Professional Documents
Culture Documents
DOI 10.1007/s10551-008-9740-1
ABSTRACT. As the functional capabilities of high-tech an organization integrates social, environmental, and
medical products converge, supplying organizations seek economic activities in the pursuit of outcomes other
new opportunities to differentiate their offerings. than profit (Amaral and La Rovere, 2003; Cowell
Embracing product sustainability-related differentiators et al., 1999). Historically, companies have focused
provides just such an opportunity. This study examines
on the economic dimension and employed
the challenge organizations face when attempting to
understand how customers perceive environmental and resources to maximize the company’s profit (e.g.,
social dimensions of sustainability by exploring and Friedman,
defining both dimensions on the basis of a review of 1970; Gauthier, 2005; Walker, 2002), but in re-
extant literature and focus group research with a leading sponse to the view that ‘‘companies do not only
supplier of magnetic resonance imaging (MRI) scanning serve shareholders, but are embedded in their eco-
equipment. The study encompasses seven hospitals and nomic, ecological and social environment, which
one private imaging center in the Netherlands and they must take into consideration when doing
identifies five social aspects that cover 11 indicators. The business’’ (Seuring et al., 2003, p. 204), they have
authors conduct 22 customer perception interviews with begun pursuing other aspects of sustainability, bal-
key decision-making stakeholders involved in purchasing ancing economic prosperity with environmental
MRI scanning equipment. Respondents find environ-
protection and social equity, to meet the principles
mental and social sustainability dimensions personally
relevant but professionally secondary to cost, perfor- of sustainable development (Isaksson and Garvare,
mance, and ability to use the equipment in their orga- 2003; Keeble et al., 2003). Customers’ perceptions
nizations’ physical infrastructure. Finally, incorporating a of a product’s social and environmental sustainability
product’s environmental and social credentials within the in turn influences their purchase choice as they seek
marketing of MRI scanning equipment enhances offerings compatible with their views of sustainable
the perception of the product offering in decision- development (Isaksson and Garvare, 2003). Al-
making stakeholders’ minds and provides a means of though this influence has been identified, its nature
differentiation. has yet to be defined, making the use of environ-
mental and social sustainability in support of product
KEY WORDS: high-tech medical equipment, pur- purchasing and marketing efforts problematic. For
chasing process, decision making stakeholders, environ- example, few offerings highlight social sustainability
mental sustainability, social sustainability
credentials (Isaksson and Garvare, 2003), though
such credentials may provide marketing opportuni-
ties if perceived as relevant by customers. Further-
Introduction more, though the economic and environmental
dimensions of sustainability are well understood, its
This article examines a given product’s (high-tech social dimensions remain novel and unexplored
medical equipment) social and environmental sus- (e.g., Amaral and La Rovere, 2003; Keeble et al.,
tainability and its potential to support a product 2003).
purchasing process. Sustainability describes how An example of the increasing importance of social
sustainability emerges in the high-tech medical
Purchasing and Marketing of Social and Environmental Sustainability 1
equipment industry. Philips Medical Systems purchasing processes associated with high-tech
introduced magnetic resonance imaging (MRI) medical equipment. Third, we consider how social
scanning equipment in 1983 and currently com- and environmental sustainability can enhance the
mands 25% of the worldwide market, which rep- marketing of such products. In order to address these
resents 24.8% of the company’s total sales. With objectives, the remainder of this article is structured
annual growth levels of greater than 6%, the Euro- as follows: First, a literature review explores the
pean market for high-tech medical equipment is environmental and social dimensions of sustainability
both attractive and strategically important for Philips to conceptualize a theoretical framework. Second,
and its competitors, such as GE Healthcare and we report the findings of an empirical study that
Siemens Medical Solutions. As the technological qualitatively explores the influence of social and
capabilities of MRI scanners converge, companies environmental sustainability during the purchase of
increasingly turn to social and environmental MRI scanning equipment. Third, we present an
responsibility standards to influence customers’ analysis and discussion of these empirical findings.
purchasing decision-making. Within the Nether- Fourth and finally, the conclusion identifies this
lands, four types of institutions purchase MRI study’s theoretical and managerial contributions,
scanning equipment: academic, teaching, and com- addresses some limitations, and suggests avenues for
munity hospitals, and private imaging centers. The further research.
purchasing decision-making process in each is gen-
erally similar and influenced by three types of
stakeholders: clinicians, operators, and business Theoretical background
managers (Heesch, 2006). The influence of each
stakeholder during the different purchasing stages for Dimensions of environmental and social sustain-
MRI scanning equipment already has been sum- ability pertain to impacts on society’s future needs
marized into a customer-purchasing framework (e.g., Cowell et al., 1999; Fiksel et al., 1998; Se-
(Figure 1). uring et al., 2003; Veleva and Ellenbecker, 2001),
This study has three additional objectives. First, which requires satisfying present needs without
we provide clearer insights about what constitutes a compromising the needs of future generations (e.g.,
product’s environmental and social sustainability. Cowell et al., 1999; Ottman, 1997). A sustainable
Second, we identify whether, and how, social and company thus is one ‘‘whose characteristics and
environmental sustainability may influence the actions are designed to lead to a ‘desirable future
Customer type Customer Responsibility type Energy Weight Packaging Hazardous Recyling Proactive Health Health
use substances and safety complaints complaints Pur
Disposal regulation operators patients cha
sin
Academic Hospital AZM Business responsible 0 1 0 1 0 1 1 1 g
Academic Hospital AZM Operational responsible 0 1 0 1 1 1 1 1 an
Academic Hospital LUMC Business responsible 0 1 0 1 0 1 1 1 d
Academic Hospital LUMC Clinical responsible 0 0 0 1 0 1 1 1 Ma
Academic Hospital LUMC Operational responsible 1 1 0 1 1 1 1 1 rket
Teaching Hospital CWZ Clinical responsible 0 0 0 0 0 1 1 1 ing
Teaching Hospital CWZ Operational responsible 1 0 0 1 1 1 1 1 of
Teaching Hospital JBZ Business responsible 0 1 0 0 1 1 1 0 Soc
Teaching Hospital JBZ Clinical responsible 1 1 0 0 0 1 1 1 ial
Teaching Hospital JBZ Operational responsible 0 0 0 0 0 1 1 1 an
Teaching Hospital Kennemer Gasthuis Business responsible 0 1 0 1 0 1 1 1 d
Teaching Hospital Kennemer Gasthuis Clinical responsible 1 0 0 0 0 1 1 1 En
Teaching Hospital Kennemer Gasthuis Operational responsible 0 0 0 0 1 1 1 1 vir
Community Hospital Gelderse Vallei Business responsible 0 0 0 1 1 1 1 1 on
Community Hospital Gelderse Vallei Clinical responsible 0 1 1 1 1 1 1 1 me
Community Hospital Gelderse Vallei Operational responsible 0 0 0 1 0 1 1 1 ntal
Community Hospital St. Anna Business responsible 0 1 0 1 1 1 1 1 Sus
Community Hospital St. Anna Clinical responsible 0 0 0 0 0 1 1 1 tain
Community Hospital St. Anna Operational responsible 0 1 0 1 0 1 1 1 abil
Imaging Centre DiaSana Business responsible 1 1 0 1 1 1 1 1 ity
Imaging Centre DiaSana Clinical responsible 1 0 0 0 1 1 1 1
Imaging Centre DiaSana Operational responsible 0 0 0 1 0 1 1 1
Total 6 11 1 14 10 22 22 21
% 27.3 50 4.55 63.6 45.5 100 100 95.5
45
1
45
2
TABLE I
continued
Customer type Customer Responsibility type Availability Accessibility Ethical Ethical Operator Patient Contribution Increase
in different different production production comfort comfort to science level of
markets patient types producer suppliers living
the sample considers energy important, though equipment: customer health and safety, customer
unexpectedly, this percentage includes only one comfort, ethical production, product accessibility,
business manager. That is, energy usage seems less and contribution to society (see Figure 2).
relevant than scan quality, perceived as a minor cost
compared with the purchasing and running costs Customer health and safety
and because it gets subsumed into the hospitals’ ‘‘Health and safety’’ refers to how product usage
overall electricity costs. The business manager’s might harm individuals and the producer initiatives
view was moderated by the desire to apportion to minimize such harm. All interviewees identified
actual energy cost per patient. this aspect as an important influence. Philips
Medical Systems was perceived to engage proac-
tively in enhancing safety during usage and
Social sustainability aspects equipment maintenance, based on the assumption
of duty of care rather than tangible evidence. The
Five social aspects can be derived from literature and complexity of MRI scanning equipment meant
company-based focus groups, combined with the users must rely on the company’s expertise to
production and usage attributes of MRI scanning guarantee safeness:
Although it did not have a direct influence on the This study identifies that sufficient numbers of
purchase decisions, all interviewees, due to their stakeholders view social and environmental sustain-
sense of conscience and job orientation, saw this ability aspects as influences on their perceptions of
issue as personally important. Indirect communica- MRI scanning equipment. In addition, it reveals
tion of how Philips Medical Systems improves considerable similarity between the customer insti-
developing countries’ health care therefore may tution and the three stakeholder groups in terms of
enhance the company’s reputation with health care the information sought and product requirements.
professionals, which would provide a subliminal That is, companies that supply high-tech medical
equipment should incorporate social and environ- The findings highlight that not all indicators can
mental sustainability into their marketing efforts. measure performance. First, because interviewees
Although this finding derives from a study con- cannot differentiate between the ethical production
ducted within a clearly defined and narrow context, of the company and that of its suppliers, measuring
the principle offers insights and possibilities for other beyond the ‘‘headline’’ title may not provide
businesses and product types. meaningful results, though ethical production re-
In response to the lack of a robust definition of mains important for the customers’ overall percep-
social sustainability within existing literature, this tion of the company and can influence brand
study builds on work by Geibler et al. (2006) and attitude at a holistic level. Second, the ‘‘packaging,’’
confirms that the majority of social sustainability ‘‘accessibility in different markets,’’ and ‘‘increase in
indicators actually are known and understood and living’’ indicators do not appear important in the
can influence purchasing decisions. Thus, it be- context of purchasing MRI scanning equipment,
comes possible to suggest a tentative definition of which challenges both these indicators’ inclusion
social sustainability: A product or system that meets within the model and their value as inputs for
the performance requirements and expectations of cus- measuring performance. The framework suggested
tomer stakeholders without causing harm to the well- by Geibler et al. (2006) thus provides a useful means
being of society and its members across different time to conceptualize both sustainability aspects and
periods. In addition, the identified indicators add to linked indicators and has applicability beyond its
our understanding of what social sustainability is current focus.
not only through a link to actual product func- The hierarchy of the influence of the social
tions (e.g., the scanner’s ability to produce quality aspects and indicators cannot rank actual indicators
images) but also by noting that customers’ views but can classify them into three levels. The cost
of social and environmental dimensions and indi- and performance of the scanning equipment con-
cators are personal but still inform how they think stitute the first level and provide the business
professionally about social sustainability. We also context, on which all other levels depend. This
demonstrate that society involves impacts on both finding is not surprising; the actual cost of scanning
individuals and groups connected to the produc- equipment is likely to represent a major element of
tion, use, and disposal of MRI scanners. Finally, the capital expenditure for a hospital or imaging
and directly related to a technology that contains center. Performance pertains to the scanner’s ability
hazardous substances and emits radiation, stake- to fulfill its core function; the higher the quality of
holders are concerned about the long-term po- the scan, the greater its use as a diagnosis tool. The
tential for harm, which suggests applicability second level consists of indicators that appear
beyond the production of high-tech medical professionally relevant because they have a direct
equipment. or potentially direct impact on users of the scan-
By using the concept specification model to ning equipment, such as hazardous substances,
conceptualize the social sustainability aspects and health complaints of operators, and patient com-
their linked indicators, we validate the five social fort. Finally, the third level comprises factors that
sustainability aspects, which now can be considered matter personally but have little direct influence on
relevant to high-tech medical equipment. We also the purchasing decision, including packaging,
validate most of the social sustainability indicators, accessibility to different markets, and increase in
providing a basis for measuring both the extent to level of living. By identifying these different levels
which customers see these aspects as important and of the perceived importance of social and envi-
their awareness of the product’s relationship with ronmental sustainability dimensions, companies can
these aspects. The aspects and indicators also comply focus their efforts on dimensions valued more by
with the success criteria suggested in literature their customers. This suggestion also mirrors the
(Amaral and La Rovere, 2003; Fiksel et al., 1998; view that too many indicators become hard to
Isaksson and Garvare, 2003), in that they are rele- measure, and organizations need to be selective
vant, understandable to users, limited in number, when choosing social and environmental dimen-
and adaptable to future developments. sions (Isaksson and Garvare, 2003).
TABLE II
Summary of social and environmental sustainability-related marketing opportunities
45
7
Purchasing and Marketing of Social and Environmental Sustainability 1
Customer health Health complaints of operators because of use Health and safetya,g
and safety of equipment Healthb
Health complaints of patients because of use of Quality, health, and safetyc
equipment Peace of mindd
Proactive anticipation of safety regulations Illness and disease reductiond
Accident and injury reductiond,h
Health and well-beingd
External social improvementse
Products and service labelingg,h
Customer comfort Operator comfort Quality of working conditionsa
Patient comfort Satisfaction of needsb
Peace of mindd
External social improvementse
Noise and pollutionh
Ethical production Ethical performance of the company Quality of working conditionsa,f
Ethical performance of the suppliers Education and traininga,b
Healthb
Equityb
Individual contentmentb
Taking employees into considerationc
Quality, health, and safety at workc
Quality of lifed
Illness and disease reductiond
Equity within organizatione
Internal social improvementse
Ethical productionh
Accidents or incidentsh
Supplier fairnessi
Product accessibility Product accessibility for patients with physical Equityb
or mental disadvantages Quality of lifed
Product availability at emerging markets and International equitye
base of pyramid External social Improvementse
Accessibility to key servicesh
More equitable accessibilityi
Contribution to Contribution to science (e.g., new health Employmenta,i
society solutions) Innovation potentiala
Increase level of living Product acceptance and societal benefitsa
International equitye
Social impact of operationsf
Quality of life in communityf
Community developmenth
Regeneration and rebuilding
of communitiesh
Intellectual assetsi
a
Geibler et al. (2006).
b
Seuring et al. (2003).
c
Gauthier (2005).
d
Fiksel et al. (1998).
e
Steurer et al. (2005).
f
Tanzil and Beloff (2006).
g
Global Reporting Initiative (2006).
h
Sigma (2007).
i
Sherwin (2004).
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