External Pressure For most respondents it is difficult to give examples of best practices for dealing with external pressures on individual firms. From the interviews two important reasons were identified. First the business environment is very unpredictable and firms have less influence on it. Second, most pressures from the business environment are often not targeted at one specific firm but to groups of firms in a sector or even to a total sector. These reasons make it more difficult to develop best practices for individual firms which take into account specific pressures. As one of the respondents briefly summarised for media attention: Most things in the media are exceptions, but are broadly reported. The problem with media attention is that only a few or even one firm or pon can damage a whole sector and in most cases you have no idea to which topics the media will pay attention to. Applying standards In order to deal with requirements from various sources from the business environment, like the government, action groups and consum, firms often use certain standards as good practices. Nine respondents mentioned that in many sectors basic kind of quality systems exist (like Eurep-GAP for primary in the fruit and vegetable sector), but also systems that deal with specific requirements. Table 1 shows some of these systems. Some systems, like ISO, BRC, IFS and FloriMark are especially aimed at more documentation of the ts and or tion ses (e.g. detailed traceability). Other quality systems are aimed at sustainability or environmental issues, like Nature s Choice initiated by the British retailer Tesco in the fruit and vegetable sector and MPS-GAP aimed at retail requirements in the flower and plant sector. Other systems are focusing on social aspects during the tion ses, like MPS Socially Qualified (safety, health and working conditions). Within these specific systems the requirements on specific topics (e.g. traceability) are much higher than requested by law. Table 1. Standard systems and examples of specific systems
Kind of firm Standard systems Examples of specific systems Poultry farm IKB HACCP, ISO Poultry slaughtsor IKB, HACCP ACP, BRC, IFS Fruit and vegetable grower Eurep GAP EKO, Nature s Choice Fruit and vegetable trader HACCP EKO, IFS, BRC Flower and plant grower MPS A, B, C MPS-GAP, MPS Socially Qualified Flower and plant trader - FloriMark, ISO Many systems focused on sustainability and social aspects, like prescriptions for labour circumstances are useful for firms involved in highly international chains, because in the Netherlands many of these requirements of these systems are included in law. Sector-wide initiatives to deal with external pressures Participating in sector-wide initiatives developed for dealing with certain pressures can be regarded as another best practice. These initiatives are usually developed by interest organisations or t boards. For example three respondents from the fruit and vegetable sector mentioned the initiative Food Compass which helps trad to comply with the legislation on residual limits 1. One respondent from the fruit and vegetable sector and one from the flower and plant sector mentioned crisis teams in which representatives of the whole sector are involved, as another sectorwide initiative. One of the most important tasks of such teams is to react on media attention. Collaboration with action groups 1 Food Compass was established in July 2003 by the Fruit Trade Association Netherlands Frugi Venta and the Dutch Product Board for Horticulture with the aim of providing companies a cost-effective monitoring solution in compliance with the latest requirements of the Dutch Code of Practice on Hygiene that came into force on July, 1, 2003. Food Compass off independent advice to its memb on how to act to protect consumer safety if residues above the maximum permitted level are. Participants in this system receive every month a digital newsletter, covering all kind of issues related to residuals, like whether or not exceeding of residual norms or acute toxics have been found during sampling for residuals or changes in residual norms have occurred. The outcomes of the test and inspections are stored in an Early Warning and Response System, which is accessible for the memb of Food Compass (www.foodcompass.nl).
Two respondents, a trader of fruit and vegetables and a sor of poultry meat were able to give examples about how their firms have dealt with direct external pressures, in this case from action groups. In one case the demands of the action groups (Milieudefensie, Natuur en Milieu and Greenpeace) were focused on the compliance with maximum residual limits in fruit and vegetables. In the other case demands from the Dutch Animal Welfare Society were focused on animal welfare, especially on lowering the speed of growing of chickens. Fast growth of chickens sometimes results in health problems. In both cases an effective way of working turned out to invite memb of the action groups and to exchange opinions about the roots of conflicts and possible solutions. Firms also showed what they had already done to prevent problems. The fruit and vegetable trader in close cooperation with action groups and suppli developed and launched t market combinations that take into account many requirements of action groups. The quality management systems played a crucial role in selecting suppli that were able to work according to these requirements. For example six groups of ten grow were contracted who partly grow their ts according to the wishes of the action groups. Meetings were being organised in which grow and memb of the actions groups meet each other and exchange their opinions. From both sides more commitment and awareness for each oth demands were obtained. A comparable approach was followed by the slaughterhouse together with Dutch Animal Welfare Society and consumer panels for the development of a special slow growing chicken. However, the project was cancelled because it turns out that consum did not want to pay more (+ 2 Euro per kilo extra) for this kind of poultry meat. Pro-active participation on pressures Three respondents mentioned that some firms could respond to external pressure by making their tion ses transparent with regard to these pressures. Some pressures from the business environment are based on a wrong representation of reality. The poultry farmer accepted a visit of the radio program Het Filiaal 2 for a convation about animal welfare aspects especially about problems with the growing of the chickens. The respondent could show that he treated his animals well 2 Currently, Het Filiaal is a short program of Radio 1, the news and sport channel on the Dutch Radio. A reporter visits all kind of extraordinary organisations, foundations, people, events etc. and makes an approximately 10 minutes reportation of the visit and is broadcasted every day, except in the weekends.
and that he did not face any problems. Two other respondents from the flower and plant sector mentioned that doing business with smallhold in developing countries has a positive effect on the imago and reputation of the firms. The respondent from the VWA confirmed that firms become more transparent. In contrary to the past, now progressive firms contact the VWA that the newspaper of tomorrow will include a recall. In this case firms can show that they are very precise in their quality management. Regarding these statements is seems that some firms see possibilities for competing on pressures form their business environment. One of the statements in the questionnaire measures to what extent firms perceived a certain pressure as something on which they could effectively compete and distinguish from other firms. The results in table 2 show that most firms have a score around four (the middle of the scale) which means that they are not sure about the possibilities of competing on certain external pressure. Table 2 Perceived possibilities for effectively competing on basis of four external pressures. Poultry chain Fruit and vegetables Flow and plants Primary Trad Primary Trad Primary Trad Media attention 4.2 (1.1) 3.7 (1.7) 4.1 (1.8) 3.7 (1.7) 3.3 (1.9) 3.3 (1.8) Legislation 4.0 (1.7) 4.0 (1.6) 3.8 (1.8) 3.8 (1.5) 3.1 (1.6) 2.7 (1.6) Changing consumer 4.5 (1.6) 4.7 (1.6) 4.8 (1.6) 4.4 (1.6) 4.4 (1.6) 4.1 (1.9) demands Corporate Social 4.4 (1.6) 4.4 (1.5) 4.5 (1.7) 4.1 (1.6) 3.9 (1.7) 3.6 (1.9) Responsibility Measured on a seven point Likert scale on which 1 means totally not applicable, 4 neutral and 7 totally applicable (Standard deviations between brackets) Especially in the flower and plant sector, respondents do not see great possibilities for competing on the selected pressures. This could also be the result of the less
importance of quality in this chain compared to the other two chain included in the study, which was turned out from the various ANOVAs. Because most firms do not perceive external pressure as something to compete on, some firms can distinguish themselves from the majority of firms. Distribution channel At least six respondents mentioned that the level of external pressure a firm increases, when it is involved in distribution channels including retail. Table 3 Perceived external pressures for trad dependent on distribution channels including retail Delivering to retailer Yes No Fruit and vegetables 61.8 (18.5)** 52.4 (13.9)** Flow and plants 50.9 (22.8) 42.4 (18.6) ** P < 0.05 (two tailed). Standard deviation between brackets It was possible to test this proposition for trad by comparing the index for external pressure. Trad and from the fruit and vegetable chain included in the questionnaire delivering to retail have indeed a significant higher perceived pressure from the business environment. Retail are dealing with large groups of buy who are critical on the ts they are buying and retail want to avoid negative publicity. For trad and from the flower and plant sector the difference was not significant.