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Business Management Dynamics Vol.3, No.1, Jul 2013, pp.01-16

©Society for Business and Management Dynamics

Assessing perceptions regarding the sustainability of contemporary organizations EE SMITH1* and C ROOTMAN*

Abstract This article sets out to examine the perceptions regarding the sustainability of organizations within the Nelson Mandela Bay region in South Africa. The integration of economic, social and environmental performance seems to be an obstacle to many organizations. Not many organizations pursue a sustainability agenda full-on and lack a vision of sustainability, thus needing appropriate change strategies. To be able to achieve the research objectives of this project a comprehensive literature study was conducted which formed the theoretical framework for collecting the primary data. During the empirical investigation, a survey was conducted by means of 450 self-administered questionnaires being distributed to the designated population. Three hypotheses were formulated and tested as to investigate the relationship between the two independent variables, namely triple bottom line (TBL) and greening, and the dependent variable (sustainability outcomes). Some significant relationships were found between these variables. Sustainability champions need to make the link between organizational purpose, environmental performance and social responsibility in terms of long-term sustainability. Practical guidelines are provided to assist organizations in dealing with sustainability issues.

Key words: greening; sustainability; triple bottom line (TBL)

Available online www.bmdynamics.com ISSN: 2047-7031

INTRODUCTION The main aim of this article is to assess the perceptions regarding organisational sustainability, focussing specifically on aspects of the triple bottom line (TBL) and greening. Clarke and Clegg (2000:46) postulate that “sustainability is becoming a key nosiness imperative, as the eternal search for domination over nature is replaced by the challenge of achieving environmental balance.” Fowler and Hope (2007:26) claim that although strategic management literature largely overlooked sustainability issues prior to the 1990’s, recent years have seen an increase in research into the competitive implications of incorporating sustainable practices into the organisation. Although there is no consensus on the meaning of sustainability, there is common acceptance that it involves consideration of environmental, economic and social aspects – the triple bottom line (Cowell, Hogan & Clift, 1997). Part of the reason for the different interpretations of the term sustainability is related to the emphasis put on the different aspects of sustainability (Cowell, Wehrmeyer, Argust, Graham & Robertson, 1999:277). Estes (2009:7) argues that sustainability links contentious concepts such as social good and environmental stewardship with the goal of financial gain, ultimately aimed at reordering our existence as inhabitants of a planet with limited resources sensitive to growth. A sustainability revolution has been started (Edwards, 2005:1). While Wilkinson, Hill and Gollan (2001:1500) suggest that organisations take a more holistic and integrated approach to societal and environmental concerns and assess their role in adopting practices that support a sustainable approach, Jamali (2006:809) is of the opinion that the TBL should be facilitated through a management orientation supporting continual adaptability and learning, thus becoming a learning organisation. Learning processes could be intentionally used to move the organisation in desired sustainability directions. In today’s global business environment, organisations are facing increasing competitive, regulatory and community pressures. Furthermore, there is also pressure for environmental sustainability, which requires the need for strategies to be put in place to reduce the environmental impact caused by products and services offered. Going green reflects a social consciousness around saving and advancing earth’s natural resources, preserving them and protecting them for the sake of civilization (Clem 2008:1). Houy, Reiter, Fettke and Loos (2011:510) conclude that the sustainability of business activities is gaining increasing importance and organisations are putting more effort in improving sustainability.

* Department of Business Management, Nelson Mandela Metropolitan University, PO Box 77000, Port Elizabeth, South Africa, 6031 1 E-mail: [email protected]

http://www.bmdynamics.com/

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The first part of this article is devoted to giving the problem statement, research objectives and hypotheses of the study. Thereafter, a literature study follows covering sustainability, TBL and greening; and an outlay of the research methodology is provided. Lastly, the empirical results are highlighted and the main conclusions and recommendations as well as future research possibilities are discussed. PROBLEM STATEMENT Both Bansal (2005:197) and Sharma and Starik (2002:1) postulate that although there is a substantial body of literature on different frameworks and models of sustainability, the understanding of business models and how sustainable development is operationalised is weak. Quinn and Dalton (2009:21) alleges that not many organisations pursue a sustainability agenda full-on and therefore lack a vision of sustainability. There is a need for appropriate change strategies to help organisations to advance toward full sustainability (all three aspects of sustainability). Sharma and Ruud (2003:205) suggest that sustainability must be treated as an ethical code for human survival and progress. Jamali (2006: 809) advocates that although organisations have broaden their performance evaluation from a short-term financial focus to broader sustainability management, there is an absence of a comprehensive management framework that would address, balance and integrate TBL considerations. Schaefer (2004:179) argues that dealing with environmental soundness and that starting to integrate environmental and social issues with management practices do not have to be a sequential process. Bond, Curran, Kirkpatric, Lee and Francis (2001) suggest the growing acceptance of sustainable development as an overarching policy goal has stimulated interest in assessing the impact of particular interventions on sustainability. However, Wiesner, Chadee, Best and Poole (2010) are of the opinion that the establishment, implementation and maintenance of a formal system of integrated sustainable reporting are costly and often beyond the reach of many smaller organisations which do not have the resources. Swallow (2009:9) is of the opinion that the paradigm shift for “going green” is still in its infancy stage. There is an increase need for management theory development in the area of ecological sustainability and the need to adopting environmental strategies and programmes (Daily & Huang 2001:1539). Sustainability champions need to make the link between organisational purpose, environmental performance and social responsibility in terms of long-term sustainability. Condon (2004) argues that some organisations could be regarded as leaders in sustainable practices, while others lack the sort of strategic thinking which view changes in the business environment as opportunities, seeing the tasks which require more change as an additional burden, rather than a source of potential advantage. Against this background, the following research question will be addressed in this article: “What are the perceptions regarding the sustainability of organisations with specific reference to the triple bottom line and greening? OBJECTIVES The primary objective of this article is to investigate the perceptions regarding the sustainability of organisations in Nelson Mandela Bay. To help achieve this primary objective, the following secondary goals have been identified:

To provide a literature overview of sustainability, the TBL concept and greening.

To empirically test the perceptions regarding sustainability aspects and outcomes of organisations in Nelson Mandela Bay.

To provide recommendations to organisations as to assist them in improving sustainability outcomes.

HYPOTHESES Following the introduction, problem statement and objectives, two hypotheses were formulated, namely: H1: There is a significant positive relationship between perceptions regarding TBL and sustainability

outcomes. H2: There is a significant positive relationship between perceptions regarding greening and

sustainability outcomes.



THEORETICAL OVERVIEW OF SUSTAINABILITY Clarification of key concepts For the purpose of this study, an organization will be regarded as “a social unit of people that is structured

and managed to meet a need or to pursue collective goals” (Business Dictionary.com, 2013). All organizations have a management structure that determines relationships between the different activities and the members, and subdivides and assigns roles, responsibilities, and authority to carry out different tasks. Sustainability is defined as humanity having the ability to make development sustainable to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs (Kates, Parris & Leiserowitz, 2005:4). Dresner (2002:30) concurs by defining sustainability as the amalgamation of conservation and development to ensure that reformations and alterations to the planet secure the survival and well-being of all people. TBL is defined by Vanclay (2004:266) as the “whole set of values, issues and processes that organisations must address in order to minimise any harm resulting from their activities and to create economic, social and environmental value. McDonough and Braungart (2002:251) state that the TBL refers to balancing traditional economic goals with social and environmental concerns to generate prosperity. Gilbert (2007) describes greening as activities that are

performed in a way so that it has either limited negative ecological impact or it directly benefits the natural environment in some way. Dallas (2008:9) regards greening as keeping the environmental

footprint small, reduce waste and reuse materials as much as possible, including using scarce natural resources efficiently and effectively, while keeping the environment free from detrimental products. Sustainability The core challenge for sustainability in the long-run is to ensure productive work and a better quality of life for all people through proactive risks management measures (World Bank Development Report, 2003). Sustainability is fast becoming a major business performance dimension that is imperative in shaping the competitive landscape for many industries and organisations (Millar & Russell 2011:512). The main focus is thus an integrated assessment in terms of economic, social and environmental impacts (Jones, Shan & Goodrum 2010:971). Table 1 below indicates the three main elements of sustainability.

Table 1: Elements of sustainability Three P’s Triple E What it is?

People Equity Human capital

Planet Environment Natural capital

Profit Economics Economic capital

Source: Adapted from Swallow (2009:10) These three elements or areas need to be integrated as to ensure the long-term sustainability of the organisation. Stubbs and Cocklin (2008:121) have identified the following key issues in adopting a sustainability philosophy:

Link the organisation’s purpose to economic, environmental and social aspects of sustainability.

Use a TBL approach in measuring performance.

Consider the needs of all stakeholders and not only owner/shareholder expectations.

Treat nature as a stakeholder and promote environmental stewardship.

Sustainability champions need to drive cultural and structural changes necessary to implement sustainability.

Apply a systems perspective whereby all units and departments of the organisation work together in implementing the sustainability philosophy.

The organisation adopting a sustainability philosophy needs to develop internal structural and cultural capabilities and collaborate with all key stakeholders. Van Marrewijk (2003:95) argues that hundreds of concepts and definitions have been proposed for sustainability. In Figure 1, five ambition levels of corporate sustainability are proposed in an attempt to provide an inclusive definition of all sustainability elements.



Figure 1: Ambition levels of sustainability

Source: Adopted from Van Marrewijk (2003:95)

The above-mentioned levels of sustainability could assist organisations in understanding the concept of sustainability as being viewed from different perspectives. Table 2 below provides some models or frameworks for understanding and managing organisational sustainability. An in-depth discussion of these models however falls beyond the scope of this article.

Table 2: Models for understanding and managing organisational sustainability

Model/framework

Elements/aspects Authors

Three dimensional model Economic capital Social capital Natural capital

Dyllick & Hockerts (2002)

Sustainability balanced scorecard

Finanacial perspective Customer perspective Internal process perspective Learning and growth perspective Non-market perspective

Figg, Hahn, Schaltegger & Wagner (2002)

European corporate sustainability framework (ECSF)

Five sustainability enablers: Leadeship People Policy and strategy Partnerships and resources Processes

Marrewijk & Hardjono (2003)

Systems approach Five step corporate sustainability management system (CSMS): Sustainable development policy, planning, implementation, communication and review and corrective stages

Azapagic (2003)

Integrated management system approach

Plan: stakeholder requirements; employee health and safety; environmental scanning; financial probity and transparency Do: corporate governance and strategy; integrated objectives, manual; procedures and reviews Check: sustainable social, ecological and economic business processes

Asifet, Searcy, Zutshi, & Ahmad (2011)



It should be noted however that these models or frameworks need to be adapted to the specific context, capabilities and stakeholder needs of an organisation. Quinn and Dalton (2009:26) also developed a framework for implementing sustainability in an organisation, consisting of three steps: setting direction, creating alignment and maintaining commitment (see Figure 2). The role of the leader or sustainability champion in this regard is seems to be critical.

Figure 2: Framework for implementing sustainability

Source: Adapted from Quinn and Dalton (2009:26).

Organisations can use this framework for dealing with the intersection of social needs, the natural environment and corresponding business imperatives. Following the above discussion, it is evident that possible outcomes of effective sustainability policies and practices in an organisation could be (Jakeman, Letcher, Newham & Norton 2005; Porter 2008 and Scheirer, Hartling & Hagerman 2008): effective corporate governance; enhanced reputation; better investor relations; nurtured community or societal relationships; environmental protection; effective risk management and human capital development. Often organisations do not fully embrace sustainability, which stems from the fact that they do not understand the issues and strategies needed to adopt a more sustainable path (Gray, 2010:47 and Sharpley 2000:1). Two sustainability aspects namely TBL and greening are outlined in more detail below. It should be noted that the results of this study form part of a bigger study and thus the focus in this article on only certain aspects of sustainability. Triple bottom line TBL, also referred to as the “three pillar approach” (Pope, Annandale & Morrison-Saunders 2004:597) is one of the concepts used in literature as a means of promoting direction planning and decision-making towards sustainable development (Hacking & Guthrie 2008:73). In 1997, the TBL concept was developed



by Elkington (1997) as a tool for measuring organisational performance (Hubbard 2009:197). TBL denotes organisational development as it reports on the impact of an organisation. According to Hubbard (2009:179), various stakeholders pay attention to the impact of organisations on the natural environment and on societies, therefore opinions arise that organisations are responsible for more than economic performance and development. This public sentiment also led to the creation of TBL in 1997. TBL may be regarded as the concept placing equal importance on economic, social and environmental considerations in decision-making (Berndt & Tait 2012: 142; Pope et al. 2004:597). Gibson (2001) also conceptualised TBL as three overlapping circles representing the economy, society and environment. Hacking and Guthrie (2008:77) argue that sustainable development encompasses TBL, which at a minimum includes economic, social and biophysical (environmental) dimensions. TBL is based on the idea that an organisation’s performance depends on its impact on all stakeholders, including the communities in which it operates and government authorities, not only on stakeholders with whom it has transactional relationships such as employees, suppliers and customers (Hubbard 2009:180). TBL refers to the economic aspects of producing and providing products and/services, but also extents to an organisation’s social and environmental measures of performance (Bosch, Tait & Venter 2011:698). TBL reporting then includes a report of an organisation’s economic performance relating to sales growth, profit growth and return on assets; its social performance such as educational donations, sponsorships and customer satisfaction levels; as well as its environmental performance such as its reuse of water, waste reduction efforts and levels of pollution (Hubbard 2009:180). Berndt and Tait (2012:143) also refer to TBL reporting in these three areas (economic, social and environmental) as integrated sustainability reporting. Greening Olson (2010:3) claims that heightened interest in and arguments for environmental stewardship is found abundantly in strategic and environmental literature as a result of global warming, climate change green-house gasses, resource scarcity and carbon footprint. Prakash (2000:1) concurs that in the last two decades environmental issues have become important in public and business policy. Organisations need as a starting point to create a green strategic vision and imperatives. Cohen and Robbins (2011:280) argue that organisations need to manage their environmental performance as carefully as they manage quality, product development and customer relations as to be sustainable. However, greening involves not only adopting green practices but also adopting a green mind-set and greener vision as a route to greater progress as well as better business practices (Kaplan 2009:47). Albino, Balice and Dangelico (2009:83) is of the opinion that for organisations to respond to the challenges of environmental sustainability, appropriate green strategies and operations are required. The purpose of going green is to use products and methods that would not negatively impact the environment through pollution or depleting natural resources from mother earth (Robinson (2008:1). The use of alternative sources could have positive outcomes such as to keep the environmental footprint small, reduce waste and re-use materials as much as possible (Dallas 2008:9). Green organisations should have green visions with strategic plans based on long-term objectives and not on short-term goals only (Gunningham, Kagan & Thornton 2003). Managers need to develop systems and structures within their organisations, which satisfy the requirements of green business practices whilst still achieving strategic business goals. Both Anastas and Zimmerman (2003:94) and Barr (2003:227) plead for individuals and organisations to engage in environmental actions that can contribute to environmental sustainability. These actions are usually termed the three R’s as depicted in Figure 3:

Reducing amount of waste being produced, reduce consumption or buy less.

Reusing things by finding ways to use them again.

Recycling items through a process making it possible to create new products.

Van Wylick (2008:1) is of the opinion that organisations choose to implement green business activities as a result of governmental and consumer pressures. Organisations can also feel pressurised, by environmental regulations supporting pollution, to decrease the use of some technology or to use cleaner energy sources (Wankel 2008:253). The ethical and moral responsibility of humans in terms of the environment informs organisations of the depletion of its resources and the prospective harmful effects



this have on the population and animals thus encouraging organisations to believe in the importance of implementing green business initiatives (Kirk, Lynch & Tzschentke 2004:116).

Figure 3: Three R’s of the environment

Source: Alahari, Kohli and Torr (2008:

Organisations should implement green business activities, as acting socially responsible can be invaluable publicity (Greenwood 2008:2; Weiss 2006:173). Thomas (2006:1) indicates green business activities can increase access to capital sources and investment opportunities as the community considers social responsibility as an indicator of good quality management. Environmental performance can also be a source of differentiation for organisations (Wankel 2008:253). Green business activities also create sustainable development within the organisation, which in turn creates value for the customers (Bramlin & Pavelin 2006:435). RESEARCH METHODOLOGY The following section provides an outline of the research methodology followed in this study. Research paradigm The study being reported here attempted to identify the influence of two sustainability aspects (independent variables) on sustainability outcomes (dependent variable), based on organisations’ perceptions. The positivistic or quantitative research method was used, which is a form of conclusive research using a large sample, structured data collection procedures and emphasising the quantification of constructs (Babbie & Mouton 2003:49). This study was quantitative in nature as it involved exploratory research, aimed at describing organisations’ perceptions regarding various sustainability aspects by empirically testing set hypotheses (Zikmund, Babin, Carr & Griffin 2010:94). Population and sample To collect the primary data in the empirical investigation, the unit of analysis was owners, managers and/or employees of organisations. For the purpose of this study, the target population consists of all organisations in the Nelson Mandela Bay region of the Eastern Cape in South Africa. As no sample frame exists of all the organisations in the Eastern Cape, the researchers used a non-probability sampling technique. Convenience sampling was used, due to the accessibility and availability of the respondents, to distribute 450 questionnaires in order to gather the responses of at least 200 owners/managers/employees (Saunders, Lewis & Thornhill 2007:234). Questionnaire design During the empirical investigation, a self-developed and self-administered measuring instrument in the form of a structured questionnaire, based on an extensive literature overview, was distributed to organisations in the Eastern Cape. The language of communication was English, and the questionnaire consisted of two sections. Section A of the questionnaire consisted of statements on an ordinal scale regarding the two sustainability aspects (TBL and greening) and sustainability outcomes. This section made use of a five-point Likert-type scale ranging from ‘strongly disagree’ (1) to ‘strongly agree’ (5). A total of 30 statements were used in this section. Section B contained a nominal scale of measurement,



using 11 categorical variables, and gathered the biographical data of the owners/managers/employees, including their gender, age, qualification and employment position. In addition, section B gathered demographical data of the organisations, such as its size and types of offerings. Pilot study

The questionnaire was distributed to 10 organisations in the designated region and also to academics in the fields of strategic management and statistics. Some problem areas were identified and suggestions for improvement were provided which ensured the face validity of the questionnaire. Validity and reliability of the measuring instrument The researchers aimed to ensure convergent validity of the measuring instrument by performing an Exploratory Factor Analysis (EFA). In addition, the face validity of the measuring instrument was also ensured as experts in the fields of strategic management and sustainability assisted with the questionnaire design. The researchers planned to confirm the internal consistency or reliability of the measuring instrument by calculating Cronbach’s alpha correlation coefficients. Data collection Both primary and secondary sources (Zikmund 2003:63-64) were used to collect information on sustainability aspects and sustainability outcomes. Secondary sources used for the literature overview included books, articles from journals and websites. Primary research was conducted by means of a survey using self-administered questionnaires. During the empirical investigation a total of 392 questionnaires were returned, giving a response rate of 87%. Data processing Questionnaires were inspected, coded and transferred to a Microsoft Excel spread sheet. Four questionnaires were regarded as incomplete as these had more than three missing values, and were therefore removed from the data basis. Other missing values (where questionnaires had three or less missing values) were replaced by using the mean-substitution approach. This method was appropriate, as Hair, Black, Babin, Anderson and Tatham (2006:61-63) indicate that it is a popular method that is best suited where the levels of missing values are relatively low. The data from the remaining 388 questionnaires were statistically analysed using the computer programme Statistica 11. Data analysis Data analysis was performed in five phases:

The study calculated descriptive statistics, such as means and standard deviations, in order to summarise the information about the sample and variables data (Zikmund 2003:402).

An EFA was conducted to determine the validity of the data. Items with factor loadings of at least

0.5 are considered as valid (Hair, Anderson, Tatham & Black 1998:111).

Cronbach’s alpha correlation coefficients were computed to test the reliability of the measuring instrument. It is stated that Cronbach’s alpha coefficients range from 0 to 1, and that a test should have a Cronbach’s alpha correlation coefficient equal to or greater than 0.70 (Gwet 2012:246; Hair, Babin, Money & Samouel, 2003:172) in order to be regarded as reliable.

The Pearson’s product moment correlations were calculated to determine the correlations between the study’s variables. According to Hair et al. (2003:283), the Pearson correlation coefficient

measures the association between two variables and the measurement ranges from -1.00 to +1.00, with zero indicating no association between the two variables. Therefore, the Pearson correlation coefficients enabled the researchers to identify correlations between the two independent variables (the sustainability aspects, namely TBL and greening) and the dependent variable (sustainability outcomes).

Finally, a multiple regression analysis were used to test the influence of the two sustainability aspects, namely TBL and greening, on sustainability outcomes, based on organisations’ perceptions. The multiple regression analysis made it possible to determine the extent of the relationships between the variables and therefore to test the hypotheses (Zikmund, et al.

2010:592).



EMPIRICAL RESULTS The main empirical results are outlined in this section under a number of headings, organised according to the data analysis steps discussed above. Frequency distributions to describe the sample The majority of the 388 owners/managers/employees of the organisations that participated in the study were male 63%, with 37% being female respondents. Furthermore, many respondents were between the ages of 35 and 44 years (29%) and in the age category 25 – 34 years (28%). Another 22% of the respondents were between the ages of 45 and 54 years. Just over half (52%) of the respondents were from the white population group, whereas 23% were of the black population group. Most of the respondents (60%) had a qualification equivalent to a Grade 12 or a national certificate/diploma. Many respondents occupied the position of manager (48%), and 28% of the respondents were the owners of the organisations. Most of the respondents represented small organisations (52%) offering both products and services (52%). Validity and reliability of results The results of the EFA are presented in Table 3.

Table 3: Factor analysis results

Factors Factor 1 Triple bottom line

Factor 2 Green practices

Factor 3 Environmental protection

Factor 4 Sustainability outcomes Items

TBL18 0.696813 0.136175 0.203426 0.093031

TBL11 0.675968 0.310835 0.044508 0.249979

TBL13 0.667277 0.236378 0.208204 0.178912

TBL15 0.579319 0.247311 0.115473 0.103049

TBL17 0.533033 -0.120972 0.479647 0.127262

GR28 0.222173 0.790396 0.226088 0.031526

GR29 0.197728 0.736408 -0.030847 -0.069950

GR27 -0.012423 0.674608 0.299466 0.177795

GR30 -0.045451 0.557884 0.180766 0.246897

GR25 0.323456 0.553638 0.432038 -0.093456

GR21 0.256376 0.501647 0.372003 0.217371

GR23 0.207522 0.230623 0.711056 0.123510

GR24 0.093927 0.342739 0.702521 0.054178

GR22 -0.035399 0.284786 0.615746 0.387343

GR26 0.157527 0.309976 0.585157 0.112906

TBL16 0.269942 -0.101102 0.560492 0.222835

SUS1 0.093327 -0.025005 0.133680 0.700060

SUS3 0.185805 0.022048 0.122953 0.654191

SUS9 0.186785 0.040692 0.225653 0.593499

SUS2 0.209358 0.111409 0.135548 0.530361

SUS8 0.283206 0.334012 0.103630 0.519151

From Table 3 it can be seen that 21 of the original 30 items displayed sufficient evidence of validity, as their factor loadings of greater than 0.50 provide evidence of validity (Hair et al. 1998:111). The 21 items loaded onto four distinct factors during the EFA. As expected, a TBL factor and a sustainability outcome factor emerged. To measure the variable TBL, 10

items were initially developed, and five of these items loaded distinctively onto one factor. Therefore, this factor was named TBL. Factor loadings between 0.533 and 0.697 were reported for this factor, and



therefore providing evidence of convergent validity for this factor. TBL explains 4.065% of the variance in the data. There had originally been 10 items that were developed to measure sustainability outcomes, and of those items, five loaded onto the factor as expected. The factor was therefore named sustainability outcomes. Factor loadings of between 0.519 and 0.700 were returned, confirming the convergent validity for this factor. Sustainability outcomes explain 3.849% of the variance in the data.

A greening factor did not distinctly emerge from the EFA as initially expected. In fact, the 10 items originally developed to measure the greening variable loaded onto two factors. These two factors needed to be renamed based on their item loadings. The first greening factor was named green practices, as all the

items which loaded related to activities that organisations specifically implement to act in a “green” way. For example, items related to the use of green transport, green suppliers, environmentally-friendly products and green community action programmes. Green practices reported factor loadings of between 0.502 and 0.790, which provide evidence of convergent validity for this factor. Green practices also explain 3.472% of the variance in the data. Another four greening items loaded onto a second greening factor which was named environmental protection, as all the items which loaded related to business activities

aimed at protecting (and therefore not harming) the environment. For example, these items related to activities for reducing waste, pollution as well as limiting climate, infrastructure and forestry changes. In addition, an item originally expected to measure TBL, relating to decreasing electricity consumption and waste management, also loaded onto the environmental protection factor. Factor loadings of between 0.560 and 0.711 were returned for environmental protection which explains 3.541% of the variance in the data.

Sufficient evidence of convergent validity for this factor is thus provided. Based on the EFA, items that did not load significantly were consequently eliminated from further analysis. Based on the EFA results, the two original hypotheses were reformulated into three hypotheses as follows: H1: There is a significant positive relationship between perceptions regarding TBL and sustainability

outcomes. H2: There is a significant positive relationship between perceptions regarding green practices and

sustainability outcomes. H3: There is a significant positive relationship between perceptions regarding environmental protection

and sustainability outcomes. In order to report on the study’s reliability, Table 4 presents the Cronbach’s alpha coefficients for all the factors.

Table 4: Cronbach’s alpha coefficients

Variable Cronbach’s alpha coefficient

TBL 0.7759

Green practices 0.8142

Environmental protection 0.7834

Sustainability outcomes 0.7203

As indicated, a reliability estimate equal to or greater that 0.70 is considered to be acceptable (Hair et al. 2006:778), as this indicates reliability. It is evident that all the variables in this study met the requirements for reliability. The highest Cronbach’s alpha coefficient of 0.8142 was reported for greening practices,

which shows that the measuring scale for this variable can be regarded as the most reliable. Descriptive statistics and correlations between variables The descriptive statistics of the variables were calculated and are shown in Table 5. Sustainability outcomes returned the highest mean score of 4.092, with most of the respondents agreeing that their organisations focus on sustainability outcomes. However, environmental protection reported the lowest mean score of 3.292, showing that respondents were neutral on whether their organisations engage in activities that focus on environmental protection.



Table 5: Descriptive statistics of the variables Variable Mean Std. dev.

TBL 3.609 0.702

Green practices 3.828 0.677

Environmental protection 3.292 0.725

Sustainability outcomes 4.092 0.584

The independent variable, environmental protection, obtained the highest standard deviation score of 0.725 while the dependent variable, sustainability outcomes, obtained the lowest score of 0.584. These standard deviations show that respondents mostly differed in their viewpoints on environmental protection and mostly had similar viewpoints regarding sustainability outcomes. Table 6 reveals the results of the

Pearson’s product moment correlations.

Table 6: Pearson’s product moment correlations

Variables TBL Green practices Environmental protection

Sustainability outcomes

TBL 1.000 0.509 0.526 0.547

Green practices 0.509 1.000 0.603 0.358

Environmental protection

0.526 0.603 1.000 0.491

Sustainability outcomes

0.547 0.358 0.491 1.000

(p<0.05) The Pearson’s product moment correlations show significant positive (p<0.05) correlations between all the variables used in the study. It is evident that there are positive correlations between the independent variables and the dependent variable. Thus, if one of these variables increase/improve in an organisation, there will be a positive influence or increasing effect on any other of these variables. To support the results of the Pearson’s product moment correlations, in order to assess the influence of the various independent variables (TBL, green practices and environmental protection) on sustainability outcomes

(dependent variable), based on organisations’ perceptions, a multiple linear regression analysis was undertaken. Multiple regression results Table 7 portrays the multiple regression analysis results.

Table 7: Influence of the independent variables on the dependent variable

Dependent variable: Sustainability outcomes R-Square = 0.357

Independent variables Beta t-value Sig.(p)

TBL 0.338 8.079 0.000*

Green practices -0.020 -0.469 0.639

Environmental protection 0.253 5.421 0.000*

(*p<0.001) From the multiple linear regression analysis, significant positive relationships (0.000; p<0.001) are reported between both TBL and sustainability outcomes; and between environmental protection and sustainability outcomes. However, this study found a negative, although not significant, relationship between green practices and sustainability outcomes. Therefore, the results show that those organisations that focus on TBL and engage in environmental protection activities, are likely to experience improved sustainability outcomes. Whereas, from respondents’ perspectives, those organisations that engage in green practices might realise a decrease in sustainability outcomes. As a result of the multiple linear regression



analyses hypothesis H2 is rejected, as there is no significant positive relationship between the perceptions regarding green practices and sustainability outcomes. However, hypotheses H1 and H3 are accepted, as significant positive relationships exist between the perceptions regarding TBL and sustainability outcomes, as well as between the perceptions regarding environmental protection and sustainability outcomes.

CONCLUSIONS AND MANAGERIAL RECOMMENDATIONS Sustainability links concepts such as social good and environmental stewardship with the goal of financial gain, ultimately aimed at caring for a planet with limited resources sensitive to growth. TBL should be facilitated through continual adaptability and learning, intentionally used to move the organisation in desired sustainability directions. Literature has indicated that not many organisations pursue a sustainability agenda full-on and therefore lack a vision of sustainability. There is a need for appropriate change strategies to help organisations to advance toward full sustainability (incorporating economic, social and environmental aspects). There is a need for a comprehensive management framework that would address, balance and integrate TBL considerations. The establishment, implementation and maintenance of a formal system of integrated sustainable reporting are costly and often beyond the reach of many smaller organisations which do not have the resources. Various models and frameworks for implementing and managing organisational sustainability have been discussed in the literature study as to provide a theoretical basis for conducting the empirical study. The primary objective of this study was to investigate the perceptions regarding the sustainability of organisations in Nelson Mandela Bay. Therefore, the empirical investigation focused on investigating the influence of two sustainability aspects (independent variables) on sustainability outcomes (dependent variable), based on organisations’ perceptions. The EFA and the Cronbach’s alpha coefficients confirmed evidence of convergent validity and reliability for the measuring instrument used in this study. Based on the EFA, the hypotheses were also reformulated. The statistics calculated to analyse relationships between the variables revealed a significant positive relationship between an organisation’s focus on TBL and its sustainability outcomes. This result showed that according to organisations, those that focus on TBL

are likely to experience improved sustainability levels. In other words, organisations engaging in TBL reporting of their economic, social and environmental performance and impact might increase their sustainability levels. In addition, this empirical investigation showed a significant positive relationship between perceptions regarding environmental protection and sustainability outcomes. This result indicated

that, based on organisations’ perceptions, environmental protection activities such as those aiming to reduce waste, pollution as well as climate and infrastructure changes, might lead to higher levels of sustainability. Furthermore, the statistical analysis revealed that, based on organisations’ perceptions, there exist a negative (although not significant) relationship between green practices and sustainability outcomes. In other

words, organisations regard the engagement in green practices as an activity that might possibly decrease sustainability outcomes. This perception of respondents might be as a result of the percentage of sample respondents operating in small organisations. The statistical analysis showed that 52% of the respondents owned/were employed in small organisations. Small organisations might not engage in green practices as they perceive these too expensive for their smaller operations. As these small organisations do not want to or cannot afford to implement green practices such as changing to greener transport means, greener suppliers and implementing green community programmes, these organisations perceive green practices as those possibly decreasing their sustainability outcomes. This perception might be because of the financial implications resulting from green practice implementation. Considering the above results, the following practical actions in order to improve sustainability outcomes are recommended to organisations (based on aspects tested in the measuring instrument):

Organisations should focus on the protection and management of their intangible assets and reputation.

Risks and threats to the longevity of organisations should be proactively managed.

Organisations should ensure that corporate governance and reporting are practiced according to the principles of the King III report.



In terms of TBL reporting, organisations regard the reporting on efforts of unemployment alleviation and female labour involvement important. These two efforts should therefore be focus areas for organisations.

In terms of TBL social performance reporting, organisations view activities aligned with community priorities important. In other words, when organisations decide on their social sustainability efforts, they should first identify and consider community needs and priorities in order to possibly align the organisations’ social efforts with community needs.

As a starting point when a sustainability focus through “going green” arises, especially in a small organisation, rather focus on environmental protection activities (instead of green practices);

Emphasise the aim to reduce water use and increase the use of recycled water.

Involve employees to determine means of reducing pollution caused by business activities.

Involve production, cleaning and general administrative employees in identifying waste reduction possibilities.

Emphasise the importance of decreasing electricity consumption; for example, stress the importance of switching off unused electrical appliances and lights.

Suppliers of green materials and methods should, when approaching organisations, especially small organisations, focus on marketing environmental protection aids.

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