Table 15. Business Model - Chemical Company

98 | Carlos Fúquene Retamoso

In a consistent manner, Chemical Company has maintained R&D capabilities over years of operation in conjunction with the improvement of its operational efficiency. For example, the firm encourages employees to identify and implement operational efficiency, relying on ideas and suggestions based on employees´ experience and knowledge. Chemical Company developed an Innovative Ideas Program that stimulates employee participation through an incentive plan based on their recognition and economic compensation, which has operated for more than 20 years. Specifically, in 2016 and 2015, the company implemented more than 90 innovative ideas per year, surpassing by 80% those implemented in 2014 (Chemical-Company Sustainability Report, 2018). The Company has constantly used its financial capability for the adoption of cleaner technologies for operational efficiency (i.e. eco-efficiency). Finally, the Company made an investment of 15 million USD in 2019 to renovate its manufacturing technology (Lozano, 2019).

Regarding, strategic capabilities, Chemical Company has focused on achieving an advantageous position through business efficiency. Specifically, the Company acquires companies and creates synergies throughout its value chain to achieve an economically sustainable business (Hernández, 2011). The following statement, taken from the sustainability reports, shows that the business model captures value by vertical integration:

“The business strategy emphasizes the importance of being a vertically integrated company, with focus on special products with the aim of reducing the volatility of raw materials. Hence, we focus on production and marketing towards products with greater profitability and value added”

Table 15 presents a summary of the influencing sub-factors and environmental practices associated to the dynamic business model of the firm.

Table 15. Business Model - Chemical Company.

esa factor category main features

Business model

Dynamic Company has worked to increase its portion of the market (50% of market share) by developing and positioning its new products and using its R&D capabilities to take advantage of market opportunities. Company has developed an Innovative Ideas Program for process redesign. Company has adopted cleaner production technologies to achieve operational efficiency.

Case studies | 99

• Manager`s perspective

The CEO of Chemical Company holds a Bachelor of Science in Engineering. He is Colombian and began to work in the Company in the late 90´s as a sales engineer. He occupied the head of the commercial distribution division in 2000 and in 2008 he became the CEO of the company. His work experience during more than 20 years at the company has focused on sales.

Influencing factors observed in the manager`s perspective were associated with the individual characteristics of the CEO, which cover his personal values, perspective towards ESA and leadership style.

- Personal values The CEO exhibits self-strain and submission to norms of behavior to keep a smooth interaction with cultural norms, including the rules of the parent company:

“We support transparency and accountability, and therefore commit ourselves to annually report our progress and challenges, in line with the sustainability strategy […]” (CEO’s statement about sustainability, 2016)

In acknowledging his concern about the norms of behavior, the CEO exhibits tradition as one of his main personal values. Traditional modes of behavior become expressions of the CEO’s acceptance of the customs and ideas that firm´s culture imposes on employees. The CEO’s traditional values, associated to self-strain and submission to norms, constituted a mechanism to the support and adoption of global strategies from the parent company:

“[…] In 2016, we consolidated our commitments to ethical principles and corporate values” ...

- Perspective towards ESA The manager´s perspective instituted a mechanism for the encouragement of eco-efficiency programs for the company to be profitable. Next statement illustrates some of the initiatives supported by the CEO:

…“We permanently invest in innovation and state-of-the-art equipment to increase productivity and use efficient machines that demand less energy and water”… (Gómez, 2015).

100 | Carlos Fúquene Retamoso

... “In the area of environmental conservation, we have special savings programs in the consumption of both water and energy ... and also we develop certain projects for the conservation of water […]”

Besides, CEO stated about the investments in 2019, which confirms his focus on efficiency:

“[…] The company’s investments in 2019 sum up 15 million dollars … [this occurs] because we are in a sector in which we must renew, upgrade equipment and invest in innovation … in order to be at the forefront of the productive, technological, commercial and distribution processes …” (Lozano, 2019)

He adds:

“[…] Likewise, we will allocate resources to improve the efficiency of the technological platforms for hydraulic design of water piping systems […]”

“[…] Another item will be allocated to issues of social responsibility…”

“[…] With regard to the environment, we intend to maintain our competitiveness and at the same time reduce our environmental footprint. We handle resources responsibly in our production processes and bring environmentally responsible solutions to the country. As an active company from a sector linked to water, we invest in research programs for new technologies and hydraulic performance that we subsequently disseminate to our customers and users […]”

- Transactional constructive leadership style CEO reflects a transactional leadership style. For example, during a public interview he has mentioned about the guiding principle of firm´s decisions:

“Shared value is to make the company successful, responsive to investors, that can operate in the territories under a long-term perspective”. … As far as the company creates value for society… you will have better relations with stakeholders. […]”

The former quote reflects that it is required, by the CEO, a clear set of rules to facilitate the exchange process between the company and the shareholders and interested parties.