ISO 14000 TOTAL QUALITY ENVIRONMENTAL MANAGEMENT:

THE INTEGRATION OF ENVIRONMENTAL MARKETING,

TOTAL QUALITY MANAGEMENT, AND CORPORATE
ENVIRONMENTAL POLICY
 Contents
Table 1.
Environmental/Sustainable
Marketing Perspectives
Compared to Traditional
Marketing
Table 2.
Environmental/Sustainable
Marketing Adapted to the Van
Waterschoot and Van Den
Bulte Improved Marketing mix
Classification Framework
Table 3. Selected
Environmental Product
Certification and/or Labeling
Systems
Table 4. Total Quality
Management (TQM)
Compared to Total Quality
Environmental Management
(TQEM)
Table 5. Motives for
Environmental Standards
Adoption
Table 6. Potential
Implementation Barriers and
Solutions for ISO 14000
Registration
Table 7. ISO 14000 Total
Quality Environmental
Management: The Integration
of Environmental Marketing,
Corporate Environmental
Policy, and Total Quality
Management
Notes:
Notes:
Notes:
Notes:
Notes:
Notes:
practices Hawken (1993) states that "not one wildlife reserve, wilderness, or indigenous
culture will survive the global market economy." Similarly, Shrivastava (1995) suggests
This exploratory study attempts to assess the
implications of the emerging ISO 14000 standards, as an
integrator of environmental marketing, Total Quality
Management, and corporate environmental codes of
conduct such the CERES Principles or the GEMI
Principles.
Anheuser-Busch does not subscribe to the theory that
deterioration of air or land or water is necessarily the
price of progress.
--August A. Busch Jr. (1970)
We don't need environmentalists, we need responsible
business entrepreneurs. Screw the environmentalists.
--Horst Rechelback, the first signer of the Valdez
Principles
(Kelly, 1993)
INTRODUCTION
Publicly traded corporations often adopt agency theory
as a foundation for business decision making. Agency
theory suggests that the paramount goal of management
is to create wealth for the owners (Jensen & Meckling,
1976). A corporation that adamantly follows agency
theory will relentlessly pursue activities that maximize
stockholder value, moderated only by externally imposed
law and regulation. However, Quinn and Jones (1995)
propose in the current social climate that shareholder
wealth maximinization must also be tempered by the
social and moral obligations of the firm. Quinn and Jones
(1995) suggest that this broader perspective, termed
"agent morality theory," results in enhanced long term
performance derived from the "invisible asset" of ethical
and socially responsible behavior.
These social and moral obligations are made with the
various "stakeholders" of the corporation including
(Donaldson & Preston, 1995): (1) customers, (2)
communities, (3) employees, (4) trade associations, (5)
suppliers, (6) governments, (7) investors, and (8) political
groups. Donaldson and Preston (1995) suggest that
corporations must move from the "morally untenable"
agency theory to a broader stakeholder perspective,
explicitly considering the effect on all stakeholders in the
development and implementation of strategy. Polonsky
(1995) proposes that stake-holder theory allows the
integration of environmental issues into overall corporate
strategy. However, in an appraisal of modern business
environmental management "risks have proliferated through population explosion, industrial
pollution, environmental degradation, and the lack of institutional capacity for risk
management."

Corporate managers are faced with many salient issues in their attempt to maximize value for
the different and sometimes conflicting interests of stakeholders. One of the most salient
issues pertaining to value creation with multiple stakeholder groups is the relationship of the
organization to its natural environment. The increased population pressures, urbanization,
environmental education, and changes in underlying social values have stimulated the recent
renewal of interest in environmental issues, both by individual citizens and corporations. For
example, the Roper Organization (1993) in a study of US households found that over fifty
percent of households perceive that they are "sympathetic" environmentalists. Shrivastava
(1996) suggests that there is a "ground swell of public awareness and support for
environmental protection" due to the "seriousness of environmental problems."

The Interrelationship Between Commerce and the Environment

Corporate involvement with environmental issues appears to "parallel trends in public

concern" (Hoffman, 1996). Hoffman (1996) in a content analysis study of trade journals in the
chemical and petroleum industries, found that corporate commitment to the environment has
tended to follow a sequence of philosophical perspectives that include: (1) techno-optimism
and self regulating (1960-1970); (2) defensive orientation as the public will confront industry
as the cause of all problems (1970-1982); (3) cooperation between industry and government
(1982-1988); (4) pro-active industry based solutions (1988-Present); and (5) confrontation re-
visited (1990-Present). Progressive corporations tend to take a more pro-active posture
toward the environment.

Businesses supporting Hoffman's (1996) pro-active perspective are gaining competitive

advantage by segmenting markets based on the consumer's level of environmental
involvement (Roper, 1992). This process, termed environmental marketing (Coddington,
1993), attempts to create competitive advantages as a strategic response to public
environmental concern. For example, the Body Shop, a U.K. based cosmetics retailer, has
created a sustainable competitive advantage based on manifest concerns for nature and the
cultural adoption of environmental values. The Body Shop has achieved superior sustained
business performance by marketing environmentally congruent cosmetic products and
utilizing eco-sensitive promotion and packaging (Ottman, 1993).

Pedro's Inc., a U.S. based firm specializing in the development and marketing of eco-friendly
bike equipment, has also developed its competitive advantage based on environmental
issues. Pedro's makes bicycle tire tools out of recycled milk bottles and bike solvents and
lubricants from environmentally friendly, non-toxic chemicals. Other firms have adopted
environmental / eco-labeling to attract the "educated, affluent, and mainstream" green, or
environmentally sensitive, consumer (Ottman, 1993). Even the global fast food giant
McDonald's has made great strides in becoming more eco-friendly. McDonald's has
cooperated with the Environmental Defense Fund to develop a waste reduction action plan
along with other initiatives such as a corporate level environmental affairs officer and a design
team whose goal is to reduce packaging (Frause & Colehour, 1994).

Individual business, inter-industry sponsored associations, and intra-industry sponsored

associations are developing and implementing their own policies, environmental standards,
and codes of environmentally responsible conduct as a "pro-active" response to
environmental issues. For example, the Paris based International Chamber of Commerce has
developed "The Business Charter for Sustainable Development," or GEMI Principles, that
provides a comprehensive framework describing how socially responsible organizations
should relate to the natural environment (International Chamber of Commerce, 1990;
Coddington, 1993; Frause & Colehour, 1994).

PURPOSE

The purpose of the present study is to explore the implications of the emerging ISO 14000
environmental standards. ISO 14000 is a new set of formal inter-industry, international
standards for environmental management being developed by the British Standards Institute
and the International Organization for Standardization (ISO) (Johnannson, 1994/95). ISO
14000 will be a comprehensive environmental system involving a set of fourteen standards
which will approach environmental management in a similar manner as the ISO 9000
standards approached quality management (Fredericks & McCallum, 1995).

This study will discuss the foundation areas for each of the standards comprising the ISO
14000 system and demonstrate that ISO 14000 is a Total Quality Environmental system which
integrates environmental marketing, corporate environmental policy, and Total Quality
Management (TQM). A discussion of each of these concepts is presented next. The ISO
14000 environmental management standards are then discussed, including value of ISO
14000 certification, components in the ISO 14000 series, and ISO 14000 implementation
issues. Finally, ISO 14000 is shown to be the integrator of environmental marketing, corporate
environmental policy, and Total Quality Management.

ENVIRONMENTAL MARKETING

Why are global businesses concerned with the environment? The adoption of more
environmentally congruent practices and policies by business is derived from the increasing
concern for the natural environment by consumers. This increased level of sympathy toward
the environment is manifested by the finding that a majority of US households are willing to
pay price premiums for environmentally sensitive products (Roper Organization, 1992).

"Marketing activities that recognize environmental stewardship as a business development

responsibility and business growth opportunity" is how Coddington (1993) defines the
emerging practice of environmental marketing. Ottman (1993) defines environmental
marketing as having two objectives: (1) to develop and offer environmentally compatible
products, and (2) to create a quality based image that suggests to all stakeholders that the
firm is environmentally sensitive.

Miles and Munilla (1993) in defining the eco-marketing concept suggest that "consumers are
... concerned with a holistic view of corporate image, particularly with regard to social concern
and (environmental) responsibility." Sheth and Parvatiyar (1995) suggest that corporations'
internal environmental marketing efforts should be augmented by government policy, resulting
in the two dimensional construct of "sustainable marketing" which includes: (1) "proactive
corporate strategies that would benefit both corporations and society;" and (2) "government
intervention for sustainable development." Environmental marketing, green marketing, eco-
marketing, and sustainable marketing are all different perspectives of the attempt by
businesses to adapt to the growing environmental concerns of various stakeholders.

The U.S. Federal Trade Commission's 1992 guidelines on environmental marketing focus on
advertising and define the parameters that are acceptable when making environmental claims
(Coddington, 1993). Table one summarizes the differences between the
sustainable/green/environmental marketing perspective and traditional marketing. Table two
provides an adaptation of Van Waterschoot and Van den Bulte (1992) revised 4P marketing
mix classification framework.

Three indicators of a firm's commitment to environmental marketing are eco-labeling, lifecycle

analysis, and environmental design. A discussion of each of these concepts follows.

Eco-Labeling

Consumers are looking for indicators of a business's commitment to the environment with
environmental labeling standards. Eco-labeling identifies a product as complying with one of
several environmental certification programs. Likewise, manufacturers and marketers are
attempting to differentiate their products by ecological labeling, with the objective of
enhancing market share or profitability. Coddington (1993) reports that environmental labeling
programs have developed on a global scale, beginning with the German Blue Angel program
in 1978, followed by the Canadian Environmental Choice program in 1988, and the Japanese
Eco-Markprogram in 1989 among others. Table 3 summarizes selected international
environmental labeling standards.

Lifecycle Analysis

Lifecycle analysis, another indicator of environmental commitment, explicitly integrates

externalities from both the production and consumption of the product into the systems that
produce a firm's products or services (Tibor & Feldman, 1996). All stages of the lifecycle,
including raw material acquisition, production of the good or service, distribution, waste
management, energy supply, product use, product disposal, and recycling are analyzed from
an environmental cost perspective. As shown in Figure 1, lifecycle analysis can be assessed
by augmenting the traditional operations management transformation process diagram. This
model contains many environmentally-sensitive systems. Inputs (such as raw materials,
transportation systems for raw materials, and energy supply systems) are converted to
outputs (including products/services, transportation systems for outputs, recycling, and
product disposal) through a transformation process (which includes maintenance, by-
products, toxic emissions, waste disposal). Although not currently practiced widely, lifecycle
analysis has the potential to reduce energy and material usage (Tibor & Feldman, 1996).

Environmental Design

An important component of lifecycle analysis is environmental design. Using an environmental

design approach, products and processes are designed such that emissions and wastes are
either minimized or completely removed (Tibor & Feldman, 1996), thereby diminishing the
environmental impact of producing the good or service. Environmental design attempts to
minimize the externalities associated with the production, consumption, and ultimate
disposition of a product. A measure of a product's total impact on the environment can be
captured using full cost accounting. Full cost accounting attempts to quantify the
environmental impact of product/process designs by allocating traditional costs to the product
as well as environmental costs, including direct costs, hidden costs, contingent liability costs,
and costs associated with invisible assets (GEMI, 1994b). In this way, managers can
accurately assess the costs associated with any product or process modification.

CORPORATE ENVIRONMENTAL POLICY

Many organizations with a pro-active perspective towards environmental issues have adopted
(or are in the process of adopting) formal intra-organizational environmental codes of conduct
or industry-specific codes. In addition, many firms are developing their own corporate
environmental statements (see for example Anheuser-Busch, 1970). Formal non-industry
specific intra-organizational statements of environmental principles include: (1) the Coalition
for Environmentally Responsible Economies (CERES) principles, also called the Valdez
Principles; (2) the International Chamber of Commerce's Business Charter for Sustainable
Development, or the GEMI Principles (International Chamber of Commerce, 1990); and (3)
the United States Federal Trade Commission's Guidelines for the Use of Environmental
Marketing Claims (Coddington, 1993).

Examples of emerging industry-specific environmental codes of conduct include the Chemical

Manufacturers Association's Responsible Care Program and the American Forest and Paper
Association's Sustainability Guidelines. These formal statements have become models which
establish a framework for evaluating an organization's commitment and performance with
respect to environmental responsibilities (Sanyal & Neves, 1991).

An example of how these environmental codes of conduct affect business practices is

demonstrated in the CERES or Valdez Principles. These principles, formulated as a response
to the Exxon Valdez oil spill, are designed to "create a voluntary mechanism of corporate self-
governance that will maintain business practices consistent with the goals of sustaining our
fragile environment" (CERES, 1990). Ten dimensions are included to assess a company's
involvement in environmentally responsible activities including guidelines regarding
organizational structure, product design, product manufacture, waste management, and after-
sales liabilities. For example, these principles suggest formulation of an environmental affairs
committee (reporting to the Board of Directors). It is also recommended that products be
designed that "minimize adverse environmental impact" (Sanyal & Neves, 1991) and use
recallable material. In addition, processes which manufacture the product should maximize
energy efficiency, preferably using renewable natural resources. These processes should also
minimize pollution. After manufacture, the Valdez principles suggest firms should take
responsibility for damage to the environment caused by their product.

TOTAL QUALITY MANAGEMENT AND THE ENVIRONMENT

Cardy and Dobbins (1996) suggest that "what exactly constitutes TQM seems to differ across
organizations and quality proponents." However, the quality movement has focused
organizational resources on improving customer satisfaction and value. Taguchi's (1987) and
Taguchi, Elsayed and Hsiang's (1989) social loss function framework suggests that quality is
defined by the total costs that a product (or an organization) inflicts upon society. These
losses could be either due to: (1) variation in the total product, or (2) negative externalities
that result from any stage in the product's lifecycle, from product development to ultimate
disposition. Miles, Russell and Arnold (1995) suggest that when firms incorporate quality as
the foundation of their corporate culture they should consider: (1) both the production and
consumption externalities associated with the product; (2) the satisfaction of both latent and
explicit customer needs; and (3) the creation of the highest total value possible for the specific
product/market interface. These definitions of quality suggest that organizations consider, if
not always explicitly, the environmental effects of the production and consumption of the
product.

The Global Environmental Management Initiative (GEMI) created the Total Quality and
Environmental Management (TQEM) model in an attempt to "marry environmental
management and Total Quality Management" (Coddington, 1993; GEMI, 1993). TQEM is the
integration of a comprehensive lifecycle approach to TQM and environmental management
which includes (GEMI, 1993): (1) customer identification and satisfaction; (2) continuous
improvement; (3) a proactive approach to problem solving; and (4) a systems approach to
business, explicitly including the natural environment. TQEM even adapts some of the basic
TQM tools into an environmental quality framework including: (1) Plan, Do, Check, Act cycle;
(2) fishbone diagrams; (3) pareto charts; (4) control charts; (5) flow charts; and (6)
benchmarking (see GEMI, 1993). Hence, TQEM appears to be an extension of TQM, explicitly
taking into consideration environmental issues and costs pertaining to the production,
consumption, and the ultimate disposition of the product, its packaging, and related by-
products. Table four provides a summary of the similarities between TQM and TQEM.

TQEM CERTIFICATION: ISO 14000

One framework available to businesses taking a pro-active perspective towards that

environment by adopting a stakeholder or agent morality orientation is to implement the
emerging ISO 14000 comprehensive TQEM standards, set to be released during 1996
(Johannson, 1994/95). ISO 14000's approach to TQEM is modeled after ISO 9000's
approach to TQM and BS 7750, a TQEM standard previously developed by the British
Standards Institute with registration process and management systems similar to ISO 9000
(Fredericks & McCallum, 1995). The widely adopted ISO 9000 series has become virtually a
requirement to actively engage in global business.

Value of ISO 14000 Certification

The value of ISO 14000 certification to business is derived from the relationship between total
benefits that arc estimated to accrue to the adopting organizations and total cost. Although
ISO 14000 has not yet been fully released (at the time of the present study), an assessment
of the costs of ISO 14000 adoption can be estimated using the costs of adopting the BS 7750
standard (on which the ISO 14000 series was modelled). The pecuniary and non pecuniary
costs of achieving BS 7750 certification are quite high and could in time cost from "$100,000
to $1 million per plant." (Ouellett, 1995) Then, why is ISO 14000 a rational decision for an
organization attempting to maximize shareholder wealth?

There are seven potential benefits accruing to business that achieve I$O 14000 certification:
(1) internal motives based on a corporate culture that values morality, ethics, and corporate
social responsibility; (2) ability to charge more for products due to effect of differentiation
(Kotler, 1994); (3) certification as a barrier to entry in some markets resulting in less
competition (see for example Porter, 1980, 1985); (4) enhanced corporate image which may
allow some special considerations when dealing with public stakeholders; (5) adoption of
standards may help insulate the firm against charges of environmental negligence (Rothery,
1995); (6) the adoption of sound environmental practices such as energy conservation and
recycling may actually produce cost savings (Chemicals Business News Base, June 9, 1995),
including lower insurance rates (Tibor & Feldman, 1996); and (7) voluntary adoption of
environmental practices allows commerce to have input on standards and may pre-empt
government regulations.

Not all firms will realize each of these benefits. However, firms are more likely to achieve ISO
14000 certification, thereby attaining many of these benefits when: (1) the firm is operating in
an environment where ISO 9000 is a business requirement, hence ISO documentation
procedures are well understood; (2) the firm is ISO 9000 certified (irrespective of business
environment pressures) and is familiar with the certification process; (3) the corporation has a
documented company-specific environmental policy; (4) the firm operates in an industry
where environmental codes of conduct have been adopted; or (5) the firm operates in an
industry in which extensive environmental laws and regulations apply. Table 5 summarizes the
motives for ISO-14000 adoption.
ISO 14000 Components

Stoller (1995) suggests that ISO 14000 will consist of several standards classified into six
categories: (1) environment management system; (2) environmental auditing; (3)
environmental performance evaluation; (4) lifecycle assessment; (5) environmental labeling;
and (6) environmental aspects in product standards. A brief discussion of each of these
categories follows.

The ISO 14000 Environmental Management System (EMS) standard (ISO standards 14001,
14004) provides basic requirements for firms implementing an environmental management
system. The standard defines an environmental management system as "that part of the
overall management system which includes organization structure, planning activities,
responsibilities, practices, procedures, processes, and resources for developing,
implementing, achieving, reviewing, and maintaining the environmental policy" (Tibor &
Feldman, 1996). Environmental policy describes a firm's intentions, values, culture, and
principles with respect to environmental performance. ISO 14000 parallels the approach TQM
takes toward quality management, where a quality management system is seen as a
philosophical business orientation. In this way the ISO 14000 standards help define the
corporation's environmental policy. ISO 14000 requires that the firm declare in a policy
statement a strong commitment to comply with environmental regulations and minimize
pollution.

The environmental management system standard also requires identifying environmental

aspects of the firm's products, services, and activities. One approach which can be used to
identify these aspects is the previously discussed lifecycle analysis. After identification, the
EMS standard requires objectives and targets be set (for every relevant function and level in
the organization) that facilitate continuous improvement with respect to environmental
management (parallel to a TQM approach). Additionally, the ISO 14001/14004 standards
address the responsibilities and monitoring requirements of the EMS. As proposed, the ISO
14001 and 14004 standards are quite comprehensive. It is anticipated that most companies
will first seek certification in one of these standards as an antecedent to certification in the
entire ISO 14000 series.

After development of the environmental management system, a standard approach must be

developed which assesses whether the EMS meets ISO standards and has been correctly
implemented. The environmental auditing standard (ISO 14010-14012) addresses this issue.
Environmental auditing is the most widely accepted tool in the environmental management
system (Tibor & Feldman, 1996). Included in this standard are guidelines for determining
evidence of conformance to standards, criteria for the audit, reporting findings, and when
corrective action is appropriate. The auditing standards are developed to monitor and control
the environmental management system, not the performance of the company with regard to
the environment. Hence, ISO 14010-14012 must be implemented concurrent with or after the
ISO 14001 and 14004 standards are adopted.

The third standard in the ISO 14000 series addresses environmental performance. This
standard, ISO 14031 (environmental performance evaluation) generates information which
assesses the organization's total performance with respect to the environment. Environmental
performance indicators are identified which detail performance in all environmental aspects
identified in the EMS. These environmental performance indicators are then used to evaluate
and continuously improve environmental performance.

Lifecycle assessment/analysis and environmental labeling are also components of the ISO
14000 series, proposed as individual standards 14040-14041 (lifecycle assessment) and ISO
14020-14022, 14024 (environmental labeling). Hence, the ISO 14000 standards also integrate
environmental marketing into TQEM.

The final component of ISO 14000, proposed as the ISO 14060 standard, addresses
environmental aspects in product standards. The purpose of ISO 14060 is to increase
awareness among standard developers of the potential impact a new standard could have on
the environment. Standards should be developed which achieve the intended performance
while reducing pollution, conserving resources, and guarding against "reasonably foreseeable
misuses" (Tibor & Feldman, 1996).

ISO 14000 Implementation Issues

Dramatic organizational change, such as ISO 9000 or ISO 14000 adoption, does not come
without costs. Costs will accrue both to the adopting organization and its stakeholders. These
costs may be explicit, such as registration fees, training of personnel, or costs incurred to
modify current processes; or implicit, such as moral and productivity problems, shifts in
supplier chain relationships, or competing organizational objectives. Jump (1995) suggests
four major barriers to ISO 14000 registration: (1) cost effectiveness; (2) agency costs; (3) ISO
14000 registration producing trade barriers; and (4) potential conflicts with corporate
reengineering. Gloria, Saad, Breville and O'Connell (1995) propose similar impediments in a
recent study of 34 Fortune 500 companies involved in life cycle analysis (a component of ISO
14000) implementation, stating that life cycle analysis was impeded by costs (ranging "from
$15,000 to $300,000 per product") and data quality/management issues. These barriers and
potential solutions are summarized in Table 6.

Other authors discuss the importance of human resources in the implementation of ISO
9000/14000. A recent study of 290 ISO 9000-certified companies in Belgium indicated that 81
percent believe that contribution of the human resources department is "absolutely essential
in making the quality system work smoothly" and in implementing ISO 9000 (Vloeberghs,
1996). Although many firms in this study utilized the human resource department on an ad-
hoc basis (for training and other specific human resource issues), some firms reported
enlisting the human resources department on a strategic level, giving this department "active
participation" in management meetings and input on quality policy. Based on the similarities
between ISO 9000 and ISO 14000, it is likely that the human resource function will be of
critical importance in ISO 14000 implementation. Tibor and Feldman (1996) advocate this
position in stating that "teamwork, cooperation, good communication, and extensive training"
(all supported by or directly related to the human resources department) are "critical" aspects
of effective ISO 14000 implementation.

An ISO 14000 Implementation Framework

A step-by-step approach will likely enhance the success of ISO 14000 implementation. First, it
is typically beneficial to perform an initial environmental SWOT analysis (Tibor & Feldman,
1996). Here, current environmental management practices/policies are analyzed and data
collected regarding measurement/ monitoring of the environmental system. In looking at its
environmental strengths/ weaknesses and opportunities/threats, a firm can determine how
ISO 14000 implementation efforts should be focused. If the SWOT analysis demonstrates that
environmental concern has not become part of the "corporate culture" of the organization,
firms should focus on "identifying those objectives that can be achieved with available
resources and those that result in clear business benefits" (Tibor & Feldman, 1996). This
includes reduction of regulatory violations, recycling, and waste reductions. In this case, using
the basic elements of the ISO 14001 standard may be appropriate.
After implementing a "simple" environmental system (evidenced in the basic elements of the
ISO 14001 standard) designed to increase company-wide environmental awareness, top
management would likely invoke training of employees. It is critical that management provide
both time and resources in support of ISO 14000 certification. It is likewise crucial that
personnel be trained on the systems-based approach ISO 14000 requires. Teamwork and
good communication are essential in the certification effort (Tibor & Feldman, 1996). As has
been evidenced by ISO 9000-certified companies, the final phase in ISO 14000
implementation/certification is a change in company culture. The ultimate goal is to have a
firm where employees own "the environmental issues and the environmental aspects of their
jobs" (Tibor & Feldman, 1996).

ISO 14000: Integrator of Environmental Marketing, Corporate Environmental Policy, and Total
Quality Management

ISO 14000 is a comprehensive Total Quality Environmental Management (TQEM) system

which integrates the basic components of environmental marketing (environmental labeling,
lifecycle assessment, and environmental design) with Total Quality Management. In addition,
ISO 14000 addresses the emerging environmental concerns by both consumers and
commerce which stimulated the development of environmental codes of conduct. Table 7
provides a framework of how ISO 14000 integrates environmental marketing, total quality
management, and corporate environmental policy into a comprehensive total quality
environmental management system.

CONCLUSIONS AND IMPLICATIONS

With the ISO 9000 quality management series and the pending adoption of the ISO 14000
TQEM standards, the ability to engage in global marketing is dependent on an organization's
willingness to adopt international quality and environmental management practices. ISO
14000 provides a formal set of consistent international standards which integrate many of the
emerging environmental and quality issues. In summary, the ISO 14000 standards formally
integrate and codify many of the TQM, environmental marketing, and environmental policy
concepts which have been previously developed.

Given the widespread, global adoption of the ISO 9000 quality standards, it is reasonable to
assume ISO 14000 will be likewise embraced. ISO 14000 certification will allow firms to
market globally without constraints due to environmental concerns and to promote its
products as being eco-friendly to an increasing environmentally oriented international
markets.

Subsequent research should address the impact of ISO 14000 adoption on all the
organization's salient stakeholders, including: (1) customers, (2) communities, (3) employees,
(4) government, and (5) owners. One area or focus should be pertaining to the human
resource management implications of ISO 14000. For example, Ocean Spray cooperative has
considered paying its member/producers not only on the traditional attributes of the quality
and quality of the cranberries delivered, but also on the grower's environmental performance
(Murray, 1996).

Companies may also wish to reconsider the manner in which employees are hired,
compensated and promoted under the ISO 14000 umbrella. It is possible that environmental
concern may be incorporated into hiring procedures. Performance evaluations could include
environmental concern as well as recycling and waste reduction initiatives. Additionally,
attitudes toward teamwork and cooperation with other employees (important employee
attributes in the system-based ISO 14000 approach) could be used in determining salary
increases. Further research should also consider the implications of ISO 14000 adoption in
gaining competitive advantage in specific domestic and global markets.

Table 1. Environmental/Sustainable Marketing Perspectives

Compared to Traditional Marketing
The following chart reads as follows

Row 1: Objective/Perspective

Row 2: Environmental/green/Sustainable Marketing

Row 3: Traditional Marketing

Objective

Satisfy customer needs in an environmentally

sustainable way, while earning a profit.[1]

Satisfy customer needs at profit.[2]

Perspective of Customer

The buyer of the product, and the victim of all

externalities; or all stakeholders.[1]

The reason for existence.

Perspective of Government

An ally in the creation of a sustainable economy to

work and manage.[1]

A regulator and limiter. To be managed.

Perspective of Demand

The redirection of demand towards products with low

levels of externatility production.

The stimulation of for any and all products. Most

efforts placed on highest margin products.

Notes:
1 Sheth and Parvatiyar (1995)

2 McCarthy and Perreault (1993)

Table 2. Environmental/Sustainable Marketing Adapted to the

Van Waterschoot and Van Den Bulte Improved Marketing mix
 Classification Framework
The following chart reads as follows

Row 1: Marketing Mix Function[1]

Row 2: Environmental/green/sustainable Marketing

Row 3: Traditional Marketing

PRODUCT

Need satisfying instruments in an exchange.

Environmental design of product;[4] Products designed

to facilitate long term use, energy efficient,
efficient recycling, "life-cycle recyclibility
responsibility" & consider both the total cost of
production and consumption.[2]

Planned obsolescence, designing products to have

shorter lives, disposable products, no concern about
externalities from the production or consumption of
product.

MASS COMMUNICATION
Non-personal message with goals of creating awareness, interest,
and desire.

Environmental labeling. Move towards rational

consumption.

Stimulation of both primary and selective demand

utlizing mass media. Attempt to create desire for
unsought goods. Focus on image and emotion of
products.

PLACE
Where and how of availability

Lifecycle assessment, Total Cost Assessment of

distribution.[4]

Distribution based on interrelation-ship between

costs of distribution and strategic objectives.

PERSONAL COMMUNICATION
Personal messages with goals of maintaining awareness and interest
and stimulating desire and sales.

Focus on meeting consumer needs at minimal cost to

environment, while achieving long term profits.

Focus on meeting customer needs at a profit.[3]

PLACE
Where and how of availability

Lifecycle assessment, Total Cost Assessment of

distribution.[4]

Distribution based on interrelationship between costs

of distribution and strategic objectives.

PRICE
The cost and method of payment

Total cost assessment, Full Cost Accounting,[4] or the

explicit internalization of all external costs must
be considered in setting price in relationship to
strategic objectives and demand.[5]

A strategic decision based on interrelationship

between marketing objectives, financial objectives,
and demand.

Notes:
1 Van Watershoot and Van den Bulte (1992)

2 Sheth and Parvatiyar (1995)

3 McCarthy and Perreault (1993)

4 GEMI (1994a, 1994b)

5 Miles, Russell, and Arnold (1995)

Table 3. Selected Environmental Product Certification and/or

Labeling Systems
The following chart reads as follows

Row 1: Product Certifier

Row 2: Geographic Scope

Row 3: Attributes

Blue Angel

Germany

Criteria for each product category is determined

through a public hearing process. Certified products
carry the Blue Angel Logo. Must be re-certified every
three years.[1] Certification appears to focus on
 product design characteristics.

Environmental Choice

Canada
Similar programs in New Zealand and Australia.[2]

Environmental Canada, utilizing public hearing and

with Canadian Standards Board establish criteria.
Criteria considers a "modified life-cycle approach
that looks at production, transportation, use, and
disposal of products."[1] Eco-design appears to be
omitted. Products that meet the criteria carry the
EcoLogo.

Eco-mark

Japan

Simple process for product certification.

Green Cross or Scs

United States

Initially certification based on specific product

attributes. SCS utilizes a life-cycle approach
assessing a product's level of environmental
burden.[2]

Green Seal

United States

Similar to the Canadian Environmental Choice modified

lifecycle analysis, testing done by UL.[1]

BS 7750

United Kingdom

Labeling part of total lifecycle and environmental

management system.

ISO 14000

World

Labeling part of total lifecycle and environmental

management systems.

Notes:
1 Frause and Colehour (1994)
2 Coddington (1993)

Table 4. Total Quality Management (TQM) Compared to Total

Quality Environmental Management (TQEM)
The following chart reads as follows

Row 1: Attribute

Row 2: TQM

Row 3: TQEM

Dimensions

Customer Focus[1], Value[2], Social Loss[3],

Teamwork[4], Continuous Improvement[4], Proactive[5]

Customer Focus[6], Continuous Improvement[6],

Environmental Focus[6], Systems Approach[6], Proactive
Problem Solving[6]

Founders

Deming

GEMI

Date Philosophy Developed

1950's

1990's

Champions

Operations Management, Marketing

Operations Management, Marketing, Accounting

Motives for Development

Consumer demands for higher quality products; global

markets

Consumer demand for eco-responsible products and

business

Theoretical Roots[7]

Statistical Process Control,[7] Systems Theory[7]

Corporate Social Responsibility, Systems Theory,[6]

Stakeholder Theory
Formalized by and Codified by

ISO 9000

ISO 14000

Notes:
1 Deming(1986)

2 Adapted from Kotler (1994)

3 Taguchi (1987)

4 Dean and Bowen (1994)

5 Svedberg (1990)

6 GEMI (1993)

7 Shani and Mitki (1996)

Table 5. Motives for Environmental Standards Adoption

Legend for chart:

A - Motive
B - Support

A B

Corporate Social A motive based on ethical perspective of

Responsibility business's role in society.[1,2,3,4]

Differentiation The ability to obtain a price premium due

to the effect of differentiation; the
potential for increased sales and/or market
share due to differentiation.[5]

Entry Barrier Certification as a barrier to entry in some

markets resulting in less competition.[6,7]
For example the EC may force some type of
environmental compliance for organizations
hoping to gain entry into their markets.

Image Enhancement Voluntary adoption of environmental

standards may enhance corporate image which
allows some special considerations when
dealing with public stakeholders.[8]

Legal Immunity Voluntary adoption of environmental

standards may help protect firm against
 charges of environmental negligence.[9]

Cost Savings The adoption of sound environmental

practices such as energy conservation and
recycling may actually save the
organization expenses,[10] including lower
insurance rates.[11]

Influence on Legal Voluntary adoption of environmental

Standards practices allows commerce to have input on
standards and may pre-empt regulations.[11]

Notes:
1. Donaldson and Preston (1995)

2. Polonsky (1995)

3. Quinn and Jones (1995)

4. Shrivastava (1996)

5. Dickson and Gintner (1987)

6. Porter (1980)

7. Porter (1985)

8. GEMI (1994b)

9. Rothery (1995)

10. Chemicals Business News Base (June 9, 1995)

11. Tibor and Feldman (1996)

Table 6. Potential Implementation Barriers and Solutions for ISO

14000 Registration
Legend for chart:

A - Implementation Barrier
B - Potential Solution

A B

Cost Effectiveness[1] Adapt cost/benefit assessments of ISO 9000

to ISO 14000. Utilize Rust, Zahorik and
Keiningham's (1995) Return on Quality
framework.

Agency Costs[1] Make adoption and implementation of ISO

 14000 congruent with other organizational
and personal objectives.

Trade Barrier Since ISO 9000 has become the global

Issues[1] quality standard, it is likely that ISO
14000 will become the global environmental
standard. Firms (large or small) will
likely be forced to comply with ISO 14000.

Conflicts with Reengineer systems and processes such that

Corporate environmental "value-added" is considered
Reengineering[1] in addition to more traditional value-added
activities.

Morale Problems Involve employees and the human resources

department in developing the ISO 14000
system. Allow employees to "own" the
environmental aspects of their jobs[2].

Notes:
1 Jump (1995)

2 Tibor and Feldman (1996)

Table 7. ISO 14000 Total Quality Environmental Management:

The Integration of Environmental Marketing, Corporate
Environmental Policy, and Total Quality Management
Legend for chart:

A - ISO 14000 Component Standard

B - Foundation Area

A B

14001 Environmental Management Total Quality Management (TQM)

14004 System (EMS)

14010 TQM and Corporate Environmental

Policy

14011 Environmental Auditing

14012

14015

14020 Environmental Marketing

14021 Environmental Labeling

14022
14024

14031 Environmental Performance TQM

Evaluation

14040 Life Cycle Assessment TQM, Environmental Marketing,

(LCA) and Corporate

14041 Environmental Policy

14060 Environmental Aspects in Environmental Marketing

Product Standards

Adapted from Miles, Munilta, & Russell (forthcoming) and Tibor & Feldman (1996)

DIAGRAM: Figure 1. Lifecycle Analysis Using a Traditional Transformation Process Model

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~~~~~~~~

By Morgan P. Miles and Gregory R. Russell, Georgia Southern University

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Source: Journal of Quality Management, 1997, Vol. 2 Issue 1, p151, 18p
Item: 9703303301

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