwasfoundthatmacro-environmentaldifferencespercountry can have an effect on the extent to which progress can be made on company-widesustainabilitytargets.Aplatformforbottomupcommunicationcanbeanapproachtogivesubstanceto the general sustainability strategy of the company and to communicate these macro-environmentaldifferencestothecentralmanagement.Forcorporatesustainability inthefarmfeedindustryitwasfoundthatfeedmanufacturersareoperatinginahighlycompetitivemarketwithlowmarginswhichmakesitdifficulttostartwithsustainabilityinitiativeswhichaddcoststotheproduct.Structuralcommunicationwithstakeholdersanddiscussingsustainability issueswithcompetitors ininterest-groupmeetingsareapproachesthatcanbeused.

Keywords:Corporatesustainabilitystrategy,implementation,farmfeedindustry,ForFarmers

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Acknowledgements

IwouldliketothankmyfirstsupervisorDr.JosBijmanforhisguidanceandfeedbackformythesis.Ithashelpedmeenormously.IalsowouldliketothankValentinaMateriaforreviewingmythesis.Hercommentshavebeenveryuseful.

SpecialthankstoNickMajor,directorcorporateaffairsatForFarmersandexternalsupervisorofmythesis,whogavemetheopportunitytodoacasestudyresearchatForFarmers.ThetimeandeffortsofMr.Majorhavemadeitpossibletogetintouchwithalltherespondentsinthedifferentcountries.Executingtheinterviewswasdefinitelyoneofthemostexcitingelementsofthisresearch.Moreover,I have very much enjoyed the review sessions and discussions in the LaPlace at Schiphol. I havelearnedalot.IwouldalsoliketothankJosWesterhofandthisteamwhogavemeawarmwelcomeatthecompanyandadesktoworkonattheheadquartersinLochem.

LastbutnotleastIwouldliketothankmyfamilyandfriendswhosupportedmethroughthewholeprocessofwritingmythesis.AspecialthankstoYvetteBuistwhohelpedmewithreviewingthefinaldocumentandmanagingthereferences.

BartGrobbenMarch,2016Wageningen

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Disclaimer

This report is produced by a student of Wageningen University as part of his MSc-program. Thisreport is not an official publication ofWageningen University orWageningen UR and the contenthereindoesnotrepresentanyformalpositionorrepresentationbyWageningenUniversity.

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TableofContentsAbstract..........................................................................................................................................iiAcknowledgements..................................................................................................................iiiDisclaimer....................................................................................................................................ivTableofContents.........................................................................................................................vListofTables...............................................................................................................................viListofFigures..............................................................................................................................vi

1Introduction.....................................................................................................................11.1Researchobjective..............................................................................................................11.2Backgroundinformation..................................................................................................1Conceptualizationofcorporatesustainability..............................................................................1Corporatesustainabilityinthefarm-feedindustry....................................................................41.3ResearchFramework.......................................................................................................................6

1.4Researchquestions.............................................................................................................82Methods.............................................................................................................................9

2.1Deskresearch......................................................................................................................................92.2Casestudyresearch..........................................................................................................................9

3Literaturereview........................................................................................................103.1Implementationframeworks........................................................................................10Integratedmanagementsystems....................................................................................................10Integratingcorporatesustainabilityintothedifferentmanagementlevels................11Integratingthreedimensions............................................................................................................12

3.2Changemanagement........................................................................................................13Changeenablers......................................................................................................................................13

3.3Internationalcompanies................................................................................................154Theoreticalframework.............................................................................................16

5Casestudy......................................................................................................................185.1Casedescription.................................................................................................................185.2Methodology.......................................................................................................................21Researchplan...........................................................................................................................................21Researchdesign......................................................................................................................................22Preparedatacollection........................................................................................................................23Collectdata................................................................................................................................................24Analysisofdata.......................................................................................................................................24Sharedata..................................................................................................................................................26

6Results............................................................................................................................27

7Discussion......................................................................................................................29Reflectiononfindings...........................................................................................................................29Reflectiononmethodology................................................................................................................29Limitationsandfutureresearch......................................................................................................30

8Conclusion.....................................................................................................................32Answertoresearchquestion............................................................................................................32RecommendationsforForFarmers................................................................................................34

Bibliography.....................................................................................................................34

Appendices.......................................................................................................................36AppendixA..................................................................................................................................36AppendixB..................................................................................................................................37

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ListofTables

Table1Mergers,acquisitionsandstrategiesofForFarmers.................................................................18Table2KeyperformanceindicatorsofthesustainabilitystrategyofForFarmers(TaskForceSustainabilityForFarmers,2015)............................................................................................................20Table3Respondentscasestudyinterviews...........................................................................................23

ListofFigures

Figure1Globaldemandforlivestockproteins,(FAO,2015b).................................................................4Figure2Chronologicalstepsforimplementingcorporatesustainability(Baumgartner,2014)............12Figure3Stepsofacasestudy(Yin,2013)..............................................................................................21

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1Introduction

Largecorporationshavetakenagrowinginterestinmakingtheirbusinesspracticesmoresustainableoverthepastyears.Effortsmadebycorporationstomaketheirbusinesspracticesmoresustainablearealsoknownascorporatesustainability (CS). This research has a particular interest in the implementation of corporate sustainability by(large) internationalcorporations inthefarmfeedsector.CS isnotauniversalconceptandtherearenowrittenmanualsforcorporationswhichcanbefollowedfor implementingCS.Onthecontrary, foreverycorporationCSmight have a differentmeaning, the implementation of CSmight be based on different values and a differentapproachmightbeneededfortheimplementationofCSatdifferentcorporations.

Duetothese issues, threemainquestionscanbedistinguishedonwhichresearchershavefocusedtheirstudiesovertime.Thesequestionsare:What isCS?,Why implementCS?andHowto implementCS?.Asstatedbefore,thereisnouniversalanswertothesequestions.Nevertheless,researchershaveattemptedtofindgeneralanswerstothesequestionsandliteratureontheseissuesisstillevolving.Inthesection1.2Backgroundinformation,abriefoverviewisgivenaboutcommonviewsincurrentliteraturethatgiveananswertothequestionsWhatisCS?andWhyimplementCS?

The‘HowtoimplementCS?’questionisstilltheleastexploredone.Literatureonthistopicisexpandingrapidlyinterms of: CS implementation strategies, frameworks for integrating CS and management tools for theimplementationofCS.Mostoftheliteratureinthisdomaintriestogiveananswertothequestion:HowtoreallyimplementCSintotheDNAofthecorporation.Auniversalanswertothisquestionhoweverdoesnotexist;CSisnot a universal concept and the implementation of CS is different per country, per sector and per corporation(Baumgartner,2014).Abouttheimplementationofcorporatesustainabilityforcompaniesthathavetodealwithdifferent contextual dimensions (country, sector and corporation) still little is known. This research thereforefocuses on this gap in literature in an attempt to obtain more insight in the challenges with regard to theimplementationprocessofCSinamulti-dimensionalcontext.

1.1ResearchobjectiveTheobjectiveofthisresearchistoobtainmoreinsightsintheimplementationprocessofcorporatesustainabilityinto internationalcorporations in the farmfeedsector.The farmfeedsector, ischosenasasubjectof researchbecausetheyarearelativeunknownplayerinthesupplychainforsocietycomparedtoretailers,processorsandfarmers.Nevertheless,bypurchasingrawmaterials,producingfeedcompoundforfarmersandprovidingfarmerswith expertise, feed manufacturers have a key role in the supply chain. This makes the farm feed sector aninteresting domain of research with regard to sustainability. The research particularly focuses on theimplementation of corporate sustainability within the corporation. In order to reach the research objective,insightsfrombothliteratureandfieldresearcharecombined.Theliteratureresearchisthetheoreticalfoundationoftheresearch.Existingframeworksandtheoriesforimplementingcorporatesustainabilityarereviewedtofindchallengesandpossiblesolutionsfortheimplementationprocess.TheempiricalpartoftheresearchconsistsofacasestudyconductedatForFarmers,aninternationalcorporationproducingfarmfeed.ThedifferentdivisionsofthecompanyinTheNetherlands,Belgium,TheUnitedKingdomandGermanywillbetreatedassub-casesinthisresearch. Finally, the ultimate goal of this research is to provide insights that can be used formanaging thesespecificchallengesattheprocessofimplementingcorporatesustainabilitypolicies,combininginsightsfrombothliteratureandfieldresearch.

1.2BackgroundinformationAs stated in the introduction, this study focusses on how corporate sustainability can be implemented ininternationalcorporationsinthefarmfeedindustry.Beforethisquestioncanbeanswered,itisimportanttoknowwhat ismeantwith the concept of corporate sustainability andwhat the relations are between the farm feedsectorandcorporatesustainability.Inthissectionbothissuesarediscussed.

ConceptualizationofcorporatesustainabilityCorporate sustainability is a complex concept because it has a different meaning to different people andcorporations. Moreover, the concept of corporate sustainability has evolved over time and has taken severalforms. Thishasmade the challenge to findauniversal definitionof corporate sustainability evenbigger. In this

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chaptertheconceptofcorporatesustainabilityisdiscussedintwoways.First,theevolutionofthetermsusedforcorporatesustainabilityarediscussedbriefly.Subsequentlytheunderlyingtheoriesthatarerelatedtocorporatesustainabilityarediscussed.Theaimofthischapteristofindadefinitionforcorporatesustainabilitythatcanbeusedastheoreticalfoundationinthisresearch.Moreover,challengesthatcorporationsmightfacewithregardtotheconceptualizationofcorporatesustainabilityaredescribed.

EvolutionoftermsforcorporatesustainabilityCorporate Sustainability;As far as literature about CS goes back in history, it has been a struggle to come to auniversaldefinitionofcorporatesustainability.Eberstadt (1973)claims thataspectsofCScanbe tracedback toancient Greece (Wilson, 2003). Ever since, sustainability at the corporate level has taken many forms and isdefinedindifferentways(Rahdari&Rostamy,2015).Thetermcorporatesustainabilitycanbeseenasacollectivenoun foura largevarietyof sustainabilityapproacheson thecorporate level.Somewidelyusedapproachesarediscussedinthefollowingparagraphofthissectioninordertofindadefinitionofcorporatesustainabilitythatcanbeusedinthisresearch.SustainableDevelopment;ManyauthorsconsiderthedefinitioninthebookOurcommonfuturepublishedbytheWorld Commission for Environmental Development (Brundtland et al., 1987), as the starting point where themodernconceptofsustainabilityatcorporatelevelisbeingpopularized.Thisbook,alsoknownastheBrundtlandreport,usestheterm‘sustainabledevelopment’(SD)andisconceptualizedas:“developmentwhichmeetstheneedsofcurrentgenerationswithoutcompromisingtheabilityoffuturegenerationstomeettheirownneeds".Inthisdefinitionthereisastrongemphasisontheenvironmentalaspect.

TripleBottomLine; This approach, introducedbyElkington (1997), hashada large impacton theapproach towardscorporatesustainability.Ithasbroadenedthescopeofcorporatesustainabilityfromtheemphasisontheenvironmenttowardsabroaderview,whichincludestheeconomicandsocialimpactofacompany.Inotherwords,accordingtotheTripleBottomLine,a company should take intoaccount its impacton threedomains: thesocial,environmentaland economic impact. This approach has become the basis of another common and closely related approach,which is known as People Planet Profit (Elkington, 1997). Corporate sustainability is widely conceptualizedaccordingtotheTripleBottomLineapproach(Svenssonetal.,2011),andwillalsobeusedinthisresearch.

CorporateSocialResponsibility;Dahlsrud(2008)analyzedhowCorporateSocialResponsibility (CSR) isdefined inliterature.Oneofhisconclusionsisthatcorporatesustainabilityandcorporatesocialresponsibilityareoftenusedinterchangeably. Nowadays the term ‘Corporate Social Responsibility’ seems to be usedmore than ‘CorporateSustainability’. Dahlsrud (2008) follows the line of reasoning of (Linnanen&Panapanaan, 2002) that theword‘Social’inCSRisconfusingbecauseitseemstoputtheemphasisonthesocialdimensionoftheTripleBottomLine,while there is also economic and environmental sustainability. Following this line of reasoning, using the term‘corporate sustainability’would be in favor because it reduces confusion (Dahlsrud, 2008). For this reason, thisresearchwillalsomakeuseoftheterm:‘corporatesustainability’.

ContributionofdifferentconceptstocorporatesustainabilityAccording toWilson (2003) the term corporate sustainability finds its roots in a combination of four separatetheoriesthattogether formthepillarsundercorporatesustainability (Wilson,2003).This isadifferent fromtheprevioussectionbecauseinthiscasethedifferentconceptsarenotseenasseparateconcepts,buteachcontributeone overall concept, which is corporate sustainability. Because this viewmight help to understand the overallcontentofcorporatesustainability,thefourpillarsofWilson(2003)aredescribedinthefollowingparagraph.SustainableDevelopment:ThisconceptcontributestotheCSintermsofsettingtheboundariesofthesubjectandgivingadescriptionofthecommonsocietalgoal(Wilson,2003).TheTripleBottomLineofElkington(1997)canbelinkedtothisconceptandcanbeusedasatooltosettheboundariesofCSandgiveadescriptionofthegoalsinterms of the social, economic and environmental impact. Therefore, sustainable development should not beinterpreted as sustainability that focuses on the environmental aspect but also includes the social andenvironmentaldimension.Thiscanbeconfusingbecause,asstatedearlier,sustainabledevelopmentisinterpretedindifferentwaysinscientificliterature.

Corporate Social Responsibility: This concept contributes to CS by providing the ethical arguments as to whycorporationsshouldworktowardssustainablegoals(Wilson,2003).Thiscaneitherbeargumentsthatrefertothecorporationasawholeasargumentsforindividualemployees/managersofacompanytoactinasustainableway.This research focuses on the ethical arguments of individuals because in the implementation of corporate

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sustainability a company has already decided to apply CS. The values of individual managers and employeestowardsCSareessentialforthesuccess its implementation(Epstein&Buhovac,2014).TheframeworkprovidedbyVanMarrewijkandWerre(2003)canhelptoidentifythevaluesofacorporationorindividualandthejoiningambition level for implementing corporate sustainability. According to Van Marrewijk and Werre (2003), themotivationforimplementingcorporatesustainabilitycanbebasedonsixprinciples:

1. Pre-CS; At this level there is no interest and ambition for CS. CSmight be initiated onlywhen forces fromoutsideenforcemoresustainablebusinesspractises.

2. Compliance-drivenCS;Thislevelconsistsofprovidingwelfaretosociety,withinthelimitsofregulationsoftherightfulauthorities.

3. Profit-driven CS; At this level social, economic and environmental aspects of CS are implemented providedthatitcontributestothefinancialbottomline.

4. CaringCS;Atthislevelsocial,economicandenvironmentalaspectsofCSareimplementedbecausetheyareimportantinthemselves.CSinitiativesgobeyondlegalcomplianceandbeyondprofitconsiderations.

5. SynergisticCS;Consistsoffunctionalsolutionscreatingeconomic,socialandenvironmentalvalueincorporateperformanceinasynergisticapproachwithallrelevantstakeholders.

6. HolisticCS;CSisfullyintegratedandembeddedineveryaspectofthecorporation,aimedatcontributingtothequalityandcontinuationoflifeofeverybeingandentity,nowandinthefuture.(VanMarrewijk&Werre,2003)

Stakeholder Theory:Wilson (2003) contributes to the concept of CS by describing the business arguments forapplying CS. Therefore, the stakeholder theory can be seen as an element of strategic management. ThestakeholdertheorywasfirstpopularizedbyFreeman(1984)andincludesbothinternalandexternalstakeholdersof a corporation. Although there is no strict demarcation between internal and external stakeholder, theemployeesofacompanyaremostlyseenastheinternalstakeholders.Externalstakeholdersareabroaddefinitionand can include amongst others: customers, NGO’s, people living in the neighborhood and suppliers. BusinessargumentsforCSwithregardto internalstakeholderscan includeamongstothers:higheremployeemotivation,cost savings and improved competitiveness (Weber, 2008). For internal stakeholders arguments for applyingCSmightinclude:betterimage,strongerbrand,accesstonewmarkets,competitiveadvantage(Wilson,2003).

CorporateAccountabilityTheory:AccordingtoWilson(2003),corporateaccountabilitytheorycontributestoCSbyexplaining the corporate sustainability practices of the company. Accountability differentiates itself fromresponsibilitybyexplaininghowCSisdoneinsteadofwhyCSshouldbedone(Wilson,2003).Fortheconventionalcompany that is solely focused on profit maximization this means a shift from financial reporting towardsintegratedreporting(Epstein&Buhovac,2014).Integratedreportingmeansthatreportspublishedbycompaniesdonotonlyreportontheirdecisionanditsfinancialconsequences,butalsoincludethesocialandenvironmentalconsequences.

ConcludingparagraphInlinewiththeworkofDahlsrud(2008),thisresearchwillconsiderCSasasocialconstruct.Thismeansthatitisnotpossible todevelopanunbiaseddefinitionofCSbecause it consistsofdifferentdimensions thatarevalueddifferentlybydifferentpeople.Moreover,itissubjecttochangewhenthecultureorcontextchangesovertime.Bydefiningcorporatesustainabilityinthisresearch,theselimitationshavetobetakenintoaccount.

In current literature ‘corporate sustainability’ isoftenused interchangeablywith ‘corporate social sustainability’and ‘sustainable development’. In this study ‘corporate sustainability’ will be used as the terminology forsustainablebusinesspracticesofcorporations.Moreover,theconceptualizationofcorporatesustainabilityinthisstudyisbasedontwowidelyuseddefinitionsincurrentliterature.First,thedefinitionofBrundtlandetal.(1987)isusedtodefinethegoalofsustainability,namely:developmentwhichmeetstheneedsofcurrentgenerationswithoutcompromisingtheabilityoffuturegenerationstomeettheirownneeds.Second,theconceptoftheTripleBottomLine(Elkington, 1997), is used to define how corporations can approach this goal, namely: by taking into account theeconomic,socialandenvironmentalimpactofthecorporations’activities(Elkington,1997).

Withregardtotheimplementationofcorporatesustainabilitywithinacorporation,particularlyfourconceptsrelatedtocorporatesustainabilityareimportant:theboundariesforsettingthesustainabilitygoals,theinternal(moral)valuesinthecorporation,thebusinessargumentsforcorporatesustainabilityandsustainabilityreporting.

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Corporatesustainabilityinthefarm-feedindustryThis section describes the sustainability issues related to the farm feed sector from different perspectives. Bydescribingtheseissues,differentexamplesaregivenofwhatisseenassustainabilityinthisspecificsector.

SustainabilityinthefarmfeedsectoraccordingtotheFoodandAgricultureOrganizationFarm feed producers convert raw materials into animal feed for the livestock sector. In 2015 the global feedproduction is approaching the one billion tons (IFIF, 2015a). Feed is produced for different types of livestock,includingruminant,swine,poultryandfish.AccordingtotheFoodandAgricultureOrganization(FAO),thedemandfor livestockproducts isexpectedto increasewith60percentby2050duetotheexpectedgrowthoftheworldpopulation(FAO,2015a).Infigure1theexpectedgrowthratesforproteinsforlivestockproductionareshown.

Figure1Globaldemandforlivestockproteins,(FAO,2015b)

Asaresultofthegrowingdemandforlivestockproteins,thedemandforanimalfeedisexpectedtoincreaseaccordingly.Thisexpectedincreaseinproductionofanimalfeedcouldleadtomajorsocial,environmentalandeconomicimpactsonglobalsociety(FAO,2015a).TheFAOdoesnotpresentaclearactionplanforcorporatesustainabilitypractices specifically for the farm feed sector.However, somespecific sustainability issuesandapproachesarementioned.Forexample it isstatedthat theglobal livestocksectorcontributes to theglobalhuman induced Green House Gas (GHG) emission, with 14,5% (FAO, 2015a). According to the FAO (FAO,2015a),approachesformoresustainableproductionofanimalfeedshouldfocusonthefollowingaspects:

• Efficiencyintheuseofresources• Conserve,protectandenhancenaturalresources• Protectandimproverurallivelihoods,equityandsocialwell-being

SustainabilityaccordingtothefarmfeedsectoronagloballevelOnagloballevel,farmfeedindustryformedtheInternationalFeedIndustryFederation(IFIF),whichisaninterestgroup for animal feed manufacturers worldwide. The IFIF acknowledges the need for sustainable farm feedproductionbymakingsustainabilityoneofthreestrategicpillarsoftheIFIF’svisionandmission(IFIF,2015d).Like

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the FAO, the IFIF does not have a clear action plan for sustainable farm feed production. Instead the IFIF isinvolvedindifferentprojectsthatfocusonsustainabilityissuesinthefarmfeedindustry.Theseissuesinclude:

• Productionofsafe,efficientandaffordablefood• ReductionofGHGemissionforlivestockkeeping

Accordingtothe IFIF, innovationandefficiency inanimal feedproduction isanessentialpartofthesolutionformakingthelivestockproductionchainmoresustainable(IFIF,2015b).TheFAOandIFIFcooperateinachievingthisgoalintermsofprovidingexpertiseandparticipatethe‘GuidingGroup’ofFAO’sagendaforsustainablelivestock(IFIF,2015c).

FarmfeedsectoronaEuropeanlevelOn a European level the farm feed industry has formed the European FeedManufactures’ Federation (FEFAC)whichisaninterestgroupforanimalfeedmanufacturesinEurope.TheFEFACisalsoamemberoftheIFIF.PrimarygoalsofFEFACare:securingfoodsafetyandaccesstorawmaterials(FEFAC,2015).Sustainabilityismentionedinthemission statement in termsof ‘encourage sustainability related research anddevelopment’ and ‘encourageprecompetitive innovative projects that improve the sustainability of resource efficient livestock productionsystems(FEFAC,2015).

FarmfeedsectoronaNational(Dutch)levelOnanationallevel,thefarmfeedindustryhasformedthe‘NederlandsVerenigingDiervoerderindustrie’(Nevedi).NevediisamemberofFEFACandistheDutchinterestgroupforanimalfeedmanufacturers.Inthecorporations’missionandvisionstatement,sustainabilityisnotexplicitlymentioned.Issuesthatarementionedare:efficiency,transparency, expertise, being aware of the local environment and securing the image of the sector (NEVEDI,2015). Although sustainability is notmentioned in themission en vision statement of Nevedi, the corporationshowsthatsustainabilityisontheagendabypublishingasocialaccountabilityreport(NEVEDI,2012).Thisreportelaborates on the corporations’ strategy for sustainable business practices. Nevedi distinguishes for pillars:sustainable rawmaterials, sustainableproduction, safeandhealthy foodandgoodemployerpractices (NEVEDI,2012).ThelatestachievementsofNevediwithregardtocorporatesustainabilityisthetransitiontowardsa100%procurement of ‘responsible soy’ by all the Nevedi members in 2015. Nevedi promotes an approach that issupportedbythewholesectorandpromotescooperationwithkeyplayersinthechain.

ConcludingparagraphAccording to the FAO, themain issues for sustainability in the livestock sector are reducingGHG emission andprotect and secure natural resources. From a social point of view, the FAOmentions the protection of socialwellbeing inruralareas.Animalfeedmanufacturesshowcommitmenttocorporatesustainability issuesthroughtheFIFI,FEFACandNevedi.Ongloballevel,thereisattentionforallthreedimensionsofcorporatesustainability(environmental,economic,social).

- Attentionforsocialwellbeingatruralareas- ReduceGHGemission- Sustainableuseofresources- Safeandsufficientandaffordablefood

Onthenational leveltheemphasisofsustainability isontheenvironmentaldimension.GHGemissionreductionandefficientuseofrawmaterialshavepriority.

Inshort, itcanbeconcludedthatthefeedmanufacturersgloballyhavetodealwithserioussustainabilityissues.Accordingtothemissionandvisionoftheinterestgroups,theseissueshavebeennotified,especiallyonagloballevel.GlobaluniversalgoalsarereductionofGHGemissionandefficientuseofresourcesandproductionofsafeanimalfeed.

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1.3ResearchFrameworkThissectionshowsavisualizationoftheresearchframework.Thisframeworkisaschematicrepresentationofthedifferentstepsoftheresearchthathavebeenconducted,inachronologicorder(DeVaus,2001).Theresearchframeworkisfollowedbyabriefexplanationofthedifferentsteps.

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Literaturereview

Theliteraturereviewfocusesontheimplementationofcorporatesustainability.Threebodiesofliteraturearereviewed:literaturerelatedtointegrationframeworksforacorporatesustainabilitystrategy,managementofchangeandliteraturerelatedtotheimplementationofacorporatesustainabilityininternationalcorporations

TheoreticalFramework

Thetheoreticalframeworkisbasedontheoutcomeoftheliteraturereview.Eightpropositionsaredevelopedthat describe the main challenges and approaches with regard to the implementation of a corporatesustainabilitystrategy.Theseissuesformthebasisfortheinterviewquestionsofthecasestudy.

Datacollection

Thedata collection consists of eight face-to-face interviewswith ChiefOperatingOfficers andBusinessUnitDirectorsof the fourkeycountriesofForFarmers (at leastonepercountry).The interviewshavea lengthofapproximately45minutesandwillberecordediftherespondentagrees.Theinterviewsareusedtocheckthepropositions from the theoretical framework and to detect unexplored challenges related to theimplementationofcorporatesustainability.

Results

Therecordedinterviewsareconvertedintotranscripts.Subsequentlythetranscriptsareanalyzedbymeansofa software package called Atlas IT. The most relevant answers from the interviews that relate to thepropositionaregivenintheresultschapter.

Discussion

Inthediscussiontheresultsarecomparedtoliterature.Differencesandsimilaritiesarediscussed.

Conclusion

Finally,theconclusionwillgiveananswertocentralresearchquestionandthesub-questionsofthisthesisproject.Givingtheseanswerscanbeconsideredastheultimategoaloftheresearch.Allthestepsfromtheresearchframeworkcontributetoansweringthecentralresearchquestion.

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1.4ResearchquestionsThefollowingresearchquestionscanbederivedfromtheresearchframework.

Centralresearchquestion:

Howcancorporatesustainabilitybeimplementedintodailybusinesspracticesoftransnationalcorporationsinthefarmfeedsector,andwhatarethemainchallenges?

Theanswertothecentralresearchquestionisbasedonthefindingsoffoursub-research-questions.

Sub-question1

a. Whatarechallengesfortheimplementationofcorporatesustainabilitythroughoutancorporation?b. Howcancorporationsdealwiththesechallenges?

Sub-question2

a. Whatarechallengesfortheimplementationofcorporatesustainabilityspecificallyforinternationalcorporations?

b. Howcancorporationsdealwiththesechallenges?

Sub-question3

a.WhatchallengesfortheimplementationofcorporatesustainabilitydoesForFarmersexperience?

b.HowdoesForFarmersdealwiththeseimplementationchallenges?

Thebodyofliteratureoncorporatesustainabilityinthefarmfeedsectorissmall.Possiblybecausethetopicisvery specific. Therefore, the information needed to answer this question is mainly collected from the casestudyinthisresearch.

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2MethodsTworesearchstrategiesareusedinthisstudy.Thesestrategiesare:deskresearchandcasestudyresearch.

2.1DeskresearchDesk research, also known as secondary research, makes use of existing data sources. It includes analyzing,summarizing,collationandsynthesizingexistingresearch(Crouch&Housden,2012).Deskresearchisusedatthefirstandlastphaseofthisresearchproject.Atthefirstphaseoftheresearch,existingacademicresearchrelatedtosub-research-questiononeandtwoisreviewed.Theliteraturereviewinthisstudyfocussesonthreebodiesofliteraturerelatedtotheimplementationofcorporatesustainability.Theseare‘frameworksforimplementationof corporate sustainability’, ‘management of change’ and ‘corporate sustainability for internationalcorporations’. The insights from the literature review are used to compose the framework. The theoreticalframeworkcanbeseenasthetheoreticalfoundationoftheresearchandgivesdirectiontothedatacollectionand analysis. Composing the theoretical framework is also part of the desk research. The last phase of thisresearch consist of analyzing the results from the case study and drawing conclusions. This part can also beconsidereddeskresearch.

2.2CasestudyresearchThesecondphaseof theresearchprojectconsistsofacasestudy.Acasestudy isa typeof researchdesign.Other types of research design are: experiments, longitudinal design and cross-sectional design (De Vaus,2001).Acasestudydesigncanbeappliedwhentheresearchersareinterestedindetailedinformationofonesubjectof researchcollectedatonepointof time.This is thepreferred researchdesignwhenoneparticularcasemeets the requirementsand finds itself in the right circumstances (DeVaus,2001).With regard to thisresearchproject, thecompanyofForFarmershasbeenselectedas thesubjectof research.ForFarmers isaninternational company that produces farm feed. Moreover, the corporation is in the middle of theimplementationofacorporatesustainabilitystrategyandiswillingtoshareinformation.ThesecircumstancesmakeForFarmersa subjectof research thatmatcheswith the focusof the research.The introductionof thecaseandthecasestudydesigncanbefoundinchapter5Casestudy.

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3LiteraturereviewIn this chapter three bodies of literature are reviewed that relate to the implementation of corporatesustainability into a corporation. The first section of this chapter will review three different managementperspectives that can be used to integrate corporate sustainability. In the second section, literature aboutmanagement of corporate change is reviewed, since the changes needed for implementing corporatesustainability throughout the corporationhave tobemanagedas goodaspossible. The third sectionof thischapterwill look intothesustainabilitymanagementof internationalcorporations.Thechapterconcludesbysummarizingthechallengesandpossiblesolutionsforimplementingcorporatesustainability.

3.1ImplementationframeworksIn the current literature the implementation of corporate sustainability into daily business practices isapproachedindifferentways.Thisparagraphdiscussesthreeapproachesthatfocusonimplementingcorporatesustainabilityinacorporation,eachfromadifferentperspective.Thefirstapproachfocussesontheintegrationof different management systems into one integrated management system for corporate sustainability. Thesecond approach focusses on the integration of the corporate sustainability strategy into the differentmanagement levels of the corporation. The third approach discusses the integration of the three dimensions(economic,socialandenvironmental)ofcorporatesustainability.Thethreemanagementperspectivesthatarereviewedshowasimilarityinthefactthattheyalladvocateanintegratedapproachtowardstheimplementationof corporate sustainability. An integrated approach has the aim to implement corporate sustainabilitythroughout the whole corporation, including its different management levels and its different divisions. Bydiscussingthedifferentperspectives, thisparagraphtries tocapturethemost important issuesandchallengesforcorporationstoimplementcorporatesustainabilityinanintegratedmanner.

IntegratedmanagementsystemsCorporate sustainability is a dynamic concept because the content changes over time due to changingenvironmentalfactors,changeofkeystakeholdersandchangeofproductionprocesses.Inordertoidentifythechanging sustainability issues, several management systems have emerged to identify the corporations keystakeholder requirements. Examplesof sustainability issues thatareoftenmanaged separatelyarehealthandsafety, environment and quality. Rocha, Searcy, and Karapetrovic (2007) provide a framework that helps tointegratesuchseparatemanagementsystemsbymeansofanIntegratedManagementSystem(IMS)approach.AnIMScanbedefinedasasetofinterconnectedprocessesthatsharethesamehuman,material,information,infrastructural and financial resources in order to achieve a composite set of goals (Rocha et al.,2007)(Karapetrovic, 2003). Integration of management systems can contribute to a better understanding byemployeesoftheapproachofthesustainability issues,reduceredundanciesand improveusabilityofseparatemanagementsystemsforcorporatesustainability.AnotherimportantfeatureofanIMSisthedevelopmentofaninfrastructureforcontinuousimprovementofvariousdimensionsofstrategyandoperations(Rochaetal.,2007).AccordingtoSvenssonetal.(2011)anextrafeatureofIMSisthesystematizationofstakeholderdemands.

AccordingtoRochaetal.(2007)anIMSisbuiltonthefivekeyelementsinacorporation:

1) Stakeholders; The internal and external stakeholders set the standards and requirements for thecorporationandprovideinputforsustainabilitymeasures

2) Resources; Resources have to be managed according to the requirements of the stakeholders.Resourcesareverydiverse,includingrawmaterials,labourandsocialcontracts.

3) Leadership;Topmanagementhastoprovidethenecessaryconditionsanddirectionstoachievesuccessandcontinuousimprovement.

4) Processes;Processesshouldbeinplacetotransformresourcesintooutcomesthatmatchstakeholders’requirements.

5) Values;Thevaluesguideandboundthecorporation’soperationsbythepresentpolicies,ethicalvaluesandprinciples.Thesevalueshavetobetakenintoaccountwhenthecorporatesustainabilitystrategyisdeveloped.

Byre-examiningtheperspectivesonall fivekeyelementsfromtheviewpointofcorporatesustainability,stepscan be made in terms of integration of management systems and redundancies can be reduced. However,

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internal discussions and debates are the only way to create acceptance and commitment that is needed tointegratesustainabilityprinciplesintothedailybusinessinfrastructureofthecorporation.

ApartfromlookingatthefiveindividualelementsoftheIMS,Rochaetal.(2007)alsoemphasizestheimportanceoftheexaminationoftheentireIMS,alsocalledthemacro-perspective.Thisperspectiveisparticularlyimportantfortworeasons.Firstforthemanagementoftrade-offsthathavetobemadebetweentheseparatedimensionsof sustainability. Secondly to address the horizontal and vertical integration of the IMS throughout thecorporation(Rochaetal.,2007).Forsuccessful implementationthecorporation’svisionandstrategy,thegoalsandobjectivesshouldbeintegratedatalllevelsofthecorporation(Sawyer,1992).Thehorizontallevelrelatestothedifferentchainsanddepartmentsofthecorporation.Thevertical levelreferstothedifferentmanagementlevels. The two elements that Rocha et al. (2007) call ‘macro-management’ are reviewed in the followingparagraphs.

IntegratingcorporatesustainabilityintothedifferentmanagementlevelsOnewayoflookingattheimplementationofcorporatesustainabilityistofocusontheintegrationofcorporatesustainability into all management levels of the corporation. For successful implementation of corporatesustainability,itcannotonlybethetopmanagementthatiscommittedtosustainability(Porter,1996;Rochaetal., 2007). Baumgartner (2014) developed a conceptual framework for integrating sustainability aspects intodifferentmanagement levels of an individual company. This framework distinguishes between three differentmanagementlevels:thenormativelevel,thestrategiclevelandtheoperationallevel.

According to Bleicher (1996) normative management includes three elements: corporate vision, corporategovernanceandcorporateculture.Thetaskofthenormative level istoensurethe legitimacyofthecorporateactivitiesattheinternalstakeholders,theexternalstakeholdersandthesociety.Onthenormativelevel,ithastobeclarifiedtowhichextentcorporatesustainabilityareanelementofthecorporatevision,missionstatementandcorporateculture(Baumgartner,2009,2014).

Strategicmanagement is theprocessofplanning, implementingandevaluating companywidedecision-makingwhichenablescompaniestoreachtheirgoals(Baumgartner,2014;David,2001).

Thethirdmanagementlevelistheoperationallevel.Atthislevelallthenormativeandstrategicgoalshavetobeimplementedintoallthebusinessactivities.Baumgartner(2014)distinquishes:

• Logistics and material management; in the form of e.g. use of recycled materials, social andenvironmentalaspectswithinthesupplychain.

• Production; in the form of e.g. zero emmission, cleaner production, health and safety, productionplanning,reducewaste.

• Maintenance; In the form of e.g. minimizing product losses, sustainability oriented maintenancemanagement.

• Marketing;Integrationofsustainabilityinmarketingstrategy• CommunicationandPR;Intheformofe.g.creditability,transparency,productdeclaration,labels,public

relations,sustainabilityreporting.• Humanresourcemanagement;e.g.competencedevelopmentandtraining.

For successful implementationofcorporatesustainability inacorporation, thenormative level isnormally thestartingpoint.A requirement is thewillingnessof the topmanagement to implement corporate sustainability(Baumgartner,2014;Stone,2006).Subsequentlythecompanycanstartwiththestrategicpositioningregardingcorporatesustainability.Thestrategicpositionofthecompanyisbasedonthecontextualfactorsofthecompanyand can be defensive, reactive, proactive or active (Baumgartner, 2014). On the operational level thesustainabilityrelatedactivitiesareimplementedintotheactivitiesofthecompany.

Animportantaspectistoenablefeedbackandlearningloopsbetweenthedifferentmanagementlevels.InFigure2,thedifferentimplementationstepsandlearningloopsaccordingtoBaumgartnerareshown.

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Figure2Chronologicalstepsforimplementingcorporatesustainability(Baumgartner,2014)

Svenssonetal. (2011)emphasizethe importanceofcontinuous improvementduetothedynamiccharacterofcorporate sustainability. Therefore the development of competences and institutional knowledge is crucial(Svenssonetal.,2011).

IntegratingthreedimensionsHahn, Pinkse, Preuss, and Figge (2014) introduce an integrated framework for corporate sustainability,whichfocuses specifically on tensions between the three dimensions (economic, social and environmental) ofcorporate sustainability. Corporate sustainability here is also defined according to the Triple Bottom Line-concept,whichincludestheeconomic,socialandenvironmentalimpactofthecorporation.However,Hahnetal.(2014) state that much of the literature on corporate sustainability has used an instrumental logic whereeconomicsustainabilityisprioritizedoversocialandenvironmentalsustainability.AccordingtoHahnetal.(2014)this dismisses the situations where financial tensions cannot be aligned with social and environmentalsustainability goals. Hahn et al. (2014) analyze the tensions between the social, environmental and economicdimensionsofcorporatesustainability.Theseincludetensionsthatstemfromsustainabilityatindividualandfirmlevel.Fourmaintensionswithregardtocorporatesustainabilityareidentified(Hahnetal.,2014):

• Tensionsbetweenindividualandcorporatesustainabilityagendas• Tensionsbetweentheshorttermorientationtowardsacorporation’sfinancialobjectivesandtheneed

forlongtermorientationforenvironmentalprotectionandsocialequity• Tension between demands for fundamentally changed products and business models for more

sustainability and well institutionalized practices so that change comes at the risk of institutionaldisapprovalandlossoflegitimacy.

• Tensionsbetweenefficiencyofcorporationsandlossofdiversityandflexibility

Hahn et al. (2014) promote an integrative view on corporate sustainability, which leaves space for tensionsbetween the three dimensions. The integrative view argues that firms need to pursue different sustainability

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aspects inallthreedimensionssimultaneouslyeveniftheyseemcontradictive.Hahnetal. (2014)makeuseofacceptancestrategiesandsolutionsstrategiestodealwiththetensionsincorporatesustainability.

3.2ChangemanagementChange isanongoingprocess in corporationsand isalwayspresent (Burnes,2004). Implementingcorporatesustainabilitythroughoutacorporationcanbeamajorchangeforacorporationandmayresultinchangesinacorporation, both at the strategic and operational level. Management of such change can contribute to asuccessful implementationofcorporatesustainabilitythroughoutthecorporation(Benn,Dunphy,&Griffiths,2014). Brightman andMoran (2001) define changemanagement as: ‘the process of continually renewing acorporation’s direction, structure and capabilities to serve the ever changing need of external and internalstakeholders’. This section discusses the factors that seem particularly important for successful changemanagement.

ChangeenablersWhat are the driving forces of corporate change? The answer to this question is discussed in literature inmainlytwoways,driversthatmakecorporationschangeanddriversthatenablecorporationstochange.Bennet al. (2014) focus on drivers that make an corporation change particularly for implementing corporatesustainability.Thesedriversareglobalization,evolvingregulation,newtechnologiesandbusinessmodelsanddynamicnaturalenvironment. Intheimplementationphase,however,morerelevantaredriversthatenablechange.Kemelgor,Johnson,andSrinivasan(2000)analyzeddriversthatenableacorporationtochange.Accordingtotheirworkthefollowingsixdriversarefound:createsupport,leadership,clearnessofgoalsandprocesses,communication,trainingandindividualcompetencies,alignmentofcorporation’sstructureandprocesses.

CreatesupportamonginternalstakeholdersItiscrucialthatthevisionforchangeisacceptedbyemployeesandotherkeystakeholders.Thisclaimiswidelysupported in literature includingtheworkofEpsteinandBuhovac (2014),Bennetal. (2014),Svenssonetal.(2011) and Rocha et al. (2007). Firms that build sustainability into their culture and business practices arebetterabletointegratesustainabilitymessagingintomainstreamcommunications.Buildingsustainabilityintoa corporation’s culturewill take time. Specifically for corporate sustainability, Benn et al. (2014) identify sixdifferentstagesfortheimplementationofcorporatesustainability.Thesestagesare:

1. rejection2. non-responsiveness3. compliance4. efficiency5. strategicproactivity6. thesustainingcorporation

These stages vary from activism against corporate sustainability at the first stage till total integration ofcorporate sustainability throughout the whole corporation. These stages are very similar to the stagesdescribedbyVanMarrewijkandWerre(2003),althoughinthiscaseitisaboutthestageofthecorporationasawhole. Best practices for creating understanding and acceptance of change are cross-functional andmultigenerational interaction (Epstein & Buhovac, 2014). This interaction can include participation in thechangingefforts.Allowingcorporationmemberstoparticipateinchangeeffortsreducesresistancetochange(Coch & French, 1948). Moreover, employee participation in change initiatives can deepen employees’understanding of the change initiatives, increase commitment to change initiatives and even increaseemployee motivation. Examples for employee participation include focus groups, pilot efforts, shaping thechangeimplementationanddesigningchangetraining(Kemelgoretal.,2000).

LeadershipChangerelatedactionsfromleadersinacorporationisacrucialdriverforchange.Forsuccessfulchange,ahighlevelofeffortisneededfromthecorporation’sleaders.Moreover,alackofsuchleadershipcanbeasourceoffailure (Whelan-Berry, Gordon, & Hinings, 2003). Benn et al. (2014) distinguish five types of leadership forcorporate sustainability that can be linked to the six phases of corporate sustainability discussed in theprevious paragraph. There is not strictly one type of leadership thatmatcheswith each stage of corporatesustainability;sometimesdifferenttypesofleadershipmightbenecessary.

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Thebulletpointsbelowdescribethedifferenttypesofleadership.Moreover,thetypesofleadershiparelinkedtothedifferentstagesofsustainability(Bennetal.,2014):

• Transactionalleadership:Rewardsystemsforbehavioursthatmeettheexpectationsofthecompanyand thus the company goals. This typeof leadership is important at the compliancephase and theefficiencyphase.

• Distributedleadership;noindividualdominates.Differentindividualscanexerciseleadershipfunctionswithin a groupor corporations at different times.More thanone leader anddifferent leaderswithdifferentresponsibilities.Thistypeofleadershipismainlyimportantattheefficiencyphase.

• Enabling leadership; some corporations are so complex that traditional leadership is not applied.Enabling leaders create the structures, rules and interaction that support the leadership actions ofotherswhousethesetofurtherchangetheobjectives.Thistypeofleadershipismainlyimportantattheefficiencyphase.

• Transformationalleadership;leadersthatcanchangetheirroleinordertomotivateotherstoperformtheirbest.Suchleadersgobeyondtheirself-interestforthesakeofthecorporationasawhole.Thistypeofleadershipisimportantatthestrategicproactivityphaseandthesustainingcorporatephase.

• Complexity leadership; is a relatively new contribution to leadership theory. Leadership in complexsystemsistheoutcomemanyinteractionspeopleinthesystemandemergesaspeopletrytocreateorder from what may be an uncontrolled and somewhat chaotic process. This view challengesmechanistic, linear views of corporate behaviour and traditions top down models. This type ofleadershipisimportantatthesustainingcorporatephase.

Clearnessgoalsandprocesses

Incaseofsuccessfulchangeimplementation,thevisionisthestartingpoint(Bennetal.,2014;Kemelgoretal.,2000).Thevisionforchangeandthecorrespondinggoalsandprocessesshouldbecleartoalltheemployeesinthecorporation.This increases thechance for successful implementationof thechanges (Bennetal.,2014).According toempiric researchofSawyer (1992),goalclarityandprocessclarityalsocontribute tohigher jobsatisfaction.Sincejobsatisfactioncanbeconsideredasapartthesocialdimensionofcorporatesustainability,theclarityofthevisonandtherelatedgoalshavetobetakenintoaccount.

CommunicationPoorcommunication isoneofthereasonsgivenforchangefailure.Communicationforchangebuildsontheemployees’understandingof theneed for initiatives for change.Moreover, communications shouldbe two-way,tellingandlisteningtoemployees(Kemelgoretal.,2000).Twowayscommunicationforchangecanalsorefer to how a corporation is structured. Baumgartner (2014) distinguishes two ways of changeimplementation: inside-outandoutside-inimplementation.Theinsideoutisbasedonabottomupapproachof change, where change initiatives are initiated form within the corporation and taken over by themanagementwhenapproved.Theoutsideinapproachreferstoatopdownapproachwherethemanagementplans the change initiatives (Baumgartner, 2014). Especially for the inside out approach two wayscommunicationbecomesmoreimportant.

TrainingandindividualcompetenciesTraining can provide for an understanding of the change initiative and related new knowledge, skills andbehavior(Kemelgoretal.,2000).Osagie, Wesselink, Blok, Lans, and Mulder (2014) explored individual competencies for implementing andmanaging corporate sustainability. By means of a literature review complemented with 28 interviews ofmanagers and directors, the research resulted in a distinction of eight corporate sustainability relatedcompetencies.Theseinclude:

1) anticipatingonfuturechallengesanddevelopmentsregardingCS.2) UnderstandingtheinterdependencybetweensystemsandsubsystemsrelevanttoCSpractices.3) UnderstandingCSdrivers,standardsandregulations.4) CSleadershipandmanagementcompetencies.5) Interpersonalcompetencies;realizinginterpersonalCS-supportiveprocessesinCSintegration6) Personalattributesandattitudes7) Personalvalue-drivencompetencies8) Reflectioncompetences(bothpersonalreflectionandreflectiononexperiences)

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Theseeight competenciesaremore specific than thegeneral skillsdescribedbyKemelgoret al. (2000), andmightbeused forchangerelated training, specifically forCS.Whatstandsouthere is resemblancebetweenthedriversforchangediscussedinthisparagraphandtheindividualcompetencesmentionedby(Osagieetal.,2014).Leadership,driversandpersonalvaluesareimportantconceptsinbothcases.

Alignmentofcorporation’sstructureandprocessestothecorporation’sstrategy

This driver includes planning, budgeting, reporting, operations, customer and technology systems.Modificationsmightberequired intheseprocesses for thechangeprocesstobesuccessful(Kemelgoretal.,2000). In section 3.1 Implementation frameworks, it is discussed into more detail how the corporation’sstructureandprocessescanbealignedtothesustainabilitystrategy.

3.3InternationalcompaniesThis section discusses the challenges that might be faced by international companies when implementingsustainability.Thishoweverisstillarelativelyunexploreddomaininliterature(Bondy&Starkey,2014).Epsteinand Buhovac (2014) acknowledge the fact that an international environment requires extra attention withregard to the implementation of corporate sustainability. Decisions have to be made on centralizing ordecentralizing resources and business activities. These decisions can depend on several contextual factors,including: size of the corporationg, product diversification, geographical diversification (Epstein & Buhovac,2014).Whengeographicaldiversificationincludesavarietyofcountries,thecontextualfactorscanbyanalyzedby studying the political, technical, environmental, economic and legal characteristics of the country. Thisapproach isalsoknownas thePESTEL framework foranalyzing themacroenvironment (Johnson,Scholes,&Whittington,2009).

Bondy and Starkey (2014) did research to what extent corporate sustainability goals of internationalcorporations reflect home country or host country perspectives. It was found that most multinationalcorporationsintheresearchfavoreduniversalsustainabilityissuesinthedevelopmentphaseofthecorporatesustainabilitypolicy.Thisresulted in ignoranceof localsustainability issues,despitethestated importanceofthose local issues. Moreover, multinational corporations believed that by including universal/globalsustainabilitygoalsinthesustainabilitystrategywouldresultinsolutionsforsustainabilityissuesatalllevelsofthecooperation.However,thecontraryisconcludedintheresearch:standardizingthecorporatesustainabilitystrategy to universal issues leads to a marginalization of local issues. Therefore, Bondy and Starkey (2014)conclude that global standardswith little representation of local cultures and local sustainability issues areinsufficientforaddressingthewiderimpactofthecorporation’simpacttosocietyatglobalandlocallevels.

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4TheoreticalframeworkThe theoretical framework describes themost important challenges and approaches related to the first twocentralresearchquestionsofthisstudy.Thesechallengesandapproachesarebasedontheliteraturereviewandaregivenintheformofpropositions.Thethirdresearchquestionspecificallyfocussesonthefarmfeedindustryand includes a case study at the company ForFarmers. The propositions from the first and second researchquestionareusedasatooltofindananswerstothethirdcentralresearchquestion.

Researchquestion1

Whatarechallengesfortheimplementationofcorporatesustainabilitythroughoutacorporation?

Howcancorporationsdealwiththesechallenges?

Propositionsrelatedtoconceptualization

1) Challenge:Developingaclearcompanyconceptofcorporatesustainability

Approach:IncludeallthethreesustainabilitydimensionsofTripleBottomLine

Approach:Definethebusinessargumentsforimplementingcorporatesustainability

Approach:Definetheethicalargumentsforimplementingcorporatesustainability

2) Challenge:Developingclearsustainabilitygoalsforthecorporation

Approach:Setboundarieswithregardtosustainabilityandtranslatethemtocleargoals

Approach:Maketheshiftfromconventionalfinancialreportingtowardsintegratedreporting

Propositionsrelatedtointegratedimplementation

3) Challenge:Integratingcorporatesustainabilityintodifferentmanagementlevelsofthecorporation

Approach:DefinewhatsustainabilitystrategywouldcreatelegitimacyatinternalandexternalstakeholdersanddecidetowhatextentCSshouldbepartofacorporation’smissionandvision(normativelevel).

Approach:Planhowthecorporationcanachievehergoalswithregardtothemissionandvisionstatement(strategiclevel)

Approach:Implementsustainabilitystrategyaccordingtoplanattheoperationallevel.

4) Challenge:Lackofresourcestomeetthedifferentmanagementstandards(e.g.quality,healthandsafety,environmental)

Approach:Integratedifferentmanagementsystemsthathavesharedgoalsintoonemanagementsystem.

5) Challenge:DealwiththetensionsbetweenthethreedimensionsofCS

Approach:Lookforsynergiesbetweenthethreedimensionsofcorporatesustainability

Propositionsrelatedtochangemanagement

6) Challenge:Enablingandmotivatingallpeoplethroughoutthecorporationtoadapttonecessarychange.

Approach:Makeuseofthe6enablersofchange

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Researchquestion2

Whatarechallengesfortheimplementationofcorporatesustainabilityspecificallyforinternationalcorporations?

Howcancorporationsdealwiththesechallenges?

Propositionsrelatedtointernationalization

7) Challenge:Marginalizinglocalsustainabilityissuesbecausecentralmanagementispronetocommittoglobalcorporatesustainabilitygoals.

Approach:Createaneffectivenetworkwithinthecorporationforbottomupcommunicationtoidentifyandintegratelocalsustainabilityissuesincentralsustainabilitystrategy.

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5CasestudyThischapterconsistsoftwosections.FirstadescriptionofthecompanyForFarmersisgiven,whichisusedasthecaseinthisstudy.Subsequently,thesecondsectionelaboratesonthemethodologyofthecasestudy.

5.1Casedescription

CompanyprofileofForFarmers

The empirical data is collected in a case study research at an animal feedmanufacturing corporation calledForFarmers.ForFarmersisthemarketleaderinEuropeintermsoftonsofproductionofanimalfeedperyear.Forfarmers has production locations in four countries: The Netherlands, Germany, Belgium and The UnitedKingdom and the headquarters is located in The Netherlands. The corporation’s total net-turnover was 2,3billionEuroin2014andtheworkforceofthecompanyincludesover2300employees.Nexttotheproductionofanimalfeedforruminant,poultry,swineandhorses,ForFarmerssellsagriculturalcommoditiesandprovidesforexpertisetofarmersonthefieldofanimalfeed,businessdevelopment,livestockkeepingand(ForFarmers,2015a).

In theirvisionandmissionstatement,ForFarmersstatesthatheraim is tooffera total feedsolutionfor thefarmers,whichmeansofferingalltheinputstheanimalsneed.Thistotalfeedsolutionforthefarmersshouldhave high quality, high efficiency and a high level of ease of work. The vison of ForFarmers is that higherefficiencycanberealizedbygainingeconomiesofscalebycompanygrowth.

AnotheraimofForFarmersistocreateonebrandoverallthecountries.ForFarmersisaresultofseveralmergerswhichstartedintheNetherlands.InTable1abriefoverviewisgivenoftheactivitiesthatresultedinthecurrentcorporationForFarmers(ForFarmers,2015b).

Year Activity

2000 MergerofthetwocooperativesABCandCTA2006 Take-overofBeta(Germany)2007 Take-overofBM(Germany)andintroductionofthenameForFarmers2012 AcquisitionofHendrixUTD(TheNetherlands,BelgiumandGermany)andBOCMPAULS(United

Kingdom)2014 IntroductionofoneForFarmersoverallthecountries

AcquisitionofWeyfeedandHSTfeed(UnitedKingdom)StartpreparationsfortransitionfromcooperativetolistedcompanyIntroductionofnewstrategyHORIZON2020

Table1Mergers,acquisitionsandstrategiesofForFarmers

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ForFarmersandcorporatesustainability

CorporatesustainabilityisstronglyrepresentedinthestrategicdocumentsofForFarmers.Thesedocumentsinclude:missionandvisionstatement,HORIZON2020,materialityanalysis,communicationstrategy.

• MissionandVisionstatement;Inmissionandvisionstatement,thethreecorevaluesofthecompany’sstrategyareappointed:ambition,partnershipandsustainability(ForFarmers,2015d).

• Website;onthewebsiteoftheForFarmersGroup,aspecialpageisdedicatedtothecorporatesustainabilitystrategyofForFarmers.EfficientproductionofanimalfeedandeconomicsustainabilityaretwoprimarythemesofthecorporatesustainabilitystrategyofForFarmers(ForFarmers,2015c).http://www.forfarmersgroup.eu/duurzaamheid/duurzaamheid.aspx

• HORIZON2020;Horizon2020elaboratesonthestrategicgoalsofForFarmersforthecomingyears.Thisdocumentisintroducedin2014andisincludedintheannual(financial)reportofForFarmers(ForFarmers,2014).ThisreporthasaseparatechapterelaboratingonthecorporatesustainabilitystrategyofForFarmers.CorporatesustainabilityisseenasanintegralthemethroughoutallthebusinesspracticesofForFarmers.Adistinctionismadebetweenfourthemes:sustainableprocurement,environment,human,societyandwell-beingoflivestock.

• Materialityanalysis;thematerialityanalysisisaclassifieddocumentforinternalusemadebyaconsultant.Thisanalysishasresultedinninekeyperformanceindicators(KPI’s)thatthattogetherformthesustainabilitystrategyofForFormers.TheseKPI’scanbefoundinTable2.

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DELETED(CONFINDENTIAL)

Table2KeyperformanceindicatorsofthesustainabilitystrategyofForFarmers(TaskForceSustainabilityForFarmers,

2015)

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5.2MethodologyThissectiondescribesthemethodologyusedfortheempiricalpartoftheresearch.Theempiricalpartconsistsofacasestudy.Inordertodescribethedifferentstepsofthecasestudyandexplainthechoicesthataremadeinastructuredway,thestepsofYin(2013),showninFigure3,areused.Thefollowingstepswillbediscussedinthischapterrespectively:researchplan,researchdesign,preparation,datacollection,dataanalysisandsharingofinformation.

ResearchplanTheresearchplanelaborateswhyForFarmersisselectedasthecaseinthisresearchandwhattypeofresearchmethodisselected.

SelectionofthecaseIn this researchForFarmers is selectedasa casebecause ithasall the characteristics that are relevantwithregardtothecentralresearchquestion.RelevantinthiscasemeansthatForFarmersis(Yin,2013):

ü afarmfeedmanufacturerü aninternationalcorporationü currentlydevelopingandimplementingacorporatesustainabilitystrategyü willingtocooperateinthisresearch

Forthesereasons,ForFarmerscanbeseenasarepresentativeortypicalcasewithregardtothisstudy.

SelectionoftheresearchmethodA case study is a researchmethod. Examples of other researchmethods include experiments, surveys andepidemiologic research. The choice for a researchmethod generally depends on three factors: the type ofresearchquestion, the control the investigator has over the actual behavior of the events and the focusontemporary as opposed to historical phenomena. Generally case studies are preferred when ‘how’ or ‘why’

Figure3Stepsofacasestudy(Yin,2013)

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questions are asked, the investigator has little control over the events and the focus is on a contemporaryphenomenon(Yin,2013).Inthisresearchthecentralresearchquestionisa‘how’question,namely:‘Howcancorporatesustainabilitybeimplementedintodailybusinesspracticesoftransnationalcorporationsinthefarmfeedsector?’.InformationabouttheimplementationprocessismainlycollectedbyinterviewswithmanagersofForFarmers.Byconductinginterviews,thereisnocontrolovertheevents(whichisthecaseatexperiments).Moreover,theimplementationofcorporatesustainabilityisstudiedatonepointintimebytakinginterviews.Forthesereasons,acasestudyisselectedastheresearchmethodfortheempiricalpartofthisstudy.

ResearchdesignThe research design links the collected data to the initial question of the research (Yin, 2013). In short theresearchdesignidentifiesthecasestudydesign,developspropositionsoratheoryanddefinesprocedurestosecurethequalityofthecasestudy(Yin,2013).

CasestudydesignThe case study design that is selected in this research is the embedded single-case design (Yin, 2013). Thismeans there is one casewithmultiple units of analysis. The ForFarmers corporation is the casewhere theimplementationofcorporatesustainability inthefarmfeedindustry isstudied.Becausethisstudyalsotakesinto account the influence of possible differences per country on the implementation of corporatesustainability, the fourdifferentkeycountriesofForFarmersareselectedas theembeddedunitsofanalysis.ThesecountriesareTheNetherlands,Belgium,GermanyandTheUnitedKingdom.Thedatacollection inthecasestudyismainlybasedoninterviewswithrespondentsfromeveryunitofanalysis.

PropositionsThepropositionsforthecasestudyarederivedfromscientificliteraturediscussedintheliteraturereviewofthisresearch.Thepropositionsconsistofchallengesrelatedtotheimplementationofcorporatesustainabilitythatcorporationsmightface.ThesechallengescanbefoundinChapter4TheoreticalFramework.Thesepropositionsformthebasisoftheinterviewquestionsofthecasestudy.

ProcedurestomaintainqualitySeveral criteriacanbeused tomaintain thequalityof the researchdesign.These include:constructvalidity,internalvalidity,externalvalidityandreliability(Yin,2013).

Constructvalidity;Constructvalidityisaboutdevelopingasufficientlyoperationalsetofmeasuresandtheuseofobjectivemeasurestocollectdata(Yin,2013).Tacticstostrengthenconstructvaliditycanbeappliedinboththedatacollectionphaseandthecompositionphase.Inthisresearchtwotacticswillbeusedtostrengthentheconstruct validity. First, multiple sources of evidence will be used. These include interviews with scholars,interviews with managers and directors of ForFarmers (minimum of two interviews for every country),scientific articles and scientific books. Second, the research is supervised and reviewed by two academicsupervisors.ThesearemysupervisorJosBijmanandmyco-readerValentinaMateria.

Reliability;Goodreliabilitymeansthatthesamefindingswillbefoundiftheresearchwouldberepeatedinthesameway. In order to strengthen the reliability of this research, a case studyprotocol is developed.A casestudyprotocolguidestheinvestigatorincarryingoutthedatacollection(Yin,2013).AccordingtoYin(2013)acasestudyprotocolshouldprovideinformationaboutthefollowingtopics:

Fieldprocedures;presentationof credentials,access to thecase studysites, sourcesofdata,andproceduralreminders.

Casestudyquestions;thespecificquestionsthatthecasestudyinvestigatormustkeepinmindduringthedatacollection.Adistinctionbetween leveloneand level twoquestions canbehelpful in thisprocess. Level-onequestionsare thespecificquestionsaskedto the interviewee.Level twoquestionshaveahigherabstractionlevelandarederivedfromtheliterature.Theanswertolevel2questionsshouldideallybeansweredfromtheinformationgatheredfromtheanswersfromthelevel1questions(Yin,2013).

The research protocol can be found in section 5.2 Methodology of this report. This protocol includes theproceduresoftheinterviewandthecasestudyquestions.Relevantreadingsarenotincludedintheprotocol,butcanbefoundinChapter3Literaturereview.

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Internal validity; Internal validity ismainly important for the typeof research that tries to identify a causalrelationship(Yin,2013).Becausethisisanexploratoryresearch,thistypeofinternalvalidityisnotapplicableinthesenseof identifyingcausal relationships.However,withregardtocasestudies, internalvalidity isalsoofconcern bymeans ofmaking inferences. Basically, an inference ismade every time an occurrencewas notwatcheddirectly,butwasclaimedbyaninterviewee(Yin,2013).Tacticstostrengthentheinternalvalidityofcasestudyresearcharehardtoidentify,butoptionsforaddressingtheseconcernsincludelogicthinkingandconsideringrivalexplanations.Bothtacticswillbeappliedduringthedatacollectinganddataanalysisphasesofthisresearch.

External validity; External validity is concerned with the extent to which outcomes of research can begeneralized to other similar cases. Especially for single case studies the external validity is often seen as alimitation.Inordertostrengthentheexternalvalidityofasinglecasestudyistheuseoftheory(Yin,2013).Thisresearchmakesuseofgeneralmanagementtheoriestostrengthenitsexternalvalidity.Thesetheoriesincludemanagementofchange,management instrumentsand implementationframeworksandarediscussed intheliteraturereviewofthisdocument.

PreparedatacollectionAnimportanttaskpriortothedatacollectionphaseisthedevelopmentofacasestudyprotocol.Theprotocolforthisresearchisdescribedinthissectionanddescribespreparationsandproceduresthathavetobethoughtof prior to the data collection phase. These preparations include selection of the candidates, approach ofcandidates,protectionofrespondentsandthedesignofthecasestudyquestions.Theseissuesarediscussedrespectively.

SelectionoftherespondentsTheselectionoftherespondentsisalogicalresultfromtheresearchquestionofthisresearch.Theemphasisinthisresearchisontheimplementationofcorporatesustainabilityinacorporateinternationalcorporation.Thisresulted in the selection of research candidates in the key countries where ForFarmers is operating. Theseincludecandidatesfrom:TheNetherlands,Belgium,UnitedKingdomandGermany.Fromthesefourcountriesthechiefoperatingofficers (COO’s)were interviewed(oneforeachcountry).TheCOO’sarealsomemberofthe central board of ForFarmers.Moreover, one or two business unit directors (BUD’s) of each country areselected. These business unit directors fall under the direct authority of the chief operating officers. Thisresulted in8casestudy interviewswithmanagersanddirectorsofForFarmers.ByselectingbothCOO’sandBUD’sitisexpectedtocollectinformationaboutpossibledifferencesincorporatesustainabilitypercountryaswell as possible differences in management levels. The following table gives an overview of the selectedrespondents Table 3.

DELETED(CONFIDENTIAL)

Table3Respondentscasestudyinterviews

RespondentprotectionResearchshouldalwaysbeconductedwiththehighestethicalstandards.Foracasestudybasedoninterviews,thismeansthatthereshouldbeaplanfortheprotectionofhumansubjects(Yin,2013).Thisincludesgaininginformed consent from all persons that take part in the case study and protecting the privacy andconfidentialityofthosewhoparticipate.Thegainingofinformedconsentinthiscasestudyisaddressedbyanemailtoallthepotentialinterviewcandidateswithinformationabouttheinterview.Basedontheinformationin this email, the respondents where requested to reply to the author of this researchwhether theywerewilling toparticipate in a case studyby giving and interview. This approachwasused to ensure a voluntarycooperationoftheparticipantsbasedonbasicpriorinformationabouttheinterview.TheemailthatwassendtotherespondentscanbefoundinAppendixA.

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The privacy and confidentiality is protected in two ways. First, the author of this report, who also did theinterviews, signed a confidentiality agreement of the company ForFarmers. Secondly, for the privacy andconfidentiality of the individual interviews, the interviewees were asked if they agree with a recordedinterview. If they agreed, the second question was if they preferred an anonymous interview or not. Theanswerstobothquestionswillberespected.Thesemeasuresensuretheprotectionofhumansubjectsinthisresearch.

CasestudyquestionsFor each of the four topics in the literature review, the related interview questions are given. Level-onequestionsrefertoquestionsabouttheissuestheresearcherisinterestedin.Oftenthesequestionscannotbeaskeddirectlyinaninterviewbecausetheyhaveahighabstractionlevel.Morespecificquestions,applicabletoForFarmers, havebeenasked in order toobtain theneeded information. Thesemore specific questions arereferredtoaslevel-twoquestions(Yin,2013).TheconceptualizationoftheinterviewtopicstogetherwiththecompletelistofleveloneandleveltwoquestionscanbefoundinAppendixB.

CollectdataAccordingtoYin(2013),casestudyevidencemaycomefromfivesources.Thesesourcesincludedocuments,archivalrecords,interviews,directobservation,andparticipantobservation.Allthesesourcesofevidencewillbe used in this case study and described in this section, except for participant observation, because theresearcher/authorofthisprojectdidnotparticipateintheprocessesofthecorporationbeingresearched.

SourcesofcasestudyevidenceDocumentation;Mainly scientific articles are used in this research as source of evidence. These articles arediscussed in the literature review of this research and are used as a theoretical basis of this research.Moreover,thecasestudyquestionsarebasedontheimplementationchallengesfoundinliterature.

Archival records; The archival records used in this case study research are documents for internal use ofForFarmers, related to the implementation of corporate sustainability. Amongst these documents is amaterialityanalysisforcorporatesustainabilityimplementationexecutedbyanexternalconsultant.

Interviews;Inthiscasestudyresearch,interviewsaremostimportantsourceofinformation.TheseinterviewsconsistofeightstructuredinterviewswithdirectorsandmanagersofForFarmers.ThelistofquestionscanbefoundinAppendixB.Alltheinterviewsaretakenatthehomecountryoftherespondent,eitherinEnglishorDutch.The interviewsapproximatelyhadadurationof45minutesandhavebeenrecorded, transcribedandanalyzed.

Directobservations;Directobservationsarenotedanddocumentedduringthetimespendattheheadofficeof ForFarmers. Everyweek, the authorworksoneday at theheadoffice for over a time spanof 5months.Moreover,directobservationscanbedoneduringtheinterviewsthatwilltakeplaceinthedifferentcountries.

Using all these sources of evidence does not only help to obtain more relevant information, it can alsostrengthentheinternalvalidityoftheresearchbyconnectinginformationfromdifferentsourcestoeachotherandtodrawconclusionsbasedthisinformationfrommultipledatasources.Inthisresearchtheresearcherwillalsopayattentiontoothersourcesofinformationduringtheinterviewsandwritethosefindingsdownintheinterviewreport.

Analysisofdata“Theanalysisofcasestudyresearchisoneoftheleastdevelopedaspectsandmostdifficultaspectsofdoingcasestudyresearch”(Yin,2009:127).Withregardtotheanalysisofthecollecteddataofacasestudy,muchdependsontheinvestigator’sownstyleofrigorousempiricalthinking,alongwiththesufficientpresentationofevidenceandcarefulconsiderationofalternative interpretations(Yin,2013).However,ageneralstrategyfortheanalysisofthecasestudydataisrecommended.“Themostpreferredstrategyisfollowingthetheoreticalpropositions that lead to the case study. Propositions help to focus attentionon certain data and to ignoreotherdata.Moreover, thepropositionsalsohelp toorganize theentire case studyand todefinealternativeexplanationstobeexamined”(Yin,2013:130).

Thestrategyforthedataanalysisinthisresearchisalsobasedontheoreticalpropositions.ThepropositionscanbefoundinChapter4TheoreticalFramework.Thepropositionsarehypotheticalanswerstothethree

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centralresearchquestionsderivedfromtheliteraturereview.Theliteraturereviewconsistsofthefollowingcategories:conceptualization,managementofchange,implementationinaninternationalenvironmentandintegrativeimplementation.Theinterviewtranscriptsareanalyzedbyextractingtherelevantquotations.Inordertoorganizetherelevantquotations,thesoftwareprogramAtlasTIisused.Thisprogramenablestheresearchertohighlightanddistractrelevantpartsofthetranscriptsbyusingdifferentcodes.Thefollowingpartofthissectiondescribesthemethodologyofextractingrelevantquotationsandwhichcodeareusedforallthethreeresearchquestions.

Methodologysubquestion1

Researchquestion1 tries to findoutwhat general challengesmightbe facedby corporations to implementcorporate sustainability. To find an answer to this question, the transcripts will be analysed from theperspectiveofthreecategoriesoftheliteraturereview.Theseare:

• Conceptualization;thiscategorylooksforanswersrelatedtogoalsclarityandconceptclarity.• Integrated implementation; this category looks for answers related to Integrated Management

Systems(IMS),Implementationofsustainabilityindifferentmanagementlevelsandthebalancingofthethreedimensionsofcorporatesustainability.

• Management of change; this category looks for answers that relate to the six enablers of changereviewedintheliteraturereview.

Therelevantpartsofthetranscriptswillbecodedwiththenameoftheaccordingcategory.Anextracodeisusedforpossiblenewchallengesthatarenotdescribedintheliteraturereview.


Researchquestion2isdirectlylinkedtotheinternationalizationcategoryintheliteraturereview.Accordingtothe literature review, this category looks for comments that are related to balancing the local sustainabilityissueswiththecentralcompanysustainabilitystrategy,whichisoftenfocusedonglobalsustainabilityissues.

AnotherperspectiveisusedtofinddifferencesinsustainabilitychallengesandapproachesamongthefourkeycountriesofForFarmers.Onecodecalled‘characteristics’isusedtonamethesecharacteristics.


Theanswertoresearchquestion3 is relativelyunexploredbecause it isveryspecific.Therefore,onecode isusedtocodeallthetextfragmentsthatarerelatedtochallengesspecificforthefarmfeedsector,andpossibleapproachesthatForFarmersusestoaddressthesechallenges.

Finally,somegeneralcodesarenecessarytoorganizetheselectedtextfragments.Thesecodesrelateto:

• Correspondingsub-researchquestion(Sub-question1,2or3)• Typeofcomment(challengeorapproach)• Respondent(Nameoftherespondent)• Country(Belgium,Netherlands,Germany,UnitedKingdom)

Results

Theresultsofthisstudyconsistofthecollectionofanswersforallthethreeresearchquestions

Analysis

Theanalysisinthisstudymakesuseoftheresults,andconsistsofinterpretationandanalyticskillsinordertofindnewinsightswithregardtotheresearchquestions.Theanalysiscanbefoundinchapter7Discussion.

Becausenoinformationaboutspecificchallengeswasfoundintheliteratureaboutthefarmfeedsector,theanswer to this question is mainly based on the case study interviews. Therefore, all the answers from therespondentswillbescrutinizedinordertoidentifyspecificchallengesandsolutionsfortheimplementationofcorporatesustainabilityinthefarmfeedsector.

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SharedataThe data and findings of the case study are documented in this final thesis report. With regard toconfidentiality,thecompanyForFarmersmightdecidetoleavepartsofthereportout.Therevisedversionwillbeopen to thepublic and students and canbe found in thedigital databaseof theWageningenUniversity.Moreover, two presentations will be given in order to share the most important findings of this researchproject.OnepresentationwillbeheldasacolloquiumatWageningenUniversityandonepresentationwillbegivenattheheadquartersofForFarmersinLochem,TheNetherlands.

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6Results

Inthischaptertheresultsofthecasestudyaregivenandanalyzedwiththeaimtofindananswertothethirdresearchquestion.Thethirdresearchquestionconsistsoftwoelements:

a.WhatchallengesfortheimplementationofacorporatesustainabilitystrategydoesForFarmersexperience?

b.HowdoesForFarmersdealwiththeseimplementationchallenges?

Theresultsaregiveninaccordancewiththesevenproposedchallengesandthejoiningapproaches,whichhavebeendiscussedinChapter4TheoreticalFramework.Inordertogiveanoverviewtothereader,thepropositionsaregivenagainbelow.Thechallengesarenumberedandthejoiningapproachesaregiveninitalic.

Propositions

1. Developingaclearcompanyconceptofcorporatesustainability

- IncludeallthreesustainabilitydimensionofTripleBottomLine- Definethebusinessargumentsforimplementingcorporatesustainability- Definetheethicalargumentsforimplementingcorporatesustainability

2. Developingclearsustainabilitygoalsforcorporatesustainability

- Setboundarieswithregardtosustainabilityandlinkthemtocleargoals- Maketheshiftfromconventionalfinancialreportingtowardsintegratedreporting

3. Integratingcorporatesustainabilityintodifferentmanagementlevelsofthecompany

- DefinewhatsustainabilitystrategywouldcreatelegitimacyatinternalandexternalstakeholdersanddecidetowhatextentCSshouldbepartofacorporation’smissionandvision(normativelevel)

- Planhowthecorporationcanachievehergoalswithregardtothemissionandvisionstatement(strategiclevel)

4. Lack of resources to meet the different management standards (e.g. quality, health and safety,

environmental)

- Integratedifferentmanagementsystemsthathavesharedgoalsintoonemanagementsystem.5. Dealingwiththetensionsbetweenthethreedimensionsofcorporatesustainability

- Lookforsynergiesbetweendimensions6. Enablingandmotivatingallpeoplethroughoutthecorporationtoadapttonecessarychange

- Makeuseofthe6enablersofchange7. Marginalizing localsustainability issuesbecausecentralmanagement ispronetocommittoglobal

corporatesustainabilitygoals.

- Createaneffectivenetworkwithinthecorporationforbottomupcommunicationtoidentifyandintegratelocalsustainabilityissuesincentralsustainabilitystrategy

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7DiscussionThischapterconsistofatwoelements.Firstareflectiononthemainfindingsoftheresearchisgiven.Second,adiscussiononthemethodologyispresented.

Reflectiononfindings


ReflectiononmethodologyThis section reflects on themethodology of the research. First, the challenges that have been experiencedduring the research are described. Subsequently some practices are described that have made a greatcontributiontotheresearch.

Thefollowingaspectsmadethisresearchchallenging.

Topic; As described in the introduction of this study, the topic of sustainability is complex because of thedifferent dimensions it entails. As a consequence, different people have different views and opinionssustainability.Fortheresearchthismeantthatfirstadefinitionofcorporatesustainabilityhadtobedevelopedbefore the topic of corporate sustainability implementation could start at the first place. Moreover, thedefinitionofcorporatesustainabilitysometimesvariedamongtherespondentsaswell.Inthedefinitionoftheresearch,all threedimensionswere taken intoaccount. Fromthecase study interviews,however itbecameclear that the focuswas especially on economic and environmental sustainability. Thismade it hard to getusefulanswerstoquestionsrelatedtothesocialaspectofcorporatesustainability.

Timing;TheinterviewswereexecutedjustbeforeameetingwithallseniormanagersofForFarmerswherethesustainabilitystrategywascommunicatedanddiscussed.Ideally,theinterviewsshouldhavebeentakenafterthismeeting.However,theinterviewshadalreadybeenscheduledtwomonthsearlierandcouldnoteasilybemovedtoanotherdate.

Confidentiality;DuetoaconfidentialityagreementwithForFarmers,theauthorhadtotreat the informationdelicatelyandtherefore itwasdifficulttocompareall thegathered informationwithexternalstudiesand/orother companies in order to come to new insights. Besides, the respondents might also have a personalinterestbyframingtheiranswersinsuchawaythatitmightbebeneficialforthem,oratleastnotpotentiallydamaging.Noclear indicationshoweverdidappearduring thecasestudyanswers.However, it seemedthatthe COO’s were able to talk more freely than BUD’s. Framing answers to the interview can influence theoutcomeoftheresearch.

Hierarchy;Withregardtotimeconstraintsalimitedamountofrespondentscouldbeapproached.Respondentsofthefourdifferentcountrieshavebeenselected,toincludepossibledifferencespercountry.Becauseatthetime of the start of this research only the central management was well informed about the sustainabilitystrategy,alltherespondentscamefromthecentralmanagement(ChiefOperatingOfficersandBusinessUnitDirectors). As a consequence, no respondents from the operational level could be interviewed. Includingrespondentsfromthelowermanagementwouldhavebeeninteresting,becausetheoutcomeofthisresearchsuggestthatoneofthebiggestchallengesisasuccessful implementationofthesustainabilitystrategyinthislevelofthecorporation.Moreover,includingrespondentsfromthetaskforcesustainabilitywouldhavebeeninteresting because they are actually developing the corporate sustainability strategy of the corporation.Because country differenceswere foundmore relevant in this study, the COO’s and BUD’s of the differentcountriesareselectedinstead.

Countries; Cultural differences also have an impact on what aspects of corporate sustainability are foundimportant. This gives an extra dimension of complexity to the already complex concept of corporatesustainability.

Scope of the research;Due to the large scope of the research question of this study, the literature reviewcontainsalargevarietyoftopics.Thiswasnecessaryatthestartoftheresearchtoobtaininsightsinthemostimportantchallengesandapproaches.Themainchallengewastomakeadecisiononwhatissuestoincludeinthe study. It was especially hard to find a way to deal with possible differences per country and possibledifferencesper typeof livestock. The ‘oneForFarmers’ strategy that ForFarmers tries to implementwas theargument for not focusing on one specific country or type of livestock. The result was a comprehensiveliterature review with the main challenges and approaches related to the implementation of corporatesustainability in the farm feed industry in general. The downside, however, is the large variety of differenttheories and models that are included in the review, which made it complex to work with during thecontinuationoftheresearch.

Thefollowingaspectshavebeenhelpfulfortheresearch.

Thepropositionsdevelopedinthetheoreticalframeworkhaveproventobeveryusefulduringtheresearch,fortwo reasons. First, because the propositions made the author summarize the literature review and drawconclusions about the literature review. This process of summarizing and drawing conclusions gives theresearchera‘fresh’viewonalltherelevantissuesdiscussed.Thisisuseful,becauseafterhavingfocusedonaspecifictopic,itiseasytolooseoversight.Secondly,thepropositionshaveproventobeusefulforastructuredanalysisoftheinterviews.

The interviews were planned immediately at the start of this study, approximately twomonths before theinterviewstookplace.Thisapproachmadeitpossibletoexecutetheinterviewsveryeffectivelywithinatimespanofapproximatelytwoweeks.Interviewswereheldfacetofacewhichmadeitpossibletogettoknowtherespondentandgavetheinterviewamorepersonalcharacterinsteadofforexampleaconferencecall.

The interview transcripts havebeenanalyzedwith the softwareprogramATLASTI.Although timehad tobeinvested to be able toworkwith the program, the program has been of great help for the analysis of theinterviews. ATLAS TI made it possible to order the quotations by topic, after the selected quotations werecoded.

LimitationsandfutureresearchTheexplorativecharacterofthisresearchhasledtoalargevarietyofinformationabouttheimplementationofcorporatesustainabilityinthefarmfeedsector.However,duetothelargescopeofthisresearch,notalltopicscouldbeanalyzedindetail.Thiscanbeseenasalimitationofthisresearch.

Anotherlimitationoftheresearchistheextenttowhichtheoutcomecanbegeneralized.Asdiscussedinthemethodology chapter of this study, this is a limitation of the single case study design. Therefore, futureresearchmight build on the result of this exploratory study to see if the result can be generalized to othercompaniesinthefarmfeedsector.

Moreover,thenumberofrespondentsislimited.Forfurtherresearch,morerespondentscanbeincluded,fromdifferentcompanies.

The domains of stakeholdermanagement andmanagement of change in de farm feed sectormight be aninteresting field for future research.More insights in stakeholdermanagement is relevantbecause the farmfeed industryseemstomovetowardsamoreproactiverole in thesupplychainwithregardtosustainabilitywhichleadstomorestakeholderstodealwith.Managementofchangeisrelevantforrealizinginternalchangewith regard to sustainability.An interesting topicof researchcouldbehowbroad sustainabilityKPI’s canbetranslated toclearworkablegoalsat theoperational level.Finally,an interestingdomain for future researchthatbuildsontheoutcomeofthisresearchcouldbetostudytheeffectofmarket-leadershiponthecorporatesustainabilitystrategyofthecorporation.

Finally, it might be an interesting topic for future research to broaden insights about how a sustainabilitystrategycanbeintegratedintosupportingdepartments,andmorespecifically,intosupportingdepartmentsinthefarmfeedindustry.

8ConclusionThischapterisdividedintotwoparts.Thefirstpartgivesanswertothecentralresearchquestion.Theansweris derived from the findings of the literature review and the case study. The chapter concludes withrecommendationsforthecompanyForFarmers.

AnswertoresearchquestionThis study had the aim to obtain more insight in how corporate sustainability can be implemented byinternationalcompaniesinthefarmfeedsector.First,aliteraturereviewwasdonetofindthemainchallengesandapproachesdescribedinliterature.Subsequently,acasestudywasdoneatForFarmers,themarketleaderof animal feed manufacturing in Europe. The central research question is divided into three sub researchquestions.

The first subquestion focussesongeneral challengesandapproacheswith regard to the implementationofcorporatesustainability.Twomainchallengesareidentifiedrelatedtothisquestion.Firstly,creatingawarenessand commitment in the lower management levels of the corporation. In line with literature, theimplementation of corporate sustainability at ForFarmers so far has been a top down process. From thisperspective, the further you go down in the hierarchy of the corporation, themore complex it becomes toreach employees, and thus to create awareness of and commitment to the sustainability strategy. Thischallenge of creating awareness is closely related to the challenge of translating the goals of the centralmanagement,whichhaveahighabstractionlevel,intocleargoalsforthedepartments,whichcanbeusedbytheemployees.Itisexpectedthatcleargoalsatdepartmentlevelhaveapositiveeffectontheawarenessandcommitmentof theemployees.Lookingat thespecificdepartments,developingclear sustainabilitygoals forsupportingdepartments(e.g.HR,Legal,Sales)isfoundmoredifficultthanformanufacturingandlogistics.

Anapproachthatcanfosterawarenessandcommitmenttothesustainabilitystrategyisclearcommunication.Top-downcommunicationisimportanttocommunicatethesustainabilitythroughoutthecorporation.Bottom-upcommunicationcanhelptogivesubstancetothegeneralsustainabilitystrategy,whichcanhelptocreateacommonsenseofresponsibilitytoachievesustainabilitygoals.Moreover,trainingandworkshopscanhelptocreateawarenessandcommitment. Finally,extra incentives for theemployeescanbe introduced to rewardactionsthatcontributetogoalswithinthesustainabilitystrategyofthecompany.Asecondchallenge,whichisalso related to creating commitment to the sustainability strategy, is to align the incentives of all theemployees in such a way that corporate sustainability becomes a common goal for the entire corporation.Contradictive incentivesare foundbothbetweendifferentdepartmentsandbetweendifferentmanagementlevels.Themostimportantapproachfoundinordertoaligntheincentivesarecross-functionalmeetings.

The second sub-question focusses on the implementation challenges and approaches specifically forinternational corporations.Different challengesare found that relate tomacro-environmental circumstancesper country. Different perceptions of the concept of sustainability make it challenging for an internationalcorporationtodevelopasustainabilitystrategythat isapplicabletoallcountries.Accordingtothisstudythemaindifferencesare:

• A different perception per country concerning sustainable raw materials (particularly soy) whichmakesageneralpurchasingstrategyproblematic;

• Differentmillsizespercountry,whichinfluencestheenergysavingsthatcanbeachieved.Thismakesitdifficulttosetcorporationwidetargetsforenergysavings;

• Legaldifferencesconcerningthemaximumallowedloadofthelorrypercountry.Thismakesithardtosetcorporationwidetargetsforfuelsavings;

• Differentmethodsofkeepinglivestockpercountry(livestockinsideoroutside).Ontheonehandthisinfluences towhatextentantibioticscanbereduced.Ontheotherhand, it influences theextentofanimalwelfare.

Anapproachtodealwith thesechallenges is todecentralizedecisionmakingonsustainability initiativesandtargets.Althoughtheoverallstrategyshouldbetakenastheguideline,decentralizeddecisionmakingenablesthe corporation to adapt to differences on a local scale that affect the extent to which sustainabilityachievementscanberealized.

Finally,thethirdresearchquestionfocussesonchallengesandapproachesinthefarmfeedsector.Twomainchallenges are identified with regard to the farm feed sector. Firstly, the farm feed industry is a highlycompetitive market with small margins. This makes it hard for an individual company to come up with asustainability strategy that implies additional costs. Different approaches are used for achieving results oncorporate sustainability without ending up with a higher product price compared to the competition. Oneapproachisfocusingonefficiencies.Efficienciescanleadtoenvironmentalandeconomicsustainabilityatthesametime.Anotherapproachistoworktogetherwithintheindustry.AnexampleistheagreementbetweenfeedmanufacturersintheNetherlandstobuyresponsiblesoy.

A second challenge for feed manufacturers is finding their proper role in the supply chain with regard tosustainability. In the past, feed manufacturers were mainly focused on achieving efficiencies in their corebusiness,whicharefeedproductionandfeedlogistics.Currently,themarketleaderoffeedmanufacturinginEuropehaschangeditsrolebyintroducingasustainabilitystrategywhichhasabroaderscopeandasksforamorepro-activerolewithregardtosustainability inthesupplychain.Bothsustainability issuesthatrelatetopurchasingofrawmaterialsandsustainability issuesatfarmlevelaretaken intoaccount.Asaconsequence,For Farmers has to deal with a larger variety of stakeholders with sometimes contradictive interests(employees,farmers,NGO’s,governments,retailersandconsumers).Giventheseinsights it ischallengingforthefarmfeedindustry,andforForFarmersinparticularasbeingthemarketleader,toplayaroleinthesupplychain that gets approval from all stakeholders. Structural communication with stakeholders therefore isessential. Stakeholdermanagement can lead to favorable products compared to the competitorswhen thecompanyisbetterabletofulfilltheneedsofthestakeholders.

RecommendationstoForFarmers


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Appendices

AppendixA

Date: 02-11-2015

Content: InvitationforaninterviewforaMScthesisresearchproject.

Topic: Implementationofcorporatesustainability

DearSirorMadam,

ViathisemailIwouldliketoinviteyouforaninterviewabouttheimplementationofcorporatesustainability.The interviews are part of my MSc thesis research project, under the supervision of the University ofWageningen.IamconductingthisresearchatForFarmersandmysupervisorwithinthecompanyisNickMajor,corporateaffairsdirector.

Theaimofmyresearchistoobtainmoreinsightsintheimplementationprocessofsustainabilitythroughoutcorporations.ByinterviewingrespondentsinthefourkeycountriesofForFarmers,Ihopetolearnmoreaboutspecificsustainabilityaspectspercountry,sectorandcorporation(Forfarmersinthiscase).

TheinterviewIamplanningtotakehasthefollowingcharacteristics:

• Theinterviewwilltakeapproximately45minutes• Theinterviewwillbetakenbyonepersonwhichisme,BartGrobben• Thequestionsthatwillbeaskedareopen-questionsaboutspecificaspectsofthecountry,sectorand

thecompany,relatedtosustainability• WithyourpermissionIwouldliketorecordtheinterview,whichenablesmemakeatranscriptofthe

interview• Atyourrequesttheinterviewwillbekeptconfidential• Nopreparationisneeded

Ihopethisinformationissufficienttogiveyouabasicideaoftheresearchprojectandtheinterviews.Formoreinformationand/orremarksyoucancontactmevia:[email protected]

Yourparticipationwouldbeofgreatvalueformyresearchandwouldbehighlyappreciated.

Thankyouinadvance.

Bestregards,

BartGrobben

MScstudentManagementEconomicsandConsumerStudies

AppendixB

Conceptualization

Challenges

● Conceptclarity● Goalclarity

Level-onequestions

1. Isthereoneclearcommondefinitionofcorporatesustainabilitythroughoutthecorporation?2. Isthereoneclearsetofsharedcorporatesustainabilitygoalsthroughoutthecorporation?

Level-twoquestions

1. Howwouldyoudescribetheconceptofcorporatesustainability?2. WhatareaccordingtoyouthesustainabilitygoalsForFarmersshouldgoafter?

Managementofchange

Challenges

● Matchstrategyandleadershipwithcorporateculture● Involvewholecorporationinchangeprocess● Alignhumanresourcestochange● Aligncorporatestructureandprocessestochange

Level-onequestions

1. Whatisthecorporatecultureofthecompanyandwhatandwhattypeofleadershipisused?2. Isthewholecorporationinvolvedintheimplementationofcorporatesustainability?3. Ishumanresourcesalignedwithnewcorporatesustainabilitygoals?4. Arethecorporateprocessesalignedwithcorporatesustainability?

Level-twoquestions

1. (Difficulttoaddressininterviewregardingthetimeconstraints)2. Howdoyoumakesurecorporatesustainabilityisimplementedthroughoutthewholecorporation?

Forexample,howdoyoutranslatethesustainabilitygoalstooperations,salesandblendingmanagers?

3. Doestheimplementationofcorporatesustainabilitystrategyrequiredifferent/extra(human)resources?

4. Doestheimplementationofcorporatesustainabilityrequireforexampleadifferentprocessforproductionoradifferentprocedureofsales?How/what?

Corporatesustainabilityinaninternationalenvironment

Challenges

● AddressinglocalandglobalsustainabilityissuesLevel-onequestions

1. Arebothlocalandglobalsustainabilityissuestakenintoaccountinthecorporatesustainabilitystrategyofthecompany?

2. Dotheissuesfitinthelocalenvironment/country?Level-twoquestions

1. DoesthesustainabilitystrategyofForFarmerstakeintoaccountbothlocalandglobalsustainabilityissues?

2. Dotheissuesmatchwiththesustainabilityneedsofthecountry/localenvironment?Why?

Integrativeimplementationframeworks

Challenges

● Makingtrade-offs/settingprioritiesbetweendifferentcorporatesustainabilitygoals● Aligningsustainabilitygoalsbetweenthedifferentmanagementlevels(normative,strategicand

operational)● Addresspossibletensionsbetweenindividualandcorporategoals● Addresstensionsbetweenshorttermorientationofthefinancialgoalsandlongtermorientationof

thesocialandenvironmentalgoals.Level-onequestions

1. Howisdecidedhowtrade-offsbetweenthesocial,economicandenvironmentaldimensionofcorporatesustainabilityaremanaged?

2. Howaresustainabilitygoalsonastrategiclevelandtheoperationallevelaligned?3. Aretheretensionsbetweenpersonalgoalsandsustainabilitygoalsofthecorporation?Howarethey

managed?4. Howdoyoudealwiththeshorttermfinancialgoalsandlongtermorientedsocialandenvironmental

goals?Level-twoquestions

1. Howdoyoumakethetrade-offbetween,forexample,newtruckswhicharecleaner,andthehighercoststhatareinvolved?Or,highersafetystandardsattheworkfloor,andthehighercoststhatareinvolved?

2. Howdoyoumakesurethatasustainabilitygoals,likeforexample:ensuringsafeworkingconditionsorproducingefficientfarmfeed,becomesagoalforlowermanagement/employeesaswell?

3. Doyouhavethefeelingthatsomepeople’sself-interestmightworkasacounterforcetowardsthesustainabilitygoalsofthefirm?If,so,howcantheybemanaged?

4. Doyouexperiencetensionsbetweenshorttermorientedfinancialresultsandthelongtermorientedsocialandenvironmentalresults?Ifyes,howcanyoumanagethese?

Entirelistoflevel-twoquestionsgroupedtogether

Challengesrelatedtoconceptualization

1. Howwouldyoudescribetheconceptofcorporatesustainability?2. WhatareaccordingtoyouthesustainabilitygoalsForFarmersshouldgoafter?

Challengesrelatedtomanagementofchange

3. (Difficulttoaddressininterviewregardingthetimeconstraints)4. Howdoyoumakesurecorporatesustainabilityisimplementedthroughoutthewholecorporation?

Forexample,howdoyoutranslatethesustainabilitygoalstooperations,salesandblendingmanagers?

5. Doestheimplementationofcorporatesustainabilitystrategyrequiredifferent/extra(human)resources?

6. Doestheimplementationofcorporatesustainabilityrequireforexampleadifferentprocessesforproductionoradifferentprocedureofsales?How/what?

Challengesrelatedtocorporatesustainabilityinaninternationalcontext

7. DoesthesustainabilitystrategyofForFarmerstakeintoaccountbothlocalandglobalsustainabilityissues?

8. Dotheissuesmatchwiththesustainabilityneedsofthecountry/localenvironment?Why?

Challengesrelatedtointegrativeimplementationsframeworks

9. Howdoyoumakethetrade-offbetween,forexample,newtruckswhicharecleaner,andthehighercoststhatareinvolved?Or,highersafetystandardsattheworkfloor,andthehighercoststhatareinvolved?

10. Howdoyoumakesurethatasustainabilitygoals,likeforexample:ensuringsafeworkingconditionsorproducingefficientfarmfeed,becomesagoalforlowermanagement/employeesaswell?

11. Doyouhavethefeelingthatsomepeople’sself-interestmightworkasacounterforcetowardsthesustainabilitygoalsofthefirm?If,so,howcantheybemanaged?

12. Doyouexperiencetensionsbetweenshorttermorientedfinancialresultsandthelongtermorientedsocialandenvironmentalresults?Ifyes,howcanyoumanagethese?

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