Instead, it is viewed as an ancillary aspect of conducting business. Regulations are perceived as an unfamiliar nuisance. As a result, the organizations characterized by the lack of a permanent staff or budget for dealing with environmental issues. Very often, the plant engineering staff is called upon to handle environmental issues on an ad hoc basis. For example, when faced with the flood of environmental laws in the 1970s, Allied-Signal managers admitted to viewing the resulting expenditures as merely "a cost of the way we did business." ⁴ Few firms presently exist in this stage. Given the all-pervasive nature of today's environmental regulations, every company must have an understanding of environmental law, either in-house or through outside consulting services, in order to survive. Environmental goal-setting is virtually absent in this phase. Some smaller companies and larger laggards may still exhibit this type of behavior and management structure.

Advancing to this stage, the firm perceives environmental regulation as important enough to merit full-time attention. However, the firm views regulation, and not concern for the environment per se, as the motivator of new practices. Certain parts of the organization are altered, but the basic structure remains untouched. Dedicated compliance staffs labeled "government affairs" or "regulatory compliance" behave as buffers, limiting the collection of information and the impact that environmental regulation will have on the inner workings of the firm. These departments can exist on many levels, such as the operating level in the form of environmental engineering, the corporate level in the form of environmental counsel, or the political level through lobbyists who fight environmental statutes and regulations.

Most publicly held U.S. corporations can count themselves in this stage while also moving toward the next. For example, an Office of Technology Assessment study determined that the standard industrial thinking was to treat process wastes and emissions as separate and distinct from the process itself.⁵ A few years ago, a Conference Board survey found that 65% of U.S. firms put resources into lobbying to change environmental regulations.⁶ The survey also found that while some U.S. firms located their environmental affairs function in either manufacturing or engineering, the legal department was listed slightly more often. When rating the factors that reflected in environmental policy decisions, 69% of the companies were motivated in response to legal or regulatory requirements, 21% were motivated in response to liability pressures, and 32% were motivated by social responsibility. This emerging social responsibility may be what is driving companies on to the next stage of the greening process.

At this stage, the firm believes that environmental protection has certain strategic