1. Choose a newsitem about an event in which the actions of a firm or governmental agancy play a crucial role.
● write a plausible account of how these actions might be the result of rational decisionmaking.
● write an alternative equally plausible account, showing how these actions might result from a boundedly rational organization.
The Evolution of Timberland Product Labeling
- Sustainable Earthkeeper Phylosophy
Timberland, one of my favorite brands, is famous for its quality, sustainability and expensive price. I would like to take this case as example for reasoning why sustainable labeling decisions are made by the company's management.
More and more, today’s consumers want to know what kind of environmental footprint is being left by the products they buy. In 2006, Timberland began putting that information on 30 million footwear boxes: by placing a “nutritional label” on every box to educate consumers about the product. Where it was manufactured. How it was produced. And its effect on the environment. To create the label, three critical areas are highlighted: Information about the manufacturing plant. The impact of manufacturing on the climate. And the impact on the community, including such factors as the number of hours of volunteer service performed by Timberland employees to “Make it better” in the community. Timberland also puts a message inside the box asking consumers to consider what kind of footprint they themselves are leaving and encouraging them to become proactive in the effort to protect our planet. Under this initiative, footwear boxes are also crafted from 100% post-consumer recycled waste fiber, using no chemical glues. Only soy-based inks are used to print the labels, which are the first of their kind in the industry.
The Timberland Company’s popularity has expanded amongst the casual consumer since 1918. The well-known product of the hiking boot turns eco-friendly, finding its mark in the retail sector and proliferating products from waterproof hiking boots to innovative environmentally-friendly worldwide stores. The Timberland Company has shown its sustainability effort and its impacts on the retail industry with great influenced concepts of nature transforming the way we not only conserve energy, but how one’s fashion becomes conservative-naturally. The Timberland brand has a remarkable philosophy stated well by Timberland’s President & CEO Jeff Swartz, which involves not only community engagement, but its offering of environmental conscious products, and it’s very profitable supply chains. Jeff Swartz calls these elements the, “Earthkeepers philosophy.” Mike Harrison, Timberland’s Chief Brand officer expressed his advocacy campaign for nature conservation with the proliferation of the Earthkeeper boot, and bringing a full-line of merchandise that has become very profitable for Timberland. According to, Stratham, N.H (The Business Wire) reports the bottom line equaled in the second quarter revenue at $240.1 million, a 27.1% increase compared with revenue of 189.0 million for the same period of 2010.
This outdoor brand was developed with the intention to be sustainable with retail stores using less energy as they are LEED certified, and the manufacturing of products that can be completely dissembled and recycled, eco-conscious good. Another interesting fact about this retailer is that has its own Nutrition Label, the first of its kind for the retail industry, which includes how the product was produced, manufactured, and the impact on the environment. I find this very exciting, for I have always loved this modern hiking boot made by Timberland. Go to timberland.com to shop, learn, and become environmentally educated on how one retailer in the industry is consciously aware of its surroundings.
Timberland's eco-consciousness results from its sustainable product strategy. I believe Timberland firstly tried to capture and appeal the customer's psychology. As customers always want to know what material has been used for the product and whether it worth the price. By taking the opportunity of informing customers the materials of the product, Timberland tries to educate people how its manufacturing is consciously aware of environmental impact and how people should confront themselves with this sustainable theme.
From this case, we could see Timberland is paying high attention on Corporate Social Responsibility. By placing a “nutritional label” on every box to educate consumers about the product, Timberland educates people the impact of manufacturing on climate, environment and community. It conveys to the public the company's awareness of "Profit, People and Planet". The triple bottom line is nevertheless one of the core values within social perspectives in Industrial Ecology. As we could see from the above Footprint label, Timberland precisely evaluates the product's environmental impact by calculating the energy consumed and renewable energy percentage in the consumption, which is very impressive to me actually. To be honest, I like this brand not only because of its high quality of product but also because the co-emotion of sustainable life. I think the sustainable label transforms the way we not only conserve energy, but also how one’s fashion becomes conservative-naturally.
In terms of decisionmaking, the CEO of Timberland, Jeff Swartz calls it “Earthkeepers philosophy.” Apart from capturing the customers' psychology, Timberland's commitment to stakeholder engagement has helped embed innovation across the company and the entire footwear industry. It has helped make the Timberland brand increasingly synonymous with social responsibility and transparency. I would also like to highlight that the stakeholder analysis is also one of the key concept in Industrial Ecology.
- Quarterly CSR reporting, which allows stakeholders to offer feedback in response to updated performance data regarding the company’s energy, product, workplace and service goals
- Quarterly stakeholder conference calls with CEO Jeff Swartz focused on Timberland’s CSR strategy pillars
- Voices of Challenge, an online platform for stakeholders to candidly discuss key issues as they relate to Timberland’s four sustainability pillars.
Now, I would also like to reason a little bit on this case from what I learned on the
"evolutionary approach towards the strategic perspectives of firms".
Novelty is created through the internal dynamics of the firm: the processes of framing, positioning, routinizing, and problem solving. In the competitive market which analogize with the biological evolution, I would say the selection pressure is the public fashion and customers preference. In terms of the mechanisms of Firm Level Retention and Change, Dr. Boons grouped the the corporations as three kinds: 1) Stable Firms; 2) Dynamic Firms; 3) Transformative Firms. According to my learning, I would reason here that Timberland falls into both category of Dynamic Firms and Transformative Firms. From the Dynamic Firm perspective, Timberland has routines for seeking new opportunities in terms of technological innovation, which it then translates into operative routines and activities. While incorporating the Transformative Firm characteristics, Timberland is trying to shape new values in the market for which confronts with its sustainable product strategies. It is dedicated to establish a new technological trajectory. In that sense Timberland can be seen as institutional entrepreneurs who seek to form a new organizational field with its own selection and transmission mechanisms. By introducing a new sustainable value into the market, it puts selection pressure to its competitors.The Eco-labeling is such an innovation by Timberland and it would highly influence the market and this industry.
We also talked about mechanisms of transmission in the strategic perspectives of firms. I'd like to say for competitors of Timberland, a transmission might need to be adopted. From the four mechanisms of transmission: coercion; imitation; through taxes and subsidies; through external consultation or professional network, I believe the imitation mechanisms might play an important role.
Now I try to explain why Timberland's sustainable strategy decision-making could be from a bounded rationality. Although this could be pretty hard as I have elaborate a lot on its rational decisionmaking possibilities. Nevertheless, one of the points on bounded rationality is that at the management level, emotions play a significant role in decision-making. Though I tried to avoid taking emotion into account for strategic decisionmaking on the firms, I was deeply impressed by the biography of the CEO of Timberland, Jeffery B. Swartz. Jeff is third generation of the Swartz family to lead Timberland. He received an MBA from Dartmouth in 1984, and a BA in Comparative Literature from Brown in 1982. Jeff is one of 19 founding CEOs selected for President Bush’s task force on national service called Business Strengthening America. He is on the board of directors for the Climate Group, Share Our Strength, Honest Tea, City Year, the Harlem Children’s Zone and Limited Brands, Inc. In addition, Jeff is a member of the World Economic Forum and the Two/Ten Foundation, an organization providing charitable funds and services to individuals in the footwear industry. In 2002, he received the Two/Ten Foundation’s T. Kenyon Holly Memorial Award for Humanitarian Achievement.
Thus From Jeff's bio, I could see his contributions to sustainable economy and eco-business. If any bounded rationality should be assumed, I would love to say it's the CEO Jeff's dedication to sustainability that promoted the sustainable strategy of Timberland and finally influence the whole market as well as customers' awareness of environmental impacts of their purchases.
2. Describe your learning experiences with the EMS exercise.
“Platform inc. is a firm that designs and assembles platforms used for oil drilling. The CEO is committed to environmental excellence of her business, which is an important player in the international market. As a result, the firm has started R&D to develop platforms suitable for off-shore wind turbines. Also, top management is interested in thinking about alternative business models that involve product service systems (PSS) and recycling and remanufacturing. To underpin these activities, the CEO has decided that information on environmental impact needs to become incorporated in the decision making of the firm.
As a starting point in the process of developing an Environmental Management System, the CEO has asked four core departments (Production, EHS, Marketing and Design) to provide the following:
- a vision of what excellence means, and the role of the departments in making that a reality;
- a specification of what information the departments need, and can provide, as input and output of the EMS;
- a specification of what information needs to be collected routinely”
During last lecture of the Social Systems Policy and Management, industrial ecology students are divided into four groups representing four departments of the company, namely Production, EHS, Marketing and Design. Students are required to establish an Vision for each department and decide what kinds of in-put and out-put information are needed and how these information interacts with each other on a inter-department level.
Before describing the experience, I would like to elaborate again on the definition of EMS. Environmental management system (EMS) refers to the management of an organization's environmental programs in a comprehensive, systematic, planned and documented manner.
So, how comprehensive can it be ? how systematic could it operate ? how could it be planned within a company with different departments ?
The answer is coordination and an appropriate model.
I would like to describe my reflections during the entire EMS exercise from two perspectives:
1) The Plan-Do-Check-Act Cycle of EMS;
2) The Horizontal Hierarchy in Corporation Management.
First, the Plan-Do-Check-Act Cycle is an continuous self-reviewing and self-refining closed loop. It requires an organization to consistently scrutinize its process and communication channel. By checking its process the organization adjust its manufacturing or service to the plan and avoid any mistakes. By checking its communication channel, the organization guarantees its channel to receive feedback.
Thus the model is continuous because an EMS is a process of continual improvement in which an organization is constantly reviewing and revising the system. In the class exercise, our group was assigned to act as the market department. We had a fierce discussion on what in-put and out-put information should be. Before the final comments from Dr. Boons, I didn't realize that the in-put and out-put information should match the needs and outputs from other departments. It is really critical to clarify the common ultimate goal of the whole corporation before each department take actions in their own fields so that each of them could tailor their information mobility and resources. The "routines" basically explains when and how to collect the information. If there is a huge mindset gap between different departments, the whole process cannot go on and it should self-review the gap thus further coordination could be carried out. In this sense, we acknowledge that the employees in a company should bear in mind how he/she should provide efficient and significant output which is good to the whole, not just to his own department. I believe that's also the reason many junior manager trainees should be circulated between different departments within a corporation to learn the mindset and knowledge boundaries of different departments.
The second perspective I thought of during the exercise is the Horizontal Hierarchy in Corporation Management which I learned in one Project Management course. In today's progressive business environment, many leaders opt to implement a horizontal or "flat" hierarchy in their companies. Leaders who integrate this structure into their organizational culture typically approach leadership with an inclusive style. In a horizontal hierarchy, employees gain an insight and understanding of such resulting in the fostering of team commitment that they may not have received in a top to bottom kind of structure. Even if employees are in different departments, they are sometimes assigned to a special projects with participation from different departments. And in this special project, there must be a project manager who is in whole charge of the diversified team and does not necessarily report to department managers. In this case, he should communicate well with employees coming from different departments. So within this niche, employees should speak the same "language" and understand what each other needs. So in a horizontal hierarchy and horizontal management, information could be shared better and the input and output information is more than convenient to be exchange.
In addition, the horizontal hierarchy allows members of all levels (both employees and managers) the ability to participate and get a first hand understanding as to why and how decisions are made. Under this kind of organizational framework, rarely are people left out and feel alienated from their companies.