Sustainable Development Scholarship and Business Action: Insights from AMD's Special Issue, Exams of Sustainable Development

Download Sustainable Development Scholarship and Business Action: Insights from AMD's Special Issue and more Exams Sustainable Development in PDF only on Docsity! 1 Introductory Essay for AMD Special Issue Sustainable Development for a Better World: Contributions of Leadership, Management and Organizations Jennifer Howard-Grenville (U. of Cambridge, UK), Gerald F. Davis (U. of Michigan, USA), Thomas Dyllick (U. of St. Gallen, Switzerland, CH), C. Chet Miller (U. of Houston, USA), Stefan Thau (INSEAD, Singapore) and Anne S. Tsui (University of Notre Dame, USA, Peking University and Fudan University, China) 2 On September 25th 2015, all 193 member countries of the United Nations (UN) adopted a set of 17 Sustainable Development Goals (SDGs) designed to end poverty, protect the planet, and ensure prosperity for all as part of a new global “Agenda 2030” (United Nations, 2015). Building on the earlier UN Millennium Development Goals and seeking to complete what had been left undone, this new agenda for sustainable development laid out a bold ambition: “We are resolved to free the human race from the tyranny of poverty ... and to heal and secure our planet. We are determined to take the bold and transformative steps which are urgently needed to shift the world on to a sustainable and resilient path. As we embark on this collective journey, we pledge that no one will be left behind.” (United Nations, 2015: 1) The 17 SDGs (see Table 1) and their 169 detailed targets cover a range of issues, from gender equality to inclusive and sustainable cities, from peace to biodiversity, from healthy lives to decent work, from climate change to poverty, with many other areas covered as well. Notably, the efforts to achieve these diverse and ambitious goals are to be undertaken in an “integrated and indivisible” manner, “balanc[ing] the three dimensions of sustainable development: the economic, social and environmental.” (United Nations, 2015: 1). Also important, businesses were heavily involved in the development of the SDGs and are seen as critical partners in enabling their achievement, in contrast to the Millennium Development Goals. Agenda 2030 “call[s] upon all businesses to apply their creativity and innovation to solving sustainable development challenges” (United Nations, 2015: 29). Closely related initiatives have framed the SDGs explicitly in terms of business responsibilities and opportunities (see, for example, SDG Compass: The Guide for Business Action on the SDGs). ------- Insert Table 1 about here [ideally also use the SDG table in colour] -------- If the sheer volume of activity they have spurred is any indication, the SDGs have struck a chord. Many business organizations across a wide variety of sectors are now framing their environmental, social, and governance (ESG) actions in terms of the SDGs. According 5 Our field, however, can be rightly critiqued for having proliferated too many theories, prescriptions and answers to non-pressing questions (like other social sciences (Watts, 2017), and indeed like basic and applied sciences (Sarewitz, 2016)). Such variety at best complicates but at worst can mislead the very constituents who might benefit from our work. One of the editors of this special issue, Jerry Davis, has compared management studies to the Winchester Mystery House, built in San Jose, California, by an heiress to the Winchester rifle fortune (2015). With no overall objective other than to keep building continuously over a 40-year period, the resulting house is an agglomeration of individually well-constructed but collectively incoherent elements: stairways that lead nowhere, doors that do not open, and stained-glass windows in rooms that admit no light. We seem to live in a similar house, where individual theories, methods, and papers may be executed to the highest standard, but where novelty for the sake of novelty is pursued in isolated projects, resulting in multiple and sometimes inconsistent answers to the same question. This tendency must be curbed if we are to build a useable base of knowledge that will help with the achievement of the SDGs. Considering all of our gifts, treasures, and faults, management scholars have a golden opportunity to make a real difference in the world by orienting more of our research efforts towards the SDGs. This re-orientation would be consistent with recent calls for responsible research within the management field, an emphasis on striving for both rigor and relevance by studying societally important questions (cRRBM, 2017). We should draw from our collective nimbleness across levels of analysis as well as our conceptual composure in embracing complexity, yet rein in our tendency to pick up familiar theoretical tools and to keep building just for the sake of building. To be sure, conducting useful problem-oriented social science holds real challenges, as Watts (2017: 3) notes: Health, education, inequality, cultural norms, economic policies, and physical environments all interact in complicated ways to produce particular individual and group outcomes. Attempts to understand or influence these outcomes in the real world therefore often result in a difficult choice between focusing on such a small 6 part of the problem that one misses the larger picture, and drowning in complexity. (emphasis added) Watts advocates for social scientists to choose “Goldilocks” problems – ones that are neither too big nor too small – in order to make genuine progress. In this volume, we believe authors have offered inspiring proof of concept that management scholars are eminently capable of selecting such problems for study and applying rigorous qualitative and quantitative methodologies that yield theoretical insights and practical implications. We invite scholars to build from these positive examples and explore how the SDGs define a set of problems that can lead them to act more like Goldilocks and less like Sarah Winchester. In the remainder of this essay, we first put the SDGs and their aspirations into the context of existing business and management research, much of which has been problem- and solution-focused. We then provide an overview of the themes that arise out of the papers included in the special issue, which helps to illustrate some of the new ways in which our scholarship can inform business action on sustainable development. Finally, we conclude with a call for further research and engagement in key directions suggested by the research included in this special issue. Building on Existing Management Research in Sustainable Development Scholarship on corporate social responsibility and business impact on the natural environment goes at least as far back as the 1987 publication of the Bruntland Report, which broadly defined the term sustainable development and advocated for its principles (for useful overviews of past research on corporate social responsibility and the natural environment, see handbooks such as Bansal & Hoffman, 2012; Crane, McWilliams, Matten, Moon, & Siegel, 2008). Further, management scholars have recognized that business practices are at the heart of many of the complex issues captured by the SDGs. Extant management research, however, has only begun to explore and inform practices related directly to achieving the SDGs. 7 In the work to date, our field has laid some important groundwork needed for tackling issues related to the SDGs. These efforts capture processes and phenomena within and across levels of analysis and leverage theoretical lenses familiar to management scholars. Using labels such as societal ‘grand challenges’ (George et al., 2016) or ‘wicked problems’ (Rittell & Webber, 1973), management researchers have examined how complex institutional arrangements and organizational configurations both perpetuate and mitigate problems like climate change (Schüssler, Rüling, & Wittneben, 2014), inequality (Mair, Wolf, & Seelos, 2016) and exploitative supply chain practices (Kim & Davis, 2016). The lenses of social movement theory (Luo, Zhang, & Marquis, 2016), framing (Ansari, Wijen, & Gray, 2013), organizational design (Majchrzak, Griffith, Reetz, & Alexy, 2018), and robust action (Ferraro et al., 2015) have been useful in exploring grand challenges. Focusing on how individuals can shift frames and actions, accounts also have explored how people frame desired changes for their peers (Bansal, 2003; Howard-Grenville, Nelson, Earle, Haack, & Young, 2017) and document the challenges involved (Sonenshein, DeCelles, & Dutton, 2014; Whiteman & Cooper, 2011). Finally, at the individual level within organizations, management scholars have offered insights into issues raised by the SDGs by considering stress, coping, and well- being (Gaines & Jermier, 1983; Xie & Johns, 1995); income (Judge, Piccolo, Podsakoff, Shaw, & Rich, 2010; Leana & Meuris, 2015); justice (Colquitt, Conlon, Wesson, Porter, Ng, 2001); and status differences (Marr & Thau, 2014; Pettit, Yong, & Spataro, 2010). While the variety and scope of existing management scholarship related to the SDGs holds promise, it is at risk of being lost in, or having its impact tempered by, the multiple conversations in which it resides. Similar to the building of the Winchester House, we have been adding too much complexity and novelty rather than building something that clearly and coherently contributes to well-defined problems. There now are subfields on sustainable development in most if not all functional areas within the broader umbrella of management 10 offer another example of how actions and interactions ripple up to create durable social outcomes. Through qualitative case studies of two community-based enterprises in rural Germany, these authors find that people’s identification with their community together with the emergence of a new enterprising identity facilitate collective mobilization needed to spark and sustain community-based enterprise (CBE) creation. At the community level, lasting commitment to CBEs can be further reinforced through rituals and artifacts. At a broader level of analysis, but nonetheless showing the importance of cross-level interactions, the paper by Rousseau, Berrone, and Gelabert (Localizing sustainable development goals: Nonprofit density and city sustainability) uses quantitative analysis of the density of local environmental non-profit organizations (LENOs) within 100 U.S. metropolitan areas over a 12 year period to investigate the relationship between organizations (in this case, LENOs) and urban-scale outcomes. The authors find that cities with higher density of LENOs have greater reductions in toxic pollution over time and higher rates of adoption of voluntary environmental standards at the city level; notably, higher income inequality in a city suppresses the relationship between LENOs and city sustainability. This paper and the one by Hertel, Bacq, and Belz have important implications for SDG 11 (sustainable cities and communities), as they shed light on how individual identity, organizational presence (or absence), and social demographics contribute to the attainment of community or urban level outcomes. Finally, one paper addresses the influence of the collective on the individual, demonstrating multi-level interactions from the other direction. Goodman and Kaplan draw on an ethnographic study of women’s employment in rural India to show how employment decisions are strongly shaped by a woman’s household. The authors use the anthropological lens of household decision making to uncover four distinct negotiation styles that were engaged to reallocate work within families and enable women to maintain paid work outside 11 the household. Accordingly, Goodman and Kaplan show how attaining SDGs 8 (Decent work for all) and 5 (Gender equality) demands taking into account how individual actions and choices are shaped by their family and community circumstances, as well as other social structures. Theme 2: Conceptualizing Complexity While the papers mentioned so far engage complexity by considering interactions across levels of analysis, other ways in which management scholars engage complexity are further illustrated by the papers in this special issue. Our conceptual approaches allow us to consider the construction, contestation and perpetuation of meanings, actions, and arrangements, and we embrace the influence of collective and individual identities, power and interests, and day-to-day practices on these processes. Several papers highlight how particular interests produce certain outcomes, and demonstrate that pursuit of the SDGs must account for how these interests are distributed and negotiated. Rawhouser, Cummings and Hiatt (The pursuit of UN sustainable development goals and new project approval in the global carbon offset market) show how approvals for the UN’s Clean Development Mechanism (CDM) carbon offset projects differ by the aspects of sustainability (social, economic, environmental) they address, and further by idiosyncratic differences in host country policymaker preferences, which may reflect the location of decision making within different types of government departments. In other words, international mechanisms to enable sustainable development are influenced by their local interpretation, suggesting both a multilevel explanation and one that accounts for distinct organizational arrangements and policymaker interests. An additional paper that shows how interests shape outcomes and condition the attainment of social value is that by Etzion, Kypraios, and Forgues (Employing finance in pursuit of the Sustainable Development Goals: The promise and perils of catastrophe bonds). This paper offers a cautionary tale on the value derived from catastrophe bonds, designed to insure against extreme weather events like hurricanes, flooding or forest 12 fires. The authors find that catastrophe bonds have delivered strong value to investors but have failed to provide pay-off value to the communities and companies covered by them. Clearly, as interest in financial mechanisms to address aspects of sustainability – like climate risk, biodiversity loss, or maintenance of natural capital – rises, we need to take heed of the message that our underlying models are inherently incomplete, which, coupled with lack of transparency and accessibility of the mechanisms themselves, diminishes the social value that can be attained. Finally, complexity and divergent interests and identities are found to be productive in making progress on the SDGs in other cases. The paper by Williams, Whiteman, and Parker (Backstage interorganizational collaboration: Corporate endorsement of the Sustainable Development Goals) traces the involvement of business in formulating and supporting the SDGs. Providing critical context and history, this paper also shows how emergent and unplanned dynamics between two initially separate inter-organizational collaborations, one led by the World Business Council for Sustainable Development (WBCSD) and one led by the UN, resulted in WBCSD member companies endorsing the SDGs. Key to this process was the use of a science-based boundary object, openness to serendipity, and unplanned variance. Backstage (a.k.a. offstage) activities also played a role, even though such activities inherently do not align with inclusion. Related to but different from these emphases, Kucukkeles, Ben-Menahem and von Krogh (Small numbers, big concerns: Practices and organizational arrangements in rare disease drug repurposing) show that purposeful actions can lead to convergence of interests in cases where existing organizational arrangements and market failures have prevented progress on societal challenges. In their paper on the repurposing of drugs for treating rare disease, they show how field actors were able to create new organizational arrangements to reinforce a standard of excellence (using state-of-the-art knowledge and resources) and apply it to the cure of rare diseases. These authors discover 15 SDGs, as the SDGs can be interpreted as primarily focused on economy-wide and organizational level efforts to advance health, education, environment, and prosperity for all. Even individual wellbeing is often examined at the aggregate level. We believe, however, that knowledge is needed specifically to understand how people suffer or thrive, as individuals, when attention is put on organizational and policy arrangements to deliver the SDGs. We also urge scholars conducting individual-level research to take into account the context within which outcomes are observed and be open to discoveries that challenge accepted understanding. For example, we cannot assume that well-being, stress, justice and income considerations in developed economies, where most current studies on these topics have been conducted, are similar in developing or base-of-the-pyramid economies. With issues as urgent and important as those captured in the SDGs, it is imperative that we find ways to encourage much more management scholarship that can inform – and critique – the way business and other organizations might make progress and improve their impact on economic and social outcomes for employees and individuals across diverse settings. In taking up all of the opportunities and challenges of high-quality research on the SDGs, scholars are encouraged to leverage our full toolkit of methodological approaches. We are excited that the papers in this volume represent a useful mix of quantitative (Rawhouser, et al.; Rousseau, et al; Etzion, et al.), and qualitative approaches (Goodman, et al.; Hertel, et al.; Kucukkeles, et al.; Williams, et al.), as well as mixed methods (Bode, et al.). Specific methods employed range from ethnographic fieldwork to quantitative exploratory analysis and modelling, demonstrating that insights into real-world problems need not be limited to a certain kind of data or analytical approach. Indeed, with such a range of approaches, SDG foci, and levels of analysis, we do risk building new windows and staircases within a Winchester mystery house if we do not keep an eye on the purpose of the research. How can this methodological flexibility be used to build, reinforce, or challenge the evidence base so 16 that our scholarship can say more – and more robustly – about chosen Goldilocks problems? To be sure, many journals seek only novelty in empirical and theoretical contributions, lessening the tendency for scholars to build on what has gone before. But many journals are also embracing the importance of scholarship that is problem-focused (e.g., George, Howard- Grenville, Tihyani, & Joshi, 2016), which helps in managing the tension between novelty for the sake of novelty and scholarship that takes seriously the solving of puzzles and problems related to the social good. AMD in particular welcomes problem-focused studies that explore new territory but with concrete empirical foundations and respect for what has come before. To put this another way, AMD welcomes robust studies that engage in empirical exploration (Bamberger, 2018) in order to truly understand the pressing problems of the world, as the studies in this special issue aspire to do. A final note on the nature of the SDGS themselves is warranted. Given that there are 17 of them, and each envisions bold transformation from the current state, we might rightly question how realistic this bold agenda is. In the words of UN officials, “We are setting out a supremely ambitious and transformational vision.” Can the goals actually be attained? Can individual businesses, governments, and scientific organizations do their parts to attain the seemingly impossible? History suggests that success might be attainable, but it also suggests that skirting failure is far from guaranteed (Sitkin, Miller, & See, 2019). The Apollo 11 moon landing, the dramatic reduction of infectious diseases in many parts of the world, the building of Egyptian pyramids, and the construction of the Great Wall of China and Angkor Wat in Cambodia highlight what humankind can accomplish. On the other hand, great ambitions often disappoint. In the United States, a relatively wealthy nation, President Lyndon Johnson’s War on Poverty failed to eliminate or even appreciably reduce poverty. Efforts to build an accepting multi-cultural society have not succeeded in South Africa. Efforts to stem 17 the tide of oceanic pollution have largely failed. Efforts to create peace on the planet have failed miserably. Existing research focused on organizational characteristics that enable audacious goal attainment offers some hints as to what is possible with the SDGs. Based on this work, organizations with a reasonable degree of internal slack coupled with swagger borne of recent success, possibly in non-SDG pursuits, seem to be best positioned to undertake the exceedingly difficult work (Sitkin, See, Miller, Lawless, & Carton, 2011; Sitkin et al., 2019). Complacency, however, can derail such organizations (see Lant, Milliken, & Batra, 1992; Levitt & March, 1988). Organizations without slack and recent success probably should consider contributing only through small wins (see Weick, 1984). (Sitkin et al., 2011; Sitkin, Miller, & See, 2017). In considering how businesses and other organizations can tackle the SDGs, it might be worthwhile to consider the size and scope of problems that are tackled. It is important to recall that the 17 goals contain within them a number of more specific targets – 169 in all – that may well be more effective and productive starting points for some or even many organizations. Overall, there is a great deal of complexity involved in the pursuit of the SDGs. As such, management researchers cannot just continue “business as usual”. We have a professional duty, as social scientists, to contribute knowledge that is robust and useful for solving the world’s toughest social problems. Natural scientists are doing their part. We believe that social scientists in business schools must contribute. This special issue offers eight studies that are inspirational examples for other scholars to follow. We have ten more years to achieve the SDGs, or at least to make substantial progress toward their achievement. Management scholars have a dire obligation to contribute to this ambitious but necessary agenda to ensure a sustainable future for all. 20 Table 2: Summary of Papers in the Special Issue Paper Title and Authors SDG focus Key Findings Implications for Leadership, Organizations, and Management 1. Backstage interorganizational collaboration: Corporate endorsement of the Sustainable Development Goals (Williams, Whiteman, Parker) All • Business support for SDGs occurred through an emergent, improvised set of inter-organizational activities, which included the unplanned intersection of two initially separate inter-organizational collaborations. • Key triggering mechanisms for the collaborations included strong reliance on a science-based boundary object, embrace of variance and disequilibrium within the World Business Council for Sustainable Development, and use of opportunistic boundary spanning. • Science-based boundary objects should be leveraged to convince additional business leaders to support and act on the SDGs. • Business involvement in interorganizational collaborations could be very advantageous for SDG progress, but such collaborations must be explicitly designed to support serendipity and unplanned variance. • The usefulness of backstage activities, which inherently do not align with inclusion, must be considered alongside on-stage acts. 2. Sustainable cross-sector collaboration: A global platform for social impact (Bode, Rogan, Singh) 17 Partnerships for the Goals • A for-profit firm successfully initiated and maintained a platform to facilitate Cross-Sector Partnerships between Special Purpose Organizations and other corporations, NGOs or government, aligning the interests of the firm’s senior leaders, employees, and the special purpose organizations. • A co-investment model and a set of practices that legitimized the involvement of employees in the platform were key to success. • Individual actions can affect macro-level outcomes even without full alignment of a majority; i.e., engaging a minority may be sufficient for lasting corporate involvement in partnerships for the SDGs. • Careful design of these partnerships matters to ensure participation. 3. Small numbers, big concerns: Practices and organizational arrangements in rare disease drug repurposing (Kucukkeles, Ben- Menahem, von Krogh) 3 Ensuring Healthy Lives 1 Reducing Poverty • Government and market failures to drug discovery for rare disease were overcome through mobilizing collaboration amongst stakeholders, using knowledge of patients and relatives, and finding funding opportunities. These practices were made possible through finding alternative uses of existing drugs. • Non-profit actors can mobilize to solve wicked problems, by focusing on standards of excellence to overcome market and government failures. • Stakeholder empowerment (in this case, the involvement of patients and relatives) and stakeholder dialogue can be a driving force in solving societal problems beyond the confines of specific organizational arrangements. 4. It takes a village to sustain a village: A 1 Reducing Poverty • Community based enterprises (CBE) were successfully initiated and sustained through collective agency, • Local community members can catalyse creation of organizations to address social issues, and initiate 21 social identity perspective on successful community- based enterprise creation (Hertel, Bacq, Belz) 11 Striving for Sustainable Cities and Communities 12 Establishing Sustainable Consumption and Production Systems willingness to invest private resources, and lasting commitment from supporters. • Identity-relevant mechanisms were important for this to happen, including the perception of an identity threat, comparison with other groups, and definition of a new group within the community. specific identity processes that enable them to endure and thrive. • The development of a new ‘enterprising’ identity can be particularly important to solving community-based problems. 5. Work-life balance as a household negotiation: A new perspective from rural India (Goodman & Kaplan) 8 Decent Work for all Adults 5 Gender equality • Poor women in rural India were able to take on paid employment if others in family took over some domestic responsibilities. • Farm, care, and household work needed to be reallocated in families for women to become employees. • Households that succeeded in this reallocation did so through a process of intrahousehold negotiation. • Highlights the role of an entire household in influencing women’s ability to work; shows that employment is not (always) an individual choice. • Highlights the importance of household negotiation processes in enabling or constraining women’s employment. 6. Localizing sustainable development goals: Nonprofit density and city sustainability (Rousseau, Berrone, Gelabert) 11 Sustainable cities and communities • US cities with a higher density of local environmental non-profit organizations (LENOs) had reduced industrial toxic releases per capita, when considering trends from 2005-2016. • LENO density was also associated with an increased rate of new LEED-certified buildings. • The effects were stronger in wealthier, more educated and more business-dense communities. • Non-profit environmental organizations can play an important role in reducing local pollution. • Cities can enhance their sustainability by enabling non-profits to act as watchdogs, although the benefit is greatest for cities that are already rich in community resources. 7. The pursuit of UN Sustainable Development Goals and new project approval in the global carbon offset 13 Climate action • Under the Kyoto protocol, firms in the industrialized world could buy carbon offsets via approved projects in low-income countries, especially China, India, and Brazil. These offset projects were more likely to be approved by local authorities in China, and less likely in • Creating a common mechanism for carbon offsets will not yield common results across institutional contexts; countries will implement the system in their own way. 22 market (Rawhouser, Cummings, Hiatt) Brazil, while the factors associated with success varied by country. • Mechanisms like carbon offset projects are subject to variation in adoption according to host country prioritization of sustainable development dimensions. • This has implications for other mechanisms with broad sustainability goals yet decentralized implementation. 8. Employing finance in pursuit of the Sustainable Development Goals: The promise and perils of catastrophe bonds (Etzion, Kypraios, Forgues) All • Conventional insights from sociology of finance do not apply to catastrophe bonds. • Catastrophe bonds have delivered strong value to investors while not providing pay-off value to communities and companies covered by them. • Known and accepted ignorance seems to govern use of catastrophe bonds. • Catastrophe bonds and similar instruments (e.g., social impact bonds, bio-diversity markets) should be better designed to enhance social value while curbing excess profit taking by investors. • Habitats and catastrophes can be transformed into tradable financial units, but this approach should be used with great caution given potential limitations as well as the availability of alternatives.