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The entrepreneurial multi-party sustainability initiative of a chemical cluster - Barriers at the interface between subsidiaries and parent companies

Conference contribution
Authors Gabriela Schaad
Anders Sandoff
Johanna Mossberg
Christian Jensen
Published in EGOS, 7-9 July 2016, Naples
Publication year 2016
Published at Department of Business Administration, Management & Organisation
Department of Business Administration, Industrial and Financial Management & Logistics
Language en
Keywords subsidiary initiative, green chemistry, MNE, chemical cluster, sustainability
Subject categories Economics and Business

Abstract

Multinational enterprises (MNEs) can act as resourceful players in solving global sustainability issues, although the extent to which they are prepared to take responsibility is highly debated. This paper touches upon this issue in the context of the chemical industry. Given its current dependence on fossil fuel feedstocks and the co-production of substantial CO2 emissions, the chemical industry plays an important role in climate change mitigation. Green chemistry, introducing new products and process technologies based on biogenic feedstock, is one of the possible solutions put forward to improve the chemical industry’s sustainability, although mayor challenges yet remain unsolved. Little attention has so far been paid to the relation between headquarters and subsidiaries with respect to sustainability issues. The purpose of this paper is to presents novel insights on the organizational barriers encountered at the interface of subsidiaries and headquarters in relation to an entrepreneurial multi-party sustainability initiative. Subsidiaries can leverage location and engage in initiatives that may generate new technological knowledge and competences, potentially triggering strategic renewal of the MNE. However, in practice, MNEs tend to be skeptical to entrepreneurial efforts in subsidiaries and frequently discourage or hinder such initiatives. This paper reports on a case study of five subsidiaries in a chemical cluster in Sweden, promoting their joint vision for sustainable chemistry with their respective headquarters. The study, covering the first three years of the joint sustainability initiative, shows that the barriers at the interface of subsidiaries and headquarters can be categorized as financial, conceptual, cultural and structural. Studying the consequences of such barriers revealed that limitations were managed in innovative ways. However, advancing green chemistry in the studied companies is a difficult task as long as sustainability initiatives are assessed along the same evaluation criteria as any commercial project within the MNEs. To judge from this study, it is currently highly uncertain whether large multinational chemical firms are prepared to leave business as usual and make concessions to more firmly address global sustainability challenges, green chemistry and sustainability.

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