Grand societal challenges and the reorientation of incumben - PowerPoint Presentation

Slide1

Grand societal challenges and the reorientation of incumbent industries: A dialectic issue life cycle model and examples

Prof. Frank Geels

SPRU, Univ. of Sussex

(sustainable practices workshop, 26-27 Jan. 2012)Slide2

StructureIntroduction/motivation

Theoretical framework

Case study 1

Case study 2

ConclusionsSlide3

1. IntroductionWhy at this workshop?NOT about consumption practices

But it is about:

“problems such as

climate

change”



Issue life cycles (the dynamics of problems)

Political economy

 much talk in transitions literature about power and politics, but remains vague (often rather discursive)

“Questions

of the

interaction

between political and regulatory

frameworks”. And

industry/technical innovation, markets and civil

society/discourse.Slide4

Background (innovation studies)New topic

: Grand societal challenges

(climate change, energy security, transport and resource efficiency, food safety, obesity, health and aging)

Linked to

: Systemic transitions + directionality of innovation

(rather than speed and output)

Focal actor

: Industry (population of firms)

Embedded in organizational field

(link to my previous work)Slide5

Organizational fieldSlide6

Research questionsLock-in, inertia, path dependence

How do societal problems emerge and develop?

How do industries respond to societal problems? When do they implement substantial responses (i.e. overcome lock-in)? Slide7

Research strategyDevelop an enriched issue life cycle model

Confront the model with in-depth case studies:

US car industry and:

Local air pollution (1945-1985)

Car safety (1910-2000)

Climate change (1990-2010)Slide8

2. Theoretical frameworkIssue life cycle theory (Business & Society)

Mahon and

Waddock

(1992)Slide9

Tombari (1984)Slide10

Rivoli and Waddock (2010)Slide11

StrengthsIssues/problems have temporalityIssue dynamics are socially enacted

Social construction + power/politics

Multi-dimensional:

Activists/social movements

Public opinion

Political debates

Political decisions (+ implementation)Slide12

WeaknessesToo little conflict/struggle (teleological unfolding)

Too little corporate strategies

Linear sequence

(problem in many phase-models)Slide13

ImprovementsLink to broader industry framework

Add more strategy and struggle/conflict

Flexible with phases: backwards, forwardsSlide14

Triple embeddedness framework of industry Inspired by:

institit

. theory: org. fields

Structuration

theory (‘rules and resources’)

Regulation theory (mode of production, regime of accumulation, mode of regulation)

Scott’s (1993) institutional pillars

Evolutionary theory: adapting to selection pressuresSlide15

Framing, PR and issue management strategiesIgnore, deny, downplay problems

Emphasize uncertainties and contest the science

Emphasize costs and difficulties of solutions

Adjust storylines to increase

(

Benford

and Snow, 2000):

Actor credibility

Empirical fit

Centrality

Experiential commensurability

Macro-cultural resonanceSlide16

Corporate political strategies (Hillman and Hitt, 1999)

1. Information and framing strategy

- industry research institutes to build expertise

- contest the science

- commission research reports

- testify as expert witness in hearings

2. Financial incentives strategy

- make contributions to political parties

- pay fees to politicians for speeches

- offer politicians lucrative jobs at the end of their career

3. Organized pressure strategy

- create fake grassroots organizations (‘astroturf’)

- create industry associations that speak for the industry

- mobilize employees, suppliers, customers to pressure their representatives

4. Direct lobbying strategy

- hire lobbyists to work politicians

- mobilize CEOs to speak with politicians

5. Confrontational strategies

- oppose laws through litigation

- threaten policy makers with plant closures

- refuse to implement or obey policiesSlide17

Economic positioning strategiesPorter: low cost, high performance, niche market

Supply chain management, marketing strategies

Corporate strategy/missionSlide18

Innovation strategiesTension: Radical and incremental innovationExploitation-exploration

(March, 1991)

Ambidextrous organizations

(

Tushman

)

Radical innovation not just about knowledge flows (innovation systems),

But also about beliefs and strategic commitmentSlide19

Rothwell (1992)

Tactical factors

Strategic factors

Effective linkages with external sources of know-how

Top management commitment to, and visible support for, innovation

Effective functional integration; involving all departments in the project from its earliest stages

Long-term corporate strategy in which innovation plays a key role

Careful planning and project control procedures

Long-term commitment to major projects.Slide20

Temporal unfolding of pressures and responses

(ideal-type)Slide21

Phase 1: Problem definition and framing strugglesSlide22

Phase 2: Rising public concerns and defensive industry responsesSlide23

Phase 3: Political debates/struggles and defensive hedgingSlide24

Phase 4: Political regulations and diversificationSlide25

Phase 5: Spillovers to task environment and reorientationSlide26

Different issue cyclesSlide27

3. Longitudinal case study: Air pollution, technical innovation, and the American car industry (1943-1985)

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Source:

University of Southern California Digital Library and Los Angeles Times photographic archive, UCLA LibrarySlide28

Phase 1: Issue emergence and sensemaking attempts (1943-1953)

Pressures:

Severe smog events in California (1943, 1948)Slide29

Public concerns and protests

Smog protestants at Board of Supervisors, 1947

Source:

University of Southern California Digital Library Slide30

Symbolic policy statements (concern)

Smog committee at District Attorney's Office, 1947

Source:

University of Southern California Digital Library Slide31

Research into causes (sensemaking struggles)Initial blame to stationary sources (oil and waste burning)Haagen-Smit research: car exhausts + smog chemistry

Smoking stack from Mercer Hotel, LA, 1949

Source:

University of Southern California Digital Library Slide32

Car industry responses:UnconcernedRejected automobile as causeSlide33

Phase 2: Policy learning and defensive industry responses (1953-1960)Pressures:

1953 ‘five-day siege of smog’ increased public concern

Activist movement:

Stamp out Smog (1958)

Stamp Out Smog

meets with public officials

Source:

Jacobs and Kelly (2008:192)Slide34

Policy debates and early Federal involvementFederal Air Pollution Control Act (1955) stimulated further studies on the causes and (health) effects of air pollutionFirst National Conference on Air Pollution in 1958Slide35

Car industry responsesIndustry acknowledges the issue (denial impossible)Framing strategies:

Science base uncertain

California is special case

(no federal involvement needed)

Incremental R&D programme by Vehicle Combustion Products Committee (1953)

But also collusion: agree not to competeSlide36

Phase 3: Increasing public concern, early legislation and industry delay (1960-1970)Pressures

Growing scientific understanding of health effects

New framing in

public discourse

Increasing anxiety

Health risk framing of air pollution in the early 1960s

Source:

Washington Star, reprinted in U.S. Department of HEW (1966:3)Slide37

Smog problems spread to other states (New York, Philadelphia) New activist groups:

Clean Air Council (1967) and the Group Against Smog and Pollution (GASP) (1969)

Coalition with medical establishment

Californian legislation:

Motor Vehicle Pollution Control Act (1960)

1963 Clean Air Act (CAA): weak, no standards, but do more researchSlide38

Decreasing legitimacy of car industry:‘anti-trust case of the century’ (1969): conspiracy re. pollution control devicesSecret recall campaigns: 20% of cars recalled for safety defects between 1960 and 1966

Safety issue: Nader (1965)

and regulations (1967)

Public perception: car industry no

regard for public interest.

 Needs to be forced by law

Ralph Nader’s

Unsafe at any speed

Source:

Scanned cover of the bookSlide39

Car industry responses

Framing strategies:

‘regulation is not needed’ (Voluntary’ installation of devices in 1960)

Solutions are expensive

(mocked in newspapers)

Cartoon mocking the reluctance of the car industry to install control devices

Source:

Washington Post, reprinted in U.S. Department of HEW (1966:53)Slide40

Incremental innovation strategiesPCV valvesevaporation-control systems (ECS)transmission controlled spark (TCS)thermovacuum switches (TVS)

air injected reactor (AIR)

Radical innovation strategies

Suppliers (chemical industry) offer catalytic converters

Industry rejects, but starts R&DSlide41

Phase 4: Tough legislation and resisted implementation (1970-1977)PressuresPeak in public attentionSlide42

Air pollution resonates with broader cultural trend of environmentalism (Earth Day, 1970)

Earth Day One (April 22

nd

, 1970)

Source:

Getty imagesSlide43

Increasing frustration with car industryPolitical jockeying Muskie and Nixon Result in tough Clean Air Act (1970)

Figure 7: Number of air pollution control bills introducedSlide44

Car industry responsesFraming strategies

CAA is threat to US economy (imposes costs)

Emphasise trade-offs with fuel efficiency (1973)

Political strategies

Lobby senators to kill the bill

Complain directly to President

Litigation tactics to fight CAA implementationSlide45

Innovation strategiesContinue incremental innovationBut also improve catalysts Innovation race (patents)Slide46

GM breaks industry front and installs catalytic converters (1975)Advertising

GM’s 1975 add of catalytic converters

Source:

Google News ArchivesSlide47

Phase 5: Industry fightback, implementation delays, and institutionalization (1977-1985)

Pressures

Decline in public attention

Postponement of 1977 standards

Other issues: oil crises, economic problems (late 1970s), unemployment

Policy makers more interested in saving car industry than air pollution

New anti-regulation discourse (causing economic problems)

Reagan (1981) attempts regulatory rollbackSlide48

Car industry responsesEconomic problems (weak demand + Japanese competition)Slide49

Economic problems embolden industry: refusal to comply with 1978 standardsIndustry supports anti-regulation discourseAsk policymakers for supportInnovation strategiesSlowing down patent race

But install three-way catalyst (1981), which reconfigured the engineSlide50

Pattern matchingRelatively good match with first three phases

Deviations in fourth and fifth phase, due to:

Decreasing pressure from public opinion

Limited spillovers from the issue to consumer demand

Rise of competing issues

Strong resistance from the powerful car industry

50Slide51

4. Case study 2: Safety (1900-2000)Main dynamic

Until 1960s: 3E-framing dominant (Engineering, Education, Enforcement)

Car design was kept off agenda

Alternative framing in 1950s: crash engineering and medical establishment

Clash between professional communities (not driven by ‘the public’)

Nader (1965) + public outrage + policy learning

National Highway Traffic Safety Act (1966)

Followed by resistance and implementation struggles

(seatbelt vs. airbag controversy)Slide52

Difference with case 1

Public attention continuous rise



spillover

to consumer preferences in late 1980s

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Relative importance of decision criteria for car purchase

‘Safety did not sell’ in 1950s and 1960s, but does in 1990s

 Market demand stimulates major industry effort

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Automobile safety patents (based on USPTO)

Lesson

: Industry fights regulation to delay issue progression

But when issue spills over to markets, industry can accelerate and mobilize resources Slide55

5. Concluding commentsIndustries tend to postpone substantial solutions to ‘issues’

External pressures important: public opinion, activists, politics, markets

Pressure around issues develops gradually and dialectically (conflict)

Issues go up and down

What about climate change?Slide56

Decreasing public attentionSlide57
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Volatile and low carbon priceSlide59

Kyoto successor postponed (limited political pressure)contesting the science (UEA ‘climate gate’)Debates (

Newsnight

) on costs of green energy

Maybe the climate change issue moves back to earlier phase

Need to analyze pressures and responses

(third case next year?)