In Search of the Dominant Rationale in Sustainability Management: Legitimacy- or Profit-Seeking?
- 1.2k Downloads
The academic debate why and how companies are dealing with sustainability is dominated by two main arguments—the profit-seeking and the legitimacy-seeking view. While the first argues that companies (only) establish sustainability management measures if this helps to increase their economic success, others emphasize that companies predominantly react on societal pressure dealing with sustainability (only) to secure legitimacy. Whereas both lines of argument have gained a lot of attention in academia, little is known about their relative importance in shaping corporate practice. This papers aims to fill this gap with an empirical analysis of corporate practices of large companies in ten countries worldwide. To capture the organizations’ rationale in sustainability management practice, we systematically applied various measures related to actors and operational activities focusing on the companies’ intention to pursue sustainability management, the integration of sustainability management to the core business, and the actual implementation of related measures. Overall the findings indicate that seeking legitimacy dominates corporate sustainability management practices.
KeywordsSustainability management Legitimacy Profit-seeking Corporate sustainability Sustainability management practices
The authors are thankful to the anonymous reviewers and the associate editors for excellent comments. We are also grateful to Markus Beckmann for valuable comments on earlier versions of this paper.
- Bartlett, J. E., Kotrlik, J. W., & Higgins, C. C. (2001). Organizational research: determining appropriate sample size in survey research. Information Technology, Learning and Performance Journal, 19(1), 43–50.Google Scholar
- Blume, L. E., & Easley, D. (2008). Rationality. In S. N. Durlauf & L. E. Blume (Eds.), The new Palgrave dictionary of economics. Basingstoke: Palgrave Macmillan.Google Scholar
- BMU (German Federal Ministry for the Environment). (2002). Sustainability management in business enterprises. Concepts and instruments for sustainable organisation development. Bonn: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety; Federation of German Industries; Centre for Sustainability Management.Google Scholar
- Brignall, S. (2002). The unbalanced scorecard: a social and environmental critique. Proceedings of the PMA 2002: Research and action, Boston, MA, pp. 85–92.Google Scholar
- Clark, C. E. (2000). Differences between public relations and corporate social responsibility: An analysis. Corporate Reputation Review, 26(3), 363–380.Google Scholar
- Collison, D., Clark, R., Barbour, J., Buck, A., Fraser, R., Lyon, B., et al. (2003). Environmental performance measurement through accounting systems: A survey of UK practice. In M. Bennett, P. M. Rikhardsson, & S. Schaltegger (Eds.), Environmental management accounting. Purpose and progress (pp. 189–232). Dordrecht: Kluwer.CrossRefGoogle Scholar
- Commons, J. R. (1934): Institutional economics: Its place in political economy. New York.Google Scholar
- Commons, J. R. (1936). Institutional economics. American Economic Review, 26, 237–249.Google Scholar
- Du, X. (2014). How the market values greenwashing? Evidence from China. Journal of Business Ethics.Google Scholar
- Epstein, M. J. (2008). Making sustainability work. Best practices in managing and measuring corporate social, environmental and economic impacts. Sheffield, San Francisco: Greenleaf Pub.; Berrett-Koehler Publishers.Google Scholar
- European Commission. (2004). ABC of the main instruments of corporate social responsibility. Brussels: European Commission.Google Scholar
- Friedman, M. (1962). Capitalism and freedom. Chicago: University of Chicago Press.Google Scholar
- Friedman, M. (1970). The social responsibility of business is to increase its profits. In R. Chadwick & D. Schroeder (Eds.), 2002. London: Applied Ethics, Routledge.Google Scholar
- IPCC (Intergovernmental Panel on Climate Change) (2008). Climate change 2007. Synthesis report. Available at: www.ipcc.ch/pdf/assessment–report/ar4/syr/ar4_syr.pdf. Retrieved from 20 Mar 2015.
- IUCN (International Union for Conservation of Nature) (2008). Summary statistics for globally threatened species. Available at www.iucnredlist.org/static/stats. Retrieved from 20 Mar 2015.
- Kiron, D., Kruschwitz, N., Reeves, M., & Goh, E. (2013). The benefits of sustainability-driven innovation. MIT Sloan Management Review, 54(2), 69–73.Google Scholar
- KPMG (2014). Corporate sustainability. A progress report, available at: http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/corporate-sustainability-v2.pdf. Retrieved from 08 July 2015.
- Lacy, P., Cooper, T., Hayward, R., & Neuberger, L. (2010). A new area of sustainability. CEO reflections on progress to date, challenges ahead and the impact of the journey toward a sustainable economy. Accenture.Google Scholar
- Machlup, F. (1967). Theories of the firm: Marginalist, behavioral, managerial. The American Economic Review, 57(1), 1–33.Google Scholar
- Margolis, J. D., & Walsh, J. P. (2001). People and profits? The search for a link between a company’s social and financial performance. New York: Psychology Press.Google Scholar
- Milanés-Montero, P., & Pérez-Calderón, E. (2011). Corporate environmental disclosure and legitimacy theory. A European perspective. Environmental Engineering and Management Journal, 10(12), 1883–1891.Google Scholar
- OECD. (2012). Demographic Change and Local Development. Paris: OECD.Google Scholar
- Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1/2), 62–77.Google Scholar
- Revell, A., Stokes, D., & Chen, H. (2010). Small businesses and the environment: Turning over a new leaf? Business Strategy and the Environment, 19(5), 273–288.Google Scholar
- Schaltegger, S., Windolph, S. E., Harms, D., & Hörisch, J. (2014). Corporate sustainability in international comparison. State of practice, opportunities and challenges. Heidelberg: Springer.Google Scholar
- Scott, W. R. (1995). Institutions and organizations. Thousand Oaks, CA: Sage Publications.Google Scholar
- Scott, W. R. (2005). Institutional theory: Contributing to a theoretical research program. In K. G. Smith & M. A. Hitt (Eds.), Great minds in management: The process of theory development. Oxford: Oxford University Press.Google Scholar
- Sen, A. (2008). Rational Behaviour. In S. N. Durlauf & L. E. Blume (Eds.), The new Palgrave dictionary of economics. Basingstoke: Palgrave Macmillan.Google Scholar
- United Nations. (1992). Rio declaration on environment and development. Rio de Janeiro.Google Scholar
- UNDP (United Nations Development Programme). (2010). Human development report 2010. 20th anniversary edition. The real wealth of nations. Pathways to human development, http://hdr.undp.org/sites/default/files/reports/270/hdr_2010_en_complete_reprint.pdf. Retrieved from 20th June 2015.
- von Weizsäcker, E. U., Hargroves, K., Smith, M., Desha, C., & Stasinopoulos, P. (2009). Factor five. Transforming the global economy through 80 % improvements in resource productivity, Earthscan. London: Routledge.Google Scholar
- Wagner, M. (2006). Achieving environmental-economic sustainability through corporate environmental strategies: Empirical evidence on environmental shareholder value. In S. Schaltegger, M. Bennett, & R. Burritt (Eds.), Sustainability accounting and reporting (pp. 183–206). Dordrecht: Springer.CrossRefGoogle Scholar
- WCED (World Commission on Environment and Development) (1987). Our common future. Oxford/New York: Oxford University Press. Available at: http://www.un-documents.net/ocf-02.htm#I. Retrieved from 27 July 2015.
- Woods, I. (2005). Investors look for corporate social responsibility. Civil Engineers Australia, 77(3), 8–11.Google Scholar
- WWF (World Wide Fund for Nature). (2010). Living planet report 2010. Gland: WWF.Google Scholar