Hidden Benefits of End-of-Pipe Waste Treatment Nilanjana Dutt & - - PowerPoint PPT Presentation

Hidden Benefits of End-of-Pipe Waste Treatment

Nilanjana Dutt & Andrew King

Duke University & Tuck School of Business Alliance for Research on Corporate Sustainability May 11, 2011

• Organizational Search

– How firms decide where to search for information i.e. search space

• Utility companies expanding into

renewable electricity

– Survey combined with archival data

My Research

• Organizational Search

– How firms decide where to search for information? – What affects selection + use of information?

• organizational conditions
• accidents and spills

Connection to this Research

• Are we correctly characterizing previous

research?

• How can we strengthen the analysis?
• Endogeneity threats?
• How can we strengthen the conclusions?

Our goals for this talk

Waste Management

Process On site EoP

(energy, recycle, treat)

Off site

1 2 3

Conceptual Context

• Incentives:

– Lower incentives for waste reduction as employees can always manage waste at end  considered bad for waste reduction (DeCanio, 1993)

• Information:

– Problem and analysis separated in time, space, and

• person. (MacDuffie, 1995)

But where is the empirical evidence??

Conceptual Context

• Failure is an opportunity to improve (Levitt &

March 1988, Haunschild et al. 2002, Baum et al. 2007)

– Failure directs attention to problem  provides feedback to improve – Different organizational conditions lead to different amounts of improvement (Sitkin1992)

How do the three waste management

• ptions stack up?

Hypothesis

• Environmental Management wisdom

– Lack of incentives impedes waste reduction On site EoP reduces waste reduction

• Organizational Learning wisdom

– Feedback increases waste reduction  On site EoP increases waste reduction H1: the greater the presence of on-site end of pipe, the greater the waste reduction

Data and Method

Data and Measures

• Unbalanced longitudinal panel from 1992-2004

(27,503 facilities constituting 581,902 facility year obs.)

– Use EPA’s Toxic Release Inventory at the chemical level – FE at the chemical-facility level; cluster at facility level

• DV: improvement: approximately percentage change in waste

reduction [(log waste (year t +1)/ log waste(year t))*100]

• IV: spill: 0,1 dummy; waste mgmt: dummy measuring two types of

waste processing (base case is no management)

• Controls: size, age, growth, time since last spill, tenure of officers,

EMS certification, time, chemical, facility dummies

What We Expect

Pre accident dummies Post accident dummies

Rates of Improvement

Year to year improvement:

• Facilities with no treatment are increasing waste

6.65%/year

• Those with on site treatment are reducing waste by

7.2%/year

• Those with off site treatment are reducing waste by

8.27%/year Failure based improvement:

• No improvement for no treatment; off site treatment
• Significant improvement for on site EoP

Changes Following Accidents

Problems

• Endogenity about choice of treatment

– Not likely to be an issue based on interviews – Need to create matched sample

• Addressed problems

– Regression to the mean – Unobserved intention to improve – Within plant effect

Implications

• Incentives are important for learning but

may be less so than feedback

• Firms should choose waste treatment

based on:

– Need for learning and improvement – Occurrence of failure – Costs of On site EoP vs. Costs of failure?

Questions?