Why Firms Delay Reaching True Sustainability

Abstract

This paper explores a discrepancy between what the literature says about sustainability and how sustainability is actually practiced. Our analysis reveals that we are in a transition era in which firms incrementally offset – rather than eliminate – their negative impacts on the environment and society. We also argue that external stakeholders have yet to create the conditions that would compel firms to become truly sustainable. We further find that a firm's response to external pressure to become truly sustainable greatly depends on its capabilities. For large firms, the decision to become truly sustainable is driven by their ability to manage external stakeholders’ expectations, with the most innovative of large firms remaining unsustainable even in the long term. In contrast, small innovative firms guide their decision‐making based on their internal readiness to change and therefore will be the first to reach true sustainability. Finally, and regardless of size, firms that lack an innovation capability are unlikely to become truly sustainable; they will struggle to survive the transition era.

Managing Sustainable Hybrid Organisations: A Case Study in the Agricultural Sector

“…The processes of transition towards a sustainability-driven hybrid business model seem more likely in the case of small firms, which face lower stakeholder pressure [70]. As Shevchenko et al [71] (p. 925] suggest, "for small innovative firms, the decision to engage in such a change largely depends on their readiness to change, an internal factor, and not their ability to offset stakeholder pressure"; this readiness to change can be largely conditioned, as in our study, by the role of entrepreneurial leaders driven by their sustainability principles and personal values [38]. However, if these sustainable hybrid business models are not adopted widely by bigger companies, serious doubts can be raised about their true transformative impact [24].…”

Using Country Sustainability Risk to Inform Sustainable Supply Chain Management: A Design Science Study

“…New technologies and software tools can support this effort, responding to the increased need for efficient SCSR assessment (Shevchenko et al. ; Wieland et al. ).…”

The Power Paradox: Implicit and Explicit Power Motives, and the Importance Attached to Prosocial Organizational Goals in SMEs

“…In addition, the specificities of small businesses have been stressed in sustainable entrepreneurship studies. In small businesses, key decision-makers directly shape the prosocial agenda of their firm [20]. Indeed, by sharing their values and transcending them throughout the firm, small business key decision-makers can develop a more authentic and effective approach to CSR [30], allowing small businesses to provide an answer to growing institutional pressures for deliberate CSR actions [18].…”