Organizational Change for Corporate Sustainability

Suzanne Benn, Melissa Edwards, Tim Williams

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781317214496
• Edition: 4
• Topic: Business
• Subtopic: Business General
• Index: Business

Since this classic book was first published in 2003, sustainability has increasingly been accepted as standard business practice for leading corporations, while the science itself has revealed how human activity has become the dominant force influencing irreversible changes in the planetary systems.

The fourth edition of this trailblazing book on corporate sustainability provides new insights into how organizations can transition towards a more responsible way of conducting their business. It charts new thinking on value creation, business models and organizational purpose as the basis of a broader-based transition to a sustainable society. The sustainability phase model has been substantially revised to incorporate emergent approaches in sustainable supply chain management, strategic sustainability, sustainability-oriented innovation and new business models. There is a companion website that contains a range of materials to support learning.

This new edition with the authors' unified approach to sustainable business reshapes its plan of action to bring about corporate change by drawing in new management theory and practice on strategy-making and leadership, making it core reading for students and researchers of sustainability and business, organizational change and corporate social responsibility.

Part I
Towards third wave corporations

1
Setting the agenda for corporate sustainability

• Why corporate sustainability?
• Redesigning the corporation
• Phase models of sustainability
• Change agent roles and the phase model
• Appendix 1.1: phases in the development of corporate sustainability

Why corporate sustainability?

Since the first edition of this book was published in 2003, corporate sustainability has increasingly become integral to competitive advantage and is a contributing factor in influencing investment decisions.¹ In 2017, we are confronted by an extraordinary transition into the Anthropocene Era and recognition that human activity has breached several planetary boundaries. Never before in the history of the world has the viability of much of the life on this planet been under threat from humanity; never before have so many of the world’s people experienced such material wealth and so many others lived in abject poverty; never before have so many had such interesting and fulfilling work and so many others such degrading work or no work at all. If we are to live healthy, fulfilling lives on this planet in the future, we must find new, life-affirming values and forge new patterns of living and working together. This new edition incorporates what we see as the most influential of these new understandings bringing about change and the increasing urgency to do so in an Anthropocene Era. We also discuss sustainability transitions as a means of moving away from traditional business practices towards the ‘ideal’ sustaining organization and innovative new business forms that are challenging the status quo.

Our current transition into the Anthropocene Era has been brought about by multiple causes but one important contributing factor has been the rise of the corporation. Corporations are the fundamental cells of modern economic life, and their phenomenal success in transforming the earth’s resources into wealth has shaped the physical and social world in which we live. The powerful dynamism of modern organizations has transformed nature and society and therefore must bear responsibility for sustaining the biosphere and people’s livelihoods. The dominant model of the corporation as a profit-maximizing, externalizing machine needs to be modified to one which is a regenerative force that contributes to the continuing health of the planet, the survival of humans and other species, the development of a just and humane society, and the creation of work that brings dignity and self-fulfilment to those undertaking it.

In this edition, we continue to highlight how ‘business as usual’ is not sustainable and, unless significantly reshaped, will continue to undermine the sustainability of society and the planet. Corporations have contributed to the problems and they must therefore be part of the solution. Fortunately, their transformation is already under way, driven in part by the changing demands of modern society and also by the leadership of far-sighted and responsible people within and outside corporations who see the need for change. However, for the transformation to be successful, many more change agents are needed and to transition to a sustainable economy, viable ‘business as unusual’, sustainable business models must emerge. Some of the most important changes in history have been created by people of vision and imagination who were not content simply to react to events but felt compelled to envisage the possibility of a different world and to initiate action to bring the new reality into being. They were often regarded as deluded or heretical at the time but later were celebrated for their foresight and courage.² Today senior executives from large and profitable corporations – Phillips, DuPont, Honda, GE, Marks and Spencer, Nike, Siemens, Unilever – are centralizing sustainability as a core purpose of their business. In their minds, there is no doubt that we face serious issues such as climate change, resource scarcity, vulnerable ecosystems and poverty.

This depletion of the services provided by nature to humankind requires a shift in how corporations think about and deal with sustainability. There is a compelling business case, an ethical responsibility and scientific discoveries indicating a more urgent compulsion to respond to sustainability issues. Some are responding to pressure from external stakeholders such as industry associations, government agencies or, increasingly, from companies along their supply chains. Others are assenting to demands from internal stakeholders concerned variously with ethical issues of production or supply, or the savings to be achieved from reducing waste and an efficiency approach to resource use.

Importantly, we also note in this new edition of the book that many smaller companies and entrepreneurs are driving and shaping the sustainability agenda as sustainability-oriented innovation becomes essential. And a supportive institutional infrastructure is supporting the emergence of sustaining organizations while new business models such as the Circular and Sharing Economies are challenging the status quo. This book is written to assist change agents to drive the necessary changes faster and farther while there is time. We discuss key issues in the debate around corporate sustainability, advocating for proactive business responses. The current crisis is too urgent to wait for consensus: we need to start out on the path towards sustainability by generating new business models that enable flourishing social relationships and restore the natural world.

Corporations are not the enemy; however, many must significantly change the way they do business. New social and ecological realities require new responses. The crises faced by humanity can be resolved only by the use of concerted corporate action. Corporations are instruments of social purpose, formed within society to accomplish useful social objectives. If they do this, they have a right to a continued existence, a license to use resources and a responsibility to produce socially beneficial products and services. However, if they debase human life, act with contempt for the community of which they are part, plunder and pollute the planet and produce ‘bads’ as well as ‘goods’, they forfeit their right to exist. They become unsustainable because they are unsustaining. The single-minded pursuit of short-term profitability for shareholders or owners does not justify a ‘couldn’t care less’ approach to people and the planet. The prevailing economic value of unlimited and unending growth is the ideology of the cancer cell. Living within the natural limits of the earth’s resources and exercising responsible resource stewardship is a universal requirement for all of us, individually and collectively.

As with the previous editions, this book provides a roadmap for business organizations moving towards sustainability. We continue the development of our framework in the form of a phase model showing the transition between different organizational approaches to sustainability. We define key steps along the way and indicate how to make an incremental transition from step to step or, in some cases, a transformative leap and transition between waves to achieve the aspired sustaining corporation. As we write this in 2017, we note the major shift since the first edition published in 2003, with many companies moving further along the phase model towards higher levels of sustainability.

What was relatively unusual in 2003, is now expected of leading companies as they attempt to address sustainability challenges such as climate change and human rights issues. This is, therefore, a guidebook for corporate change agents – executives, managers and members of the workforce, external consultants, community activists – who are dissatisfied with the status quo in organizational life and who want to expedite transition to this new organizational world where individuals are cherished, the community is supported, and the natural environment is nourished as a matter of course as the organization goes about its core business. Nothing less than this is worthy of our humanity, our intelligence and our ingenuity.

The distinctive contribution of this book is that it concentrates on how to implement the changes that make organizations more sustainable themselves and also more sustaining of the environment and society. So, this book is a practical and informed tool for creating sustainable corporations that are part of the solution to keeping a world fit to live in. It is an invitation to you to be part of the future solution – a responsible agent of creative change.

For those who are prepared to act with purpose and direction in reshaping the organizational world, this is perhaps the most exciting period in human history. Each generation faces its challenges. But this and the next two or three generations will be decisive in determining whether more humans than have ever lived on this planet can create the collaborative institutional forms needed for our survival and the survival of those other precious life forms who share this planet with us. And beyond survival, to create innovative institutional forms to provide us all, and those who come after us, with a quality of economic, social and cultural life that nurtures and develops our human capabilities.

That is the challenge we deal with in this book. In meeting this challenge, we must redesign many of our organizations and fundamentally rethink the core value proposition of business models. So, we begin here with a short discussion of the evolution of the institution which is the focus of our book: the corporation. Because corporations share so many common features and are so pervasive, we can easily assume that the corporation is an immutable social form. But it is not – it has already undergone substantial redefinitions over time. The question we address here is how can we redesign the corporation for human and ecological sustainability?

Redesigning the corporation

Over the years, corporate scandals such as James Hardie, Enron and Anvil Mining have been compounded by the recognized complicity of corporations in major environmental disasters, such as BP with the Deepwater Horizon oil rig spill in 2010 where workers lost their lives and billions of dollars in damages awarded against BP reflected the huge impact on human welfare as well as on the natural environment. The tragic effect of the earthquake and subsequent tsunami on the Fukushima nuclear plant in Japan in 2011 had been heralded by numerous reports identifying poor safety records at the plant and came less than four years after a magnitude 6.8 quake shut the world’s biggest atomic plant, also run by Tokyo Electric Power Co. Stanford researchers have calculated that the latter incident may eventually cause anywhere from 15 to 1,300 deaths and from 24 to 2,500 cases of cancer, mostly in Japan.³ Such incidents highlighted the extent to which powerful corporate entities can write their own rules for action, regardless of the consequences for others. As a result, there is increased public pressure for corporations to be made more accountable. The difficulties associated with holding organizations accountable for compliance with legal requirements and legitimate community expectations will be discussed in Chapter 4.

The rise of the multinational corporation and the internationalization of financial markets has taken the power of the modern corporation to the point where it can represent a formidable challenge to the authority of the nation-state, let alone small groups of citizens. Global corporations operate across political boundaries and so escape overall surveillance by particular nation-states. The wealth of the largest global companies exceeds that of most nations and this ha...