Sustainability and Organizational Change Management

Stewart Clegg, João de Matos, Stewart Clegg, João de Matos, Stewart Clegg, João Amaro de Matos

• Publisher: Taylor & Francis
• Year: 2017
• eBook ISBN: 9781317373506
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

There is no bigger challenge for organizational change management in the contemporary world than achieving greater sustainability. The challenges associated with sustainable development are multifaceted, including criteria pertaining to the delivery of environmental, social, ethical and economic results. Creating sustainable value requires companies to address issues that relate to pollution and waste, created by industrialization; to respond in a transparent manner to the challenges increasingly raised by the civil society, namely NGOs; to invest in emerging technologies that provide innovative solutions to many of today's environmental problems; and to effectively respond to the challenges of increased poverty and inequality around the globe. On the other hand, to create shareholder value, managers must focus not only on cost reduction and risk control, but also on fostering innovation, enhancing corporate reputation within external stakeholders, and establishing a credible growth path for the future.

The current global financial crisis has left few untouched: unprecedented unemployment figures, public deficits, bankruptcies, redundancies, austerity regimes, and governments bailing out banks all over the globe. World confidence is at a record low. How can management scholars encounter solutions for the dilemmas created by this scenario of change in which they can manage to change sustainably? This book provides some answers to these pressing questions. This book was originally published as a special issue of the Journal of Change Management.

Sustainability and Organizational Change^†

JOÃO AMARO DE MATOS^* & STEWART R. CLEGG^*,**

^*Nova School of Business and Economics, Lisbon, Portugal, ^**Centre for Management and Organization Studies, University of Technology, Sydney, Australia

There is no bigger challenge for organizational change management in the contemporary world than achieving greater sustainability. Challenges associated with sustainable development are multifaceted, including criteria pertaining to the delivery of environmental, social, ethical and economic results. Creating sustainable value requires companies to address issues that relate to pollution and waste, created by industrialization, to respond in a transparent manner to the challenges increasingly raised by civil society, namely NGOs, to invest in emerging technologies that provide innovative solutions to many of today’s environmental problems and to respond effectively to the challenges of increased poverty and inequality around the globe. On the other hand, to create shareholder value, managers must focus not only on cost reduction and risk control but also on fostering innovation, enhancing corporate reputation within external stakeholders and establishing a credible growth path for the future.

The need for sustainable development is the major organizational change that contemporary businesses face. For almost the entire trajectory of industrial organizations its material basis has been dependent on the exploitation of nature with consequent external effects, such as the despoliation of nature. Only in recent times has this major organizational change begun to percolate into business organizations’ strategies and those of governments. That such organizational change is recognized to be both major and transcendent can be seen in the increased attention several different institutions, such as the European Union (EU), now pay to issues of sustainability. The EU developed the strategy for ‘Europe 2020’, based on three pillars: new sources for new growth, reaching out for a sustainable society and going green for a competitive economy.

The EU is seeking to shape major organizational changes towards sustainability in difficult, dangerous and interesting times. The world is coming out of its worst financial and economic crisis since the 1920s. The crisis has left few untouched: unprecedented unemployment figures, public deficits, bankruptcies, redundancies and governments bailing out banks all over the globe. World confidence is at a record low. How can management scholars contribute and analyse solutions for the dilemmas of managing to change sustainably?

In this call for papers, we invited researchers to consider the intersection of the demands both to create shareholder value and ensure sustainable development and to present their research work on this topic. We received contributions from many different management areas, from marketing to finance, from human resources to entrepreneurship. All papers were double blind reviewed and in every case subject to revision and resubmission following review.

From the papers submitted, we eventually chose five for publication. The Special Issue leads in with a contribution from Cambridge strategist and industrial economist, Christos Pitelis, on ‘The Public-Private Nexus in Organizational Economics and the Challenge of Sustainable Value Creation.’ In this paper, he explores the scope for cross-fertilization between extant alternative organizational economics perspectives on the private-public nexus. Organizational economics has been one of the more laggard areas of analysis in terms of its interest in issues of sustainability. It is because organizational economics as a perspective has been slow to develop a focus on sustainable organizational change that this paper is a particularly useful contribution, in which the comparative advantages of apparently competing perspectives are elaborated and the opportunities for synthesis explored, particularly in their implications for public–private links that foster sustainable system-wide value creation. It is precisely these kinds of links that will be necessary to create meta-level changes that the global agenda for sustainability will require. To do so, the limitations of organizational economics as a whole need to be transcended through leveraging a multi- and cross-disciplinary perspective.

The second contribution comes from members of the Faculty of Business and Economics of The Technische Universitaet, Dresden. The contributors are Edeltraud Guenther, Anne-Karen Hueske, Kristin Stechemesser, and Lioba Buscher. These authors present a paper on ‘The “Why Not”-Perspective of Green Purchasing: A Multilevel Case Study Analysis’. A vital part of the change programmes that make organizations more sustainable are the decisions that they make when purchasing. It is all too easy to externalize a lack of sustainability into the supply chain while representing the organization itself as highly sustainable. The focal organization can claim that it has changed by becoming more sustainable in its practices, but if it does so by externalizing unsustainable elements of organizational behaviour into the supply chain there may well be no net benefit. The result may be ‘green-washing’ an appearance of change rather than the achievement of real organizational change.

The paper begins by noting that organizations that seek to change by becoming greener need not only a normative and instrumental ‘how to do it’ perspective but also a perspective on ‘why not’, focusing on factors that may hamper, decelerate or even block green purchasing. The paper presents the results of a case study that follows Eisenhardt’s well-known design for case study research. The analysis is of the procurement strategies of six European municipal organizations that are attempting to go green. In the first stage of the project, the authors analysed barriers to green procurement in these six municipalities across five European countries; in the second stage, they combined those findings with the literature on multilevel research, presenting a framework based on a multilevel categorization. The authors developed hypotheses by analysing both the organizational and the individual level in one of the biggest procurement agencies in Europe.

Due to its critical gatekeeper position in organizations, the focus was on the procurement process. If procurement practices do change organizationally then whatever changes may occur towards more sustainable practices within the focal organizations will be undercut by behaviour elsewhere in the supply chain. The research question that they address is ‘Why do organizations not implement green purchasing?’ Researching organizational change through analysis of non-decision-making has a strong lineage in social science (see, e.g. Crenson, 1971). The authors answer the question through a multilevel analysis examining the relationships that lead to barriers for green purchasing as these are constituted between the individual, group, organizational level and the external environment. Complementing the ‘how to’ perspective with taking the ‘why not perspective’ the authors identify the challenges facing managers who foster organizational change programmes for sustainability.

André Martinuzzi and Barbara Krumay present ‘The Good, the Bad, and the Successful – How CSR Leads to Competitive Advantage and Organizational Transformation.’ In this paper they link the adoption of corporate social responsibility (CSR) as a major change to four key areas of organizational change management. The focus is on changes in project management, quality management and strategic management, as well as in organizational learning and transformation.

They develop a stage model for CSR implementation. This stage model represents a referential framework that supports the analysis of the materiality of CSR, the potential of CSR to create competitive advantage, and the impacts of CSR on business and society. A comprehensive literature review of material on CSR provides the frame for investigation of specific business operations as well as a series of case studies in the textile sector and the chemical industry. They suggest that companies try to cope with new societal demands by integrating them into well-established business operations: they change but do so buy integration and renovation rather than revolutionary action. Often they will choose to pursue change strategies in an area perceived as ‘good’ by the public, making use of project management know-how to do so. In these cases, this is organizational change in the ‘shop window’ while behind the scenes things stay pretty much the same because these ‘good’ projects are not necessarily linked to the companies’ core activities. Many companies also implement CSR through quality management to avoid ‘bad things’. Here organizational change is focused on quality and the elimination of waste. Although quality management systems can and do have sustainability implications by reducing waste and thus increasing efficiency the processes that deliver them are often seen as annoying obligations, with a low stimulus for innovation resulting. The changes that occur, in other words, make for more economical presentation of the shop window, but do not represent widespread organizational change.

It is only at the level of strategic CSR that larger scale organizational change for sustainability occurs. Strategic CSR perceives opportunities for innovation through sustainability, despite well-established structures, processes and thought patterns that counter innovative thinking and acting. Transformational CSR tries to overcome these constraints by linking CSR with organizational learning that can foster system-wide change. There are real practitioner implications for change management in this work. Companies can use it to assess the stage they have reached in managing organizational changes in CSR implementation, strive for higher impact, boost their competitiveness and be seen to change towards greater CSR maturity.

In a paper that focuses on East Asia and one of its major agribusinesses, palm oil, authored by Renato Orsato, Stewart Clegg and Horacio Falcão, the politics of organizational change in terms of sustainability is tackled head on. The paper addresses ‘The Political Ecology of Palm Oil Production: Eco-activism and Multinationals in Malaysia and Indonesia.’ The study is based on extensive fieldwork in the island of Borneo and offers an analysis of the different levels in the global value chain of the palm oil industry, including local organizations, the industry structure overall, as well as the local governments of Malaysia and Indonesia.

The palm oil industry produces what is now the world’s leading crop export. Palm oil production is an area that is ecologically and socially destructive. It also lies at the end of a value chain that stretches into some of the largest and most successful multinational organizations in the Western world, many of which make claims to being sustainable in their marketing. The production of palm oil is at the base of the supply chain that reaches into our bathrooms and our kitchens.

Palm oil production is a highly contested terrain. It is a plantation crop, mass-produced, in areas of the tropics that have been stripped of biodiversity and turned over to plantation style monoculture. Such strategies for economic development have many critics of the organizational changes that these strategies produce on the ecologies, economies and societies in question. These criticisms have surfaced organizationally in disputes that have been aired in and around the Roundtable on Sustainable Palm Oil, a type of voluntary environmental initiative, or green club, as they have also been called.

The use of the political ecology framework for the analysis of the palm oil industry contributes not only to the development of a more institutional power perspective on organizational change management but also provides solid ground for analysis of green clubs, which are an increasingly important type of organization used by managers globally to manage sustainability, and impressions of it, as a key aspect of organizational change.

The Special Issue concludes with another paper that focuses on the politics of change and which, in so doing, revisits the most debated area in change management – resistance to it. Miguel Pinha e Cuhna, Stewart Clegg, Armenio Rego, and Joana Story offer an analysis that charts the shift ‘From the Physics of Change to Realpolitik: Improvisational Relations of Power and Resistance.’

The paper addresses one of the key staples of the change management field: resistance to change. Dominant tendencies in the managerialist literature, ever since Coch and French’s (1948) famous article, have tended to see resistance to change as something irrational. The authors problematize mechanistic action–reaction types of analyses, in which change and resistance to change are counter-posed. In doing so they uncover some fragility in debates that differentiate between the agents of change and resisters of change. The paper addresses the roles attached to the participants in change processes. Beyond the traditional separation between agents and recipients of change, the paper suggests the potential of minimal structures and improvisations as means for achieving change. Improvisation, they suggest, creates a space in which established orders of organizing are challenged and alternative orders are allowed to flourish. Hence, if organizational change is to occur, it is more likely to be adopted and less likely to be resisted where it is not seen as something imposed but instead is emergent. The authors suggest that, paradoxically, directed structural interventions can produce organizational contexts more amenable to fostering emergent change. These systematic change management programmes should seek to minimize structure, shift roles and combine paradoxical requirements, helping not only to diffuse resistance to change but also serving to recreate the nature of change in organizations. In this way, to use a previous metaphor, change that goes beyond the shop window is more likely to occur.

Overall, these papers provide informed and constructive insight into an area of debate that is often occluded in corporate spin and critical controversy. Greenwash aplenty accompanies many practices of managing organizational change that claim to be moving the organization towards a greener and more sustainable future, as authors such as Banerjee (2009) has argued. If there is to be real progress made in managing organizations on this planet then tackling issues of sustainability effectively must be at the forefront of concerns for advancing both the theory and practice of change.

References

Banerjee, B. S. (2009). Corporate social responsibility: The good, the bad and the ugly. Critical Sociology, 34(1), 51–79.

Coch, L., & French, J. R. P., Jr. (1948). Overcoming resistance to change. Human Relations, 1(4), 512–532.

Crenson, M. (1971). The un-politics of air pollution: A study of non-decisionmaking in the cities. Baltimore, MD: Johns Hopkins University Press.

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^†The initial call for papers for a Special Issue of the Journal of Change Management was announced in conjunction with the 1st CEMS Annual Event Research Symposium, which was held in Lisbon, hosted by Nova School of Business and Economics, on 8 December 2011. The theme of the Special Issue was devoted to Sustainability as a Real Opportunity: How Can Management Foster What Politics Cannot?

The Public−Private Nexus in Organizational Economics and the Challenge of Sustainable Value Creation

CHRISTOS N. PITELIS

Judge Business School and Queens’ College, University of Cambridge, UK

ABSTRACT This article explores the scope for cross-fertilization between extant alternative organizational economics perspectives on the private−public nexus. It is suggested that there is substantial scope, which has gone underexplored. The comparative advantages are highlighted, and a synthesis and extension of apparently competing perspectives is provided. Furthermore, the article explores the implications for public−private links that foster sustainable system-wide value creation and concludes by pinpointing limitations of organizational economics as a whole and the need to leverage a multi- and cross-disciplinary perspective.

Introduction

In this paper the substantive aim is to address public-private-polity links that foster sustainable system-wide efficiency-value creation. Conceptually, the paper explores the scope for cross-fertilization between alternative organizational economics perspectives on the public-private-polity nexus. While organizational economics is one approach only, it has been influential in the analysis of both private and public organization. Yet, recent conceptual advances in the analysis of business organization and strategy have not been leveraged for the analysis of public organization. We aim to explore this issue and in so doing, we attempt an integration of alternative organizational economics perspectives on business and public organization, and provide a critical synthesis and extension on their interrelationship. We then explore their implications for the type of public−private links that promote sustainable system-wide efficiency-value creation. Finally, we highlight limitations of econ...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Citation Information
• Notes on Contributors
• 1. Sustainability and Organizational Change
• 2. The Public–Private Nexus in Organizational Economics and the Challenge of Sustainable Value Creation
• 3. The ‘Why Not’–Perspective of Green Purchasing: A Multilevel Case Study Analysis
• 4. The Good, the Bad, and the Successful – How Corporate Social Responsibility Leads to Competitive Advantage and Organizational Transformation
• 5. The Political Ecology of Palm Oil Production
• 6. From the Physics of Change to Realpolitik: Improvisational Relations of Power and Resistance
• 7. Advancing Sustainability Through Change and Innovation: A Co-evolutionary Perspective
• 8. A Proposed Model for Evaluating the Sustainability of Continuous Change Programmes
• Index