A dynamic sustainability Balanced Scorecard methodology as a navigator for exploring the dynamics and complexity of corporate sustainability strategy

Abstract

The majority of recent empirical research regarding corporate environmental literature seeks to identify the potential relationships between environmental management practices and the financial performance of the firms. In addition, another major part of the research concerns the effect of corporate social responsibility practices on corporate financial performance. The majority of these studies focus on the effect of either social or environmental aspects on firms' economic performance through various statistical techniques in an ex post and static base (at the end of year -annually). To contribute to this literature, this article aims at developing a dynamic sustainability Balance Scorecard methodology to investigate the evolutionary trends of the relationships among environmental, social, and economic performance of firms. The main contribution is the development of an integrated mental model in order to improve managers' and scholars' comprehension of corporate sustainability performance. The proposed methodology is mainly based on the corporate environmental and social management literature, system thinking, system dynamics, and Stella software. Some computational examples are also presented based on three scenarios.

Corporate Sustainability Strategies and Decision Support Methods: A Bibliometric Analysis

“…Existing researchers [1][2][3] have noticed that sustainability is becoming an increasing issue for decision-makers and scholars worldwide because it is concerned with the sustainable development of an organization in terms of environmental, economic and social views. In organizations, managers formulate and implement sustainability strategies in order to respond to environmental and social issues [1].…”

Assessing the Effects of Climate Change Regulations on the Business Community: A System Dynamic Approach

“…Additionally, the time dimension problem complicates the management of business sustainability. Variables that describe critical aspects of market, society and the natural environment act in different time intervals (Tsalis et al , ). Therefore, it is necessary to overcome the restrictions of classical science, which examines sustainability as a project that ‘has an end state’ through a linear and mechanistic thinking (Hjorth and Bagheri, ).…”

“…feedback loops), and thus assists managers in designing essential strategies to guarantee a business's stability (Vlachos et al , ). Interestingly, the CLD is a powerful communication tool whereby individuals are able to understand the behavior of the system (Sterman, ; Tsalis et al , ).…”

Occupational health and safety within corporate social responsibility context: a balanced scorecard dynamic decision making model

“…Consequently, a critical question is how these factors affect and are affected by CSR-OHS topics? In the case of CSR, Tsalis et al (2015) suggest the customer perspective should be expanded by incorporating many other stakeholder groups since the relative literature recommends shifting from one group (e.g., shareholders) to many groups (e.g., customers, employees, local community) (Steurer et al, 2005;Munilla and Miles, 2005). For the purpose of the model proposed in this paper, this perspective includes two main groups: customers and employees.…”

“…Despite the assurances of the architects of the balanced scorecard regarding its capability to link lagging and leading indicators (Kaplan and Norton, 1992), many scholars support that long-run decision making and feedback loops between lagging and leading indicators will be better achieved by dynamic advance of indicators through a system dynamic software (Akkermans and van Oorschot, 2005;Nielsen and Nielsen, 2008;Barnabè, 2011). Similarly, some scholars focus on system dynamic balanced scorecard in the field of corporate sustainability, CSR and OHS (Liu et al, 2015;Tsalis et al, 2015;Nikolaou et al, 2015). Figure 3 illustrates a system dynamic balanced scorecard for CSR-OHS agenda.…”