Under construction: how managerial cognition shapes sustainable transition pathways

An optimal integrated power and water supply planning model considering Water-Energy-Emission nexus

Corporate sustainability confronts managers with tensions between complex economic, environmental, and social issues. Drawing on the literature on managerial cognition, corporate sustainability, and strategic paradoxes, we develop a cognitive framing perspective on corporate sustainability. We propose two cognitive frames—a business case frame and a paradoxical frame—and explore how differences between them in cognitive content and structure influence the three stages of the sensemaking process—that is, managerial scanning, interpreting, and responding with regard to sustainability issues. We explain how the two frames lead to differences in the breadth and depth of scanning, differences in issue interpretations in terms of sense of control and issue valence, and different types of responses that managers consider with regard to sustainability issues. By considering alternative cognitive frames, our argument contributes to a better understanding of managerial decision making regarding ambiguous sustainability issues, and it develops the underlying cognitive determinants of the stance that managers adopt on sustainability issues. This argument offers a cognitive explanation for why managers rarely push for radical change when faced with complex and ambiguous issues, such as sustainability, that are characterized by conflicting yet interrelated aspects.

Sustainable and Responsible Business has become a mainstream concept as organisations seek to adapt to a changing business environment and address social, environmental and economic challenges. However many academics and practitioners suggest that such efforts are prone to inevitable failure as they are peripheral, uneconomic, and incremental. It is common for businesses to innovate at the level of their products and services yet to be truly sustainable and responsible, activities should be linked with the core business of the firm and requires more radical innovation. There is then a need to that innovate at the level of a firm’s value creation process, at the level of the business model. Whilst there is much research which present case studies of companies who utilise sustainable business model designs, only recently has attention turned to the development and application of tools and techniques which can assist business leaders in developing models to apply to their own organisations. This chapter discusses sustainable business model design before reviewing a range of toolkits designed to integrate sustainability principles into business strategic planning and assessing their applicability to sustainable and responsible business model design. The aim is to identify and review some of the key tools available for firms to utilise when developing new sustainable business model pathways.

Analysing transition pathways in developing cities: The case of Nairobi's splintered sanitation regime

Social sustainability requires both technological innovations and societal changes within energy systems, with decentralization playing a critical role. This shift emphasizes the increasing importance of individual user decision-making, posing significant management challenges. An individual’s environmental awareness has a key influence on their energy decisions. However, the relationship between individual environmental awareness and social sustainability, particularly from a systemic perspective, remains underexplored. Our study uses agent-based modeling to examine this relationship within Japan’s electricity market, focusing on social learning and consumer heterogeneity. We find that social learning leads to the formation of consumer clusters with specific electricity preferences, affecting environmental awareness differently across high- and low-carbon groups. This process reveals the nuanced role of social learning in promoting low-carbon technology adoption, which varies according to the market share of low-carbon energy. Additionally, our results suggest that initial heterogeneity in environmental awareness among consumers has a limited and varied effect on sustainable transition pathways. However, the diversity resulting from social learning significantly shapes these trajectories. These insights highlight the complex interplay between individual behaviors, societal dynamics, and technological advancements in steering the sustainable transition, providing valuable considerations for future energy system management.

An interval parameter optimization model for sustainable power systems planning under uncertainty

Sustainable transition pathways with high penetration of variable renewable energy in the coal-based energy systems

Research has shown that managerial cognition and cognitive frames play a prominent role in shaping organizational strategy under conditions of market uncertainty and ambiguity. While this work often has implications for understanding incumbent responses to disruptive innovation, relatively few attempts have been made to apply a cognitive lens directly to cases of disruptive innovation. Where a cognitive approach has been applied, it has often incorporated binary or dichotomous understandings of cognitive framing: often involving an opportunity/threat heuristic Recent work has begun to suggest that cognitive positions held by organizational members can incorporate multi- dimensional and non-binary cognitive frames. This paper explores the cognitive processes involved in incumbent organizations following the emergence of a disruptive innovation. We conduct an in-depth case study of the response of Aviva plc. to a disruptive innovation - the rise of general insurance aggregator sites between 2005 and 2007 -t...

There is growing attention in theories and practices to achieve sustainable business models (SBMs). However, achieving SBMs for incumbents is an arduous and challenging process. Based on the literature on SBMs and managerial cognition, we explore how managers use their cognitive processes to adapt business models to environmental changes. Based on the study of a Chinese incumbent, this paper reveals the evolution process of incumbents’ SBMs in the manufacturing sector and indicates managers’ effective cognitive processes under different environmental conditions. This study attempts to open the black box of the link between cognitive processes and SBMs, reveal the role of cognitive heuristics, and provide practice guidance for incumbent firms to achieve sustainable development.

Sustainable business models, venture typologies, and entrepreneurial ecosystems: A social network perspective

The development of sustainable and competitive business models for resilient strategies is a topical topic, due to the economic, social and environmental changes facing the contemporary world. In the context of global crises, such as climate change, the COVID-19 pandemic and economic instability, companies are forced to rethink their strategies to face the challenges of the future. Sustainable business models not only meet the requirements of environmental protection and social responsibility, but also stimulate long-term competitiveness. Companies that adopt sustainable and resource-efficient practices build resilience, becoming less vulnerable to market fluctuations and strict carbon regulations. Orientation towards resilient strategies for the development of sustainable business models would constitute an opportunity for the Republic of Moldova in confronting atypical situations in the context of geopolitical flows.

Purpose This study aims to explore how sustainable business models reshape, and are reshaped by, the boundaries of efficiency, power, competence and identity in the fashion industry. Moreover, it provides new insights into the challenges emerging from redesigning the fenceposts of existing business models. Design/methodology/approach The paper utilises an industry-level study from the Nordic fashion industry, drawing on primary and secondary data. Findings The findings demonstrate that sustainable fashion business models challenge the boundaries of power with the idea of production quotas to enhance sustainability and reduce waste. These quotas, aimed at improving environmental practices, might create uncertainty in recycling policies, impacting fashion industry environmental efforts and societal sustainability expectations. The paradox within the industry’s efforts to reshape its identity involves promoting responsible consumption through repair services while driving mass consumption with frequent seasonal releases. Research limitations/implications Managerial implications highlight the importance of prioritising sustainability to enhance efficiency, drive positive change, develop competencies and shape brand identity. This study contributes to the existing literature by introducing a novel boundary-oriented perspective for evaluating sustainable fashion business models. Practical implications This study contributes to the existing literature by introducing a novel boundary-oriented perspective for evaluating sustainable fashion business models. Originality/value This study offers empirical evidence based on an industry-level study from the fashion industry. It provides a new perspective by analysing the context of how sustainable business models reshape and are reshaped by organisational boundaries in the fashion industry.

PURPOSE: The influence of environmental, social, and governance (ESG) factors on financial performance has been confirmed in the literature. The article aims to examine the relationship between financial and non-financial factors in enterprises and to indicate for which groups of enterprises the relationship of ESG and financial performance is most visible in the context of building sustainable business models and the ability to adapt to sustainability. The article assumes that enterprises’ financial and non-financial results determine their adaptability to sustainability, and there is a relationship between financial results, non-financial performance, and companies’ sustainable business models. METHODOLOGY: The analysis encompasses 11 EU countries in the period 2008–2020. The study analyzed 6,864 observations, that is, 96,096 data cells. The data are divided into two groups of variables: financial and non-financial. The research is based on clusters analysis and ANOVA. It was carried out in two stages. In the first step, enterprises were grouped into clusters according to the financial condition criterion, considering the enterprise’s size and sector and country in which it operates. In the next step, it was checked whether enterprises with good financial standing also achieve better non-financial results. FINDINGS: It was found that large enterprises achieve better financial results than small and medium-sized enterprises, even though they operate in the same location and sectors. It can be emphasized there are statistical differences between entities with relatively good financial conditions and those with relatively weaker financial conditions in the context of such values as gender employment gap, total population living in households considering that they suffer from noise, greenhouse gas emission, Corruption Perceptions Index. The companies with relatively better financial standing achieve a smaller gender employment gap (at the national level) than entities with relatively worse financial conditions. It is similar to referring to the greenhouse gas (GHG) level. IMPLICATIONS: The results of this study may be useful for managements of companies in developing strategies of transformation towards sustainability, thanks to the fact that they provide information on what factors should be taken into account in the transformation process. ORIGINALITY AND VALUE: The originality of this study lies in the fact that it takes into account both financial and non-financial factors and examines the relationships between these factors in the process of companies’ adaptation towards sustainability and sustainable business model.

The global climate change and resource depletion crisis require rethinking business models that drive the production and consumption of goods and services. This requires transdisciplinary and systemic reconfiguration and a critical evaluation of traditional economic, business, and management constructs. This research provides a systematic literature review of how the constructs of sustainability, resilience, and sustainable business models have been defined and applied in the economic, business, and management academic literature from 1990 until 2022. The key contributions of this paper are (1) a review of how sustainability, resilience, and sustainable business models have been defined in the literature, (2) an identification of the interfaces and lack thereof between these constructs, and (3) an outline of the gaps and limitations and need for further research to address the knowledge gaps.

The aim of this chapter is to identify the concept of sustainable business models (SBMs) bridging from traditional business models (BMs) to sustainable business models (SBMs) while using value creation in exploring the characteristics of SBMs. The literature review of the chapter provides the platform to assess and to map, discuss, and develop the SBM pyramid framework. The SBM pyramid provides a framework and tool for how to identify, understand, develop and evaluate the level of sustainability of BMs and the BM dimensions—theoretically and empirically. A case example is offered to provide an illustration of the concept empirically and to explore the use of the framework in exploration and assessment of the levels of sustainability of the overall BM, the individual BM dimensions and the value proposition, delivery, creation and value capture of a company/business in practice. The three-dimensional framework can be applied by theorists and practitioners in identifying, developing and evaluating the level of sustainability in the value creation, value delivery, and value capture of any existing (sustainable) BM and it's BM dimensions and in designing new SBM innovations.