Adoption Issues for Automatic Demand Response Program by a Multinational Company

Chris Shockman, Shockman Consulting
Juozas Abaravicius, Lund University
Mary Ann Piette, Lawrence Berkeley National Laboratory

Keywords

Abstract

The process of adopting socially desirable environmental programs is not well understood. Large companies with widely dispersed operations face special difficulties since their familiarity with the local environmental needs may not be complete. These companies may follow socially responsible policies in other areas, but may not understand and support the local environmental needs.

This case study follows the decision process for one such large company – IKEA Corporation USA. IKEA is a multinational company (MNC) whose headquarters are located in Sweden. IKEA has supported environmentally responsible programs internationally, but except for a pilot test they have not participated in an Automatic Demand Response (ADR) in California. This situation occurs despite the belief by California IKEA local managers who were provided with an explanation of the purpose agreed that it was socially desirable and that it follows their overall corporate philosophy of environmental responsibility.

This study examines the limits and possibilities of environmental decision making by local managers of multinational operations such as IKEA managers. Some definitions were provided to general store employees to determine their reaction to a program called “demand response”. The power and authority of local managers to respond quickly to potential social problems is examined. The formal decision making process is explicated and projections about future avenues of approach for environmentally desirable projects are included. This study will provide insight for other socially desirable environmental projects that face adoption difficulties in large, complex organizations. While the main focus is on a MNC, it is expected that any large, complex organization with dispersed operations could benefit from the study.