Top management and the adoption of energy efficiency practices: Evidence from small and medium-sized manufacturing firms in the US

Abstract

a b s t r a c tBarriers to energy efficiency have been extensively discussed in the energy literature, but little is known about positive drivers. This paper investigates the role of top managers and more specifically of top operations managers on the adoption of energy-efficiency practices, based on 5779 energy efficiency recommendations made to 752 small and medium-sized manufacturing firms under the US Department of Energy's IACs (Industrial Assessment Centers) Program, through which teams of students and faculty from engineering schools provide free energy assessments. Top operations managers possess knowledge of production processes, for maximizing the effective manufacture and distribution of goods. We find that their involvement significantly increases the adoption of energy-efficiency initiatives, while involvement of general top managers without an operational role has little or no effect. Involvement of top operations managers increases the percentage of recommended energy savings that are implemented by 13.4% on average and increases the probability of adoption of more disruptive individual recommendations related to process and equipment change from 31% to 44%. Our findings imply that, in order to advance energy efficiency in SMEs (Small and Medium Enterprises), it may be advisable to target managers who are sufficiently senior but still in a clearly operationally-focused position.

Closing the Energy Efficiency Gap—A Systematic Review of Empirical Articles on Drivers to Energy Efficiency in Manufacturing Firms

“…Moreover, Anderson, De Dreu, and Nijstad [58] revealed that firms are about 40% more responsive to investment costs than to energy savings (operating costs). In fact, energy efficiency investments have a larger probability of being realized if the payback time is shorter than 2-3 years [72,86,87]. Thus, we identified contradicting research results considering the economic rationale that drives energy efficiency.…”

Energy management in industry – a systematic review of previous findings and an integrative conceptual framework

“…Gordić et al, 2010;Virtanen et al, 2013), whereas the studies which focus on SME mainly applied a quantitative or mixed method design (e.g. Önüt & Soner, 2007;Blass et al, 2014). Figure 6 illustrates the industry sector distribution of the analyzed studies.…”

“…Based on a sample of 752 small and medium-sized U.S. manufacturing firms, Blass et al (2014) empirically investigate the role of top managers in the adoption of energy-efficiency practices. They find that the involvement of top operations managers with a clearly operationally-focused position significantly increases the adoption of energy-efficiency initiatives, while involvement of general top managers without an operational role has little or no effect.…”

“…The energy culture also includes aspects like top management involvement in the energy-related decision-making process (Blass et al, 2014), reward and compensation on individual and group level (Stawicki et al, 2010) and finally energy-related education and training (Bowonder, 1984;Lesourd & Ruiz, 1984).…”

Innovative means of energy efficiency management for regional industrial enterprises

“…From the standpoint of a systemic and integrated approach the authors fully explore the problem of energy management development at the level of enterprises and companies, the private moments, such as energy auditing survey and the development of energy efficiency programs, which are paid more attention to the practice [7,8,9,10,11,12,13].…”