Abstract
The practice of corporate sustainability is beset with compromise; it involves inevitable trade-offs across competing objectives and across a range of stakeholders and time horizons. These trade-offs create tension points that present the company with strategic choices that ultimately shape its overall approach to sustainability. Accordingly, trade-offs constitute a material aspect of a company’s sustainability practice, and ought to be disclosed in sustainability reports. The purpose of this research is therefore to understand how companies perceive, manage, and report on these critical trade-off decisions in the practice of sustainability. To achieve this objective, this dissertation conducted a study in three phases. In Phase I, this study conducted a review and content analysis of the trade-off literature through the lens of the natural resource-based view of the firm. Through this process, this study proposed a hierarchical framework for the analysis of trade-offs based on their root tensions, their interconnections, and their connection to sustainability synergies. In Phase II, this study used an organizational cognition perspective to posit that companies perceive and respond to these trade-off decisions in ways that reflect the company’s underlying sustainability logic. To explore this link, this study performed a content analysis of interviews with sustainability managers, as well as archival documents. This study found that companies with an instrumental logic saw trade-offs as binary and resolved them by counterbalancing the ‘lose’ dimension with ‘wins’ elsewhere. In contrast, companies with an integrative logic saw trade-offs as non-binary, and resolved them through an iterative, risk-based approach. Finally, in Phase III, this study used a legitimacy perspective to determine whether companies are disclosing these trade-offs in their sustainability reports. To do so, this study analyzed sustainability reports and interviews with sustainability managers using content analysis. This study found that 92% of all reporting companies had encountered sustainability trade-offs but had not disclosed them in their reports. Evidence of these accounts were nevertheless present in the implicit (or latent) content of the reports. These findings highlight the negative light in which many companies perceive trade-offs, and the legitimacy threat that their disclosure poses.
Highlights
Introduction toTrade-offs in Sustainability:Companies are increasingly expected to set and deliver on sustainability targets to manage their sustainability performance
This latter section describes the conflict themes and categories that have emerged from the review, and which form the basis of the framework
With regards to RQ 2-3, on the role of organizational logics in trade-off decision-making, this study demonstrated that the way companiesperceive trade-offsdoes differ and is shown to be influenced by the company’s underlying logic
Summary
Introduction toTrade-offs in Sustainability:Companies are increasingly expected to set and deliver on sustainability targets to manage their sustainability performance. In this chapter (Phase II of the dissertation), this nascent line of inquiry is extended to the organizational level, and posits that companies interpret and respond to these tensions in ways that reflect an underlying collective cognitive frame, or sustainability logic This argument is based on a growing body of research that explores company experiences with sustainability through a cognitive lens (e.g.Hahn et al 2014; Sharma and Jaiswal 2017). From the references captured in this review, it is apparent that trade -off research varies widely in terms of publications, disciplines, areas of application, research approaches, and methodologies This variation is likely wider still, given that this screening process did not include the large body of work on trade -offs in sustainability planning (e.g., Morrison-Saunders and Pope 2013) or in sustainability-related consumer purchasing decisions (e.g.,Olson 2013, Lekakos et al 2014). The latter group of applied studieswas classifiedfurther (Figure 2-4) according to the study sub-category depending on the application area
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