Research: Sustainability strategies are more successful when managers believe in them

New research from the Business School has found that business sustainability strategies can succeed alongside mainstream competitive strategies when managers believe in them.

 

In Toward a Process Theory of Making Sustainability Strategies Legitimate in Action, the academics found that although managers support sustainability strategies, there can be tensions in goals, values and product features. They can occur when implementing sustainability strategies alongside the mainstream strategy, creating the potential for ‘decoupling’, where organisations adopt policies symbolically without implementing them substantially.

 

However, the authors found that working through such tensions on specific tasks helps to overcome them. Resolving tensions reinforces the organisational-level legitimacy of the strategy and its integration within the mainstream strategy.

 

The three-year qualitative study focused on the implementation of a new sustainability strategy alongside a mainstream strategy at TechPro, a market-leading global manufacturer with 20,000 full-time employees and an annual revenue of US$3.5 billion. While the company had no existing sustainability strategy, it had a long history of placing a high premium on corporate values such as ‘trustworthiness’ and ‘truthfulness’ which guided the firm’s environmental and social standards.

 

The new strategy proved to be popular with staff who were keen to demonstrate their own values through its implementation. It focused on addressing TechPro’s social and environmental responsibilities in product policy and staff behaviour while their existing mainstream strategy focused on the competitive objectives and targets associated with defending their market position: for example, improving operational efficiency to ensure competitive pricing and maintaining while growing market share.

 

The study found that tensions arose when managers tried to implement the sustainability strategy alongside the mainstream strategy in their day-to-day operations. The tensions were in three areas:

1. Between strategic goals due to incompatibility of tasks involving both organisational environmental compliance and organisational profit.
2. Between product features resulting from incompatibility in incorporating the sustainability and mainstream strategy features in the technical design of a product or in the production process. For example, by choosing materials that were cost friendly versus environmentally friendly.
3. Between organisational values, defined as competitive orientation versus social orientation and competitive products versus trustworthy products.

 

The researchers found that workers could resolve the tensions to carry out the two strategies in three ways:

1. Mutually adjusting by compromising, reinterpreting or splitting between the strategies when both could not physically be incorporated into a product or product development process.
2. Prioritising the sustainability strategy over the mainstream strategy on values-driven tasks by enabling differentiation between the tasks; and not inhibiting wider integration of the strategies within the organisation.
3. Combining the strategies within a common purpose and including the new sustainability strategy within existing procedures.

 

“Sustainability has become a strategic priority for companies worldwide as consumers, shareholders and employees become more environmentally and socially aware” says report co-author, Professor Paula Jarzabkowski of the Business School.

 

“Prioritising sustainability strategies can simultaneously enhance an organisation’s competitiveness and its social agenda” she says. “However, although the sustainability strategy was seen as the right thing to do, the company was also faced with rising cost pressures and a battle to maintain market leadership, so it was difficult to implement both strategies at the same time”.

 

Professor Jarzabkowski found the research was particularly interesting as TechPro is a leading global manufacturer of the kind of high-end goods that many of us have in our homes, rather than a traditional social enterprise which might already have an inbuilt sustainability strategy within the business.

 

“Surprisingly, we found that rather than suppress the sustainability strategy, or do only the minimum, sometimes TechPro managers prioritised it over competitive actions they could have taken” she says.

 

“The research gives us hope. If a mainstream global business with a huge market share and presence in households around the world can develop and implement a successful sustainability strategy alongside their mainstream strategy, then other businesses can do the same. This means that more firms can become more environmentally and socially aware and this will have positive benefits for people, the planet and profit”.

 

Professor Jarzabkowski adds that the support that managers and workers gave the sustainability strategy was also crucial to its success.

 

“Their belief in and commitment to incorporating sustainability within the business played a significant part in the success of both strategies”.