i

Incorporatingsustainabilityintobusinessdecisions:how

organisationschoosetobuildabetterworld

CatherineElizabethAnneTilley

ChurchillCollege

May2019

ThisdissertationissubmittedforthedegreeofDoctorofPhilosophy

i

Declaration

Thisdissertationistheresultofmyownworkandincludesnothingwhichisthe

outcomeofworkdoneincollaborationexceptasdeclaredinthePrefaceandspecifiedin

thetext.

ItisnotsubstantiallythesameasanythatIhavesubmitted,or,isbeingconcurrently

submittedforadegreeordiplomaorotherqualificationattheUniversityofCambridge

oranyotherUniversityorsimilarinstitutionexceptasdeclaredinthePrefaceand

specifiedinthetext.Ifurtherstatethatnosubstantialpartofmydissertationhas

alreadybeensubmitted,or,isbeingconcurrentlysubmittedforanysuchdegree,

diplomaorotherqualificationattheUniversityofCambridgeoranyotherUniversity

orsimilarinstitutionexceptasdeclaredinthePrefaceandspecifiedinthetext

ItdoesnotexceedtheprescribedwordlimitfortheDegreeCommitteeinEngineering.

ii

Incorporatingsustainabilityintobusinessdecisions:howorganisationschoosetobuildabetterworld

CatherineTilley

Abstract

Businesseshaveacriticalroleinthetransitiontoasustainableeconomy,butthis

requiresthemtoincludesocialandenvironmentalconsiderationsintheirdecision-

making.However,thiscreatestheproblemofresolvingcompetingeconomic,socialand

environmentalcommitmentsoverthelongandshortterm.Scholarshaveexamined

thiseitherasananalyticaloracognitiveproblem,buttheseapproachesmayunderstate

theimportanceoforganisationalinfluences.Thisthesisthereforeaddressestwo

questions:first,howdotheformal,behaviouralandsocialstructuresofanorganisation

interacttoinfluencetheinclusionofsustainabilitycriteriaindecision-makingin

incumbentbusinesses?Second,whatarethepointsofinterventiontoinfluencethese

systems?Toanswerthesequestions,Iundertookthreeconnectedempiricalstudies,

usingmixedqualitativemethods.

Theseinvestigationsproducedfourfindings.First,includingsustainabilitychangesthe

natureofdecisions,leadingtofourspecificarchetypesofdecisions.Second,thewayin

whichdecision-makersresolvethecompetingcommitmentsinthesesituationsis

shapedbyabroaderframingofthetensionbetweenthefundamentallogicofthe

businessandthedemandsofitsenvironment.Third,decision-makingisinfluencedbya

seriesofcontextualfactors,includingthepropertiesofthedecisionitself;thedecision

maker(s);theorganisation;andthebroaderenvironmentalcontext.Fourth,theprocess

ofchangingdecision-makingrequiresacombinationofinterventions,andasetof

foundationalcapabilitiestochange.Companiesundertakingthistypeofchangefind

systemicbarriersthatcanonlyberesolvedthroughco-operationbeyondtheboundaries

oftheorganisation.Thesefindingshaveimplicationsforpractice.

iii

Thisresearchcontributestotheliteratureondecision-makingandsustainabilityby

presentinganovelclassificationofdecisionsandbyaddingdetailtotheunderstanding

ofcontextualfactorsinfluencingdecision-makersandtoparadoxtheoryby

demonstratingtheinfluenceofparadoxesondecision-makinglogicandondriving

change.Thismatters:corporatesustainabilityisanenactedprocessandunless

businessdecision-makingchanges,wewillnotbeabletoachievethesocialand

environmentalchangeweneed.

iv

‘Itisourchoices,Harry,thatshowwhatwetrulyare,farmorethanourabilities’

J.K.RowlingHarryPotterandChamberofSecrets

v

AcknowledgementsAlthoughthisdissertationiswritteninthefirstperson,therearemanypeoplewithout

whomitwouldneverhavebeeneitherstartedorfinished,andinthisshortspaceitwill

notbepossibletothankallofthemtotheextenttheydeserve.Despitethis,I’d

particularlyliketothankmysupervisor(and,Ihope,friend)SteveEvansandthemany

intervieweeswhoIcannotnameforconfidentialityreasons,butwithoutwhomthis

wouldbeathindocumentindeed.

Athesisisasolowork(andanyerrorsareemphaticallymyown),butresearchersneed

communities,andIhavebeenfortunatetobeamemberofseveralwonderfulnetworks.

InCambridge,theInstituteforManufacturingprovidedmewithawelcomingacademic

homeandasplendidcollectionoflunchcompanions;ChurchillCollegegavemean

interdisciplinarycommunityandamagnificentmentorinGeorgiaSorenson;Polly

CourticeandcolleaguesattheCambridgeInstituteforSustainabilityLeadership

introducedmetopeopleandideaswhohavebeeninfluentialinthisworkandtriggered

theideafortheresearch.I’vealsobeensupportedbygroupsofothersustainability

scholars:theEGOSParadoxgroupwelcomedmeearlyinmycareer;theGRONEN

networkintroducedmetoagroupofpeoplewithsharedinterests;andtheIvey/ARCS

fellowshipenabledmetobuildagroupofpeers.TimaBansal,TobiasHahnandmany

morehavebeengenerouswiththeirguidanceandsupportasInavigatedthecomplex

worldoforganisationalscholarship.

Throughoutthis,I’vebeensupported,toleratedandgenerallylookedafterbymyfamily.

MypartnerNic,brotherJames,andfatherPeterhaveseenmethroughthetoughtimes

aswellasthefunofdiscovery,andIamgratefulbeyondwordsfortheirencouragement

andgoodhumour.

Finally,Iwouldliketoacknowledgethreefriendswhowerenotwithmeonthejourney.

JuliaLawrence,KarenTannerandLyndaWoodswerebrilliant,beautifulwomenwhose

liveswereaninspirationtomany.Theirdeathsin2015promptedthereflectionsonlife

thatledtothisthesis,andtheyhaveoftenbeenonmymindalongtheway.Their

memoryhasbeenablessing.

vi

TableofContentsDeclaration..............................................................................................................................................iAcknowledgements............................................................................................................................vAbstract...................................................................................Error!Bookmarknotdefined.TableofContents...............................................................................................................................viIndexofFigures...........................................................................................................................viiiIndexofTables...............................................................................................................................ix

1:INTRODUCTION............................................................................................................................11.1 Thecontext............................................................................................................................11.2Theproblemthiscreates....................................................................................................21.3Theobjectiveofthisresearch...........................................................................................31.4Howthisdocumentisorganised.....................................................................................4

2:THERESEARCHQUESTION......................................................................................................62.1Introduction..............................................................................................................................62.2Threemainschoolsofthoughtindecision-making................................................62.3Sustainabilityinbusinessdecision-making:mappingtheliterature.............82.4Thesustainabilitycontext................................................................................................142.5Literatureonanalysisandinformation......................................................................162.6Sustainabilityandmanagerialcognition....................................................................192.7Sustainabilityandorganisation.....................................................................................222.8Problematisingtheliterature..........................................................................................242.9TheResearchQuestions....................................................................................................26

3:METHOD.........................................................................................................................................273.1 Introduction........................................................................................................................273.2Researchapproach............................................................................................................273.2.1 Researchphilosophy..............................................................................................273.2.2Researchprinciples....................................................................................................28

3.3Researchmethods................................................................................................................293.3.1Researcharchitecture................................................................................................293.3.2Choiceofqualitativemixedmethods..................................................................30

3.4Analyticalapproach...........................................................................................................363.5Limitationsofthemethod................................................................................................40

4:STUDY1...........................................................................................................................................444.1Introduction............................................................................................................................444.2Whydosustainabilityconsiderationsmakedecisionsdifficult?.....................454.2.1Analyticalapproach....................................................................................................464.2.2Fourarchetypesofdecisions..................................................................................504.2.3Demandsondecision-makingprocess...............................................................56

4.3Competingcommitmentsandparadoxesinsustainability................................624.3.1Analyticalapproach....................................................................................................654.3.2Howdoexecutivesmanagecompetingdemands?........................................664.3.3Howdoindividualdecision-makersusetheseapproaches?....................674.3.4Howdothecharacteristicsofthedecisionsinformchoiceofapproach? 684.3.5Tensionbetweentheexternalandinternalcontext..................................724.3.6Connectionsbetweenthemacroandmicroleveltensions.......................78

4.4Organisationalinfluencesondecision-making.......................................................794.4.1Theproblemoforganisingforsustainability..................................................80

4.4.2Organisationdesign.........................................................................................................824.4.3Performancemanagement......................................................................................864.4.5Culture..............................................................................................................................87

vii

4.4.5Leadership......................................................................................................................904.4.6Summaryoforganisationalinfluences..............................................................92

4.5Individualdecision-makers.............................................................................................934.5.1Knowledge......................................................................................................................934.5.2Biasesandattitudes...................................................................................................964.5.3Permissionspace.........................................................................................................994.5.4Frameworkofinfluencesondecision-making............................................104

4.6Thesystemfordecision-making................................................................................1055:STUDY2........................................................................................................................................1095.1Introduction........................................................................................................................1095.2Method...................................................................................................................................1105.3TheCaseContext...............................................................................................................1115.4Tensionbetweentheinternalandexternalcontext.......................................1135.5SegmentationofConsultCo’sdecisions.................................................................1175.5.1ThePre-BidStage.....................................................................................................1185.5.2TheBidStage..............................................................................................................1205.5.3ProjectStart-Up........................................................................................................1215.5.4ProjectManagement...............................................................................................1225.5.5HowConsultCo’ssustainabilityagendainfluencesdecisions...............123

5.6ConsultCo’sorganisation...............................................................................................1245.6.1OrganisationalFactors...........................................................................................1255.6.2Individualfactors.....................................................................................................1355.6.3Summary......................................................................................................................142

5.7ConsultCo’snestedparadoxes....................................................................................1445.8Conclusions.........................................................................................................................147

6:STUDY3........................................................................................................................................1516.1Introduction........................................................................................................................1516.2Reframingthecorporate-leveltension...................................................................1526.3Decisionpropertiesandprocess................................................................................1546.4Organisationalinfluencesonchange.......................................................................1636.4.1Individualattributesandbehaviour................................................................1636.4.2Organisationalfactors..........................................................................................1666.4.3Thecriticalroleofknowledgeandlearning.................................................1696.4.4Influencesbeyondtheboundariesoftheorganisation...........................1696.4.5Implicationsforchange.........................................................................................172

6.5Nestedchangeandthewhack-a-moleapproach..............................................1736.5.1Conditionsofthiscase...........................................................................................1736.5.2Thewhack-a-molemetaphor..............................................................................1746.5.3Nestedness..................................................................................................................178

6.6Conclusions.......................................................................................................................1797:CONCLUSIONS..........................................................................................................................1837.1AnsweringtheResearchQuestions..........................................................................1837.2Limitationsoftheresearch...........................................................................................1847.3ContributionstoKnowledge........................................................................................1847.3.1Contributionstothestudyofdecision-making...........................................1847.3.2ContributionstoParadoxtheory.......................................................................185

7.3ImplicationsforPractice...............................................................................................1867.4Futuredirections..............................................................................................................188

Appendix1:Keyorganisationalconceptsfromtheliterature..................................190Frameworksection1:Environment...............................................................................190Frameworksection2:Organisation................................................................................191

viii

Frameworksection3:Decision-makers........................................................................199Frameworksection4:Decisions.......................................................................................201

Appendix2:ListofDecisions..................................................................................................202Appendix3:Datastructurefrominterviewsandliterature.......................................205References........................................................................................................................................216

IndexofFiguresFigure1:Contextualfactorsinfluencingtheinclusionofsustainabilityindecision-

making.........................................................................................................................................24Figure2:Overallstudydesign..................................................................................................35Figure3:Processfordataanalysis–Study1......................................................................36Figure4:Datastructurefortheouterlayerofthecontextframework...................38Figure5:Datastructurefortheformalelementsoftheorganisationalcontext.38Figure6:Datastructureforthesocialelementsoftheorganisationalcontext...39Figure7:Datastructurefortheindividuallayerofthecontextframework.........39Figure8:Fourcontextsfordecision-making......................................................................44Figure9:Howfrequentlyaredifferentapproachesusedtomanagecompeting

demands?....................................................................................................................................66Figure10:Approachesadoptedincompaniesthatreframetheirbusinessparadox 78Figure11:Fourlevelsofinfluenceondecision-making.................................................80Figure12:Organisationalinfluencesondecision-making.........................................104Figure13:Thedecision-makingsystem.............................................................................107Figure14:KeyinitiativesinConsultCo'schangemanagementprogramme......113Figure15:Keydecisionsduringtheprojectlifecycle..................................................118Figure16:NestedtensionsatConsultCo...........................................................................146Figure17:Fivecapabilitiesneededformakingdecisionsin'messysituations'160Figure18:Organisationaldynamicsshapingdecisionsovertime.........................172Figure19:Learningloopsfornestedchange...................................................................180Figure20:Foundationalandcontextualchange.............................................................182Figure21:Changestepsforcompaniestoincorporatesustainabilityintodecision-

making......................................................................................................................................187

ix

IndexofTables

Table1:Numberofarticlescategorisedbytheme...........................................................10Table2:ThematicanalysisofarticlesbypublicationError!Bookmarknotdefined.Table3:Howanalyticmethodsmapontotensionscreatedbythesustainabilitycontext

........................................................................................................................................................17Table4:Objectivesandapproachforeachresearchstep.............................................30Table5:Listofinterviewees......................................................................................................32Table6:SourcesandusesofdatainthePrescriptiveStudy........................................33Table7:TopicsandparticipantsforStudy3......................................................................34Table8:Intervieweesreflectionsoncharacteristicsofsustainability-relateddecisions

........................................................................................................................................................47Table9:Factorsmakingdecisionsmoredifficult.............................................................49Table10:Fourarchetypesofdecisions.................................................................................51Table11:Differentcharacteristicsanddecision-supportneedsofthefourdecision

archetypes.................................................................................................................................58Table12:Sixtheoreticalapproachestomanagingtension..........................................64Table13:Howpeopletalkabouttheirlogicalapproach...............................................65Table14:Characteristicsofdecisionsassociatedwithdifferentresolutionapproaches

........................................................................................................................................................69Table15:Theroleoforganisationalfactorsinenablingorhinderingsustainabilityat

ConsultCo................................................................................................................................143Table16:Testingthetheoreticalideas..............................................................................148

1

1:INTRODUCTION

1.1 Thecontext

Intwomajorglobalpolicydecisionsin2015,policy-makersdescribedtheworldwe

wanttoseeandcommittedtosubstantialchangetocreateaneconomywhichismore

sociallyandenvironmentallysustainable.InSeptemberthatyear,theUNsignedthe

SustainableDevelopmentGoals(SDGs),whichsetouttargetstoachievebettersocial,

environmentalandeconomicoutcomesfortheworldoverthenext15years,andin

DecembertheConferenceofParties(COP)signedtheParisAgreementtocommitto

reducegreenhousegasemissions.Takentogether,thesecommitmentsdescribethe

worldwewanttolivein.However,achievingtheseoutcomeswillrequireconsiderable

changethroughouttheeconomy.AnalysisbyJohanRockströmetal(2017)showsthat

from2020to2050,weneedtohalveglobalemissionseverydecadeifwearetoachieve

ourcommitmentstoslowingclimatechange.Thelevelofchangerequiredisdramatic

anddemanding.

ThisanalysisisexpandedintheIPCC’s2018report(Rogeljetal.2018),whichidentifies

thesectorsthatneedtochangemostdramaticallyinordertoreducecarbonemissions.

Specifically,theuseofenergybyindustry,transportandbuildingsisaverysignificant

driverofthechangethatisneeded.Muchoftheburdenofthischangefallsupon

incumbentbusinesses.Thesebusinessesarenotonlysignificantemittersofcarbon,but

alsoshapesystemsofsupplyandconsumption.Ifwearetoseeajusttransitiontoa

low-carboneconomy,businesswillbeasignificantplayer.

Aswellastheurgentneedtode-carbonise,companiesarealsoworkingonother

environmentalgoals(forexample,reducingresourceconsumptionandwaste)andon

socialgoals(forexampleworkingtowardshavingamorepositiveimpactonthe

communitiestheyserve).Thisbalancingofenvironmental,economicandsocial

outcomesoverthelongandshorttermisatthebasisofthedefinitionofsustainable

development(WorldCommissiononEnvironmentandDevelopment1987p.16).Inthis

thesis,Iwillbedescribingthisbalanceas‘corporatesustainability’.

2

Thisisacontestedconcept,andbothcorporate‘sustainability’andcorporate

‘responsibility’areideasthatcontinuetoevolve(Bansal&Song2017).Whilethenature

ofthesocialroleofbusinesshasbeendebatedhistorically(Margolis&Walsh2003),

thereisincreasingrecognitionoftheneedforcompaniestoactresponsibly–indeed,

corporatesocialresponsibilityhasgone‘mainstream’(Lyonetal.2018).However,

thereismuchmoretodotoshifttheemphasisfromafocusonsimplymakingthecase

forgreenbusinesstotakingasystemicapproachtocorporatesustainability(Bansal&

Song2017)andtoengagebusinessintacklingtheworld’sgrandchallenges(Georgeet

al.2016).Inthiscontext,thereisalsoaroleformanagementscholarstounderstand

howthesechangescanbeeffected(Eisenhardtetal.2016;Georgeetal.2016;Lyonetal.

2018).Thisdissertationseekstoaddressoneoftheproblemsbusinessesfaceinacting

inawaythatissociallyandenvironmentallysustainable.

1.2Theproblemthiscreates

Corporatesustainabilityisanenactedprocess.Becominganenvironmentally,socially

andeconomicallysustainableorganisationisnotamatterofsimplychangingapolicy–

peoplethroughouttheorganisationneedtodevelopnewhabitsintheirchoicesand

behaviour.Thedecisiontoactsustainablyisnotlimitedtoasinglepointinthe

organisation.Instead,decisionsinmanyfunctionsandatmanylevelsallcontributeto

theorganisation’ssocialandenvironmentalsustainability.AsHerbertSimonwrote:

‘Thetaskof“deciding”pervadestheentireadministrativeorganisationquiteasmuchas

thetaskof“doing”’(Simon1997p.1).

Companiesthereforefaceahighlycomplexproblemastheyworktowardscorporate

sustainability.First,theyaredealingwithachangethatisbothextremelyurgentand

presentsaglobalthreat(UNEP2018p.xiv).Second,thechangethatisneededis

pervasive:corporateactionswithsustainabilityimpactsarenotlimitedtotheworkof

individualexperts,butcanoccuranywhereinanorganisationwherethereisanimpact

onresourcesorstakeholders.Third,businessesworkingtobecomesustainableare

tryingtoeffectsystemicchangeinasystemcharacterisedbycomplexityand

uncertainty.Thismeansthattheknowledgerequiredtomakefullyinformeddecisions

maynotbeavailable.Wesimplycannotknowthecompleterangeofimpactsofsome

3

actions.Thiscombinationofurgency,uncertaintyandpervasivenessmeansthatthe

contextofcorporatesustainabilityisuniquelyproblematicfordecision-makers.

Withinthiscontext,thedecisionsthemselvesarecomplicatedbecausetheyare‘rifewith

tensions’(VanDerByl&Slawinski2015).Tensionisinevitable:itisencapsulatedinthe

definitionofsustainability,whichinvolvesmanagingeconomic,environmentaland

socialoutcomesforthelongandshortterm(WorldCommissiononEnvironmentand

Development1987p.16).Thisleadstotensionbetweenpublicandprivatevalue

(Haffar&Searcy2015),betweenthelongandshortterm(Slawinski&Bansal2015)and

betweendifferentethicalapproachestotheproblem(Rodeetal.2015).Thesetensions

appearindifferentpermutations(Haffar&Searcy2015),atseverallevelsinthe

organisation,andcanbemutuallyreinforcing(Slawinskietal.2017).Tensionsrelated

tosustainabilityalsoariseatthesystemlevel(Schad&Bansal,2018)whenthereare

multiple,conflictingdemandsfromtheexternalenvironment,whetherfromcustomers,

shareholders,regulatorsorotherstakeholders(Smith&Lewis2011).Howeverthey

becomesalientforexecutivesatamorespecificlevel(Schad&Bansal,2018),for

examplewhentheyneedtomakechoicesbetweenconflictingdemands.

Thusweseethattheworldneedstochange,andthatbusinessisanimportant

constituencyinthistransformation.However,businessesseekingtoactinawaythatis

sociallyandenvironmentallysustainableneedtomakeprofoundchangestothewayin

whichtheymakedecisions.Actingsustainablywillcreatetensionsfordecision-makers,

andtheyneedtofindwaystoresolvetheseinacontextwheretheavailableinformation

maynotbeadequateforthetask.

1.3Theobjectiveofthisresearch

Overthelastcoupleofdecadestherehasbeenaconsiderablebodyofresearchthat

makesthecaseforsustainablebusiness.However,therehasbeenratherlesswork

lookingathowbusinessesneedtoactdifferentlytobesociallyandenvironmentally

sustainable(Zolloetal.2013).Theobjectiveoftheresearchwasthereforetohelpus

betterunderstandhowbusinessescanadapttheirdecision-makingsystemsto

incorporatesocialandenvironmentalconsiderations.

4

Thisquestionsitsattheintersectionbetweentwoquitefragmentedfields:workon

decision-making,andworkoncorporatesustainability.Withintheresearchobjectives

thereareseveralpossiblefieldsofenquiry,andsoIconductedanextensiveliterature

reviewbeforefinalisingtheresearchquestion.ThisisdiscussedinChapter2.

Thisresearchiswarrantedfortwomainreasons.First,theproblemofchangingtheway

corporationsactisurgent(Rogeljetal.2018p.97)andyetthereisrelativelylittleclear

guidanceonhowtheyneedtochange(Zolloetal.2013).Thisleadstoablindspotfor

practitioners.Second,therehavebeencallsintheacademiccommunityforfurther

empiricalworkinthisfield(Epsteinetal.2015;VanDerByl&Slawinski2015;Haffar&

Searcy2015).Theobjectiveofthisworkistoaddressthislacunabytakingan‘engaged

scholarship’approach(VandeVen2007)toensurethattheempiricalapproachnotonly

addressesgapsintheacademicliterature,butalsomeetstheneedsofpractitioners.

1.4Howthisdocumentisorganised

Theorganisationofthisdissertationbroadlyreflectsthesequenceinwhichthework

wasconducted,startingwiththedevelopmentofaresearchquestion,andthen

presentingthemethodsusedandthefindingsfromthreeconnectedqualitativestudies,

andtheconclusionsfromtheresearch.Themainbodyoftheargumentistherefore

organisedinthefollowingchapters:

TheResearchQuestion

Chapter2situatestheresearchinthecontextoftheexistingliterature,whichis

problematizedtoidentifytheresearchquestion.

Methods

Chapter3outlinesthephilosophyandprinciplesunderlyingtheresearchmethod,and

thenexplainstheoverarchingstructureoftheresearchprocess.Theprojectconsisted

ofthree,connectedqualitativestudiesinformedbytheprinciplesofengaged

scholarship(VandeVen2007).Thefollowingthreechapterspresentthefindingsof

thesethreestudies.

5

Study1

Chapter4presentsthefindingsofthefirstofthethreestudies.Thedatainthischapter

isdrawnfromtheanalysisof45decisionscollectedininterviewswithexecutives.

Thesefindingswerecombinedwithasecondliteraturereviewinordertocreatethree

newconceptsforanalysingdecisionsthatincludesocialandenvironmentalaspects.

Study2

Chapter5presentsasinglecasestudythatwasdevelopedtoexploretherelationships

betweentheconceptsemerginginChapter4.Thisstudyshedslightontheway

decision-makinginorganisationscanchangeovertime,astheyrespondtopressuresfor

sustainability.

Study3

Chapter6introducesthefindingsfromthethirdstudy.Thisstudywasaseriesoffocus

groupswithseniorexecutiveswhosedecisionsinvolvedsocialorenvironmental

considerations.Thepurposeofthisstudywastotestandextendtheemergingfindings,

andtoensurethattheworkhadrelevanceforpracticeaswellastheory.

ContributionandConclusions

Inthefinalchapter,Idiscussthefindingsfromthiswork,assessingthelimitationsofthe

work,contributionstoknowledgeandimplicationsforpractice.Thischapteralso

includesasuggestedagendaforfutureresearch.

Inthisseriesofsteps,theresearchprogressesfromaninitialobjective–tounderstand

howbusinesscanadapttheirdecision-makingsystemstoincorporatesocialand

environmentalconsiderations–tothedevelopmentofaclearresearchquestionrooted

incurrentknowledge.Ithendevelopanswerstothisquestionthroughaseriesofthree

relatedempiricalstudies.Finally,thesefindingsarereviewedinthecontextofcurrent

knowledgetoshowboththecontributionstothiscorpusandthefuturedevelopments

suggestedbythiswork.

6

2:THERESEARCHQUESTION

2.1IntroductionThischapterexaminesthecurrentstateoftheliteratureondecision-makingandhow

thisrelatestothefieldofcorporatesustainability.Itakeasystematicapproachtothe

literatureonsustainabilityinbusinessdecision-makingtomapoutthekeythemesin

theliterature.Thesearethenproblematized(Alvesson&Sandberg2011)toidentifythe

researchquestionsandsituatetheminthecontextofexistingknowledge.Iwillreturn

totheliteratureagaininChapter4tocontextualisetheearlyempiricalfindingsfromthe

research.

Thischapterisorganisedinfiveparts.Itbeginswithanoutlineofthebroadschoolsof

thinkingondecision-makingthatemergedintwentieth-centuryacademia.Second,it

exploresthewaysinwhichthesebroadschoolsofthoughthavebeenadoptedinthe

sustainabilityliterature.Third,itshowswhythesustainabilitycontextisparticularly

challengingfordecision-makers.Thisisfollowedbyareviewoftheliterature,following

systematicprinciples(Tranfieldetal.2003)andamapthemajorthemesarisingfrom

this.Finally,Iproblematisethisliteraturetodrawouttheresearchquestionsthat

informthisthesis.

2.2Threemainschoolsofthoughtindecision-making

Decision-makingispartofthehumancondition,andproblemsofchoiceoccurinworks

bymanygreatphilosophers,includingPlato,AristotleandAquinas(Greco,Ehrgott,&

Figueira,2016p.4).Thereisalsoatraditionofanalysingdecisionsfromamathematical

pointofview,andintheseventeenthcenturyPascalandFermatbeganworkthatsowed

theseedsofourunderstandingofprobability(Hodgett,2013p.10).Giventhislong

history,Iintendonlytooutlinethemajorthemesintheliteraturethathaveinformed

currentworkondecision-makinginbusinesses.Ourcurrentthinkingondecision-

makingwassignificantlyshapedbyworkdevelopedfromthemiddleofthetwentieth

centuryonwards,whichreflectsthreefundamentallydifferentviewsofhuman

rationality.

7

ThefirstoftheseviewsisexemplifiedintheworkofgametheoristsVonNeumannand

Morgenstern(1947).Muchofthesubsequentdevelopmentofourideasondecision-

makinghasbeenaresponseorreactiontotheirdevelopmentofgametheory.First,Von

NeumannandMorgensterndevelopedanexpectedutilityfunctionthathasbecomethe

standardmethodtomodelrationalchoice(Hodgett,2013p.11).Thistheoryunderpins

severaltechniquesformakingcomplexdecisions–includingmulti-criteriadecision

analysis(Hodgett,2013p.13),butisbasedonanassumptionthatdecision-makershave

accesstothetimeandinformationthattheyneed,andwillactrationallytomaketheir

decisions.

However,thisviewofhumanrationalitywaschallengedbyHerbertSimon,a

contemporaryofVonNeumann,whenheproposedthetheoryofboundedrationality

(Simon,1945p.121).Simon’sviewwasthatdecisionmakers’abilitytoactrationally

waslimited–orbounded–bytheirorganisationalconditions,thatledtopartial

information(Simon,1945p.88),andhedevelopedthisintoabehaviouralmodelof

rationalchoice(Simon1955),exploringtherelationshipbetweenthedecision-maker

andenvironment.VonNeumannandMorgenstern’sassumptionsaboutrationality

werechallengedstillfurtherin1979byKahnemanandTverskywhodemonstratedthat

peopleviewriskasymmetrically,andthereforedonotconformtotheexpectednormsof

economicallyrationalbehaviour(Kahneman&Tversky1979).Thisledtoasubsequent

streamofworkanalysingcognitivebiasindecision-making.

Thisgivesthreebroadviewsonthenatureofdecision-making.First,onethatsuggests

thatdecision-makingissomethingthatcanbemodelledandsupportedmathematically.

Second,onethatsuggeststhatourdecision-makingisshapedbyanorganisational

contextthatfocusesourattentioninonedirectionandlimitsboththeavailabilityofdata

andthetimeavailabletomakechoices.Third,thereisanapproachthatfocusesonour

cognitivelimitationsandsuggeststhatonlybychangingthewaywethinkcanwe

changethewaywemakedecisions.Essentially,wecancharacterisetheseasanalytical,

organisationalandcognitiveapproachestodecision-making.

Theseleadtoquitedifferentapproachestodecision-support.Whiletheanalytical

schoolhasproducedarangeofdifferenttoolstomanagethecomplexityofdecisions,

workbyGerdGigerenzer(forexample:Gigerenzer&Goldstein,1996),buildingonthe

8

behaviouralviewofdecision-making,suggeststhatsomedecisionscanbesimplifiedto

heuristics,andthatthesecanbeusedforeffectiveorganisationaldecision-making

(Bingham&Eisenhardt2011).Otheracademics–mostnotablyRichardThaler(Thaler

&Sundstein2008)–havedevelopedapproachestodecision-supportthatarebasedon

KahnemanandTversky’srecognitionofcognitivelimitation.Theypointoutthatby

workingwiththesebiases,wecancreateenvironmentsthatencouragepeopletomake

particulardecisions.

Thus,weseethattheliteratureondecision-makingissomewhatfragmented.Workhas

beendrivenbymathematicians,economistsandpsychologists,andisrootedindiffering

viewsofhumanrationality.Thesefracturespersistintheliteratureaboutstrategic

decision-making(Shepherd&Rudd2014).Buthowaretheseapproachesusedinthe

contextofbusinessdecisionsinvolvingsustainability?

2.3Sustainabilityinbusinessdecision-making:mappingtheliterature.

Tounderstandthisproblembetter,Iundertookaliteraturereviewinformedbythe

principlesofsystematicreview(Tranfieldetal.2003).Systematicreviewhasits

originsinthefieldofmedicine(Kitchenhametal.2009)andwasdevelopedasawayto

compileevidencefrommultiplestudies.Sincethen,ithasbeenadaptedfordifferent

fields,includingsoftwareengineering(Kitchenhametal.2009)socialsciencesand

publicpolicy(Tranfieldetal.2003).However,theobjectivesofthesystematic

approachvarybyfield:inmedicineandsoftwareengineering,theintentistocreatean

evidencebaseforpractitioners,drawingonasynthesisofscientificevidence;by

contrast,Tranfieldetal(2003)intheirworkonapplyingsystematicliteraturereviewto

management,observethatsomeofthenorms(suchasontologicalorepistemological

consistency)thatapplyinotherfieldsdonotapplytomanagement,andsowhilea

systematicapproachtoliteraturecanbehelpful,itisunlikelytoproducethetypeof

evidencebasethatisavailableinotherfields.Becausedecision-makingisamulti-

disciplinaryfield,Iexpectedtofindthattheliteraturewouldbequitefragmented,and

thattherewouldbeepistemologicalinconsistenciesinthefield.Ithereforedecidedto

usethesystematicapproachonlytomaptheliteratureanduncoverthemainthemesor

perspectives,ratherthantocompareindividualstudies.Ihavethereforeadopteda

systematicapproachtothesearchandmappingofexistingworkinordertodevelopa

9

researchquestion,ratherthanusingthisasasteptoaccumulateevidencefora

particularfinding.

Thisworkcomprisedthreesteps.ThefirststepwasasearchintheThomsonReuters

WebofSciencedatabaseforallmaterialspublishedinEnglishbeforetheendof2018

usingthestring:businessANDdecision-makingANDsustainab*.Thisproducedalistof

820articles(includingconferencepapers,journalarticlesandbookchapters).Forthe

secondstep,Ireviewedthetitlesandabstractsofthesearticlestoremovethosethat

were:

• Notfocusedondecision-making(eg.Articlesaboutgenderdifferenceinwhich

differencesindecision-makingwereaverysmallpartofthediscussion)

• Notfocusedonsocialorenvironmentalsustainability(eg.Articlesthatwere

assessingwhetherasectorcouldcontinueinthelongterm)

• Notfocusedontheinternalworkingsofanorganisation(eg.Articlesabout

consumerdecision-making)

• Focusedonthegreensupplychain(thisisalarge,andgrowingbodyof

specialisedliterature)

• Focusedonveryspecificsituationssuchashealthcare,communityinterventions

oragriculture,thatmightnotbegeneralizabletobusinesssettings

• Focusedonmulti-organisationdecision-making(eg.Managementofcommon

resourcessuchaswatersupplies)

• Focusedoneducationalsettings(eg.Provisionofbettersustainabilityeducation

forMBAstudents)

• Focusedonscienceasatopic(eg.Howsciencecanbeusedtoinformpolicy

decisions).

Thisfilteringleftasetof234articlestoreview.

Becausesomewritersuse‘sustainability’and‘corporatesocialresponsibility’moreor

lessinterchangeably,Iconductedasecondsearchusingthestring

‘organisationANDdecisionmakingAND(sustainab*ORcorporatesocial

responsibility)’intheWebofScience’sbusinessandmanagementdatabases.This

searchproduced583articles.Ireadthetitles(andwherenecessarytheabstracts)to

10

applythesamefilteringcriteria,creatingalistof107articles.Ithenmergedthetwo

lists,removinganyoverlapstobuildafinalsetof325documents.

Thethirdstepwastoreadandcategorisethearticles.Becauseofthebroadnatureof

theenquiry,thearticleswereverydiverseandsoIgroupedthearticlesthematicallyinto

fourmaingroups.Oneofthesegroupswasabouttheoverallcontextforbusinessand

sustainability;theremainingthreebroadlyreflectedthethreeschoolsofthought

outlinedabove–therewasagroupaboutinformationandanalysis;agroupabout

managerialcognition;andagroupaboutorganisation.Theoveralldistributionofthe

articlesisshowninTable1below:

Table1:Numberofarticlescategorisedbytheme

Theme Numberofarticles %oftotalSustainabilitycontext 51 16Informationandanalysis 187 58Managerialcognition 29 9Organisation 46 14Other(forexample,specificindustries)

12 4

Theliteratureisstrikinglyfragmented.Thearticleswerespreadacross191journals,

conferenceproceedingsorbooks,ofwhichonly14includedmorethanthreearticles.

Ofthegeneralistmanagementjournalsthatareoftenusedasthebasisforaliterature

review(forexampleVanDerByl&Slawinski2015),onlyone–theAcademyof

ManagementReview–includedmorethantwoarticlesaboutsustainabilityand

decision-making.Themorespecialisedjournals,suchasJournalofCleanerProduction,

JournalofBusinessEthicsandSustainabilityweremostprolific,buteventheyaccounted

collectivelyforonly25%ofthearticles.151Journalsincludedonlyonerelevantarticle.

ThebibliometricsareshowninTable2:

Table2:Thematicanalysisofarticlesbypublication

JournalContext

CognitionOrganisation

Information

ToolsOther

TotalJournalofCleanerProduction

73

213

34JournalofBusinessEthics

611

62

2

27Sustainability

21

21

141

21InternationalJournalofLifecycleAssessm

ent

7

7

Managem

entDecision1

2

11

5

BusinessStrategyandtheEnvironm

ent

1

21

4

OrganisationandEnvironment

1

21

4ResourcesConservationandRecycling

1

1

2

4

SustainabilityAccountingManagem

entandPolicyJournal1

1

2

4

AcademyofM

anagementReview

2

1

3

BusinessEthics-AEuropeanReview

2

1

3EcologicalEconom

ics

11

13

EuropeanJournalofOperationalResearch

1

2

3

GroupDecisionandNegotiation

1

11

3

11

14

Journalshadaneditorialslanteithertowardsthe‘human’aspectsofdecision-making

(thecontext,cognitionandorganisationarticles),orthe‘technical’aspects(information

andanalysis).ThissuggeststhatthedistinctionmadebyBansal&Song(2017)

betweenworkon‘responsibility’,whichisbasedonanormativeormoralimperative,

andworkon‘sustainability’,basedonanunderstandingofecologicalsystems,persists,

with‘responsibility’representedinthejournalsemphasisingcontext,cognitionand

organisation,and‘sustainability’representedinthemoretechnicallyfocusedjournals.

Iusedthisinitialclassificationasabasistoreviewandproblematizetheliteratureto

identifymyresearchquestion,expandingthesearchusinga‘snowballing’approach

whennecessary.Thisanalysisformsthebasisfortherestofthischapter.

2.4Thesustainabilitycontext

Businessesthataspiretoworkinawaythatissociallyandenvironmentallyresponsible

faceaparticularorganisationalchallenge,specifically,howtocopewiththeadditional

complexitythispresents(Pirson&Turnbull2018).Itisimportanttounderstandhow

thechoicetoactinawaythatissociallyandenvironmentallysustainablecanmake

decision-makingmorecomplicated,asindividuals–andindeedorganisations–are

workingwithmultipleobjectives(Epsteinetal.2015;Mitchelletal.2016)thatmaybe

intensionwitheachother.ThisisdiscussedbrieflyintheIntroduction(Section1.2,

above).

Thesetensionsareoftennestedwithinabroaderquestionaboutthepurposeofthefirm

(Dyck&Greidanus2017;Bentoetal.2017).Theycanbegeneralisedasatension

betweenprivatevalueandsharedvalue(Haffar&Searcy2015;Porter&Kramer2011),

essentiallycontrastingtheimmediateneedsofthecompanywiththelong-termneedsof

stakeholders,whichcanincludeotherspeciesorfuturegenerations.Thistension

betweentheexternalenvironmentandthecompany’svaluecreationsystemcancreate

aparadox–‘apersistentcontradictionbetweenindependentelements’(Schadetal.

2016)–forthecompany.Thiscanbeachallengetocompaniesseekingtoactmore

sustainablyasitcreatesaparadoxattheheartoftheiroperations.

15

Thisisparticularlywellillustratedindecision-making:eachdecisionpresentsspecific

tensions,butthesearelocatedinanorganisationalcontextthatmaypresentalargerset

ofenduringtensions(Smith2014).Thesetensionsmaybelatent,orunseenuntila

choiceneedstobemade(Smith&Lewis2011;Bansaletal.2018).However,atthis

point,theycomplicatedecision-makinginfourdistinctways.First,decision-makers

findthattheymayneedtomanage

conflictingdemandsfromtheexternalenvironment,whetherfromcustomers,

shareholders,regulatorsorotherstakeholders(Smith&Lewis2011).Second,they

needtofindwaystobalancethelong-termandtheshort-termwhichmaybeintension

(Bansal&Desjardine2014).Thesetwofactorsinteracttocreateathirdproblemof

complexity(Pirson&Turnbull2018).Finally,somesustainability-relateddecisions

havethecharacteristicsofwickedproblems(Rittel&Webber1973)sothattheyare

characterisedbyhighlevelsofambiguity.

Notonlydodecision-makersfindthatthesefourfactorsmaketheirdecisions

intrinsicallymorecomplex,theymayfindthatthereisatensionbetweenthedemands

oftheexternalenvironmentandthedominantorganisationallogic,the‘practices,

assumptions,valuesandbeliefsthatshapecognitionandbehaviour’(Besharov&Smith

2014)usedtomakechoicesintheorganisation.Therehasbeenlittleempiricalresearch

intohowexecutivesactuallyexperiencetheseclustersoftensions(Sheepetal.2017)

andtherehavebeencallsformoreempiricalresearchtounderstandhowexecutives

resolvethetensionsarisingfromincorporatingsustainabilityindecision-making

(Epstein&Widener2011;Haffar&Searcy2015;VanDerByl&Slawinski2015).

Therearedivisionsintheliteratureaboutthewaythesetensionscanbehandled.The

threemaintheoreticalperspectives–analytical,cognitiveandorganisational–that

dominatetheacademicworkondecision-makingpersist.HerbertSimon(1997p.56)

notedthatdecisionswerealways‘acombinationoffactsandjudgement’.Thethree

literaturesIwillreviewapproachthisindifferentways:theliteratureonanalysisand

informationfocusesonthefacts;literatureoncognitionfocusesontheprocesses

underlyingjudgement;andtheworkonorganisationfocusesonthebroadercontext

withinwhichtheseinteract.

16

2.5LiteratureonanalysisandinformationThemajority–58%–ofthearticlesthatappearedinthesearchwerefocusedonthe

problemsofassemblingandanalysinginformationtoincludesustainability

considerationsindecision-making.

Becauseworkingsustainablyrequiresbusinessestolookatsocialandenvironmental

outcomesaswellaseconomicones,thestartingpointofmanysustainabilityinitiatives

isarequirementfornewdatareporting(Stefanetal.2011).Thereisasignificantbody

ofliteratureaboutthis,coveringquestionsofcorporatereportingandtheneedfornew

standardsofmeasurement(Hosoda&Suzuki2015).AsBeloffetalobserve,thesheer

numberoftoolsandmethodsisoverwhelming(Beloffetal.2004).Muchoftheinitial

pressuretoadoptthesemethodsisexternaltotheorganisation(Beloffetal.2004),and

sotheinformationmaynotreflectthewayinwhichtheorganisationstructuresits

information:itmaybeacomplexmixofinternallyandexternallysourceddataand–

unlikeconventionalcorporatereporting–maybeinamixofunits,ratherthan

expressedexclusivelyineconomicterms.Giventhevitalroleofexternalstakeholders

forsustainability,datafromthemisimportant(Epstein&Widener2011),andyetgiven

itsdynamicnature,itisdifficulttocreatestandardisedreportingapproachesforthese

groups.

Scholarshaveidentifiedthreechallengesinherentintheintroductionofnew

information.Firstexistingcorporateontologiesdonotincorporatethisdata(Muñozet

al.2013),implyinganeedformuchmoreprofoundchangestotheinformation

infrastructureoftheorganisation.Second,dataiscollectedforexternalreportingto

stakeholders,andmaynotbewellconnectedtothemanagementaccountingsystemthat

informsdecision-making(Hosoda&Suzuki2015).Finally,executivesdonotknowhow

toprocessthislargevolumeofnewdata,orrelytooheavilyonit(Zapico2014;

Neumannetal.2012).Iconcludethatthedataneedtobeprioritisedandanalysed

beforetheycanbeusefulformakingdecisions.

Thisisasignificantfocusofscholarship:142ofthearticlesreviewedwerefocusedon

analyticaltechniquestoprocesstheinformation.Thesefallbroadlyintotwocategories:

methodsforanalysis;andsystemsformanagingandpresentingdata.

17

Thearticlesaboutanalyticalmethodsfallbroadlyintofourcategories,eachofwhich

addressaspecificprobleminherentinthesustainabilitycontext.Lifecycleanalysisis

anapproachdevelopedtoreducetheproblemofdecision-methodsthatfavourthe

short-term(suchasdiscountedcashflowmethods)bycomparingtheimpactofprojects

orproductsovertheirentirelifecycle.Thiswasthefocusof20ofthearticles.The

secondcategorywasagroupofanalyticmethodsthatenabletheevaluationofdecisions

basedonmultipledifferentcriteria,andwasdescribedin37articles.Thethird

categorywasagroupofanalyticmethodsthathelpanalysedecisionsunderconditions

ofuncertainty,forexamplebyanalysingoptions,andtherewere12articlesfocusedon

theseapproaches.Finally,therewere11articlesthatdescribedmodelsorsystems

dynamicsapproachestoexploringthecomplexityindecisions.Broadly,theanalytical

methodseachaddressparticularproblemsposedbythetensionsimplicitinintroducing

sustainabilityconsiderationstobusinessdecision-making,thus:

Table3:Howanalyticmethodsmapontotensionscreatedbythesustainabilitycontext

Problem ApproachTensionbetweentheshortandlong-termindecision-making

Lifecycleanalysisallowsdecision-makerstoexaminethecompleteimpactofadecision

Tensionbetweeneconomic/environmental/socialoutcomes(orcombinationsofthese

Multi-criteriadecisionanalysis,analytichierarchyprocessandTOPSISallenabledecision-makerstoexaminemultiplecriteria

Highlevelsofuncertaintyaboutinputvariablesandoutcomes

Greydecision-making,fuzzylogicanddataenvelopmentallallowdecision-makerstoanalysetherangeofoutcomesofadecision.

Complexityofrelationshipsbetweensystemelements

Systemdynamicsandmodelling.

Theproblemtheseanalyticalmethodspresentisthatmanydecisionshaveallofthese

tensions,andsothetoolswouldneedtobeusedinconjunctionwitheachother.Several

authorshavedescribedsituationsusingcombinationsofanalyticalmethods,asmore

thanoneisrequiredtosolvethefullsetofproblemsposedbyagivendecision

(Hoogmartensetal.2014;Bakshi2011).

Thishasledtothedevelopmentofworkonbuildingsustainabilityinformationinto

enterprise-levelsystems.Chofrehetal,inaliteraturereviewoftheworkonsustainable

18

enterpriseresourceplanning(Chofrehetal.2014)makethecaseforembedding

sustainabilityintobusinesssystems.However,theadditionofextrainformation

complicatestheunderlyingmodelandmayendupconfusingusers(Oertwigetal.2015),

andtherearesignificantchallengesinimplementingthesesystems(McIntoshetal.

2011).Thereisstillafocusinenterprise-levelsystemsondata,ratherthanthe

decisionstowhichthesewillbeapplied(Stefanetal.2011).

Inmanyorganisations,managersalreadyreceivelargequantitiesofinformationeven

withoutadditionalfactsrelatedtosustainability,leadingtotheriskofcognitive

overload(Neumannetal.2012).Itisthereforehelpfultohavepresentationaltoolsto

helpsummariseandsynthesisethecoredata,andensurethatmanagementattentionis

focusedonthemostsalientfacts.Thewayinwhichmanagersreceivethedataneedsto

reflecttheorganisationalontologyandwayinwhichthecompanysignalswhatis

important.Interestingly,thereisrelativelylittleaboutthisintheacademicliterature,

andalmostallofwhathasbeenwrittenisaboutversionsofonetool:theBalanced

Scorecard,mentionedinsevenofthearticles.PistoniandSongini(2016)pointoutthat

theBalancedScorecardhasbeenproposedasavehicleforsignallingthecompany’s

prioritiesandthatthereareseveraloptionsforprovidingthedata,rangingfroman

entirelyseparatescorecardforsustainabilityquestionstothecompleteintegrationof

sustainabilityintothebusinessscorecard.

Despitetheextentofthisliteratureanditsprominenceinacademicworkondecision-

makingforsustainability,ithassomelimitations.First,theseapproachesallseekto

solveproblemswithintheexistingbusinesssystem(Zapico2014).Thismeansthat

tensionsarisingfromthefirm’sfundamentalvaluecreationmethodarenotaddressed.

Rather,thesymptomatictensions–differencesinstakeholderviews,forexample–are

managedeitherthroughindividualanalyticalapproachesdescribedabove,orthrough

combinationsofapproaches.Theseapproachestendtobequiteresource-intensive,

andthereforeusedfordecisionsthatareexceptionalintheircomplexity(Arvaietal.

2012).Whentheyaresuccessfullyembeddedincorporateinformationsystemsthey

alsobecomerelativelyinflexible(Brynjarsdottiretal.2012).Theythereforemaynotbe

appropriatefortheorganisationalrealityofverydistributed,rapiddecision-makingthat

needstoresponddynamicallytostakeholders.Finally,theyplacesignificantcognitive

19

demandsonmanagers(Neumannetal.2012):Zapico(2014)suggeststhatthisleadsto

ablinddependenceondatathatcanleadtounwittingshort-termism.

Thus,whileimproveddatamayhelppeoplemakebetter-informeddecisions,thereisno

evidencethatitfundamentallychangespeople’swaysofmanagingthetensionsinherent

insustainability.Whilethebalancedscorecardiseffectiveformanagingmultiple

objectives,itreinforcestheFirm’sexistingstrategyandsodoesnothelpexecutives

addressproblemsthattheyarenotalreadythinkingabout(Hahn&Figge2018).People

aretherefore‘lockedinto’aparticularwayofseeingthesocialandenvironmentalissues

facingabusiness,andrespondingaccordingly.Thepresentationofdatainabalanced

scorecarddoesnotseemtochangeethicalperspectives(Wynder&Dunbar2016).This

questionofhowpeoplethinkisanimportantpartofthedecision-makingprocess,and

hasbeenextensivelydiscussedinaseparatebodyofliteratureonmanagerialcognition.

2.6Sustainabilityandmanagerialcognition

SinceHambrickandMasondevelopedtheupperechelonstheoryinordertodescribe

thewayinwhichthecharacteristicsandattitudesofseniormanagersshapecorporate

decision-making(Hambrick&Mason1984),scholarshavebeeninterestedintheway

thatsociallyandenvironmentallyresponsiblebehaviourinbusinessesoriginatesinthe

ethicalorientationofindividualleaders(Yinetal.2016).Ifsustainabilityisamoral

issue(Margolis&Walsh2003;Mazutis&Eckardt2017),thenitmakessenseto

understandwhetherpeopleactmorally.However,historically,therehasbeen

relativelylittleempiricalexaminationofthisphenomenon(Aguinis&Glavas2012).

Therehasthereforebeenatrendinrecentyearstowardsexplorationofthesemicro-

foundationsofsustainability,focusedonmanagerialcognition.

Researchonmanagerialcognitionhasitsrootsintheproblemofuncertaintyinthe

externalenvironment(Kaplan2011)andincorporatesboththeknowledgeandthe

valuesandbeliefsofdecision-makers(Hambrick&Mason1984).Becausepeopleare

notabletoknoweverythingaboutasituation(Simon,1997p.78),theydevelop

cognitiveframes,definedas‘awell-learnedsetofmentalassociationsthatexcludes

someinterpretationsofenvironmentalstimuliandreinforcesothers’(Porac&Rosa

1996).Theseframeshelpdirectattentiontoparticularissuesinasituation(Kaplan&

Tripsas2008),effectivelyactingasfiltersindecision-making.Peoplehavearepertoire

20

offrames,or‘schemataofinterpretation’(Goffman1974p.21),buttheytendtobefairly

stable(Porac&Rosa1996),changinginresponsetouncertaintyandexternalpressure

(Kaplan2008).

Giventheimportanceofthesecognitiveframesforsensemaking,thereisagrowing

bodyofscholarshipexploringthewaysinwhichtheyenableexecutivestomakesenseof

thetensionsinherentinthecontextofsustainablebusiness.Hahnetalsuggestthat

therearetwodominantcognitiveframesamongexecutives,andcharacterisetheseasa

‘businesscaseframe’anda‘paradoxframe’(Hahn,Preuss,Pinkse&Figge,2014).

Cognitiveframesarevitalindecision-makingastheyshapeboththeinterpretationof

theproblemandthechoiceofaction(Kaplan2008;Grewatsch&Kleindienst2018),and

Hahnetal’sworksuggeststhatexecutiveswiththesetwodifferentframeswillbehave

verydifferentlybothintheirwayofseeingthetensionsincorporatesustainabilityand

intheirresponsestothem(Hahnetal.2014).

Inthefirstoftheseframes–the‘BusinessCase’frame–Hahnetalproposethat

managersarefocusingonenvironmentalandsocialactionsthatwillsupporteconomic

outcomes(forexample,improvingresourceefficiencyisbeneficialtotheenvironment

andreducescosts).Thisenablesthemtomakerelativelystraightforwarddecisions:

somethingeitherworkseconomically,oritdoesnot.Theycontrastthiswitha‘Paradox

frame’,inwhichtheexecutiveshaveamorecomplexandambivalentattitudetowards

thetensionsinsustainability.Thisleadsthemtoconsidermorecomprehensive

responsestotensions,butatthesametimetheyaremoreawareoftherisksassociated

withthese(Hahnetal.2014).Thisisnotdissimilartothetwoworldviews(mechanic

andorganic)proposedbyIms&Jakobsen(2011).Thisconceptualisationhasbeen

influential(todate,theoriginalarticlebyHahnet.al.hasbeencited110times),buthas

notsofarbeentestedempirically.

Thedistinctionbetweenthesetwoframingsunderpinsafractureintheliterature:while

theanalyticalliteraturereviewedinsection2.5isframedintermsofabusinesscase,

thereisalsoabodyofworkwithitsrootsinthecorporatesocialresponsibilityliterature

thathasamuchdeeperfocusonethical,values-basedperspectives(Bansal&Song

2017),whichreflectsthecomplexitiessuggestedbyHahnetal’s‘Paradoxframe’.The

tensionbetweenthesetwoframescanbeusedproductively–forexampletomanage

21

biasingroupdecision-making(Mazutis&Eckardt2017;Hahn&Aragón-Correa2015)

andsoarriveatbettersolutions.However,itcanalsobeacauseofstressforindividuals

whentheircognitiveframeclasheswiththedominantframeintheirorganisation(Zollo

etal.2013).

Whilecognitiveframesareeffectiveatdirectingattention,theycanalsocreateblind

spots–importantissuesthatdecision-makersfailtoattendtobecausetheyfalloutside

thecognitiveframe.Thiscanbebecausetheissueis‘toolarge’–forexamplesystemic

problemssuchasclimatechange–or‘toosmall’tobeofinteresttothecorporation

(Bansaletal.2018).Failuretoattendtosustainabilitycanalsobecausedbycognitive

biases(Mazutis&Eckardt2017),andbyhabitsofmindandactionthatarecreatedby

‘organisationalscripts’(Gioia1992).Thesescriptsoffernotonlyacognitiveframing,

butanestablishedpatternofbehaviour(Gioia1992).Theyhavethebenefitofreducing

thecognitivecostofdecision-making,andmayenablenon-specialiststomakedecisions,

whichmeanstheyarehelpfulinsituationswheresustainabilityissuesarepervasivein

theorganisation.Thedisadvantageisthattheygiveconfidencewhereitmaynotbe

warranted(Gioia1992),andmayallowdecision-makerstoglossoverinconvenient

truths.

Theresultofthisisthatmanyorganisationaldecisionsare‘scripted’–thatistosaythey

followparticularcognitivepatternsandsequencesofbehaviourrangingfromthevery

sophisticated(‘whenwehaveabusinesscaseforaninvestmentgivingapositivenet

presentvalue,wereferittotheinvestmentcommitteeforapproval’)tothetrivial

(‘whenIleavetheofficeIswitchthelightsout’).Thesepatternsareoftenefficientand

reducethecognitiveloadfordecision-makers,buttheyarenotnecessarilywelladapted

tohandlingthecomplexityofthetensionsraisedbysustainability.These‘scripts’or

schemasareembeddedintheorganisation,sothisraisesthequestion:howdo

organisationalsystemsshapedecision-makingroutines?

22

2.7SustainabilityandorganisationThereisanextensivebodyofworkaboutorganisationalcontextandthewayit

influencescorporateapproachestosustainability.Scholarsrecognisethatthebroader

contextisimportantinshapingdecision-making(Shepherd&Rudd2014;Deanetal.

1991).Organisationsexertinfluence–eitherthroughformalprocesses,habitsand

routines–onthewayinwhichpeopleunderstanddecisionsevenbeforetheymake

them.Workonethicaldecision-makingidentifiesorganisationalcontextasadominant

forceindecision-making(Blome&Paulraj2013;Lietal.2018),overridingthe

individualpreferencesofmanagers(Chenetal.1997).AsLülfsandHahn(2014)write:

‘Thecreationofanorganizationalculturefosteringsustainabilityorientationseemsto

bemoreimportantthanformalexpressionsofcorporatesustainability(Howard-

Grenville,2006;Linnenluecke&Griffiths,2010;Tudoretal.,2008).’(Lülfs&Hahn,2014

p.52)How,then,isthisachieved?

Althoughmanyissuesareidentifiedintheliteratureasinfluencesindecision-making,

noneofthearticlesreviewedofferedacomprehensivemodelconnectingtheseconcepts

toshowtheorganisationalinfluencesondecision-makers.Instead,scholarshave

focusedonspecificissuessuchastheroleofsub-cultures(Howard-Grenville2006),the

creationoforganisationalclimate(Ardichvilietal.2009)ortheimpactofformal

systems(Ford&Richardson1994).Therewasaparticularlylargebodyofliterature

aboutthecharacteristicsofindividualleaders(Forexample:Aguinis&Glavas,2012;

Ardichvilietal.,2009;Blome&Paulraj,2013;Stubbs&Cocklin,2008),andageneral

tendencytoemphasisethe‘softsystems’,suchascultureandethicalclimate,ratherthan

themoreformalprocessesoftheorganisation,althoughthesedoappearinliterature

reviews(Ford&Richardson1994;Verbosetal.2007;Nawaz&Koç2018).AsSchrettle

etalwrite:‘Tothebestofourknowledge,thereisnodescriptivemodel,whichsupports

decision-makingoffirmsfacingasustainabilitychallengebylinkingallrelevant

dimensionsinatransparentway’(Schrettleetal.2014p.74).

Thisreadingoftheliteratureonorganisationgeneratedalistof107factorsthatcould

influencedecision-processes.ThesourcesforthesearelistedinAppendix1.These

107conceptsoperateatdifferentorganisationallevels:somedescribethebehaviourof

individuals(forexample:moralresponsibility);othersoperateatthelevelofthe

organisation,ororganisationalunit(forexample:culture);somedescribethe

23

relationshipbetweentheinternalandexternalaspectsofthefirm(forexample:theory

ofthefirm).Ithereforeorganisedthemintoabroadconceptualframeworkdrawingon

thefourcontextsidentifiedbyDean,SharfmanandFordintheirreviewoftheliterature

onstrategicdecision-making(Deanetal.1991p.89).Deanetaldidnotelaborateon

themoredetailedaspectsofthesecontexts(forexample,thespecificorganisational

elementsinfluencingdecisions).Ithereforeadaptedtheiroriginalframeworkandused

thisasabasisformappingthefactorsidentifiedinthesustainabilityliterature.Imade

twoalterationstothismapping:first,Deanetalputthedecisionprocessandproblemat

twodifferentorganisationallevels(onthegroundsthattheprocessisaninteraction

betweenthedecision-makerandtheproblem).Whilethismaybethecaseforstrategic

decisions,theuseoforganisationalscriptsforsomesustainability-relateddecisions

meansthattheprocessismorecloselyrelatedtotheproblemthantothedecision-

maker.Ihavethereforegroupedthedecisionproblemandprocessinthesamelayer.

ThesecondchangethatIproposeinthisframeworkisthatIhavechangedDeanetal’s

‘team’to‘decision-maker’,assomesustainability-relateddecisionsaremadeby

individualsratherthangroups.Thismappingisthusadevelopmentoftheiroriginal

proposedframeworkandisshowninFigure1.

24

Figure1:Contextualfactorsinfluencingtheinclusionofsustainabilityindecision-making

Thissynopticmodelshowsthattherearemanypossibleinfluencesondecision-makers.

Manyofthemunderpintheorganisationallogicthatshapesbehaviourandcognition

(Besharov&Smith2014).However,thereisnoindicationoftherelativesignificanceof

these,northerelationshipsbetweenthesefactorstoshowhowbusinessesmightshape

theirorganisationstobettermanagethechallengesofactingsustainably.Iwilldevelop

thisideafurtherinChapter4.

2.8Problematisingtheliterature

ThemappingoftheliteratureinTable2showsthatthereisnotacoherentliterature

abouthowcompaniesincorporatesocialandenvironmentalconsiderationsintotheir

decision-making.Itisclearthatthereisnotsomuchagapintheliteratureasaseries

ofproblemstobesolved(Alvesson&Sandberg2011).Thesewillinformtheresearch

question.

Thefirstproblemintheliteratureisanapparentdisconnectbetweenthecomplex,

systemicproblemofincorporatingsocialandenvironmentalcriteriaintodecision-

Environment

Decisionproper/es

Decisionprocess

Organisa/on

Decision-maker

Environment/BusinessCharacteris3cs•  TheoryoftheFirm •  Ownershipstructure/Shareholders•  BoardaAen/on/governance•  Compe//veintensity/

Compe//veness •  Regulatoryenvironment•  Geopoli/calenvironment•  Size •  History/pathdependency•  Munificence•  Materialityofsustainability •  Purpose,MissionandVision•  Customerandmarketdemand•  NGOinterest•  Corporategoals•  Corporateiden/ty

Organisa3on•  Accountability•  Accoun/ngpolicies,sustainability

reportsandtriple-boAomline•  Problem-solvingapproach•  AOtudesandbeliefs•  Cultureandclimate•  Codesofconduct,corporatepolicyand

rules•  Complexity•  Communica/on•  Controlsystem•  Co-opera/onandcollabora/on•  Conflict-resolu/on•  Corporateaffairs•  Culture•  Organisa/ondesignandstructure•  Empowerment•  Environmentalmanagementsystem•  Ethicalclimate,cultureandnorms•  Heroesandrolemodels•  Historicalantecedents•  HRprocesses•  Incen/vesandrewards•  Inclusionandindependence•  InfluenceofexternalgroupsOrganisa3on•  Instrumentalism Opera/ngprocedures•  Jobdesign Organisa/onalepistemology•  Knowledgemanagement Rou/nesandscripts•  Language Peergroups•  Leadership Performancemanagement•  Organisa/onallearning Managerialinterpreta/onsofCSR•  Leadership Processes•  Long-termperspec/ve Removalofemo/onalcontent•  Myths Rituals•  Normsandvalues Stories•  Stakeholderrela/ons Socialisa/on•  Sub-cultures Sustainabilitymindset•  Tradi/ons CommitmenttoCSR•  Trainingandcapabili/es

DecisionMakers•  Abilitytoseekassistance•  AOtudesandbeliefs•  Timeperspec/ve•  Decisionrights•  Desires•  Iden/fica/onwiththeorganisa/on•  FocusofaAen/onandpriori/es•  Habits•  Informa/on•  Inten/on,commitmentandvalues•  Independence/isola/on•  Moralcodeandmaturity•  Perceivedlevelofcontrol•  Seniority•  Skill,capabili/esandtraining•  Socialapproval•  Stressandworkload•  Careerorienta/on

Decisioncharacteris3cs•  Decisioncriteria•  Dynamicsofprocess•  Par/cipa/oninprocess•  Complexity•  Ambiguity•  Inter-temporality•  Varietyofstakeholders

25

making(Pirson&Turnbull2018)andthetypeofsolutionsproposed.Manyarticles

describesingleapproachestoamulti-facetedproblem(seeTable3,above),andthe

fragmentationoftheliteraturehaslimitedtheoreticaldevelopment(Shepherd&Rudd

2014).Whatisneededisthereforeamoreintegrativeapproachtothetopictomake

connectionsbetweentheanalytical,cognitiveandorganisationalliteratures.

Thenaturalstartingpointfortheseconnectionswouldbearesearchquestionstemming

fromtheorganisationalliterature.Theattentionbasedviewofthefirmsuggeststhat

theorganisationshapesandinfluenceswaysofseeinginformationandthinkingaboutit

(Ocasio1997).Ithereforetaketheorganisationalliteratureasmystartingpoint.I

interprettheorganisationbroadlytoencompassarangeofformal,behaviouraland

socialfactorsthatshapetheorganisationallogic,theinformationandthecognitive

processofthedecision-maker.

Thesecondproblemintheliteratureisatrade-offbetweentheoreticalcomplexityand

empiricism.Thearticlesdescribingthecomplex,paradoxicalnatureofsustainability

(forexample:Hahnetal.2015;Hahnetal.2017)tendtobeconceptual.Bycontrast,the

empiricalarticlesinthiscollectiontendedtofocusonnarrowerissues–forexample

casestudiesshowingtheuseofanalyticalmethods,orsurveybasedstudiesofethical

leadership.Theempiricalsettingsareveryvaried.However,giventhattheindustries

thatmostneedtodecarbonise(Rogeljetal.2018p138-148)areoftendominatedby

incumbents,thereisvalueinfocusingonlarge,establishedbusinessesasanempirical

setting.

Thethirdproblemisrelatedtothefirst.Becausedecision-makingbehaviourin

organisationsarisesfromabroadsystem,itisdifficulttoidentifythepointsof

interventionwheredecisionscanbechangedorimproved.Researchtodatehas

identifiedarangeofapproaches,rangingfromimprovinginformation(Chofrehetal.

2014)toinfluencingleadership(Epsteinetal.2010),buttheseneedtobesetinthe

broadercontextofthesystemthatshapesdecision-making.

Byusingtheseproblemsasastartingpoint,Ihavedefinedtworesearchquestionsto

addressinthisthesis.

26

2.9TheResearchQuestions

Q1:Howdotheformal,behaviouralandsocialstructuresofanorganisationinteract

toinfluencetheinclusionofsustainabilitycriteriaindecision-makinginincumbent

businesses?

Q2:Whatarethepointsofinterventiontoinfluencethesesystems?

27

3:METHOD

3.1 Introduction

Havingconcludedthelastchapterwithtworesearchquestions,thischapterdescribes

themethodsusedtoanswerthese.Thechapterisorganisedinfourmainsections.The

firstintroducesthefundamentalbeliefs–theresearchphilosophyandprinciples–

underlyingtheresearchapproach.Thesecondintroducestheoverallarchitectureof

theprojectandthechoiceofqualitativemixedmethodsused.Thethirdcommentson

theanalyticalmethodsusedtoderiveinsightfromthedata.Finally,thereisashort

commentaryonthelimitationsofthesemethodsandthemitigationstrategiesadopted

intheresearch.

3.2Researchapproach

3.2.1 ResearchphilosophyManyfieldshaveestablishedontologicalandepistemologicalconventions.However,as

IestablishedinChapter2,thefieldsofdecision-makingandsustainabilityare

fragmented,andthereareavarietyofperspectives.SchadandBansal(2018)suggest

thattheinconsistencyforsustainabilitywritersarisesbecauseweareworkingatthe

interfacebetweenthematerial(suchasemissionsorphysicalresources)andthe

sociallyconstructed.Thereisthereforearealchoiceforscholarsinthisfieldboth

ontologicallyandepistemologically.

TheresearchphilosophyIhaveadoptedisrootedinthenatureoftheproblem

examined.Inthisstudy,Ihavetakenaconstructionistontologicalapproach.Thisis

becausebasedonthereviewoftheliterature,therearetwoforcesshapingdecision-

makinginorganisations:aformalortechnicalapproach(forexampleinthesystematic

analysisofproblems);andanapproachrootedinsocialinteractionsandbehavioural

models(forexamplethepersonalstancetakenbyleaders).HerbertSimonin

‘AdministrativeBehaviour’(Simon1997p.119)pointedoutthatpeoplelimitthe

amountofinformationtheytakeintoaccountindecision-making.Theirthinkingis

constrainedbycircumstance.Tounderstandthenatureoftheseconstraints,Iseekto

28

understandthewayinwhichtheyareinterpretedbythedecision-makers.Myviewthat

aconstructionistapproachisbettersuitedtounderstandingthisproblembecauseofthe

significantroleofpersonalconstructsinthephenomenonobserved.

Justasdecision-makerslimittheinformationtheytakeintoaccount,researchersalso

operatefromapositionofincompleteknowledgeandboundedrationality(Mantere&

Ketokivi2013).Theepistemologicalapproachisthereforeinterpretivist.Again,this

choiceisrootedinthesubjectoftheresearch.ThedecisionsIaminterestedincreatea

problemofdatacollection:muchoftheheavyworkofdecision-makinghappensinside

people’sheadsastheyevaluatetheinformationandoptionsavailable.Myviewisthat

thiscanonlybeunderstoodphenomenologically:‘inordertograspthemeaningsofa

person’sbehaviour,thephenomenologistattemptstoseethingsfromthatperson’s

pointofview’(Taylor&Bogdan,1975p.14).

Thisphilosophicalapproachmeansthattheresearchisgroundedintheexperiencesof

theinformants.Thishasinfluencedaseriesofchoicesabouttheprinciples,architecture

andmethodsusedtoaddresstheresearchquestion.

3.2.2ResearchprinciplesAkeyprinciplethathasinformedtheresearchdesignisaneedtoinvolvedecision-

makersasactiveparticipantsintheprocess.Thisisfortworeasons.First,one

observationfromthereviewoftheliteratureinChapter2isthatmuchoftheworkon

thewaythatdecision-makersresolvethetensionsbroughtaboutbytryingtoact

sustainablyisconceptualinnature.Therehasbeenrelativelylittleworkthatactually

engagesthedecision-makersthemselves,andIseektoaddressthisgapinour

understanding.Second,theproblemofincorporatingsocialandenvironmentalthinking

intocorporatedecision-makingisarealone:oneaimofthisresearchisthereforeto

generatepracticalinsightsfordecision-makers.

Toachievethis,thestudyfollowsan‘engagedscholarship’approach(VandeVen2007),

andindeedthisprincipleinformedotherdesignchoices,suchastheuseofqualitative

mixedmethodsandanabductiveapproachtoreasoning,inwhichItogglebetween

empiricaldatafrommyinformantsandtheory(Alvesson&Kärrenman2007).The

intentionwastounderstandthenatureofaspecificproblem(thefirstwordsofmytwo

29

researchquestionsare‘how’and‘what’)thathasnotbeenwelldescribedfromthepoint

ofviewofthoseexperiencingit,andtoexplorethisfrommultipleperspectives.InVan

deVen’sterms,thisis‘informedbasicresearch’inwhichtheacademicresearcheris

clearlypositioned‘asanoutsider’(VandeVen,2007p.271)butconsultsstakeholdersat

eachstepoftheresearchprocess.Thisprocessofconsultationwasbuiltintothe

researchdesign.

Acorollaryofengagingcloselywithhumansubjectsistheneedtoworktohigh

standardsofconfidentialityinboththedatamanagementandthereporting.Datathat

couldidentifyindividualsorcompanies(suchasjobtitlesfortheindividualsorthe

numberofstaff,orsizeofturnoverforthecompanies)hasbeenwithheldthroughout

thisthesis.Ifiledadatamanagementplanatthebeginningoftheprogrammeinwhich

Icommittedtoseparatingthedataaboutrespondentsfromthedatatheysupplied.All

participantswereinvitedtoparticipateandhadtheoptiontorefuse.Theygave

informedconsentforanyrecordings(oneparticipantwithheldconsent,butgave

permissionformetotakenotesduringtheinterview).

3.3Researchmethods

3.3.1Researcharchitecture

Justastheresearchphilosophyandprincipleswerechosentoreflectthecharacteristics

oftheresearchquestionandthecurrentknowledgeinthefield,theresearch

architecturewasdevelopedtorespondtothreespecificcharacteristicsofcurrent

knowledge.First,theknowledgeissomewhatfragmented,andsoitwasimportantto

takeabroadapproachtoidentifyingthefactorsthatcouldinfluencedecision-making.

Second,someofthemostinfluentialworkinthefieldwasdevelopedconceptually,and

sohadnotbeentestedbypractitioners.Thisapproachthereforecombinedaseriesof

qualitativeinvestigationstofirst,generatetheoriesfromthebroadexperienceof

decision-makersworkingtoincludesustainabilityintheirchoices,thentestthese

theoriesinasinglecase,andfinallyexploretheirgeneralizabilitythroughdiscussions

withpractitioners.Thisledtothedevelopmentofaseriesofinterconnectedstudies

describedinTable4,below.

30

Table4:Objectivesandapproachforeachresearchstep

Stage Objective OutputResearchclarification

Understandthecurrentstateofknowledgeandidentifytheresearchquestions

LiteraturereviewdescribedinChapter2.

Study1 Understandthecurrentexperienceofdecision-makersanddeveloptheoreticalmodelsofdecision-makingandorganisation

Analysesofthetypesofdecisions,logicsusedandfactorsinfluencingdecision-makingdescribedinChapter4.

Study2 Testandextendthedevelopingtheoryandexploretheinteractionsbetweenmodelsinacasestudy

ApplicationoftheanalysisinChapter4,anddevelopmentofamodelshowinghowdecision-makingchangedovertimeinanorganisation,describedinChapter5.

Study3 Testtheemergingfindingswithpractitioners,followingtheengagedscholarshipapproach.

TestingandextensionoftheideasdevelopedinStudies1and2,describedinChapter6.

Iselecteddifferentresearchmethodsforeachofthesestudies..

3.3.2ChoiceofqualitativemixedmethodsGiventhenatureofthegapintheliteraturedescribedinChapter2,Idecidedtotakean

abductiveapproachtotheorybuilding.AsAlvesson&Kärrenman(2007)observe,

researchersoftencombinedeductive,inductiveandabductiveapproachesinthecourse

oftheirthinking,andthisworkisnoexception.However,thefocusonanabductive

approachinthisstudyisfortwomainreasons.First,astheliteratureisfragmented,it

wasnotpossibletotakeadeductiveapproach,buildingacoherentsetofhypothesesfor

testingdeductively.However,therearesometheoreticalframeworksthatcaninform

thiswork–particularlyfromthefieldofparadoxtheory.BlessingandChakrabarti

(2009)emphasiseaparallelprocessofexploringtheliteratureandempiricaldata,

whichcreatestheconditionsforanabductiveapproach(Alvesson&Kärrenman2007).

Abductionalsoenablestheresearchertofocusonsolvingaproblem,ratherthantesting

ahypothesis(Bryman&Bell2015)whichiscongruentwithmyresearchobjectives.

Becausetheworkisexploratory,Ihaveusedacombinationofqualitativemethods

(Edmondson&McManus2007),usingdifferentmethodsfordatacollectionandanalysis

ineachofthethreestudies.

31

ForStudy1,Iconducted17interviews,usingcriticalincidenttechnique.Critical

incidenttechniquehassomedistinctstrengthsasamethodforunderstandingthe

featuresofaphenomenon.Theapproachenables‘theconsciousreflectionsofthe

incumbent,theirframeofreference,feelings,attitudesandperspectiveonmatters

whichareofcriticalimportancetothem’(Chell,1998p.68).Thistendstoproducedata

attwolevels:descriptionsofthespecificincident(inthiscasedecisions);and

reflectionsonthebroadercontextforthisincident,allowingtheresearchertomake

connectionsbetweentheincidentandbroadercontext(Chell,1998p.55).Itisnotan

uncomfortableorexcessivelytime-consumingprocessforinterviewees.Ratherthan

focusingonpsychologicalconstructs,dataiscollectedthroughdebriefingparticular

incidents(inthiscase,decisions)andallowingtheintervieweetoreflectonthese.As

theunitofanalysisistheincident,ratherthantheinterviewee(Flanagan1954),thisis

anefficientdata-collectionmethodasitispossibletoexamineseveralincidentsinone

interview,anditenablesthegenerationofinsightbothatthespecificcaselevelandas

comparisonsbetweencases(Chell1998p.55).Thesefactorscombinedtomakethisa

suitablemethodforaninitialstudytoexaminethewayinwhichorganisationsresolve

thetensionsofsustainabilityconsiderationindecisions.

Iconducted17interviewswithexecutivesbetweenDecember2016andJune2017,at

whichpointtheresearchbegantoreachtheoreticalsaturation(Glaser&Strauss1968

p.61).Thecriteriaforinclusioninthesamplewerethatintervieweesshouldbe

experiencedseniormanagers,workingintheprivatesector,thattheyshouldhave

exposuretosustainabilityissues,andthattheyshouldbefromindustrieswhere

sustainabilityisamaterialconsideration.Becauseintervieweeswerereflectingon

decisionsthattheyhadmadeatanytimeintheircareers,someintervieweesgave

examplesofdecisionsfrommorethanonecompany.Thefulllistofintervieweesis

showninTable5.

32

Table5:Listofinterviewees

Interviewee Jobtitle Industry/ies1 DirectorofCapitalInvestment Beverages2 DirectorofProcurement Retail3 CEO Apparel

4 DirectorofPolicyWater,energyandconstruction

5 GlobalHeadofSustainability Engineering6 SustainabilityDirector RealEstate7 DirectorofEngineering Engineering8 DirectorofCorporateAffairs Travel&tourism9 HeadofSustainability Aerospace

10 MarketingDirectorTelecommsandenergy

11DirectorofProjectInvestment,laterDirectorofSustainability

Banking(twoseparatebanks)

12 VPofStrategy Energy13 HeadofSustainability Apparel14 HeadofInnovation Flooring15 DirectorofManufacturing Flooring16 DirectorofSustainability Construction17 StrategyDirector FMCG.

Thismeansthatalthoughtherewere17interviewees,therewere20companies

representedinthesample.Theindustriesrepresentedwere:apparel,banking,

beverages,consultingengineering,energy,flooring,FMCG,realestate,retail,telecoms

andtourism,andthecompanieshadarangeofdifferentownershipstructures.This

varietywasimportant:Iwasexplicitlylookingforpatternsthatcouldbegeneralizable,

andabroadsamplewouldbemorehelpfulinidentifyingthecommonfeaturesofthe

problem,ratherthanissuesthatmightbespecifictoaparticularorganisation,orevena

particularexecutive.

Duringtheinterviews(whichtypicallylastedaboutonehour),theintervieweeswere

askedtodescribesituationswhentheyhadbeeninvolvedinmakingdecisionsthathad

beencomplicatedbytheneedtoconsidersocialorenvironmentalsustainability.This

meansthattheyonlydescribedsituationsinwhichtheyfeltthetensiontobesalient,

andsothesampledoesnotincludedecisionsinwhichsustainabilityissuesmighthave

beenpresentbutunnoticed(Schad&Bansal,2018).Theintervieweesdescribedand

reflectedon45differentdecisions:12ofthemdescribedmultipledecisions,andfive

33

describedonedecisionindetail.ThefulllistofdecisionsisdescribedinAppendix2.

Thus,thedatacovered45decisions,17executivesand20companies.Theinterviews

wererecordedandtranscribed,andtheanalysisconductedusingAtlasTisoftware.

OnelimitationofStudy1isthatthetheoriesgeneratedfromtheanalysiswerebasedon

experiencesinarangeofdifferentsettings.FortheStudy2,Idevelopedasingle

companycasestudythatallowedmetoexplorethewayinwhichtheseemergingideas

interactinasinglecompany.Thecompany,whichisdescribedmorefullyinChapter5,

hadamulti-yearhistoryofworkingtowardssustainabilityinanindustrialcontextthat

ischaracterisedbytension:thedesignandconstructionofinfrastructure.Thecase

studyisbasedonfourmaindatasources(Yin1984).ThesearesummarisedinTable6:

Table6:SourcesandusesofdatainthePrescriptiveStudy

Source Typeofdata UseinthecasestudyCompanydocuments

5years’ofannualreports.Twoyears’ofpress-cuttings,12reportswrittenbyConsultCoonsustainabilityOver6,000tweets

Evidenceaboutthecompany’ssustainabilitycommitments,performanceandcontext.

Consultancyreport

37pagereportproducedin2017evaluatingtheConsultCo’schangemanagementprocessforsustainability

Evidenceaboutthechangemanagementprocessandtimeline

Interviews 12interviewswithpeopleinlinemanagementrolesatConsultCo(conductedbetweenMarchandJuly2018)

Evidenceaboutthetimelineandimpactsofthechangemanagement,andtheexperiencesofmanagingparadox

Clientevents Participantobservationintwoday-longclienteducationevents(in2015and2016)

Evidenceabouttheengagementofclientsandseniormanagers

Theintervieweeswereselectedusingasamplingframetoensurethatwegathered

pointsofviewfromeachofthemajorgeographicregionsandeachofthemajorbusiness

unitswhereConsultCooperates.Halfoftheintervieweeswereseniormanagers

typicallyservingin‘double-hatting’roleswheretheyhadresponsibilityfora

combinationofclientwork,businessdevelopmentandknowledgeleadership.Theother

sixintervieweeswereprojectmanagers,responsiblefortheday-to-daymanagementof

34

engineeringprojects.Theinterviewstypicallylasted1hour,andwererecordedand

transcribedforanalysis.

Study3wasagainaresponsetoapossiblelimitationofthepreviousstudy,inthatit

allowedmetotestthegeneralizabilityoftheemergingfindings.Italsoallowedmeto

followtheprinciplesof‘engagedscholarship’(VandeVen2007)byregularlydiscussing

therelevanceofboththeresearchquestionsandtheemergingfindingswithagroupof

practitioners.Thestudyconsistedofaseriesofthree2-hourworkshopsforsenior

executiveswhowereinterestedinsustainability.Theworkshopswereconvenedin

November2017(8participants),June2018(5participants)andOctober2018(5

participants).Becausetherewassomecontinuityintheparticipants,atotalof12

executiveswereinvolvedinthesemeetings.Theparticipantswererecruitedfrom

differentsectors,andwereorganisedsothattherewerenevertwoparticipantsfrom

competingcompaniesinthesamemeeting.Theparticipantswereamixtureof

sustainabilityprofessionals(eg.HeadofSustainability)andexecutivesinrelatedroles

(eg.CEO,DirectorofStrategy).TheoverallprogrammeofworkshopsisshowninTable

7:

Table7:TopicsandparticipantsforStudy3

Date Discussiontopics ParticipantsNovember2017

Overviewoftheprojectandobjectives.FindingsfromStudy1:Waystoresolvetension

Roles:CEO,DirectorofTechnology,DirectorofStrategy,HeadofPolicy,DirectorofSustainability,DirectorofProcurementIndustries:Retail,Furniture,FMCG,Utilities,Telecom,Beverages,Energy,Food

June2018 FindingsfromStudy1:ArchetypesofdecisionsApproachestochange

Roles:DirectorofCompliance,CEO,GovernanceAdvisor,DirectorofSustainability,PolicyAdvisorIndustries:Energy,Utilities,Transport,Engineering,Pharmaceuticals

October2018

FindingsfromStudy2:OrganisationalsystemsThedynamicsofchange

Roles:DirectorofSustainability,CEO,PolicyAdvisor,DirectorofTechnology,Industries:Telecoms,Utilities,Food,Retail,Energy

35

Theworkshopsallfollowedthesameformat:apresentationlastingapproximately40

minutesintroducingthecurrentfindingsandtopicsfordiscussion,followedbyagroup

discussiontypicallylasting80minutes.

Eachmeetingwasrununderthe‘ChathamHouse’rule,themeetingswererecordedand

ashortsummarywassenttotheparticipantsfortheirreview.

Inadditiontothisformalprocessfordatacollection,Iarrangedregulardiscussionswith

executiveswhowereunabletoparticipateintheworkshops(eitherbecausetheywere

notUKbasedorbecauseofpriorcommitments),whichallowedmetomaintaintheir

involvementinthe‘engagedscholarship’process.

Intotal,thedatainformingmyworkcomprises29formalinterviews(eitherusing

criticalincidenttechniqueoraspartofacasestudy),abroadcollectionofdocuments

supportingthecaseanalysis,andsixhoursofrecordedworkshops.Theoverall

architectureshowingthesequenceofdatacollectionandanalysisisshowninFigure2,

below:

Figure2:Overallstudydesign

Research

clarifica,o

nStud

y1

Stud

y2

Stud

y3

Literaturereview

Literaturereview

Literaturereview

Workshop3

Workshop2

Workshop1

Design Datacollec,on

Repor,ng/valida,on

Design Datacollec,on

Repor,ng/valida,on

Analysis

Analysis

36

Foreachofthestudies,Iadoptedtheprinciplesofparticipantcross-checking

(Butterfieldetal.2005)bywritingareportofmyfindingsandcirculatingittothe

participantstoinvitetheirfeedback.

3.4AnalyticalapproachBecauseoneofthemainobjectivesofthisresearchwastodevelopanunderstandingof

theexperiencesofexecutiveswhowereincludingsocialandenvironmental

considerationsintheirdecision-making,muchoftheanalysiswasbasedonthe

fundamentalprinciplesofgroundedtheory(Glaser&Strauss1968).However,thiswas

appliedindifferentwaystothethreestudies,giventheirdifferentobjectives.Inall

cases,analysisstartedwhilethedata-collectionwasstillinprogress.

TheanalyticalprocessconsistedofthestepsshowninFigure3.Giventhatcritical

incidenttechniqueprovidesdataattwodifferentlevels(informationabouttheincident

itselfandreflectionsonthecontext)(Chell1998p.55),Istartedtwoseparateanalytical

processes,firsttocaptureinformationaboutthedecisions,andsecondtocapture

informationabouttheirorganisationalcontexts.Figure3:Processfordataanalysis–Study1

DatafromStudy1

Completedatastructure

(Appendix3)

Conceptsfromorganisa<onalliterature

(Sec<on2.7)

Proper<esofdecisionsthemselves Reflec<onsoncontext

Whydecisionsweredifficult

(Sec<on4.2)

Logicformakingdecisions

(Sec<on4.3)

Codesanddatastructure

(Figures4-7)

37

Thefirstprocessisdescribedindetailinsection4.2.1and4.3.1.Ianalysedthe

descriptionsofeachofthe45decisionsdescribedintheinterviews(andlistedin

Appendix2)andidentified,first,thecharacteristicsthattheintervieweesaidmadethe

decisiondifficult,andsecond,thelogicalapproachthatthedecision-makerstookto

resolvingthecompetingcommitmentsinherentinthedecision.

Thesecondanalysiswasthecreationofaframeworkdescribingthecontextinfluencing

decision-making(showninFigure1).Todothis,Itookfoursteps.Thefirsttwosteps

werebothintendedtogeneratecodes,andranbroadlyinparallel.First,Iidentifiedthe

differentorganisationalconceptsintheliterature(thisisshowninSection2.7),takinga

groundedapproachtoidentifyingconcepts.Inparallel,Icodedmyinterviewdatausing

opencodingandthenaxialcoding(Strauss&Corbin2008).Second,Iorganisedthese

codesintoadatastructure(Gioiaetal.2013).Interestingly,theemergingstructure

mappedwellontoDeanetal’s(1991)modeloffournestedcontextsinformingdecisions.

ThesestructuresareshowninFigures4to7.Figure4showsthedatastructure

outermostlayeroftheframework(theexternalandinternalcontext),Figure5shows

thedatastructurefortheformalelementsoftheorganisationalcontext.Figure6shows

thedatastructureforthesocialelementsoftheorganisationalcontext,andFigure7

showsthedatastructurefortheindividual‘layer’ofthecontextframework.

38

Figure4:Datastructurefortheouterlayerofthecontextframework

Figure5:Datastructurefortheformalelementsoftheorganisationalcontext

1stOrderConcepts 2stOrderThemes AggregateDimensions

•  Regulatorytension;geopoli<calconcerns•  Materialityofenvironmental/socialimpacts•  Marginsandcomplexityofbusiness•  Compe<<veintensity

•  Needsoflocalcommunity•  Marketdemand;demandfromspecificcustomers•  Shareholderinfluence•  InfluenceofNGOs

•  Influenceoversuppliers,customers,employees•  Investorrela<ons•  Conveningpower

•  Opera<onsstrategy•  Strategicopportuni<es•  Mergersandacquisi<ons

Industrycharacteris<cs

Externalstakeholders

Influenceandpower

Company-specificissues

Externalcontext

Internalcontext•  Sustainabilityambi<on,strategyandplan•  Useofscience-basedtargets•  Star<ngsustainability

Sustainabilitystrategy

•  Vision Strategicdirec<on•  Purpose Companypriori<es

•  Theoryofthefirm Ownershipstructure•  Boardgovernance Businessmodel

Mentalmodelsofthefirm

Companydirec<on

1stOrderConcepts 2stOrderThemes AggregateDimensions

•  Organisa7onofsustainabilityfunc7on•  Interfaceswithothergroups(eg.Finance)•  Degreeofcentralisa7onofsustainability

•  Proceduresandorganisa7onalrou7nes•  Processesformanagingdissentorconflict•  Companypolicies(forsustainabilityordecision-making)

•  Financialincen7ves•  Recogni7onorrewardforsustainabilityexper7seand/or

behaviour

•  Companycontrolsystems•  Individualperformancemanagement

•  Conflictbetweendifferentobjec7ves•  Perverseincen7ves.

•  Howmuchco-ordina7onistherebetweengroups•  Approachtoteamworkandcross-cuNnggroups•  Formalandinformalcommunica7onschannels

Locusofsustainability

Linkages

Processes,policiesandstandards

Incen7ves

Conflic7ngpriori7es

Control

Organisa7ondesign

Performancemanagement

•  Keyperformanceindicators•  Individualorcollec7vetargets•  Alignmentofobjec7veswithstrategy

Targets

•  Complexityoforganisa7onandbusinessmodel•  Levelofcentralisa7onordegreeoffragmenta7on•  Governancestructures

•  Conflictbetweenorganisa7onalsilos•  Credibilityofthesustainabilityfunc7on•  Differen7altreatmentofriskoropportunity

Structuraltension

Organisa7onalstructure

•  Roles•  Employeevalueproposi7on•  Careerpaths

Jobdescrip7ons

39

Figure6:Datastructureforthesocialelementsoftheorganisationalcontext

Figure7:Datastructurefortheindividuallayerofthecontextframework

1stOrderConcepts 2stOrderThemes AggregateDimensions

•  Percep8onsofsocialresponsibilityandobliga8ons

•  Commitmenttoscience

•  Values,ethicsandtradi8onsofphilanthropy

•  Socialconcernsandimpacts

•  Mo8va8on

•  Levelofautonomyandindependence

•  Hierarchicaldistance

•  LeadersseEnganexample

•  Leadersgivingamandateorconferringauthority

•  Whoaretherolemodels

•  Howpeoplearepromoted

•  Whatisintraininganddevelopmentprogrammes

•  Leadershipambi8on(forselfororganisa8on)

•  Sourcesofstatusorrecogni8on

•  Rolemodels

•  Storiesandmyths

Values

Signalsand

precedents

Self-determina8on

Leadersasenablers

Power

Leadership

development

Culture

Leadership

•  Leaders’percep8onsofsustainability

•  Leadersmaking‘actsoffaith’

•  Leaders’individualinterests

Leaders’beliefs

•  Specialistculturesorminoritygroupsorganisedaround

exper8se

•  Approachtowardsinclusioninteamworking

•  Degreesoftrust

•  Importanceofconsensus

Inclusiveness

Specialismand

minoritycultures

1stOrderConcepts 2stOrderThemes AggregateDimensions

•  Basinga8tudeonopinionorfact

•  ‘Irra=onalconcerns’aboutsustainabilityinbusiness

•  Sustainabilityisa:cost/risk/opportunity/moral

obliga=onPercep=ons

Ra=onality

Knowledge

Permissionspace

A8tudes

•  Sphereofinfluence

•  Credibilityoftheteam

•  Cultureofautonomyorindependence

•  Levelofdecentralisa=onInferredauthority

Informalauthority

•  Roledescrip=ons

•  MandateFormalauthority

•  Crea=ngaframeworkforthinking

•  Showingmanagerswhatishappening

•  Crea=ngtransparent,understandabledata

•  Providingtraining

Building

understanding

Organisa=onal

epistemology

•  Informalsharingofinforma=on

•  Buildingaknowledgemanagementsystem

•  Codifyingexperience(eg.Tools,casestudies)

•  Lifecycleanalysis

•  Mul=-criteriadecisionanalysisBeUeranalysis

Organisa=onal

learning

•  Se8ngmeasurementstandards

•  Providingaccuratedata

•  Providing‘complete’data(eg.LCA)

BeUerdata

40

Havingidentifiedtheconcepts,themesanddimensionsfromboththeliteratureandthe

interviews,Icombinedthemtoformacompletecodestructure.ThisisinAppendix3.

Finally,Iorganisedtheseintoaframeworktoexploretheemergingrelationships

betweenfactors.

ThisframeworkformedthebasisofthecodingforStudy2,describedinChapter5.

However,therewereafewconstructsthatwerespecifictoConsultCo’soperating

context(forexample:riskmanagement;post-mergerintegration),andIcreated

additionalcodesfortheseinordertoensurethatIwasgroundingtheanalysisinthe

data,andnotsimplyforcingthedataintoapreconceivedstructure(Strauss&Corbin

2008p.113).BecausetheworkshopsinStudy3wereresponsestomaterialthathad

alreadybeenanalysed,Ididnottranscribeorcodethese.Rather,Ipreparedashort

reportofeachdiscussion,andusedthistoconfirmmyunderstandingofthedebatewith

theparticipants.ThesefindingsarediscussedinChapter6.

Iengagedtheparticipantsactivelyintheanalysis,sharingreportsofthefindingswith

theintervieweesateachstageoftheprocess,andprovidingtheopportunitytogive

feedbackiftheydidnotagreewiththeanalysis.

3.5Limitationsofthemethod

Therearenaturallysomelimitationstothesemethods,andthreeinparticularmerit

attention:thechoiceofpeopleandcompaniesinvolvedintheresearch;thetruthfulness

ofinterviewees;andthereliabilityoftheanalyticalmethods.Iwillbrieflyoutlinethe

problemsthesepresent,andthemethodsbywhichImitigatedthesedifficulties.

Thecompaniesandparticipantsinthisstudywerenotchosenatrandom.Ideliberately

workedwithcompaniesthatareawareofthesocialandenvironmentalissuestheyface,

andhavestartedtotakestepstoaddressthesedirectlyinthewaytheydobusiness.

Theemphasisinthisresearchisonincumbentbusinesses,astheyhaveasubstantial

socialandenvironmentalimpact,andneedtochangesignificantlyinordertoaddress

this.Theparticipantsinthefirstofthethreestudieswerelargelyrecruitedfrommy

ownprofessionalnetworkormembersofsustainability-relatedprofessionalgroups.

41

Thispurposiveapproachtosamplingmeantthatlarge,internationalcompanieswitha

strongpresenceinWesternEuropeareover-representedinthestudy:theinterviewees

andworkshopgroupmembersalmostallworkedforcompanieslikethis,andthecase

studycompanywasalsoaninternationalorganisationwithastrongUKpresence.There

arealsoarelativelyhighnumberofformerconsultantsinthesample(fiveoutofthe

seventeeninthefirststudy).Thisbiaspersistedintheparticipantsintheworkshop

groups,whowererecruitedinthesameway(anddidincludesomeinterviewees).This

biasdoessuggestthatthefindingsaremorelikelytoapplytolarge,European

companies,butdoesnotexcludethepossibilitythattheymaybehelpfultosmaller

organisations,orotherinternationalcontexts.

Interviewscanbepoliticaloccasions(Alvesson&Kärrenman2007)inwhichthe

interviewee(orinterviewer)seekstoimpresstheirownversionofeventsintothe

writtenrecord.Groupsalsohavethepotentialtobecomepoliticalasgroupmembers

maycompetewitheachotherforattentionandfor‘shareofvoice’.Thismeansthatthe

researcherneedstounderstandandcheckboththecontentandtheundercurrentofthe

wordsspoken–to‘listenforthesongbeneaththewords’(Heifetz&Linsky,2002p.55).

Tomanagethis,Itookaseriesofsteps.

First,inallthreestudies,Iworkedtoestablisharapportwiththeintervieweesand

ensuredthattheyunderstoodhowIwouldbeusingtheirinformationconfidentially.

Theinterviewmethodusedforthefirststudy–criticalincidenttechnique–hasa

distinctadvantageinthatitdirectstheintervieweetofocusveryspecificallyon

describinganincidentthatisimportanttothem.Theseveryconcreteeventsbecome

thestartingpointforreflection.Thismeansthatalthoughthedataareinterpretations,

theyarerootedinaspecificanddescribablecontext.Theintervieweeswerespeaking

ontheirownbehalfabouttheirownexperience,ratherthantryingtorepresenta

particularposition.Thisreducesthe‘political’contentoftheseinterviews,andmeant

thatalthoughtheintervieweesmayhavebeenmakingsenseoftheirexperience

retrospectively,theywerediscussingthisauthentically.

Thepoliticalstancewasahigherriskinthecase-studyinterviews,whichinvolvedjunior

andseniormanagersfromasinglecompany,someofwhommayhavewishedtomakea

particularimpressionaboutthebusiness’sworkinsustainability.Tomanagethis,I

42

startedeachinterviewwithaquestionthatlargelybuiltonthecriticalincident

approach,invitingtheintervieweetoshareaveryspecificexperienceaboutdecision-

making,andthenworkedfromthattostarttotesttheemergingtheoriesaboutthe

organisation.Iwasabletotriangulatesomeofthedatabetweendifferentsources(for

example,combininginterviewdatawiththecompany’sexternalreports)togathera

holisticviewofthecompany.

Whiletheproblemofmanagingpoliticalpositioningwithinonecompanycanbe

managedthroughtriangulation,theproblemofmanagingadiscussionbetweenseveral

executivesneedsadifferentapproach.Forthethirdstudy,Iinvitedexecutiveswhodid

nothaveexistingworkingrelationshipsatthestartoftheprogrammetoparticipatein

workshops.Theriskinthiscasewasthatparticipantswouldtrytopresenttheirown

companiesorexperiencesinaparticularlyfavourablelight,orwouldsimplynot

contributeproductivelytothediscussion.Tomanagethis,Itookthreesteps:first,Iwas

veryclearaboutthe‘rulesofengagement’intheworkshops,includingtheapproachto

confidentialityandtherecruitmentofpeoplefromnon-competingbusinesses;second,I

designedtheworkshopsothatweopenedthemeetingwithapresentationandquite

uncontroversialdiscussiontoallowparticipantstogetusedtothesetting;third,Iwas

accompaniedbyasecondresearcher,whohelpedensurethatthediscussionincluded

everyone.Overtime,theparticipantsintheworkshopstartedtogettoknoweach

other,andbecameincreasinglycomfortableintheirdiscussions.Thisledtoamuch

moreopenanddirectsharingofviews.

Aswellastheproblemsofcollectingdatainawaythatwouldprovideareliablesetof

evidence,qualitativeresearchcancreateproblemsofinterpretationandanalysis.The

mainstrategyforvalidatingthefindingswasparticipantcross-checking,whichwasused

inallthreeofthestudies.Additionallyforsomeanalyses,Iconvenedgroupsofother

researcherstodiscussandcheckmycodingofevidence.Giventheabductiveapproach,

Ihaveplacedlessemphasisonresearcherinvariancethanonreflexivityandcredibility

intheinterpretationofthedata(Mantere&Ketokivi2013),testedthroughsharingthe

findingswithinterviewees,workshopgroupmembersandfellowacademics.

43

Despitethenaturallimitationsofthemethods,myviewisthatthefindingsfromthis

studycanformabasisforfurtherresearchandpractice,andthisisdiscussedfurtherin

Chapter7.

44

4:STUDY1

4.1IntroductionTheobjectiveStudy1wastoaddressthefirstresearchquestion:howdotheformal,

behaviouralandsocialstructuresofanorganisationinteracttoinfluencetheinclusionof

sustainabilitycriteriaindecision-makinginincumbentbusinesses?Todothis,I

conductedinterviewswith17executivesusingcriticalincidenttechnique,usingthe

methodsdescribedinChapter3.Thischapterdescribesthemainfindingsfromthat

study,introducingideasthatIlatertestinChapters5and6.

Thechapterisinfourlongsections,followedbyaconcludingdiscussion.These

sectionsmapontothefour‘layers’ofcontextshowninFigure8.

Figure8:Fourcontextsfordecision-making

Inthismodel,derivedfromworkbyDean,SharfmanandFord(1991p.89)and

elaboratedinSection2.7,thedecisionsareattheheartofasystemcomprisingthebroad

externalcontext,theorganisationalcontext,andthecontextofindividualdecision-

makers.Deanetal(1991)donotdistinguishbetweentheproperties,or

Environment

Decisionproper/es

Decisionprocess

Organisa/on

Decision-maker

45

characteristics,ofthedecisionandtheprocessbywhichitismade.However,thereview

oftheliteraturesuggeststhatsustainability-relateddecisionsdohaveparticular

characteristicsthatmakethemdifficult:inSection4.2Ireviewtheseandcommenton

theirimplicationsforprocess.Processandpropertiesarethereforeseparatedinthis

model.Eachsectionofthischapterdiscussesoneofthe‘layers’oftheframeworkand

beginswithabriefcommentonthekeyfindingsfromtheliteraturereviewinorderto

situatethefindingsfromtheinterviewsincontext.

First,Section4.2introducesthedecisionsthemselves.Onefeatureofcriticalincident

techniqueisthattheunitofanalysisistheincident,ratherthantheinterview.By

analysingthe45decisionsdescribedbytheinterviewees,Iidentifythefactorsthatmake

thesedecisionsdifficultandsuggestanovelclassificationofdecisions.

Second,oneofthemainchallengesofintroducingsustainabilitycriteriatodecision-

makingistheintroductionoftensionbetweencompetingcommitments(thisis

describedinChapter2).InSection4.3,byexaminingthedifferentapproachesthat

executivestaketomanagingthesetensionsatthedecisionlevel,Ishowhowthe

competingcommitmentsthatariseattheindividuallevelarenestedwithinabroader

contextand‘zoomout’toexaminethetensionbetweentheexternalenvironmentand

thefirm.

Therelationshipbetweenthishighleveltension(betweenthefirmandthe

environment)andthetensionsattheindividuallevelisinfluencedbyfactorsatthelevel

oftheorganisation,andattheleveloftheindividualdecision-maker.Theseare

reviewedinSections4.4and4.5respectively.

Section4.6presentsasynthesisofthesefindings,andoffersamodeltoshowtheway

organisationalsystemsshapedecision-making.Thissectionsummarisestheideasthat

aretestedandextendedthroughthePrescriptiveStudyinChapter5.

4.2Whydosustainabilityconsiderationsmakedecisionsdifficult?Theliteraturedescribesfourwaysinwhichincludingsocialandenvironmental

considerationsindecision-makingcanaddcomplexity(seeSection2.4,above).These

46

were:managingthedemandsofstakeholders(Smith&Lewis2011);managinginter-

temporality(Bansal&Desjardine2014);managingcomplexity(Pirson&Turnbull

2018);andmanagingambiguity(Rittel&Webber1973).However,therearetwoclear

gapsinourunderstandingofhowdecisionsaredifficult.First,thesecriteriahavebeen

proposedbydifferentauthors,largelywritingfromaconceptualbasis.Wedonotknow

howtheyinteract,orhowdecision-makersexperiencethesechallenges.Isthereonly

onetypeofsustainability-relateddecision,orarethereseveral?Second,thesecriteria

focusoncharacteristicsofthedecisionitselfratherthanthewaysinwhichthecontext

mightmakethedecisionproblematic.Theydonottakeaccountofthedecision-makers

andthefactorsthatmightinfluencethem,whicharediscussedinSections4.3to4.5.

Theinquirystartedbyexaminingthenatureofthedecisions,andwhytheseare

problematicinordertoleadtoabetterunderstandingofhowtheformal,behavioural

andsocialstructuresoftheorganisationcanhelpsupport(orstandinthewayof)

includingsustainabilityindecision-making.

4.2.1AnalyticalapproachIntheinterviewprotocol,Ispecificallyaskedabout‘decisionsthathadbeenmade

difficultbecauseoftheneedtoincludesocialorenvironmentalconsiderations’,butdid

notexplicitlysuggestanyofthetensionsthathavebeenidentifiedintheliterature.The

intervieweesthenidentifieddecisionsthatweresalientforthem.Thedecisionswereon

arangeoftopics,includingbusinessdecisions(suchaschoicesaboutstrategyorcapital

expenditure),questionsofinnovationorresourceefficiency(suchaschoicesof

technology)andoperationalquestions.Thedecisionswereall‘paradoxesof

performing’(Smith&Lewis2011),thatistosay,theywerecharacterisedbyhavingto

meetmultipleobjectivessimultaneously.

Becausetheliteraturedidnotofferacomprehensivesetofcharacteristicsofthese

sustainability-relateddecisions,Idecidedtotakeagroundedapproachtothisanalysis

andthereforedidnotapproachitwithasetofexistingconstructstotest.These

emergedfrommycodingoftheinterviews.Inmyinitialanalysis,Iusedopencoding

thatidentifiedsixspecificattributesthatmadedecisionsdifficult:inter-temporality;

stakeholders;ambiguity;uncertainty;irrevocability;andcentrality.

47

Table8:Intervieweesreflectionsoncharacteristicsofsustainability-relateddecisions

Attribute ExamplequotationInter-temporality ‘Ithinksustainability’sgreatforeconomicsbutit’sovera

muchlongersustainedperiod,andIthinkoneofthedifficultieswas…thesystemwasquarterlyresultsandevenannualresultswhereassustainablebenefitsareoveramuchwiderlengthoftime.’

Stakeholders ‘Itisalsoalwaysasortofnegotiationthingsoyouhavetonegotiatewithseveralcounter-parties,authorities,regulators,owners’‘

Ambiguity ‘Itisabouttakingatop-down…viewononehandandmappingoutthesecomplexitiesandfirstofallmakingittransparentwhatthetrade-offsandoptimisationchoicesare.Andthentryingtosimplyfindthebestpossiblealternative,orvariousalternatives.’

Uncertainty ‘Youcangetitincrediblywrong.Youhavesomebeliefs…butnoneofthesearecalibratedwithanythingsoyou’retakingamassiveguess.’

Irrevocability ‘Thefirstthingthatwereallychangedisthatsustainabilityisdiscussedreallyearlyon.Soit’snot“ohyes,let’sgetthewholethingplannedout,architectsengaged,everythingdesigned”andthenmuch,muchlater,whataboutthatsustainabilitytarget.Sowe’rethererightatthestart,andmoreseniorpeoplearethererightatthestart.’

Centrality ‘It’simportanttodothehygienestuff,but[sustainability’s]gottobepartofthebusiness.’

Thefirsttwoofthesefactorshavetheirrootsinthedefinitionsofsustainability.First,

almostallofthedecisionshadsomeproblemofinter-temporality.Inter-temporalityis

well-describedasaproblemintheliterature(Slawinski&Bansal2015;Bansal&

Desjardine2014).Whilethiswasintrinsicinmanyofthedecisions,itwasfeltmost

acutelyincasesinvolvingcapitalallocation,particularlywhenmakingabusinesscase

forlong-termprojectsthatwereassessedonarelativelyshortpaybackperiod.Second,

severaldecisionswerecharacterisedbyhavingmultiplestakeholders,sometimes

includingalargeordiversegroupofstakeholders,oftenwithdifferingviewsonthe

‘right’answertoaquestion.Thepresenceofmultiplestakeholderstendstocreate

tensionsforanorganisation(Smithetal.2013),andHafferandSearcy(2016)identify

tensionbetweenstakeholdersasoneofthemainareasfortrade-offsincorporate

sustainability.Alargebodyofliteratureisdevotedtoorganisationalresponsesto

stakeholderdemands(Yuanetal.2011),andindeedstakeholdermanagementisoftena

significantresponsibilityforseniorsustainabilityprofessionals(Strand2014).

48

Thesetwofactorshavesecondordereffectsthatcreatedtwofurtherdifficultiesforthe

executives.First,theinter-temporalorinter-stakeholderproblemsmeantthatsome

decisionswereambiguousordifficulttoframe,orhaduncleargoals.Second,inmany

casesthedecisionwasunprecedentedandinformationwasunavailable,sothedecision-

makerswereworkingfromapositionofhighuncertainty.Bothofthesefactorsledtoa

lackofclarityforthedecision-makers,andthisinturncreatedsomestressesinthe

organisation.Asoneintervieweesaid:

“Youcanreallyfeelthatthediscomfortpeoplehavebecausealthoughit’sdatadriven

it’snotthedatapeoplehave…Peoplearetryingtofigureoutwhat’srightandwhat’s

involved.”

Thefinaltwocharacteristicsthatmadethedecisionsdifficultwereintrinsictothe

decisionsthemselves.First,someofthedecisionsdemandedattentionbecausethey

wereirrevocableorhadsystemicsecond-orderconsequencesthatmadethemdifficult

toreverse–effectivelythisincreasedtheircomplexity.Forexample,somedecisions

aboutproductsmaychangeanentiresupplychain,orinvolvetheconfigurationof

capitalassets.Second,manyofthedecisionswerecentraltothebusiness.Ifoundthat

therewasadifferencebetweenthewaycompaniestreated‘hygiene’decisions(suchasa

choicetorecycleofficepaperoruseLEDlighting)versusdecisionsthatrelatedtothe

coreofthebusiness(suchaschoicesabouttheportfolioofassets).Theissuesthatwere

centraltothebusinesstendedtohavemoresignificantsecond-ordereffectsandwere

thereforemorecomplex.

Afteridentifyingthesesixconceptsfromtheinterviewdata,Icreatedasetofindicators

toassesstheextenttowhicheachfactorwaspresentinthedecisions.

ThekeyindicatorsusedtoanalysethesefactorsarelistedinTable9:

49

Table9:Factorsmakingdecisionsmoredifficult

Factor Keyindicators ScaleforassessmentInter-temporality Rangeofdifferenttime-

horizonsimpliedbythedecision

Low(nosignificantinter-temporality)Medium(someinter-temporality,butnotconsideredsignificant)High(significantinter-temporality)

Stakeholders Numberofdifferentstakeholdersinvolved

Manystakeholders–Fewstakeholders

Centrality Degreeofimportanceofthedecisiontothewayinwhichthecompanycreatesvalue.

Core(decisionispartofthevaluecreationsystem)Hygiene(decisionisperipheraltovaluecreationsystem)

Uncertainty Difficultyofpredictingtheoutcomeofthedecision–thismaybebecausetheproblemisnovel,orbecauseoftheabsenceofdata.

High(theproblemisnovelorunquantifiable)Low(thistypeofproblemisfamiliarordataiseasilyavailable)

Ambiguity Levelofclarityintheproblemdefinition.

High(problemisnotclearlydefined)Low(problemisclearlydefined)

Irrevocability Difficultyofreversingthedecision(becauseofsecond-ordereffects)

High(thedecisionhassystemiceffectsthatcannotbereversed)Medium(thedecisionhassecond-ordereffectsthatwouldbeexpensiveordifficulttoreverse)Low(thedecisionisrelativelyeasytoreverse

Onelimitationofthisanalysisisthatthedata-gatheringapproachwasnotdesignedto

collectthisdatainastructuredway–rather,itwascodifiedinretrospect.Thismeans

thatthecalibrationofeachcategoryissomewhatcrude,andthereisclearlyan

opportunitytodeveloptheseconstructsfurther.Nevertheless,theinterviewsdid

includesufficientinformationtobeabletocategoriseeachofthe45decisionsinterms

ofthesecriteria.Thefindingsarethereforesufficientlyrobusttosuggestatheoretical

frameworkforfurthertesting.

Thesefactorsarenotnecessarilyindependent(forexample,ambiguityanduncertainty

arerelated:ifthetermsofreferenceforadecisionareunclear,thenthecertaintyofthe

50

outcomeislikelytobelower).Mostofthesefactorsdirectlyrelatetotheneedforsocial

andenvironmentalsustainability(forexampleirrevocabilityisrelatedtointer-temporal

tensions,ambiguityandcomplexityarerelatedtohavingmultiplestakeholders),andall

ofthedecisionshadsomecombinationofthesecharacteristicsdirectlydrivenbythe

tensionsarisingfromtheneedtoactsustainably.

4.2.2FourarchetypesofdecisionsIassessedeachdecisionusingthecriteriainTable9(above).Over80%ofthe45

decisionshada‘high’(orequivalent)ratinginthreeormoreofthecriteria.Therewere

somerepeatedcombinationsoffactorsmeaningthatalmostallofthedecisionsfellinto

oneoffourbroadcategories–orarchetypes–ofdecisions.Thearchetypeseachhave

particularcharacteristicsrequiringdifferentapproaches,andIgavethemnamesbased

onthese.ThearchetypesareshowninTable10.Thefourdecisionsthatdidnotfall

immediatelyintothesearchetypesweredecisionsaboutimplementingasustainability

plan(forexample:choicesabouttarget-settingforsustainability).

Table10:Fourarchetypesofdecisions

OperationalD

ecisionsEngineeringefficiency

Messysituations

Wickedproblem

s

StakeholdersMaybebroadgroupsof

stakeholders–oftenincludingcustom

ers

Generallyrelativelyfew

stakeholders(occasionallym

ore)

Many,variedstakeholders–som

etimesinconflict

Inter-tem

porality

Inter-temporalityis

relativelylessimportant,

butmaybepresent

Decisionm

ethods(eg.Payback,N

PV)m

aynotbealignedtoinvestm

entlife-cycle

Timehorizonsare

differentfordifferentstakeholders

Severalchallengesofinter-tem

porality(forexample,

differentstakeholdersanddifferentdecision-m

ethods)

Centralitytothebusiness

Thedecisionm

aybecentral,orm

aybeahygieneissue

Thedecisionism

aterialtothebusiness

UncertaintyThedecisionisnotgenerallyuncertain.

Thedecisionisrelativelyuncertainandm

ayneednew

information.

Thereisahighdegreeofuncertainty,andinform

ationmaybeunavailable.

Problem

ambiguity

Theproblem

isfairlywelldefined

Theproblem

isfairlywell

defined,butmaybe

perceiveddifferentlybystakeholders

Problem

definitionisunclearoram

biguous

Decision

Irrevocability

Thedecisionm

aybehardtoreverse

Thedecisionhaseffectsforthebroadersystem

,socannotbereversed

51

52

Thearchetypaldecisionshaddifferentcharacteristics,typicallyoccurringinparticular

partsoftheorganisation,andrequiringdifferentinformational,cognitiveand

organisationalcapabilitiestomakethedecisions.Someofthesecharacteristicswere

describedintheliterature,buthadnotbeenattributedtoaparticulardecisiontype.

OperationalDecisionsThe‘OperationalDecisions’inthesamplewerefrequentdecisionsthatweregenerally

coretothebusiness.Typically,theseweredecisionsmadebygeneralistmanagersas

partoftheirdailywork,withoutreferencetospecialistexpertise.Theyincludedchoices

aboutpackagingmaterials,logistics(forexample,useofair-freight),orissuesarisingin

thesupplychain(forexamplewheretoplaceaparticularorder,orwhethertoservea

particularcustomer).Oftenthesedecisionsweremaderapidly,underpressureand

using‘routine’processesandheuristics:theexecutives’establishedhabitsofmindwere

veryimportantinmakingthesechoices.

Thereweretwomainproblemsthatexecutivesfacedindealingwiththesesituations.

First,inseveralcases,thedecisionsweremadedifficultbecauseofwherethekeyissues

drivingcomplexityweretheirorganisationalissues,suchasconflictingincentiveswithin

theorganisationoraneedtoreorganisedecision-makingprocesses(thisisdiscussedin

Section4.2.3below).Second,insomecases,the‘rulesofthumb’,orheuristicsbeing

usedwerenotbasedontherightinformation.Oneintervieweepointedtosituations

wherepeoplehadfallenbackonhabitswithoutre-analysingthesituationandhad

thereforemademistakes:

“Iturnedto[mycolleague]andIsaid:“You’veneverdoneitthiswaybefore,have

you?”andhesaid“no”…soevenpeoplewhodothisalldaylonghaven’taskedthe

question.Sotheideathatsustainabilityissomesortofknownsecretthateveryone

knowstheanswerto,andonlyneedstobeabletoaffordisnottrue.Peopledon’t

knowwhat’sbest.”

Thesehabitsofmindareshapedtoalargeextentbytheorganisationalcultureand

formalstructures(suchasincentivesanddecision-rights),andaredifficulttochange

(Gioia1992).Thereiscompetitionforexecutives’attention(Ocasio2011),andthisis

shapedanddirectedbytheorganisation(Simon1997;Felinetal.2017).Sections4.4

and4.5discussthefactorsinfluencingthisprocess.

53

EngineeringEfficiencySeveralofthedecisionsaroseinanengineeringcontext–ofteninquestionsaboutlarge

capitalinvestmentsorachoiceoftechnology.Theengineeringefficiencyproblemswere

generallywell-defined,unambiguousproblems,withareasonabledegreeofalignment

amongststakeholders,andwhichwereirrevocableandcentraltothebusiness.

Examplesincludedchoicesofmanufacturingtechnology,orthemanagementoflarge

capitalprogrammes.Manyoftheseexamplesweresituationswheretheissueatstake

wasoneofresourceefficiencyandbusinessesfoundthattheycouldimproveeconomic

andenvironmentaloutcomesbyimprovingenergyormaterialuse.Inmanyofthese

cases,thedecisionwasmadeaspartofarecurringprocess(forexamplecapital

budgeting)usingstandardisedinformationandanalysistomakeabusinesscase

(typicallyusinganetpresentvalueorpaybackperiodcalculation).

Thesedecisionsarecharacterisedbythreeinterconnectedproblems.First,theymay

requirethedecision-makerstoseetheopportunityandusesomecreativityinthe

option-generationstageinordertoidentifyresource-savingsolutions.Oneinterviewee

commented:

“Whatwefoundbeforeisthatanawfullotofstuffjustdidn’tgetthoughtabout

becausethewrongpeopleweremakingthedecisions,wellnotthewrongpeople,but

peoplewhodidn’tknow.”

Second,toidentifyandassessresource-savings,companiesoftenrequirenewformsof

data–forexampleaboutenergyuse–whichmaynotbeavailable.Onemanager

describedtheprocessheledtodevelopaninformationsystemtoimproveanalysisofa

capitalinvestmentprogrammeforaglobalmanufacturingnetwork:

“Weknewthatwehadtodebunkthesecommonmyths,andwehadtodothescience

sowegoteverysinglepieceofdatathatwecouldfromthevolumeofthesitetothe

typeofproducttothetypeofpackaging,totheageofthesite,tothefueltype–

everythingyoucouldget.Andthenwedidther-squaredanalysistoseewhatthe

driversofperformancewere.”

Thiscompanybuiltaveryeffectiveknowledgemanagementsystemtoimprovethe

qualityoftheirengineeringplanningandachieveaggressiveresourceefficiencytargets.

54

Third,theseareoftenlong-termprojectsinwhichtheevaluationprocessprivilegesthe

short-termimpacts(Bansal&Desjardine2014),andsoifaresourceisrelativelylow

cost(forexample,water)ortheimpactisinthelonger-termfuture(forexample

reducedcostsofdecommissioning),itmaybedifficulttomakeabusinesscase.Asone

intervieweesaid:

“Forenergy,itisalwayseasytomakethebusinesscase…butforotherenvironmental

elements,thecaseisnevergoingtoaddup.Weneverhaveabusinesscasefora

waterimprovementproject,butwedoitanywaybecauseit’stherightthingtodo.”

Inothercompanies,theexpenditureprocesswasmorestringent,andopportunitiesto

makeimprovementstoenvironmentalperformancewerepostponedbecausethe

paybacktimewastoolong.Companieswithlargenumbersof‘engineeringefficiency’

decisionstendedtomanagethemusingestablishedprocessesforgatheringand

managinginformation,andevaluatingbusinesscasesconsistently.Thismeansthatto

fullyincorporatesocialandenvironmentalconsiderationsintodecision-making,some

companiesneedtochallengestandardinvestmentevaluationtechniques(suchas

paybackperiodsornetpresentvalue)(Slawinski&Bansal2015).

Messysituations

Thesedecisionswereaboutfairlywelldefinedproblems,butweredifficultbecauseof

themisalignmentofstakeholderneeds,sometimescombinedwithconstraintsonthe

situation(forexample,littletimetomakeadecision,lackofinformationtoassessthe

issuesproperly,difficulttechnicalproblems).Thesedemandscouldbesubstantial:

“Thesearegoodpeopleworkinghard,buttheyareundersomuchpressuretodeliver

againstplandevelopment,planningapplication,pensionfundinvestors,

shareholders,regulationcomplianceandsoon,thattheideathattheycouldstand

aboveallthisandthink‘what’sthereallybigpicturehere?’…it’sbeyondthe

capability…oftheteam.”

Often,theorganisationwasfacinga‘one-off’situation,anddidnothavewell-established

proceduresformakingthedecision.Examplesincludedabanktryingtoevaluatethe

environmentalriskofasubstantialinfrastructureproject;anexecutivedeciding

whethertotakeacustomerorderforapieceofworkwhichmighthaveseriousnegative

socialandenvironmentalconsequences;andthedesignofacomplexinfrastructure

project.Theseweresituationsthatdidnothaveestablishedorganisationalroutines,or

55

establishedinformationsystems,andsothereneededtoberealleadershipinengaging

internalandexternalstakeholders,andestablishingprocessesforescalatinghigh-risk

issues.Asoneintervieweesaid:

“Itisalwaysasortofnegotiation.Youhavetonegotiatewithseveralcounter-parties

–authorities,regulators,owners–onseveralfrontsatthesametime.”

Thus,theexecutivesworkingonthesedecisionstypicallyneededtohavestrong

stakeholderengagementskills,andinparticularneededtobeabletoshapetheway

differentpartiessawthedecision.Thepresenceofmultiplestakeholderscancreate

demandsfornewinformation(Epstein&Widener2011)andaneedforthecreationof

sense-makingnarratives(Angus-Leppan,Benn,etal.2010;Tuckett&Nikolic2017).

Wickedproblems

Allofthefactorsthatmakeitdifficulttoincludesustainabilityconsiderationsin

decision-makingwerepresentinthesedecisions.Theythereforerequiredverycareful

formulation,astheambiguityoftheproblemmeantthatthesolutionspacewas

potentiallylarge.Theseweretypicallystrategicordirection-settingproblems,and

weredemandingforthedecision-makers.Manyofthedecisionsinthiscategorywere

notsimpledilemmaswithtwooutcomestobebalanced,butpresentedmorecomplex

situationswithmultipledimensionstobeoptimised.Oneintervieweedescribedan

iterativeprocessformakingthistypeofdecision:

“Youneedtohaveyourminimumrequirementsclearsothatyouknowwhatisthe

ultimate,whatyoucanlivewithandbeyondwhatpointyoucannotgo,butitstill

leavessomeflexibilityandroomformanoeuvre.Soyoutrytogetthebestpossible

solution.Itisabout…mappingoutthesecomplexitiesandfirstofallmakingit

transparentwhatthetrade-offsandoptimisationchoicesare.Andthentryingto

simplyfindthebestpossiblealternative,orvariousalternatives.”

Examplesofdecisionsinthiscategoryincludeddecisionsaboutmanagingportfoliosof

assets(forexample,howtomanageanenergyproductionportfolio);thedevelopmentof

verysignificantnewinfrastructureprojectsinvolvinglargecommunities;and

fundamentalshiftsofcorporatestrategy.

56

Theseproblemshavethecharacteristicsof‘wickedproblems’(Rittel&Webber1973).

RittelandWeber(1973)intheirdelineationofthecharacteristicsofwickedproblems

pointtofourclustersofcharacteristicsthatthenshapetheapproachestomakingthese

decisions.First,theyarguethatthereisnodefinitiveformulationforawickedproblem,

andthusno‘stoppingrule’.Thismakesmanydata-drivenapproachesdifficult(Zapico

2014),astheytendneedbothapreciseformulationandastoppingpoint.Theanalytical

approachesthathavebeentraditionallysuggestedasdecision-supportmethodsare

insufficienttotacklethewickedproblemsofsustainability(Bakshi2011),andmore

interdisciplinaryapproachesareneeded.Second,theyarguethatsolutionsare

good/bad,ratherthantrue/false,meaningthatwedependonjudgementratherthan

analysistoevaluatesolutions.Thishasledauthorstofocusonleadershipasthekeyto

crackingtheseproblems(Metcalf&Benn2013;Grint2008).Leadershaveaparticular

roleinaskingquestionstoadvancethisproblem-solving(Grint2005;Heifetz&Linsky

2002).Thisquestioningapproachraisestwofurtheractivitiesforleadersaddressing

wickedproblems:processesofiteration(Sheepetal.2017)andengagementwitha

broadersetofstakeholders(Roberts2000)toframeandre-frametheproblem

(Reinecke&Ansari2016).Itisclearthatthesedifferentconfigurationsofproblems

makedifferentdemandsonthedecision-makers.

4.2.3Demandsondecision-makingprocessIncludingsustainabilityconsiderationsinbusinessdecisionsaddscomplexityandgives

decisionsthatmighttypicallybecharacterisedas‘operational’or‘tactical’someofthe

characteristicsofstrategicdecisions.Leibleinetal(2018)arguethatstrategicdecisions

havethreeproperties:interdependenceacrosscontemporaneousdecisions,acrossthe

decisionsofothereconomicactors,andacrosstime.40%(18outof45)ofthedecisions

reportedintheinterviewshadallofthesecharacteristics,andalmostasmanyagain(16

outof45)hadtwooutofthesethreecharacteristics.Furthermoreinter-personaland

intra-organisationalissuesarealsocommoninstrategicdecisions.Different

perspectivesorframesareparticularlyimportantinmanagingstrategicuncertainty

(Kaplan2008).However,despitethiscomplexity,sustainability-relateddecisionsare

notalwayssupportedwiththesameresources–information,timeandseniorattention

–asstrategicdecisions.

57

InChapter2,Idescribedthreebroadstrandsofscholarshipintheliterature:the

analytical,thecognitiveandtheorganisational.Myanalysissuggeststhatthedifferent

decision-typeshaveparticularcharacteristicsthatmadethemmoreamenableto

particularanalytical,cognitiveororganisationalapproaches.Thedecisionsareheldat

differentpointsintheorganisation,rangingfromoperationalmanagers,designated

expertswithdeepexpertise,orthestrategicapex.Theyaremadeindifferenttime

frames,allowingdifferentlevelsofdeliberationoranalysis.Theyrequiredifferent

balancesofjudgementandinformation(Simon1997p.60).Thecharacteristicsofthe

decisionsandtheirdifferentcognitive,organisationalandanalyticaldemandsare

summarisedTable11:

Table11:Differentcharacteristicsanddecision-supportneedsofthefourdecisionarchetypes

Operationaldecisions

EngineeringefficiencyMessysituations

Wickedproblem

sWhythe

decisionisdifficult

Typically,thesedecisionshavem

anystakeholdersandarecentraltothebusiness.Theyareoftenirrevocableorhardtoreverse

Thesedecisionshaveproblem

sofinter-temporality,

arecentraltothebusinessandirrevocable

Thesedecisionshavemany

stakeholdersandsignificantissuesofinter-tem

porality.Theissueism

aterialtothebusinessanddecisionisirrevocable

Thedecisionsarehighlyam

biguouswithm

anystakeholders,problem

sofinter-tem

porality,andsecond-ordersystem

iceffects.

Organisation

-allocus

Throughouttheorganisation

Specialistdivision(usuallytechnical)

Canbeanygroupwith

impactonexternal

constituencies

Typicallyatthestrategicapex,oradesignatedspecialistgroup

Key

challengesGeneralistsneedtobeabletom

akegooddecisionsinshorttim

e-frames

Needtohavesufficientinform

ationtoevaluateoptionsovertim

e

Needtobeabletobalancethedem

andsofstakeholders

Thedecisionhashighlevelsofuncertaintyandcom

plexityInform

ation-alneeds

Needforeasilyaccessible,standardisedinform

ationorheuristics

Relevantsustainabilityandperform

ancemetrics(eg.

Emissions,energyuse).

Analyticalmethodseg.Life

cycleanalysis,AHPmaybe

used

Informationabouttheactual

impactsofthedecisionin

severaldifferentdim

ensions.Understandingofhow

thisimpacts

stakeholders.

Needinformationto

definetheboundaryconditionsoftheproblem

Cognitiveapproach

Organisationalschemasor

scripts‘Businesscase’approach

Needforcarefulframing

andnarrativestoengagedifferentaudiences

Needforiterationsoffram

ingandre-framing

ofparadoxesOrganisation

-alcapabilities

Asupportiveculturewith

appropriatesustainabilitytraining.Cleardecision-rightsandprocessestopre-em

ptpoordecisions

Effectiveprocessmanagem

entandgoodflow

sofinformation

Skilledengagementof

externalgroups,andanabilitytoleadcom

plexdecisionprocesses

Abilitytoengagewith

paradoxicalproblems,

includingusingjudgem

entandcreativity.

58

59

Thetypeofdecisionsthatareproblematicinanygivencompanywilldependonits

particularcircumstances.Forexample,aretailerwithalargenumberofmanagers

workinginthesupplychainmayfindthatitsmostmaterialimpactscomefrom

operationalproblems;amanufacturermaybefocusedonengineeringefficiencytorun

itsassets;anorganisationinvolvedindevelopinginfrastructuremaydealwithmany

messysituations;andapowergeneratorseekingtoexitfossilfuelsmayfacewicked

problems.Thesedifferencessuggestthatthereisnota‘onesizefitsall’approachto

solvingtheproblemsofincludingsustainabilityconsiderationsindecision-making,and

thattheapproachescompaniestakewillneedtobetailoredtotheissuesthataremost

materialintheirbusiness.Simplyadoptingbetterinformationoranalyticmethods–

helpfulthoughtheseare–doesnotaddressthefundamentalcapabilitiesneededto

bringsustainabilityconsiderationsintodecision-making.

Thisgoessomewaytoexplainingthediversityofapproachesintheliterature.Itisclear

fromtheliteraturereviewinChapter2thatthesolutionsproposedtodecision-making

forsustainabilitytendtoconcentrateonanalyticalandinformationalproblems.These

mightbesuitedeitherto‘engineeringefficiency’or‘messysituations’archetypes.The

methodsidentified–rangingfromlife-cycleanalysistovariousformsofmulti-criteria

decisionanalysis–canbeeffectiveformakingthistypeofdecision(thatistosay,one

withafairlyclearlydefinedproblemandonewherethetimetomakethedecisionis

longenoughtobeabletocompletetheanalysis).However,thesedecisionsareonlya

subsetofthecompleterangeofproblemscompaniesface.Whileitwasclearfromthe

interviewsthatinformationandanalysisareimportant,theyareonlypartofabroader

organisationalcapabilitythatincludesformalstructures(suchasperformance

managementordecisionrights),socialstructures(suchascultureandleadership),and

cognitiveabilities.Thisorganisationalcontextwillbedescribedinmoredepthin

Section4.4.

Theintervieweescommentedontheneedtoreviseprocessesmorethoroughlyinorder

toaccommodatesustainability.Oneintervieweewhosecompanywasintheprocessof

changingitssustainabilityapproachcommented:

60

“Whenyoucomeintothedecisionmakingprocess,it’salittlebitvaguenowinterms

ofthatprioritization…that’sprobablywhysustainabilitysometimesgetspushed

out”

Others,howeverdescribedamuchmorefundamentalreviewofthedecision-making

processes,particularlyfordecisionsmaderepeatedly(suchascapitalbudgeting).

Theintervieweesalsoobservedthatsomeone-offdecisions(suchasonescharacterised

as‘messyproblems’)nowrequiredamuchgreaterprocessofconsultation:

“[The]decisionhad,ultimatelytakenbyCEO,hadinputfromtherelevantpeopleand

therestoftheboard,andithadthesustainabilityteamdoingalotofwork,working

outexactlyhowbaditwas,presentingthatinitsfullglory,presentingthat,and

saying‘thisisexactlywhatyou’rebitingoff,andthisisexactlywhatyou’llgetback,

andthesearetheoptionsforthefuturetomakeitbetterorworse.Whatdoyou

wanttodo?’”

Anintervieweeinadifferentorganisationhadasimilarobservation:

“Everyonedoesgetincludedinthedecision-makingprocess,andeveryonehasa

voice.So,againthatcanmakeitquitedifficultbecauseeveryoneisveryconsidered,

andthere’sagreatcultureofinclusion.”

Theintervieweesdidtaketheviewthatprocessmatters.Oneofthem,incomparingtwo

difficultdecisionsthathadeachhadimplicationsforsocialorenvironmental

sustainability,reflected:

“Iwouldsaythefirstonewasactuallywrong,andthesecondonewasright.Iwould

saythatthefirstonewasnotmadeintherightway.Theactualdecisionitself,the

processwaswrong.Theoutcome,Ithinkwasalsowrong….Thesecondone,Ithink

wastherightdecision.AndIthink,whetherwedoitagain,Idon’tknowifeveryone

woulddoitagainbutIwould.Andthatprocesswasdefinitelyright.”

Thesealterationstoprocessalsoincludesomechangestodecision-makingcriteria.

Thesewereparticularlyclearinthedecisionsaboutinvestments,forwhichtherewere

veryspecificfinancialguidelines–usuallypaybackperiodsornetpresentvalue

calculations.Paybackwasusedinmanyofthe‘operational’decisions:

61

“Soaplantsitewouldnormallyonlyfundsomethingwitha[paybackperiod]oftwo

years.Andthat’squitetypical.Insomeplacesit’saslowasayear.”

“Wehavedonealotofthingswhichhavevery[quickpayback]whereitmightbeless

than2years,lessthan1year,lessthan6monthsdependingontheinvestmentthatis

required.But…peoplethinkthatnow,themanagementordirectorsorpeoplewho

makedecisionsonthefinancialside,arenowfindingithardtogiveproper[returns]

fortheinvestmentsthatarerequiredtobemaintainedforustobecomemore

sustainable.Sothatisthemainproblemthatwearefacingatthemoment.”

Thesechangesofcriteriapresentedcompanieswithtwonewproblems:first,aneedfor

newinformation(discussedabove),forexampletopricecarbonorwater;secondthe

questionofwhattodointhecaseofdecisionsthatwereimportantfromasustainability

pointofview(forexampletosavewater),butforwhichtherewasnotaclearbusiness

case.Companiestookdifferentapproachestothis:whileonespecificallymentioneda

designatedcapitalbudgetforthesesituations,anothercommented:

“Therewasnocapexslushfund,andtherewerenospecialarrangementswhereit

doesn’tbreakevenbutbecauseit’saSustainableDevelopmentprojectitcango.My

previousbosswasaveryhard-nosedguyandthisisnotaltruism.It’swhatthe

businessneeds.”

Othersdescribedsituationswheretheprocessofbuildingabusinesscasehadbeen

expandedtoaccommodatesustainabilitycriteria:

“Soawholepartofitwasthatwehavere-reviewedouracquisitionsprocessandhow

wethinkaboutsustainability.Sopreviouslythoseassetandportfolioandinvestment

teamswouldgooffandbuyanasset…butwe’venowredesignedtheprocessesand

[thesustainabilitymanager]isinvolvedvery,veryearly.”

Thesechangesarenottrivial:theyrequirenewprocessesforinformationmanagement,

consultationandstakeholderengagement.Companiesthatchoosetoactsustainably

needtomakeinter-linkedchangesattheleveloftheindividualdecision,theindividual,

andtheorganisation.

62

Thus,the‘active’decision-supportapproachesthathavebeensuggestedintheliterature

(Arvaietal.2012)addressonlyasubsetoftheproblemsdecision-makersface.Social

andpsychologicalapproaches–suchasculturalnorms,stakeholdermanagementand

cognitiveframing–alsoplayasignificantroleinresolvingthetensionsthesedecisions

create.Thefactorsmakingdecisionsdifficultariseinparticularconfigurationsin

organisations,creatingthefourarchetypesofdecisionsandplacingdifferentpressures

ondecision-makers.So,giventhatdecision-supportsystemsthatexistinorganisations

maynotbewellmatchedtothetypesofdecisionsthatexecutivesface,howdothey

managethisproblem?

4.3Competingcommitmentsandparadoxesinsustainability

Thetensionsrelatedtosustainabilityoccuratthemacroandmicrolevelsofthe

organisation(Haffar&Searcy2015).Thisisparticularlywellillustratedindecision-

making:eachdecisionpresentsspecifictensions,butthesearelocatedinan

organisationalcontextthatmaypresentalargersetofenduringtensions(Smith2014).

Tensionsrelatedtosustainabilityariseatthesystemlevel(Schad&Bansal,2018)when

therearemultiple,conflictingdemandsfromtheexternalenvironment,whetherfrom

customers,shareholders,regulatorsorotherstakeholders(Smith&Lewis2011).

Howevertheybecomesalientforexecutivesatamorespecificlevel(Schad&Bansal,

2018),forexamplewhentheyneedtomakechoicesbetweenconflictingdemands.In

thissection,Iwillexploretherelationshipbetweenthemacro-levelandmicro-level

tensionsinsustainabilitydecisions.Thisreferstotherelationshipbetweentheouter

layerinFigure8(theenvironment,whichincludesbothexternalandinternalelements)

andtheinnermostlayer(thedecisionitself).

AsIestablishedintheintroduction,theproblemsustainabilitycreatesforexecutives

makingdecisionsisthattheyareconstantlytryingtoreconcilecompetingobjectives.

Sixdifferentapproachestoresolvingthesetensionsinbusinessdecisionsaredescribed

intheliterature.Thevastbulkofresearchtodatehasfocusedonmakingabusiness

caseforsustainability(Margolis&Walsh2003;Gao&Bansal2013;VanDerByl&

Slawinski2015).Thesebusinesscasesareframedintwodifferentways:win/win

businesscasesandtrade-offs.Inthewin/winbusinesscases,decisionshavebeenmade

thatarepositivebothforthebusinessandforsocietyandtheenvironment–for

63

example,adoptingsolutionswhichmakemoreefficientuseofresources(andthusboth

savingmoneyandreducingmaterialimpacts).Inthetrade-offcases,decision-makers

havehadtochoosebetweentheeconomic,environmentalandsocialoutcomesofa

decision–ithasnotbeenpossibletofindanswerswhichallowallthreetobeoptimised.

Thesetwoapproachesshareanimportantcommonfeature,whichisthattheyareboth

instrumental–thatistosaytheyprioritiseeconomicoutcomesabovetheeconomicor

socialoutcomesofthedecision.

Thisinstrumentalapproach,however,neglectsthesystemicaspectsofsustainability

andmaycreatemoraldilemmasformanagers(Margolis&Walsh2003).Byprivileging

economicoutcomesoverenvironmentalandsocialoutcomes,managerswilltendto

focusontheshortterm(Gao&Bansal2013)andmaylosetheopportunitytocreate

valuethatissharedbetweenstakeholders(Porter&Kramer2011).GaoandBansal

(2013)thereforeproposeanalternative,integrativelogicfordecision-making,and

describefourdistinctcharacteristicsofthisapproach:first,decision-makerslook

simultaneouslyattheenvironmental,socialandeconomicaspects;second,they

accommodatemultipletime-frames,notsimplytheeconomictime-frame;third,their

spatialapproachencompassesmultiplestakeholders,ratherthanprivileging

shareholders;andfinally,integrativelogicsareinformedbyanethicsofcare,rather

thananethicsoffairness(Gao&Bansal2013).Thus,therearetwoinstrumental

approaches(trade-offsandwin-winbusinesscases),andoneintegrativeapproachto

decision-making.

Thisintegrativelogicisnottheonlyalternativethathasbeenproposedtothebusiness

caseapproach.Scholarshavealsodevelopedabodyofworkexploringtheproblemof

managingmultipleoutcomes–social,environmentalandeconomic–fromaparadox

theoryperspective.Thistheoryhasalreadybeenproposedinthecontextof

sustainability(Hahnetal.2015;VanDerByl&Slawinski2015),andhasfeatureswhich

makesitparticularlyrelevantfordecision-makinginthiscontext.Decision-makingis

oftendrivenbyconditionsofplurality,changeandscarcity–allpre-conditionsfor

organisationalparadox(Smith&Lewis2011).Paradoxtheoryhasalsobeenusefulin

examininginterrelatedproblems–producingconceptssuchasnestedparadoxes

(Andriopoulos&Lewis2009)andknotsoftension(Sheepetal.2017).

64

Paradoxtheorypresentsthreewaystomanagetension(Hahnetal.,2015;Poole&Van

deVen,1989):opposition,inwhichthetwocompetingdemandsarepolarised;

separation,inwhichtheyareseparatedeitherintimeorspace;andsynthesis,inwhicha

solutionisfoundtoresolvethecompetingdemandsbymanagingthemcreatively–for

examplebyre-framingtheproblem.Thisaddsthreenewstrategiestothetwo

instrumentalandoneintegrativeapproaches.Thus,theliteraturesuggeststhatthere

aresixarchetypalapproachestoresolvingthetensionsinherentinthesedecisions.

TheseareshowninTable12:

Table12:Sixtheoreticalapproachestomanagingtension

Approach Typeoflogic HowtensionismanagedOpposition Paradox Tensionmanagedbyaccentuatingthe

difference(e.g.,‘Businessversussociety’)Separation Paradox Tensionmanagedbyseparatingthrough

time/space/structure(e.g.,Twopoliciesoperatingindifferentlocations)

Trade-off Instrumentalism Tensionavoidedasonesustainabilityelementischosenoveranother(e.g.,Choosingtohaveaworseenvironmentalorsocialoutcomeinordertohaveabettereconomicoutcome)

Win-winbusinesscase

Instrumentalism Tensionavoidedthroughalignment/optimisationofsustainabilityelements(e.g.,Findingasustainablesolutionthatisalsolowercostforthebusinessorhighervalueforcustomers).

Integration Integration Tensionmanagedbyshiftingfocusfromeconomictosocialand/orenvironmental.(e.g.,Settingadesignprincipletoaddressallthreeissuesinparallel).

Synthesis Paradox Tensionmanagedbyaddressingabroaderissuethatconnectsthetwoelementsattension(e.g.,Reframingthequestion).

Clearly,someoftheseapproachesaremorelikelytoproducefavourablesocialand

environmentaloutcomes.Win-winbusinesscases,integrationandparadoxallpresent

thepossibilityofimprovingsustainability,whiletrade-offs,separationandopposition

implycompromiseatbest.Itwouldthereforebeusefultoknowmoreabouthow

executivesusethesedifferentapproaches,andunderwhatconditions.

65

4.3.1Analyticalapproach

Tounderstandthetypesoflogicdecision-makersuse,andthesituationsinwhichthey

usethis,Itookthreesteps.First,Ireviewedeachofthe45decisions,andidentified

fromtheinterviewsthetypeoflogicusedtomakethedecision:Ifoundthattherewere

linguisticmarkersassociatedwitheachtypeoflogic(forexample,peopledoactually

describe‘winwins’as‘winwins’,buttalkaboutintegrativedecisionsas‘values-based

judgements’).TheselinguisticmarkersareshowninTable13:

Table13:Howpeopletalkabouttheirlogicalapproach

Logicalapproach

Examplephrase

Opposition Notused:seeSection4.3.2belowSeparation ‘Weknowthatthereisnowayyet–andthat’stheoperativeword–

thereisnowayyettomakethisasustainableproduct.Thereissuchathingonthedrawingboard’

Trade-off ‘Sooneobjectiveisobviouslysustainabilityintermsofclimatechange,positiveorneutralinvestmentsandenergyproduction.Butthenoneotherissecurityofsupply.Andthesetwoarenotnecessarilygoinginthesamedirectionbecauseifyouhavewindandsolaryoudon’tnecessarilyhavesecurityofsupply.’

Win-winbusinesscase

‘Wetaskedthemtosay‘isthisachievable,howmuchisitgoingtocostthis,andhowarewegoingtodoit?’Andtheanswerswere:yes,itisachievable;it’snotgoingtocostyou,infactitwillsaveyou£400m;andyoualreadyknowhow’.

Integration ‘Soessentiallyrunningitisquitecostnegativereally.It’squiteahugestep.So,admirably,thecompanyaredoingtherightthing.’

Synthesis ‘It’sariskmanagementissueinthebigpicture.Butit’salsoastrategicissue.’

Iengagedagroupofcolleaguestotestthevalidityofthisanalysisbyreadingextractsof

theinterviewsdescribingthedecisions(notthelongerreflectivesections)andassigning

themtodifferentapproaches.Sixcolleaguesparticipatedinthisprocessandtheywere

unanimousintheirallocationofdecisionstologics.Thisthereforemeetsthegoalof

researcherneutrality(Mantere&Ketokivi2013;Eisenhardt&Graebner1989).

Second,Isetouttounderstandthefactorsthatinfluencedthechoiceofapproach.Todo

this,Ilookedatresponsesoftheindividualdecisionmakerstoseeiftherewere

particularpatternsofbehaviour(forexamplerelatedtoprofessionalbackground),and

thenlookedatthecharacteristicsofthedecisionathandandthebroaderorganisational

contextthattheydescribedintheirinterviews.

66

Thisanalysisgivesfourmainfindings,whichwillbereportedasfollows:first,theway

inwhichthesixapproacheswereusedoverall;second,thewayindividualdecision-

makersusedthem;third,thewaydifferentlogicalapproachesmightbeusedforthe

differenttypesofdecisionsdescribedinsection4.2;andfourth,theorganisational

contextfortheseapproaches.

4.3.2Howdoexecutivesmanagecompetingdemands?

AllthedecisionsIanalysedcouldbedescribedintermsofthesesixapproaches,andI

didnotinthecourseofanalysisuncoveraseventhapproach.Thedistributionofthe

approachesisshowninFigure9:

Figure9:Howfrequentlyaredifferentapproachesusedtomanagecompetingdemands?

Thereisclearlymoreuseofthetwo‘business-case’approachesthantheintegrativeor

paradoxicalapproachesinthissample.Onlyoneoftheapproaches–opposition–was

notusedinthedecisionsanalysed.Thisisinterestingbecausealthoughoppositionis

undoubtedlypartofthediscourseaboutsustainability(Margolis&Walsh2003),and

therehasbeenhistoricaloppositiontothenotionofcorporatesocialresponsibility,this

N=45

2

6

21

12

4

0

0 5 10 15 20 25

Synthesis

Integra6on

Win/Win

Trade-off

Separa6on

Opposi6on

67

simplydidnotariseintheinterviews.Peopledidnotidentify‘ideological’oppositionto

sustainability:failuretoadequatelyconsidersocialorenvironmentalissueswas

attributedinsteadtoignoranceortoprocessfailures.Thismaybeanoutcomeofthe

interviewprotocol(whichencouragedpeopletoconsiderdecisionsinvolving

sustainability),andsoIhaveretainedthislogicinthemodelasitmaybeusedinsome

circumstancesorinsomecompaniesthatfelloutsidethesamplingframe.

Itispossiblethatthe‘win-win’businesscasesareover-representedinthedata,first

becausetheyarememorable;andsecondbecauseitispossiblethatsomemore

integrativedecisionsaredescribedas‘win-wins’.GaoandBansal(2013)giveaspecific

listofcriteriafor‘integrative’decisions,anditispossiblethatsomeofthedecisions

describedas‘win-wins’wereactuallymadeonthisbasis,butwerethenjustifiedby

givingabusinesscase.Forexample,someofthe‘win-win’decisionsdescribe

thoughtfulassessmentofstakeholderpositions(forexample,engineersinstallingnew

infrastructureincommunitiesregularlyengagethestakeholdersandareoftendealing

withmultipletime-framesastheyconsiderthewholelifeoftheinstalledproject),and

maymeetthecriteriaforanintegrativedecision.However,peoplefinditeasierto

justifytheirdecisionsinwin/winterms:oneexecutivereportedtakinga‘win/win’

approachbecause“Iwantedtosticktomymandate”,andheclearlyfeltthathisauthority

didnotextendtovalues-basedjudgements.Thisledmetolookatthewayindividual

decision-makersusetheseapproaches.

4.3.3Howdoindividualdecision-makersusetheseapproaches?As12outofthe17intervieweesdescribedmorethanonedecision(theremainder

typicallydescribedasingleprobleminmoredepthandwithagreaterlevelofreflection

onthecontext),Iwasabletomakesomepreliminaryobservationaboutthewaythey

usetheseapproachesasarepertoire.Themajorityoftheintervieweesdescribedusing

atleasttwoofthedifferentapproaches,suggestingthatpeoplecanbeflexibleintheir

problem-solving.However,formanyinterviewees,theirrepertoiretendedtofocus

eitherontrade-offs(forexampletrade-offsplusseparations)oronwin-wins(for

exampleusingwin-winsandintegrativesolutions).Onlytwopeopledescribedusinga

repertoirethatincludedbothtrade-offsandwin-winbusinesscases,integrationor

synthesissolutions.

68

Whilethereisabodyofliteraturefocusingonindividuals’abilitytotakecreative,

paradoxicalapproachestodecision-making(Miron-Spektoretal.2017),empiricalwork

inthisareahastendedtofocusonpeoplemakingthesametypesofdecisions.While

onepossibleinterpretationofmydataisthatpeopleeitherhelda‘businesscase’frame

ora‘paradoxframe’(Hahnetal.2014),thedataisnotsufficientlyrobusttobeableto

clearlysupportthis.Therearethreereasonstobecautiousaboutindividualcognitive

framinginthisparticulardata.First,theintervieweeschosethedecisionsthemselves,

andatleastoneofthepeopledescribinga‘trade-off’viewandoneofthetwostrategists

whodescribedabroaderrepertoirespecificallyfocusedonsituationsthattheyhad

foundfrustratingbecauseofthecompromisesinvolved,andsounder-reportedthewin-

winbusinesscasesthattheyworkedon.Second,peopleindifferentrolesfacedifferent

typesofdecision–itispossiblethatsomeofthesechoicesweresimplynotamenableto

alternativeviews.Finally,allofthesepeoplewereworkingindifferentorganisations,

andthereforefaceddifferentinfluences–forexample,engineersinsomeorganisations

hadadifferentcognitiveframefromengineersinothersettings.Ithereforelookedat

thetypesofdecisionsinwhicheachapproachwasusedtoseeifthisprovidedastronger

explanationforthechoiceofapproach.

4.3.4Howdothecharacteristicsofthedecisionsinformchoiceofapproach?Theapproachesintherepertoireareusedunderdifferentcircumstances.Thismeans

thattheymaynotallbeavailableforeverydecision:insomecasesitmaysimplybe

impossibletofindawin-winbusinesscase,forexample.Thetypicalusesofeach

strategyaresummarisedbelow,inTable14.

69

Table14:Characteristicsofdecisionsassociatedwithdifferentresolutionapproaches

Approach UsecaseSeparation Temporalseparationisusedasaninterimstrategy,usually

onthepathtoawin-winbusinesscase.Thismaybe,forexample,toallowtimefordevelopmentofatechnology.

Trade-off Trade-offsweretypicallyusedundertwoconditions.Firstinsituationsofscarcity,oftendescribedbyintervieweesaseitheraproblemofaparticularsituation,oranon-goingprobleminalow-marginindustry(forexample,construction).Second,theyoccurredwhenthequestionwasverynarrowlyfocused(wecanonlydoxory)andsooptionswerelimited.

Win-winbusinesscase

Win-winbusinesscasesareusedintwocases:1)whenthereisacasemadeonthebasisofmaterialefficiencyand2)whenthereisaconstructiveprocessofstakeholderengagementtoarriveatabusinesscase.

Integration Complexdecisions,oftenmadebyseniorleadersunderconditionsofuncertainty(forexample:informationnotavailable),anddeterminedonthebasisofvalues.

Synthesis Thetwocasesinthisdatawerecomplexdecisionsthattheexecutivesdescribedasexceptionalcaseswithoutastandardresolutionprocess,andwherethereissufficienttimeandseniorattentiontoworkonalternativeframings.

Separationstrategieswereusedasinterimmeasures–asoneintervieweesaid:

“Wealsoknowthatthereisnowayyet–andthat’stheoperativeword–thereisno

wayyettomakethisasustainableproduct.Thereissuchathingonthedrawing

boardwhichisbecomingcloserandcloserandwhichwehopetolaunchnextyear”.

Whilemanyoftheorganisationswereinternational,andcouldthereforeadopt

separationstrategiesbasedonspatialseparations,allofthesedecisionsweredescribed

asinter-temporalseparationsorstepsonapathwaytoabetterresolutionofthe

problem.Inallthesecases,theseparationapproachwasasteptowardsawin-win

businesscasesolution.Thus,wecanseethatpeoplemaychangetheirapproachtoa

decisionovertime.

Trade-offswereusedextensively,butwereparticularlyassociatedwithconditionsof

scarcity:

“Constructionisdrivenbycontractorsthatmakegenerallylessthan2%profit,soifit

doesn’tsavemoney,orshortentheprogramme,orreducehealthandsafetyrisk,they

just,itdoesn’tmatterwhetherthey’reinterestedornotinterested,theycan’t

influencethesustainabilitydecision.”

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Therewerealsosomedecisionswhichweresimplynotpossibletoframeinotherterms

astheyeventuallyinvolvedirreconcilabletensions–ortensionswhichwerenot

reconcilablebythedecision-maker.Thesewereoftendescribedasstructuralproblems:

“Thecapexteamisresponsibleforgettingthemoney,you’vegotanotherpartofthe

organisationresponsibleforspendingthemoney…theprocurementteam.Andthen

you’vegotanotherpartoftheorganisationactuallyrunningthemachine.”

Thedifferencesinprioritiesinthesethreeteamsmeantthatthedecision-makeroften

foundthatitwasimpossibletoresolvethetensionsindevelopinganeconomicallyand

environmentallysustainableassetwithoutmakingatrade-off,andsothiswas

recognisedasaparadox.Thedifferentlogicsofdifferentprofessionalgroupscouldnot

bereconciled(Besharov&Smith2014).

Bycontrast,theother‘instrumental’logicwasseenverypositively.Win-winbusiness

caseswereconsistentlydescribedasgoodoutcomes,asbydefinitiontheymeetthe

needsofmanypartiestothedecision.Asoneintervieweesaid:

‘“Whywouldn’tyou?You’dbenaughtynotto’wasthesentimentinourmind.So

therewasthisdoublewin,doubleno-brainerwastheideafromourperspective”

Thedecisionsmadeusingwin-winlogicfellintotwodistinctcategories.First,there

wereaseriesofdecisionswherethebusinesscasewaspredicatedonresource

efficiency:usinglessenergy(orpackaging,orothermaterials)notonlyreduced

emissionsbutreducedcosts.Asoneintervieweesaid:

“There’ssomuchthatdoesn’tcostmoneythatI’mhappyframingeverythinginthat

win/winscenarioanddevelopmentisreallyontheembodiedcarbonandwhilewe’re

strippingthatoutandwe’realsostrippingcostout,thenthat’sfine.”

Otherwin-winsweresignificantlymorecomplex,andinvolvednegotiationswitha

varietyofstakeholders,forexampleinthemanagementofsocialandenvironmental

issuesinthedevelopmentoflargeinfrastructureprojects.Itispossiblethatwin-wins

areover-representedinthisdata,firstbecausetheyarememorable–nevertheless,they

areclearlyasignificantpartoftherepertoireofdecision-makingapproaches;and

secondbecauseitispossiblethatsomemoreintegrativedecisionsaredescribedas‘win-

wins’.

Despitethepossibleover-statementofwin-wins(describedabove),thereweresome

decisionsthatwereclearlyintegrative,andwerequalitativejudgementsbasedon

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values,andhadinvolvedextensivestakeholderengagement.Thesewereusedonlyin

caseswhereseniormanagersmadethedecisionsbecausetheytendedtohavehigh

ambiguityanduncertainty,andethicalissueswereinvolved.Thejustificationforthese

decisionswasoftenvaluesbased:

“Ourboard…wassplitonthis.Wehadacouple…whosaid‘look,Idon’twantmy

businessinconveniencedonthis’...Andtherewereoneortwootherswhoseemedto

haveasenseofresponsibilityandsawitasaresponsibilityissue.Andthenwehad

thechairwhosaid‘Lookifithelpsmemanage[thebusiness]asaresponsible

memberofsocietythenI’lldoit.’”

Becauseofthenatureofthesedecisions,theyweretypicallymadebyseniorexecutives

workingwithahigherlevelofmanagerialdiscretionandtheauthoritytomakethese

morevalues-baseddecisions.

‘Synthesis’strategieswereonlyusedbyexecutivesincomplex,policy-settingsituations.

Thetwointervieweeswhohadusedtheseapproachesdescribedthedecisionsinterms

ofnewinsightsthathadallowedthemtoreframethedecision–forexamplebringinga

risk-managementapproachtoadecisionthathadpreviouslyonlybeenseenasa

sustainabilityproblem,andsochangingthenatureofthedebate.Becausetheywere

unusual,Iinvitedagroupofseniorexecutivestocommentonthem,andtheyobserved

thatthesedecisionsarecognitivelydemandingastheyinvolvecreatingnewwaysof

seeingaproblem,andsoarenotwidelyused,orroutinizedinstandarddecision-making

processes.ThisdiscussionisdescribedmorefullyinChapter6.Bothofthetwo

decisionswhichwereresolvedusingsynthesis(afundamentalreframingoftheissues)

weredecisionsdirectlyrelatedtothecentralparadoxofthebusiness,inbothcases

reframingtheirapproachtotheenvironmentasanissueofrisk-managementrather

thansustainability.Thesewerebothdecisionsthatwereextremelycomplex,and

requiredsignificanteffortsandbespokeprocessestoresolve.Thisdatasetisofcourse

relativelysmall,butitsuggeststhattheintegrationandsynthesisapproachesare

cognitivelyandprocedurallydemanding,andsoareusedlessthanotherapproaches.

Thissuggeststhattheuseofthedifferentapproachesiscontextual,andthatthereisa

mixtureofdeterminantsoftheapproachused,includingthecomplexityofthedecision,

theprocesstobeused,theseniorityordiscretionofthepermissionholder,andthenthe

opportunityforsavings.Thisledmetolookatthebroadercontextsurroundingthe

decision.

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4.3.5TensionbetweentheexternalandinternalcontextSofar,Ihaveestablishedthatexecutivesusethedifferentdecision-makingapproaches

asarepertoire,butthatmostpeopleuseonlypartoftherepertoire,withtheirdecisions

clusteringeitheraroundatrade-offframe,orawin-winbusinesscaseframing.While

thisisinfluencedtoacertainextentbythecharacteristicsofthedecisionstheyare

making,theapproachesarealsonestedinthebroaderlogicoftheorganisation.Ineach

business,therewasalong-termtensionbetweendifferentsocial,environmentaland

commercialforcesthatcreatedalong-termandfundamentalparadox.Thiswasmore

nuancedthanthecentraltensionbetweenpursuitofcompanyvalueversuspursuitof

sharedvalue(Haffar&Searcy2015),butdidrelatedirectlytothewaythecompany

chosetorespondtoitsexternalenvironment.

Thecentralsustainability-relatedparadoxarisesineachcompanywhentensionsexist

eitheratthefieldlevelintheexternalenvironment(forexamplebetweeninstitutions

andNGOs),orbetweentheexternalenvironmentandtheorganisationallogicthatis

usedtomakesenseofit.Scholarsrecognisethatthebroadenvironmentalcontextis

importantinshapingdecision-making(Deanetal.1991;Shepherd&Rudd2014),but

thereisnotabroadconsensusfordescribingtheseenvironmentalfactors(Shepherd&

Rudd2014).Schneideretal(2017)observethattherequirementsofsustainability

increasethecomplexityoftheexternalenvironment(forexample,bycreatingpressure

toconsiderabroadergroupofstakeholders),butthereisnotasinglesourcethat

describesthesefeaturesoftheenvironment.Differentauthorshaveemphasised

differentfacets.Becauseofthis,Ireviewedtheenvironmentintermsoftwodistinct

contexts:theexternalcontext(whichmaybecreatingnewsocialorenvironmental

demands)andtheinternalcontext,orsetofwaysinwhichthecompanymayrespondto

these.

Themainelementsoftheexternalcontextfallintotwogroups:theparticular

constellationofstakeholdersaroundthebusiness;andtheindustrycharacteristics(for

example,munificenceandcompetitiveintensity).Theintervieweesexperiencedthe

diversityofstakeholdersasanimportantdriverofcomplexity.Complexityisafactor

whichappearsseveraltimesintheliteratureaboutthedecision-makingcontext

(Shepherd&Rudd2014;Hahnetal.2016;Aragón-Correa&Sharma2003;Chenetal.

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2017).Whilethedifferentauthorsproposeslightlydifferentdefinitionsofcomplexity

(sometodescribeheterogeneityofcompetitorseg.Chenetal,otherstodescribea

proliferationofdifferentactorseg.AragonCorreaandSharma),thereisastrongsense

thatcompaniesthatarehavingtomonitormanydifferentorganisationshavetobringin

moreinformationtotheirdecision-making.Theintervieweesparticularlyexperienced

thisashavingabroadrangeofstakeholders,includingregulators,customers,suppliers,

NGOs,civilsocietyandshareholders.Asoneintervieweesaid:

“Therewasalotofworklastyeartoengagewithpeopleatalllevels,actually,within

thecompanybutalsoexternallywespentalotoftimetalkingtooursuppliers,our

customers,ourinvestorsandreallytriedtolookatwhatallourpeergroupwere

doing,whatlegislationwastellingus,andreallytryingtoidentifywhatwereour

mostmaterialissuesandwhatwewanttomajoron.”

Whilethiscompanyhadmanagedtoidentifyacoresetofissuestoworkon,manyofthe

intervieweesexperiencedtensionorcomplexityasaresultofworkingwithmultiple

stakeholders.Thistookthreemainforms:tensionbetweensustainabilityandfinancial

outcomes;tensionbetweendifferentexternalinstitutions;andinternaltensionarising

fromdifferencesintheprioritiesaccordedtodifferentstakeholdergroups.

Themaintensionthattheintervieweesdescribedwasbetweenstakeholderneedsand

profits:essentiallyaproblemofvalue-sharing(Porter&Kramer2011).Forexample,

oneintervieweedescribedthecompany’sdealingswithNGOs:

“IthinkthatthatrelationshipbetweenbusinessandNGOshasreallychangedsince

2003/2004,anditsnowmuchmorecollaborative,whichis‘yes,weactually

understandtheenvironmentalorsocialissue.That’snottheissue.Theissueiscan

wefindsmartwaysaroundit.’Sothereisalwaysatensionwithprofitability,butwe

said,lookwhywouldyoucreatepotentialriskforprofit’ssake?”

However,someintervieweesdescribedabusinesscasethatwouldmeetinvestoror

customerneedsbyimprovingresourceefficiency:

“[AftertheVWcarbonincident]wegotafewletterstoourChiefExecutivesaying‘we

willnotinvestinyouunlessyoudocarbonreportingandmanageyourcarbon’.

Whichwasgreatforus.Imeanweareverymuchoftheopinionthatifyoudrive

downcarbonyoudrivedowncost:theyareabsolutelylinked.”

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Anotherpointedoutthatcustomerswereextremelyimportantinbuildinginternal

commitmenttosustainabilityasitsuggestedthepossibilityofgrowingthebusiness

sustainably:

“Iwouldn’tsayeverybody’sinterested,buttherearemoreandmorecustomerswho

arereally,reallyinterestedinit.….That’smusictomyears.”

Thesecondtensionthatintervieweesreportedwasthecomplexityofdealingwith

institutionsatmultiplelevels.Thisparticularlyeffectedcompaniesworkingin

regulatedindustries.

“ThecomplexityisthatinEuropethesethingsshouldbecuttingacrossEuropewith

thesameregulationandtargets.However,everycountrymakestheirownenergy

strategiesandplansandroadmapsandsoonanditbecomesablurrymessvery

easily.AndtheEUthingislikeaveryvisionary,highlevelthingbutthedirtydetails

aredifferentineverycountryandeverylocationandeveryoneinterpretsitin

differentways.”

Tensioncouldalsoarisewhendifferentpartsofanorganisationemphasiseddifferent

stakeholdersindevelopingtheirsustainabilitypriorities:

“Therehasbeensomefrictionbetweenthefacilitiesandthecorporatelevelbecause

whatthefactoriesneedistohelpthecommunitythattheylivein.Butthecorporate

needissomethingtomarket.”

Theresponsetothesetensionswasinfluencedbytheresources–whetherofmoneyor

attention–availabletothedecision-makers.Thisisshapedbythestructureofthe

industry.Competitivethreats(Deanetal.1991)andcompetitiveintensity(Ford&

Richardson1994)(Ford&Richardson1994)areinfluencesinstrategicandethical

decision-making.Competitioncanplayadualroleinsustainability,eitherasaspurto

actmoresustainably(Bansal&Roth2000),orbyreducingresourcesordirecting

attentionawayfromsocialandenvironmentalneeds.Severalintervieweesdescribed

theirsustainabilitystrategyasaformofcompetitivedifferentiation:

“Ithinkthey’ddonesomemarketresearchandsawtherewasanichethere.Sothere

werelotsofpeopledoingcommercialdevelopment,butnoonereallyhadcornered

theextreme,greensustainableangle.”

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“OurCEOhadalreadydecidedthathewanted[company]tobethe…sectorleaderon

sustainabilityandthere’dbeenquiteabitofdiscussionatexecutivecommitteelevel

aboutwhytheywantedtotakethatleadershipposition”

“Theyreallywantedtoputthemselves,fromabrandperspective,asasustainable

company,anenvironmentalcompany.”

Oneeffectofcompetitiveintensity,particularlyinmorecommoditisedindustries,is

downwardpressureonmargins.Munificenceisanenvironmentalfactorthatis

describedbyseveralauthorsparticularlyasadriverofsustainabilityinitiatives

(Aragón-Correa&Sharma2003;Chenetal.2017;Hahnetal.2016).Intheinterviews,

thecompaniesoperatinginindustrieswithstructurallyhighermarginstendedtofeel

thattheywerelessconstrainedintheirdecision-making.Thecompaniesinlowmargin

sectors(examplesincludedapparelmanufactureandconstruction)tendedtomake

moretrade-offsintheirdecisions.Thissectoralcharacteristicalsohasatime

dimension:companieswithlowmarginstendtoneedtofocusontheshorttermfor

survival,andsofindthatthereisrealtensionintakinglong-termdecisionsfor

sustainability(Bansal&Desjardine2014).Oneintervieweeinalow-marginsector

describedacompanychangingitsinvestmentcriteriaduringhardtimestofocusonlyon

projectswithaveryshortpaybackperiod.

Thedemandsofthisexternalenvironmentcancreateaparadox–‘apersistent

contradictionbetweenindependentelements’(Schadetal.2016)–forthecompany.

Thisarisesfromatensionbetweensomeaspectoftheexternalenvironmentanda

fundamentalaspectofthecompanyitself,typicallyrelatedtothewayinwhichitis

configuredtoaddresstheneedsoftheexternalenvironment.Thisinternalcontextisat

amoreabstractlevelthanthecompany’sorganisationoroperations–rather,it

comprisesthesetoffundamentalbeliefsaboutwhatthecompanydoes,andhowitdoes

it.Workingfromtheliterature,Ifoundtwomainaspectsofthisinternalcontext,which

alsoappearedintheinterviews:thetheoryofthefirm,anditsvision,missionand

purpose.

Eachoftheseaddresses–indifferentways–thefundamentalquestionofwhatthefirm

isfor.Theoriesofthefirmexistineconomicstoaddressthequestionofthe

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fundamentaldesignofthefirm(forexample,whydoesitexist?whereshouldits

boundariesbe?Whatisitsfunction?)(Seth&Thomas1994).Thesequestionshave

importantimplicationsforthewayinwhichacompanythinksaboutsustainability

(Lozanoetal.2015),forexampleacompanyseekingtomaximiseshareholderreturns

willtendtoemphasisetheneedsofshareholdersaboveotherstakeholders.Although

theintervieweesdidnotusetheterm‘theoryofthefirm’,theunderlyingbeliefsabout

thefunctionofthefirm,theimportanceofitsownershipandgovernancestructuredid

emergeininterviewsanditwasclearthattherewerefundamentalbeliefsinthe

organisationaboutthefunctionofthefirm.Thesewereoftenexpressedthrough

corporatevisions(Ardichvilietal.2009),missionsorstatementsofpurpose(Hyman&

Curran2000).Forexample:

“Iheardourchiefexecutivesaying,isthatacompanythatjustmakesmoneyisnot

muchofacompany.You’vegottoaddvalue.You’vegottohaveapurpose,Imean

whyareyoudoingit?”

Nothavingavisionwasalsoabarriertocleardecision-making:asoneintervieweesaid:

“Weendupintheplaceofnotdoinganythingbecausewecan’tmakethatfuture

decisionbecausewehaven’tgotthevision.”

Theinteractionbetweentheseexternalforces–theneedsofsocietyandthe

environment(oftenexpressedthroughthevoicesofregulators,NGOsandcivilsociety),

andtheinternalforces–thechoicesthecompanyhasmadeabouthowtoservethe

market,withwhatproductsandservices,andhowtheychoosetointeractwith

customersandsuppliers–isacomplexone,anditisatthecorebothofthecreationof

paradoxanditsresolution.

Someofthecompanieshaddirectlyaddressedthisparadoxbycreatingandarticulating

awayofthinkingaboutsustainabilityintheirbusiness.Forexample,abankthatwas

facingdifficultiesinmakingdecisionsaboutfinancingprojectswithsignificantsocialor

environmentalimpactsreframedthedecisionasaquestionaboutrisk(ratherthan

sustainability),whichcreatedalanguageandframeworkforthinking.Bycontrast,one

ofthecompaniesthathadnotframeditsapproachtosustainabilitywasamanufacturer.

Althoughtheyhadadoptedarangeofenvironmentallyresponsiblepracticesin

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manufacturing,theyhadnotmanagedtoreducethelife-cycleimpactoftheproductand

sotheirgrowthstrategywasincreasingoverallemissions.Thiscreatedsometension

forthesustainabilityteam.Allofthecompanieshadsometensionattheheartofthe

business,andsoallthedecisionswerenestedinsignificantandenduringparadoxes.

Themanagementofthiscentralparadoxissignificantinshapingthewayinwhich

executivesresolvedthetensionscausedbyincludingsocialandenvironmental

considerationsintheirdecision-making.Ofthe20companiesdiscussedinthe

interviews,eighthadclearlytakenstepstoframethesustainabilityparadoxattheheart

ofthebusiness,forexamplebydescribingsocialandenvironmentalsustainabilityasa

matterofbusinessriskoropportunityandsocreatinganeworganisationallogic.

Theseframingswereallbasedonwin-winbusinesscases:theygavereasonswhyacting

inasociallyandenvironmentallyresponsiblewaywouldbegoodfortheirbusiness.

Theseframingsweretailoredtothespecificissuesfacedbythecompanyandaddressed

arangeofconceptsincluding:riskmanagement:marketaccess(includingmarketsfor

talent);costefficiency;andvalues.Theframingneedstobesufficientlyflexibletobe

relevanttodifferentgroupsacrossthebusinessandtoexternalstakeholders

Intheothertwelvecompanies,thetensioncreatedbytheparadoxhadnotbeen

explicitlyaddressed.AsSchadandBansal(2018)observe,paradoxescreatedby

sustainabilitymaybelatentwithinasystem:someoftheexecutivesinthesecompanies

mayhaverecognisedtheparadox,buttherehadnotbeenanefforttoaddressitatthe

companylevel.Weobservedthatthismadeadifferencetothelogicthattheexecutives

usedintheirdecision-making.Executivesinorganisationswhichhadactivelyreframed

theircentralparadoxmademoreuseofwin/winlogics,integrativelogicsandsynthesis;

executivesinorganisationsthathadnotreframedusedtrade-offsandseparationmore

frequently.ThisisshowninFigure10:

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Figure10:Approachesadoptedincompaniesthatreframetheirbusinessparadox

Thisstronglysuggeststhatthewayinwhichthecompanyishandlingparadoxatthe

organisationallevelinfluencesthewayinwhichtensionsinbusinessdecisionsare

managed.

4.3.6ConnectionsbetweenthemacroandmicroleveltensionsTherearesomelimitationstothisanalysis.First,becausetheintervieweeschosethe

decisions,theyarenotnecessarilytypicalofthesuiteofdecisionstakeninan

organisation.Inparticular,un-memorabledecisions(thosethatseemtrivialorsimple

totheinterviewee)areunder-recorded,andthosewheresustainabilityconsiderations

werenotpartofthediscussionareunder-recorded.Second,situationswhereadecision

wasmade‘onauto-pilot’–forexamplefollowingorganisationalscripts(Gioia1992)–

areunder-recorded.Finally,aswithsomuchinterview-basedresearch,the

intervieweesweremakingsenseoftheirexperienceafterthefact:thisisasubjective

process.Nevertheless,therearesomeinterestingindicativefindings.

Separa&on Trade-off Win/Win Integra&on SynthesisCompanieswhoreframe 1 2 17 4 2Companieswhodon't

reframe 3 10 4 2 0

0

2

4

6

8

10

12

14

16

18

N=45

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Theinteractionbetweenthedecisionandthedecision-makerisanimportantone:

althoughdecision-makersareverypositiveaboutwin-winbusinesscases,some

decisionscannotberesolvedusingthatlogic(inoneexample,separationwasusedasa

strategywhilethecompanydevelopedthetechnologyforawin-winapproach).

Decisionswithhighlevelsofnovelty(forexamplewithnoestablishedprocessfor

deciding),orcomplexity(forexample,withparticularlycomplexdemandsfrom

stakeholders)alsopresentrealchallengestothedecision-makers.Thedecision-makers

thenbringtheirownmentalresourcestothesedecisions,determiningthewaythe

choiceismadeandtypicallyusingpartofanavailablerepertoireofwaystoreconcile

competingcommitments.Thesementalresourcesareshapedbytheorganisation–

eitherformally(forexamplethroughinformationsystems),socially(forexample

throughleadershipprocessesortheorganisationalculture)orbehaviourally(for

examplethroughcognitiveframing).Inparticular,thecorporatelevelframingof

sustainability–thewayinwhichitisbuiltintotheirapproachtobusiness–playsa

significantroleinenablingmanagerstoincorporatesocialandenvironmental

considerationsintotheirdecision-making.Context,inshort,matters.

Decisionsthatexecutivesmakearethusnestedwithinabroader,paradoxicalcontext

(Sheepetal.2017).However,thisraisesaquestionabouthowthetensionatthis

contextuallevelistransmittedtothemicro-levelofdecisions.Howaretheparadoxes,

orframesoftensions,expressedthroughtheorganisation?

4.4Organisationalinfluencesondecision-makingInChapter2,Ipresentedabroadframeworkforunderstandingthelayersofcontextthat

shapedecision-making.Ihavenowestablishedthatdecisionsincludingsocialand

environmentalconsiderationshaveparticularproperties,creatingcompeting

commitmentsfordecision-makers,andthattheseareinfluencedbyamacro-level

paradoxshapedbytherelationshipbetweentheexternalcontextoftheorganisation

andtheinternalresponsetoit.Therearetwofurthercontextuallevelsthatinfluence

decision-making:theorganisationandtheindividualdecision-maker(Deanetal.1991).

ThisisshowninFigure11,whichhasnowbeendevelopedtoshowthatthereisa

relationshipbetweentheexternalandinternalcontexts,describedabove.

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Figure11:Fourlevelsofinfluenceondecision-making

However,asIobservedinChapter2.7,authorshavefocusedonindividualfactors,or

groupsoffactors,inorganisations:wedonothaveacompletemodelofhowthisworks.

Inthissection,Iusemyinterviewdataandtheliteraturetoidentifythemain

organisationalfactorsthatinfluencedecision-makers,andorganisetheseintoa

conceptualframework.Insection4.5,Iwillusethesameapproachtoidentifythe

factorsattheleveloftheindividualdecision-maker,thatenable–orhinder–the

inclusionofsocialandenvironmentalsustainabilityindecision-making.

4.4.1Theproblemoforganisingforsustainability

Insection4.2,Ishowedthatdecisionswithmaterialsocialandenvironmentalimpacts

canemergeatmanydifferentpointsintheorganisationandcanrequireawiderangeof

typesofinformationandexpertise.Thiscreatesaspecificproblemindesigningan

organisationforsocialandenvironmentalsustainabilitybecausethereisaneedfor

sustainabilityexpertiseintwoplaces:companieswanttoretainsomelevelofcentral

functiontobeabletosetdirectionandstandardsandtoprovidesomecoreservices

(suchasreporting),butatthesametimesustainabilityisanissueforpeopleworkingin

Externalcontext

Internalcontext

Decisionproper1es

Decisionprocess

Organisa1on

Decision-maker

81

linefunctions–forexampleinengineering,procurementoroperations–wherethe

dailydecisionscanmakeasubstantialdifferencetothecompany’senvironmentaland

socialimpact.

Althoughthedatacollectionprocessdidnotincludecollectingorganisationchartsfrom

eachoftheinterviewees,sevenintervieweesdescribedasituationinwhichthe

sustainabilityfunctionwasasmallgroup,reportingtotheCorporateAffairsdirectorate.

Thisenabledthemtoplayacriticalroleinmanagingthecomplexneedsofexternal

stakeholders,butseparatedthemfromtheoperationsthathavethemostdirectimpact

onsustainability.Severalintervieweesmentionedthis:

“[There’sa]dynamictensionbetweentechnicalmanufacturingandcorporateaffairs

…weusedtojokethatwehadtotaketheCorporateAffairsDirectorandshowhim

wheretheTechnicalDirector’sofficewas,becausetheyneverusedtocollaborate.

Theywereboxedin.”

“They[thesustainabilitygroup]reportedtovariousdifferentpeopleovertime.They

nowreporttoourHeadofMarketingwhoisalsoresponsibleforbrand.Andthose

twoarenowquiteintegratedtogether….They’reindependentofthesupplychain

director,butthatisslightlyoddbecausetheydospendalltheirtimeworkingwith

thesupplychainteam.”

Thesegroupsareoftenrelativelyverysmall.AlthoughIdidnotcollectdataoneachof

thecompaniesinvolved,therangeofratiosof‘HQsustainabilitypeople’(whocanbe

performingawiderangeoftasks)tothetotalemployees(anyofwhomcouldbe

involvedinadecisionwithamaterialimpact)rangedfrom1:33toover1:10,000.This

meansthatthesustainabilityspecialistsfaceadilemmathatissometimesfacedbyother

‘compliance’functions(forexample,Health&Safety),whichishowtheycaninfluence

thebehaviouroftensorthousandsofpeoplewithwhomtheymayhavenoformal

organisationalrelationship.

Thishastwoeffects.First,thereisastrongneedforlinkagemechanismstotransmit

knowledgebetweenthesustainabilityexpertsandthedecision-makers(andtoprovide

afeedbackloop).Second,thereisaneedtoembedsustainabilitythinkingintosomeof

theorganisationalroutinesandprocessesthatareusedfordecision-making(for

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exampletomake‘operationaldecisions’or‘engineeringefficiency’decisionsdescribed

inSection4.2.2above).Thegeneraltrendthattheintervieweesdescribedwastowards

pushingaccountabilityforsustainabilityintothemainstreamofthebusiness.Thisdoes

taketime,andthecompanieswiththelongestexperienceofworkingonsustainability

issuestendedtohavethestrongeststructuresforde-centralisingaccountabilityfor

sustainabilitywhileretainingexpertise.

Theorganisationallayeroftheframeworkdescribesthemeansbywhichthe

organisationinfluencesthedecision-makingofthepeoplewhoaremakingthematerial

decisions.Althoughtheintervieweesidentifiedseveraldifferentorganisationaldesign

elements,thesefellintofourmaingroups.Twoofthese–organisationdesignand

performancemanagement–areessentiallyformalintheiroperation.Theothertwo–

cultureandleadership–areformsofsocialinfluence.Thesemeansforconnecting

knowledgeandawarenessofsustainabilitytothedecision-makersareimportant:a

failuretohave‘therightpeopleintheroom’wasoftengivenasareasonforexcluding

sustainabilityconsiderationsfromdecisions.Asoneintervieweesaid:

“Alltheideasthatwereobvioustoanyonehadbeenengineeredout.Butifyou’dhad

aleadershipteamthatknewsomethingaboutsustainabilityandwereengineers,you

couldhavedonesomethingexciting.”

4.4.2Organisationdesign

Theterm‘organisationdesign’canbequitebroad.Inthisresearch,Iuseittorefertoa)

thestructuralmechanismsoftheorganisationthatgroupandlinkactivities;b)the

processesandpoliciesbywhichworkiscarriedoutandc)formaljobdescriptions.

Thesearetheactivitiesthatinfluencetheorganisationallocusofsustainabilityactivities,

andthechannelsbywhichknowledgeandinfluenceareconveyedfromthe

sustainabilityleadersandexpertstothepeoplemakingdecisionseveryday.

Thereisrelativelylittleresearchattheintersectionbetweenorganisationstructureand

decision-making(Pirson&Turnbull2018),indeedorganisationdesignisanunder-

researchedfield(Milleretal.2009)andthearticlesintheliteraturereviewtendedto

focuseitheronco-ordinationmechanismsorHRmanagement.Atthemostobvious

level,theremaybeaformalorganisationco-ordinatingsustainabilityacrossthe

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organisation(Arrudaetal.2013).However,otherformalstructuresincludingHR

processes,codesofconductandformalrelationshipswiththeexternalworldalsogive

signalsabouttheroleofsustainabilityintheorganisation.Thefundamentalbeliefsand

valuesoftheorganisationaremosteffectivewhentheyarereflectedinHRprocesses

(companiesthatclaimtobeethicalneedtorewardethicalbehaviour),andsodecision-

makerstaketheircuesaboutthevaluesoftheorganisationfromprocessesfortalent

attraction,selectionandattrition(Verbosetal.2007;Ardichvilietal.2009)and

promotion(Meyers2004).

Basedontheinterviewdata,thestructuralmechanismsthatareusedtolinkthecentral

sustainabilityteamtothebroaderbusinessvaryinthedegreeofformalityused.First,

therewereexamplesoforganisationswithstrongformalstructuresfordirecting

sustainability.Oneintervieweedescribedanorganisationwithacleargovernance

structureledfromthetopteam;anothermadeitclearthattherewasstrongleadership

fromtheboard.However,whiletheseareeffectiveincreatingtop-downlegitimacyfor

sustainabilityintheorganisation,theyarelesseffectiveattransferringideasacross

groupsorgatheringinformationandfeedbackfromdifferentdivisions.Asoneofthe

intervieweessaid:

“Buttherealityisthatthewaythatdecisionsgetmadehereisthatbeforeyouwould

goto[thetopteam]I’llhavedoneloadsofengagementwitheveryone”.

Manyoftheorganisationsthereforealsohadnetworkstoformconnectionsacrossthe

organisation.Someofthesewereformallydesigned:

“Thesustainabilityteamisagroup-widefunctionthatworkswiththeunits,andthen

therearesustainabilitypersonsthatarealsointheunits...soitworksinthissense

likeamatrixofsomekind.”

“We’vegotanindustrialsustainabilitynetwork,withallthesitesrepresented,andwe

meetfacetofacethreetimesoverthecourseoftheyear,andsharebestpractice,go

andseesomeofthebestprojectsatthedifferentsites”

Othersweremuchlessformalintheirstructure:

“Weendedupdevelopingan“eco-productsdivision”,andIusethatwordlooselyin

speech-marks,becauseitdidn’texistonpaper.”

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Theselessformalnetworkswereparticularlyeffectiveforbuildingasenseofinclusion

intheorganisation.Asoneintervieweesaid:

“Thisisthegroupwherewecangetthemtogethertotalkaboutwhat’sgoingon,so

we’vegotpeople[fromallthebusinessareas],andit’stakenawhile,butthepeople

now,theyjustallwanttobeonthegroup,anditaddsareallymeaningful,

purposefulbitoftheirjob.They’reexcitedaboutit.”

Thechallengewiththeselinkingmechanismsisthattheyareinherentlycostly,andthey

needtobeeffectiveinordertocreatecommensuratevalue.

Thesecondmechanismthatwasusedinmanyorganisationstoimprovethe‘reach’of

thecentralsustainabilityteamwasprocess.Oneofthekeytasksofembedding

sustainabilityintoanorganisation’sdecision-makingistoensurethatitisincorporated

inthecriticalprocessesoftheorganisation.Asoneintervieweesaid:“Changingthe

processesisa‘must’.”Forexample:twointervieweesdescribedchangestotheportfolio

managementandacquisitionprocess;othersdescribedchangestooperating

procedures;anothersaid:

“Wewentontodeveloppoliciesinlotsof[businessareas]andwefollowedasimilar

approachwhichwasadoptingaframework,takingitout,consultingwithbothsides,

andthensaying‘Thesearetherulesandthisiswhatwewillliveupto.’”

Processesareoftensupportedbystandards,andseveralintervieweestalkedabout

introducingsustainabilitystandardstotheorganisationasawayofcontrollingthe

inputstoprocesses.Executivessaid:

“Fromasustainabilitypointofviewaswellwhenwe’restartingtoformour

requirementsforequipment…sowe’reembeddingthatinourprocessandmaking

surethateverytimeyougothroughtheprocessofdesigningproductsorequipment

thatwewanttointegratewe’veconsideredthewholepossibility.”

“Youdon’twantpeopletobespendingtimethinkingaboutthis,youwantthemtodo

whatitsaysintherule-bookandreportproperly,andthengetonwithitorthere’s

thenightmareofarguingandfighting”

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Changingprocessesandstandardsiscomplicatedwork:notonlyisitdifficulttodo,the

changeneedslegitimacyinordertobeadopted,andneedstobesupportedbythe

leadersoftheorganisation.Althoughprocessesareapowerfulwayofembedding

sustainabilityinorganisationaldecision-making,notalloftheintervieweeswerein

organisationswherethishadbeenpossible.

Thethirdformaldesignelementthatintervieweesdescribedwasjobdescriptions.Job

descriptionsfocuspeople’stimeandattentionontheareasforwhichtheyare

accountable.Asorganisationsbegintoincludesustainabilityconsiderationsintheir

coreprocesses,theymayalsoneedtoupdatejobdescriptionstoaccommodatethese.

Thiscancreatesomedifficultiesformanagers:

“Thingsmovesoquickly,andIsee[mycolleagues],they’rehereintheevenings,

they’reworkingweekends,andnowwe’resaying‘rightaswellasthis,youhaveto

consider[sustainability]’,andwe’veactuallygotaformalrequirementof

sustainabilityandwe’vegotformalguidelinesofhowyouhavetodothat.Andthere

wasabitofpushbackonthat–‘thisisn’trealistic’‘howarewegoingtodothis?’So

yes[weneededtoprovide]moreresourcetohelpdoit.”

“Butnow,Ithink,managershavetobeallthingstoallpeople,sotheyhavetoshow

diversityandinclusion,theyhavetoshowgoodethicalperformanceandbehaviours,

sonowyouhavetobeanall-rounderandaddressallofthesesustainabilityelements”

However,insomecasesitiswelcomed-“someyoungengineershavegotareallikingfor

environmentalwork,andaskforit”;“whentheycomeherethey’realreadypassionate

aboutitandtheywanttousethatandthinkaboutsustainabilityintheirjobs.”Thiscanbe

motivatingforstaff.Asoneexecutivesaid:

“Inactualfacttheheartsandmindsofthepeopleontheshopflooriswhatmakesit

happen.Sotheygohomeatnightandthekidssay‘whatdidyoudo’,andyousay‘I

workedonthisamazingprojectsothatweuselesswater’,andthekidsarelike‘wow,

dad,that’scool’whereaswhenyousay‘todayIdidaprojectthatmadethiscompany

£1million’thenthey’relike‘OK,sowhatdowegetfromthat?’.”

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4.4.3PerformancemanagementThereisanextensivegeneralmanagementliteratureonperformancemanagement,and

inasustainabilitycontext,performancemanagement(Hallstedtetal.2010)andreward

systems(Ardichvilietal.,2009;JamesJr.,2000;Lülfs,Hahn2014;Nijhof&Rietdijk,

1999)canalsoreinforceandencourageparticulartypesofbehaviour.Targetsand

incentives(Aguinis&Glavas,2012;Ardichvilietal.,2009;Lülfs&Hahn,2014)are

influentialinsignallingexpectationsofdecision-makersanddirectingattention.

Thequestionofperformancemanagement–whetherthroughtargets,incentivesor

rewards–cameupveryfrequentlyintheinterviews.Onewayinwhichcompanies

reinforcethefocusonsustainability–particularlyforlinemanagers-isthroughthe

performancemanagementsystem.Manyofthecompaniesdescribedastrongsystemof

targetswithintheorganisation,andtheinclusionofsustainabilityinthesetargetswas

extremelyhelpfulinfocusingattentiononsustainability:

“Theyhad10KPIs,thentheyhad11[whencarbonwasadded],thentheyhad12

[whenwaterwasadded].AndthewholebusinessisdrivenaroundthoseKPIS,soit’s

justlikethequality….nowthewaterthatyouuseisjustoneofthese.”

“EachyearthewholebusinesshasgroupKPIsandthat’swhatthewholecompany’s

bonusallocationsareon.Andthey’reseteveryyear,andthere’sabout12ofthem,

andthisyeartwoofthemareaboutsustainability.Soit’sreallygreat.”

“Itdoesn’tmatterifyouhityourrevenue,yourprofit,yourbrandtargetandyour

peopletarget.Ifyoudon’thityoursustainabilityones,it’sjustasbigafailureasif

youdidn’thitthefinancialones.”

Bycontrast,theperformancemanagementsystemcanalsobearealchallengefor

sustainabilitywhenincentivesdonotsupportsustainability,orwhentheresponsibility

forsustainabilityorresourceconsumptionisseparatedfromtheactivitydrivingit.As

oneexecutivesaid:

“Everyoneelsealwayshadanimperativethatoverruledit,sothatcommercialguy

haditaspartoftheirrole,butitwasawholelotlessimportantthanhittingtheir

numbers.Soforeveryoneitwasprioritynumberfive.Apartfromafewpeoplewho

haditasprioritynumberoneandnodecisionmakingpower”

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Problemsalsoarisewhenthetargetsarenotagoodfitfortheoperatingcontext:

“thesegoalshavebeensetbypeoplewhodon’tworkinmyareaanddon’tworkin

factoriesanddon’thavemuchexperienceofsocialresponsibility,andsomostofthese

goalswerecompletelyunachievable.”

Aswellasperformanceindicatorsandtargets,onecompanyhadincludedsustainability

onitslistofpromotioncriteria:“youweren’tgoingtogetpromotedifyouweren’tgoing

toengagewiththegreenagenda,soitbecameaboutstatus.”

However,thisisonlyeffectivewhenitiscongruentwiththeexistingperformance

managementsystem.Oneinterviewee,workinginaprivatelyheldcompanyobserved

thatwhiletheydomonitorandmanageindividualperformance,individualbehaviouris

nottargetdriven,andsotheseapproacheswouldsimplynotworkinthatcontext.

4.4.5Culture

Theliteratureonorganisationalculturesisextensive,andmanywriterson

sustainabilityinorganisationsdrawfromit.Thekeyfeaturesthatemergedfromthe

literaturesearcharefoundedonthebasicbeliefsarisingintheorganisations.While

individualscananddohavestrongattitudes,thesecanbeaccentuated(oroverridden)

byorganisationalattitudes(McNamara&Bromiley1997).Theseorganisational

attitudesareshapedbyunderlyingsharedbeliefs(JamesJr.2000;Meyers2004;Gioia

1992)whichcanleadtopro-socialorpro-environmentalattitudes(Victor&Cullen

1988;Howard-Grenville2006),totheperceptionofaclimatethatsupports

sustainability(Lülfs&Hahn,2014)or,bycontrast,toaninstrumentalistattitude

(Aguinis&Glavas2012;Victor&Cullen1988).Attitudestowardstimearealso

importantinshapingthewayinwhichdecision-makerswillthinkabouttheinter-

temporaltensionspresentedbysustainability(Howard-Grenville2006;Stubbs&

Cocklin2008;Ardichvilietal.2009).

Theseattitudesareestablishedintheorganisationthroughnormsandvalues(Nijhof&

Rietdijk1999;Ardichvilietal.2009;Blome&Paulraj2013).Peopleacquirethesefrom

observingtheirpeers,leadersandreferentgroups(Ford&Richardson,1994;Lülfs&

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Hahn,2014)andfromexternalbodies–forexampleprofessionalassociations(Victor&

Cullen1988).Normsareexpressedfurtherthroughavarietyofsignalsinthe

organisation.Theseincludethechoiceofrolemodelsandheroes,(JamesJr.2000;

Ardichvilietal.2009)stories,(JamesJr.2000;Ardichvilietal.2009),language(Blome&

Paulraj2013;JamesJr.2000;Ardichvilietal.2009),rituals(Blome&Paulraj2013;

JamesJr.2000)andtraditions(Nijhof&Rietdijk1999).Thesenormsarereinforcedby

socialisationmechanisms(Blome&Paulraj2013;Cohen1993).

Theintervieweesidentifiedseveralofthesefactorsintheirreflectionsontheir

decisions.Whileafewdescribedafundamentalbeliefaboutsustainability,many

othersdescribedthewaythisbeliefwasreflectedthroughsocialmechanisms,suchas

language,rolemodellingandwaysofworking.Attheheartofthesustainability

cultureisacommonbeliefaboutthebusiness–thisisdescribedearlierinthediscussion

aboutframing(Section4.3.5)andinthedescriptionofvisionsandpurpose.Asone

intervieweesaid:

“Itwasarelativelyeasydecisiontomakeatanyrate,becausewhatallowedforthat

wasacommonsentimentthatbusinesscanbeaforceforgood,andcommonalityof

wantingtoexplorehowwecouldmakeitgood.Andnobodyhadapointofcynicism

againstthat.Andthat’sthefirsttimeinmycareerthatI’veexperiencedthat.”

Butthisclarityaboutthecompany’sapproachtosustainabilityneedstobeconstantly

reinforcedthroughitssocialprocesses.Intervieweesdescribedseveraldifferent

approachesthatwerebeingusedtoimproveawarenessandunderstandingof

sustainability.Severalintervieweesgaveexamplesofthewaythatchangingtheway

peopletalkedaboutsustainabilitybegantonormaliseandlegitimateitinthecorporate

culture.Oneofthemajorshiftsforsomeorganisationswasthemovefromtalkingabout

sustainabilityasacosttotalkingaboutitasarisk,oranopportunity.Asone

intervieweesaid:

“Wewantedtochangethethinking.Andwehad–itwasn’tcalledacampaignabout

greenthinking–butwetalkedaboutgreenthinking.Wewantedpeopletothink

green.”

Interviewsalsomentionedtheimportanceofstories–forexampleabouthowclients

werevaluingsustainability,howshareholdersvalueditorabouthowthecompanywas

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makingadifferencestartedtochangethelanguagewithincompaniestoplacearenewed

emphasisonsustainability.

“Sothisisprobablygoingtomaketheimpact,thechange.Askingclientsandthe

clients’clients–thefinalusers….Icouldseethatthisconcept,ifitispursuedwith…

goodspeakers,goodstories,thentheygetit.Clients,colleagues…theyrealisethat

thisisallaboutco-operation,allaboutintegration”

Insomecases,thesestorieswereamplifiedthroughprocesses-suchasawards-togive

formalrecognitiontopeoplewhohadincorporatedsustainabilityintotheirwork.This

alsohadtheeffectofcreatingvisiblerolemodelswithinthecompany.Severalofthe

intervieweesgaveexamplesofthewaysinwhichtheirorganisationswereraisingthe

profileofmanagerswhohaddoneoutstandingworkonsustainabilitybyusinginternal

awardsschemesandusingthesetoraisethestatusofpeoplewhowereacting

sustainably.

Anothercompanyhadbeeneffectiveatcelebratingclientswhohadbeeninnovativein

sustainability,whichinturninspireditsownstafftothinkmoreabouttheissues.

Severaloftheexecutivesinterviewedhadworkedforcompaniesthathadwonawards

forsustainabilityorhadundertakencommunityinitiativesthathadamotivatingeffect

onstaff:“Wealsoknowthatourpeopleloveit...allouremployeeswereasked‘whatmakes

youproudtobe[here]?’andthiswasthenumberoneissueonwhytheyfeelproud.”

Thisworkonthesocialfabricoftheorganisationisnottrivial,buttheintervieweeson

thewholesawitasafundamentaldriverofchange:

“Myaiminintroducingthisisnottogetmoreworkforme.Itistotrainthedecision-

makersinthinkingadifferentway.IfImanagetotrainthemtothinkinadifferent

wayandwegetwhatwewant,itmaybethatwe’resuccessful.”

Welldone,theseculturechangescanbearealsourceofdistinctivenessforacompany:

“Andwhatsetusapartwasthatitwasthroughout–onanyjob,withanykindof

person,theykindofknew[aboutsustainability].”

Despitethefactthatseveralintervieweesreportedinnovations(suchaswaystocreate

recognitionforsustainability),theywerealsoworkingwithinexistingculturalsystems

thatdidnotchange.Thesealsohadanimpactondecision-making.Forexample,

companiesneedawaytoresolveconflictsbetweengroupsinvolvedinadecision:while

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thiscansometimesbehandledthroughformaldecision-rights,theremayalsobe

culturalnormsformanagingconsensusordissentforexample,oneinterviewee

describedaprocessforresolvingaconflictaboutasustainabilityissue:

“Ihavedisagreedandcommittedwhichisa[companyprinciple].Sowesaydisagree

andcommit.SoI’vedisagreedwithher,butI’vecommittedthatwecouldputaplan

togetherorthemandmakeitclearthatwedon’tthinkthisisOK.”

Similarly,anothercompanydescribedanexistingculturalinfluenceondecision-making:

“Thecultureisoneofinformationsharing,andinawaythat’sgreatbecause

everyone’sinvolvedbutitcanslowthingsdown.Sowhenyousaywho’sinvolved,it

canbealotofpeopleinvolvedinthatdecision.Wehavealotofstakeholders

generally,oralotofpeoplewhoperceivethemselvesasstakeholders.Sowetryto

involveeveryone,wehavealotofmeetings.”

Thus,cultureisnotonlyasubstantialthemeintheliteratureaboutbringing

sustainabilitytodecision-making,itisalsoafeaturethatsomeorganisationshave

deliberatelyinfluencedinordertoincludemoreconsiderationofsocialand

environmentalthinking.Thisisparticularlyimportantincompanieswherethe

materialimpactsofsustainabilityoccuratsomedistancefromthecentralsustainability

team.Socialfactors,suchasstorytellingorrolemodelling,areeffectivelysubstituting

formalprocessesofinfluenceforthesustainabilityteam.However,togivethem

legitimacy,theymayneedasecondsocialprocess:leadership.

4.4.5LeadershipAdiscussionofculturewouldbeincompletewithoutobservingthatpeopletaketheir

cuesfromthetopoftheorganisationandthatleadershipisakeyfactorinshapingthe

waypeoplethinkandmakedecisions.Leadersinfluencetheclimateinavarietyof

ways(Cohen1993),butparticularlythroughtheirfocusofattention,thechoiceofwhat

theyreward(Ford&Richardson1994)andtheirnorms(Blome&Paulraj,2013;Lülfs&

Hahn,2014).Choiceofleadershipstyleisalsoimportant:Verbossuggeststhat

‘authenticleadership’ishelpfulforcreatinganethicalclimate(Verbosetal.2007)and

NijhofandReitdijkcommentontheimportanceofsupportivemanagement(Nijhof&

Rietdijk1999).Leadershipwasaclearthemeintheinterviewdataaswellasthe

literature,andwhilethereisnotonenormativemodelofeffectivesustainability

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leadershipemerging,intervieweesgaveaseriesofinterestingexamplesofthreemain

phenomena:directionsetting;advocacyandsupport;andengagingpeople.

Manyoftheintervieweesdescribedsituationsinwhichaseniorleader(orsmallgroup)

hadtakenacleardecisionthatthecompanyshouldoperatesustainably,andthishad

subsequentlyinformedthedevelopmentofaprogramme.Theseleadershadgenerally

seensustainabilityeitherasaresponsibilityoranopportunity:

“Itisdrivenbyindividualpassions”

“OurCEOhadalreadydecidedthathewanted[thecompanytobethe]sectorleader

onsustainabilityandthere’dbeenquiteabitofdiscussionatexecutivecommittee

levelaboutwhytheywantedtotakethatleadershipposition”

Thisdirectionsettingneedstobesufficientlyconcretetoinformthewaythe

organisationworks.Oneintervieweecommentedonanorganisationwhosedirection

hadbeentoovague:“Theyneedmuchclearerguidance”.

Thesecondrolethatemergedforleadershipistoadvocateforsustainabilitywithin(and

sometimesbeyond)theorganization:

“[TheCEO]launchedthenewKPIs…andsomeoneasked:‘Whyissustainabilityon

that?Isitreallystrategic?’andhelookedthepersonintheeyeandhesaid:‘Ifyou’re

askingthatquestionyou’reworkingforthewrongcompany.’”

“He’smoreofanadvocatenowforsocialandenvironmentalsustainabilityashe’s

maturedasanindividual,youcanseethewayhe’stakenhimself”

Giventherelativelackofformalauthoritythatmostsustainabilityprofessionalshavein

theirorganisations,thisadvocacyroleisanimportantenablerofsomeoftheother

organisationalfunctions–includingformalactivitiessuchasestablishingnetworks,and

socialactivitiessuchasinfluencingthechoiceofwords–thatpeoplehaveusedtobuild

sustainabilitycriteriaintotheorganisation’sdecision-making.

Finally,leadersrecognisethatsustainabilityneedstobebothbroadanddeepwithinan

organisation,andmakesparticulardemandsonpeopleintermsofmanagingmultiple

stakeholders,newknowledgeandhigherlevelsofcomplexity,uncertaintyorambiguity.

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Somehavethereforestartedtousethisasacatalysttobuildnewleadershipcapabilities

withintheorganisation:

“Myendgameistousesustainabilitytocreateleadership.Butnotthekindof

leadershipwhichisthecommandandcontrol.Butthekindthatallowsamultitude

ofindividualstoworktogetherinaconstructive,collaborative,leadingway.”

Leadershipalonecannotchangeacompleteorganisationalsystem,however.Itis

reinforcedbysystemstotransferknowledgeandunderstanding;byrolemodelsandby

thelanguageusedintheorganisation.

4.4.6Summaryoforganisationalinfluences

Thus,thereisaclearrelationshipbetweenthefourorganisationalelements–

organisationdesign,performancemanagement,cultureandleadership–thatinfluence

theinclusionofsustainabilitycriteriaindecision-making.Whentheseworkeffectively

together,itbecomespossibleforcompaniestobringsocialandenvironmental

considerationsintomoreoftheirdecisions.However,disconnectsbetweenthese

elementscancausesignificantbarrierstothistypeofaction.Theintervieweessingled

outthreeorganisationalproblemscreatingtensionindecision-making:conflicting

objectives;structuralsilos;andalackofmechanismsornormsforresolvingproblems.

First,decisionsaremadedifficultwhenincentivesdonotsupportsustainability,or

whentheresponsibilityforsustainabilityorresourceconsumptionisseparatedfrom

theactivitydrivingit.Problemsalsoarisewhenthetargetsdonotreflecttheoperating

context,orcannotbeunderstoodbythepeopletowhomtheyapply.Second,decisions

canbemademoredifficultwhentherearestructuralsilosintheorganisation.

Compartmentalisationofthesustainabilityteamcanleadtotensionindecision-making:

oneintervieweedescribeda“dynamictension”betweendepartments,andanother

pointedouttheproblemsofneedingtorundifferentpartsofthebusinessindifferent

ways.Finally,companiesneedeffectivemechanismsforresolvingproblems.Some

intervieweesdescribedveryclearnormsorprocessesforresolvingdisagreement,

whereasothersdescribedamoreinformalapproach.Whileitisclearthateitherof

theseapproachescouldbeeffectiveintherightcontext,itwasalsoclearthatboth

createdconditionsinwhichresolvingproblemscouldbetime-intensiveandfrustrating.

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Thuswecannotseparatethedecisionfromitsorganisationalcontextandthedecision-

makersthemselves.Decision-makinginbusinessisseenthroughtheeyesofparticular

decision-makers,whoseperceptionoftheproblemis,inturn,shapedbythe

organisationitself.

4.5Individualdecision-makersTheformalandsocialstructuresoftheorganisationinfluencedecision-makersby

directingtheirattention(Felinetal.2017;Heimer2008;Simon1997;Ocasio1997).

However,decision-makersarealsoindividualswiththeirownagencyandtheirown

interpretationsofthedecisionathand.Ithereforeexaminedtheliteratureandthedata

toidentifytheparticularattributesthatindividualdecision-makersbringtotheir

context,tosuggestthewaysinwhichvariationmightoccurindecision-making.

Boththeliteratureandthedataaresomewhatfragmentedonthistopic.AsShepherd

andRudd(2013)observe,moststudiesofdecision-makersfocusonaverylimited

numberofvariables,meaningthatthereisnotaholisticbasisfortheorybuilding.My

owndataarealsolimited:someintervieweesdidreflectontheparticular

characteristicsofdecision-makers,buttheinterviewstructurewasnotdesignedto

probethissystematically.However,thereissufficientmaterialheretostarttoidentify

theelementsthatshapeindividualdecision-makers’approachtotheirdecisions.

Althoughmyanalysiswasinductive,anddrewontheaxialcodingfromthedataandthe

keythemesintheliterature,Ifoundthatthethreerecurrenttopicsinthisanalysisare

allfeaturesofboundedrationality,describedbyHerbertSimoninAdministrative

Behaviour(1997p.66).Ourindividualwaysofunderstandingdecisionsarelimitedby

ourknowledgeofthematterathand;ourownattitudesandthewaywepayattentionto

it;andourperceivedauthoritytodealwithit–aphenomenonwhichIwillcall

‘permissionspace’.

4.5.1KnowledgeDecision-makingmaycalluponbothexplicitandtacitknowledge(Nonaka&Takeuchi

1995p.8).Addingsustainabilityconsiderationstocorporatedecision-making

complicatesthis:newsystemsneedtobedevelopedtocreateandshareexplicit

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knowledge;andthesetsofexperienceandpatternrecognitionthatformtacit

knowledgeneedtochangetoaccommodatethesenewideas.Theliteratureon

organisationallearningisfragmented(Fortisetal.2018).However,scholarssuggest

thatsocialfactorsplayanimportantroleinthewayindividualsacquireandprocessthe

knowledgetheyneedtotakeinformeddecisions.

First,differentorganisations–includingdifferentpartsofasingleorganisation–have

differentepistemologies,anddefineproblemsindifferentways.HowardGrenville

givesanexampleofthisincomparingtwounitswithinasinglelargemanufacturing

organisation(Howard-Grenville2006).Inthisexample,onegrouptakeaveryscientific,

factualapproachtoknowledgeanddescribeproblemsinawaythatwillleadthemtoa

single,technical‘rightanswer’.Thesecondgrouphasamuchhighertoleranceof

ambiguity,andexpectsthatthe‘right’answerwillbeamatterofjudgement.Sackmann

(1992)identifiesfourdifferenttypesofknowledgethatareusedindifferentwaysby

differentsub-cultures,andsoshapethewaysinwhichproblemsaredefined.Different

organisations(orpartsoforganisations)willevaluatedecisionsbasedondifferenttacit

criteriabesidesformaldecisioncriteria,basedontheirethicalorientation(Victor&

Cullen1988).Theseschemasaretheoutcomesofseveralcharacteristicsofthegroups–

cultural,historical,andexpertisedriven–butwillnecessarilynarrowthefocusofthe

group’sproblem-solvingapproach.Thus,theorganisationallocusofthedecision-maker

mayshapetheiraccessto,andinterpretationof,knowledgeaboutsustainability.

Becauseknowledgeisasystemofstocksandflows(Dierickx&Cool1989),theabilityof

theorganisationtoshareknowledgeandtolearnplaysavitalroleinthewaydecision-

makersareabletouseknowledge.Knowledgesharingisconnectedtoorganisational

climate(Blome&Paulraj2013)andislistedasafactorinbuildinganethicalclimate,

thatistosayoneinwhichvaluejudgementscanbebuilteffectivelyintodecision-

making(Verbosetal.2007).Organisationsthatareabletouseadouble-looplearning

process(Verbosetal.2007;Marlowetal.2012),arealsoabletoacceleratetheir

learningandsoimprovejudgement.HymanandCurran(Hyman&Curran2000)

commentthatacapacityfororganisationallearningisessentialtobuildamoral

organisation.Theorganisation’sabilitytolearnintersectswiththelearningabilityofits

members.Trainingandawarenessofsustainabilitydoesinfluencetheextenttowhich

theseconsiderationscanbebroughtintodecision-making(Aguinis&Glavas,2012;Lülfs

&Hahn,2014),andcangeneratemoreknowledge(Schrettleetal.2014).Arrudagoes

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sofarastosaythatconvertingknowledgeintocollectivelearningiskeyresponsibilityof

leadership(Arrudaetal.2013p.4324).

Theintervieweeswereintenselyawareofdifferencesinlevelsofknowledgeand

understandingbetweendecision-makers.Thiswasoftenexpressedashaving‘the

wrongpeopleintheroom’:

“Whatwefoundbeforeisthatanawfullotofstuffjustdidn’tgetthoughtabout

becausethewrongpeopleweremakingthedecisions,wellnotthewrongpeople,but

peoplewhodidn’tknow.”

Anothersaid:

“Alltheideasthatwereobvioustoanyonehadbeenengineeredout.Butifyou’dhad

aleadershipteamthatknewsomethingaboutsustainabilityandwereengineers,you

couldhavedonesomethingexciting.”

Theintervieweesputmuchlessemphasisoninformationandanalysisthanwouldbe

expectedfromthebodyofliteraturedescribedinChapter2(inwhichasubstantial

majorityofthearticlesfocusedonanalyticaltechniquesfordecision-making).The

intervieweesdiscussedknowledgeextensively,butplacedmuchlessemphasisonthe

formalanalyticaltechniques,andmuchmoreonthedecision-makers’relationshipswith

knowledge.Somehadextremelyimpressivedataandanalysissystems;otherswerestill

intheprocessofbuildingtheinformationneededtomakeinformeddecisions.Asone

intervieweesaid:

“Youcanreallyfeelthatthediscomfortpeoplehavebecausealthoughit’sdatadriven

it’snotthedatapeoplehave…Peoplearetryingtofigureoutwhat’srightandwhat’s

involved.”

Thisquestionoftheepistemologywasanimportantone.Asseveralinterviewees

pointedout,sustainabilityisquiteanebulousconcept,andpeoplecannotincorporateit

intotheirdecisionsuntilitisclearwhatthefocusis.Companiestookdifferent

approachestocreatingthisclarity,rangingfromquiteasubjectivediscussionwith

seniorleaders:

“Iaskedthem‘whatdoyouwanttoachieve?Whatdoyouwanttogetoutof…

sustainability?’Sotheygavemesomeanswers...Iplayeditback…lettingthem

discussit,tochoose,andlettingthemshapeitbasedonwhattheyaskedme.Sothey

coulddefineitbecausetheycanonlythinkthisway.”

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Thisactofshapingthinkingwascentraltothewaysomeoftheintervieweesdescribed

theirwork,particularlyininfluencingtrainingprogrammes.Oneintervieweedescribed

frameworksasawaytoachievethis:

“Ifyou’veboundedthatconcerninsomewaybycreatingaframeworkandsaying

‘thisishowwe’remanagingthis,thisishowwe’remanagingthat’,thenIthinkyou

knowit’samoreinformed,rationaldiscussion…forme,havingtransparent

frameworksthathelpyounavigateadecisionthatupfrontyoumightknownothing

about,that’sbeenhelpful.”

However,evenwhentheinformationandmethodsareavailablethereisstillaproblem

ofusingtheknowledgecorrectly.Oneintervieweegaveexamplesofdecisionswhich

werenotcorrectlyanalysedandwhereaheuristichadturnedouttobeincorrect.Asthe

executiveinvolvedsaid:

“Evenpeoplewhodothisalldaylonghaven’taskedthequestion.Sotheideathat

sustainabilityissomesortofknownsecretthateveryoneknowstheanswerto,and

onlyneedstobeabletoaffordisnottrue.Peopledon’tknowwhat’sbest.”

Thisvariationintheknowledgethatindividualsbringtotheirdecision-makingmeans

thatdecision-makersmaynotrecognisethesocialorenvironmentalaspectsofa

problemathand:inshort,itdirectsandboundstheirattention.Thesecondfactorthat

aroseattheindividuallevel–individualattitudesandbiases–alsohasthiseffect.

4.5.2Biasesandattitudes

InChapter2,Idescribedabodyofliteraturethatexploresthepsychologicalaspectsof

decision-making,particularlyaddressingthelimitsonpurerationality.Weknowthat

individualsbringarangeofcognitivebiasestodecision-making(Kahneman2011;Arvai

etal.2012).Thisbiasisheightenedinthecaseofsustainabilitydecisions,inwhich

thereissomeevidencethatpersonalopinionsaboutsustainabilityissueschange

behaviouringroupdecision-making(delaTorre-Ruizetal.2015).AsHerbertSimon

observes,thepresenceofemotionindecision-makingtendstonarrowthefocusof

attention(Simon1997p.91).Whilethereisincreasinginterestinfindingwaysto

managetheproblemofbiasindecision-making(Kahnemanetal.2011),noneofthe

intervieweesdirectlyaddressedthisintheirreflectionsonactualdecisions.

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Earlierinthischapter(Section4.3.3)Isuggestedthatindividualsbringtheirown

cognitiveframes–orparticularwaysofseeingaproblem–totheirwork,andthatthese

areverymuchinfluencedbyabroader,corporateframingofsustainability(whereone

exists).Thisanalysissuggestedpeopletendedtouseaframingfortheirdecision-

makingthatwasinfluencedbythebroaderorganisationalperspectiveonsustainability.

Aswellasexploringthewaypeopleframedthelogicoftheirdecisions,thecodingofthe

interviewdatarevealedfourperspectivesonhowsustainabilityisinterpretedmore

generally.InSection4.3.3,Ilookedspecificallyatthelogicthatexecutiveswereusingto

resolvethecompetingcommitmentsarisingintheirdecision-making.Thefour

perspectivesdescribedbelowdescribethebroaderframingofsustainability:how

sustainabilityisseenratherthanhowaconflictisresolved.Theseperspectivesmaybe

situational:anexecutivemayinterpretonequestionasamatterofcostandanotherasa

matterofopportunity.Whilethereisalogicalconnectionbetweenthesetwoframes,

althoughthereisnotsufficientdatatotestthisconnectionrobustly.

Althoughcriticalincidenttechniquedoesencouragereflection,mymethodwasnot

designedtodeliberatelysurfaceeitherconsciousorunconsciousbias,nordidIdirectly

attempttoassesspeople’sindividualframingofsustainability.However,some

intervieweesdidreflectonthedifferingperceptionsofsustainabilityamongdecision-

makers.Thewordtheymostfrequentlyusedwas‘attitude’,andsoratherthan

describingtheseas‘cognitiveframes’,Iamcallingthem‘attitudes’.Thesearepositions

thatexecutivesadoptintheirorganisations,andmaybedistinctfrombeliefstheyhold

intheirpersonallives:myinterviewsdidnotexplorethis.Thisstudydoesnotexamine

thewayinwhichthesebeliefsareheldnortheirorigins–whicharelikelytobecomplex

andmaystemfrompersonalviews,professionalidentity,orthebroaderframingof

sustainabilitywithintheorganisation.

Thefirstattitudethatappearedintheinterviewsisthat‘Sustainabilityisacost’.Oneof

thechallengesforbusinessisthattakingmeasurestoimprovesocialandenvironmental

sustainabilitycanbeashort-termcost.Thishasledtoaperceptionthatacting

sustainablyismoreexpensivethannot,andsoitisnotalwaysseenaspossiblesourceof

value.Asoneintervieweesaid:

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“TherewasskepticismaboutthisinFinance.Youknowthere’sa‘yeswecandoit’

departmentanda‘no,wecan’tdoit’department,andthat’showitfelttomeatthe

time.Andtheywereworriedaboutthecost”.

Anotherintervieweeobservedthesame,commenting:“Theyonlysawitasacost.”

Thesecondattitudeisthat“Sustainabilityisaboutriskmanagement”.Someofthe

intervieweesdescribeddecisionsaboutsustainabilityintermsofriskmanagement.

Intervieweesmentionedthreemajortypesofrisk:theriskofnon-compliancewith

changingregulation;riskstothecompany’soperations;andrisktothecompany’s

reputation.Oneintervieweecommented:“It’sariskmanagementissueinthebig

picture.”.Anotherdescribedhisinternaldiscussionswiththeorganization:

“[Theysaid]‘Whyareyoudoingthis?It’sjustgoingtomakelifemoredifficultforus’.

Oneofthemsaid,‘You’reopeningPandora’sbox’towhichIsaid‘Pandora’sboxis

alreadyopen,I’mjusttryingtocontrolitasariskissue’.”

Third,someintervieweestooktheattitudethat“Sustainabilityisaresponsibility”.

Sometimes,peoplemakedecisionsbasednotjustoneconomicvaluebutalsoonvalues.

Thisisnottosaythattheyarenoteconomicallyinformed,butratherthatacompanyhas

decidedthattheyhavearesponsibilityextendingbeyondtheirownimmediateinterests.

Oneintervieweecommented:

“Ourboard…wassplitonthis.Therewereoneortwootherswhoseemedtohavea

senseofresponsibilityandsawitasaresponsibilityissue.”

Anotherintervieweeobservedthatresponsibilitywascoretothecompany’sreputation:

“Oneofthekeypartsofourstrategyistobetopofmindasanexampleofa

responsiblebusiness.”

Thissenseofresponsibilitycaninfluencethewayindividualdecisionsaremade:

anotherintervieweesaid:

“Weneverhaveabusinesscaseforawaterimprovementproject,butwedoit

anywaybecauseit’stherightthingtodo.”

Anothercompanydescribedthesamedilemma:

“Itisadifficultcall.Anditcomesbacktothefinancialversuswherethe

responsibilityis.”

Fourth,somepeopletooktheattitudethat“Sustainabilityisanopportunity”.Justas

sustainabilityisnotalwaysacost,itisnotalwaysanopportunity.However,thereare

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caseswhendoescreatethepossibilityofinnovationanddevelopment.Oneinterviewee

said:

“It’salsoastrategicissue.Wewanttobeinindustrieswherethemega-trendis

behindusandsupportingus.Andthemegatrendisthatclimatechangeisimportant

andthatmoreandmorecountriesandbusinesseswillseeitthatway.”

Anothersaid:

“Theyreallywantedtoputthemselves,fromabrandperspective,asasustainable

company,anenvironmentalcompany…Ithinkthey’ddonesomemarketresearch

andsawtherewasanichethere…noonereallyhadcorneredtheextreme,green

sustainableangle.”

Athirddescribedsustainabilityasatriggerforinnovation:

“Peoplefromdifferentpartsof[theorganization]justsawtheopportunitytogrow

differentpartsofthemarket.”

Thesedifferentattitudeseachhavesomestrengthsbutbecausetheyfocusanddirect

attentioninaparticularway,theycancreateblind-spotsandcanleadtomismatchesin

communication:anexecutivewhobelievesthatsustainabilityisaresponsibilitymay

notgetfarbyappealingtothevaluesofsomeonewhobelievesitisacost.Several

intervieweesdescribedtheseclashes,forexample:

“TheCEOthoughtitwasagreatidea–hisperspectivewasreputation,marketing,

brand-building,consumerengagement,andothersintheteamlookeditessentially

throughthoseprisms.ButtheFinanceguyswereessentially‘ohwhat’sitgoingto

cost?’and‘Ican’tseeanypositivereturnonthis.’”

Thedifferencesarenotnecessarilyirreconcilable.However,severalintervieweessaw

themasabarriertoeffectivedecision-making.

4.5.3PermissionspaceThefinalfactorthatinfluencesthewayinwhichindividualsmakedecisionsistheir

senseofpermission,ortheauthorityandagencythattheyhavetochoose.Thisshapes

therangeofoptionsthattheywillconsiderinmakingadecision.Althoughpermission

is‘given’(forexamplethroughdecisionrights)itisalso‘taken’,andindividualsmay

varyintheirinterpretationoftheirauthorityandresponsibilityintermsof

sustainability.Thisisparticularlysignificantinanemergingfield:organisationsthat

areadoptingsustainabilitymaybeaddingittoasetofexistingresponsibilitiesandso

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thereisalevelofmanagerialinterpretationinvolved(Sandhu&Kulik2018).This

meansthatsomemanagersarerelyingonorganisationalcuestodecidewhetherthey

havepermissiontomakeaparticulardecision,andifso,howboldshouldtheybein

makingit?Iamthereforecallingthemanager’sinterpretationoftheirdecision-making

mandatethe‘permissionspace’todistinguishitfromthemoreformallygiven

‘authority’.

Again,theliteraturetouchesondifferentaspectsofthepermissionspace,offeringa

rangeofformalandsocialinfluencesonthedecision-maker,butthereisnotacentral

theoryofpermission.Atthecoreofthis‘permissionspace’lietheformalelementsof

theorganisation,includingdecision-rights,formalaccountabilitiesandjobdesign

(JamesJr.2000;Varmaetal.2007).Targetsandincentives(Aguinis&Glavas,2012;

Ardichvilietal.,2009;Lülfs&Hahn,2014)arealsoextremelyinfluentialinsignalling

expectationsofdecision-makers.Manyorganisationsprescribeformaldecisioncriteria

(Gioia1992)orguidelinesformakingdecisions(Nijhof&Rietdijk1999).Themanagers

willalsointerprettheir‘permissionspace’bearinginmindtheirdegreeof

empowerment(Blome&Paulraj2013;JamesJr.2000;Aguinis&Glavas2012).

Structuraldesignmayalsohaveaninfluenceonthewayinwhichthedecision-maker

interpretstheirbrief.Therelativeindependenceorinterdependenceofthe

organisationalunitwillshapethelevelofautonomyadecision-makermightfeel(Victor

&Cullen1988)andthewayinwhichtheytakemoralresponsibilityfordecisions

(Weber1990).Managers’perceptionsaboutthecontrolsystem(Verbekeetal.1996;

JamesJr.2000)willalsoinfluencetheirbeliefsaboutthelevelofindependencethey

haveindecision-making.

Decision-makersalsointerprettheirpermissionspaceandcriteriabasedontheir

understandingofhistoricalantecedents(Blome&Paulraj2013;Nijhof&Rietdijk1999),

andtheirinterpretationoftheculturedescribedabove(inSection4.4.5).Finally,some

stylisticcharacteristicsoftheorganisation(orthesub-culture)mayinfluencethe

decision-makers’interpretationofthewaytowork,forexampletheextenttowhichthe

organisationencouragesco-operationandcollaboration(Stubbs&Cocklin2008)and

theexistenceofco-operativeconflictresolutionprocesses(Hyman&Curran2000).

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Firmsvaryinthespecificitywithwhichtheydefineindividualdecision-rights.This

meansthatsomeoftheintervieweeswereclearerabouttheboundariesoftheir

mandatethanothers:asoneintervieweesaid,“Iwantedtostickonthemandate.Ididn’t

wanttoexpandtoomuch”.Theyoftenassociateditwithrisk.Somefeltthattherewas

apersonalrisktosteppingbeyondtheirmandate,andothersdescribedasituationwhen

thepersonresponsibleforadecisionhadcausedabreachofasustainabilityprinciple

becauseoftheirinterpretationoftheirpermission:

“ThedecisionwastakennotbytheBoardortheCEO,butitwastakenbythe[two

executivesresponsible]…anditwasn’tclearatallwhethertheyweremakingthe

righttrade-offs.Theycertainlydidn’thaveanylargercontexttooursustainability

commitments,whichtheycertainlyshouldhave.Norwasitclearthattheywere

tradingthingsoffintherightway.”

Asaresultofthisparticularincident,thecompanyinvolvedhadreviewedthewayit

manageddecisionrights.

Intheinterviews,Ifoundevidenceofthecompaniesusingbothformalandinformal

systemstosignalandcontroldecision-rights,andindividualsinterpretingthesebased

ontheirownunderstandingofthesituation.First,formaldecisionrightscanbe

assignedtopeopleinparticularroles.Severalintervieweesdescribedformaldecision-

makingprocesses,typicallyinvolvingacommitteeorleadershipgroup:

“Wehaveaglobalcommittee…chairedbymyselfandmeetingonceamonthona

conferencecall,andonceayearwemeetface-to-face.Wehavetheguysfromeach

ofthehubs(i.e.regions)andarollingagenda,whichwediscuss,butthefinaldecision

ismadebyme.”

“ThegovernanceofourprogrammeisthattheExecutiveCommitteehasdelegated

authoritytotheSustainabilityCommitteetomakedecision.Therearesevenpeople

ontheExecutiveCommittee,butthreeofthemarealsoontheSustainability

CommitteesotheotherfourIsupposehavesaid‘Yeswetrustyoutogetonandmake

sensibledecisions’.”

Thisclarityisnotguaranteed,particularlyincompaniesthatarestilldevelopingtheir

approachtosustainability.Asoneintervieweesaid:

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“OneofthethingsI’vefound…isthatthere’smixedunderstandingofwhat

sustainabilitymeans,whereitbegins,whereitends,whoseresponsibilityisit?”

Thislackofclarityaboutresponsibilitymadeitdifficultforthemtoincludesocialand

environmentalconsiderationsconsistentlyintheirdecision-making.

Whiletherightstodecideareoftenclear,theresponsibilitytoconsultisnot.Ifthe

formaldecisionrightsarevestedinapersonorgroupwhohasanincompleteorpartial

understandingofthesustainabilityissuesinvolvedinaproblem,theresultislikelytobe

adecisionthatdoesnotincorporatetheseconsiderations.Asoneintervieweesaid:

“Wereallydidtakeaviewthatwewouldtrytoenablepeopletohavebetter

discussionsandmakebetterdecisionsaboutthingsbybeingbetterinformed.”

Thisprocesscanbetimeconsuming.Tohelpexecutivesmanagethis,onecompany

articulatedaseriesof‘redlines’tosignalthepointswhereadecisionreallyneeded

attention.

“Sowhattheydidfirstofallisthattheyputinasetof,theycalledthem‘redlines’,

whichwerebasically‘youneverevereverdothis’...Whatdoesredlinemean?Doesit

meanweneverdoit?Noitdoesn’t.ItmeansthatyouhavetogettheentireBoardto

aspecialsessionwheretheyhavetoagreetogether,unanimouslythatithastobe

done.”

Thishelpedthemtoprioritisethedecisionsthatneededattention,andclarified

responsibilityintheorganisationtomanagetheriskofbreachingasustainability

commitment.

Aswellastheseformalguidelines,culturalfactorscanplayaroleinhelpingpeople

interpretandunderstandtheirpermissionspace.Thiscantakevariousforms.Firstthe

degreeofempowermentinanorganisationisimportantinshapingthewaypeople

makedecisions:

“Peopleweregivenmorefreedomtodotheirownthings.Itwasn’taverycontrolling,

top-downplace.Theytriedtodothatonsomethings,butitdidn’tworkbecause

peoplelikedtobetheirownboss.Sowehadpolicy,butgotpeopletoimplementin

theirownway.Sowethenengagedwithpeople,andsomeofthemdidn’tagree,but

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wejustkeptengaging.Andthenpeoplecameupwithsomewonderfulsuggestions

andIthinkthat’swhywewereconsideredtobeverysuccessful.”

Organisationalfactorsarealsoimportanthere:decentralisedorganisationsmaygive

theirmanagersmoreindependence,whichmeansthattheyinterprettheirpermission

spaceinaparticularway:

“It’saverydecentralisedorganisationandalotofthemanagersruntheirown

empire,…andsustainabledevelopmentdidnothavetheagendathenthatitdoes

nowsowehadtogo‘guysthisisjustaboutmoney’andthatcuttotraction,sowe

couldgettothembysavingenergy.”

WhilethesecommentsallreinforcethefactorsIidentifiedintheliterature,therewas

oneotherthemeintheinterviewsthatshapedthepermissiondecision-makerswere

given:credibility.Credibilitywasparticularlyimportantforsustainabilityspecialists.

Thesepeopletendedtohaverelativelylittleformalauthorityfordecisions,butfound

thattheyneededtoinfluenceother–oftensenior–decision-makers.Asone

intervieweesaid:

“OneofthethingsI’vehadtodoisimprovethecredibilityofmyteaminternally.I

needtoknowthattheywillhaveenoughcommercialknowledgethatthey’renot

goingtosaysomethingsilly,thatthey’regoingtobetakenseriously.”

Thiscredibilityandpermissionspacecanbedevelopedandchangedovertime:

“Sodefinitelythatroadmapwassetatthebeginningofmymandate,butitisvery

aliveanditdevelopsasthesituationisdeveloping.”

Theseideasofasphereofinfluence,mandateandcredibilityareclearlyimportantin

practice.Intheliteraturetheseissuesmayappearas‘political’considerations(Elbanna

2006),andthereisastrongbodyofworkabouttheroleofpoliticsinorganizational

decision-making(Eisenhardt&Bourgeois1988).Despitethis,theinterviewees

themselvesrarelydescribedtheirworkaspolitical.Rather,theyacceptedandmanaged

thepowerimbalancesorinformationalasymmetriesintheirworkanddirectedtheir

attentiontowardstheproblemsofthedecisionathand.

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4.5.4Frameworkofinfluencesondecision-making.Thisanalysisallowsmetocompletetheconceptualframeworkconnectingtheformal,

behaviouralandsocialstructuresinfluencingtheinclusionofsustainabilitycriteriain

decision-makinginincumbentbusinesses.

Thedecisionitselfisattheheartofthemodel.Thiscomprisestwoelements–the

propertiesofthedecision(whatisit,howisitdefined?)andtheprocessforthedecision

(howwillthedecisionbetaken?Whatarethecriteriaforevaluation?)Thedecisionis

surroundedbyasecondlayer,whichbringsinthedecision-makers.Thiscomprises

threeelements:theknowledgeandpermissionspacethatthedecision-makersbring,

andtheirownpersonalattitudesandbiases.Thethirdlayerdescribesthe

organisationalfactorsinfluencingthedecision-makers.Theseincludetheorganisation

design,culture,leadershipandperformancemanagementoftheorganisation.Theouter

layerincludesthecontextualfactors–bothwithinandbeyondtheorganisation–which

shapetheapproachtotheproblem

Figure12:Organisationalinfluencesondecision-making

Externalcontext

Internalcontext

PerformanceManagement

CultureLeadership

Organisa;ondesign

Decisionproper;es

Decisionprocess

Biasesanda>tudes

KnowledgePermissionspace

105

Thesefourlevels–theinternal/external,theorganisational,thedecision-makerandthe

decisionitself–mapcloselyontothefourcontextsidentifiedbyDean,Sharfmanand

Fordintheirreviewoftheliteratureonstrategicdecision-making(Deanetal.1991:89).

However,Deanetaldidnotelaborateonthemoredetailedaspectsofthesecontexts

(forexamplethespecificorganisationalelementsinfluencingdecisions).Thisworkin

turninfluencedShepherdandRudd’sframework(Shepherd&Rudd2014p.352)–again

basedonaliteraturereviewofstrategicmanagementdecisionprocesses.While

ShepherdandRuddincludemoredetailintheirframework,thereislittleinformationon

theorganisationalfactorsandmoreemphasisonthepoliticalactivityofthedecision-

makersthanIfoundinthedataonsustainability-relateddecisions.Theresemblances

betweenthesethreeframeworksarestructuralratherthanspecific.

Threeoftheselevels–theindividual,organisationalandinstitutional–alsooccurinthe

paradoxliteratureindiscussionsabouttensions.Tensionscanbeexacerbatedwhen

theyarereinforcedatmultiplelevels(Sheepetal.2017),andcansometimesbeonly

understoodandaddressedby‘zoomingin’totheindividuallevelor‘zoomingout’tothe

systemlevel(Schad&Bansal2018).Inasustainabilitycontext,theconnections

betweentheselevelscancreatebarrierstoaction(Slawinskietal.2017).Theexistence

ofthesedifferentlevelsinboththestrategicdecision-makingliteratureandtheparadox

literature,suggeststhattheymeritfurtherexploration.InChapter5,Iwillshowhow

thesedifferentlevelsofanalysiscanbeappliedinasinglecasestudy.

4.6Thesystemfordecision-making

Thisanalysishasgeneratedthreesignificantnewconcepts.First,aclassificationof

differentdecisiontypes;secondananalysisofthedifferentwaysinwhichdecision-

makerscanresolvethetensionbetweencompetingcommitments;andthird,a

frameworkshowingtherelationshipsbetweentheorganisationalfactorsthatshape

decision-making.Thisintegratesseveralthemesfromtheliterature,whichhave

previouslybeentreatedindependently.Myworksofarhas,however,described

elementsofasystem,ratherthanthesystemitself.Thissystemicaspectisimportant:

asoneoftheintervieweessaid:

“Wehavecreatedasystemicapproach…ifwe’vegotamorecomplexmixofthings

itishardertocopy,andmoredifferentiated”.

106

Thisisacontrastwiththeverygranulardescriptionsofthephenomenoninthe

literature.Whilethesehaveenabledquitespecificunderstandingofelementsofthe

system(suchasthenatureoftensions,organisationalcultureorhowtousemulti-

criteriadecisionanalysis),theliteraturedoesnotaddresstheproblemofhowto

integratetheseelements.Thishashithertobeenabarriertotheoreticaldevelopment.

Thisinitialstudydemonstratessixbroadprinciples:

1. Introducingsocialandenvironmentalconsiderationsintocorporatedecision-

makingcausesaclashbetweentheneedsofstakeholdersand–formany

companies–fundamentalbeliefsaboutthenatureandbusinessofthefirm.For

manyfirms,thiscreatesaparadoxintheirvaluecreationmodel.

2. Thiscreatestensionbetweencompetingcommitments,whichwillinfluencethe

wayinwhichexecutivesmaketheirdecisions.Ifcompaniesreframetheir

businesstoincludesomeconceptofsustainability,thismaybroadenthelogical

possibilitiesavailabletodecision-makersinresolvingthetensionbetweenthese

commitments.

3. Thistensionwillbeheldindifferentpartsoftheorganisationindifferentways.

Thematerialimpactsofthetensionbetweenthecompany’sbusinessandthe

needsofexternalstakeholderscouldbemanifestinanumberofwaysfrom

operationalactivities(forexample,inpackagingchoices)throughtocapital

investmentorportfoliomanagementdecisions.Becausethesedecisionsare

madeindifferentways,differentdecision-makingcapabilities–information,

analyticalorframingmethods,orscriptsandschemas–willbeneededin

differentpartsoftheorganisation.

4. Tomanagethechangesinthenatureofthedecisions,decision-makerswillneed

toworkinnewways.Specifically,theywillneed:accesstonewexplicit

knowledge(forexample,informationaboutcarbonemissions)andtacit

knowledge(forexample,howtointerpretthisinformation);newwaysof

thinking,orattitudes,towardssustainability;andclarityabouttheirpermission,

ormandate,toincludesocialandenvironmentalconsiderationsintheirchoices.

107

5. Theseattitudes,knowledgeandpermissionspacecanbeinfluencedthrough

formalprocesses(suchastraining),butarealsoshapedbyandinterpretedfrom

thesignalstheorganisationsendthroughitsformalandsocialsystems.

6. Themainformalandsocialsystemsimplicatedinshapingdecision-makers’

thinkingare:organisationdesign,performancemanagement,cultureand

leadership.

TheserelationshipsareshowninFigure13,below:

Figure13:Thedecision-makingsystem

Thissystemicviewoftherelationshipsbetweentheformal,behaviouralandsocial

structuresthatinfluencetheinclusionofsustainabilitycriteriaindecision-makinglead

toaseriesofideastoexploreinthecasestudyreportedinChapter5.Specifically:

1. Thetensionbetweentheexternalandinternalfactorsisspecifictoaparticular

businessataparticulartime.

2. Thereframingofthistensionisasignificantdecision,whichhasimplications

broadlyinthebusiness.Thisisthereforeledfromthetopoftheorganisation

Howdecisionsaremade

A"ributesofdecisions• Archetypalcharacteris5cs• Decisionprocess• Decisioncriteria

A"ributesofdecision-makers• Knowledge• PermissionSpace• A;tudesandbiases

Tension

Internalfactors:•  TheoryofFirm•  Vision,missionandpurpose•  Rela5onshipswith

stakeholders

`

Externalfactors:•  Compe55on•  Complexity•  Munificence•  Stakeholders

Tensioncanbemoderatedby:•  Reframingthetension•  Companypoint-of-

viewonsustainability

Decisionprocessesanddecision-makerscanbemoderatedby:•  Organisa5ondesign•  Culture•  Performancemanagement•  Leadership

108

3. Ifthetensionisnotre-framed,itwillpersist.Thiswillcreatetrade-offproblems

whereverintheorganisationthematerialimpactsofthetensionmightbefelt.

4. Ifthetensionisreframed,itstillexists,butdecision-makersmayhavebeengiven

abroaderrepertoireofwaystomanagethecompetingcommitmentstheyface.

5. Simplyre-framingsustainabilityisnotsufficientiftheorganisationalsystems

which‘bound’decision-makingareunchanged.

6. Thereneedstobecomplementaritybetweenthesesystems.Changingonefactor

withoutaddressingsystemiceffects(forexample,changingtheavailabilityof

informationwithoutchangingthecriteriabywhichdecisionsaremade)willnot

improvedecision-making.

However,thisisstillessentiallyatheoreticalmodel,createdfromcombiningideasinthe

literaturewithobservationsfrompractitioners.Inthenextchapter,Iwillshow,usinga

casestudy,howthepartsofthemodelworktogethertoconfigureasystemina

companythatisworkingtobecomemoresociallyandenvironmentallysustainable.

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5:STUDY2

5.1IntroductionThesystemdiagramattheendofChapter4(Figure13)illustratestheproblemsthat

incorporatingsocialandenvironmentalcriteriaintobusinessdecisionspresent.First,in

ordertochangethewayadecisionismade,thebroaderorganisationalsystemneedsto

changesothattheforcesinfluencingdecision-makersaccommodatethesenewcriteria.

Second,becausedecisionsaredifficultfordifferentreasons,thereisnotasinglesystem

thatcanbeoptimisedforeverything:itismorelikelythattherewillbesub-systems(for

example,capitalinvestment,portfolioplanningorproductinnovation)whichneedto

workindifferentways,despiteacommoncorporatecontext.Thesetwoinsightswere

developedbymakingcomparisonsacrossdifferentcasecontextssotounderstandthe

relationshipsbetweenorganisationalelementsmorefully,Idecidedtoobservethese

phenomenainasinglecontext(Dyer&Wilkins1991).

ThischapterpresentstheStudy2,asingle-companycasestudyofalargeengineering

companyusingthepseudonymConsultCo.ThisbuildsonChapter4,byexaminingthe

threenewtheoreticalideasproposedinStudy1–asegmentationofdecision-types,a

classificationoflogic,andaframeworkoforganisationalinfluencesondecisionmaking

–inasinglesettingtoseehowthethreeconceptsinteract.

Thechapterisorganisedinawaythatreflectstheframeworkoriginallypresentedin

Chapter4.4.2,whichisrepeatedbelowforclarity.

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Afterthisintroduction,Idescribethemethodandthecontextforthecasestudy.

Section5.4introducestheoutercircleoftheframework–thetensionbetweenthe

internalandexternalcontext–togiveanoverviewofthecorporateframingof

sustainabilityandlogicsusedfordecision-making.Insection5.5,Ipresentthedifferent

decisiontypesthatarepresentinConsultCo.Havingestablishedthese,insection5.6,I

analysetheorganisationalandindividualfactorsshapingdecision-making.Section5.7

showshowthetensionsindecision-makingatConsultCoarenested,andhowby

understandingthechallengesatthemicro-level,ConsultCoisabletostartaddressing

tensionsatthemeso-andmacro-levels.Thechapterendswithabriefsummaryofthe

findingsandlimitationsofthestudy.

5.2MethodThiscasestudyisbasedondatacollectedfromarangeofsources(Yin1984),described

inSection3.3.2above.Whiletheanalysisbelowisinformedbythecontextualdata

(largelycompanyreports),itisrootedintheinterviewtranscripts,whichwerecoded

usingAtlasTisoftware.

Externalcontext

Internalcontext

PerformanceManagement

CultureLeadership

Organisa;ondesign

Decisionproper;es

Decisionprocess

Biasesanda>tudes

KnowledgePermissionspace

111

Myobjectiveinthisstudywastotestandextendtheemergingtheories,ratherthanto

developtheoryinaninductiveway.Thisbroadlyfollowsthetheory-informedapproach

describedbyEisenhardtandGraebner(1989),andisconsistentwiththeabductive

approachthatItooktodevelopingtheinitialideasfortesting.Therefore,insteadof

startingwithopencoding,asIdidinStudy1,Icodedthedatausingthecodestructure

developedinStudy1asastartingpoint.Thisisdescribedinsection3.4.Ithenwrotea

‘thickdescription’(Dyer&Wilkins1991),whichIusedasthebasisforparticipantcross-

checking(Butterfieldetal.2005).Inordertocheckmyunderstandingofthesituation,I

heldtwomeetingswiththeSustainabilityLeaderatConsultCoduringthecourseofthe

analysis,andshareda15,000-wordreportofthefindingswiththeinterviewees.

5.3TheCaseContextConsultCowaschosenforthecasestudyusingtheprincipleoftheoreticalsampling

(Eisenhardt&Graebner1989),coupledwithanenthusiasmonthepartoftheir

SustainabilityLeader(whohadbeenanintervieweeinDescriptiveStudy1)todeepen

hisengagementwiththestudy.ConsultCoisaninterestingexampleofacompanythat

hadamulti-yearhistoryofworkingtowardssustainabilityinanindustrythathas

significantsocialandenvironmentalimpacts(Rogeljetal.2018p.140-142)andis

characterisedbytension:thedesignandconstructionofinfrastructure.ConsultCoisa

large,internationalengineeringconsultancywithastaffofapproximately15,000

people.Ithasaglobalpresence,andworksinarangeofsectors,including

infrastructure,water,energyandtransportprovidingservicesfromadvisoryworkto

moredetailedengineeringdesign.Thesesectorsarecarbonintensiveandtheassets

oftenhavelonglives,andsothewayinwhichConsultCoprovidesitsservicestothese

clientscanhaveaverysignificantimpactonsocialandenvironmentalsustainability.

Becauseofthis,ConsultCohasmadesustainabilityakeystrategicinitiative.Thiswas

initiatedfromtheverytopoftheorganisation,aspartofastrategicrefreshafewyears

ago.Thisreviewofstrategyalsotriggeredotherinitiatives,includingafocusonethics,

onbigdata,anupdatedbrandidentityandsomeworkontheorganisation(suchasthe

clarificationofaccountabilities).Theseinitiativeshavebeenmutuallyreinforcing,and

soConsultCo’ssustainabilityworkispartoftheirbroaderorganisationalsystem.

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“It’sourChairmanwho’schampionedit[sustainability],andethics,andthedigital

revolution.Thosearethethreethingshe’sparticularlygonefor.Andhecouldsee

thattherewerechangingpatternsinsocietyandthatthiswouldbecomeimportant.”

Decidingtoadoptcorporatesustainabilityasastrategicinitiativewasprescient.Ina

recentmemowhichwaspublicallyshared,ConsultCo’sCEOobservedthatthereis

increasingpressurefromfinancialbodies(suchastheFinancialStabilityBoard’s

TaskforceonClimate-relatedFinancialDisclosure)forprofessionalstotake

responsibilityfortheinfrastructuretheydesign,andthishasbecomeasignificant

debateamongtheprofessionalbodiessettingstandardsforengineering.ConsultCohas

takenadecisiontoactpre-emptivelyandtotakealeadershipstanceinsustainability.

AtthetimeIundertookthisresearch,ConsultCowasinthefifthyearofitschange

programme.ConsultCoapproachedtheirchangeprogrammebyworkinginparallelon

developingtheawarenessandunderstandingoftheirclients,andbydevelopingtheir

ownknowledgeandcapabilitiestodesignandbuildsustainableinfrastructure.

Effectively,therehavebeenthreebroadstrandstothechangeprogramme:phaseone

involvedsettingthestrategicdirectionforsustainability,andintroducingcoreconcepts;

phasetwoinvolvedbuildingcapabilitiesandknowledgestocksandflows;andphase

threeinvolvedchangingtheselectionofclientstohelpConsultCoexitparticularly

pollutingorproblematicbusinesses.Theoverallarchitectureoftheprojectisshownin

Figure14.Themaininitiativesareshowninboxes,whichareconnectedwitharrowsto

showsignificantinterdependencies.Thethreephasesoftheprojectareindicated

acrossthebottomofthefigureusingbroadarrows.

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Figure14:KeyinitiativesinConsultCo'schangemanagementprogramme

Ratherthandescribingtheimpactofeachchangeinitiativechronologically,thenext

sections(5.4to5.6)analysethewaytheseorganisationalchangeshaveshapedtheway

peoplemanagesocialandenvironmentalissuesintheirdecision-making.

5.4Tensionbetweentheinternalandexternalcontext

InChapter4.3,Idiscussedtheroleofhavingacorporateframe,orperspectiveon

sustainabilityandthewaythisinfluencesdecision-making.ConsultCohasdevelopedan

approachtoframingthatreflectsthenatureofitsimpacts–whichareprimarily

incurredthroughthedecisionstheymakeaboutconstructionprojects.Thetwoassets

thatConsultCobringstoitsworkarethetimeofitsconsultantsandtheknowledgethat

theyhave(includingknowledge-basedtools).Thiscontrastswithorganisationsthat

maybemanaginglargefixedassetsresponsibleforenergyormaterialsuse.Instead,

ConsultConeedstobeabletomanageanapproachtosustainabilitythatisessentially

intangible.Thismeansthatwhiletheyareabletousesomeconventionalmetrics(and

dopublishanannualprogressreportcoveringissuessuchascarbonemissions),much

moreoftheirworkisconducted‘invisibly’throughtheirworkwithclients.

Clientmanagement

ini+a+ves

Sustainabilitysupport

ini+a+ves

Impacts

Regularprogrammeofeventsforclientengagement(includingConsultCo

staff

Developmentofaseriesofpublica+onsandcasestudiestoinspireclients

Exitfromsometypes

ofclientwork

Key

leadership

appointment

Newdata-

setsand

reports

Trainingforspecialistadvisorsto

reviewprojects

Introduc+onofsustainability

assessmentsonmostprojects

Buildingstructuresfor

improvedknowledge

sharing

External

repor+ng

ofprogress

Strategicini+a+ves

Strategic

commitmentto

sustainability

Newclient

leadership

strategy

Programmeof

cultural

integra+on

‘Decisionto

bid’process

revised

Phase1 Phase2 Phase3

Introduc+onof

sustainability

networks

Knowledge

People

Projects

Educa+on

Discussionof

sustainability

opportuni+es

Broader

awarenessof

benefitsof

sustainability.

Decreasein

embedded

carbonin

projects

Developmentof

more

informa+onand

capabili+esfor

consultants

ConsultCo

posi+onedto

servefewer,

beQerclients.

114

ConsultCo(likemanyotherprofessionaladvisoryfirms)facesatensionindecision-

makingforsustainability,inthattheirworkisactuallycarriedoutforclientswhoare

ultimatelyresponsibleforowningandoperatingthebuiltasset.Asoneinterviewee

said:

“Asaconsultingfirm,wecanpropose,wecanrecommend.Andthen,thishappens

throughoutthewholedecision-makingprocess,notjustsustainability.”

Thus,ConsultCo’sapproachtosustainability–whileanimportantstrategicplatform–is

constantlynegotiatedthroughtheprocessofclientengagementandisspecifictothe

context.Asoneintervieweesaid:

“Thedriversineachofthosegeographicallocationsarequitedifferent,and,Ifor

manyyearshavebelievedthatsustainabilityisaboutplace”.

Despitethisapparentambiguity,ConsultCo’sapproachtosustainabilityisbasedona

fundamentallogicthatthereisabusinesscaseforactinginawaythatissociallyand

environmentallysustainable,andthis‘corporateframing’iscommunicatedto

ConsultCo’sstaffthrougharangeofchannels,includingtrainingandinternal

publications.Thisbusinesscaseisbasedonthreemainideas.First,thematerialsand

energysavingfromactingsustainablymeansthatsustainabilitypaysforitself:

“We’vegotthismantranow…thatreducingcarbonreducescost,whichisgreatand

there'ssomeevidenceofthat,butweshouldbedoingthatasstandardacrossallof

ourprojects.”

Second,theabilitytoworksustainablyisrelevantandappealingforclients,andhas

reputationalvalue;

“Sustainabilityisalayer,ratherthansomethingthatclientspurchaseontheirown….

butsometimesitthestrandthatmakesthemtakenoticeofus.”

Andthird,employeesaremoreattractedtoacompanythattheybelieveacts

responsibly,andthattheywishtoworkthisway–asoneintervieweesaid:

“Iendedupgoingtoquiteafewrecruitmenteventsandfoundthatalmost

universally,[that]ifIwasapersonatarecruitingeventwhoknewsomethingabout

sustainability…thenIwasalwaysinveryhighdemandanditveryquicklybecame

clearthatitiscoretothebusiness,anditisabsolutelyfundamentalforrecruitment

aswellasallsortsofotherthings”.

115

Becauseofthis‘win/winbusinesscase’framing,Ifoundthatthetwodominantlogics

usedinmakingdecisionsaboutsustainabilitywereeitherwin/wins(inwhichcasethe

decisionswerepredicatedeitheronmaterialorenergysavings,oronsocialbenefits

withoutsignificantcost),ortrade-offs(insituationswherewin/winswereapparently

unachievable).

Theengineers’leveloffocusonwin/winswasinfluencedbyclients’approachesto

sustainability.Someoftheintervieweescommentedonhowimportantitistohavea

clientthatbelievesintheimportanceofsustainability:

“IamaproponentofsustainabilitybutIthinktheoverallcompanyisreallypushed

byourclientsfromthesustainabilityperspective,atleastinmyexperience.”

“TheprojectsthatIseethatintegratesustainabilitythemostaretheoneswhereour

clientsarerequestingit.”

ConsultCohasthereforeworkedactivelyonengagingclientswithsustainability(for

examplethrougheventsandpublications)andhascreatedprocesses(discussedin

section5.6.1,below)toensurethattheclientperspectiveonsustainabilityandthe

ConsultCoperspectivearealignedbeforeaprojectbegins,andthatthisalignmentis

maintainedthroughtheprojectlifecycle.

TherearethereforetwofundamentaldriversforsustainabilityinConsultCo:client

demandandConsultCo’sownstrategicpush.Thesedriversarebalanceddifferentlyin

eachsituation,andsothereisno‘onerightway’tomanageeachprojectforsocialand

environmentalsustainability.

Thereare,however,twopotentialareaswheretheinterestsofConsultCoanditsclients

arenotaligned:thelifecycleoftheassetandthecontractualtermsforthework.The

problemofinter-temporality–balancingthelongandtheshortterm–isacommonone

incompaniesthataretryingtoactsustainably(Bansal&Desjardine2014).Someof

ConsultCo’sprojectshaveextremelylonglifecycles,andyettheconsultantsonlywork

onitforashortperiod:

“Tobesuccessfulinsustainabledevelopmentweneedtothinkaboutthewhole

project’slife.Wecan’tjustconstrainourthinkingbygettingtotheendoftheproject

andpracticalcompletionandthenjustgoaway.Whichofcourseiswhatwedo.”

Thisproblemcanbereinforcedbythecontractualterms:

116

“Mostofourclientsaren'tincentivisedonawholelifebasis,andthey'recertainlynot

incentivisingusonawholelifebasis.”

Clientsvarynotonlyintheirapproachtosustainability,butalsointheirapproachto

contractmanagement.Oneintervieweecontrastedtwoverydifferentexperienceswith

differentprojects.Inthefirstcase,theintervieweedescribedaverypositivewin/win

experience:

“He'sanexcellent,inspirationalleader,stillatthebackofhismindwewereonacost-

incentivisedproject,sohewasalsoawarethatallofthisgreatstuffweweredoing…

wasn'tjustforthesakeofit,itwouldactuallydriveefficienciesanditwouldsaveus

money.”

Theintervieweecomparedthiswithaprojectforadifferentclient:

“Whereyou'reworkingwithavery,verytraditionalclient,whoisn'treallyinterested

in[sustainability],you'rebeingpaidbythehour,anythingthatisn'tinyourscopeisa

disallowedcostsoyoucan'tcoveritinanyway,you'renotgoingtogetanyfinancial

awardfromdoingit,thenthatwillinevitablydriveaverydifferentculture.”

Thismeansthattheconsultantsaretryingtodeliversocial,environmentaland

economicoutturnswithinabriefthathasbeensetbyaclient,andsometimesworkingto

optimisetotallifeimpactswhilebeingrewardedbasedonaninitialcapitalbudget.The

intervieweesidentifiedtwowaysinwhichthistensionismanaged.Thefirstofthese,

whichisdiscussedinsection5.5.1,isConsultCo’sprocessfordecidingwhichclientsto

workwith,andwhichprojectstoworkon.Thesecondistheroleofleadership

(discussedfurtherinsection5.6.1).Asoneseniorintervieweesaid:

“Sometimesthethingsweneedtodeliverforourbusinessdon’tfitintoourcostings

andapproachforaproject,soweneedtofinddifferentwaysofdeliveringoutcomes,

andthosecomeunderpressuresofthingslikeutilisationandbudgetsandallthose

sortsofthings.Sooneofmyjobs…istotrytounderstandsomeofthosestressorsor

constraintsandtrytounlockthosebarriers.”

Thistensionbetweenthelongandshort-term,andthetensionthatmaybesetup

throughthecontractualtermsneedstobemanagedthroughthedecisionsthatthe

engineersmakeoverthelifetimeoftheproject.

117

5.5SegmentationofConsultCo’sdecisions

BecauseConsultCo’smainimpactisthroughthedecisionsmadeonitsprojects–

whetherthesearehigh-levelcitymasterplansordetailedengineeringdesign–themain

focusofthisanalysisisonthedecisionsmadeduringthecourseoftheprojects.These

decisionsarespreadthroughouttheorganisation,ratherthanbeingconcentratedina

singlelocus.Thenature,complexityandscopeofthedecisionsvaryaccordingto

seniorityandrole,butitisnotthecasethattherearejobswheresustainabilityis

irrelevant.Thenatureoftheproblembeingsolved–andthepotentialsustainability

impact–changesovertheprojectlife-cycle,andsoIwillreviewthetypesofdecisions

andthestrategiesformanagingthemacrossfourstagesofthelifecycle:thepre-bid

stage,bidstage,projectstart-up,andprojectmanagement.

Thereare,ofcourse,otherdecisionsthatareimportantforsustainabilityatConsultCo–

forexample,choicesaboutinvestmentsinknowledge,instaffdevelopmentorinthe

basicoperationalmanagementofthecompany(forexamplemanagingthecarbon

efficiencyofConsultCo’soffices).Whilesomeintervieweesdiddiscussaspectsofthese,

themainfocusoftheinterviewswasonthedecisionsmadeinthecourseofConsultCo’s

projects.Thenatureofthedecisions,andthedecision-makers,changesoverthecourse

ofthislife-cycle,asoneintervieweecommented:

“Sometimeswe’llpickupworkwheresomeofthebaselinedecisionshavebeenmade.

Forexample,ifsomething’sbeentakenthroughtheplanningconsentphasethenwe

canonlygosofar.Whenwe’reintodetaileddesign,thenalotoftheworkmaybe

aboutselectionofmaterialsorconstructionmethods,thatsortofthing.Whereas

whenwe’reintheearlierstages,clearlyyoucangetmuchmoreinvolvedinthe

pillarsofsustainability,andyoucanhavemuchmoreofaninfluenceontheoverall

choiceoftheschemeoptions”.

Thissectionoutlinesthekeycharacteristicsofthedecisionsateachstepintheprocess

showninFigure15:

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Figure15:Keydecisionsduringtheprojectlifecycle

5.5.1ThePre-BidStage

Oneconventionalchallengewithformalbiddingprocessesisthattheyareoftenquite

time-pressuredandcanfeelquitetransactional.Tomanagethis,ConsultCohasstarted

toworkwithclientsearlierintheprojectlifecycle.Thereisnowaformalrolefor

accountleaders,whoarechargedwithunderstandingmoreaboutclientneedspriortoa

potentialbidarising.Theserelationshipsallowtheleaderstoreflectonfirst,whether

thecompanyshouldengagewithaparticularprojectatall,andsecond,theclient’s

sustainabilitygoalsandpriorities.Asoneleadersaid:

“I’vebeenworkingfor[client]forover20years–we’vebeeninvolvedinthe

conceptionstage,intheconstructionstage.Inthosekindoflong-termrelationships

thenwereallydohavetheopportunity,andwereallydoinvestbybringingexpertise

in[sustainability],andIcanthinkofnumeroustimeswhenwe’vedonethatand

we’veaddedvalue.”

Pre-bid Bidstage Projectstart-up Designphase Comple9on

•  DevelopmentDirectorsworkcloselywithpoten9alclientstounderstand(andshape)sustainabilityaspira9ons.

•  ConsultComaydecidenottobidifitisnotpossibletoreconcileviewsonsustainability

•  Theremaybelessemphasisonsustainability,ormorecompliance-basedapproachesatthisstageHoweverPSCconsultantsmaytakepart(est.66%ofcases).

•  Atensionatthisstageisbetweenlife9meandcapitalcosts

•  Astheteammobilise,theyre-engagewiththesustainabilityaspira9onsfortheproject.

•  Thisstageisanopportunitytodosomecrea9veproblem-solvingonsustainability

•  Sustainabilityissuesariseinbothengineeringdecisions(eg.Choiceofmaterials)andinprocessesofstakeholderengagement

•  AIertheprojectiscomplete,theclientisresponsibleformanagingitsongoingsustainability.It’sthereforeveryimportantthattheseconsidera9onshavebeenbuiltintotheearlierwork.

119

Aspartofthethirdwaveofitschangeprogramme(SeeFigure14,above)ConsultCohas

madesomechoicesaboutthetypeofprojectitispreparedtoengagewithbothinterms

ofsustainabilityandethics:

“Giventhatthebigdecisionswemakeareaboutwhoweworkwith…they’vegotto

passtheethicstest”

“[Sustainability]isacriterioninwhetherornotwetakeonprojects.Soifyou're

workinginaprojectarea-well,anyprojectarea,butparticularlythosethatmight

havesignificantsustainabilityimpacts-itwillaffectwhatmarkets,whatprojects

youwillpursue.So,hydro-projectsinvolvinglargescaleresettlement,orcoal-fired

projectswillbe,wellwelikelywon'tgetinvolved.Itwouldhavetobesomething

exceptionaltomakeusdothat.”

ThisstanceiseffectivenotonlyinreducingthereputationalrisksthatConsultComight

face,butalsocanmakethedecisionsfacingthegroupsimpler.Forexample,thereare

difficulttrade-offstobemadeinsomegeographiesaboutthebestsourceofenergyto

use.ConsultCo’sapproachofonlyworkinginsomesectorsmeansthatitisableto

betterfocusonbuildingresponsibly.Thishashadsomeorganisationalimplications:

“Ican'tpretendit'sasimpleproblembecausesometimespeople'slivelihoodsaretied

upinatechnologywhichisnotdeemedsustainable….Ithinkitdoestakevery

strongleadership,andstrongleadershipsignalsandafirmresolve…Itistough,and

itdoeshavechallengingaspectsintermsofmaintainingthatcollaborative,open

workingculturewhenyou'redeprioritisingsomesectorsoverothers.”

However,thedecisionsmadeataday-to-daylevelhavebecomeclearer.

Whiletheprocessofmanagingclientrelationshipsisanongoingone,atsomepoint

thereisadecisiontobidornot.Thisisathepointatwhichthepeopleleadingthe

relationshipneedtobringtogethertheirknowledge–asonepersonsaid:“Anumberof

thingsgointothedecision”.Toformalisethisprocess,again,aspartofitssustainability

changeprogramme,ConsultCohasintroduceda‘decision-to-bid’form.Thiswas

mentionedbyseveraloftheinterviewees,anddescribedmorefullybyone:

“Itasksyouaseriesofquestionsandthatresultin'OK,Ihaveansweredallthese

questions,Ihavethoughtaboutallthesethings'and[it]presentsyouwhetherwe

shouldgoafteritorweshouldn'tgoafterit.Sothatdecision-to-bidformisdefinitely

somethingthatweuse,andtherearesomeotherfactorstoitobviously,likethecost

120

ofit,theposition,dowehavetheexpertise,andthingslikethattoo.Butreallythebig

thingisthedecision-to-bidform.That'swhatConsultCoreallywantsyoutoconsider

priortogoingaftersomething.”

TheeffectthishasisthatConsultCohasveryfewdecisionswiththecharacteristicsof

‘wickedproblems’,thatistosayquestionsthataretrulyambiguous.Thisisnottosay

thatthedecisionsthatariseduringtheremainderoftheprojectareeasy–theyarenot.

However,theytendtobesolublewithinthetermsofreferenceoftheprojectitself.

5.5.2TheBidStage

Severalintervieweesreportedthatcoverageofsustainabilityatthebidstagewas

relativelylowerthanatthepre-bidstage.Theysuggestedtworeasonsforthis.First,

despitetheenthusiasmsomeclientshaveforsustainability,thismaynotbeakeypoint

intheirprocurementprocesses.OneAccountLeader,whoworkedbothonthepre-bid

andbidstageswithclientsobserved:

“Wequiteoftengetdisappointedbythelevelofsustainabilitycoverageinbids.Even

atthemoreoptimisticsideofthatspectrum,thequestionmightbefairlygeneric,

process-basedpieces,there’softenanopportunitytobringinsomeevidenceof

awardsorparticularsavingsthatwemadeincompletedprojects.But…ifthe

questiondoesn’treallydemandalot,youdon’tgetanyextramarksforitandyoucan

actuallylosemarksbyfocusingonsomethingthat’snotreallybeingaskedfor,no

matterhowpassionateyoufeelaboutit.”

Second,therecanbealackofresources.IfConsultCodecidestoproceedwithabid,they

assembleateamtodevelopthiswork.Aswellastheengineers,andsometimes

marketingpeople,therearedesignated‘ProjectSustainabilityCo-ordinators’(PSCs)

whoareallocatedtoprojectstoensurethattheappropriateknowledgeisbroughtin.

Oneoftheprojectmanagersspokeaboutthevalueofthisgroup:“Thesepeoplehavehadtotakeatrainingcourseforconstructionprojects,and

they'reabletobeakindofsoundingboard.Becausetheriskisthatpeoplewhohave

workedonthefeebid…mightgetblinkered.Sometimesyouneedagreenerperson

tocomeinandsay'really?Haveyousolvedtheproblem?’”

121

However,someoftheintervieweesobservedproblemswiththesystem.Insome

locations,therearenotenoughqualifiedPSCs,andinothers,theyaresometimesnot

usedverymuch,partlybecauseofthelackofemphasisonsustainabilityinthebid,and

partlybecauseofthepressureofotheractivities:

“You’rebeingaskedtothinkaboutitatthesametimeasdoingariskmatrix,and

puttingthecoststogether,soit’sjustanotherthing…Andputtingafeetogether,to

befair,isprobablystillwaymoreimportant.”

Despitethisrelativelylowemphasisonsustainabilityatthebidphaseoftheproject,

intervieweesmaintainthatitisimportant:

“Itgenuinelyisimportanttous.Justbecauseatendermaynothavecovereditvery

much,wewilltaketheopportunityafterwardstoexplorewithinourprojectaswell

asourpositioning,howbestwecanservethesustainabilityambitionsandaimsof

ourclients.”

Thisprocessofre-groupingstartsintheprojectstart-upphase.

5.5.3ProjectStart-Up

Theintervieweeswereunanimousinidentifyingthatthebeginningoftheprojectwas

importantinincorporatingsustainabilityideasintothework:

“Fromapersonalsatisfactionpointofview,Ithinkthefrontendoftheprojectis

wherewecancreatethegreatestvalue,findthegreatestopportunities,andtryto

impartthosesolutions.”

However,thisisalsoapointofdiscontinuitywherethepeopleleadingthebidhandover

tothepeoplewhowillactuallyimplementthework.Thisisacriticalpointforbuilding

alignmentbothwithinConsultCoandwiththeclientabouttheroleofsustainability.A

projectmanagerdiscussedtheprocessofalignment:

“Youhaveaprojectkick-offwhereyougeteveryoneintoaroom,andifit'sacrossa

fewoffices,thenyougeteveryonedialedinviaSkype,andyousay:thisisourbrief,

thisistheclientrequirement,andthisisConsultCo'srequirementsontopoftheclient

requirements.”

122

Anotherintervieweedescribedtheprocessforengagingclientsinbuildingclarityabout

thesustainabilityaimsoftheproject:

“Itry…tohavethatconversationabout‘whatareyoutryingtoachieve?Andwhat

aretheconstraintsforyourorganisation?Andwhatarethethingsthatworkwell

andthatdon’tworkwell?’Becausethatthengivesustheflavour,andtheguidance

abouthowwetacklethatnextstage.Andalsoitgivesustheopportunitytocome

backatvariousstagesintheprocesstocomebackandsay‘Hey,yourememberthese

wereyourheadlinegoals,thesewerethethingsyouwanttoachieve’.”

Atprojectstart-up,thedecisionsmayberenewedagainastheteamtakesoverand

startsworking:

“Onceyou’vemobilised,you’reintoarole,andclearlyasanorganisationwecan

continuetoinvestinthingswebelieveinandmaybeevenspendsomeofourown

moneyonaprojectputtingsomeexpertsandsomeinputintothesustainabilityspace

…becausewethinkwewillbeabletomakesavingseitherwithinthespecificproject

we’reworkingonorinthewholelifecostofthepieceofinfrastructurewe’reworking

on.”

Thisprocesseffectivelysetsthecontextformakingthedecisionsthroughthenextphase

oftheproject.

5.5.4ProjectManagement

ConsultCo’smaterialimpactsonsocietyandtheenvironmentcomefromthedecisions

thattheirengineers(andotherprofessionals)makeinthecourseoftheprojects

themselves.Theserangefromhighlevel,conceptualdecisionstodetaileddesign

choices.Somearetakenbasedonstandardsorrulesofthumb,whereasothersinvolve

morecomplexprocessesofengagingclientsorabroadergroupofstakeholders.Using

theclassificationofdecisiontypesfromChapter4.2.2,ConsultCo’sprojectspresent

decisionsinthreecategories:‘operationaldecisions’,‘engineeringefficiency’and‘messy

situations’

Designdecisionsvaryintheircomplexity.Somearerelativelyroutine,andcanbemade

usingstandardprocedures.Severalintervieweesspokeaboutusingparticular

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sustainabilitystandards(whichexistindifferentregions)inordertomakesurethat

theyhadaprocessformakingsurethatengineerspaidattentiontosustainabilityin

somedecisions.Wherepossible,ConsultCohasalsobeendevelopingtools–for

examplecarboncalculators–thatcanacceleratetheseroutinedecisions.However,

therearetwopotentiallimitationsofthisstandardisationandroutinisation.Thefirstis

thatthestandardsstillneedtobeappliedthoughtfullybytheengineers:

“It'snotlikethetoolsarebeingprescriptive'dothisandthatspecificallyandyou'llbe

moresustainable'.No,it'smore'saveenergy:youshowusthebestwaytosave

energytosuittheneedsofyourproject.''Promoteindoorenvironmentalqualityfor

occupants','reduceenvironmentalimpactthroughwasteminimisationandmaterial

selection',youknow,allofthosethingsarebroadsubjectsandcertainlythereare

specificthingsweneedtosatisfy,butwedon'tneedtobeconstrainedbythosetools.”

Thesecondisthatsomeestablishedstandardsmightnotbethemostappropriatefora

particularsituation:

“Somebody…mightlookatitandsay‘thisistheBritishStandard,thisiswhatithasto

be,andtherearenodeviations’.Soyousometimeshavetotakethesepeopleasideand

say'canwebecleverhere?”.

Sowhiletoolsandstandardswerecertainlyseenashelpfulbymanyoftheinterviewees,

somepointedoutthatengineersneededtogofurther:

“Ithinkyouhavetobeunafraidtochallengethings,andyouhavetosay‘why?’and

‘whatareourlimitsherereally?’andyoucan'ttakethingsatfacevalue.”

Theintervieweesgaveseveralexamplesofdecisionsthatwereimprovedbychallenging

thefundamentalassumptionsofaproject.Takingthisapproach,however,doesrequire

peopletotaketimeandthought.Oneintervieweedescribedusinga‘TakeFive’

approach–borrowedfromhealthandsafetyprotocols–toencourageengineersinthe

designphasetostepbackandlookatthebroadercontextfortheirdecisions.

5.5.5HowConsultCo’ssustainabilityagendainfluencesdecisions

ThechangesthatConsultCohasmadetotheprojectprocessaspartofitssustainability

programmehavehadsomeeffectsonthetypeofdecisionstheyareinvolvedin.

Introducingthe‘Decision-to-bid’processmeansthattheydonotfacedecisionswiththe

characteristicsof‘wickedproblems’astheyhaveelectednottotakeworkthatcreates

124

these.However,theintroductionofPSCsand‘Take5’hasdirectedattentiontoroutine

decisions.Choicesthatwereoncemanagedas‘operationaldecisions’nowhavethe

characteristicsof‘engineeringefficiency’or‘messysituation’decisionsastheengineers’

attentionisdirectedtowardsthesocialandenvironmentalaspectsofthedecision,thus

creatingmorepotentialtensions.Thismakesnewdemandsontheengineers,

particularlyontheirtimeandknowledge.Althoughtheintervieweeswereconvinced

thatstakeholderengagementwasessentialtosometypesofdecision-making,engaging

communitiesiscomplexwork,andcanbetime-consuming:

“Thesocialsidetakesmoretimethanthedesign,whichisridiculousintheory,butin

practicethatiswhathappens.So…youputinyourassumptionsonhowmuchtime

youneedtodesignandhowmuchyouneedtoconsult,and…wegotthebalance

wrongbecauseweunderestimatedthetimetogetpeopleonside.Becauseitcantake

alotofeffort,youknow,tobringpeopleonboard.Thenoveralltheprojectsucceeds

better.”

Thus,ConsultCo’sadoptionofsocialandenvironmentalsustainabilityasastrategic

priorityinitsworkhasstartedtoredirectattentionintheorganisation,andhaschanged

thenatureofthedecisionsthataremadeinitsprojects.Increasingawarenessamong

thestaffofthesocialandenvironmentalaspectsoftheprojectshasbothimprovedthe

impactofConsultCo’swork,andincreasedthedemandsonitsengineersintermsoftime

andknowledge.

5.6ConsultCo’sorganisation

Thesechangeshave,ofcourse,takenplacewithinthecontextofanestablished

organisation.Inthissection,Iexaminefirsttheorganisationalfactorsinfluencing

decision-makers(culture,organisationdesign,leadershipandperformance

management),andsecond,thefactorsthatindividualdecision-makersbringtoeach

decision(theirsenseofpermission,attitudesandbiases,andknowledge).Attheendof

eachsection,Icommentonhowthesecharacteristicsmightenableorhinderthe

effectiveinclusionofsocialorenvironmentalconsiderationsindecision-making.

125

5.6.1OrganisationalFactors

Culture

Theintervieweesplacedastrongemphasisoncultureintheirdescriptionsofthe

decision-makingenvironment.ConsultCo’scultureisverymuchshapedbyitshistory.

Inparticular,ithastwoapparentlycontradictorycharacteristicsthatareinfluencedby

thewaythecompanydeveloped.Ononehand,thecultureisquitefragmented,with

severaldistinctsub-cultures;ontheother,theemployeeownershipstructuremeans

thatthereisadeepsenseofsharedcommitmentandmutualreliance.

Theculturalfragmentationstemsfromthreedistinctphenomena.First,ConsultCo’s

strategyofgrowthbyacquisition–eithergeographicallyorthroughtheacquisitionof

firmsbringingnewspecialistdisciplinestothecompany–hasmeantthatthecultureis

notcompletelyconsistentthroughouttheorganisation.

Thishasbeenproblematicinsomecases,particularlywhentheintentionwastobringin

veryspecificexpertise:

“WewereacquiredbyConsultCobuttheproblemwas…theythoughtit[the

culture]wouldjustruboffonpeople.Sotosomeextenttheindoctrinationofthe

ConsultCowaykilledit.”

“Youcouldseetheverymuchadifferentculturewhichisnowinplace,andthe

transitionfromtheless-disciplinedandhighlyenthusiastic,butnowmovingintothe

morecontrolledenvironment.”

However,whentheacquisitionswerepredicatedongeographicgrowth,thislevelof

culturaldiversityhassometimesbeenadvantageous.

“It’seasytotakeforgrantedas[nationality]whereit’sinourculturetobe

questioning.Andthat’snotnecessarilythesameinothercultures.Weneedto

recognisethosedifferencesandfindotherwaysofgettingthebestoutofpeople.”

ThisflexibilityissometimesseenasanadvantageasitenablesConsultCotoreflectthe

characteristicsofitsclients,andoneintervieweecommentedonthiseffectatthelevelof

themicro-cultureofaprojectteam:

126

‘”Theprojectmanagersetareallygoodcultureinthatteam,andmadeitveryclear

fromthestartthathewantedittobeaflagshipproject.Hewantednewideas.He

wantedittotakeastepforward,tobetheexamplethatweusedforthenextthreeor

fouryears.”

“Evenwithinthatproject,theculturechangeddramaticallyoverthecourseofit.”

Specialistculturesarealsocreatedbythenormsofdifferentengineeringprofessions.

However,ConsultCo’sneedtocultivateprofessionalspecialistsandatthesametime

makethemworktogetherinamultidisciplinarywayissomethingthatneedstobe

managedactively:

“It’seasytoseeinengineering:youlookatanelectricalengineeroramechanical

engineerandtheywillbequiteheavyintheirsinglediscipline…weencouragepeople

tobefarmoremulti-disciplinaryintheirapproach.”

“Wetrytogetthemtounderstandtheneeds–youknowmechanicalengineers

understandingelectricalengineersunderstandinghydraulicengineers,

understandingarchitects,understandingclients–wereallytrytoengenderthis

culturewiththeteam.”

Thus,therearepotentialfissuresinthecorporateculturebetweendifferent

geographies,professionaldisciplinesandinsomecasestheculturesofacquired

organisations.

Inrecentyears,therehasbeenaconcertedefforttoaddressthesechallengeswithan

initiativetoimproveconnectivitywithinthecompany.Severalinterviewees

commentedonthis:

“There’saculturalchangethat’sgonethroughinmytimeframehere”

“Twoyearsagotheystartedanewinitiative,whichwas‘weareConsultCo,weare

onecompany.Let'sbreakdownthesebarriers’”

Thisnewapproachwaswellreceivedbytheintervieweeswhomentionedit.In

particularitemphasisesconnectedthinkingandproblem-solving,bothofwhichwere

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seenasstrengthsofConsultCo,andbothofwhichwererelevantfortheworkon

sustainability.Oneintervieweecommentedexplicitlyonthewayinwhichthischanging

culturecouldsupportsustainability:

“We’retalkingaboutachangeoveryears,ratherthanweeksandmonths.Butthat’s

howyouchangethecultureofabusiness….[sustainability]reallyhasbecomeapart

ofConsultCo’scultureandourethosthatthisisimportanttous,notbecausewehave

to,butbecausewe’veturned‘haveto’into‘wantto’andweseethebenefitsofit.”

Asaresultoftheseefforts,theintervieweesidentifiedafewfundamentalcharacteristics

thatweresharedbyallthesub-cultures:

“Youknow,althoughthegroupcultureisn'thomogenousacrosstheregions,Ithink

therearestrongcommonelementsrunningthroughmostbusinessunitsandmost

regionsthatdofacilitatethatopen,collaborativeapproachtodoingthings.AndI

reallydovalueitbecauseIoftenseehowmuchotherorganisationsdon'talways

achievethisandaremuchmoresilo-ed.”

Thetwomostcommonthemesthatwerementionedintheinterviewswerecollegiality

andriskaversion,andtheseseemtobeconsistentacrosssectorsandgeographies

Almosteveryintervieweeappreciatedandsawthevalueofthecompany’scollegiality:

“Collaborationisencouragedatthetopandalsobottom-up”

“ConsultCoisunique.Itisengaged,openandcollaborative”

Intervieweesalsomadetheconnectionbetweenthistypeofcollaborativeapproachand

theneedtoseekknowledgeandexpertisetomakeinformeddecisions:

“There’sisabigfocusonakindofflathierarchy,collaborativeapproach,opennessto

newlearning,globallyintegratedworking.”

“Peopleareveryhelpful”

Theotherconsistentthemeinthecommentsaboutculturewasacertainlevelof

risk-aversion.Thisclearlyinformsdecision-making:

“Lookingattheissueofrisk–corporaterisk–alotofthedecisionsIwouldmake

wouldbe‘whatistherisktoConsultCointhis?’…Alotofthetimewithdecision-

makingIgothroughtheprocessthatsays‘whathappensif?’Idoalotofthat.”

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Thesetwoaspectsofthecultureareapparentlyintensionwitheachother.One

intervieweepointedoutthedifficultyofmanagingthistension:

“Wearequiteriskaverse,andwecouldempowerpeoplemore.It’shardtostrikethe

rightbalancebetweenthesetwothings.”

Anotherintervieweepointedoutthatthisbalanceofconservatismandcollegiality

occursinotherculturestoo,usingananalogy:“insomewayswe’reprobablya

Gentlemen’sclub.”Manyintervieweesattributedthesetothecompanyownership,

commenting:“Ithinkthecultureisspecialbecauseweareemployeeowned”.Thisdrives

collegiality,aspeopleseethevalueofworkingtogetherbecausetheycanshareinthe

benefitofthework,butalsodrivesalevelofriskaversionaspeoplehaveapersonal

financialstakeinthecompany.

TheseaspectsofConsultCo’sculturedoinfluencedecision-makers.Whileeachofthem

isoperatinginaparticularclientcontextandwithabackgroundinaparticular

geographyordiscipline,thebroadercontextofConsultCoenablesthembothtomake

judgementandtoseekknowledgeandinput,bothofwhichwereimportantin

influencingindividualdecision-makers.

OrganisationDesign

Thiscommitmenttocollegialityalsoinfluencessomeoftheformalsystemsofthe

organisation.TheintervieweesemphasisedthreecharacteristicsofConsultCo’sformal

organisation–processes,jobdescriptionsandnetworks–thatplayasignificantrolein

bringingsustainabilityintodecision-making.Theyalsocommentedonthestructural

tensionsthatexistwithinthecompany.

IntheanalysisofthedecisiontypesinSection5.5,itwasclearthattheoverall

managementoftheprojectprocessisakeyfeatureofthewaydecisionsaremadeat

ConsultCo,forexamplethroughthedecision-to-bidform.Despitethis,noteverything

canbemanagedthroughprocess.Oneintervieweeobservedthatthisroutinisationcan

beuninspiringattimes:

“There’sbottomupenthusiasm,butwhenthetopdownprocessesapply,itswitches

everybodyoff.”

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Thisispartlyforculturalreasons.Aswehaveseen,ConsultCo’speoplevaluecollegiality

andprofessionalidentity,ratherthansimplybeingtoldwhattodo.Bycontrast,another

intervieweepointedoutthatsometimesprocessesdonotgofarenough:

“WhatI'mtryingtodoiswhat'snotpartoftheroutineprocess-well,weneedto

makesurethat'sworking-butweneedtopushbeyondwhattheroutineprocess

won'tprovide.”

Thissuggeststhattheprocesses,whileundoubtedlyuseful,needtobecomplemented

withothersystemicapproaches–suchasthecorporateculture,andthenetwork

structure–toinfluencedecision-makers.

ThesecondmechanismbywhichConsultCoshapesanddirectstheattentionofdecision-

makersisjobdescriptions.Oneintervieweepointedoutthattheremitfordecisionsis

establishedbasedonpeople’sroles:

“[People]startwithaverysmallremitwithpossiblynotagreatdealofultimaterisk,

andthenastheygrowtheirskillsettheygrowtheextenttowhichtheirdecisionsare

significant.”

Anothercommentedthattheseareclarifiedattheprojectleveltoo,toensurethat

decision-rightsareunambiguous.

“Atthestartofeveryprojectwetrytobeclearabouttherole,responsibilityand

accountabilityofeveryoneontheteam,andpeopleknowwhatthegoalpostsareand

howtoescalateprojects.”

Again,thisisaneffectivewaytomanageinaculturethatisessentiallycollegial.

WhileclearjobdescriptionsandprocessesarethemeansbywhichConsultCobrings

clarityandaccountabilitytodecision-making,networksarethemeansbywhichit

ensuresthattherightknowledgeandinformationischannelledtothedecision-makers.

Oneofthechallengesofincludingsocialandenvironmentalsustainabilityindecision-

makingisthatitmaycallontypesofexpertisethatarenotintheteam.ConsultCohas

emphasisedtheimportanceofmulti-disciplinarityinthistypeofwork:

“Ithinkthatsustainabilityisnecessarilyaverymulti-disciplinedpractice,thatit

requiresthesharedknowledgeandexperienceofpeoplefromavarietyof

backgrounds.”

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Thistypeofmulti-disciplinarityisrecognisedasaninstitutionalstrength,andisasource

ofdistinctivenessforthebusiness,aswellasbeinganimportantpartofmanaging

sustainability:

“It’sourabilitytosynergisethosecomplexmultidisciplinaryenvironmentsthatsets

ConsultCoapart.Sogenuinely,inthatspace,wearerecognisedasoneofthefew

organisationswhocanreallydothat.”

Toaddressthisneed,ConsultCohascreatedaseriesofpracticegroupsthatareableto

connectpeopleandknowledge.Thesegroupsareresponsibleforthestockof

knowledge(describedlaterinthissection),andtheorganisationdesignisresponsible

foritsflow.Oneoftheintervieweesdescribedtheroleofthepractices:

“Theresourcesareintheregions,sothepracticeisreallyacoordinatingfunction.So

makingsurethatpeoplearepluggedintogetherandmakingsurethatknowledgeis

collatedandputtogetherinacommonaccessibleplaceinawaythatpeopleare

requiredtoaccessit.Sothepracticeismoreaboutmakingsurethattheinterface

happensthanabouthostingthecapability.”

Thepracticeleadersareallin‘double-hatting’roles,combiningclientandbusiness

leadershipwithknowledge.Asonesaid:

“WefeltatConsultCothatitwouldbequiteusefultohavepeopleinthecross-hairs

betweentheverticalbusinessandthehorizontalpractice….It’schallenging,butit

makessense.”

Althoughsocialandenvironmentalsustainabilityisnotapracticegroup,itlargely

operatesinthesameway,asachannelforknowledgeandanetworkforpeople:

“IntermsofhowsustainabilityfitswithinConsultCo,….ifyoumakeateamofpeople

whodosustainability,itgiveseveryoneelseintheroomaremittonotdo

sustainability.Sothat’swhyyoudon’thaveasustainabilityteam.Youhavea

sustainabilitynetworkandpractitioners”

Oneofthemembersofthisnetworkdescribedtherolethus:“Iactasaconduitorflue

betweendifferentdisciplinesandgivepeopleguidance”.

Despitetheclarityofprocessesandjobdescriptions,andtheenergythathasgoneinto

creatinglinkingmechanismsandnetworkstosupportsustainability,thereremainsome

structuraltensionswithinConsultCo’sorganisationdesign.Theintervieweesidentified

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threemainareasoftensioninthedesign.First,thesizeoftheorganisationmeansthat

thereareverymanycountries,sectorsandpracticesthatneedtobeco-ordinated,and

thisiscomplexwork.Thesheercomplexitymeansthatsiloscanbealmostinevitable.

Thesecondchallengeisthetensionthatisheldwithinindividualrolesbecauseofthe

needfordouble-hatting:whilethisonlyaffectsseniorpeople,itmakesconsiderable

demandsontime.Asoneintervieweesaid:

“Butoneofthechallengesweface–itneverceasestoamazeme–howcomplex

everybody’sjobis”

“IfIhadendlesshourstospendonthis,Icoulddomore,butyou’vegottobalance

everything.”

ThefinalareaoftensionisbetweendifferentlevelsinConsultCo’shierarchy.Afew

intervieweesidentifiedalayerofmiddlemanagementasabarriertosustainability.This

wasmentionedbothbyseniormanagers(generallyreferringtoalayerbelowthem)and

byprojectmanagers(generallyreferringtoalayerabovethem).Asonepersonsaid:

“They’reblockedbythemiddlemanagerswhodon’tknowwhat[sustainability]is,

can’tseewhatit’sgottodowiththeirdayjob,anddon’tletithappen”.

Thisgapmaybeaproblemofknowledgeandexperience:

“Betweenearlycareerprofessionalsandmid-careerprofessionals…Ithinkthat's

wherethegapis.It'snotwiththeseniorleaders-theydogetit,andtheyverymuch

buyintoit,soitisthatmid-level.Theremaybeanelementofskepticism,Ithink,but

Ithinkactually,generally,myviewofitisthatitfeelsasthoughpeopledogetitand

theydobuyintoit,andtheydobelieveit'simportant,theyjustmaybedon'thavethe

confidencetodoit.”

Itmayalsobeafunctionoftheproblemthathasarisenasthetimedemandsofbuilding

socialandenvironmentalthinkingintothework.Themid-careerprofessionalshave

moredemandsontheirtime,andsomaynothavethecapacitytospendtimeoncreative

solutionsorstakeholderengagement.Thisquestionofthepressuresonindividual

managersisdiscussedlater,inSections5.6.2and5.7.

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Leadership

Leadershipwasarecurrentthemewhenintervieweesweretalkingabouttheadoption

ofsustainabilityasatopicforthecompany.Itisalso,ofcourse,essentialinmodelling

thecompany’scollegiality.Theintervieweestalkedabouttheimportanceofleading

thisfromthefront,ofrole-modellinganddevelopingthenextcohortofleaders.

TherewaswidespreadacknowledgementthatConsultCo’sdecisiontobuildsocialand

environmentalsustainabilityintotheirworkhadtakenstrongleadership:

“There’sthatinitialleadershipsaying:‘Doyouknowwhat?We’regoingtospend

somemoneyonthis.We’regoingtoinvest,andwethinkwe’regoingtogetareturn

onthisinvestment.’Andthenextlayerofleadershipishavingthecouragetoappoint

peopleandenabletheminthatrolewhohavetheleadershipcredentialstomakea

difference.”

“[OurChairman]stoodupandputhispersonalreputationonthebasisthatwewere

goingtoinvestasignificantamountofthegroup’smoneyinsustainability…andby

takingthatstanceveryearly...he’sputusinapositionwherewe’vegotaleading

edge”.

Thisveryvisibleleadershiphas,inturngivenpeopleconfidencetostartapplying

sustainabilityprinciplesintheirownwork:

“Itdoestakebehaviouratthetoptomakepeoplesay:‘wellIcanseethattheycare

aboutit,andsoIhavepermissiontoo’.”

However,becomingaleaderisdifficult.AlthoughConsultCohasastructureofcareer

developmentprogrammesdesignedtohelpbuildleadership,someoftheproject

managersdidmentionthedifficultyofmakingthetransitiontoleadership:

“Ithinkthatmightbethatalotofthetimewehavethesereallygoodengineersand

wepromotethemtobeprojectmanagers,andthatmightnotalwaysbethebestspot

forthem,becauseit'saverydifferentjob.Averydifferentjob.”

Oneoftheconcernsexpressedaboutthepossiblelayerofmiddlemanagementthatare

notdeeplycommittedtosustainabilitywastheeffectitwouldhaveonothers:

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“Theproblemisthateitherconsciouslyorsub-consciously,peoplefollowwhattheir

managersdo.Itjustsortofgetserodedinthepeoplewhocameintothecompany

withthepassion.”

Becauseoftheneedtoworkinamulti-disciplinaryway,oftenleadingotherswithmore

subject-matterexpertise,manypeopletalkedaboutleadershipasaprocessof

empowering:

“IfindthatincreasinglyIneedtogivespacetootherpeopletodothesethingsand

empowerthem,andthat’sgoingtogivethemtheopportunitytodevelopthoseskills”.

“Hehadtodrivethatandsay'I'mgoingtobelieveinyouguys,I'mgoingtobelievein

myteamcometomewithwhatideas,andifIthinkthey'regoodenough,I'mgoingto

putsomemoneyinthat,andI'mgoingtoinvestsomeofourfutureprofitbecauseI

thinkit'sgoingtohaveamultipliereffectandcreatemoreprofit.'”

“SoI’mafirmbelieverfromaleadershipstyletobringeverybodyin,anddragthose

intothedecisions.Intheendofthedayyou’vegottomakethedecision.”

Thisisallconsistentwiththeculturalemphasisoncollegiality.

PerformanceManagement

Interestingly,mostintervieweesdidnotdiscussquestionsofperformancemanagement

(suchaskeyperformanceindicators)unprompted.Aspartoftheseriesof

organisationalchangesthathaveledtotheculturalrenewalandbrandrenewal,

ConsultCohasclarifiedandemphasisedtheimportanceofaccountability:

“Oneofthethingsthathaschangedinrecentyearsisanincreasedunderstanding

aroundthebusinessofthedifferencebetweenresponsibilityandaccountabilityand

alsoanincreasedunderstandingofthedefinitionofaccountability.”

Theintervieweesweregenerallyveryclearthattheywereaccountableforproject

deliverytotimeandbudget,andthisiswheretheydirectedtheirattention.

Thisintensefocusontimeandcostcanbeintensionwiththedemandsforcreative

thinkingtoproducemoresustainableoutcomes:

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“Sometimes,theproject,youjusthavetofocusongettingtheprojectdonewithinthe

fee.Thereisabigpushonmakingsureyoudon’toverrun.AndIthinkitdoesdepend

onthepeoplebeingabletoseethattherearedifferentwaystoskinacat,andthat

actuallyyoucould,ifyou’remorecreativeatthebeginningbeabletodosomething

moreinterestingwithinthefee.Butsomepeoplecandoit,andsomepeoplecan’t.”

Thiscommercialimperativeclearlyfocusesattentionontheprojects,butitmaybeat

thecostofothersustainability-relatedactivities.Inparticular,sustainabilityisnot

monitoredparticularlydirectly:

“FromaKPIsperspective..thereisn'tactuallyaquestion'whathaveyoudoneto

boostsustainabilityinyourprojects,'…maybethatwouldbepenalisingpeoplewho

don'thaveopportunitiesto.Butit'sworththequestion.”

Thisproblemofwhenandhowtospendextratimeonsustainabilityandknowledge

activitieswasarecurrentthemeinthediscussions.Oneintervieweepointedoutthat

performancereviewsalsodonottakeaccountofnon-projectbasedbehaviourthatis

neededtomaintaintheculturalcollegialityandknowledgesharingthatConsultCois

activelypromoting:

“BringitintotheirPDR-performancedevelopmentreviews-thatwehavetodoonce

ayear,andseeifwecouldusethattosay'howareyouengagingacrossthenetwork?

whatareyougivingback,besidesyourdayjob?’”

Thus,althoughtheperformancemanagementsystemisnotseenasaparticularlystrong

influenceonincludingsustainabilityconsiderationsindecision-making(comparedwith,

forexample,thecultureororganisationdesign),itdoespotentiallycreatetension

betweenthecommercialpressuresonpeople,andthetimerequiredtomakeconsidered

decisions.

ThesecommentsonConsultCo’sorganisationsuggestacombinationoffactorsenabling

theincorporationofsocialandenvironmentalsustainabilityintodecision-making.The

revisedprocesses(suchasthedecision-to-bidformsandtheallocationofPSCs)are

gainingtraction.Thestrongemphasisonnetworksandthecultureofmulti-

disciplinarityalsomakeiteasierforengineerstoaccesstheknowledgethattheyneedto

includesustainabilityintheirwork.Thereisvisibleleadershipbothatthetopandat

otherlevelsinthefirmtoensurethatpeoplepayattentiontosustainability.

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However,therearesomeareasthatmayinhibittheadoptionofsustainability.

ConsultCo’sstrongcommercialfocusensuresthatpeopleareveryfocusedonthetime

andcostoftheirproject,whichonlysupportssustainabilitythinkingiftheopportunities

forsavings(fromexamplefrommaterialefficiency)outweighthetimecostoffinding

these.ConsultCo’shistoricaldifficultiesinintegratingnewculturesarestillbeing

resolved.Althoughthereareseveralopportunitiesforpeopletolearnabout

sustainability,itisnotroutinelyincludedinleadershipdevelopment.Finally,thereare

concernsaboutaparticularlayerofmanagementwhodonotseemtobefullyengaged

withsustainability:itispossiblethatthisisagenerationalissue,andsowilltaketimeto

beresolved,orthatthisisagroupofpeoplewhosimplyrequiremoreknowledgein

ordertobeconfidenthandlingthedemandsofsocialandenvironmentalsustainability.

Thesefactorsallinfluencethedecision-makers.Butwhatdothedecision-makers

themselvesaddtothismix?

5.6.2Individualfactors

AlthoughConsultCohassomeestablishedprocessesandstructures,ultimatelytheway

decisionsaremadedependsonhowdecision-makersthemselvesinterpretthesituation,

andtheactionsthattheychoosetotake.Iexploretheseintermsofthethreefactors

identifiedinChapter4:permissionspace,biasesandattitudes,andknowledge.

Permissionspace

Althoughaccountabilityissetoutbothinjobdescriptionsandinthediscussionsteams

haveattheprojectkick-off,permissionissomethingthatpeopleinterpretintheirroles.

Inparticular,peoplemayinterpretthesignalsthatthesystemsends,forexample

choosingwheretofocustheirattentionandhowmuchcreativitytoapplytoaparticular

problem.Thisinturncaninfluencethedecisionsthattheymake.Oneinterviewee

describedthiswell:

“Becausewedotendtobelimitedbyourjobdescriptions,butwithinthatthere’salso

‘Idoknowwhatitsays,Idoknowwhattherulesareaboutwhentoask’butthere’s

anassumptionthatanythingoutsideofthoseboundariesisfairgame.Well,Idon’t

know,maybethat’sapersonalitything,buttheoptionstherearetocheckortoact.”

136

Ingeneral,theintervieweesfoundConsultCo’sapproachtopermissionwas

unambiguous.Evenatthemostseniorlevels,oneintervieweecommented:“thereare

someno-goareas”.OneintervieweewhohadjoinedConsultCofromanothercompany

spokeaboutatimewhenthishadstifledtheabilitytoinnovate,butrecognizedthatthis

ischanginginresponsetosomeoftheculturalandstrategicinitiativesinprogress:

“Therewasaclampdownof‘no.Thisisyourproject.Thisisyourjob.Thisiswhat

youdo’.Andthatwasquitetough,Ifound.ButIthinktheyarerallying.Ithinkwith

newinitiativesthereisprogresstobemade.”

Anotherintervieweealsocommentedthattheworkonculturechangewasencouraging

creativity:

“[ConsultCo]neededto…promotemoreofthepeoplewhothinkdifferently,promote

asinnurture,givethemaplacetoact”

Astheculturecontinuestodevelop,ConsultCoismanagingatensionbetween

thehighlevelsofaccountabilitythatsupportthedeliveryofprojects,andthelevelsof

managerialdiscretionthatallowpeopletothinkcreativelytosolvetheproblemsof

socialandenvironmentalsustainability.

Attitudesandbiases

Theintervieweesgenerallysharedapositiveattitudetowardssustainabilityandthe

opportunitiesthatitpresentsforConsultCo.Theyalsoobservethisintheircolleagues–

nobodydescribedanysituationswherepeoplehadnotacknowledgedthepotential

valueofactingsustainably:

“Ourseniorengineers,principalengineers,getthattryingtoreducecarbonisagood

thing.Theyconceptuallygetthat.”

“Itstartedoffbeingsomethingforspecialistsorzealots,butthat’schanged”

“It’sintellectuallystimulatingandit’saboutengineerssavingtheplanet.”

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Sustainabilityisnotjusttolerated,forsomeemployeesitisanimportantpartofwhat

theyvalueabouttheirwork:

“[for]alotofouremployees,andtheyoungeronesinparticular,thisisnotafadit’sa

wayoflife,andifwedonotpursueworkthatintereststhem,thenthatwon’twork”.

However,believinginthelogicofactingsustainablyisnecessarybutnotsufficientto

actuallydoit.Someoftheintervieweespointedoutthatinordertobringsustainability

intodecision-makingitisalsoimportanttoasktherightquestionsandapproach

problemscreatively:“it'sacertainmindsetthatyoudon'thavetodothingsthesame

way”.Thebarrierstodoingthisarealsoattitudinal:

“It'sprobablytodowithnotusingthetoolstoshareknowledgeandmaybenot

questioningenoughormaybenotwantingtobequestioned.”

Butasoneintervieweepointedout,sometimesthebarrierstoincorporating

sustainabilityintodecisionsaresituational:

“TheimportanceofConsultCo'svaluesisdefinitelystressed[but]Ithinkthat

sometimescangetlostinthestressofthejobandthat'swhenthingsgetalittle

challenging.”

“It'sstillhardtobalanceallthismakingdecisionswiththinkingoutsidetheboxwhile

stilltryingtogettheworkdone”

Insummary,attitudestowardssustainabilityaregenerallypositiveatConsultCo,butthe

abilitytoasktherightquestions,especiallyunderpressureoftime,areneededto

converttheseattitudesintobehaviour.

Knowledge

KnowledgeisavitalpartofConsultCo’sbusinessmodel,andthereforeakeyassettothe

firm.Effectiveknowledgemanagementrequiresnotonlyanappropriate‘stock’of

knowledge,butalsosystemstoguidethe‘flow’throughanorganization(Dierickx&Cool

1989).Thesesystemsoftencombineformalelements(suchasknowledgemanagers

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andtaxonomies)withsocialelements(suchasrecognitionforknowledge

contributions).

Becauseofitsstrategicimportance,andtherapiddevelopmentofnewknowledgeina

large,internationalcompany,ConsultCohasbeenworkingonformalizingthe

institutionalapproachtoknowledgemanagement:

“Iwouldsaythatwearetryingmovefromindividualheroicstoacommonsystem,

andindoingsoforbothknowledgeandinnovationwe’reworkingwithaframework

whichsetsouttheConsultCowayofdoingthosetopicsbyintroducingacommonset

ofterms,byintroducingaflow…thatallowsustotakethoseindividualheroesbut

getconsistencyacrossthebusiness”.

ThishasbenefitsforConsultCo’sworkonsustainability.Theintervieweesrecognize

thatknowledgesharingisessentialforsustainabilitytobeintegratedintotheworkof

theorganisation.

“AsI’vegatheredmoreexperienceI’vecometorecognisethatifwewanttoachieve

broadersuccessforsustainabilityandsuccessfortheoutcomesofourprojectsthen

weneedtoshareourknowledgeandweneedtoengagewithallofourcolleaguesto

achievethebestoutcomes.”

Developingandmaintainingastockofcodifiedknowledgeisthefirststepincreatinga

knowledge-managementsystem,andthisisafocusforConsultCo,particularlyinareas

thataredevelopingrapidly:

“inConsultCothereisalotofmovingimplicittoexplicitknowledgeatthemoment.”

Thestockcomprisesthreemainelements:newknowledgefromR&D;codificationof

knowledgeinframeworks;andindividualexpertise.

ConsultCo’sR&Dinvestmentsreflectthepotentialareasforfuturegrowth.Thismeans

thattherearequitedifferentprioritiesindifferentunits.Oneintervieweehighlighted

thiscontrast:

“Therearesomeunitsorsectorswherethere'smuchmoreofafocusonkeeping

everyoneonthestraightandnarrowfee-earningwork,andthere'slessspacefor

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innovation,there'slessspace,lessfundingandthereforetime,availablefortesting

outsomeofthesenewapproaches.”

Inothergroups,thereisanurgentneedfortherapiddevelopmentofknowledge:

“Theunderlyingtechnologyischangingsufficientlyfastthatit'snotjustamatterof

gettingnewpeopleuptospeedwithwhat'soutthere,it'salsoamatterofwhat'sout

therealsochangingandhavingtokeepuptospeedwiththat.Soitisamassive

challengetomanagethatwhiledeliveringprojectsandgrowingthebusiness.”

AlthoughR&Disimportant,formanypartsofConsultCotheobjectiveofinvestmentin

knowledgeistofindwaystoscaleandshareknowledge,ratherthanrelyingtooheavily

onindividualexperts.

“Soin[sector]forexample,ourtargetistoincreasethestandardisationofmaterials,

soratherthanknowledgesittinginindividualspecialists'headswe'regettingmore

andmoreontopaperintoguidelines,intoreporttemplates,intotrainingmodules,

intoinductionmaterialssothatitfacilitatesourpathtogrowthbecausewecan

inductpeopleintothepracticewhenmoreofourknowledgeiskindofdownonpaper

andstandardised.”

Oneformatforcodificationistoolsorframeworks.Thesemaybeexternal(forexample

somebuildingstandards),ormayhavebeendevelopedbyConsultCo.Several

intervieweesgaveexamplesofusingframeworks:

“WhenI'mlookingatsustainabilityconsiderationsIreallylooktopublished

guidance,whetherthatbetheclient'sguidanceforsustainabilityconsiderations

becausetheyhavetheirownaswell,orthis[industrystandard],tosay‘OKwhatare

theconsiderationsweshouldhave,andareweconsideringallofthesustainability

factorswherewemaybemissingsomethingthatwedidn'tconsiderpreviously?’”

Besidestheseformalinvestments,frameworksandtools,knowledgestocksincludethe

experiencesofindividualpractitioners.Evenwithstrongsystemsandprocessesin

place,therearealwayselementsofknowledgemanagementthatareessentially

voluntary.Peopleneedtochoosetosharetheirknowledgeandexperiencewithothers.

Onepersonpointedoutthatthisknowledgesharingneedstobereinforcedin

ConsultCo:

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“Ittakessomebodytakingthetimetodoitandgettingsatisfactionfromit.Butnota

lotofpeoplewouldbemotivatedtodothat,andIdon'tthinkacrossthecompanyitis

encouragedasmuchasitshouldbe.”

ConsultCo’scollegialcultureneedstobesupportedbysomeformalsystemsto

encouragethislevelofknowledgesharing.

Thisneedforpeopletotakesomepersonalownershipappliestothedevelopmentnot

onlyofstocksofknowledgeforConsultCo,butalsotoindividualskilldevelopment.

AlthoughConsultCodoesprovidemanytrainingopportunities,someintervieweesalso

commentedontheneedforindividualstoinvesttimeintheirownprofessional

development:

“Andpeoplehavetoinvesttimeintheirskills,andthat’saroundself-directed

research,it’saroundreading,it’saroundlookingonYouTube,it’slookingatarticles,

it’sgoingtoconferences,it’saboutpublicspeaking,tradeshows.”

Thismeansthatforsomepeople,theneedtocontinuetobuildtheirownskillsandto

makecontributionstoConsultCo’sknowledgestockisquitedemanding.

Agoodstockofknowledgeisnecessary,butnotsufficient,foracompanylikeConsultCo.

Peoplealsoneedtobeabletofindandusetheknowledgewhentheyneedit.

Intervieweesidentifiedthreemaincomponentsofthissystem:first,awarenessofthe

toolsandknowledgeavailable;second,networksofknowledgeandpeople;andthirda

culturewhichencouragestheuseofthesemethods.

Theintervieweestookdifferentviewsoflevelsofawareness,whichseemstobepartly

dependentontheirlocation.Onecommentedthatthereweresomelimitationson

awarenessofgoodpracticesbetweengroups:

“Ifeellikewe'vedevelopedourownthingsthathelpwithourworkhereinthisoffice,

andwedotrytoshareit…butthenyougetkindofstuckinyourowngroupandyou

don'tgetenough,youdon'tlookfarenoughoutwhenyouneedit.Like,theremight

beanotherofficethatdoesthisworkalreadywhocouldhelpsupportyou,butyou're

notawareofthatresource.”

Anothercommentedthatthereweregoodresources,butthatpeoplevariedintheir

levelofengagement:

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“WehaveYammer,butitdependsontheengagementlevelsofstaffwhetherthey

engagewithitornot.Butthere'sdefinitelygoodthings.”

Finally,talkingspecificallyabouttools,onepersoncommentedthatforsomeactivities

therewasacosttoadoption:awarenessonitsownisnotsufficient,butpeoplealso

needtoacquiretheskillstousethetoolsorapplytheknowledgethattheyareableto

access:

“Ithinkpeopleareawareofthem,butactuallygettingthemtousethemisharder.

Andsothere'sprobably,evennow,there'salatentawarenessthatsomeofthesetools

existandareavailable.Whatthereisn'tis,…thereisn'tthatsortofpotofgoldto

fundtimeforpeopletojustplaywiththingsforfamiliarisation.”

Thisraisesanimportantissueaboutaccesstoexpertise,throughpeopleandnotjust

throughtoolsordocuments:

“Weneedtohavepractitionersineachofourlocationswhounderstandthosetools.

Butit’smorethanthatbecausethetoolsarenotthemeanstotheend.Certainlythey

areaframeworkthattakespeopleonajourneytoachievinganoutcome,and

certainlytheyprovidegreatguidance,butyoustillneedthepractitionerswho

understandexcellence”

Thereisthusabottleneck:knowledgeexists,butthereisalimitedsupplyofexpertiseto

interpretit.

“Youneedtohavetherightpeoplefortherightproject….alotofthosetechnical

expertscansometimesbe,wellthey'reexpertsforareasonandeveryonewantsthem.

Soweneedtocomeupwithawaytomanagethat.”

ConsultCoencouragesindividualnetworksandcollaborationtohelpdistribute

knowledgeefficientlywithintheorganisation,andintervieweesgaveexamplesofhow

theyusedtheirpersonalnetworkstosolvetechnicalproblems.However,theseneedto

beinitiated.Oneprojectmanagerobservedthatnetworksforknowledgesharingare

notnecessarilyaccessibletoeveryone:

“AndIthinkit'salsoachallengeofwhoisbuildingthatnetwork.Soinmyposition,

maybeotherpeopleknow,butitdoesn'tnecessarilygetpasseddowntotheyounger

engineers.Atmylevel,itmightbeharderformetoknowthatthoseresourcesare

available.”

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Finally,thesystemneedstobereinforcedculturally.Twointervieweescommentedon

thispositiveculture:

“Acollegiatecultureallowsformuchfaster,organicuptakeofsometopics”

“Ithinkitmustbesomethingtodowithitbeingemployeeowned…Irememberthat

therewasthismantrawhenIarrivedthatwas‘withintwophonecallsyou’llget

whatyouneedtoknow’.”

ThisshowsthatConsultCo’sknowledgemanagementisasystemofknowledgestocks

andflows,supportedbyasetofbehaviourthatcanencourageboththedevelopmentof

thestocksandtheuseoftheflows.

Althoughpermission-space,attitudesandknowledgeareallimportantinmaking

decisions,theConsultCointervieweesplacedaparticularlystrongemphasisontheir

needtohavetherightknowledgeavailabletoinformtheirdecisions.

ConsultCo’sorganisationincludesformalandsocialelementstoreinforcethesharingof

knowledge:thereareinvestmentprocessestodevelopthestockofknowledge;practice

networkscreateaformalstructureforsharingit,andthisissupportedsociallybya

broadlycollegialculture.Thus,therearesomemutuallysupportingelementsacrossthe

organisation,andthatConsultCoparticularlyemphasises:leadership,culture,

organisationdesign(includingprocessesandjobdescriptions)andknowledgeto

influencethewayspeoplemaketheirdecisions.

5.6.3Summary

ThisanalysisshowshowConsultCohasstartedtodevelopsomefacetsofthe

organisationtosupportitsinitiativeinsustainability:

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Table15:TheroleoforganisationalfactorsinenablingorhinderingsustainabilityatConsultCo

Organisationalfactor

Roleinenablingorhinderingtheinclusionofsustainabilityindecision-makingatConsultCo

Culture Strongfocusoncollegialityenablesbettersharingofsustainabilityknowledgeandinformation,andriskaversionleadstoawarenessofsustainabilityissues.However,commercialpressuresontimemayleadtosometrade-offsindesigndecisions.

OrganisationDesign Theorganisationdesignincludeslinkingmechanismsthatenableandencourageknowledgetransferandbuildawarenessofsustainability.However,sustainabilityisnotexplicitlyincludedinperformancemanagementorincentivesystems.

Leadership Corporatelevelleadershipforsustainabilityisstrongandwellrespected.However,leadershipattheindividualprojectlevelismorevariable,andsubjecttothepressuresontheindividualprojectmanager.

PerformanceManagement

Theperformancemanagementsystemisnotdesignedtosupportsustainability.Peopleareunderstrongcommercialpressures,reflectingthecontractualrelationshipsbetweenConsultCoanditsclients.

Permissionspace Peopleinterprettheirpermissionspacebasedonstrongsignalsfromthecommercialmanagementoftheprojectcoupledwithencouragementfromtheculturetoactinawaythatissustainable.Thereissometimesatensionbetweenthesesignals.

Attitudes/Biases Peoplearegenerallypositiveintheirattitudestowardssocialandenvironmentalsustainabilityintheirwork.

Knowledge TheknowledgemanagementsystemwithinConsultCocansupportsustainabilitybyprovidinginformationandacceleratingdecision-making.However,maintainingthesystemcreatestime-pressureforpractitioners.

Thisshowsthattherearesomeclearformalandsocialenablersfortheincorporationof

sustainabilityconsiderationsintodecision-makingatConsultCo.However,theseare

counterbalancedbythepressureoftimeontheconsultants.AsConsultCohasdirected

people’sattentiontowardssustainability,theyfindthattheyneedtospendmoretime

oneitherfindinginnovativedesignsorengagingwithstakeholders.Decisionsthatwere

oncemadeinaroutineway(andperhapswithoutconsideringsocialandenvironmental

impacts)needtobeanalysedmoredeeply.Giventhattimeutilisationisthedriverof

commercialsuccessforConsultCo,thiscreatesatensionintheprojects.Inthenext

section,Iwilldiscussthewaythistensionismanagedintheorganisation.

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5.7ConsultCo’snestedparadoxes

TheanalysisofConsultCo’ssituationrevealsaseriesoftensionsatthemacro,mesoand

microlevelsoftheorganisation.Atthemacrolevel,thereistensionbetweentheneedto

buildmoreinfrastructuretomeettheneedsofagrowingglobalpopulationsetagainst

theneedtoconserveresources.Thisthenfeedsameso-leveltensionbetweenclients

andConsultCo,whichmaybeaccentuatedbycontractualarrangements.Atthemicro-

level,individualengineersfindnewpressuresontheirtime.First,thenewfocuson

socialandenvironmentalsustainabilitymeansthattheyneedtospendmoretimeon

projectsinordertosolvedifficultproblems,butthecontractualtermsthatdetermine

theavailabletimehavenotchanged,andsotheyfeelconstrained.Second,theengineers

needtobuildandsharenewknowledge(rangingfrommethodstonewdatasets)in

ordertoactsustainably,butthiswouldrequirethemtospendtimeawayfromtheir

clients.Thesetensionsactasareinforcingknot,anddirectlyaddressthe

heartofConsultCo’sbusinessmodel.Eachofthesetensionsarisesinresponseto

ConsultCo’smanagementoftheprevioustension.

Theresolutiontothesetensionsalsoliesinaseriesofnestedresponses,andindeed,

ConsultCo’songoingchangeprogrammeaddressesthese.First,ConsultCoisaddressing

thetensionexperiencedbyindividualengineersintheirtimemanagementthrough

targetedinvestmentsintechnology.Thesecanacceleratedecision-making.For

example,oneintervieweetalkedaboutimprovedcarboncalculations

“Tooptioneerthecarbonimpacttakessecondsnowinsteadofdays,whichmeanswe

cantrymanymoreideasnow.Andwhatwearedoingnowisbringinginthingslike

machinelearningandorganicalgorithmdevelopmentandsomeautomated

procedurestoreallychallengethenorm.Butthatisahugeopportunityinthe

sustainabilityspace.”

Sometechnologiescanalsoacceleratetheprocessofstakeholderengagementand

decision-making:

“Backinthedaywewouldtrydesperatelytotrytoexplainthingstopeopleusing

drawingsandnowwecanputapairofgogglesonthemandstandinthefront

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gardenandseewhatabridgeisgoingtolooklike…We’reevenatastagenow

wherewe’renotjustplayingwithacoupleofoptions,we’reworkingoffthereal

model,soinconsultingwithstakeholders,inaroomwecanliterallymakechangesto

themodelaswe’remakingdecisionsanditrecordsthatchangeandmakesitintothe

thingeveryoneisworkingfrom.”

However,atthecurrentstageofdevelopmenttechnologyalonecannotsolvethe

problemsfacedbyengineers.Thereisafundamentaldisconnectintherelationship

betweentheclientandtheconsultantthatcausesthispressure.Oneinterviewee

pointedoutthatthecontractualtermscanbeestablishedinawaythatismoreholistic,

andthatthiscanbehelpfulinreinforcingthesocialandenvironmentalelementsofa

project:

“Probablythekeythingisthesetupandhowyou'reincentivised.SoI'veworkedon

jobswhere…you'reinasortofsetupwherethereareclearKPIsandyou'rebeing

monitoredandincentivisedtoworkacrossarangeofthings,awidebasketof

indicatorsthataren'tjustcommercial…Sothatwouldbethefirstquestion:what's

ourroleintheproject?andwhat'sthescope?andwhat'sourperformance

incentivisedon?”

Questionsatthismesolevelhaveledseveralcompanies–includingConsultCotojoin

industry-levelinitiatives,suchastheInstituteforCivilEngineering’s‘Project13’

approachtoinfrastructure,whichcouldre-shapetheclientrelationshipstodelivermore

sustainableoutcomes:

“It'sanICE[InstituteofCivilEngineers]initiativewhichis…tryingtotransformhow

infrastructure'sdelivered.There'squiteabigfocusonshiftingfromminimum

outturncosttomaximisingvalueoverthelifecycle,sowhole-lifevalue.”

Thispatternofthecreationandresolutionoftensionsatdifferentlevelswithinthe

organisationisshownbelowinFigure16whichisbasedonthemodelpropsedbySchad

&Bansal(2018).Therelationshipsbetweentensionsarerevealedby‘zoomingin’from

themacrotothemicroandthen‘zoomingout’(Schad&Bansal2018)toshowhoweach

leveloftensionisrelated:

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Figure16:NestedtensionsatConsultCo

Thecasedemonstratestheproblemofchangingthewaypeoplebringsocialand

environmentaldecisionsbyshowingaseriesofnested,complextensions(Sheepetal.

2017)situatedinabroader–andinthiscasequiteproblematic–system.Thenestof

paradoxesisrevealedbyzoomingin(Schad&Bansal2018;Nicolini2009),butthesecan

onlyultimatelybemanagedbyzoomingouttosolvethesystemicproblemin

conjunctionwithotherparties(inthiscaseanindustrybody)(Schneideretal.2017).

Byexaminingthisprocessovertime,Ishowthatthecompany’seffortstochangedo

makeadifferencebutthateventuallythisprogrammecannotbecompletedwithinthe

boundariesoftheorganisationandtheyneedtoengageabroadersystemtoeffectthe

changethatisneeded.Thecasealsoshowstheconnectionbetweenthemacro/meso/

microlevelsofthesystem:changesareneededatthelevelinwhichthevariousentities

interact,andalsoattheleveloftheorganisation,andtheindividualdecision-maker.

Itisalsoeasytoseewhysomeorganisationsfailtochange(Slawinskietal.2017):

unpickingtheparadoxesattheheartofthischangeprocesshasrequiredboldleadership

anddeepthinkingbyConsultCo.Fromthepointofviewofthepeopleinthe

organisation,managingthischangeislikeplayingthegame‘whack-a-mole’.Theyare

Macro-le

velten

sions

Meso-levelten

sions

Micro-le

velten

sions

Zoomingin Zoomingout

Thegrowingpopulationneedsmoreinfrastructure

Butthiscreates

environmen-talandsocialburdens

Wecanseehow

sustainableinfrastructure

isgoodbusiness

Butourclientshavenotaskedustodothis

Ineedtospendtimefocusedonsolvingnewproblems

Ineedtospendtimefocusedoncommunityengagement

Ineedtospendtime

learningtodothiswork

Ineedtobillallmytimeto

clients

Weneedtofindnewwaysto

createvalue

Workisletonstandardcontractterms

Weneedtocollaborate

ondevelopingnewwaysto

work

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workinghard,perhapsatanincreasingrate,tofixproblems,butthesecontinueto

persistbecausetheunderlyingsystem–inthiscasethestructureoftheconstruction

industry-generatesthem.However,the‘moles’–theproblemsandparadoxescreated

–canprovideameansofunderstandingthefundamentalsofthesystem,andthus

startingtoidentifythepointsforchange.

5.8Conclusions

ThepurposeofthePrescriptiveStudywastotestandextendthedevelopingtheoryand

exploretheinteractionsbetweenmodelsinacasestudytostarttorevealthepointsof

interventioninthesystem.ItshowsthattheframeworkcreatedabductivelyinChapter

4fromtheliteratureandmyempiricalfindingsisahelpfulanalyticaltoolandcanshow

theformal,behaviouralandsocialinfluencesondecision-makersinanorganisation.It

illustratesthefourdifferentarchetypesofdecisions,andshowshowthesecanchange

throughthedirectionofattention.Italsoshowsthe‘nestedness’oftensionin

organisations.IendedChapter4withaseriesofideastoexploreinthecasestudy,and

findthatinthiscasetheylargelyholdtrue.ThesearediscussedinTable16:

Table16:Testingthetheoreticalideas

IdeafromChapter4

Observationinthiscase

Thetensionbetweentheexternalandinternalfactorsisspecifictoaparticularbusinessataparticulartim

e.

InConsultCo’scaseitisclearthatthetensionsbetweentheinternalandtheexternaltaketwoform

s:first,thebroadtensionthatexistsintheconstructionindustry;andsecond,thetensionsthatexistinaparticularproject.

Thereframingofthistensionisasignificant

decision,whichhasimplicationsbroadlyinthe

business.Thisisthereforeledfromthetopofthe

organisation

ConsultCohastakenastrategicdecision,ledbytheBoardtoincorporatesustainabilityintoitsbusiness.However,theongoingre-fram

ingofsustainabilityineachprojectisledatalowerlevelintheorganisation.Thus,thereneedstobeaclearconnectionbetweenthesenestedfram

es.Ifthetensionisnotre-fram

ed,itwillpersist.Thiswillcreatetrade-offproblem

swhereverintheorganisationthem

aterialimpactsofthetension

mightbefelt

Interviewees’commentsthatclientsupportofsustainabilitym

akesiteasiertoincludesocialandenvironm

entalconsiderationsinparticularprojectssuggestthattensionsthatarenotaddressedinotherprojectspersist.

Ifthetensionisreframed,itstillexists,but

decision-makersm

ayhavebeengivenabroaderrepertoireofwaystom

anagethecompeting

commitm

entstheyface.

ThechangeprogrammeatConsultCohasledtoagreaterfocusonwin/winasa

logicfordecision-making,throughresourceefficiency.Thissuggeststhatthe

corporatelevelreframingand(andsubsequentrefram

ingofsustainabilityinprojects)isenablingdecision-m

akerstouseabroaderrepertoireofapproaches.

Simplyre-fram

ingsustainabilityisnotsufficientiftheorganisationalsystem

swhich‘bound’decision-makingareunchanged.

ConsultCo’schangemanagem

entapproachwasinitiatedwithareframing

process,butwasfollowedwithorganisationalchanges,specificallychangingthe‘decision-to-bid’process,theintroductionofthePESrole,andtheestablishm

entofsustainabilitynetworkstolinkgroupsacrosstheorganisation.Thishasm

adeacontributiontotheinclusionofsustainabilitythinkingintheorganisation.

Thereneedstobecomplem

entaritybetweenthesesystem

s.Simplychangingonefactor(forexam

ple,changingtheavailabilityofinform

ationwithoutchangingthecriteriabywhichdecisionsarem

ade)willnotim

provedecision-making.

ConsultCo’schangeshavebroadlyworkedwithintheexistingculturalandorganisationalnorm

softhecompany.Thererem

ainsometensionsbetween

organisationalelementsthathavenotadaptedtotheneedsofsustainability(eg.

performancem

anagement),andthesedoleadtotensionfordecision-m

akers.

148

149

However,thecasestudyalsoextendstheemergingtheorybyprovidinginsightsintothesecondofmytworesearchquestions:‘Whatarethepointsofinterventiontochangethese[organisational]systems?’.Thecasestudyrevealsaseriesoffindingsthataddressthisquestion:

1. Theprocessofre-framingthetensionbetweentheexternalpressuresonthecompanyandtheinternalresponses(describedinSection4.3.6)doesnotonlyinfluencethelogicsthatcanbeappliedtoindividualdecisions,butcanbeusedtodriveabroaderchangeprogramme.AtConsultCo,thisframingofsustainabilitywasacriticalfirststepintheirworktowardschangingtheirwayofworking.

2. Thisprocessofre-framingchangesthenatureofdecisionsmadeinthecompany,byre-directingexecutives’attention.InConsultCo’scasethisresultedinagreaterconsciousnessoftheimplicationsof‘operationaldecisions’,whilereducingthenumberof‘wickedproblems’.Thismeansthatthedecisionsupport(describedinSection4.2.3)neededtochangeinresponsetothenewtypesofdecision–particularly‘engineeringefficiency’and‘messysituations’.

3. Thechangeindecision-typesledtoademandfornewtypesofknowledgewithintheorganisation.This,inturn,hadimplicationsforthetypesoforganisationalsystems–includingbothformalsystems,suchaslinkagemechanisms,andsocialsystemssuchasacultureofsharing–toenablebettermanagementofknowledge.

4. Atanindividuallevel,anew,andfundamentaltensionbecamesalient.Includingsocialandenvironmentalconsiderationsindecision-makingmeantthatthedecisionsbecamemoretime-consuming.However,thefundamentalbusinessmodelatConsultCoisbasedonbillablehours.Thus,themicro-leveltensionsrevealedasystem-levelproblem,thatcouldonlybeaddressedincollaborationwithorganisationsbeyondConsultCo.

ThiscascadingsetofactionsandreactionsisillustratedinFigure16(above).Thefindingsalsosuggestaseriesofprinciplesaboutthepointsofinterventionforcompaniestryingtoincorporatesocialandenvironmentalconsiderationsintheirdecision-making:

1. Theframingofsustainabilityatthecorporatelevelisnotonlyimportantforindividualdecision-makers,asevidencedinChapter4(Section4.3.6).Itmayalso

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havearoleinshapingtheoverallchangeprogrammeasacompanyadoptssustainability.Thus,itiscanbeapointofinterventionforcompaniesplanningtochange.

2. Thiscorporateframingthenneedstobemadesalientfortheparticulardecisionsathand.Thismaymeancreatinga‘re-framing’foraparticulargroupofpeople,ororganisationallocus.

3. Thepointofinterventionintheorganisationalsystemwilldependonthemostpressingissuesfortheorganisation.HowevertheConsultCocasesuggestsfirstthatthiswillrequiresometypeoforganisationallearningasthecompanyrequiresnewtypesofdecisionsupport,andsecondthattheinterventionswillbeiterative.

4. Thisisadynamicprocess,withunforeseeableconsequences:eachchangemaybeareactiontotheuncoveringofthebroadersystem.

Theseprinciplesareofcoursebasedonasinglecasestudy.InChapter6,IwillintroduceStudy3,inwhichagroupofseniorexecutivesfromabroaderselectionofcompaniesreviewedtheemergingfindingsfrombothStudy1andStudy2.

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6:STUDY3

6.1IntroductionTheobjectiveoftheStudy3wastotestandextendthetheoriesdevelopedintheearliertwostudiesbytalkingwithpractitionersabouthowtheyareactuallyoperationalizedincompanies,inthespiritof‘engagedscholarship’.Thiswasaniterativeprocess(VandeVen,2007p.102)consistingofthreeworkshopsheldduringthecourseofthedatagatheringandanalysisprocess,inNovember2017,June2018andOctober2018,inwhichasmallgroupofexecutivesdiscussedtheirownexperiencesoftheissuesarisingfromtheresearch.ThemethodisdescribedinChapter3.3.2.Althoughtherewasathemeandstructureforeachworkshop,thefacilitationprocesswasnotstronglydirective,andthediscussionthereforefollowedtheinterestsoftheparticipants.Thismeansthatthereisnotanequalcoverageofalltopics–subjectsthatwereimportanttotheexecutiveswerediscussedinmoredepth.Severaloftheparticipantsdrewonexampleseitherfromtheirowncompaniesorfrompublicdomaininformationaboutothercompaniestoillustratetheirpoints.Wheretheinformationisfromthepublicdomain,Ihavereportedthenameofthecompany,butIhavenotnamedthecompanieswhoseexecutivesparticipatedinthediscussions.ThechapterfollowsthestructureofthefindingsfromChapters4and5.Insection6.2,Ireviewthediscussionabouttensionbetweentheexternalandinternalenvironmentsandthewaycompaniescanframethistensionconstructively.ThisbuildsonthefindingsreportedinSection4.3.5.Section6.3‘zoomsin’tolookattheclassificationofdecisionsanddecisionsupportmethodsandcapabilitiesneededtomakethem,buildingon4.2.3and5.5.5.InSection6.4,Ireviewthewayinwhichtheelementsoftheorganisationworktogetherwiththeindividualdecision-makerstoformasystem.ThisallcontributestodeepeningtheanswertoResearchQuestion1:‘Howdotheformal,behaviouralandsocialstructuresofanorganisationinteracttoinfluencetheinclusionofsustainabilitycriteriaindecision-makinginincumbentbusinesses?’.Section6.4alsoprovidesalinktothesecondResearchQuestion:‘Whatarethepointsofinterventiontoinfluencethesesystems?’.Thisideaisexpandedfurtherinsection6.5,whichreviewstheexecutives’discussiononchangingcompanies.Thechapterconcludesinsection6.6withacommentaryontheoverallfindingsfromtheexecutiveworkshops.

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6.2Reframingthecorporate-leveltensionTheframingofthetensionarisingbetweenbusinessesandtheirsocialandenvironmentalcontexttoinfluencethewaypeoplemakedecisionswasanimportantthemeinthisresearch,andisexploredinChapter4.3.5andagaininChapter5.4.Itwasalsoatopicthattheexecutivesdiscussedseveraltimesduringthecourseoftheworkshops,andwhichtheysawhavinganimportantroleinintroducingsustainabilitycriteriatodecision-making–asoneparticipantcommented:“Reframingis,inmyview,critical.”Theworkshopparticipantstooktheviewthatreframingatthebusinesslevelwasalmostalwaystriggeredbyatensionbetweentheexternalandinternalenvironments,ratherthansimplyadesirebyleaderstoreconsidertheirpositiononsustainability.Consumers,regulatorsandcompetitorswereallsuggestedaspotentialtriggersorconstraintsonthecompany.Forexample,changesinregulation(suchastheFinanceactorthegenderratioreportingregulations)havebeeninfluentialindirectingmanagerialattentiontotheimportanceofsocialandenvironmentalsustainability.Reputationalproblemsforcompetitorsoratasectorallevelcanalsodrivesomecompaniestotakeapre-emptiveapproachtotrytofindwaystoseparatetheirownapproachfromothers.Aswellastheregulatorydrivetowardstransparency,theriseofsocialmediahasalsoledtosomeconsumerpressureoncompanies–mostrecentlyinrespectoftheiruseofplastics.Thishastwoimplications:first,itsuggeststhatcorporateframingofsustainabilityneedstobesomewhatdynamicinordertorespondtothechangingexternalenvironment;second,companiesmayneedtobethoughtfulintheirresponsetoconsumers’demands–oneexecutivepointedoutthatsometimesthesewerenotanappropriateresponsetocurrentscience.Finally,oneparticipantcommentedthat:

“Itisoftenunderestimatedjusthowcostlyitistoreframebecausesomuchhasto

change…socompanieswilldothisveryrarelyunlessthey’reforcedto.External

pressure,customerpressure,financialpressure,Iwouldhavethoughtwoulddoit”.

Thisreframingcanstarttodriveanewsenseofidentitywithintheorganisation–asoneparticipantsaid,“ithelpsusanswerthe‘whoweare’questions”.Identitycanbeatouchstonefordecision-making.Oneparticipantcontrastedtwopossibleframingsforanexamplecompany:acompanythatframestheirroleas‘asuppliertobigbrands’will

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approachproblemsinadifferentwayfromonethatidentifiesitselfas‘acompanywithdeepexpertiseinsustainablemanufacturing’.Decisionsareinformedby–andreinforce–executives’understandingofthiscorporateidentity.Identitiesaremulti-dimensionalandtensionsbetweenthesedimensionsmayproducechallengesforcompaniesovertime.OneparticipantgavetheexampleofNordiccompanies,someofwhichhaveadeepculturalinterestinsustainabilitybutalsooperateglobally,forexampleCarlsbergistryingtore-emphasiseitsDanishtraditionsandvalueswhilemaintainingastronginternationalbusiness.Framingthissenseofidentitygivespeopleastrongsignalabouthowpeopleshouldmakedecisions.Asoneexecutivesaid:“Wemakethesedecisionsbecauseweknowwhoweare”.

Thisquestionofidentityalsohasimportantimplicationsfordecision-makers.Somegroupshaveclashesbetweentheirprofessionalidentitiesandthecorporateidentity,whichsurfaceindecision-making,forexampleoneparticipantquotedagroupsaying:“Weareengineers,butthatisapoliticaldecision”.Thus,thecorporateframingneedstobeexpressedthroughouttheorganisationandbroughttolifeinawaythatisrelevantforeachgroup.Thiscanhelppeoplefindnewwaysofseeingtheirroles,thenatureofthedecisionathand,andinterpretingtheirownpermissiontoact.Asoneparticipantsaid:

“Thebig,trickydecisionsaren’tnecessarilyfixedbybetterdata,systemsandtools.It

ismoreabouthelpingpeopletohavetheconfidencetomakethedecisions.”

Anothercommented:“Thereframingopensupanewspaceforpeopletoexplore.”

Athirdparticipantmadetheconnectionbetweentheactofreframingandtheeffect:“There’saleadershipmoment,whenthebusinessreframes,butthisgivespermission

forpeopletotakeadecision,andpeoplecanthensellintheirdecisionbasedontheir

framing.”

Althoughtheactofreframingispowerful,itisalsodeeplyproblematic.Oneparticipantsaid:

“Theactofreframingisimmenselypowerful,butalsochallenging,requiringanew

wayofthinking”

Furthermore,itrequiresaveryhighleveloforganisationallegitimacy.Theparticipantsagreedthatthiswouldbeasuitablerolefortheboard:

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“ThisisagreatjobforanewCEO,asyouneedtobebothcloseenoughtothebusiness

tounderstandthefundamentaltensionsitfaces,anddistantenoughtobeabletore-

thinkthese.”

Findingnewwaystoseethebusinessandsoprovideacredibleframingrequiresthoughtandcreativity-asoneparticipant,referringtothedifferentlogicalapproachestomanagingcompetingcommitments,said:“theactofreframingisasynthesis”.Theparticipantsseereframingnotonlyasawaytoinitiateachangeinthewaysofseeingsustainabilityintheorganisation,butalsoaphenomenonthatchallengespeoplepersonally.

“Reframingislikelytocreateacaseforchange,butalsocreatessomevery

fundamentalcognitivedissonance.Wenaturallyfeeladesiretoreducethis–

especiallywithdecisionsthathavebeenmade.Wefindourselvessaying‘ifwedoit

thatway,theneverythingI’vebeendoinghasbeenwrong’.”

Reframingthereforerequiresanuancedculturalunderstanding,inordertoavoidbeingrejectedas‘toodifficult’beforetheworkofintroducingsustainabilitytodecision-makingstarts.Thus,theprocessofreframingisanimportantstepinshapinganenvironmenttoincludesocialandenvironmentalconsiderationsindecision-making.Notonlycanitinitiatechange,butitalsoshapestwoimportantsocialprocesses.First,itisavisiblestepforleadershipandsocanstarttore-setsomeelementsoftheorganisationalcontext.Second,itcanshapepeople’sinterpretationofdecisionsbyinfluencingtheirattitudesandtheirpermission-space.Thismeansthatthereisatleastsomesocialmechanismbywhichthishigh-levelframingcaninfluencethedecisionstakenwithinthebusiness.TheexecutivesthereforeaffirmedthefindingsaboutreframingtensionfromChapter4andChapter5.

6.3DecisionpropertiesandprocessWhiletheframingofthetensionbetweensocial,environmentalandeconomicconsiderationscaninfluencethewaydecision-makersunderstandthenatureoftheirdecisions,itmayalsocreatenewdemandsintermsofprocess.Theworkshopparticipantsallagreedwiththesegmentationofdecisionsandrecognisedthefourarchetypes.However,theyextendedtheseideasintwoways.First,theycommented

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onthesituationalcharacteristicsofdecisionsthatmayaffectthewayinwhichchoicesaremade;andsecond,therewasanextensivediscussionofaparticulardecisiontype–messysituations–andtheorganisationalcapabilitiesthatmightberequiredtodealwiththesedecisions.Althoughthegroupagreedwiththeclassificationofthefourarchetypes,theirviewaspractitionerswasthattheclarityofthearchetypesandthelogicalresolutionofdecisions(discussedaboveinChapter4.3.4)donotcapturethemessinessofthedecision-makingprocess.Oneparticipantwhohadbeeninvolvedincomplexdecisionspointedoutthatduringtheprocess,peoplemaytrymorethanoneofthelogicalapproachesdescribedinChapter4.3.2(forexample,startingwithwin/winbusinesscases,andthentryingotherapproachesuntiltheyfindasolutionthatworks).Thismeansthatsynthesisapproaches–whichareoftenthemostdemandingfordecision-makers–maywellonlybeusedwhenotherapproacheshavealreadyfailed.Aswellaschangingthetypeoflogicalapproachovertime,thegroupmadeanimportantobservationaboutthepropertiesandprocessofdecisions,whichisthatthereissomedynamismbetweenthefourarchetypes(thiswasalsoobservedintheConsultCocase).Specifically,threesituationalfactorsmaychangethewaydecision-makersmayapproachtheirdecisions.First,decisionsthatneedtobemadeurgentlyrequirerapidprocessesthatmaymeanexcludingsomeinformation–forexample,asoneparticipantsaid:

“Oneofthewaysofturningamessyproblemintosomethingmoretechnicalisto

ignoresomestakeholders.Forexample,anorganisationmaydecidethattheiractionwillannoyonegroup,butwillallowthemtosolveatechnicalprobleminorderto

moveforward.”

Theexecutivescommentedthattheneedforspeedhaspartlyarisenfromtheriseofsocialmedia,whichcanmeanthatexternalgroups(customers,consumersorNGOs)cancreateanimmediateneedforcommunicationaboutsustainability(orother)issues.Thus,decisionsareunderanewformofscrutiny,andthishasimplicationsforanumberofimportantprocesses,suchasstrategyformulation.Thisneedforimmediacyisapropertyoftheprocess,ratherthantheinter-temporalitythatmaybeafeatureofthedecision.

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Second,somedecisionsthatareinitiallyone-offsituationsmaybecomerepeated(andrepeatable)overtime.Situationsthatstartas‘messy’mayrecur.Oneparticipantgaveanexampleofexposuretoriskininfrastructurefinancing,whichisoftentreatedasasingledecision.However,inaportfolioofrecurrentdecisions,thereisasignificantcumulativeeffectofthesechoices,andsothereisaneedtodevelopstrongerprocessesformanagingthedecisions.Atthispoint,thedecisionsmaybegintoadoptthecharacteristicsof‘engineeringefficiency’choicesasthecompanydevelopstheknowledgeandmethodsformanagingthese.Finally,thereisfrustrationinmanyorganisationsabouttheinformationthatisavailablefordecision-making.Thissituationisimprovinginsomecompanies,particularlyinresponsetotheneedtoincludesustainabilitydatainannualreports,whichhasbroughtthistotheattentionofthefinancedepartment.However,thisisnotalwaysthedatathatisnecessaryfordecision-making,andmanycompaniesarestillstrugglingtobuildtheinformationinfrastructurethattheyneed.Asoneparticipantcommented:

“Someinformationalsocan’tbemonetised,andthisalsocausesproblemsinsome

decision-makingasthereis,ineffect,nosinglecurrencytocaptureallthe

informationneeded.”

Becauseformanycompanies,sustainabilityisarelativelynewarea,thedataissometimesmoreusefultoshapethinkingthantodemonstrateatrackrecord,ashistoricaldatamaynotbeavailable.Formanyorganisations,developingtherightinformationinfrastructureisalongprocess–theyneedtoact,createthedata,andthentrack.Thiscanthenbeusedasatoolformeasurementandtocreatetransparency.Initiatingasustainabilitystrategycanbeveryproblematic,asthedatawillnotnecessarilybeavailable,andactivitiessuchasmeasuringenvironmentalfootprints(thuscreatinghelpfuldataforfuturedecisions)happenafterthefact.Somemethodsforprocessingdatafordecisions–suchaslife-cycleanalysis–canbeverylabourintensive,andthereissomeinterestinhowcompaniesbuildtheskillsandresourcestomanagethenewdataneeded.Thegrouptooktheviewthattherightinformationisimportantbecauseithelpspeopleseethingsdifferently.Thiscanthuschangethenatureoftheproblemcompaniesaresolvingintheirdecision-making.Forexample,companiesthatareunawareofstakeholderneedsmaybetreating‘messysituations’as‘engineeringefficiency’problems,andcausingdifficultieselsewhereinthe

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system.However,therewasalsoaclearviewthatcompaniesneedtoadoptnewdataandmethodsaswellasfocusingonbehaviouralchange.Unlessbothareinplace,thereisariskthatthecompanywillnotachieveanychangeintheirdecision-making–asoneparticipantsaid:

“Ithinkthebalancebetweentheeffortsonmethodandonbehaviouralchangeis

wrong.”

Becausethiswasclearlyatopicofinterest,decision-makingprocesseswerethemainfocusofthesecondworkshop.Inthisworkshop(thesecondofthethreedescribedinChapter3.3.2),theparticipantswereinvitedtocommentontheirexperienceof‘messysituations’,andcommentonthecapabilitiesthatareneededtomanagethese.Messysituationswerechosenastheyarenon-routinedecisionsinwhichthedecisionisclear,butitiscomplicatedbythefactthattherearemanystakeholders(whomayhavedifferentviewsoftheproblem),theyareimportanttothebusiness,hardtoreverse,andhavesomeuncertainty.Althoughtheinitialsegmentationdatawasnotintendedtomeasurethefrequencyofanyparticulartypeofdecision,messysituationswerereportedbyabroadrangeofinterviewees,andtheworkshopparticipantsallhadexperienceofthem.Onespecificproblemcreatedbymessysituationsisthattheyareusuallyunprecedented,andsothereisnotanestablishedsetofrulesformanagingthem.Acorollaryofthis,asoneparticipantpointedoutisthat:

“Messysituationsarethosedecisionswherebeingrightdoesn’tcount.”Thisputsnewdemandsonthedecision-makingprocess,requiringwhatoneparticipantdescribedas“workingoutloud”andintroducingtransparencyandengagementintheprocess.Organisationsthatacquirethiscapabilitybecomeeffectiveatstakeholdermanagement.Theworkshopparticipantstooktheviewthatdecisionsarisinginmessysituationshavemoreincommonwithothermessysituationsthantheydowithday-to-dayactivity.Asaresult,insomesituationswheretheyarelikelytoarisewithfrequency,organisations

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createspecialistteamstohandlethem:oneparticipantgavetheexampleoftheUKGovernment’smajorprojectleaders.Thisallowsthemtobuildcapabilitiesatscaleinordertodealwiththechallengesarising.Thereis,ofcourseaconsequencetothis:forexamplethegroupgavewasthatatIBMitbecameclearthatparticipatingina‘redteam’wasagoodpathtopromotion.Asoneparticipantsaid:“theproblemwiththesesituationsisthatthey’rejustsosexy”.Thisactuallycreatesaproblemfororganisations,asattentionisdivertedawayfromtheday-to-dayoperationstowardsincidentsthatmightbeacrisis,andsocanincreasethenumberofpotentialproblemsastheyreceivemoremanagerialattention.Onesuggestionthatadecision-makermadeforawaytomanagethesemessysituationswithoutremovingtheproblemfromits‘naturalowners’istointroduceachange-agentrole.Thismeansthatthemessysituationcanbemorestructured,andthechangeagentcanfacilitateaprocesstocreateclarityaboutthedecisionandstakeholders.Thisre-definestheroleoftheoriginaldecision-makerasasubject-matterexpert,andallowsthemtofocusonapplyingtheirexpertiseandjudgementtotheproblemwhilethechangeagent“holdsthemess”.Theseinterventionsdependoncorrectlyidentifyingthatamessysituationisactuallymessyandthatitisnotsimplyatechnicalproblem.Thegroupgaveexamplesofwhenthiscouldbeaproblem.Formanyexecutives,thetemptationistofocusonthetechnicalaspectsofthedecisionandtoviewitasanengineeringproblem.OneapproachtakenbytheUKGovernmentwastousethemanagementinformationsystemstoidentifyprojectsthatwerelikelytoinvolvecomplexstakeholdersandtakeapre-emptiveapproachtomanagingthese.Theseapproachesworkverywellforproject-basedorganisations.However,messysituationsalsoariseinlinejobs–forexamplethedecisionandmanagementofaproductrecallforafactory.OneexamplethegroupdiscussedwasNike’sresponsetofindingchildlabourina3rdtiersupplier.Theirimmediatereactionwastoseethisasalegalproblem:acontractwasbeingbroken.However,thiswasatechnicalsolutiontowhatwasactuallyamorecomplexstakeholderproblem.After18months,theyfinallydevelopedanewapproachtosupplychainmanagement,andhavebecomeabeaconcompanyforthis.Thegroupagreedthatthekeytorecognisingtheseproblemsistoidentifythempre-emptivelybyunderstandingthattherearesignificantstakeholdersthatdonotseethe

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situationfromthecompany’spointofview.Thesesituationsmaytaketimetocrystalliseasproblematicdecisions,buttherootsmaybeinplaceearly.Thiscanbedescribedas‘political’,forexample:“wethoughtwehadatechnicalproblem,anditbecamepolitical’”–thislanguageisoftenindicativeofthepresenceofcomplexstakeholders.Thisariseswhenacompanyhasspentalotoftimedevelopingatechnicalsolution,buthasnotrecognisedthatthecommunitymightseeitincompletelydifferentterms.Soinonecase,theteamhadsolvedtheproblemonitsownterms,butnotintheenvironmentinwhichtheywereoperating.Thechallengewiththesepre-emptiveapproachesisthattheyareexpensive,comparedwithtechnicalproblemsolving.Thereisarealtrade-offindecidingwhethertoallocatetimetotechnicalproblemsolvingortobuildingadeepunderstandingofallthestakeholders–somethingthatwasidentifiednotonlybytheworkshopparticipants,butalsobytheintervieweesatConsultCo.Thisisadecisionabouthowtoapproachtheproblem,andisnotoftenframeddeliberatelyasatrade-off.Differentexecutivesanddifferentcompanieswillvaryintheirhabitualandcontextualapproachestothisbalancebetweentechnicalandstakeholderfocus,partlydependingontheirapproachtheriskinherentinthecontext.Thegroupidentifiedfivespecificcapabilitiesthattheyconsideredtobeimportantinmanagingthesesituations,basedontheirownexperience.TheseareshowninFigure17:

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Figure17:Fivecapabilitiesneededformakingdecisionsin'messysituations'

Identifyingandunderstandingthestakeholders

Oneparticipantpointedoutthatproblemsarisewhengroupsspendalotoftimedenyingwhothestakeholdersare(eg.“it’sjustnotrelevantforthatgroup”).Thereisarealskillindefiningthefullsetofstakeholdersandtheirrelativeinfluenceinthedecision,andtheninunderstandingtheirpointofview.Thisunderstandinginturnshapestheunderstandingofboththepermissionspaceandthewaysofinterpretingtheproblem.Itisthereforeakeypartofthedecision-making,butisalsonotwithoutcost,sodecision-makersneedtobeabletojudgehowmucheffortiscommensuratewiththecomplexityofthesituationandtheimportanceofthestakeholders.

1.Iden(fyingandunderstandingthestakeholders

2.Understandingpermissionspace

3.Definingtheproblem

4.Principles,notrules

5.Interac(onskills

SeDngthepre-condi(onsforproblemsolving

Makingthedecision

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Understandingpermissionspace.

Executivesneedaveryclearunderstandingofthepermissionspace,whichmaybere-shapeddependingontheconstellationofstakeholders.Someofthisiscultural,andsoorganisationsmayneedtoreconsidertheirrisktolerance.Thegroupdiscussedthecaseoftheveryslowchangeinthecementindustry,inwhichexecutiveshavetakentheviewthat:“wedon’tdoradical–it’snotinourpermissionset”,leadingtocollectiveinertia.ThisframingalsoledtotheslowpaceofchangeintheNikecase:forthefirst18months,theirviewwasthattheproblemlaybetweentheir2ndand3rdtiersuppliers.Itwasonlywhentheyextendedtheirownunderstandingoftheirremitbyreviewingtheirstakeholdersandpermissionthattheyactivelyengagedwiththeproblem.Definingtheproblem.

Understandingthestakeholdersandpermissionspaceletsexecutivesstarttodiscusswhatagooddecisionwouldlooklikeinthiscontext.Thisischallengingasstakeholdersmayhaveverydifferentideasofaneffectiveoutcome.Companiesmayfinditdifficulttomakedecisionsthatraiseissuesofco-ordinationorgovernance.Asoneparticipantobserved:

“Itmaybeeasiertomakeabusinesscasefornewequipmentthantoconveneagroup

ofpeopletoagreetochangetheirbehaviour”.Onewaytomanagethisistotakeaphasedapproachtoproblemsolving–forexampletakingsmallerandlesscontroversialdecisionsfirst.Thismayhelpmanagetheproblemscausedbytheirrevocabilityofsomedecisions.Principles,notrules

Messysituationsmayexistoutsidethescopeofthenormalsystemofruleswithinanorganisation,andthereforecreatestressesonrule-basedsystem.Byworkingwithprinciples,ratherthanrules,itispossibletoaddresstheseinanewway.Whilethisishappeninginsomecases,itisbynomeansubiquitous.Oneimportantaspectofprinciples-baseddecisionsisthelegitimacyoftheprinciples.Ifthesecanbeagreedwithstakeholdersearlyintheprocess,anddonotappeartobe

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developedinresponsetocrisis,theycanbeveryhelpful.However,thereneedstobeintegritybothintheprinciplesandintheiruse.Principles-basedapproachesmayworkwellwith‘workingoutloud’,butthisoftencreatesarequirementfornewinteractionandpersonalskills.InteractionSkills

Thegroupidentifiedseveralskillsthatareimportantinworkinginthisway.Inanenvironmentwhere‘beingrightisnotthepoint’,executivesrequireverydifferentpersonalqualitiesandwaysofworking.Thefourskillsthatthegroupdiscussedwere:

1. Theconfidencetoworkoutloud.Inordertointroducetransparencytotheprocess,andenablehealthydebate,executivesneedto‘workoutloud’.Thisisnotatypicalmodusoperandi,andrequiresconfidenceandanabilitytobewronginpublic.

2. Managinghealthyconflictasasourceofcreativity.Someorganisations(andsometeams)areabletomanageconflicteffectivelytoresolveissuesratherthanpersonalisingissues.

3. Ahealthyapproachtofailure.Aconsequenceof‘workingoutloud’andhealthyconflictisthatsomepositionspeoplewilladoptduringthedecisionprocesswillnotprevail,andmightbe‘failures’.Companiesthathaveadoptedahighertoleranceoftheriskoffailurefindthatthishelpsthemtomakeprogressfaster,andpotentiallytobemoreinnovative.

4. Tenacityandpersonalenergy.Allofthisrequirestenacity,andsufficientpersonalenergytoinvestintheprocessforthelongterm.Thegroup’sviewisthatthisisateachableskill,andalsoonethatcanbesupportedthroughtheorganisation.

Theseskillsneedtobesupportedthroughthesocialaspectsoftheorganisation(leadership,culture).PeermentoringhasbeenintroducedintheUKCivilServicetocreatepermanentactionlearningsetsandhelpleaderswhoareworkingondevelopingtheskillsformanagingmessysituations.

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Thesecapabilitiesare,ofcourse,shapedbythebroaderorganisationalenvironmentandbythedecision-makersthemselves.Thesewererecurrentthemesduringallthreeoftheworkshops.

6.4Organisationalinfluencesonchange

Duringtheworkshops,theparticipantsreviewedtheframeworkdescribingtheorganisationalinfluencesondecision-makers(Figure8).Whilethiswasoriginallydevelopedasastatic,descriptiveframeworkinresponsetoResearchQuestion1(Howdotheformal,behaviouralandsocialstructuresofanorganisationinteracttoinfluencetheinclusionofsustainabilitycriteriainincumbentbusinesses?),theworkshopparticipantswerealsointerestedinthewayitcouldbeusedtodrivechangeinanorganisation,addressingResearchQuestion2:‘Whatarethepointsofinterventiontoinfluencethesesystems?’Ultimately,decisionsaremadebyindividuals(sometimesactingingroups),anditisclearfromthediscussionthatthecontext–thesector,externalpressures(fromcustomers,suppliersorothers),theorganisation’sidentityandgovernancestructureallcreatepressuresthatdirectandshapetheirchoices.Therefore,muchofthediscussionwasaboutthewaysinwhichcompaniescaninfluencethissystemtodriveindividualbehaviourchange.

6.4.1Individualattributesandbehaviour

Chapter4.5describesthethreeattributesofindividualdecision-makersthatshapetheirdecision-making:theirknowledge;attitudesandbiases;andpermissionspace.Thesethreeareinterconnected:adecision-makers’attitudesandbiaseswillshapethewaytheyinterprettheknowledgeavailabletothem;theirpermissionspacewillshapethesetofactionsthattheyperceiveasavailable.Theseareeffectivelytheboundariesonrationaldecision-makingthatariseinthisresearch.Tochangethebehaviourofdecision-makers,organisationsthereforeneedtoshapetheiraccesstoknowledgeandinformation;thewaytheyinterpretit;andtheirpermissionspace.

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Althoughmanyoftheorganisationsinvolvedinthisresearchusetrainingprogrammesasawayofbuildingknowledgeamongindividualdecision-makers,thisisusuallypartofabroaderorganisationalsystemofstocksandflowsofknowledge.Thediscussionaboutindividualbehaviourchangefocusedmoreoninfluencingattitudesandpermissionspace.Influencingattitudes

Thegroupwasinterestedinthewaysinwhichthepersonalhistoryandprofessionalidentityofdecision-makersshapestheirattitudesandbiases,skillsandcapabilities.Inparticular,theywereinterestedinhowtoshapethistobuildeffectivedecision-makersandintheroleofdifferentfunctions.Theymadetwoparticularobservationsabouttheconnectionbetweentheorganisationandtheindividual:first,thenatureoftheworkforce;andsecondtheimportanceofprofessionalaffiliation.Oneexecutivepointedoutthatdifferentcompanieshavedifferentworkforceprofiles.Lowlevelsofemployeeturnovercancreateculturalstability,whichcanbeveryeffectiveformaintaininggoodpractices,butisalsodifficulttochange.Onecompanyintheresearchwastakingadvantageofaparticularphaseinitshistoryasagenerationofmanagerswereretiringandbeingreplaced.Otherswerefindingwaystocreateexperiencesthatwouldbuildcommitmentamongdecision-makers(forexamplebeingputinapositionwheretheywouldneedtospeakpublicallyaboutsustainability).Thissuggeststhatmanagersattemptingtointerveneintheorganisation’sdecision-makingcanidentifyparticulartimesorparticularpeopletobeafocusforinterventionandchange.Severalworkshopparticipantssuggestedthatanotherareathatimpactsdecision-makingispeople’sprofessionaldiscipline.Thiswasfirsttestedexperimentallyin1958(Dearborn&Simon1958).Thegrouppointedoutthatfinanceprofessionalshaveverywellestablishedprotocols(forexampleaboutreporting)whichcanbedifficulttochange.Thereframingofsustainabilityasaproblemofriskcanbeahelpfulwayofengagingfinanciers,butdoesnotaddresstheopportunitiesorsolutionspresentedbyactingmoresustainably.HRpeoplemayapproachthequestionfromanentirelydifferentangle,forexampleconsideringthewayinwhichsustainabilitycanbebuiltintoanemployeevalueproposition.Marketerswillengagefromacustomerpointofview.

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Thegroupwereinterestedinthewayinwhichdifferentprofessionalfunctionscanbeengagedconstructivelyindecision-making.PermissionSpaceTheworkshopparticipantswereinterestedinpermissionasaninterpretedspace:thewayinwhichexecutivesfeelempoweredtothinkcreativelyaboutsolvingaparticularproblem.Basedonthediscussion,thegroupsawthepotentialofnewinformationandreframingaswaystohelpexecutivesinterprettheirpermission-space,butalsoseeitasanareawhichhasbeenunder-explored.Theyobservedthatdecision-makingrequiresknowledgenotonlyofthesubjectmatter,butalsoofthedegreeofinformalpermissionavailable.Oneparticipantobservedthat:

“Seniorpeopletendtoknowquitewellwhattheirpermissionmightbeandhowto

negotiateit.”

Onefactorshapingpermissionspaceisthedecision-makers’understandingoftheexpectationsofotherpeople(whichmaybedifferentfromthepeople’sactualexpectations).Forexample,Boardswilltendtoassumethatshareholdersarelookingforfinancialresults.Thiswillshapetheassumeddecision-space.Oneparticipantreportedonworktheyhaddonebylookingbackatearlierdecisions,andobservedthatproblemsoftenarisefromamisplacedunderstandingofexpectations,andthusanincorrectinterpretationofthepermissionspaceforadecision.Thiscanbeimprovedbyinvitingpeopletotalkmoreopenlyaboutthenatureofthepermissionspaceforacomplexdecision,andbeingpreparedtobeexplicitaboutit.Therearebarrierstopermission.Sometimesthesecanbeindividualleaderswhoarereluctanttodelegateorcorporateculturesorregulatoryenvironmentsthatarefocusedonmaintainingacertainstatusquo,whichlimitsthedegreesoffreedomavailabletodecision-makers.Similarly,someculturesaremoreeffectiveatpushingpeopleoutsidetheircomfortzonesandencouragingthemtotakeabroaderpermissionspace.Professionalrolescanalsolimitpermission-space,forexamplefinanceprofessionalswhoseetheirroleascreatingshareholdervaluewillinterprettheirrangeofoptionsdifferentlyfromthosewhoseetheirroleasenablingtheresponsibleuseofresources.Finally,someindustrystandards(eg.BREEAM),whilewellintended,createatick-box

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mentalitywhichcanleadpeopletodothingswhicharelesseffective.Whilestandardsgivepeoplethereassuranceofhavingdone‘therightthing’:thereistheriskthatthisgivesafalsesenseofconfidence.Onemanagerpointedoutthatbecausedifferentpeopleinterprettheirrolesindifferentways,changeagentsneedtotakequiteatailoredapproachtoidentifyingtheleaderswhoaremakingdecisionsandinfluencingthem–oftenbyshowingthemgoodexamplesofpeopleusingtheirpermissionspaceeffectively.Thisinvolvesnotonlybuildingthedecision-makingprocesses,toolsandwaysofdoingthings,butalsoadeepunderstandingofthedecision-makersthemselves.Permissionspaceisthusamalleable,negotiatedareathatcanbeshapedbythebroaderorganisationtoencourage(ordiscourage)theinclusionofsocialandenvironmentalconsiderationsindecision-making.

Bothofthesepointsstarttosuggestthatinterventionsincompaniescanbequitenuancedandrequireatargetedapproachtoparticularaudiencesforbehaviourchange.Thispotentiallyaddsconsiderablecomplexitytochangeprogrammes,andthussuggeststhatcompaniesneedtoconductacarefuldiagnosistoidentifythedecisionmakerswhoseworkdrivesthemostmaterialsocialandenvironmentalimpacts.

6.4.2Organisationalfactors

ThefourorganisationalfactorsidentifiedinChapter4.4are:leadership,culture,organisationdesign,andperformancemanagement.Asthediscussionofpermissionspaceaboveshows,thesedoinfluenceindividualbehaviour.However,theorganisationisnotonlytheenvironmentfordecision-making,italsoprovidestheconditionsforchange.Giventheworkshopparticipants’focusonthesocialstructuresoforganisations–theirleadershipandculture–itisnotsurprisingthattheysawtheseasaveryimportantmechanismforchangingdecision-making.Leadershipinparticularwasdescribedasacriticalwayofshapingtheinterpretationofsustainability,anddirectingattentiontoit.Theinitialstepofreframingsustainabilitywasclearlyseenbythegroupasacriticalact

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ofleadership.Inordertodothis,somecompanieswereworkingtoinfluencetheirleaders.Asoneparticipantsaid:

“Weworkwiththenewyoungleadersandtrytounderstandthemtoinfluence

change.Theyareallknownfordifferentwaystomakechangehappen,soeveryone

needstomakeithappeninadifferentway–andthisgivestheexamples.”

However,whileeveryoneagreedthatleadershipwascriticalforchange,theinterdisciplinarynatureofsustainabilitymeantthatmanyoftheparticipantssawtheproblemas‘toobig’foranindividualleader,andrequiringamuchbroaderorganisationalconsensustoshift.Leadersinfluence,andareinfluencedby,thecultureoftheirorganisations.Theorganisationalculturetendstosetnorms,particularlyaboutinteraction–oneparticipantgavetheexampleofconfidenceinhandlingconflict.Thus,inordertobuildthecapabilitiesthatthegroupdescribedformanagingsomedecisions,theremayneedtobesomeculturalchanges.Cultureisalsoinfluentialinshapingpermissionspace.Thegroupthereforesawtheabilitytounderstandacultureasacriticalprerequisitetomanagechange,andobservedthatsomeofthechangemethodsthathavebeeneffectiveinsomecontextswouldbeproblematicinothers:

“Pushingpeopleoutoftheircomfortzone[describedasaprocessforchange]isvery

specificallycultural”

“Therearecultures–includingsub-cultureswithincompanies–thatwantto

preservethestatusquo,sothereisatimeandaplaceforchange”

However,culturesareatleastpartlymalleableandcanbeshaped.Oneparticipantgaveanexampleofhowtheirorganisationhadchangeditsattitudetowardsfailuretoencouragehigherlevelsofinnovationandlearning.Asonepersoncommented“akeyskillistenacity”,andthisisbothteachableandculturallysupportable.Organisationdesignwasnotdescribedasadirectenablerofsustainabilitybyanyoftheworkshopparticipants.Rather,theyreinforcedfindingsfromtheinterviewsthatthereweresomestructuraltensionsintheirorganisations.Asoneparticipantcommented:

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“Therearepeoplebarriers,thereareprocessbarriers”.

Somelevelofconflictseemstobeinevitablewhenthedifferenttensionsinadecisionareheldatdifferentplacesintheorganisation(forexamplewhenprocurement,engineeringandfinancehavedifferentobjectives),andsothesecanonlyberesolvedataseniorlevel,orbycreatingcross-cuttingnetworks.Manyoftheworkshopparticipantshadexperienceofcreatingnetworkstomobilisepeoplewithincompaniesandacrosscompanies.Thesenetworksneedtooperatewithintheexistingstructuresandsystems,toaugmentthembycreatinglinkages.Thesethenbecomeconduitsforknowledgeandforinfluencingbehaviourchange.Theformalsystems–organisationdesignandperformancemanagement–havearoleinthetransferandsharingofknowledge,andinembeddingthechange.Theycanalsoprovidesupportforsomeoftheculturalandleadershipinterventions,forexamplethestructuralsupportforformalmentorshipschemes,ordevelopingperformancesystemsthatdonotpunishcertaintypesoffailure.Thecombinedeffectofchangingformalsystemsistoratchetthechangeasitishardertoundotheembeddedchanges.Oneexecutivecommentedonthewaythatthecompanyhadmanagedamulti-yearprogrammetoembedsustainabilityinthebusiness:

“Itwaslikearugbyline.We’dmoveforward,thenreinforce,andthentrytomove

forwardagain.”

Althoughperformancemanagementwasemphasisedbysomeoftheinterviewees(seeSection4.4.4)itwasseenonlyasawayofdirectingattentionandreinforcingsocialnorms–evenincompaniesthatarequitetarget-driven.Oneoftheparticipantswhohadbeendeeplyinvolvedinmanagingsustainability-relatedchangeintheirorganisationconcludedthateffectivechangerequiredworkingwithformalandsocialelementsoftheorganisationsimultaneously:

“Youhavetoplayallofthesethingsatthesametime,becausewehaveprocesses,we

havetools,wehavewaystomakedecisions,andthenwehavewaystoinvestin

people.”

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6.4.3ThecriticalroleofknowledgeandlearningAlthoughknowledgeappearsintheframeworkofinfluencesasanindividualfactor(seeSection4.5.1),thediscussionintheworkshopdevelopedthisideafurther,showinghowknowledgeatboththeindividualandorganisationallevelalsohasacriticalroleinchangingthewaydecisionsaremade.Asoneparticipantsaid:

“Howcanweusedatatoopensomeone’smind,ortoseeadifferentperspective,orto

understandthesystembetter?”

Althoughthisispowerful,thereisacosttodevelopingthistypeofknowledge,particularlyforcompaniesthatareleadingintheirindustries.Asoneworkshopparticipantobserved:“Ifyouareasustainabilitypioneer,thereisalearningcost”.Insomesectors,thecostofthisextraknowledgeseemstohaveinhibitedindividualcompanieschanging.Thegrouptooktheviewthatorganisationslearnhowtoacquireandsupporttheseskills,butoftenasaresultofabadexperience(examplesgiven:Nike,BrentSpar).Thismayinspireothercompaniestolearntheskillspre-emptively,aspartofbuildingastrategyofresilienceinthefaceofchange.Notonlydocompaniesneedtochangethewaytheymanageknowledge,theyalsoneedknowledgetomanagethechange.Effectivemonitoringofthechangeprocesswillcreateafeedbackloop.Asoneexecutivesaid:“Ifthereisn’tafeedbackloop…thenthereisnoprocessforevolution”.Thisistheprocessbywhichtheknowledgemaybetranslatedintoorganisationallearning.Thus,knowledgehasmultiplerolesinshapingthewayorganisationsadapttoincludesustainabilityconsiderationsintheirdecision-making.Thissuggeststhatknowledgehasadualroleintheframework,asbothanindividualfactorandasanorganisationalfactor.

6.4.4Influencesbeyondtheboundariesoftheorganisation.Aswellasextendingtheframeworktoencompassadualrolefororganisationalandindividualknowledge,theworkshopparticipantsalsoexploredtheroleoftheenvironmentbeyondtheboundariesoftheorganisationasadriverofchange.

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OnefeatureoftheConsultCocaseisthatultimately,collaborationbeyondtheboundariesoftheorganisationwasnecessarytostarttoeffectthesystemchangesthatcouldsolveConsultCo’sproblems.Thisthemearoseintheworkshops.Severalcompanieshadbeeninvolvedinexternalnetworksaspartoftheirdrivetowardssustainability.Theseexternalnetworkstooktwospecificforms:first,groupsofpeer-likeorganisationsworkingonspecificissues;second,companiesworkingwiththeirsupplychainsorsuppliersworkingwiththeircustomerstoimprovesustainabilityintheproductionsystem.Manyoftheparticipantsintheworkshopshadbeeninvolvedwithissue-focusedindustrynetworks.Thereweretwomainreasonsforthis.First,thecostsoftheorganisationallearningforsustainabilityseemtobehigh(althoughtheyarealsodifficulttoquantifyastheyarenotheldatasinglepointintheorganisation).Thismeansthatformanycompanies,theremaybeafirstmoverdisadvantage.Thegroupdiscussedtheexampleofthecementindustry,wherethereareknownopportunitiesforimprovementinenergyefficiency,butnoindividualcompanyistakingleadership.Companiestemper‘firstmoveradvantage’withconsiderableriskaversion,andsosomechangesmoveatasectorallevel.Oneparticipantcommented:

“It’sactuallyeasierifthewholesectormoves,evenifyoulosefirstmoveradvantage”Thisiscomparablewithchangesinhealthandsafety,inwhichcompaniesoftenmoveinparallel.Second,thereareadvantagesofsharingvoiceandresourcestoeffectchange.Oneparticipantgaveanexamplefromanindustrywhereamajorplayerhadbeenfacingaseriesoffinancialandreputationalproblems,and‘theywentundergroundonsustainability’inordertoregroup,butotherindustryplayerstookovertheleadinaseriesofindustry-levelinitiatives(suchasworkingtoreducedeforestationinthesupplychain).Thisallowsthemajorplayersinthesectortoshareresourcestodrivechange.Astheexecutiveinvolvedsaid:

‘We’vedoneourbit,theycandotheirbit...then,betweenusallwithin20yearswe’ll

keepthatenergyupandkeepthatleadership’.

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Thegroupobservedthatthisapproachofconveningwithinandacrossindustriesisbeingusedtotacklearangeofproblems,fromthereductionofplasticsinthefoodsupplychaintoEllenMacArthur’sapproachtoconveninggroupsofcompaniestosolveproblemsinthecirculareconomy.Aswellassectorallevelnetworks,thegroupdiscussedtheroleofsupplychainsininfluencingcompaniestoactsustainably.Therelativepowerofbusinessesatdifferentpointsinasupplychainmaybeanimportantdeterminantofthewaytheycantakedecisions.Groupmembersgaveexamplesofsupplierswantingtodrivechange,butthisalterstraditionalrelationships,andsomecompaniesactconservativelyinordertoavoiddestabilisingarelationshipwithanimportantcustomer.Wediscussedanexamplefromtheapparelindustry,wheremanufacturingmarginsareverytightbutatthesametimesomemanufacturerswouldliketotakeanactiveleadershiproleinintroducingsustainablemanufacturingtothebrandstheyserve–forexamplebysettingstandards,KPIs,andreducingaudits.Theproblemthispresentsisthatitisonlypossibletoleadacustomerinadirectionthatisinterestingforthem:again,thisisanexampleofatensionbetweentheinternalandexternalcontexts.Thisisfurthercomplicatedinindustrieswherepeercompaniesbecomesuppliers(forexample,thepharmaceuticalindustry).Thesedifferentapproachestoworkinganddecision-makingarehighlightedwhenacompanyworksasasupplierinonecontextandacontrollingcompanyinanother.Therearerealdifferencesinactivitiessuchascollectingsustainabilityindifferentrelationalset-ups,asoneparticipantsaid“It’sasthoughthelefthandandtherighthandarenottalkingatall”.Thissuggeststhatmanagingeffectiveexternalcollaborationforsustainabilityalsorequireshighlevelsofinternalco-ordination.

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6.4.5ImplicationsforchangeThisdiscussionpointstowardsthephenomenonofnestedtensionsdescribedintheConsultCocase(Chapter5.7).Figure18showsaverysimplifiedversionofthewaysinwhichactionsinthedifferentorganisationallayerscancreatepressureforchangeovertime:Figure18:Organisationaldynamicsshapingdecisionsovertime

Therearetwofeedbackloopsinthismodel.First,asthecompanydevelopsnewknowledge,somedecisionsbecomeeasier–theresultsofthesedecisionsmaythenfeedbackintotheknowledgestocks.Second,asdecisionmakers’changingperceptionsoftheissuesinfluencesocial(andsometimesformal)systemchanges,whichreinforcethenewunderstandingofissues.Thissuggeststhattherearetwolayersoflearningloopsinvolvedinstartingtointroducesustainabilitycriteriatodecision-making.First,thereisacycleoflearningbetweenthedecision-makerandtheorganisation–thisisoftenmanagedthroughbehaviouralchangeeffortsandorganisationalshifts(suchastheintroductionofsustainabilitynetworkstoshareknowledge).Second,andnotshowninFigure18,there

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Companyrespondsbyreframingtheroleofsustainability

Decision-makerschangepercep0onofissuesbutneednewknowledge

Companydevelopsnewknowledgestockandsystemstoshareknowledge

Decision-makerschangepercep0onofissuesbutneedbroaderpermission

Companyneedstocollaboratetosolveproblems

Framingofdecisionsmaychange

Leadersamplifythisreframingthroughtheorganisa0on

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Somedecisionsmaybeinsolublewithinthecompany

Leadersamplifythisapproachthroughtheorganisa0on

Somedecisionsmaybecomeeasier

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isacycleoflearningbetweentheorganisationandtheexternalenvironment,asthecompanytestsandsensestheimpactofdecisionsonexternalstakeholders.Thus,theprocessofbehaviouralchangeisnestedwithinabroadercontextofsystemicchange.

6.5Nestedchangeandthewhack-a-moleapproachThefindingfromthisdiscussionabouttheorganisationandchange,whichextendsthefindingsfromStudies1and2isthattheorganisationalsystemsthatareusuallyusedtodrivebehaviouralchangearenestedwithinabroaderprocessofsystemicchange,thatisshapedbythedecision-makingwithincompanies.Manyoftheinterventionsthataremadeaspartofatraditionalchangeprogrammetointroducesustainabilitytocompaniesaddressoneoftheselevels(thebehaviouralorthesystemic),butnotboth.Toexploretherelationshipbetweenthesetwolevelsofchange,IdedicatedthewholeagendaofthethirdworkshoptoadiscussionoftheConsultCocase,inwhichbothtypesofchangeareevident.Thediscussionexploredthreemainthemes:first,thefeaturesoftheConsultCocase(toseeiftheideascouldbeapplicableinothercontexts);second,thepropertiesof‘whack-a-mole’change;andthirdthenatureofnestedchange.

6.5.1ConditionsofthiscaseTheexecutivesidentifiedfourfeaturesofthiscasethatmakeitahelpfulanalogyforotherindustries,andsosuggestthatsomeofthefindingsmaybegeneralizable.Thesewere:

1. Inconsistentcustomerbehaviour.Whiletheclientsareinterestedinsustainability,theyareactuallycontractingbasedontimeandefficiency.Thisphenomenonissimilartoconsumerbehaviourinotherindustries,whereconsumerswantsustainableproducts,butdon’twanttochangetheirhabitsofconsumption.Thereisaquestionabouthowfarthecompany’sclientengagementprocesscangoinchangingthisbehaviour(forexample:incompetitivebids,thebidsareevaluatedusingthesamecriteria,andsoeveryoneneedstobidinthesameway).

2. Challengesofincumbency.Whereasastart-up,ornicheplayercanpotentially

offeranewwayofworking,theincumbentsaretoolargetosimplychangethe

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rulesunilaterally–itcreatestoomuchrisk.Onepossibilitythatthegroupsuggestedwastheideaofhavingmultiplebusinessmodels(eg.Aninternalstart-up)inordertotryoutnewwaysofworking.

3. Theabilitytomakesomechangesalsodependsonthelocusinthesupplychain.

Inthiscase,theengineeringconsultantsarepartofaverycomplexgroupoforganisations(clients,consultants,builders,communities…)involvedinthedevelopmentanddeliveryoflargeinfrastructureprojects.Therearesomechangesthatcannotbemadeunilaterallyastheyrequiretherestofthegrouptoshift.Thisoccursinotherindustries:forexample,buyerpowerisconcentratedinsomeretailcontexts,andsocompaniestryingtooffersustainableproductsmightnothavesufficientpowertoinfluencesupplierbehaviour.

4. Thereisacostassociatedwithbeingapioneerinsustainability,assystemsmay

needtobesetupfromscratch.InConsultCo’scase,thisistheinvestmentinnewknowledge,includingbothdatabasesandtheprocessesandnetworksforimprovedknowledgeexchange.Inothercompanies,thesesystemsareexpectedtoincludeacombinationofbusinesssystems(suchaschangingthesupplychain)andthecostsoflearning.

Theparticipantsintheworkshopwereallrecruitedfromorganisationsthathadsomeorallofthesefeatures.ThismeantthattheywereabletorelatetheConsultCoexperiencetotheirownexperience,andtheircommentaryisbasedonthis.

6.5.2Thewhack-a-molemetaphor

Inchapter5.7,Iintroducedthemetaphorofthegame‘whack-a-mole’todescribetheproblemsConsultCofacedinmanagingitschangeprogramme.Therearethreemainprinciplesunderpinningthismetaphor:

1. Asoneproblemissolved,asecond(andsometimesmore)becomesapparent.2. Eachproblemisasymptomofanunderlyingsystemicproblem(thereisactually

amachineunderthewhack-a-molegame).

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3. Thissystemicproblemisnotsolubleusingthesamemethodsthatareusedforthepresentingproblems.

Whilethemetaphorisanewone,theexecutivesintheworkshoprecognisedthephenomenonfromtheirownexperiencesofintroducingchangeinsystemsthathadsimilarcharacteristicstotheConsultCosituation.Thegroupidentifiedfourspecificproblemspresentedbythistypeofchange.Solvingthewrongproblem.

Oneproblemthatthe‘whack-a-mole’situationpresentsisthatitispossibleforpeopletomisdiagnosethesystemicproblem.Oneparticipantgavetheexampleofthecurrenthighlevelofpublicpressuretoreduceplasticsfromtheirbusiness.Thisisdistractingattentionfrommorepressingproblems–particularlyde-carbonisation.Thisgivesthemanagersaproblemofcompetingcommitments:whiletheyaredeeplycommittedtomeetingthedemandsofcustomers,sometimesthesedemandsareatoddswiththeircommitmenttoactingbasedonscientificpriorities(forexampletheirmostmaterialimpacts).Giventhatthereislimitedresourceinacompanyformanagingtheseproblems,thedecisionofwhattoprioritiseismanagedasatrade-off.Thisraisedaquestionforbroaderdiscussion,whichiswhetheritisactuallypossibletoseethesystemicproblematallbeforegoingthroughtheprocessofaddressingthepresentingproblems.Thegrouptooktheviewthat‘whack-a-mole’situationscreateopportunitiesfororganisationallearningfortwomainreasons.First,manyorganisations(andpeople)arerelativelyinexperiencedwithsustainability,andsotacklingthepresentingproblemsisawayoflearningaboutthesystemandthesustainabilityissues.Second,becausesystemproblemsaresochallenging,peopleeitheravoidtheseorarereluctanttobelievethattheyareapriority:forexample,griddecarbonisationwillhelpaddressarangeofsustainabilityproblems,butrequirespolicychangeandwillradicallydisruptseveralindustries.Asoneparticipantsaid:

“Peoplegettoapointwheretheyaresaying‘Someone[else]needstodosomething

differently’,whichsuggestsaneedforabroaderchange.”

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Oneoftheworkshopparticipantsobservedthattheideaoflearningisapartofthewhack-a-molemetaphor:

“Ifyouhaveplayedwhack-a-mole,youknowthatthesystemwillcontinuetopresent

problems,butifyouarenewtoit,youneedtoactuallyplaythegameforawhile

beforeyouunderstandhowitworks.”

Thissuggeststhatthistypeofchangecallsforanexperiencedcadreofleadersandstrongorganisationallearningprocesses.Thisledthegrouptoconsiderthesecondchallengetheyidentifiedforthistypeofchange.Delegatingchangetothewrongpeople.

Oneproblemisthatoftenthepeopleputinchargeofthesechangesarepeoplewhoare‘goodathittingmoles’ratherthanpeoplewhoareabletounderstandandaddressthebroadersystemicissues.Asonepersonsaid:

“Ifyouhaveawhack-a-moleprobleminsustainability,youprobablyhaven’tunderstoodsustainability.”

Often,sustainabilityisencouragedincompaniesthroughinformalnetworks,whichcanbeeffectiveinidentifyingandchallengingproblems,butmaynothavetheresourcesorauthoritytoaddressfundamentalproblems.Oneexecutivegaveanexampleoftheproblemofbringinginnewrecruitstosustainability:

“Theysay‘ofcoursewecanrecyclethings,wejustneedtoworkharder’….Andthat’s

what’shappeningincarbonandclimatechangeatthemoment,whereyou’vegot

businessesthinking‘wecansolveit,that’sOK’.Butyouneedgriddecarbonisation

andnewregulationforthat…ratherthanjusttinkeringaroundwithalittlebitof

innovationandthinkingwecansolveit.”

Veryseniorcoalitionsmaybeeffectiveindrivingchange,astheyarepotentiallypositionedtomakeorinfluencesystemlevelinterventions.

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Changemanagementprocess

Theseproblemsofstaffingandtacklingthewrongproblemledthegrouptosuggestthatthechallengecompaniesfaceisoneofspecification:ofidentifyingthepointatthesystemtointervene,theresourcesneededtodothis,andthefeedbackloopstohelpmonitorprogress.However,problemsaregenerallyspecifiedintermsofcurrentnorms,whichtendtobeeffectiveforspecifyinganapproachtoapresentingproblem,ratherthanadeepersystemicproblem.EffectiveorganisationallearningisacriticalpartofthetypeofchangeprocessthatisdescribedinFigure18,above.Thismeansthattheorganisationsundertakingthistypeofchangeneedtwoquitedifferentformsofnewknowledge.First,theyneedtointroducenewstocksandflowsofknowledgetohelpdecision-makersmakebetter-informeddecisions.Thismayinvolvenotonlyimprovingdataandsharinginthebusiness,butalsoimprovingthesensingoftheexternalworld–forexample,throughcleareridentificationandunderstandingofstakeholders.Second,theyneedaneffectiveprocessforlearningaboutthechangeitself.Asoneoftheworkshopparticipantssaid:

“Ifmolesarethewaywelearnaboutthesystem,thenperhapsmyjobistosetalotofmolesrunningsothatwecanacceleratetheprocess.”

Thisisarelativelysophisticatedformofdouble-looplearning(Argyris1976),requiringahighlevelofreflectionbythemanagersofthechange,effectivelyformingalayerofactivity(orcost)thatneedstobedesignedintotheprogramme.GovernanceThegroupsuggestedthatultimatelythe‘whack-a-mole’problemssurfaceissuesofgovernance.Resolvingtheserequiresdifferentstructureseitherwithinorbeyondtheorganisation.Theseproblemsmaybesodifficultthatitispeoplewillprefertokeepdealingwithsymptomatic‘moles’ratherthanaddresstheunderlyingchallenges.

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Therearetwoaspectstothis.First,thede-centralisationandcomplexityofmanylargeorganisationscreatesproblemsofgovernance.TherecentscandalatVolkswagenisagoodexampleofthis(Elsonetal.2015).However,creatingthecontrolsystemsthatcanmanagethisproblemandareflexibleenoughtorespondtoadynamicproblemofsustainabilitycreatesnewproblemsoforganisationdesign.Muchoftheworktodate–bothbyacademicsandpractitioners–hasfocusedondevelopingsocial,ratherthanformalapproachestochangeanditmaybethatthisisanewfieldfordevelopment.Second,theworkshopparticipantstooktheviewthatthesemayneedtobecollaborationsatthesectorlevel,ratherthanthebusinesslevel.Thisalsoraisesproblemsofgovernance,astheoversightofthesechangeprocessesneedstobesharedbetweenseveralgroups,ordelegatedtoaco-ordinatingorganisation.

6.5.3NestednessJustasthechoicesmadebyindividualdecision-makersarenestedwithinthecontextofabusiness,thebusinessesthemselvesarenotisolatedfromthebroadersocietalcontext.Althoughtheunitofanalysisforthisresearchisasinglebusiness,wecanobservesomeofthesameproblemsemergingatasocietallevel.Forexample,thecurrentpublicfocusonplasticisanexampleofasymptomaticproblem,whichisnotnecessarilyaddressingthedeepersystemicissues.Thisnestednessmeansthatcompanieswillnotbeabletosolvethecompleteproblemswithoutreferraltothebroadersystem.Asoneparticipantsaid:

“Whateverproblemwe’vetriedtosolve,eventually,we’vehitalimit.”

Themulti-dimensionalnatureofsustainabilitythatcausestensionsandtrade-offsincompaniesisalsovisibleatasocietallevel,forexampleincitygovernment,whereresourcesandenergyarelimited.Solvingtheseproblemsrequiresgovernmentswithawillingnesstocollaborateandanunderstandingoftheunderlyingsystems.Despitesomerealprogressbysomecompanies,nocompanycanfullyclaimtobesustainable,becauseeveryonehastoengagewithsomepartofasystemthatisnot:forexample,almosteverycompanyrequiressomeaccesstopowergenerationthatisnotentirelyrenewable.Thismeansthatallcompanieswillneedtolearnhowtomanage

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these‘whack-a-mole’processesinordertoachievethechangeneeded.Thisrequiresimprovedapproachestolearning,effectiveexternalcollaboration,andadeterminationtodirectresourcestothemanagementofdifficult,systemicproblems.

6.6ConclusionsStudy3hasreaffirmedseveraloftheearlierfindingsofthisstudyandformedconnectionsbetweenthefindingsinthefirsttwostudies.Specifically:

1. Thediscussionsconfirmedboththeimportanceandthedifficultyofthereframingprocessinsettingadirectionforcompaniestoadoptsocialandenvironmentalsustainabilityintheirdecision-making.

2. Thediscussionsconfirmedthatthearchetypesofdecisionsarerecognisable,buttheycanbedynamic.Thatistosay,decisionsthathavethecharacteristicsofonearchetypecanbetreatedwithapproachesthataresuitedtoanotherarchetype.Thisistypicallytosimplifyandacceleratedecision-making,butmayleadtounintendedconsequences(forexample,afailuretomanagestakeholderswellifa‘messysituation’istreatedlikeanengineeringproblem,orafailuretoimproveefficiencyifanengineeringproblemistreatedasaroutinedecision).

3. Theworkshopparticipantsbroadlyagreedwiththestructureoftheframeworkoforganisationalinfluencesondecision-makers,butexpandedthisbyshowingnotonlyhowthiscandescribethefactorsthatinfluencedecision-making,butalsohowthesecanbeengagedinchangeprocesses.Inparticular,theparticipantsemphasised:thesignificanceofthesocialaspectsofthemodel(leadershipandculture)ininfluencingdecision-makers;theratchetingeffectthatchangingtheorganisationcanhaveonembeddingchange;andtheimportanceofknowledgetransferandlearningatbothanorganisationalandindividuallevel.

4. Knowledgeandlearninghaveanimportantroleinshapingthedynamicsofthesystemovertime,andrequireparticularorganisationalcapabilities.

5. Theconnectionbetweentheorganisationandtheexternalenvironmentisanongoingone,anddoesnotsimplystopaftertheinitialtensionbetweenthebusinessanditssocialandenvironmentaloperatingcontexthasbeenre-framed.Thisconnectioncaneitherbeusedasasourceofinformationandlearningtoimprovedecision-making(forexamplebybringingknowledgeabout

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stakeholdersintothebusiness),orcanbeaprocessofengagementandcollaborationwithotherorganisationstodrivesystem-levelchange.Thisisanexpansionoftheoriginal,staticmodel.

6. Thetypeofchangerequiredtoembedsocialandenvironmentalconsiderationsintobusinessdecision-makingisthuscomplex.Itrequiresmultiple,sometimesexperimental,pointsofintervention(includingseveralformalandsocialorganisationalsystems).Itneedstoincorporatelearningloopsbothbetweentheindividualdecision-makerandtheorganisation,andbetweentheorganisationandtheenvironment.Andfinally,itmayeventuallyrequiresystem-levelchange,whichcanonlybeachievedbyactionbeyondtheboundariesoftheorganisation.

Figure19showshowthesedifferentideasarerelatedtoeachother,toshowaprocessofinfluenceandchange.Thetwosetsoflearningloopsareshowningreyboxes.Figure19:Learningloopsfornestedchange

Here,weseethatwhiletheprocessofchangingapproachestodecision-makingisinitiatedbyareframingofthetensionbetweentheexternalcontextandthecompany’sapproachtovaluecreation,thisisfollowedbyaseriesofiterativechangesastheorganisationlearnsfirstfromtheeffectofitsinternalprocessesonthedecisionspeople

Decisio

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Organisa

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Environm

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Decisio

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Tensionbetweenbusinessandtheenvironmentcreatespressureforchange

Companyrespondsbyreframingtheroleofsustainability

Companyneedstocollaboratetosolveproblems

Framingofdecisionsmaychange

Somedecisionsmaybeinsolublewithinthecompany

Somedecisionsmaybecomeeasier

Decision-makerslearnsothattheirknowledge,aBtudesandpermissionspacechangeover0me

Companyknowledge,andformalandsocialprocesseschangetoproducenewenvironmentfordecision-makers

Organisa0onallearningloopsareestablished

Companysensesandlearnsfromtheenvironment

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make,andsecondfromthebroaderexternalenvironment.Thereisalsoafeedbackloopbetweenthesetwolevels:someofthedecisionsmadebythecompanywillinturnchangetheexternalenvironment,andsomecanonlyberesolvedincollaborationbeyondtheboundariesoftheorganisation.Thisdiagramsuggeststhattherearefivecriticalpointsofinterventiontoinfluencesystems.First,companiesneedtocreateaframingoftherelationshipbetweentheirbusiness,societyandtheenvironment,andtheyneedtoensurethatthiscanbeinterpretedthroughouttheorganisation(Zolloetal.2013).Second,theyneedtoidentifythedecisionsthathavethemostmaterialsocialandenvironmentalimpacts(Epstein&Widener2011),andassesstheneedtochange–forexample,theworkthatneedstobedonetore-thinkheuristicsinacontextwherethemajorimpactsarelargelyincurredthroughroutineoperationswillbeverydifferentfromtheworkthatneedstobedoneinabusinesswherethereareasmallernumberofmessysituationsrequiringaparticularsetofskillsinaleadershipteam.Third,theyneedtoensurethatthepeoplemakingthesedecisionshaveaccesstotacitandexplicitknowledge(Fortisetal.2018)andthepermissionspacetobeabletobringsocialandenvironmentalconsiderationsintotheirdecisions.Thisisachievedthrougharangeofsocialandformalorganisationalprocesses,whichdependontheorganisationalcontext.Fourth,theorganisationneedstoenableaseriesofreflexivelearningprocesses:forindividualdecision-makers;fortheorganisationalchange;andtobringinideasfromtheexternalenvironment(Raischetal.2018;Fortisetal.2018).Thesebecometheengineofthechangeprogramme.Finally,theorganisationneedstobepreparedtoco-operateexternallytoworkonsystem-levelissueswhentheyreachapointwheretheproblemcannotbesolvedwithintheboundariesofthefirm(Schad&Bansal2018).Thesefive‘foundational’approachestochangeformthesupportingframeworkforchangeintheformal,behaviouralandsocialaspectsoftheorganisationdescribedinChapter4.Ithereforeproposeatheoreticaldistinctionbetween‘foundational’and‘contextual’interventions,inwhichthecontextualinterventionsarethosechangesthattheorganisationmakestoitsformalandsocialstructures(describedinChapter4),andthefoundationalinterventionsarethemorefundamentalprocessesdrivingthechange.ThismodelbringstogetherconceptsfromacrossthefragmentedliteraturedescribedinChapter2tocreateanintegrativeviewofthesysteminfluencingdecision-makers,and

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thepointsofinterventionthatareneededforchange.TherelationshipsbetweentheseareshowninFigure20.Figure20showsasimplifiedmodelofthecontextuallayersframework(fromFigures1,8,9and10)inwhichthecontextsthatarethemainfocusofchangeateachstagearehighlightedingrey.Beneaththat,Ishowthefivefoundationalchangesdescribedabove,withthefeedbackloopsshowninaverysimplifiedasarrows.The‘learning’boxisshownsupportingthechanges–again,thisisaninteractiveprocess(theinteractionsareomittedfromthediagramforsimplicity.Figure20:Foundationalandcontextualchange

Thus,theprocessesof‘zoomingin’and‘zoomingout’-identifiedbyNicolini(2009)andSchadandBansal(2018)astheworkofresearchers–arealsoimportantactivitiesforpractitionersofchangeastheyworkthroughthedifferentcontextuallayersoftheorganisationinparallelwiththefoundationalchangesteps,reinforcedbylearningandfeedbackloops.

Learning

Focusforcon

textual

change

External/internalcontext

Decisioncontext Individualandorganisa9onalcontexts

External/systemiccontext

Changestep

sand

feed

backloop

s

Framing Iden9fyingmaterialdecisions

Changingformalandsocialsystems

System-levelchange

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7:CONCLUSIONS

7.1AnsweringtheResearchQuestionsMyaiminthisstudywastounderstandhowbusinessescanadapttheirdecision-makingsystemstoincorporatesocialandenvironmentalconsiderationsbyansweringtworesearchquestions:

Q1:Howdotheformal,behaviouralandsocialstructuresofanorganisationinteracttoinfluencetheinclusionofsustainabilitycriteriaindecision-makinginincumbentbusinesses?Q2:Whatarethepointsofinterventiontoinfluencethesesystems?

Ifindthattheformal,behaviouralandsocialstructuresofcompaniesarecomplexanddynamic,andthattheyareconfiguredtorespondtotheparticularcircumstancesofthebusiness.The107factorsidentifiedfromtheliteraturereview(describedinChapter2andlistedinAppendix1)appearindifferentcombinationsindifferentorganisations.Nevertheless,theycanbegeneralisedintoadescriptivemodelbuildingontheworkofDeanetal(1991).ThisisdevelopedinChapter4andillustratedinChapter5.Behaviouralstructures(orcognitiveframes)areinfluencedbytheorganisationalframing(andreframing)ofsustainability,butthisisthenreinforcedthroughsocialprocesses(leadershipandculture)andformalstructures,particularlythosethatareresponsiblefortheaccumulationandtransmissionofknowledge.Interveninginthisstructureisdifficult,andthepointsofinterventionforcompaniesreflectboththemostmaterialandparadoxicalissuesthattheyface,andthetypesofdecisionthatpredominateintheirorganisation.Changespresentconsequences,andsothepointsofinterventionchangeandmatureovertime.Nevertheless,basedonmyinitialfindingsfromChapters5and6,Ifindanimportantdistinctionbetweenthefoundationalpracticesneededto‘zoomin’and‘zoomout’todrivesystemchange,andthecontextualchangesthataparticularcompanyneedstomaketoitsformal,behaviouralandsocialstructuresinordertobringsustainabilityconsiderationsintodecision-making.Whileseveralofthesestepshavealreadybeenidentifiedintheliterature,thissynopticview–illustratedinFigure20–isnovel.

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7.2LimitationsoftheresearchThisworkis,ofcourse,notwithoutlimitations.Therearetwoparticularconstraintsonthiswork.First,eachofthequalitativemethodsIhaveadoptedhassomelimitations,whichIdescribeindetailinChapter3.4.AlthoughItookstepstomitigatethesemethodologicalandsamplinglimitations,thefindingsoftheresearcharestillinterpretationsbyasingleresearcherofdatathatwasprovidedinaspecificintervieworfocusgroupsetting.Thisthereforeraisesquestionsaboutthegeneralizabilityofthefindings.Here,ItaketheapproachofGioiaetal(2013),anddepartfromthepurelyinterpretivistviewthateverysituationisspecific(andthus,notgeneralizable).Thisstudydoesproposesomenewprinciples(describedinthecontributionstoknowledgesection,below)thatmayformthebasisforgeneralizableknowledgeandsetadirectionforfutureresearch.Thesecondlimitationofthisstudyarisesfromitsbreadth.OneoftheproblemsidentifiedinthereviewoftheliteratureinChapter2isthatthescopeofmanypreviousstudieshasbeennarrow.Thishasledtoafragmentedliterature,whichhaslimitedthebasisfortheorydevelopment(Shepherd&Rudd2014;Shepherd&Suddaby2017)andhasalsoledtoafocusontoolsoranalyticalmethods,ratherthanorganisationalinterventionstosupportpractitioners.However,inordertoavoidtheseproblems,thestudyitselfiswide-ranging,encompassingaverywiderangeofdecisions(describedinChapter4.2)andorganisationalelements(describedinChapter2.7).Thismeansthattherearefindingsthatcouldbetestedanddevelopedingreaterdetail–again,thisprovidesadirectionforfutureresearch.

7.3ContributionstoKnowledge

Despitetheselimitations,thisstudyadvancesknowledgeintwofields:ourbroadunderstandingofdecisions;andparadoxtheory.

7.3.1Contributionstothestudyofdecision-makingThisstudymakestwodistinctcontributionstothestudyofdecision-making.First,theclassificationofsustainability-relateddecisionsintofourdistincttypes(describedin

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Chapter4.2)isnovel.Byshowingthatdecisionshavedifferentproperties,thisallowsustocontextualisethefragmentedliterature:wecanseethattheliteratureonstakeholders(forexample)addressesdifferenttypesofdecisionsfromtheliteratureonanalyticalmethods.BecauseIfindthatdifferenttypesofdecisionco-existincompanies,andthatthemixofdecisiontypeschangesovertime,Iarguethatthe‘singlelens’approachtodecision-makingthatwefindintheliteraturemeansthatwedonothaveaclearbasisfortheorisingaboutthefullsetofsituationsinwhichcompanieshavetorespondtosocialandenvironmentalfactors.Bringingtogetherthreestrandsofsustainability-relatedliterature(theanalytical,cognitiveandorganisationalperspectives),thisframeworkoffersabasisforfurthertheorisingaboutthemeansbywhichcompaniescanbringsocialandenvironmentalthinkingintotheirbusinesssystems.Second,thisresearchhighlightsthecomplexrelationshipbetweentheexecutiveandtheorganisationalenvironmentinitiallysetoutbyHerbertSimon(1945).ThisstudydevelopsthecontextualframeworkproposedbyDeanetal(1991)intwoways.First,itidentifiesthespecificcharacteristicsofeachofthefourlayersoftheframework(describedinChapter4.4)andthenitexplorestheconnectionsbetweentheselayers(inChapter6).Bydoingthis,Ibringempiricalevidenceanddetailtoadiscussionthathasbeenfragmentedandconceptual,andsocreateabasisforfurthertheoreticaldevelopment(Shepherd&Rudd2014)specificallyinthecontextofdecision-makingrelatedtosustainability.

7.3.2ContributionstoParadoxtheory

Severalauthorshaveproposedparadoxtheoryasalenstoexaminethemanytensionsthatariseinthecontextofcorporatesustainability(Hahnetal.2017).Thisstudycontributestothatgrowingbodyofscholarshipinthreespecificways.First,Iproposesixpossiblelogicalapproachestomanagingcompetingdemandsindecision-making.Myanalysissuggeststhatmanypeopleusearepertoireofapproaches,andthatthisisnotsimplydrivenbythepresenceorabsenceofa‘paradoxmindset’(Hahnetal.2014;Miron-Spektoretal.2017),butisalsoinfluencedbythepropertiesofthedecisionitselfandtheorganisationalinfluencesonthedecision-maker.Thisispotentiallyanimportantshiftintheliteratureasitsuggeststhat,ratherthanfocusing

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exclusivelyonindividualcognition,organisationscancreateasystemthatleadstobetterinclusionofsocialandenvironmentalcriteriaindecision-making.Itthereforesuggeststhatinterventionsforchangecanbebuiltintotheorganisation,ratherthanfocusingontheindividual.Second,thedatasuggestthatthischoiceoflogicsisinfluencedbythecorporate-levelframingofthetensionfacedbythebusinessbetweensocial,environmentalandeconomicoutcomesoverthelongandshortterm.Thisaddsevidencetotwoconcepts:first,theideathatparadoxesarenestedwithinorganisations(Sheepetal.2017)andthattensionsoccurandreinforceeachotheratmultiplelevels;andsecond,theideathatachangeintheorganisation’sdominantlogiccanprecipitateadynamicprocessofchange(Jay2013).Thisalsoprovidesevidenceforpractitioners:changeprocessesneedtoincludethisstepofreframingtherelationshipbetweenthecompany,societyandtheenvironmentinordertoinfluencethebehaviourofdecision-makers.Third,Idemonstratehowthisprocessofchangecanworkthroughtheorganisation.The‘whack-a-mole’viewofchangebuildsonSchadandBansal’s(2018)proposalthattoresolvetensionsinasystem,peopleneedto‘zoomin’tounderstandthemicro-leveltensions,andthen‘zoomout’toaddresstheproblematasystemlevel.Itdoesthisintwoways:first,thecasestudyinChapter5givesempiricalevidencethatthishappens;second,myanalysisofthisevidenceproposesthatthisprocessisaugmentedwithaprocessoforganisationallearning,similartothatdescribedbyRaischetal(2018).Thecombinationofthesethreecontributionstoparadoxtheorysetsanewframeforcompaniesworkingtocreatechangesintheirorganisation:thefocuscanbeonstepstochangetheorganisation,ratherthanindividualmindsets,andthisisachievedbysettingahigh-levelframingoftheproblem,andthenusingthistostarttouncoverthedetailsoftensionswithinthesystem,learningfromtheseandsoidentifyingthepointsofsystemicintervention.

7.3ImplicationsforPracticeThesecontributionstoknowledgealsohaveimplicationsforpractice,whichsurfacedduringthediscussionsheldaspartofStudy3.Theresearchsuggeststhatcompanies

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canimprovethewayinwhichtheyincludesustainabilitycriteriaintheirdecision-making,butthatthismayrequiresubstantialchange.Byusingtheclassificationofdecisiontypes(Chapter4.2)andtheframeworkoforganisationalcontexts(Chapter4.4)asdiagnosticlenses,practitionerscanidentifythecriticalareasforchange.Themainstepsforthisprocessofchangefromapractitionerperspective–startingwithreframingthecorporateleveltension,workingthroughorganisationalchange,buildingalearningsystem,andleadingtobroadercollaborations–areillustratedinFigure21:Figure21:Changestepsforcompaniestoincorporatesustainabilityintodecision-making

Thesedependonfivefundamentalcapabilitiesbeyondagenericorganisationalchangeability:reframing,identifyingtheareasforintervention,interveningformallyandsocially,buildingmethodsfororganisationallearning,andindustry-levelcollaboration.ThesearedescribedinChapter6.

Diagnosis Interven.on LearningSystem-levelcollabora.on

Changestepsand

feedbackloops

Conceptsfromtheresearch •  Iden.fythe

corporate-level

paradox

•  Iden.fythemost

material

decisions,andtheproblemsthey

face

•  Describethe

organisa.onal

pressuresonthesedecision-

makers

•  Applysocialinfluences

(leadership,

culture)tostart

changing

behaviour•  Createknowledge

stocksandflows

tosupport

decision-making

•  Useformalandsocialinfluences

todirectaFen.on

•  Establishprocessesto

manage

knowledgefor

decision-making

•  Establishprocessesto

manage

knowledgefor

change

•  Iden.fyproblemsthatcannotbe

solvedwithinthe

organisa.on,and

collaborateto

resolvethese.•  Con.nueto

reviewthe

tensionbetween

theinternaland

externalcontexts,andwhere

needed,reframe.

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7.4Futuredirections

Theresearchleavessomeinterestingquestionsopenforfurtherdevelopment.Therearetwoaspectstothis:first,areaswheretheinitialqualitativefindingscouldbetestedquantitatively;andsecond,areaswherethereisanopportunityforfurthertheoreticaldevelopment.Thetwofindingsmeritingfurtherquantitativetestingare:

1. Theclassificationofdecisions.Thisinitialclassificationwasdevelopedbasedonasampleof45decisions,andhasbeentestedwithexecutives(whodidnotproposeafifthtypeofdecision).However,testingwithalargersampleofdatacollectedspecificallyforthispurposemightproducemorerobustresults,andmightenablefurtherdevelopmentoftheconcept.

2. Thelogicalapproachesforresolvingcompetingcommitments.Theinitialfindingthatpeopleusetheselogicalapproachesasarepertoireandareinfluencedbytheircontextisanovelone,andcouldbetestedmorerobustly.Thiscouldbedoneeitherthroughfurtheranalysisofdecisions,orpotentiallythroughexperimentalmethods.

Therearealsofourfindingsthatmeritfurthertestingqualitatively.First,theprocessofchangingdecision-makinginorganisationscanbeinitiatedbycreatingareframingofthetensionbetweentheorganisationanditssocialandenvironmentalcontext.Whilereframingtensionisarecurrentthemeintheliterature(Smith2014;Zolloetal.2013),thereisrelativelylittlewrittenabouttheactualprocessbywhichthisisachievedattheorganisationallevel.Thiswouldbeahelpfuldevelopmentforpractitioners.Second,thewaysinwhichpermissionisbothgivenandinterpretedareunclearandmeritfurtherinvestigation.Manyofthedecisionsinvolvingsocialandenvironmentalimpactsaremadebynon-specialistmanagerswhoareunclearabouttheextentoftheirresponsibilityinthisfield.Whilemanagerialdiscretionhasbeenconsideredasafactorinadoptingsustainability(Sharma2000),thetensionbetweenmanagingriskand

189

failuresofcompliancewhilealsoenablingpositiveactionforsustainabilityisnotonethathasbeenfullyexplored.Third,thedistinctionbetweenfoundationalandcontextualinterventionsforthetypeofchangeneededtobuildsustainabilityconsiderationsintotheorganisationisanovelonethatcouldbetestedwithfurthercasestudiestoexploretheprocessofchange.Muchoftheexistingempiricalworkonchangehastendedtofocuseitheratthelevelofsense-making((Angus-Leppan,Metcalf,etal.2010),andtheworkconnectingtheseprocessestosystem-levelchangehastendedtobeconceptual.Finally,thisresearchraisesquestionsabouttheroleofprofessionalsinthesustainabilityfield.InChapter4.4.2,Idescribeaspecificproblemforsustainabilitymanagers,whichisthattheirorganisationallocusisoftenseparatedfromthemajorsocialandenvironmentalimpactsofthebusiness,andthereforetheyneedtofindwaystocreatecross-cuttinglinkagesintheorganisationsothattheycancreateinfluence.AsSadhuandKulik(2018)note,theserolesarechangingovertime.Thus,understandingthecapabilitiesandinfluencethesemanagersneedtoshapeanenvironmentwheredecisionsincorporatesocialandenvironmentalideasintotheirdecision-makingwillbeimportant.Thisisimportantwork.Unlessbusinesseslearntomakedecisionsthattakeaccountofsocialandenvironmentalimpactsoverthelongandshortterm,wewillbeunabletomakethechangesneededtomeetthecommitmentsoftheParisClimateAgreementandtheSustainableDevelopmentGoals.Itisclearfromthisresearchthatthechangeisdifficult,butthatthroughanuancedunderstandingofanorganisationanditsmaterialimpacts,andanabilitytoviewtheseinanewlight,itispossibletomakethechangesweneed.

190

Appendix1:Keyorganisationalconceptsfromtheliterature

Framew

orksection1:Environment

Framework

sectionConceptfrom

literature

Reference

Environment

Regulation

Sharma,S.(2000).Academ

yofManagem

entJournalGeopoliticaltension

Eccles,R.,Ioannou,I.,&

Serafeim,G.(2012).N

ationalBureauofEconomicResearch,

WhitePaper

Materiality

Epstein,M.J.,&

Widener,S.K

.(2011).BusinessStrategyandtheEnvironment

Munificence

Aragón-Correa,J.A

.,&Sharm

a,S.(2003).AcademyofM

anagementReview

Com

petitiveintensityFord,R

.C.,&Richardson,W

.D.(1994).JournalofBusinessEthics.

Customerdem

andGrew

atsch,S.,&Kleindienst,I.(2018).LongRangePlanning

Marketdem

andMuñoz,E.,Capón-G

arcía,E.,Laínez,J.M.,Espuña,A

.,&Puigjaner,L.(2013).Journalof

CleanerProductionNGOinfluence

Bowen,F.E.,B

ansal,P.,&Slaw

inski,N.(2018).StrategicM

anagementJournal

ShareholdersAragón-Correa,J.A

.,&Sharm

a,S.(2003).AcademyofM

anagementReview

Hym

an,M.R.,&

Curran,C.M.(2000).JournalofBusinessEthics

Stubbs,W

.,&Cocklin,C.(2008).Organization&Environm

ent

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entBoardG

overnanceArdichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009)JournalofBusinessEthicsAguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entArruda,L.R

.,Lameira,V

.D.J.,G

oncalvesQuelhas,O

.L.,&Pereira,F.N

.(2013).Sustainability

Competitiveness

Ford,R.C.,&

Richardson,W

.D.(1994).JournalofBusinessEthics

191

Environment

CorporategoalsHahn,T

.,Preuss,L.,Pinkse,Jonatan,&Figge,F.(2014).Academ

yofManagem

entReview

Meyers,C.(2004).ScienceandEngineeringEthics

Victor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

CorporateidentityAguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entFord,R

.C.,&Richardson,W

.D.(1994).JournalofBusinessEthics

Firmsize

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entBowen,F.E.,B

ansal,P.,&Slaw

inski,N.(2018).StrategicM

anagementJournal

Weber,J.(1990).H

umanRelations

History

Schrettle,S.,Hinz,A

.,Scherrer-Rathje,M

.,&Friedli,T

.(2014).InternationalJournalofProductionEconom

icsArdichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthicsMission,V

aluesandpurpose

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entStubbs,W

.,&Cocklin,C.(2008).Organization&Environm

ent

Hym

an,M.R.,&

Curran,C.M.(2000).JournalofBusinessEthics

TheoryoftheFirm

Hahn,T

.,Preuss,L.,Pinkse,Jonatan,&Figge,F.(2014).Academ

yofManagem

entReview

Lozano,R.,Carpenter,A

.,&Huisingh,D

.(2015).JournalofCleanerProduction

Framew

orksection2:Organisation

Framework

sectionConceptfrom

literature

Reference

Organisation

Accountability

Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009)JournalofBusinessEthicsAccountingpolicies,reportingandtriplebottom

line

Brow

n,J.(2009)CriticalPerspectivesonAccountingLülfs,R

.,&Hahn,R

.(2014).Organization&Environment

Arruda,L.R

.,Lameira,V

.D.J.,G

oncalvesQuelhas,O

.L.,&Pereira,F.N

.(2013).Sustainability

Stubbs,W

.,&Cocklin,C.(2008).Organization&Environm

ent

192

Organisation

Approachtoproblem

resolution

Howard-G

renville,J.A.(2006).Organization&Environm

entAttitudes

Howard-G

renville,J.A.(2006).Organization&Environm

entBeliefs

Gioia,D

.A.(1992).JournalofBusinessEthics

Meyers,C.(2004).ScienceandEngineeringEthics

Climate

Lülfs,R.,&

Hahn,R

.(2014)Organization&Environment

CodeofconductVictor,B

.,&Cullen,J.B

.(1988)AdministrativeScienceQuarterly

Wyld,D

.C.,&Jones,C.A

.(1997)JournalofBusinessEthicsMeyers,C.(2004)ScienceandEngineeringEthics

Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009)JournalofBusinessEthicsBlom

e,C.,&Paulraj,A

.(2013)JournalofBusinessEthicsLülfs,R

.,&Hahn,R

.(2014)Organization&Environment

Communication

Blom

e,C.,&Paulraj,A

.(2013)JournalofBusinessEthicsCom

plexityofbureaucracy

Weber,J.(1990)H

umanRelations

Controlsystem

Nijhof,A

.,&Rietdijk,M

.(1999)JournalofBusinessEthicsVerbeke,W

.,Ouw

erkerk,C.,&Peelen,E.(1996)JournalofBusinessEthics

JamesJr.,H

.S.(2000).JournalofBusinessEthicsCooperationandcollaboration

Stubbs,W.,&

Cocklin,C.(2008)Organization&Environment

Cooperativeconflictresolution

Hym

an,M.R.,&

Curran,C.M.(2000)JournalofBusinessEthics

Corporateaffairsdepartm

entAguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entCorporatepolicy

Wyld,D

.C.,&Jones,C.A

.(1997).JournalofBusinessEthics

Meyers,C.(2004).ScienceandEngineeringEthics

193

Organisation

CultureWyld,D

.C.,&Jones,C.A

.(1997).JournalofBusinessEthicsAttitudes

Lülfs,R.,&

Hahn,R

.(2014).Organization&Environment

Victor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

Howard-G

renville,J.A.(2006).Organization&Environm

entDom

inantreasoningforproblem

-solvingVictor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

Employee

independence/em

powerm

entEnvironm

entalmanagem

entsystem

Equallydistributedauthority

Howard-G

renville,J.A.(2006).Organization&Environm

entAguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entBlom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthicsJam

esJr.,H.S.(2000).JournalofBusinessEthics

Lülfs,R.,&

Hahn,R

.(2014).Organization&Environment

Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthicsEthicalaw

arenessVerbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthicsEthicalclim

ateVerbeke,W

.,Ouw

erkerk,C.,&Peelen,E.(1996).JournalofBusinessEthics

Controlsystem

EthicalcodeBlom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthicsVerbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthicsNijhof,A

.,&Rietdijk,M

.(1999).JournalofBusinessEthicsEthicalculture

Verbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthicsCooperativeconflictresolution

Blom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthicsEthicalnorm

sofleadership

Blom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthics

194

Organisation

Firmcom

mitm

enttoCSR

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entGuidelinesfordecision-m

akingNijhof,A

.,&Rietdijk,M

.(1999).JournalofBusinessEthicsHeroes&

rolemodels

Jam

esJr.,H.S.(2000).JournalofBusinessEthics

Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthics

Blom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthicsHistoricalantecedents

HRprocesses

Wyld,D

.C.,&Jones,C.A

.(1997).JournalofBusinessEthicsVerbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthicsNijhof,A

.,&Rietdijk,M

.(1999).JournalofBusinessEthicsBlom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthicsMeyers,C.(2004).ScienceandEngineeringEthics

Verbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthicsIncentivesandrew

ardsNijhof,A

.,&Rietdijk,M

.(1999).JournalofBusinessEthics

JamesJr.,H

.S.(2000).JournalofBusinessEthicsHym

an,M.R.,&

Curran,C.M.(2000).JournalofBusinessEthics

Verbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthics

Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthics

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

ent

Blom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthics

Lülfs,R.,&

Hahn,R

.(2014).Organization&Environment

Inclusionandparticipation

Hym

an,M.R.,&

Curran,C.M.(2000).JournalofBusinessEthics

195

Organisation

IndependenceInfluenceofexternalnorm

s(eg.Professionalbodies)

Victor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

Victor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

Instrumentalism

Victor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entJobdesign

JamesJr.,H

.S.(2000).JournalofBusinessEthics

Howard-G

renville,J.A.(2006).Organization&Environm

entKnow

ledgemanagem

entKnow

ledgetransfer,trainingandcapabilities

Blom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthicsSchrettle,S.,H

inz,A.,Scherrer-R

athje,M.,&

Friedli,T.(2014).InternationalJournalof

ProductionEconomics

Arruda,L.R

.,Lameira,V

.D.J.,G

oncalvesQuelhas,O

.L.,&Pereira,F.N

.(2013).Sustainability

LanguageJam

esJr.,H.S.(2000).JournalofBusinessEthics

Equallydistributedauthority

Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthicsEthicalaw

arenessBlom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthicsLeadership

Verbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthicsStubbs,W

.,&Cocklin,C.(2008).Organization&Environm

entArdichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthicsEthicalcode

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entEthicalcultureLeadership(supervisors)

Blom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthics

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entLeadership(supportfrom

managers)

Nijhof,A

.,&Rietdijk,M

.(1999).JournalofBusinessEthics

196

Organisation

Leadershipandcom

munication

Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthicsMarlow

,D.R.,M

oglia,M.,Beale,D

.J.,&Stenstrom

er,A.(2012).Journal-Am

ericanWater

WorksAssociation

LearningStubbs,W

.,&Cocklin,C.(2008)Organization&Environm

ent

Hym

an,M.R.,&

Curran,C.M.(2000).JournalofBusinessEthics

Verbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthicsLong-term

perspectiveStubbs,W

.,&Cocklin,C.(2008).Organization&Environm

entManagerial

interpretationsofCSR

Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthicsAguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entJam

esJr.,H.S.(2000).JournalofBusinessEthics

Mythsandstories

Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009)JournalofBusinessEthicsNorm

sandvalues

JamesJr.,H

.S.(2000).JournalofBusinessEthics

Blom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthics

Victor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

Nijhof,A

.,&Rietdijk,M

.(1999).JournalofBusinessEthicsArdichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthics

Meyers,C.(2004).ScienceandEngineeringEthics

Stubbs,W

.,&Cocklin,C.(2008).Organization&Environm

entLülfs,R

.,&Hahn,R

.(2014).Organization&Environment

Operatingprocedures

Weber,J.(1990).H

umanRelations

197

Organisation

Organisationstructure

Victor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

Varm

a,V.A.,Reklaitis,G

.V.,Blau,G

.E.,&Pekny,J.F.(2007).Com

putersandChemical

Engineering

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

ent

Blom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthics

Lülfs,R.,&Hahn,R

.(2014).Organization&Environment

Organisationalepistem

ologyHoward-G

renville,J.A.(2006).Organization&Environm

entOrganisationalroutinesOrganisationalscript

Lülfs,R.,&

Hahn,R

.(2014).Organization&Environment

Meyers,C.(2004).ScienceandEngineeringEthics

Gioia,D

.A.(1992).JournalofBusinessEthics

PeergroupsVictor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

Wyld,D

.C.,&Jones,C.A

.(1997).JournalofBusinessEthics

Verbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthicsPerform

ancemanagem

entJam

esJr.,H.S.(2000).JournalofBusinessEthics

Stubbs,W.,&

Cocklin,C.(2008).Organization&Environment

Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthics

Hallstedt,S.,N

y,H.,Robèrt,K

.-H.,&

Brom

an,G.(2010).JournalofCleanerProduction,18

Arruda,L.R

.,Lameira,V

.D.J.,G

oncalvesQuelhas,O

.L.,&Pereira,F.N

.(2013).Sustainability,Ardichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthicsProcesses

Verbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthics

198

Organisation

Rem

ovalofemotional

contentRituals

Gioia,D

.A.(1992).JournalofBusinessEthics

JamesJr.,H

.S.(2000).JournalofBusinessEthics

Blom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthicsRules

Victor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

SocialisationVerbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).Journalof

BusinessEthics

Blom

e,C.,&Paulraj,A

.(2013).JournalofBusinessEthicsStakeholderrelations

Nijhof,A

.,&Rietdijk,M

.(1999).JournalofBusinessEthicsStubbs,W

.,&Cocklin,C.(2008).Organization&Environm

entArdichvili,A

.,Mitchell,J.A

.,&Jondle,D

.(2009).JournalofBusinessEthics

S.,Ny,H

.,Robèrt,K

.-H.,&

Brom

an,G.(2010).JournalofCleanerProduction

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entSustainabilitym

ind-set

Stubbs,W.,&

Cocklin,C.(2008).Organization&Environment

Traditions

Nijhof,A

.,&Rietdijk,M

.(1999).JournalofBusinessEthics

199

Framew

orksection3:Decision-makers

Fram

ework

sectionConceptfrom

literatureReference

Decision-m

akers

Abilitytoseekassistance

Aguinis,H

.,&Glavas,A

.(2012).JournalofManagem

entAttitude

JamesJr.,H

.S.(2000).JournalofBusinessEthics

Lülfs,R.,&

Hahn,R

.(2014).Organization&Environment

Victor,B

.,&Cullen,J.B

.(1988).AdministrativeScienceQuarterly

Belief

JamesJr.,H

.S.(2000).JournalofBusinessEthicsCareerorientationandtim

eperspectiveDecision-rights

Verbeke,W

.,Ouw

erkerk,C.,&Peelen,E.(1996).JournalofBusinessEthics

JamesJr.,H

.S.(2000).JournalofBusinessEthicsDesires

JamesJr.,H

.S.(2000).JournalofBusinessEthicsExtentofidentificationw

iththeorganisation

Verbos,A

.K.,Gerard,J.A

.,Forshey,P.R.,H

arding,C.S.,&Miller,J.S.(2007).

JournalofBusinessEthicsFocusofattention,priorities

Gioia,D

.A.(1992).JournalofBusinessEthics

Habits

Lülfs,R.,&

Hahn,R

.(2014).Organization&Environment

199

200

Fram

ework

sectionConceptfrom

literatureReference

Decisionm

akers

Informationavailable

Nijhof,A

.,&Rietdijk,M

.(1999).JournalofBusinessEthicsAttitude

Gioia,D

.A.(1992).JournalofBusinessEthics

Lülfs,R

.,&Hahn,R

.(2014).Organization&Environment

Intention,commitm

entandvalues

Lülfs,R.,&

Hahn,R

.(2014).Organization&Environment

Jam

esJr.,H.S.(2000).JournalofBusinessEthics

Levelofindependence/isolationMoralcode

Weber,J.(1990).H

umanRelations

JamesJr.,H

.S.(2000).JournalofBusinessEthicsMoralm

aturityWeber,J.(1990).H

umanRelations

SeniorityFord,R

.C.,&Richardson,W

.D.(1994).JournalofBusinessEthics

PerceivedlevelofcontrolLülfs,R

.,&Hahn,R

.(2014).Organization&Environment

SkillsandcapabilitiesLülfs,R

.,&Hahn,R

.(2014).Organization&Environment

SocialapprovalMeyers,C.(2004).ScienceandEngineeringEthics

StressGioia,D

.A.(1992).JournalofBusinessEthics

Training

Ford,R.C.,&

Richardson,W

.D.(1994).JournalofBusinessEthics

Workload

Gioia,D

.A.(1992).JournalofBusinessEthics

201

Framew

orksection4:Decisions

Framework

sectionConceptfrom

literatureReference

Decision

Decision-criteria(eg.Cost-

benefit)Gioia,D

.A.(1992).JournalofBusinessEthics

Dynam

icsofteamdecision-

making

delaTorre-R

uiz,J.M.,Aragón-Correa,J.A

.,&Martín-T

apia,I.(2015).BusinessStrategyandtheEnvironm

entDegreeofactive

participationinteams

delaTorre-R

uiz,J.M.,Aragón-Correa,J.A

.,&Martín-T

apia,I.(2015).BusinessStrategyandtheEnvironm

entCom

plexityPirson,M

.,&Turnbull,S.(2018).BusinessandSociety

Ambiguity

Hahn,T

.,&Figge,F.(2018).JournalofBusinessEthics

Inter-temporality

Bansal,P.,&

Desjardine,M

.R.(2014).StrategicOrganization

Slawinski,N

.,&Bansal,P.(2015).OrganizationScience

Varietyofstakeholders

Haffar,M

.,&Searcy,C.(2015).JournalofBusinessEthics

202

Appendix2:ListofDecisionsDecision Description Logicalapproach

1 Choosingprojectstoincludeinacapitalinvestmentprogrammeinaglobalbeveragemanufacturer

Win-win

2 Settingtargetsforsustainabilitytobalancecarbon,waterandhighproductionvolumes

Win-win

3 Whethertoinvestinaparticularnewproductiontechnologyunderconditionsofuncertainty

Win-win

4 Settingstandardsforsupplychainfactoryconditionsindifferentcountrieswheresocialnormsvariedverymuch

Separation(Geographical)

5 Selectionofpackagingthatwouldbesuitableforveryhighvolumeofshipments

Win-win

6 Decisionaboutwhethertoacceptanorderfromamajorcustomerthatwouldinvolveworkingwithasupplierthatdidnotmeethighenvironmentalstandards.

Tradeoff

7 Decisiontostartacorporateresponsibilityprogrammeinasituationwheretherewasnotanimmediatelyobviousbusinesscase.

Win-win

8 Choosingtheareasoffocusincreatingasustainabilityambitionforanengineeringcompany

Win-win

9 Decisiontoincorporatesocialandenvironmentalsustainabilityintooverallbusinessstrategy

Win-win

10 Decisiontoadoptscience-basedtargets,eventhoughthesewerepotentiallyproblematicforthecompany

Integrative

11 Includingsustainabilityassessmentintheassetacquisitionprocess

Win-win

12 Adoptingnewenergysavingtechnologyacrosslargeestateofbuildings.

Win-win

13 Changingdesignofnewbuildingstoreduceembeddedcarbon

Win-win

14 Settingthesustainabilityaspirationinarealestatecompany

Win-win

15 Decisiontocreateasocialinclusionprogrammethatwouldengageandsupportvulnerablecommunities.

Integrative

16 Designdecisionsaboutroadlocationonacitymasterplanningproject

Tradeoff

17 Decisionaboutuseofpumpinginsignificantwastewatermanagementsystem

Tradeoff

203

18 Decisionaboutroutingofarailwaylinetoencourageswitchingfromroadtransport(decidedtodevelopinstages)

Separation(Temporal)

19 Selectionofbuildingcladdingmaterialforalargedevelopment

Tradeoff

20 Specifyingandprocuringnewequipmentinindustrialmanufacturing(example1:focusoncapitalbudgethasledtopoorlifecyclemanagement)

Tradeoff

21 Specifyingandprocuringnewequipmentinindustrialmanufacturing(example2:valueengineeringhasledtoreducedenvironmentalperformance)

Trade-off

22 Materialsselectionprobleminanindustrialmanufacturingsetting:thechoicewasbetweentwomaterialsbothofwhichcreateddifferentenvironmentalproblems.

Trade-off

23 Settingthetaxpolicyforanonlinecompanyoperatinginseveralcountries.Decisionwasbetweentaxefficiencyandsociallicensetooperate

Tradeoff

24 Creatinganewproducttoengageconsumerswithsocialissues

Win-win

25 Settingapolicytouserenewableenergyforcompanyoperations

Trade-off

26 Creatingabusinessmodelforarenewableenergybusiness

Win-win

27 Settingstaffmanagementpoliciesinasustainablebusiness

Win-win

28 Adoptingapolicyforresponsibleinvestmentinabank

Integrative

29 Decisionaboutfundingapipelineinanecologicallysensitiveareawithlargenumberofstakeholders

Synthesis

30 Decisiontofundaverylargeinfrastructureproject

Win-win

31 Decisiontoadoptrenewableenergyforalargefacility

Win-win

32 Evaluatingacquisitionsinanenergyportfolio(inanenergycompanythatwasseekingtoexitfossilfuels)

Win-win

33 Evaluatinginvestmentsforthecompany’sinnovationportfolio

Win-win

34 Makingdecisionsaboutassetnetworktoensuresecurityofsupplyofelectricity(when/whethertoincludefossilfuels)

Tradeoff

35 Decisionabouthowtocommunicatetheenvironmentalpolicyofacompanytoinvestors(choicewasbetweenemphasisingenvironment

Synthesis

204

oremphasisingrisk)

36 Decisiontobuilda‘greenfactory’,eventhoughthecostswererelativelyhighandthiswasaninnovationinthesectorandtheregion.

Win-win

37 Decisiontochangefuelsupply(fromfossiltonon-fossilfuel)inalargeoperationalfactorysetting.

Win-win

38 Choiceaboutwhethertouseairtransportinacompanywitha‘green’brandortofaceasignificantsupplyproblem

Tradeoff

39 Decision-makingduringatransitionfromplasticpackagingtorecycledpackaging.

Tradeoff

40 Re-organisinglogisticsnetworkinordertoreducevehicleuse.

Win-win

41 Decisiontorecycleproduct(whichincludedintroducingreverselogistics)beforealltechnicalproblemswereresolved.

Integrative

42 Decisionaboutwhethertoinstallemissionsmonitoringequipmentonthefactorychimneys

Tradeoff

43 Choiceoftechnologytoimplementrecycling. Tradeoff44 Adoptingnewstandardsforbuildingand

constructiontoprovidehigherenergyefficiencyandlowerembeddedcarbon.

Win-win

45 DecidingtochangethefinancialreportingsystemtointegrateESGdata.

Integrative

205

Appendix3:Datastructurefrominterview

sandliteratureAggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

Externalcontext

IndustrycharacteristicsRegulatoryconcerns

Regulation(Sharm

a2000)

GeopoliticaltensionsGeopoliticaltension

(Ecclesetal.2012)

Materialsustainabilityissues

Materiality

(Epsteinetal.2015)

Margins

Munificence

(Aragón-Correa&Sharm

a2003)

Complexity

Bureaucraticcomplexity

(Weber1990)

Competitorpressure.

Competitiveintensity

(Ford&Richardson1994)

Externalstakeholders

Needsoflocalcom

munity

Localownership

(Stubbs&Cocklin2008)

Demandfrom

aspecificcustomer

Customerdem

and(Grew

atsch&Kleindienst2018)

Marketdem

andMarketdem

and(Muñozetal.2013)

InfluenceofNGO

NGOinfluence

(Bowenetal.2018)

InfluenceofshareholdersShareholders

(Aragón-Correa&Sharm

a2003;Stubbs&

Cocklin2008;Hym

an&

Curran2000;Aguinis&Glavas

2012)Internalcontext

Mentalm

odeloftheFirm

TheoryoftheFirm

Theoryofthefirm

(Lozanoetal.2015;Bentoetal.2017;H

ahnetal.2016)

Ownershipstructure

Ownership

(Stubbs&Cocklin2008)

Businessmodel

SustainabilityBusinessModel

(Stubbs&Cocklin2008)

BoardGovernanceBoardGovernance

(Ardichvilietal.2009;Aguinis&

Glavas2012;Arrudaetal.2013)

Characteristicsofthebusiness

History

(Victor&Cullen1988)

SizeoftheFirm

SizeoftheFirm

(Ford&Richardson1994)

BrandCorporateidentity

(Aguinis&Glavas2012)

206

Pathdependency(Schrettleetal.2014)

Aggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

Internalcontext

Companydirection

VisionVisionandm

ission(Ardichvilietal.2009)

PurposeWorthypurpose

(Hym

an&Curran2000)

StrategicDirection

Companypriorities

Corporategoals(Hahnetal.2010;M

eyers2004;Victor&

Cullen1988)

SustainabilityStrategy

Sustainabilityambition

Commitm

enttosustainability

(Aguinis&Glavas2012)

Startingsustainability

Science-basedtarget

Sustainabilityreport(Lülfs&

Hahn2014)

Sustainabilityplan

Sustainabilitystrategy

Influencingpow

erInfluenceonsuppliers

Influenceoncustomers

Infuenceonemployees

Conveningpower

Investorrelations

Specificstrategicissue

Operationsstrategy

Opportunitycreation

M&A-opportunityandintegration

ParadoxConflictingpriorities

Optimisingm

ultipleobjectives

(Lewis2000)

Conflictingsuccesscriteria

Inter-tem

poraltension

(Slawinski&

Bansal2015)

207 Aggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

OrganisationDesign

LocusofsustainabilityHow

thesustainabilityfunctionisorganised

Degreeofcentralisation

Relationshiptocorporateaffairs

How

embeddedissustainabilityin

operations

How

doessustainabilityworkw

ithfinance

How

doessustainabilityconnecttoengineering

Linkages

Organisationalco-ordinationIsolationvs.independenceofunits

(Weber1990)

CrosscuttinggroupLinkagesbetw

eenplanningandoperations

(Varmaetal.2007)

Teamwork

Rulesofengagement

(delaTorre-Ruizetal.2015)

Formal/inform

alcommunications

channelsOpennessofcom

munication

(Blome&

Paulraj2013)

Co-operation

(Stubbs&Cocklin2008)

Externalcollaboration

(Stubbs&Cocklin2008)

Processes/policies/standards

ProcedureGuidelinesfordecisions

(Nijhof&

Rietdijk1999)

Organisationalroutine

Processform

anagingdissent

Processforresolvingconflict

Companypolicies

Codesofconduct

(Ardichvilietal.,2009;Blome&

Paulraj,2013;Lülfs&

Hahn,2014;

Meyers,2004;Victor&

Cullen,1988;W

yld&Jones,1997)

208 Aggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

OrganisationDesign

StructuraltensionsConflictbetw

eenorganisationalsilos

Credibilityofthesustainabilityfunction

Differentinstitutionaltreatmentofriskand

opportunity

Organisationstructure

Organisationalcomplexity

Businessmodel

Fragmentation

Degreeofcentralisation

Governancestructures

Jobdescriptions

Roles

Em

ployeevalueproposition

CareerpathAttraction/Selection/Attrition

(Verbosetal.2007;Ardichvilietal.2009)

Prom

otion(Meyers2004)

Training

(Ford&Richardson1994)

Performance

managem

entTargets

Performancetargets(individual/

collective)

Keyperform

anceindicators

Alignm

entofobjectiveswithstrategy

209 Aggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

Incentives

FinancialincentivesIncentives

(Aguinis&Glavas,2012;Blom

e&

Paulraj,2013;Hym

an&Curran,

2000;JamesJr.,2000;Lülfs&

Hahn,2014;Verbosetal.,2007)

Statusandrecognitionforaction/expertise

Fairnessofcom

pensation(Ardichvilietal.2009)

CEOcom

pensation(Aguinis&

Glavas2012)

Form

alrewards

(Nijhof&

Rietdijk1999)

Processintegrity

(Ardichvilietal.2009)

Conflictingpriorities

Conflictbetweendifferentobjectives

(Epsteinetal.2015;Mitchelletal.

2016;Pirson&Turnbull2018)

Perverseincentives

Control

Individualperformancem

anagement

Controlsystemsintheorganisation

Control(Nijhof&

Rietdijk1999;Verbekeetal.1996;Jam

esJr.2000)

CultureAttitudes

Sharedbeliefs

(JamesJr.2000;Gioia1992;

Meyers2004)

Pro-socialattitude

(How

ard-Grenville2006)

Pro-environm

entalattitude(How

ard-Grenville2006)

Caringattitude

(Victor&Cullen1988)

Attitudetow

ardstime

(How

ard-Grenville2006)

Norm

s

Referentgroups(Ford&

Richardson1994)

Top-m

anagementnorm

s(Blom

e&Paulraj2013)

Externalnorms(eg.professional

bodies)(Victor&

Cullen1988)

210 Aggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

CultureNorm

s

Norm

sandvalues

(Nijhof&

Rietdijk1999;JamesJr.

2000;Blome&

Paulraj2013;Victor&Cullen1988;Ardichvilietal.

2009;Stubbs&Cocklin2008)

Values

Doestheorganisationhaveparticularsocialconcerns

Whatarethecorporatevalues

Values(Meyers2004)

Organisation'scommitm

enttoscience

How

doestheorganisationseeitsresponsibility?

Instrumentalism

(Aguinis&

Glavas2012)

Whataretheorganisation'sm

oralobligations

Perceivedsustainabilityclimate

(Lülfs&Hahn,2014)

Organisationaltraditionofphilanthropy

EthicsEthicalclim

ate

(Ford&Richardson1994;Verbeke

etal.1996;Verbosetal.2007;Blom

e&Paulraj2013)

Signalsandprecedents

Rolemodels

Herosandrolem

odels

(JamesJr.2000;Ardichvilietal.

2009;Wyld&

Jones1997;Blome&

Paulraj2013;Verbosetal.2007)

StoriesStories

(JamesJr.2000;Ardichvilietal.

2009)

Myths

Rituals

(Blome&

Paulraj2013;JamesJr.

2000)

Traditions

(Nijhof&

Rietdijk1999)

Language

(Blome&

Paulraj2013;JamesJr.

2000;Ardichvilietal.2009)

211 Aggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

CultureSelf-determ

inationWhatarepeople'sm

otivations

How

hierarchicalistheorganisation

Levelsofautonomyand

independence

(Weber1990)

Inclusiveness

LevelsofinclusivenessInclusionandparticipation

(Hym

an&Curran2000)

Emphasisonteam

work

Levelsoftrust

Attitudetow

ardsconsensus

Socialisationm

echanisms

(Blome&

Paulraj2013;Verbosetal.2007)

Moderationofem

otion(Gioia1992)

Minoritycultures

Specialistculturesforexpertise

Relativepowerofdifferent

groups(How

ard-Grenville2006)

LeadershipLeaders'beliefsshapingaction

Leadersmaking'actsoffaith'

Individualinterestsofparticularleaders

Leaders'perceptionsofsustainability

Leaders'attitudestowards

sustainability(Aguinis&

Glavas2012)

Leadersasenablers

Leaderssettinganexample

Leadersconferringanauthorityormandate

Supervisorormanagersupport

(Aguinis&Glavas2012)

Whatleadersrew

ard(Ford&

Richardson1994)

Pow

erLeaderslookingforstatus/recognition

Leadershipambition

212 Aggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

LeadershipLeadershipdevelopm

entLearningandtrainingprogram

mes

How

peoplearepromoted

Whoaretherolem

odels

Leadershipstyle

Authenticleadership(Verbosetal.2007)

Knowledge

BetterdataChoosingm

easurementstandards

ProvidinghelpfulaccuratedataInform

ationavailable(Gioiaetal.2013)

Creating'complete'data(eg.lifecycle

analysis)

Accountancyprocesses(Brow

n2009)

Betteranalysis

LifecycleanalysisLifecycleanalysis

(Shrivastava&Hart1995)

Multicriteriadecisionanalysis

Multi-criteriadecisionanalysis

(Hallstedtetal.2010)

Organisationallearning

Informationsharing

Abilitytoseekassistance(Aguinis&

Glavas2012)

Buildingaknowledgem

anagement

system

Codifyingexperience(eg.casestudies)

Formalityofknow

ledgecaptureandsharing

(Blome&

Paulraj2013)

Typesoflearning(single/doubleloop)

(Marlow

etal.2012)

Buildingunderstanding

Showingm

anagerswhatisreally

happening

Learningprogram

mes

Training/capabilitybuilding(Arrudaetal.2013)

Creatingtransparentdata

Organisationalepistem

ologyCreatingafram

eworkforthinking

How

problemsaresolved

(How

ard-Grenville2006)

213 Aggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

Permission

spaceForm

alauthorityRoledescriptions

Mandate

Form

alityofdecisionrights(Jam

esJr.2000)

Inferredauthority

Cultureofautonomy/independence

Empow

erment

(JamesJr.2000)

Levelofdecentralisation

Perceivedamountofcontrol

(Lülfs&Hahn,2014)

Inform

alauthoritySphereofinfluence

Credibilityoftheteam

Interdependence

(Victor&Cullen1988)

Inclusion/participation

(Hym

an&Curran2000)

Attitudesofdecision-makers

Intrinsic

Desire(Jam

esJr.2000)

Moralm

aturity(W

eber1990)

Moralcode

(JamesJr.2000)

Personalcodeofconduct

(Ford&Richardson1994)

Careerorientation

(Verbekeetal.1996)

Attitudetoenvironm

ent(Victor&

Cullen1988)

Pro-socialattitude

(Victor&Cullen1988)

Intentiontow

ardssustainability(Lülfs&

Hahn,2014)

Tim

eperspective(How

ard-Grenville2006)

Beliefs

(JamesJr.2000)

Com

mitm

enttoatopic(Lülfs&

Hahn,2014)

Attitude

(JamesJr.2000)

Skills,capabilities

(Lülfs&Hahn,2014)

214 Aggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

Attitudesofdecision-makers

Situational

Stress(Gioia1992)

Workload

(Gioia1992)

Focusofattention

(Gioia1992)

Seniorityinorganisation

(Ford&Richardson1994)

Conflictingview

pointsSom

epeoplehaveirrationalconcerns

Somepeoplearguefrom

opinion,notfact

Clashingperceptionsofsustainability

Perceptionsofsustainability

Sustainabilityisquitevague

Sustainabilityisacost

Sustainabilityisallaboutcompliance

Sustainabilityisallaboutrisk

Sustainabilitym

akesusefficient

Sustainabilitydifferentiatesourbrand

Sustainabilityisanopportunity

Sustainabilityisaresponsibility

Sustainabilityisavalue-something

wecareabout

215 Aggregatedim

ensionSecondorderthem

esConceptfrom

interview

Conceptfromliterature

Examplesource

Propertiesofdecisions

Whytheproblem

isdifficult

Complexity

Complexity

(Pirson&Turnbull2018)

Centrality

Irrevocability

Ambiguity

Ambiguity

(HahnandFigge2018)

Inter-temporality

Inter-temporality

(Bansal&Desjardine2014;

Slawinski&

Bansal2015)

VarietyofstakeholdersVarietyofstakeholders

(Haffar&

Searcy2015)

Decisionprocess

Definetheproblem

EngagepeopleLevelofinvolvem

entinprocess(delaTorre-Ruizetal.2015)

GenerateOptions

Evaluateoptions

Decisioncharacteristics

Typeofdecision

Repeatabilityofthedecision

216

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