Sustainable Development in Management Thinking: Past
Contributions, Present Challenges and Future Directions
Desarrollo Sostenible: Contribuciones
Pasadas, Desafíos Presentes y Futuros
Arturo, Briseño-García[1], Cristabell, Azuela-Flores[2] y
Ana Luz, Zorrilla-delCastillo[3]
Resumen
El objetivo de este artículo
es presentar los principales argumentos en torno al concepto de desarrollo
sostenible empresarial y describir la influencia que éste ha tenido en las
empresas y sus operaciones. Se explica la literatura relevante sobre el
desarrollo sostenible, sus desafíos actuales y algunas de las direcciones
futuras. La argumentación sugiere que antes de desarrollar campañas verdes en
los negocios, todavía hay una serie de cuestiones sin resolver en torno al
concepto de desarrollo sostenible. Así mismo, existe una necesidad particular de comprender la motivación
real de las empresas para la sostenibilidad. Por ejemplo, a nivel de la industria, el
comportamiento de una empresa es un tema complejo de controlar, ya sea a través
de parámetros legales preestablecidos o mediante un enfoque voluntario. El
interés en las prácticas sostenibles ha creado implicaciones importantes para
los gerentes de casi todas las industrias que buscan comprender mejor los
argumentos en torno al concepto de desarrollo sostenible y el compromiso que
las empresas deben asumir para abordar estos desafíos ambientales. Este artículo contribuye a
resaltar los desafíos actuales en torno al concepto de desarrollo sostenible describiendo algunos de los
desafíos futuros que enfrentará para brindar una mejor aplicación para las
empresas.
Palabras clave: Desarrollo sostenible, visión basada en los recursos naturales, gestión de la cadena de suministro verde, autorregulación de la industria.
Abstract
The
aim of this paper is to present the main arguments around the concept of
sustainable development as a business perspective and the influence that this
concept has brought to firms and their operations. It explains relevant
literature on sustainable development describing its foundations, their current
challenges and some of the future directions along which the concept can
achieve its intended purpose. The arguments suggest that before calling for a
massive green campaign in business, there are unresolved issues around the
concept of sustainable development, there is a particular need to understand
the real motivation of firms for sustainable. For example, at the industry
level, a firm’s behavior is a complex issue to control – either through
pre-established legal parameters or through a voluntary approach. The interest
in sustainable practices has created important implications for managers in
almost every industry looking to better understand the arguments around the
concept of sustainable development and the commitment that firms should make to
address these environmental challenges. Research centered only on economic
benefits or only on environmental issues can lead to an incomplete vision of
the opportunities for firms that both approaches can generate if they are
correctly combined.
Keywords:
Sustainable Development,
Natural Resource-Based View, Green Supply Chain Management, Industry Self Regulation
Códigos JEL: M1, L1, L21
Introduction
One
of the primary challenges that the current economic system encounters is the negative
impact of business activities on the environment. This impact is primarily observed
because businesses are increasingly perceived as being the main cause of social
and environmental problems (Gupta, 1995; Kolk, 2015; Porter & Kramer, 2011;
Sodhi, 2015). Society has raised questions in terms of what firms are doing to
manage their business operations in a way that is sustainable over the long
term (Gladwin, Kennelly, & Krause, 1995; Hoffman, 2000; Montiel, 2008).
This interest in sustainable practices has created important implications for
managers in almost every industry looking to better understand the arguments around
the concept of sustainable development and the commitment that firms should
make to address these environmental challenges.
However, many unresolved issues around the concept of
sustainable development must be developed before calling for a massive green
campaign in business. For example, at the industry level, a firm’s behavior is
a complex issue to control – either through pre-established legal parameters
and specific sanctions or through a voluntary approach. At the business level,
contextual characteristics of firms can result on the inability to transfer
best practices from one business to another. More importantly, there is a
particular need to understand the real motivation of firms for sustainable
practices. Research centered only on economic benefits or only on environmental
issues can lead to an incomplete vision of the opportunities for firms that
both approaches can generate if they are correctly combined.
In recent decades, there has been a discussion on the role
of the current economic system and the adoption of a more humanistic approach
to the challenges for sustainable development. For example, Pirson
and Lawrence (2009) argue that the classic economic model has been demonstrated
to be incomplete in delivering long-term results, especially in
regard to social and environmental problems. These researchers’
assumption is based on the argument that this model mainly considers maximizing
utility and goal-oriented objectives to undertake business activities. As a
result, Pirson and Lawrence propose that a renewed
economic paradigm must emerge that incorporates humanistic objectives, such as
those oriented toward the creation of caring relationships with other
individuals and to comprehending the natural world that is contextual to any
economic development.
Similarly, Porter and Kramer, (2011) have also suggested
that a change in the current economic system is needed. These researchers
consider that current capitalism fails to offer more extensive benefits for
both businesses and society. Furthermore, the researchers stressed the
importance of capitalism as a platform for generating wealth to satisfy human
needs. A shared value approach, as they suggest, can be a response to the
narrow view of capitalism, serving as a new source of innovation that embraces
not only profit but also social and environmental issues, thereby leading to
sustainable development.
Regardless of whether the answer lies in completely
changing the current economic system or using it to create economic, social and environmental benefits, the concept of
sustainable development is an attempt to improve a firm’s operations by
creating awareness on the impact that business activities have on the
environment and producing competitive advantages for firms that invest in green
operations. Accordingly, the aim of this paper is to present some of the main
arguments around sustainable development on two different levels, i.e.,
business and industry, and the impact that this concept has brought to firms
and their operations.
The first section of this paper presents important concepts
on sustainable development and the impact that the concept has had on theory
and practice. The second section focuses on the debate concerning the correct
implementation of sustainable practices in business both at the industry and
business level. Finally, the third section presents suggestions for future
research in which the concept can evolve in management thinking.
Concept of Sustainable
Development: Past contributions
Even though the management literature contains several
definitions for the concept of sustainable development (Sauvé, Bernard, &
Sloan, 2016) for the purposes of this paper, we will follow the definition by
the World Commission on Economic Development (WCED). This definition states
that it is “development that meets the needs of the present without
compromising the ability of the future generations to meet their own needs”
(WCED, 1987 p.43). This concept embraces the general idea that economic
advancement should not be related to short-term objectives that endanger
resources over the long term. Although this idea is helpful, it does not
provide answers as to the areas in which economic development should be
focused. To this end, Gladwing et al, (1995) suggest
that sustainable development has five main components, namely, (a)
inclusiveness, (b) connectivity, (c) equity, (d) prudence, and (e) security
.
First, inclusiveness is related to a broader vision of the
world, including in both humans and nature. This vision presents a larger view of
how ecological efficiency and social sufficiency can be achieved. The second
component, connectivity, relates to the notion of interconnection in attending
the world’s problems. Nations are obliged to set both social and economic goals
concerning education, employment, health and
redistribution of resources to attain sustainable development. Central to
equity, the third component, is the concept of fair distribution of resources
and property rights. However, the problem with this concept lies in determining
what exactly “fair” means, leaving a subjective term open to debate. The fourth
component, prudence, expresses the idea of an economic, social
and environmental conscience where all human activities must take into account
the impact generated in the short and long term. Finally, security refers to a
wide spectrum of activities, ranging from securing resources for future
generations to human rights and democracy.
In terms of managerial impact, the concept of sustainable
development presents a challenge for present and future managers due to an
incomplete capacity of firms to associate economic development with natural resources
(Gladwing, et al. 1995; Pirson
& Lawrence, 2009). Consequently, different approaches from both academia
and businesses have emerged that seek to bring these two elements together. For
example, Gladwing et al. (1995) propose that is
through sustainable development that human progress can be achieved in the long
term by the alignment of the classical economic model (technocentric) and the
environment (ecocentric). According to Galadwing et al., the idea of progress through free
markets, efficiency, and resource exploitation, which is associated with a techonocentric perspective, is more embedded in current
business thinking. Conversely, the ecocentric view
has been visualized as an opposite perspective, since it considers organic
growth, redistribution, and ecological integrity as the main drivers of human
behavior. Gladwing et al conclude presenting the sustaincentric approach as an emerging force to overcome
current approaches and offers a more holistic view to business that could possibly
lead firms into behavior where natural resources are considered.
Alternatively, a growing approach in the business
literature to address the application of the concept of sustainable development
has been the incorporation of environmental activities into business strategy
(Hart, 1995; Hoffman, 2000; Kolk 2015; Porter & Kramer, 2011, Husted &
Allen, 2009). The main argument in this approach is that environmental
objectives can be considered like any other economic objective in firms.
However, Hoffman (2000) argues that for a true application of the concept, a
business strategic approach at the individual level alone will not suffice. This
researcher suggests that real change is needed in the entire market system if
full integration is to be expected from firms. Hoffman states that the concept
of sustainable development currently used by firms is incapable of achieving
full integration of environmental concerns into business strategic thinking,
which he suggests is the result of three factors: (a) variations in the
sustainability concept that generates ambiguity and causes firms to look into
existing business practices, adapting them in order to react to social demands;
(b) sustainable development has permeated the business jargon although has not
been completely adopted in business practice;
and (c) at its core, sustainable development requires a deeper
commitment that goes beyond the limits of the existing market economy,
especially in terms of defining its priorities.
Based specially on the third factor, it can be concluded
that one reason affecting an apparent real application of sustainable
development at the strategic level is related to the market orientation to
profits. However, this is, ironically, this same orientation that serves as a driver
for some sustainability practices (Bansal & Clelland, 2004; Hart, 1995;
Hoffman, 2000). For example, in their study of firms listed on the stock market
and its performance in environmental activities, Bansal and Clelland (2004)
found that firms earn environmental legitimacy when their environmental
performance meets stakeholders’ expectations around this subject. The concept
of environmental legitimacy is defined as “a generalized perception or
assumption that a firm´s corporate environmental performance is desirable
proper or appropriate” (Bansal & Clelland, 2004, p. 94). The authors
conclude that this legitimacy is important for investors when public
information is available to make investment decisions. It is also important for
public firms because environmental legitimacy leads to better financial
performance in long-term share prices, particularly diminishing specific risk to
the business resulting from the variability of long-term share prices.
The arguments in this section present some of the ideas on
the increasing importance of the concept of sustainable development in current
management thinking. These ideas explain the existence of a continuous debate
around this subject and the influence it has had on managers regardless of
their industry. In the next section, I will present some of the major impacts
that this concept has had on management theory and practice.
Sustainable Development and Its Impact on Businesses
Operations
The importance of defining what sustainable development
entails, understanding how it can be placed into practice more effectively, and
analyzing the context in which it operates is important for management theory in order to conceptualize its complexity, unresolved issues
and future direction as a way of promoting a better application of the concept.
Therefore, in this section, I present some of the influences that the concept
has generated on management theory and practice.
It is important to first establish the impact that
sustainability has had on management theory. One of the outcomes of this
influence has been the incorporation of natural conditions in the definition of
business resources and the impact that these can have in business activities (De
Stefano, Montes-Sancho & Busch, 2016; Hart, 1995; Yunus & Michalisin, 2016). In his work “A Natural Resourced Base
View of the Firm,” Hart (1995) suggests that both, internal capabilities
and external environmental factors are crucial to achieving a sustained
competitive advantage. He distinguishes two important concepts in strategy. The
first is that competitive advantage is achieved when it comes from the
alignment of internal capabilities and external context (Andrews, 1971; Mårtensson,
& Westerberg, 2016; Peteraf, 1993); the second is
that these capabilities should present certain characteristics, such as a
difficulty in recreation by others, in order to
develop a sustainable competitive advantage (Barney, 1991; Wernerfelt 1984).
The latter approach is known as the Resourced Based View of
the Firm (RBV), which has been widely discussed in management over the last
three decades. The basic argument in the RBV is that internal resources are
sources of competitive advantage. This resources that firms possess are
prerequisites to exploiting external/market opportunities, serving as a
platform for business operations. However, Hart (1995) detects an important
omission in this theory in terms of the natural environment. This is derived
from a limited view of the external context, which has traditionally focused on
political, economic, social, and technological factors, excluding the natural
environment as a source of competitive advantage. As a result, Hart argues that
strategic decisions around a firm’s capabilities are shaped by constraints but
also by opportunities presented in the natural environment.
The emergence of the NRBV of the firm presents an
opportunity to align business operations and the capabilities intrinsic to them
with the natural environment. This also creates important opportunities for the
concept of sustainable development. According to the NRBV, there are three
strategic capabilities that should be present in business operations in order to improve its impact on the environment: pollution
prevention, product stewardship and sustainable development (Hart, 1995). Next,
I will introduce these capabilities.
Pollution prevention.
This refers to the control of current emissions and the prevention of future
ones. The concept of pollution prevention presents important opportunities for
competitive advantage, especially in terms of cost savings that translate into
a cost advantage. However, there is a need to redefine current operational
capabilities and create new ones to obtain real results.
Product stewardship.
This presents an opportunity for product/services/process redesign aiming to
achieve low life cycles, use of biodegradable and reusable materials and
renewable sources of energy. It involves the commitment to investment in physical
and technological resources to create in many cases a new material/process from
the standard in the industry.
Sustainable development.
This emphasizes the relationship between production and consumption and the macro-perspective
that firms, particularly multinationals, should have in their operations
worldwide. This view plays an important role in designing, producing, and
delivering product and services in both developed and developing countries.
Sustainable development should consider the responsibility of attending all
markets sustainably.
As the NRBV states, business should create capabilities
oriented to generating strategies that meet the requirements and exploit the
opportunities that the natural environment entails. However, while the
strategic side of sustainable development could be attributable largely to the
top management and the decision-making process within the firm, logically, the
practical side of the concept lies at the operational level. It is in this area
where the impact of sustainable development is easier to identify (Preuss,
2005).
Hence, at the operational level, Supply Chain Management
(SCM) represents a business field that is increasing in importance for
achieving both economic and environmental objectives (Darnall,
Jolley, & Handfield, 2008; Preuss, 2008; Yunus & Michalisin,
2016). SCM is defined as the activities related to the flow and transformation
of products or services from raw materials to end users, including the
information and relationships along the chain (Preuss, 2005). This concept has
also evolved to consider environmental issues along the supply chain, creating
the concept of Green Supply Chain Management (GSCM), which consists in ensuring
that the activities of suppliers and customers along the value chain reduce
their environmental impact (Darnall et al., 2008).
Additionally, Preuss (2005) presents the GSCM components that
are essential to the concept and serve as guidelines for managers in its
application. These components are (a) Purchase of products, establishing
environmental requirements for suppliers; (b) Manufacturing process, creating
green policies, certifying processes and waste disposal; (c) Environmental
initiatives, selecting suppliers with environmental criteria; (d) Internal firm
initiatives, establishing Environmental Management Systems (EMS) or recycling;
and (e) Downstream logistics, which are activities oriented to recover products
after they disposed of by the consumer. Empirical evidence on GSCM and EMS will
be provided in the next section when we analyze environmental practices at the business
level.
Conceptually, this section contains several definitions that
are summarized in Table 1. “The Green Dictionary” is a guide for readers looking
to gain better comprehension.
Table
1
The Green Dictionary
|
|
Concept |
Elements |
|
Ecocentric
Approach |
A natured center system of values with no
division between human and nonhuman nature |
|
|
Environmental
Legitimacy |
A generalized perception or assumption that a
firm´s corporate environmental performance is desirable proper or appropriate |
|
|
Green
Supply Chain Management |
Ensuring
that the activities of suppliers and customers along the value chain reduce
their environmental impact |
Purchase
products, Manufacturing process, Environmental initiatives, Internal firm
initiatives, Downstream logistics |
|
Natural
Resource Based View |
The notion
that strategy and competitive advantage are rooted in capabilities that
facilitate environmentally sustainable economic activity |
Pollution
Prevention, Product stewardship, Sustainable development |
|
Shared
Value |
Policies and operating practices that enhance
the competitiveness of a company while simultaneously advancing the economic
and social conditions in the communities in which operates |
|
|
Sustainable
Development |
Development that meet
the needs of the present without compromising the ability of the future
generations to meet their own needs |
Inclusiveness,
connectivity, equity, prudence and security. |
|
Sustaincentric
approach |
An emergent value system that aims for a
higher and deeper integration of the technocentric and ecocentric approaches |
|
|
Technocentric approach |
A value system that is centered
on technology and its ability to
affect and control the environment |
|
Source: Own
elaboration
To conclude, this
section presents some of the repercussions that the concept of sustainable
development has brought both in management theory and business operations. The
next section presents various empirical evidence in the discussion of how
environmental ideas can be put into to practice effectively.
Debate
around Sustainable Development: Present challenges
Despite
the influences that the concept of sustainable development has generated in
business practices, society and governments, both in
developing and developed countries, several concerns have emerged around the real
impact of business operations and the use and control of natural resources
(Blackman, Lahiri, Pizer, Rivera & Muñoz, 2010). As a result, part of the
agenda in management theory has been to determinate the most effective way to
achieve a correct implementation for the concept of sustainable development (Gladwing et al., 1995; Hoffman, 2000; Melnyk, Sroufe, &
Calantone, 2010; Minbashrazgah
& Shabani, 2019).
This
cause-effect relationship between present and future actions can be identified
in environmental management actions at a business level, mainly in its
operations. However, it can also be studied at the industry level, considering
all its members and their interactions. Consequently, this section is divided
in two parts. First, the concept of sustainable development is analyzed from
the industry-level and second, from a business-level perspective. This
structure is presented in Figure 1.
Industry Level (Macro –perspective) Business Level (Micro – perspective) Self Regulation in developed countries (e.g. King
& Lenox, 2000) Self Regulation in developing countries (e.g.
Blackman, et al., 2010) Effect
of best practices (Christmann, 2000) Firm´s
size and sustainable development (e.g. Darnall, et al. 2010) Environmental Management Systems (e.g. Darnall, et
al., 2008; Lueg & Radlach, 2015) Green Supply
Chain Management (e.g. Preuss, 2005) Sustainable Development
Two
perspectives for sustainable development: industry-level and business-level
Source:
Own elaboration
Sustainable Development at the Industry Level
Since firms integrating a particular industry share some
commonalities, it can be argued that such common platforms can create
opportunities for regulation to enhance the environmental performance of its
members. This “macro” perspective of firms has been traditionally used by
governments to create specific sets of rules oriented toward controlling
environmental behavior (Blackman, et al., 2010). However, this coercive
approach is often regarded as inefficient since different strategies can be
built to overturn it (Cairncross, 1993).
An alternative approach for coping with these problems has
been Industry Self-Regulation (ISR) (Blackman el al.,
2010; King & Lenox, 2000). ISR is defined as self-organized efforts to
collectively act without direct intervention by the government (King &
Lenox, 2000). This collective approach is generally achieved by the creation of
an institution within the industry that acts as an organization to supervise a
firm´s environmental performance. While the traditional regulatory strategies
rely on sanctions, self-regulation consists in creating incentives for
pollution control (Blackman, et al., 2010). Different stakeholders, especially
governments, have increasingly encouraged adoption of this structure as an
alternative way to improve business practices.
Despite the initial appeal for these self-regulated
attempts by firms to become better citizens, environmentally speaking, there is
still a discussion about whether ISR is efficient in accomplishing its
objectives. For example, Grief (1997) suggests that any viable action to
regulate a firm´s behavior must have explicit sanctions for the participants in
the industry in order to control their environmental
performance; otherwise, it will create opportunistic behavior for members to
camouflage their actions. Conversely, proponents in favor of self-regulation
claim that pre-established sanctions are not necessarily a requirement for ISR
to work since the internal structure of the supervisory body can control by
coercion, established norms, and environmental best practices (Nash &
Ehrenfeld, 1997).
Although few studies exist in relation to ISR, King and
Lenox (2000) present the case of the chemical industry in the United States.
The institution created to promote and supervise environmental performance in
the industry was the Chemical Manufacturing Association through the Responsible
Care (RC) program. By analyzing 1,500 firms, of which 160 where members of RC
(accounting for a third of the total production of the industry), King and
Lenox found no evidence that RC positively influences the rate of environmental
improvement among its members. Moreover, the improvement among members was
slower than the improvement of nonmembers. In contrast, a positive relationship
was found in terms of reputation, where firms with well-known brands
participate more often. This last positive correlation may explain how
reputation influences companies in their attempts to control the perception of
stakeholders by being perceived as environmentally friendly. This raises
questions regarding the real motivation behind the RC member´s actions.
In contrast, self-regulation has not been exclusively
studied in developed countries. For example, Blackman et al., (2010) analyzed
the behavior of firms in voluntary regulatory programs in Mexico. In their
study, Blackman, et al. argues that different studies of self-regulation in
developing countries frequently label it as ineffective since it mainly
attracts clean participants. They also suggest that practices around ISR from
developed countries are not applicable to the specific context in developing countries.
One of the main ideas drawn from this section is that self-regulation
is distant from a unique solution to resolve environmental problems at the
industry level. This argument does not intend to discard those firms that can self-regulate
their conduct; instead, it simply highlights the importance for society and
governments of correctly investing resources into initiatives where a positive
contribution can be made. Additionally, self-regulation should consider the
context of where it operates to fully understand and predict a firm’s behavior.
The risks could be high if a strategy is blindly followed without knowing its
real impact on environmental performance.
In the next section, we will present different results from
empirical studies to understand the implications for sustainable development at
the business level.
Sustainable Development at
Business Level
In this “micro” perspective, a firm’s operations are central
to determining the degree of commitment to the concept of sustainable
development since they account for a large proportion of the impact on the
environment. A traditional approach in the management literature is the
existence of a trade-off between a firm’s competitive position and
environmental quality (Florida, 1996). This trade-off exists because any
activity oriented to diminish the firm’s environmental footprint will create
additional costs that constrain the firm’s competitive position.
As a result, this approach has generated the use of end of
pipe technology to reduce emissions and wastes instead of a dipper approach to
sustainable development. However, firms that do contribute to reducing their
environmental impact are important to study since they tend to generate best
practices that others will adopt the latter as innovative actions for
sustainable development. According to Cairncross (1993) and Hart (1995), these environmental
best practices can allow firms to improve their competitive position and
simultaneously reduce the negative impact on the environment, reducing or even
eliminating the traditional trade-off.
Identifying environmental best practices is related to the
concept of complementary assets (CA) developed by Teece (1986). First, Teece
defines complementary assets as those resources or capabilities that generate
competitive advantage for firms and produce better financial performance.
Process-focused best practices are defined as actions oriented toward improving
production processes and reducing the cost originating in the input and waste
disposal (Hart, 1995). Examples of such practices are redesigning production
processes, substituting fewer polluting inputs, recycling byproducts and
innovating processes that are less polluting (Florida, 1996).
Much of the debate around environmental best practices concerns
their implementation and the influence of contextual factors in
order to achieve competitive advantage (Christmann, 2000). Additionally,
Florida (1996) states that many of the suggestions that it is possible to
reduce both environmental control cost and emissions are not based on enough
empirical evidence beyond isolated case studies. This has motivated some
empirical studies to determine the degree of application of sustainable
practices.
For example, Christmann (2000) uses the RBV and CA to
identify three process-oriented best practices: (a) pollution prevention
technologies, (b) innovation of proprietary pollution prevention technologies,
and (c) early timing. Using a sample of 88 firms from the chemical industry,
Christmann’s findings were contrasting. Two out of three practices (pollution
prevention technologies and early timing) showed no relationship to confirm
that these environmental practices generate cost savings. However, in the case
of innovation of proprietary pollution prevention technologies, a strong
positive relationship was found. Additionally, positive relationships were
found related to complementary assets, which do contribute to generating a cost
advantage.
Also, De Stefano et al. (2016)
uses a resource based perspective for environmental actions in the automobile
firms. Their findings suggest that under regulatory uncertainty CO2 reductions are created
from clean technology innovations. They conclude that continuous innovation in
products is necessary condition for long term competitive advantage.
These findings are important for firms that seek to
implement environmental best practices. First, it is important to understand
that imitating best practices from other firms to improve environmental
performance will not necessarily result in successful strategies; a firm’s
context is important to establish cases in which these practices can truly
produce appropriate results (Christmann, 2000). Another conclusion is in terms
of the heterogeneity of capabilities in CA. A firm’s best practices should
match those capabilities that better complement each other to create real
competitive advantage (Christmann, 2000).
Other results from environmental best practices also show
opposing evidence for sustainable practices. For example, concentrating on Environmental
Management Systems (EMS), Melnyk et al. (2002) finds positive results for
formal EMS in reducing waste and pollution from operations and improving the firm’s
general performance. In addition, Darnall et al. (2008)
evaluate the relationship between EMS and Supply Chain Management (SCM) founding
that firms using EMS are more likely to transcend the boundaries of their
internal operations to control environmental practices along their supply
chain, creating a multiplier effect for other participants.
However, Preuss (2005) questions the real evidence of SCM. He
found evidence that green supply chain management (GSCM) is present in firms
but mainly in large corporations competing in industries where a spotlight
around environmental performance already exists. The noninvolvement of other
participants in GSCM occurs because managers are skeptical of the real economic
benefits of these practices (Preuss, 2005). Also, Lueg & Radlach (2015) questions EMS capabilities to address all
aspects of sustainable development. In their literature review for management
control systems, they argue that the alignment usually presented in the
traditional performance indicators and firm’s strategy is weaker for the case
of sustainable development.
Another area of debate around sustainable development concerns
a firm’s size. Darnall, Henriques, and Sadorsky (2010) explored the effect of proactive
environmental practices in small firms considering that this area has been
overlooked by researchers who have mainly concentrated their efforts on large
firms. Small firms present specific characteristics, such as flexibility,
social exposure, a simplified decision-making process and greater propensity to
innovate, all of which can be used to improve environmental practices.
In their study, Darnall et al.,
(2010) collected data on small firms from the manufacturing sector from
countries that are members of the Organization for Economic Cooperation and
Development (OCDE). They found that stakeholders generate pressure to improve the
environmental performance of both large and small firms. However, it is in
small firms where the effect is greater, generating a more intensive reaction
for sustainable practices. Darnall et al. highlight
that this has important implications for environmental management. For example,
stakeholder pressures can be redirected to small firms instead of large ones to
optimize the effect on sustainable practices.
The implications of the debate on sustainable development
at the industry and business levels are rich in content. Despite opposite evidence
suggesting that environmental best practices can be successfully applied, it is
important that research on sustainable development focus on a wider view to
determine the real implementation of green strategies. In the next section, I
present areas for future research on sustainable development and the importance
of the concept years to come.
Opportunities for Sustainable
Development: Future directions
A recurrent challenge in management thinking in recent
decades has been the creation of sustainable business operations while
remaining competitive in the market. (Christmann, 2000; Hart, 1995; Hoffman,
2000). As explained in the introduction to this paper, some authors suggest
that an appropriate approach to promoting changes in present management
practices should be by changing the roots of much of the current economic and
business paradigms. This change represents a challenge for future research on
sustainable development since answers are continuously required and demanded by
theorists, practitioners and academic institutions looking to fully understand
and apply the concept of sustainable development. Similarly, in this section, I
present some of the mayor areas in which research can direct its efforts in order to generate a true contribution to management
theory and practice. I present four areas, namely, (a) Industry, (b) Business, (c)
Technology, and (d) Entrepreneurship. Each of these sections presents areas of
future research suggested by different authors that can serve as a guideline for
future studies.
Industry
As a collective force, firms can voluntarily reduce their
environmental footprint. As previously explained, self-regulation represents an
alternative to governmental policy that coercively aims to regulate a firm´s
behavior. However, and despite efforts in empirical research made on this
subject, some questions regarding self-regulation remain unanswered.
King & Lenox (2000) provide an example of these unanswered
questions by suggesting that studies on self-regulation should focus not only
on initiatives generated within the industry but also from outside the
industry, for example, with the creation of the new environmental management
standard ISO 14000. They also suggest that self-regulation should be
investigated in different industries by looking for the specific reason why
they join such initiatives. In the same vein, Blackman et al. (2010) suggest
that future research should aim to answer questions about the role of self-regulatory
programs in developing countries that present weak environmental regulation by governments.
Interestingly, another area proposed for future research at
the industry level concerns the influence that industry norms have over a
firm´s practices (Melnyk, et al., 2010). Melnyk et al. explain that research in
sustainable development should focus on studying the effect that industry has on
sustainable practices, such as Environmental Management Systems (EMS) and the firm’s
performance at the operational level. They also suggest further developments in
understanding industry characteristics that influence practices in business
such as level of regulation, environmental experience, exposure of
environmental problems and supply chain particularities.
Business
To increase evidence on the effectiveness of the
sustainable development concept at this level, different authors have suggested
complementary research ideas to contribute to this subject in the future. For
example, Christmann (2000) suggests that a shift in research on sustainable
development, which traditionally focuses on environmental strategies and
ignores a firm´s characteristics and its context. She highlights that a firm´s
resources and capabilities can have an important influence on how environmental
strategies are shaped. Christmann also believes that future research should
identify how environmental practices create resources and capabilities that
results in competitive advantage, identifying major barriers and
characteristics of best practices in other industries.
Additionally, Bansal
(2005) states that studies on sustainable development traditionally take either
an institutional (defined as the social context in which a firm operates) or a
resource- based approach (defined as effective strategies that create resources
and capabilities that generate competitive advantage). Accordingly, she
suggests that future research should consider both approaches since both
contribute to a correct understanding of sustainable development. She completes
her ideas for future research by focusing on areas to help understand the
application of the concept of sustainable development.
Additionally, at the
business level, Darnall et al., (2008) consider it relevant
for future research to study the effects of stakeholder pressure on managers of
small and medium enterprises (SME). In addition, they view the dynamics between
the SME context and the propensity to use environmental practices along with
the variations presented among particular groups of
stakeholders over sustainable practices as an interesting research topic.
Finally, considering SMEs and the dynamic evolution of
sustainable development on business, Melnyk et al. (2010) suggest that new
research should update environmental practices, especially concerning SMEs and
the adoption of ISO14000 considering with particular interest its impact on
SMEs.
Technology
The role of technology in sustainable development has been
widely considered as an important factor (Elliot, 2006; Florida, 1996; Hart,
1995; Melnyk et al., 2010). In particular, Elliot
(2006) identifies the role of technology on sustainable development from a
wider perspective. In his view, technology has been presented in scientifically
determining the effect of human behavior on the environment, e.g., climate
change. Additionally, Elliot recognizes
the challenge that sustainable development represents for business activities
considering the degree of uncertainty that the concept still entails and the
actions that are required, nonetheless.
In his work, Elliot (2006) identifies four clear areas
where technology contributes to sustainable development: (a) supporting technical
goals, (b) mediating communications, (c) facilitating human behavior, and d) monitoring
and evaluating environmental impact. In his view, technology (considering
information systems in particular) represents much of the solutions to
environmental problems.
Consequently, he suggests that future research study the
role of information technologies in sustainable development considering diverse
areas such as stakeholder involvement, integrative business activities,
organizational awareness in sustainable development, the impact and effectiveness
of industrial alliances on innovation, and the role of individuals and groups
in society.
Entrepreneurship
An alternative approach suggested to attain sustainable
development has been entrepreneurship (Hall, Daneke
& Lenox, 2010; Pirson & Lawrence, 2009). For
example, Hall et al. (2010) state that entrepreneurship is an effective vehicle
to achieve sustainable processes and products. However, they also state that
there are still unresolved issues since the literature in this area has not
been abundant. In addition, Pirson and Lawrence
(2009) recognize the value of entrepreneurship from a social perspective. These
social entrepreneurs are a new class of no-loss business “people driven to make
a difference in the world and to give a better chance in life” (Pirson & Lawrence, 2009, p. 562).
Finally, Hall et al. (2010) suggest that studies should aim
to determine the extension of entrepreneurship to promote sustainable
development, the motivation factors and barriers to
adopt the concept and differences between entrepreneurs oriented to sustainable
programs versus traditional entrepreneurs.
As explained in these five areas, the concept of
sustainable development presents great challenges for the next decades.
Conclusions
Over the last twenty years, management theory has been
incorporating more environmental concerns in business practices, acknowledging
the importance of sustainable development over the long term. With increasing
pressure from society and overwhelming scientific evidence on the impact that human
activities have on the environment, sustainability as a business perspective
represents a challenge for current and future practitioners and academics in
making strategic decisions and grasping new sources of competitive advantage.
To achieve this sustainability, firms require appropriate
capabilities that generate and support sustainable business operations. It is
in this area where the concept of sustainable development can be seen in
action. Areas such as Green Supply Chain Management and Environmental Management
Systems can provide a wide range of opportunities where businesses should
attempt to diminish their ecological footprint.
Future research will need to embark in the difficult task
of reshaping the boundaries, both in theory and practice, of current management
thinking in order to find answers in different areas
of sustainable development. Business practices should aim to become more
efficient, and much of this can be achieved with the support of technology.
Finally, industries should become more self-aware regarding the impact that
firms have on the environment, recognizing and supporting new entrepreneurial
models.
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[1] Doctor en Ciencias
Administrativas; Profesor de Tiempo Completo; Facultad de Comercio y
Administración Victoria; Universidad Autónoma
de Tamaulipas; Competitividad y
Sostenibilidad Organizacional, abriseno@docentes.uat.edu.mx;
ORCID:0000-0002-6567-241X
[2] Doctora en Ciencias Administrativas; Profesor de
Tiempo Completo; Facultad de Comercio y Administración Victoria; Universidad
Autónoma de Tamaulipas; Competitividad de las Instituciones de Educación
Superior, azorrilla@docentes.uat.edu.mx; ORCID:0000-0001-6908-9208
[3] Maestra en Administración; Profesora de Horario Libre;
Facultad de Comercio y Administración Victoria; Universidad Autónoma de
Tamaulipas; Gestión Estratégica de las Organizaciones; cristabell.azuela@docentes.uat.edu.mx;
ORCID 0000-0002-5587-8596