Sustainability Mindsets for Strategic Management: Lifting the Yoke of the Neo-Classical Economic Perspective

Abstract

While sustainability has attracted the attention of managers and academicians for over two decades, the macro-level indicators of sustainability are not moving in the right direction. Climate change continues to be an existential threat for humanity and other indicators of sustainability do not fare much better. The logic of the business case and the associated framing of tension between financial outcomes and sustainability have generated a limited and inadequate response to the existential challenges before humanity today. In this essay, we analyze the evolution of sustainability in the business context and call for a recognition that social and environmental outcomes must supersede economic ones in corporate sustainability thinking. We call for a widening of the spatial, temporal, and moral lenses in the formulation and execution of business strategy to ensure that it is in alignment with the needs of current and future generations of humanity and proportionate to planetary conditions.

Explorations in organized hypocrisy and a proposed direction for a sustainable future

“…As discussed earlier, companies that use a business-case driven approach limit their actions to those situations where the business case exists and therefore demonstrate a low commitment to sustainability. They perceive a tension between financial performance and their responsibilities for sustainability (Farias et al , 2020). They tend to use hypocritical approaches to manage these tensions (Cho et al , 2015).…”

“…In contrast, companies with a high commitment to sustainability see their responsibilities to society and the environment clearly. They deal with the perceived tensions by prioritizing their responsibilities to society and the environment (Farias et al , 2020).…”

“…Intent refers to the goal of the organization's activities in relation to its stakeholders and the tension between shareholder primacy and stakeholder primacy. In our discussion of the role of business in society, we noted that shareholder primacy has long been recognized as an impediment to the adoption of sustainable practices (Farias et al, 2020;Landrum, 2018;Waddock, 2020) and promotes short-term profit-oriented action (Slawinski et al, 2017). By contrast, the multiple stakeholder perspective brings responsibility to a variety of business participants into focus (Donaldson and Walsh, 2015;Freeman et al, 2010;Sanford, 2011).…”

“…Through a normative lens, we examine organized hypocrisy and its associated problems in greater depth to add to the volume of work that argues that current approaches to sustainability in the corporate world founded in the neo-classical and neo-liberal economic perspective lead to a limited and insufficient response to the problem at hand (Dyllick and Muff, 2016; Farias et al , 2020; Landrum and Ohsowski, 2018; Waddock, 2020; Whelan and Fink, 2016). Next, we extend the work of Dyllick and Muff (2016) and Landrum (2018) to propose a typology of firm behavior based on the literature and anecdotal evidence from the field that could resolve these problems by challenging firms to eliminate hypocrisy and to align corporate actions, decisions and talk that characterizes the majority of corporate strategies today.…”

The Role Of Word Of Mouth’s Value Co-Creation On The Achievement Of Sustainability

“…has been managed in an economic form (Ferraro & Agrawal, 2021). Practically, the concept creates a cycle in which the return of responsibility for resource management is in the form of economic management results in the form of profits being given back to the environment (planet) and human life (people) in a balanced way (Farias, Farias, Krysa, & Harmon, 2020). Balance here means that the three dimensions must receive the same weight (Ritala, Albareda, & Bocken, 2021).…”