Sustainability issues have still the minor role in strategic decision making

The shared cognitive structures of the boards of directors in the cleantech companies was examined to identify common patterns in the strategic interpretation on sustainability issues.

When operating in a rapidly developing and emerging business environment, such as the cleantech industry, cognitive limits become important factors in organizational decision-making. Decision-makers and organizations do not pursue action against environmental stimuli, per se. They respond to such issues that meet their previous experience and are advocated by internal or external meaningful stakeholders, e.g. sustainability directives set by the European Union commission.

Despite the research setting and the topicality of the sustainability management in business and research, our study provides results that could be considered unexpected. According to our results, the economic issues dominated directors’ attention, and the sustainability issues had only a minor or no role in boards’ shared cognitive maps.

However, previous research on corporate sustainability has indicated that environmental and social issues often influence both the costs and income of a company, posing a direct influence on the economic success of the company. This may indicate the minor value of the sustainability management issues for the companies or the board members who may have limited experiences in sustainability management issues and underestimate the relevancy of the issues. The alternative explanation is related to the nature of the board as representatives of shareholders rather than a wide range of stakeholders. It can be assumed that the views of the stakeholders would be more closely associated with the sustainability agenda.

In any case, it seems that the sustainability issues are still emerging in the firms’ strategies and still complementing the existing businesses and operations.

Author:

Jukka-Pekka Bergman

Lappeenranta University of Technology

See the article: http://www.emeraldinsight.com/doi/full/10.1108/CG-04-2015-0051