Abstract
The purpose of this article is to challenge organizational scholars, management educators, and business leaders to consider more deeply the impact of global business activities on local ecosystems. Drawing on the management, sustainability, and entomology literature, we illustrate the complex relationship between global business and biodiversity loss through the lens of the commercial bumble bee trade. Global firms in this trade rear and supply bees for greenhouse crop pollination. We build on a well-known global strategy framework used in management education by adding a sustainability dimension, and offering propositions for the relationship between global business strategy and the strength of environmental sustainability. We conclude that a locally responsive, place-sensitive business strategy supports the strongest degree of environmental sustainability, and addresses the invisible compromises to ecosystem health that may result from the efforts of global firms to provide otherwise beneficial products and services.
Keywords
Introduction
Virtually every organizational decision generates an impact on the natural environment, even though the organization may be unaware of what these impacts are.
Global businesses are powerful actors in the world economy. They exert, whether directly or indirectly, a major influence on the quality of human life (Shrivastava, 1995). Industrial development over the past two centuries has brought wealth, education, and medicine to many, contributing to the betterment of society. At the same time, it has brought environmental degradation (Beck, 2008; Goodland, 1995; Shrivastava & Kennelly, 2013). Concern for the natural environment has primarily been voiced by scientists, conservationists, and citizen advocacy groups who call for businesses to adopt practices more conducive to environmental sustainability. Businesses have placed increasing emphasis on understanding and managing the interface between their activities and the natural environment largely in response to these calls as well as to pressures from shareholders, employees, clients, and other key stakeholders of the firm (Waddock, Bodwell, & Graves, 2002). Indeed, the concept of sustainable development, which encapsulates environmental, social, economic, and corporate sustainability, currently figures into the “greening” of business and corporate social responsibility (Dyllick & Hockerts, 2002).
Comparatively little attention has been given to the relationship between business activities and biodiversity loss despite the essential role of biodiversity in human well-being (Winn & Pogutz, 2013). Biodiversity refers to the “variety of genes, species, and ecosystems that constitute life on Earth,” and allows for the provision of numerous essential services to society (Rands et al., 2010, p. 1298). These include material goods such as food and nonmaterial benefits such as recreation, pollination and pest control services, and longer term resilience to disturbance in the environment (Rands et al., 2010). The scant attention paid to biodiversity loss is primarily due to its general lack of visibility and difficulty in being understood (Winn & Pogutz, 2013).
A timely example is the decline in bee populations worldwide. The visibility of bee decline has been low outside of agribusiness, beekeeping, and entomology circles, until recently. The phenomenon of Colony Collapse Disorder, where honey bees suddenly disappear from their hives, has been highlighted by the media. Once the issue became “visible,” the general public learned about the importance of bees and other insects given their role as pollinators. Pollination is a vital ecosystem service; roughly three quarters of the world’s known flowering plants rely on insect pollination, including most food crops and some that provide fiber, drugs, and fuel (New, 2012). More than a third of the world’s crops rely on bee pollination (Spivak, Mader, Vaughan, & Euliss, 2011). While the honey bee has garnered media attention, population declines are also occurring among wild bees, including bumble bees. These bees have evolved closely with local ecosystems and, together with honey bees, are valuable crop pollinators (e.g., Spivak et al., 2011). The decline of bee pollinators has important implications for ecosystem health and food supply (Vanbergen, 2013).
The hypothesized causes of bee decline are manifold, and all can be attributed to business activity. These include the loss of suitable habitat through the intensification of agriculture, the overuse of pesticides, global warming, and the spread of parasites and disease through the transport of bees (Kremen, Williams, & Thorp, 2002; New, 2012; Vanbergen, 2013). We focus on the latter issue and highlight the commercial bumble bee trade. This trade exemplifies the relationship between global business and biodiversity loss, and the importance of examining the impact of business on ecosystems even if the effects are not readily visible or clearly understood.
The overarching objective of this article is to challenge organizational scholars, management educators, and business leaders to consider more deeply the impact of global business activities on ecosystem sustainability. Specifically, we respond to recent calls in the organization and environment literature to provide detailed examples of business impact on biodiversity and how it is being addressed (Shrivastava & Kennelly, 2013; Winn & Pogutz, 2013), and to consider fresh ways to conceptualize the relationship between management theory and the natural environment, particularly with regard to its use in management education (Starik, Rands, Marcus, & Clark, 2010). We contribute to the organization and environment literature in the following ways.
First, we present a detailed example of the complex relationship between global business and biodiversity loss through the lens of the commercial trade in bumble bees. The commercial bumble bee industry rears and supplies bumble bees worldwide for the pollination of greenhouse crops. While the bees provide a beneficial and natural pollination service, they can be invasive with long-term ramifications for biodiversity and the sustainability of local ecosystems. Second, we reexamine a well-known global strategy framework of Bartlett and Ghoshal (1989) that is used extensively in management education and, like many classic management theories, does not consider the natural environment. We build on this framework from a sustainability perspective and derive propositions regarding the relationship between global business strategy and the strength of environmental sustainability, illustrated by the global trade in bumble bees. This serves to embed environmental sustainability within a classic management framework, providing centrality to the importance of the natural environment (Starik et al., 2010). Third, we offer a relatively rare interdisciplinary study in that the authors, representing the social and natural sciences, bridge the disciplines of management, sustainability, and entomology. Our integration of sustainability concepts into classical management theory is informed by entomological research findings that are not readily accessible to organizational scholars due to disciplinary silos (Winn & Pogutz, 2013).
The article proceeds with an overview of the commercial bumble bee trade and its associated ecological concerns. This is followed by sections on theories related to global business strategy, biodiversity loss, and sustainable development that form the basis for our conceptual model. A discussion section ensues with implications for global business, research limitations, and future directions. We conclude that global firms need to adopt a locally responsive, place-sensitive business strategy to protect biodiversity and to address the invisible compromises to ecosystem health that may result from their efforts to provide otherwise beneficial products and services.
The Commercial Bumble Bee Trade
Everybody knows the burly, good-natured bumble-bee. (F. W. L. Sladen, 1912, p. 1)
The trade in bumble bees has developed substantially in recent years in conjunction with a growing demand for the pollination of greenhouse crops, particularly tomatoes (Velthuis & van Doorn, 2006; Winter et al., 2006). Tomatoes are a major crop of the world economy (Peralta & Spooner, 2005). The ability to produce bumble bee colonies year-round has facilitated the global expansion of the greenhouse tomato industry by providing a cost effective method for crop pollination. Here we consider the origin, structure, and economic rationale of the global bumble bee industry, beginning with the nature and importance of bumble bees, as these insects constitute the industry’s primary product.
The Nature and Importance of Bumble Bees
Bumble bees (Bombus) in the wild provide a fundamental pollination role that propagates biodiversity and sustains ecosystems. They also have at least two important crop-related functions. One, bumble bees act as important back-up pollinators for farmers when honey bees, the primary crop pollinator worldwide, are in short supply. Two, they pollinate more effectively than honey bees for some crops due to a behavior referred to as “buzz pollination.” Buzz pollination involves the bumble bee grabbing the pollen-producing structure of the flower with its jaws and vibrating its wing muscles to dislodge the pollen from the flower. Tomato flowers, for instance, need to be shaken to release their pollen. Buzz pollination thus yields larger and more abundant fruit compared to pollination by honey bees (The Xerces Society, 2007). This variation in the effectiveness of pollination services among different bee species underscores the importance of biodiversity for ecosystem sustainability. Some species are better suited for pollinating particular plants due to the method of pollen collection, body size, tongue length, and floral preferences.
Two major species of bumble bee are reared and traded globally to provide pollination services for agricultural crops. The primary one, and the focus here, is the Eurasian Bombus terrestris (B. terrestris), which occurs in Europe, coastal North Africa, and West and Central Asia. The other is the North American Bombus impatiens (B. impatiens) which is native to the East coast of the United States and Canada (Velthuis & van Doorn, 2006).
Origin and Structure of the Industry
Bumble bees have been introduced to various regions of the world for at least a century. However, the commercial bumble bee industry began only in 1985 with the discovery in Belgium of the benefits of using B. terrestris for the pollination of greenhouse tomatoes compared with alternate pollination methods (Velthuis & van Doorn, 2006). The use of B. terrestris spread quickly throughout Belgium and the Netherlands (Velthuis, 2002), creating an industry based in these countries that now exports bumble bees worldwide. It is estimated that around one million colonies or hives are exported globally each year (Graystock et al., 2013).
A commercial B. terrestris colony consists of a small cardboard box containing 75 to 100 bees and pollen for their sustenance. The colony is thus a ready-made shelf product that is easily suitable for transport and marketing (Dafni, Kevan, Gross, & Goka, 2010). Most bumble bee producers also sell biological control agents for crop protection. These include parasitic wasps and other insects, mites, and microorganisms. The bumble bees and biological control agents are often promoted as a package so that pesticides that might injure the bumble bees are not needed in greenhouses. This is referred to as Integrated Pest Management.
There are more than 30 producers of bumble bee colonies worldwide, although the market is dominated by three companies: Biobest of Belgium, and Koppert Biological Systems and Bunting Brinkman Bees, both of the Netherlands. These companies generally mass-rear B. terrestris colonies in Europe to serve markets around the world through sales and distribution offices. More recently, producers have begun a practice of rearing additional bumble bee species in Europe for export to markets where these species are native (Velthuis & van Doorn, 2006). Some producers have established subsidiaries in other countries to rear colonies of native bumble bee species for sale in local and regional markets (Velthuis & van Doorn, 2006).
Economic Rationale for the Industry
Before the use of bumble bees for greenhouse crop pollination, growers used either a mechanical means (a vibrating wand) or a hormone spray. Growers typically used pesticides in their greenhouses to eliminate insects that would eat the crops. The use of bumble bees and the accompanying biological control agents replaces hormones and pesticides with a natural way to pollinate and protect crops. Pollination by bumble bees is less expensive than alternate means of pollination. It also produces larger yields and higher fruit quality (The Xerces Society, 2007), leading to a higher market price (Velthuis, 2002; Velthuis & van Doorn, 2006). B. terrestris is hearty and adaptable, making it a more effective pollinator than native species in some countries.
A further rationale for the commercial bumble bee industry is that it satisfies a growing demand for bumble bees in the face of pollinator shortages. It is estimated that potentially 11% of bumble bee species worldwide are in decline (Murray, Coffey, Kehoe, & Horgan, 2013). Through colony production the industry serves to increase the supply of bumble bee pollinators which are declining in the wild. This is an important consideration given the trend of tomato production and consumption over the past 40 years. During this period, the world crop area of tomatoes has increased by 164% and world consumption of tomatoes by 314% (Nicola, Tibaldi, & Fontana, 2009). Greenhouse tomato production is growing relative to field-grown tomatoes, particularly in countries where bumble bees may not occur in the wild due to climate and other factors. Greenhouses produce a wide variety of high-quality tomatoes that are part of the trend toward higher value-added produce (Cook & Calvin, 2005).
The commercial bumble bee industry plays a larger and perhaps more significant role in its potential to address global food shortages. Demand for agricultural goods is expected to double between 2005 and 2050 in tandem with increases in the human population and improvements in standards of living (Tilman, Balzer, Hill, & Befort, 2011). Greenhouse production is likely to be a viable solution to growing demand since larger quantities of high-quality goods can be produced in less space using minimal inputs of fertilizer, labor, water, and energy. Increased greenhouse production to address global food shortages translates to higher demand for commercial bumble bees. Despite the economic benefits, there are ecological concerns associated with the commercial bumble bee trade.
Ecological Concerns With the Bumble Bee Trade
[I]t is worth pointing out as not being generally known, that the commonest of the humble-bees (B. terrestris) does much more harm than good to many of our flowers. (T. Belt, 1875, p. 26)
The introduction of bumble bees around the world has long caught the attention of scientists, beginning with the export of B. terrestris to New Zealand in the late 19th century for experimental purposes. Thomas Belt, a contemporary of Charles Darwin, warned against the export of this species of humble bee (Belt, 1875, 1878), as the bumble bee was called at that time. Corroborating Darwin’s findings on B. terrestris he observed, “It obtains the nectar from the red clover and other flowers with narrow corolla-tubes, or otherwise difficult of access, by boring holes from the outside, as has been shown by Darwin” (Belt, 1878, p. 89). In other words, unable to access the nectar of the flower in a way that would result in pollination, B. terrestris accessed the nectar by boring holes in the flower. While Belt was not opposed to the export of bumble bees for their use as pollinators, he felt that B. terrestris was an inappropriate species for export since plants were left damaged and un-pollinated by its “nectar-stealing” behavior.
Despite these earlier concerns, the use of B. terrestris as a commercial bumble bee has developed rapidly over the past three decades. The import of B. terrestris for commercial purposes has sometimes led to the unanticipated migration and establishment of these bees, within and across national borders. Research findings of entomologists from around the world point to similar conclusions about the ecological effects of B. terrestris (and other introduced bumble bees) on the flora and fauna of local ecosystems when the alien bees escape into the wild from greenhouse enclosures. The key findings are as follows.
Competition for Foraging and Nesting
Commercially introduced B. terrestris has been found to compete with native bumble bees for foraging and nesting sites (Ings, Ward, & Chittka, 2006; Inoue, Makino, Yokoyama, & Sakai, 2010; Inoue, Yokoyama, & Tsuchida, 2010; Inoue, Yokoyama, & Washitani, 2008; Nagamitsu et al., 2007). Research findings in Japan indicate that B. terrestris has a rapid rate of reproduction, is more efficient in foraging, and the queens (colony founders) become active earlier compared with the native species B. ignitus (Inoue, Makino, et al., 2010). These traits could potentially displace native bees from foraging and nest sites, causing the numbers of the native species to decrease significantly. Similar studies in Tasmania on B. terrestris indicate risks of competition with native bees, with implications for the invasion of natural vegetation and competition for nectar that potentially reduces forage for a native parrot (Hingston, Herrmann, & Jordan, 2006; Hingston, Potts, & McQuillan, 2004).
Disruption of Pollinating Behavior
The introduction of B. terrestris has been found by Japanese entomologists to disrupt the pollinating behavior of native bumble bee species, resulting in a decrease of nectar availability and consequent reduction in seed production (Dohzono, Kunitake, Yokoyama, & Goka, 2008). In a study by Kenta, Inari, Nagamitsu, Goka, and Hiura (2007), the pollination of seven species of native Japanese plants by B. terrestris and by three species of native Japanese bumble bees indicated that fruit set and fruit quality were lowered when only the imported pollinator was used. This suggests that bumble bee-pollinated native plants are relatively specialized to native bumble bee pollinators and that these co-evolved, plant–insect partnerships are vulnerable to alien species invasion.
Reproductive Disturbance and Genetic Contamination
Entomologists have found evidence that interbreeding between nonnative and native species (interspecific mating) may lead to reproductive disturbance and genetic contamination of native bumble bee species (Goka, 2010; Kraus et al., 2011; Tsuchida, Kondo, Inoue, & Goka, 2010). A laboratory examination of hybrid production between B. terrestris and a native species in Japan revealed that the hatching rate of the resulting eggs was significantly lower than the rates obtained from intraspecific mating of either species. Furthermore, the eggs derived from interspecific mating were inviable due to genetic mechanisms which prevent normal development of the eggs (Kanbe, Okada, Yoneda, Goka, & Tsuchida, 2008). Other studies indicate that up to 30% of native queens in the northern regions of Japan have mated with B. terrestris males (Goka, 2010). Given that Bombus queens only mate once in their lives, there is high risk that the resulting large percentage of inviable eggs will lead to a decline in native bumble bee species (Goka, 2010; Tsuchida et al., 2010). These concerns are echoed in Mexico where use of the nonnative B. impatiens originating from the United States carries the potential risk of genetic contamination of two closely related Mexican species of bumble bee (Winter et al., 2006). In Poland, a study found that gene disturbance occurs even among subspecies of B. terrestris, such that the importation and commercial use of one subspecies is predicted to alter the genetic structure of the native subspecies, which may in turn “lead to the loss of specific traits and local adaptations” (Kraus et al., 2011, p. 191).
Transmission of Parasites and Diseases
The transport of bumble bees across international borders, or otherwise outside of their natural distribution range, has been associated with the transmission of parasites and disease to native bumble bees (Goka, Okabe, Yoneda, & Niwa, 2001; Graystock et al., 2013; Thorp, 2003). In Ireland, pathogens have been found in imported colonies of B. terrestris (Murray et al., 2013). In Japan, tracheal mites have been detected in imported colonies of B. terrestris (Goka et al., 2001). In the United States, there is strong circumstantial evidence to suggest that wild populations of four North American bumble bees were infected with an introduced disease accidentally carried by commercially bred bumble bee colonies from Europe, leading to widespread losses and the apparent extinction of one species (Goulson, 2003; Thorp, 2003). In Mexico, a parasite was found in imported colonies of B. terrestris in the mid-1990s; thereafter, imports of B. terrestris were replaced by imports of the North American B. impatiens. The results of a study in Argentina indicate that a parasite carried by B. terrestris may be linked to “the population collapse and geographical retraction” of a native bumble bee in the Patagonian region (Arbetman, Meeus, Morales, Aizen, & Smagghe, 2013, p. 489). A recent study in the United Kingdom found that 77% of the B. terrestris colonies purchased from three companies contained eight parasites, five in the bees and three in the pollen; four of the parasites are also infectious to honey bees (Graystock et al., 2013).
The above entomological findings underscore concerns about a potential long-term domino effect of interlinked extinctions that could reduce the resiliency of ecosystems (Buchmann & Nabhan, 1996). Perhaps most alarming are the findings that indicate dual potential harm to bumble bees and honey bees, the two major insect pollinators that support human food supply (Graystock et al., 2013). Indeed, the import of B. terrestris has been banned or regulated in some countries, including the United States, Japan, and Mexico (Mizutani & Goka, 2010; Winter et al., 2006), and has been listed as a threatening species in two Australian states (Moore & Gross, 2012). In sum, the global trade in commercial bumble bees has introduced invasive species into countries around the world with serious implications for biodiversity loss. It exemplifies the complex relationships between global business strategy, biodiversity loss, and sustainable development. We now turn to the theoretical underpinnings of these relationships.
Global Business and Biodiversity Loss
Strategy and the Environment
When a firm expands globally, it has several strategic pathways from which to choose. The choice depends on the nature of the industry, competition within the industry, and the relative pressure for the firm to reduce costs and/or adapt to local markets (Bartlett & Ghoshal, 1989; Prahalad & Doz, 1987). These pressures and their associated strategies are encapsulated in Bartlett and Ghoshal’s global strategy framework described as follows.
When a firm experiences high pressure to reduce costs in order to compete and sustain its business, and has low pressure to adapt to local circumstances, it likely chooses a global standardization strategy. Production is centralized to achieve economies of scale, and mass-produced products are exported to overseas markets. In contrast, when a firm experiences high pressure to respond to consumer tastes, government regulations, and stakeholder concerns in the host country, without high pressure to reduce costs, the firm likely chooses a localization strategy. Production is adapted to local requirements, possibly including local content. This strategy is typically more costly since production is decentralized to individual host markets, and production is on a smaller, locally tailored scale. When pressure is both low to adapt locally and to reduce costs, a firm may be in a monopoly position and is following what is referred to as an international strategy. Global firms, however, increasingly face high pressure for cost reduction and local responsiveness simultaneously. These dual pressures derive from consumer demands for locally relevant goods at mass-production prices, on the one hand, and local legislation and other requirements, on the other. This situation prompts adoption of a so-called transnational strategy where firms attempt to mass produce when possible and customize when necessary.
The above framework of global strategy, which continues to figure into many of the top international business and management textbooks used in business schools (e.g., Hill, 2014; Luthans & Doh, 2014), does not address the protection of local ecosystems. This is consistent with the observation that organization theories that concern the need for firms to adapt to their contexts have consistently ignored the natural environment (Aragon-Correa, 1998; Starik et al., 2010). Being responsive to local conditions in this framework does include abiding by host country regulations and addressing stakeholder concerns, though this has mainly been interpreted as concerns over levels of firm ownership, use of local content in the production process, consumer taste, and labor conditions. A notable exception is a study by Peng and Lin (2008) who found a positive relationship between addressing pressures from local constituencies (abiding by local environmental laws and meeting the demands of environmentalists and other local stakeholders), the adoption of green management, and the performance of Taiwanese subsidiaries of multinational enterprises. This lacuna in the global strategy literature is puzzling given that many of the drivers of biodiversity loss are associated with global business.
Drivers of Biodiversity Loss
As noted earlier, biodiversity embraces the multitude of “genes, species, and ecosystems that constitute life on Earth,” and allows for the provision of numerous essential services to society (Rands et al., 2010). These services, often referred to as ecosystem services, include the provision of material goods such as food and nonmaterial benefits such as recreation, pollination and pest control services, and longer-term resilience to disturbance in the environment (Ehrlich & Pringle, 2008; Rands et al., 2010). The interactions among organisms and their interactions with the physical environment (soil, water, air) constitute an ecosystem (Slootweg, 2005; Rands et al., 2010). Ecosystems maintain their resiliency and adapt to changing conditions through their reservoirs of biodiversity. A loss of biodiversity leads to unstable ecosystems and life support processes become unreliable (Slootweg, 2005). The rapid loss of biodiversity has received heightened attention in recent years (Ehrlich & Pringle, 2008; Winn & Pogutz, 2013).
Human population growth, economic specialization, international trade, and invasive species are the key drivers of biodiversity loss. Continued growth of the human population results in higher demand for land development to create living space, and the intensification of agriculture to accommodate higher demand for food products (Ehrlich & Pringle, 2008). This includes the use of resources for local consumption, and for consumers worldwide. Lenzen et al. (2012) note that, historically, local demand for food, fuel, and living space placed a relatively low-impact intrusion on species habitats. Expanded globalization of the economy, however, means that habitat degradation can be far removed from the places of consumption or production.
Economic specialization and international trade, the backbone of global business, have been associated with biodiversity loss (Korhonen, 2006; Lenzen et al., 2012). Lenzen et al. (2012) report that 30% of global species threats, excluding invasive species, are due to international trade, and that these threats are facilitated by complex networks of supply chains. Their study underscores the importance of examining biodiversity loss as a global systemic phenomenon (Lenzen et al., 2012). In international trade, mass produced goods and services, including ecosystem services, can often be imported and outsourced more cheaply than they can be obtained locally (Ehrlich & Pringle, 2008). While economic specialization with large-scale mass production addresses demand for consumption, it appears to work against ecosystem diversity (Korhonen, 2006). Mass production of individual crops or selected species poses a risk that new genetic combinations of parasites and pathogens will emerge (Korhonen, 2006).
Invasive species, or the introduction of nonnative species into local ecosystems, pose one of the greatest threats to biodiversity worldwide (Graystock et al., 2013; Worner & Gevrey, 2006). The introduction of nonnative species can occur inadvertently through international trade, and can result in predatory behavior, competition with native species, and the disruption of co-evolved interactions such as the unique pollinating activity between particular species of insects and plants (e.g., Ehrlich & Pringle, 2008; Goka, 1998; Ings et al., 2006). These effects can ultimately threaten the existence of native species and compromise the health of local ecosystems. Diminished biodiversity through the decreased size or extinction of genetically distinct populations can result in a loss of future evolutionary potential and pose a critical threat to ecosystem resilience and sustainability (Ehrlich & Pringle, 2008; New, 2012).
While any one driver may contribute to biodiversity loss, they will “often act synergistically in imperiling populations and species” (Ehrlich & Pringle, 2008, p. 11583). The commercial bumble bee trade provides an apt illustration of these drivers. As we have seen, the global trade in bumble bees developed partly in response to a greater demand for food to accommodate a growing world population. The industry relies on international trade and supply chains to deliver a mass-produced good (bumble bee) that has proven to be invasive in many areas where it has been introduced, imperiling native species. This combination of factors, we argue, is not conducive to sustainable development. As we propose below, protection of biodiversity is best served through a localization strategy, as opposed to a global standardization strategy, combined with an ethos of super-strong sustainability.
Sustainable Development
Sustainable development has become one of the most salient issues facing the world since the publication of the Brundtland Report in 1987 and the subsequent Earth Summits in Rio de Janeiro and Johannesburg in 1992 and 2002, respectively. Sustainable development has been defined as “meeting the needs of the present without compromising the ability of future generations to meet their needs” (Brundtland & World Commission on Environment and Development, 1987). Implicit in this definition is the recognition that the natural environment can be vulnerable to human activity and subject to significant and irreversible damage (Rands et al., 2010).
A popular conceptualization of sustainable development is the interlocking of environmental, social, and economic spheres, one nested within the other (Adams, 2006), and the capital reserves present in each sphere (Dyllick & Hockerts, 2002; Goodland, 1995). Capital can be broadly defined as “a stock that provides current and future utility” (Neumayer, 2013, p. 7). The environmental sphere is the outer, all-embracing sphere and refers to the sustainability of the natural environment. Natural capital in this sphere consists of mineral and organic compounds, intact ecosystems, and biodiversity that allow ecosystems to be resilient and to adapt and respond to environmental change. Nested within the environmental sphere is the social sphere which refers to the sustainability of social and cultural systems. This sphere contains social capital consisting of social institutions, social networks and relationships, cultural values, and culturally embedded indigenous and scientific knowledge that enable societies to solve problems, to be resilient, and to respond to social change. The economic sphere is nested within the social sphere and refers to the sustainability of economic systems and business enterprises. Economic capital in this sphere consists of the factors of production and the processes and technologies used to transform natural resources and human labor into goods and services that respond to changing market demands. Firms, as repositories of economic capital, sustain themselves by adopting strategies to respond effectively to changes in market demand. The nesting of spheres indicates that the economy and society depend on the health of the natural environment for their existence.
Inherent in this conceptualization of sustainable development is that culturally embedded values in the social sphere determine the nature of the interface between activity in the economic sphere and the natural environment. Underpinning these values are implicit beliefs about the relationship between man and nature, that is, whether nature is viewed simply as a commodity to serve humanity (man controls nature) or as having inalienable rights (man coexists with nature; e.g., Schein, 2010). Such beliefs, in turn, lie at the heart of what has been viewed as trade-offs or substitutability between natural and man-made (social and economic) capital (Malovics, Csigene, & Kraus, 2008). A fundamental dilemma of this trade-off is the extent to which it is appropriate to substitute man-made for natural capital in addressing pressing issues, namely, to achieve the economic growth needed to alleviate poverty and to feed, clothe, and house a growing world population, given the environmental degradation that so commonly accompanies economic growth (Adams, 2006; Goodland, 1995).
Degrees of Environmental Sustainability
According to Goodland (1995), environmental sustainability can be divided into three degrees—weak sustainability, strong sustainability, and super-strong sustainability—depending on how much substitutability one believes there is between natural and man-made capital. The various degrees of environmental sustainability are in contrast to nonsustainability, which refers to economic activity that exceeds the regenerative and assimilative capacity of the environment.
Weak sustainability is founded on the assumption that natural capital is abundant and can be safely depleted as long as man-made capital is built up in exchange (Neumayer, 2013). Natural capital is considered to be substitutable in the production of consumption goods and as a direct provider of utility. What is important for future generations is that the aggregate of capital, both natural and man-made, be the same or higher than at the present. The relative ratio of natural to man-made capital within the aggregate is of little concern. Technology is viewed as capable of overcoming any limitations or constraints in natural systems (Korhonen, 2006). While weak sustainability is considered to be a “welcome first step” from conditions of nonsustainability (Goodland, 1995, p. 15), nature is viewed as a commodity in the sense that natural capital can be expended to enhance the stock of economic capital. It is not protective of biodiversity. Natural capital is considered not worth conserving and, moreover, can readily be converted to other assets that promise to generate a higher net rate of return (Neumayer, 2013).
Strong sustainability, in contrast, generally regards natural capital as nonsubstitutable by other forms of capital. That is, natural and man-made capital are not perfect substitutes (Goodland, 1995). While the conceptualization of weak sustainability is relatively straightforward, the many contributions to conceptualizing strong sustainability have resulted in at least two interpretations, one that allows for the use of nonrenewable resources and a more rigorous interpretation that does not (Neumayer, 2013). This gradation of perspectives on environmental sustainability leads us to consider that in strong sustainability natural capital is generally nonsubstitutable by man-made capital. The more rigorous interpretation of strong sustainability we consider to be super-strong sustainability.
Super-strong sustainability, the furthest degree along the environmental sustainability spectrum, regards natural capital as not substitutable. There is an emphasis on the protection of “critical natural capital” by nonsubstitutability even among those forms of natural capital that provide similar functions. Because the environment may suffer irreversible harm if natural capital is diminished, super-strong sustainability requires the maintenance of both the level of natural capital as well as the aggregate of all forms of capital to bequeath to future generations (e.g., Neumayer, 2013). Strong, and particularly super-strong, sustainability upholds the rights of nature and is protective of biodiversity.
Weak, strong and super-strong sustainability thus represent divergent values and worldviews. This is likely to manifest in quite different ideas on how the economy and environment should be managed (Adams, 2006); on what constitutes risk in the environmental, social, and economic spheres; and on the role of technology in and across these spheres (Beck, 2008; Callon, Lascoumes, & Barthe, 2009; Latour, 2004). These differences are expressed through stakeholders, including consumers, investors, lenders, employees, suppliers, nongovernmental organizations, scientists, community activist organizations, organizations representing indigenous communities, and government institutions (e.g., Waddock et al., 2002). In essence, weak sustainability embodies the worldview that risk to the natural environment from economic activity can be overcome through technological advances. Strong sustainability, and particularly super-strong sustainability, embodies a worldview that there is risk to the environmental sphere, and ultimately to the social and economic spheres, when natural capital is replaced by man-made capital in the process of industrialization. As Beck (2008, p. 161) observes, environmental problems can be a side effect of successful industrialization that continues apace, “oblivious to its consequences” and consuming “its own natural and cultural foundations.”
The compression of the world through globalization brings environmental issues to the fore across national contexts. Global business actors must work with stakeholders at both global and local levels. Stakeholders particularly at the local level can play an important role in influencing the interface between business and the natural environment. They are closest to the natural environment in a given locale and are generally the first to notice disruptions in the local ecosystem. Such stakeholders include farmers, scientists, and conservationists, among others, who may mobilize political activity through citizen advocacy groups and social movements to effect change (Callon et al., 2009; Latour, 2004). Local stakeholders can thus exert pressure on global business to change corporate strategy to be more locally responsive with regard to the natural environment (Shrivastava & Kennelly, 2013).
Toward an Integrated Model
As illuminated above, biodiversity loss is associated with global business activities. Yet, management theories, including those presented in well-known textbooks used to educate future business leaders, have been devoid of implications for the natural environment. We propose an integrated model of global business strategy and environmental sustainability based on a global strategy framework of Bartlett and Ghoshal (1989).
Recall that the original framework is a typology of four strategies that result from a combination of two sets of external pressures faced by global firms: pressures to reduce costs arising from competition and pressures to be responsive to local market demands. The resulting strategies are International, Global Standardization, Transnational, and Localization. We build on this framework by adding an environmental sustainability curve that includes Nonsustainability, Weak Sustainability, Strong Sustainability, and Super-Strong Sustainability. Figure 1 presents our model. As shown, the sustainability curve runs through the four strategies in the typology.

Global business strategy and environmental sustainability.
Implicit in the sustainability curve is a gradient of relative trade-offs between natural and man-made capital. We propose that natural capital is fully substitutable by man-made capital in the International strategy, generally substitutable in the Global Standardization strategy, generally not substitutable in the Transnational strategy, and not substitutable in the Localization strategy. The trade-off between natural and man-made capital in our context is between using native pollinators and introduced nonnative pollinators. Also, implicit in the sustainability curve is that preservation of local ecosystems is an additional source of pressure on global firms. We propose that such pressure can be both external and internal to the firm. In the original framework, high pressure for local responsiveness refers mainly to abiding by local regulations and meeting consumer demands. We extend this form of external pressure to explicitly cover laws and regulations that pertain to environmental protection, consumer preference for environmentally sound products and services, as well as grassroots citizen advocacy for the preservation of local ecosystems. Internal pressure, we propose, comes from the organizational culture of the firm that may be more or less supportive of environmental sustainability. From a sustainability perspective, the pressure to reduce costs includes pressure to make more efficient use of scarce natural resources. The following propositions relate global business strategy to the sustainability curve. The global bumble bee trade is used to illustrate the propositions.
The international strategy is adopted by firms that have low pressure for cost reductions and low pressure for local responsiveness. These firms are in a position to be relatively unconcerned about competitors or customer needs and preferences. They may be the only supplier in a monopoly position, and hold relatively high bargaining power vis-à-vis the state and other local stakeholders. Since cost competitiveness is not an issue, there is little internal pressure to conserve resources. As such, global firms adopting this strategy may use resources in an unrestrained manner. Nature is a commodity and natural capital is fully substitutable by man-made capital. There is low external pressure for local responsiveness in the form of environmental laws or consumer activism. The international strategy is not conducive to protection of the natural environment and is associated with nonsustainability.
Referring to the global bumble bee trade, entomologists in Mexico observe that two large companies there “monopolize” the supply of commercial bumble bees, and that the development of a native bee species for commercial pollination could be cheaper and easier for local farmers (Palma, Quezada-Euán, Reyes-Oregel, Meléndez, & Moo-Valle, 2008, p. 84). It is also recognized that the commercial bumble bees currently supplied (B. impatiens) could potentially harm local ecosystems (Palma et al., 2008; Vergera & Fonseca-Buendía, 2013). At present local natural capital in the form of native bumble bee species that could potentially be used in greenhouse pollination is fully substituted by imports of an alien bumble bee species in a seemingly unconstrained, nonsustainable manner.
The global standardization strategy is adopted by firms that have high pressure for cost reductions and low pressure for local responsiveness. These firms are most concerned with cost competitiveness and relatively unconcerned about local adaptation since their products are thought to be suitable across national markets. This strategy is characterized by standardization and mass production to provide economies of scale. This encourages the trade-off of natural capital for man-made capital, endorsing nature as a commodity. Natural capital can generally be substituted by man-made capital as long as the total stock of capital remains the same or higher for future generations (Neumayer, 2013). Firms following the global standardization strategy value the efficient use of resources since it reduces costs, and may have an organizational culture of resource conservation. The global standardization strategy is protective of the natural environment only to this limited extent, and is relatively unconducive to its protection over the long term. It is associated with weak sustainability.
In our example, the global bumble bee companies mass-rear colonies of a single species (B. terrestris) in a centralized location (e.g., the Netherlands) for export to markets around the world. This is indicative of a global standardization strategy that provides economies of scale. As a result of these economies, firms may contribute to increased agricultural production and reduced need for land resources though greenhouse cultivation. However, in the same way that a mass-produced, standardized product may not suit consumer or legal requirements across all countries, the mass-reared species of bumble bee has been found to be environmentally unsuitable in a number of countries, resulting in damage to local ecosystems. Regarding the trade-off of natural and man-made capital, introduced nonnative bumble bees would generally substitute for native bee species unless companies are faced with legislative or other constraints.
A transnational strategy is adopted by global firms that are faced with simultaneous pressures for cost-effectiveness and local responsiveness. Companies following this strategy seek to retain economies of scale through standardization when possible, while catering to local requirements. They may achieve a balance of these simultaneous pressures through “mass-customization” (Bartlett & Ghoshal, 1989). These firms are likely to value the efficient use of resources as a means to reduce costs, and to be concerned about the trade-off between natural and man-made capital. They are highly responsive to local environmental regulations and consumer preference for eco-friendly products. The transnational strategy is associated with strong sustainability since high pressure to be locally responsive, whether emanating from external stakeholders or from internalized values, likely means a lower trade-off between natural and man-made capital.
Companies in the global bumble bee industry have engaged in mass-customization practices suggestive of a transnational strategy. One practice is for companies to collect native queen bees (colony founders) from their target markets and bring the bees to Europe for mass-rearing of colonies. The colonies are then exported back to the target market for distribution to greenhouse growers. Queens of the Japanese native bumble bee B. ignitus have been collected in Japan, taken to the Netherlands for mass-rearing of colonies, and then shipped back to Japan. The same strategy was used in the United States in the early 1990s, when two North American bumble bee species were shipped to Europe and reared in the same facilities as B. terrestris, then returned to the United States for use as commercial pollinators (Thorp, 2003). Another practice indicative of the transnational strategy is the commercial rearing of a bumble bee native to one location for distribution to a select region. For instance, B. impatiens, which is native to the East coast of the United States and Canada, is reared for regional use throughout North America (the United States, Canada, and Mexico). The transnational strategy allows for mass-customization of bumble bee colony production for use in various target markets, reaping economies of scale while producing bumble bee colonies that are expected to be more environmentally suitable for local markets. This indicates a consideration that local natural capital in the form of native bumble bee species may, in general, not be substitutable by introduced bumble bee species.
A localization strategy is adopted by firms that experience high pressure to be locally responsive to consumer demand and legal requirements (Bartlett & Ghoshal, 1989). It is a relatively costly strategy because of the differentiation in product or service required for the local market. From an environmental sustainability perspective, firms following this strategy are likely to have organizational cultures that value protection of the natural environment and uphold the precautionary principle. They are likely to engage with local stakeholders and operate in ways that minimize environmental impact even when causal linkages between their business activity and harm to the environment have not been fully established (Convention of Biological Diversity, 2004). Super-strong sustainability upholds the rights of nature and regards natural capital, particularly critical natural capital, as nonsubstitutable by other forms of capital, even those forms of natural capital that provide similar functions (Neumayer, 2013). The localization strategy is associated with super-strong sustainability because high responsiveness to local environmental conditions can serve to protect natural capital, local ecosystems, and biodiversity.
There is evidence of bumble bee producing companies shifting toward a localization strategy. A classic localization approach is for a global firm to set up a production operation in the host country using local content in the production process. This strategy is adopted by Koppert in the Eastern United States with the establishment of a subsidiary that rears B. impatiens. The rearing and use of this species for commercial pollination, at least in the Eastern United States and Canada where it is native, is consistent with super-strong sustainability. It also indicates a consideration that native bumble bee species are critical natural capital not substitutable by alien bumble bee species, even though they perform the same pollinating function.
Setting up a local production facility may serve to avoid some of the complications that emerged with a transnational strategy. For instance, native bees reared outside their natural distribution range have returned from the production location with disease that they spread to other native bees. This has occurred in Japan as well as in the United States where bees returning from the production location in Europe reportedly spread a highly virulent disease among wild bee populations (Goulson, 2003; Thorp, 2003). It is recognized that the use of bumble bee species native to a particular locale is the ideal solution for commercial pollination needs (Velthuis & van Doorn, 2006), and research is progressing on that front. In Mexico, a native bumble bee is being studied for commercial capacity as a potential replacement for the introduced B. impatiens (Vergera & Fonseca-Buendía, 2013). In Japan, entomological research continues on the optimum greenhouse conditions, such as lighting and temperature, under which the pollination efficiency of B. ignitus can be maximized (Mitsuhata, 2006).
Summary of Relationships in the Model
Table 1 summarizes the key relationships in the model. As shown, each global strategy is associated with a set of business pressures, a location on the environmental sustainability curve, and a related capital substitutability gradient. Examples from the commercial bumble bee trade are provided for each global strategy.
Summary of Relationships in the Model.
Discussion
As environmentalists emphasize: it is better to be vaguely right in time than precisely right too late. (E. Neumayer, 2013, p. 104)
The primary objective of this article was to challenge organizational scholars, management educators, and business leaders to consider more deeply the impact of global business activities on local ecosystems. We met this objective by presenting an increasingly high profile biodiversity issue, the loss of bees, and using it to illustrate a model that integrates environmental sustainability considerations into mainstream management theory used in management education. The following sets out the contributions of the study, implications for practice, limitations of the research, and future directions.
Contributions of the Study
First, we presented the economic rationale and ecological concerns associated with the little-known but important global business of rearing and supplying bumble bees for greenhouse crop pollination. The commercial bumble bee trade provides a poignant illustration of the complexity and challenge inherent in sustainable development, particularly with regard to biodiversity. On the one hand, the beneficial aspects of the bumble bee trade are to provide a natural product for greenhouse crop pollination, augment a dwindling natural resource, and support an increasing demand for food as a result of population growth. On the other hand, as we have demonstrated through entomological research findings in multiple countries, these benefits must be weighed against the serious risks to local ecosystems posed by the introduction of currently available commercialized bumble bee species into areas where they are not native (Murray et al., 2013; Winter et al., 2006). We showed how firms in the industry are attempting to address the issue, notably through development of native species for commercial pollination.
Second, we integrated sustainability theories into a classic global strategy framework that is used extensively in management education (Bartlett & Ghoshal, 1989) and derived propositions regarding the relationship between global strategy and the strength of environmental sustainability. While the drivers of biodiversity loss—economic specialization, mass production, and the introduction of invasive species through international trade—are associated with global business, management theories have not addressed environmental sustainability as a global business concern. Our model embeds environmental sustainability within a classic management framework, and can be used as a tool in management education to raise the consciousness of students about the potential consequences to the natural environment of strategic choices. It is one small step toward mainstreaming environmental sustainability into management thinking.
Third, we engaged in a relatively rare interdisciplinary collaboration in that the authors, representing fields in the social and natural sciences, attempted to bridge the disciplines of management, sustainability, and entomology. This entailed becoming conversant with each other’s discipline and perspectives on the nature of globalization and the role of business. Such interdisciplinary collaboration, we believe, provides a vehicle for gaining a more holistic and deeper understanding of the relationship between organizations and the natural environment than might ordinarily be obtained through the lens of a single discipline.
Implications for Practice
The implications for managers of global firms include the need to abide by the precautionary principle, to engage extensively with stakeholders, and to reconsider the meaning of “local.” It is important to act in a precautionary manner even when the cause and effect linkages between business activity and environmental damage have not been fully established. Rather than wait for causality to be determined while the environment suffers, and finding too late that initial research findings were “precisely right,” it is better to act early on evidence that appears to be only “vaguely right.” In the interest of protecting the natural environment, it behooves managers to actively engage with stakeholders. This is because biodiversity issues are often invisible and not well understood by corporate actors. Managers should be prepared to be transparent and open to sharing information with other stakeholders.
Determining the appropriate degree of local responsiveness is likely to be the greatest challenge. How local is local? Our concept of native species is often based on national and administrative boundaries arbitrarily defined by human beings, not on biological boundaries defined by an organism’s natural distribution (Goka, 2010). As we have seen, there are ecological risks associated with using bumble bees for pollination outside of their natural distribution range, even if they are native to that country. That is, a single native bumble bee species may not be appropriate for use in all areas of the same country, let alone across national borders. Even the interaction between two subspecies can create conditions for biological invasion (Kraus et al., 2011). In short, there appears to be no universal answer to how local is local when it comes to biodiversity protection. It is a constant process of inquiry, engagement with stakeholders, and willingness to adopt more locally responsive strategies when faced with new information. Compounding the challenge for global firms to be locally responsive is their relative lack of commitment to particular localities because they operate in a multitude of countries (Shrivastava & Kennelly, 2013). This could be addressed if global firms develop a corporate culture that respects local ecosystems. As proposed in our model, the preservation of local natural capital should be considered its own source of pressure for local responsiveness, embedded in corporate culture, beyond the external pressure of local legislation.
There is evidence that firms in the global bumble bee industry have responded to pressure from local stakeholders by shifting from a global standardization strategy to more transnational or localization strategies. This indicates a movement along the environmental sustainability curve toward stronger sustainability. Pressure for greater local responsiveness has come from entomologists, conservationists, government agencies, NGOs, and concerned citizens. This pressure has manifested in legislation in some countries. There is indication that external pressure for local responsiveness will continue to mount for these companies. Policy recommendations have called for the tightening of international and national protocols for the import of bumble bees, the requirement of a full ecological assessment report, and proof that there are no native bee species that can be used for commercial pollination (Dafni et al., 2010; Thorp, 2003; Winter et al., 2006). In Japan, stakeholder engagement has resulted in legislation to restrict imports of alien species (external pressure) and a corporate culture (internal pressure) that is more open to work with stakeholders toward environmentally sustainable solutions, namely the commercial development of native species (Reade, Goka, Thorp, Mitsuhata, & Wasbauer, 2014). Responding to external and internal pressures shifts firms along the sustainability curve toward super-strong sustainability.
We conclude that a locally responsive, place-sensitive business strategy is supportive of the strongest degree of sustainability and can help address the invisible compromises to ecosystem health that may result from the efforts of global firms to provide otherwise beneficial products and services. The transnational strategy is often proposed to be ideal for many firms given the balance between cost effectiveness and local responsiveness. This may be the case for some industries depending on the environmental issue. Both the transnational and localization strategies are high in local responsiveness and fall into the strong and super-strong area of the sustainability curve. Yet as our model and the biodiversity literature indicate, a strategy that prioritizes “place” appears necessary to protect biodiversity and local ecosystems.
Limitations and Future Directions
The limitations of the study provide avenues for future research. To illustrate the relationship between business and threats to biodiversity, we focused on one industry and one particular risk to biodiversity. There are other industries and biodiversity issues that could have been selected. Despite our limited focus, we have provided an in-depth view of business impact on biodiversity and ways of addressing it, in an underresearched area fundamental to ecosystem health.
The model can benefit from further refinement. For instance, there can be a more nuanced treatment of the relationship between business strategy and environmental sustainability, such that gradations in the level of external pressure even within one strategy type can be assessed. This might allow for a more accurate determination of a firm’s location vis-à-vis strategy and strength of sustainability. Relatedly, in our example of the bumble bee trade, we were limited primarily to observations of corporate reaction to external pressure, such as legislation or threat of legislation. Research is needed to investigate the impact of a firm’s organizational culture, as internal pressure, on the behavior of the firm toward the natural environment, and how internal pressure interacts with external pressure to affect firm behavior. More consideration can be given to types of firms or industries that would likely be associated with different strategy and sustainability combinations. Likewise, future research could examine whether there is any variation in local responsiveness of firms that have a physical presence in a local community through foreign direct investment, as opposed to those that have an arm’s length relationship with the local community through an exporting arrangement.
In closing, ecosystem health depends on biological diversity. Loss of biodiversity is tantamount to “the canary in the coal mine” in that it presages in uncertain ways the unraveling of an ecosystem. As shown in this article, even the less visible organisms like insects are necessary for ecosystem health and ultimately for human survival. Furthermore, the full value of critical natural capital to humankind is yet to be discovered. In the case of bumble bees, society loses potentially valuable future biological resources with their decline. In the interest of preserving options for future generations, more interdisciplinary studies are needed to aid global firms in the protection of local ecosystems and biodiversity in its myriad forms.
Footnotes
Acknowledgements
We wish to thank Editor Mark Starik and several anonymous reviewers who helped considerably with the positioning and structure of the article.
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: A Lucas Research Grant, San José State University, is gratefully acknowledged.
