Project

Corporate sustainability; Path-dependency theory; Qualitative Comparative Analysis; Comparative process analysis; Resource orchestration theory

Lead
Many companies find it challenging to balance stakeholder pressures such as environmental, social, and financial tensions. The project “Pathways to sustainability” looks at the ways companies deal with tensions and at how they learn from their decisions. By providing an in-depth look at companies' internal processes, this project creates novel insights for managers pursuing corporate sustainability.
Lay summary
Companies are facing increasing stakeholder pressures to both address social and environmental challenges such as combating climate change or child labor, while also delivering high returns for shareholders. Oftentimes it is difficult for companies to deal with these competing demands because managers are challenged to use limited resources to create value. Tensions between various pressures many times create barriers to move forward in addressing sustainability-related goals and companies are stuck in positions of stalemate with no clear direction on the horizon. The project “Pathways to sustainability” looks at the ways companies deal with tensions and at how they learn from their decisions. By providing an in-depth look at companies' internal processes, this project creates novel insights into the sustainability journey of companies over time and offers important recommendations for managers pursuing corporate sustainability.

Direct link to Lay Summary

Last update: 30.10.2018

Natural persons

Number	Title	Start	Funding scheme

At a time of extraordinary social and environmental change, companies increasingly face the challenge of becoming more sustainable. While some companies only reluctantly address the topic, others eagerly implement sustainability activities understanding it as a way to reap the benefits of “low hanging fruits” or as a long-term strategy to create competitive advantage. Past research on corporate sustainability has investigated why companies adopt sustainability activities and whether or when better social and environmental footprints improve financial performance (Gao & Bansal, 2013). In answering these questions, researchers have often focused on so-called win-win situations in which the managerial decisions are relatively straightforward because investments and returns are well-known. However, recent research suggests that most decisions in the context of sustainability involve significant trade-offs, requiring managers to take into account wide-ranging impacts on a company’s day-to-day operations (Hahn, Preuss, Pinkse, & Figge, 2014). These trade-offs significantly challenge managers as they may fundamentally affect their company’s resources and capabilities. Nevertheless, we know little about how companies manage these trade-offs and therefore how sustainability develops inside companies over time. This project takes two steps to expand research on corporate sustainability by unpacking pathways to corporate sustainability. First, we ask how trade-offs between sustainability activities influence the extent to which companies integrate them into their organization. To address this question, we enrich research on corporate sustainability with resource orchestration theory (Sirmon, Hitt, Ireland, & Gilbert, 2011) to develop a theoretical perspective on the interdependencies among sustainability activities. We study this question with a longitudinal comparative case study design of four companies using archival and interview data. Second, acknowledging that embedding and leveraging sustainability may involve fundamental changes to a company’s core resources and capabilities, we ask in which sequences companies integrate sustainability activities into their organization. To address this question, we draw on path dependency theory (Sydow, Schreyögg, & Koch, 2009) and develop a process perspective to explain why some sequences of sustainability activities should appear more frequently than others. To this end, we develop a dataset with information on how approximately 100 companies have implemented sustainability activities over a period of 10-15 years. To analyze this data, we use an innovative methodological approach, Comparative Process Analysis, that allows us to identify and explain typical and atypical pathways to corporate sustainability, i.e., those that a large or a small number of companies pursue. Overall, the project will contribute to the literature on corporate sustainability by explaining why the trade-offs among sustainability activities influence their implementation difficulty and by identifying common sequences of sustainability activities to theorize on how sustainability develops inside companies over time.