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Beyond the Bounded Instrumentality in Current Corporate Sustainability Research: Toward an Inclusive Notion of Profitability

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Abstract

We argue that the majority of the current approaches in research on corporate sustainability are inconsistent with the notion of sustainable development. By defining the notion of instrumentality in the context of corporate sustainability through three conceptual principles we show that current approaches are rooted in a bounded notion of instrumentality which establishes a systematic a priori predominance of economic organizational outcomes over environmental and social aspects. We propose an inclusive notion of profitability that reflects the return on all forms of environmental, social, and economic capital used by a firm. This inclusive notion of corporate profitability helps to redefine corporate profitability as if sustainability matters in that it overcomes the bounded instrumentality that impairs current research on corporate sustainability. We apply this notion to different car manufacturers and develop conceptual implications for future research on corporate sustainability.

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Notes

  1. It is noteworthy that the conventional notion of economic value creation is based on this assumption as it only takes into account economic capital in the assessment of corporate profitability.

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Acknowledgments

The authors would like to thank Monika Winn, Rob Spencer and Ralf Barkemeyer as well as the participants of the SEABUS Network, the reviewers and the editor of Journal of Business Ethics for their valuable comments. This research benefited from funding of the MISTRA foundation and the German Ministry for Education and Research.

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  1. Euromed Management School, Domaine de Luminy-BP 921, 13288, Marseille Cedex 9, France

    Tobias Hahn & Frank Figge

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Hahn, T., Figge, F. Beyond the Bounded Instrumentality in Current Corporate Sustainability Research: Toward an Inclusive Notion of Profitability. J Bus Ethics 104, 325–345 (2011). https://doi.org/10.1007/s10551-011-0911-0

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