Proceedings of 26th International Business Research Conference
7 - 8 April 2014, Imperial College, London, UK, ISBN: 978-1-922069-46-7
Drivers and Barriers for Implementing Environmental
Management in Beverage Processors: A Case of Thailand
Auttasuriyanan Pakpoom** and Setthasakko Watchaneeporn ***
The main purpose of this study is to gain a clearer understanding of key
determinants that drive environmental management and barriers that hinder
its development. The study employs semi-structured interviews with key
informants accompanied by site observations. Key informants include
production, environmental and plant managers of six beverage companies,
including three Thai and three multinational companies in Thailand. It is found
that corporate image, government subsidies, top management leadership
and education institutes are four primary factors influencing the
implementation of environmental management in the beverage processors.
No demand from Asia buyers, employee resistance to change and lack of
environmental knowledge are identified as barriers.
Keywords: Environmental Management, Beverage, Government Subsidies, Education
Institutes, Employee Resistance, Environmental Knowledge, Thailand
1. Introduction
At the present time, business is under pressure from social groups adversely affected by its
activities: those in the state sector, customers, communities and international organizations.
These parties are demanding that business considers the environmental impacts of its
operations (Hopwood, 2009; Zhu and Sarkis, 2006). Examples of such pressure are the
issuing of legislation requiring businesses to carry out environmental impact assessments,
publish sustainability reports and issue environmental management standards (Robinson et
al., 2006). As a result, for businesses to uphold their commitment to various stakeholders in
society, for their activities to gain social acceptance (Delai and Takahashi, 2011) and to
ensure long-term sustainability, they must apply the Triple Bottom Line principle. This
principle involves consideration of economic and social development along with
environmental management (Elkington, 1998). Environmental management is considered a
part of Corporate Social Responsibility (CSR).
This paper aims to at least in part fill that gap, by exploring key determinants that drive
environmental management and barriers that hinder its development. Two key research
questions are address:
RQ1. What are key determinants that drive implementation of environmental management
for beverage processors in Thailand?
RQ2. What are barriers to implementation of environmental management for beverage
processors in Thailand?
**Auttasuriyanan Pakpoom. Thammasat Business School, Thammasat University, Bangkok 10200, Thailand.
E-mail: pakpoom.ibmp@gmail.com
***Watchaneeporn Setthasakko, Ph.D is an Associate Professor at Thammasat Business School, Thammasat
University, Bangkok 10200, Thailand. E-mail: wsetthasakko@yahoo.com
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2. Literature review
2.1 Sustainability
Sustainability stands as the means of meeting the needs of the present generation without
compromising the ability of future generations to meet their own needs (World Commission
on Environment and Development; WCED, 1987).
To move towards sustainability, business firms need to look at everything from a holistic
perspective in order to understand the interconnections between economic growth and
environmental and social sustainability.
Also, they have to shift their thinking from the conventional way of viewing impact on the
environmental and society to that of creating a long-term vision of environmental and social
sustainability or Corporate Social Responsibility (Hoffman, 2000; Schaltegger et al., 2002;
Setthasakko, 2007; Welford, 2000).
2.2 Corporate Social Responsibility and Environmental management
Corporate Social Responsibility, or CSR, is a continuing commitment by business to operate
ethically and play a part in economic development. This can be done by improving the
quality of life of the workforce and their families, as well as becoming involved in the
development of local communities and wider society (The World Business Council for
Sustainable Development; WBCSD, 1999).
There are 3 types of CSR which can be adopted in business operations (Corporate Social
Responsibility Institute; CSRI, 2008; Thai Corporate Social Responsibility, 2010):
1. CSR-after-process: This involves corporate activities that benefit society in various ways.
These activities take place following, or separately from, main corporate activity. Such
activities can include those whose purpose is to enhance corporate image, such as planting
trees, donating educational grants, awareness campaigns and giving aid to victims of natural
disasters.
2. CSR-in-process: This type of CSR involves incorporating social responsibility into the main
business operations of the company, without having been compelled to do so. This type of
CSR includes responsible methods of making profits, such as producing goods which do not
harm the environment, pollution prevention or control in the production process to limit
impacts on communities, and being committed to employee welfare and responsibilities to
customers.
3. CSR-as-process: This involves CSR activities which do not seek profit for the organization;
in other words, the organization‟s purpose is to bring benefits to society through all its
practices. Examples are charitable trusts or foundations.
Foran, 2001; Frederick et al, 1992; Jackson and Hawker, 2001; Lea, 2002; Marsden,
2001and Van Marrewijk, 2003 point out that environmental management is part and parcel
of CSR. This viewpoint is in line with that of the European Commission (2011), which
defines CSR as the incorporation of concern for society, the environment, human rights and
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consumer rights into business processes, as well as interaction with stakeholders,
undertaken voluntarily. Under this definition, it is clear that environmental management is
included.
Environmental management is defined as the effective handling of natural resources and the
environment, whether in exploration, storage, maintenance and conservation in order to
minimize negative environmental impact. It can also benefit humanity by ensuring that
resources remain for continuous use, without shortages or other problems (Brorson and
Larsson, 1999; Robert, 2000).
2.3 Beverage processing companies in Thailand
Even though Beverage processing companies have brought great benefits in expanding the
Thai economy, continuous expansion has also had environmental and social impacts due to
the ongoing rise in demand for water in drinks production. Groundwater has been extracted
for industrial use since 1978, extraction rates increasing by 3.04% per year. This has
resulted in the water table reaching crisis levels in 7 provinces, namely Bangkok, Samut
Prakan, Samut Sakhon, Nonthaburi, Nakorn Pathom, Pathum Thani and Ayutthaya
(Department of Groundwater Resources, 2012).
Due to this groundwater crisis, legislation has been passed to limit and control groundwater
extraction and use in the affected areas, as well as increasing the fee to be paid on
extraction to match that paid for mains water. Some in Beverage processing companies,
however, still prefer to use groundwater as a raw material in the production process, as
using mains water, which is chlorinated, may cause problems in the production process and
affect product quality. Furthermore, using mains water instead increases operational costs
such as laying pipes, pump installation and dechlorination to make the water suitable to be
used in the production process, in order to preserve product taste (Koontanakulwong et al.,
2007).
Groundwater extraction for use in beverage production has resulted in the lowering of the
water table in the central region of the country. This has led to subsidence and flooding in
coastal areas where tidal surges have occurred, causing saltwater intrusion into freshwater
areas. This has happened in the coastal areas surrounding Bangkok, Samut Prakan and
Samut Sakhon (Department of Groundwater Resources, 2012).
3. Research methodology
This paper focused on six beverage processing companies used as case studies, employing
a system perspective as a conceptual guide. An exploratory case study was conducted
because this method excels at research situations involving a contemporary phenomenon
within its real-life contexts (Yin, 2003). This study used a multiple-case design for cross-site
comparison and analytic generalization.
The research was conducted by semi-structured-interviews with key informants, site
observation and documentation during the winter of 2013. The informants are production,
environmental and plant managers. They were asked a core set of semi-structured
questions and probed for elaborations and explanations of issues as they emerged. The
interview format covered the following areas:
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


background of company;
implementation of environmental management; and
barriers to implementation of environmental management
The interviews ranged in length from one hour to two hours. Extensive notes were taken at
the time and written up later the same day. Data were analyzed by using the method
suggested by Miles and Huberman (1994) for qualitative analysis: data reduction, data
display matrix and conclusion drawing and verification. By using this method, we can
understand determinants and barriers to the implementation of environmental management
for beverage processors in Thailand.
In order to increase the trustworthiness of the study, site observations were undertaken,
allowing the researcher to obtain a “system” view of production processes and
environmental management practices, including wastewater treatment and solid waste
management.
4. Companies profile
The companies studied are located in the Central and East regions of Thailand. The criterion
for selecting the six beverage processing companies was primarily based on the fact that
they are Thai company or multinational company has implementing environmental
management. The chief differences among the companies studies are years of operation,
authorized capital, number of employees and type of product.
Confidentiality was agreed upon as a condition prior to research access. The companies are
referred to here under the pseudonyms Company A, Company B, Company C, Company D,
Company E and Company F. The features of the companies are given below.
Company A was established about 31 years ago with an aim to consolidate its leading spirits
business in Thailand. It is a Thai company. At present, it has authorized capital of
approximately $ us 152 m and employs 450 people. The company‟s products are exported
to international market, including the European Union and the Asia-pacific region.
The
company has received many international management certificates, including
ISO
9001:2008, ISO 14001:2004 and ISO 22000:2005.
Company B was established about 35 years ago. It is a Thai company. Authorized capital is
approximately $ us 8 m and employs 2,450 people. It is the leading energy drink company in
Thailand. The products of company B are exported to 160 countries all over the world. Its
involvement in environmental management includes participation in Green Industry project of
Ministry of Industry.
Company C was established about 50 years ago. It is a Thai company. At present,
this
company employs 170 people. It is a leader in Alcohol Company in Thailand.
Its
involvement in environmental management includes participation in Cleaner Production
project. The company has received ISO 14001:2004.
Company D was established about 20 years ago. It is a multinational company from
Netherlands. It has an authorized capital of approximately $ us 30 m and employs 135
people. At present, some products are exported to Asian countries. Environmental
management is illustrated by the fact that it was the first Brewery Company in Thailand that
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implements a “Water for Life” project. The project involves a research on improving the
efficiency of brewery‟s wastewater treatment following nature-by-nature conservation
approach. The company has received many international management certificates, including
ISO 9001:2000, ISO 14001:2004 and ISO 22000:2009.
Company E was established about 19 years ago with the authorized capital of approximately
$ us 56 m. It is a multinational company from Taiwan. This company employs 257 people. At
present, it is the leading mixed vegetable and fruit juice Beverages Company in Thailand.
Most of its products are exported aboard, including to the US,
the Middle East and other
Asian countries. The control of pollutants is within all applicable government requirements.
Company F was established about 32 years ago. It is a multinational company from the
United States. Authorized capital is approximately $ us 29 m. It is a leader in Sparkling
Beverages Company in Thailand and employs 1,190 people. Environmental management is
illustrated by the fact that it was the first Sparkling Beverages Company to be granted the
ISO 14001 certification in Thailand.
5. Findings
5.1 Drivers for implementing environmental management
The driver for implementing environmental management are corporate image, government
subsidies, top management leadership and education institutes.

Corporate image
Beverage processing companies are viewed as having negative impacts on the environment
and society. They are seen as being responsible for taking away water resources from
communities, for water pollution and foul odours and leaching of effluent into community
water sources. Thai culture is also group-orientated rather than individualistic. The need to
build a good corporate image for companies in order to be accepted in coexisting with
communities has resulted in pressure for both Thai and multinational companies to carry out
environmental management. In an interview, a plant manager was quoted as saying:
“…Even though communities have sometimes settled in the area after the
establishment of industry, if they cannot live in the area then neither can we. We
might be reported to the authorities by the community for foul-smelling effluent.
To build a good image to ensure acceptance by the community, we follow ISO
14001 to show the community that we are truly committed to the environment and
are open to scrutiny by external parties on an annual basis...” (Plant Manager,
Company A)
“…Even if we were here before the community, we still want to be able to coexist
with it without generating resentment and without the risk of being reported to
authorities regarding effluent from the production process, as has happened in
the past. We have, for example, had people complain about foul-smelling effluent
and its strange colour. Because of this, in order to build a good image, we
practise environmental management that is effective and in accordance with
Department of Industrial Works regulations…” (Plant Manager, Company C)
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“…We practise environmental management because we want to be accepted by
the community, so we (a brewery) have set up a Water for Life project. We grow
plants that help treat the effluent and invite local people living around the brewery
to collect these plants, which can be used as animal feed or in handicrafts. That
raises income for their families and the community…” (Environmental Manager,
Company D)
“…Even though we have been here for 32 years, before the local community
settled here, we wish to live in harmony with the local people. That is why we
place importance on the environment, as can be seen from our exclusive use of
groundwater and mains water without extracting water from the Chao Phraya
River. This is despite the fact that our filtering system can clean the water and
can also help greatly reduce water costs. However, management policy is not to
take water from the surrounding communities, which has helped us to gain the
confidence of the local people…” (Plant Manager, Company F)
 Government subsidies
The Department of Industrial Works only awards subsidies to companies which practise
environmental management in line with legislation and have had at least 50 years of good
relations with the Department of Industrial Works. These subsidies are another motivation
for Thai companies to pay attention to environmental management, as stated by a plant
manager in an interview:
“…Even though the Department of Industrial Works does not force us to join the
Green Factory scheme or carry out ISO 14001, we are happy to get involved, as it
is a good opportunity for us as a state enterprise to preserve good relations with
state bodies. We have maintained good relations with the Department of
Industrial Works and have followed environmental management legislation for 50
years. As a result we receive a 40 million baht investment subsidy from the
Department of Industrial Works, which is 20% of the total investment needed to
build our new environmentally friendly alcohol distillation tower…” (Plant Manager,
Company C)
 Top management leadership
Due to the hierarchical nature of Thai culture and society, senior management are the sole
decision makers, while lower ranking staff merely obey orders. Because of this, senior
managers in both Thai and multinational companies are major players in the success of
environmental management via budget allocation, designated areas within breweries or
factories and liaison with suppliers, as well as incorporating environmental issues into
company policy. This results in staff cooperation in environmental management, as stated in
the following interview of a plant manager:
“…The goal of the company president is to bring the factory in line with ISO
14001 criteria by next year. The president has always supported the role of staff
in environmental management. If there is any practical aspect that staff do not
understand, the president will send staff to study real life examples from other
companies which successfully operate those systems, so that staff can see how
we can apply these practices to our factory…” (Plant Manager, Company B)
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“…In the early days of our Water for Life project, which used plants to treat
effluent in order to save energy and reduce chemical use, we were supported by
senior management, who are from overseas. They provided the budget and a
1.97 acres space in the factory grounds as an experimentation area…”
(Environmental Manager, Company D)
“…The company president plans to make our factory into a Level 4 Green
industry within 3 years. At present, the president is speaking to our 40 to 50
suppliers, asking them to cooperate in environmental management so that it runs
through the entire supply chain…” (Environmental Manager, Company E)
“Apart from the environmental policy handed down from our American parent
company, our management has always placed emphasis on the environment
from the earliest days of the company, founded in 1951. This can be seen in our
status as the first factory in the network under our parent company, as well as
being the first beverage factory in Thailand to meet ISO 14001 standards”
(Environmental Manager, Company F)
 Education institutes
Universities have an important role to play in supporting beverage processing companies in
practicing environmental management to exceed required standards. They have done this
by providing equipment and up to date expertise to both Thai and multinational companies,
including using waste products from the production process to feed animals and treating
factory effluent by using plants, in order to reduce the use of chemicals and to save energy.
In an interview, an environmental manager commented:
“…We have joined forces with Windows and NIDA, which have supported us in
our environmental management and have helped set up our pollution control
project free of charge. The project aims to reduce incomplete combustion. Tests
have shown that there is now no dioxin release detected from the factory boiler”
(Environmental Manager, Company A)
“…The brewery‟s environmental management practices are based on
collaboration with Kasetsart University, such as in the Water for Life project, which
uses plants to help treat effluent. The brewery wishes to be an initiator in effluent
treatment to prevent offensive smells which disturb local communities. Apart from
this, to deal with waste products which cannot be re-used, such as brewer‟s grain,
the brewery has joined hands with Thammasat University‟s farm to convert it into
animal feed” (Environmental Manager, Company D)
5.2 Barriers to implementing environmental management
Implementing environmental management is challenging. There are obstacles during the
Implement, the research identified primary barriers: No demand from Asia buyers, employee
resistance to change and lack of environmental knowledge.

No demand from Asia buyers
An important barrier to the practice of environmental management by both Thai and
multinational beverage processing companies that export to consumers in Asia (China, Hong
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Kong, Myanmar, Vietnam, Laos, Cambodia and Malaysia) is the lack of interest of those
markets in environmental management. These countries are more interested in product
pricing, quality and safety, according to the following interviews:
“…At present we export alcoholic beverages to Vietnam, Cambodia, Myanmar
and Hong Kong. Our customers are not currently interested in environmental
issues, neither do they inquire about ISO 14001 standards, which we have been
recognised as meeting. Instead, they focus on consistency of pricing and
quality...” (Plant Manager, Company A)
“…Our overseas customers, whether they be in Myanmar, Laos or Cambodia, are
not interested in our ISO 14001 standards, but rather in quality and pricing…”
(Environmental Manager, Company D)
“…A proportion of our fruit and vegetable beverages are exported to America, the
Middle East, Myanmar, Vietnam, Laos and Malaysia. Our Asian customers are
not interested in our factory‟s environmental management practices, but rather
focus on quality and safety. For example, Chinese customers are only concerned
with whether the tea leaves used in the production process are organic…” (Plant
Manager, Company E)
 Lack of environmental knowledge
Another obstacle to the implementation of environmental management occurring in Thai and
multinational companies is the lack of environmental knowledge on the part of staff. This is
especially true for environmental standards such as ISO 14001, some points of which are
hard to interpret, leading to environmental department personnel taking considerable time in
learning about them, or liaising with environmental consultancy firms for project advice.
Following this process, staffs in other departments are then trained prior to undertaking their
duties, as related in this interview:
“…Most factories take no more than 2 years for the implementation of ISO 14000,
but our factory has taken as long as 3 years. That is partly because of a lack of
comprehension by staff, which meant that the factory has had to have an advisor
give a talk and arrange training for all factory staff…” (Plant Manager, Company
C)
“…With the emergence of new environmental standards such as ISO 14001,
there are problems with interpreting some points, particularly as they are written in
English. As a result, our environment department staffs have to take time to
familiarize themselves with the standards. Then the staffs have to be trained in
operations in other parts of the factory prior to ISO 14001 implementation, as ISO
14001 implementation depends on cooperation and liaison between different
departments…” (Environmental Manager, Company F)

Employee resistance to change
Employee resistance is another barrier to implementing environmental management,
especially in Thai companies which are state enterprises. This is due to state enterprises
being wholly government-owned, the government having more than a 50% shareholding, or
being under direct or indirect government supervision.
This has meant that the
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organizational culture of such bodies remain like that of the civil service, where staff are
unmotivated to comply in implementing environmental management, which they see as
increasing their workload. An interview stated that:
“…Despite being a state enterprise, our internal culture is similar to that of the civil
service, working day to day. When we first started the Green Factory and Clean
Technology project to cut production waste and pollution, there was resistance
from older staff members to the implementation of ISO 14000. Even though we
pointed out that environmental issues were a concern of everyone in the factory,
they still saw that the old way of doing things was alright and wondered why
anything had to change…” (Plant Manager, Company C)
6. Conclusions, Limitation and Future research
The findings show that key determinants that drive implementation of environmental
management consist of corporate image, government subsidies, top management
leadership and education institutes. No demand from Asia buyers, employee resistance to
change and lack of environmental knowledge are identified as barriers to implementation of
environmental management for beverage processors in Thailand.
A deeper understanding of these factors derived from case study research with the use of indepth interviews and site observations will assist in the implementing environmental
management toward sustainability. Furthermore, in order to improve generalization of the
findings, future research should broaden the simple. It would also be beneficial to pursue
comparative research between industries and countries.
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