Making 'Green Giants': Environment Sustainability in the German Chemical Industry, 1950s–1980s

Geoffrey  Jones; Christina  Lubinski

Article | Business History

Making 'Green Giants': Environment Sustainability in the German Chemical Industry, 1950s–1980s

by Geoffrey Jones and Christina Lubinski

Abstract

This article examines the evolution of corporate environmentalism in the West German chemical industry between the 1950s and the 1980s. It focuses on two companies, Bayer and Henkel, that have been identified as "green giants," and traces the evolution of their environmental strategies in response to growing evidence of pollution and resulting political pressures. The variety of capitalism literature has suggested that the German coordinated market economy model was more conducive to green corporate strategies than liberal market economies such as the United States. This article finds instead that regional influences were more important, supporting sociological theories about the importance of visibility in corporate green strategies. It identifies major commonalities between corporate strategies in the German and American chemical industries until the 1970s, when the two German firms diverged from their American counterparts in using public relations strategies not only to contain fallout from criticism, but also as opportunities for changes in corporate culture aimed at promoting a positive bond with consumers based on new green brand identities.

Keywords: business history; chemical industry; Green Business; regional strategy; pollution; Henkel; Bayer; Globalization; History; Chemical Industry; Germany; United States;

Format: Print

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Citation:

Jones, Geoffrey, and Christina Lubinski. "Making 'Green Giants': Environment Sustainability in the German Chemical Industry, 1950s–1980s." Business History 56, no. 4 (July 2014): 623–649.

Chapter | The Routledge Companion to the Makers of Global Business | 2019

Origins and Development of Global Business

G. Jones

This chapter explores how business enterprises have been powerful actors in the spread of global capitalism between 1840 and the present day. Emerging out of the industrialized Western economies, global firms created and co-created markets and ecosystems through their ability to transfer a package of financial, organizational, and cultural assets, skills, and ideologies across national borders. They have been major drivers of trade growth, which they often organized within their own boundaries. They have been shapers of, as well as responders to, globalization waves. They were also actors in periodic de-globalization waves, mainly because they functioned as reinforcers of gaps in wealth and income rather than disrupters of them. They were disappointing institutions for knowledge and technology transfer. In recent decades, the domination of global markets by Western and Japanese firms have shifted to a situation in which they competed as equals with firms based in China, India, the Arab Gulf, and elsewhere in the non-Western world. This trend is likely to accelerate as the growing fragility of institutional structures in the United States and the European Union further weakens the competitiveness of firms based in those regions.

Keywords: global business; multinational; Globalization; Business History; Strategy; Africa; Asia; Europe; Latin America; Middle East; North and Central America; Oceania;

Citation:

Jones, G. "Origins and Development of Global Business." Chap. 2 in The Routledge Companion to the Makers of Global Business, edited by Teresa da Silva Lopes, Christina Lubinski, and Heidi J.S. Tworek, 17–34. New York: Routledge, 2019. View Details

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This chapter provides a new lens to the extensive debate among economists and economic historians concerning why the West grew rich and the rest of the world lagged behind as modern industrialization took hold in the 19th century. The literature has focused heavily on quantitative research on comparative income levels, especially GDP per capita and real wage levels as well as on broad brush explanations related to institutions, culture, and human capital development. This chapter argues that there needs to be closer engagement with the processes of how such factors translated into generating productive entrepreneurs and business enterprises. It explores in particular why the development of modern business enterprises in Africa, Asia, and Latin America lagged; how they started to emerge more successfully in the interwar years only to be set back by failed government policies after World War II; and how the second global economy from the 1980s provided many more opportunities for firms outside the West to catch-up with innovation and competitiveness.

This article engages in a methodological experiment by using historical evidence to challenge a common misperception about internalization theory. The theory has often been criticized for maintaining that it assumes a hierarchically organized MNE based on knowledge flowing from the home country. This is not an accurate description of how global firms operate in recent decades, but this article shows it has never been true historically. Using longitudinal data on individual firms from the nineteenth century onwards, it reveals evidence of how entrepreneurs and firms with multinational activity faced by market imperfections changed the design of their headquarters and their organizational structures.

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Making 'Green Giants': Environment Sustainability in the German Chemical Industry, 1950s–1980s

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