The increasing strategic importance of environmental, social and ethical issues as well as related performance measures has spurred interest in corporate sustainability performance measurement and management systems. This paper focuses on the balanced scorecard, a performance measurement and management system aiming at balancing financial and non-financial as well as short and long-term measures. Modifications to the original BSC which explicitly consider environmental, social or ethical issues are often referred to as sustainability balanced scorecards. There is much scholarly discussion about SBSC (...) architecture and how it can be designed to relate performance dimensions, strategic objectives and the logical links among these elements. To synthesise the widely scattered research findings and publications on the SBSC, we conducted a thematic analysis based on a systematic literature review containing 69 relevant articles spanning a period of two decades. We found that sustainability-oriented modifications of the BSC architecture are motivated by instrumental, social/political or normative theoretical perspectives. Moreover, these modifications can be mapped with a typology of generic SBSC architectures. The first dimension of the typology describes the hierarchy between performance perspectives and strategic objectives and how it is related to the organisational value system. The second dimension describes how sustainability-related strategic objectives are integrated into SBSC performance perspectives and how this is related to corporate sustainability strategy. This study contributes to the development of the emerging SBSC literature and practice and, more generally, to research on corporate sustainability performance measurement and management. We conclude with a research agenda and implications for management. (shrink)

In an effort to meet growing stakeholder demands for transparency, accountability, and responsibility, many large organizations globally have voluntarily adopted the Global Reporting Initiative guidelines. Moreover, triggered by recent management transgressions, the ancient virtue of practical wisdom has gained increased attention from management scholars, who argue that the Aristotelian concept, with its interdisciplinary nature, has the capacity of turning management back into a holistic, contextual, and virtue-orientated practice. Especially the fact that practical wisdom is firmly based on normative values, coupled (...) with the emphasis on experience and practice, makes it well suited as a leitmotif for sustainable and responsible management. This conceptual paper builds on the link between practical wisdom and sustainability. I argue that the GRI may be regarded as an example of procedural practical wisdom in the context of sustainability reporting, specifically in terms of its emphasis on the holistic and situational dimensions, articulated through the concepts of materiality analysis and stakeholder dialogue. Practical implications, limitations, and avenues for further research are discussed. (shrink)

This study examines how ambiguity in corporate objectives affects managers’ choice between opposing sustainability and short-term profit goals. We test this question with an experiment in which we vary whether environmental sustainability is included explicitly as a strategic objective that is used for managers’ performance evaluations. Findings show that managers increase biodegradable production and correspondingly decrease short-term profit when environmental sustainability performance is explicitly incorporated within the company’s strategic objectives. Also, managers in the implicit incorporation group are more likely to (...) decrease their biodegradable production when they learn that their counterparts within the firm have chosen to decrease biodegradable production in other product lines. Further, managers in the explicit incorporation group have greater trust in senior management, and that trust mediates the negative relationship between incorporation ambiguity and the level of biodegradable production. The theoretical and practical implications of this study are discussed. (shrink)

While the economic and environmental dimensions of the triple bottom line have been covered extensively by management theory and practice, the social dimension remains largely underrepresented. The resource-based view of the firm and the natural resource-based view of the firm are revisited to lay the theoretical foundation for exploring how the social dimension might be addressed. Social capabilities are then explored by looking at the social entrepreneurship literature and illustrative cases with the purpose of elaborating RBV toward a social resource-based (...) view of the firm. Three illustrative cases, which represent social businesses located in catastrophe-ridden Haiti, show how capabilities are used to overcome challenging constraints. The goal for the social entrepreneur is to employ the appropriate capabilities to ensure economic success, a positive environmental impact, and social benefits that leave the local community in a better position than without the business. Just as NRBV is a previous elaboration of RBV, so can SRBV be an elaborated theoretical foundation for future research. The components of a theory are systematically addressed by extending the range of variables, extending the domain, and offering propositions on variable relationships and outcome predictions. By highlighting the social capabilities of social entrepreneurs, this research illuminates the micro-foundations of corporate social responsibility, emphasizing the value of individual level analyses. (shrink)

Management accounting and control seeks to provide information that substantiates decision-making at all firm levels and thus may also foster ethical decision-making. Against this background, this article presents a systematic literature review of research on management accounting and control and business ethics that has been published in the Journal of Business Ethics. Through this review, we intend to bring to the forefront a research topic that has been widely neglected in broader literature reviews on accounting ethics research and that has (...) been covered by a small number of articles published by traditional leading accounting journals only. Our systematic literature review is guided by a theoretical framework that integrates the decision-facilitating and decision-influencing roles of management accounting and control information and the stages of the ethical decision-making process. Through this theoretical lens, we analyze 64 management accounting and control articles published in the Journal of Business Ethics over more than three decades. Synthesizing and structuring this research, we discuss prior accomplishments and elaborate on avenues for future research. (shrink)

This article explores how corporate governance processes and structures are being used in large Australian companies to develop, lead and implement corporate responsibility strategies. It presents an empirical analysis of the governance of sustainability in fifty large listed companies based on each company’s disclosures in annual and sustainability reports. We find that significant progress is being made by large listed Australian companies towards integrating sustainability into core business operations. There is evidence of leadership structures being put in place to ensure (...) that board and senior management are involved in sustainability strategy development and are then incentivised to monitor and ensure implementation of that strategy through financial rewards. There is evidence of a willingness to engage and communicate clearly the results of these strategies to interested stakeholders. Overall, there appears to be a developing acceptance amongst large corporations that efforts towards improved corporate sustainability are not only expected but are of value to the business. We suggest that this is evidence of a managerial shift away from an orthodox shareholder primacy understanding of the corporation towards a more enlightened shareholder value approach, often encompassing a stakeholder-orientated view of business strategy. However, strong underlying tensions remain due to the insistent market emphasis on shareholder value. (shrink)

The aim of this research is to ascertain whether a firm’s environmental motivations may help to predict how complete or incomplete its environmental management will be, understanding incomplete management to be that which neglects one or more of the three keys aspects of such management, namely, monitoring, action and results. We specifically posit that while motivations based on the search for legitimation lead to more incomplete styles of environmental management, competitive motivations entail a more complete management. The analyses conducted with (...) a sample of 1,902 plants provide empirical evidence in favour of such reasoning. The contribution this research makes, therefore, is not restricted solely to showing the effect motivations have on the environmental performance of organisations, as it also introduces a new dimension of environmental management—the degree of completeness, which needs to be considered when understanding and evaluating this effect. (shrink)

Amid the growth of scholarly research on environmental workplace behaviors, two limitations stand out. First, there has been scant research on the cross‐level effects of organizational‐level determinants on individual employee environmental behaviors using a methodologically appropriate multilevel analytic approach. Second, there has been an overwhelming focus on voluntary, as opposed to task‐related, employee environmentally friendly behaviors. In addressing these limitations, this field study (N = 615 U.S.‐based employees nested in 51 organizations) makes a theoretical and empirical contribution to the literature, (...) specifically by linking the dimensions of organizational‐level environmental orientation with individual‐level employee environmental in‐role (i.e., task‐related) behaviors using multilevel analysis. The results indicate that organizational internal environmental orientation is positively related to employee recycling behavior. Managerial status exerts a moderating effect, such that the positive relationship between internal environmental orientation and energy‐saving behavior is stronger among managers than among non‐managers. Furthermore, an organization's external environmental orientation has an unequivocal positive relationship only with employee energy‐saving behavior. The theoretical and practical implications of the findings are discussed. (shrink)

This research proposes an explanation for the conflicting extant evidence about whether family ownership of a business promotes proactive environmental strategy (PES). Based on insights drawn from strategic reference point theory, organizational identity theory, and the socioemotional wealth preservation perspective, we propose that family ownership has a moderated–mediated relationship with PES, with commitment as a moderator and long-term orientation as a mediator. A test using 454 China private firms with different levels of family ownership supports the hypotheses. This shows that (...) PES as a strategy related to business ethics does not happen without commitment and long-term orientation. (shrink)

A large body of the literature on sustainability indicators, assessments and reporting is currently available. However, sustainability performance measurement systems have an insubstantial presence in the literature. Invariably, a sustainability performance measurement system presents the potential for certain trade-offs or opportunity costs for organizations. Extant sustainability platforms and standards are largely silent about how to deal with trade-offs. Utilizing evidence from the literature, as well as contingency factors, this paper seeks to present a heuristic model for establishing trade-offs in corporate (...) sustainability performance measurement systems. Trade-offs in this area revolve around performance measurement, stakeholder management, competitive advantage, as well as the vertical and horizontal integration of the performance platform. This is particularly important for organizations seeking to establish, integrate or expand their environmental management systems into the area of sustainability. As yet, formalistic attempts to deal with trade-offs in sustainability performance measurement systems are infrequent and vague. (shrink)

In a recent systematic review of the Sustainability Balanced Scorecard literature in this journal, we developed a typology of architectures as a basis for the process of SBSC design, implementation, use, and evolution. This paper addresses a comment by Hahn and Figge designed to stimulate further research. We argue that the existing literature demonstrates that the SBSC management tool can play an important role in corporate sustainability. The SBSC architectures—as representations of goals and priorities—form an integral and iterative part of (...) the corporate sustainability strategy-making process and therefore cannot be isolated from it. However, the concept as such should not be overloaded. In this paper, we first reflect on the potentials and constraints of the SBSC in relation to radical or transformational change and measuring performance outcomes on the level of human–earth systems. Second, we discuss the importance of SBSC architecture concerning how it enables the integration of sustainability into business organisations; how both strictly hierarchical cause-and-effect chains and less hierarchical designs can allow companies to seek inclusive profits; and the contingency-based use of generic architectures in contrast to its use as a diagnostic tool. (shrink)

Corporate sustainability introduces multiple tensions or paradoxes into organisations which defy traditional approaches such as trading-off contrasting options. We examine an alternative approach: to manage corporate sustainability with a paradoxical lens where contradictory elements are managed concurrently. Drawing on paradox theory, we focus on two specific pathways: to the organisation-wide acceptance of paradox and to paradoxical resolution. Introducing the concept of strategic agility, we argue that strategically agile organisations are better placed to navigate these paradox pathways. Strategic agility comprises three (...) organisational meta-capabilities: strategic sensitivity, collective commitment, and resource fluidity. We propose that strategically agile organisations draw on strategic sensitivity and collective commitment to achieve organisation-wide acceptance of paradox, and collective commitment and resource fluidity to achieve paradoxical resolution. For each of these meta-capabilities, we identify three organisational practices and processes specifically related to corporate sustainability that organisations can leverage in pursuit of strategic agility. We offer a conceptual framework depicting the strategic agility meta-capabilities, and associated practices and processes, which organisations draw on to successfully manage corporate sustainability with a paradoxical lens. (shrink)

Ethical banking, microfinance institutions or certain credit cooperatives, among others, grant socially responsible loans. This paper presents a credit score system for them. The model evaluates social and financial aspects of the borrower. The financial aspects are evaluated under the conventional banking framework, by analysing accounting statements and financial projections. The social aspects try to quantify the loan impact on the achievement of Millennium Development Goals such as employment, education, environment, health or community impact. The social credit score model should (...) incorporate the lender’s know-how and should also be coherent with its mission. This is done using Multi-Criteria Decision Making. The paper illustrates a real case: a loan application by a social entrepreneur presented to a socially responsible lender. The decision support system not only produces a score, but also reveals strengths and weaknesses of the application. (shrink)

Nowadays businesses are often expected to create not just financial, but multiple kinds of value—and they report on this using numbers and narratives. Multiple-value accounting narratives, such as those required by the Integrated Reporting framework, are often met with suspicion: accounting scholars have argued that inconsistencies between narratives and performances show that narratives are used for impression management rather than to accurately report the (ir)responsible behavior of companies. This paper proposes to assess narratives beyond inconsistencies with reported performances. Starting from (...) the idea that performances are delivered in response to the kinds of value in the situation of the company, we argue that narratives and performances should be analyzed together as interrelated elements and considered in relation to the kinds of value in the situation. The paper transforms the common consequentialist view on which value should be “increased,” into the value pluralist view that something being of value can require many different performances such as for example respecting, maximizing, admiring, maintaining, using, and bringing it about. From this perspective, multiple-value accounting narratives logically precede the reporting of performances and should identify the kinds of value in the situation to which the company ought to respond, which performances are required by these kinds of value, and which indicators and targets should be used to report on these performances. A brief analysis of the annual report of Unilever illustrates how such metaethical criteria can help assess and develop multiple-value accounting narratives. (shrink)

This study examines the extent to which enabling and controlling uses of management control systems moderate the relationship between environmental innovation strategy and organizational performance. Partial least squares structural equation modeling is used to analyze survey data collected from top managers in 175 manufacturing and services sectors representing multinational and local organizations operating in Sri Lanka. We find that while the enabling use of MCS positively moderates the relationship between environmental innovation strategy and organizational performance, in contrast, the controlling use (...) of MCS negatively moderates the relationship. We compare the results for the manufacturing and services sectors. As predicted, we find a significant positive moderating impact of the enabling use of MCS in both manufacturing and services sectors. However, contrary to our expectations, we find no significant moderating impact for both sectors for the controlling use of MCS. We conclude that environmental innovation strategy per se does not lead to performance improvements; however, the extent to which organizations use enabling and controlling MCS determines the relationship. We provide theoretical insights and practical implications concerning the importance of strategic alignment between managerial controls, environmental innovation strategy, and organizational performance. (shrink)

In recent years, researchers and practitioners have increasingly paid attention to food waste, which is seen as highly unethical given its negative environmental and societal implications. Waste recovery is dependent on the creation of connections along the supply chain, so that actors with goods at risk of becoming waste can transfer them to those who may be able to use them as inputs or for their own consumption. Such waste recovery is, however, often hampered by what we call ‘circularity holes’, (...) i.e., missing linkages between waste generators and potential receivers. A new type of actor, the digital platform organization, has recently taken on a brokerage function to bridge circularity holes, particularly in the food supply chain. Yet, extant literature has overlooked this novel type of brokerage that exploits digital technology for the transfer and recovery of discarded resources between supply chain actors. Our study investigates this actor, conceptualized as a ‘circularity broker’, and thus unites network research and circular supply chain research. Focusing on the food supply chain, we adopt an interpretive inductive theory-building approach to uncover how platform organizations foster the recovery of waste by bridging circularity holes. We identify and explicate six brokerage roles, i.e., connecting, informing, protecting, mobilizing, integrating and measuring, and discuss them in relation to extant literature, highlighting novelties compared to earlier studies. The final section reflects on contributions, implications, limitations and areas for further research. (shrink)

In a recent review article published in this journal, Hansen and Schaltegger discuss the architecture of sustainability balanced scorecards. They link the architecture of SBSCs to the maturity of the value system of a firm as well as to the proactiveness of a firm’s sustainability strategy. We contend that this argument is flawed and that the architecture of SBSC does not matter since—irrespective of their architecture—SBSCs are ill-suited to achieve substantive corporate contributions to sustainability. First, we assess the SBSC against (...) three fundamental conditions for an effective management of corporate sustainability—the generation of positive outcomes at the societal level, the consideration of complexities and tensions, and the integration of heterogeneous and competing logics—to show that the SBSC is diametrically opposed to the complex and multi-facetted nature of corporate sustainability and ill-suited to achieve transformational change of for-profit organisations towards sustainability. Second, we address the question whether architecture of the SBSC matters and find that it is a fallacy to believe that the architecture of SBSCs can address this fundamental misfit. Rather, our argument reveals that irrespective of its architecture the SBSC is not a suitable tool for achieving strategic change for sustainability beyond incrementalism because it is deeply rooted in the idea of aligning sustainability with established core business routines. We propose that the emerging integrative view on corporate sustainability offers a more promising route for scholars and practitioners who are truly concerned with a deep transformation of private firms towards more sustainability. (shrink)

We predict multistakeholder benefits as a measure of organizational performance from the perspective of important organizational stakeholders. Specifically, we identify the relative importance of theoretical antecedents that affect the different dimensions of stakeholder benefits. Offering the first empirical synthesis of multistakeholder benefits to date, we assess the statistical explanatory power of different theories in the literature, focusing on the extent to which their suggested antecedents of organizational performance may lead to improvements in multiple dimensions of stakeholder benefits. Based on 110 (...) empirical studies since 1990 to date concerning any two of four stakeholder groups (investors, customers, employees, and community /environment), we find no evidence for any single theory to have sufficient explanatory power in predicting benefits concerning all four stakeholder groups. Thus, we cannot reduce different mechanisms leading to multistakeholder benefits to a grand model or theory but need to resort to a multi-theoretical synthesis. Taking stock of the meta-analysis, we suggest future studies should fill three gaps: multiple dimensions within a stakeholder benefit, causal complexity, and inequality of stakeholder benefit creation. (shrink)

Business Ethics, the Environment & Responsibility, EarlyView.

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 establish sustainability management measures if this helps to increase their economic success, others emphasize that companies predominantly react on societal pressure dealing with sustainability 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. (shrink)

Cooperatives are facing the challenge to be competitive in the market, without losing their traditional values of mutuality and democracy. To do that, they need to re-construct open and participative dialogue with their employees and members based on more democratic forms of communication and engagement. From this point of view, the measurement and communication of sustainability aspects may allow a dialogue to be mobilized with shareholders and stakeholders without losing the attention on competitive factors. Based on these premises, the article (...) analyses the experience of a 5-year action research project , carried out within Unicoop Tirreno, an Italian consumers' cooperative, and aimed to implement different tools for sustainability accounting and to embrace a more open dialogue with stakeholders, in particular with employees and members. In this process of change, the tools implemented for sustainability accounting played a key role in supporting the cooperative to reinterpret its own values and in stimulating a new and participative management approach. The results indicate a virtuous circle between the management and measurement of cooperative principles and the management and measurement of sustainability issues. (shrink)

This paper highlights the emergence of different ‘vocabularies’ that describe various values-driven business functions within large organizations and argues for improved horizontal alignment between them. We investigate two established functions that have long-standing organizational histories: Ethics and Compliance and Corporate Social Responsibility. By drawing upon research on organizational alignment, we explain both the need for and the potential benefit of greater alignment between these values-driven functions. We then examine the structural and socio-cultural dimensions of organizational systems through which E&C and (...) CSR horizontal alignment can be coordinated to improve synergies, address tensions, and generate insight to inform future research and practice in the field of Business and Society. The paper concludes with research questions that can inform future scholarly research and a practical model to guide organizations’ efforts towards inter-functional, horizontal alignment of values-driven organizational practice. (shrink)

У статті проаналізовано концепції соціальної відповідальності, поняття, які використовуються литовськими вченими, зміст корпоративної соціальної відповідальності та основних тенденцій, що визначають основні положення соціальної відповідальності відповідно до яких функціонують організацій, мережа глобального договору. У статті аналізуються принципи етики і сталого розвитку як важливих компонентів в рамках корпоративної соціальної відповідальності, висвітлюється використання принципів етики і соціальної відповідальності та їх значення у формуванні репутації компанії, тим самим забезпечуючи відповідальінсть зацікавлених сторін, проведення на користь орагнізцаії будь-якої економічної діяльності.