awareness of the environmental issues associated with palm oil cultivation.
Recall that Hansen et al. (2015)describes legitimacy struggles that organizations associated with palm oil supply chain go through provided constantly evolving public opinion on the com-modity. Interestingly enough, in the Japanese and Chinese market, there were no such struggles in the first place, as palm oil is still mostly invisible to the society at large.
Issue professionals resorted to their personal and organizational network to educate con-sumers and introduce the moral legitimacy struggle into the market after the legitimizing strat-egy – the RSPO in this case – was in place. Thus, this can be perceived as legitimacy struggles being reversed engineered into the system to balance action and reaction.
Having supports from consumers also benefit retailers and manufacturers who adopted the RSPO standards as it helps consumers understand why they should pay more for sustainable products. This will help to ensure that the firms committed to sourcing the CSPO will still be able to secure their financial bottom-line.
6.3 Implications
In the following section, we would like to point out some implications of this study for researchers and practitioners to reflect on.
Implications for Literature
We observed that the field-level change, which the WWF created globally so far, are still of limited reach to a handful of companies in the empirical world. Looking at the theoretical framework we developed based on a synthesis of field-level change triggering isomorphism and professional-organizational networks established by other scholars (El-Gazzar & Wahid, 2013;
Seabrooke & Henriksen, 2017). We suggest that the field-level change is a result of professionals and organizations seeking issue control through the process of sense-giving and sense-making (see Figure6.1).
The changes take place across spatial and temporal dimensions and emanate from the West-ern consumer countries and Southeast Asian producer countries to the East Asian markets of China and Japan as globalization continues. Although the domino effect might eventually end one day, either because the market becomes saturated with RSPO certified products or the RSPO loses its legitimacy to continue as an MSI. At this point in time, we believe that the field-level change is still constantly evolving.
Our theoretical framework could be interpreted in two scenarios. The first scenario would be when one organization takes action in the field and leads to the action of another organization,
Figure 6.1: Theoretical Framework
Source: Authors adapted from El-Gazzar and Wahid (2013)
be it an outcome of peer competition or supply chain compliance. As this new firm takes similar actions, it adds to the field level change and trickles down to affect another new organization.
In this scenario, the organization who takes action are not the same one each time, so the spiral curve develops deeper into supply chains and magnifies the field.
Take the case of Mars China and AEON for example. When the companies demanded their tier-one suppliers to comply to the RSPO standard, their tier-one suppliers took action. In most cases, these tier-one suppliers also have their own suppliers. As a result, the tier-two suppliers would also have to take action, and this spiral continues until the end is met. In this scenario, the role of professionals mainly remains at interpreting and making sense of external threats and further influencing the outcome of an organization with the right knowledge they possess. This trajectory primarily results from a compliance-based mindset of an organization, who takes actions according to prescriptive rules, as observed in both our quantitative and qualitative findings.
However, exceptions do exist. Building on the case of our first scenario, the second scenario explains how an organization, who first took actions in the field, keeps on staying in the field and
6.3. IMPLICATIONS 103 contributes to the development of the field. This type of organization takes preemptive actions, adds new ideas as well as measures to the mainstream discussions, and creates treatments of the issue as time goes by. These organizations are also the ones who have higher chances to succeed in issue control.
Take the members who joined the Palm Oil Innovation Group (POIG) for example. When the NGOs started to push for more drastic changes in 2013 and built a more credible benchmark based on the existing RSPO P&Cs, some companies who are already part of the RSPO stepped up and joined this movement by undertaking assurance and human rights innovations. The commitment as such entails more rigorous auditing measures and provides more transparency to the companies simultaneously, which may then create another field-level change as the new ideas are channeled into the field by these innovators once again.
In this scenario, the information and knowledge that issue professionals create and exchange becomes an essential part of the equation. As a similar group of professionals and organizations sticks together and are eager to be fed with the latest knowledge concerning the issue, profes-sionals can advance their personal projects and attempt to control the issue if they have the right network connections and expertise to mobilize the organization.
To conclude, laying out the two scenarios does not imply that, in reality, they are mutually exclusive. For instance, an organization can be an innovator to develop new treatments for the issue, while complying to the demand from its clients. Although our analytical framework cannot possibly cover every aspect of the whole empirical world, our findings point strongly towards the need to onboard more than just market actors to deeply institutionalize the RSPO in the two countries.
Referring back to Newton et al. (2013)’s framework for analyzing opportunities for actors to influence commodity supply chains though interventions, we realized that the state’s role in creating opportunity and stability for the sustainable palm oil industry in both Chinese and Japanese contexts is minimal or rather missing. Although Newton et al. (2013)did not argue that all three influencing actors must be present in the same intervention at the same time to create impact, their framework implies that multi-stakeholder collaboration is imperative to generate stability in the supply chain.
From our findings, although the pressure put into the market actors are effectively making the presence of the RSPO felt by wider audience, the situation is still far from stable. We argue that to make sustainable palm oil a norm, the RSPO and its supporters from the private sector must not be satisfied with the status quo and continue to make the effort to involve the government and the civil society.
This is because by not having the support from those in these two domains, the businesses cannot ensure their continuity. First, this is because they decoupled from structures that
pro-vide efficiency(Meyer & Rowan, 1977), which in this case is to procure conventional palm oil.
Adopting the RSPO in the belief that it will provide legitimacy makes them less efficient and increased their costs. Not having the support from the civil society means that these costs cannot be passes on to the consumers, which will result in destabilization.
The government also plays a crucial role. Although the RSPO is a non-governmental MSI, the back up from local government to support its standards is indispensable. Not only the government can help to spread the awareness by mandating the food producer to explicitly show palm oil in ther ingredient list, it can also help with tax burden, as suggested by an actor in our data. In China, however, the role of the government is even more important, as it is the sole entity that dictates the continuity of most firms within the country. This is apparent from the findings that institutional legitimacy threats from outside of China has no effect on the Chinese companies, even though they also operate abroad.
From the argument above, we proposed a slight modification to Newton et al.’s framework for commodity supply chain interventions (see Figure6.2). Note that this is only what we observed in our case study and does not apply to all markets. For example, the point of departure for the RSPO in the European market would start from civil society towards the market, which then influence the government’s regulation.
Figure 6.2: A framework for actors to influence commodity supply chains through interventions in the Chinese and Japanese markets
Adapted from: Newton et al. (2013)