AbstractClimate change is a complex, multilevel challenge with implications of failure unimaginable for current and future generations. However, despite the Paris Agreement supporting the imperative for action in an atmosphere of scientific consensus, organisations are failing to take the decisive action required. We argue that this lack of organisational action needs to be addressed by examining the cognitive foundations of managerial decisions on climate change and sustainability. A systematic review of research on cognition, sensemaking and managerial interpretation where it is (...) linked to climate change or sustainability is presented within this article. The results detail a multilevel analysis highlighting key themes and the core concepts from the literature including factors shaping the cognitive process, to elucidate reasons for inaction and potential for promoting change. Through this research, an integrated model is presented demonstrating the interaction of factors, cognitive processes and outcomes. Based on this analysis, potential reasons for inaction are proposed and countered by three potential solutions linked to leadership, social norms and structural reform. (shrink)

Introducing and implementing corporate sustainability poses many challenges to business organizations. In this longitudinal, inductive study, we focus on how such challenges are handled in a Dutch bank that is developing its sustainability policies. We examine why there is such a high degree of tension and conflict within the organization and identify how the development of these policies is affected by the interplay between subcultures and institutional logics. We show how different subcultures affect the enactment of logics by infusing the (...) rational and mindful behavior coming from logics with (sub)cultural values, beliefs, and assumptions. In turn, conflicting logics amplify subcultural characteristics between groups by shaping different behavior and practices. Together, this leads to a magnification of subcultural differences while, at the same time, logics are increasingly being perceived as incompatible. (shrink)

The ability of managers to identify and interpret challenges in the external environment is one of the micro-foundations of dynamic capabilities. The underlying literature on strategic issue interpretation suggests that interpreting environmental challenges as opportunities rather than threats is more likely to lead to proactive and innovative responses, but there are also potentially positive effects of threat interpretation, for instance high levels of commitment and risk-seeking behaviour. In this paper, I use the context of climate change to explore the link (...) between threat interpretation and innovation in more detail. I use exploratory cluster analysis and illustrative case studies to develop a set of propositions to explain when threat interpretation can in fact encourage innovation. I identify two ethical mechanisms that positively mediate the relationship between threat interpretation and innovation: enlarged concept of responsibility to society and moral legitimacy. The paper contributes to the literature by identifying the importance of ethics in linking managerial interpretation to innovation, particularly in the context of global environmental and social challenges. (shrink)

Does private regulation of workers’ rights in global value chains improve working conditions on the factory floor? Drawing on one of the first systematic longitudinal studies of supplier compliance with multinational corporation (MNC) codes of conduct, this paper finds—in contrast to previous research—substantial improvements over time. While in 2004, the four examined Chinese toy suppliers violated most of the evaluated code of conduct criteria and consciously decoupled the code of conduct policy from actual practices, by 2009 they had recoupled policy (...) and practice and complied with nearly all examined criteria (except working hours). The paper contributes to the private regulation literature by challenging previous research claims, identifying factors that could make private regulation effective, and outlining a research method for empirically studying the effects of codes of conduct over time. The paper also contributes to new institutional theory by discussing how recoupling could be influenced by two factors not identified in previous research: (i) trusting relationships between the organization and the stakeholder exerting pressure and (ii) factors unrelated to main external pressures leading to “accidental” recoupling. (shrink)