i Incorporating sustainability into business decisions: how organisations choose to build a better world Catherine Elizabeth Anne Tilley Churchill College May 2019 This dissertation is submitted for the degree of Doctor of Philosophy
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i
Incorporatingsustainabilityintobusinessdecisions:how
organisationschoosetobuildabetterworld
CatherineElizabethAnneTilley
ChurchillCollege
May2019
ThisdissertationissubmittedforthedegreeofDoctorofPhilosophy
i
Declaration
Thisdissertationistheresultofmyownworkandincludesnothingwhichisthe
outcomeofworkdoneincollaborationexceptasdeclaredinthePrefaceandspecifiedin
thetext.
ItisnotsubstantiallythesameasanythatIhavesubmitted,or,isbeingconcurrently
submittedforadegreeordiplomaorotherqualificationattheUniversityofCambridge
oranyotherUniversityorsimilarinstitutionexceptasdeclaredinthePrefaceand
specifiedinthetext.Ifurtherstatethatnosubstantialpartofmydissertationhas
alreadybeensubmitted,or,isbeingconcurrentlysubmittedforanysuchdegree,
diplomaorotherqualificationattheUniversityofCambridgeoranyotherUniversity
orsimilarinstitutionexceptasdeclaredinthePrefaceandspecifiedinthetext
ItdoesnotexceedtheprescribedwordlimitfortheDegreeCommitteeinEngineering.
ii
Incorporatingsustainabilityintobusinessdecisions:howorganisationschoosetobuildabetterworld
CatherineTilley
Abstract
Businesseshaveacriticalroleinthetransitiontoasustainableeconomy,butthis
requiresthemtoincludesocialandenvironmentalconsiderationsintheirdecision-
making.However,thiscreatestheproblemofresolvingcompetingeconomic,socialand
environmentalcommitmentsoverthelongandshortterm.Scholarshaveexamined
thiseitherasananalyticaloracognitiveproblem,buttheseapproachesmayunderstate
theimportanceoforganisationalinfluences.Thisthesisthereforeaddressestwo
questions:first,howdotheformal,behaviouralandsocialstructuresofanorganisation
interacttoinfluencetheinclusionofsustainabilitycriteriaindecision-makingin
incumbentbusinesses?Second,whatarethepointsofinterventiontoinfluencethese
systems?Toanswerthesequestions,Iundertookthreeconnectedempiricalstudies,
usingmixedqualitativemethods.
Theseinvestigationsproducedfourfindings.First,includingsustainabilitychangesthe
natureofdecisions,leadingtofourspecificarchetypesofdecisions.Second,thewayin
whichdecision-makersresolvethecompetingcommitmentsinthesesituationsis
shapedbyabroaderframingofthetensionbetweenthefundamentallogicofthe
businessandthedemandsofitsenvironment.Third,decision-makingisinfluencedbya
seriesofcontextualfactors,includingthepropertiesofthedecisionitself;thedecision
maker(s);theorganisation;andthebroaderenvironmentalcontext.Fourth,theprocess
ofchangingdecision-makingrequiresacombinationofinterventions,andasetof
foundationalcapabilitiestochange.Companiesundertakingthistypeofchangefind
systemicbarriersthatcanonlyberesolvedthroughco-operationbeyondtheboundaries
oftheorganisation.Thesefindingshaveimplicationsforpractice.
iii
Thisresearchcontributestotheliteratureondecision-makingandsustainabilityby
presentinganovelclassificationofdecisionsandbyaddingdetailtotheunderstanding
ofcontextualfactorsinfluencingdecision-makersandtoparadoxtheoryby
demonstratingtheinfluenceofparadoxesondecision-makinglogicandondriving
change.Thismatters:corporatesustainabilityisanenactedprocessandunless
businessdecision-makingchanges,wewillnotbeabletoachievethesocialand
environmentalchangeweneed.
iv
‘Itisourchoices,Harry,thatshowwhatwetrulyare,farmorethanourabilities’
J.K.RowlingHarryPotterandChamberofSecrets
v
AcknowledgementsAlthoughthisdissertationiswritteninthefirstperson,therearemanypeoplewithout
whomitwouldneverhavebeeneitherstartedorfinished,andinthisshortspaceitwill
notbepossibletothankallofthemtotheextenttheydeserve.Despitethis,I’d
particularlyliketothankmysupervisor(and,Ihope,friend)SteveEvansandthemany
intervieweeswhoIcannotnameforconfidentialityreasons,butwithoutwhomthis
wouldbeathindocumentindeed.
Athesisisasolowork(andanyerrorsareemphaticallymyown),butresearchersneed
communities,andIhavebeenfortunatetobeamemberofseveralwonderfulnetworks.
InCambridge,theInstituteforManufacturingprovidedmewithawelcomingacademic
homeandasplendidcollectionoflunchcompanions;ChurchillCollegegavemean
interdisciplinarycommunityandamagnificentmentorinGeorgiaSorenson;Polly
CourticeandcolleaguesattheCambridgeInstituteforSustainabilityLeadership
introducedmetopeopleandideaswhohavebeeninfluentialinthisworkandtriggered
theideafortheresearch.I’vealsobeensupportedbygroupsofothersustainability
scholars:theEGOSParadoxgroupwelcomedmeearlyinmycareer;theGRONEN
networkintroducedmetoagroupofpeoplewithsharedinterests;andtheIvey/ARCS
fellowshipenabledmetobuildagroupofpeers.TimaBansal,TobiasHahnandmany
morehavebeengenerouswiththeirguidanceandsupportasInavigatedthecomplex
worldoforganisationalscholarship.
Throughoutthis,I’vebeensupported,toleratedandgenerallylookedafterbymyfamily.
MypartnerNic,brotherJames,andfatherPeterhaveseenmethroughthetoughtimes
aswellasthefunofdiscovery,andIamgratefulbeyondwordsfortheirencouragement
andgoodhumour.
Finally,Iwouldliketoacknowledgethreefriendswhowerenotwithmeonthejourney.
JuliaLawrence,KarenTannerandLyndaWoodswerebrilliant,beautifulwomenwhose
liveswereaninspirationtomany.Theirdeathsin2015promptedthereflectionsonlife
thatledtothisthesis,andtheyhaveoftenbeenonmymindalongtheway.Their
memoryhasbeenablessing.
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TableofContentsDeclaration..............................................................................................................................................iAcknowledgements............................................................................................................................vAbstract...................................................................................Error!Bookmarknotdefined.TableofContents...............................................................................................................................viIndexofFigures...........................................................................................................................viiiIndexofTables...............................................................................................................................ix
1:INTRODUCTION............................................................................................................................11.1 Thecontext............................................................................................................................11.2Theproblemthiscreates....................................................................................................21.3Theobjectiveofthisresearch...........................................................................................31.4Howthisdocumentisorganised.....................................................................................4
2:THERESEARCHQUESTION......................................................................................................62.1Introduction..............................................................................................................................62.2Threemainschoolsofthoughtindecision-making................................................62.3Sustainabilityinbusinessdecision-making:mappingtheliterature.............82.4Thesustainabilitycontext................................................................................................142.5Literatureonanalysisandinformation......................................................................162.6Sustainabilityandmanagerialcognition....................................................................192.7Sustainabilityandorganisation.....................................................................................222.8Problematisingtheliterature..........................................................................................242.9TheResearchQuestions....................................................................................................26
3:METHOD.........................................................................................................................................273.1 Introduction........................................................................................................................273.2Researchapproach............................................................................................................273.2.1 Researchphilosophy..............................................................................................273.2.2Researchprinciples....................................................................................................28
3.3Researchmethods................................................................................................................293.3.1Researcharchitecture................................................................................................293.3.2Choiceofqualitativemixedmethods..................................................................30
3.4Analyticalapproach...........................................................................................................363.5Limitationsofthemethod................................................................................................40
4:STUDY1...........................................................................................................................................444.1Introduction............................................................................................................................444.2Whydosustainabilityconsiderationsmakedecisionsdifficult?.....................454.2.1Analyticalapproach....................................................................................................464.2.2Fourarchetypesofdecisions..................................................................................504.2.3Demandsondecision-makingprocess...............................................................56
4.3Competingcommitmentsandparadoxesinsustainability................................624.3.1Analyticalapproach....................................................................................................654.3.2Howdoexecutivesmanagecompetingdemands?........................................664.3.3Howdoindividualdecision-makersusetheseapproaches?....................674.3.4Howdothecharacteristicsofthedecisionsinformchoiceofapproach? 684.3.5Tensionbetweentheexternalandinternalcontext..................................724.3.6Connectionsbetweenthemacroandmicroleveltensions.......................78
4.4Organisationalinfluencesondecision-making.......................................................794.4.1Theproblemoforganisingforsustainability..................................................80
4.4.2Organisationdesign.........................................................................................................824.4.3Performancemanagement......................................................................................864.4.5Culture..............................................................................................................................87
vii
4.4.5Leadership......................................................................................................................904.4.6Summaryoforganisationalinfluences..............................................................92
4.5Individualdecision-makers.............................................................................................934.5.1Knowledge......................................................................................................................934.5.2Biasesandattitudes...................................................................................................964.5.3Permissionspace.........................................................................................................994.5.4Frameworkofinfluencesondecision-making............................................104
4.6Thesystemfordecision-making................................................................................1055:STUDY2........................................................................................................................................1095.1Introduction........................................................................................................................1095.2Method...................................................................................................................................1105.3TheCaseContext...............................................................................................................1115.4Tensionbetweentheinternalandexternalcontext.......................................1135.5SegmentationofConsultCo’sdecisions.................................................................1175.5.1ThePre-BidStage.....................................................................................................1185.5.2TheBidStage..............................................................................................................1205.5.3ProjectStart-Up........................................................................................................1215.5.4ProjectManagement...............................................................................................1225.5.5HowConsultCo’ssustainabilityagendainfluencesdecisions...............123
5.6ConsultCo’sorganisation...............................................................................................1245.6.1OrganisationalFactors...........................................................................................1255.6.2Individualfactors.....................................................................................................1355.6.3Summary......................................................................................................................142
5.7ConsultCo’snestedparadoxes....................................................................................1445.8Conclusions.........................................................................................................................147
6:STUDY3........................................................................................................................................1516.1Introduction........................................................................................................................1516.2Reframingthecorporate-leveltension...................................................................1526.3Decisionpropertiesandprocess................................................................................1546.4Organisationalinfluencesonchange.......................................................................1636.4.1Individualattributesandbehaviour................................................................1636.4.2Organisationalfactors..........................................................................................1666.4.3Thecriticalroleofknowledgeandlearning.................................................1696.4.4Influencesbeyondtheboundariesoftheorganisation...........................1696.4.5Implicationsforchange.........................................................................................172
6.5Nestedchangeandthewhack-a-moleapproach..............................................1736.5.1Conditionsofthiscase...........................................................................................1736.5.2Thewhack-a-molemetaphor..............................................................................1746.5.3Nestedness..................................................................................................................178
6.6Conclusions.......................................................................................................................1797:CONCLUSIONS..........................................................................................................................1837.1AnsweringtheResearchQuestions..........................................................................1837.2Limitationsoftheresearch...........................................................................................1847.3ContributionstoKnowledge........................................................................................1847.3.1Contributionstothestudyofdecision-making...........................................1847.3.2ContributionstoParadoxtheory.......................................................................185
7.3ImplicationsforPractice...............................................................................................1867.4Futuredirections..............................................................................................................188
Appendix1:Keyorganisationalconceptsfromtheliterature..................................190Frameworksection1:Environment...............................................................................190Frameworksection2:Organisation................................................................................191
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Frameworksection3:Decision-makers........................................................................199Frameworksection4:Decisions.......................................................................................201
Appendix2:ListofDecisions..................................................................................................202Appendix3:Datastructurefrominterviewsandliterature.......................................205References........................................................................................................................................216
IndexofFiguresFigure1:Contextualfactorsinfluencingtheinclusionofsustainabilityindecision-
making.........................................................................................................................................24Figure2:Overallstudydesign..................................................................................................35Figure3:Processfordataanalysis–Study1......................................................................36Figure4:Datastructurefortheouterlayerofthecontextframework...................38Figure5:Datastructurefortheformalelementsoftheorganisationalcontext.38Figure6:Datastructureforthesocialelementsoftheorganisationalcontext...39Figure7:Datastructurefortheindividuallayerofthecontextframework.........39Figure8:Fourcontextsfordecision-making......................................................................44Figure9:Howfrequentlyaredifferentapproachesusedtomanagecompeting
demands?....................................................................................................................................66Figure10:Approachesadoptedincompaniesthatreframetheirbusinessparadox 78Figure11:Fourlevelsofinfluenceondecision-making.................................................80Figure12:Organisationalinfluencesondecision-making.........................................104Figure13:Thedecision-makingsystem.............................................................................107Figure14:KeyinitiativesinConsultCo'schangemanagementprogramme......113Figure15:Keydecisionsduringtheprojectlifecycle..................................................118Figure16:NestedtensionsatConsultCo...........................................................................146Figure17:Fivecapabilitiesneededformakingdecisionsin'messysituations'160Figure18:Organisationaldynamicsshapingdecisionsovertime.........................172Figure19:Learningloopsfornestedchange...................................................................180Figure20:Foundationalandcontextualchange.............................................................182Figure21:Changestepsforcompaniestoincorporatesustainabilityintodecision-
making......................................................................................................................................187
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IndexofTables
Table1:Numberofarticlescategorisedbytheme...........................................................10Table2:ThematicanalysisofarticlesbypublicationError!Bookmarknotdefined.Table3:Howanalyticmethodsmapontotensionscreatedbythesustainabilitycontext
........................................................................................................................................................17Table4:Objectivesandapproachforeachresearchstep.............................................30Table5:Listofinterviewees......................................................................................................32Table6:SourcesandusesofdatainthePrescriptiveStudy........................................33Table7:TopicsandparticipantsforStudy3......................................................................34Table8:Intervieweesreflectionsoncharacteristicsofsustainability-relateddecisions
........................................................................................................................................................47Table9:Factorsmakingdecisionsmoredifficult.............................................................49Table10:Fourarchetypesofdecisions.................................................................................51Table11:Differentcharacteristicsanddecision-supportneedsofthefourdecision
archetypes.................................................................................................................................58Table12:Sixtheoreticalapproachestomanagingtension..........................................64Table13:Howpeopletalkabouttheirlogicalapproach...............................................65Table14:Characteristicsofdecisionsassociatedwithdifferentresolutionapproaches
........................................................................................................................................................69Table15:Theroleoforganisationalfactorsinenablingorhinderingsustainabilityat
ConsultCo................................................................................................................................143Table16:Testingthetheoreticalideas..............................................................................148
1
1:INTRODUCTION
1.1 Thecontext
Intwomajorglobalpolicydecisionsin2015,policy-makersdescribedtheworldwe
wanttoseeandcommittedtosubstantialchangetocreateaneconomywhichismore
sociallyandenvironmentallysustainable.InSeptemberthatyear,theUNsignedthe
SustainableDevelopmentGoals(SDGs),whichsetouttargetstoachievebettersocial,
environmentalandeconomicoutcomesfortheworldoverthenext15years,andin
DecembertheConferenceofParties(COP)signedtheParisAgreementtocommitto
reducegreenhousegasemissions.Takentogether,thesecommitmentsdescribethe
worldwewanttolivein.However,achievingtheseoutcomeswillrequireconsiderable
changethroughouttheeconomy.AnalysisbyJohanRockströmetal(2017)showsthat
from2020to2050,weneedtohalveglobalemissionseverydecadeifwearetoachieve
ourcommitmentstoslowingclimatechange.Thelevelofchangerequiredisdramatic
anddemanding.
ThisanalysisisexpandedintheIPCC’s2018report(Rogeljetal.2018),whichidentifies
thesectorsthatneedtochangemostdramaticallyinordertoreducecarbonemissions.
Specifically,theuseofenergybyindustry,transportandbuildingsisaverysignificant
driverofthechangethatisneeded.Muchoftheburdenofthischangefallsupon
incumbentbusinesses.Thesebusinessesarenotonlysignificantemittersofcarbon,but
alsoshapesystemsofsupplyandconsumption.Ifwearetoseeajusttransitiontoa
low-carboneconomy,businesswillbeasignificantplayer.
Aswellastheurgentneedtode-carbonise,companiesarealsoworkingonother
environmentalgoals(forexample,reducingresourceconsumptionandwaste)andon
socialgoals(forexampleworkingtowardshavingamorepositiveimpactonthe
communitiestheyserve).Thisbalancingofenvironmental,economicandsocial
outcomesoverthelongandshorttermisatthebasisofthedefinitionofsustainable
development(WorldCommissiononEnvironmentandDevelopment1987p.16).Inthis
thesis,Iwillbedescribingthisbalanceas‘corporatesustainability’.
2
Thisisacontestedconcept,andbothcorporate‘sustainability’andcorporate
‘responsibility’areideasthatcontinuetoevolve(Bansal&Song2017).Whilethenature
ofthesocialroleofbusinesshasbeendebatedhistorically(Margolis&Walsh2003),
thereisincreasingrecognitionoftheneedforcompaniestoactresponsibly–indeed,
corporatesocialresponsibilityhasgone‘mainstream’(Lyonetal.2018).However,
thereismuchmoretodotoshifttheemphasisfromafocusonsimplymakingthecase
forgreenbusinesstotakingasystemicapproachtocorporatesustainability(Bansal&
Song2017)andtoengagebusinessintacklingtheworld’sgrandchallenges(Georgeet
al.2016).Inthiscontext,thereisalsoaroleformanagementscholarstounderstand
howthesechangescanbeeffected(Eisenhardtetal.2016;Georgeetal.2016;Lyonetal.
2018).Thisdissertationseekstoaddressoneoftheproblemsbusinessesfaceinacting
inawaythatissociallyandenvironmentallysustainable.
1.2Theproblemthiscreates
Corporatesustainabilityisanenactedprocess.Becominganenvironmentally,socially
andeconomicallysustainableorganisationisnotamatterofsimplychangingapolicy–
peoplethroughouttheorganisationneedtodevelopnewhabitsintheirchoicesand
behaviour.Thedecisiontoactsustainablyisnotlimitedtoasinglepointinthe
organisation.Instead,decisionsinmanyfunctionsandatmanylevelsallcontributeto
theorganisation’ssocialandenvironmentalsustainability.AsHerbertSimonwrote:
‘Thetaskof“deciding”pervadestheentireadministrativeorganisationquiteasmuchas
thetaskof“doing”’(Simon1997p.1).
Companiesthereforefaceahighlycomplexproblemastheyworktowardscorporate
sustainability.First,theyaredealingwithachangethatisbothextremelyurgentand
presentsaglobalthreat(UNEP2018p.xiv).Second,thechangethatisneededis
pervasive:corporateactionswithsustainabilityimpactsarenotlimitedtotheworkof
individualexperts,butcanoccuranywhereinanorganisationwherethereisanimpact
onresourcesorstakeholders.Third,businessesworkingtobecomesustainableare
tryingtoeffectsystemicchangeinasystemcharacterisedbycomplexityand
uncertainty.Thismeansthattheknowledgerequiredtomakefullyinformeddecisions
maynotbeavailable.Wesimplycannotknowthecompleterangeofimpactsofsome
3
actions.Thiscombinationofurgency,uncertaintyandpervasivenessmeansthatthe
contextofcorporatesustainabilityisuniquelyproblematicfordecision-makers.
Withinthiscontext,thedecisionsthemselvesarecomplicatedbecausetheyare‘rifewith
tensions’(VanDerByl&Slawinski2015).Tensionisinevitable:itisencapsulatedinthe
definitionofsustainability,whichinvolvesmanagingeconomic,environmentaland
socialoutcomesforthelongandshortterm(WorldCommissiononEnvironmentand
Development1987p.16).Thisleadstotensionbetweenpublicandprivatevalue
(Haffar&Searcy2015),betweenthelongandshortterm(Slawinski&Bansal2015)and
betweendifferentethicalapproachestotheproblem(Rodeetal.2015).Thesetensions
appearindifferentpermutations(Haffar&Searcy2015),atseverallevelsinthe
organisation,andcanbemutuallyreinforcing(Slawinskietal.2017).Tensionsrelated
tosustainabilityalsoariseatthesystemlevel(Schad&Bansal,2018)whenthereare
multiple,conflictingdemandsfromtheexternalenvironment,whetherfromcustomers,
shareholders,regulatorsorotherstakeholders(Smith&Lewis2011).Howeverthey
becomesalientforexecutivesatamorespecificlevel(Schad&Bansal,2018),for
examplewhentheyneedtomakechoicesbetweenconflictingdemands.
Thusweseethattheworldneedstochange,andthatbusinessisanimportant
constituencyinthistransformation.However,businessesseekingtoactinawaythatis
sociallyandenvironmentallysustainableneedtomakeprofoundchangestothewayin
whichtheymakedecisions.Actingsustainablywillcreatetensionsfordecision-makers,
andtheyneedtofindwaystoresolvetheseinacontextwheretheavailableinformation
maynotbeadequateforthetask.
1.3Theobjectiveofthisresearch
Overthelastcoupleofdecadestherehasbeenaconsiderablebodyofresearchthat
makesthecaseforsustainablebusiness.However,therehasbeenratherlesswork
lookingathowbusinessesneedtoactdifferentlytobesociallyandenvironmentally
sustainable(Zolloetal.2013).Theobjectiveoftheresearchwasthereforetohelpus
betterunderstandhowbusinessescanadapttheirdecision-makingsystemsto
incorporatesocialandenvironmentalconsiderations.
4
Thisquestionsitsattheintersectionbetweentwoquitefragmentedfields:workon
decision-making,andworkoncorporatesustainability.Withintheresearchobjectives
thereareseveralpossiblefieldsofenquiry,andsoIconductedanextensiveliterature
reviewbeforefinalisingtheresearchquestion.ThisisdiscussedinChapter2.
Thisresearchiswarrantedfortwomainreasons.First,theproblemofchangingtheway
corporationsactisurgent(Rogeljetal.2018p.97)andyetthereisrelativelylittleclear
guidanceonhowtheyneedtochange(Zolloetal.2013).Thisleadstoablindspotfor
practitioners.Second,therehavebeencallsintheacademiccommunityforfurther
empiricalworkinthisfield(Epsteinetal.2015;VanDerByl&Slawinski2015;Haffar&
Searcy2015).Theobjectiveofthisworkistoaddressthislacunabytakingan‘engaged
scholarship’approach(VandeVen2007)toensurethattheempiricalapproachnotonly
addressesgapsintheacademicliterature,butalsomeetstheneedsofpractitioners.
1.4Howthisdocumentisorganised
Theorganisationofthisdissertationbroadlyreflectsthesequenceinwhichthework
wasconducted,startingwiththedevelopmentofaresearchquestion,andthen
presentingthemethodsusedandthefindingsfromthreeconnectedqualitativestudies,
andtheconclusionsfromtheresearch.Themainbodyoftheargumentistherefore
organisedinthefollowingchapters:
TheResearchQuestion
Chapter2situatestheresearchinthecontextoftheexistingliterature,whichis
problematizedtoidentifytheresearchquestion.
Methods
Chapter3outlinesthephilosophyandprinciplesunderlyingtheresearchmethod,and
thenexplainstheoverarchingstructureoftheresearchprocess.Theprojectconsisted
ofthree,connectedqualitativestudiesinformedbytheprinciplesofengaged
scholarship(VandeVen2007).Thefollowingthreechapterspresentthefindingsof
thesethreestudies.
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Study1
Chapter4presentsthefindingsofthefirstofthethreestudies.Thedatainthischapter
isdrawnfromtheanalysisof45decisionscollectedininterviewswithexecutives.
Thesefindingswerecombinedwithasecondliteraturereviewinordertocreatethree
newconceptsforanalysingdecisionsthatincludesocialandenvironmentalaspects.
Study2
Chapter5presentsasinglecasestudythatwasdevelopedtoexploretherelationships
betweentheconceptsemerginginChapter4.Thisstudyshedslightontheway
decision-makinginorganisationscanchangeovertime,astheyrespondtopressuresfor
sustainability.
Study3
Chapter6introducesthefindingsfromthethirdstudy.Thisstudywasaseriesoffocus
groupswithseniorexecutiveswhosedecisionsinvolvedsocialorenvironmental
considerations.Thepurposeofthisstudywastotestandextendtheemergingfindings,
andtoensurethattheworkhadrelevanceforpracticeaswellastheory.
ContributionandConclusions
Inthefinalchapter,Idiscussthefindingsfromthiswork,assessingthelimitationsofthe
work,contributionstoknowledgeandimplicationsforpractice.Thischapteralso
includesasuggestedagendaforfutureresearch.
Inthisseriesofsteps,theresearchprogressesfromaninitialobjective–tounderstand
howbusinesscanadapttheirdecision-makingsystemstoincorporatesocialand
environmentalconsiderations–tothedevelopmentofaclearresearchquestionrooted
incurrentknowledge.Ithendevelopanswerstothisquestionthroughaseriesofthree
relatedempiricalstudies.Finally,thesefindingsarereviewedinthecontextofcurrent
knowledgetoshowboththecontributionstothiscorpusandthefuturedevelopments
suggestedbythiswork.
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2:THERESEARCHQUESTION
2.1IntroductionThischapterexaminesthecurrentstateoftheliteratureondecision-makingandhow
thisrelatestothefieldofcorporatesustainability.Itakeasystematicapproachtothe
literatureonsustainabilityinbusinessdecision-makingtomapoutthekeythemesin
theliterature.Thesearethenproblematized(Alvesson&Sandberg2011)toidentifythe
researchquestionsandsituatetheminthecontextofexistingknowledge.Iwillreturn
totheliteratureagaininChapter4tocontextualisetheearlyempiricalfindingsfromthe
research.
Thischapterisorganisedinfiveparts.Itbeginswithanoutlineofthebroadschoolsof
thinkingondecision-makingthatemergedintwentieth-centuryacademia.Second,it
exploresthewaysinwhichthesebroadschoolsofthoughthavebeenadoptedinthe
sustainabilityliterature.Third,itshowswhythesustainabilitycontextisparticularly
challengingfordecision-makers.Thisisfollowedbyareviewoftheliterature,following
systematicprinciples(Tranfieldetal.2003)andamapthemajorthemesarisingfrom
this.Finally,Iproblematisethisliteraturetodrawouttheresearchquestionsthat
informthisthesis.
2.2Threemainschoolsofthoughtindecision-making
Decision-makingispartofthehumancondition,andproblemsofchoiceoccurinworks
bymanygreatphilosophers,includingPlato,AristotleandAquinas(Greco,Ehrgott,&
Figueira,2016p.4).Thereisalsoatraditionofanalysingdecisionsfromamathematical
pointofview,andintheseventeenthcenturyPascalandFermatbeganworkthatsowed
theseedsofourunderstandingofprobability(Hodgett,2013p.10).Giventhislong
history,Iintendonlytooutlinethemajorthemesintheliteraturethathaveinformed
currentworkondecision-makinginbusinesses.Ourcurrentthinkingondecision-
makingwassignificantlyshapedbyworkdevelopedfromthemiddleofthetwentieth
centuryonwards,whichreflectsthreefundamentallydifferentviewsofhuman
rationality.
7
ThefirstoftheseviewsisexemplifiedintheworkofgametheoristsVonNeumannand
Morgenstern(1947).Muchofthesubsequentdevelopmentofourideasondecision-
makinghasbeenaresponseorreactiontotheirdevelopmentofgametheory.First,Von
NeumannandMorgensterndevelopedanexpectedutilityfunctionthathasbecomethe
standardmethodtomodelrationalchoice(Hodgett,2013p.11).Thistheoryunderpins
severaltechniquesformakingcomplexdecisions–includingmulti-criteriadecision
analysis(Hodgett,2013p.13),butisbasedonanassumptionthatdecision-makershave
accesstothetimeandinformationthattheyneed,andwillactrationallytomaketheir
decisions.
However,thisviewofhumanrationalitywaschallengedbyHerbertSimon,a
contemporaryofVonNeumann,whenheproposedthetheoryofboundedrationality
(Simon,1945p.121).Simon’sviewwasthatdecisionmakers’abilitytoactrationally
waslimited–orbounded–bytheirorganisationalconditions,thatledtopartial
information(Simon,1945p.88),andhedevelopedthisintoabehaviouralmodelof
rationalchoice(Simon1955),exploringtherelationshipbetweenthedecision-maker
andenvironment.VonNeumannandMorgenstern’sassumptionsaboutrationality
werechallengedstillfurtherin1979byKahnemanandTverskywhodemonstratedthat
peopleviewriskasymmetrically,andthereforedonotconformtotheexpectednormsof
economicallyrationalbehaviour(Kahneman&Tversky1979).Thisledtoasubsequent
streamofworkanalysingcognitivebiasindecision-making.
Thisgivesthreebroadviewsonthenatureofdecision-making.First,onethatsuggests
thatdecision-makingissomethingthatcanbemodelledandsupportedmathematically.
Second,onethatsuggeststhatourdecision-makingisshapedbyanorganisational
contextthatfocusesourattentioninonedirectionandlimitsboththeavailabilityofdata
andthetimeavailabletomakechoices.Third,thereisanapproachthatfocusesonour
cognitivelimitationsandsuggeststhatonlybychangingthewaywethinkcanwe
changethewaywemakedecisions.Essentially,wecancharacterisetheseasanalytical,
organisationalandcognitiveapproachestodecision-making.
Theseleadtoquitedifferentapproachestodecision-support.Whiletheanalytical
schoolhasproducedarangeofdifferenttoolstomanagethecomplexityofdecisions,
workbyGerdGigerenzer(forexample:Gigerenzer&Goldstein,1996),buildingonthe
8
behaviouralviewofdecision-making,suggeststhatsomedecisionscanbesimplifiedto
heuristics,andthatthesecanbeusedforeffectiveorganisationaldecision-making
(Bingham&Eisenhardt2011).Otheracademics–mostnotablyRichardThaler(Thaler
&Sundstein2008)–havedevelopedapproachestodecision-supportthatarebasedon
KahnemanandTversky’srecognitionofcognitivelimitation.Theypointoutthatby
workingwiththesebiases,wecancreateenvironmentsthatencouragepeopletomake
particulardecisions.
Thus,weseethattheliteratureondecision-makingissomewhatfragmented.Workhas
beendrivenbymathematicians,economistsandpsychologists,andisrootedindiffering
viewsofhumanrationality.Thesefracturespersistintheliteratureaboutstrategic
decision-making(Shepherd&Rudd2014).Buthowaretheseapproachesusedinthe
contextofbusinessdecisionsinvolvingsustainability?
2.3Sustainabilityinbusinessdecision-making:mappingtheliterature.
Tounderstandthisproblembetter,Iundertookaliteraturereviewinformedbythe
principlesofsystematicreview(Tranfieldetal.2003).Systematicreviewhasits
originsinthefieldofmedicine(Kitchenhametal.2009)andwasdevelopedasawayto
compileevidencefrommultiplestudies.Sincethen,ithasbeenadaptedfordifferent
fields,includingsoftwareengineering(Kitchenhametal.2009)socialsciencesand
publicpolicy(Tranfieldetal.2003).However,theobjectivesofthesystematic
approachvarybyfield:inmedicineandsoftwareengineering,theintentistocreatean
evidencebaseforpractitioners,drawingonasynthesisofscientificevidence;by
contrast,Tranfieldetal(2003)intheirworkonapplyingsystematicliteraturereviewto
management,observethatsomeofthenorms(suchasontologicalorepistemological
consistency)thatapplyinotherfieldsdonotapplytomanagement,andsowhilea
systematicapproachtoliteraturecanbehelpful,itisunlikelytoproducethetypeof
evidencebasethatisavailableinotherfields.Becausedecision-makingisamulti-
disciplinaryfield,Iexpectedtofindthattheliteraturewouldbequitefragmented,and
thattherewouldbeepistemologicalinconsistenciesinthefield.Ithereforedecidedto
usethesystematicapproachonlytomaptheliteratureanduncoverthemainthemesor
perspectives,ratherthantocompareindividualstudies.Ihavethereforeadopteda
systematicapproachtothesearchandmappingofexistingworkinordertodevelopa
9
researchquestion,ratherthanusingthisasasteptoaccumulateevidencefora
particularfinding.
Thisworkcomprisedthreesteps.ThefirststepwasasearchintheThomsonReuters
WebofSciencedatabaseforallmaterialspublishedinEnglishbeforetheendof2018
usingthestring:businessANDdecision-makingANDsustainab*.Thisproducedalistof
820articles(includingconferencepapers,journalarticlesandbookchapters).Forthe
secondstep,Ireviewedthetitlesandabstractsofthesearticlestoremovethosethat
were:
• Notfocusedondecision-making(eg.Articlesaboutgenderdifferenceinwhich
differencesindecision-makingwereaverysmallpartofthediscussion)
• Notfocusedonsocialorenvironmentalsustainability(eg.Articlesthatwere
assessingwhetherasectorcouldcontinueinthelongterm)
• Notfocusedontheinternalworkingsofanorganisation(eg.Articlesabout
consumerdecision-making)
• Focusedonthegreensupplychain(thisisalarge,andgrowingbodyof
specialisedliterature)
• Focusedonveryspecificsituationssuchashealthcare,communityinterventions
oragriculture,thatmightnotbegeneralizabletobusinesssettings
• Focusedonmulti-organisationdecision-making(eg.Managementofcommon
resourcessuchaswatersupplies)
• Focusedoneducationalsettings(eg.Provisionofbettersustainabilityeducation
forMBAstudents)
• Focusedonscienceasatopic(eg.Howsciencecanbeusedtoinformpolicy
decisions).
Thisfilteringleftasetof234articlestoreview.
Becausesomewritersuse‘sustainability’and‘corporatesocialresponsibility’moreor
lessinterchangeably,Iconductedasecondsearchusingthestring
‘organisationANDdecisionmakingAND(sustainab*ORcorporatesocial
responsibility)’intheWebofScience’sbusinessandmanagementdatabases.This
searchproduced583articles.Ireadthetitles(andwherenecessarytheabstracts)to
10
applythesamefilteringcriteria,creatingalistof107articles.Ithenmergedthetwo
lists,removinganyoverlapstobuildafinalsetof325documents.
Thethirdstepwastoreadandcategorisethearticles.Becauseofthebroadnatureof
theenquiry,thearticleswereverydiverseandsoIgroupedthearticlesthematicallyinto
fourmaingroups.Oneofthesegroupswasabouttheoverallcontextforbusinessand
sustainability;theremainingthreebroadlyreflectedthethreeschoolsofthought
outlinedabove–therewasagroupaboutinformationandanalysis;agroupabout
managerialcognition;andagroupaboutorganisation.Theoveralldistributionofthe
articlesisshowninTable1below:
Table1:Numberofarticlescategorisedbytheme
Theme Numberofarticles %oftotalSustainabilitycontext 51 16Informationandanalysis 187 58Managerialcognition 29 9Organisation 46 14Other(forexample,specificindustries)
12 4
Theliteratureisstrikinglyfragmented.Thearticleswerespreadacross191journals,
conferenceproceedingsorbooks,ofwhichonly14includedmorethanthreearticles.
Ofthegeneralistmanagementjournalsthatareoftenusedasthebasisforaliterature
review(forexampleVanDerByl&Slawinski2015),onlyone–theAcademyof
ManagementReview–includedmorethantwoarticlesaboutsustainabilityand
decision-making.Themorespecialisedjournals,suchasJournalofCleanerProduction,
JournalofBusinessEthicsandSustainabilityweremostprolific,buteventheyaccounted
collectivelyforonly25%ofthearticles.151Journalsincludedonlyonerelevantarticle.
ThebibliometricsareshowninTable2:
Table2:Thematicanalysisofarticlesbypublication
JournalContext
CognitionOrganisation
Information
ToolsOther
TotalJournalofCleanerProduction
73
213
34JournalofBusinessEthics
611
62
2
27Sustainability
21
21
141
21InternationalJournalofLifecycleAssessm
ent
7
7
Managem
entDecision1
2
11
5
BusinessStrategyandtheEnvironm
ent
1
21
4
OrganisationandEnvironment
1
21
4ResourcesConservationandRecycling
1
1
2
4
SustainabilityAccountingManagem
entandPolicyJournal1
1
2
4
AcademyofM
anagementReview
2
1
3
BusinessEthics-AEuropeanReview
2
1
3EcologicalEconom
ics
11
13
EuropeanJournalofOperationalResearch
1
2
3
GroupDecisionandNegotiation
1
11
3
11
14
Journalshadaneditorialslanteithertowardsthe‘human’aspectsofdecision-making
(thecontext,cognitionandorganisationarticles),orthe‘technical’aspects(information
andanalysis).ThissuggeststhatthedistinctionmadebyBansal&Song(2017)
betweenworkon‘responsibility’,whichisbasedonanormativeormoralimperative,
andworkon‘sustainability’,basedonanunderstandingofecologicalsystems,persists,
with‘responsibility’representedinthejournalsemphasisingcontext,cognitionand
organisation,and‘sustainability’representedinthemoretechnicallyfocusedjournals.
Iusedthisinitialclassificationasabasistoreviewandproblematizetheliteratureto
identifymyresearchquestion,expandingthesearchusinga‘snowballing’approach
whennecessary.Thisanalysisformsthebasisfortherestofthischapter.
2.4Thesustainabilitycontext
Businessesthataspiretoworkinawaythatissociallyandenvironmentallyresponsible
faceaparticularorganisationalchallenge,specifically,howtocopewiththeadditional
complexitythispresents(Pirson&Turnbull2018).Itisimportanttounderstandhow
thechoicetoactinawaythatissociallyandenvironmentallysustainablecanmake
decision-makingmorecomplicated,asindividuals–andindeedorganisations–are
workingwithmultipleobjectives(Epsteinetal.2015;Mitchelletal.2016)thatmaybe
intensionwitheachother.ThisisdiscussedbrieflyintheIntroduction(Section1.2,
above).
Thesetensionsareoftennestedwithinabroaderquestionaboutthepurposeofthefirm
(Dyck&Greidanus2017;Bentoetal.2017).Theycanbegeneralisedasatension
betweenprivatevalueandsharedvalue(Haffar&Searcy2015;Porter&Kramer2011),
essentiallycontrastingtheimmediateneedsofthecompanywiththelong-termneedsof
stakeholders,whichcanincludeotherspeciesorfuturegenerations.Thistension
betweentheexternalenvironmentandthecompany’svaluecreationsystemcancreate
aparadox–‘apersistentcontradictionbetweenindependentelements’(Schadetal.
2016)–forthecompany.Thiscanbeachallengetocompaniesseekingtoactmore
sustainablyasitcreatesaparadoxattheheartoftheiroperations.
15
Thisisparticularlywellillustratedindecision-making:eachdecisionpresentsspecific
tensions,butthesearelocatedinanorganisationalcontextthatmaypresentalargerset
ofenduringtensions(Smith2014).Thesetensionsmaybelatent,orunseenuntila
choiceneedstobemade(Smith&Lewis2011;Bansaletal.2018).However,atthis
point,theycomplicatedecision-makinginfourdistinctways.First,decision-makers
findthattheymayneedtomanage
conflictingdemandsfromtheexternalenvironment,whetherfromcustomers,
shareholders,regulatorsorotherstakeholders(Smith&Lewis2011).Second,they
needtofindwaystobalancethelong-termandtheshort-termwhichmaybeintension
(Bansal&Desjardine2014).Thesetwofactorsinteracttocreateathirdproblemof
complexity(Pirson&Turnbull2018).Finally,somesustainability-relateddecisions
havethecharacteristicsofwickedproblems(Rittel&Webber1973)sothattheyare
characterisedbyhighlevelsofambiguity.
Notonlydodecision-makersfindthatthesefourfactorsmaketheirdecisions
intrinsicallymorecomplex,theymayfindthatthereisatensionbetweenthedemands
oftheexternalenvironmentandthedominantorganisationallogic,the‘practices,
assumptions,valuesandbeliefsthatshapecognitionandbehaviour’(Besharov&Smith
2014)usedtomakechoicesintheorganisation.Therehasbeenlittleempiricalresearch
intohowexecutivesactuallyexperiencetheseclustersoftensions(Sheepetal.2017)
andtherehavebeencallsformoreempiricalresearchtounderstandhowexecutives
resolvethetensionsarisingfromincorporatingsustainabilityindecision-making
(Epstein&Widener2011;Haffar&Searcy2015;VanDerByl&Slawinski2015).
Therearedivisionsintheliteratureaboutthewaythesetensionscanbehandled.The
threemaintheoreticalperspectives–analytical,cognitiveandorganisational–that
dominatetheacademicworkondecision-makingpersist.HerbertSimon(1997p.56)
notedthatdecisionswerealways‘acombinationoffactsandjudgement’.Thethree
literaturesIwillreviewapproachthisindifferentways:theliteratureonanalysisand
informationfocusesonthefacts;literatureoncognitionfocusesontheprocesses
underlyingjudgement;andtheworkonorganisationfocusesonthebroadercontext
withinwhichtheseinteract.
16
2.5LiteratureonanalysisandinformationThemajority–58%–ofthearticlesthatappearedinthesearchwerefocusedonthe
problemsofassemblingandanalysinginformationtoincludesustainability
considerationsindecision-making.
Becauseworkingsustainablyrequiresbusinessestolookatsocialandenvironmental
outcomesaswellaseconomicones,thestartingpointofmanysustainabilityinitiatives
isarequirementfornewdatareporting(Stefanetal.2011).Thereisasignificantbody
ofliteratureaboutthis,coveringquestionsofcorporatereportingandtheneedfornew
standardsofmeasurement(Hosoda&Suzuki2015).AsBeloffetalobserve,thesheer
numberoftoolsandmethodsisoverwhelming(Beloffetal.2004).Muchoftheinitial
pressuretoadoptthesemethodsisexternaltotheorganisation(Beloffetal.2004),and
sotheinformationmaynotreflectthewayinwhichtheorganisationstructuresits
information:itmaybeacomplexmixofinternallyandexternallysourceddataand–
unlikeconventionalcorporatereporting–maybeinamixofunits,ratherthan
expressedexclusivelyineconomicterms.Giventhevitalroleofexternalstakeholders
forsustainability,datafromthemisimportant(Epstein&Widener2011),andyetgiven
itsdynamicnature,itisdifficulttocreatestandardisedreportingapproachesforthese
groups.
Scholarshaveidentifiedthreechallengesinherentintheintroductionofnew
information.Firstexistingcorporateontologiesdonotincorporatethisdata(Muñozet
al.2013),implyinganeedformuchmoreprofoundchangestotheinformation
infrastructureoftheorganisation.Second,dataiscollectedforexternalreportingto
stakeholders,andmaynotbewellconnectedtothemanagementaccountingsystemthat
informsdecision-making(Hosoda&Suzuki2015).Finally,executivesdonotknowhow
toprocessthislargevolumeofnewdata,orrelytooheavilyonit(Zapico2014;
Neumannetal.2012).Iconcludethatthedataneedtobeprioritisedandanalysed
beforetheycanbeusefulformakingdecisions.
Thisisasignificantfocusofscholarship:142ofthearticlesreviewedwerefocusedon
analyticaltechniquestoprocesstheinformation.Thesefallbroadlyintotwocategories:
methodsforanalysis;andsystemsformanagingandpresentingdata.
17
Thearticlesaboutanalyticalmethodsfallbroadlyintofourcategories,eachofwhich
addressaspecificprobleminherentinthesustainabilitycontext.Lifecycleanalysisis
anapproachdevelopedtoreducetheproblemofdecision-methodsthatfavourthe
short-term(suchasdiscountedcashflowmethods)bycomparingtheimpactofprojects
orproductsovertheirentirelifecycle.Thiswasthefocusof20ofthearticles.The
secondcategorywasagroupofanalyticmethodsthatenabletheevaluationofdecisions
basedonmultipledifferentcriteria,andwasdescribedin37articles.Thethird
categorywasagroupofanalyticmethodsthathelpanalysedecisionsunderconditions
ofuncertainty,forexamplebyanalysingoptions,andtherewere12articlesfocusedon
theseapproaches.Finally,therewere11articlesthatdescribedmodelsorsystems
dynamicsapproachestoexploringthecomplexityindecisions.Broadly,theanalytical
methodseachaddressparticularproblemsposedbythetensionsimplicitinintroducing
sustainabilityconsiderationstobusinessdecision-making,thus:
Table3:Howanalyticmethodsmapontotensionscreatedbythesustainabilitycontext
Problem ApproachTensionbetweentheshortandlong-termindecision-making
Lifecycleanalysisallowsdecision-makerstoexaminethecompleteimpactofadecision
Tensionbetweeneconomic/environmental/socialoutcomes(orcombinationsofthese
Multi-criteriadecisionanalysis,analytichierarchyprocessandTOPSISallenabledecision-makerstoexaminemultiplecriteria
Highlevelsofuncertaintyaboutinputvariablesandoutcomes
Greydecision-making,fuzzylogicanddataenvelopmentallallowdecision-makerstoanalysetherangeofoutcomesofadecision.
Complexityofrelationshipsbetweensystemelements
Systemdynamicsandmodelling.
Theproblemtheseanalyticalmethodspresentisthatmanydecisionshaveallofthese
tensions,andsothetoolswouldneedtobeusedinconjunctionwitheachother.Several
authorshavedescribedsituationsusingcombinationsofanalyticalmethods,asmore
thanoneisrequiredtosolvethefullsetofproblemsposedbyagivendecision
(Hoogmartensetal.2014;Bakshi2011).
Thishasledtothedevelopmentofworkonbuildingsustainabilityinformationinto
enterprise-levelsystems.Chofrehetal,inaliteraturereviewoftheworkonsustainable
18
enterpriseresourceplanning(Chofrehetal.2014)makethecaseforembedding
sustainabilityintobusinesssystems.However,theadditionofextrainformation
complicatestheunderlyingmodelandmayendupconfusingusers(Oertwigetal.2015),
andtherearesignificantchallengesinimplementingthesesystems(McIntoshetal.
2011).Thereisstillafocusinenterprise-levelsystemsondata,ratherthanthe
decisionstowhichthesewillbeapplied(Stefanetal.2011).
Inmanyorganisations,managersalreadyreceivelargequantitiesofinformationeven
withoutadditionalfactsrelatedtosustainability,leadingtotheriskofcognitive
overload(Neumannetal.2012).Itisthereforehelpfultohavepresentationaltoolsto
helpsummariseandsynthesisethecoredata,andensurethatmanagementattentionis
focusedonthemostsalientfacts.Thewayinwhichmanagersreceivethedataneedsto
reflecttheorganisationalontologyandwayinwhichthecompanysignalswhatis
important.Interestingly,thereisrelativelylittleaboutthisintheacademicliterature,
andalmostallofwhathasbeenwrittenisaboutversionsofonetool:theBalanced
Scorecard,mentionedinsevenofthearticles.PistoniandSongini(2016)pointoutthat
theBalancedScorecardhasbeenproposedasavehicleforsignallingthecompany’s
prioritiesandthatthereareseveraloptionsforprovidingthedata,rangingfroman
entirelyseparatescorecardforsustainabilityquestionstothecompleteintegrationof
sustainabilityintothebusinessscorecard.
Despitetheextentofthisliteratureanditsprominenceinacademicworkondecision-
makingforsustainability,ithassomelimitations.First,theseapproachesallseekto
solveproblemswithintheexistingbusinesssystem(Zapico2014).Thismeansthat
tensionsarisingfromthefirm’sfundamentalvaluecreationmethodarenotaddressed.
Rather,thesymptomatictensions–differencesinstakeholderviews,forexample–are
managedeitherthroughindividualanalyticalapproachesdescribedabove,orthrough
combinationsofapproaches.Theseapproachestendtobequiteresource-intensive,
andthereforeusedfordecisionsthatareexceptionalintheircomplexity(Arvaietal.
2012).Whentheyaresuccessfullyembeddedincorporateinformationsystemsthey
alsobecomerelativelyinflexible(Brynjarsdottiretal.2012).Theythereforemaynotbe
appropriatefortheorganisationalrealityofverydistributed,rapiddecision-makingthat
needstoresponddynamicallytostakeholders.Finally,theyplacesignificantcognitive
19
demandsonmanagers(Neumannetal.2012):Zapico(2014)suggeststhatthisleadsto
ablinddependenceondatathatcanleadtounwittingshort-termism.
Thus,whileimproveddatamayhelppeoplemakebetter-informeddecisions,thereisno
evidencethatitfundamentallychangespeople’swaysofmanagingthetensionsinherent
insustainability.Whilethebalancedscorecardiseffectiveformanagingmultiple
objectives,itreinforcestheFirm’sexistingstrategyandsodoesnothelpexecutives
addressproblemsthattheyarenotalreadythinkingabout(Hahn&Figge2018).People
aretherefore‘lockedinto’aparticularwayofseeingthesocialandenvironmentalissues
facingabusiness,andrespondingaccordingly.Thepresentationofdatainabalanced
scorecarddoesnotseemtochangeethicalperspectives(Wynder&Dunbar2016).This
questionofhowpeoplethinkisanimportantpartofthedecision-makingprocess,and
hasbeenextensivelydiscussedinaseparatebodyofliteratureonmanagerialcognition.
2.6Sustainabilityandmanagerialcognition
SinceHambrickandMasondevelopedtheupperechelonstheoryinordertodescribe
thewayinwhichthecharacteristicsandattitudesofseniormanagersshapecorporate
decision-making(Hambrick&Mason1984),scholarshavebeeninterestedintheway
thatsociallyandenvironmentallyresponsiblebehaviourinbusinessesoriginatesinthe
ethicalorientationofindividualleaders(Yinetal.2016).Ifsustainabilityisamoral
issue(Margolis&Walsh2003;Mazutis&Eckardt2017),thenitmakessenseto
understandwhetherpeopleactmorally.However,historically,therehasbeen
relativelylittleempiricalexaminationofthisphenomenon(Aguinis&Glavas2012).
Therehasthereforebeenatrendinrecentyearstowardsexplorationofthesemicro-
foundationsofsustainability,focusedonmanagerialcognition.
Researchonmanagerialcognitionhasitsrootsintheproblemofuncertaintyinthe
externalenvironment(Kaplan2011)andincorporatesboththeknowledgeandthe
valuesandbeliefsofdecision-makers(Hambrick&Mason1984).Becausepeopleare
notabletoknoweverythingaboutasituation(Simon,1997p.78),theydevelop
cognitiveframes,definedas‘awell-learnedsetofmentalassociationsthatexcludes
someinterpretationsofenvironmentalstimuliandreinforcesothers’(Porac&Rosa
1996).Theseframeshelpdirectattentiontoparticularissuesinasituation(Kaplan&
Tripsas2008),effectivelyactingasfiltersindecision-making.Peoplehavearepertoire
20
offrames,or‘schemataofinterpretation’(Goffman1974p.21),buttheytendtobefairly
stable(Porac&Rosa1996),changinginresponsetouncertaintyandexternalpressure
(Kaplan2008).
Giventheimportanceofthesecognitiveframesforsensemaking,thereisagrowing
bodyofscholarshipexploringthewaysinwhichtheyenableexecutivestomakesenseof
thetensionsinherentinthecontextofsustainablebusiness.Hahnetalsuggestthat
therearetwodominantcognitiveframesamongexecutives,andcharacterisetheseasa
‘businesscaseframe’anda‘paradoxframe’(Hahn,Preuss,Pinkse&Figge,2014).
Cognitiveframesarevitalindecision-makingastheyshapeboththeinterpretationof
theproblemandthechoiceofaction(Kaplan2008;Grewatsch&Kleindienst2018),and
Hahnetal’sworksuggeststhatexecutiveswiththesetwodifferentframeswillbehave
verydifferentlybothintheirwayofseeingthetensionsincorporatesustainabilityand
intheirresponsestothem(Hahnetal.2014).
Inthefirstoftheseframes–the‘BusinessCase’frame–Hahnetalproposethat
managersarefocusingonenvironmentalandsocialactionsthatwillsupporteconomic
outcomes(forexample,improvingresourceefficiencyisbeneficialtotheenvironment
andreducescosts).Thisenablesthemtomakerelativelystraightforwarddecisions:
somethingeitherworkseconomically,oritdoesnot.Theycontrastthiswitha‘Paradox
frame’,inwhichtheexecutiveshaveamorecomplexandambivalentattitudetowards
thetensionsinsustainability.Thisleadsthemtoconsidermorecomprehensive
responsestotensions,butatthesametimetheyaremoreawareoftherisksassociated
withthese(Hahnetal.2014).Thisisnotdissimilartothetwoworldviews(mechanic
andorganic)proposedbyIms&Jakobsen(2011).Thisconceptualisationhasbeen
influential(todate,theoriginalarticlebyHahnet.al.hasbeencited110times),buthas
notsofarbeentestedempirically.
Thedistinctionbetweenthesetwoframingsunderpinsafractureintheliterature:while
theanalyticalliteraturereviewedinsection2.5isframedintermsofabusinesscase,
thereisalsoabodyofworkwithitsrootsinthecorporatesocialresponsibilityliterature
thathasamuchdeeperfocusonethical,values-basedperspectives(Bansal&Song
2017),whichreflectsthecomplexitiessuggestedbyHahnetal’s‘Paradoxframe’.The
tensionbetweenthesetwoframescanbeusedproductively–forexampletomanage
21
biasingroupdecision-making(Mazutis&Eckardt2017;Hahn&Aragón-Correa2015)
andsoarriveatbettersolutions.However,itcanalsobeacauseofstressforindividuals
whentheircognitiveframeclasheswiththedominantframeintheirorganisation(Zollo
etal.2013).
Whilecognitiveframesareeffectiveatdirectingattention,theycanalsocreateblind
spots–importantissuesthatdecision-makersfailtoattendtobecausetheyfalloutside
thecognitiveframe.Thiscanbebecausetheissueis‘toolarge’–forexamplesystemic
problemssuchasclimatechange–or‘toosmall’tobeofinteresttothecorporation
(Bansaletal.2018).Failuretoattendtosustainabilitycanalsobecausedbycognitive
biases(Mazutis&Eckardt2017),andbyhabitsofmindandactionthatarecreatedby
‘organisationalscripts’(Gioia1992).Thesescriptsoffernotonlyacognitiveframing,
butanestablishedpatternofbehaviour(Gioia1992).Theyhavethebenefitofreducing
thecognitivecostofdecision-making,andmayenablenon-specialiststomakedecisions,
whichmeanstheyarehelpfulinsituationswheresustainabilityissuesarepervasivein
theorganisation.Thedisadvantageisthattheygiveconfidencewhereitmaynotbe
warranted(Gioia1992),andmayallowdecision-makerstoglossoverinconvenient
truths.
Theresultofthisisthatmanyorganisationaldecisionsare‘scripted’–thatistosaythey
followparticularcognitivepatternsandsequencesofbehaviourrangingfromthevery
sophisticated(‘whenwehaveabusinesscaseforaninvestmentgivingapositivenet
presentvalue,wereferittotheinvestmentcommitteeforapproval’)tothetrivial
(‘whenIleavetheofficeIswitchthelightsout’).Thesepatternsareoftenefficientand
reducethecognitiveloadfordecision-makers,buttheyarenotnecessarilywelladapted
tohandlingthecomplexityofthetensionsraisedbysustainability.These‘scripts’or
schemasareembeddedintheorganisation,sothisraisesthequestion:howdo
organisationalsystemsshapedecision-makingroutines?
22
2.7SustainabilityandorganisationThereisanextensivebodyofworkaboutorganisationalcontextandthewayit
influencescorporateapproachestosustainability.Scholarsrecognisethatthebroader
contextisimportantinshapingdecision-making(Shepherd&Rudd2014;Deanetal.
1991).Organisationsexertinfluence–eitherthroughformalprocesses,habitsand
routines–onthewayinwhichpeopleunderstanddecisionsevenbeforetheymake
them.Workonethicaldecision-makingidentifiesorganisationalcontextasadominant
forceindecision-making(Blome&Paulraj2013;Lietal.2018),overridingthe
individualpreferencesofmanagers(Chenetal.1997).AsLülfsandHahn(2014)write:
‘Thecreationofanorganizationalculturefosteringsustainabilityorientationseemsto
bemoreimportantthanformalexpressionsofcorporatesustainability(Howard-
Grenville,2006;Linnenluecke&Griffiths,2010;Tudoretal.,2008).’(Lülfs&Hahn,2014
p.52)How,then,isthisachieved?
Althoughmanyissuesareidentifiedintheliteratureasinfluencesindecision-making,
noneofthearticlesreviewedofferedacomprehensivemodelconnectingtheseconcepts
toshowtheorganisationalinfluencesondecision-makers.Instead,scholarshave
focusedonspecificissuessuchastheroleofsub-cultures(Howard-Grenville2006),the
creationoforganisationalclimate(Ardichvilietal.2009)ortheimpactofformal
systems(Ford&Richardson1994).Therewasaparticularlylargebodyofliterature
aboutthecharacteristicsofindividualleaders(Forexample:Aguinis&Glavas,2012;
Ardichvilietal.,2009;Blome&Paulraj,2013;Stubbs&Cocklin,2008),andageneral
tendencytoemphasisethe‘softsystems’,suchascultureandethicalclimate,ratherthan
themoreformalprocessesoftheorganisation,althoughthesedoappearinliterature
reviews(Ford&Richardson1994;Verbosetal.2007;Nawaz&Koç2018).AsSchrettle
etalwrite:‘Tothebestofourknowledge,thereisnodescriptivemodel,whichsupports
decision-makingoffirmsfacingasustainabilitychallengebylinkingallrelevant
dimensionsinatransparentway’(Schrettleetal.2014p.74).
Thisreadingoftheliteratureonorganisationgeneratedalistof107factorsthatcould
influencedecision-processes.ThesourcesforthesearelistedinAppendix1.These
107conceptsoperateatdifferentorganisationallevels:somedescribethebehaviourof
individuals(forexample:moralresponsibility);othersoperateatthelevelofthe
organisation,ororganisationalunit(forexample:culture);somedescribethe
23
relationshipbetweentheinternalandexternalaspectsofthefirm(forexample:theory
ofthefirm).Ithereforeorganisedthemintoabroadconceptualframeworkdrawingon
thefourcontextsidentifiedbyDean,SharfmanandFordintheirreviewoftheliterature
onstrategicdecision-making(Deanetal.1991p.89).Deanetaldidnotelaborateon
themoredetailedaspectsofthesecontexts(forexample,thespecificorganisational
elementsinfluencingdecisions).Ithereforeadaptedtheiroriginalframeworkandused
thisasabasisformappingthefactorsidentifiedinthesustainabilityliterature.Imade
twoalterationstothismapping:first,Deanetalputthedecisionprocessandproblemat
twodifferentorganisationallevels(onthegroundsthattheprocessisaninteraction
betweenthedecision-makerandtheproblem).Whilethismaybethecaseforstrategic
decisions,theuseoforganisationalscriptsforsomesustainability-relateddecisions
meansthattheprocessismorecloselyrelatedtotheproblemthantothedecision-
maker.Ihavethereforegroupedthedecisionproblemandprocessinthesamelayer.
ThesecondchangethatIproposeinthisframeworkisthatIhavechangedDeanetal’s
‘team’to‘decision-maker’,assomesustainability-relateddecisionsaremadeby
individualsratherthangroups.Thismappingisthusadevelopmentoftheiroriginal
proposedframeworkandisshowninFigure1.
24
Figure1:Contextualfactorsinfluencingtheinclusionofsustainabilityindecision-making
Thissynopticmodelshowsthattherearemanypossibleinfluencesondecision-makers.
Manyofthemunderpintheorganisationallogicthatshapesbehaviourandcognition
(Besharov&Smith2014).However,thereisnoindicationoftherelativesignificanceof
these,northerelationshipsbetweenthesefactorstoshowhowbusinessesmightshape
theirorganisationstobettermanagethechallengesofactingsustainably.Iwilldevelop
thisideafurtherinChapter4.
2.8Problematisingtheliterature
ThemappingoftheliteratureinTable2showsthatthereisnotacoherentliterature
abouthowcompaniesincorporatesocialandenvironmentalconsiderationsintotheir
decision-making.Itisclearthatthereisnotsomuchagapintheliteratureasaseries
ofproblemstobesolved(Alvesson&Sandberg2011).Thesewillinformtheresearch
question.
Thefirstproblemintheliteratureisanapparentdisconnectbetweenthecomplex,
systemicproblemofincorporatingsocialandenvironmentalcriteriaintodecision-
Environment
Decisionproper/es
Decisionprocess
Organisa/on
Decision-maker
Environment/BusinessCharacteris3cs• TheoryoftheFirm • Ownershipstructure/Shareholders• BoardaAen/on/governance• Compe//veintensity/
Compe//veness • Regulatoryenvironment• Geopoli/calenvironment• Size • History/pathdependency• Munificence• Materialityofsustainability • Purpose,MissionandVision• Customerandmarketdemand• NGOinterest• Corporategoals• Corporateiden/ty
Organisa3on• Accountability• Accoun/ngpolicies,sustainability
reportsandtriple-boAomline• Problem-solvingapproach• AOtudesandbeliefs• Cultureandclimate• Codesofconduct,corporatepolicyand
rules• Complexity• Communica/on• Controlsystem• Co-opera/onandcollabora/on• Conflict-resolu/on• Corporateaffairs• Culture• Organisa/ondesignandstructure• Empowerment• Environmentalmanagementsystem• Ethicalclimate,cultureandnorms• Heroesandrolemodels• Historicalantecedents• HRprocesses• Incen/vesandrewards• Inclusionandindependence• InfluenceofexternalgroupsOrganisa3on• Instrumentalism Opera/ngprocedures• Jobdesign Organisa/onalepistemology• Knowledgemanagement Rou/nesandscripts• Language Peergroups• Leadership Performancemanagement• Organisa/onallearning Managerialinterpreta/onsofCSR• Leadership Processes• Long-termperspec/ve Removalofemo/onalcontent• Myths Rituals• Normsandvalues Stories• Stakeholderrela/ons Socialisa/on• Sub-cultures Sustainabilitymindset• Tradi/ons CommitmenttoCSR• Trainingandcapabili/es
DecisionMakers• Abilitytoseekassistance• AOtudesandbeliefs• Timeperspec/ve• Decisionrights• Desires• Iden/fica/onwiththeorganisa/on• FocusofaAen/onandpriori/es• Habits• Informa/on• Inten/on,commitmentandvalues• Independence/isola/on• Moralcodeandmaturity• Perceivedlevelofcontrol• Seniority• Skill,capabili/esandtraining• Socialapproval• Stressandworkload• Careerorienta/on
Decisioncharacteris3cs• Decisioncriteria• Dynamicsofprocess• Par/cipa/oninprocess• Complexity• Ambiguity• Inter-temporality• Varietyofstakeholders
25
making(Pirson&Turnbull2018)andthetypeofsolutionsproposed.Manyarticles
describesingleapproachestoamulti-facetedproblem(seeTable3,above),andthe
fragmentationoftheliteraturehaslimitedtheoreticaldevelopment(Shepherd&Rudd
2014).Whatisneededisthereforeamoreintegrativeapproachtothetopictomake
connectionsbetweentheanalytical,cognitiveandorganisationalliteratures.
Thenaturalstartingpointfortheseconnectionswouldbearesearchquestionstemming
fromtheorganisationalliterature.Theattentionbasedviewofthefirmsuggeststhat
theorganisationshapesandinfluenceswaysofseeinginformationandthinkingaboutit
(Ocasio1997).Ithereforetaketheorganisationalliteratureasmystartingpoint.I
interprettheorganisationbroadlytoencompassarangeofformal,behaviouraland
socialfactorsthatshapetheorganisationallogic,theinformationandthecognitive
processofthedecision-maker.
Thesecondproblemintheliteratureisatrade-offbetweentheoreticalcomplexityand
empiricism.Thearticlesdescribingthecomplex,paradoxicalnatureofsustainability
(forexample:Hahnetal.2015;Hahnetal.2017)tendtobeconceptual.Bycontrast,the
empiricalarticlesinthiscollectiontendedtofocusonnarrowerissues–forexample
casestudiesshowingtheuseofanalyticalmethods,orsurveybasedstudiesofethical
leadership.Theempiricalsettingsareveryvaried.However,giventhattheindustries
thatmostneedtodecarbonise(Rogeljetal.2018p138-148)areoftendominatedby
incumbents,thereisvalueinfocusingonlarge,establishedbusinessesasanempirical
setting.
Thethirdproblemisrelatedtothefirst.Becausedecision-makingbehaviourin
organisationsarisesfromabroadsystem,itisdifficulttoidentifythepointsof
interventionwheredecisionscanbechangedorimproved.Researchtodatehas
identifiedarangeofapproaches,rangingfromimprovinginformation(Chofrehetal.
2014)toinfluencingleadership(Epsteinetal.2010),buttheseneedtobesetinthe
broadercontextofthesystemthatshapesdecision-making.
Byusingtheseproblemsasastartingpoint,Ihavedefinedtworesearchquestionsto
addressinthisthesis.
26
2.9TheResearchQuestions
Q1:Howdotheformal,behaviouralandsocialstructuresofanorganisationinteract
toinfluencetheinclusionofsustainabilitycriteriaindecision-makinginincumbent
businesses?
Q2:Whatarethepointsofinterventiontoinfluencethesesystems?
27
3:METHOD
3.1 Introduction
Havingconcludedthelastchapterwithtworesearchquestions,thischapterdescribes
themethodsusedtoanswerthese.Thechapterisorganisedinfourmainsections.The
firstintroducesthefundamentalbeliefs–theresearchphilosophyandprinciples–
underlyingtheresearchapproach.Thesecondintroducestheoverallarchitectureof
theprojectandthechoiceofqualitativemixedmethodsused.Thethirdcommentson
theanalyticalmethodsusedtoderiveinsightfromthedata.Finally,thereisashort
commentaryonthelimitationsofthesemethodsandthemitigationstrategiesadopted
intheresearch.
3.2Researchapproach
3.2.1 ResearchphilosophyManyfieldshaveestablishedontologicalandepistemologicalconventions.However,as
IestablishedinChapter2,thefieldsofdecision-makingandsustainabilityare
fragmented,andthereareavarietyofperspectives.SchadandBansal(2018)suggest
thattheinconsistencyforsustainabilitywritersarisesbecauseweareworkingatthe
interfacebetweenthematerial(suchasemissionsorphysicalresources)andthe
sociallyconstructed.Thereisthereforearealchoiceforscholarsinthisfieldboth
ontologicallyandepistemologically.
TheresearchphilosophyIhaveadoptedisrootedinthenatureoftheproblem
examined.Inthisstudy,Ihavetakenaconstructionistontologicalapproach.Thisis
becausebasedonthereviewoftheliterature,therearetwoforcesshapingdecision-
makinginorganisations:aformalortechnicalapproach(forexampleinthesystematic
analysisofproblems);andanapproachrootedinsocialinteractionsandbehavioural
models(forexamplethepersonalstancetakenbyleaders).HerbertSimonin
‘AdministrativeBehaviour’(Simon1997p.119)pointedoutthatpeoplelimitthe
amountofinformationtheytakeintoaccountindecision-making.Theirthinkingis
constrainedbycircumstance.Tounderstandthenatureoftheseconstraints,Iseekto
28
understandthewayinwhichtheyareinterpretedbythedecision-makers.Myviewthat
aconstructionistapproachisbettersuitedtounderstandingthisproblembecauseofthe
significantroleofpersonalconstructsinthephenomenonobserved.
Justasdecision-makerslimittheinformationtheytakeintoaccount,researchersalso
operatefromapositionofincompleteknowledgeandboundedrationality(Mantere&
Ketokivi2013).Theepistemologicalapproachisthereforeinterpretivist.Again,this
choiceisrootedinthesubjectoftheresearch.ThedecisionsIaminterestedincreatea
problemofdatacollection:muchoftheheavyworkofdecision-makinghappensinside
people’sheadsastheyevaluatetheinformationandoptionsavailable.Myviewisthat
thiscanonlybeunderstoodphenomenologically:‘inordertograspthemeaningsofa
person’sbehaviour,thephenomenologistattemptstoseethingsfromthatperson’s
pointofview’(Taylor&Bogdan,1975p.14).
Thisphilosophicalapproachmeansthattheresearchisgroundedintheexperiencesof
theinformants.Thishasinfluencedaseriesofchoicesabouttheprinciples,architecture
andmethodsusedtoaddresstheresearchquestion.
3.2.2ResearchprinciplesAkeyprinciplethathasinformedtheresearchdesignisaneedtoinvolvedecision-
makersasactiveparticipantsintheprocess.Thisisfortworeasons.First,one
observationfromthereviewoftheliteratureinChapter2isthatmuchoftheworkon
thewaythatdecision-makersresolvethetensionsbroughtaboutbytryingtoact
sustainablyisconceptualinnature.Therehasbeenrelativelylittleworkthatactually
engagesthedecision-makersthemselves,andIseektoaddressthisgapinour
understanding.Second,theproblemofincorporatingsocialandenvironmentalthinking
intocorporatedecision-makingisarealone:oneaimofthisresearchisthereforeto
generatepracticalinsightsfordecision-makers.
Toachievethis,thestudyfollowsan‘engagedscholarship’approach(VandeVen2007),
andindeedthisprincipleinformedotherdesignchoices,suchastheuseofqualitative
mixedmethodsandanabductiveapproachtoreasoning,inwhichItogglebetween
empiricaldatafrommyinformantsandtheory(Alvesson&Kärrenman2007).The
intentionwastounderstandthenatureofaspecificproblem(thefirstwordsofmytwo
29
researchquestionsare‘how’and‘what’)thathasnotbeenwelldescribedfromthepoint
ofviewofthoseexperiencingit,andtoexplorethisfrommultipleperspectives.InVan
deVen’sterms,thisis‘informedbasicresearch’inwhichtheacademicresearcheris
clearlypositioned‘asanoutsider’(VandeVen,2007p.271)butconsultsstakeholdersat
eachstepoftheresearchprocess.Thisprocessofconsultationwasbuiltintothe
researchdesign.
Acorollaryofengagingcloselywithhumansubjectsistheneedtoworktohigh
standardsofconfidentialityinboththedatamanagementandthereporting.Datathat
couldidentifyindividualsorcompanies(suchasjobtitlesfortheindividualsorthe
numberofstaff,orsizeofturnoverforthecompanies)hasbeenwithheldthroughout
thisthesis.Ifiledadatamanagementplanatthebeginningoftheprogrammeinwhich
Icommittedtoseparatingthedataaboutrespondentsfromthedatatheysupplied.All
participantswereinvitedtoparticipateandhadtheoptiontorefuse.Theygave
informedconsentforanyrecordings(oneparticipantwithheldconsent,butgave
permissionformetotakenotesduringtheinterview).
3.3Researchmethods
3.3.1Researcharchitecture
Justastheresearchphilosophyandprincipleswerechosentoreflectthecharacteristics
oftheresearchquestionandthecurrentknowledgeinthefield,theresearch
architecturewasdevelopedtorespondtothreespecificcharacteristicsofcurrent
knowledge.First,theknowledgeissomewhatfragmented,andsoitwasimportantto
takeabroadapproachtoidentifyingthefactorsthatcouldinfluencedecision-making.
Second,someofthemostinfluentialworkinthefieldwasdevelopedconceptually,and
sohadnotbeentestedbypractitioners.Thisapproachthereforecombinedaseriesof
qualitativeinvestigationstofirst,generatetheoriesfromthebroadexperienceof
decision-makersworkingtoincludesustainabilityintheirchoices,thentestthese
theoriesinasinglecase,andfinallyexploretheirgeneralizabilitythroughdiscussions
withpractitioners.Thisledtothedevelopmentofaseriesofinterconnectedstudies
describedinTable4,below.
30
Table4:Objectivesandapproachforeachresearchstep
Stage Objective OutputResearchclarification
Understandthecurrentstateofknowledgeandidentifytheresearchquestions
LiteraturereviewdescribedinChapter2.
Study1 Understandthecurrentexperienceofdecision-makersanddeveloptheoreticalmodelsofdecision-makingandorganisation
Analysesofthetypesofdecisions,logicsusedandfactorsinfluencingdecision-makingdescribedinChapter4.
Study2 Testandextendthedevelopingtheoryandexploretheinteractionsbetweenmodelsinacasestudy
ApplicationoftheanalysisinChapter4,anddevelopmentofamodelshowinghowdecision-makingchangedovertimeinanorganisation,describedinChapter5.
Study3 Testtheemergingfindingswithpractitioners,followingtheengagedscholarshipapproach.
TestingandextensionoftheideasdevelopedinStudies1and2,describedinChapter6.
Iselecteddifferentresearchmethodsforeachofthesestudies..
3.3.2ChoiceofqualitativemixedmethodsGiventhenatureofthegapintheliteraturedescribedinChapter2,Idecidedtotakean
abductiveapproachtotheorybuilding.AsAlvesson&Kärrenman(2007)observe,
researchersoftencombinedeductive,inductiveandabductiveapproachesinthecourse
oftheirthinking,andthisworkisnoexception.However,thefocusonanabductive
approachinthisstudyisfortwomainreasons.First,astheliteratureisfragmented,it
wasnotpossibletotakeadeductiveapproach,buildingacoherentsetofhypothesesfor
testingdeductively.However,therearesometheoreticalframeworksthatcaninform
thiswork–particularlyfromthefieldofparadoxtheory.BlessingandChakrabarti
(2009)emphasiseaparallelprocessofexploringtheliteratureandempiricaldata,
whichcreatestheconditionsforanabductiveapproach(Alvesson&Kärrenman2007).
Abductionalsoenablestheresearchertofocusonsolvingaproblem,ratherthantesting
ahypothesis(Bryman&Bell2015)whichiscongruentwithmyresearchobjectives.
Becausetheworkisexploratory,Ihaveusedacombinationofqualitativemethods
(Edmondson&McManus2007),usingdifferentmethodsfordatacollectionandanalysis
ineachofthethreestudies.
31
ForStudy1,Iconducted17interviews,usingcriticalincidenttechnique.Critical
incidenttechniquehassomedistinctstrengthsasamethodforunderstandingthe
featuresofaphenomenon.Theapproachenables‘theconsciousreflectionsofthe
incumbent,theirframeofreference,feelings,attitudesandperspectiveonmatters
whichareofcriticalimportancetothem’(Chell,1998p.68).Thistendstoproducedata
attwolevels:descriptionsofthespecificincident(inthiscasedecisions);and
reflectionsonthebroadercontextforthisincident,allowingtheresearchertomake
connectionsbetweentheincidentandbroadercontext(Chell,1998p.55).Itisnotan
uncomfortableorexcessivelytime-consumingprocessforinterviewees.Ratherthan
focusingonpsychologicalconstructs,dataiscollectedthroughdebriefingparticular
incidents(inthiscase,decisions)andallowingtheintervieweetoreflectonthese.As
theunitofanalysisistheincident,ratherthantheinterviewee(Flanagan1954),thisis
anefficientdata-collectionmethodasitispossibletoexamineseveralincidentsinone
interview,anditenablesthegenerationofinsightbothatthespecificcaselevelandas
comparisonsbetweencases(Chell1998p.55).Thesefactorscombinedtomakethisa
suitablemethodforaninitialstudytoexaminethewayinwhichorganisationsresolve
thetensionsofsustainabilityconsiderationindecisions.
Iconducted17interviewswithexecutivesbetweenDecember2016andJune2017,at
whichpointtheresearchbegantoreachtheoreticalsaturation(Glaser&Strauss1968
p.61).Thecriteriaforinclusioninthesamplewerethatintervieweesshouldbe
experiencedseniormanagers,workingintheprivatesector,thattheyshouldhave
exposuretosustainabilityissues,andthattheyshouldbefromindustrieswhere
sustainabilityisamaterialconsideration.Becauseintervieweeswerereflectingon
decisionsthattheyhadmadeatanytimeintheircareers,someintervieweesgave
examplesofdecisionsfrommorethanonecompany.Thefulllistofintervieweesis
showninTable5.
32
Table5:Listofinterviewees
Interviewee Jobtitle Industry/ies1 DirectorofCapitalInvestment Beverages2 DirectorofProcurement Retail3 CEO Apparel
4 DirectorofPolicyWater,energyandconstruction
5 GlobalHeadofSustainability Engineering6 SustainabilityDirector RealEstate7 DirectorofEngineering Engineering8 DirectorofCorporateAffairs Travel&tourism9 HeadofSustainability Aerospace
10 MarketingDirectorTelecommsandenergy
11DirectorofProjectInvestment,laterDirectorofSustainability
Banking(twoseparatebanks)
12 VPofStrategy Energy13 HeadofSustainability Apparel14 HeadofInnovation Flooring15 DirectorofManufacturing Flooring16 DirectorofSustainability Construction17 StrategyDirector FMCG.
Thismeansthatalthoughtherewere17interviewees,therewere20companies
representedinthesample.Theindustriesrepresentedwere:apparel,banking,
beverages,consultingengineering,energy,flooring,FMCG,realestate,retail,telecoms
andtourism,andthecompanieshadarangeofdifferentownershipstructures.This
varietywasimportant:Iwasexplicitlylookingforpatternsthatcouldbegeneralizable,
andabroadsamplewouldbemorehelpfulinidentifyingthecommonfeaturesofthe
problem,ratherthanissuesthatmightbespecifictoaparticularorganisation,orevena
particularexecutive.
Duringtheinterviews(whichtypicallylastedaboutonehour),theintervieweeswere
askedtodescribesituationswhentheyhadbeeninvolvedinmakingdecisionsthathad
beencomplicatedbytheneedtoconsidersocialorenvironmentalsustainability.This
meansthattheyonlydescribedsituationsinwhichtheyfeltthetensiontobesalient,
andsothesampledoesnotincludedecisionsinwhichsustainabilityissuesmighthave
beenpresentbutunnoticed(Schad&Bansal,2018).Theintervieweesdescribedand
reflectedon45differentdecisions:12ofthemdescribedmultipledecisions,andfive
33
describedonedecisionindetail.ThefulllistofdecisionsisdescribedinAppendix2.
Thus,thedatacovered45decisions,17executivesand20companies.Theinterviews
wererecordedandtranscribed,andtheanalysisconductedusingAtlasTisoftware.
OnelimitationofStudy1isthatthetheoriesgeneratedfromtheanalysiswerebasedon
experiencesinarangeofdifferentsettings.FortheStudy2,Idevelopedasingle
companycasestudythatallowedmetoexplorethewayinwhichtheseemergingideas
interactinasinglecompany.Thecompany,whichisdescribedmorefullyinChapter5,
hadamulti-yearhistoryofworkingtowardssustainabilityinanindustrialcontextthat
ischaracterisedbytension:thedesignandconstructionofinfrastructure.Thecase
studyisbasedonfourmaindatasources(Yin1984).ThesearesummarisedinTable6:
Table6:SourcesandusesofdatainthePrescriptiveStudy
Source Typeofdata UseinthecasestudyCompanydocuments
5years’ofannualreports.Twoyears’ofpress-cuttings,12reportswrittenbyConsultCoonsustainabilityOver6,000tweets
Evidenceaboutthecompany’ssustainabilitycommitments,performanceandcontext.
Consultancyreport
37pagereportproducedin2017evaluatingtheConsultCo’schangemanagementprocessforsustainability
Evidenceaboutthechangemanagementprocessandtimeline
Interviews 12interviewswithpeopleinlinemanagementrolesatConsultCo(conductedbetweenMarchandJuly2018)
Evidenceaboutthetimelineandimpactsofthechangemanagement,andtheexperiencesofmanagingparadox
Clientevents Participantobservationintwoday-longclienteducationevents(in2015and2016)
Evidenceabouttheengagementofclientsandseniormanagers
Theintervieweeswereselectedusingasamplingframetoensurethatwegathered
pointsofviewfromeachofthemajorgeographicregionsandeachofthemajorbusiness
unitswhereConsultCooperates.Halfoftheintervieweeswereseniormanagers
typicallyservingin‘double-hatting’roleswheretheyhadresponsibilityfora
combinationofclientwork,businessdevelopmentandknowledgeleadership.Theother
sixintervieweeswereprojectmanagers,responsiblefortheday-to-daymanagementof
34
engineeringprojects.Theinterviewstypicallylasted1hour,andwererecordedand
transcribedforanalysis.
Study3wasagainaresponsetoapossiblelimitationofthepreviousstudy,inthatit
allowedmetotestthegeneralizabilityoftheemergingfindings.Italsoallowedmeto
followtheprinciplesof‘engagedscholarship’(VandeVen2007)byregularlydiscussing
therelevanceofboththeresearchquestionsandtheemergingfindingswithagroupof
practitioners.Thestudyconsistedofaseriesofthree2-hourworkshopsforsenior
executiveswhowereinterestedinsustainability.Theworkshopswereconvenedin
November2017(8participants),June2018(5participants)andOctober2018(5
participants).Becausetherewassomecontinuityintheparticipants,atotalof12
executiveswereinvolvedinthesemeetings.Theparticipantswererecruitedfrom
differentsectors,andwereorganisedsothattherewerenevertwoparticipantsfrom
competingcompaniesinthesamemeeting.Theparticipantswereamixtureof
sustainabilityprofessionals(eg.HeadofSustainability)andexecutivesinrelatedroles
(eg.CEO,DirectorofStrategy).TheoverallprogrammeofworkshopsisshowninTable
7:
Table7:TopicsandparticipantsforStudy3
Date Discussiontopics ParticipantsNovember2017
Overviewoftheprojectandobjectives.FindingsfromStudy1:Waystoresolvetension
Roles:CEO,DirectorofTechnology,DirectorofStrategy,HeadofPolicy,DirectorofSustainability,DirectorofProcurementIndustries:Retail,Furniture,FMCG,Utilities,Telecom,Beverages,Energy,Food
June2018 FindingsfromStudy1:ArchetypesofdecisionsApproachestochange
Roles:DirectorofCompliance,CEO,GovernanceAdvisor,DirectorofSustainability,PolicyAdvisorIndustries:Energy,Utilities,Transport,Engineering,Pharmaceuticals
October2018
FindingsfromStudy2:OrganisationalsystemsThedynamicsofchange
Roles:DirectorofSustainability,CEO,PolicyAdvisor,DirectorofTechnology,Industries:Telecoms,Utilities,Food,Retail,Energy
35
Theworkshopsallfollowedthesameformat:apresentationlastingapproximately40
minutesintroducingthecurrentfindingsandtopicsfordiscussion,followedbyagroup
discussiontypicallylasting80minutes.
Eachmeetingwasrununderthe‘ChathamHouse’rule,themeetingswererecordedand
ashortsummarywassenttotheparticipantsfortheirreview.
Inadditiontothisformalprocessfordatacollection,Iarrangedregulardiscussionswith
executiveswhowereunabletoparticipateintheworkshops(eitherbecausetheywere
notUKbasedorbecauseofpriorcommitments),whichallowedmetomaintaintheir
involvementinthe‘engagedscholarship’process.
Intotal,thedatainformingmyworkcomprises29formalinterviews(eitherusing
criticalincidenttechniqueoraspartofacasestudy),abroadcollectionofdocuments
supportingthecaseanalysis,andsixhoursofrecordedworkshops.Theoverall
architectureshowingthesequenceofdatacollectionandanalysisisshowninFigure2,
below:
Figure2:Overallstudydesign
Research
clarifica,o
nStud
y1
Stud
y2
Stud
y3
Literaturereview
Literaturereview
Literaturereview
Workshop3
Workshop2
Workshop1
Design Datacollec,on
Repor,ng/valida,on
Design Datacollec,on
Repor,ng/valida,on
Analysis
Analysis
36
Foreachofthestudies,Iadoptedtheprinciplesofparticipantcross-checking
(Butterfieldetal.2005)bywritingareportofmyfindingsandcirculatingittothe
participantstoinvitetheirfeedback.
3.4AnalyticalapproachBecauseoneofthemainobjectivesofthisresearchwastodevelopanunderstandingof
theexperiencesofexecutiveswhowereincludingsocialandenvironmental
considerationsintheirdecision-making,muchoftheanalysiswasbasedonthe
fundamentalprinciplesofgroundedtheory(Glaser&Strauss1968).However,thiswas
appliedindifferentwaystothethreestudies,giventheirdifferentobjectives.Inall
cases,analysisstartedwhilethedata-collectionwasstillinprogress.
TheanalyticalprocessconsistedofthestepsshowninFigure3.Giventhatcritical
incidenttechniqueprovidesdataattwodifferentlevels(informationabouttheincident
itselfandreflectionsonthecontext)(Chell1998p.55),Istartedtwoseparateanalytical
processes,firsttocaptureinformationaboutthedecisions,andsecondtocapture
informationabouttheirorganisationalcontexts.Figure3:Processfordataanalysis–Study1
DatafromStudy1
Completedatastructure
(Appendix3)
Conceptsfromorganisa<onalliterature
(Sec<on2.7)
Proper<esofdecisionsthemselves Reflec<onsoncontext
Whydecisionsweredifficult
(Sec<on4.2)
Logicformakingdecisions
(Sec<on4.3)
Codesanddatastructure
(Figures4-7)
37
Thefirstprocessisdescribedindetailinsection4.2.1and4.3.1.Ianalysedthe
descriptionsofeachofthe45decisionsdescribedintheinterviews(andlistedin
Appendix2)andidentified,first,thecharacteristicsthattheintervieweesaidmadethe
decisiondifficult,andsecond,thelogicalapproachthatthedecision-makerstookto
resolvingthecompetingcommitmentsinherentinthedecision.
Thesecondanalysiswasthecreationofaframeworkdescribingthecontextinfluencing
decision-making(showninFigure1).Todothis,Itookfoursteps.Thefirsttwosteps
werebothintendedtogeneratecodes,andranbroadlyinparallel.First,Iidentifiedthe
differentorganisationalconceptsintheliterature(thisisshowninSection2.7),takinga
groundedapproachtoidentifyingconcepts.Inparallel,Icodedmyinterviewdatausing
opencodingandthenaxialcoding(Strauss&Corbin2008).Second,Iorganisedthese
codesintoadatastructure(Gioiaetal.2013).Interestingly,theemergingstructure
mappedwellontoDeanetal’s(1991)modeloffournestedcontextsinformingdecisions.
ThesestructuresareshowninFigures4to7.Figure4showsthedatastructure
outermostlayeroftheframework(theexternalandinternalcontext),Figure5shows
thedatastructurefortheformalelementsoftheorganisationalcontext.Figure6shows
thedatastructureforthesocialelementsoftheorganisationalcontext,andFigure7
showsthedatastructurefortheindividual‘layer’ofthecontextframework.
38
Figure4:Datastructurefortheouterlayerofthecontextframework
Figure5:Datastructurefortheformalelementsoftheorganisationalcontext
1stOrderConcepts 2stOrderThemes AggregateDimensions
• Regulatorytension;geopoli<calconcerns• Materialityofenvironmental/socialimpacts• Marginsandcomplexityofbusiness• Compe<<veintensity
• Needsoflocalcommunity• Marketdemand;demandfromspecificcustomers• Shareholderinfluence• InfluenceofNGOs
• Influenceoversuppliers,customers,employees• Investorrela<ons• Conveningpower
• Opera<onsstrategy• Strategicopportuni<es• Mergersandacquisi<ons
Industrycharacteris<cs
Externalstakeholders
Influenceandpower
Company-specificissues
Externalcontext
Internalcontext• Sustainabilityambi<on,strategyandplan• Useofscience-basedtargets• Star<ngsustainability
Sustainabilitystrategy
• Vision Strategicdirec<on• Purpose Companypriori<es
• Theoryofthefirm Ownershipstructure• Boardgovernance Businessmodel
Mentalmodelsofthefirm
Companydirec<on
1stOrderConcepts 2stOrderThemes AggregateDimensions
• Organisa7onofsustainabilityfunc7on• Interfaceswithothergroups(eg.Finance)• Degreeofcentralisa7onofsustainability
• Proceduresandorganisa7onalrou7nes• Processesformanagingdissentorconflict• Companypolicies(forsustainabilityordecision-making)
• Financialincen7ves• Recogni7onorrewardforsustainabilityexper7seand/or
behaviour
• Companycontrolsystems• Individualperformancemanagement
• Conflictbetweendifferentobjec7ves• Perverseincen7ves.
• Howmuchco-ordina7onistherebetweengroups• Approachtoteamworkandcross-cuNnggroups• Formalandinformalcommunica7onschannels
Locusofsustainability
Linkages
Processes,policiesandstandards
Incen7ves
Conflic7ngpriori7es
Control
Organisa7ondesign
Performancemanagement
• Keyperformanceindicators• Individualorcollec7vetargets• Alignmentofobjec7veswithstrategy
Targets
• Complexityoforganisa7onandbusinessmodel• Levelofcentralisa7onordegreeoffragmenta7on• Governancestructures
• Conflictbetweenorganisa7onalsilos• Credibilityofthesustainabilityfunc7on• Differen7altreatmentofriskoropportunity
Structuraltension
Organisa7onalstructure
• Roles• Employeevalueproposi7on• Careerpaths
Jobdescrip7ons
39
Figure6:Datastructureforthesocialelementsoftheorganisationalcontext
Figure7:Datastructurefortheindividuallayerofthecontextframework
1stOrderConcepts 2stOrderThemes AggregateDimensions
• Percep8onsofsocialresponsibilityandobliga8ons
• Commitmenttoscience
• Values,ethicsandtradi8onsofphilanthropy
• Socialconcernsandimpacts
• Mo8va8on
• Levelofautonomyandindependence
• Hierarchicaldistance
• LeadersseEnganexample
• Leadersgivingamandateorconferringauthority
• Whoaretherolemodels
• Howpeoplearepromoted
• Whatisintraininganddevelopmentprogrammes
• Leadershipambi8on(forselfororganisa8on)
• Sourcesofstatusorrecogni8on
• Rolemodels
• Storiesandmyths
Values
Signalsand
precedents
Self-determina8on
Leadersasenablers
Power
Leadership
development
Culture
Leadership
• Leaders’percep8onsofsustainability
• Leadersmaking‘actsoffaith’
• Leaders’individualinterests
Leaders’beliefs
• Specialistculturesorminoritygroupsorganisedaround
exper8se
• Approachtowardsinclusioninteamworking
• Degreesoftrust
• Importanceofconsensus
Inclusiveness
Specialismand
minoritycultures
1stOrderConcepts 2stOrderThemes AggregateDimensions
• Basinga8tudeonopinionorfact
• ‘Irra=onalconcerns’aboutsustainabilityinbusiness
• Sustainabilityisa:cost/risk/opportunity/moral
obliga=onPercep=ons
Ra=onality
Knowledge
Permissionspace
A8tudes
• Sphereofinfluence
• Credibilityoftheteam
• Cultureofautonomyorindependence
• Levelofdecentralisa=onInferredauthority
Informalauthority
• Roledescrip=ons
• MandateFormalauthority
• Crea=ngaframeworkforthinking
• Showingmanagerswhatishappening
• Crea=ngtransparent,understandabledata
• Providingtraining
Building
understanding
Organisa=onal
epistemology
• Informalsharingofinforma=on
• Buildingaknowledgemanagementsystem
• Codifyingexperience(eg.Tools,casestudies)
• Lifecycleanalysis
• Mul=-criteriadecisionanalysisBeUeranalysis
Organisa=onal
learning
• Se8ngmeasurementstandards
• Providingaccuratedata
• Providing‘complete’data(eg.LCA)
BeUerdata
40
Havingidentifiedtheconcepts,themesanddimensionsfromboththeliteratureandthe
interviews,Icombinedthemtoformacompletecodestructure.ThisisinAppendix3.
Finally,Iorganisedtheseintoaframeworktoexploretheemergingrelationships
betweenfactors.
ThisframeworkformedthebasisofthecodingforStudy2,describedinChapter5.
However,therewereafewconstructsthatwerespecifictoConsultCo’soperating
context(forexample:riskmanagement;post-mergerintegration),andIcreated
additionalcodesfortheseinordertoensurethatIwasgroundingtheanalysisinthe
data,andnotsimplyforcingthedataintoapreconceivedstructure(Strauss&Corbin
2008p.113).BecausetheworkshopsinStudy3wereresponsestomaterialthathad
alreadybeenanalysed,Ididnottranscribeorcodethese.Rather,Ipreparedashort
reportofeachdiscussion,andusedthistoconfirmmyunderstandingofthedebatewith
theparticipants.ThesefindingsarediscussedinChapter6.
Iengagedtheparticipantsactivelyintheanalysis,sharingreportsofthefindingswith
theintervieweesateachstageoftheprocess,andprovidingtheopportunitytogive
feedbackiftheydidnotagreewiththeanalysis.
3.5Limitationsofthemethod
Therearenaturallysomelimitationstothesemethods,andthreeinparticularmerit
attention:thechoiceofpeopleandcompaniesinvolvedintheresearch;thetruthfulness
ofinterviewees;andthereliabilityoftheanalyticalmethods.Iwillbrieflyoutlinethe
problemsthesepresent,andthemethodsbywhichImitigatedthesedifficulties.
Thecompaniesandparticipantsinthisstudywerenotchosenatrandom.Ideliberately
workedwithcompaniesthatareawareofthesocialandenvironmentalissuestheyface,
andhavestartedtotakestepstoaddressthesedirectlyinthewaytheydobusiness.
Theemphasisinthisresearchisonincumbentbusinesses,astheyhaveasubstantial
socialandenvironmentalimpact,andneedtochangesignificantlyinordertoaddress
this.Theparticipantsinthefirstofthethreestudieswerelargelyrecruitedfrommy
ownprofessionalnetworkormembersofsustainability-relatedprofessionalgroups.
41
Thispurposiveapproachtosamplingmeantthatlarge,internationalcompanieswitha
strongpresenceinWesternEuropeareover-representedinthestudy:theinterviewees
andworkshopgroupmembersalmostallworkedforcompanieslikethis,andthecase
studycompanywasalsoaninternationalorganisationwithastrongUKpresence.There
arealsoarelativelyhighnumberofformerconsultantsinthesample(fiveoutofthe
seventeeninthefirststudy).Thisbiaspersistedintheparticipantsintheworkshop
groups,whowererecruitedinthesameway(anddidincludesomeinterviewees).This
biasdoessuggestthatthefindingsaremorelikelytoapplytolarge,European
companies,butdoesnotexcludethepossibilitythattheymaybehelpfultosmaller
organisations,orotherinternationalcontexts.
Interviewscanbepoliticaloccasions(Alvesson&Kärrenman2007)inwhichthe
interviewee(orinterviewer)seekstoimpresstheirownversionofeventsintothe
writtenrecord.Groupsalsohavethepotentialtobecomepoliticalasgroupmembers
maycompetewitheachotherforattentionandfor‘shareofvoice’.Thismeansthatthe
researcherneedstounderstandandcheckboththecontentandtheundercurrentofthe
wordsspoken–to‘listenforthesongbeneaththewords’(Heifetz&Linsky,2002p.55).
Tomanagethis,Itookaseriesofsteps.
First,inallthreestudies,Iworkedtoestablisharapportwiththeintervieweesand
ensuredthattheyunderstoodhowIwouldbeusingtheirinformationconfidentially.
Theinterviewmethodusedforthefirststudy–criticalincidenttechnique–hasa
distinctadvantageinthatitdirectstheintervieweetofocusveryspecificallyon
describinganincidentthatisimportanttothem.Theseveryconcreteeventsbecome
thestartingpointforreflection.Thismeansthatalthoughthedataareinterpretations,
theyarerootedinaspecificanddescribablecontext.Theintervieweeswerespeaking
ontheirownbehalfabouttheirownexperience,ratherthantryingtorepresenta
particularposition.Thisreducesthe‘political’contentoftheseinterviews,andmeant
thatalthoughtheintervieweesmayhavebeenmakingsenseoftheirexperience
retrospectively,theywerediscussingthisauthentically.
Thepoliticalstancewasahigherriskinthecase-studyinterviews,whichinvolvedjunior
andseniormanagersfromasinglecompany,someofwhommayhavewishedtomakea
particularimpressionaboutthebusiness’sworkinsustainability.Tomanagethis,I
42
startedeachinterviewwithaquestionthatlargelybuiltonthecriticalincident
approach,invitingtheintervieweetoshareaveryspecificexperienceaboutdecision-
making,andthenworkedfromthattostarttotesttheemergingtheoriesaboutthe
organisation.Iwasabletotriangulatesomeofthedatabetweendifferentsources(for
example,combininginterviewdatawiththecompany’sexternalreports)togathera
holisticviewofthecompany.
Whiletheproblemofmanagingpoliticalpositioningwithinonecompanycanbe
managedthroughtriangulation,theproblemofmanagingadiscussionbetweenseveral
executivesneedsadifferentapproach.Forthethirdstudy,Iinvitedexecutiveswhodid
nothaveexistingworkingrelationshipsatthestartoftheprogrammetoparticipatein
workshops.Theriskinthiscasewasthatparticipantswouldtrytopresenttheirown
companiesorexperiencesinaparticularlyfavourablelight,orwouldsimplynot
contributeproductivelytothediscussion.Tomanagethis,Itookthreesteps:first,Iwas
veryclearaboutthe‘rulesofengagement’intheworkshops,includingtheapproachto
confidentialityandtherecruitmentofpeoplefromnon-competingbusinesses;second,I
designedtheworkshopsothatweopenedthemeetingwithapresentationandquite
uncontroversialdiscussiontoallowparticipantstogetusedtothesetting;third,Iwas
accompaniedbyasecondresearcher,whohelpedensurethatthediscussionincluded
everyone.Overtime,theparticipantsintheworkshopstartedtogettoknoweach
other,andbecameincreasinglycomfortableintheirdiscussions.Thisledtoamuch
moreopenanddirectsharingofviews.
Aswellastheproblemsofcollectingdatainawaythatwouldprovideareliablesetof
evidence,qualitativeresearchcancreateproblemsofinterpretationandanalysis.The
mainstrategyforvalidatingthefindingswasparticipantcross-checking,whichwasused
inallthreeofthestudies.Additionallyforsomeanalyses,Iconvenedgroupsofother
researcherstodiscussandcheckmycodingofevidence.Giventheabductiveapproach,
Ihaveplacedlessemphasisonresearcherinvariancethanonreflexivityandcredibility
intheinterpretationofthedata(Mantere&Ketokivi2013),testedthroughsharingthe
findingswithinterviewees,workshopgroupmembersandfellowacademics.
43
Despitethenaturallimitationsofthemethods,myviewisthatthefindingsfromthis
studycanformabasisforfurtherresearchandpractice,andthisisdiscussedfurtherin
Chapter7.
44
4:STUDY1
4.1IntroductionTheobjectiveStudy1wastoaddressthefirstresearchquestion:howdotheformal,
behaviouralandsocialstructuresofanorganisationinteracttoinfluencetheinclusionof
sustainabilitycriteriaindecision-makinginincumbentbusinesses?Todothis,I
conductedinterviewswith17executivesusingcriticalincidenttechnique,usingthe
methodsdescribedinChapter3.Thischapterdescribesthemainfindingsfromthat
study,introducingideasthatIlatertestinChapters5and6.
Thechapterisinfourlongsections,followedbyaconcludingdiscussion.These
sectionsmapontothefour‘layers’ofcontextshowninFigure8.
Figure8:Fourcontextsfordecision-making
Inthismodel,derivedfromworkbyDean,SharfmanandFord(1991p.89)and
elaboratedinSection2.7,thedecisionsareattheheartofasystemcomprisingthebroad
externalcontext,theorganisationalcontext,andthecontextofindividualdecision-
makers.Deanetal(1991)donotdistinguishbetweentheproperties,or
Environment
Decisionproper/es
Decisionprocess
Organisa/on
Decision-maker
45
characteristics,ofthedecisionandtheprocessbywhichitismade.However,thereview
oftheliteraturesuggeststhatsustainability-relateddecisionsdohaveparticular
characteristicsthatmakethemdifficult:inSection4.2Ireviewtheseandcommenton
theirimplicationsforprocess.Processandpropertiesarethereforeseparatedinthis
model.Eachsectionofthischapterdiscussesoneofthe‘layers’oftheframeworkand
beginswithabriefcommentonthekeyfindingsfromtheliteraturereviewinorderto
situatethefindingsfromtheinterviewsincontext.
First,Section4.2introducesthedecisionsthemselves.Onefeatureofcriticalincident
techniqueisthattheunitofanalysisistheincident,ratherthantheinterview.By
analysingthe45decisionsdescribedbytheinterviewees,Iidentifythefactorsthatmake
thesedecisionsdifficultandsuggestanovelclassificationofdecisions.
Second,oneofthemainchallengesofintroducingsustainabilitycriteriatodecision-
makingistheintroductionoftensionbetweencompetingcommitments(thisis
describedinChapter2).InSection4.3,byexaminingthedifferentapproachesthat
executivestaketomanagingthesetensionsatthedecisionlevel,Ishowhowthe
competingcommitmentsthatariseattheindividuallevelarenestedwithinabroader
contextand‘zoomout’toexaminethetensionbetweentheexternalenvironmentand
thefirm.
Therelationshipbetweenthishighleveltension(betweenthefirmandthe
environment)andthetensionsattheindividuallevelisinfluencedbyfactorsatthelevel
oftheorganisation,andattheleveloftheindividualdecision-maker.Theseare
reviewedinSections4.4and4.5respectively.
Section4.6presentsasynthesisofthesefindings,andoffersamodeltoshowtheway
organisationalsystemsshapedecision-making.Thissectionsummarisestheideasthat
aretestedandextendedthroughthePrescriptiveStudyinChapter5.
4.2Whydosustainabilityconsiderationsmakedecisionsdifficult?Theliteraturedescribesfourwaysinwhichincludingsocialandenvironmental
considerationsindecision-makingcanaddcomplexity(seeSection2.4,above).These
46
were:managingthedemandsofstakeholders(Smith&Lewis2011);managinginter-
temporality(Bansal&Desjardine2014);managingcomplexity(Pirson&Turnbull
2018);andmanagingambiguity(Rittel&Webber1973).However,therearetwoclear
gapsinourunderstandingofhowdecisionsaredifficult.First,thesecriteriahavebeen
proposedbydifferentauthors,largelywritingfromaconceptualbasis.Wedonotknow
howtheyinteract,orhowdecision-makersexperiencethesechallenges.Isthereonly
onetypeofsustainability-relateddecision,orarethereseveral?Second,thesecriteria
focusoncharacteristicsofthedecisionitselfratherthanthewaysinwhichthecontext
mightmakethedecisionproblematic.Theydonottakeaccountofthedecision-makers
andthefactorsthatmightinfluencethem,whicharediscussedinSections4.3to4.5.
Theinquirystartedbyexaminingthenatureofthedecisions,andwhytheseare
problematicinordertoleadtoabetterunderstandingofhowtheformal,behavioural
andsocialstructuresoftheorganisationcanhelpsupport(orstandinthewayof)
includingsustainabilityindecision-making.
4.2.1AnalyticalapproachIntheinterviewprotocol,Ispecificallyaskedabout‘decisionsthathadbeenmade
difficultbecauseoftheneedtoincludesocialorenvironmentalconsiderations’,butdid
notexplicitlysuggestanyofthetensionsthathavebeenidentifiedintheliterature.The
intervieweesthenidentifieddecisionsthatweresalientforthem.Thedecisionswereon
arangeoftopics,includingbusinessdecisions(suchaschoicesaboutstrategyorcapital
expenditure),questionsofinnovationorresourceefficiency(suchaschoicesof
technology)andoperationalquestions.Thedecisionswereall‘paradoxesof
performing’(Smith&Lewis2011),thatistosay,theywerecharacterisedbyhavingto
meetmultipleobjectivessimultaneously.
Becausetheliteraturedidnotofferacomprehensivesetofcharacteristicsofthese
sustainability-relateddecisions,Idecidedtotakeagroundedapproachtothisanalysis
andthereforedidnotapproachitwithasetofexistingconstructstotest.These
emergedfrommycodingoftheinterviews.Inmyinitialanalysis,Iusedopencoding
thatidentifiedsixspecificattributesthatmadedecisionsdifficult:inter-temporality;
stakeholders;ambiguity;uncertainty;irrevocability;andcentrality.
47
Table8:Intervieweesreflectionsoncharacteristicsofsustainability-relateddecisions
Attribute ExamplequotationInter-temporality ‘Ithinksustainability’sgreatforeconomicsbutit’sovera
muchlongersustainedperiod,andIthinkoneofthedifficultieswas…thesystemwasquarterlyresultsandevenannualresultswhereassustainablebenefitsareoveramuchwiderlengthoftime.’
Stakeholders ‘Itisalsoalwaysasortofnegotiationthingsoyouhavetonegotiatewithseveralcounter-parties,authorities,regulators,owners’‘
Ambiguity ‘Itisabouttakingatop-down…viewononehandandmappingoutthesecomplexitiesandfirstofallmakingittransparentwhatthetrade-offsandoptimisationchoicesare.Andthentryingtosimplyfindthebestpossiblealternative,orvariousalternatives.’
Uncertainty ‘Youcangetitincrediblywrong.Youhavesomebeliefs…butnoneofthesearecalibratedwithanythingsoyou’retakingamassiveguess.’
Irrevocability ‘Thefirstthingthatwereallychangedisthatsustainabilityisdiscussedreallyearlyon.Soit’snot“ohyes,let’sgetthewholethingplannedout,architectsengaged,everythingdesigned”andthenmuch,muchlater,whataboutthatsustainabilitytarget.Sowe’rethererightatthestart,andmoreseniorpeoplearethererightatthestart.’
Centrality ‘It’simportanttodothehygienestuff,but[sustainability’s]gottobepartofthebusiness.’
Thefirsttwoofthesefactorshavetheirrootsinthedefinitionsofsustainability.First,
almostallofthedecisionshadsomeproblemofinter-temporality.Inter-temporalityis
well-describedasaproblemintheliterature(Slawinski&Bansal2015;Bansal&
Desjardine2014).Whilethiswasintrinsicinmanyofthedecisions,itwasfeltmost
acutelyincasesinvolvingcapitalallocation,particularlywhenmakingabusinesscase
forlong-termprojectsthatwereassessedonarelativelyshortpaybackperiod.Second,
severaldecisionswerecharacterisedbyhavingmultiplestakeholders,sometimes
includingalargeordiversegroupofstakeholders,oftenwithdifferingviewsonthe
‘right’answertoaquestion.Thepresenceofmultiplestakeholderstendstocreate
tensionsforanorganisation(Smithetal.2013),andHafferandSearcy(2016)identify
tensionbetweenstakeholdersasoneofthemainareasfortrade-offsincorporate
sustainability.Alargebodyofliteratureisdevotedtoorganisationalresponsesto
stakeholderdemands(Yuanetal.2011),andindeedstakeholdermanagementisoftena
significantresponsibilityforseniorsustainabilityprofessionals(Strand2014).
48
Thesetwofactorshavesecondordereffectsthatcreatedtwofurtherdifficultiesforthe
executives.First,theinter-temporalorinter-stakeholderproblemsmeantthatsome
decisionswereambiguousordifficulttoframe,orhaduncleargoals.Second,inmany
casesthedecisionwasunprecedentedandinformationwasunavailable,sothedecision-
makerswereworkingfromapositionofhighuncertainty.Bothofthesefactorsledtoa
lackofclarityforthedecision-makers,andthisinturncreatedsomestressesinthe
organisation.Asoneintervieweesaid:
“Youcanreallyfeelthatthediscomfortpeoplehavebecausealthoughit’sdatadriven
it’snotthedatapeoplehave…Peoplearetryingtofigureoutwhat’srightandwhat’s
involved.”
Thefinaltwocharacteristicsthatmadethedecisionsdifficultwereintrinsictothe
decisionsthemselves.First,someofthedecisionsdemandedattentionbecausethey
wereirrevocableorhadsystemicsecond-orderconsequencesthatmadethemdifficult
toreverse–effectivelythisincreasedtheircomplexity.Forexample,somedecisions
aboutproductsmaychangeanentiresupplychain,orinvolvetheconfigurationof
capitalassets.Second,manyofthedecisionswerecentraltothebusiness.Ifoundthat
therewasadifferencebetweenthewaycompaniestreated‘hygiene’decisions(suchasa
choicetorecycleofficepaperoruseLEDlighting)versusdecisionsthatrelatedtothe
coreofthebusiness(suchaschoicesabouttheportfolioofassets).Theissuesthatwere
centraltothebusinesstendedtohavemoresignificantsecond-ordereffectsandwere
thereforemorecomplex.
Afteridentifyingthesesixconceptsfromtheinterviewdata,Icreatedasetofindicators
toassesstheextenttowhicheachfactorwaspresentinthedecisions.
ThekeyindicatorsusedtoanalysethesefactorsarelistedinTable9:
49
Table9:Factorsmakingdecisionsmoredifficult
Factor Keyindicators ScaleforassessmentInter-temporality Rangeofdifferenttime-
horizonsimpliedbythedecision
Low(nosignificantinter-temporality)Medium(someinter-temporality,butnotconsideredsignificant)High(significantinter-temporality)
Stakeholders Numberofdifferentstakeholdersinvolved
Manystakeholders–Fewstakeholders
Centrality Degreeofimportanceofthedecisiontothewayinwhichthecompanycreatesvalue.
Core(decisionispartofthevaluecreationsystem)Hygiene(decisionisperipheraltovaluecreationsystem)
Uncertainty Difficultyofpredictingtheoutcomeofthedecision–thismaybebecausetheproblemisnovel,orbecauseoftheabsenceofdata.
High(theproblemisnovelorunquantifiable)Low(thistypeofproblemisfamiliarordataiseasilyavailable)
Ambiguity Levelofclarityintheproblemdefinition.
High(problemisnotclearlydefined)Low(problemisclearlydefined)
Irrevocability Difficultyofreversingthedecision(becauseofsecond-ordereffects)
High(thedecisionhassystemiceffectsthatcannotbereversed)Medium(thedecisionhassecond-ordereffectsthatwouldbeexpensiveordifficulttoreverse)Low(thedecisionisrelativelyeasytoreverse
Onelimitationofthisanalysisisthatthedata-gatheringapproachwasnotdesignedto
collectthisdatainastructuredway–rather,itwascodifiedinretrospect.Thismeans
thatthecalibrationofeachcategoryissomewhatcrude,andthereisclearlyan
opportunitytodeveloptheseconstructsfurther.Nevertheless,theinterviewsdid
includesufficientinformationtobeabletocategoriseeachofthe45decisionsinterms
ofthesecriteria.Thefindingsarethereforesufficientlyrobusttosuggestatheoretical
frameworkforfurthertesting.
Thesefactorsarenotnecessarilyindependent(forexample,ambiguityanduncertainty
arerelated:ifthetermsofreferenceforadecisionareunclear,thenthecertaintyofthe
50
outcomeislikelytobelower).Mostofthesefactorsdirectlyrelatetotheneedforsocial
andenvironmentalsustainability(forexampleirrevocabilityisrelatedtointer-temporal
tensions,ambiguityandcomplexityarerelatedtohavingmultiplestakeholders),andall
ofthedecisionshadsomecombinationofthesecharacteristicsdirectlydrivenbythe
tensionsarisingfromtheneedtoactsustainably.
4.2.2FourarchetypesofdecisionsIassessedeachdecisionusingthecriteriainTable9(above).Over80%ofthe45
decisionshada‘high’(orequivalent)ratinginthreeormoreofthecriteria.Therewere
somerepeatedcombinationsoffactorsmeaningthatalmostallofthedecisionsfellinto
oneoffourbroadcategories–orarchetypes–ofdecisions.Thearchetypeseachhave
particularcharacteristicsrequiringdifferentapproaches,andIgavethemnamesbased
onthese.ThearchetypesareshowninTable10.Thefourdecisionsthatdidnotfall
immediatelyintothesearchetypesweredecisionsaboutimplementingasustainability
plan(forexample:choicesabouttarget-settingforsustainability).
Table10:Fourarchetypesofdecisions
OperationalD
ecisionsEngineeringefficiency
Messysituations
Wickedproblem
s
StakeholdersMaybebroadgroupsof
stakeholders–oftenincludingcustom
ers
Generallyrelativelyfew
stakeholders(occasionallym
ore)
Many,variedstakeholders–som
etimesinconflict
Inter-tem
porality
Inter-temporalityis
relativelylessimportant,
butmaybepresent
Decisionm
ethods(eg.Payback,N
PV)m
aynotbealignedtoinvestm
entlife-cycle
Timehorizonsare
differentfordifferentstakeholders
Severalchallengesofinter-tem
porality(forexample,
differentstakeholdersanddifferentdecision-m
ethods)
Centralitytothebusiness
Thedecisionm
aybecentral,orm
aybeahygieneissue
Thedecisionism
aterialtothebusiness
UncertaintyThedecisionisnotgenerallyuncertain.
Thedecisionisrelativelyuncertainandm
ayneednew
information.
Thereisahighdegreeofuncertainty,andinform
ationmaybeunavailable.
Problem
ambiguity
Theproblem
isfairlywelldefined
Theproblem
isfairlywell
defined,butmaybe
perceiveddifferentlybystakeholders
Problem
definitionisunclearoram
biguous
Decision
Irrevocability
Thedecisionm
aybehardtoreverse
Thedecisionhaseffectsforthebroadersystem
,socannotbereversed
51
52
Thearchetypaldecisionshaddifferentcharacteristics,typicallyoccurringinparticular
partsoftheorganisation,andrequiringdifferentinformational,cognitiveand
organisationalcapabilitiestomakethedecisions.Someofthesecharacteristicswere
describedintheliterature,buthadnotbeenattributedtoaparticulardecisiontype.
OperationalDecisionsThe‘OperationalDecisions’inthesamplewerefrequentdecisionsthatweregenerally
coretothebusiness.Typically,theseweredecisionsmadebygeneralistmanagersas
partoftheirdailywork,withoutreferencetospecialistexpertise.Theyincludedchoices
aboutpackagingmaterials,logistics(forexample,useofair-freight),orissuesarisingin
thesupplychain(forexamplewheretoplaceaparticularorder,orwhethertoservea
particularcustomer).Oftenthesedecisionsweremaderapidly,underpressureand
using‘routine’processesandheuristics:theexecutives’establishedhabitsofmindwere
veryimportantinmakingthesechoices.
Thereweretwomainproblemsthatexecutivesfacedindealingwiththesesituations.
First,inseveralcases,thedecisionsweremadedifficultbecauseofwherethekeyissues
drivingcomplexityweretheirorganisationalissues,suchasconflictingincentiveswithin
theorganisationoraneedtoreorganisedecision-makingprocesses(thisisdiscussedin
Section4.2.3below).Second,insomecases,the‘rulesofthumb’,orheuristicsbeing
usedwerenotbasedontherightinformation.Oneintervieweepointedtosituations
wherepeoplehadfallenbackonhabitswithoutre-analysingthesituationandhad
thereforemademistakes:
“Iturnedto[mycolleague]andIsaid:“You’veneverdoneitthiswaybefore,have
you?”andhesaid“no”…soevenpeoplewhodothisalldaylonghaven’taskedthe
question.Sotheideathatsustainabilityissomesortofknownsecretthateveryone
knowstheanswerto,andonlyneedstobeabletoaffordisnottrue.Peopledon’t
knowwhat’sbest.”
Thesehabitsofmindareshapedtoalargeextentbytheorganisationalcultureand
formalstructures(suchasincentivesanddecision-rights),andaredifficulttochange
(Gioia1992).Thereiscompetitionforexecutives’attention(Ocasio2011),andthisis
shapedanddirectedbytheorganisation(Simon1997;Felinetal.2017).Sections4.4
and4.5discussthefactorsinfluencingthisprocess.
53
EngineeringEfficiencySeveralofthedecisionsaroseinanengineeringcontext–ofteninquestionsaboutlarge
capitalinvestmentsorachoiceoftechnology.Theengineeringefficiencyproblemswere
generallywell-defined,unambiguousproblems,withareasonabledegreeofalignment
amongststakeholders,andwhichwereirrevocableandcentraltothebusiness.
Examplesincludedchoicesofmanufacturingtechnology,orthemanagementoflarge
capitalprogrammes.Manyoftheseexamplesweresituationswheretheissueatstake
wasoneofresourceefficiencyandbusinessesfoundthattheycouldimproveeconomic
andenvironmentaloutcomesbyimprovingenergyormaterialuse.Inmanyofthese
cases,thedecisionwasmadeaspartofarecurringprocess(forexamplecapital
budgeting)usingstandardisedinformationandanalysistomakeabusinesscase
(typicallyusinganetpresentvalueorpaybackperiodcalculation).
Thesedecisionsarecharacterisedbythreeinterconnectedproblems.First,theymay
requirethedecision-makerstoseetheopportunityandusesomecreativityinthe
option-generationstageinordertoidentifyresource-savingsolutions.Oneinterviewee
commented:
“Whatwefoundbeforeisthatanawfullotofstuffjustdidn’tgetthoughtabout
becausethewrongpeopleweremakingthedecisions,wellnotthewrongpeople,but
peoplewhodidn’tknow.”
Second,toidentifyandassessresource-savings,companiesoftenrequirenewformsof
data–forexampleaboutenergyuse–whichmaynotbeavailable.Onemanager
describedtheprocessheledtodevelopaninformationsystemtoimproveanalysisofa
capitalinvestmentprogrammeforaglobalmanufacturingnetwork:
“Weknewthatwehadtodebunkthesecommonmyths,andwehadtodothescience
sowegoteverysinglepieceofdatathatwecouldfromthevolumeofthesitetothe
typeofproducttothetypeofpackaging,totheageofthesite,tothefueltype–
everythingyoucouldget.Andthenwedidther-squaredanalysistoseewhatthe
driversofperformancewere.”
Thiscompanybuiltaveryeffectiveknowledgemanagementsystemtoimprovethe
qualityoftheirengineeringplanningandachieveaggressiveresourceefficiencytargets.
54
Third,theseareoftenlong-termprojectsinwhichtheevaluationprocessprivilegesthe
short-termimpacts(Bansal&Desjardine2014),andsoifaresourceisrelativelylow
cost(forexample,water)ortheimpactisinthelonger-termfuture(forexample
reducedcostsofdecommissioning),itmaybedifficulttomakeabusinesscase.Asone
intervieweesaid:
“Forenergy,itisalwayseasytomakethebusinesscase…butforotherenvironmental
elements,thecaseisnevergoingtoaddup.Weneverhaveabusinesscasefora
waterimprovementproject,butwedoitanywaybecauseit’stherightthingtodo.”
Inothercompanies,theexpenditureprocesswasmorestringent,andopportunitiesto
makeimprovementstoenvironmentalperformancewerepostponedbecausethe
paybacktimewastoolong.Companieswithlargenumbersof‘engineeringefficiency’
decisionstendedtomanagethemusingestablishedprocessesforgatheringand
managinginformation,andevaluatingbusinesscasesconsistently.Thismeansthatto
fullyincorporatesocialandenvironmentalconsiderationsintodecision-making,some
companiesneedtochallengestandardinvestmentevaluationtechniques(suchas
paybackperiodsornetpresentvalue)(Slawinski&Bansal2015).
Messysituations
Thesedecisionswereaboutfairlywelldefinedproblems,butweredifficultbecauseof
themisalignmentofstakeholderneeds,sometimescombinedwithconstraintsonthe
situation(forexample,littletimetomakeadecision,lackofinformationtoassessthe
issuesproperly,difficulttechnicalproblems).Thesedemandscouldbesubstantial:
“Thesearegoodpeopleworkinghard,buttheyareundersomuchpressuretodeliver
againstplandevelopment,planningapplication,pensionfundinvestors,
shareholders,regulationcomplianceandsoon,thattheideathattheycouldstand
aboveallthisandthink‘what’sthereallybigpicturehere?’…it’sbeyondthe
capability…oftheteam.”
Often,theorganisationwasfacinga‘one-off’situation,anddidnothavewell-established
proceduresformakingthedecision.Examplesincludedabanktryingtoevaluatethe
environmentalriskofasubstantialinfrastructureproject;anexecutivedeciding
whethertotakeacustomerorderforapieceofworkwhichmighthaveseriousnegative
socialandenvironmentalconsequences;andthedesignofacomplexinfrastructure
project.Theseweresituationsthatdidnothaveestablishedorganisationalroutines,or
55
establishedinformationsystems,andsothereneededtoberealleadershipinengaging
internalandexternalstakeholders,andestablishingprocessesforescalatinghigh-risk
issues.Asoneintervieweesaid:
“Itisalwaysasortofnegotiation.Youhavetonegotiatewithseveralcounter-parties
–authorities,regulators,owners–onseveralfrontsatthesametime.”
Thus,theexecutivesworkingonthesedecisionstypicallyneededtohavestrong
stakeholderengagementskills,andinparticularneededtobeabletoshapetheway
differentpartiessawthedecision.Thepresenceofmultiplestakeholderscancreate
demandsfornewinformation(Epstein&Widener2011)andaneedforthecreationof
sense-makingnarratives(Angus-Leppan,Benn,etal.2010;Tuckett&Nikolic2017).
Wickedproblems
Allofthefactorsthatmakeitdifficulttoincludesustainabilityconsiderationsin
decision-makingwerepresentinthesedecisions.Theythereforerequiredverycareful
formulation,astheambiguityoftheproblemmeantthatthesolutionspacewas
potentiallylarge.Theseweretypicallystrategicordirection-settingproblems,and
weredemandingforthedecision-makers.Manyofthedecisionsinthiscategorywere
notsimpledilemmaswithtwooutcomestobebalanced,butpresentedmorecomplex
situationswithmultipledimensionstobeoptimised.Oneintervieweedescribedan
iterativeprocessformakingthistypeofdecision:
“Youneedtohaveyourminimumrequirementsclearsothatyouknowwhatisthe
ultimate,whatyoucanlivewithandbeyondwhatpointyoucannotgo,butitstill
leavessomeflexibilityandroomformanoeuvre.Soyoutrytogetthebestpossible
solution.Itisabout…mappingoutthesecomplexitiesandfirstofallmakingit
transparentwhatthetrade-offsandoptimisationchoicesare.Andthentryingto
simplyfindthebestpossiblealternative,orvariousalternatives.”
Examplesofdecisionsinthiscategoryincludeddecisionsaboutmanagingportfoliosof
assets(forexample,howtomanageanenergyproductionportfolio);thedevelopmentof
verysignificantnewinfrastructureprojectsinvolvinglargecommunities;and
fundamentalshiftsofcorporatestrategy.
56
Theseproblemshavethecharacteristicsof‘wickedproblems’(Rittel&Webber1973).
RittelandWeber(1973)intheirdelineationofthecharacteristicsofwickedproblems
pointtofourclustersofcharacteristicsthatthenshapetheapproachestomakingthese
decisions.First,theyarguethatthereisnodefinitiveformulationforawickedproblem,
andthusno‘stoppingrule’.Thismakesmanydata-drivenapproachesdifficult(Zapico
2014),astheytendneedbothapreciseformulationandastoppingpoint.Theanalytical
approachesthathavebeentraditionallysuggestedasdecision-supportmethodsare
insufficienttotacklethewickedproblemsofsustainability(Bakshi2011),andmore
interdisciplinaryapproachesareneeded.Second,theyarguethatsolutionsare
good/bad,ratherthantrue/false,meaningthatwedependonjudgementratherthan
analysistoevaluatesolutions.Thishasledauthorstofocusonleadershipasthekeyto
crackingtheseproblems(Metcalf&Benn2013;Grint2008).Leadershaveaparticular
roleinaskingquestionstoadvancethisproblem-solving(Grint2005;Heifetz&Linsky
2002).Thisquestioningapproachraisestwofurtheractivitiesforleadersaddressing
wickedproblems:processesofiteration(Sheepetal.2017)andengagementwitha
broadersetofstakeholders(Roberts2000)toframeandre-frametheproblem
(Reinecke&Ansari2016).Itisclearthatthesedifferentconfigurationsofproblems
makedifferentdemandsonthedecision-makers.
4.2.3Demandsondecision-makingprocessIncludingsustainabilityconsiderationsinbusinessdecisionsaddscomplexityandgives
decisionsthatmighttypicallybecharacterisedas‘operational’or‘tactical’someofthe
characteristicsofstrategicdecisions.Leibleinetal(2018)arguethatstrategicdecisions
havethreeproperties:interdependenceacrosscontemporaneousdecisions,acrossthe
decisionsofothereconomicactors,andacrosstime.40%(18outof45)ofthedecisions
reportedintheinterviewshadallofthesecharacteristics,andalmostasmanyagain(16
outof45)hadtwooutofthesethreecharacteristics.Furthermoreinter-personaland
intra-organisationalissuesarealsocommoninstrategicdecisions.Different
perspectivesorframesareparticularlyimportantinmanagingstrategicuncertainty
(Kaplan2008).However,despitethiscomplexity,sustainability-relateddecisionsare
notalwayssupportedwiththesameresources–information,timeandseniorattention
–asstrategicdecisions.
57
InChapter2,Idescribedthreebroadstrandsofscholarshipintheliterature:the
analytical,thecognitiveandtheorganisational.Myanalysissuggeststhatthedifferent
decision-typeshaveparticularcharacteristicsthatmadethemmoreamenableto
particularanalytical,cognitiveororganisationalapproaches.Thedecisionsareheldat
differentpointsintheorganisation,rangingfromoperationalmanagers,designated
expertswithdeepexpertise,orthestrategicapex.Theyaremadeindifferenttime
frames,allowingdifferentlevelsofdeliberationoranalysis.Theyrequiredifferent
balancesofjudgementandinformation(Simon1997p.60).Thecharacteristicsofthe
decisionsandtheirdifferentcognitive,organisationalandanalyticaldemandsare
summarisedTable11:
Table11:Differentcharacteristicsanddecision-supportneedsofthefourdecisionarchetypes
Operationaldecisions
EngineeringefficiencyMessysituations
Wickedproblem
sWhythe
decisionisdifficult
Typically,thesedecisionshavem
anystakeholdersandarecentraltothebusiness.Theyareoftenirrevocableorhardtoreverse
Thesedecisionshaveproblem
sofinter-temporality,
arecentraltothebusinessandirrevocable
Thesedecisionshavemany
stakeholdersandsignificantissuesofinter-tem
porality.Theissueism
aterialtothebusinessanddecisionisirrevocable
Thedecisionsarehighlyam
biguouswithm
anystakeholders,problem
sofinter-tem
porality,andsecond-ordersystem
iceffects.
Organisation
-allocus
Throughouttheorganisation
Specialistdivision(usuallytechnical)
Canbeanygroupwith
impactonexternal
constituencies
Typicallyatthestrategicapex,oradesignatedspecialistgroup
Key
challengesGeneralistsneedtobeabletom
akegooddecisionsinshorttim
e-frames
Needtohavesufficientinform
ationtoevaluateoptionsovertim
e
Needtobeabletobalancethedem
andsofstakeholders
Thedecisionhashighlevelsofuncertaintyandcom
plexityInform
ation-alneeds
Needforeasilyaccessible,standardisedinform
ationorheuristics
Relevantsustainabilityandperform
ancemetrics(eg.
Emissions,energyuse).
Analyticalmethodseg.Life
cycleanalysis,AHPmaybe
used
Informationabouttheactual
impactsofthedecisionin
severaldifferentdim
ensions.Understandingofhow
thisimpacts
stakeholders.
Needinformationto
definetheboundaryconditionsoftheproblem
Cognitiveapproach
Organisationalschemasor
scripts‘Businesscase’approach
Needforcarefulframing
andnarrativestoengagedifferentaudiences
Needforiterationsoffram
ingandre-framing
ofparadoxesOrganisation
-alcapabilities
Asupportiveculturewith
appropriatesustainabilitytraining.Cleardecision-rightsandprocessestopre-em
ptpoordecisions
Effectiveprocessmanagem
entandgoodflow
sofinformation
Skilledengagementof
externalgroups,andanabilitytoleadcom
plexdecisionprocesses
Abilitytoengagewith
paradoxicalproblems,
includingusingjudgem
entandcreativity.
58
59
Thetypeofdecisionsthatareproblematicinanygivencompanywilldependonits
particularcircumstances.Forexample,aretailerwithalargenumberofmanagers
workinginthesupplychainmayfindthatitsmostmaterialimpactscomefrom
operationalproblems;amanufacturermaybefocusedonengineeringefficiencytorun
itsassets;anorganisationinvolvedindevelopinginfrastructuremaydealwithmany
messysituations;andapowergeneratorseekingtoexitfossilfuelsmayfacewicked
problems.Thesedifferencessuggestthatthereisnota‘onesizefitsall’approachto
solvingtheproblemsofincludingsustainabilityconsiderationsindecision-making,and
thattheapproachescompaniestakewillneedtobetailoredtotheissuesthataremost
materialintheirbusiness.Simplyadoptingbetterinformationoranalyticmethods–
helpfulthoughtheseare–doesnotaddressthefundamentalcapabilitiesneededto
bringsustainabilityconsiderationsintodecision-making.
Thisgoessomewaytoexplainingthediversityofapproachesintheliterature.Itisclear
fromtheliteraturereviewinChapter2thatthesolutionsproposedtodecision-making
forsustainabilitytendtoconcentrateonanalyticalandinformationalproblems.These
mightbesuitedeitherto‘engineeringefficiency’or‘messysituations’archetypes.The
methodsidentified–rangingfromlife-cycleanalysistovariousformsofmulti-criteria
decisionanalysis–canbeeffectiveformakingthistypeofdecision(thatistosay,one
withafairlyclearlydefinedproblemandonewherethetimetomakethedecisionis
longenoughtobeabletocompletetheanalysis).However,thesedecisionsareonlya
subsetofthecompleterangeofproblemscompaniesface.Whileitwasclearfromthe
interviewsthatinformationandanalysisareimportant,theyareonlypartofabroader
organisationalcapabilitythatincludesformalstructures(suchasperformance
managementordecisionrights),socialstructures(suchascultureandleadership),and
cognitiveabilities.Thisorganisationalcontextwillbedescribedinmoredepthin
Section4.4.
Theintervieweescommentedontheneedtoreviseprocessesmorethoroughlyinorder
toaccommodatesustainability.Oneintervieweewhosecompanywasintheprocessof
changingitssustainabilityapproachcommented:
60
“Whenyoucomeintothedecisionmakingprocess,it’salittlebitvaguenowinterms
ofthatprioritization…that’sprobablywhysustainabilitysometimesgetspushed
out”
Others,howeverdescribedamuchmorefundamentalreviewofthedecision-making
processes,particularlyfordecisionsmaderepeatedly(suchascapitalbudgeting).
Theintervieweesalsoobservedthatsomeone-offdecisions(suchasonescharacterised
as‘messyproblems’)nowrequiredamuchgreaterprocessofconsultation:
“[The]decisionhad,ultimatelytakenbyCEO,hadinputfromtherelevantpeopleand
therestoftheboard,andithadthesustainabilityteamdoingalotofwork,working
outexactlyhowbaditwas,presentingthatinitsfullglory,presentingthat,and
saying‘thisisexactlywhatyou’rebitingoff,andthisisexactlywhatyou’llgetback,
andthesearetheoptionsforthefuturetomakeitbetterorworse.Whatdoyou
wanttodo?’”
Anintervieweeinadifferentorganisationhadasimilarobservation:
“Everyonedoesgetincludedinthedecision-makingprocess,andeveryonehasa
voice.So,againthatcanmakeitquitedifficultbecauseeveryoneisveryconsidered,
andthere’sagreatcultureofinclusion.”
Theintervieweesdidtaketheviewthatprocessmatters.Oneofthem,incomparingtwo
difficultdecisionsthathadeachhadimplicationsforsocialorenvironmental
sustainability,reflected:
“Iwouldsaythefirstonewasactuallywrong,andthesecondonewasright.Iwould
saythatthefirstonewasnotmadeintherightway.Theactualdecisionitself,the
processwaswrong.Theoutcome,Ithinkwasalsowrong….Thesecondone,Ithink
wastherightdecision.AndIthink,whetherwedoitagain,Idon’tknowifeveryone
woulddoitagainbutIwould.Andthatprocesswasdefinitelyright.”
Thesealterationstoprocessalsoincludesomechangestodecision-makingcriteria.
Thesewereparticularlyclearinthedecisionsaboutinvestments,forwhichtherewere
veryspecificfinancialguidelines–usuallypaybackperiodsornetpresentvalue
calculations.Paybackwasusedinmanyofthe‘operational’decisions:
61
“Soaplantsitewouldnormallyonlyfundsomethingwitha[paybackperiod]oftwo
years.Andthat’squitetypical.Insomeplacesit’saslowasayear.”
“Wehavedonealotofthingswhichhavevery[quickpayback]whereitmightbeless
than2years,lessthan1year,lessthan6monthsdependingontheinvestmentthatis
required.But…peoplethinkthatnow,themanagementordirectorsorpeoplewho
makedecisionsonthefinancialside,arenowfindingithardtogiveproper[returns]
fortheinvestmentsthatarerequiredtobemaintainedforustobecomemore
sustainable.Sothatisthemainproblemthatwearefacingatthemoment.”
Thesechangesofcriteriapresentedcompanieswithtwonewproblems:first,aneedfor
newinformation(discussedabove),forexampletopricecarbonorwater;secondthe
questionofwhattodointhecaseofdecisionsthatwereimportantfromasustainability
pointofview(forexampletosavewater),butforwhichtherewasnotaclearbusiness
case.Companiestookdifferentapproachestothis:whileonespecificallymentioneda
designatedcapitalbudgetforthesesituations,anothercommented:
“Therewasnocapexslushfund,andtherewerenospecialarrangementswhereit
doesn’tbreakevenbutbecauseit’saSustainableDevelopmentprojectitcango.My
previousbosswasaveryhard-nosedguyandthisisnotaltruism.It’swhatthe
businessneeds.”
Othersdescribedsituationswheretheprocessofbuildingabusinesscasehadbeen
expandedtoaccommodatesustainabilitycriteria:
“Soawholepartofitwasthatwehavere-reviewedouracquisitionsprocessandhow
wethinkaboutsustainability.Sopreviouslythoseassetandportfolioandinvestment
teamswouldgooffandbuyanasset…butwe’venowredesignedtheprocessesand
[thesustainabilitymanager]isinvolvedvery,veryearly.”
Thesechangesarenottrivial:theyrequirenewprocessesforinformationmanagement,
consultationandstakeholderengagement.Companiesthatchoosetoactsustainably
needtomakeinter-linkedchangesattheleveloftheindividualdecision,theindividual,
andtheorganisation.
62
Thus,the‘active’decision-supportapproachesthathavebeensuggestedintheliterature
(Arvaietal.2012)addressonlyasubsetoftheproblemsdecision-makersface.Social
andpsychologicalapproaches–suchasculturalnorms,stakeholdermanagementand
cognitiveframing–alsoplayasignificantroleinresolvingthetensionsthesedecisions
create.Thefactorsmakingdecisionsdifficultariseinparticularconfigurationsin
organisations,creatingthefourarchetypesofdecisionsandplacingdifferentpressures
ondecision-makers.So,giventhatdecision-supportsystemsthatexistinorganisations
maynotbewellmatchedtothetypesofdecisionsthatexecutivesface,howdothey
managethisproblem?
4.3Competingcommitmentsandparadoxesinsustainability
Thetensionsrelatedtosustainabilityoccuratthemacroandmicrolevelsofthe
organisation(Haffar&Searcy2015).Thisisparticularlywellillustratedindecision-
making:eachdecisionpresentsspecifictensions,butthesearelocatedinan
organisationalcontextthatmaypresentalargersetofenduringtensions(Smith2014).
Tensionsrelatedtosustainabilityariseatthesystemlevel(Schad&Bansal,2018)when
therearemultiple,conflictingdemandsfromtheexternalenvironment,whetherfrom
customers,shareholders,regulatorsorotherstakeholders(Smith&Lewis2011).
Howevertheybecomesalientforexecutivesatamorespecificlevel(Schad&Bansal,
2018),forexamplewhentheyneedtomakechoicesbetweenconflictingdemands.In
thissection,Iwillexploretherelationshipbetweenthemacro-levelandmicro-level
tensionsinsustainabilitydecisions.Thisreferstotherelationshipbetweentheouter
layerinFigure8(theenvironment,whichincludesbothexternalandinternalelements)
andtheinnermostlayer(thedecisionitself).
AsIestablishedintheintroduction,theproblemsustainabilitycreatesforexecutives
makingdecisionsisthattheyareconstantlytryingtoreconcilecompetingobjectives.
Sixdifferentapproachestoresolvingthesetensionsinbusinessdecisionsaredescribed
intheliterature.Thevastbulkofresearchtodatehasfocusedonmakingabusiness
caseforsustainability(Margolis&Walsh2003;Gao&Bansal2013;VanDerByl&
Slawinski2015).Thesebusinesscasesareframedintwodifferentways:win/win
businesscasesandtrade-offs.Inthewin/winbusinesscases,decisionshavebeenmade
thatarepositivebothforthebusinessandforsocietyandtheenvironment–for
63
example,adoptingsolutionswhichmakemoreefficientuseofresources(andthusboth
savingmoneyandreducingmaterialimpacts).Inthetrade-offcases,decision-makers
havehadtochoosebetweentheeconomic,environmentalandsocialoutcomesofa
decision–ithasnotbeenpossibletofindanswerswhichallowallthreetobeoptimised.
Thesetwoapproachesshareanimportantcommonfeature,whichisthattheyareboth
instrumental–thatistosaytheyprioritiseeconomicoutcomesabovetheeconomicor
socialoutcomesofthedecision.
Thisinstrumentalapproach,however,neglectsthesystemicaspectsofsustainability
andmaycreatemoraldilemmasformanagers(Margolis&Walsh2003).Byprivileging
economicoutcomesoverenvironmentalandsocialoutcomes,managerswilltendto
focusontheshortterm(Gao&Bansal2013)andmaylosetheopportunitytocreate
valuethatissharedbetweenstakeholders(Porter&Kramer2011).GaoandBansal
(2013)thereforeproposeanalternative,integrativelogicfordecision-making,and
describefourdistinctcharacteristicsofthisapproach:first,decision-makerslook
simultaneouslyattheenvironmental,socialandeconomicaspects;second,they
accommodatemultipletime-frames,notsimplytheeconomictime-frame;third,their
spatialapproachencompassesmultiplestakeholders,ratherthanprivileging
shareholders;andfinally,integrativelogicsareinformedbyanethicsofcare,rather
thananethicsoffairness(Gao&Bansal2013).Thus,therearetwoinstrumental
approaches(trade-offsandwin-winbusinesscases),andoneintegrativeapproachto
decision-making.
Thisintegrativelogicisnottheonlyalternativethathasbeenproposedtothebusiness
caseapproach.Scholarshavealsodevelopedabodyofworkexploringtheproblemof
managingmultipleoutcomes–social,environmentalandeconomic–fromaparadox
theoryperspective.Thistheoryhasalreadybeenproposedinthecontextof
sustainability(Hahnetal.2015;VanDerByl&Slawinski2015),andhasfeatureswhich
makesitparticularlyrelevantfordecision-makinginthiscontext.Decision-makingis
oftendrivenbyconditionsofplurality,changeandscarcity–allpre-conditionsfor
organisationalparadox(Smith&Lewis2011).Paradoxtheoryhasalsobeenusefulin
examininginterrelatedproblems–producingconceptssuchasnestedparadoxes
(Andriopoulos&Lewis2009)andknotsoftension(Sheepetal.2017).
64
Paradoxtheorypresentsthreewaystomanagetension(Hahnetal.,2015;Poole&Van
deVen,1989):opposition,inwhichthetwocompetingdemandsarepolarised;
separation,inwhichtheyareseparatedeitherintimeorspace;andsynthesis,inwhicha
solutionisfoundtoresolvethecompetingdemandsbymanagingthemcreatively–for
examplebyre-framingtheproblem.Thisaddsthreenewstrategiestothetwo
instrumentalandoneintegrativeapproaches.Thus,theliteraturesuggeststhatthere
aresixarchetypalapproachestoresolvingthetensionsinherentinthesedecisions.
TheseareshowninTable12:
Table12:Sixtheoreticalapproachestomanagingtension
Approach Typeoflogic HowtensionismanagedOpposition Paradox Tensionmanagedbyaccentuatingthe
difference(e.g.,‘Businessversussociety’)Separation Paradox Tensionmanagedbyseparatingthrough
time/space/structure(e.g.,Twopoliciesoperatingindifferentlocations)
Trade-off Instrumentalism Tensionavoidedasonesustainabilityelementischosenoveranother(e.g.,Choosingtohaveaworseenvironmentalorsocialoutcomeinordertohaveabettereconomicoutcome)
Win-winbusinesscase
Instrumentalism Tensionavoidedthroughalignment/optimisationofsustainabilityelements(e.g.,Findingasustainablesolutionthatisalsolowercostforthebusinessorhighervalueforcustomers).
Integration Integration Tensionmanagedbyshiftingfocusfromeconomictosocialand/orenvironmental.(e.g.,Settingadesignprincipletoaddressallthreeissuesinparallel).
Synthesis Paradox Tensionmanagedbyaddressingabroaderissuethatconnectsthetwoelementsattension(e.g.,Reframingthequestion).
Clearly,someoftheseapproachesaremorelikelytoproducefavourablesocialand
environmentaloutcomes.Win-winbusinesscases,integrationandparadoxallpresent
thepossibilityofimprovingsustainability,whiletrade-offs,separationandopposition
implycompromiseatbest.Itwouldthereforebeusefultoknowmoreabouthow
executivesusethesedifferentapproaches,andunderwhatconditions.
65
4.3.1Analyticalapproach
Tounderstandthetypesoflogicdecision-makersuse,andthesituationsinwhichthey
usethis,Itookthreesteps.First,Ireviewedeachofthe45decisions,andidentified
fromtheinterviewsthetypeoflogicusedtomakethedecision:Ifoundthattherewere
linguisticmarkersassociatedwitheachtypeoflogic(forexample,peopledoactually
describe‘winwins’as‘winwins’,buttalkaboutintegrativedecisionsas‘values-based
judgements’).TheselinguisticmarkersareshowninTable13:
Table13:Howpeopletalkabouttheirlogicalapproach
Logicalapproach
Examplephrase
Opposition Notused:seeSection4.3.2belowSeparation ‘Weknowthatthereisnowayyet–andthat’stheoperativeword–
thereisnowayyettomakethisasustainableproduct.Thereissuchathingonthedrawingboard’
Trade-off ‘Sooneobjectiveisobviouslysustainabilityintermsofclimatechange,positiveorneutralinvestmentsandenergyproduction.Butthenoneotherissecurityofsupply.Andthesetwoarenotnecessarilygoinginthesamedirectionbecauseifyouhavewindandsolaryoudon’tnecessarilyhavesecurityofsupply.’
Win-winbusinesscase
‘Wetaskedthemtosay‘isthisachievable,howmuchisitgoingtocostthis,andhowarewegoingtodoit?’Andtheanswerswere:yes,itisachievable;it’snotgoingtocostyou,infactitwillsaveyou£400m;andyoualreadyknowhow’.
Integration ‘Soessentiallyrunningitisquitecostnegativereally.It’squiteahugestep.So,admirably,thecompanyaredoingtherightthing.’
Synthesis ‘It’sariskmanagementissueinthebigpicture.Butit’salsoastrategicissue.’
Iengagedagroupofcolleaguestotestthevalidityofthisanalysisbyreadingextractsof
theinterviewsdescribingthedecisions(notthelongerreflectivesections)andassigning
themtodifferentapproaches.Sixcolleaguesparticipatedinthisprocessandtheywere
unanimousintheirallocationofdecisionstologics.Thisthereforemeetsthegoalof
researcherneutrality(Mantere&Ketokivi2013;Eisenhardt&Graebner1989).
Second,Isetouttounderstandthefactorsthatinfluencedthechoiceofapproach.Todo
this,Ilookedatresponsesoftheindividualdecisionmakerstoseeiftherewere
particularpatternsofbehaviour(forexamplerelatedtoprofessionalbackground),and
thenlookedatthecharacteristicsofthedecisionathandandthebroaderorganisational
contextthattheydescribedintheirinterviews.
66
Thisanalysisgivesfourmainfindings,whichwillbereportedasfollows:first,theway
inwhichthesixapproacheswereusedoverall;second,thewayindividualdecision-
makersusedthem;third,thewaydifferentlogicalapproachesmightbeusedforthe
differenttypesofdecisionsdescribedinsection4.2;andfourth,theorganisational
contextfortheseapproaches.
4.3.2Howdoexecutivesmanagecompetingdemands?
AllthedecisionsIanalysedcouldbedescribedintermsofthesesixapproaches,andI
didnotinthecourseofanalysisuncoveraseventhapproach.Thedistributionofthe
approachesisshowninFigure9:
Figure9:Howfrequentlyaredifferentapproachesusedtomanagecompetingdemands?
Thereisclearlymoreuseofthetwo‘business-case’approachesthantheintegrativeor
paradoxicalapproachesinthissample.Onlyoneoftheapproaches–opposition–was
notusedinthedecisionsanalysed.Thisisinterestingbecausealthoughoppositionis
undoubtedlypartofthediscourseaboutsustainability(Margolis&Walsh2003),and
therehasbeenhistoricaloppositiontothenotionofcorporatesocialresponsibility,this
N=45
2
6
21
12
4
0
0 5 10 15 20 25
Synthesis
Integra6on
Win/Win
Trade-off
Separa6on
Opposi6on
67
simplydidnotariseintheinterviews.Peopledidnotidentify‘ideological’oppositionto
sustainability:failuretoadequatelyconsidersocialorenvironmentalissueswas
attributedinsteadtoignoranceortoprocessfailures.Thismaybeanoutcomeofthe
interviewprotocol(whichencouragedpeopletoconsiderdecisionsinvolving
sustainability),andsoIhaveretainedthislogicinthemodelasitmaybeusedinsome
circumstancesorinsomecompaniesthatfelloutsidethesamplingframe.
Itispossiblethatthe‘win-win’businesscasesareover-representedinthedata,first
becausetheyarememorable;andsecondbecauseitispossiblethatsomemore
integrativedecisionsaredescribedas‘win-wins’.GaoandBansal(2013)giveaspecific
listofcriteriafor‘integrative’decisions,anditispossiblethatsomeofthedecisions
describedas‘win-wins’wereactuallymadeonthisbasis,butwerethenjustifiedby
givingabusinesscase.Forexample,someofthe‘win-win’decisionsdescribe
thoughtfulassessmentofstakeholderpositions(forexample,engineersinstallingnew
infrastructureincommunitiesregularlyengagethestakeholdersandareoftendealing
withmultipletime-framesastheyconsiderthewholelifeoftheinstalledproject),and
maymeetthecriteriaforanintegrativedecision.However,peoplefinditeasierto
justifytheirdecisionsinwin/winterms:oneexecutivereportedtakinga‘win/win’
approachbecause“Iwantedtosticktomymandate”,andheclearlyfeltthathisauthority
didnotextendtovalues-basedjudgements.Thisledmetolookatthewayindividual
decision-makersusetheseapproaches.
4.3.3Howdoindividualdecision-makersusetheseapproaches?As12outofthe17intervieweesdescribedmorethanonedecision(theremainder
typicallydescribedasingleprobleminmoredepthandwithagreaterlevelofreflection
onthecontext),Iwasabletomakesomepreliminaryobservationaboutthewaythey
usetheseapproachesasarepertoire.Themajorityoftheintervieweesdescribedusing
atleasttwoofthedifferentapproaches,suggestingthatpeoplecanbeflexibleintheir
problem-solving.However,formanyinterviewees,theirrepertoiretendedtofocus
eitherontrade-offs(forexampletrade-offsplusseparations)oronwin-wins(for
exampleusingwin-winsandintegrativesolutions).Onlytwopeopledescribedusinga
repertoirethatincludedbothtrade-offsandwin-winbusinesscases,integrationor
synthesissolutions.
68
Whilethereisabodyofliteraturefocusingonindividuals’abilitytotakecreative,
paradoxicalapproachestodecision-making(Miron-Spektoretal.2017),empiricalwork
inthisareahastendedtofocusonpeoplemakingthesametypesofdecisions.While
onepossibleinterpretationofmydataisthatpeopleeitherhelda‘businesscase’frame
ora‘paradoxframe’(Hahnetal.2014),thedataisnotsufficientlyrobusttobeableto
clearlysupportthis.Therearethreereasonstobecautiousaboutindividualcognitive
framinginthisparticulardata.First,theintervieweeschosethedecisionsthemselves,
andatleastoneofthepeopledescribinga‘trade-off’viewandoneofthetwostrategists
whodescribedabroaderrepertoirespecificallyfocusedonsituationsthattheyhad
foundfrustratingbecauseofthecompromisesinvolved,andsounder-reportedthewin-
winbusinesscasesthattheyworkedon.Second,peopleindifferentrolesfacedifferent
typesofdecision–itispossiblethatsomeofthesechoicesweresimplynotamenableto
alternativeviews.Finally,allofthesepeoplewereworkingindifferentorganisations,
andthereforefaceddifferentinfluences–forexample,engineersinsomeorganisations
hadadifferentcognitiveframefromengineersinothersettings.Ithereforelookedat
thetypesofdecisionsinwhicheachapproachwasusedtoseeifthisprovidedastronger
explanationforthechoiceofapproach.
4.3.4Howdothecharacteristicsofthedecisionsinformchoiceofapproach?Theapproachesintherepertoireareusedunderdifferentcircumstances.Thismeans
thattheymaynotallbeavailableforeverydecision:insomecasesitmaysimplybe
impossibletofindawin-winbusinesscase,forexample.Thetypicalusesofeach
strategyaresummarisedbelow,inTable14.
69
Table14:Characteristicsofdecisionsassociatedwithdifferentresolutionapproaches
Approach UsecaseSeparation Temporalseparationisusedasaninterimstrategy,usually
onthepathtoawin-winbusinesscase.Thismaybe,forexample,toallowtimefordevelopmentofatechnology.
Trade-off Trade-offsweretypicallyusedundertwoconditions.Firstinsituationsofscarcity,oftendescribedbyintervieweesaseitheraproblemofaparticularsituation,oranon-goingprobleminalow-marginindustry(forexample,construction).Second,theyoccurredwhenthequestionwasverynarrowlyfocused(wecanonlydoxory)andsooptionswerelimited.
Win-winbusinesscase
Win-winbusinesscasesareusedintwocases:1)whenthereisacasemadeonthebasisofmaterialefficiencyand2)whenthereisaconstructiveprocessofstakeholderengagementtoarriveatabusinesscase.
Integration Complexdecisions,oftenmadebyseniorleadersunderconditionsofuncertainty(forexample:informationnotavailable),anddeterminedonthebasisofvalues.
Synthesis Thetwocasesinthisdatawerecomplexdecisionsthattheexecutivesdescribedasexceptionalcaseswithoutastandardresolutionprocess,andwherethereissufficienttimeandseniorattentiontoworkonalternativeframings.
Separationstrategieswereusedasinterimmeasures–asoneintervieweesaid:
“Wealsoknowthatthereisnowayyet–andthat’stheoperativeword–thereisno
wayyettomakethisasustainableproduct.Thereissuchathingonthedrawing
boardwhichisbecomingcloserandcloserandwhichwehopetolaunchnextyear”.
Whilemanyoftheorganisationswereinternational,andcouldthereforeadopt
separationstrategiesbasedonspatialseparations,allofthesedecisionsweredescribed
asinter-temporalseparationsorstepsonapathwaytoabetterresolutionofthe
problem.Inallthesecases,theseparationapproachwasasteptowardsawin-win
businesscasesolution.Thus,wecanseethatpeoplemaychangetheirapproachtoa
decisionovertime.
Trade-offswereusedextensively,butwereparticularlyassociatedwithconditionsof
scarcity:
“Constructionisdrivenbycontractorsthatmakegenerallylessthan2%profit,soifit
doesn’tsavemoney,orshortentheprogramme,orreducehealthandsafetyrisk,they
just,itdoesn’tmatterwhetherthey’reinterestedornotinterested,theycan’t
influencethesustainabilitydecision.”
70
Therewerealsosomedecisionswhichweresimplynotpossibletoframeinotherterms
astheyeventuallyinvolvedirreconcilabletensions–ortensionswhichwerenot
reconcilablebythedecision-maker.Thesewereoftendescribedasstructuralproblems:
“Thecapexteamisresponsibleforgettingthemoney,you’vegotanotherpartofthe
organisationresponsibleforspendingthemoney…theprocurementteam.Andthen
you’vegotanotherpartoftheorganisationactuallyrunningthemachine.”
Thedifferencesinprioritiesinthesethreeteamsmeantthatthedecision-makeroften
foundthatitwasimpossibletoresolvethetensionsindevelopinganeconomicallyand
environmentallysustainableassetwithoutmakingatrade-off,andsothiswas
recognisedasaparadox.Thedifferentlogicsofdifferentprofessionalgroupscouldnot
bereconciled(Besharov&Smith2014).
Bycontrast,theother‘instrumental’logicwasseenverypositively.Win-winbusiness
caseswereconsistentlydescribedasgoodoutcomes,asbydefinitiontheymeetthe
needsofmanypartiestothedecision.Asoneintervieweesaid:
‘“Whywouldn’tyou?You’dbenaughtynotto’wasthesentimentinourmind.So
therewasthisdoublewin,doubleno-brainerwastheideafromourperspective”
Thedecisionsmadeusingwin-winlogicfellintotwodistinctcategories.First,there
wereaseriesofdecisionswherethebusinesscasewaspredicatedonresource
efficiency:usinglessenergy(orpackaging,orothermaterials)notonlyreduced
emissionsbutreducedcosts.Asoneintervieweesaid:
“There’ssomuchthatdoesn’tcostmoneythatI’mhappyframingeverythinginthat
win/winscenarioanddevelopmentisreallyontheembodiedcarbonandwhilewe’re
strippingthatoutandwe’realsostrippingcostout,thenthat’sfine.”
Otherwin-winsweresignificantlymorecomplex,andinvolvednegotiationswitha
varietyofstakeholders,forexampleinthemanagementofsocialandenvironmental
issuesinthedevelopmentoflargeinfrastructureprojects.Itispossiblethatwin-wins
areover-representedinthisdata,firstbecausetheyarememorable–nevertheless,they
areclearlyasignificantpartoftherepertoireofdecision-makingapproaches;and
secondbecauseitispossiblethatsomemoreintegrativedecisionsaredescribedas‘win-
wins’.
Despitethepossibleover-statementofwin-wins(describedabove),thereweresome
decisionsthatwereclearlyintegrative,andwerequalitativejudgementsbasedon
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values,andhadinvolvedextensivestakeholderengagement.Thesewereusedonlyin
caseswhereseniormanagersmadethedecisionsbecausetheytendedtohavehigh
ambiguityanduncertainty,andethicalissueswereinvolved.Thejustificationforthese
decisionswasoftenvaluesbased:
“Ourboard…wassplitonthis.Wehadacouple…whosaid‘look,Idon’twantmy
businessinconveniencedonthis’...Andtherewereoneortwootherswhoseemedto
haveasenseofresponsibilityandsawitasaresponsibilityissue.Andthenwehad
thechairwhosaid‘Lookifithelpsmemanage[thebusiness]asaresponsible
memberofsocietythenI’lldoit.’”
Becauseofthenatureofthesedecisions,theyweretypicallymadebyseniorexecutives
workingwithahigherlevelofmanagerialdiscretionandtheauthoritytomakethese
morevalues-baseddecisions.
‘Synthesis’strategieswereonlyusedbyexecutivesincomplex,policy-settingsituations.
Thetwointervieweeswhohadusedtheseapproachesdescribedthedecisionsinterms
ofnewinsightsthathadallowedthemtoreframethedecision–forexamplebringinga
risk-managementapproachtoadecisionthathadpreviouslyonlybeenseenasa
sustainabilityproblem,andsochangingthenatureofthedebate.Becausetheywere
unusual,Iinvitedagroupofseniorexecutivestocommentonthem,andtheyobserved
thatthesedecisionsarecognitivelydemandingastheyinvolvecreatingnewwaysof
seeingaproblem,andsoarenotwidelyused,orroutinizedinstandarddecision-making
processes.ThisdiscussionisdescribedmorefullyinChapter6.Bothofthetwo
decisionswhichwereresolvedusingsynthesis(afundamentalreframingoftheissues)
weredecisionsdirectlyrelatedtothecentralparadoxofthebusiness,inbothcases
reframingtheirapproachtotheenvironmentasanissueofrisk-managementrather
thansustainability.Thesewerebothdecisionsthatwereextremelycomplex,and
requiredsignificanteffortsandbespokeprocessestoresolve.Thisdatasetisofcourse
relativelysmall,butitsuggeststhattheintegrationandsynthesisapproachesare
cognitivelyandprocedurallydemanding,andsoareusedlessthanotherapproaches.
Thissuggeststhattheuseofthedifferentapproachesiscontextual,andthatthereisa
mixtureofdeterminantsoftheapproachused,includingthecomplexityofthedecision,
theprocesstobeused,theseniorityordiscretionofthepermissionholder,andthenthe
opportunityforsavings.Thisledmetolookatthebroadercontextsurroundingthe
decision.
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4.3.5TensionbetweentheexternalandinternalcontextSofar,Ihaveestablishedthatexecutivesusethedifferentdecision-makingapproaches
asarepertoire,butthatmostpeopleuseonlypartoftherepertoire,withtheirdecisions
clusteringeitheraroundatrade-offframe,orawin-winbusinesscaseframing.While
thisisinfluencedtoacertainextentbythecharacteristicsofthedecisionstheyare
making,theapproachesarealsonestedinthebroaderlogicoftheorganisation.Ineach
business,therewasalong-termtensionbetweendifferentsocial,environmentaland
commercialforcesthatcreatedalong-termandfundamentalparadox.Thiswasmore
nuancedthanthecentraltensionbetweenpursuitofcompanyvalueversuspursuitof
sharedvalue(Haffar&Searcy2015),butdidrelatedirectlytothewaythecompany
chosetorespondtoitsexternalenvironment.
Thecentralsustainability-relatedparadoxarisesineachcompanywhentensionsexist
eitheratthefieldlevelintheexternalenvironment(forexamplebetweeninstitutions
andNGOs),orbetweentheexternalenvironmentandtheorganisationallogicthatis
usedtomakesenseofit.Scholarsrecognisethatthebroadenvironmentalcontextis
importantinshapingdecision-making(Deanetal.1991;Shepherd&Rudd2014),but
thereisnotabroadconsensusfordescribingtheseenvironmentalfactors(Shepherd&
Rudd2014).Schneideretal(2017)observethattherequirementsofsustainability
increasethecomplexityoftheexternalenvironment(forexample,bycreatingpressure
toconsiderabroadergroupofstakeholders),butthereisnotasinglesourcethat
describesthesefeaturesoftheenvironment.Differentauthorshaveemphasised
differentfacets.Becauseofthis,Ireviewedtheenvironmentintermsoftwodistinct
contexts:theexternalcontext(whichmaybecreatingnewsocialorenvironmental
demands)andtheinternalcontext,orsetofwaysinwhichthecompanymayrespondto
these.
Themainelementsoftheexternalcontextfallintotwogroups:theparticular
constellationofstakeholdersaroundthebusiness;andtheindustrycharacteristics(for
example,munificenceandcompetitiveintensity).Theintervieweesexperiencedthe
diversityofstakeholdersasanimportantdriverofcomplexity.Complexityisafactor
whichappearsseveraltimesintheliteratureaboutthedecision-makingcontext
(Shepherd&Rudd2014;Hahnetal.2016;Aragón-Correa&Sharma2003;Chenetal.
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2017).Whilethedifferentauthorsproposeslightlydifferentdefinitionsofcomplexity
(sometodescribeheterogeneityofcompetitorseg.Chenetal,otherstodescribea
proliferationofdifferentactorseg.AragonCorreaandSharma),thereisastrongsense
thatcompaniesthatarehavingtomonitormanydifferentorganisationshavetobringin
moreinformationtotheirdecision-making.Theintervieweesparticularlyexperienced
thisashavingabroadrangeofstakeholders,includingregulators,customers,suppliers,
NGOs,civilsocietyandshareholders.Asoneintervieweesaid:
“Therewasalotofworklastyeartoengagewithpeopleatalllevels,actually,within
thecompanybutalsoexternallywespentalotoftimetalkingtooursuppliers,our
customers,ourinvestorsandreallytriedtolookatwhatallourpeergroupwere
doing,whatlegislationwastellingus,andreallytryingtoidentifywhatwereour
mostmaterialissuesandwhatwewanttomajoron.”
Whilethiscompanyhadmanagedtoidentifyacoresetofissuestoworkon,manyofthe
intervieweesexperiencedtensionorcomplexityasaresultofworkingwithmultiple
stakeholders.Thistookthreemainforms:tensionbetweensustainabilityandfinancial
outcomes;tensionbetweendifferentexternalinstitutions;andinternaltensionarising
fromdifferencesintheprioritiesaccordedtodifferentstakeholdergroups.
Themaintensionthattheintervieweesdescribedwasbetweenstakeholderneedsand
profits:essentiallyaproblemofvalue-sharing(Porter&Kramer2011).Forexample,
oneintervieweedescribedthecompany’sdealingswithNGOs:
“IthinkthatthatrelationshipbetweenbusinessandNGOshasreallychangedsince
2003/2004,anditsnowmuchmorecollaborative,whichis‘yes,weactually
understandtheenvironmentalorsocialissue.That’snottheissue.Theissueiscan
wefindsmartwaysaroundit.’Sothereisalwaysatensionwithprofitability,butwe
said,lookwhywouldyoucreatepotentialriskforprofit’ssake?”
However,someintervieweesdescribedabusinesscasethatwouldmeetinvestoror
customerneedsbyimprovingresourceefficiency:
“[AftertheVWcarbonincident]wegotafewletterstoourChiefExecutivesaying‘we
willnotinvestinyouunlessyoudocarbonreportingandmanageyourcarbon’.
Whichwasgreatforus.Imeanweareverymuchoftheopinionthatifyoudrive
downcarbonyoudrivedowncost:theyareabsolutelylinked.”
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Anotherpointedoutthatcustomerswereextremelyimportantinbuildinginternal
commitmenttosustainabilityasitsuggestedthepossibilityofgrowingthebusiness
sustainably:
“Iwouldn’tsayeverybody’sinterested,buttherearemoreandmorecustomerswho
arereally,reallyinterestedinit.….That’smusictomyears.”
Thesecondtensionthatintervieweesreportedwasthecomplexityofdealingwith
institutionsatmultiplelevels.Thisparticularlyeffectedcompaniesworkingin
regulatedindustries.
“ThecomplexityisthatinEuropethesethingsshouldbecuttingacrossEuropewith
thesameregulationandtargets.However,everycountrymakestheirownenergy
strategiesandplansandroadmapsandsoonanditbecomesablurrymessvery
easily.AndtheEUthingislikeaveryvisionary,highlevelthingbutthedirtydetails
aredifferentineverycountryandeverylocationandeveryoneinterpretsitin
differentways.”
Tensioncouldalsoarisewhendifferentpartsofanorganisationemphasiseddifferent
stakeholdersindevelopingtheirsustainabilitypriorities:
“Therehasbeensomefrictionbetweenthefacilitiesandthecorporatelevelbecause
whatthefactoriesneedistohelpthecommunitythattheylivein.Butthecorporate
needissomethingtomarket.”
Theresponsetothesetensionswasinfluencedbytheresources–whetherofmoneyor
attention–availabletothedecision-makers.Thisisshapedbythestructureofthe
industry.Competitivethreats(Deanetal.1991)andcompetitiveintensity(Ford&
Richardson1994)(Ford&Richardson1994)areinfluencesinstrategicandethical
decision-making.Competitioncanplayadualroleinsustainability,eitherasaspurto
actmoresustainably(Bansal&Roth2000),orbyreducingresourcesordirecting
attentionawayfromsocialandenvironmentalneeds.Severalintervieweesdescribed
theirsustainabilitystrategyasaformofcompetitivedifferentiation:
“Ithinkthey’ddonesomemarketresearchandsawtherewasanichethere.Sothere
werelotsofpeopledoingcommercialdevelopment,butnoonereallyhadcornered
theextreme,greensustainableangle.”
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“OurCEOhadalreadydecidedthathewanted[company]tobethe…sectorleaderon
sustainabilityandthere’dbeenquiteabitofdiscussionatexecutivecommitteelevel
aboutwhytheywantedtotakethatleadershipposition”
“Theyreallywantedtoputthemselves,fromabrandperspective,asasustainable
company,anenvironmentalcompany.”
Oneeffectofcompetitiveintensity,particularlyinmorecommoditisedindustries,is
downwardpressureonmargins.Munificenceisanenvironmentalfactorthatis
describedbyseveralauthorsparticularlyasadriverofsustainabilityinitiatives
(Aragón-Correa&Sharma2003;Chenetal.2017;Hahnetal.2016).Intheinterviews,
thecompaniesoperatinginindustrieswithstructurallyhighermarginstendedtofeel
thattheywerelessconstrainedintheirdecision-making.Thecompaniesinlowmargin
sectors(examplesincludedapparelmanufactureandconstruction)tendedtomake
moretrade-offsintheirdecisions.Thissectoralcharacteristicalsohasatime
dimension:companieswithlowmarginstendtoneedtofocusontheshorttermfor
survival,andsofindthatthereisrealtensionintakinglong-termdecisionsfor
sustainability(Bansal&Desjardine2014).Oneintervieweeinalow-marginsector
describedacompanychangingitsinvestmentcriteriaduringhardtimestofocusonlyon
projectswithaveryshortpaybackperiod.
Thedemandsofthisexternalenvironmentcancreateaparadox–‘apersistent
contradictionbetweenindependentelements’(Schadetal.2016)–forthecompany.
Thisarisesfromatensionbetweensomeaspectoftheexternalenvironmentanda
fundamentalaspectofthecompanyitself,typicallyrelatedtothewayinwhichitis
configuredtoaddresstheneedsoftheexternalenvironment.Thisinternalcontextisat
amoreabstractlevelthanthecompany’sorganisationoroperations–rather,it
comprisesthesetoffundamentalbeliefsaboutwhatthecompanydoes,andhowitdoes
it.Workingfromtheliterature,Ifoundtwomainaspectsofthisinternalcontext,which
alsoappearedintheinterviews:thetheoryofthefirm,anditsvision,missionand
purpose.
Eachoftheseaddresses–indifferentways–thefundamentalquestionofwhatthefirm
isfor.Theoriesofthefirmexistineconomicstoaddressthequestionofthe
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fundamentaldesignofthefirm(forexample,whydoesitexist?whereshouldits
boundariesbe?Whatisitsfunction?)(Seth&Thomas1994).Thesequestionshave
importantimplicationsforthewayinwhichacompanythinksaboutsustainability
(Lozanoetal.2015),forexampleacompanyseekingtomaximiseshareholderreturns
willtendtoemphasisetheneedsofshareholdersaboveotherstakeholders.Although
theintervieweesdidnotusetheterm‘theoryofthefirm’,theunderlyingbeliefsabout
thefunctionofthefirm,theimportanceofitsownershipandgovernancestructuredid
emergeininterviewsanditwasclearthattherewerefundamentalbeliefsinthe
organisationaboutthefunctionofthefirm.Thesewereoftenexpressedthrough
corporatevisions(Ardichvilietal.2009),missionsorstatementsofpurpose(Hyman&
Curran2000).Forexample:
“Iheardourchiefexecutivesaying,isthatacompanythatjustmakesmoneyisnot
muchofacompany.You’vegottoaddvalue.You’vegottohaveapurpose,Imean
whyareyoudoingit?”
Nothavingavisionwasalsoabarriertocleardecision-making:asoneintervieweesaid:
“Weendupintheplaceofnotdoinganythingbecausewecan’tmakethatfuture
decisionbecausewehaven’tgotthevision.”
Theinteractionbetweentheseexternalforces–theneedsofsocietyandthe
environment(oftenexpressedthroughthevoicesofregulators,NGOsandcivilsociety),
andtheinternalforces–thechoicesthecompanyhasmadeabouthowtoservethe
market,withwhatproductsandservices,andhowtheychoosetointeractwith
customersandsuppliers–isacomplexone,anditisatthecorebothofthecreationof
paradoxanditsresolution.
Someofthecompanieshaddirectlyaddressedthisparadoxbycreatingandarticulating
awayofthinkingaboutsustainabilityintheirbusiness.Forexample,abankthatwas
facingdifficultiesinmakingdecisionsaboutfinancingprojectswithsignificantsocialor
environmentalimpactsreframedthedecisionasaquestionaboutrisk(ratherthan
sustainability),whichcreatedalanguageandframeworkforthinking.Bycontrast,one
ofthecompaniesthathadnotframeditsapproachtosustainabilitywasamanufacturer.
Althoughtheyhadadoptedarangeofenvironmentallyresponsiblepracticesin
77
manufacturing,theyhadnotmanagedtoreducethelife-cycleimpactoftheproductand
sotheirgrowthstrategywasincreasingoverallemissions.Thiscreatedsometension
forthesustainabilityteam.Allofthecompanieshadsometensionattheheartofthe
business,andsoallthedecisionswerenestedinsignificantandenduringparadoxes.
Themanagementofthiscentralparadoxissignificantinshapingthewayinwhich
executivesresolvedthetensionscausedbyincludingsocialandenvironmental
considerationsintheirdecision-making.Ofthe20companiesdiscussedinthe
interviews,eighthadclearlytakenstepstoframethesustainabilityparadoxattheheart
ofthebusiness,forexamplebydescribingsocialandenvironmentalsustainabilityasa
matterofbusinessriskoropportunityandsocreatinganeworganisationallogic.
Theseframingswereallbasedonwin-winbusinesscases:theygavereasonswhyacting
inasociallyandenvironmentallyresponsiblewaywouldbegoodfortheirbusiness.
Theseframingsweretailoredtothespecificissuesfacedbythecompanyandaddressed
arangeofconceptsincluding:riskmanagement:marketaccess(includingmarketsfor
talent);costefficiency;andvalues.Theframingneedstobesufficientlyflexibletobe
relevanttodifferentgroupsacrossthebusinessandtoexternalstakeholders
Intheothertwelvecompanies,thetensioncreatedbytheparadoxhadnotbeen
explicitlyaddressed.AsSchadandBansal(2018)observe,paradoxescreatedby
sustainabilitymaybelatentwithinasystem:someoftheexecutivesinthesecompanies
mayhaverecognisedtheparadox,buttherehadnotbeenanefforttoaddressitatthe
companylevel.Weobservedthatthismadeadifferencetothelogicthattheexecutives
usedintheirdecision-making.Executivesinorganisationswhichhadactivelyreframed
theircentralparadoxmademoreuseofwin/winlogics,integrativelogicsandsynthesis;
executivesinorganisationsthathadnotreframedusedtrade-offsandseparationmore
frequently.ThisisshowninFigure10:
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Figure10:Approachesadoptedincompaniesthatreframetheirbusinessparadox
Thisstronglysuggeststhatthewayinwhichthecompanyishandlingparadoxatthe
organisationallevelinfluencesthewayinwhichtensionsinbusinessdecisionsare
managed.
4.3.6ConnectionsbetweenthemacroandmicroleveltensionsTherearesomelimitationstothisanalysis.First,becausetheintervieweeschosethe
decisions,theyarenotnecessarilytypicalofthesuiteofdecisionstakeninan
organisation.Inparticular,un-memorabledecisions(thosethatseemtrivialorsimple
totheinterviewee)areunder-recorded,andthosewheresustainabilityconsiderations
werenotpartofthediscussionareunder-recorded.Second,situationswhereadecision
wasmade‘onauto-pilot’–forexamplefollowingorganisationalscripts(Gioia1992)–
areunder-recorded.Finally,aswithsomuchinterview-basedresearch,the
intervieweesweremakingsenseoftheirexperienceafterthefact:thisisasubjective
process.Nevertheless,therearesomeinterestingindicativefindings.
Separa&on Trade-off Win/Win Integra&on SynthesisCompanieswhoreframe 1 2 17 4 2Companieswhodon't
reframe 3 10 4 2 0
0
2
4
6
8
10
12
14
16
18
N=45
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Theinteractionbetweenthedecisionandthedecision-makerisanimportantone:
althoughdecision-makersareverypositiveaboutwin-winbusinesscases,some
decisionscannotberesolvedusingthatlogic(inoneexample,separationwasusedasa
strategywhilethecompanydevelopedthetechnologyforawin-winapproach).
Decisionswithhighlevelsofnovelty(forexamplewithnoestablishedprocessfor
deciding),orcomplexity(forexample,withparticularlycomplexdemandsfrom
stakeholders)alsopresentrealchallengestothedecision-makers.Thedecision-makers
thenbringtheirownmentalresourcestothesedecisions,determiningthewaythe
choiceismadeandtypicallyusingpartofanavailablerepertoireofwaystoreconcile
competingcommitments.Thesementalresourcesareshapedbytheorganisation–
eitherformally(forexamplethroughinformationsystems),socially(forexample
throughleadershipprocessesortheorganisationalculture)orbehaviourally(for
examplethroughcognitiveframing).Inparticular,thecorporatelevelframingof
sustainability–thewayinwhichitisbuiltintotheirapproachtobusiness–playsa
significantroleinenablingmanagerstoincorporatesocialandenvironmental
considerationsintotheirdecision-making.Context,inshort,matters.
Decisionsthatexecutivesmakearethusnestedwithinabroader,paradoxicalcontext
(Sheepetal.2017).However,thisraisesaquestionabouthowthetensionatthis
contextuallevelistransmittedtothemicro-levelofdecisions.Howaretheparadoxes,
orframesoftensions,expressedthroughtheorganisation?
4.4Organisationalinfluencesondecision-makingInChapter2,Ipresentedabroadframeworkforunderstandingthelayersofcontextthat
shapedecision-making.Ihavenowestablishedthatdecisionsincludingsocialand
environmentalconsiderationshaveparticularproperties,creatingcompeting
commitmentsfordecision-makers,andthattheseareinfluencedbyamacro-level
paradoxshapedbytherelationshipbetweentheexternalcontextoftheorganisation
andtheinternalresponsetoit.Therearetwofurthercontextuallevelsthatinfluence
decision-making:theorganisationandtheindividualdecision-maker(Deanetal.1991).
ThisisshowninFigure11,whichhasnowbeendevelopedtoshowthatthereisa
relationshipbetweentheexternalandinternalcontexts,describedabove.
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Figure11:Fourlevelsofinfluenceondecision-making
However,asIobservedinChapter2.7,authorshavefocusedonindividualfactors,or
groupsoffactors,inorganisations:wedonothaveacompletemodelofhowthisworks.
Inthissection,Iusemyinterviewdataandtheliteraturetoidentifythemain
organisationalfactorsthatinfluencedecision-makers,andorganisetheseintoa
conceptualframework.Insection4.5,Iwillusethesameapproachtoidentifythe
factorsattheleveloftheindividualdecision-maker,thatenable–orhinder–the
inclusionofsocialandenvironmentalsustainabilityindecision-making.
4.4.1Theproblemoforganisingforsustainability
Insection4.2,Ishowedthatdecisionswithmaterialsocialandenvironmentalimpacts
canemergeatmanydifferentpointsintheorganisationandcanrequireawiderangeof
typesofinformationandexpertise.Thiscreatesaspecificproblemindesigningan
organisationforsocialandenvironmentalsustainabilitybecausethereisaneedfor
sustainabilityexpertiseintwoplaces:companieswanttoretainsomelevelofcentral
functiontobeabletosetdirectionandstandardsandtoprovidesomecoreservices
(suchasreporting),butatthesametimesustainabilityisanissueforpeopleworkingin
Externalcontext
Internalcontext
Decisionproper1es
Decisionprocess
Organisa1on
Decision-maker
81
linefunctions–forexampleinengineering,procurementoroperations–wherethe
dailydecisionscanmakeasubstantialdifferencetothecompany’senvironmentaland
socialimpact.
Althoughthedatacollectionprocessdidnotincludecollectingorganisationchartsfrom
eachoftheinterviewees,sevenintervieweesdescribedasituationinwhichthe
sustainabilityfunctionwasasmallgroup,reportingtotheCorporateAffairsdirectorate.
Thisenabledthemtoplayacriticalroleinmanagingthecomplexneedsofexternal
stakeholders,butseparatedthemfromtheoperationsthathavethemostdirectimpact
onsustainability.Severalintervieweesmentionedthis:
“[There’sa]dynamictensionbetweentechnicalmanufacturingandcorporateaffairs
…weusedtojokethatwehadtotaketheCorporateAffairsDirectorandshowhim
wheretheTechnicalDirector’sofficewas,becausetheyneverusedtocollaborate.
Theywereboxedin.”
“They[thesustainabilitygroup]reportedtovariousdifferentpeopleovertime.They
nowreporttoourHeadofMarketingwhoisalsoresponsibleforbrand.Andthose
twoarenowquiteintegratedtogether….They’reindependentofthesupplychain
director,butthatisslightlyoddbecausetheydospendalltheirtimeworkingwith
thesupplychainteam.”
Thesegroupsareoftenrelativelyverysmall.AlthoughIdidnotcollectdataoneachof
thecompaniesinvolved,therangeofratiosof‘HQsustainabilitypeople’(whocanbe
performingawiderangeoftasks)tothetotalemployees(anyofwhomcouldbe
involvedinadecisionwithamaterialimpact)rangedfrom1:33toover1:10,000.This
meansthatthesustainabilityspecialistsfaceadilemmathatissometimesfacedbyother
‘compliance’functions(forexample,Health&Safety),whichishowtheycaninfluence
thebehaviouroftensorthousandsofpeoplewithwhomtheymayhavenoformal
organisationalrelationship.
Thishastwoeffects.First,thereisastrongneedforlinkagemechanismstotransmit
knowledgebetweenthesustainabilityexpertsandthedecision-makers(andtoprovide
afeedbackloop).Second,thereisaneedtoembedsustainabilitythinkingintosomeof
theorganisationalroutinesandprocessesthatareusedfordecision-making(for
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exampletomake‘operationaldecisions’or‘engineeringefficiency’decisionsdescribed
inSection4.2.2above).Thegeneraltrendthattheintervieweesdescribedwastowards
pushingaccountabilityforsustainabilityintothemainstreamofthebusiness.Thisdoes
taketime,andthecompanieswiththelongestexperienceofworkingonsustainability
issuestendedtohavethestrongeststructuresforde-centralisingaccountabilityfor
sustainabilitywhileretainingexpertise.
Theorganisationallayeroftheframeworkdescribesthemeansbywhichthe
organisationinfluencesthedecision-makingofthepeoplewhoaremakingthematerial
decisions.Althoughtheintervieweesidentifiedseveraldifferentorganisationaldesign
elements,thesefellintofourmaingroups.Twoofthese–organisationdesignand
performancemanagement–areessentiallyformalintheiroperation.Theothertwo–
cultureandleadership–areformsofsocialinfluence.Thesemeansforconnecting
knowledgeandawarenessofsustainabilitytothedecision-makersareimportant:a
failuretohave‘therightpeopleintheroom’wasoftengivenasareasonforexcluding
sustainabilityconsiderationsfromdecisions.Asoneintervieweesaid:
“Alltheideasthatwereobvioustoanyonehadbeenengineeredout.Butifyou’dhad
aleadershipteamthatknewsomethingaboutsustainabilityandwereengineers,you
couldhavedonesomethingexciting.”
4.4.2Organisationdesign
Theterm‘organisationdesign’canbequitebroad.Inthisresearch,Iuseittorefertoa)
thestructuralmechanismsoftheorganisationthatgroupandlinkactivities;b)the
processesandpoliciesbywhichworkiscarriedoutandc)formaljobdescriptions.
Thesearetheactivitiesthatinfluencetheorganisationallocusofsustainabilityactivities,
andthechannelsbywhichknowledgeandinfluenceareconveyedfromthe
sustainabilityleadersandexpertstothepeoplemakingdecisionseveryday.
Thereisrelativelylittleresearchattheintersectionbetweenorganisationstructureand
decision-making(Pirson&Turnbull2018),indeedorganisationdesignisanunder-
researchedfield(Milleretal.2009)andthearticlesintheliteraturereviewtendedto
focuseitheronco-ordinationmechanismsorHRmanagement.Atthemostobvious
level,theremaybeaformalorganisationco-ordinatingsustainabilityacrossthe
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organisation(Arrudaetal.2013).However,otherformalstructuresincludingHR
processes,codesofconductandformalrelationshipswiththeexternalworldalsogive
signalsabouttheroleofsustainabilityintheorganisation.Thefundamentalbeliefsand
valuesoftheorganisationaremosteffectivewhentheyarereflectedinHRprocesses
(companiesthatclaimtobeethicalneedtorewardethicalbehaviour),andsodecision-
makerstaketheircuesaboutthevaluesoftheorganisationfromprocessesfortalent
attraction,selectionandattrition(Verbosetal.2007;Ardichvilietal.2009)and
promotion(Meyers2004).
Basedontheinterviewdata,thestructuralmechanismsthatareusedtolinkthecentral
sustainabilityteamtothebroaderbusinessvaryinthedegreeofformalityused.First,
therewereexamplesoforganisationswithstrongformalstructuresfordirecting
sustainability.Oneintervieweedescribedanorganisationwithacleargovernance
structureledfromthetopteam;anothermadeitclearthattherewasstrongleadership
fromtheboard.However,whiletheseareeffectiveincreatingtop-downlegitimacyfor
sustainabilityintheorganisation,theyarelesseffectiveattransferringideasacross
groupsorgatheringinformationandfeedbackfromdifferentdivisions.Asoneofthe
intervieweessaid:
“Buttherealityisthatthewaythatdecisionsgetmadehereisthatbeforeyouwould
goto[thetopteam]I’llhavedoneloadsofengagementwitheveryone”.
Manyoftheorganisationsthereforealsohadnetworkstoformconnectionsacrossthe
organisation.Someofthesewereformallydesigned:
“Thesustainabilityteamisagroup-widefunctionthatworkswiththeunits,andthen
therearesustainabilitypersonsthatarealsointheunits...soitworksinthissense
likeamatrixofsomekind.”
“We’vegotanindustrialsustainabilitynetwork,withallthesitesrepresented,andwe
meetfacetofacethreetimesoverthecourseoftheyear,andsharebestpractice,go
andseesomeofthebestprojectsatthedifferentsites”
Othersweremuchlessformalintheirstructure:
“Weendedupdevelopingan“eco-productsdivision”,andIusethatwordlooselyin
speech-marks,becauseitdidn’texistonpaper.”
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Theselessformalnetworkswereparticularlyeffectiveforbuildingasenseofinclusion
intheorganisation.Asoneintervieweesaid:
“Thisisthegroupwherewecangetthemtogethertotalkaboutwhat’sgoingon,so
we’vegotpeople[fromallthebusinessareas],andit’stakenawhile,butthepeople
now,theyjustallwanttobeonthegroup,anditaddsareallymeaningful,
purposefulbitoftheirjob.They’reexcitedaboutit.”
Thechallengewiththeselinkingmechanismsisthattheyareinherentlycostly,andthey
needtobeeffectiveinordertocreatecommensuratevalue.
Thesecondmechanismthatwasusedinmanyorganisationstoimprovethe‘reach’of
thecentralsustainabilityteamwasprocess.Oneofthekeytasksofembedding
sustainabilityintoanorganisation’sdecision-makingistoensurethatitisincorporated
inthecriticalprocessesoftheorganisation.Asoneintervieweesaid:“Changingthe
processesisa‘must’.”Forexample:twointervieweesdescribedchangestotheportfolio
managementandacquisitionprocess;othersdescribedchangestooperating
procedures;anothersaid:
“Wewentontodeveloppoliciesinlotsof[businessareas]andwefollowedasimilar
approachwhichwasadoptingaframework,takingitout,consultingwithbothsides,
andthensaying‘Thesearetherulesandthisiswhatwewillliveupto.’”
Processesareoftensupportedbystandards,andseveralintervieweestalkedabout
introducingsustainabilitystandardstotheorganisationasawayofcontrollingthe
inputstoprocesses.Executivessaid:
“Fromasustainabilitypointofviewaswellwhenwe’restartingtoformour
requirementsforequipment…sowe’reembeddingthatinourprocessandmaking
surethateverytimeyougothroughtheprocessofdesigningproductsorequipment
thatwewanttointegratewe’veconsideredthewholepossibility.”
“Youdon’twantpeopletobespendingtimethinkingaboutthis,youwantthemtodo
whatitsaysintherule-bookandreportproperly,andthengetonwithitorthere’s
thenightmareofarguingandfighting”
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Changingprocessesandstandardsiscomplicatedwork:notonlyisitdifficulttodo,the
changeneedslegitimacyinordertobeadopted,andneedstobesupportedbythe
leadersoftheorganisation.Althoughprocessesareapowerfulwayofembedding
sustainabilityinorganisationaldecision-making,notalloftheintervieweeswerein
organisationswherethishadbeenpossible.
Thethirdformaldesignelementthatintervieweesdescribedwasjobdescriptions.Job
descriptionsfocuspeople’stimeandattentionontheareasforwhichtheyare
accountable.Asorganisationsbegintoincludesustainabilityconsiderationsintheir
coreprocesses,theymayalsoneedtoupdatejobdescriptionstoaccommodatethese.
Thiscancreatesomedifficultiesformanagers:
“Thingsmovesoquickly,andIsee[mycolleagues],they’rehereintheevenings,
they’reworkingweekends,andnowwe’resaying‘rightaswellasthis,youhaveto
consider[sustainability]’,andwe’veactuallygotaformalrequirementof
sustainabilityandwe’vegotformalguidelinesofhowyouhavetodothat.Andthere
wasabitofpushbackonthat–‘thisisn’trealistic’‘howarewegoingtodothis?’So
yes[weneededtoprovide]moreresourcetohelpdoit.”
“Butnow,Ithink,managershavetobeallthingstoallpeople,sotheyhavetoshow
diversityandinclusion,theyhavetoshowgoodethicalperformanceandbehaviours,
sonowyouhavetobeanall-rounderandaddressallofthesesustainabilityelements”
However,insomecasesitiswelcomed-“someyoungengineershavegotareallikingfor
environmentalwork,andaskforit”;“whentheycomeherethey’realreadypassionate
aboutitandtheywanttousethatandthinkaboutsustainabilityintheirjobs.”Thiscanbe
motivatingforstaff.Asoneexecutivesaid:
“Inactualfacttheheartsandmindsofthepeopleontheshopflooriswhatmakesit
happen.Sotheygohomeatnightandthekidssay‘whatdidyoudo’,andyousay‘I
workedonthisamazingprojectsothatweuselesswater’,andthekidsarelike‘wow,
dad,that’scool’whereaswhenyousay‘todayIdidaprojectthatmadethiscompany
£1million’thenthey’relike‘OK,sowhatdowegetfromthat?’.”
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4.4.3PerformancemanagementThereisanextensivegeneralmanagementliteratureonperformancemanagement,and
inasustainabilitycontext,performancemanagement(Hallstedtetal.2010)andreward
systems(Ardichvilietal.,2009;JamesJr.,2000;Lülfs,Hahn2014;Nijhof&Rietdijk,
1999)canalsoreinforceandencourageparticulartypesofbehaviour.Targetsand
incentives(Aguinis&Glavas,2012;Ardichvilietal.,2009;Lülfs&Hahn,2014)are
influentialinsignallingexpectationsofdecision-makersanddirectingattention.
Thequestionofperformancemanagement–whetherthroughtargets,incentivesor
rewards–cameupveryfrequentlyintheinterviews.Onewayinwhichcompanies
reinforcethefocusonsustainability–particularlyforlinemanagers-isthroughthe
performancemanagementsystem.Manyofthecompaniesdescribedastrongsystemof
targetswithintheorganisation,andtheinclusionofsustainabilityinthesetargetswas
extremelyhelpfulinfocusingattentiononsustainability:
“Theyhad10KPIs,thentheyhad11[whencarbonwasadded],thentheyhad12
[whenwaterwasadded].AndthewholebusinessisdrivenaroundthoseKPIS,soit’s
justlikethequality….nowthewaterthatyouuseisjustoneofthese.”
“EachyearthewholebusinesshasgroupKPIsandthat’swhatthewholecompany’s
bonusallocationsareon.Andthey’reseteveryyear,andthere’sabout12ofthem,
andthisyeartwoofthemareaboutsustainability.Soit’sreallygreat.”
“Itdoesn’tmatterifyouhityourrevenue,yourprofit,yourbrandtargetandyour
peopletarget.Ifyoudon’thityoursustainabilityones,it’sjustasbigafailureasif
youdidn’thitthefinancialones.”
Bycontrast,theperformancemanagementsystemcanalsobearealchallengefor
sustainabilitywhenincentivesdonotsupportsustainability,orwhentheresponsibility
forsustainabilityorresourceconsumptionisseparatedfromtheactivitydrivingit.As
oneexecutivesaid:
“Everyoneelsealwayshadanimperativethatoverruledit,sothatcommercialguy
haditaspartoftheirrole,butitwasawholelotlessimportantthanhittingtheir
numbers.Soforeveryoneitwasprioritynumberfive.Apartfromafewpeoplewho
haditasprioritynumberoneandnodecisionmakingpower”
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Problemsalsoarisewhenthetargetsarenotagoodfitfortheoperatingcontext:
“thesegoalshavebeensetbypeoplewhodon’tworkinmyareaanddon’tworkin
factoriesanddon’thavemuchexperienceofsocialresponsibility,andsomostofthese
goalswerecompletelyunachievable.”
Aswellasperformanceindicatorsandtargets,onecompanyhadincludedsustainability
onitslistofpromotioncriteria:“youweren’tgoingtogetpromotedifyouweren’tgoing
toengagewiththegreenagenda,soitbecameaboutstatus.”
However,thisisonlyeffectivewhenitiscongruentwiththeexistingperformance
managementsystem.Oneinterviewee,workinginaprivatelyheldcompanyobserved
thatwhiletheydomonitorandmanageindividualperformance,individualbehaviouris
nottargetdriven,andsotheseapproacheswouldsimplynotworkinthatcontext.
4.4.5Culture
Theliteratureonorganisationalculturesisextensive,andmanywriterson
sustainabilityinorganisationsdrawfromit.Thekeyfeaturesthatemergedfromthe
literaturesearcharefoundedonthebasicbeliefsarisingintheorganisations.While
individualscananddohavestrongattitudes,thesecanbeaccentuated(oroverridden)
byorganisationalattitudes(McNamara&Bromiley1997).Theseorganisational
attitudesareshapedbyunderlyingsharedbeliefs(JamesJr.2000;Meyers2004;Gioia
1992)whichcanleadtopro-socialorpro-environmentalattitudes(Victor&Cullen
1988;Howard-Grenville2006),totheperceptionofaclimatethatsupports
sustainability(Lülfs&Hahn,2014)or,bycontrast,toaninstrumentalistattitude
(Aguinis&Glavas2012;Victor&Cullen1988).Attitudestowardstimearealso
importantinshapingthewayinwhichdecision-makerswillthinkabouttheinter-
temporaltensionspresentedbysustainability(Howard-Grenville2006;Stubbs&
Cocklin2008;Ardichvilietal.2009).
Theseattitudesareestablishedintheorganisationthroughnormsandvalues(Nijhof&
Rietdijk1999;Ardichvilietal.2009;Blome&Paulraj2013).Peopleacquirethesefrom
observingtheirpeers,leadersandreferentgroups(Ford&Richardson,1994;Lülfs&
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Hahn,2014)andfromexternalbodies–forexampleprofessionalassociations(Victor&
Cullen1988).Normsareexpressedfurtherthroughavarietyofsignalsinthe
organisation.Theseincludethechoiceofrolemodelsandheroes,(JamesJr.2000;
Ardichvilietal.2009)stories,(JamesJr.2000;Ardichvilietal.2009),language(Blome&
Paulraj2013;JamesJr.2000;Ardichvilietal.2009),rituals(Blome&Paulraj2013;
JamesJr.2000)andtraditions(Nijhof&Rietdijk1999).Thesenormsarereinforcedby
socialisationmechanisms(Blome&Paulraj2013;Cohen1993).
Theintervieweesidentifiedseveralofthesefactorsintheirreflectionsontheir
decisions.Whileafewdescribedafundamentalbeliefaboutsustainability,many
othersdescribedthewaythisbeliefwasreflectedthroughsocialmechanisms,suchas
language,rolemodellingandwaysofworking.Attheheartofthesustainability
cultureisacommonbeliefaboutthebusiness–thisisdescribedearlierinthediscussion
aboutframing(Section4.3.5)andinthedescriptionofvisionsandpurpose.Asone
intervieweesaid:
“Itwasarelativelyeasydecisiontomakeatanyrate,becausewhatallowedforthat
wasacommonsentimentthatbusinesscanbeaforceforgood,andcommonalityof
wantingtoexplorehowwecouldmakeitgood.Andnobodyhadapointofcynicism
againstthat.Andthat’sthefirsttimeinmycareerthatI’veexperiencedthat.”
Butthisclarityaboutthecompany’sapproachtosustainabilityneedstobeconstantly
reinforcedthroughitssocialprocesses.Intervieweesdescribedseveraldifferent
approachesthatwerebeingusedtoimproveawarenessandunderstandingof
sustainability.Severalintervieweesgaveexamplesofthewaythatchangingtheway
peopletalkedaboutsustainabilitybegantonormaliseandlegitimateitinthecorporate
culture.Oneofthemajorshiftsforsomeorganisationswasthemovefromtalkingabout
sustainabilityasacosttotalkingaboutitasarisk,oranopportunity.Asone
intervieweesaid:
“Wewantedtochangethethinking.Andwehad–itwasn’tcalledacampaignabout
greenthinking–butwetalkedaboutgreenthinking.Wewantedpeopletothink
green.”
Interviewsalsomentionedtheimportanceofstories–forexampleabouthowclients
werevaluingsustainability,howshareholdersvalueditorabouthowthecompanywas
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makingadifferencestartedtochangethelanguagewithincompaniestoplacearenewed
emphasisonsustainability.
“Sothisisprobablygoingtomaketheimpact,thechange.Askingclientsandthe
clients’clients–thefinalusers….Icouldseethatthisconcept,ifitispursuedwith…
goodspeakers,goodstories,thentheygetit.Clients,colleagues…theyrealisethat
thisisallaboutco-operation,allaboutintegration”
Insomecases,thesestorieswereamplifiedthroughprocesses-suchasawards-togive
formalrecognitiontopeoplewhohadincorporatedsustainabilityintotheirwork.This
alsohadtheeffectofcreatingvisiblerolemodelswithinthecompany.Severalofthe
intervieweesgaveexamplesofthewaysinwhichtheirorganisationswereraisingthe
profileofmanagerswhohaddoneoutstandingworkonsustainabilitybyusinginternal
awardsschemesandusingthesetoraisethestatusofpeoplewhowereacting
sustainably.
Anothercompanyhadbeeneffectiveatcelebratingclientswhohadbeeninnovativein
sustainability,whichinturninspireditsownstafftothinkmoreabouttheissues.
Severaloftheexecutivesinterviewedhadworkedforcompaniesthathadwonawards
forsustainabilityorhadundertakencommunityinitiativesthathadamotivatingeffect
onstaff:“Wealsoknowthatourpeopleloveit...allouremployeeswereasked‘whatmakes
youproudtobe[here]?’andthiswasthenumberoneissueonwhytheyfeelproud.”
Thisworkonthesocialfabricoftheorganisationisnottrivial,buttheintervieweeson
thewholesawitasafundamentaldriverofchange:
“Myaiminintroducingthisisnottogetmoreworkforme.Itistotrainthedecision-
makersinthinkingadifferentway.IfImanagetotrainthemtothinkinadifferent
wayandwegetwhatwewant,itmaybethatwe’resuccessful.”
Welldone,theseculturechangescanbearealsourceofdistinctivenessforacompany:
“Andwhatsetusapartwasthatitwasthroughout–onanyjob,withanykindof
person,theykindofknew[aboutsustainability].”
Despitethefactthatseveralintervieweesreportedinnovations(suchaswaystocreate
recognitionforsustainability),theywerealsoworkingwithinexistingculturalsystems
thatdidnotchange.Thesealsohadanimpactondecision-making.Forexample,
companiesneedawaytoresolveconflictsbetweengroupsinvolvedinadecision:while
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thiscansometimesbehandledthroughformaldecision-rights,theremayalsobe
culturalnormsformanagingconsensusordissentforexample,oneinterviewee
describedaprocessforresolvingaconflictaboutasustainabilityissue:
“Ihavedisagreedandcommittedwhichisa[companyprinciple].Sowesaydisagree
andcommit.SoI’vedisagreedwithher,butI’vecommittedthatwecouldputaplan
togetherorthemandmakeitclearthatwedon’tthinkthisisOK.”
Similarly,anothercompanydescribedanexistingculturalinfluenceondecision-making:
“Thecultureisoneofinformationsharing,andinawaythat’sgreatbecause
everyone’sinvolvedbutitcanslowthingsdown.Sowhenyousaywho’sinvolved,it
canbealotofpeopleinvolvedinthatdecision.Wehavealotofstakeholders
generally,oralotofpeoplewhoperceivethemselvesasstakeholders.Sowetryto
involveeveryone,wehavealotofmeetings.”
Thus,cultureisnotonlyasubstantialthemeintheliteratureaboutbringing
sustainabilitytodecision-making,itisalsoafeaturethatsomeorganisationshave
deliberatelyinfluencedinordertoincludemoreconsiderationofsocialand
environmentalthinking.Thisisparticularlyimportantincompanieswherethe
materialimpactsofsustainabilityoccuratsomedistancefromthecentralsustainability
team.Socialfactors,suchasstorytellingorrolemodelling,areeffectivelysubstituting
formalprocessesofinfluenceforthesustainabilityteam.However,togivethem
legitimacy,theymayneedasecondsocialprocess:leadership.
4.4.5LeadershipAdiscussionofculturewouldbeincompletewithoutobservingthatpeopletaketheir
cuesfromthetopoftheorganisationandthatleadershipisakeyfactorinshapingthe
waypeoplethinkandmakedecisions.Leadersinfluencetheclimateinavarietyof
ways(Cohen1993),butparticularlythroughtheirfocusofattention,thechoiceofwhat
theyreward(Ford&Richardson1994)andtheirnorms(Blome&Paulraj,2013;Lülfs&
Hahn,2014).Choiceofleadershipstyleisalsoimportant:Verbossuggeststhat
‘authenticleadership’ishelpfulforcreatinganethicalclimate(Verbosetal.2007)and
NijhofandReitdijkcommentontheimportanceofsupportivemanagement(Nijhof&
Rietdijk1999).Leadershipwasaclearthemeintheinterviewdataaswellasthe
literature,andwhilethereisnotonenormativemodelofeffectivesustainability
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leadershipemerging,intervieweesgaveaseriesofinterestingexamplesofthreemain
phenomena:directionsetting;advocacyandsupport;andengagingpeople.
Manyoftheintervieweesdescribedsituationsinwhichaseniorleader(orsmallgroup)
hadtakenacleardecisionthatthecompanyshouldoperatesustainably,andthishad
subsequentlyinformedthedevelopmentofaprogramme.Theseleadershadgenerally
seensustainabilityeitherasaresponsibilityoranopportunity:
“Itisdrivenbyindividualpassions”
“OurCEOhadalreadydecidedthathewanted[thecompanytobethe]sectorleader
onsustainabilityandthere’dbeenquiteabitofdiscussionatexecutivecommittee
levelaboutwhytheywantedtotakethatleadershipposition”
Thisdirectionsettingneedstobesufficientlyconcretetoinformthewaythe
organisationworks.Oneintervieweecommentedonanorganisationwhosedirection
hadbeentoovague:“Theyneedmuchclearerguidance”.
Thesecondrolethatemergedforleadershipistoadvocateforsustainabilitywithin(and
sometimesbeyond)theorganization:
“[TheCEO]launchedthenewKPIs…andsomeoneasked:‘Whyissustainabilityon
that?Isitreallystrategic?’andhelookedthepersonintheeyeandhesaid:‘Ifyou’re
askingthatquestionyou’reworkingforthewrongcompany.’”
“He’smoreofanadvocatenowforsocialandenvironmentalsustainabilityashe’s
maturedasanindividual,youcanseethewayhe’stakenhimself”
Giventherelativelackofformalauthoritythatmostsustainabilityprofessionalshavein
theirorganisations,thisadvocacyroleisanimportantenablerofsomeoftheother
organisationalfunctions–includingformalactivitiessuchasestablishingnetworks,and
socialactivitiessuchasinfluencingthechoiceofwords–thatpeoplehaveusedtobuild
sustainabilitycriteriaintotheorganisation’sdecision-making.
Finally,leadersrecognisethatsustainabilityneedstobebothbroadanddeepwithinan
organisation,andmakesparticulardemandsonpeopleintermsofmanagingmultiple
stakeholders,newknowledgeandhigherlevelsofcomplexity,uncertaintyorambiguity.
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Somehavethereforestartedtousethisasacatalysttobuildnewleadershipcapabilities
withintheorganisation:
“Myendgameistousesustainabilitytocreateleadership.Butnotthekindof
leadershipwhichisthecommandandcontrol.Butthekindthatallowsamultitude
ofindividualstoworktogetherinaconstructive,collaborative,leadingway.”
Leadershipalonecannotchangeacompleteorganisationalsystem,however.Itis
reinforcedbysystemstotransferknowledgeandunderstanding;byrolemodelsandby
thelanguageusedintheorganisation.
4.4.6Summaryoforganisationalinfluences
Thus,thereisaclearrelationshipbetweenthefourorganisationalelements–
organisationdesign,performancemanagement,cultureandleadership–thatinfluence
theinclusionofsustainabilitycriteriaindecision-making.Whentheseworkeffectively
together,itbecomespossibleforcompaniestobringsocialandenvironmental
considerationsintomoreoftheirdecisions.However,disconnectsbetweenthese
elementscancausesignificantbarrierstothistypeofaction.Theintervieweessingled
outthreeorganisationalproblemscreatingtensionindecision-making:conflicting
objectives;structuralsilos;andalackofmechanismsornormsforresolvingproblems.
First,decisionsaremadedifficultwhenincentivesdonotsupportsustainability,or
whentheresponsibilityforsustainabilityorresourceconsumptionisseparatedfrom
theactivitydrivingit.Problemsalsoarisewhenthetargetsdonotreflecttheoperating
context,orcannotbeunderstoodbythepeopletowhomtheyapply.Second,decisions
canbemademoredifficultwhentherearestructuralsilosintheorganisation.
Compartmentalisationofthesustainabilityteamcanleadtotensionindecision-making:
oneintervieweedescribeda“dynamictension”betweendepartments,andanother
pointedouttheproblemsofneedingtorundifferentpartsofthebusinessindifferent
ways.Finally,companiesneedeffectivemechanismsforresolvingproblems.Some
intervieweesdescribedveryclearnormsorprocessesforresolvingdisagreement,
whereasothersdescribedamoreinformalapproach.Whileitisclearthateitherof
theseapproachescouldbeeffectiveintherightcontext,itwasalsoclearthatboth
createdconditionsinwhichresolvingproblemscouldbetime-intensiveandfrustrating.
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Thuswecannotseparatethedecisionfromitsorganisationalcontextandthedecision-
makersthemselves.Decision-makinginbusinessisseenthroughtheeyesofparticular
decision-makers,whoseperceptionoftheproblemis,inturn,shapedbythe
organisationitself.
4.5Individualdecision-makersTheformalandsocialstructuresoftheorganisationinfluencedecision-makersby
directingtheirattention(Felinetal.2017;Heimer2008;Simon1997;Ocasio1997).
However,decision-makersarealsoindividualswiththeirownagencyandtheirown
interpretationsofthedecisionathand.Ithereforeexaminedtheliteratureandthedata
toidentifytheparticularattributesthatindividualdecision-makersbringtotheir
context,tosuggestthewaysinwhichvariationmightoccurindecision-making.
Boththeliteratureandthedataaresomewhatfragmentedonthistopic.AsShepherd
andRudd(2013)observe,moststudiesofdecision-makersfocusonaverylimited
numberofvariables,meaningthatthereisnotaholisticbasisfortheorybuilding.My
owndataarealsolimited:someintervieweesdidreflectontheparticular
characteristicsofdecision-makers,buttheinterviewstructurewasnotdesignedto
probethissystematically.However,thereissufficientmaterialheretostarttoidentify
theelementsthatshapeindividualdecision-makers’approachtotheirdecisions.
Althoughmyanalysiswasinductive,anddrewontheaxialcodingfromthedataandthe
keythemesintheliterature,Ifoundthatthethreerecurrenttopicsinthisanalysisare
allfeaturesofboundedrationality,describedbyHerbertSimoninAdministrative
Behaviour(1997p.66).Ourindividualwaysofunderstandingdecisionsarelimitedby
ourknowledgeofthematterathand;ourownattitudesandthewaywepayattentionto
it;andourperceivedauthoritytodealwithit–aphenomenonwhichIwillcall
‘permissionspace’.
4.5.1KnowledgeDecision-makingmaycalluponbothexplicitandtacitknowledge(Nonaka&Takeuchi
1995p.8).Addingsustainabilityconsiderationstocorporatedecision-making
complicatesthis:newsystemsneedtobedevelopedtocreateandshareexplicit
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knowledge;andthesetsofexperienceandpatternrecognitionthatformtacit
knowledgeneedtochangetoaccommodatethesenewideas.Theliteratureon
organisationallearningisfragmented(Fortisetal.2018).However,scholarssuggest
thatsocialfactorsplayanimportantroleinthewayindividualsacquireandprocessthe
knowledgetheyneedtotakeinformeddecisions.
First,differentorganisations–includingdifferentpartsofasingleorganisation–have
differentepistemologies,anddefineproblemsindifferentways.HowardGrenville
givesanexampleofthisincomparingtwounitswithinasinglelargemanufacturing
organisation(Howard-Grenville2006).Inthisexample,onegrouptakeaveryscientific,
factualapproachtoknowledgeanddescribeproblemsinawaythatwillleadthemtoa
single,technical‘rightanswer’.Thesecondgrouphasamuchhighertoleranceof
ambiguity,andexpectsthatthe‘right’answerwillbeamatterofjudgement.Sackmann
(1992)identifiesfourdifferenttypesofknowledgethatareusedindifferentwaysby
differentsub-cultures,andsoshapethewaysinwhichproblemsaredefined.Different
organisations(orpartsoforganisations)willevaluatedecisionsbasedondifferenttacit
criteriabesidesformaldecisioncriteria,basedontheirethicalorientation(Victor&
Cullen1988).Theseschemasaretheoutcomesofseveralcharacteristicsofthegroups–
cultural,historical,andexpertisedriven–butwillnecessarilynarrowthefocusofthe
group’sproblem-solvingapproach.Thus,theorganisationallocusofthedecision-maker
mayshapetheiraccessto,andinterpretationof,knowledgeaboutsustainability.
Becauseknowledgeisasystemofstocksandflows(Dierickx&Cool1989),theabilityof
theorganisationtoshareknowledgeandtolearnplaysavitalroleinthewaydecision-
makersareabletouseknowledge.Knowledgesharingisconnectedtoorganisational
climate(Blome&Paulraj2013)andislistedasafactorinbuildinganethicalclimate,
thatistosayoneinwhichvaluejudgementscanbebuilteffectivelyintodecision-
making(Verbosetal.2007).Organisationsthatareabletouseadouble-looplearning
process(Verbosetal.2007;Marlowetal.2012),arealsoabletoacceleratetheir
learningandsoimprovejudgement.HymanandCurran(Hyman&Curran2000)
commentthatacapacityfororganisationallearningisessentialtobuildamoral
organisation.Theorganisation’sabilitytolearnintersectswiththelearningabilityofits
members.Trainingandawarenessofsustainabilitydoesinfluencetheextenttowhich
theseconsiderationscanbebroughtintodecision-making(Aguinis&Glavas,2012;Lülfs
&Hahn,2014),andcangeneratemoreknowledge(Schrettleetal.2014).Arrudagoes
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sofarastosaythatconvertingknowledgeintocollectivelearningiskeyresponsibilityof
leadership(Arrudaetal.2013p.4324).
Theintervieweeswereintenselyawareofdifferencesinlevelsofknowledgeand
understandingbetweendecision-makers.Thiswasoftenexpressedashaving‘the
wrongpeopleintheroom’:
“Whatwefoundbeforeisthatanawfullotofstuffjustdidn’tgetthoughtabout
becausethewrongpeopleweremakingthedecisions,wellnotthewrongpeople,but
peoplewhodidn’tknow.”
Anothersaid:
“Alltheideasthatwereobvioustoanyonehadbeenengineeredout.Butifyou’dhad
aleadershipteamthatknewsomethingaboutsustainabilityandwereengineers,you
couldhavedonesomethingexciting.”
Theintervieweesputmuchlessemphasisoninformationandanalysisthanwouldbe
expectedfromthebodyofliteraturedescribedinChapter2(inwhichasubstantial
majorityofthearticlesfocusedonanalyticaltechniquesfordecision-making).The
intervieweesdiscussedknowledgeextensively,butplacedmuchlessemphasisonthe
formalanalyticaltechniques,andmuchmoreonthedecision-makers’relationshipswith
knowledge.Somehadextremelyimpressivedataandanalysissystems;otherswerestill
intheprocessofbuildingtheinformationneededtomakeinformeddecisions.Asone
intervieweesaid:
“Youcanreallyfeelthatthediscomfortpeoplehavebecausealthoughit’sdatadriven
it’snotthedatapeoplehave…Peoplearetryingtofigureoutwhat’srightandwhat’s
involved.”
Thisquestionoftheepistemologywasanimportantone.Asseveralinterviewees
pointedout,sustainabilityisquiteanebulousconcept,andpeoplecannotincorporateit
intotheirdecisionsuntilitisclearwhatthefocusis.Companiestookdifferent
approachestocreatingthisclarity,rangingfromquiteasubjectivediscussionwith
seniorleaders:
“Iaskedthem‘whatdoyouwanttoachieve?Whatdoyouwanttogetoutof…
sustainability?’Sotheygavemesomeanswers...Iplayeditback…lettingthem
discussit,tochoose,andlettingthemshapeitbasedonwhattheyaskedme.Sothey
coulddefineitbecausetheycanonlythinkthisway.”
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Thisactofshapingthinkingwascentraltothewaysomeoftheintervieweesdescribed
theirwork,particularlyininfluencingtrainingprogrammes.Oneintervieweedescribed
frameworksasawaytoachievethis:
“Ifyou’veboundedthatconcerninsomewaybycreatingaframeworkandsaying
‘thisishowwe’remanagingthis,thisishowwe’remanagingthat’,thenIthinkyou
knowit’samoreinformed,rationaldiscussion…forme,havingtransparent
frameworksthathelpyounavigateadecisionthatupfrontyoumightknownothing
about,that’sbeenhelpful.”
However,evenwhentheinformationandmethodsareavailablethereisstillaproblem
ofusingtheknowledgecorrectly.Oneintervieweegaveexamplesofdecisionswhich
werenotcorrectlyanalysedandwhereaheuristichadturnedouttobeincorrect.Asthe
executiveinvolvedsaid:
“Evenpeoplewhodothisalldaylonghaven’taskedthequestion.Sotheideathat
sustainabilityissomesortofknownsecretthateveryoneknowstheanswerto,and
onlyneedstobeabletoaffordisnottrue.Peopledon’tknowwhat’sbest.”
Thisvariationintheknowledgethatindividualsbringtotheirdecision-makingmeans
thatdecision-makersmaynotrecognisethesocialorenvironmentalaspectsofa
problemathand:inshort,itdirectsandboundstheirattention.Thesecondfactorthat
aroseattheindividuallevel–individualattitudesandbiases–alsohasthiseffect.
4.5.2Biasesandattitudes
InChapter2,Idescribedabodyofliteraturethatexploresthepsychologicalaspectsof
decision-making,particularlyaddressingthelimitsonpurerationality.Weknowthat
individualsbringarangeofcognitivebiasestodecision-making(Kahneman2011;Arvai
etal.2012).Thisbiasisheightenedinthecaseofsustainabilitydecisions,inwhich
thereissomeevidencethatpersonalopinionsaboutsustainabilityissueschange
behaviouringroupdecision-making(delaTorre-Ruizetal.2015).AsHerbertSimon
observes,thepresenceofemotionindecision-makingtendstonarrowthefocusof
attention(Simon1997p.91).Whilethereisincreasinginterestinfindingwaysto
managetheproblemofbiasindecision-making(Kahnemanetal.2011),noneofthe
intervieweesdirectlyaddressedthisintheirreflectionsonactualdecisions.
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Earlierinthischapter(Section4.3.3)Isuggestedthatindividualsbringtheirown
cognitiveframes–orparticularwaysofseeingaproblem–totheirwork,andthatthese
areverymuchinfluencedbyabroader,corporateframingofsustainability(whereone
exists).Thisanalysissuggestedpeopletendedtouseaframingfortheirdecision-
makingthatwasinfluencedbythebroaderorganisationalperspectiveonsustainability.
Aswellasexploringthewaypeopleframedthelogicoftheirdecisions,thecodingofthe
interviewdatarevealedfourperspectivesonhowsustainabilityisinterpretedmore
generally.InSection4.3.3,Ilookedspecificallyatthelogicthatexecutiveswereusingto
resolvethecompetingcommitmentsarisingintheirdecision-making.Thefour
perspectivesdescribedbelowdescribethebroaderframingofsustainability:how
sustainabilityisseenratherthanhowaconflictisresolved.Theseperspectivesmaybe
situational:anexecutivemayinterpretonequestionasamatterofcostandanotherasa
matterofopportunity.Whilethereisalogicalconnectionbetweenthesetwoframes,
althoughthereisnotsufficientdatatotestthisconnectionrobustly.
Althoughcriticalincidenttechniquedoesencouragereflection,mymethodwasnot
designedtodeliberatelysurfaceeitherconsciousorunconsciousbias,nordidIdirectly
attempttoassesspeople’sindividualframingofsustainability.However,some
intervieweesdidreflectonthedifferingperceptionsofsustainabilityamongdecision-
makers.Thewordtheymostfrequentlyusedwas‘attitude’,andsoratherthan
describingtheseas‘cognitiveframes’,Iamcallingthem‘attitudes’.Thesearepositions
thatexecutivesadoptintheirorganisations,andmaybedistinctfrombeliefstheyhold
intheirpersonallives:myinterviewsdidnotexplorethis.Thisstudydoesnotexamine
thewayinwhichthesebeliefsareheldnortheirorigins–whicharelikelytobecomplex
andmaystemfrompersonalviews,professionalidentity,orthebroaderframingof
sustainabilitywithintheorganisation.
Thefirstattitudethatappearedintheinterviewsisthat‘Sustainabilityisacost’.Oneof
thechallengesforbusinessisthattakingmeasurestoimprovesocialandenvironmental
sustainabilitycanbeashort-termcost.Thishasledtoaperceptionthatacting
sustainablyismoreexpensivethannot,andsoitisnotalwaysseenaspossiblesourceof
value.Asoneintervieweesaid:
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“TherewasskepticismaboutthisinFinance.Youknowthere’sa‘yeswecandoit’
departmentanda‘no,wecan’tdoit’department,andthat’showitfelttomeatthe
time.Andtheywereworriedaboutthecost”.
Anotherintervieweeobservedthesame,commenting:“Theyonlysawitasacost.”
Thesecondattitudeisthat“Sustainabilityisaboutriskmanagement”.Someofthe
intervieweesdescribeddecisionsaboutsustainabilityintermsofriskmanagement.
Intervieweesmentionedthreemajortypesofrisk:theriskofnon-compliancewith
changingregulation;riskstothecompany’soperations;andrisktothecompany’s
reputation.Oneintervieweecommented:“It’sariskmanagementissueinthebig
picture.”.Anotherdescribedhisinternaldiscussionswiththeorganization:
“[Theysaid]‘Whyareyoudoingthis?It’sjustgoingtomakelifemoredifficultforus’.
Oneofthemsaid,‘You’reopeningPandora’sbox’towhichIsaid‘Pandora’sboxis
alreadyopen,I’mjusttryingtocontrolitasariskissue’.”
Third,someintervieweestooktheattitudethat“Sustainabilityisaresponsibility”.
Sometimes,peoplemakedecisionsbasednotjustoneconomicvaluebutalsoonvalues.
Thisisnottosaythattheyarenoteconomicallyinformed,butratherthatacompanyhas
decidedthattheyhavearesponsibilityextendingbeyondtheirownimmediateinterests.
Oneintervieweecommented:
“Ourboard…wassplitonthis.Therewereoneortwootherswhoseemedtohavea
senseofresponsibilityandsawitasaresponsibilityissue.”
Anotherintervieweeobservedthatresponsibilitywascoretothecompany’sreputation:
“Oneofthekeypartsofourstrategyistobetopofmindasanexampleofa
responsiblebusiness.”
Thissenseofresponsibilitycaninfluencethewayindividualdecisionsaremade:
anotherintervieweesaid:
“Weneverhaveabusinesscaseforawaterimprovementproject,butwedoit
anywaybecauseit’stherightthingtodo.”
Anothercompanydescribedthesamedilemma:
“Itisadifficultcall.Anditcomesbacktothefinancialversuswherethe
responsibilityis.”
Fourth,somepeopletooktheattitudethat“Sustainabilityisanopportunity”.Justas
sustainabilityisnotalwaysacost,itisnotalwaysanopportunity.However,thereare
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caseswhendoescreatethepossibilityofinnovationanddevelopment.Oneinterviewee
said:
“It’salsoastrategicissue.Wewanttobeinindustrieswherethemega-trendis
behindusandsupportingus.Andthemegatrendisthatclimatechangeisimportant
andthatmoreandmorecountriesandbusinesseswillseeitthatway.”
Anothersaid:
“Theyreallywantedtoputthemselves,fromabrandperspective,asasustainable
company,anenvironmentalcompany…Ithinkthey’ddonesomemarketresearch
andsawtherewasanichethere…noonereallyhadcorneredtheextreme,green
sustainableangle.”
Athirddescribedsustainabilityasatriggerforinnovation:
“Peoplefromdifferentpartsof[theorganization]justsawtheopportunitytogrow
differentpartsofthemarket.”
Thesedifferentattitudeseachhavesomestrengthsbutbecausetheyfocusanddirect
attentioninaparticularway,theycancreateblind-spotsandcanleadtomismatchesin
communication:anexecutivewhobelievesthatsustainabilityisaresponsibilitymay
notgetfarbyappealingtothevaluesofsomeonewhobelievesitisacost.Several
intervieweesdescribedtheseclashes,forexample:
“TheCEOthoughtitwasagreatidea–hisperspectivewasreputation,marketing,
brand-building,consumerengagement,andothersintheteamlookeditessentially
throughthoseprisms.ButtheFinanceguyswereessentially‘ohwhat’sitgoingto
cost?’and‘Ican’tseeanypositivereturnonthis.’”
Thedifferencesarenotnecessarilyirreconcilable.However,severalintervieweessaw
themasabarriertoeffectivedecision-making.
4.5.3PermissionspaceThefinalfactorthatinfluencesthewayinwhichindividualsmakedecisionsistheir
senseofpermission,ortheauthorityandagencythattheyhavetochoose.Thisshapes
therangeofoptionsthattheywillconsiderinmakingadecision.Althoughpermission
is‘given’(forexamplethroughdecisionrights)itisalso‘taken’,andindividualsmay
varyintheirinterpretationoftheirauthorityandresponsibilityintermsof
sustainability.Thisisparticularlysignificantinanemergingfield:organisationsthat
areadoptingsustainabilitymaybeaddingittoasetofexistingresponsibilitiesandso
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thereisalevelofmanagerialinterpretationinvolved(Sandhu&Kulik2018).This
meansthatsomemanagersarerelyingonorganisationalcuestodecidewhetherthey
havepermissiontomakeaparticulardecision,andifso,howboldshouldtheybein
makingit?Iamthereforecallingthemanager’sinterpretationoftheirdecision-making
mandatethe‘permissionspace’todistinguishitfromthemoreformallygiven
‘authority’.
Again,theliteraturetouchesondifferentaspectsofthepermissionspace,offeringa
rangeofformalandsocialinfluencesonthedecision-maker,butthereisnotacentral
theoryofpermission.Atthecoreofthis‘permissionspace’lietheformalelementsof
theorganisation,includingdecision-rights,formalaccountabilitiesandjobdesign
(JamesJr.2000;Varmaetal.2007).Targetsandincentives(Aguinis&Glavas,2012;
Ardichvilietal.,2009;Lülfs&Hahn,2014)arealsoextremelyinfluentialinsignalling
expectationsofdecision-makers.Manyorganisationsprescribeformaldecisioncriteria
(Gioia1992)orguidelinesformakingdecisions(Nijhof&Rietdijk1999).Themanagers
willalsointerprettheir‘permissionspace’bearinginmindtheirdegreeof
empowerment(Blome&Paulraj2013;JamesJr.2000;Aguinis&Glavas2012).
Structuraldesignmayalsohaveaninfluenceonthewayinwhichthedecision-maker
interpretstheirbrief.Therelativeindependenceorinterdependenceofthe
organisationalunitwillshapethelevelofautonomyadecision-makermightfeel(Victor
&Cullen1988)andthewayinwhichtheytakemoralresponsibilityfordecisions
(Weber1990).Managers’perceptionsaboutthecontrolsystem(Verbekeetal.1996;
JamesJr.2000)willalsoinfluencetheirbeliefsaboutthelevelofindependencethey
haveindecision-making.
Decision-makersalsointerprettheirpermissionspaceandcriteriabasedontheir
understandingofhistoricalantecedents(Blome&Paulraj2013;Nijhof&Rietdijk1999),
andtheirinterpretationoftheculturedescribedabove(inSection4.4.5).Finally,some
stylisticcharacteristicsoftheorganisation(orthesub-culture)mayinfluencethe
decision-makers’interpretationofthewaytowork,forexampletheextenttowhichthe
organisationencouragesco-operationandcollaboration(Stubbs&Cocklin2008)and
theexistenceofco-operativeconflictresolutionprocesses(Hyman&Curran2000).
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Firmsvaryinthespecificitywithwhichtheydefineindividualdecision-rights.This
meansthatsomeoftheintervieweeswereclearerabouttheboundariesoftheir
mandatethanothers:asoneintervieweesaid,“Iwantedtostickonthemandate.Ididn’t
wanttoexpandtoomuch”.Theyoftenassociateditwithrisk.Somefeltthattherewas
apersonalrisktosteppingbeyondtheirmandate,andothersdescribedasituationwhen
thepersonresponsibleforadecisionhadcausedabreachofasustainabilityprinciple
becauseoftheirinterpretationoftheirpermission:
“ThedecisionwastakennotbytheBoardortheCEO,butitwastakenbythe[two
executivesresponsible]…anditwasn’tclearatallwhethertheyweremakingthe
righttrade-offs.Theycertainlydidn’thaveanylargercontexttooursustainability
commitments,whichtheycertainlyshouldhave.Norwasitclearthattheywere
tradingthingsoffintherightway.”
Asaresultofthisparticularincident,thecompanyinvolvedhadreviewedthewayit
manageddecisionrights.
Intheinterviews,Ifoundevidenceofthecompaniesusingbothformalandinformal
systemstosignalandcontroldecision-rights,andindividualsinterpretingthesebased
ontheirownunderstandingofthesituation.First,formaldecisionrightscanbe
assignedtopeopleinparticularroles.Severalintervieweesdescribedformaldecision-
makingprocesses,typicallyinvolvingacommitteeorleadershipgroup:
“Wehaveaglobalcommittee…chairedbymyselfandmeetingonceamonthona
conferencecall,andonceayearwemeetface-to-face.Wehavetheguysfromeach
ofthehubs(i.e.regions)andarollingagenda,whichwediscuss,butthefinaldecision
ismadebyme.”
“ThegovernanceofourprogrammeisthattheExecutiveCommitteehasdelegated
authoritytotheSustainabilityCommitteetomakedecision.Therearesevenpeople
ontheExecutiveCommittee,butthreeofthemarealsoontheSustainability
CommitteesotheotherfourIsupposehavesaid‘Yeswetrustyoutogetonandmake
sensibledecisions’.”
Thisclarityisnotguaranteed,particularlyincompaniesthatarestilldevelopingtheir
approachtosustainability.Asoneintervieweesaid:
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“OneofthethingsI’vefound…isthatthere’smixedunderstandingofwhat
sustainabilitymeans,whereitbegins,whereitends,whoseresponsibilityisit?”
Thislackofclarityaboutresponsibilitymadeitdifficultforthemtoincludesocialand
environmentalconsiderationsconsistentlyintheirdecision-making.
Whiletherightstodecideareoftenclear,theresponsibilitytoconsultisnot.Ifthe
formaldecisionrightsarevestedinapersonorgroupwhohasanincompleteorpartial
understandingofthesustainabilityissuesinvolvedinaproblem,theresultislikelytobe
adecisionthatdoesnotincorporatetheseconsiderations.Asoneintervieweesaid:
“Wereallydidtakeaviewthatwewouldtrytoenablepeopletohavebetter
discussionsandmakebetterdecisionsaboutthingsbybeingbetterinformed.”
Thisprocesscanbetimeconsuming.Tohelpexecutivesmanagethis,onecompany
articulatedaseriesof‘redlines’tosignalthepointswhereadecisionreallyneeded
attention.
“Sowhattheydidfirstofallisthattheyputinasetof,theycalledthem‘redlines’,
whichwerebasically‘youneverevereverdothis’...Whatdoesredlinemean?Doesit
meanweneverdoit?Noitdoesn’t.ItmeansthatyouhavetogettheentireBoardto
aspecialsessionwheretheyhavetoagreetogether,unanimouslythatithastobe
done.”
Thishelpedthemtoprioritisethedecisionsthatneededattention,andclarified
responsibilityintheorganisationtomanagetheriskofbreachingasustainability
commitment.
Aswellastheseformalguidelines,culturalfactorscanplayaroleinhelpingpeople
interpretandunderstandtheirpermissionspace.Thiscantakevariousforms.Firstthe
degreeofempowermentinanorganisationisimportantinshapingthewaypeople
makedecisions:
“Peopleweregivenmorefreedomtodotheirownthings.Itwasn’taverycontrolling,
top-downplace.Theytriedtodothatonsomethings,butitdidn’tworkbecause
peoplelikedtobetheirownboss.Sowehadpolicy,butgotpeopletoimplementin
theirownway.Sowethenengagedwithpeople,andsomeofthemdidn’tagree,but
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wejustkeptengaging.Andthenpeoplecameupwithsomewonderfulsuggestions
andIthinkthat’swhywewereconsideredtobeverysuccessful.”
Organisationalfactorsarealsoimportanthere:decentralisedorganisationsmaygive
theirmanagersmoreindependence,whichmeansthattheyinterprettheirpermission
spaceinaparticularway:
“It’saverydecentralisedorganisationandalotofthemanagersruntheirown
empire,…andsustainabledevelopmentdidnothavetheagendathenthatitdoes
nowsowehadtogo‘guysthisisjustaboutmoney’andthatcuttotraction,sowe
couldgettothembysavingenergy.”
WhilethesecommentsallreinforcethefactorsIidentifiedintheliterature,therewas
oneotherthemeintheinterviewsthatshapedthepermissiondecision-makerswere
given:credibility.Credibilitywasparticularlyimportantforsustainabilityspecialists.
Thesepeopletendedtohaverelativelylittleformalauthorityfordecisions,butfound
thattheyneededtoinfluenceother–oftensenior–decision-makers.Asone
intervieweesaid:
“OneofthethingsI’vehadtodoisimprovethecredibilityofmyteaminternally.I
needtoknowthattheywillhaveenoughcommercialknowledgethatthey’renot
goingtosaysomethingsilly,thatthey’regoingtobetakenseriously.”
Thiscredibilityandpermissionspacecanbedevelopedandchangedovertime:
“Sodefinitelythatroadmapwassetatthebeginningofmymandate,butitisvery
aliveanditdevelopsasthesituationisdeveloping.”
Theseideasofasphereofinfluence,mandateandcredibilityareclearlyimportantin
practice.Intheliteraturetheseissuesmayappearas‘political’considerations(Elbanna
2006),andthereisastrongbodyofworkabouttheroleofpoliticsinorganizational
decision-making(Eisenhardt&Bourgeois1988).Despitethis,theinterviewees
themselvesrarelydescribedtheirworkaspolitical.Rather,theyacceptedandmanaged
thepowerimbalancesorinformationalasymmetriesintheirworkanddirectedtheir
attentiontowardstheproblemsofthedecisionathand.
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4.5.4Frameworkofinfluencesondecision-making.Thisanalysisallowsmetocompletetheconceptualframeworkconnectingtheformal,
behaviouralandsocialstructuresinfluencingtheinclusionofsustainabilitycriteriain
decision-makinginincumbentbusinesses.
Thedecisionitselfisattheheartofthemodel.Thiscomprisestwoelements–the
propertiesofthedecision(whatisit,howisitdefined?)andtheprocessforthedecision
(howwillthedecisionbetaken?Whatarethecriteriaforevaluation?)Thedecisionis
surroundedbyasecondlayer,whichbringsinthedecision-makers.Thiscomprises
threeelements:theknowledgeandpermissionspacethatthedecision-makersbring,
andtheirownpersonalattitudesandbiases.Thethirdlayerdescribesthe
organisationalfactorsinfluencingthedecision-makers.Theseincludetheorganisation
design,culture,leadershipandperformancemanagementoftheorganisation.Theouter
layerincludesthecontextualfactors–bothwithinandbeyondtheorganisation–which
shapetheapproachtotheproblem
Figure12:Organisationalinfluencesondecision-making
Externalcontext
Internalcontext
PerformanceManagement
CultureLeadership
Organisa;ondesign
Decisionproper;es
Decisionprocess
Biasesanda>tudes
KnowledgePermissionspace
105
Thesefourlevels–theinternal/external,theorganisational,thedecision-makerandthe
decisionitself–mapcloselyontothefourcontextsidentifiedbyDean,Sharfmanand
Fordintheirreviewoftheliteratureonstrategicdecision-making(Deanetal.1991:89).
However,Deanetaldidnotelaborateonthemoredetailedaspectsofthesecontexts
(forexamplethespecificorganisationalelementsinfluencingdecisions).Thisworkin
turninfluencedShepherdandRudd’sframework(Shepherd&Rudd2014p.352)–again
basedonaliteraturereviewofstrategicmanagementdecisionprocesses.While
ShepherdandRuddincludemoredetailintheirframework,thereislittleinformationon
theorganisationalfactorsandmoreemphasisonthepoliticalactivityofthedecision-
makersthanIfoundinthedataonsustainability-relateddecisions.Theresemblances
betweenthesethreeframeworksarestructuralratherthanspecific.
Threeoftheselevels–theindividual,organisationalandinstitutional–alsooccurinthe
paradoxliteratureindiscussionsabouttensions.Tensionscanbeexacerbatedwhen
theyarereinforcedatmultiplelevels(Sheepetal.2017),andcansometimesbeonly
understoodandaddressedby‘zoomingin’totheindividuallevelor‘zoomingout’tothe
systemlevel(Schad&Bansal2018).Inasustainabilitycontext,theconnections
betweentheselevelscancreatebarrierstoaction(Slawinskietal.2017).Theexistence
ofthesedifferentlevelsinboththestrategicdecision-makingliteratureandtheparadox
literature,suggeststhattheymeritfurtherexploration.InChapter5,Iwillshowhow
thesedifferentlevelsofanalysiscanbeappliedinasinglecasestudy.
4.6Thesystemfordecision-making
Thisanalysishasgeneratedthreesignificantnewconcepts.First,aclassificationof
differentdecisiontypes;secondananalysisofthedifferentwaysinwhichdecision-
makerscanresolvethetensionbetweencompetingcommitments;andthird,a
frameworkshowingtherelationshipsbetweentheorganisationalfactorsthatshape
decision-making.Thisintegratesseveralthemesfromtheliterature,whichhave
previouslybeentreatedindependently.Myworksofarhas,however,described
elementsofasystem,ratherthanthesystemitself.Thissystemicaspectisimportant:
asoneoftheintervieweessaid:
“Wehavecreatedasystemicapproach…ifwe’vegotamorecomplexmixofthings
itishardertocopy,andmoredifferentiated”.
106
Thisisacontrastwiththeverygranulardescriptionsofthephenomenoninthe
literature.Whilethesehaveenabledquitespecificunderstandingofelementsofthe
system(suchasthenatureoftensions,organisationalcultureorhowtousemulti-
criteriadecisionanalysis),theliteraturedoesnotaddresstheproblemofhowto
integratetheseelements.Thishashithertobeenabarriertotheoreticaldevelopment.
Thisinitialstudydemonstratessixbroadprinciples:
1. Introducingsocialandenvironmentalconsiderationsintocorporatedecision-
makingcausesaclashbetweentheneedsofstakeholdersand–formany
companies–fundamentalbeliefsaboutthenatureandbusinessofthefirm.For
manyfirms,thiscreatesaparadoxintheirvaluecreationmodel.
2. Thiscreatestensionbetweencompetingcommitments,whichwillinfluencethe
wayinwhichexecutivesmaketheirdecisions.Ifcompaniesreframetheir
businesstoincludesomeconceptofsustainability,thismaybroadenthelogical
possibilitiesavailabletodecision-makersinresolvingthetensionbetweenthese
commitments.
3. Thistensionwillbeheldindifferentpartsoftheorganisationindifferentways.
Thematerialimpactsofthetensionbetweenthecompany’sbusinessandthe
needsofexternalstakeholderscouldbemanifestinanumberofwaysfrom
operationalactivities(forexample,inpackagingchoices)throughtocapital
investmentorportfoliomanagementdecisions.Becausethesedecisionsare
madeindifferentways,differentdecision-makingcapabilities–information,
analyticalorframingmethods,orscriptsandschemas–willbeneededin
differentpartsoftheorganisation.
4. Tomanagethechangesinthenatureofthedecisions,decision-makerswillneed
toworkinnewways.Specifically,theywillneed:accesstonewexplicit
knowledge(forexample,informationaboutcarbonemissions)andtacit
knowledge(forexample,howtointerpretthisinformation);newwaysof
thinking,orattitudes,towardssustainability;andclarityabouttheirpermission,
ormandate,toincludesocialandenvironmentalconsiderationsintheirchoices.
107
5. Theseattitudes,knowledgeandpermissionspacecanbeinfluencedthrough
formalprocesses(suchastraining),butarealsoshapedbyandinterpretedfrom
thesignalstheorganisationsendthroughitsformalandsocialsystems.
6. Themainformalandsocialsystemsimplicatedinshapingdecision-makers’
thinkingare:organisationdesign,performancemanagement,cultureand
leadership.
TheserelationshipsareshowninFigure13,below:
Figure13:Thedecision-makingsystem
Thissystemicviewoftherelationshipsbetweentheformal,behaviouralandsocial
structuresthatinfluencetheinclusionofsustainabilitycriteriaindecision-makinglead
toaseriesofideastoexploreinthecasestudyreportedinChapter5.Specifically:
1. Thetensionbetweentheexternalandinternalfactorsisspecifictoaparticular
businessataparticulartime.
2. Thereframingofthistensionisasignificantdecision,whichhasimplications
broadlyinthebusiness.Thisisthereforeledfromthetopoftheorganisation
Howdecisionsaremade
A"ributesofdecisions• Archetypalcharacteris5cs• Decisionprocess• Decisioncriteria
A"ributesofdecision-makers• Knowledge• PermissionSpace• A;tudesandbiases
Tension
Internalfactors:• TheoryofFirm• Vision,missionandpurpose• Rela5onshipswith
stakeholders
`
Externalfactors:• Compe55on• Complexity• Munificence• Stakeholders
Tensioncanbemoderatedby:• Reframingthetension• Companypoint-of-
viewonsustainability
Decisionprocessesanddecision-makerscanbemoderatedby:• Organisa5ondesign• Culture• Performancemanagement• Leadership
108
3. Ifthetensionisnotre-framed,itwillpersist.Thiswillcreatetrade-offproblems
whereverintheorganisationthematerialimpactsofthetensionmightbefelt.
4. Ifthetensionisreframed,itstillexists,butdecision-makersmayhavebeengiven
abroaderrepertoireofwaystomanagethecompetingcommitmentstheyface.
5. Simplyre-framingsustainabilityisnotsufficientiftheorganisationalsystems
which‘bound’decision-makingareunchanged.
6. Thereneedstobecomplementaritybetweenthesesystems.Changingonefactor
withoutaddressingsystemiceffects(forexample,changingtheavailabilityof
informationwithoutchangingthecriteriabywhichdecisionsaremade)willnot
improvedecision-making.
However,thisisstillessentiallyatheoreticalmodel,createdfromcombiningideasinthe
literaturewithobservationsfrompractitioners.Inthenextchapter,Iwillshow,usinga
casestudy,howthepartsofthemodelworktogethertoconfigureasystemina
companythatisworkingtobecomemoresociallyandenvironmentallysustainable.
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5:STUDY2
5.1IntroductionThesystemdiagramattheendofChapter4(Figure13)illustratestheproblemsthat
incorporatingsocialandenvironmentalcriteriaintobusinessdecisionspresent.First,in
ordertochangethewayadecisionismade,thebroaderorganisationalsystemneedsto
changesothattheforcesinfluencingdecision-makersaccommodatethesenewcriteria.
Second,becausedecisionsaredifficultfordifferentreasons,thereisnotasinglesystem
thatcanbeoptimisedforeverything:itismorelikelythattherewillbesub-systems(for
example,capitalinvestment,portfolioplanningorproductinnovation)whichneedto
workindifferentways,despiteacommoncorporatecontext.Thesetwoinsightswere
developedbymakingcomparisonsacrossdifferentcasecontextssotounderstandthe
relationshipsbetweenorganisationalelementsmorefully,Idecidedtoobservethese
phenomenainasinglecontext(Dyer&Wilkins1991).
ThischapterpresentstheStudy2,asingle-companycasestudyofalargeengineering
companyusingthepseudonymConsultCo.ThisbuildsonChapter4,byexaminingthe
threenewtheoreticalideasproposedinStudy1–asegmentationofdecision-types,a
classificationoflogic,andaframeworkoforganisationalinfluencesondecisionmaking
–inasinglesettingtoseehowthethreeconceptsinteract.
Thechapterisorganisedinawaythatreflectstheframeworkoriginallypresentedin
Chapter4.4.2,whichisrepeatedbelowforclarity.
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Afterthisintroduction,Idescribethemethodandthecontextforthecasestudy.
Section5.4introducestheoutercircleoftheframework–thetensionbetweenthe
internalandexternalcontext–togiveanoverviewofthecorporateframingof
sustainabilityandlogicsusedfordecision-making.Insection5.5,Ipresentthedifferent
decisiontypesthatarepresentinConsultCo.Havingestablishedthese,insection5.6,I
analysetheorganisationalandindividualfactorsshapingdecision-making.Section5.7
showshowthetensionsindecision-makingatConsultCoarenested,andhowby
understandingthechallengesatthemicro-level,ConsultCoisabletostartaddressing
tensionsatthemeso-andmacro-levels.Thechapterendswithabriefsummaryofthe
findingsandlimitationsofthestudy.
5.2MethodThiscasestudyisbasedondatacollectedfromarangeofsources(Yin1984),described
inSection3.3.2above.Whiletheanalysisbelowisinformedbythecontextualdata
(largelycompanyreports),itisrootedintheinterviewtranscripts,whichwerecoded
usingAtlasTisoftware.
Externalcontext
Internalcontext
PerformanceManagement
CultureLeadership
Organisa;ondesign
Decisionproper;es
Decisionprocess
Biasesanda>tudes
KnowledgePermissionspace
111
Myobjectiveinthisstudywastotestandextendtheemergingtheories,ratherthanto
developtheoryinaninductiveway.Thisbroadlyfollowsthetheory-informedapproach
describedbyEisenhardtandGraebner(1989),andisconsistentwiththeabductive
approachthatItooktodevelopingtheinitialideasfortesting.Therefore,insteadof
startingwithopencoding,asIdidinStudy1,Icodedthedatausingthecodestructure
developedinStudy1asastartingpoint.Thisisdescribedinsection3.4.Ithenwrotea
‘thickdescription’(Dyer&Wilkins1991),whichIusedasthebasisforparticipantcross-
checking(Butterfieldetal.2005).Inordertocheckmyunderstandingofthesituation,I
heldtwomeetingswiththeSustainabilityLeaderatConsultCoduringthecourseofthe
analysis,andshareda15,000-wordreportofthefindingswiththeinterviewees.
5.3TheCaseContextConsultCowaschosenforthecasestudyusingtheprincipleoftheoreticalsampling
(Eisenhardt&Graebner1989),coupledwithanenthusiasmonthepartoftheir
SustainabilityLeader(whohadbeenanintervieweeinDescriptiveStudy1)todeepen
hisengagementwiththestudy.ConsultCoisaninterestingexampleofacompanythat
hadamulti-yearhistoryofworkingtowardssustainabilityinanindustrythathas
significantsocialandenvironmentalimpacts(Rogeljetal.2018p.140-142)andis
characterisedbytension:thedesignandconstructionofinfrastructure.ConsultCoisa
large,internationalengineeringconsultancywithastaffofapproximately15,000
people.Ithasaglobalpresence,andworksinarangeofsectors,including
infrastructure,water,energyandtransportprovidingservicesfromadvisoryworkto
moredetailedengineeringdesign.Thesesectorsarecarbonintensiveandtheassets
oftenhavelonglives,andsothewayinwhichConsultCoprovidesitsservicestothese
clientscanhaveaverysignificantimpactonsocialandenvironmentalsustainability.
Becauseofthis,ConsultCohasmadesustainabilityakeystrategicinitiative.Thiswas
initiatedfromtheverytopoftheorganisation,aspartofastrategicrefreshafewyears
ago.Thisreviewofstrategyalsotriggeredotherinitiatives,includingafocusonethics,
onbigdata,anupdatedbrandidentityandsomeworkontheorganisation(suchasthe
clarificationofaccountabilities).Theseinitiativeshavebeenmutuallyreinforcing,and
soConsultCo’ssustainabilityworkispartoftheirbroaderorganisationalsystem.
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“It’sourChairmanwho’schampionedit[sustainability],andethics,andthedigital
revolution.Thosearethethreethingshe’sparticularlygonefor.Andhecouldsee
thattherewerechangingpatternsinsocietyandthatthiswouldbecomeimportant.”
Decidingtoadoptcorporatesustainabilityasastrategicinitiativewasprescient.Ina
recentmemowhichwaspublicallyshared,ConsultCo’sCEOobservedthatthereis
increasingpressurefromfinancialbodies(suchastheFinancialStabilityBoard’s
TaskforceonClimate-relatedFinancialDisclosure)forprofessionalstotake
responsibilityfortheinfrastructuretheydesign,andthishasbecomeasignificant
debateamongtheprofessionalbodiessettingstandardsforengineering.ConsultCohas
takenadecisiontoactpre-emptivelyandtotakealeadershipstanceinsustainability.
AtthetimeIundertookthisresearch,ConsultCowasinthefifthyearofitschange
programme.ConsultCoapproachedtheirchangeprogrammebyworkinginparallelon
developingtheawarenessandunderstandingoftheirclients,andbydevelopingtheir
ownknowledgeandcapabilitiestodesignandbuildsustainableinfrastructure.
Effectively,therehavebeenthreebroadstrandstothechangeprogramme:phaseone
involvedsettingthestrategicdirectionforsustainability,andintroducingcoreconcepts;
phasetwoinvolvedbuildingcapabilitiesandknowledgestocksandflows;andphase
threeinvolvedchangingtheselectionofclientstohelpConsultCoexitparticularly
pollutingorproblematicbusinesses.Theoverallarchitectureoftheprojectisshownin
Figure14.Themaininitiativesareshowninboxes,whichareconnectedwitharrowsto
showsignificantinterdependencies.Thethreephasesoftheprojectareindicated
acrossthebottomofthefigureusingbroadarrows.
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Figure14:KeyinitiativesinConsultCo'schangemanagementprogramme
Ratherthandescribingtheimpactofeachchangeinitiativechronologically,thenext
sections(5.4to5.6)analysethewaytheseorganisationalchangeshaveshapedtheway
peoplemanagesocialandenvironmentalissuesintheirdecision-making.
5.4Tensionbetweentheinternalandexternalcontext
InChapter4.3,Idiscussedtheroleofhavingacorporateframe,orperspectiveon
sustainabilityandthewaythisinfluencesdecision-making.ConsultCohasdevelopedan
approachtoframingthatreflectsthenatureofitsimpacts–whichareprimarily
incurredthroughthedecisionstheymakeaboutconstructionprojects.Thetwoassets
thatConsultCobringstoitsworkarethetimeofitsconsultantsandtheknowledgethat
theyhave(includingknowledge-basedtools).Thiscontrastswithorganisationsthat
maybemanaginglargefixedassetsresponsibleforenergyormaterialsuse.Instead,
ConsultConeedstobeabletomanageanapproachtosustainabilitythatisessentially
intangible.Thismeansthatwhiletheyareabletousesomeconventionalmetrics(and
dopublishanannualprogressreportcoveringissuessuchascarbonemissions),much
moreoftheirworkisconducted‘invisibly’throughtheirworkwithclients.
Clientmanagement
ini+a+ves
Sustainabilitysupport
ini+a+ves
Impacts
Regularprogrammeofeventsforclientengagement(includingConsultCo
staff
Developmentofaseriesofpublica+onsandcasestudiestoinspireclients
Exitfromsometypes
ofclientwork
Key
leadership
appointment
Newdata-
setsand
reports
Trainingforspecialistadvisorsto
reviewprojects
Introduc+onofsustainability
assessmentsonmostprojects
Buildingstructuresfor
improvedknowledge
sharing
External
repor+ng
ofprogress
Strategicini+a+ves
Strategic
commitmentto
sustainability
Newclient
leadership
strategy
Programmeof
cultural
integra+on
‘Decisionto
bid’process
revised
Phase1 Phase2 Phase3
Introduc+onof
sustainability
networks
Knowledge
People
Projects
Educa+on
Discussionof
sustainability
opportuni+es
Broader
awarenessof
benefitsof
sustainability.
Decreasein
embedded
carbonin
projects
Developmentof
more
informa+onand
capabili+esfor
consultants
ConsultCo
posi+onedto
servefewer,
beQerclients.
114
ConsultCo(likemanyotherprofessionaladvisoryfirms)facesatensionindecision-
makingforsustainability,inthattheirworkisactuallycarriedoutforclientswhoare
ultimatelyresponsibleforowningandoperatingthebuiltasset.Asoneinterviewee
said:
“Asaconsultingfirm,wecanpropose,wecanrecommend.Andthen,thishappens
throughoutthewholedecision-makingprocess,notjustsustainability.”
Thus,ConsultCo’sapproachtosustainability–whileanimportantstrategicplatform–is
constantlynegotiatedthroughtheprocessofclientengagementandisspecifictothe
context.Asoneintervieweesaid:
“Thedriversineachofthosegeographicallocationsarequitedifferent,and,Ifor
manyyearshavebelievedthatsustainabilityisaboutplace”.
Despitethisapparentambiguity,ConsultCo’sapproachtosustainabilityisbasedona
fundamentallogicthatthereisabusinesscaseforactinginawaythatissociallyand
environmentallysustainable,andthis‘corporateframing’iscommunicatedto
ConsultCo’sstaffthrougharangeofchannels,includingtrainingandinternal
publications.Thisbusinesscaseisbasedonthreemainideas.First,thematerialsand
energysavingfromactingsustainablymeansthatsustainabilitypaysforitself:
“We’vegotthismantranow…thatreducingcarbonreducescost,whichisgreatand
there'ssomeevidenceofthat,butweshouldbedoingthatasstandardacrossallof
ourprojects.”
Second,theabilitytoworksustainablyisrelevantandappealingforclients,andhas
reputationalvalue;
“Sustainabilityisalayer,ratherthansomethingthatclientspurchaseontheirown….
butsometimesitthestrandthatmakesthemtakenoticeofus.”
Andthird,employeesaremoreattractedtoacompanythattheybelieveacts
responsibly,andthattheywishtoworkthisway–asoneintervieweesaid:
“Iendedupgoingtoquiteafewrecruitmenteventsandfoundthatalmost
universally,[that]ifIwasapersonatarecruitingeventwhoknewsomethingabout
sustainability…thenIwasalwaysinveryhighdemandanditveryquicklybecame
clearthatitiscoretothebusiness,anditisabsolutelyfundamentalforrecruitment
aswellasallsortsofotherthings”.
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Becauseofthis‘win/winbusinesscase’framing,Ifoundthatthetwodominantlogics
usedinmakingdecisionsaboutsustainabilitywereeitherwin/wins(inwhichcasethe
decisionswerepredicatedeitheronmaterialorenergysavings,oronsocialbenefits
withoutsignificantcost),ortrade-offs(insituationswherewin/winswereapparently
unachievable).
Theengineers’leveloffocusonwin/winswasinfluencedbyclients’approachesto
sustainability.Someoftheintervieweescommentedonhowimportantitistohavea
clientthatbelievesintheimportanceofsustainability:
“IamaproponentofsustainabilitybutIthinktheoverallcompanyisreallypushed
byourclientsfromthesustainabilityperspective,atleastinmyexperience.”
“TheprojectsthatIseethatintegratesustainabilitythemostaretheoneswhereour
clientsarerequestingit.”
ConsultCohasthereforeworkedactivelyonengagingclientswithsustainability(for
examplethrougheventsandpublications)andhascreatedprocesses(discussedin
section5.6.1,below)toensurethattheclientperspectiveonsustainabilityandthe
ConsultCoperspectivearealignedbeforeaprojectbegins,andthatthisalignmentis
maintainedthroughtheprojectlifecycle.
TherearethereforetwofundamentaldriversforsustainabilityinConsultCo:client
demandandConsultCo’sownstrategicpush.Thesedriversarebalanceddifferentlyin
eachsituation,andsothereisno‘onerightway’tomanageeachprojectforsocialand
environmentalsustainability.
Thereare,however,twopotentialareaswheretheinterestsofConsultCoanditsclients
arenotaligned:thelifecycleoftheassetandthecontractualtermsforthework.The
problemofinter-temporality–balancingthelongandtheshortterm–isacommonone
incompaniesthataretryingtoactsustainably(Bansal&Desjardine2014).Someof
ConsultCo’sprojectshaveextremelylonglifecycles,andyettheconsultantsonlywork
onitforashortperiod:
“Tobesuccessfulinsustainabledevelopmentweneedtothinkaboutthewhole
project’slife.Wecan’tjustconstrainourthinkingbygettingtotheendoftheproject
andpracticalcompletionandthenjustgoaway.Whichofcourseiswhatwedo.”
Thisproblemcanbereinforcedbythecontractualterms:
116
“Mostofourclientsaren'tincentivisedonawholelifebasis,andthey'recertainlynot
incentivisingusonawholelifebasis.”
Clientsvarynotonlyintheirapproachtosustainability,butalsointheirapproachto
contractmanagement.Oneintervieweecontrastedtwoverydifferentexperienceswith
differentprojects.Inthefirstcase,theintervieweedescribedaverypositivewin/win
experience:
“He'sanexcellent,inspirationalleader,stillatthebackofhismindwewereonacost-
incentivisedproject,sohewasalsoawarethatallofthisgreatstuffweweredoing…
wasn'tjustforthesakeofit,itwouldactuallydriveefficienciesanditwouldsaveus
money.”
Theintervieweecomparedthiswithaprojectforadifferentclient:
“Whereyou'reworkingwithavery,verytraditionalclient,whoisn'treallyinterested
in[sustainability],you'rebeingpaidbythehour,anythingthatisn'tinyourscopeisa
disallowedcostsoyoucan'tcoveritinanyway,you'renotgoingtogetanyfinancial
awardfromdoingit,thenthatwillinevitablydriveaverydifferentculture.”
Thismeansthattheconsultantsaretryingtodeliversocial,environmentaland
economicoutturnswithinabriefthathasbeensetbyaclient,andsometimesworkingto
optimisetotallifeimpactswhilebeingrewardedbasedonaninitialcapitalbudget.The
intervieweesidentifiedtwowaysinwhichthistensionismanaged.Thefirstofthese,
whichisdiscussedinsection5.5.1,isConsultCo’sprocessfordecidingwhichclientsto
workwith,andwhichprojectstoworkon.Thesecondistheroleofleadership
(discussedfurtherinsection5.6.1).Asoneseniorintervieweesaid:
“Sometimesthethingsweneedtodeliverforourbusinessdon’tfitintoourcostings
andapproachforaproject,soweneedtofinddifferentwaysofdeliveringoutcomes,
andthosecomeunderpressuresofthingslikeutilisationandbudgetsandallthose
sortsofthings.Sooneofmyjobs…istotrytounderstandsomeofthosestressorsor
constraintsandtrytounlockthosebarriers.”
Thistensionbetweenthelongandshort-term,andthetensionthatmaybesetup
throughthecontractualtermsneedstobemanagedthroughthedecisionsthatthe
engineersmakeoverthelifetimeoftheproject.
117
5.5SegmentationofConsultCo’sdecisions
BecauseConsultCo’smainimpactisthroughthedecisionsmadeonitsprojects–
whetherthesearehigh-levelcitymasterplansordetailedengineeringdesign–themain
focusofthisanalysisisonthedecisionsmadeduringthecourseoftheprojects.These
decisionsarespreadthroughouttheorganisation,ratherthanbeingconcentratedina
singlelocus.Thenature,complexityandscopeofthedecisionsvaryaccordingto
seniorityandrole,butitisnotthecasethattherearejobswheresustainabilityis
irrelevant.Thenatureoftheproblembeingsolved–andthepotentialsustainability
impact–changesovertheprojectlife-cycle,andsoIwillreviewthetypesofdecisions
andthestrategiesformanagingthemacrossfourstagesofthelifecycle:thepre-bid
stage,bidstage,projectstart-up,andprojectmanagement.
Thereare,ofcourse,otherdecisionsthatareimportantforsustainabilityatConsultCo–
forexample,choicesaboutinvestmentsinknowledge,instaffdevelopmentorinthe
basicoperationalmanagementofthecompany(forexamplemanagingthecarbon
efficiencyofConsultCo’soffices).Whilesomeintervieweesdiddiscussaspectsofthese,
themainfocusoftheinterviewswasonthedecisionsmadeinthecourseofConsultCo’s
projects.Thenatureofthedecisions,andthedecision-makers,changesoverthecourse
ofthislife-cycle,asoneintervieweecommented:
“Sometimeswe’llpickupworkwheresomeofthebaselinedecisionshavebeenmade.
Forexample,ifsomething’sbeentakenthroughtheplanningconsentphasethenwe
canonlygosofar.Whenwe’reintodetaileddesign,thenalotoftheworkmaybe
aboutselectionofmaterialsorconstructionmethods,thatsortofthing.Whereas
whenwe’reintheearlierstages,clearlyyoucangetmuchmoreinvolvedinthe
pillarsofsustainability,andyoucanhavemuchmoreofaninfluenceontheoverall
choiceoftheschemeoptions”.
Thissectionoutlinesthekeycharacteristicsofthedecisionsateachstepintheprocess
showninFigure15:
118
Figure15:Keydecisionsduringtheprojectlifecycle
5.5.1ThePre-BidStage
Oneconventionalchallengewithformalbiddingprocessesisthattheyareoftenquite
time-pressuredandcanfeelquitetransactional.Tomanagethis,ConsultCohasstarted
toworkwithclientsearlierintheprojectlifecycle.Thereisnowaformalrolefor
accountleaders,whoarechargedwithunderstandingmoreaboutclientneedspriortoa
potentialbidarising.Theserelationshipsallowtheleaderstoreflectonfirst,whether
thecompanyshouldengagewithaparticularprojectatall,andsecond,theclient’s
sustainabilitygoalsandpriorities.Asoneleadersaid:
“I’vebeenworkingfor[client]forover20years–we’vebeeninvolvedinthe
conceptionstage,intheconstructionstage.Inthosekindoflong-termrelationships
thenwereallydohavetheopportunity,andwereallydoinvestbybringingexpertise
in[sustainability],andIcanthinkofnumeroustimeswhenwe’vedonethatand
we’veaddedvalue.”
Pre-bid Bidstage Projectstart-up Designphase Comple9on
• DevelopmentDirectorsworkcloselywithpoten9alclientstounderstand(andshape)sustainabilityaspira9ons.
• ConsultComaydecidenottobidifitisnotpossibletoreconcileviewsonsustainability
• Theremaybelessemphasisonsustainability,ormorecompliance-basedapproachesatthisstageHoweverPSCconsultantsmaytakepart(est.66%ofcases).
• Atensionatthisstageisbetweenlife9meandcapitalcosts
• Astheteammobilise,theyre-engagewiththesustainabilityaspira9onsfortheproject.
• Thisstageisanopportunitytodosomecrea9veproblem-solvingonsustainability
• Sustainabilityissuesariseinbothengineeringdecisions(eg.Choiceofmaterials)andinprocessesofstakeholderengagement
• AIertheprojectiscomplete,theclientisresponsibleformanagingitsongoingsustainability.It’sthereforeveryimportantthattheseconsidera9onshavebeenbuiltintotheearlierwork.
119
Aspartofthethirdwaveofitschangeprogramme(SeeFigure14,above)ConsultCohas
madesomechoicesaboutthetypeofprojectitispreparedtoengagewithbothinterms
ofsustainabilityandethics:
“Giventhatthebigdecisionswemakeareaboutwhoweworkwith…they’vegotto
passtheethicstest”
“[Sustainability]isacriterioninwhetherornotwetakeonprojects.Soifyou're
workinginaprojectarea-well,anyprojectarea,butparticularlythosethatmight
havesignificantsustainabilityimpacts-itwillaffectwhatmarkets,whatprojects
youwillpursue.So,hydro-projectsinvolvinglargescaleresettlement,orcoal-fired
projectswillbe,wellwelikelywon'tgetinvolved.Itwouldhavetobesomething
exceptionaltomakeusdothat.”
ThisstanceiseffectivenotonlyinreducingthereputationalrisksthatConsultComight
face,butalsocanmakethedecisionsfacingthegroupsimpler.Forexample,thereare
difficulttrade-offstobemadeinsomegeographiesaboutthebestsourceofenergyto
use.ConsultCo’sapproachofonlyworkinginsomesectorsmeansthatitisableto
betterfocusonbuildingresponsibly.Thishashadsomeorganisationalimplications:
“Ican'tpretendit'sasimpleproblembecausesometimespeople'slivelihoodsaretied
upinatechnologywhichisnotdeemedsustainable….Ithinkitdoestakevery
strongleadership,andstrongleadershipsignalsandafirmresolve…Itistough,and
itdoeshavechallengingaspectsintermsofmaintainingthatcollaborative,open
workingculturewhenyou'redeprioritisingsomesectorsoverothers.”
However,thedecisionsmadeataday-to-daylevelhavebecomeclearer.
Whiletheprocessofmanagingclientrelationshipsisanongoingone,atsomepoint
thereisadecisiontobidornot.Thisisathepointatwhichthepeopleleadingthe
relationshipneedtobringtogethertheirknowledge–asonepersonsaid:“Anumberof
thingsgointothedecision”.Toformalisethisprocess,again,aspartofitssustainability
changeprogramme,ConsultCohasintroduceda‘decision-to-bid’form.Thiswas
mentionedbyseveraloftheinterviewees,anddescribedmorefullybyone:
“Itasksyouaseriesofquestionsandthatresultin'OK,Ihaveansweredallthese
questions,Ihavethoughtaboutallthesethings'and[it]presentsyouwhetherwe
shouldgoafteritorweshouldn'tgoafterit.Sothatdecision-to-bidformisdefinitely
somethingthatweuse,andtherearesomeotherfactorstoitobviously,likethecost
120
ofit,theposition,dowehavetheexpertise,andthingslikethattoo.Butreallythebig
thingisthedecision-to-bidform.That'swhatConsultCoreallywantsyoutoconsider
priortogoingaftersomething.”
TheeffectthishasisthatConsultCohasveryfewdecisionswiththecharacteristicsof
‘wickedproblems’,thatistosayquestionsthataretrulyambiguous.Thisisnottosay
thatthedecisionsthatariseduringtheremainderoftheprojectareeasy–theyarenot.
However,theytendtobesolublewithinthetermsofreferenceoftheprojectitself.
5.5.2TheBidStage
Severalintervieweesreportedthatcoverageofsustainabilityatthebidstagewas
relativelylowerthanatthepre-bidstage.Theysuggestedtworeasonsforthis.First,
despitetheenthusiasmsomeclientshaveforsustainability,thismaynotbeakeypoint
intheirprocurementprocesses.OneAccountLeader,whoworkedbothonthepre-bid
andbidstageswithclientsobserved:
“Wequiteoftengetdisappointedbythelevelofsustainabilitycoverageinbids.Even
atthemoreoptimisticsideofthatspectrum,thequestionmightbefairlygeneric,
process-basedpieces,there’softenanopportunitytobringinsomeevidenceof
awardsorparticularsavingsthatwemadeincompletedprojects.But…ifthe
questiondoesn’treallydemandalot,youdon’tgetanyextramarksforitandyoucan
actuallylosemarksbyfocusingonsomethingthat’snotreallybeingaskedfor,no
matterhowpassionateyoufeelaboutit.”
Second,therecanbealackofresources.IfConsultCodecidestoproceedwithabid,they
assembleateamtodevelopthiswork.Aswellastheengineers,andsometimes
marketingpeople,therearedesignated‘ProjectSustainabilityCo-ordinators’(PSCs)
whoareallocatedtoprojectstoensurethattheappropriateknowledgeisbroughtin.
Oneoftheprojectmanagersspokeaboutthevalueofthisgroup:“Thesepeoplehavehadtotakeatrainingcourseforconstructionprojects,and
they'reabletobeakindofsoundingboard.Becausetheriskisthatpeoplewhohave
workedonthefeebid…mightgetblinkered.Sometimesyouneedagreenerperson
tocomeinandsay'really?Haveyousolvedtheproblem?’”
121
However,someoftheintervieweesobservedproblemswiththesystem.Insome
locations,therearenotenoughqualifiedPSCs,andinothers,theyaresometimesnot
usedverymuch,partlybecauseofthelackofemphasisonsustainabilityinthebid,and
partlybecauseofthepressureofotheractivities:
“You’rebeingaskedtothinkaboutitatthesametimeasdoingariskmatrix,and
puttingthecoststogether,soit’sjustanotherthing…Andputtingafeetogether,to
befair,isprobablystillwaymoreimportant.”
Despitethisrelativelylowemphasisonsustainabilityatthebidphaseoftheproject,
intervieweesmaintainthatitisimportant:
“Itgenuinelyisimportanttous.Justbecauseatendermaynothavecovereditvery
much,wewilltaketheopportunityafterwardstoexplorewithinourprojectaswell
asourpositioning,howbestwecanservethesustainabilityambitionsandaimsof
ourclients.”
Thisprocessofre-groupingstartsintheprojectstart-upphase.
5.5.3ProjectStart-Up
Theintervieweeswereunanimousinidentifyingthatthebeginningoftheprojectwas
importantinincorporatingsustainabilityideasintothework:
“Fromapersonalsatisfactionpointofview,Ithinkthefrontendoftheprojectis
wherewecancreatethegreatestvalue,findthegreatestopportunities,andtryto
impartthosesolutions.”
However,thisisalsoapointofdiscontinuitywherethepeopleleadingthebidhandover
tothepeoplewhowillactuallyimplementthework.Thisisacriticalpointforbuilding
alignmentbothwithinConsultCoandwiththeclientabouttheroleofsustainability.A
projectmanagerdiscussedtheprocessofalignment:
“Youhaveaprojectkick-offwhereyougeteveryoneintoaroom,andifit'sacrossa
fewoffices,thenyougeteveryonedialedinviaSkype,andyousay:thisisourbrief,
thisistheclientrequirement,andthisisConsultCo'srequirementsontopoftheclient
requirements.”
122
Anotherintervieweedescribedtheprocessforengagingclientsinbuildingclarityabout
thesustainabilityaimsoftheproject:
“Itry…tohavethatconversationabout‘whatareyoutryingtoachieve?Andwhat
aretheconstraintsforyourorganisation?Andwhatarethethingsthatworkwell
andthatdon’tworkwell?’Becausethatthengivesustheflavour,andtheguidance
abouthowwetacklethatnextstage.Andalsoitgivesustheopportunitytocome
backatvariousstagesintheprocesstocomebackandsay‘Hey,yourememberthese
wereyourheadlinegoals,thesewerethethingsyouwanttoachieve’.”
Atprojectstart-up,thedecisionsmayberenewedagainastheteamtakesoverand
startsworking:
“Onceyou’vemobilised,you’reintoarole,andclearlyasanorganisationwecan
continuetoinvestinthingswebelieveinandmaybeevenspendsomeofourown
moneyonaprojectputtingsomeexpertsandsomeinputintothesustainabilityspace
…becausewethinkwewillbeabletomakesavingseitherwithinthespecificproject
we’reworkingonorinthewholelifecostofthepieceofinfrastructurewe’reworking
on.”
Thisprocesseffectivelysetsthecontextformakingthedecisionsthroughthenextphase
oftheproject.
5.5.4ProjectManagement
ConsultCo’smaterialimpactsonsocietyandtheenvironmentcomefromthedecisions
thattheirengineers(andotherprofessionals)makeinthecourseoftheprojects
themselves.Theserangefromhighlevel,conceptualdecisionstodetaileddesign
choices.Somearetakenbasedonstandardsorrulesofthumb,whereasothersinvolve
morecomplexprocessesofengagingclientsorabroadergroupofstakeholders.Using
theclassificationofdecisiontypesfromChapter4.2.2,ConsultCo’sprojectspresent
decisionsinthreecategories:‘operationaldecisions’,‘engineeringefficiency’and‘messy
situations’
Designdecisionsvaryintheircomplexity.Somearerelativelyroutine,andcanbemade
usingstandardprocedures.Severalintervieweesspokeaboutusingparticular
123
sustainabilitystandards(whichexistindifferentregions)inordertomakesurethat
theyhadaprocessformakingsurethatengineerspaidattentiontosustainabilityin
somedecisions.Wherepossible,ConsultCohasalsobeendevelopingtools–for
examplecarboncalculators–thatcanacceleratetheseroutinedecisions.However,
therearetwopotentiallimitationsofthisstandardisationandroutinisation.Thefirstis
thatthestandardsstillneedtobeappliedthoughtfullybytheengineers:
“It'snotlikethetoolsarebeingprescriptive'dothisandthatspecificallyandyou'llbe
moresustainable'.No,it'smore'saveenergy:youshowusthebestwaytosave
energytosuittheneedsofyourproject.''Promoteindoorenvironmentalqualityfor
occupants','reduceenvironmentalimpactthroughwasteminimisationandmaterial
selection',youknow,allofthosethingsarebroadsubjectsandcertainlythereare
specificthingsweneedtosatisfy,butwedon'tneedtobeconstrainedbythosetools.”
Thesecondisthatsomeestablishedstandardsmightnotbethemostappropriatefora
particularsituation:
“Somebody…mightlookatitandsay‘thisistheBritishStandard,thisiswhatithasto
be,andtherearenodeviations’.Soyousometimeshavetotakethesepeopleasideand
say'canwebecleverhere?”.
Sowhiletoolsandstandardswerecertainlyseenashelpfulbymanyoftheinterviewees,
somepointedoutthatengineersneededtogofurther:
“Ithinkyouhavetobeunafraidtochallengethings,andyouhavetosay‘why?’and
‘whatareourlimitsherereally?’andyoucan'ttakethingsatfacevalue.”
Theintervieweesgaveseveralexamplesofdecisionsthatwereimprovedbychallenging
thefundamentalassumptionsofaproject.Takingthisapproach,however,doesrequire
peopletotaketimeandthought.Oneintervieweedescribedusinga‘TakeFive’
approach–borrowedfromhealthandsafetyprotocols–toencourageengineersinthe
designphasetostepbackandlookatthebroadercontextfortheirdecisions.
5.5.5HowConsultCo’ssustainabilityagendainfluencesdecisions
ThechangesthatConsultCohasmadetotheprojectprocessaspartofitssustainability
programmehavehadsomeeffectsonthetypeofdecisionstheyareinvolvedin.
Introducingthe‘Decision-to-bid’processmeansthattheydonotfacedecisionswiththe
characteristicsof‘wickedproblems’astheyhaveelectednottotakeworkthatcreates
124
these.However,theintroductionofPSCsand‘Take5’hasdirectedattentiontoroutine
decisions.Choicesthatwereoncemanagedas‘operationaldecisions’nowhavethe
characteristicsof‘engineeringefficiency’or‘messysituation’decisionsastheengineers’
attentionisdirectedtowardsthesocialandenvironmentalaspectsofthedecision,thus
creatingmorepotentialtensions.Thismakesnewdemandsontheengineers,
particularlyontheirtimeandknowledge.Althoughtheintervieweeswereconvinced
thatstakeholderengagementwasessentialtosometypesofdecision-making,engaging
communitiesiscomplexwork,andcanbetime-consuming:
“Thesocialsidetakesmoretimethanthedesign,whichisridiculousintheory,butin
practicethatiswhathappens.So…youputinyourassumptionsonhowmuchtime
youneedtodesignandhowmuchyouneedtoconsult,and…wegotthebalance
wrongbecauseweunderestimatedthetimetogetpeopleonside.Becauseitcantake
alotofeffort,youknow,tobringpeopleonboard.Thenoveralltheprojectsucceeds
better.”
Thus,ConsultCo’sadoptionofsocialandenvironmentalsustainabilityasastrategic
priorityinitsworkhasstartedtoredirectattentionintheorganisation,andhaschanged
thenatureofthedecisionsthataremadeinitsprojects.Increasingawarenessamong
thestaffofthesocialandenvironmentalaspectsoftheprojectshasbothimprovedthe
impactofConsultCo’swork,andincreasedthedemandsonitsengineersintermsoftime
andknowledge.
5.6ConsultCo’sorganisation
Thesechangeshave,ofcourse,takenplacewithinthecontextofanestablished
organisation.Inthissection,Iexaminefirsttheorganisationalfactorsinfluencing
decision-makers(culture,organisationdesign,leadershipandperformance
management),andsecond,thefactorsthatindividualdecision-makersbringtoeach
decision(theirsenseofpermission,attitudesandbiases,andknowledge).Attheendof
eachsection,Icommentonhowthesecharacteristicsmightenableorhinderthe
effectiveinclusionofsocialorenvironmentalconsiderationsindecision-making.
125
5.6.1OrganisationalFactors
Culture
Theintervieweesplacedastrongemphasisoncultureintheirdescriptionsofthe
decision-makingenvironment.ConsultCo’scultureisverymuchshapedbyitshistory.
Inparticular,ithastwoapparentlycontradictorycharacteristicsthatareinfluencedby
thewaythecompanydeveloped.Ononehand,thecultureisquitefragmented,with
severaldistinctsub-cultures;ontheother,theemployeeownershipstructuremeans
thatthereisadeepsenseofsharedcommitmentandmutualreliance.
Theculturalfragmentationstemsfromthreedistinctphenomena.First,ConsultCo’s
strategyofgrowthbyacquisition–eithergeographicallyorthroughtheacquisitionof
firmsbringingnewspecialistdisciplinestothecompany–hasmeantthatthecultureis
notcompletelyconsistentthroughouttheorganisation.
Thishasbeenproblematicinsomecases,particularlywhentheintentionwastobringin
veryspecificexpertise:
“WewereacquiredbyConsultCobuttheproblemwas…theythoughtit[the
culture]wouldjustruboffonpeople.Sotosomeextenttheindoctrinationofthe
ConsultCowaykilledit.”
“Youcouldseetheverymuchadifferentculturewhichisnowinplace,andthe
transitionfromtheless-disciplinedandhighlyenthusiastic,butnowmovingintothe
morecontrolledenvironment.”
However,whentheacquisitionswerepredicatedongeographicgrowth,thislevelof
culturaldiversityhassometimesbeenadvantageous.
“It’seasytotakeforgrantedas[nationality]whereit’sinourculturetobe
questioning.Andthat’snotnecessarilythesameinothercultures.Weneedto
recognisethosedifferencesandfindotherwaysofgettingthebestoutofpeople.”
ThisflexibilityissometimesseenasanadvantageasitenablesConsultCotoreflectthe
characteristicsofitsclients,andoneintervieweecommentedonthiseffectatthelevelof
themicro-cultureofaprojectteam:
126
‘”Theprojectmanagersetareallygoodcultureinthatteam,andmadeitveryclear
fromthestartthathewantedittobeaflagshipproject.Hewantednewideas.He
wantedittotakeastepforward,tobetheexamplethatweusedforthenextthreeor
fouryears.”
“Evenwithinthatproject,theculturechangeddramaticallyoverthecourseofit.”
Specialistculturesarealsocreatedbythenormsofdifferentengineeringprofessions.
However,ConsultCo’sneedtocultivateprofessionalspecialistsandatthesametime
makethemworktogetherinamultidisciplinarywayissomethingthatneedstobe
managedactively:
“It’seasytoseeinengineering:youlookatanelectricalengineeroramechanical
engineerandtheywillbequiteheavyintheirsinglediscipline…weencouragepeople
tobefarmoremulti-disciplinaryintheirapproach.”
“Wetrytogetthemtounderstandtheneeds–youknowmechanicalengineers
understandingelectricalengineersunderstandinghydraulicengineers,
understandingarchitects,understandingclients–wereallytrytoengenderthis
culturewiththeteam.”
Thus,therearepotentialfissuresinthecorporateculturebetweendifferent
geographies,professionaldisciplinesandinsomecasestheculturesofacquired
organisations.
Inrecentyears,therehasbeenaconcertedefforttoaddressthesechallengeswithan
initiativetoimproveconnectivitywithinthecompany.Severalinterviewees
commentedonthis:
“There’saculturalchangethat’sgonethroughinmytimeframehere”
“Twoyearsagotheystartedanewinitiative,whichwas‘weareConsultCo,weare
onecompany.Let'sbreakdownthesebarriers’”
Thisnewapproachwaswellreceivedbytheintervieweeswhomentionedit.In
particularitemphasisesconnectedthinkingandproblem-solving,bothofwhichwere
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seenasstrengthsofConsultCo,andbothofwhichwererelevantfortheworkon
sustainability.Oneintervieweecommentedexplicitlyonthewayinwhichthischanging
culturecouldsupportsustainability:
“We’retalkingaboutachangeoveryears,ratherthanweeksandmonths.Butthat’s
howyouchangethecultureofabusiness….[sustainability]reallyhasbecomeapart
ofConsultCo’scultureandourethosthatthisisimportanttous,notbecausewehave
to,butbecausewe’veturned‘haveto’into‘wantto’andweseethebenefitsofit.”
Asaresultoftheseefforts,theintervieweesidentifiedafewfundamentalcharacteristics
thatweresharedbyallthesub-cultures:
“Youknow,althoughthegroupcultureisn'thomogenousacrosstheregions,Ithink
therearestrongcommonelementsrunningthroughmostbusinessunitsandmost
regionsthatdofacilitatethatopen,collaborativeapproachtodoingthings.AndI
reallydovalueitbecauseIoftenseehowmuchotherorganisationsdon'talways
achievethisandaremuchmoresilo-ed.”
Thetwomostcommonthemesthatwerementionedintheinterviewswerecollegiality
andriskaversion,andtheseseemtobeconsistentacrosssectorsandgeographies
Almosteveryintervieweeappreciatedandsawthevalueofthecompany’scollegiality:
“Collaborationisencouragedatthetopandalsobottom-up”
“ConsultCoisunique.Itisengaged,openandcollaborative”
Intervieweesalsomadetheconnectionbetweenthistypeofcollaborativeapproachand
theneedtoseekknowledgeandexpertisetomakeinformeddecisions:
“There’sisabigfocusonakindofflathierarchy,collaborativeapproach,opennessto
newlearning,globallyintegratedworking.”
“Peopleareveryhelpful”
Theotherconsistentthemeinthecommentsaboutculturewasacertainlevelof
risk-aversion.Thisclearlyinformsdecision-making:
“Lookingattheissueofrisk–corporaterisk–alotofthedecisionsIwouldmake
wouldbe‘whatistherisktoConsultCointhis?’…Alotofthetimewithdecision-
makingIgothroughtheprocessthatsays‘whathappensif?’Idoalotofthat.”
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Thesetwoaspectsofthecultureareapparentlyintensionwitheachother.One
intervieweepointedoutthedifficultyofmanagingthistension:
“Wearequiteriskaverse,andwecouldempowerpeoplemore.It’shardtostrikethe
rightbalancebetweenthesetwothings.”
Anotherintervieweepointedoutthatthisbalanceofconservatismandcollegiality
occursinotherculturestoo,usingananalogy:“insomewayswe’reprobablya
Gentlemen’sclub.”Manyintervieweesattributedthesetothecompanyownership,
commenting:“Ithinkthecultureisspecialbecauseweareemployeeowned”.Thisdrives
collegiality,aspeopleseethevalueofworkingtogetherbecausetheycanshareinthe
benefitofthework,butalsodrivesalevelofriskaversionaspeoplehaveapersonal
financialstakeinthecompany.
TheseaspectsofConsultCo’sculturedoinfluencedecision-makers.Whileeachofthem
isoperatinginaparticularclientcontextandwithabackgroundinaparticular
geographyordiscipline,thebroadercontextofConsultCoenablesthembothtomake
judgementandtoseekknowledgeandinput,bothofwhichwereimportantin
influencingindividualdecision-makers.
OrganisationDesign
Thiscommitmenttocollegialityalsoinfluencessomeoftheformalsystemsofthe
organisation.TheintervieweesemphasisedthreecharacteristicsofConsultCo’sformal
organisation–processes,jobdescriptionsandnetworks–thatplayasignificantrolein
bringingsustainabilityintodecision-making.Theyalsocommentedonthestructural
tensionsthatexistwithinthecompany.
IntheanalysisofthedecisiontypesinSection5.5,itwasclearthattheoverall
managementoftheprojectprocessisakeyfeatureofthewaydecisionsaremadeat
ConsultCo,forexamplethroughthedecision-to-bidform.Despitethis,noteverything
canbemanagedthroughprocess.Oneintervieweeobservedthatthisroutinisationcan
beuninspiringattimes:
“There’sbottomupenthusiasm,butwhenthetopdownprocessesapply,itswitches
everybodyoff.”
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Thisispartlyforculturalreasons.Aswehaveseen,ConsultCo’speoplevaluecollegiality
andprofessionalidentity,ratherthansimplybeingtoldwhattodo.Bycontrast,another
intervieweepointedoutthatsometimesprocessesdonotgofarenough:
“WhatI'mtryingtodoiswhat'snotpartoftheroutineprocess-well,weneedto
makesurethat'sworking-butweneedtopushbeyondwhattheroutineprocess
won'tprovide.”
Thissuggeststhattheprocesses,whileundoubtedlyuseful,needtobecomplemented
withothersystemicapproaches–suchasthecorporateculture,andthenetwork
structure–toinfluencedecision-makers.
ThesecondmechanismbywhichConsultCoshapesanddirectstheattentionofdecision-
makersisjobdescriptions.Oneintervieweepointedoutthattheremitfordecisionsis
establishedbasedonpeople’sroles:
“[People]startwithaverysmallremitwithpossiblynotagreatdealofultimaterisk,
andthenastheygrowtheirskillsettheygrowtheextenttowhichtheirdecisionsare
significant.”
Anothercommentedthattheseareclarifiedattheprojectleveltoo,toensurethat
decision-rightsareunambiguous.
“Atthestartofeveryprojectwetrytobeclearabouttherole,responsibilityand
accountabilityofeveryoneontheteam,andpeopleknowwhatthegoalpostsareand
howtoescalateprojects.”
Again,thisisaneffectivewaytomanageinaculturethatisessentiallycollegial.
WhileclearjobdescriptionsandprocessesarethemeansbywhichConsultCobrings
clarityandaccountabilitytodecision-making,networksarethemeansbywhichit
ensuresthattherightknowledgeandinformationischannelledtothedecision-makers.
Oneofthechallengesofincludingsocialandenvironmentalsustainabilityindecision-
makingisthatitmaycallontypesofexpertisethatarenotintheteam.ConsultCohas
emphasisedtheimportanceofmulti-disciplinarityinthistypeofwork:
“Ithinkthatsustainabilityisnecessarilyaverymulti-disciplinedpractice,thatit
requiresthesharedknowledgeandexperienceofpeoplefromavarietyof
backgrounds.”
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Thistypeofmulti-disciplinarityisrecognisedasaninstitutionalstrength,andisasource
ofdistinctivenessforthebusiness,aswellasbeinganimportantpartofmanaging
sustainability:
“It’sourabilitytosynergisethosecomplexmultidisciplinaryenvironmentsthatsets
ConsultCoapart.Sogenuinely,inthatspace,wearerecognisedasoneofthefew
organisationswhocanreallydothat.”
Toaddressthisneed,ConsultCohascreatedaseriesofpracticegroupsthatareableto
connectpeopleandknowledge.Thesegroupsareresponsibleforthestockof
knowledge(describedlaterinthissection),andtheorganisationdesignisresponsible
foritsflow.Oneoftheintervieweesdescribedtheroleofthepractices:
“Theresourcesareintheregions,sothepracticeisreallyacoordinatingfunction.So
makingsurethatpeoplearepluggedintogetherandmakingsurethatknowledgeis
collatedandputtogetherinacommonaccessibleplaceinawaythatpeopleare
requiredtoaccessit.Sothepracticeismoreaboutmakingsurethattheinterface
happensthanabouthostingthecapability.”
Thepracticeleadersareallin‘double-hatting’roles,combiningclientandbusiness
leadershipwithknowledge.Asonesaid:
“WefeltatConsultCothatitwouldbequiteusefultohavepeopleinthecross-hairs
betweentheverticalbusinessandthehorizontalpractice….It’schallenging,butit
makessense.”
Althoughsocialandenvironmentalsustainabilityisnotapracticegroup,itlargely
operatesinthesameway,asachannelforknowledgeandanetworkforpeople:
“IntermsofhowsustainabilityfitswithinConsultCo,….ifyoumakeateamofpeople
whodosustainability,itgiveseveryoneelseintheroomaremittonotdo
sustainability.Sothat’swhyyoudon’thaveasustainabilityteam.Youhavea
sustainabilitynetworkandpractitioners”
Oneofthemembersofthisnetworkdescribedtherolethus:“Iactasaconduitorflue
betweendifferentdisciplinesandgivepeopleguidance”.
Despitetheclarityofprocessesandjobdescriptions,andtheenergythathasgoneinto
creatinglinkingmechanismsandnetworkstosupportsustainability,thereremainsome
structuraltensionswithinConsultCo’sorganisationdesign.Theintervieweesidentified
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threemainareasoftensioninthedesign.First,thesizeoftheorganisationmeansthat
thereareverymanycountries,sectorsandpracticesthatneedtobeco-ordinated,and
thisiscomplexwork.Thesheercomplexitymeansthatsiloscanbealmostinevitable.
Thesecondchallengeisthetensionthatisheldwithinindividualrolesbecauseofthe
needfordouble-hatting:whilethisonlyaffectsseniorpeople,itmakesconsiderable
demandsontime.Asoneintervieweesaid:
“Butoneofthechallengesweface–itneverceasestoamazeme–howcomplex
everybody’sjobis”
“IfIhadendlesshourstospendonthis,Icoulddomore,butyou’vegottobalance
everything.”
ThefinalareaoftensionisbetweendifferentlevelsinConsultCo’shierarchy.Afew
intervieweesidentifiedalayerofmiddlemanagementasabarriertosustainability.This
wasmentionedbothbyseniormanagers(generallyreferringtoalayerbelowthem)and
byprojectmanagers(generallyreferringtoalayerabovethem).Asonepersonsaid:
“They’reblockedbythemiddlemanagerswhodon’tknowwhat[sustainability]is,
can’tseewhatit’sgottodowiththeirdayjob,anddon’tletithappen”.
Thisgapmaybeaproblemofknowledgeandexperience:
“Betweenearlycareerprofessionalsandmid-careerprofessionals…Ithinkthat's
wherethegapis.It'snotwiththeseniorleaders-theydogetit,andtheyverymuch
buyintoit,soitisthatmid-level.Theremaybeanelementofskepticism,Ithink,but
Ithinkactually,generally,myviewofitisthatitfeelsasthoughpeopledogetitand
theydobuyintoit,andtheydobelieveit'simportant,theyjustmaybedon'thavethe
confidencetodoit.”
Itmayalsobeafunctionoftheproblemthathasarisenasthetimedemandsofbuilding
socialandenvironmentalthinkingintothework.Themid-careerprofessionalshave
moredemandsontheirtime,andsomaynothavethecapacitytospendtimeoncreative
solutionsorstakeholderengagement.Thisquestionofthepressuresonindividual
managersisdiscussedlater,inSections5.6.2and5.7.
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Leadership
Leadershipwasarecurrentthemewhenintervieweesweretalkingabouttheadoption
ofsustainabilityasatopicforthecompany.Itisalso,ofcourse,essentialinmodelling
thecompany’scollegiality.Theintervieweestalkedabouttheimportanceofleading
thisfromthefront,ofrole-modellinganddevelopingthenextcohortofleaders.
TherewaswidespreadacknowledgementthatConsultCo’sdecisiontobuildsocialand
environmentalsustainabilityintotheirworkhadtakenstrongleadership:
“There’sthatinitialleadershipsaying:‘Doyouknowwhat?We’regoingtospend
somemoneyonthis.We’regoingtoinvest,andwethinkwe’regoingtogetareturn
onthisinvestment.’Andthenextlayerofleadershipishavingthecouragetoappoint
peopleandenabletheminthatrolewhohavetheleadershipcredentialstomakea
difference.”
“[OurChairman]stoodupandputhispersonalreputationonthebasisthatwewere
goingtoinvestasignificantamountofthegroup’smoneyinsustainability…andby
takingthatstanceveryearly...he’sputusinapositionwherewe’vegotaleading
edge”.
Thisveryvisibleleadershiphas,inturngivenpeopleconfidencetostartapplying
sustainabilityprinciplesintheirownwork:
“Itdoestakebehaviouratthetoptomakepeoplesay:‘wellIcanseethattheycare
aboutit,andsoIhavepermissiontoo’.”
However,becomingaleaderisdifficult.AlthoughConsultCohasastructureofcareer
developmentprogrammesdesignedtohelpbuildleadership,someoftheproject
managersdidmentionthedifficultyofmakingthetransitiontoleadership:
“Ithinkthatmightbethatalotofthetimewehavethesereallygoodengineersand
wepromotethemtobeprojectmanagers,andthatmightnotalwaysbethebestspot
forthem,becauseit'saverydifferentjob.Averydifferentjob.”
Oneoftheconcernsexpressedaboutthepossiblelayerofmiddlemanagementthatare
notdeeplycommittedtosustainabilitywastheeffectitwouldhaveonothers:
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“Theproblemisthateitherconsciouslyorsub-consciously,peoplefollowwhattheir
managersdo.Itjustsortofgetserodedinthepeoplewhocameintothecompany
withthepassion.”
Becauseoftheneedtoworkinamulti-disciplinaryway,oftenleadingotherswithmore
subject-matterexpertise,manypeopletalkedaboutleadershipasaprocessof
empowering:
“IfindthatincreasinglyIneedtogivespacetootherpeopletodothesethingsand
empowerthem,andthat’sgoingtogivethemtheopportunitytodevelopthoseskills”.
“Hehadtodrivethatandsay'I'mgoingtobelieveinyouguys,I'mgoingtobelievein
myteamcometomewithwhatideas,andifIthinkthey'regoodenough,I'mgoingto
putsomemoneyinthat,andI'mgoingtoinvestsomeofourfutureprofitbecauseI
thinkit'sgoingtohaveamultipliereffectandcreatemoreprofit.'”
“SoI’mafirmbelieverfromaleadershipstyletobringeverybodyin,anddragthose
intothedecisions.Intheendofthedayyou’vegottomakethedecision.”
Thisisallconsistentwiththeculturalemphasisoncollegiality.
PerformanceManagement
Interestingly,mostintervieweesdidnotdiscussquestionsofperformancemanagement
(suchaskeyperformanceindicators)unprompted.Aspartoftheseriesof
organisationalchangesthathaveledtotheculturalrenewalandbrandrenewal,
ConsultCohasclarifiedandemphasisedtheimportanceofaccountability:
“Oneofthethingsthathaschangedinrecentyearsisanincreasedunderstanding
aroundthebusinessofthedifferencebetweenresponsibilityandaccountabilityand
alsoanincreasedunderstandingofthedefinitionofaccountability.”
Theintervieweesweregenerallyveryclearthattheywereaccountableforproject
deliverytotimeandbudget,andthisiswheretheydirectedtheirattention.
Thisintensefocusontimeandcostcanbeintensionwiththedemandsforcreative
thinkingtoproducemoresustainableoutcomes:
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“Sometimes,theproject,youjusthavetofocusongettingtheprojectdonewithinthe
fee.Thereisabigpushonmakingsureyoudon’toverrun.AndIthinkitdoesdepend
onthepeoplebeingabletoseethattherearedifferentwaystoskinacat,andthat
actuallyyoucould,ifyou’remorecreativeatthebeginningbeabletodosomething
moreinterestingwithinthefee.Butsomepeoplecandoit,andsomepeoplecan’t.”
Thiscommercialimperativeclearlyfocusesattentionontheprojects,butitmaybeat
thecostofothersustainability-relatedactivities.Inparticular,sustainabilityisnot
monitoredparticularlydirectly:
“FromaKPIsperspective..thereisn'tactuallyaquestion'whathaveyoudoneto
boostsustainabilityinyourprojects,'…maybethatwouldbepenalisingpeoplewho
don'thaveopportunitiesto.Butit'sworththequestion.”
Thisproblemofwhenandhowtospendextratimeonsustainabilityandknowledge
activitieswasarecurrentthemeinthediscussions.Oneintervieweepointedoutthat
performancereviewsalsodonottakeaccountofnon-projectbasedbehaviourthatis
neededtomaintaintheculturalcollegialityandknowledgesharingthatConsultCois
activelypromoting:
“BringitintotheirPDR-performancedevelopmentreviews-thatwehavetodoonce
ayear,andseeifwecouldusethattosay'howareyouengagingacrossthenetwork?
whatareyougivingback,besidesyourdayjob?’”
Thus,althoughtheperformancemanagementsystemisnotseenasaparticularlystrong
influenceonincludingsustainabilityconsiderationsindecision-making(comparedwith,
forexample,thecultureororganisationdesign),itdoespotentiallycreatetension
betweenthecommercialpressuresonpeople,andthetimerequiredtomakeconsidered
decisions.
ThesecommentsonConsultCo’sorganisationsuggestacombinationoffactorsenabling
theincorporationofsocialandenvironmentalsustainabilityintodecision-making.The
revisedprocesses(suchasthedecision-to-bidformsandtheallocationofPSCs)are
gainingtraction.Thestrongemphasisonnetworksandthecultureofmulti-
disciplinarityalsomakeiteasierforengineerstoaccesstheknowledgethattheyneedto
includesustainabilityintheirwork.Thereisvisibleleadershipbothatthetopandat
otherlevelsinthefirmtoensurethatpeoplepayattentiontosustainability.
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However,therearesomeareasthatmayinhibittheadoptionofsustainability.
ConsultCo’sstrongcommercialfocusensuresthatpeopleareveryfocusedonthetime
andcostoftheirproject,whichonlysupportssustainabilitythinkingiftheopportunities
forsavings(fromexamplefrommaterialefficiency)outweighthetimecostoffinding
these.ConsultCo’shistoricaldifficultiesinintegratingnewculturesarestillbeing
resolved.Althoughthereareseveralopportunitiesforpeopletolearnabout
sustainability,itisnotroutinelyincludedinleadershipdevelopment.Finally,thereare
concernsaboutaparticularlayerofmanagementwhodonotseemtobefullyengaged
withsustainability:itispossiblethatthisisagenerationalissue,andsowilltaketimeto
beresolved,orthatthisisagroupofpeoplewhosimplyrequiremoreknowledgein
ordertobeconfidenthandlingthedemandsofsocialandenvironmentalsustainability.
Thesefactorsallinfluencethedecision-makers.Butwhatdothedecision-makers
themselvesaddtothismix?
5.6.2Individualfactors
AlthoughConsultCohassomeestablishedprocessesandstructures,ultimatelytheway
decisionsaremadedependsonhowdecision-makersthemselvesinterpretthesituation,
andtheactionsthattheychoosetotake.Iexploretheseintermsofthethreefactors
identifiedinChapter4:permissionspace,biasesandattitudes,andknowledge.
Permissionspace
Althoughaccountabilityissetoutbothinjobdescriptionsandinthediscussionsteams
haveattheprojectkick-off,permissionissomethingthatpeopleinterpretintheirroles.
Inparticular,peoplemayinterpretthesignalsthatthesystemsends,forexample
choosingwheretofocustheirattentionandhowmuchcreativitytoapplytoaparticular
problem.Thisinturncaninfluencethedecisionsthattheymake.Oneinterviewee
describedthiswell:
“Becausewedotendtobelimitedbyourjobdescriptions,butwithinthatthere’salso
‘Idoknowwhatitsays,Idoknowwhattherulesareaboutwhentoask’butthere’s
anassumptionthatanythingoutsideofthoseboundariesisfairgame.Well,Idon’t
know,maybethat’sapersonalitything,buttheoptionstherearetocheckortoact.”
136
Ingeneral,theintervieweesfoundConsultCo’sapproachtopermissionwas
unambiguous.Evenatthemostseniorlevels,oneintervieweecommented:“thereare
someno-goareas”.OneintervieweewhohadjoinedConsultCofromanothercompany
spokeaboutatimewhenthishadstifledtheabilitytoinnovate,butrecognizedthatthis
ischanginginresponsetosomeoftheculturalandstrategicinitiativesinprogress:
“Therewasaclampdownof‘no.Thisisyourproject.Thisisyourjob.Thisiswhat
youdo’.Andthatwasquitetough,Ifound.ButIthinktheyarerallying.Ithinkwith
newinitiativesthereisprogresstobemade.”
Anotherintervieweealsocommentedthattheworkonculturechangewasencouraging
creativity:
“[ConsultCo]neededto…promotemoreofthepeoplewhothinkdifferently,promote
asinnurture,givethemaplacetoact”
Astheculturecontinuestodevelop,ConsultCoismanagingatensionbetween
thehighlevelsofaccountabilitythatsupportthedeliveryofprojects,andthelevelsof
managerialdiscretionthatallowpeopletothinkcreativelytosolvetheproblemsof
socialandenvironmentalsustainability.
Attitudesandbiases
Theintervieweesgenerallysharedapositiveattitudetowardssustainabilityandthe
opportunitiesthatitpresentsforConsultCo.Theyalsoobservethisintheircolleagues–
nobodydescribedanysituationswherepeoplehadnotacknowledgedthepotential
valueofactingsustainably:
“Ourseniorengineers,principalengineers,getthattryingtoreducecarbonisagood
thing.Theyconceptuallygetthat.”
“Itstartedoffbeingsomethingforspecialistsorzealots,butthat’schanged”
“It’sintellectuallystimulatingandit’saboutengineerssavingtheplanet.”
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Sustainabilityisnotjusttolerated,forsomeemployeesitisanimportantpartofwhat
theyvalueabouttheirwork:
“[for]alotofouremployees,andtheyoungeronesinparticular,thisisnotafadit’sa
wayoflife,andifwedonotpursueworkthatintereststhem,thenthatwon’twork”.
However,believinginthelogicofactingsustainablyisnecessarybutnotsufficientto
actuallydoit.Someoftheintervieweespointedoutthatinordertobringsustainability
intodecision-makingitisalsoimportanttoasktherightquestionsandapproach
problemscreatively:“it'sacertainmindsetthatyoudon'thavetodothingsthesame
way”.Thebarrierstodoingthisarealsoattitudinal:
“It'sprobablytodowithnotusingthetoolstoshareknowledgeandmaybenot
questioningenoughormaybenotwantingtobequestioned.”
Butasoneintervieweepointedout,sometimesthebarrierstoincorporating
sustainabilityintodecisionsaresituational:
“TheimportanceofConsultCo'svaluesisdefinitelystressed[but]Ithinkthat
sometimescangetlostinthestressofthejobandthat'swhenthingsgetalittle
challenging.”
“It'sstillhardtobalanceallthismakingdecisionswiththinkingoutsidetheboxwhile
stilltryingtogettheworkdone”
Insummary,attitudestowardssustainabilityaregenerallypositiveatConsultCo,butthe
abilitytoasktherightquestions,especiallyunderpressureoftime,areneededto
converttheseattitudesintobehaviour.
Knowledge
KnowledgeisavitalpartofConsultCo’sbusinessmodel,andthereforeakeyassettothe
firm.Effectiveknowledgemanagementrequiresnotonlyanappropriate‘stock’of
knowledge,butalsosystemstoguidethe‘flow’throughanorganization(Dierickx&Cool
1989).Thesesystemsoftencombineformalelements(suchasknowledgemanagers
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andtaxonomies)withsocialelements(suchasrecognitionforknowledge
contributions).
Becauseofitsstrategicimportance,andtherapiddevelopmentofnewknowledgeina
large,internationalcompany,ConsultCohasbeenworkingonformalizingthe
institutionalapproachtoknowledgemanagement:
“Iwouldsaythatwearetryingmovefromindividualheroicstoacommonsystem,
andindoingsoforbothknowledgeandinnovationwe’reworkingwithaframework
whichsetsouttheConsultCowayofdoingthosetopicsbyintroducingacommonset
ofterms,byintroducingaflow…thatallowsustotakethoseindividualheroesbut
getconsistencyacrossthebusiness”.
ThishasbenefitsforConsultCo’sworkonsustainability.Theintervieweesrecognize
thatknowledgesharingisessentialforsustainabilitytobeintegratedintotheworkof
theorganisation.
“AsI’vegatheredmoreexperienceI’vecometorecognisethatifwewanttoachieve
broadersuccessforsustainabilityandsuccessfortheoutcomesofourprojectsthen
weneedtoshareourknowledgeandweneedtoengagewithallofourcolleaguesto
achievethebestoutcomes.”
Developingandmaintainingastockofcodifiedknowledgeisthefirststepincreatinga
knowledge-managementsystem,andthisisafocusforConsultCo,particularlyinareas
thataredevelopingrapidly:
“inConsultCothereisalotofmovingimplicittoexplicitknowledgeatthemoment.”
Thestockcomprisesthreemainelements:newknowledgefromR&D;codificationof
knowledgeinframeworks;andindividualexpertise.
ConsultCo’sR&Dinvestmentsreflectthepotentialareasforfuturegrowth.Thismeans
thattherearequitedifferentprioritiesindifferentunits.Oneintervieweehighlighted
thiscontrast:
“Therearesomeunitsorsectorswherethere'smuchmoreofafocusonkeeping
everyoneonthestraightandnarrowfee-earningwork,andthere'slessspacefor
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innovation,there'slessspace,lessfundingandthereforetime,availablefortesting
outsomeofthesenewapproaches.”
Inothergroups,thereisanurgentneedfortherapiddevelopmentofknowledge:
“Theunderlyingtechnologyischangingsufficientlyfastthatit'snotjustamatterof
gettingnewpeopleuptospeedwithwhat'soutthere,it'salsoamatterofwhat'sout
therealsochangingandhavingtokeepuptospeedwiththat.Soitisamassive
challengetomanagethatwhiledeliveringprojectsandgrowingthebusiness.”
AlthoughR&Disimportant,formanypartsofConsultCotheobjectiveofinvestmentin
knowledgeistofindwaystoscaleandshareknowledge,ratherthanrelyingtooheavily
onindividualexperts.
“Soin[sector]forexample,ourtargetistoincreasethestandardisationofmaterials,
soratherthanknowledgesittinginindividualspecialists'headswe'regettingmore
andmoreontopaperintoguidelines,intoreporttemplates,intotrainingmodules,
intoinductionmaterialssothatitfacilitatesourpathtogrowthbecausewecan
inductpeopleintothepracticewhenmoreofourknowledgeiskindofdownonpaper
andstandardised.”
Oneformatforcodificationistoolsorframeworks.Thesemaybeexternal(forexample
somebuildingstandards),ormayhavebeendevelopedbyConsultCo.Several
intervieweesgaveexamplesofusingframeworks:
“WhenI'mlookingatsustainabilityconsiderationsIreallylooktopublished
guidance,whetherthatbetheclient'sguidanceforsustainabilityconsiderations
becausetheyhavetheirownaswell,orthis[industrystandard],tosay‘OKwhatare
theconsiderationsweshouldhave,andareweconsideringallofthesustainability
factorswherewemaybemissingsomethingthatwedidn'tconsiderpreviously?’”
Besidestheseformalinvestments,frameworksandtools,knowledgestocksincludethe
experiencesofindividualpractitioners.Evenwithstrongsystemsandprocessesin
place,therearealwayselementsofknowledgemanagementthatareessentially
voluntary.Peopleneedtochoosetosharetheirknowledgeandexperiencewithothers.
Onepersonpointedoutthatthisknowledgesharingneedstobereinforcedin
ConsultCo:
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“Ittakessomebodytakingthetimetodoitandgettingsatisfactionfromit.Butnota
lotofpeoplewouldbemotivatedtodothat,andIdon'tthinkacrossthecompanyitis
encouragedasmuchasitshouldbe.”
ConsultCo’scollegialcultureneedstobesupportedbysomeformalsystemsto
encouragethislevelofknowledgesharing.
Thisneedforpeopletotakesomepersonalownershipappliestothedevelopmentnot
onlyofstocksofknowledgeforConsultCo,butalsotoindividualskilldevelopment.
AlthoughConsultCodoesprovidemanytrainingopportunities,someintervieweesalso
commentedontheneedforindividualstoinvesttimeintheirownprofessional
development:
“Andpeoplehavetoinvesttimeintheirskills,andthat’saroundself-directed
research,it’saroundreading,it’saroundlookingonYouTube,it’slookingatarticles,
it’sgoingtoconferences,it’saboutpublicspeaking,tradeshows.”
Thismeansthatforsomepeople,theneedtocontinuetobuildtheirownskillsandto
makecontributionstoConsultCo’sknowledgestockisquitedemanding.
Agoodstockofknowledgeisnecessary,butnotsufficient,foracompanylikeConsultCo.
Peoplealsoneedtobeabletofindandusetheknowledgewhentheyneedit.
Intervieweesidentifiedthreemaincomponentsofthissystem:first,awarenessofthe
toolsandknowledgeavailable;second,networksofknowledgeandpeople;andthirda
culturewhichencouragestheuseofthesemethods.
Theintervieweestookdifferentviewsoflevelsofawareness,whichseemstobepartly
dependentontheirlocation.Onecommentedthatthereweresomelimitationson
awarenessofgoodpracticesbetweengroups:
“Ifeellikewe'vedevelopedourownthingsthathelpwithourworkhereinthisoffice,
andwedotrytoshareit…butthenyougetkindofstuckinyourowngroupandyou
don'tgetenough,youdon'tlookfarenoughoutwhenyouneedit.Like,theremight
beanotherofficethatdoesthisworkalreadywhocouldhelpsupportyou,butyou're
notawareofthatresource.”
Anothercommentedthatthereweregoodresources,butthatpeoplevariedintheir
levelofengagement:
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“WehaveYammer,butitdependsontheengagementlevelsofstaffwhetherthey
engagewithitornot.Butthere'sdefinitelygoodthings.”
Finally,talkingspecificallyabouttools,onepersoncommentedthatforsomeactivities
therewasacosttoadoption:awarenessonitsownisnotsufficient,butpeoplealso
needtoacquiretheskillstousethetoolsorapplytheknowledgethattheyareableto
access:
“Ithinkpeopleareawareofthem,butactuallygettingthemtousethemisharder.
Andsothere'sprobably,evennow,there'salatentawarenessthatsomeofthesetools
existandareavailable.Whatthereisn'tis,…thereisn'tthatsortofpotofgoldto
fundtimeforpeopletojustplaywiththingsforfamiliarisation.”
Thisraisesanimportantissueaboutaccesstoexpertise,throughpeopleandnotjust
throughtoolsordocuments:
“Weneedtohavepractitionersineachofourlocationswhounderstandthosetools.
Butit’smorethanthatbecausethetoolsarenotthemeanstotheend.Certainlythey
areaframeworkthattakespeopleonajourneytoachievinganoutcome,and
certainlytheyprovidegreatguidance,butyoustillneedthepractitionerswho
understandexcellence”
Thereisthusabottleneck:knowledgeexists,butthereisalimitedsupplyofexpertiseto
interpretit.
“Youneedtohavetherightpeoplefortherightproject….alotofthosetechnical
expertscansometimesbe,wellthey'reexpertsforareasonandeveryonewantsthem.
Soweneedtocomeupwithawaytomanagethat.”
ConsultCoencouragesindividualnetworksandcollaborationtohelpdistribute
knowledgeefficientlywithintheorganisation,andintervieweesgaveexamplesofhow
theyusedtheirpersonalnetworkstosolvetechnicalproblems.However,theseneedto
beinitiated.Oneprojectmanagerobservedthatnetworksforknowledgesharingare
notnecessarilyaccessibletoeveryone:
“AndIthinkit'salsoachallengeofwhoisbuildingthatnetwork.Soinmyposition,
maybeotherpeopleknow,butitdoesn'tnecessarilygetpasseddowntotheyounger
engineers.Atmylevel,itmightbeharderformetoknowthatthoseresourcesare
available.”
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Finally,thesystemneedstobereinforcedculturally.Twointervieweescommentedon
thispositiveculture:
“Acollegiatecultureallowsformuchfaster,organicuptakeofsometopics”
“Ithinkitmustbesomethingtodowithitbeingemployeeowned…Irememberthat
therewasthismantrawhenIarrivedthatwas‘withintwophonecallsyou’llget
whatyouneedtoknow’.”
ThisshowsthatConsultCo’sknowledgemanagementisasystemofknowledgestocks
andflows,supportedbyasetofbehaviourthatcanencourageboththedevelopmentof
thestocksandtheuseoftheflows.
Althoughpermission-space,attitudesandknowledgeareallimportantinmaking
decisions,theConsultCointervieweesplacedaparticularlystrongemphasisontheir
needtohavetherightknowledgeavailabletoinformtheirdecisions.
ConsultCo’sorganisationincludesformalandsocialelementstoreinforcethesharingof
knowledge:thereareinvestmentprocessestodevelopthestockofknowledge;practice
networkscreateaformalstructureforsharingit,andthisissupportedsociallybya
broadlycollegialculture.Thus,therearesomemutuallysupportingelementsacrossthe
organisation,andthatConsultCoparticularlyemphasises:leadership,culture,
organisationdesign(includingprocessesandjobdescriptions)andknowledgeto
influencethewayspeoplemaketheirdecisions.
5.6.3Summary
ThisanalysisshowshowConsultCohasstartedtodevelopsomefacetsofthe
organisationtosupportitsinitiativeinsustainability:
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Table15:TheroleoforganisationalfactorsinenablingorhinderingsustainabilityatConsultCo
Organisationalfactor
Roleinenablingorhinderingtheinclusionofsustainabilityindecision-makingatConsultCo
Culture Strongfocusoncollegialityenablesbettersharingofsustainabilityknowledgeandinformation,andriskaversionleadstoawarenessofsustainabilityissues.However,commercialpressuresontimemayleadtosometrade-offsindesigndecisions.
OrganisationDesign Theorganisationdesignincludeslinkingmechanismsthatenableandencourageknowledgetransferandbuildawarenessofsustainability.However,sustainabilityisnotexplicitlyincludedinperformancemanagementorincentivesystems.
Leadership Corporatelevelleadershipforsustainabilityisstrongandwellrespected.However,leadershipattheindividualprojectlevelismorevariable,andsubjecttothepressuresontheindividualprojectmanager.
PerformanceManagement
Theperformancemanagementsystemisnotdesignedtosupportsustainability.Peopleareunderstrongcommercialpressures,reflectingthecontractualrelationshipsbetweenConsultCoanditsclients.
Permissionspace Peopleinterprettheirpermissionspacebasedonstrongsignalsfromthecommercialmanagementoftheprojectcoupledwithencouragementfromtheculturetoactinawaythatissustainable.Thereissometimesatensionbetweenthesesignals.
Attitudes/Biases Peoplearegenerallypositiveintheirattitudestowardssocialandenvironmentalsustainabilityintheirwork.
Knowledge TheknowledgemanagementsystemwithinConsultCocansupportsustainabilitybyprovidinginformationandacceleratingdecision-making.However,maintainingthesystemcreatestime-pressureforpractitioners.
Thisshowsthattherearesomeclearformalandsocialenablersfortheincorporationof
sustainabilityconsiderationsintodecision-makingatConsultCo.However,theseare
counterbalancedbythepressureoftimeontheconsultants.AsConsultCohasdirected
people’sattentiontowardssustainability,theyfindthattheyneedtospendmoretime
oneitherfindinginnovativedesignsorengagingwithstakeholders.Decisionsthatwere
oncemadeinaroutineway(andperhapswithoutconsideringsocialandenvironmental
impacts)needtobeanalysedmoredeeply.Giventhattimeutilisationisthedriverof
commercialsuccessforConsultCo,thiscreatesatensionintheprojects.Inthenext
section,Iwilldiscussthewaythistensionismanagedintheorganisation.
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5.7ConsultCo’snestedparadoxes
TheanalysisofConsultCo’ssituationrevealsaseriesoftensionsatthemacro,mesoand
microlevelsoftheorganisation.Atthemacrolevel,thereistensionbetweentheneedto
buildmoreinfrastructuretomeettheneedsofagrowingglobalpopulationsetagainst
theneedtoconserveresources.Thisthenfeedsameso-leveltensionbetweenclients
andConsultCo,whichmaybeaccentuatedbycontractualarrangements.Atthemicro-
level,individualengineersfindnewpressuresontheirtime.First,thenewfocuson
socialandenvironmentalsustainabilitymeansthattheyneedtospendmoretimeon
projectsinordertosolvedifficultproblems,butthecontractualtermsthatdetermine
theavailabletimehavenotchanged,andsotheyfeelconstrained.Second,theengineers
needtobuildandsharenewknowledge(rangingfrommethodstonewdatasets)in
ordertoactsustainably,butthiswouldrequirethemtospendtimeawayfromtheir
clients.Thesetensionsactasareinforcingknot,anddirectlyaddressthe
heartofConsultCo’sbusinessmodel.Eachofthesetensionsarisesinresponseto
ConsultCo’smanagementoftheprevioustension.
Theresolutiontothesetensionsalsoliesinaseriesofnestedresponses,andindeed,
ConsultCo’songoingchangeprogrammeaddressesthese.First,ConsultCoisaddressing
thetensionexperiencedbyindividualengineersintheirtimemanagementthrough
targetedinvestmentsintechnology.Thesecanacceleratedecision-making.For
example,oneintervieweetalkedaboutimprovedcarboncalculations
“Tooptioneerthecarbonimpacttakessecondsnowinsteadofdays,whichmeanswe
cantrymanymoreideasnow.Andwhatwearedoingnowisbringinginthingslike
machinelearningandorganicalgorithmdevelopmentandsomeautomated
procedurestoreallychallengethenorm.Butthatisahugeopportunityinthe
sustainabilityspace.”
Sometechnologiescanalsoacceleratetheprocessofstakeholderengagementand
decision-making:
“Backinthedaywewouldtrydesperatelytotrytoexplainthingstopeopleusing
drawingsandnowwecanputapairofgogglesonthemandstandinthefront
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gardenandseewhatabridgeisgoingtolooklike…We’reevenatastagenow
wherewe’renotjustplayingwithacoupleofoptions,we’reworkingoffthereal
model,soinconsultingwithstakeholders,inaroomwecanliterallymakechangesto
themodelaswe’remakingdecisionsanditrecordsthatchangeandmakesitintothe
thingeveryoneisworkingfrom.”
However,atthecurrentstageofdevelopmenttechnologyalonecannotsolvethe
problemsfacedbyengineers.Thereisafundamentaldisconnectintherelationship
betweentheclientandtheconsultantthatcausesthispressure.Oneinterviewee
pointedoutthatthecontractualtermscanbeestablishedinawaythatismoreholistic,
andthatthiscanbehelpfulinreinforcingthesocialandenvironmentalelementsofa
project:
“Probablythekeythingisthesetupandhowyou'reincentivised.SoI'veworkedon
jobswhere…you'reinasortofsetupwherethereareclearKPIsandyou'rebeing
monitoredandincentivisedtoworkacrossarangeofthings,awidebasketof
indicatorsthataren'tjustcommercial…Sothatwouldbethefirstquestion:what's
ourroleintheproject?andwhat'sthescope?andwhat'sourperformance
incentivisedon?”
Questionsatthismesolevelhaveledseveralcompanies–includingConsultCotojoin
industry-levelinitiatives,suchastheInstituteforCivilEngineering’s‘Project13’
approachtoinfrastructure,whichcouldre-shapetheclientrelationshipstodelivermore
sustainableoutcomes:
“It'sanICE[InstituteofCivilEngineers]initiativewhichis…tryingtotransformhow
infrastructure'sdelivered.There'squiteabigfocusonshiftingfromminimum
outturncosttomaximisingvalueoverthelifecycle,sowhole-lifevalue.”
Thispatternofthecreationandresolutionoftensionsatdifferentlevelswithinthe
organisationisshownbelowinFigure16whichisbasedonthemodelpropsedbySchad
&Bansal(2018).Therelationshipsbetweentensionsarerevealedby‘zoomingin’from
themacrotothemicroandthen‘zoomingout’(Schad&Bansal2018)toshowhoweach
leveloftensionisrelated:
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Figure16:NestedtensionsatConsultCo
Thecasedemonstratestheproblemofchangingthewaypeoplebringsocialand
environmentaldecisionsbyshowingaseriesofnested,complextensions(Sheepetal.
2017)situatedinabroader–andinthiscasequiteproblematic–system.Thenestof
paradoxesisrevealedbyzoomingin(Schad&Bansal2018;Nicolini2009),butthesecan
onlyultimatelybemanagedbyzoomingouttosolvethesystemicproblemin
conjunctionwithotherparties(inthiscaseanindustrybody)(Schneideretal.2017).
Byexaminingthisprocessovertime,Ishowthatthecompany’seffortstochangedo
makeadifferencebutthateventuallythisprogrammecannotbecompletedwithinthe
boundariesoftheorganisationandtheyneedtoengageabroadersystemtoeffectthe
changethatisneeded.Thecasealsoshowstheconnectionbetweenthemacro/meso/
microlevelsofthesystem:changesareneededatthelevelinwhichthevariousentities
interact,andalsoattheleveloftheorganisation,andtheindividualdecision-maker.
Itisalsoeasytoseewhysomeorganisationsfailtochange(Slawinskietal.2017):
unpickingtheparadoxesattheheartofthischangeprocesshasrequiredboldleadership
anddeepthinkingbyConsultCo.Fromthepointofviewofthepeopleinthe
organisation,managingthischangeislikeplayingthegame‘whack-a-mole’.Theyare
Macro-le
velten
sions
Meso-levelten
sions
Micro-le
velten
sions
Zoomingin Zoomingout
Thegrowingpopulationneedsmoreinfrastructure
Butthiscreates
environmen-talandsocialburdens
Wecanseehow
sustainableinfrastructure
isgoodbusiness
Butourclientshavenotaskedustodothis
Ineedtospendtimefocusedonsolvingnewproblems
Ineedtospendtimefocusedoncommunityengagement
Ineedtospendtime
learningtodothiswork
Ineedtobillallmytimeto
clients
Weneedtofindnewwaysto
createvalue
Workisletonstandardcontractterms
Weneedtocollaborate
ondevelopingnewwaysto
work
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workinghard,perhapsatanincreasingrate,tofixproblems,butthesecontinueto
persistbecausetheunderlyingsystem–inthiscasethestructureoftheconstruction
industry-generatesthem.However,the‘moles’–theproblemsandparadoxescreated
–canprovideameansofunderstandingthefundamentalsofthesystem,andthus
startingtoidentifythepointsforchange.
5.8Conclusions
ThepurposeofthePrescriptiveStudywastotestandextendthedevelopingtheoryand
exploretheinteractionsbetweenmodelsinacasestudytostarttorevealthepointsof
interventioninthesystem.ItshowsthattheframeworkcreatedabductivelyinChapter
4fromtheliteratureandmyempiricalfindingsisahelpfulanalyticaltoolandcanshow
theformal,behaviouralandsocialinfluencesondecision-makersinanorganisation.It
illustratesthefourdifferentarchetypesofdecisions,andshowshowthesecanchange
throughthedirectionofattention.Italsoshowsthe‘nestedness’oftensionin
organisations.IendedChapter4withaseriesofideastoexploreinthecasestudy,and
findthatinthiscasetheylargelyholdtrue.ThesearediscussedinTable16:
Table16:Testingthetheoreticalideas
IdeafromChapter4
Observationinthiscase
Thetensionbetweentheexternalandinternalfactorsisspecifictoaparticularbusinessataparticulartim
e.
InConsultCo’scaseitisclearthatthetensionsbetweentheinternalandtheexternaltaketwoform
s:first,thebroadtensionthatexistsintheconstructionindustry;andsecond,thetensionsthatexistinaparticularproject.
Thereframingofthistensionisasignificant
decision,whichhasimplicationsbroadlyinthe
business.Thisisthereforeledfromthetopofthe
organisation
ConsultCohastakenastrategicdecision,ledbytheBoardtoincorporatesustainabilityintoitsbusiness.However,theongoingre-fram
ingofsustainabilityineachprojectisledatalowerlevelintheorganisation.Thus,thereneedstobeaclearconnectionbetweenthesenestedfram
es.Ifthetensionisnotre-fram
ed,itwillpersist.Thiswillcreatetrade-offproblem
swhereverintheorganisationthem
aterialimpactsofthetension
mightbefelt
Interviewees’commentsthatclientsupportofsustainabilitym
akesiteasiertoincludesocialandenvironm
entalconsiderationsinparticularprojectssuggestthattensionsthatarenotaddressedinotherprojectspersist.
Ifthetensionisreframed,itstillexists,but
decision-makersm
ayhavebeengivenabroaderrepertoireofwaystom
anagethecompeting
commitm
entstheyface.
ThechangeprogrammeatConsultCohasledtoagreaterfocusonwin/winasa
logicfordecision-making,throughresourceefficiency.Thissuggeststhatthe
corporatelevelreframingand(andsubsequentrefram
ingofsustainabilityinprojects)isenablingdecision-m
akerstouseabroaderrepertoireofapproaches.
Simplyre-fram
ingsustainabilityisnotsufficientiftheorganisationalsystem
swhich‘bound’decision-makingareunchanged.
ConsultCo’schangemanagem
entapproachwasinitiatedwithareframing
process,butwasfollowedwithorganisationalchanges,specificallychangingthe‘decision-to-bid’process,theintroductionofthePESrole,andtheestablishm
entofsustainabilitynetworkstolinkgroupsacrosstheorganisation.Thishasm
adeacontributiontotheinclusionofsustainabilitythinkingintheorganisation.
Thereneedstobecomplem
entaritybetweenthesesystem
s.Simplychangingonefactor(forexam
ple,changingtheavailabilityofinform
ationwithoutchangingthecriteriabywhichdecisionsarem
ade)willnotim
provedecision-making.
ConsultCo’schangeshavebroadlyworkedwithintheexistingculturalandorganisationalnorm
softhecompany.Thererem
ainsometensionsbetween
organisationalelementsthathavenotadaptedtotheneedsofsustainability(eg.
performancem
anagement),andthesedoleadtotensionfordecision-m
akers.
148
149
However,thecasestudyalsoextendstheemergingtheorybyprovidinginsightsintothesecondofmytworesearchquestions:‘Whatarethepointsofinterventiontochangethese[organisational]systems?’.Thecasestudyrevealsaseriesoffindingsthataddressthisquestion:
1. Theprocessofre-framingthetensionbetweentheexternalpressuresonthecompanyandtheinternalresponses(describedinSection4.3.6)doesnotonlyinfluencethelogicsthatcanbeappliedtoindividualdecisions,butcanbeusedtodriveabroaderchangeprogramme.AtConsultCo,thisframingofsustainabilitywasacriticalfirststepintheirworktowardschangingtheirwayofworking.
2. Thisprocessofre-framingchangesthenatureofdecisionsmadeinthecompany,byre-directingexecutives’attention.InConsultCo’scasethisresultedinagreaterconsciousnessoftheimplicationsof‘operationaldecisions’,whilereducingthenumberof‘wickedproblems’.Thismeansthatthedecisionsupport(describedinSection4.2.3)neededtochangeinresponsetothenewtypesofdecision–particularly‘engineeringefficiency’and‘messysituations’.
3. Thechangeindecision-typesledtoademandfornewtypesofknowledgewithintheorganisation.This,inturn,hadimplicationsforthetypesoforganisationalsystems–includingbothformalsystems,suchaslinkagemechanisms,andsocialsystemssuchasacultureofsharing–toenablebettermanagementofknowledge.
4. Atanindividuallevel,anew,andfundamentaltensionbecamesalient.Includingsocialandenvironmentalconsiderationsindecision-makingmeantthatthedecisionsbecamemoretime-consuming.However,thefundamentalbusinessmodelatConsultCoisbasedonbillablehours.Thus,themicro-leveltensionsrevealedasystem-levelproblem,thatcouldonlybeaddressedincollaborationwithorganisationsbeyondConsultCo.
ThiscascadingsetofactionsandreactionsisillustratedinFigure16(above).Thefindingsalsosuggestaseriesofprinciplesaboutthepointsofinterventionforcompaniestryingtoincorporatesocialandenvironmentalconsiderationsintheirdecision-making:
1. Theframingofsustainabilityatthecorporatelevelisnotonlyimportantforindividualdecision-makers,asevidencedinChapter4(Section4.3.6).Itmayalso
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havearoleinshapingtheoverallchangeprogrammeasacompanyadoptssustainability.Thus,itiscanbeapointofinterventionforcompaniesplanningtochange.
2. Thiscorporateframingthenneedstobemadesalientfortheparticulardecisionsathand.Thismaymeancreatinga‘re-framing’foraparticulargroupofpeople,ororganisationallocus.
3. Thepointofinterventionintheorganisationalsystemwilldependonthemostpressingissuesfortheorganisation.HowevertheConsultCocasesuggestsfirstthatthiswillrequiresometypeoforganisationallearningasthecompanyrequiresnewtypesofdecisionsupport,andsecondthattheinterventionswillbeiterative.
4. Thisisadynamicprocess,withunforeseeableconsequences:eachchangemaybeareactiontotheuncoveringofthebroadersystem.
Theseprinciplesareofcoursebasedonasinglecasestudy.InChapter6,IwillintroduceStudy3,inwhichagroupofseniorexecutivesfromabroaderselectionofcompaniesreviewedtheemergingfindingsfrombothStudy1andStudy2.
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6:STUDY3
6.1IntroductionTheobjectiveoftheStudy3wastotestandextendthetheoriesdevelopedintheearliertwostudiesbytalkingwithpractitionersabouthowtheyareactuallyoperationalizedincompanies,inthespiritof‘engagedscholarship’.Thiswasaniterativeprocess(VandeVen,2007p.102)consistingofthreeworkshopsheldduringthecourseofthedatagatheringandanalysisprocess,inNovember2017,June2018andOctober2018,inwhichasmallgroupofexecutivesdiscussedtheirownexperiencesoftheissuesarisingfromtheresearch.ThemethodisdescribedinChapter3.3.2.Althoughtherewasathemeandstructureforeachworkshop,thefacilitationprocesswasnotstronglydirective,andthediscussionthereforefollowedtheinterestsoftheparticipants.Thismeansthatthereisnotanequalcoverageofalltopics–subjectsthatwereimportanttotheexecutiveswerediscussedinmoredepth.Severaloftheparticipantsdrewonexampleseitherfromtheirowncompaniesorfrompublicdomaininformationaboutothercompaniestoillustratetheirpoints.Wheretheinformationisfromthepublicdomain,Ihavereportedthenameofthecompany,butIhavenotnamedthecompanieswhoseexecutivesparticipatedinthediscussions.ThechapterfollowsthestructureofthefindingsfromChapters4and5.Insection6.2,Ireviewthediscussionabouttensionbetweentheexternalandinternalenvironmentsandthewaycompaniescanframethistensionconstructively.ThisbuildsonthefindingsreportedinSection4.3.5.Section6.3‘zoomsin’tolookattheclassificationofdecisionsanddecisionsupportmethodsandcapabilitiesneededtomakethem,buildingon4.2.3and5.5.5.InSection6.4,Ireviewthewayinwhichtheelementsoftheorganisationworktogetherwiththeindividualdecision-makerstoformasystem.ThisallcontributestodeepeningtheanswertoResearchQuestion1:‘Howdotheformal,behaviouralandsocialstructuresofanorganisationinteracttoinfluencetheinclusionofsustainabilitycriteriaindecision-makinginincumbentbusinesses?’.Section6.4alsoprovidesalinktothesecondResearchQuestion:‘Whatarethepointsofinterventiontoinfluencethesesystems?’.Thisideaisexpandedfurtherinsection6.5,whichreviewstheexecutives’discussiononchangingcompanies.Thechapterconcludesinsection6.6withacommentaryontheoverallfindingsfromtheexecutiveworkshops.
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6.2Reframingthecorporate-leveltensionTheframingofthetensionarisingbetweenbusinessesandtheirsocialandenvironmentalcontexttoinfluencethewaypeoplemakedecisionswasanimportantthemeinthisresearch,andisexploredinChapter4.3.5andagaininChapter5.4.Itwasalsoatopicthattheexecutivesdiscussedseveraltimesduringthecourseoftheworkshops,andwhichtheysawhavinganimportantroleinintroducingsustainabilitycriteriatodecision-making–asoneparticipantcommented:“Reframingis,inmyview,critical.”Theworkshopparticipantstooktheviewthatreframingatthebusinesslevelwasalmostalwaystriggeredbyatensionbetweentheexternalandinternalenvironments,ratherthansimplyadesirebyleaderstoreconsidertheirpositiononsustainability.Consumers,regulatorsandcompetitorswereallsuggestedaspotentialtriggersorconstraintsonthecompany.Forexample,changesinregulation(suchastheFinanceactorthegenderratioreportingregulations)havebeeninfluentialindirectingmanagerialattentiontotheimportanceofsocialandenvironmentalsustainability.Reputationalproblemsforcompetitorsoratasectorallevelcanalsodrivesomecompaniestotakeapre-emptiveapproachtotrytofindwaystoseparatetheirownapproachfromothers.Aswellastheregulatorydrivetowardstransparency,theriseofsocialmediahasalsoledtosomeconsumerpressureoncompanies–mostrecentlyinrespectoftheiruseofplastics.Thishastwoimplications:first,itsuggeststhatcorporateframingofsustainabilityneedstobesomewhatdynamicinordertorespondtothechangingexternalenvironment;second,companiesmayneedtobethoughtfulintheirresponsetoconsumers’demands–oneexecutivepointedoutthatsometimesthesewerenotanappropriateresponsetocurrentscience.Finally,oneparticipantcommentedthat:
“Itisoftenunderestimatedjusthowcostlyitistoreframebecausesomuchhasto
change…socompanieswilldothisveryrarelyunlessthey’reforcedto.External
pressure,customerpressure,financialpressure,Iwouldhavethoughtwoulddoit”.
Thisreframingcanstarttodriveanewsenseofidentitywithintheorganisation–asoneparticipantsaid,“ithelpsusanswerthe‘whoweare’questions”.Identitycanbeatouchstonefordecision-making.Oneparticipantcontrastedtwopossibleframingsforanexamplecompany:acompanythatframestheirroleas‘asuppliertobigbrands’will
153
approachproblemsinadifferentwayfromonethatidentifiesitselfas‘acompanywithdeepexpertiseinsustainablemanufacturing’.Decisionsareinformedby–andreinforce–executives’understandingofthiscorporateidentity.Identitiesaremulti-dimensionalandtensionsbetweenthesedimensionsmayproducechallengesforcompaniesovertime.OneparticipantgavetheexampleofNordiccompanies,someofwhichhaveadeepculturalinterestinsustainabilitybutalsooperateglobally,forexampleCarlsbergistryingtore-emphasiseitsDanishtraditionsandvalueswhilemaintainingastronginternationalbusiness.Framingthissenseofidentitygivespeopleastrongsignalabouthowpeopleshouldmakedecisions.Asoneexecutivesaid:“Wemakethesedecisionsbecauseweknowwhoweare”.
Thisquestionofidentityalsohasimportantimplicationsfordecision-makers.Somegroupshaveclashesbetweentheirprofessionalidentitiesandthecorporateidentity,whichsurfaceindecision-making,forexampleoneparticipantquotedagroupsaying:“Weareengineers,butthatisapoliticaldecision”.Thus,thecorporateframingneedstobeexpressedthroughouttheorganisationandbroughttolifeinawaythatisrelevantforeachgroup.Thiscanhelppeoplefindnewwaysofseeingtheirroles,thenatureofthedecisionathand,andinterpretingtheirownpermissiontoact.Asoneparticipantsaid:
“Thebig,trickydecisionsaren’tnecessarilyfixedbybetterdata,systemsandtools.It
ismoreabouthelpingpeopletohavetheconfidencetomakethedecisions.”
Anothercommented:“Thereframingopensupanewspaceforpeopletoexplore.”
Athirdparticipantmadetheconnectionbetweentheactofreframingandtheeffect:“There’saleadershipmoment,whenthebusinessreframes,butthisgivespermission
forpeopletotakeadecision,andpeoplecanthensellintheirdecisionbasedontheir
framing.”
Althoughtheactofreframingispowerful,itisalsodeeplyproblematic.Oneparticipantsaid:
“Theactofreframingisimmenselypowerful,butalsochallenging,requiringanew
wayofthinking”
Furthermore,itrequiresaveryhighleveloforganisationallegitimacy.Theparticipantsagreedthatthiswouldbeasuitablerolefortheboard:
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“ThisisagreatjobforanewCEO,asyouneedtobebothcloseenoughtothebusiness
tounderstandthefundamentaltensionsitfaces,anddistantenoughtobeabletore-
thinkthese.”
Findingnewwaystoseethebusinessandsoprovideacredibleframingrequiresthoughtandcreativity-asoneparticipant,referringtothedifferentlogicalapproachestomanagingcompetingcommitments,said:“theactofreframingisasynthesis”.Theparticipantsseereframingnotonlyasawaytoinitiateachangeinthewaysofseeingsustainabilityintheorganisation,butalsoaphenomenonthatchallengespeoplepersonally.
“Reframingislikelytocreateacaseforchange,butalsocreatessomevery
fundamentalcognitivedissonance.Wenaturallyfeeladesiretoreducethis–
especiallywithdecisionsthathavebeenmade.Wefindourselvessaying‘ifwedoit
thatway,theneverythingI’vebeendoinghasbeenwrong’.”
Reframingthereforerequiresanuancedculturalunderstanding,inordertoavoidbeingrejectedas‘toodifficult’beforetheworkofintroducingsustainabilitytodecision-makingstarts.Thus,theprocessofreframingisanimportantstepinshapinganenvironmenttoincludesocialandenvironmentalconsiderationsindecision-making.Notonlycanitinitiatechange,butitalsoshapestwoimportantsocialprocesses.First,itisavisiblestepforleadershipandsocanstarttore-setsomeelementsoftheorganisationalcontext.Second,itcanshapepeople’sinterpretationofdecisionsbyinfluencingtheirattitudesandtheirpermission-space.Thismeansthatthereisatleastsomesocialmechanismbywhichthishigh-levelframingcaninfluencethedecisionstakenwithinthebusiness.TheexecutivesthereforeaffirmedthefindingsaboutreframingtensionfromChapter4andChapter5.
6.3DecisionpropertiesandprocessWhiletheframingofthetensionbetweensocial,environmentalandeconomicconsiderationscaninfluencethewaydecision-makersunderstandthenatureoftheirdecisions,itmayalsocreatenewdemandsintermsofprocess.Theworkshopparticipantsallagreedwiththesegmentationofdecisionsandrecognisedthefourarchetypes.However,theyextendedtheseideasintwoways.First,theycommented
155
onthesituationalcharacteristicsofdecisionsthatmayaffectthewayinwhichchoicesaremade;andsecond,therewasanextensivediscussionofaparticulardecisiontype–messysituations–andtheorganisationalcapabilitiesthatmightberequiredtodealwiththesedecisions.Althoughthegroupagreedwiththeclassificationofthefourarchetypes,theirviewaspractitionerswasthattheclarityofthearchetypesandthelogicalresolutionofdecisions(discussedaboveinChapter4.3.4)donotcapturethemessinessofthedecision-makingprocess.Oneparticipantwhohadbeeninvolvedincomplexdecisionspointedoutthatduringtheprocess,peoplemaytrymorethanoneofthelogicalapproachesdescribedinChapter4.3.2(forexample,startingwithwin/winbusinesscases,andthentryingotherapproachesuntiltheyfindasolutionthatworks).Thismeansthatsynthesisapproaches–whichareoftenthemostdemandingfordecision-makers–maywellonlybeusedwhenotherapproacheshavealreadyfailed.Aswellaschangingthetypeoflogicalapproachovertime,thegroupmadeanimportantobservationaboutthepropertiesandprocessofdecisions,whichisthatthereissomedynamismbetweenthefourarchetypes(thiswasalsoobservedintheConsultCocase).Specifically,threesituationalfactorsmaychangethewaydecision-makersmayapproachtheirdecisions.First,decisionsthatneedtobemadeurgentlyrequirerapidprocessesthatmaymeanexcludingsomeinformation–forexample,asoneparticipantsaid:
“Oneofthewaysofturningamessyproblemintosomethingmoretechnicalisto
ignoresomestakeholders.Forexample,anorganisationmaydecidethattheiractionwillannoyonegroup,butwillallowthemtosolveatechnicalprobleminorderto
moveforward.”
Theexecutivescommentedthattheneedforspeedhaspartlyarisenfromtheriseofsocialmedia,whichcanmeanthatexternalgroups(customers,consumersorNGOs)cancreateanimmediateneedforcommunicationaboutsustainability(orother)issues.Thus,decisionsareunderanewformofscrutiny,andthishasimplicationsforanumberofimportantprocesses,suchasstrategyformulation.Thisneedforimmediacyisapropertyoftheprocess,ratherthantheinter-temporalitythatmaybeafeatureofthedecision.
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Second,somedecisionsthatareinitiallyone-offsituationsmaybecomerepeated(andrepeatable)overtime.Situationsthatstartas‘messy’mayrecur.Oneparticipantgaveanexampleofexposuretoriskininfrastructurefinancing,whichisoftentreatedasasingledecision.However,inaportfolioofrecurrentdecisions,thereisasignificantcumulativeeffectofthesechoices,andsothereisaneedtodevelopstrongerprocessesformanagingthedecisions.Atthispoint,thedecisionsmaybegintoadoptthecharacteristicsof‘engineeringefficiency’choicesasthecompanydevelopstheknowledgeandmethodsformanagingthese.Finally,thereisfrustrationinmanyorganisationsabouttheinformationthatisavailablefordecision-making.Thissituationisimprovinginsomecompanies,particularlyinresponsetotheneedtoincludesustainabilitydatainannualreports,whichhasbroughtthistotheattentionofthefinancedepartment.However,thisisnotalwaysthedatathatisnecessaryfordecision-making,andmanycompaniesarestillstrugglingtobuildtheinformationinfrastructurethattheyneed.Asoneparticipantcommented:
“Someinformationalsocan’tbemonetised,andthisalsocausesproblemsinsome
decision-makingasthereis,ineffect,nosinglecurrencytocaptureallthe
informationneeded.”
Becauseformanycompanies,sustainabilityisarelativelynewarea,thedataissometimesmoreusefultoshapethinkingthantodemonstrateatrackrecord,ashistoricaldatamaynotbeavailable.Formanyorganisations,developingtherightinformationinfrastructureisalongprocess–theyneedtoact,createthedata,andthentrack.Thiscanthenbeusedasatoolformeasurementandtocreatetransparency.Initiatingasustainabilitystrategycanbeveryproblematic,asthedatawillnotnecessarilybeavailable,andactivitiessuchasmeasuringenvironmentalfootprints(thuscreatinghelpfuldataforfuturedecisions)happenafterthefact.Somemethodsforprocessingdatafordecisions–suchaslife-cycleanalysis–canbeverylabourintensive,andthereissomeinterestinhowcompaniesbuildtheskillsandresourcestomanagethenewdataneeded.Thegrouptooktheviewthattherightinformationisimportantbecauseithelpspeopleseethingsdifferently.Thiscanthuschangethenatureoftheproblemcompaniesaresolvingintheirdecision-making.Forexample,companiesthatareunawareofstakeholderneedsmaybetreating‘messysituations’as‘engineeringefficiency’problems,andcausingdifficultieselsewhereinthe
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system.However,therewasalsoaclearviewthatcompaniesneedtoadoptnewdataandmethodsaswellasfocusingonbehaviouralchange.Unlessbothareinplace,thereisariskthatthecompanywillnotachieveanychangeintheirdecision-making–asoneparticipantsaid:
“Ithinkthebalancebetweentheeffortsonmethodandonbehaviouralchangeis
wrong.”
Becausethiswasclearlyatopicofinterest,decision-makingprocesseswerethemainfocusofthesecondworkshop.Inthisworkshop(thesecondofthethreedescribedinChapter3.3.2),theparticipantswereinvitedtocommentontheirexperienceof‘messysituations’,andcommentonthecapabilitiesthatareneededtomanagethese.Messysituationswerechosenastheyarenon-routinedecisionsinwhichthedecisionisclear,butitiscomplicatedbythefactthattherearemanystakeholders(whomayhavedifferentviewsoftheproblem),theyareimportanttothebusiness,hardtoreverse,andhavesomeuncertainty.Althoughtheinitialsegmentationdatawasnotintendedtomeasurethefrequencyofanyparticulartypeofdecision,messysituationswerereportedbyabroadrangeofinterviewees,andtheworkshopparticipantsallhadexperienceofthem.Onespecificproblemcreatedbymessysituationsisthattheyareusuallyunprecedented,andsothereisnotanestablishedsetofrulesformanagingthem.Acorollaryofthis,asoneparticipantpointedoutisthat:
“Messysituationsarethosedecisionswherebeingrightdoesn’tcount.”Thisputsnewdemandsonthedecision-makingprocess,requiringwhatoneparticipantdescribedas“workingoutloud”andintroducingtransparencyandengagementintheprocess.Organisationsthatacquirethiscapabilitybecomeeffectiveatstakeholdermanagement.Theworkshopparticipantstooktheviewthatdecisionsarisinginmessysituationshavemoreincommonwithothermessysituationsthantheydowithday-to-dayactivity.Asaresult,insomesituationswheretheyarelikelytoarisewithfrequency,organisations
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createspecialistteamstohandlethem:oneparticipantgavetheexampleoftheUKGovernment’smajorprojectleaders.Thisallowsthemtobuildcapabilitiesatscaleinordertodealwiththechallengesarising.Thereis,ofcourseaconsequencetothis:forexamplethegroupgavewasthatatIBMitbecameclearthatparticipatingina‘redteam’wasagoodpathtopromotion.Asoneparticipantsaid:“theproblemwiththesesituationsisthatthey’rejustsosexy”.Thisactuallycreatesaproblemfororganisations,asattentionisdivertedawayfromtheday-to-dayoperationstowardsincidentsthatmightbeacrisis,andsocanincreasethenumberofpotentialproblemsastheyreceivemoremanagerialattention.Onesuggestionthatadecision-makermadeforawaytomanagethesemessysituationswithoutremovingtheproblemfromits‘naturalowners’istointroduceachange-agentrole.Thismeansthatthemessysituationcanbemorestructured,andthechangeagentcanfacilitateaprocesstocreateclarityaboutthedecisionandstakeholders.Thisre-definestheroleoftheoriginaldecision-makerasasubject-matterexpert,andallowsthemtofocusonapplyingtheirexpertiseandjudgementtotheproblemwhilethechangeagent“holdsthemess”.Theseinterventionsdependoncorrectlyidentifyingthatamessysituationisactuallymessyandthatitisnotsimplyatechnicalproblem.Thegroupgaveexamplesofwhenthiscouldbeaproblem.Formanyexecutives,thetemptationistofocusonthetechnicalaspectsofthedecisionandtoviewitasanengineeringproblem.OneapproachtakenbytheUKGovernmentwastousethemanagementinformationsystemstoidentifyprojectsthatwerelikelytoinvolvecomplexstakeholdersandtakeapre-emptiveapproachtomanagingthese.Theseapproachesworkverywellforproject-basedorganisations.However,messysituationsalsoariseinlinejobs–forexamplethedecisionandmanagementofaproductrecallforafactory.OneexamplethegroupdiscussedwasNike’sresponsetofindingchildlabourina3rdtiersupplier.Theirimmediatereactionwastoseethisasalegalproblem:acontractwasbeingbroken.However,thiswasatechnicalsolutiontowhatwasactuallyamorecomplexstakeholderproblem.After18months,theyfinallydevelopedanewapproachtosupplychainmanagement,andhavebecomeabeaconcompanyforthis.Thegroupagreedthatthekeytorecognisingtheseproblemsistoidentifythempre-emptivelybyunderstandingthattherearesignificantstakeholdersthatdonotseethe
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situationfromthecompany’spointofview.Thesesituationsmaytaketimetocrystalliseasproblematicdecisions,buttherootsmaybeinplaceearly.Thiscanbedescribedas‘political’,forexample:“wethoughtwehadatechnicalproblem,anditbecamepolitical’”–thislanguageisoftenindicativeofthepresenceofcomplexstakeholders.Thisariseswhenacompanyhasspentalotoftimedevelopingatechnicalsolution,buthasnotrecognisedthatthecommunitymightseeitincompletelydifferentterms.Soinonecase,theteamhadsolvedtheproblemonitsownterms,butnotintheenvironmentinwhichtheywereoperating.Thechallengewiththesepre-emptiveapproachesisthattheyareexpensive,comparedwithtechnicalproblemsolving.Thereisarealtrade-offindecidingwhethertoallocatetimetotechnicalproblemsolvingortobuildingadeepunderstandingofallthestakeholders–somethingthatwasidentifiednotonlybytheworkshopparticipants,butalsobytheintervieweesatConsultCo.Thisisadecisionabouthowtoapproachtheproblem,andisnotoftenframeddeliberatelyasatrade-off.Differentexecutivesanddifferentcompanieswillvaryintheirhabitualandcontextualapproachestothisbalancebetweentechnicalandstakeholderfocus,partlydependingontheirapproachtheriskinherentinthecontext.Thegroupidentifiedfivespecificcapabilitiesthattheyconsideredtobeimportantinmanagingthesesituations,basedontheirownexperience.TheseareshowninFigure17:
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Figure17:Fivecapabilitiesneededformakingdecisionsin'messysituations'
Identifyingandunderstandingthestakeholders
Oneparticipantpointedoutthatproblemsarisewhengroupsspendalotoftimedenyingwhothestakeholdersare(eg.“it’sjustnotrelevantforthatgroup”).Thereisarealskillindefiningthefullsetofstakeholdersandtheirrelativeinfluenceinthedecision,andtheninunderstandingtheirpointofview.Thisunderstandinginturnshapestheunderstandingofboththepermissionspaceandthewaysofinterpretingtheproblem.Itisthereforeakeypartofthedecision-making,butisalsonotwithoutcost,sodecision-makersneedtobeabletojudgehowmucheffortiscommensuratewiththecomplexityofthesituationandtheimportanceofthestakeholders.
1.Iden(fyingandunderstandingthestakeholders
2.Understandingpermissionspace
3.Definingtheproblem
4.Principles,notrules
5.Interac(onskills
SeDngthepre-condi(onsforproblemsolving
Makingthedecision
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Understandingpermissionspace.
Executivesneedaveryclearunderstandingofthepermissionspace,whichmaybere-shapeddependingontheconstellationofstakeholders.Someofthisiscultural,andsoorganisationsmayneedtoreconsidertheirrisktolerance.Thegroupdiscussedthecaseoftheveryslowchangeinthecementindustry,inwhichexecutiveshavetakentheviewthat:“wedon’tdoradical–it’snotinourpermissionset”,leadingtocollectiveinertia.ThisframingalsoledtotheslowpaceofchangeintheNikecase:forthefirst18months,theirviewwasthattheproblemlaybetweentheir2ndand3rdtiersuppliers.Itwasonlywhentheyextendedtheirownunderstandingoftheirremitbyreviewingtheirstakeholdersandpermissionthattheyactivelyengagedwiththeproblem.Definingtheproblem.
Understandingthestakeholdersandpermissionspaceletsexecutivesstarttodiscusswhatagooddecisionwouldlooklikeinthiscontext.Thisischallengingasstakeholdersmayhaveverydifferentideasofaneffectiveoutcome.Companiesmayfinditdifficulttomakedecisionsthatraiseissuesofco-ordinationorgovernance.Asoneparticipantobserved:
“Itmaybeeasiertomakeabusinesscasefornewequipmentthantoconveneagroup
ofpeopletoagreetochangetheirbehaviour”.Onewaytomanagethisistotakeaphasedapproachtoproblemsolving–forexampletakingsmallerandlesscontroversialdecisionsfirst.Thismayhelpmanagetheproblemscausedbytheirrevocabilityofsomedecisions.Principles,notrules
Messysituationsmayexistoutsidethescopeofthenormalsystemofruleswithinanorganisation,andthereforecreatestressesonrule-basedsystem.Byworkingwithprinciples,ratherthanrules,itispossibletoaddresstheseinanewway.Whilethisishappeninginsomecases,itisbynomeansubiquitous.Oneimportantaspectofprinciples-baseddecisionsisthelegitimacyoftheprinciples.Ifthesecanbeagreedwithstakeholdersearlyintheprocess,anddonotappeartobe
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developedinresponsetocrisis,theycanbeveryhelpful.However,thereneedstobeintegritybothintheprinciplesandintheiruse.Principles-basedapproachesmayworkwellwith‘workingoutloud’,butthisoftencreatesarequirementfornewinteractionandpersonalskills.InteractionSkills
Thegroupidentifiedseveralskillsthatareimportantinworkinginthisway.Inanenvironmentwhere‘beingrightisnotthepoint’,executivesrequireverydifferentpersonalqualitiesandwaysofworking.Thefourskillsthatthegroupdiscussedwere:
1. Theconfidencetoworkoutloud.Inordertointroducetransparencytotheprocess,andenablehealthydebate,executivesneedto‘workoutloud’.Thisisnotatypicalmodusoperandi,andrequiresconfidenceandanabilitytobewronginpublic.
2. Managinghealthyconflictasasourceofcreativity.Someorganisations(andsometeams)areabletomanageconflicteffectivelytoresolveissuesratherthanpersonalisingissues.
3. Ahealthyapproachtofailure.Aconsequenceof‘workingoutloud’andhealthyconflictisthatsomepositionspeoplewilladoptduringthedecisionprocesswillnotprevail,andmightbe‘failures’.Companiesthathaveadoptedahighertoleranceoftheriskoffailurefindthatthishelpsthemtomakeprogressfaster,andpotentiallytobemoreinnovative.
4. Tenacityandpersonalenergy.Allofthisrequirestenacity,andsufficientpersonalenergytoinvestintheprocessforthelongterm.Thegroup’sviewisthatthisisateachableskill,andalsoonethatcanbesupportedthroughtheorganisation.
Theseskillsneedtobesupportedthroughthesocialaspectsoftheorganisation(leadership,culture).PeermentoringhasbeenintroducedintheUKCivilServicetocreatepermanentactionlearningsetsandhelpleaderswhoareworkingondevelopingtheskillsformanagingmessysituations.
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Thesecapabilitiesare,ofcourse,shapedbythebroaderorganisationalenvironmentandbythedecision-makersthemselves.Thesewererecurrentthemesduringallthreeoftheworkshops.
6.4Organisationalinfluencesonchange
Duringtheworkshops,theparticipantsreviewedtheframeworkdescribingtheorganisationalinfluencesondecision-makers(Figure8).Whilethiswasoriginallydevelopedasastatic,descriptiveframeworkinresponsetoResearchQuestion1(Howdotheformal,behaviouralandsocialstructuresofanorganisationinteracttoinfluencetheinclusionofsustainabilitycriteriainincumbentbusinesses?),theworkshopparticipantswerealsointerestedinthewayitcouldbeusedtodrivechangeinanorganisation,addressingResearchQuestion2:‘Whatarethepointsofinterventiontoinfluencethesesystems?’Ultimately,decisionsaremadebyindividuals(sometimesactingingroups),anditisclearfromthediscussionthatthecontext–thesector,externalpressures(fromcustomers,suppliersorothers),theorganisation’sidentityandgovernancestructureallcreatepressuresthatdirectandshapetheirchoices.Therefore,muchofthediscussionwasaboutthewaysinwhichcompaniescaninfluencethissystemtodriveindividualbehaviourchange.
6.4.1Individualattributesandbehaviour
Chapter4.5describesthethreeattributesofindividualdecision-makersthatshapetheirdecision-making:theirknowledge;attitudesandbiases;andpermissionspace.Thesethreeareinterconnected:adecision-makers’attitudesandbiaseswillshapethewaytheyinterprettheknowledgeavailabletothem;theirpermissionspacewillshapethesetofactionsthattheyperceiveasavailable.Theseareeffectivelytheboundariesonrationaldecision-makingthatariseinthisresearch.Tochangethebehaviourofdecision-makers,organisationsthereforeneedtoshapetheiraccesstoknowledgeandinformation;thewaytheyinterpretit;andtheirpermissionspace.
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Althoughmanyoftheorganisationsinvolvedinthisresearchusetrainingprogrammesasawayofbuildingknowledgeamongindividualdecision-makers,thisisusuallypartofabroaderorganisationalsystemofstocksandflowsofknowledge.Thediscussionaboutindividualbehaviourchangefocusedmoreoninfluencingattitudesandpermissionspace.Influencingattitudes
Thegroupwasinterestedinthewaysinwhichthepersonalhistoryandprofessionalidentityofdecision-makersshapestheirattitudesandbiases,skillsandcapabilities.Inparticular,theywereinterestedinhowtoshapethistobuildeffectivedecision-makersandintheroleofdifferentfunctions.Theymadetwoparticularobservationsabouttheconnectionbetweentheorganisationandtheindividual:first,thenatureoftheworkforce;andsecondtheimportanceofprofessionalaffiliation.Oneexecutivepointedoutthatdifferentcompanieshavedifferentworkforceprofiles.Lowlevelsofemployeeturnovercancreateculturalstability,whichcanbeveryeffectiveformaintaininggoodpractices,butisalsodifficulttochange.Onecompanyintheresearchwastakingadvantageofaparticularphaseinitshistoryasagenerationofmanagerswereretiringandbeingreplaced.Otherswerefindingwaystocreateexperiencesthatwouldbuildcommitmentamongdecision-makers(forexamplebeingputinapositionwheretheywouldneedtospeakpublicallyaboutsustainability).Thissuggeststhatmanagersattemptingtointerveneintheorganisation’sdecision-makingcanidentifyparticulartimesorparticularpeopletobeafocusforinterventionandchange.Severalworkshopparticipantssuggestedthatanotherareathatimpactsdecision-makingispeople’sprofessionaldiscipline.Thiswasfirsttestedexperimentallyin1958(Dearborn&Simon1958).Thegrouppointedoutthatfinanceprofessionalshaveverywellestablishedprotocols(forexampleaboutreporting)whichcanbedifficulttochange.Thereframingofsustainabilityasaproblemofriskcanbeahelpfulwayofengagingfinanciers,butdoesnotaddresstheopportunitiesorsolutionspresentedbyactingmoresustainably.HRpeoplemayapproachthequestionfromanentirelydifferentangle,forexampleconsideringthewayinwhichsustainabilitycanbebuiltintoanemployeevalueproposition.Marketerswillengagefromacustomerpointofview.
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Thegroupwereinterestedinthewayinwhichdifferentprofessionalfunctionscanbeengagedconstructivelyindecision-making.PermissionSpaceTheworkshopparticipantswereinterestedinpermissionasaninterpretedspace:thewayinwhichexecutivesfeelempoweredtothinkcreativelyaboutsolvingaparticularproblem.Basedonthediscussion,thegroupsawthepotentialofnewinformationandreframingaswaystohelpexecutivesinterprettheirpermission-space,butalsoseeitasanareawhichhasbeenunder-explored.Theyobservedthatdecision-makingrequiresknowledgenotonlyofthesubjectmatter,butalsoofthedegreeofinformalpermissionavailable.Oneparticipantobservedthat:
“Seniorpeopletendtoknowquitewellwhattheirpermissionmightbeandhowto
negotiateit.”
Onefactorshapingpermissionspaceisthedecision-makers’understandingoftheexpectationsofotherpeople(whichmaybedifferentfromthepeople’sactualexpectations).Forexample,Boardswilltendtoassumethatshareholdersarelookingforfinancialresults.Thiswillshapetheassumeddecision-space.Oneparticipantreportedonworktheyhaddonebylookingbackatearlierdecisions,andobservedthatproblemsoftenarisefromamisplacedunderstandingofexpectations,andthusanincorrectinterpretationofthepermissionspaceforadecision.Thiscanbeimprovedbyinvitingpeopletotalkmoreopenlyaboutthenatureofthepermissionspaceforacomplexdecision,andbeingpreparedtobeexplicitaboutit.Therearebarrierstopermission.Sometimesthesecanbeindividualleaderswhoarereluctanttodelegateorcorporateculturesorregulatoryenvironmentsthatarefocusedonmaintainingacertainstatusquo,whichlimitsthedegreesoffreedomavailabletodecision-makers.Similarly,someculturesaremoreeffectiveatpushingpeopleoutsidetheircomfortzonesandencouragingthemtotakeabroaderpermissionspace.Professionalrolescanalsolimitpermission-space,forexamplefinanceprofessionalswhoseetheirroleascreatingshareholdervaluewillinterprettheirrangeofoptionsdifferentlyfromthosewhoseetheirroleasenablingtheresponsibleuseofresources.Finally,someindustrystandards(eg.BREEAM),whilewellintended,createatick-box
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mentalitywhichcanleadpeopletodothingswhicharelesseffective.Whilestandardsgivepeoplethereassuranceofhavingdone‘therightthing’:thereistheriskthatthisgivesafalsesenseofconfidence.Onemanagerpointedoutthatbecausedifferentpeopleinterprettheirrolesindifferentways,changeagentsneedtotakequiteatailoredapproachtoidentifyingtheleaderswhoaremakingdecisionsandinfluencingthem–oftenbyshowingthemgoodexamplesofpeopleusingtheirpermissionspaceeffectively.Thisinvolvesnotonlybuildingthedecision-makingprocesses,toolsandwaysofdoingthings,butalsoadeepunderstandingofthedecision-makersthemselves.Permissionspaceisthusamalleable,negotiatedareathatcanbeshapedbythebroaderorganisationtoencourage(ordiscourage)theinclusionofsocialandenvironmentalconsiderationsindecision-making.
Bothofthesepointsstarttosuggestthatinterventionsincompaniescanbequitenuancedandrequireatargetedapproachtoparticularaudiencesforbehaviourchange.Thispotentiallyaddsconsiderablecomplexitytochangeprogrammes,andthussuggeststhatcompaniesneedtoconductacarefuldiagnosistoidentifythedecisionmakerswhoseworkdrivesthemostmaterialsocialandenvironmentalimpacts.
6.4.2Organisationalfactors
ThefourorganisationalfactorsidentifiedinChapter4.4are:leadership,culture,organisationdesign,andperformancemanagement.Asthediscussionofpermissionspaceaboveshows,thesedoinfluenceindividualbehaviour.However,theorganisationisnotonlytheenvironmentfordecision-making,italsoprovidestheconditionsforchange.Giventheworkshopparticipants’focusonthesocialstructuresoforganisations–theirleadershipandculture–itisnotsurprisingthattheysawtheseasaveryimportantmechanismforchangingdecision-making.Leadershipinparticularwasdescribedasacriticalwayofshapingtheinterpretationofsustainability,anddirectingattentiontoit.Theinitialstepofreframingsustainabilitywasclearlyseenbythegroupasacriticalact
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ofleadership.Inordertodothis,somecompanieswereworkingtoinfluencetheirleaders.Asoneparticipantsaid:
“Weworkwiththenewyoungleadersandtrytounderstandthemtoinfluence
change.Theyareallknownfordifferentwaystomakechangehappen,soeveryone
needstomakeithappeninadifferentway–andthisgivestheexamples.”
However,whileeveryoneagreedthatleadershipwascriticalforchange,theinterdisciplinarynatureofsustainabilitymeantthatmanyoftheparticipantssawtheproblemas‘toobig’foranindividualleader,andrequiringamuchbroaderorganisationalconsensustoshift.Leadersinfluence,andareinfluencedby,thecultureoftheirorganisations.Theorganisationalculturetendstosetnorms,particularlyaboutinteraction–oneparticipantgavetheexampleofconfidenceinhandlingconflict.Thus,inordertobuildthecapabilitiesthatthegroupdescribedformanagingsomedecisions,theremayneedtobesomeculturalchanges.Cultureisalsoinfluentialinshapingpermissionspace.Thegroupthereforesawtheabilitytounderstandacultureasacriticalprerequisitetomanagechange,andobservedthatsomeofthechangemethodsthathavebeeneffectiveinsomecontextswouldbeproblematicinothers:
“Pushingpeopleoutoftheircomfortzone[describedasaprocessforchange]isvery
specificallycultural”
“Therearecultures–includingsub-cultureswithincompanies–thatwantto
preservethestatusquo,sothereisatimeandaplaceforchange”
However,culturesareatleastpartlymalleableandcanbeshaped.Oneparticipantgaveanexampleofhowtheirorganisationhadchangeditsattitudetowardsfailuretoencouragehigherlevelsofinnovationandlearning.Asonepersoncommented“akeyskillistenacity”,andthisisbothteachableandculturallysupportable.Organisationdesignwasnotdescribedasadirectenablerofsustainabilitybyanyoftheworkshopparticipants.Rather,theyreinforcedfindingsfromtheinterviewsthatthereweresomestructuraltensionsintheirorganisations.Asoneparticipantcommented:
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“Therearepeoplebarriers,thereareprocessbarriers”.
Somelevelofconflictseemstobeinevitablewhenthedifferenttensionsinadecisionareheldatdifferentplacesintheorganisation(forexamplewhenprocurement,engineeringandfinancehavedifferentobjectives),andsothesecanonlyberesolvedataseniorlevel,orbycreatingcross-cuttingnetworks.Manyoftheworkshopparticipantshadexperienceofcreatingnetworkstomobilisepeoplewithincompaniesandacrosscompanies.Thesenetworksneedtooperatewithintheexistingstructuresandsystems,toaugmentthembycreatinglinkages.Thesethenbecomeconduitsforknowledgeandforinfluencingbehaviourchange.Theformalsystems–organisationdesignandperformancemanagement–havearoleinthetransferandsharingofknowledge,andinembeddingthechange.Theycanalsoprovidesupportforsomeoftheculturalandleadershipinterventions,forexamplethestructuralsupportforformalmentorshipschemes,ordevelopingperformancesystemsthatdonotpunishcertaintypesoffailure.Thecombinedeffectofchangingformalsystemsistoratchetthechangeasitishardertoundotheembeddedchanges.Oneexecutivecommentedonthewaythatthecompanyhadmanagedamulti-yearprogrammetoembedsustainabilityinthebusiness:
“Itwaslikearugbyline.We’dmoveforward,thenreinforce,andthentrytomove
forwardagain.”
Althoughperformancemanagementwasemphasisedbysomeoftheinterviewees(seeSection4.4.4)itwasseenonlyasawayofdirectingattentionandreinforcingsocialnorms–evenincompaniesthatarequitetarget-driven.Oneoftheparticipantswhohadbeendeeplyinvolvedinmanagingsustainability-relatedchangeintheirorganisationconcludedthateffectivechangerequiredworkingwithformalandsocialelementsoftheorganisationsimultaneously:
“Youhavetoplayallofthesethingsatthesametime,becausewehaveprocesses,we
havetools,wehavewaystomakedecisions,andthenwehavewaystoinvestin
people.”
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6.4.3ThecriticalroleofknowledgeandlearningAlthoughknowledgeappearsintheframeworkofinfluencesasanindividualfactor(seeSection4.5.1),thediscussionintheworkshopdevelopedthisideafurther,showinghowknowledgeatboththeindividualandorganisationallevelalsohasacriticalroleinchangingthewaydecisionsaremade.Asoneparticipantsaid:
“Howcanweusedatatoopensomeone’smind,ortoseeadifferentperspective,orto
understandthesystembetter?”
Althoughthisispowerful,thereisacosttodevelopingthistypeofknowledge,particularlyforcompaniesthatareleadingintheirindustries.Asoneworkshopparticipantobserved:“Ifyouareasustainabilitypioneer,thereisalearningcost”.Insomesectors,thecostofthisextraknowledgeseemstohaveinhibitedindividualcompanieschanging.Thegrouptooktheviewthatorganisationslearnhowtoacquireandsupporttheseskills,butoftenasaresultofabadexperience(examplesgiven:Nike,BrentSpar).Thismayinspireothercompaniestolearntheskillspre-emptively,aspartofbuildingastrategyofresilienceinthefaceofchange.Notonlydocompaniesneedtochangethewaytheymanageknowledge,theyalsoneedknowledgetomanagethechange.Effectivemonitoringofthechangeprocesswillcreateafeedbackloop.Asoneexecutivesaid:“Ifthereisn’tafeedbackloop…thenthereisnoprocessforevolution”.Thisistheprocessbywhichtheknowledgemaybetranslatedintoorganisationallearning.Thus,knowledgehasmultiplerolesinshapingthewayorganisationsadapttoincludesustainabilityconsiderationsintheirdecision-making.Thissuggeststhatknowledgehasadualroleintheframework,asbothanindividualfactorandasanorganisationalfactor.
6.4.4Influencesbeyondtheboundariesoftheorganisation.Aswellasextendingtheframeworktoencompassadualrolefororganisationalandindividualknowledge,theworkshopparticipantsalsoexploredtheroleoftheenvironmentbeyondtheboundariesoftheorganisationasadriverofchange.
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OnefeatureoftheConsultCocaseisthatultimately,collaborationbeyondtheboundariesoftheorganisationwasnecessarytostarttoeffectthesystemchangesthatcouldsolveConsultCo’sproblems.Thisthemearoseintheworkshops.Severalcompanieshadbeeninvolvedinexternalnetworksaspartoftheirdrivetowardssustainability.Theseexternalnetworkstooktwospecificforms:first,groupsofpeer-likeorganisationsworkingonspecificissues;second,companiesworkingwiththeirsupplychainsorsuppliersworkingwiththeircustomerstoimprovesustainabilityintheproductionsystem.Manyoftheparticipantsintheworkshopshadbeeninvolvedwithissue-focusedindustrynetworks.Thereweretwomainreasonsforthis.First,thecostsoftheorganisationallearningforsustainabilityseemtobehigh(althoughtheyarealsodifficulttoquantifyastheyarenotheldatasinglepointintheorganisation).Thismeansthatformanycompanies,theremaybeafirstmoverdisadvantage.Thegroupdiscussedtheexampleofthecementindustry,wherethereareknownopportunitiesforimprovementinenergyefficiency,butnoindividualcompanyistakingleadership.Companiestemper‘firstmoveradvantage’withconsiderableriskaversion,andsosomechangesmoveatasectorallevel.Oneparticipantcommented:
“It’sactuallyeasierifthewholesectormoves,evenifyoulosefirstmoveradvantage”Thisiscomparablewithchangesinhealthandsafety,inwhichcompaniesoftenmoveinparallel.Second,thereareadvantagesofsharingvoiceandresourcestoeffectchange.Oneparticipantgaveanexamplefromanindustrywhereamajorplayerhadbeenfacingaseriesoffinancialandreputationalproblems,and‘theywentundergroundonsustainability’inordertoregroup,butotherindustryplayerstookovertheleadinaseriesofindustry-levelinitiatives(suchasworkingtoreducedeforestationinthesupplychain).Thisallowsthemajorplayersinthesectortoshareresourcestodrivechange.Astheexecutiveinvolvedsaid:
‘We’vedoneourbit,theycandotheirbit...then,betweenusallwithin20yearswe’ll
keepthatenergyupandkeepthatleadership’.
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Thegroupobservedthatthisapproachofconveningwithinandacrossindustriesisbeingusedtotacklearangeofproblems,fromthereductionofplasticsinthefoodsupplychaintoEllenMacArthur’sapproachtoconveninggroupsofcompaniestosolveproblemsinthecirculareconomy.Aswellassectorallevelnetworks,thegroupdiscussedtheroleofsupplychainsininfluencingcompaniestoactsustainably.Therelativepowerofbusinessesatdifferentpointsinasupplychainmaybeanimportantdeterminantofthewaytheycantakedecisions.Groupmembersgaveexamplesofsupplierswantingtodrivechange,butthisalterstraditionalrelationships,andsomecompaniesactconservativelyinordertoavoiddestabilisingarelationshipwithanimportantcustomer.Wediscussedanexamplefromtheapparelindustry,wheremanufacturingmarginsareverytightbutatthesametimesomemanufacturerswouldliketotakeanactiveleadershiproleinintroducingsustainablemanufacturingtothebrandstheyserve–forexamplebysettingstandards,KPIs,andreducingaudits.Theproblemthispresentsisthatitisonlypossibletoleadacustomerinadirectionthatisinterestingforthem:again,thisisanexampleofatensionbetweentheinternalandexternalcontexts.Thisisfurthercomplicatedinindustrieswherepeercompaniesbecomesuppliers(forexample,thepharmaceuticalindustry).Thesedifferentapproachestoworkinganddecision-makingarehighlightedwhenacompanyworksasasupplierinonecontextandacontrollingcompanyinanother.Therearerealdifferencesinactivitiessuchascollectingsustainabilityindifferentrelationalset-ups,asoneparticipantsaid“It’sasthoughthelefthandandtherighthandarenottalkingatall”.Thissuggeststhatmanagingeffectiveexternalcollaborationforsustainabilityalsorequireshighlevelsofinternalco-ordination.
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6.4.5ImplicationsforchangeThisdiscussionpointstowardsthephenomenonofnestedtensionsdescribedintheConsultCocase(Chapter5.7).Figure18showsaverysimplifiedversionofthewaysinwhichactionsinthedifferentorganisationallayerscancreatepressureforchangeovertime:Figure18:Organisationaldynamicsshapingdecisionsovertime
Therearetwofeedbackloopsinthismodel.First,asthecompanydevelopsnewknowledge,somedecisionsbecomeeasier–theresultsofthesedecisionsmaythenfeedbackintotheknowledgestocks.Second,asdecisionmakers’changingperceptionsoftheissuesinfluencesocial(andsometimesformal)systemchanges,whichreinforcethenewunderstandingofissues.Thissuggeststhattherearetwolayersoflearningloopsinvolvedinstartingtointroducesustainabilitycriteriatodecision-making.First,thereisacycleoflearningbetweenthedecision-makerandtheorganisation–thisisoftenmanagedthroughbehaviouralchangeeffortsandorganisationalshifts(suchastheintroductionofsustainabilitynetworkstoshareknowledge).Second,andnotshowninFigure18,there
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Companyrespondsbyreframingtheroleofsustainability
Decision-makerschangepercep0onofissuesbutneednewknowledge
Companydevelopsnewknowledgestockandsystemstoshareknowledge
Decision-makerschangepercep0onofissuesbutneedbroaderpermission
Companyneedstocollaboratetosolveproblems
Framingofdecisionsmaychange
Leadersamplifythisreframingthroughtheorganisa0on
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isacycleoflearningbetweentheorganisationandtheexternalenvironment,asthecompanytestsandsensestheimpactofdecisionsonexternalstakeholders.Thus,theprocessofbehaviouralchangeisnestedwithinabroadercontextofsystemicchange.
6.5Nestedchangeandthewhack-a-moleapproachThefindingfromthisdiscussionabouttheorganisationandchange,whichextendsthefindingsfromStudies1and2isthattheorganisationalsystemsthatareusuallyusedtodrivebehaviouralchangearenestedwithinabroaderprocessofsystemicchange,thatisshapedbythedecision-makingwithincompanies.Manyoftheinterventionsthataremadeaspartofatraditionalchangeprogrammetointroducesustainabilitytocompaniesaddressoneoftheselevels(thebehaviouralorthesystemic),butnotboth.Toexploretherelationshipbetweenthesetwolevelsofchange,IdedicatedthewholeagendaofthethirdworkshoptoadiscussionoftheConsultCocase,inwhichbothtypesofchangeareevident.Thediscussionexploredthreemainthemes:first,thefeaturesoftheConsultCocase(toseeiftheideascouldbeapplicableinothercontexts);second,thepropertiesof‘whack-a-mole’change;andthirdthenatureofnestedchange.
6.5.1ConditionsofthiscaseTheexecutivesidentifiedfourfeaturesofthiscasethatmakeitahelpfulanalogyforotherindustries,andsosuggestthatsomeofthefindingsmaybegeneralizable.Thesewere:
1. Inconsistentcustomerbehaviour.Whiletheclientsareinterestedinsustainability,theyareactuallycontractingbasedontimeandefficiency.Thisphenomenonissimilartoconsumerbehaviourinotherindustries,whereconsumerswantsustainableproducts,butdon’twanttochangetheirhabitsofconsumption.Thereisaquestionabouthowfarthecompany’sclientengagementprocesscangoinchangingthisbehaviour(forexample:incompetitivebids,thebidsareevaluatedusingthesamecriteria,andsoeveryoneneedstobidinthesameway).
2. Challengesofincumbency.Whereasastart-up,ornicheplayercanpotentially
offeranewwayofworking,theincumbentsaretoolargetosimplychangethe
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rulesunilaterally–itcreatestoomuchrisk.Onepossibilitythatthegroupsuggestedwastheideaofhavingmultiplebusinessmodels(eg.Aninternalstart-up)inordertotryoutnewwaysofworking.
3. Theabilitytomakesomechangesalsodependsonthelocusinthesupplychain.
Inthiscase,theengineeringconsultantsarepartofaverycomplexgroupoforganisations(clients,consultants,builders,communities…)involvedinthedevelopmentanddeliveryoflargeinfrastructureprojects.Therearesomechangesthatcannotbemadeunilaterallyastheyrequiretherestofthegrouptoshift.Thisoccursinotherindustries:forexample,buyerpowerisconcentratedinsomeretailcontexts,andsocompaniestryingtooffersustainableproductsmightnothavesufficientpowertoinfluencesupplierbehaviour.
4. Thereisacostassociatedwithbeingapioneerinsustainability,assystemsmay
needtobesetupfromscratch.InConsultCo’scase,thisistheinvestmentinnewknowledge,includingbothdatabasesandtheprocessesandnetworksforimprovedknowledgeexchange.Inothercompanies,thesesystemsareexpectedtoincludeacombinationofbusinesssystems(suchaschangingthesupplychain)andthecostsoflearning.
Theparticipantsintheworkshopwereallrecruitedfromorganisationsthathadsomeorallofthesefeatures.ThismeantthattheywereabletorelatetheConsultCoexperiencetotheirownexperience,andtheircommentaryisbasedonthis.
6.5.2Thewhack-a-molemetaphor
Inchapter5.7,Iintroducedthemetaphorofthegame‘whack-a-mole’todescribetheproblemsConsultCofacedinmanagingitschangeprogramme.Therearethreemainprinciplesunderpinningthismetaphor:
1. Asoneproblemissolved,asecond(andsometimesmore)becomesapparent.2. Eachproblemisasymptomofanunderlyingsystemicproblem(thereisactually
amachineunderthewhack-a-molegame).
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3. Thissystemicproblemisnotsolubleusingthesamemethodsthatareusedforthepresentingproblems.
Whilethemetaphorisanewone,theexecutivesintheworkshoprecognisedthephenomenonfromtheirownexperiencesofintroducingchangeinsystemsthathadsimilarcharacteristicstotheConsultCosituation.Thegroupidentifiedfourspecificproblemspresentedbythistypeofchange.Solvingthewrongproblem.
Oneproblemthatthe‘whack-a-mole’situationpresentsisthatitispossibleforpeopletomisdiagnosethesystemicproblem.Oneparticipantgavetheexampleofthecurrenthighlevelofpublicpressuretoreduceplasticsfromtheirbusiness.Thisisdistractingattentionfrommorepressingproblems–particularlyde-carbonisation.Thisgivesthemanagersaproblemofcompetingcommitments:whiletheyaredeeplycommittedtomeetingthedemandsofcustomers,sometimesthesedemandsareatoddswiththeircommitmenttoactingbasedonscientificpriorities(forexampletheirmostmaterialimpacts).Giventhatthereislimitedresourceinacompanyformanagingtheseproblems,thedecisionofwhattoprioritiseismanagedasatrade-off.Thisraisedaquestionforbroaderdiscussion,whichiswhetheritisactuallypossibletoseethesystemicproblematallbeforegoingthroughtheprocessofaddressingthepresentingproblems.Thegrouptooktheviewthat‘whack-a-mole’situationscreateopportunitiesfororganisationallearningfortwomainreasons.First,manyorganisations(andpeople)arerelativelyinexperiencedwithsustainability,andsotacklingthepresentingproblemsisawayoflearningaboutthesystemandthesustainabilityissues.Second,becausesystemproblemsaresochallenging,peopleeitheravoidtheseorarereluctanttobelievethattheyareapriority:forexample,griddecarbonisationwillhelpaddressarangeofsustainabilityproblems,butrequirespolicychangeandwillradicallydisruptseveralindustries.Asoneparticipantsaid:
“Peoplegettoapointwheretheyaresaying‘Someone[else]needstodosomething
differently’,whichsuggestsaneedforabroaderchange.”
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Oneoftheworkshopparticipantsobservedthattheideaoflearningisapartofthewhack-a-molemetaphor:
“Ifyouhaveplayedwhack-a-mole,youknowthatthesystemwillcontinuetopresent
problems,butifyouarenewtoit,youneedtoactuallyplaythegameforawhile
beforeyouunderstandhowitworks.”
Thissuggeststhatthistypeofchangecallsforanexperiencedcadreofleadersandstrongorganisationallearningprocesses.Thisledthegrouptoconsiderthesecondchallengetheyidentifiedforthistypeofchange.Delegatingchangetothewrongpeople.
Oneproblemisthatoftenthepeopleputinchargeofthesechangesarepeoplewhoare‘goodathittingmoles’ratherthanpeoplewhoareabletounderstandandaddressthebroadersystemicissues.Asonepersonsaid:
“Ifyouhaveawhack-a-moleprobleminsustainability,youprobablyhaven’tunderstoodsustainability.”
Often,sustainabilityisencouragedincompaniesthroughinformalnetworks,whichcanbeeffectiveinidentifyingandchallengingproblems,butmaynothavetheresourcesorauthoritytoaddressfundamentalproblems.Oneexecutivegaveanexampleoftheproblemofbringinginnewrecruitstosustainability:
“Theysay‘ofcoursewecanrecyclethings,wejustneedtoworkharder’….Andthat’s
what’shappeningincarbonandclimatechangeatthemoment,whereyou’vegot
businessesthinking‘wecansolveit,that’sOK’.Butyouneedgriddecarbonisation
andnewregulationforthat…ratherthanjusttinkeringaroundwithalittlebitof
innovationandthinkingwecansolveit.”
Veryseniorcoalitionsmaybeeffectiveindrivingchange,astheyarepotentiallypositionedtomakeorinfluencesystemlevelinterventions.
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Changemanagementprocess
Theseproblemsofstaffingandtacklingthewrongproblemledthegrouptosuggestthatthechallengecompaniesfaceisoneofspecification:ofidentifyingthepointatthesystemtointervene,theresourcesneededtodothis,andthefeedbackloopstohelpmonitorprogress.However,problemsaregenerallyspecifiedintermsofcurrentnorms,whichtendtobeeffectiveforspecifyinganapproachtoapresentingproblem,ratherthanadeepersystemicproblem.EffectiveorganisationallearningisacriticalpartofthetypeofchangeprocessthatisdescribedinFigure18,above.Thismeansthattheorganisationsundertakingthistypeofchangeneedtwoquitedifferentformsofnewknowledge.First,theyneedtointroducenewstocksandflowsofknowledgetohelpdecision-makersmakebetter-informeddecisions.Thismayinvolvenotonlyimprovingdataandsharinginthebusiness,butalsoimprovingthesensingoftheexternalworld–forexample,throughcleareridentificationandunderstandingofstakeholders.Second,theyneedaneffectiveprocessforlearningaboutthechangeitself.Asoneoftheworkshopparticipantssaid:
“Ifmolesarethewaywelearnaboutthesystem,thenperhapsmyjobistosetalotofmolesrunningsothatwecanacceleratetheprocess.”
Thisisarelativelysophisticatedformofdouble-looplearning(Argyris1976),requiringahighlevelofreflectionbythemanagersofthechange,effectivelyformingalayerofactivity(orcost)thatneedstobedesignedintotheprogramme.GovernanceThegroupsuggestedthatultimatelythe‘whack-a-mole’problemssurfaceissuesofgovernance.Resolvingtheserequiresdifferentstructureseitherwithinorbeyondtheorganisation.Theseproblemsmaybesodifficultthatitispeoplewillprefertokeepdealingwithsymptomatic‘moles’ratherthanaddresstheunderlyingchallenges.
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Therearetwoaspectstothis.First,thede-centralisationandcomplexityofmanylargeorganisationscreatesproblemsofgovernance.TherecentscandalatVolkswagenisagoodexampleofthis(Elsonetal.2015).However,creatingthecontrolsystemsthatcanmanagethisproblemandareflexibleenoughtorespondtoadynamicproblemofsustainabilitycreatesnewproblemsoforganisationdesign.Muchoftheworktodate–bothbyacademicsandpractitioners–hasfocusedondevelopingsocial,ratherthanformalapproachestochangeanditmaybethatthisisanewfieldfordevelopment.Second,theworkshopparticipantstooktheviewthatthesemayneedtobecollaborationsatthesectorlevel,ratherthanthebusinesslevel.Thisalsoraisesproblemsofgovernance,astheoversightofthesechangeprocessesneedstobesharedbetweenseveralgroups,ordelegatedtoaco-ordinatingorganisation.
6.5.3NestednessJustasthechoicesmadebyindividualdecision-makersarenestedwithinthecontextofabusiness,thebusinessesthemselvesarenotisolatedfromthebroadersocietalcontext.Althoughtheunitofanalysisforthisresearchisasinglebusiness,wecanobservesomeofthesameproblemsemergingatasocietallevel.Forexample,thecurrentpublicfocusonplasticisanexampleofasymptomaticproblem,whichisnotnecessarilyaddressingthedeepersystemicissues.Thisnestednessmeansthatcompanieswillnotbeabletosolvethecompleteproblemswithoutreferraltothebroadersystem.Asoneparticipantsaid:
“Whateverproblemwe’vetriedtosolve,eventually,we’vehitalimit.”
Themulti-dimensionalnatureofsustainabilitythatcausestensionsandtrade-offsincompaniesisalsovisibleatasocietallevel,forexampleincitygovernment,whereresourcesandenergyarelimited.Solvingtheseproblemsrequiresgovernmentswithawillingnesstocollaborateandanunderstandingoftheunderlyingsystems.Despitesomerealprogressbysomecompanies,nocompanycanfullyclaimtobesustainable,becauseeveryonehastoengagewithsomepartofasystemthatisnot:forexample,almosteverycompanyrequiressomeaccesstopowergenerationthatisnotentirelyrenewable.Thismeansthatallcompanieswillneedtolearnhowtomanage
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these‘whack-a-mole’processesinordertoachievethechangeneeded.Thisrequiresimprovedapproachestolearning,effectiveexternalcollaboration,andadeterminationtodirectresourcestothemanagementofdifficult,systemicproblems.
6.6ConclusionsStudy3hasreaffirmedseveraloftheearlierfindingsofthisstudyandformedconnectionsbetweenthefindingsinthefirsttwostudies.Specifically:
1. Thediscussionsconfirmedboththeimportanceandthedifficultyofthereframingprocessinsettingadirectionforcompaniestoadoptsocialandenvironmentalsustainabilityintheirdecision-making.
2. Thediscussionsconfirmedthatthearchetypesofdecisionsarerecognisable,buttheycanbedynamic.Thatistosay,decisionsthathavethecharacteristicsofonearchetypecanbetreatedwithapproachesthataresuitedtoanotherarchetype.Thisistypicallytosimplifyandacceleratedecision-making,butmayleadtounintendedconsequences(forexample,afailuretomanagestakeholderswellifa‘messysituation’istreatedlikeanengineeringproblem,orafailuretoimproveefficiencyifanengineeringproblemistreatedasaroutinedecision).
3. Theworkshopparticipantsbroadlyagreedwiththestructureoftheframeworkoforganisationalinfluencesondecision-makers,butexpandedthisbyshowingnotonlyhowthiscandescribethefactorsthatinfluencedecision-making,butalsohowthesecanbeengagedinchangeprocesses.Inparticular,theparticipantsemphasised:thesignificanceofthesocialaspectsofthemodel(leadershipandculture)ininfluencingdecision-makers;theratchetingeffectthatchangingtheorganisationcanhaveonembeddingchange;andtheimportanceofknowledgetransferandlearningatbothanorganisationalandindividuallevel.
4. Knowledgeandlearninghaveanimportantroleinshapingthedynamicsofthesystemovertime,andrequireparticularorganisationalcapabilities.
5. Theconnectionbetweentheorganisationandtheexternalenvironmentisanongoingone,anddoesnotsimplystopaftertheinitialtensionbetweenthebusinessanditssocialandenvironmentaloperatingcontexthasbeenre-framed.Thisconnectioncaneitherbeusedasasourceofinformationandlearningtoimprovedecision-making(forexamplebybringingknowledgeabout
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stakeholdersintothebusiness),orcanbeaprocessofengagementandcollaborationwithotherorganisationstodrivesystem-levelchange.Thisisanexpansionoftheoriginal,staticmodel.
6. Thetypeofchangerequiredtoembedsocialandenvironmentalconsiderationsintobusinessdecision-makingisthuscomplex.Itrequiresmultiple,sometimesexperimental,pointsofintervention(includingseveralformalandsocialorganisationalsystems).Itneedstoincorporatelearningloopsbothbetweentheindividualdecision-makerandtheorganisation,andbetweentheorganisationandtheenvironment.Andfinally,itmayeventuallyrequiresystem-levelchange,whichcanonlybeachievedbyactionbeyondtheboundariesoftheorganisation.
Figure19showshowthesedifferentideasarerelatedtoeachother,toshowaprocessofinfluenceandchange.Thetwosetsoflearningloopsareshowningreyboxes.Figure19:Learningloopsfornestedchange
Here,weseethatwhiletheprocessofchangingapproachestodecision-makingisinitiatedbyareframingofthetensionbetweentheexternalcontextandthecompany’sapproachtovaluecreation,thisisfollowedbyaseriesofiterativechangesastheorganisationlearnsfirstfromtheeffectofitsinternalprocessesonthedecisionspeople
Decisio
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Organisa
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Decisio
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Tensionbetweenbusinessandtheenvironmentcreatespressureforchange
Companyrespondsbyreframingtheroleofsustainability
Companyneedstocollaboratetosolveproblems
Framingofdecisionsmaychange
Somedecisionsmaybeinsolublewithinthecompany
Somedecisionsmaybecomeeasier
Decision-makerslearnsothattheirknowledge,aBtudesandpermissionspacechangeover0me
Companyknowledge,andformalandsocialprocesseschangetoproducenewenvironmentfordecision-makers
Organisa0onallearningloopsareestablished
Companysensesandlearnsfromtheenvironment
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make,andsecondfromthebroaderexternalenvironment.Thereisalsoafeedbackloopbetweenthesetwolevels:someofthedecisionsmadebythecompanywillinturnchangetheexternalenvironment,andsomecanonlyberesolvedincollaborationbeyondtheboundariesoftheorganisation.Thisdiagramsuggeststhattherearefivecriticalpointsofinterventiontoinfluencesystems.First,companiesneedtocreateaframingoftherelationshipbetweentheirbusiness,societyandtheenvironment,andtheyneedtoensurethatthiscanbeinterpretedthroughouttheorganisation(Zolloetal.2013).Second,theyneedtoidentifythedecisionsthathavethemostmaterialsocialandenvironmentalimpacts(Epstein&Widener2011),andassesstheneedtochange–forexample,theworkthatneedstobedonetore-thinkheuristicsinacontextwherethemajorimpactsarelargelyincurredthroughroutineoperationswillbeverydifferentfromtheworkthatneedstobedoneinabusinesswherethereareasmallernumberofmessysituationsrequiringaparticularsetofskillsinaleadershipteam.Third,theyneedtoensurethatthepeoplemakingthesedecisionshaveaccesstotacitandexplicitknowledge(Fortisetal.2018)andthepermissionspacetobeabletobringsocialandenvironmentalconsiderationsintotheirdecisions.Thisisachievedthrougharangeofsocialandformalorganisationalprocesses,whichdependontheorganisationalcontext.Fourth,theorganisationneedstoenableaseriesofreflexivelearningprocesses:forindividualdecision-makers;fortheorganisationalchange;andtobringinideasfromtheexternalenvironment(Raischetal.2018;Fortisetal.2018).Thesebecometheengineofthechangeprogramme.Finally,theorganisationneedstobepreparedtoco-operateexternallytoworkonsystem-levelissueswhentheyreachapointwheretheproblemcannotbesolvedwithintheboundariesofthefirm(Schad&Bansal2018).Thesefive‘foundational’approachestochangeformthesupportingframeworkforchangeintheformal,behaviouralandsocialaspectsoftheorganisationdescribedinChapter4.Ithereforeproposeatheoreticaldistinctionbetween‘foundational’and‘contextual’interventions,inwhichthecontextualinterventionsarethosechangesthattheorganisationmakestoitsformalandsocialstructures(describedinChapter4),andthefoundationalinterventionsarethemorefundamentalprocessesdrivingthechange.ThismodelbringstogetherconceptsfromacrossthefragmentedliteraturedescribedinChapter2tocreateanintegrativeviewofthesysteminfluencingdecision-makers,and
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thepointsofinterventionthatareneededforchange.TherelationshipsbetweentheseareshowninFigure20.Figure20showsasimplifiedmodelofthecontextuallayersframework(fromFigures1,8,9and10)inwhichthecontextsthatarethemainfocusofchangeateachstagearehighlightedingrey.Beneaththat,Ishowthefivefoundationalchangesdescribedabove,withthefeedbackloopsshowninaverysimplifiedasarrows.The‘learning’boxisshownsupportingthechanges–again,thisisaninteractiveprocess(theinteractionsareomittedfromthediagramforsimplicity.Figure20:Foundationalandcontextualchange
Thus,theprocessesof‘zoomingin’and‘zoomingout’-identifiedbyNicolini(2009)andSchadandBansal(2018)astheworkofresearchers–arealsoimportantactivitiesforpractitionersofchangeastheyworkthroughthedifferentcontextuallayersoftheorganisationinparallelwiththefoundationalchangesteps,reinforcedbylearningandfeedbackloops.
Learning
Focusforcon
textual
change
External/internalcontext
Decisioncontext Individualandorganisa9onalcontexts
External/systemiccontext
Changestep
sand
feed
backloop
s
Framing Iden9fyingmaterialdecisions
Changingformalandsocialsystems
System-levelchange
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7:CONCLUSIONS
7.1AnsweringtheResearchQuestionsMyaiminthisstudywastounderstandhowbusinessescanadapttheirdecision-makingsystemstoincorporatesocialandenvironmentalconsiderationsbyansweringtworesearchquestions:
Q1:Howdotheformal,behaviouralandsocialstructuresofanorganisationinteracttoinfluencetheinclusionofsustainabilitycriteriaindecision-makinginincumbentbusinesses?Q2:Whatarethepointsofinterventiontoinfluencethesesystems?
Ifindthattheformal,behaviouralandsocialstructuresofcompaniesarecomplexanddynamic,andthattheyareconfiguredtorespondtotheparticularcircumstancesofthebusiness.The107factorsidentifiedfromtheliteraturereview(describedinChapter2andlistedinAppendix1)appearindifferentcombinationsindifferentorganisations.Nevertheless,theycanbegeneralisedintoadescriptivemodelbuildingontheworkofDeanetal(1991).ThisisdevelopedinChapter4andillustratedinChapter5.Behaviouralstructures(orcognitiveframes)areinfluencedbytheorganisationalframing(andreframing)ofsustainability,butthisisthenreinforcedthroughsocialprocesses(leadershipandculture)andformalstructures,particularlythosethatareresponsiblefortheaccumulationandtransmissionofknowledge.Interveninginthisstructureisdifficult,andthepointsofinterventionforcompaniesreflectboththemostmaterialandparadoxicalissuesthattheyface,andthetypesofdecisionthatpredominateintheirorganisation.Changespresentconsequences,andsothepointsofinterventionchangeandmatureovertime.Nevertheless,basedonmyinitialfindingsfromChapters5and6,Ifindanimportantdistinctionbetweenthefoundationalpracticesneededto‘zoomin’and‘zoomout’todrivesystemchange,andthecontextualchangesthataparticularcompanyneedstomaketoitsformal,behaviouralandsocialstructuresinordertobringsustainabilityconsiderationsintodecision-making.Whileseveralofthesestepshavealreadybeenidentifiedintheliterature,thissynopticview–illustratedinFigure20–isnovel.
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7.2LimitationsoftheresearchThisworkis,ofcourse,notwithoutlimitations.Therearetwoparticularconstraintsonthiswork.First,eachofthequalitativemethodsIhaveadoptedhassomelimitations,whichIdescribeindetailinChapter3.4.AlthoughItookstepstomitigatethesemethodologicalandsamplinglimitations,thefindingsoftheresearcharestillinterpretationsbyasingleresearcherofdatathatwasprovidedinaspecificintervieworfocusgroupsetting.Thisthereforeraisesquestionsaboutthegeneralizabilityofthefindings.Here,ItaketheapproachofGioiaetal(2013),anddepartfromthepurelyinterpretivistviewthateverysituationisspecific(andthus,notgeneralizable).Thisstudydoesproposesomenewprinciples(describedinthecontributionstoknowledgesection,below)thatmayformthebasisforgeneralizableknowledgeandsetadirectionforfutureresearch.Thesecondlimitationofthisstudyarisesfromitsbreadth.OneoftheproblemsidentifiedinthereviewoftheliteratureinChapter2isthatthescopeofmanypreviousstudieshasbeennarrow.Thishasledtoafragmentedliterature,whichhaslimitedthebasisfortheorydevelopment(Shepherd&Rudd2014;Shepherd&Suddaby2017)andhasalsoledtoafocusontoolsoranalyticalmethods,ratherthanorganisationalinterventionstosupportpractitioners.However,inordertoavoidtheseproblems,thestudyitselfiswide-ranging,encompassingaverywiderangeofdecisions(describedinChapter4.2)andorganisationalelements(describedinChapter2.7).Thismeansthattherearefindingsthatcouldbetestedanddevelopedingreaterdetail–again,thisprovidesadirectionforfutureresearch.
7.3ContributionstoKnowledge
Despitetheselimitations,thisstudyadvancesknowledgeintwofields:ourbroadunderstandingofdecisions;andparadoxtheory.
7.3.1Contributionstothestudyofdecision-makingThisstudymakestwodistinctcontributionstothestudyofdecision-making.First,theclassificationofsustainability-relateddecisionsintofourdistincttypes(describedin
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Chapter4.2)isnovel.Byshowingthatdecisionshavedifferentproperties,thisallowsustocontextualisethefragmentedliterature:wecanseethattheliteratureonstakeholders(forexample)addressesdifferenttypesofdecisionsfromtheliteratureonanalyticalmethods.BecauseIfindthatdifferenttypesofdecisionco-existincompanies,andthatthemixofdecisiontypeschangesovertime,Iarguethatthe‘singlelens’approachtodecision-makingthatwefindintheliteraturemeansthatwedonothaveaclearbasisfortheorisingaboutthefullsetofsituationsinwhichcompanieshavetorespondtosocialandenvironmentalfactors.Bringingtogetherthreestrandsofsustainability-relatedliterature(theanalytical,cognitiveandorganisationalperspectives),thisframeworkoffersabasisforfurthertheorisingaboutthemeansbywhichcompaniescanbringsocialandenvironmentalthinkingintotheirbusinesssystems.Second,thisresearchhighlightsthecomplexrelationshipbetweentheexecutiveandtheorganisationalenvironmentinitiallysetoutbyHerbertSimon(1945).ThisstudydevelopsthecontextualframeworkproposedbyDeanetal(1991)intwoways.First,itidentifiesthespecificcharacteristicsofeachofthefourlayersoftheframework(describedinChapter4.4)andthenitexplorestheconnectionsbetweentheselayers(inChapter6).Bydoingthis,Ibringempiricalevidenceanddetailtoadiscussionthathasbeenfragmentedandconceptual,andsocreateabasisforfurthertheoreticaldevelopment(Shepherd&Rudd2014)specificallyinthecontextofdecision-makingrelatedtosustainability.
7.3.2ContributionstoParadoxtheory
Severalauthorshaveproposedparadoxtheoryasalenstoexaminethemanytensionsthatariseinthecontextofcorporatesustainability(Hahnetal.2017).Thisstudycontributestothatgrowingbodyofscholarshipinthreespecificways.First,Iproposesixpossiblelogicalapproachestomanagingcompetingdemandsindecision-making.Myanalysissuggeststhatmanypeopleusearepertoireofapproaches,andthatthisisnotsimplydrivenbythepresenceorabsenceofa‘paradoxmindset’(Hahnetal.2014;Miron-Spektoretal.2017),butisalsoinfluencedbythepropertiesofthedecisionitselfandtheorganisationalinfluencesonthedecision-maker.Thisispotentiallyanimportantshiftintheliteratureasitsuggeststhat,ratherthanfocusing
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exclusivelyonindividualcognition,organisationscancreateasystemthatleadstobetterinclusionofsocialandenvironmentalcriteriaindecision-making.Itthereforesuggeststhatinterventionsforchangecanbebuiltintotheorganisation,ratherthanfocusingontheindividual.Second,thedatasuggestthatthischoiceoflogicsisinfluencedbythecorporate-levelframingofthetensionfacedbythebusinessbetweensocial,environmentalandeconomicoutcomesoverthelongandshortterm.Thisaddsevidencetotwoconcepts:first,theideathatparadoxesarenestedwithinorganisations(Sheepetal.2017)andthattensionsoccurandreinforceeachotheratmultiplelevels;andsecond,theideathatachangeintheorganisation’sdominantlogiccanprecipitateadynamicprocessofchange(Jay2013).Thisalsoprovidesevidenceforpractitioners:changeprocessesneedtoincludethisstepofreframingtherelationshipbetweenthecompany,societyandtheenvironmentinordertoinfluencethebehaviourofdecision-makers.Third,Idemonstratehowthisprocessofchangecanworkthroughtheorganisation.The‘whack-a-mole’viewofchangebuildsonSchadandBansal’s(2018)proposalthattoresolvetensionsinasystem,peopleneedto‘zoomin’tounderstandthemicro-leveltensions,andthen‘zoomout’toaddresstheproblematasystemlevel.Itdoesthisintwoways:first,thecasestudyinChapter5givesempiricalevidencethatthishappens;second,myanalysisofthisevidenceproposesthatthisprocessisaugmentedwithaprocessoforganisationallearning,similartothatdescribedbyRaischetal(2018).Thecombinationofthesethreecontributionstoparadoxtheorysetsanewframeforcompaniesworkingtocreatechangesintheirorganisation:thefocuscanbeonstepstochangetheorganisation,ratherthanindividualmindsets,andthisisachievedbysettingahigh-levelframingoftheproblem,andthenusingthistostarttouncoverthedetailsoftensionswithinthesystem,learningfromtheseandsoidentifyingthepointsofsystemicintervention.
7.3ImplicationsforPracticeThesecontributionstoknowledgealsohaveimplicationsforpractice,whichsurfacedduringthediscussionsheldaspartofStudy3.Theresearchsuggeststhatcompanies
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canimprovethewayinwhichtheyincludesustainabilitycriteriaintheirdecision-making,butthatthismayrequiresubstantialchange.Byusingtheclassificationofdecisiontypes(Chapter4.2)andtheframeworkoforganisationalcontexts(Chapter4.4)asdiagnosticlenses,practitionerscanidentifythecriticalareasforchange.Themainstepsforthisprocessofchangefromapractitionerperspective–startingwithreframingthecorporateleveltension,workingthroughorganisationalchange,buildingalearningsystem,andleadingtobroadercollaborations–areillustratedinFigure21:Figure21:Changestepsforcompaniestoincorporatesustainabilityintodecision-making
Thesedependonfivefundamentalcapabilitiesbeyondagenericorganisationalchangeability:reframing,identifyingtheareasforintervention,interveningformallyandsocially,buildingmethodsfororganisationallearning,andindustry-levelcollaboration.ThesearedescribedinChapter6.
Diagnosis Interven.on LearningSystem-levelcollabora.on
Changestepsand
feedbackloops
Conceptsfromtheresearch • Iden.fythe
corporate-level
paradox
• Iden.fythemost
material
decisions,andtheproblemsthey
face
• Describethe
organisa.onal
pressuresonthesedecision-
makers
• Applysocialinfluences
(leadership,
culture)tostart
changing
behaviour• Createknowledge
stocksandflows
tosupport
decision-making
• Useformalandsocialinfluences
todirectaFen.on
• Establishprocessesto
manage
knowledgefor
decision-making
• Establishprocessesto
manage
knowledgefor
change
• Iden.fyproblemsthatcannotbe
solvedwithinthe
organisa.on,and
collaborateto
resolvethese.• Con.nueto
reviewthe
tensionbetween
theinternaland
externalcontexts,andwhere
needed,reframe.
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7.4Futuredirections
Theresearchleavessomeinterestingquestionsopenforfurtherdevelopment.Therearetwoaspectstothis:first,areaswheretheinitialqualitativefindingscouldbetestedquantitatively;andsecond,areaswherethereisanopportunityforfurthertheoreticaldevelopment.Thetwofindingsmeritingfurtherquantitativetestingare:
1. Theclassificationofdecisions.Thisinitialclassificationwasdevelopedbasedonasampleof45decisions,andhasbeentestedwithexecutives(whodidnotproposeafifthtypeofdecision).However,testingwithalargersampleofdatacollectedspecificallyforthispurposemightproducemorerobustresults,andmightenablefurtherdevelopmentoftheconcept.
2. Thelogicalapproachesforresolvingcompetingcommitments.Theinitialfindingthatpeopleusetheselogicalapproachesasarepertoireandareinfluencedbytheircontextisanovelone,andcouldbetestedmorerobustly.Thiscouldbedoneeitherthroughfurtheranalysisofdecisions,orpotentiallythroughexperimentalmethods.
Therearealsofourfindingsthatmeritfurthertestingqualitatively.First,theprocessofchangingdecision-makinginorganisationscanbeinitiatedbycreatingareframingofthetensionbetweentheorganisationanditssocialandenvironmentalcontext.Whilereframingtensionisarecurrentthemeintheliterature(Smith2014;Zolloetal.2013),thereisrelativelylittlewrittenabouttheactualprocessbywhichthisisachievedattheorganisationallevel.Thiswouldbeahelpfuldevelopmentforpractitioners.Second,thewaysinwhichpermissionisbothgivenandinterpretedareunclearandmeritfurtherinvestigation.Manyofthedecisionsinvolvingsocialandenvironmentalimpactsaremadebynon-specialistmanagerswhoareunclearabouttheextentoftheirresponsibilityinthisfield.Whilemanagerialdiscretionhasbeenconsideredasafactorinadoptingsustainability(Sharma2000),thetensionbetweenmanagingriskand
189
failuresofcompliancewhilealsoenablingpositiveactionforsustainabilityisnotonethathasbeenfullyexplored.Third,thedistinctionbetweenfoundationalandcontextualinterventionsforthetypeofchangeneededtobuildsustainabilityconsiderationsintotheorganisationisanovelonethatcouldbetestedwithfurthercasestudiestoexploretheprocessofchange.Muchoftheexistingempiricalworkonchangehastendedtofocuseitheratthelevelofsense-making((Angus-Leppan,Metcalf,etal.2010),andtheworkconnectingtheseprocessestosystem-levelchangehastendedtobeconceptual.Finally,thisresearchraisesquestionsabouttheroleofprofessionalsinthesustainabilityfield.InChapter4.4.2,Idescribeaspecificproblemforsustainabilitymanagers,whichisthattheirorganisationallocusisoftenseparatedfromthemajorsocialandenvironmentalimpactsofthebusiness,andthereforetheyneedtofindwaystocreatecross-cuttinglinkagesintheorganisationsothattheycancreateinfluence.AsSadhuandKulik(2018)note,theserolesarechangingovertime.Thus,understandingthecapabilitiesandinfluencethesemanagersneedtoshapeanenvironmentwheredecisionsincorporatesocialandenvironmentalideasintotheirdecision-makingwillbeimportant.Thisisimportantwork.Unlessbusinesseslearntomakedecisionsthattakeaccountofsocialandenvironmentalimpactsoverthelongandshortterm,wewillbeunabletomakethechangesneededtomeetthecommitmentsoftheParisClimateAgreementandtheSustainableDevelopmentGoals.Itisclearfromthisresearchthatthechangeisdifficult,butthatthroughanuancedunderstandingofanorganisationanditsmaterialimpacts,andanabilitytoviewtheseinanewlight,itispossibletomakethechangesweneed.
190
Appendix1:Keyorganisationalconceptsfromtheliterature
Framew
orksection1:Environment
Framework
sectionConceptfrom
literature
Reference
Environment
Regulation
Sharma,S.(2000).Academ
yofManagem
entJournalGeopoliticaltension
Eccles,R.,Ioannou,I.,&
Serafeim,G.(2012).N
ationalBureauofEconomicResearch,
WhitePaper
Materiality
Epstein,M.J.,&
Widener,S.K
.(2011).BusinessStrategyandtheEnvironment
Munificence
Aragón-Correa,J.A
.,&Sharm
a,S.(2003).AcademyofM
anagementReview
Com
petitiveintensityFord,R
.C.,&Richardson,W
.D.(1994).JournalofBusinessEthics.
Customerdem
andGrew
atsch,S.,&Kleindienst,I.(2018).LongRangePlanning
Marketdem
andMuñoz,E.,Capón-G
arcía,E.,Laínez,J.M.,Espuña,A
.,&Puigjaner,L.(2013).Journalof
CleanerProductionNGOinfluence
Bowen,F.E.,B
ansal,P.,&Slaw
inski,N.(2018).StrategicM
anagementJournal
ShareholdersAragón-Correa,J.A
.,&Sharm
a,S.(2003).AcademyofM
anagementReview
Hym
an,M.R.,&
Curran,C.M.(2000).JournalofBusinessEthics
Stubbs,W
.,&Cocklin,C.(2008).Organization&Environm
ent
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entBoardG
overnanceArdichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009)JournalofBusinessEthicsAguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entArruda,L.R
.,Lameira,V
.D.J.,G
oncalvesQuelhas,O
.L.,&Pereira,F.N
.(2013).Sustainability
Competitiveness
Ford,R.C.,&
Richardson,W
.D.(1994).JournalofBusinessEthics
191
Environment
CorporategoalsHahn,T
.,Preuss,L.,Pinkse,Jonatan,&Figge,F.(2014).Academ
yofManagem
entReview
Meyers,C.(2004).ScienceandEngineeringEthics
Victor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
CorporateidentityAguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entFord,R
.C.,&Richardson,W
.D.(1994).JournalofBusinessEthics
Firmsize
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entBowen,F.E.,B
ansal,P.,&Slaw
inski,N.(2018).StrategicM
anagementJournal
Weber,J.(1990).H
umanRelations
History
Schrettle,S.,Hinz,A
.,Scherrer-Rathje,M
.,&Friedli,T
.(2014).InternationalJournalofProductionEconom
icsArdichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthicsMission,V
aluesandpurpose
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entStubbs,W
.,&Cocklin,C.(2008).Organization&Environm
ent
Hym
an,M.R.,&
Curran,C.M.(2000).JournalofBusinessEthics
TheoryoftheFirm
Hahn,T
.,Preuss,L.,Pinkse,Jonatan,&Figge,F.(2014).Academ
yofManagem
entReview
Lozano,R.,Carpenter,A
.,&Huisingh,D
.(2015).JournalofCleanerProduction
Framew
orksection2:Organisation
Framework
sectionConceptfrom
literature
Reference
Organisation
Accountability
Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009)JournalofBusinessEthicsAccountingpolicies,reportingandtriplebottom
line
Brow
n,J.(2009)CriticalPerspectivesonAccountingLülfs,R
.,&Hahn,R
.(2014).Organization&Environment
Arruda,L.R
.,Lameira,V
.D.J.,G
oncalvesQuelhas,O
.L.,&Pereira,F.N
.(2013).Sustainability
Stubbs,W
.,&Cocklin,C.(2008).Organization&Environm
ent
192
Organisation
Approachtoproblem
resolution
Howard-G
renville,J.A.(2006).Organization&Environm
entAttitudes
Howard-G
renville,J.A.(2006).Organization&Environm
entBeliefs
Gioia,D
.A.(1992).JournalofBusinessEthics
Meyers,C.(2004).ScienceandEngineeringEthics
Climate
Lülfs,R.,&
Hahn,R
.(2014)Organization&Environment
CodeofconductVictor,B
.,&Cullen,J.B
.(1988)AdministrativeScienceQuarterly
Wyld,D
.C.,&Jones,C.A
.(1997)JournalofBusinessEthicsMeyers,C.(2004)ScienceandEngineeringEthics
Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009)JournalofBusinessEthicsBlom
e,C.,&Paulraj,A
.(2013)JournalofBusinessEthicsLülfs,R
.,&Hahn,R
.(2014)Organization&Environment
Communication
Blom
e,C.,&Paulraj,A
.(2013)JournalofBusinessEthicsCom
plexityofbureaucracy
Weber,J.(1990)H
umanRelations
Controlsystem
Nijhof,A
.,&Rietdijk,M
.(1999)JournalofBusinessEthicsVerbeke,W
.,Ouw
erkerk,C.,&Peelen,E.(1996)JournalofBusinessEthics
JamesJr.,H
.S.(2000).JournalofBusinessEthicsCooperationandcollaboration
Stubbs,W.,&
Cocklin,C.(2008)Organization&Environment
Cooperativeconflictresolution
Hym
an,M.R.,&
Curran,C.M.(2000)JournalofBusinessEthics
Corporateaffairsdepartm
entAguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entCorporatepolicy
Wyld,D
.C.,&Jones,C.A
.(1997).JournalofBusinessEthics
Meyers,C.(2004).ScienceandEngineeringEthics
193
Organisation
CultureWyld,D
.C.,&Jones,C.A
.(1997).JournalofBusinessEthicsAttitudes
Lülfs,R.,&
Hahn,R
.(2014).Organization&Environment
Victor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
Howard-G
renville,J.A.(2006).Organization&Environm
entDom
inantreasoningforproblem
-solvingVictor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
Employee
independence/em
powerm
entEnvironm
entalmanagem
entsystem
Equallydistributedauthority
Howard-G
renville,J.A.(2006).Organization&Environm
entAguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entBlom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthicsJam
esJr.,H.S.(2000).JournalofBusinessEthics
Lülfs,R.,&
Hahn,R
.(2014).Organization&Environment
Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthicsEthicalaw
arenessVerbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthicsEthicalclim
ateVerbeke,W
.,Ouw
erkerk,C.,&Peelen,E.(1996).JournalofBusinessEthics
Controlsystem
EthicalcodeBlom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthicsVerbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthicsNijhof,A
.,&Rietdijk,M
.(1999).JournalofBusinessEthicsEthicalculture
Verbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthicsCooperativeconflictresolution
Blom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthicsEthicalnorm
sofleadership
Blom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthics
194
Organisation
Firmcom
mitm
enttoCSR
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entGuidelinesfordecision-m
akingNijhof,A
.,&Rietdijk,M
.(1999).JournalofBusinessEthicsHeroes&
rolemodels
Jam
esJr.,H.S.(2000).JournalofBusinessEthics
Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthics
Blom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthicsHistoricalantecedents
HRprocesses
Wyld,D
.C.,&Jones,C.A
.(1997).JournalofBusinessEthicsVerbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthicsNijhof,A
.,&Rietdijk,M
.(1999).JournalofBusinessEthicsBlom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthicsMeyers,C.(2004).ScienceandEngineeringEthics
Verbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthicsIncentivesandrew
ardsNijhof,A
.,&Rietdijk,M
.(1999).JournalofBusinessEthics
JamesJr.,H
.S.(2000).JournalofBusinessEthicsHym
an,M.R.,&
Curran,C.M.(2000).JournalofBusinessEthics
Verbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthics
Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthics
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
ent
Blom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthics
Lülfs,R.,&
Hahn,R
.(2014).Organization&Environment
Inclusionandparticipation
Hym
an,M.R.,&
Curran,C.M.(2000).JournalofBusinessEthics
195
Organisation
IndependenceInfluenceofexternalnorm
s(eg.Professionalbodies)
Victor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
Victor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
Instrumentalism
Victor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entJobdesign
JamesJr.,H
.S.(2000).JournalofBusinessEthics
Howard-G
renville,J.A.(2006).Organization&Environm
entKnow
ledgemanagem
entKnow
ledgetransfer,trainingandcapabilities
Blom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthicsSchrettle,S.,H
inz,A.,Scherrer-R
athje,M.,&
Friedli,T.(2014).InternationalJournalof
ProductionEconomics
Arruda,L.R
.,Lameira,V
.D.J.,G
oncalvesQuelhas,O
.L.,&Pereira,F.N
.(2013).Sustainability
LanguageJam
esJr.,H.S.(2000).JournalofBusinessEthics
Equallydistributedauthority
Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthicsEthicalaw
arenessBlom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthicsLeadership
Verbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthicsStubbs,W
.,&Cocklin,C.(2008).Organization&Environm
entArdichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthicsEthicalcode
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entEthicalcultureLeadership(supervisors)
Blom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthics
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entLeadership(supportfrom
managers)
Nijhof,A
.,&Rietdijk,M
.(1999).JournalofBusinessEthics
196
Organisation
Leadershipandcom
munication
Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthicsMarlow
,D.R.,M
oglia,M.,Beale,D
.J.,&Stenstrom
er,A.(2012).Journal-Am
ericanWater
WorksAssociation
LearningStubbs,W
.,&Cocklin,C.(2008)Organization&Environm
ent
Hym
an,M.R.,&
Curran,C.M.(2000).JournalofBusinessEthics
Verbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthicsLong-term
perspectiveStubbs,W
.,&Cocklin,C.(2008).Organization&Environm
entManagerial
interpretationsofCSR
Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthicsAguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entJam
esJr.,H.S.(2000).JournalofBusinessEthics
Mythsandstories
Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009)JournalofBusinessEthicsNorm
sandvalues
JamesJr.,H
.S.(2000).JournalofBusinessEthics
Blom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthics
Victor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
Nijhof,A
.,&Rietdijk,M
.(1999).JournalofBusinessEthicsArdichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthics
Meyers,C.(2004).ScienceandEngineeringEthics
Stubbs,W
.,&Cocklin,C.(2008).Organization&Environm
entLülfs,R
.,&Hahn,R
.(2014).Organization&Environment
Operatingprocedures
Weber,J.(1990).H
umanRelations
197
Organisation
Organisationstructure
Victor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
Varm
a,V.A.,Reklaitis,G
.V.,Blau,G
.E.,&Pekny,J.F.(2007).Com
putersandChemical
Engineering
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
ent
Blom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthics
Lülfs,R.,&Hahn,R
.(2014).Organization&Environment
Organisationalepistem
ologyHoward-G
renville,J.A.(2006).Organization&Environm
entOrganisationalroutinesOrganisationalscript
Lülfs,R.,&
Hahn,R
.(2014).Organization&Environment
Meyers,C.(2004).ScienceandEngineeringEthics
Gioia,D
.A.(1992).JournalofBusinessEthics
PeergroupsVictor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
Wyld,D
.C.,&Jones,C.A
.(1997).JournalofBusinessEthics
Verbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthicsPerform
ancemanagem
entJam
esJr.,H.S.(2000).JournalofBusinessEthics
Stubbs,W.,&
Cocklin,C.(2008).Organization&Environment
Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthics
Hallstedt,S.,N
y,H.,Robèrt,K
.-H.,&
Brom
an,G.(2010).JournalofCleanerProduction,18
Arruda,L.R
.,Lameira,V
.D.J.,G
oncalvesQuelhas,O
.L.,&Pereira,F.N
.(2013).Sustainability,Ardichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthicsProcesses
Verbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthics
198
Organisation
Rem
ovalofemotional
contentRituals
Gioia,D
.A.(1992).JournalofBusinessEthics
JamesJr.,H
.S.(2000).JournalofBusinessEthics
Blom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthicsRules
Victor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
SocialisationVerbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).Journalof
BusinessEthics
Blom
e,C.,&Paulraj,A
.(2013).JournalofBusinessEthicsStakeholderrelations
Nijhof,A
.,&Rietdijk,M
.(1999).JournalofBusinessEthicsStubbs,W
.,&Cocklin,C.(2008).Organization&Environm
entArdichvili,A
.,Mitchell,J.A
.,&Jondle,D
.(2009).JournalofBusinessEthics
S.,Ny,H
.,Robèrt,K
.-H.,&
Brom
an,G.(2010).JournalofCleanerProduction
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entSustainabilitym
ind-set
Stubbs,W.,&
Cocklin,C.(2008).Organization&Environment
Traditions
Nijhof,A
.,&Rietdijk,M
.(1999).JournalofBusinessEthics
199
Framew
orksection3:Decision-makers
Fram
ework
sectionConceptfrom
literatureReference
Decision-m
akers
Abilitytoseekassistance
Aguinis,H
.,&Glavas,A
.(2012).JournalofManagem
entAttitude
JamesJr.,H
.S.(2000).JournalofBusinessEthics
Lülfs,R.,&
Hahn,R
.(2014).Organization&Environment
Victor,B
.,&Cullen,J.B
.(1988).AdministrativeScienceQuarterly
Belief
JamesJr.,H
.S.(2000).JournalofBusinessEthicsCareerorientationandtim
eperspectiveDecision-rights
Verbeke,W
.,Ouw
erkerk,C.,&Peelen,E.(1996).JournalofBusinessEthics
JamesJr.,H
.S.(2000).JournalofBusinessEthicsDesires
JamesJr.,H
.S.(2000).JournalofBusinessEthicsExtentofidentificationw
iththeorganisation
Verbos,A
.K.,Gerard,J.A
.,Forshey,P.R.,H
arding,C.S.,&Miller,J.S.(2007).
JournalofBusinessEthicsFocusofattention,priorities
Gioia,D
.A.(1992).JournalofBusinessEthics
Habits
Lülfs,R.,&
Hahn,R
.(2014).Organization&Environment
199
200
Fram
ework
sectionConceptfrom
literatureReference
Decisionm
akers
Informationavailable
Nijhof,A
.,&Rietdijk,M
.(1999).JournalofBusinessEthicsAttitude
Gioia,D
.A.(1992).JournalofBusinessEthics
Lülfs,R
.,&Hahn,R
.(2014).Organization&Environment
Intention,commitm
entandvalues
Lülfs,R.,&
Hahn,R
.(2014).Organization&Environment
Jam
esJr.,H.S.(2000).JournalofBusinessEthics
Levelofindependence/isolationMoralcode
Weber,J.(1990).H
umanRelations
JamesJr.,H
.S.(2000).JournalofBusinessEthicsMoralm
aturityWeber,J.(1990).H
umanRelations
SeniorityFord,R
.C.,&Richardson,W
.D.(1994).JournalofBusinessEthics
PerceivedlevelofcontrolLülfs,R
.,&Hahn,R
.(2014).Organization&Environment
SkillsandcapabilitiesLülfs,R
.,&Hahn,R
.(2014).Organization&Environment
SocialapprovalMeyers,C.(2004).ScienceandEngineeringEthics
StressGioia,D
.A.(1992).JournalofBusinessEthics
Training
Ford,R.C.,&
Richardson,W
.D.(1994).JournalofBusinessEthics
Workload
Gioia,D
.A.(1992).JournalofBusinessEthics
201
Framew
orksection4:Decisions
Framework
sectionConceptfrom
literatureReference
Decision
Decision-criteria(eg.Cost-
benefit)Gioia,D
.A.(1992).JournalofBusinessEthics
Dynam
icsofteamdecision-
making
delaTorre-R
uiz,J.M.,Aragón-Correa,J.A
.,&Martín-T
apia,I.(2015).BusinessStrategyandtheEnvironm
entDegreeofactive
participationinteams
delaTorre-R
uiz,J.M.,Aragón-Correa,J.A
.,&Martín-T
apia,I.(2015).BusinessStrategyandtheEnvironm
entCom
plexityPirson,M
.,&Turnbull,S.(2018).BusinessandSociety
Ambiguity
Hahn,T
.,&Figge,F.(2018).JournalofBusinessEthics
Inter-temporality
Bansal,P.,&
Desjardine,M
.R.(2014).StrategicOrganization
Slawinski,N
.,&Bansal,P.(2015).OrganizationScience
Varietyofstakeholders
Haffar,M
.,&Searcy,C.(2015).JournalofBusinessEthics
202
Appendix2:ListofDecisionsDecision Description Logicalapproach
1 Choosingprojectstoincludeinacapitalinvestmentprogrammeinaglobalbeveragemanufacturer
Win-win
2 Settingtargetsforsustainabilitytobalancecarbon,waterandhighproductionvolumes
Win-win
3 Whethertoinvestinaparticularnewproductiontechnologyunderconditionsofuncertainty
Win-win
4 Settingstandardsforsupplychainfactoryconditionsindifferentcountrieswheresocialnormsvariedverymuch
Separation(Geographical)
5 Selectionofpackagingthatwouldbesuitableforveryhighvolumeofshipments
Win-win
6 Decisionaboutwhethertoacceptanorderfromamajorcustomerthatwouldinvolveworkingwithasupplierthatdidnotmeethighenvironmentalstandards.
Tradeoff
7 Decisiontostartacorporateresponsibilityprogrammeinasituationwheretherewasnotanimmediatelyobviousbusinesscase.
Win-win
8 Choosingtheareasoffocusincreatingasustainabilityambitionforanengineeringcompany
Win-win
9 Decisiontoincorporatesocialandenvironmentalsustainabilityintooverallbusinessstrategy
Win-win
10 Decisiontoadoptscience-basedtargets,eventhoughthesewerepotentiallyproblematicforthecompany
Integrative
11 Includingsustainabilityassessmentintheassetacquisitionprocess
Win-win
12 Adoptingnewenergysavingtechnologyacrosslargeestateofbuildings.
Win-win
13 Changingdesignofnewbuildingstoreduceembeddedcarbon
Win-win
14 Settingthesustainabilityaspirationinarealestatecompany
Win-win
15 Decisiontocreateasocialinclusionprogrammethatwouldengageandsupportvulnerablecommunities.
Integrative
16 Designdecisionsaboutroadlocationonacitymasterplanningproject
Tradeoff
17 Decisionaboutuseofpumpinginsignificantwastewatermanagementsystem
Tradeoff
203
18 Decisionaboutroutingofarailwaylinetoencourageswitchingfromroadtransport(decidedtodevelopinstages)
Separation(Temporal)
19 Selectionofbuildingcladdingmaterialforalargedevelopment
Tradeoff
20 Specifyingandprocuringnewequipmentinindustrialmanufacturing(example1:focusoncapitalbudgethasledtopoorlifecyclemanagement)
Tradeoff
21 Specifyingandprocuringnewequipmentinindustrialmanufacturing(example2:valueengineeringhasledtoreducedenvironmentalperformance)
Trade-off
22 Materialsselectionprobleminanindustrialmanufacturingsetting:thechoicewasbetweentwomaterialsbothofwhichcreateddifferentenvironmentalproblems.
Trade-off
23 Settingthetaxpolicyforanonlinecompanyoperatinginseveralcountries.Decisionwasbetweentaxefficiencyandsociallicensetooperate
Tradeoff
24 Creatinganewproducttoengageconsumerswithsocialissues
Win-win
25 Settingapolicytouserenewableenergyforcompanyoperations
Trade-off
26 Creatingabusinessmodelforarenewableenergybusiness
Win-win
27 Settingstaffmanagementpoliciesinasustainablebusiness
Win-win
28 Adoptingapolicyforresponsibleinvestmentinabank
Integrative
29 Decisionaboutfundingapipelineinanecologicallysensitiveareawithlargenumberofstakeholders
Synthesis
30 Decisiontofundaverylargeinfrastructureproject
Win-win
31 Decisiontoadoptrenewableenergyforalargefacility
Win-win
32 Evaluatingacquisitionsinanenergyportfolio(inanenergycompanythatwasseekingtoexitfossilfuels)
Win-win
33 Evaluatinginvestmentsforthecompany’sinnovationportfolio
Win-win
34 Makingdecisionsaboutassetnetworktoensuresecurityofsupplyofelectricity(when/whethertoincludefossilfuels)
Tradeoff
35 Decisionabouthowtocommunicatetheenvironmentalpolicyofacompanytoinvestors(choicewasbetweenemphasisingenvironment
Synthesis
204
oremphasisingrisk)
36 Decisiontobuilda‘greenfactory’,eventhoughthecostswererelativelyhighandthiswasaninnovationinthesectorandtheregion.
Win-win
37 Decisiontochangefuelsupply(fromfossiltonon-fossilfuel)inalargeoperationalfactorysetting.
Win-win
38 Choiceaboutwhethertouseairtransportinacompanywitha‘green’brandortofaceasignificantsupplyproblem
Tradeoff
39 Decision-makingduringatransitionfromplasticpackagingtorecycledpackaging.
Tradeoff
40 Re-organisinglogisticsnetworkinordertoreducevehicleuse.
Win-win
41 Decisiontorecycleproduct(whichincludedintroducingreverselogistics)beforealltechnicalproblemswereresolved.
Integrative
42 Decisionaboutwhethertoinstallemissionsmonitoringequipmentonthefactorychimneys
Tradeoff
43 Choiceoftechnologytoimplementrecycling. Tradeoff44 Adoptingnewstandardsforbuildingand
constructiontoprovidehigherenergyefficiencyandlowerembeddedcarbon.
Win-win
45 DecidingtochangethefinancialreportingsystemtointegrateESGdata.
Integrative
205
Appendix3:Datastructurefrominterview
sandliteratureAggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
Externalcontext
IndustrycharacteristicsRegulatoryconcerns
Regulation(Sharm
a2000)
GeopoliticaltensionsGeopoliticaltension
(Ecclesetal.2012)
Materialsustainabilityissues
Materiality
(Epsteinetal.2015)
Margins
Munificence
(Aragón-Correa&Sharm
a2003)
Complexity
Bureaucraticcomplexity
(Weber1990)
Competitorpressure.
Competitiveintensity
(Ford&Richardson1994)
Externalstakeholders
Needsoflocalcom
munity
Localownership
(Stubbs&Cocklin2008)
Demandfrom
aspecificcustomer
Customerdem
and(Grew
atsch&Kleindienst2018)
Marketdem
andMarketdem
and(Muñozetal.2013)
InfluenceofNGO
NGOinfluence
(Bowenetal.2018)
InfluenceofshareholdersShareholders
(Aragón-Correa&Sharm
a2003;Stubbs&
Cocklin2008;Hym
an&
Curran2000;Aguinis&Glavas
2012)Internalcontext
Mentalm
odeloftheFirm
TheoryoftheFirm
Theoryofthefirm
(Lozanoetal.2015;Bentoetal.2017;H
ahnetal.2016)
Ownershipstructure
Ownership
(Stubbs&Cocklin2008)
Businessmodel
SustainabilityBusinessModel
(Stubbs&Cocklin2008)
BoardGovernanceBoardGovernance
(Ardichvilietal.2009;Aguinis&
Glavas2012;Arrudaetal.2013)
Characteristicsofthebusiness
History
(Victor&Cullen1988)
SizeoftheFirm
SizeoftheFirm
(Ford&Richardson1994)
BrandCorporateidentity
(Aguinis&Glavas2012)
206
Pathdependency(Schrettleetal.2014)
Aggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
Internalcontext
Companydirection
VisionVisionandm
ission(Ardichvilietal.2009)
PurposeWorthypurpose
(Hym
an&Curran2000)
StrategicDirection
Companypriorities
Corporategoals(Hahnetal.2010;M
eyers2004;Victor&
Cullen1988)
SustainabilityStrategy
Sustainabilityambition
Commitm
enttosustainability
(Aguinis&Glavas2012)
Startingsustainability
Science-basedtarget
Sustainabilityreport(Lülfs&
Hahn2014)
Sustainabilityplan
Sustainabilitystrategy
Influencingpow
erInfluenceonsuppliers
Influenceoncustomers
Infuenceonemployees
Conveningpower
Investorrelations
Specificstrategicissue
Operationsstrategy
Opportunitycreation
M&A-opportunityandintegration
ParadoxConflictingpriorities
Optimisingm
ultipleobjectives
(Lewis2000)
Conflictingsuccesscriteria
Inter-tem
poraltension
(Slawinski&
Bansal2015)
207 Aggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
OrganisationDesign
LocusofsustainabilityHow
thesustainabilityfunctionisorganised
Degreeofcentralisation
Relationshiptocorporateaffairs
How
embeddedissustainabilityin
operations
How
doessustainabilityworkw
ithfinance
How
doessustainabilityconnecttoengineering
Linkages
Organisationalco-ordinationIsolationvs.independenceofunits
(Weber1990)
CrosscuttinggroupLinkagesbetw
eenplanningandoperations
(Varmaetal.2007)
Teamwork
Rulesofengagement
(delaTorre-Ruizetal.2015)
Formal/inform
alcommunications
channelsOpennessofcom
munication
(Blome&
Paulraj2013)
Co-operation
(Stubbs&Cocklin2008)
Externalcollaboration
(Stubbs&Cocklin2008)
Processes/policies/standards
ProcedureGuidelinesfordecisions
(Nijhof&
Rietdijk1999)
Organisationalroutine
Processform
anagingdissent
Processforresolvingconflict
Companypolicies
Codesofconduct
(Ardichvilietal.,2009;Blome&
Paulraj,2013;Lülfs&
Hahn,2014;
Meyers,2004;Victor&
Cullen,1988;W
yld&Jones,1997)
208 Aggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
OrganisationDesign
StructuraltensionsConflictbetw
eenorganisationalsilos
Credibilityofthesustainabilityfunction
Differentinstitutionaltreatmentofriskand
opportunity
Organisationstructure
Organisationalcomplexity
Businessmodel
Fragmentation
Degreeofcentralisation
Governancestructures
Jobdescriptions
Roles
Em
ployeevalueproposition
CareerpathAttraction/Selection/Attrition
(Verbosetal.2007;Ardichvilietal.2009)
Prom
otion(Meyers2004)
Training
(Ford&Richardson1994)
Performance
managem
entTargets
Performancetargets(individual/
collective)
Keyperform
anceindicators
Alignm
entofobjectiveswithstrategy
209 Aggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
Incentives
FinancialincentivesIncentives
(Aguinis&Glavas,2012;Blom
e&
Paulraj,2013;Hym
an&Curran,
2000;JamesJr.,2000;Lülfs&
Hahn,2014;Verbosetal.,2007)
Statusandrecognitionforaction/expertise
Fairnessofcom
pensation(Ardichvilietal.2009)
CEOcom
pensation(Aguinis&
Glavas2012)
Form
alrewards
(Nijhof&
Rietdijk1999)
Processintegrity
(Ardichvilietal.2009)
Conflictingpriorities
Conflictbetweendifferentobjectives
(Epsteinetal.2015;Mitchelletal.
2016;Pirson&Turnbull2018)
Perverseincentives
Control
Individualperformancem
anagement
Controlsystemsintheorganisation
Control(Nijhof&
Rietdijk1999;Verbekeetal.1996;Jam
esJr.2000)
CultureAttitudes
Sharedbeliefs
(JamesJr.2000;Gioia1992;
Meyers2004)
Pro-socialattitude
(How
ard-Grenville2006)
Pro-environm
entalattitude(How
ard-Grenville2006)
Caringattitude
(Victor&Cullen1988)
Attitudetow
ardstime
(How
ard-Grenville2006)
Norm
s
Referentgroups(Ford&
Richardson1994)
Top-m
anagementnorm
s(Blom
e&Paulraj2013)
Externalnorms(eg.professional
bodies)(Victor&
Cullen1988)
210 Aggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
CultureNorm
s
Norm
sandvalues
(Nijhof&
Rietdijk1999;JamesJr.
2000;Blome&
Paulraj2013;Victor&Cullen1988;Ardichvilietal.
2009;Stubbs&Cocklin2008)
Values
Doestheorganisationhaveparticularsocialconcerns
Whatarethecorporatevalues
Values(Meyers2004)
Organisation'scommitm
enttoscience
How
doestheorganisationseeitsresponsibility?
Instrumentalism
(Aguinis&
Glavas2012)
Whataretheorganisation'sm
oralobligations
Perceivedsustainabilityclimate
(Lülfs&Hahn,2014)
Organisationaltraditionofphilanthropy
EthicsEthicalclim
ate
(Ford&Richardson1994;Verbeke
etal.1996;Verbosetal.2007;Blom
e&Paulraj2013)
Signalsandprecedents
Rolemodels
Herosandrolem
odels
(JamesJr.2000;Ardichvilietal.
2009;Wyld&
Jones1997;Blome&
Paulraj2013;Verbosetal.2007)
StoriesStories
(JamesJr.2000;Ardichvilietal.
2009)
Myths
Rituals
(Blome&
Paulraj2013;JamesJr.
2000)
Traditions
(Nijhof&
Rietdijk1999)
Language
(Blome&
Paulraj2013;JamesJr.
2000;Ardichvilietal.2009)
211 Aggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
CultureSelf-determ
inationWhatarepeople'sm
otivations
How
hierarchicalistheorganisation
Levelsofautonomyand
independence
(Weber1990)
Inclusiveness
LevelsofinclusivenessInclusionandparticipation
(Hym
an&Curran2000)
Emphasisonteam
work
Levelsoftrust
Attitudetow
ardsconsensus
Socialisationm
echanisms
(Blome&
Paulraj2013;Verbosetal.2007)
Moderationofem
otion(Gioia1992)
Minoritycultures
Specialistculturesforexpertise
Relativepowerofdifferent
groups(How
ard-Grenville2006)
LeadershipLeaders'beliefsshapingaction
Leadersmaking'actsoffaith'
Individualinterestsofparticularleaders
Leaders'perceptionsofsustainability
Leaders'attitudestowards
sustainability(Aguinis&
Glavas2012)
Leadersasenablers
Leaderssettinganexample
Leadersconferringanauthorityormandate
Supervisorormanagersupport
(Aguinis&Glavas2012)
Whatleadersrew
ard(Ford&
Richardson1994)
Pow
erLeaderslookingforstatus/recognition
Leadershipambition
212 Aggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
LeadershipLeadershipdevelopm
entLearningandtrainingprogram
mes
How
peoplearepromoted
Whoaretherolem
odels
Leadershipstyle
Authenticleadership(Verbosetal.2007)
Knowledge
BetterdataChoosingm
easurementstandards
ProvidinghelpfulaccuratedataInform
ationavailable(Gioiaetal.2013)
Creating'complete'data(eg.lifecycle
analysis)
Accountancyprocesses(Brow
n2009)
Betteranalysis
LifecycleanalysisLifecycleanalysis
(Shrivastava&Hart1995)
Multicriteriadecisionanalysis
Multi-criteriadecisionanalysis
(Hallstedtetal.2010)
Organisationallearning
Informationsharing
Abilitytoseekassistance(Aguinis&
Glavas2012)
Buildingaknowledgem
anagement
system
Codifyingexperience(eg.casestudies)
Formalityofknow
ledgecaptureandsharing
(Blome&
Paulraj2013)
Typesoflearning(single/doubleloop)
(Marlow
etal.2012)
Buildingunderstanding
Showingm
anagerswhatisreally
happening
Learningprogram
mes
Training/capabilitybuilding(Arrudaetal.2013)
Creatingtransparentdata
Organisationalepistem
ologyCreatingafram
eworkforthinking
How
problemsaresolved
(How
ard-Grenville2006)
213 Aggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
Permission
spaceForm
alauthorityRoledescriptions
Mandate
Form
alityofdecisionrights(Jam
esJr.2000)
Inferredauthority
Cultureofautonomy/independence
Empow
erment
(JamesJr.2000)
Levelofdecentralisation
Perceivedamountofcontrol
(Lülfs&Hahn,2014)
Inform
alauthoritySphereofinfluence
Credibilityoftheteam
Interdependence
(Victor&Cullen1988)
Inclusion/participation
(Hym
an&Curran2000)
Attitudesofdecision-makers
Intrinsic
Desire(Jam
esJr.2000)
Moralm
aturity(W
eber1990)
Moralcode
(JamesJr.2000)
Personalcodeofconduct
(Ford&Richardson1994)
Careerorientation
(Verbekeetal.1996)
Attitudetoenvironm
ent(Victor&
Cullen1988)
Pro-socialattitude
(Victor&Cullen1988)
Intentiontow
ardssustainability(Lülfs&
Hahn,2014)
Tim
eperspective(How
ard-Grenville2006)
Beliefs
(JamesJr.2000)
Com
mitm
enttoatopic(Lülfs&
Hahn,2014)
Attitude
(JamesJr.2000)
Skills,capabilities
(Lülfs&Hahn,2014)
214 Aggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
Attitudesofdecision-makers
Situational
Stress(Gioia1992)
Workload
(Gioia1992)
Focusofattention
(Gioia1992)
Seniorityinorganisation
(Ford&Richardson1994)
Conflictingview
pointsSom
epeoplehaveirrationalconcerns
Somepeoplearguefrom
opinion,notfact
Clashingperceptionsofsustainability
Perceptionsofsustainability
Sustainabilityisquitevague
Sustainabilityisacost
Sustainabilityisallaboutcompliance
Sustainabilityisallaboutrisk
Sustainabilitym
akesusefficient
Sustainabilitydifferentiatesourbrand
Sustainabilityisanopportunity
Sustainabilityisaresponsibility
Sustainabilityisavalue-something
wecareabout
215 Aggregatedim
ensionSecondorderthem
esConceptfrom
interview
Conceptfromliterature
Examplesource
Propertiesofdecisions
Whytheproblem
isdifficult
Complexity
Complexity
(Pirson&Turnbull2018)
Centrality
Irrevocability
Ambiguity
Ambiguity
(HahnandFigge2018)
Inter-temporality
Inter-temporality
(Bansal&Desjardine2014;
Slawinski&
Bansal2015)
VarietyofstakeholdersVarietyofstakeholders
(Haffar&
Searcy2015)
Decisionprocess
Definetheproblem
EngagepeopleLevelofinvolvem
entinprocess(delaTorre-Ruizetal.2015)
GenerateOptions
Evaluateoptions
Decisioncharacteristics
Typeofdecision
Repeatabilityofthedecision
216
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