Corporate Sustainability and Organizational Culture

“… findings suggest that the successful implementation of culture change for corporate sustainability might be largely dependent on the values and ideological underpinnings of an organization’s culture, and that these in turn affect how corporate sustainability is implemented and the types of outcomes that can be observed.”

Linnenluecke and Griffiths were interested in examining the relationship between corporate sustainability and organizational culture.  They observed that organizational culture had often been cited as the primary reason for the failure of implementing organizational change programs, and explained that regardless of the sophistication of the tools, techniques and change strategies used by an organization, change programs are most likely to succeed when they are aligned with the values and ideological underpinnings of an organization’s culture.  They believed that organizational culture impacts how corporate sustainability is implemented and predicts the types of outcomes that may be observed by introducing various change strategies into the organization.

In order to test these propositions, Linnenluecke and Griffith set out to explore and discuss the relationship between corporate sustainability and organizational culture using the “competing values” framework of organizational culture that has been used to identify and describe the following four types of organizational culture, each with its own set of valued outcomes and a coherent managerial ideology about how those outcomes could be achieved:

  • Human Relations Model: Organizations that are dominated by human relation values promote cohesion and morale through training and development, open communication and participative decision-making
  • Open Systems Model: Organizations that are dominated by open systems values promote growth and resource acquisition through adaptability and change, visionary communication and flexible decision-making
  • Internal Process Model: Organizations that are dominated by internal process values promote stability and control through information management, precise communication and data-based decision making
  • Rational Goal Model: Organizations that are dominated by rational goal values promote efficiency and productivity through goal-setting and planning, instructional communication and centralized decision-making

Linnenluecke and Griffith put forward the following theoretical propositions with respect to each of the four cultural types with respect to how the ideological underpinnings of the applicable organizational culture were likely to influence how sustainability will be implemented and the outcomes that can be achieved from the sustainability initiatives:

Human Relations Model: Organizations dominated by the Human Relations Model, with its emphasis on social interaction and interpersonal relations, rely more heavily on internal staff development, learning and capacity building in their pursuit of corporate sustainability.  Organizations with a strong focus on social or human relations values are likely to support or attract social entrepreneurship and leaders of these organizations will likely invest significant time and energy, often at the expense of neglecting business goals and objectives, in advocating corporate sustainability principles within the organization.  The challenge for pursuing sustainability within organizations with an embedded Human Relations Model will be resolving the tensions between creating a business venture and pursuing a social purpose.

Open Systems Model: Organizations dominated by the Open Systems Model place greater emphasis on innovation for achieving ecological and social sustainability as they pursued corporate sustainability.  In this instance, innovation is applied not merely to attain higher levels of eco-efficiency, but rather to develop products, systems and practices that “move beyond pollution control or prevention and allow the organization to operate within the carrying capacity of the natural environment by minimizing their resource use and ecological footprint”. As for social sustainability, the assumption is that the organization must recognize and embrace its responsibilities toward various stakeholder groups and the community in which they operate.

Internal Process Model:  Organizations dominated by the Internal Process Model have a preference for pursuing economic sustainability and thus place greater emphasis on economic performance, growth and long-term profitability in their sustainability initiatives.  The key aspects of this approach would be maximizing production and consumption of the organization’s products and services in order to increase profits and achieving economic efficiency through the simplification of products, services and processes in order to achieve costs reductions, maximize product and pursue economic outcomes; however, realization of economic sustainability (i.e., the maximization of profits, production and consumption) alone is not sufficient for the overall sustainability of corporations.

Rational Goal Model:  Organizations dominated by the Rational Goal Model emphasize resource efficiencies in their pursuit of corporate sustainability.  There is no doubt that there are operational and sustainability advantages to implementing policies and practices that reduce costs and operational efficiencies and many organizations have implemented human resources and environmental policies focused on reducing and eliminating waste; however, efficiency should not be pursued in isolation, since it is also necessary to consider the impact that the steps taken to achieve efficiency may have on the environment and society.  Moreover, efficiencies may be of limited competitive advantage to organizations if they can be easily copied and implemented by competitors.

The propositions for each of the cultural types championed by Linnenluecke and Griffith are important for sustainability leaders in the way they serve as reminders that there is no single best type of sustainability-oriented organizational culture and that organizational culture is best viewed as a fundamental influencer on how corporate sustainability is implemented and the types of outcomes that can be expected.  Can sustainability leaders make the changes in organizational culture necessary to facilitate a shift toward different sustainability-related ends?  Organizational rigidity and multiple subcultures make the task more difficult; however, Linnenluecke and Griffith suggested that certain changes can be made to the elements of an organization’s observable culture (i.e., at the surface level) to provide a conducive context for the changes in the values, beliefs and core assumptions of organizational members necessary to pursue sustainability: publication of corporate sustainability reports, the integration of sustainability measures in employee performance evaluation, and employee training.

Sources: A detailed discussion of the article appears in the chapter on “Organizational Culture and Sustainability” in “Organizational Culture: A Library of Resources for Sustainable Entrepreneurs” prepared and distributed by the Sustainable Entrepreneurship Project (www.seproject.org) and available for download here, and the article itself can be found at M. Linnenluecke and A. Griffiths, “Corporate sustainability and organizational culture”, Journal of World Business, 45 (2010), 357.  For further discussion and description of the competing values framework of organizational culture, see R. Quinn, Beyond rational management: Mastering the paradoxes and competing demands of high performance (San Francisco, CA: Jossey-Bass, 1988); R. Quinn and J. Kimberly, “Paradox, planning, and perseverance: Guidelines for managerial practice” in J. Kimberly and R. Quinn (Eds.), Managing organizational translations (Homewood, IL: Dow Jones-Irwin, 1984), 295; and R. Quinn and J. Rohrbaugh, “A spatial model of effectiveness criteria: Towards a competing values approach to organizational analysis”, Management Science, 29(3) (1983), 363.  See also the chapters on “Dimensions of Organizational Culture” and “Typologies of Organizational Culture” in Organizational Culture: A Library of Resources for Sustainable Entrepreneurs, which is prepared and distributed by the Sustainable Entrepreneurship Project (www.seproject.org).

 

 

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