CFO World

Customer-oriented firms are environment leaders: global report

Firms need to integrate environmental issues into their strategic marketing and environmental management practices into their operations

Customer-oriented firms that value environmental management practices and adopt them as part of their strategic marketing are fast becoming known as environmental leaders, according to a global research report.

The new study from Hubert Gatignon, an emeritus professor of marketing, and the Claude Janssen chaired professor of business administration and emeritus at INSEAD, found the extent of a firm’s environmental management practices depends on how customer oriented it is.

“It’s clear from this research that customer satisfaction is an important driver of the implementation of environmental management practices. Firms need to integrate environmental issues into their strategic marketing and environmental management practices into their operations,” Gatignon said.

The report, Customer orientation and organisational innovation: The case of environmental management practices, shows customer-oriented firms gather more critical market information, recognise new customer opportunities and satisfy customers by delivering the demanded products or services.

“Customer orientation not only contributes to the firm’s environmental performance but also the development of long-term relationships and a firm’s capacity to innovate,” Gatignon said.

In a large-scale survey of 4324 French companies with 10 or more employees, Gatignon measured customer orientation by examining the company’s commitment to quality standards, such as ISO9000, whether the firms had information-gathering systems in place to capture customer data and translate it into action and the firm's’ commitment to after-sale service.

In his paper, Gatignon found the higher the firms scored on these dimensions, the higher the likelihood that they adopted environmental management practices, such as procedures to identify and measure environmental impacts by preparing environmental audits, setting environmental performance goals and obtaining ISO14001 environmental certification.

Whether firms were responsive to customers or not did not have a significant impact on their environmental management practices. According to Gatignon, a focus on only resolving current customer claims makes firms miss the needs of new customers, making them less innovative. The dimensions that mattered most were the firm’s values and its information-gathering capabilities, the report noted.

The firms surveyed spanned several sectors, such as food, consumer goods, cars and equipment and transport. Construction and intermediate goods and energy were most sensitive to the adoption of environmental management practices.

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