Paradox theory offers a unique approach through which the complex and often conflicting aspects of corporate sustainability (CS) can be addressed. Although a growing body of literature has focused on the organizational-level outcomes of a paradox approach to sustainability, we know less about how such an approach creates business contributions to sustainable development beyond the organization (societal sustainability). The present study addresses this gap in research through a qualitative meta-analysis of 32 empirical case studies. While the analyzed studies confirmed the (...) effectiveness of a paradox approach to managing CS tensions from an organizational perspective, indications of contributions to societal sustainability were ambiguous. This finding led to the creation of a typology of response–outcome pathways. These pathways illustrate variations in the societal sustainability outcomes of CS paradox responses based on the moderating effects of three factors: level of commitment to sustainability, the approach to stakeholder engagement, and the level of strategy–practice alignment. This analysis contributes to the CS paradox perspective by offering important boundary conditions to the commonly held assumption that a paradox approach leads to superior business contributions to sustainability and highlights the need for research that examines outcomes of extant CS approaches beyond the organization. (shrink)

Base-of-the-pyramid business models aim to achieve profitability and poverty reduction by including poor people into corporate value chains. This goal duality creates tensions. Actors’ responses to these tensions are influenced by their cognitive frames of the phenomena building the tension. Applying a cognitive perspective, I investigate how corporate actors with different frames of poverty respond proactively or defensively to the poverty–profitability tension by adapting business model elements. I find that proactive and defensive responses differ for actors holding different cognitive frames (...) of poverty. The responses have consequences for the poverty impact potential of BOP business models. (shrink)

The complexity of current social and environmental grand challenges generates many conflicts and tensions at the individual, organization and/or systems levels. Paradox theory has emerged as a promising way to approach such a complexity of corporate sustainability going beyond the instrumental business-case perspective and achieving superior sustainability performance. However, the fuzziness in the empirical use of the concept of “paradox” and the absence of a systems perspective limits its potential. In this paper, we perform a systematic review and content analysis (...) of the empirical literature related to paradox and sustainability, offering a useful guide for researchers who intend to adopt the concept of “paradox” empirically. Our analysis provides a comprehensive account of the uses of the construct - which allows the categorization of the literature into three distinct research streams: 1) paradoxical tensions, 2) paradoxical frame/thinking, and 3) paradoxical actions/strategies - and a comprehensive overview of the findings that emerge in each of the three. Further, by adopting a system perspective, we propose a theoretical framework that considers possible interconnections across the identified paradoxical meanings and different levels of analysis (individual, organizational, systems) and discuss key research gaps emerging. Finally, we reflect on the role a clear notion of paradox can have in supporting business ethics scholars in developing a more “immanent” evaluation of corporate sustainability, overcoming the current instrumental view. (shrink)

Although legitimacy theory provides strong arguments that environmental, social and governance disclosure and performance can help mitigate firm-specific risks, this relationship has been repeatedly challenged by conceptual arguments, such as ‘transparency fallacy’ or ‘impression management’, and mixed empirical evidence. Therefore, we investigate this relationship in the revelatory case of initial public offerings, which represent the first sale of common stock to the wider public. IPOs are characterised by strong information asymmetry between firm insiders and society, while at the same time (...) suffering from uncertainty in firm legitimacy, culminating in amplified financial risks for both issuers and investors in aftermarket trading. Using data from the United States, we demonstrate that voluntary ESG disclosure reduces idiosyncratic volatility and downside tail risk and higher ESG ratings have lower associated firm-specific volatility and downside tail risk during the first year of trading in the aftermarket. We provide theoretical arguments for the relationships observed, suggesting that companies striving for ESG performance and communicating their efforts signal their compliance with sustainability-related norms, thus acquiring and upholding a societal license to operate. ESG performance and disclosure help companies build their reputation capital with investors after going public. We also report that ESG disclosure is a more consistent proxy for ex-ante uncertainty as an indicator of aftermarket risk, thereby replacing some of the more conventional measures, such as firm age, offered in the existing literature. (shrink)

Research on corporate sustainability has started to acknowledge the role of temporality in creating more sustainable organizations. Yet, these advances tend to treat firms as monolithic and we have little understanding of how different temporal patterns throughout an organization shape perceptions of and actions toward sustainability. Building on studies highlighting how the temporal structures of work shape employee engagement with different organizational processes and issues, we seek to answer: How does the temporality of work practices structure perceptions of corporate sustainability (...) throughout the firm? Using data from an ethnography of a small European sustainable bank, we provide an account of the variety of ways in which employees in different departments perceive the bank and how they engage with sustainability. We then go on to show how the temporal structures of work practices within different departments help explain some divergence in perceptions of sustainability. Our study highlights the variegation of temporal structures in organizational processes of meaning-making and its role for a better understanding of the efforts to make corporations more sustainable. (shrink)

Per definition business sustainability demands the integration of environmental, social, and economic outcomes. Yet, managerial decision-making involving sustainability objectives is fraught with tension and the way managerial decision-makers frame sustainability issues in their mindset influences how sustainability tensions are managed at the organisational level. In the bid to better understand what types of managerial mindsets, or cognitive frames, foster integrative business sustainability practices that simultaneously advance environmental, social, and economic objectives, extant research has focussed on the underlying logics that drive (...) the acknowledgement of sustainability tensions. However, the existing logics-based constructs do not sufficiently explain this link, and it has been suggested that managers perceive and manage sustainability tensions based on the values that they hold. To clarify the roles of managerial values and logics as antecedents in business sustainability decision-making, we integrate Keeney’s value-focussed thinking approach with managerial and organisational cognition perspectives. Drawing on data from a survey with 169 senior procurement managers in Australia we found three types of cognitive frames which demonstrate that stronger sustainability values are associated with a more holistic perception of sustainability tensions and vice versa. We also found that managers’ cognitive framing of sustainability is strengthened by more holistic organisational cognitive frames and discuss according implications for managerial decision-making in theory and practice. (shrink)