Environmental Benefits of Online Reuse Marketplaces
Recently, online matching platforms (e.g. Craigslist, FreeCycle, Gumtree) have enabled consumers to directly connect with each other to buy/sell used consumer goods (electronics, furniture, packaging etc.), which would have otherwise ended up in the waste stream. Such matching platforms can facilitate the creation of C2C closed loop supply chains (CLSCs) for used goods, which can enhance product reuse and limit reliance on recycling and disposal alternatives. Yet, the true environmental benefits of these internet-enabled C2C CLSCs remain to be ascertained. This study uses a quasi-experimental setup to examine how Craigslist’s entry into various U.S. geographic markets impacts a key environmental outcome – municipal solid waste (MSW). Using a dataset assembled from various disparate sources, I find that, on average, Craigslist’s entry into a geographic market results in a 2-6% annual reduction in MSW per capita generated.
In summary, this study identifies a potential opportunity for a decentralized approach to preventing waste. If MSW generation can be prevented at the source, then expensive methods for collection, sorting and disposal can be avoided. Second, it highlights an opportunity for public involvement. Online classifieds are becoming immensely popular with young adults, with the number of online adults who have used online classified ads having more than doubled between 2005 and 2009. This provides a great opportunity for breeding a culture of reuse focused around active consumer participation in waste prevention through online channels. In many ways, internet-enabled C2C CLSCs can help truly operationalize the timeless adage “one man’s trash is another man’s treasure”.
Online Exchanges for Coordinating Industrial Surplus Chains
No matter how lean companies become, they abound with surplus (used broadly here) in the form of unused materials, by-products and process waste. If efficiently re-purposed (reused/recycled), industrial surplus can generate billions of dollars in savings and provide substantial environmental benefits. Yet, a major challenge is the lack of coordination in “industrial surplus chains” which can efficiently connect producers and consumers of industrial surplus. Increasingly, Online Material and Waste Exchanges (OMWEs) such as MNExchange.Org and WasteMatch.Org are playing the role of coordinating industrial surplus chains. In our research, we examine the effectiveness of these OMWEs and the factors that lead to successful online surplus transactions.
The analysis shows that product and transaction information richness reduce buyer uncertainty and increase transactions in OMWEs. In addition, regional county-level policies and norms affect the sellers’ commitment to the online exchange. Also, the buyers’ and sellers’ prior online transaction experience positively affects their future exchanges in OMWEs. Finally, our analysis shows that decentralized online platforms are more effective in transactions of consumer durable surplus (e.g. office furniture, electronics) but less effective in transactions of process input surplus (e.g. wood, rubber, plastics). This study lays the foundation for understanding OMWEs and has important implications for developing policies and operations to coordinate industrial surplus chains.
How Could Online Surplus Networks Operate? Online Material and Waste Exchanges (OMWEs) provide an online platform connecting suppliers of surplus material with potential buyers. These exchanges aim to improve the environment by helping industrial organizations repurpose surplus material and avoid landfill disposal. OMWEs represent an emerging surplus-driven supply network, which exhibits different internal complexity and dynamics than traditional supply networks, with similarly distinct transactional patterns and outcomes. Drawing on Complex Adaptive Systems (CAS) theory, we investigate how the complex network adapts to alter the likelihood of transactions between buyers and suppliers.
Using data from MNexchange.org, an OMWE operating in the U.S. state of Minnesota, we observe that, at the node level, buyers’ adapt their searches for products over time to increase transaction success; at the dyadic level, buyer-supplier pairing patterns adapt over time through homophilous relations to facilitate negotiations and increase transaction success; and at the network level, the entire exchange system structurally self-organizes to increase transactions rates. Throughout, buyer competition influences transaction success, contingent on whether the product has been on the market for a long time, and buyers with more experience more quickly identify favorable conditions (among products and suppliers) leading to higher transaction success than less-experienced competitors. Overall, the results demonstrate multi-level network emergence, in which complex, adaptive, and longitudinal buyer-supplier interactions resolve uncertainty and increase transactions. These findings disentangle OMWEs’ operation to allow managers and policymakers to increase the overall buyer-supplier transaction rates with an eye toward improved environmental outcomes.
Punitive & Supportive Tactics for Promoting Environmental Improvements in Firms
The challenge of externally promoting improvements is critical in supply chain and policy settings. Yet, the two most commonly used external influence approaches represent fundamentally opposite philosophies. While one approach usespunitive tactics (e.g. audits, sanctions) to coerce companies, the other approach uses supportive tactics (e.g. improvement recommendations, follow-ups) to encourage them instead. In this study, we examine whether punitive and supportive tactics can be implemented in a complementary manner. In particular, we examine this question in the context of government agencies influencing environmental improvement (EI) projects in firms.
Using archival data collected from two state-level environmental agencies in Minnesota, we conduct a longitudinal analysis of over 820 EI projects tracked over several months. One key finding of our research is that the timing ofpunitive tactics is critical for the efficacy of supportive tactics. While punitive tactics prior to EI initiation may hold some benefits, the use of punitive tactics when facilities are in the midst of adopting EIs can be highly disruptive. Further, reinforcing supportive tactics through reminders and follow-ups can ensure higher (and faster) adoption of EIs. We present implications for using the punitive and supportive approaches in a complementary manner under both policy and supply chain settings.
Deciding When to Implement Compatible Management Standards
Implementation of management standards has become a “strategic” priority for organizations. Today, the management standards landscape is surprisingly vast. Since the introduction of ISO 9000 (quality management) standard in 1987, other standards with similar structures such as ISO 14000 (environmental management), ISO 26000 (social responsibility), ISO 28000 (supply chain security and resilience), and ISO 13053 (Six Sigma) have rapidly emerged. To keep pace with rising customer expectations, regulatory requirements and productivity pressures, companies have dedicated corporate teams for monitoring and implementing new management standards. Hence, managers continuously face the challenge of when to implement the next management standard?
Our study goes beyond the well-researched question of ISO adoption and examines how timing of implementation, absorptive capacity and industry competition collectively influence firm performance. Using ISO 9001 and ISO 14001 standards as our empirical setting, our study also recognizes the interplay between structurally compatible standards. The analysis has important managerial implications. In particular, our analysis shows that the decision of when to implement the next compatible management standard (ISO 14001) is contingent on the level of industry competition and thecumulative knowledge from the previous standard (ISO 9001). In more competitive environments, firms that implement ISO 14001 faster relative to competitors achieve superior performance. Also, firms that have higher prior knowledge with ISO 9001 implementation can reap greater performance benefits from being the early mover in the race to implement ISO 14001. Interestingly, firms with low prior knowledge with the previous standards (ISO 9001) actually perform worse when they are early movers than when they are laggards in the race to implement ISO 14001. Broadly, this study offers theoretical and practical insights on when companies should implement new management standards.