Sustainability Struggles: Conflicting Cultures and Incompatible Logics

Abstract

Introducing and implementing corporate sustainability poses many challenges to business organizations. In this longitudinal, inductive study, we focus on how such challenges are handled in a Dutch bank that is developing its sustainability policies. We examine why there is such a high degree of tension and conflict within the organization and identify how the development of these policies is affected by the interplay between subcultures and institutional logics. We show how different subcultures affect the enactment of logics by infusing the rational and mindful behavior coming from logics with (sub)cultural values, beliefs, and assumptions. In turn, conflicting logics amplify subcultural characteristics between groups by shaping different behavior and practices. Together, this leads to a magnification of subcultural differences while, at the same time, logics are increasingly being perceived as incompatible.

Same Same but Different: How and Why Banks Approach Sustainability

“…In line with this argumentation, the strategy context, which covers the institutional environment amongst other domains, is the component that exerts a decisive influence on the relevance of various motive categories and, consequently, on sustainability strategy content. Recent studies on the environmental and social practices of financial service providers have equally illustrated how the sustainable logic can affect sustainable behavior if it prevails against market logic [21,34].…”

“…In contrast, the sustainable logic implies that economic goals are instruments of sustainable development, as revenue can be used to fulfil social and ecological needs. Objectives that correspond to the sustainable logic include environmental protection, social justice and equality, or the fight against poverty [21,[34][35][36]. The strategy process is the manner by which a strategy is formulated and constructed to achieve an intended purpose [37].…”

“…For example, financial institutions can apply negative criteria (e.g., excluding the nuclear sector as a client) and positive criteria (e.g., fostering growth in the renewable energy sector) in decision making and thereby "directly influence the functioning, priorities, and values of businesses" [1] (p. 4). In the same vein, sustainable criteria can be employed in decision making on lending [3,17,18,34], as is the case when banks sign the Equator Principles (EPs), which are environmental and social risk management standards that are voluntarily adopted by the project finance sector [67,68]. Banks can also engage in active ownership [69] by, say, voting on shares and engaging in dialogue with investee companies or borrowers to improve environmental and social outcomes.…”

“…Previous studies have devoted much attention to the extent of effort that financial service providers expend towards sustainable development [14][15][16] or the manner by which specific practices are implemented [17,21,34,70] and the effects of these practices on economic and marketing outcomes [7,10,[72][73][74]. However, no knowledge has been acquired as to what kinds of sustainable practices banks typically implement in combination.…”

Team Ethical Cultures Within an Organization: A Differentiation Perspective on Their Existence and Relevance

“…To find out the extent to which TECs within an organization can differ, our current study can be replicated in other organizations from other national cultures, industries, and group structures, different from the one we studied here. With regard to organizational subcultures in general, there has already been a considerable stream of research (Jung et al 2015;Shin et al 2015), for instance, how organizational subcultures may affect mergers and acquisitions (Van Marrewijk 2016), the implementation of corporate sustainability policies (Kok et al 2017), and the rivalry between different military units and services such as conventional military and special operations forces (Soeters 2018). As to the topic of ethics, we expect a similar surge in research on identifying ethical subcultures based on team and other suborganizational levels and on examining relationships with various organizational outcomes.…”