Sustainability Performance in Businesses and Its Implications for the Sustainability Service Industry

Sustainability Performance in Businesses and its Implications for the Sustainability Service Industry

Jean-Pierre Imbrogiano

A thesis submitted for the degree of Doctor of Philosophy at

The University of Queensland in 2020

Sustainable Minerals Institute Abstract

In recent decades, the world has seen an unprecedented rise of actors who aim for businesses to contribute to sustainable development. These actors are located outside of the businesses they address through service practices. Business sustainability initiatives, standard setters, and consultancies are so prevalent today that they constitute an ‘industry’ in providing these services. As a sustainability service industry therefore, these actors fulfill a crucial function in modern-day societies aiming for sustainability transitions, by acting as change agents for the business community. However, it is not clear with what performance rationales the sustainability service industry addresses the business community, as academic knowledge about sustainability performance in businesses is itself in its infancy. Like business sustainability scholarship, the sustainability service industry appears to implicitly assume contingent effectiveness of its approaches.

This thesis is a phenomenographic study of 21 business organizations operating along the automotive value chain. Its primary aim is to answer the question: How does sustainability performance occur in businesses? Phenomenographic studies describe phenomena by their diverse conceptions, meaning, how research participants understand and experience phenomena of interest. Accordingly, this study shows that businesses understand and experience sustainability performance in five different ways. The five understandings are:

(1) sustainability performance as meeting customer and regulatory requirements;

(2) sustainability performance as the reduction of operational costs;

(3) sustainability performance as the mitigation of risks to the business;

(4) sustainability performance as the prevention of risks to business operations; and

(5) sustainability performance as innovation that enables the achievement of societal sustainability aims.

The findings of the study result in two major implications for scholarship. First, the thesis discusses how sustainability performance in businesses can be theorized from a perspective of contingency. Novel propositions are presented which suggest, amongst others, that businesses’ following of conceptions of sustainability performance is contingent on risk profiles emanating from the organizational environment, and that the effectiveness of management approaches is contingent on their fit to the conceptions followed. Second, the discussion of the findings suggests that a prevalent phenomenon of conception mismatching exists in business sustainability scholarship. Conception mismatching means that scholarship does, so far, not adequately relate researched phenomena to the actual experiences of studied businesses.

Furthermore, the thesis proposes to advance sustainability performance in businesses as a new area of inquiry that nurtures a strong interest in the real-world implications of research findings. In making the first steps toward this aim, the discussion formulates five implications for the sustainability service industry, which, if followed, would lead to alterations in its practices for more effective changes in business operations. The five implications for a more effective enabling of sustainability performance in businesses are that actors of the sustainability service industry need to:

(1) discontinue unconsidered assumptions of contingent effectiveness of management approaches;

(2) differentiate between conceptions of sustainability performance when addressing businesses;

(3) take into account the diverse ways in which firms operate within as well as across conceptions of sustainability performance;

(4) increase risks to businesses to entice the development of novel solutions for the most pressing sustainability challenges;

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(5) understand and enhance their practices in accordance with their role in shaping as well as promoting certain conceptions of sustainability performance.

Declaration by the author

This thesis is composed of my original work, and contains no material previously published or written by another person except where due reference has been made in the text. I have clearly stated the contribution by others to jointly-authored works that I have included in my thesis.

I have clearly stated the contribution of others to my thesis as a whole, including statistical assistance, survey design, data analysis, significant technical procedures, professional editorial advice, financial support and any other original research work used or reported in my thesis. The content of my thesis is the result of work I have carried out since the commencement of my higher degree by research candidature and does not include a substantial part of work that has been submitted to qualify for the award of any other degree or diploma in any university or other tertiary institution. I have clearly stated which parts of my thesis, if any, have been submitted to qualify for another award.

I acknowledge that an electronic copy of my thesis must be lodged with the University Library and, subject to the policy and procedures of The University of Queensland, the thesis be made available for research and study in accordance with the Copyright Act 1968 unless a period of embargo has been approved by the Dean of the Graduate School.

I acknowledge that copyright of all material contained in my thesis resides with the copyright holder(s) of that material. Where appropriate I have obtained copyright permission from the copyright holder to reproduce material in this thesis and have sought permission from co- authors for any jointly authored works included in the thesis.

Publications included in this thesis

Peer-reviewed articles

In Chapter II:

Imbrogiano, J.-P. (2020). Contingency in business sustainability research and in the sustainability service industry: A problematization and research agenda. Organization & Environment, doi:10.1177/1086026619897532

Submitted manuscripts included in this thesis

In Chapter III, IV, and V:

Imbrogiano, J.-P. (forthcoming). Understanding sustainability performance in resource supply chains: A phenomenography 'from mine to car'. Submitted to Organization Science.

Other publications during candidature

Book chapters

Mori Junior, R., Sturman, K., Imbrogiano, J.-P. (2019). Interoperability of mineral sustainability initiatives: A case study of the Responsible Jewellery Council (RJC) and the Alliance for Responsible Mining (ARM). In M. Vogt (Ed.), Sustainability certification schemes in the agricultural and natural resource sectors (pp. 215-229). London: Routledge.

Conference papers

Imbrogiano, J.-P., Jones, D.N. (2019). The social reduction of reality. Paper presented at the 114th Annual Meeting of the American Sociological Association, New York.

Imbrogiano, J.-P., Stemn, E., Bond, C.J. (2019). Assessing sustainable impacts amidst institutional constraints: A case study of the Ghanaian mining industry. Paper presented at the 39th Annual Conference of the International Association of Impact Assessment, Brisbane, Australia.

Imbrogiano, J.-P. (2018). Contingency in business sustainability research and in the sustainability service industry: A problematization. Paper presented at the 24th International Sustainable Development Research Society Conference, Messina, Italy.

Imbrogiano, J.-P. (2018). Sustainability performance in businesses: An integrated framework. Paper presented at the 24th International Sustainable Development Research Society Conference, Messina, Italy.

Imbrogiano, J.-P., Sturman, K., Mori Junior, R. (2017). The role of sustainability standards in legitimating mining companies’ social performance. Paper presented at the 2017 Conference of the Australian Anthropological Society, the Association of Social Anthropologists of the UK and Commonwealth and the Association of Social Anthropologists of Aotearoa/New Zealand, Adelaide, Australia.

Reports

Sturman, K., Rogers, P., Imbrogiano, J.-P., Mori Junior, R., Ezeigbo, C. (2018). Monitoring impact of mineral sustainability standards to align with the Sustainable Development Goals. Brisbane, Australia: Centre for Social Responsibility in Mining, University of Queensland.

Mori Junior, R., Sturman, K., Imbrogiano, J.-P. (2017). Leveraging greater impact of mineral sustainability initiatives: An assessment of interoperability. Brisbane, Australia: Centre for Social Responsibility in Mining, University of Queensland.

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Contributions by others to the thesis

No contributions by others.

Statement of parts of the thesis submitted to qualify for the award of another degree

None

Research involving human or animal subjects

For the details of the ethics approval, see Appendix 3.

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Acknowledgements

One of the major risks identified at the beginning of my PhD, was whether I would be able to have 20+ diverse businesses ranging across the mining and automotive industries, amongst others, participating in my research. I am very thankful and indebted to the various companies and their staff working on sustainability topics who showed interest in the problem I address through my research, and who invested their time in granting me deep insights into their experiences, thoughts, and opinions. As I will also mention in this thesis, the development of knowledge on sustainability performance in businesses is very dependent on companies being willing, or at least open minded, to having researchers inquiring into their internal practices. Both businesses and researchers are part of society and need to devote their resources to the understanding of challenges to sustainability transitions, for this to be achieved.

I am also very thankful for the various people who supported and guided me throughout this research endeavor. In particular, these are my supervisors, Dr. Kathryn Sturman, Dr. Carol J. Bond, and Dr. Renzo Mori Junior. I am particularly thankful to Kathryn for her enduring support by addressing and dealing with my views on the topic, by guiding me through the PhD process, and by providing me the space to develop my own thoughts and to have my own experiences as a young researcher; to Carol, for uplifting my writing skills; and to Renzo, specifically for his engagement to get me enrolled in the PhD program. At initial stages, Prof. Saleem H. Ali, Assoc. Prof. Wolfgang Meyer, and Dr. Dr. h.c. Stefan Hanselmann also supported my enrolment in the program. I am also grateful that Prof. John R. Owen, Assoc. Prof. Bernard McKenna, and Prof. Deanna Kemp commented on my work along the way to thesis completion, which greatly facilitated the sharpening of my argumentation. I further would like to mention Prof. Jörgen Sandberg and his excellent work and teachings at the UQ Business School, which significantly influenced how I looked at my research topic.

As with every major work experience or challenging project, there is also a range of support happening in the background that has an indirect but decisive influence on our success and well-being. In the case of my 3.5-year-stay at the Sustainable Minerals Institute, this influence stems from the various colleagues and friends who made my stay truly enjoyable. I will miss being part of this interdisciplinary institute with its broad range of people and expertise, requiring one to frequently reflect on how what one thinks one has got to say might be also relevant for others with different backgrounds and expertise. I also received essential support from friends who were never tired of listening or advising, who are, in particular, Lion, Eric, Simon, Amelia, Lucy, and Brunilde. Certainly, my family and the unconditional affection they

ix rendered to me, even when living in a place as far away as Australia, provided me with the necessary strength for this journey.

I feel truly blessed to have received the opportunity to do a PhD at the University of Queensland. While the beautiful nature surrounding Brisbane accommodated my soul, my mind went through a tremendous process of change because of the freedom I was given to think, altering how I conceive of the world and life. This positive personal change process would not have been possible if there had not been sufficient funding to allow me to pursue my ideas, while not having to be concerned about how my ideas fit within the constraints of an entrenched socioeconomic system. In this sense, I am very thankful for the University of Queensland to have invited me and given me the means to develop my thoughts. Also the German Academic Exchange Service (DAAD) supported my first year of PhD candidature.

Financial support

UQ Research Training Scholarship

UQI Living Allowance Scholarship

SMI RHD Allocation Fund

DAAD Scholarship for PhD Candidates

Keywords business sustainability, sustainability performance, sustainability service industry, sustainable supply chains, contingency theory, phenomenography, problematization

Australian and New Zealand Standard Research Classifications (ANZSRC)

ANZSRC code: 150399 Business and Management not elsewhere classified, 40%

ANZSRC code: 150310 Organisation and Management Theory, 30%

ANZSRC code: 869899 Environmentally Sustainable Manufacturing not elsewhere classified, 30%

Fields of Research (FoR) Classification

FoR code: 1503 Business and Management, 70%

FoR code: 1608 Sociology, 30%

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Table of Contents

List of Tables and Figures...... xvii Abbreviations ...... xviii

Chapter I - Why Understanding Sustainability Performance in Businesses is a Prerequisite to Addressing the Grand Challenges of Our Time ...... 1 I.1. Introduction to the Thesis ...... 1 I.1. Sustainable Development and the Grand Challenges of our Time ...... 2 I.2. The Role of Private Actors in Addressing Unsustainable Development ...... 4 I.3. The Prerequisite of Understanding Sustainability Performance in Businesses ...... 6 I.4. Research Aims ...... 11 I.5. Structure of the Thesis ...... 12

Chapter II - Contingency in Business Sustainability Research and in the Sustainability Service Industry: A Problematization and Research Agenda ...... 16 II.1. Chapter Introduction ...... 16 II.2. Problematization as a Methodology to Clarify Assumptions in the Business Sustainability Field ...... 18 II.3. The Sustainability Service Industry and its Performance Orientation ...... 21 II.3.1. The implicit assumption of contingency in practices of the sustainability service industry ...... 27 II.4. What Do We Really Know So Far? Research on Internal Determinants of Business Sustainability and its Performance Orientation ...... 29 II.4.1. Limitations of validity in research on internal determinants of business sustainability ...... 31 II.4.2. The implicit assumption of contingency in practices of business sustainability scholarship ...... 37 II.5. Evaluating Assumptions of Contingency in Business Sustainability Research ...... 38 II.5.1. Summing up the problem caused in real-world practices by implicit assumptions of contingency in business sustainability research ...... 42 II.6. A First Research Agenda to Address the Impasse ...... 43 II.6.1. Alleviating the caveat of assessing business sustainability performance ...... 44

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II.6.2. Answering the overarching question: how does sustainability performance occur in businesses? ...... 45 II.6.3. When, why, and how do businesses deploy management approaches to generate sustainability performance? ...... 46 II.6.4. What is the organizational environment when businesses experience sustainability performance? ...... 47 II.6.5. What are alternatives to conceptualize and operationalize sustainability performance in businesses? ...... 48 II.6.6. What are adequate research paradigms to comprehend sustainability performance in businesses? ...... 49 II.6.7. Bringing findings together and making use of them ...... 50 II.7. Chapter Summary ...... 51

Chapter III - An Interpretative Approach to Research Sustainability Performance in Businesses...... 52 III.1. Chapter Introduction ...... 52 III.2. Phenomenography as a Research Design to Study Sustainability Performance in Businesses ...... 52 III.2.1. Epistemology and methods in phenomenography ...... 58 III.3. Methods to Research Sustainability Performance in Businesses ...... 61 III.3.1. Sample background and structure ...... 61 III.3.2. Sampling of research participants ...... 67 III.3.3. Data collection ...... 73 III.3.4. Data analysis ...... 77 III.3.5. Credibility of the research design ...... 79 III.4. Chapter Summary ...... 84

Chapter IV - Five Different Ways in which Sustainability Performance Occurs in Businesses...... 86 IV.1. Chapter Introduction ...... 86 IV.2. On the Interpretation and Presentation of the Results...... 88 IV.3. Conception I ...... 90 IV.3.1. Risk profile ...... 90 IV.3.2. Framing of sustainability performance...... 92 IV.3.3. Creation and use of sustainability management structures ...... 94

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IV.3.4. Solution finding for sustainability issues ...... 96 IV.3.5. Summary of Conception I ...... 99 IV.4. Conception II...... 99 IV.4.1. Risk profile ...... 100 IV.4.2. Framing of sustainability performance...... 103 IV.4.3. Creation and use of sustainability management structures ...... 106 IV.4.4. Solution finding for sustainability issues ...... 110 IV.4.5. Summary of Conception II ...... 114 IV.5. Conception III ...... 115 IV.5.1. Risk profile ...... 116 IV.5.2. Framing of sustainability performance...... 119 IV.5.3. Creation and use of sustainability management structures ...... 123 IV.5.4. Solution finding for sustainability issues ...... 127 IV.5.5. Summary of Conception III ...... 131 IV.6. Conception IV ...... 131 IV.6.1. Risk profile ...... 132 IV.6.2. Framing of sustainability performance...... 134 IV.6.3. Creation and use of sustainability management structures ...... 137 IV.6.4. Solution finding for sustainability issues ...... 140 IV.6.5. Summary of Conception IV ...... 143 IV.7. Conception V ...... 144 IV.7.1. Risk profile ...... 144 IV.7.2. Framing of sustainability performance...... 147 IV.7.3. Creation and use of sustainability management structures ...... 149 IV.7.4. Solution finding for sustainability issues ...... 150 IV.7.5. Summary of Conception V ...... 153 IV.8. On the Structure and Distribution of the Five Conceptions of Sustainability Performance in Businesses ...... 154 IV.8.1. Internal and external horizons of the phenomenographic results ...... 154 IV.8.2. Structural aspects and the experiences of variation by research participants ..... 156 IV.8.3. The hierarchy of conceptions in these phenomenographic results ...... 159 IV.8.4. The distribution of research participants within the identified outcome space .. 163 IV.9. Chapter Summary ...... 165

Chapter V - Toward a Theory of Sustainability Performance in Businesses ...... 167 V.1. Chapter Introduction...... 167 V.2. The Organizational Environment in a Contingency-Based Theory of Sustainability Performance in Businesses ...... 168 V.3. Conceptualizing and Operationalizing Sustainability Performance in a Contingency- Based Theory of Sustainability Performance in Businesses ...... 171 V.4. The Deployment of Management Approaches and Proactivity in the Pursuance of Sustainability Performance in Businesses ...... 173 V.5. The Interpretative Paradigm Underlying a Contingency-Based Theory of Sustainability Performance in Businesses ...... 177 V.6. On the Following of Conceptions by Business Sustainability Researchers, Conception Mismatching, and the Quest for the Financial Business Case ...... 181 V.7. Chapter Summary ...... 186

Chapter VI - Implications for the Sustainability Service Industry ...... 187 VI.1. Chapter Introduction ...... 187 VI.2. Implication I ...... 188 VI.3. Implication II...... 190 VI.4. Implication III ...... 191 VI.5. Implication IV ...... 194 VI.6. Implication V ...... 195 VI.7. Chapter Summary ...... 198

Chapter VII - Where to From Here? ...... 199 VII.1. Summary of Findings and Contributions ...... 199 VII.2. Limitations of this Research ...... 202 VII.3. Further Opportunities for Future Research ...... 205 VII.4. Concluding Remarks ...... 209

Appendices ...... 211 Endnotes ...... 227 References ...... 229

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List of Tables and Figures

Tables:

Table 1: The methodology of problematization ...... 19 Table 2: The argumentation in Chapter II for the existence of field assumptions of contingency in the business sustainability field ...... 21 Table 3: Simplified overview of internal determinants of business sustainability ...... 31 Table 4: Researched phenomena in the literature on internal determinants of business sustainability (summarized) ...... 32 Table 5: Data sources in the literature on internal determinants of business sustainability (summarized) ...... 35 Table 6: The anticipated sample structure of 25 companies ...... 68 Table 7: The achieved sample structure of 21 companies ...... 68 Table 8: Five different ways in which sustainability performance occurs in businesses ...... 87 Table 9: Referential and structural aspects of the identified five conceptions of sustainability performance in businesses ...... 156 Table 10: The distribution of research participants along the phenomenographic results according to criteria used in the sampling strategy to maximize variation of experiences ... 163

Figures:

Figure 1: Location of sample companies by location of interviewed staff ...... 69 Figure 2: Location of sample companies by location of company headquarters ...... 69 Figure 3: Size of sampled companies by number of employees worldwide...... 69 Figure 4: Sampled companies with ISO 14001 environmental management system certification ...... 69 Figure 5: Interview formats by number of interviewees per participating company ...... 71 Figure 6: Interviewees by positions held in participating companies (summarized)...... 72 Figure 7: The hierarchical logic of the identified five conceptions by their risk intensities . 160 Figure 8: A circular hierarchy of conceptions of sustainability performance in businesses. 162

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Abbreviations

C Company CFP Corporate financial performance CSP Corporate social performance CSR Corporate social responsibility DAAD German Academic Exchange Service DRC Democratic Republic of Congo EU European Union GHG Greenhouse gases GRI Global Reporting Initiative IFC International Finance Corporation IPBES Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services IPCC Intergovernmental Panel on Climate Change IPIS International Peace Information Service ISO International Organization for Standardization KLD Kinder Lydenberg Domini KYC Know your customer NGO Nongovernmental organization OECD Organisation for Economic Co-operation and Development PhD Doctor of Philosophy RDE Real driving emissions REE Rare earth elements RES Researcher R&D Research and development RHD Higher degree by research S Speaker SDG Sustainable Development Goals SMI Sustainable Minerals Institute UN United Nations UQ The University of Queensland US United States

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Chapter I

Why Understanding Sustainability Performance in Businesses is a

Prerequisite to Addressing the Grand Challenges of Our Time

I.1. Introduction to the Thesis

Human civilization is at the crossroads. On the one hand, humanity is experiencing unprecedented prosperity through expanding economic value addition and technological advancements (The World Bank, 2019). On the other hand, anthropogenic changes to the carbon dioxide concentration in the Earth’s atmosphere are predicted to have detrimental effects on life supporting ecosystems (IPCC, 2019a, 2019b, 2019c; Ripple et al., 2020).

Debates about climate change, its impacts, and prevention strategies, take place in the highest political forums. Yet, there are also phenomena representing indirect threats, or, to date, unclear scope, like the decline of nutrients in plants through higher carbon dioxide uptakes (Loladze,

2002, 2014), the entering of micro-plastics into food value chains (Li et al., 2018), or the dieback of insects worldwide (Jarvis, 2018), which all convey the same message for humankind: accumulated effects of the production and consumption of goods and services result in rebound effects disproportionate to perceived benefits. Hence, prosperity is correlated with unprecedented threats to modern human civilization and to the long-term livelihood of other species (IPBES, 2019; Ripple et al., 2017; Rockström et al., 2009).

This thesis presents a novel perspective on the sustainability challenges human societies are facing. Its point of departure is that humans cause a plethora of sustainability challenges when producing and using goods and services (Purser et al., 1995; Shrivastava, 1995a, 1995b;

Throop et al., 1993). Therefore, substantive changes in business practices need to be part of the solutions to effectively address concerns of unsustainable development (Shrivastava, 1995a,

1995b; Starik & Kanashiro, 2013; Starik & Rands, 1995; Whiteman et al., 2013). To better understand these challenges and the need for change in business practices, this thesis follows a new line of inquiry introduced by Halme et al. (2018) on an unmet need to clarify how internal business practices are related to sustainability outcomes and impacts. In particular, by adopting a phenomenographic research design, this research assesses how sustainability performance occurs in 21 businesses operating in the automotive value chain.

To connect this research project with its real-world context (Hoffman, 2016), I introduce the concept of the ‘sustainability service industry’ as a central audience for findings in business sustainability scholarship. The sustainability service industry comprises actors that are located outside the businesses they address. These actors provide services that ought to enable sustainability performance in the businesses addressed. However, it is not yet evident what performance rationale(s) the sustainability service industry adopts, and consequently, how it could bring effective change to business operations for the achievement of sustainability objectives. The findings of this phenomenographic study suggest that sustainability performance in businesses occurs in five different ways, and that the sustainability service industry should align its practices to this diversity of business experiences.

I.1. Sustainable Development and the Grand Challenges of our Time

The Brundtland Commission defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland et al., 1987). The report by the Brundtland Commission inspired a series of international summits that aimed to define the most pressing challenges to life on Earth, and what objectives the world community can set for nations and private actors to contribute to sustainable development (Ferns & Amaeshi, 2019). The first Earth Summit in 1992 achieved

2 a further conceptual delineation. Sustainable development has subsequently been reframed as comprising social, environmental, and economic dimensions (cf. Elkington, 1997). Along these three dimensions, in 2015 the United Nations (UN) General Assembly adopted a set of 17

Sustainable Development Goals (SDG), as well as 169 sub-targets which constitute a comprehensive agenda for nation states.

Despite these increasing efforts in political forums to implement an agenda for sustainable development, the challenges for the long-term conditions of life on Earth remain unresolved. Recent projections by the Intergovernmental Panel on Climate Change (IPCC) suggest that anthropogenic changes to the concentration of greenhouse gases (GHG) in the atmosphere will detrimentally affect life on all continents and in the ocean (IPCC, 2019a,

2019b, 2019c; Ripple et al., 2020). During the time of writing this thesis, international climate protests by younger generations have reached an unprecedented peak. The students, organized under the slogan ‘Fridays for Future,’ claim that politicians have ineffectively addressed an upcoming climate crisis, despite scientific forecasts of its impacts existing for decades (see e.g., Hall, 2015).

Climate change is not only a human problem, as it will potentially affect all life on

Earth. For instance, research suggests that an increase of carbon dioxide in the atmosphere and its uptake by plants will reduce their nutrient content (Loladze, 2002, 2014). For species depending on plant-based food, this would mean that the amount of nutrient intake will decrease, while the amount of calorie intake will remain stable – with yet unspecified consequences for dependent metabolisms. The relative decline of nutrients in plants could add a further toll to the loss of biodiversity worldwide. The Intergovernmental Science-Policy

Platform on Biodiversity and Ecosystem Services (IPBES) already predicts that within decades, about one million species will become extinct due to anthropogenic influences on the ecosystems on which they depend (IPBES, 2019). The report by this panel highlights further

3 how human societies themselves depend on rich biodiversity and the services it renders through ecosystems. As the Executive Secretary of the UN Convention on Biological Diversity frames the challenge: “I hope we aren’t the first species to document our own extinction” (in Watts,

2018; see also Gray & Milne, 2018).

Despite scientists’ warnings about how human activity transcends planetary boundaries and its effects on its own kind (Ripple et al., 2017; Ripple et al., 2020; Rockström et al., 2009), efforts to define implementable objectives and to develop solutions still endure. Due to their global nature, as well as the territorial constraints of nation states (Hall & Biersteker, 2002;

Strange, 1996), sustainability challenges have, amongst other global issues, contributed to major shifts in international politics.

I.2. The Role of Private Actors in Addressing Unsustainable Development

The rise of private actors in global governance has been observed by sociologists and political scientists as a phenomenon of globalization (Cutler et al., 1999; Hall & Biersteker, 2002;

Scherer & Palazzo, 2011; Strange, 1996). Private actors in global governance are, for instance, non-governmental organizations (NGOs), standard setters, and businesses. For private actors pursuing international interests, the participation in or the influencing of international decision- making processes can be of strategic relevance. Furthermore, private actors are now considered indispensable in the governance of complex issues of public concern: on the one hand, due to the global spread of their activities, these actors are at the forefront of implementing international agendas; on the other hand, their resources for the implementation of agendas can complement the efforts of nation states (Clapp, 1998; Cutler et al., 1999; Green & Colgan,

2013; Scherer & Palazzo, 2011). In these terms, the rise of private actors in global governance is a necessary shift in politics, as concerns on a global scale stress traditional decision-making

4 processes within and between nation states (Keohane & Victor, 2011; Orsini et al., 2013;

Scherer & Palazzo, 2011).

This thesis expounds the roles of two types of actors for the effective pursuance of sustainability objectives in society. First, it focusses on businesses as being the major organizational form through which humans cause unsustainable development (Purser et al.,

1995; Shrivastava, 1995a, 1995b; Throop et al., 1993). This means that business practices must change in order to contribute to achieving sustainability objectives (Shrivastava, 1995a, 1995b;

Starik & Kanashiro, 2013; Starik & Rands, 1995; Whiteman et al., 2013). Second, this thesis introduces the concept of the sustainability service industry as a group of actors that aims to enable relevant changes in businesses practices. The sustainability service industry comprises international, national, and industry initiatives; sustainability standard setters; business consultancies; rating agencies, and, to a lesser extent, academics and NGOs; as well as sustainable supply chain managers in corporations, amongst others. The sustainability service industry thus consists of private as well as public actors, who are all located outside of the businesses they address through their service practices. The phenomenon I wish to highlight about the sustainability service industry is the enabling effect that its services ought to deliver, particularly the promotion of management approaches for adoption by businesses. In aiming to enable sustainability performance in businesses, the sustainability service industry functions in modern societies as change agents for the business community (Greenwood et al., 2015).

This thesis reveals a major caveat to the effective functioning of the sustainability service industry. The caveat results from business sustainability scholarship, to date, not being able to discern when management approaches lead to performance or underperformance on sustainability objectives (see also Halme et al., 2018). In other words, scholarship cannot yet thoroughly explain how sustainability performance occurs in businesses. Without this understanding, scholarship is not in the position to inform the sustainability service industry

5 on how to enable effective changes in business practices. It is therefore not evident how the sustainability service industry orients in its practices toward sustainability performance in businesses.

I.3. The Prerequisite of Understanding Sustainability Performance in Businesses

Businesses are the main form of organization through which modern-day societies create wealth. The wealth of societies is understood as their access to goods and services (Mill, 1892;

Weitzman, 1976). Modern-day societies produce goods and services through a large-scale division of labor, ranging from the extraction of natural resources and their processing, to manufacturing, logistics, and the marketing of goods and services, amongst others. The division of labor arranged between businesses is generally referred to as a value or supply chain. Financial resources serve in value chains, as well as for end consumers, as a token of exchange to access goods and services (Innes, 1913). The acquisition of financial resources stands above the access to goods and services as an indicator of societal wealth. Particularly for businesses, the generation of financial profit and shareholder value are lead indicators of organizational performance (Friedman, 1970).

In the process of producing and using goods and services, humans adopt a perverse focus with regard to the functions they create to meet their needs and wants. Underlying the focus on functions of goods and services is a social reality construction process that institutionalizes how individuals within societies relate to objects and their surroundings

(Berger & Luckmann, 1967). Berger and Luckmann provide a simple example for the effect of the focus on functions of goods, which holds, as I will explain, a message about the origin of what are now global sustainability challenges:

All of this telephonic lore is recipe knowledge since it does not concern anything except what I have to know for my present and possible future pragmatic purposes. I am not interested in why the telephone works this way, in the enormous body of scientific and engineering knowledge that makes it possible to construct telephones. Nor am I interested in uses of the telephone that lie outside my purposes, say in combination with short-wave radio for the purpose of marine communication (Berger & Luckmann, 1967, p. 57).

What is described here, in the example of the telephone, is how, above all, humans in modern societies who utilize manufactured goods to meet their needs and wants, focus on the functions goods render, without having to understand anything else about the objects in use.

Here, the authors refer to the technical use of a product, meaning that users can focus on one technical function significant for their purposes, while there is no need to possess any knowledge about other functions or how these functions come into being.

Of relevance for the context of sustainability challenges that contemporary societies face, is that this focus on the function of goods and services applies also to production processes in value chains (Shrivastava, 1995a). To use or to manufacture a telephone, one does not have to know how and where the natural resources for the telephone have been extracted, or how or where they have been processed, or about the impacts of the diverse production and logistics processes involved. In harnessing a function of any good (or semi-produce), users (or manufacturers) do not need to know how the resources it contains will be used once the good becomes function-less (i.e., when the good turns into ‘waste’), or how a disposed good will continue to impact the environment. A reduction of knowledge thus applies also to each step in the value chain, as businesses do not need to make use of excess knowledge for the production of goods and services, unless it meets business-intrinsic purposes of value creation.

The effect of this social reality construction process, which is fueled by a belief in wealth being the access to goods and services, is a detachment of humans from the natural environment and from the functioning on which life depends (Evernden, 1993; Gray & Milne, 2018; Purser et

7 al., 1995; Shrivastava, 1995a). This detachment from environmental conditions of existence continues as long as it becomes problematic. As Berger and Luckmann (1967, p. 59) also concluded: “Only when my maxims fail ‘to deliver the goods’ in the world to which they are intended to apply are they likely to become problematic to me ‘in earnest.’”

As an unavoidable consequence, discourses of unsustainable development in the world have also affected business management and organization studies. After the landmark events of the Brundtland Commission in 1987, and the first Earth Summit in 1992, the Academy of

Management Review devoted its 20th volume to numerous articles theorizing on the relationships between firms, their stakeholders, and the natural environment. Authors acknowledge in this volume the outstanding role that businesses play in causing, together with human consumption behavior, a plethora of present, as well as long-term challenges for livelihood (Purser et al., 1995; Shrivastava, 1995a, 1995b; Starik & Rands, 1995). At the same time, the papers in this volume marked a major push forward for business sustainability scholarship in understanding the complex relationships business organizations have beyond their customers, suppliers, or regulators. In particular, some contributors denounced the socially constructed detachment of humanity and their organizations from nature, by arguing that all life and all matter are inextricably part of the natural environment (Gladwin et al., 1995;

Purser et al., 1995; Shrivastava, 1995a; Starik & Rands, 1995). Ever since this push forward in the Academy of Management Review, business research on sustainability has been thriving.

Linnenluecke and Griffiths (2013) illustrate the dynamics of this field, how its publications started to skyrocket from the early 1990s, and how it has evolved along several conceptual genealogies.

Despite business sustainability scholarship’s engagement in developing concepts and theory, the real-world effects of business activities on the environment appear to have worsened

(Dyllick & Muff, 2016; Landrum, 2018; Whiteman et al., 2013). Whiteman and her colleagues

8 suggest that business sustainability scholars need to incorporate the science of environmental degradation into their studies to enhance their potential for real-world impacts (Whiteman et al., 2013). Other scholars bemoan a certain degree of meaninglessness of popular concepts applied in the business sustainability field, like corporate social responsibility (CSR; Fleming

& Jones, 2013) or shared value (Crane et al., 2014). In addition, research into the corporate social performance (CSP)–corporate financial performance (CFP)–nexus is largely attuned to interests of whether there is a monetary business case for this form of engagement. Meanwhile, these inquiries have left unexplored the worldwide impacts of business activities, and how they will affect the abilities of future livelihood (Margolis & Walsh, 2003; Whiteman et al., 2013).

In a recent contribution, Halme et al. (2018) opened up a new line of inquiry by questioning when there is an actual ‘sustainability case’ resulting from business engagement on social and environmental objectives. These authors addressed what they considered an underdevelopment of academic knowledge on the actual sustainability performance of business practices:

However, we are not aware of any empirical research that would really tease out the link between CSR management and environmental and social performance to understand the nature of this link, when it will lead to performance improvements, and when and why the link might be broken, preventing performance improvements (Halme et al., 2018, p. 3).

Halme and her colleagues suggest that business sustainability scholarship does, to date, not comprehend the link between management approaches and the sustainability outcomes and impacts of business operations. Thus, this scholarship is not yet in a position to thoroughly explain when companies perform well or when they underperform on sustainability objectives.

Following Halme and her colleagues, I define sustainability performance in businesses as the link between business-internal practices and their sustainability outcomes and impacts.

Researching sustainability performance in businesses follows thus a different interest than a focus on the sustainability performance of businesses (e.g., Whiteman et al., 2013). The latter perspective emphasizes outcomes and impacts but does not inquire into their linkages to business-internal practices. Understanding the linkages between internal practices and contributions to sustainability objectives is, however, of crucial importance for explaining what performance societies can expect from businesses and how this will affect possibilities for societal sustainability transitions, and thus for future livelihood. To make this difference more explicit: research on the sustainability performance of businesses would ask, for instance,

‘what is the sustainability performance of businesses (and how can we measure it)?’ In contrast, research on the sustainability performance in businesses would ask, for instance,

‘how does sustainability performance occur in businesses?’ I take in this thesis the latter approach, which is, therefore, purposefully different from vast previous research to reveal new insights on the topic. Correspondingly, the interest of this thesis is not primarily on the sustainability performance of businesses but on sustainability performance in businesses, meaning how that performance comes into being inside businesses.

That sustainability performance in businesses is, so far, an overlooked area of research, has stark ramifications for the effectiveness of the sustainability service industry, as well as for societies’ aspirations. It is not evident what performance rationales the sustainability service industry applies when it promotes management approaches for the adoption by businesses.

Furthermore, there is no evidence-based guidance on how actors of the sustainability service industry could improve their approaches to enable substantive changes in business practices.

For societies which aim to solve sustainability challenges, this means that it is unclear whether the changes promoted to business practices by the sustainability service industry will lead to the anticipated performance.

I.4. Research Aims

This thesis has three aims. First, the project aims to clarify how the sustainability service industry operates in conditions where there is no evidence-based guidance on how to enable sustainability performance in businesses. In particular, the thesis assesses the performance orientation of two different disciplines with diverse schools of thought to understand how they relate to one another, i.e., practitioners of the sustainability service industry, and researchers of business sustainability. I chose problematization as the methodological approach to bring this relationship to light. Problematization aims to generate research questions by challenging assumptions held in research designs, and is thus an alternative approach to the more common gap-spotting in academic literature (Alvesson & Sandberg, 2011; Sandberg & Alvesson, 2011).

Therefore, an initial research question that this thesis will answer is:

RQ1: How does the performance orientation of the sustainability service industry relate to the performance orientation in business sustainability scholarship?

The second aim is to describe and explain how sustainability performance occurs in businesses. Through a phenomenographic study of 21 businesses operating along the automotive value chain, this research reveals the different ways in which organizations understand, and hence pursue, sustainability performance. The sample selection makes use of stakeholder pressure on car manufacturers to understand sustainability performance in their value chains. By collecting data from organizations engaging in the production of resources, the processing of resources, and end-product manufacturing, the sample allows for an analysis of a diversity of business experiences. Counter to positivist research which measures the sustainability performance of businesses, a phenomenographic study takes businesses’

11 experiences as a point of departure. The results show how understandings shape internal experiences, and how these understandings differ in accordance with contexts of engagement.

The research question that this empirical investigation answers, and which forms the primary research question of this thesis, is:

RQ2: How does sustainability performance occur in businesses?

The third aim of this project is to derive implications for real-world practices, particularly, for the practices of the sustainability service industry. The existence of the sustainability service industry as a homogenous group of actors, despite its heterogeneous appearance, has, so far, had scant attention in business sustainability scholarship. The sustainability service industry consists of change agents regarding the business community

(Greenwood et al., 2015). The provisions of the sustainability service industry, fall, to a large extent, outside of the scope of regulatory enforcement. This industry should therefore receive attention from business sustainability scholars as an audience for their research (Hoffman,

2016). The way in which I will derive implications for the sustainability service industry is through discussion of this project’s findings. The third deliverable of this thesis is therefore to answer the question:

RQ3: What do the findings imply for the sustainability service industry?

I.5. Structure of the Thesis

This thesis is organized in seven chapters. Chapter I is the introductory chapter in which I lay out the overarching problem addressed in the thesis. The context was presented as human

12 civilization facing severe sustainability challenges, businesses being the major organizational form through which humans cause unsustainable development, and the existence of a sustainability service industry which aims to enable changes in business practices accordingly.

Furthermore, I highlight the state of knowledge of sustainability performance in businesses and its ramifications for actors who seek for relevant changes in business practices.

Chapter II looks at the issue of an operating sustainability service industry, despite a lack of knowledge about how to enable sustainability performance in businesses. In particular, this chapter answers the first research question of how the performance orientations of the sustainability service industry and of business sustainability scholarship are related to one another. The methodological approach to answer this question is problematization (Alvesson

& Sandberg, 2011; Sandberg & Alvesson, 2011). The methodology of problematization influences the structure of the chapter, as it develops an argumentation about the existence of field assumptions that are shared by practitioners and researchers alike. These field assumptions pertain to contingency theory. The discussion of this finding concludes the business sustainability scholarship reviewed in this thesis is not yet in a position to explain how sustainability performance occurs in businesses, and thus to provide evidence-based guidance for practitioners of the sustainability service industry. A research agenda proposes first ways out of this impasse. Chapter II is based on a published research paper, which comprises the literature review carried out for this thesis.

Chapter III builds on the findings in Chapter II and elaborates on the interpretative approach I adopted to investigate how sustainability performance occurs in businesses. Chapter

III first explains the methodology underlying phenomenography as a research design, and then describes the methods that I used to conduct the empirical research. It also contains information on the background of the 21 sample organizations of the automotive value chain, particularly on why I chose this sampling strategy to collect my data. The chapter expands further on how

13 the data analysis resulted in the phenomenographic results, as well as in how far the research design fulfills criteria of credibility.

Chapter IV presents the results of the phenomenographic study. The introduction to the chapter expands on the sustainability engagement in mining and automotive industries and directs the attention of readers to how to interpret the study’s results and their presentation.

Phenomenographic results are presented as an ‘outcome space’, comprising the different conceptions through which study participants experience the phenomenon of interest. In this chapter, I present five different ways in which sustainability performance occurs in businesses.

The presentation of each of these five conceptions of sustainability performance unfolds within four categories of description that I identified as part of the data analysis. The final section of

Chapter IV says more about how the phenomenographic outcome space represents an internal whole of possible experiences of sustainability performance in businesses; and how far the outcome space forms a hierarchy of conceptions, as well as how the research participants and their characteristics are distributed across these results.

Chapter V is the first discussion chapter and focusses on the findings’ implications for business sustainability scholarship. In particular, I discuss what these findings imply for a contingency-based theory of sustainability performance in businesses and connect thereby the findings of the phenomenographic study (Chapter IV) and of the problematization (Chapter II).

The chapter is organized according to major concepts of contingency theory, as well as its underlying paradig. Three sections expand on what the findings of the phenomenographic study tell us about the basic concepts of contingency theory in a context of sustainability performance in businesses. The discussion in these three sections derives first propositions, which mark a way forward for the development of a contingency theory of sustainability performance in businesses. The chapter concludes with a section on implications for business sustainability scholarship that go beyond contingency theory. Here, I explain how far researchers in this field

14 engage in ‘conception mismatching’ which suggests that the phenomena scholars consider in their research might often not match the experienced realities of studied businesses.

Chapter VI is the second discussion chapter and focusses on the findings’ implications for practitioners of the sustainability service industry. The chapter thus responds to the third research question of this thesis. Drawing on the findings of the study, I formulate five implications according to which actors of the sustainability service industry should consider changing their understandings of their work and approaches as to how to enable sustainability performance in businesses.

The final chapter, Chapter VII, summarizes the findings of the thesis, names the contributions to the literature, and points to limitations of this project as well as to future research needs to advance knowledge of sustainability performance in businesses.

Chapter II

Contingency in Business Sustainability Research and in the Sustainability

Service Industry: A Problematization and Research Agenda

This chapter has been published in Organization & Environment, doi:

10.1177/1086026619897532. The original publication has been modified to fit the structure and further content of the thesis.

II.1. Chapter Introduction

A recent contribution by Halme et al. (2018) points to an extensive knowledge gap within business sustainability scholarship, claiming that no empirical evidence would yet exist that captures how management approaches lead businesses to perform on sustainability objectives.

The chapter at hand expands on this and other critiques on the limitations of this scholarship

(e.g., Bradshaw & Zwick, 2016; Crane et al., 2014; Fleming & Jones, 2013), by adding a new viewpoint to their underpinnings. I will argue here that a broad range of practitioners remain, to date, uninformed about how to enable effective changes in real-world business practices, because scholarship is not yet in a position to explain how sustainability performance occurs in businesses.

To connect business sustainability scholarship with its real-world context, this chapter introduces the sustainability service industry as a central audience for research findings

(Hoffman, 2016). The sustainability service industry comprises all actors that reside outside of the businesses which they address through service practices. Their service practices are considered to enable sustainability performance in businesses. In other words, it is the sustainability service industry that functions in real-world practices as agents of change

16 regarding the business community (Greenwood et al., 2015). However, considering that scholarship has overseen the need to clarify the link between management approaches and their contributions to sustainability objectives (Halme et al., 2018), it is not clear how the sustainability service industry orients toward performance in its approaches to enact changes in business operations. By connecting real-world with research practices, this chapter aims to demonstrate how the performance orientation of the sustainability service industry relates to the performance orientation in business sustainability research.

I chose problematization as the methodological approach to demonstrate how the performance orientations of practitioners and researchers relate to one another.

Problematization is a methodology to challenge assumptions held in research designs and to make them subject of inquiry (Alvesson & Sandberg, 2011; Sandberg & Alvesson, 2011).

Through problematization, this chapter unearths how both practitioners and researchers in the business sustainability field implicitly follow assumptions of contingency. The corresponding assumptions are, for practitioners, that there is no one best way to develop and deploy management approaches for the achievement of sustainability objectives, and, for researchers, that studied management approaches will be contingently effective. Neither practitioners nor researchers articulate these assumptions of contingency; nor are they likely to know about their assumptions; nor do researchers inquire into them. As a consequence, these implicit assumptions of contingency leave the field wide open for understanding how sustainability performance occurs in businesses.

The contributions to the literature are twofold. Firstly, the chapter unearths field assumptions in the business sustainability field by relating the performance orientations of practitioners and researchers to each other. Field assumptions of contingency connect practitioners and researchers in the business sustainability field and refrain scholarship from creating evidence-based guidance on how the sustainability service industry could improve its

17 practices for more effective changes to business operations. Secondly, through the elaboration of a research agenda, the chapter makes these field assumptions subject of inquiry. The research agenda aims for the development of theory of sustainability performance in businesses that should, in the long run, contribute to the creation of more evidence-based guidance for practitioners.

Before going into the argumentation, I explicate the methodology of problematization, its adoption in this study, and how it influences the structure of the chapter.

II.2. Problematization as a Methodology to Clarify Assumptions in the Business

Sustainability Field

Problematization is a methodology to generate research questions (Alvesson & Sandberg,

2011). Alvesson and Sandberg have brought forward problematization as an alternative to a prevalent and incremental “gap-spotting habitus” in business management and organization studies (Alvesson & Sandberg, 2013, p. 136). These authors added to previous discussions about the need for the development of more interesting research (Bartunek et al., 2006; Davis,

1971) by suggesting that research can move beyond incrementalism when identifying and challenging assumptions held in research designs. The novelty in the approach by Alvesson and Sandberg (2011) lies in the systematic guidance provided to researchers to engage in a problematization process as well as in a typology of assumptions to be challenged with an augmenting interestingness of contributions to theory (see Table 1).

This study follows the methodology of problematization as laid out by Alvesson and

Sandberg (2011), but also deviates from their guidance. Table 1 illustrates the six steps these scholars suggest for a problematization process. As this chapter follows an agenda of connecting research to its real-world implications, the first step I undertook for this study was

Aim of the problematization methodology

Generating novel research questions through a dialectical interrogation of one’s own familiar position, other stances, and the literature domain targeted for assumption challenging

A typology of assumptions open for problematization

In-house: Root metaphor: Paradigm: Ideology: Field: Assumptions that Broader images Ontological, Political-, moral-, Assumptions exist within a of a particular epistemological, and gender- about a specific specific school of subject matter and related subject matter thought underlying methodological assumptions that are shared existing literature assumptions underlying across different underlying existing literature theoretical existing literature schools

Principles for identifying and challenging assumptions

1. Identify a 2. Identify and 3. Evaluate 4. Develop 5. Relate 6. Evaluate domain of articulate articulated alternative assumptions alternative literature: assumptions: assumptions: assumptions: to audience: assumptions: What main What major Are the What What major Are the bodies of assumptions identified alternative audiences alternative literature and underlie the assumptions assumptions hold the assumptions key texts literature worthy to be can be challenged likely to make up the within the challenged? developed? assumptions? generate a domain? identified theory that domain? will be regarded as interesting by the audiences targeted? Table 1: The methodology of problematization; Source: Alvesson and Sandberg (2011, p. 260)

(1) the identification of a real-world problem that warrants improved understanding. I identified the initial problem statement in a report on the effectiveness of sustainability certification schemes: after a two-year investigation, Barry et al. (2012) could not clarify whether management approaches to sustainability are an effective means to enable changes in business operations. Subsequently, my own review set out with searches into the practices of a variety of actors that promote management approaches in the business sustainability context. After (2) an initial identification of assumptions held by practitioners, (3) I expanded the review to incorporate literature on the internal determinants of business sustainability. I chose this second domain to capture how sustainability performance is understood by scholars to occur in

19 businesses. (4) I related the findings from the review of practices and research to each other and identified their assumptions to resonate with contingency theory. (5) I evaluated assumptions of contingency in light of their appropriateness by the current state of knowledge, as well as by their implications on how scholarship informs practitioners on the effectiveness of management approaches to business sustainability. Finally, instead of ‘challenging’ assumptions of contingency in the business sustainability field, (6) I opt for their clarification in the form of a research agenda.

The result of engaging with the literature in a process of problematization is a comprehensive and compelling argumentation about the existence of field assumptions in the business sustainability field. “Field assumptions are difficult to identify because ‘everybody’ shares them, and, thus, they are rarely thematized in research texts” (Alvesson & Sandberg,

2011, p. 257). The present study identifies implicit assumptions of contingency as field assumptions in the business sustainability field by looking across communities of practices for assumptive relations. The assumptions of contingency this study unearths are field assumptions, as they hold true irrespective of actors, their practices, and their practice-inherent theoretical schools. Table 2 summarizes the following argumentation about the existence of implicit assumptions of contingency in both real-world practices and academia, and offers guidance to readers to track this argumentation throughout the chapter.

The remainder of this chapter is structured in accordance with the argumentation leading to the unearthing of the field assumptions, as well as with the steps outline for the problematization process. The first argumentation leads to the assertion of assumptions of contingency among practitioners of the sustainability service industry. The second argumentation leads to a similar assertion regarding relevant scholarship. This is followed by an evaluation of assumptions of contingency for both research and practices. The chapter concludes with the research agenda.

Arguments about the performance Arguments about the performance orientation of the sustainability service orientation of business sustainability industry: scholarship:

1) Diverse actors forming a sustainability 6) Research on internal determinants of service industry emerge interdependently. business sustainability predominantly explains the adoption of management 2) Because empirical evidence on approaches and other concepts that do not sustainability performance in businesses is directly relate to sustainability objectives. not developed, the sustainability service industry has to rely on perceived good 7) Research on internal determinants of practices that are derived from business sustainability operates with sustainability-unrelated fields. limited validity in research designs, due to a neglect of comprehensive assessments of 3) As a consequence, the effectiveness of business performance on sustainability management approaches promoted by the objectives. sustainability service industry is unsystematic. 4) Due to unsystematic and unclarified effects, management approaches promoted by the sustainability service industry can get interchangeably applied.

The resulting key argument: The resulting key arguments:

5) The sustainability service industry operates 8) Business sustainability researchers operate at the macro-level with the implicit with the implicit assumption that assumption of contingency that there is no researched phenomena will be one best way to enable sustainability contingently effective and lead to optimal performance in businesses. sustainability performance.

The conclusion about the existence of field assumptions:

9) Business sustainability research and the sustainability service industry are related to each other by both following implicit (i.e., non-articulated and unacknowledged) assumptions of contingency in their respective works. Table 2: The argumentation in Chapter II for the existence of field assumptions of contingency in the business sustainability field

II.3. The Sustainability Service Industry and its Performance Orientation

In recent decades, the world has seen an unprecedented rise of actors that aim to fortify the pursuance of social and environmental objectives by businesses. The magnitude, diversity, and interdependence of these actors have been described before from a perspective of changes in global governance (Gilbert et al., 2011; Leipziger, 2016; Reed et al., 2012; Visser et al., 2007;

Vogel, 2008; Waddock, 2008). These actors comprise international, national, and industry

21 sustainability initiatives; sustainability standard setters; business consultancies; rating agencies; to a lesser extent, academics and NGOs; as well as sustainable supply chain managers within corporations, amongst others. Two defining criteria capture what makes this group of actors homogenously distinct, despite their heterogeneous appearance. First, these actors all reside outside of the businesses that they address. Second, these actors provide services that ought to enable sustainability performance in addressed businesses. In describing these actors as one homogenous group of practitioners, the phenomenon highlighted here is the enabling character of their service practices for the achievement of business sustainability. With an interest in elucidating real-world practices, I introduce the sustainability service industry as a label for actors that seek effective approaches to manage businesses’ contributions to objectives that are set by a global agenda. It is furthermore an ‘industry’ to the extent that, for instance, more than 5,500 consultancies operating in this space (Meyer et al., 2015), as well as nowadays more than 460 environmental certification schemes covering 25 industry sectors in 199 countries,1 indicate the significance of a) the size of the sustainability service industry, b) its potential for creating employment, and c) the volume of business worldwide in offering sustainability services.

Another observation is that the sustainability service industry promotes the adoption of management tools, mechanisms, and procedures that its actors perceive enable sustainability performance in businesses. Promoted tools are, for instance, sustainability strategies or sustainability-related policies that ought to guide management in effective decision-making; mechanisms are broader concepts of recursive processes like management systems and due diligence, which rely on documentation and prescribe ongoing orientations to problem-finding and -solving; procedures are commensurate considered action processes like the Plan-Do-

Check-Act cycle of management systems, or the procedure to define corrective actions after an audit, as well as to re-audit once the corrective actions are implemented.

To provide an example of the sustainability service industry, how it promotes the adoption of management approaches, and the interdependency among its actors, I refer here to the promotion of due diligence as a mechanism to mitigate risks of human rights abuses in supply chains. The Organization for Economic Cooperation and Development (OECD),2 a multilateral political forum, developed due diligence as a management mechanism to address issues of conflict minerals in supply chains. Law makers, first in the United States (US),3 then in the European Union (EU),4 established requirements for larger companies to conduct due diligence on conflict minerals. Business-led initiatives, like Drive Sustainability by CSR

Europe,5 now promote due diligence practices for more than a dozen resources. Ernst &

Young,6 or smaller boutique consultancies like RCS Global,7 assist companies in adopting and implementing these due diligence practices. NGOs, like the Enough Project,8 push companies through advocacy work to adopt due diligence as a management approach to conflict minerals.

Staff in corporations working on sustainable supply chain management, for instance, at Apple

Inc,9 or the General Motors Company,10 pass these requirements down to their business partners. Certainly, a range of auditing firms11 benefit from the new demand for third-party assurance services of supply chain due diligence practices.

This example demonstrates that the heterogeneous appearance of these actors is of relative importance when aiming to understand their influence on sustainability performance in businesses. For instance, one could reasonably assume that diverse financial interests of the actors shape their agendas and approaches to change business practices. Politicians and law makers, for example, would be more concerned with public support for their decisions and their chances for re-election into power, hence have no direct financial interest in the promotion of due diligence practices. Initiatives of business associations would be more concerned with meeting member expectations that can involve the maintenance and increase of payments of membership fees. NGOs would rather represent public concerns to outbalance negative effects

23 of market dynamics, although there are also NGOs which work closer with businesses and benefit from their funding of projects, like, for example, the World Wildlife Fund for Nature.

Consultancies or auditing firms, in turn, have direct financial transactions with their business clients. That financial transactions in these relationships could result in lax handling of purported objectives, has, for instance, become publicly known in the Enron scandal and the recent mine tailings dam failure of Brumadinho. In both cases, auditing firms proved more interested in maintaining good client relationships rather than making sure that their control functions were effective.

However, this heterogeneity of actors has only relative influence on how the sustainability service industry considers enabling sustainability performance in businesses.

What these actors have in common is that they all reside outside of the businesses they address, and that their services comprise the promotion of management approaches for adoption by businesses that are based on the same or similar performance rationales (in the above example: due diligence as a management approach to mitigate risks of human rights abuses in supply chains). Whether and how aspects of heterogeneity, like, for instance, diverse financial interests, affect performance outcomes of management approaches to change business practices, has not yet been studied. What this thesis highlights, therefore, is the homogeneity of the sustainability service industry in promoting management approaches that ought to enable sustainability performance in the addressed businesses.

The creation and promotion of new approaches to address severe concerns about unsustainable business practices is generally a commendable development. However, as this chapter elaborates, the promotion of management approaches that ought to enable sustainability performance in businesses, is, according to the current state of knowledge, problematic. Two reasons epitomize why these practices require problematization in research.

First, all management approaches promoted by the sustainability service industry have been developed without empirical evidence of whether these will effectively address issues of business unsustainability. The contribution by Halme et al. (2018) suggests that knowledge of which management approaches would lead to specific performance outcomes and impacts for sustainability, is, to date, missing. As empirical evidence on sustainability performance in businesses is in its infancy, the sustainability service industry must draw from professionally accepted means that are considered legitimate by a business community under pressure

(DiMaggio & Powell, 1983). The example of due diligence for sustainable supply chain management makes this dilemma explicit: the concept of due diligence stems from the finance sector, hence from a sustainability-unrelated field. Additionally, the idea of scrutinizing suppliers has its origins in the defense industry (Swift et al., 2000). A similarly dubious legacy without proven issue-adequate effectiveness can be suggested for audits and assurance practices (Boiral & Gendron, 2011), sustainability reporting (Etzion & Ferraro, 2010), codes of conduct (Bondy et al., 2007), and environmental management systems (Clapp, 1998; Corbett

& Kirsch, 2001; Delmas & Montes-Sancho, 2011; Orsato, 2006). What these management approaches have in common is that they were all previously applied in sustainability-unrelated fields and subsequently considered to also contribute to the achievement of sustainability objectives.

Second, and as a consequence, evidence suggests that the management approaches promoted by the sustainability service industry lead to unsystematic contributions to sustainability objectives. I stay with the above example of due diligence in sustainable supply chain management to illustrate the extent of this argument. IPIS and Ulula (2019) have undertaken an impact assessment of due diligence programs in the eastern Democratic

Republic of Congo (DRC), i.e., the region with international attention due to the production of conflict minerals. The impact assessors find that in mining zones with operating due diligence

25 programs, there is less armed group involvement, less illegal taxation, and less corruption.

However, there also remains a significant presence of the very same concerns in mine sites with due diligence programs. Furthermore, the following of due diligence practices does not show significant differences for issues of low income payments, child labor usage, experiences of violence, and environmental degradation. Despite an interest in understanding how impacts result from due diligence practices, the study by IPIS and Ulula (2019) does not clarify the nature of this link. Other research suggests that the majority of companies are incapable of determining whether they are sourcing conflict minerals (Kim & Davis, 2016) and that the related law enforcement in the US has led to increasing conflict in the DRC and its neighboring countries (Parker & Vadheim, 2017; Stoop et al., 2018). It appears thus, in this example, that the link between management approaches and issues of business unsustainability has not yet been established.

A fallacy about the effectiveness of concurrent management approaches to business sustainability does not rest on due diligence practices alone, but also involves other tools and mechanisms promoted by the sustainability service industry. For instance, it remains to date unclear to what extent sustainable supply chain management programs are conducive to achieve sustainability objectives (Pagell & Shevchenko, 2014; Sheffi & Blanco, 2018; Villena

& Gioia, 2018). That there can be a focus on following perceived good practices, rather than on addressing issues of concern, has also been long maintained for sustainability reporting

(Belkhir et al., 2017; Cho & Patten, 2007; Delmas & Montes-Sancho, 2010; Diouf & Boiral,

2017; Patten, 2002). In the case of environmental management systems, there is an open debate about whether these mechanisms lead businesses to improve their environmental performance

(Graafland & Smid, 2016; Graafland, 2018; Khanna & Brouhle, 2009) or whether they are insignificant (Baek, 2018; Boiral, 2007; Zobel, 2018). Also, for the reduction of GHG emissions, researchers find that management practices promoted in international guidelines can

26 be insignificant (Doda et al., 2016; see also Wang, 2018). Research into the effectiveness of other sustainability management approaches and practices (including policies, reporting, accounting, life cycle assessments, carbon footprint assessments, etc.) suggest further that companies are biased toward the reaping of financial benefits in their deployments (Hörisch et al., 2015; Stevens et al., 2005). In another review of a range of tools designed to integrate environmental objectives into organizational practices, amongst others, Runhaar (2016, p. 7) concludes that they can be useful to promote policies and practices, but that “their performance usually is modest.”

II.3.1. The implicit assumption of contingency in practices of the sustainability service industry

Resulting from unclear performance expectations of widespread practices, there is confusion about what management approaches to promote when addressing a sustainability issue of concern. Mori Junior et al. (2017) illustrate in a comparative content analysis of 18 sustainability schemes in the mining industry that diverse approaches get interchangeably applied. Management tools and mechanisms like ‘policy,’ ‘due diligence,’ ‘risk assessment,’

‘management system,’ or an even less specific appearance – ‘a system in place’ – are requested in standard provisions across initiatives and for various issues of public concern. This interchangeable promotion of management approaches is also the case in more traditional core concerns to businesses, as in occupational health and safety, despite a management system approach being promoted internationally as good practice. It is not clear why actors promote a certain management approach to address a specific issue, what the assumed connotations are, and the performance rationales for the respective choices.

The promotion of diverse management approaches due to unclear performance expectations infers that the sustainability service industry operates at the macro-level with the assumption that there is no one best way to organize for sustainability performance in businesses. While an individual actor of the sustainability service industry can endeavor to prescribe effective approaches to businesses, other actors can promote diverging approaches for the same reason of perceived effectiveness. Thus, different actors promote different management approaches that are assumed to be similarly effective.

The assumption of the existence of a variety of best options is a key pillar of contingency theory (Lawrence & Lorsch, 1969). Contingency scholars propose that to achieve optimal organizational performance, managers need to deploy structures and practices that depend on the contingent variables of the organizational environment. In the context of the sustainability service industry, this means that managers deploy diverse tools, mechanisms, and procedures, depending on the sustainability issue needing to be addressed and according to its environmental characteristics. Thereby, the organization will achieve optimal sustainability performance in the areas addressed.

The assertion that all practitioners, who promote management approaches to sustainability issues, operate at the macro-level with assumptions of contingency and limited performance expectations warrants explanation. Hence, the following section aims to clarify how the contingency-based performance orientation of the sustainability service industry relates to the knowledge produced by researchers about the internal determinants of businesses and their linkages to sustainability performance.

II.4. What Do We Really Know So Far? Research on Internal Determinants of Business

Sustainability and its Performance Orientation

This section aims to decipher the performance orientation scholarship takes when researching phenomena of business sustainability. In order to grasp this performance orientation, I expanded the literature review to encompass the academic knowledge to date on internal determinants of business sustainability. I chose this literature on the premise that the inside of businesses is the primary location where their sustainability performance occurs. A first extensive reading of the literature led to the identification of seven contributions in which scholars had searched before, systematically and unsystematically, for internal determinants of business sustainability phenomena (Adams, 2002; Aguinis & Glavas, 2012; Delgado-Ceballos et al., 2012; Engert et al., 2016; Hoejmose & Adrien-Kirby, 2012; Morioka & de Carvalho,

2016; Thijssens et al., 2016). Following the rhetoric of scholars who presented an overview about ‘what we know and don’t know’ (Aguinis & Glavas, 2012), the interest in sustainability performance requires questioning what it is that we really know about the effects of business- internal determinants. Consequently, I started reanalyzing the literature used in those seven contributions and focused on references which would a) aim to explain potential improvements in social and/or environmental dimensions of sustainability, b) elaborate on internal determinants in contexts of for-profit organizations, and c) use primary data in providing empirical insights or which are conceptual in nature. Thereby, I selected a first set of 80 peer- reviewed articles that encompass publications from 1975 to 2016.

To provide a more up-to-date account of this scholarship, I selected a range of journals in business management and organization studies (i.e., Academy of Management Journal;

Academy of Management Review; Accounting, Auditing & Accountability Journal; Journal of

Management Studies; Strategic Management Journal) as well as field-specific journals (i.e.,

Accounting, Organizations & Society; Business Ethics: A European Journal; Business &

Society; Business Strategy and the Environment; Corporate Social Responsibility and

Environmental Management; Journal of Business Ethics; Journal of Cleaner Production;12

Management of Environmental Quality: An International Journal; Organization &

Environment) in which the first set of 80 articles are predominantly published. I manually searched for respective contributions in these journals through cautious reading of titles and abstracts in the volumes of the past three years (2016-2018). By applying to this literature the same three selection criteria named above, I collocated a second set of 330 papers, leading to a total sample of 410 peer-reviewed articles.

In analyzing this body of work to understand the performance orientation of its scholarship, three questions were of central interest: 1) What are the internal determinants of business sustainability? 2) What is explained in research encompassing internal determinants of business sustainability? 3) By what data sources are these explanations reached? In a first screening of the articles, I extracted information in correspondence to these questions and grouped contributions into emerging patterns. In a second screening, I consolidated the literature by its prevalent patterns to provide a consistent and faithful interpretation of this body of work. Tables 3, 4, and 5 summarize the information gained on these three points of interest.

Tables 4 and 5 are provided with the full list of references in attachment to this thesis (see

Appendix 1 and Appendix 2 respectively).

Researchers have identified a myriad of internal determinants that are said to drive sustainability performance in businesses. The results concur with factor divisions by

Adams (2002) and Thijssens et al. (2016) into personal and organizational traits, but there is also sufficient work done to separate a procedural dimension.

Organizational determinants Procedural determinants Personal determinants

Organizational culture Performance management Management (commitment)

Corporate governance Stakeholder responsiveness Leadership (style)

Integration Organizational learning Change agents (structural, functional, operational, strategic and personnel integration) Strategic fit Employee motivation

Organizational capabilities Decision-making Awareness and attitude

Organizational structure Communication Qualification and capacities Table 3: Simplified overview of internal determinants of business sustainability

While one may on first reading of Table 3 perceive that business sustainability scholarship achieved an advanced understanding of what drives sustainability performance in businesses, the scrutiny of this literature suggests that we have little evidence on the overall effects of these determinants. The following analysis of the performance orientation of business sustainability scholarship expands selected issues of validity in contributions on the internal determinants of business sustainability.

II.4.1. Limitations of validity in research on internal determinants of business sustainability

Nearly 50 percent of business sustainability research with an interest in internal determinants explains phenomena of perceived engagement, willingness of engagement, and the adoption or application of management tools, mechanisms, and procedures. The explanation of the adoption or application of management approaches is the largest group within this research body, accounting for more than a quarter of these studies. In this kind of research, scholars explain sustainability management phenomena by other management phenomena and organizational characteristics. Thus, scholars in this field tend to explain what is done or intended by businesses (output level) without elaborating on how this translates into

Percentage of studies in the Explained business sustainability phenomena literature sample13 Output level Adoption or application of management tools, mechanisms, and procedures 26.6% Perceptions of leadership, reputation, performance, organizational development etc. 18.7% resulting from sustainable engagement Adoption or investment into environmental technology and/or practices 10,7% Willingness, commitment, orientations, understandings, etc. for sustainable engagement 7.1% Content of annual or sustainability reports or other documents 5.9% Variable constructs of ethical behavior, corporate citizenship, or citizenship behavior for 5.1% the environment Development, adoption, implementation, or participation in initiatives or partnerships, as 4,1% well as philanthropy Strategic integration; development of organizational structures 3,1% Product development 2.4% Propensities to innovate or to adopt innovative practices 2.2% Organizational responsiveness 1,5% Others 7,6% Outcome level Variable constructs of combined social and environmental performance 8.5% Variable constructs of environmental performance 8.3% Variable constructs of social performance 2.7% Issue-specific environmental performance 2.4% Issue-specific social performance 1.0% Issue-specific ethical performance 0.7% Results in rankings by third parties 0.5% Impact level None 0,0% Table 4: Researched phenomena in the literature on internal determinants of business sustainability (summarized)

organizational performance (outcome level) or feeds into societal or global sustainability objectives (impact level). While this body of work contributes to the advancement of concepts and theories in the business sustainability field, it does risk promoting management approaches that have unclarified means-ends relations (Bromley & Powell, 2012).

A variety of quantitative researchers take a more outcome-oriented stance. Yet, generalizations of results are overstated if data is limited to a few sustainability issues only,

32 that are further obfuscated by aggregations in variable constructs (H. Wang et al., 2016). This is particularly the case for the use of commercially motivated databases, like the Kinder

Lydenberg Domini (KLD) database. There are various limitations of the validity of KLD data if understood to measure businesses’ contributions to sustainable development, as previously indicated by a range of scholars (Chatterji et al., 2009; Entine, 2003; Rowley & Berman, 2000;

Wood & Jones, 1995).

A central issue of commercially motivated third-party databases is, however, that the rating agencies collecting this data are also affected by a lack of access to comprehensive performance measures. Facing constraints in obtaining comprehensive performance data, rating agencies compensate this lack by a codification of how businesses adopt management tools, mechanisms, and procedures (Delmas et al., 2013). An insight into these practices give the contributions by Labelle et al. (2018) as well as Rodríguez-Ariza et al. (2017), which include some details of the SiriPro and EIRIS databases respectively. It is evident that these rating agencies put a strong emphasis on the availability of policies, statements, programs, systems, reports and other management tools, which are then combined with other performance data into constructs. Yet, researchers who draw their conclusions by interpreting these aggregated constructs do not (or cannot) differentiate between the extents of actual performance on sustainability issues of concern or the generic adoption of management approaches by businesses (Schneider & Meins, 2012). Therefore, despite their merits in advancing the use of sustainability performance measures, rating agencies are at the forefront of what I term to be a sustainability service industry that creates impressions of performance.

In the reviewed body of work, researchers surveying organizational members on their achievements also create impressions of sustainability performance. This is particularly the case when researchers use positively formulated questions to assess progresses of resource efficiency, yet without aiming for an adequate insight into the variety of resources utilized in

33 businesses (e.g., Delmas & Pekovic, 2018; Paulraj et al., 2017; Phan et al., 2018; Testa, Iraldo, et al., 2018; Zhu et al., 2007). The resulting performance data should cover, for instance, in which cases emissions have decreased, but also in which they increased or remained stable. By the current practice of keeping performance on aggregated levels, researchers omit eventual simultaneous underperformance of businesses on other categories. Readers also do not get to know how study participants draw boundaries when answering these questions. For example, if asked about environmental accidents in business operations (Paulraj et al., 2017; Zhu et al.,

2007), what do survey participants consider an environmental accident to be? And what is otherwise a non-accidentally occurring, thus socially accepted environmental degradation?

Due to such limitations, research on internal determinants through survey instruments appears to equally create impressions of performance.

A further issue of impression creation is prevalent in research on internal determinants of ethical and organizational citizenship behavior. Ethics are generally perceived to be part of sustainability discourses (see e.g., Shevchenko et al., 2016). Notwithstanding, research on ethics and organizational citizenship behavior has difficulty in translating its conceptual meanings into concerns of business sustainability (see also Fernández & Camacho, 2016).

Within research on business ethics, scholars have recognized the need to build a bridge between, for instance, ethical behavior and the environment (Ciocirlan, 2017; Tosti-Kharas et al., 2017). However, also in this literature, data gathering does not go beyond generalized measures of good intentions. In fact, if an employee responds in a survey to a question about whether he or she would internally make suggestions on how to improve the organization’s environmental performance (e.g., Boiral et al., 2018; De Roeck & Farooq, 2018; Graves &

Sarkis, 2018; Tosti-Kharas et al., 2017), researchers and readers do not get to know what that employee is actually thinking about. One does not get to know whether he or she thinks about asking another colleague to turn off the coffee maker after use, or whether he or she is planning

34 to launch an internal campaign to save a pristine forest that its company is planning to cut down for access to resources. In particular, one neither gets to know what respondents think the environment is, nor what preconception of human-nature interactions their good intentions contain, nor how their good intentions will actually feed into the sustainability performance of the business.

Percentage of studies in the Data sources literature sample13 Estimations and perceptions by company staff in surveys 48.6% Narratives and reports by company staff in interviews 33.0% Other documents, newspapers, studies, websites, reports etc. 18.4% Commercial third-party databases (e.g., rating agencies) 18.1% Public company reports 11.8% Observations, note-taking during meetings, workshops, site visits etc. 9.9% Narratives and reports by stakeholders or experts in interviews 6.3% Stakeholder or expert consultations 4.9% Non-commercial third-party databases 4.4% Site-specific performance measurements 1.4% Others 1.4% Table 5: Data sources in the literature on internal determinants of business sustainability (summarized)

There are hence also various limitations resulting from conventional forms of surveying techniques in assessing sustainability performance in businesses. Table 5 suggests that more than 80 percent of the research on internal determinants of business sustainability is based on self-referential narratives, reports, personal perceptions, and estimations of performance. This figure does not yet take into account the degree to which commercial and non-commercial databases rely on self-reported data of companies, too, or the body of work gathering its data through public company reports. Many of the qualitative studies analyzed here also make use of data sources other than self-referential narratives of company staff, but only a few include

35 stakeholders or experts to capture a range of different perspectives. The inclusion of stakeholder opinions is not, however, a panacea for company-focused performance estimations and narratives. The findings of Westphal and Zajac (1998), as well as Fiss and Zajac (2006), suggest that external stakeholders can react positively to formally adopted policies and strategies of companies, irrespective of whether these get implemented. Researchers should generally be more cautious when drawing conclusions about sustainability performance based on perceptions data. To exert cautiousness in sustainability research would also mean to demonstrate profound awareness and reflection on the concepts assessed considering the challenges for long-term livelihood on this planet.

There are a few works within the literature that are outstanding by offering more precision in the effects of business-internal determinants. Among the 410 papers reviewed, only one empirical study assessed whether the deployment of a particular management approach influences performance on a specific sustainability issue. Dahlmann et al. (2017) used data on GHG emissions in their research on the effectiveness of performance management.

Whereas climate change through an augmentation of GHG emissions is a major issue addressed in sustainability discourses, the reduction of these emissions also has a direct beneficial effect on businesses’ balance sheets (Hörisch et al., 2015; Nehler & Rasmussen, 2016; Orsato, 2006;

Penz & Polsa, 2018). Therefore, another reading of these results by Dahlmann et al. (2017) is that performance management can drive the reduction of costs in businesses. The study does not explain what these findings imply for environmental issues of concern that do not neatly suit an interest in cost reduction by businesses, like, for instance, waste to landfill, land use, or the accumulated impact of operations on biodiversity. Another issue of research which solely focuses on measures of resource efficiency is that it does not consider that cost reduction in businesses faces limitations vis-à-vis the prerogative of producing goods and services to meet customer demand (Coles et al., 2016).

Contributions that allow for more differentiation and specification of performance effects of internal determinants are rare in business sustainability research. Exemptions are, for instance, the conceptual work by Schaltegger and Burritt (2018) which suggests that different internal orientations in businesses will also lead to different types of activities of sustainability engagement. Also, Ardito and Dangelico (2018) assessed how different internal orientations affect the productivity of energy, carbon, waste, and water, while keeping these variables separate in the analysis. Yet, these contributions also offer only vague indications about resulting effects, as Schaltegger and Burritt (2018) only perceive that there are different levels of sustainability performance, while Ardito and Dangelico (2018) calculate relative as opposed to absolute reductions of resource use (see also Bjørn & Hauschild, 2013; Hörisch et al., 2015).

Nevertheless, these works showcase that there is greater realm for differentiation and specification of performance that business sustainability scholarship has yet to embrace.

II.4.2. The implicit assumption of contingency in practices of business sustainability scholarship

There is a tendency among business sustainability researchers to explain the adoption of management tools, mechanisms, and procedures as promoted by the sustainability service industry. Comprehensive explanations of sustainability performance in businesses that would allow for a distinction between performance and underperformance, as well as implications on the impact level, are absent in the reviewed literature. Furthermore, Table 4 indicates that the explanation of issue-specific sustainability performance makes up a dwarfed minority of this scholarship.

While accepting that the diverse internal determinants, as well as the management approaches researched, can have a positive effect on business sustainability, researchers leave

37 unacknowledged when this positive effect applies. What they implicitly accept by working with these management approaches, is that they will get effectively deployed when it makes sense for a business to act sustainably, and to an extent appropriately with regard to the issues addressed. In other words, business sustainability scholarship implicitly accepts that the phenomena researched will get contingently deployed by businesses, whereby businesses will achieve optimal sustainability performance. This assumption in the business sustainability field is problematic, as it masks the current constrained capability of scholars to explain sustainability performance in businesses. The following section argues that if this scholarship aims to explain performance, the acceptance of assumptions of contingency is unfounded by the current state of knowledge.

II.5. Evaluating Assumptions of Contingency in Business Sustainability Research

Contingency theory builds on the relationships between three concepts: management approaches, particularly in the form of structures and practices; the organizational environment; and organizational performance measures. Its primary tenet is that there is no one best way to deploy structures and practices to achieve optimal performance of businesses

(Donaldson, 2011; Lawrence & Lorsch, 1969). The best way to organize internally for effective task completion depends on factors emanating from the organizational environment to which businesses must adapt (Donaldson, 2011; Lawrence & Lorsch, 1969). The universalists’ notion to find ‘the best way’ is rejected by contingency theorists and replaced by a configurational ‘it depends’ (see e.g., Aragón-Correa & Sharma, 2003; Husted, 2000; Maletič et al., 2018;

Schmitz et al., 2019). Variance of optimal choices is further reflected in the idea of equifinality, meaning that there are many ways managers can choose to achieve organizational goals

(Gresov & Drazin, 1997; van de Ven & Drazin, 1985). The influence of the organizational environment on companies follows thus an open system logic (Schreyögg, 1980).

Four conceptual and paradigmatic unclarities highlight why the implicit acceptance of assumptions of contingency impedes, to date, theory development on sustainability performance in businesses. First, researchers in this space overlook in their research designs how the studied management approaches get deployed to address sustainability issues.

Research on management tools, mechanisms, and procedures indicates that there are tremendous differences across businesses as to how they deploy these means, and the performance generated (Boiral, 2007; Stevens et al., 2005; Yin & Schmeidler, 2009). However, we do not know how managers and staff deploy such management approaches in addressing sustainability issues or how contexts affect this deployment and variations thereof. In other words, we do not know what works best, what works less well, what does not work at all, or to what extent the promoted management approaches do play a role in generating performance for sustainability objectives.

Second, the organizational environment in which businesses are to contingently deploy management approaches is not yet established in the business sustainability field. Research on sustainability from an institutionalist point of view equals the organizational environment with stakeholders (Delmas & Toffel, 2004; Greening & Gray, 1994). Stakeholders have diverse characteristics that are relevant for managerial perception (Darnall et al., 2010; Mitchell et al.,

1997), different roles in relation to markets (Baron, 1995; D'Aunno et al., 2000), different positions in networks (Rowley, 1997), and different capabilities in influencing technical aspects (Crilly et al., 2016; Hall et al., 2014). A sustainability issue may also possess its own characteristics that need to be understood in order to grasp its implications for management

(Bansal, 2003; Husted, 2000; Sharma, 2000), as well as the initiative in which it is embedded

(Zollo et al., 2013). These peculiarities, perhaps constituting the organizational environment in

39 a contingent approach to sustainability performance in businesses, are very different to aspects of markets and technologies in classical contingency theory. This means that the external conditions for economic performance that are subject to contingency theory are very different to the external conditions for sustainability performance in businesses.

Third, scholarship has to further conceptualize and operationalize what sustainability performance in businesses is. In previous works using contingency theory in the business sustainability context, explained phenomena are aspects of stakeholders (Husted, 2000), issue responsiveness (Bansal & Roth, 2000; Greening & Gray, 1994), the adoption of management tools (Aragón-Correa & Sharma, 2003), strategic orientation (Schmitz et al., 2019), or economic performance (Aragón-Correa & Sharma, 2003; Maletič et al., 2018). These previously explained phenomena do not relate to business internal performance on sustainability objectives. What adequate sustainability objectives are for businesses, is itself highly contested (Meuer et al., 2019; Montiel & Delgado-Ceballos, 2014). Business sustainability scholarship, which investigates internal determinants, needs to acknowledge its according limitations and move beyond vague and ambiguous sustainability concepts as well as operationalizations based on management practices. In the long run, the collection and availability of sustainability performance data of businesses and access to the internal workings of businesses are critical to move beyond the current state of knowledge (see also Dyllick &

Muff, 2016; Montiel & Delgado-Ceballos, 2014). This is again a very different challenge compared to classical contingency theory and its focus on economic indicators, of which the data generation is part of core business activities (Nason et al., 2018).

Fourth, contingency theory builds on a paradigm that disaccords with the notion of business unsustainability. Specifically, a difference exists in related research streams as to what extent businesses are regarded as open systems. Contingency theory rests on a functionalist viewpoint and suggests that organizational members act rationally when designing and

40 deploying organizational structures to adapt to the organizational environment. The organization in contingency theory is regarded as an open system only to the extent that organizations receive signals from the environment to which they need to react (Schreyögg,

1980). Beyond being able and forced to react to signals for organizational survival, the external environment is understood as given by higher laws of social order and nature. In their influential work, Lawrence and Lorsch (1969) suggest that organizations can even choose between organizational environments.

In contrast to the assertion that businesses can choose their externally given environments, concurrent sustainability discourses show that organizations are affected by the societies in which they operate. The signals businesses receive about (un-)sustainable practices are an effect of their own operations (Devinney, 2009; Lange & Washburn, 2012; Wood &

Jones, 1995). Strategic management of stakeholders takes also as a point of departure that organizations stand with other actors in relationships of mutual influence (Freeman, 1984).

Institutionalists argue that organizations are also active influencers of stakeholders’ issue interpretation and issue governance (Battilana et al., 2009). Furthermore, sustainability research needs to take into account that organizational members are at the same time members of the society in which businesses operate (Milliken et al., 2015) and that engagement for sustainable causes may not be independent from social desirability biases (Stevens et al., 2005) or societal pressures (DiMaggio & Powell, 1983). Together, these issues suggest that the drawing of boundaries around organizations within society and nature is inadequate to grasp the problems of unsustainable development. Nevertheless, this thesis also continues, for pragmatic reasons, to make use of a differentiation between an internal and external sphere of business organizations, while arguing strongly that the full apprehension of sustainability challenges requires the overcoming of constructed boundaries.

Above four unclarities, marking the three major concepts and paradigmatic foundation of contingency theory, add up to an incomplete application of its assumptions in business sustainability research. The implicit acceptance of assumptions of contingency in business sustainability research ensues, despite concepts of contingency and their relation to each other not being established for the topic area if aiming to explain performance. Assumptions of contingency are nevertheless implicitly accepted and lead to inconclusive research: to date, business sustainability scholarship cannot explain how sustainability performance occurs in businesses.

II.5.1. Summing up the problem caused in real-world practices by implicit assumptions of contingency in business sustainability research

Because of business sustainability scholarship implicitly accepting assumptions of contingency in research designs, the sustainability service industry cannot draw on evidence-based guidance on how to address business unsustainability. The extent of this argument is understandable, if one considers academia to be the primary sector within modern day societies in which knowledge about real-world practices gets revised and improved (Hoffman, 2016). As business sustainability scholarship leans on assumptions of contingency while neglecting to advance inquiries into sustainability performance, there is also no substantial research output that would reflect and enhance this knowledge.

To sum up these concerns, I refer to a major point of criticism that was previously raised by Margolis and Walsh (2003, p. 282) and regarding which this problematization shows another deeper facet: by carrying implicit assumptions of contingency to sustainability performance, “organization theory and research handicaps itself in yet another way. It leaves organizations that seek to respond to these calls for [business] involvement bereft of

42 prescriptive guidance for how to do so.” The acknowledgement of this disconnect is a necessary step forward to create more practice-relevant theory (Corley & Gioia, 2011) that would lead to a better understanding how future generations can live with businesses (Walsh et al., 2006).

The following research agenda marks a way forward to this end.

II.6. A First Research Agenda to Address the Impasse

A major outright challenge for any endeavor studying a contingency approach to business sustainability performance is the current state of possibilities to comprehensively measure outcomes and impacts of business operations (Montiel & Delgado-Ceballos, 2014). On the one hand, the disconnect between what sustainability objectives are on the global level to maintain life-support functions of ecosystems (Ripple et al., 2017), and what sustainability objectives are at the company level, still needs to be resolved (Dyllick & Muff, 2016; Whiteman et al.,

2013). On the other hand, scholarship needs to find feasible solutions for how to integrate indirect and accumulated impacts of business operations into measurements of sustainability performance. Given the interrelatedness of all life and matter in nature (Gladwin et al., 1995;

Purser et al., 1995; Shrivastava, 1995a; Starik & Rands, 1995), the impact of a business cannot be wrested from its value chain (Sheffi & Blanco, 2018), or from social and environmental legacies of materials and products (Bjørn & Hauschild, 2013; Graedel, 2019). These impact spheres need to be considered in performance assessments. For instance, the method of the

Greenhouse Gas Protocol of distinguishing levels of influence of companies, could prove a worthwhile heuristic to specify in research the extent of sustainability performance assessed.

Without these concerns being addressed, attempts to quantitatively measure the sustainability performance of businesses are bound to create impressions that obscure the differentiation between performance and underperformance. There are, therefore, for research on

43 sustainability performance in businesses, caveats to common quantitative means of inquiring into the contingent effectiveness of management approaches.

II.6.1. Alleviating the caveat of assessing business sustainability performance

Researchers who aim to maintain quantitative modeling approaches to apprehend contingent effectiveness of business-internal determinants will have to demonstrate how they discern sustainability performance from underperformance. To allow for this distinction, researchers should specify and differentiate the performance outcomes and impacts they assess.

Specification means here to abstain from the use of aggregated constructs, and to measure performance instead on items that researchers can evidently suggest businesses address with a distinct performance rationale (e.g., the reduction of operational costs for cost-intensive resources being one performance rationale). Differentiation, in turn, needs to be horizontal as well as vertical. Horizontal differentiation means to measure sustainability performance on items that researchers can evidently suggest to be addressed in businesses with different performance rationales, while aiming to include, through the items measured, the plethora of performance rationales that potentially exist in businesses. Vertical differentiation means to measure sustainability performance on items that go beyond the direct impact sphere of an organization, to incorporate indirect impacts (e.g., through businesses in the value chain) and accumulated impacts of industrial activities. These strategies together will not replace the need for scholarship to develop means to assess business sustainability performance comprehensively, but could push the field toward better understanding of sustainability performance in businesses.

Qualitative research is not a final solution to this problem, but it offers scholarship an as yet under-engaged means, as well as several advantages to comprehend sustainability

44 performance in businesses. First, qualitative research would not have to rely on inaccessible, non-existing, or incomparable performance data (Barry et al., 2012; Boiral & Henri, 2017;

Entine, 2003). Second, qualitative research is suitable for the unveiling of social phenomena we do not know about yet, or which we cannot fully apprehend by quantitative means

(Silverman, 2006). Third, qualitative research would enable scholars to include the sustainability service industry in studies, which does often not capture performance data of its interventions (Barry et al., 2012; Hoejmose & Adrien-Kirby, 2012; Khanna & Brouhle, 2009).

Notwithstanding, in aiming to clarify assumptions of contingent effectiveness of management approaches, qualitative research will not be able to replace ideas of positivist modeling and assessments. Rather, the idea presented here is for scholarship to tackle the fundaments of contingency theory in order to flesh out new concepts that help us to explain sustainability performance in businesses. In adhering to this agenda, researchers should also resort to mixed methods approaches whenever quantitative data can be included that allow for specification and differentiation of sustainability performance in businesses.

II.6.2. Answering the overarching question: how does sustainability performance occur in businesses?

A point to start out with is the overarching question of how sustainability performance occurs in businesses. This open approach should direct researchers to capture the diversity of the phenomenon as it exists in contemporary business practices. A qualitative research design that aims to capture diversity in how a phenomenon is experienced, is, for instance, phenomenography. A phenomenographic research design of sustainability performance in businesses would seek to maximize variation in a selection of at least 20 firms, and take as a point of departure the experiences of organizational members of how they understand and enact

45 sustainability performance. Theory-informed multiple case studies could likewise deliver novel insights into how we can understand this diversity. A range of researchers in the field praise institutional theory for framing challenges of business sustainability (e.g., Campbell, 2007;

Jennings & Zandbergen, 1995). In looking through an institutionalist lens, one could aim to delineate what options for sustainability performance in businesses exist, and select appropriate cases for in-depth analysis.

II.6.3. When, why, and how do businesses deploy management approaches to generate sustainability performance?

Scholars need also to better understand how management tools, mechanism, and procedures get deployed in businesses and how these deployments contribute to the achievement of sustainability objectives. To collect data on the deployment of management approaches, ethnographic or ethnomethodological research designs are promising. In particular, future research should aim to observe when, why, and how organizational members make use of management approaches, and when they would not make use of them, or otherwise alter their behavior in their deployment. As before, the aim of these studies should also be to bring to light the diversity of internal performance and to combine these findings with performance outcomes wherever possible. Another point of interest concerning the sustainability service industry is how its staff, and particularly auditors, make sense of the deployment of diverse management tools, mechanisms, and procedures for the achievement of sustainability objectives. In either case, observational studies aiming to capture diversity in various contexts would be very time intensive. Scholars interested in answering these questions may consider applying these methodologies in more terse versions and combining them with multiple case study designs (see e.g., Halme et al., 2016).

II.6.4. What is the organizational environment when businesses experience sustainability performance?

There is also additional work needed on clarifying what the organizational environment is in the context of sustainability performance in businesses. More specifically, the roles of stakeholders, particularities about the pressures they exert, and the way businesses conceive of a sustainability issue raised by stakeholders, need to be analyzed in contexts of performance.

On the one hand, this is a rather general task that studies on sustainability performance should aim to include as feasible. Scholars should refrain from asking organizational members decontextualized questions, for instance, whether they consider stakeholder ‘A’ or stakeholder

‘B’ more important. To assess categories that define the organizational environment in contexts of performance would mean to have organizational members elaborate their own narratives of performance, and to develop and extract from these narratives details about the organizational environment as part of experienced reality.

On the other hand, there is a range of direct inquiries into the organizational environment that future scholars can undertake. Revelatory insights could result from discourse analysis of how a diversity of stakeholders, and particularly actors of the sustainability service industry, construct understandings of sustainability performance in businesses. It would further be interesting to reveal how actors of the sustainability service industry develop and make decisions on promoted management approaches in light of uncertainty about their effectiveness. Last but not least, it is not evident yet whether the sustainability service industry forms part of the organizational environment to which businesses react, or whether it takes a mediating role between businesses and the organizational environment in contexts of performance. These inquiries could elucidate under what conditions of the organizational

47 environment (and its mediation) businesses achieve higher and/or optimal sustainability performance.

II.6.5. What are alternatives to conceptualize and operationalize sustainability performance in businesses?

Considering the conceptualization and operationalization of performance in qualitative research, scholarship could engage in developing alternatives to comprehensive assessments of sustainability performance. One way could be to reconceptualize how learning and change for sustainability is taking place in businesses. Previous studies have already taken up the notion that learning and change are prerequisites of business engagement for sustainable development (Benn et al., 2014; Siebenhüner & Arnold, 2007; Zollo et al., 2013). But, as with other internal determinants, these insights need to be set up in actual performance contexts that allow for specification and differentiation. Another way to look at learning and change is through how meaning structures (Zilber, 2008) are inert or malleable in organizations in the context of sustainability performance. Also from this perspective, it would be of interest to know how actors in the organizational environment, like the sustainability service industry, affect learning and change of meanings inside organizations.

Another alternative to apprehend sustainability performance in businesses is to use developments on assessed performance outcomes and/or impacts, and to inquire into their business internal workings. Changes in performance outcomes are, amongst others, ascertainable in consecutive audit or impact assessment reports. Depending on the assessed guidelines, audit reports could be encumbered with management practices. Impact assessments, in turn, are in many nations a regulatory requirement for the approval of large- scale industrial projects and usually follow the guidelines of the IFC Performance Standards.

To apprehend changes over time of sustainability performance, a combination of ex-ante and ex-post project approval, or multiple ex-post impact assessments would be required. Impact assessment reports would have the advantage that they disclose individual performance developments within an extended context of performance. An obstacle to this idea for a new source of performance data could be the confidentiality of ex-post impact assessments.

However, shrewd researchers could attempt to exchange confidentiality for anonymity (Gioia et al., 2013), to endow the field with new opportunities to understand sustainability performance in businesses.

II.6.6. What are adequate research paradigms to comprehend sustainability performance in businesses?

Scholars will also have to stress traditional sociological research paradigms when inquiring into sustainability performance in businesses (Matthews et al., 2016). Research on this topic will ultimately have to deal with a paradigmatic clash between the societal embeddedness of businesses and positivist ideas of performance. Can, for instance, a contingency theory of sustainability performance in businesses account for businesses being part of society and nature? Or what will it otherwise mean for the field if scholarship ‘has to’ find a way to assess sustainability performance while considering businesses to be extricable from the natural environment?

A clue about how scholarship can ontologically conceive of sustainability performance could be in the argument that anthropocentric beliefs are the main cause of unsustainable development (Evernden, 1993; Gray & Milne, 2018; Purser et al., 1995). Compared to other more business-centric contributions to the development of business sustainability scholarship in the decisive 20th volume of the Academy of Management Review, the contribution by Purser

49 et al. (1995) on anthropocentricism has been paid little attention. Given that the human lifeworld is core to sociology, and thus of business management and organization studies, anthropocentrism is also fundamental to the discipline. Business sustainability scholars, who made suggestions on new paradigms, presented these as add-ons to contemporary sociology

(Gladwin et al., 1995; Matthews et al., 2016; Purser et al., 1995; Shrivastava, 1995a). Few works exist yet that challenge anthropocentric beliefs in the evolution of sociological philosophy (e.g., Derrida, 2008). Thus, scholarly work is yet missing that deconstructs the meta-theoretical foundations of contemporary sociology to make suggestions for a desanthropocentricized conception of the world (Gray & Milne, 2018). Any paradigmatic view altered on these lines should inform scholarship about whether businesses, as we know them, could still operate in sustainable societies, and consequently, what it would mean to organize for human purposes while aiming for continuous optimal sustainability performance.

II.6.7. Bringing findings together and making use of them

Future research will have to collate the findings in contributions which followed this research agenda and engaged in related inquiries. Bringing these findings together will be crucial to update the field on what we really know and don’t know, as well as for the building of theory of sustainability performance in businesses. Considering also the here emphasized potential for real-world implications of this line of inquiry, future researchers should aim to develop forums to discuss results and their limitations with practitioners as well as scientists of the environment. So far, business sustainability scholars, practitioners of the sustainability service industry, ecologists, societal decision-makers, as well as the business community, barely interact to enable changes in business practices (see also Whiteman et al., 2013; Zollo et al.,

2013). Business sustainability scholarship should therefore demonstrate more its relevancy by

50 developing research findings and future research agendas which facilitate informing practitioners who aim to enable effective changes in businesses (see also Hoffman, 2016).

II.7. Chapter Summary

In this chapter, I introduced the sustainability service industry as a range of actors that aim to enable sustainability performance in businesses. The problematization of this industry’s performance orientation and of the knowledge to date about the internal determinants of business sustainability unearthed that both practitioners and academics rely in their work on implicit assumptions of contingency. Scholarship does so far not attend to these assumptions.

In following the outlined research agenda, researchers can tackle the implicit acceptance of assumptions of contingency that would, in the long run, result in more evidence-based guidance for practitioners about how to effectively address business unsustainability.

Chapter III

An Interpretative Approach to Research Sustainability Performance in

Businesses

III.1. Chapter Introduction

The previous chapter unearths unclarified assumptions of contingency of sustainability performance in businesses as being held by both researchers and practitioners. The problematization process that leads to the unearthing of these assumptions concludes with a research agenda for the advancement of theory of sustainability performance in businesses. A central suggestion in the research agenda is to address the research question of how sustainability performance occurs in businesses through qualitative research methodologies that allow distinguishing between the varieties of performance that occur in real-world business practices. A methodological approach, that aims to describe the qualitatively different ways in which a phenomenon is experienced, is phenomenography.

This third chapter explicates the phenomenographic study I undertook on sustainability performance in businesses within a sample of the automotive value chain. I first explain phenomenography and its underlying methodology, then describe its methods, as applied in this study.

III.2. Phenomenography as a Research Design to Study Sustainability Performance in

Businesses

Phenomenography is a research design developed by a group of Swedish education researchers in the 1970s (Tight, 2016). Early findings of this group of researchers suggested that “people

52 in general hold qualitatively different conceptions of all kinds of phenomena” (Marton, 1986, p. 37). These researchers turned these findings into a basic assumption (Tight, 2016) and into a joint purpose of phenomenographic studies, which is to describe “phenomena, aspects of reality, experienced (or conceptualized) in a relatively limited number of qualitatively different ways” (Marton, 1981, p. 181).

Phenomenography turns a specific theoretical lens on social reality by researching, on the one hand, how phenomena of interest are understood by the research participants, and, on the other hand, how research participants experience these phenomena. Phenomenography thus needs to be distinguished from psychological research interests on the acts of thinking by research participants, as well as from phenomenological researchers’ mere focus on lived experience (Marton, 1986). Phenomenographic research seeks to demonstrate the relation between understandings (i.e., the content of thinking) and experiences as they occur in real-life situations. Understandings of phenomena by people, and the experiences of phenomena by people, are inextricably related to each other in phenomenography (Sandberg, 1994, 2000).

Phenomenography is, accordingly, based on an interpretative research paradigm that takes the social construction of reality as a point of departure (Berger & Luckmann, 1967).

Despite showing also, in this aspect, traits of similarity with phenomenology, phenomenography differs significantly from its namesake (see also Tight, 2016). While phenomenologists are driven by “an insistence of describing the given” (Brinkmann & Kvale,

2015, p. 36), phenomenographers refer to a second-order perspective in which phenomena are constituted by individuals in their social lifeworlds. The second-order perspective is critical for the apprehension that there are diverging conceptions in which phenomena are understood and experienced. Marton (1981), who first introduced the term ‘phenomenography’ for the new research design, provides the following example for a distinction between first and second- order perspectives in the context of education:

(…) it has been thought that learning a specific content could be described by means of a combination of statements, arrived at from a first-order perspective, about on the one hand, learning and on the other, about content. This idea of learning is, however, based on the notion of the transfer of ready-made concepts or principles into the empty spaces in the students’ heads. If we think instead of the content of learning in terms of what is in the students’ minds rather than of what is in the textbook, it clearly seems preferable that the content of learning should be described from a second-order (or experiential) perspective. This view is based on the argument that the question of the content of learning does not necessarily concern the correct meaning of the derivative or of the Darwian theory of evolution but rather the meanings the students put into the derivative or into the Darwinian theory of evolution (Marton, 1981, p. 182).

The distinct theoretical standpoint phenomenography takes has two initial implications for the study of sustainability performance in businesses. First, the study needs to apprehend sustainability performance in businesses from a second-order perspective. In the above problematization, I argue that a sustainability service industry has emerged that prescribes management tools, mechanisms, and procedures for application by businesses, with the intention to enable sustainability performance in those businesses. So far, the sustainability service industry does, in its practices, take a first-order perspective by treating the prescribed management approaches and the addressed businesses as separate entities. The prescribed management approaches are in this context “ready-made concepts and principles” which ought to be applied by businesses with “empty spaces in their heads.” For instance, mechanisms like environmental management systems are designed to be applicable for all types of businesses, irrespective of organizational or industrial characteristics. In contrast, what the theory underlying the phenomenographic research design stipulates is that businesses’ “heads” are never empty. Pre-existing content, in the form of understandings that are prevalent in businesses and fueled by experiences, will determine what it means to those businesses to apply the management approaches prescribed by the sustainability service industry.

Phenomenography thus offers a novel theoretical ground to study the variation of sustainability

54 performance in businesses and what it implies for practitioners of the sustainability service industry. In addition, phenomenography offers a paradigmatic alternative to the functionalist limitations inherent in the contingency theory of business sustainability, as discussed beforehand in Chapter II.

Second, a phenomenographic study of sustainability performance in businesses does not seek to measure outcomes and impacts as in functionalist research tradition, but to describe how businesses understand and experience sustainability performance. For a research topic that focuses on performance, the neglect of performance measurements or consideration of performance data might at first appear unconventional. As argued above, data on sustainability performance, as used and accessible to date in the business sustainability field, have various limitations of validity if aiming to research sustainability performance of businesses comprehensively. The critique of a lack of comprehensive apprehension of phenomena goes, however, well beyond the business sustainability field and applies generally to positivistic research methods that fail to consider humans’ understandings of reality (Sandberg & Targama,

2007). Through qualitative research, and particularly phenomenographic research, phenomena of interest can be (re-)discovered by generating new perspectives on findings where previous approaches have led to insufficient solutions to real-world concerns (Walsh, 2000). Yet, by applying a theoretically informed interest on understandings and experiences, the use of phenomenography to study sustainability performance in businesses narrows the research scope in relation to the research question. Notwithstanding a theoretical narrowing of scope, the above example from the educational context signifies that a phenomenographic study on sustainability performance in businesses cannot have as a mission to find the “correct” way in which the world has to conceive of sustainability performance in businesses. Rather, its aim is to describe diversity from the perspective of businesses experiencing sustainability performance.

Compared to the repertoire of other qualitative methods, phenomenography has central advantages in demonstrating qualitative differences of sustainability performance in businesses. As a general rule, the diverse conceptions of a phenomenon resulting from phenomenographic studies have to be presented by how these conceptions logically relate to each other (Walsh, 2000). This relation is usually shown by the positioning in a hierarchy of conceptions (Marton, 1981; Marton & Booth, 1997; Tight, 2016; Walsh, 2000). Conceptions are defined as the qualitatively different ways in which humans understand and experience a phenomenon (Johansson et al., 1985). As phenomenography aims to describe these qualitatively different ways in which a phenomenon is conceived, results ought to not just name the diverse conceptions, but to bring them into a hierarchical order. For a study of sustainability performance in businesses, this means that phenomenography offers the opportunity to demonstrate a hierarchy of sustainability performance conceptions that are prevalent among businesses, without having to rely on positivistic measurements of sustainability performance.

Phenomenography, as a research design to study sustainability performance in businesses, offers thus the advantage of potentially identifying higher conceptual levels, “representing the most advanced or developed way[s] of experiencing” the phenomenon (Tight, 2016, p. 320). It was, in the first place this practical interest in identifying advanced conceptions of experiencing and their potential use for improvements of learning and teaching performance that guided the education researchers in Sweden in developing phenomenography (e.g., Johansson et al., 1985;

Marton, 1986; Marton & Säljö, 1976a, 1976b). Noteworthy is, however, that such

‘developmental’ phenomenography aims only to find the conceptions and categories of description, and does itself not aim to change them among study participants (Bowden, 2000;

Bowden & Green, 2005).

While initially developed for education research, scholars have adopted phenomenography to a plurality of other contexts (see also Tight, 2016). Phenomenography is

56 now well established for the study of practices in businesses and was already applied in several studies to the business sustainability context. For instance, students used phenomenography to bring to light how diverse organizational members understand sustainability (Russell et al.,

2007), what managing diversity means in business organizations (O'Leary & Sandberg, 2016), or how businesses cope with environmental regulation in situations of political uncertainty

(Teeter & Sandberg, 2017). Whereas the study by Russell et al. (2007) has led only to generic insights that emphasize pre-existing understandings of sustainability as consisting of social, environmental, and economic dimensions, a recent study by Nichols (2018) on sustainability practices in restaurants reveals far more details of the complexities of this form of engagement.

The study by Nichols (2018) shows the diverse qualitatively different ways in which businesses engage for sustainability, but, as with most studies in the business sustainability field (see

Chapter II), does not lead to a clarification of how these practices could be linked to outcomes and impacts. Accordingly, conducting a phenomenographic study on sustainability performance in businesses would add to previous phenomenographic studies in the field and provide a new perspective on the subject matter.

In summary, phenomenography appears as a very suitable methodological approach to study sustainability performance in businesses. It would lead to the creation of new knowledge by unearthing the diversity through which this phenomenon is experienced by businesses.

Phenomenography is based on an interpretative paradigm, which contrasts with the functionalist tradition underlying contingency theory, and hence suits this study’s purpose well.

A major advantage of phenomenography is the potential to demonstrate advanced ways of experiencing performance for sustainable development, without the need to rely on ‘hard’ performance data of companies. Previous phenomenographic research has shown the applicability of its methods to the business sustainability field, leading to interesting and useful results to which practitioners might be able to relate for evidence-based guidance. It is my

57 combined interest in providing evidence-based guidance to the sustainability service industry as well as to advance knowledge and theory in the business sustainability field that led me to opt for the use of phenomenography for a study of sustainability performance in businesses.

III.2.1. Epistemology and methods in phenomenography

Phenomenographers engage in the development of new knowledge through the exploration of how individuals experience phenomena of interest. By its epistemological assumptions, it is the experience of individuals in social settings that constitutes reality and consequently delimits what we can know about reality (Berger & Luckmann, 1967). Knowledge of reality, and experiences of reality are fueled by the understandings that individuals carry about phenomena

(Marton & Booth, 1997). These understandings of individuals, however, become meaningful only in social interactions where perceptions about reality find approval among peers

(Sandberg & Targama, 2007). A divergence in ultimate sources of knowledge can thus be found among phenomenographers studying individuals’ learning in educational contexts (e.g.,

Francis, 1993), and phenomenographic studies on social phenomena (e.g., Sandberg &

Targama, 2007), as they need to see varying relevance in the social dimensions of reality construction. Yet, in either case, one conception held by an individual, or by a collective of individuals, forms only one part of the experienced reality of the phenomenon, i.e., the outcome space in phenomenography, which is constituted by the diversity of conceptions that exist

(Marton & Booth, 1997). Thus, the subjects of phenomenographic studies are always collective experiences; experiences of individuals are never seen in isolation of those of others (Åkerlind,

2005). For the study of phenomena occurring in business organizations, the collective mind – i.e., conceptions that are dominantly held across individuals – becomes the focal point of

58 investigation, as individuals form communities of practice in organizations which influence competence and performance (Sandberg & Targama, 2007; Wenger, 2003).

Phenomenography aims to describe the diverse conceptions that people hold about phenomena of interest (Francis, 1993; Marton, 1981). “Conceptions as psychological entities are epistemologically unattainable independently of context and content” (Marton, 1981, p.

194). Conceptions are usually tacit, and not exposed by individuals when accounting for their experiences (Johansson et al., 1985). They are, in phenomenography, an analytic tool to decipher reality as it unfolds through the understandings and experiences of individuals. While a conception is distinct through an inherent understanding of a phenomenon, phenomenographers describe the relation of the diverse conceptions and related experiences through categories of description. Also, categories of description are analytic tools which

“encapsulate understanding: their purpose is to determine the different ways in which people understand their world” (Walsh, 2000, p. 24; see also Johannson et al., 1985). Through categories of description, the conceptions people hold about a phenomenon allow for explanations and predictions of cases as they occur in reality (Marton, 1981). Both conceptions and their categories of description evolve in phenomenographic analysis through the hermeneutic reading of interview transcripts (Sandberg, 1994, 2000).

Interviews are the primary data source in phenomenographic research (Francis, 1993;

Marton, 1981; Walsh, 2000). Interviews of research subjects are, in phenomenography, considered the most suitable method to disclose in-depth, and as close as possible, individuals’ lived experiences. “In phenomenography individuals are seen as the bearers of different ways of experiencing a phenomenon, and as the bearers of fragments of differing ways of experiencing that phenomenon” (Marton & Booth, 1997, p. 114). In interviewing research subjects, phenomenographers, like phenomenologists, create ‘reports’ of lived experience through research participants, as opposed to ‘accounts’ in interviews done for discourse studies

59 or conversation analysis (Brinkmann & Kvale, 2015; Francis, 1993). The interview is thus an instrument to derive what has been experienced, with less interest in how experiences are linguistically constructed. Observations also form part of the methods repertoire of phenomenographers (e.g., Nichols, 2018; O'Leary & Sandberg, 2016; Sandberg, 1994;

Sandberg, 2000), but it is in interviews in which research subjects express meanings in relation to their lived experiences. Interviews offer researchers the opportunity to uncover what is expressed between the lines and to allow research subjects to expand on what would otherwise remain unsaid (Brinkmann & Kvale, 2015). Nevertheless, observation is a complementary method to counterbalance a rather constructive nature of interviews as representations of experiences (Silverman, 2006). As a general rule in phenomenographic research, irrespective of the mix of methods applied in the study context to derive data, the researcher must stay as close as possible to the research subjects’ understandings and experiences of the phenomenon of interest.

A central method to stay close to research subjects’ understandings and lived experiences, and which phenomenography shares with phenomenology, is phenomenological reduction. Phenomenological reduction requires researchers to avoid approaching research subjects’ reports with preconceived concepts. In other words, phenomenographers do not primarily test theories, concepts, or models, but they study phenomena as they are understood and experienced by individuals, from which concepts need to be developed (Francis, 1993).

The need for a conceptual openness when researching through phenomenography can be understood as a “deliberate naivité” (Brinkmann & Kvale, 2015, p. 34), in which the researcher, while having expertise for the topic area, aims to not know what he or she will encounter in the jointly created reports. Phenomenological reduction hence requires a suspension of judgement from the researcher with regard to the content of the report, a critical awareness of own presuppositions when reading and analyzing interview transcripts (Brinkmann & Kvale, 2015),

60 as well as a careful listening to what and how research participants conceive of their lived experiences of the phenomenon of interest (Ashworth & Lucas, 1998).

III.3. Methods to Research Sustainability Performance in Businesses

III.3.1. Sample background and structure

Phenomenographic studies are usually done with the participation of 20 research subjects

(Tight, 2016). The number 20 has manifested itself as a critical threshold in phenomenographic research, as the analysis of hundreds of previous studies adopting this research design have shown a saturation of conceptual variation within the first 20 research subjects (Sandberg,

2000; see also Tight, 2016). In other words, phenomenographic studies typically find the maximum of variation of conceptions as held by people about a phenomenon within the first

20 research subjects participating. Yet, in planning the study, the researcher needs to structure the sample in a way that leads to the capturing of the maximum of conceptual variation. In addition, the analysis of 20 reports of experiences are sufficient in phenomenographic research if the interviews are in-depth and reveal the conceptions held by the interviewees.

The resulting first challenges for the conduct of a phenomenographic study of sustainability performance in businesses are thus to find a way to motivate 20+ business organizations to participate in a research project on their internal experiences, and, simultaneously, to maximize variation of these experiences. Referring to my own framing of the existence of a sustainability service industry, I considered sustainable supply chain managers of large businesses as a possible promising entry point to gain access to the required number of organizations. In comparison to other actors that I name to form part of the sustainability service industry, sustainable supply chain managers are an extreme case.

Eisenhardt (1989) suggested that the choice of extreme cases, such as polar types, is worthwhile to fill theoretical categories in case study research. Sustainable supply chain management constitutes such a polar type within the sustainability service industry, because its practitioners, while operating outside of the businesses they address (see my definition of the sustainability service industry in Section II.3.), do reside inside businesses. This means that sustainable supply chain managers are the only actors in the sustainability service industry that promote perceived good management practices to other businesses that are equally designed to control the practices of the business which they are themselves part of. Consequently, sustainable supply chain management is, by definition, an extreme case of the sustainability service industry, while the phenomenon of unclear performance orientation and evidence is supposedly the same for other actors of this industry (see Chapter II).

When speaking of sustainable supply chains or sustainable supply chain management as a ‘case,’ one needs to consider that there cannot be definite clarity to what the ‘case’ exactly is. According to the typology of cases by Ragin (1992), sustainable supply chain management is a case of convention because of empirically problematic boundaries. While supply chains have clear beginnings, represented by first-tier suppliers, they have, for modern large businesses, no clear end. For instance, modern mining companies, which produce the resources needed at the beginning of another company’s value chain, have themselves large first-tier suppliers producing heavy and technologically demanding machinery. Supply chains of businesses operating with advanced technology therefore do not have a clear identifiable end that would represent distinct boundaries for ‘one case’ to be studied. Sustainable supply chain management is thus a case of convention that refers to a concept of practitioners that facilitates sense-making of organizational realities as part of complex value chains. Accordingly, the present study does not follow methods of case study research but is a phenomenographic study that builds on a case of convention of real-world relevancy to gain access to research

62 participants. This also means that this study does not focus on sustainable supply chain management or on sustainable supply chain managers, but uses their existence as part of the sustainability service industry to frame this research in a real-world context with the purpose of gaining access to research participants.

To create a case of sustainable supply chain management through which to study sustainability performance in businesses, I turned my attention to the German automotive industry. This industry is under pressure from an NGO coalition named ‘Arbeitskreis

Rohstoffe’ to understand and to improve transparency on the sourcing of metals and minerals throughout its supply chain. In 2012, a first report accused the industry of not knowing from where it is sourcing its resources and under what conditions these are produced (Kerkow et al.,

2012). The report claimed direct responsibility of German car manufacturers for detrimental social conditions and environmental degradation in regions of resource exploitation. Another report seconded by the coalition followed in 2014, addressing the same shortcomings, while also pointing to potential solutions of how to mitigate associated risks in supply chains (Betghe et al., 2014). Furthermore, while this research project was in preparation, Amnesty

International (2017) reported that only minimal or moderate action is taken by German car manufacturers to mitigate risks of human rights abuses in cobalt supply chains. As a response to these accusations and public pressure, car manufacturers joined forces with the equally and internationally addressed electronics industry to scope challenges of sustainable resource supply and to expand strategies on risk mitigation (see The Dragonfly Initiative, 2018). While

German car manufacturers had already started to adopt practices of sustainable supply chain management in the 1990s by demanding environmental management system certifications in accordance with the International Organization for Standardization’ (ISO) norm 14001, these efforts have recently been extended in scope and rigidity due to the public pressure the NGO reports caused, but also due to US and EU legislation on conflict minerals in supply chains.

The pressure on the German automotive industry to expand its sustainable supply chain practices into lower tiers of the value chain proved a fruitful ground to tap into to conduct this research project. By translating the problematization underlying this study into real-world challenges of sustainable supply chain management in the automotive industry, I claimed – from a theoretical standpoint – that these management practices, as widespread applied to date in the industry, are rather inadequate for associated challenges and purposes. I frankly claimed to sustainable supply chain managers of car manufacturers, as well as to the car industry supplying businesses, that an adequate management approach to effectively generate sustainability performance among business partners does not yet exist.14 Initially, I managed to address one senior sustainable supply chain manager of a German car manufacturer as well as a senior sustainability manager from a non-German car manufacturer as regards this problem. Both parties were interested in the aspirations of the outlined project, but after months of project advocacy, both parties refused to partner up. These first contacts were nevertheless helpful to apprehend the relevancy of the research project for practitioners of the sustainability service industry, as well as to provide affirmatory feedback on the intended sample structure.

In phenomenography, the sample structure needs to follow a strategy to maximize the variation of conceptions held by research subjects. To achieve a maximization of variation, I opted for businesses to partake by differentiating their role in automotive supply chains, as opposed to their perceived advances in sustainability performance. This means that from a vantage point of sustainability performance in businesses, the sample selection is random, which mitigates potential researcher bias in judging experiences of sustainability performance beforehand. However, with regard to criteria of companies’ positioning in automotive supply chains, the sample selection is purposive (Neuman, 2011). For the creation of a structure for purposive sampling that contributes to variation of company experiences, I oriented toward the resources named in reports of the automotive industry on responsible sourcing (Betghe et al.,

2014; Kerkow et al., 2012; The Dragonfly Initiative, 2018) and made a selection of the following eight resource categories: iron, bauxite, copper, lithium (or lead), rare earth elements

(REE), oil, rubber, and leather.15 The incorporation of oil, rubber, and leather industries contributes to variation in the sample by integrating experiences of businesses producing primarily non-metalliferous products.

Another strategy to maximize variation of experiences among the sample was to address businesses operating at different tier-levels in an automotive supply chain. As noted above,

German car manufacturers already have a history in stipulating expectations regarding environmental practices for their first-tier suppliers. Generally, among supply chain practitioners and researchers, the notion persists that the bulk of environmental degradation or detrimental social impacts of industrial operations occur at lower levels of the value chain (e.g.,

Hartmann & Moeller, 2014; Plambeck et al., 2012; Sheffi & Blanco, 2018; Villena & Gioia,

2018). In particular, industries of resource extraction, constituting in conventional supply chain thinking the lowest tiers, are highly contested industries with rather poor reputations for social and environmental performance (e.g., Moran et al., 2014; Waye et al., 2009). Accordingly, the sample structure needed to incorporate these diverse experiences by addressing businesses at various tiers. Given the complexity of ‘real’ supply chains in the automotive industry, it cannot be the aim of a qualitative study to cover a supply chain comprehensively, for instance, by integrating all existing tier-levels for one resource. For matters of pragmatism, I used a tripartite differentiation of tier-levels by referring to a) resource producers (equaling the lowest level in a value chain), b) resource processors (operating in between resource producers and first-tier suppliers), and c) first-tier suppliers. In addition, a car manufacturer was integrated into the sample structure to represent a fourth tier of the value chain. With this sample structure, 25 businesses were targeted to participate in the research project, exceeding the threshold of 20

65 participants in phenomenographic research (Sandberg, 2000; Tight, 2016). The anticipated sample structure is illustrated in Table 6.

A third strategy to maximize variation in sustainability experiences of partaking organizations was to address businesses from diverging continents and which hence operate within different cultural backgrounds and regulatory frameworks. That culture and national institutional frameworks are decisive in determining sustainability practices was, for instance, established by Matten and Moon (2008). The notion of cultural diversity affecting practices is consequently used as another differentiating strategy in the sample selection. However, cultural or regulatory diversity are not primary revelatory aims in phenomenographic research. Rather, phenomenographic studies with students of different cultural backgrounds have shown that culture can determine the holding of conceptions within the outcome space derived from experiences of one phenomenon (Marton & Booth, 1997). In other words, diverging cultural backgrounds of research participants do not lead to different results, but might, rather, emphasize certain conceptions that are part of the range of results a phenomenographic assessment delivers.

A fourth strategy to maximize variation of conceptions held by research participants was to purposefully address businesses of diverging sizes. In contrast to large organizations that may face public pressure with regard to their practices, small and medium-sized businesses often operate in an opaque space where practices remain undisclosed (Hillary, 2004; Villena

& Gioia, 2018). Research also suggests that best practices of sustainability management in businesses might be less applicable to small enterprises, due to resource constraints (Richert,

2017; Shields & Shelleman, 2015; Villena & Gioia, 2018). Consequently, the applied sampling strategy aimed to capture experiences of businesses of diverse sizes, ranging from rather small enterprises with fewer than 100 employees to multinational enterprises exceeding 100,000 employees.

III.3.2. Sampling of research participants

For a first rolling out of the sampling strategy, I searched for a means to make the selection as replicable as possible. For the selection of businesses forming part of the automotive industry,

I used the list ‘Manufacturer Group III’16 of the German Association of the Automotive

Industry. This list contained, on the date of access, 541 entries for automotive suppliers in

Europe. To reduce this first population of businesses, I undertook a first screening of all 541 entries by visiting the websites of the companies to determine which would suit the criteria for sample selection. By this screening and filtering process, the initial population was reduced to

125 businesses. At the beginning of the year 2018, I started to call companies or otherwise used professional social media to identify staff at these companies working on sustainability-related topics. While some companies communicated outright to be disinterested in participating in research, many people I reached showed interest in the project’s aims. A guarantee of anonymity, as well as confidential handling of information provided, was for all organizations a requirement or motivator for participation. It usually took a range of follow-up attempts by phone and email to receive final responses on participation in the study. Within a first three- month stay in Europe, I managed to interview an initial set of ten businesses at their premises.

The remaining sampling was an iterative rolling out (Miles et al., 2014) to achieve participation of companies that would meet yet unattended criteria of the anticipated sample structure. For the final car manufacturers and most of the resource producers, online searches for companies and contacts was the primary method. The final car manufacturer was interviewed in Germany. Four mining companies were interviewed in Australia. I chose

Australia as a country where to address mining companies due to its abundance of mining operations, but also for matters of convenience to reduce travel for interviews. I identified

Iron Bauxite Copper Lithium/Lead REE Oil Rubber Leather

Resource producer Resource producer Resource producer Resource producer Resource producer Resource producer Resource producer Resource producer

Resource processor Resource processor Resource processor Resource processor Resource processor Resource processor Resource processor Resource processor

1st tier supplier (e.g., 1st tier supplier (e.g., 1st tier supplier (e.g., 1st tier supplier (e.g., 1st tier supplier 1st tier supplier (e.g., 1st tier supplier (e.g., 1st tier supplier wheel rims, ignition plug, car paint, brake disks, chassis) (batteries) catalysts) tires) (seats) autobody) electronic wiring) car dashboards) Final automotive manufacturer Table 6: The anticipated sample structure of 25 companies

Iron Bauxite Copper Lithium/Lead REE Oil Rubber Leather

Resource producer Resource producer Resource producer Resource producer Resource processor Resource producer Resource producer

and processor and processor Resource processor Resource processor Resource processor Resource processor Resource processor

1st tier supplier 1st tier supplier 1st tier supplier 1st tier supplier 1st tier supplier 1st tier supplier 1st tier supplier 1st tier supplier

Large 1st tier supplier without distinct resource allocation Final automotive manufacturer Table 7: The achieved sample structure of 21 companies17

Europe Australia Asia Europe Australia Asia North America

Figure 1: Location of sample companies by location of interviewed staff Figure 2: Location of sample companies by location of company headquarters

1-1,000 1,000-10,0000 10,000-100,000 100,000+ With certification Without certification

Figure 3: Size of sampled companies by number of employees worldwide Figure 4: Sampled companies with ISO 14001 environmental management system certification

69 another two of the participating companies by backward and forward linkages to already participating businesses, meaning that in two instances, companies participated which have actual business relations with other companies in the sample. Both companies identified through supply chain linkages are located in Asia. A third Asian company was identified through a hint from a German NGO involved in the above named coalition, after my own attempts to motivate an organization in that industry to participate led to no results. During

2018, a second stay in Europe allowed, on the return to Australia, for visits to three Asian companies. During the fieldwork, all international travel and some national travel had, for efficiency reasons, multiple purposes. To reduce travelling needs and associated research costs, interviews were in two cases held over the phone.

Table 7 illustrates the sample achieved by this strategy, consisting of 21 organizations operating across eight different resource value chains, as well as across different stages of the value chains. The only drawback in the sample achieved is that it was not possible for me, despite extensive efforts over a time span of 1.5 years, to secure a company from the oil or petrochemicals industry to partake in this study.

Figures 1 to 4 provide further information on characteristics of the sample of businesses achieved. While a large part of the businesses were interviewed in Europe and are Europe- based, I succeeded in incorporating a range of Australian and Asian businesses. If considered in terms of headquarter location, a range of North American companies is also included in the sample. Further, the sample shows a balanced structure with regard to the size of the businesses.

Companies of the size between 1,000 and 100,000 employees make up slightly more than half of the sample. More than a quarter are businesses with fewer than 1,000 employees.

Furthermore, a range of businesses could be included that have more than 100,000 employees.

These characteristics show a diversity by region and size of businesses, corresponding to the aim of the sampling strategy to potentially maximize variation of experiences. Figure 4

70 illustrates further that most of the participating companies are ISO 14001 certified. While the latter was not a criterion of the sampling strategy, it indicates the degree to which sustainability- related management practices are yet formally adopted by the businesses. From a perspective of sustainable supply chain management in the automotive industry, it also shows the degree to which companies would comply with the requirement to have a certified environmental management system in place.

1 interviewee 2 interviewees 3 interviewees 5 interviewees

Figure 5: Interview formats by number of interviewees per participating company

I asked the companies to make various staff available for one group interview in order to develop an organizational perspective on internal experiences (Fielding & Thomas, 2008;

Fontana & Frey, 2000). The invitation to participate in this research project stated that up to five persons in a managing position shall partake in the interview (see Appendix 4). Also, in direct communication with staff coordinating the participation in this project, I explained that staff should contribute perspectives from different departments of the organization. To have participants from different professional backgrounds would also contribute to smoothing individual biases by creating an inter-subjective meaning of experience (Fontana & Frey,

2000). Figure 5 shows that in over half of the interviews, more than one staff member was available to be interviewed. The number of three interviewees was exceeded only in one case.

In other cases, the interviews had to rely on one interviewee, either because there was only one

Figure 6: Interviewees by positions held in participating companies (summarized)

72 staff member in charge of managing sustainability-related topics, or because senior staff members insisted that only they should be interviewed. Notwithstanding this, individual staff members also served well as knowledgeable experts on company experiences, which is in line with previous phenomenographic research using individuals to learn about organizational practices (Teeter & Sandberg, 2017). In one single case, I interviewed two individuals separately. Generally, staff pointed to time, motivational, or structural constraints that hindered other colleagues from participating in interviews.18 In total, I interviewed 40 staff members from the 21 businesses that participated in this study. Figure 6 shows the positions of interviewees.

III.3.3. Data collection

Semi-structured interviewing is the main method of data collection in phenomenographic research (Francis, 1993; Marton, 1986; Tight, 2016; Walsh, 2000). To stay as close as feasible to the lived experience of research participants, I visited the majority of partaking businesses at their premises to hold the interviews. Being present at the companies to be interviewed allowed for better interpersonal relations between the researcher and the interviewees, and enhanced trust in disclosure of information to the researcher, as well as providing the possibility to observe body language. In some cases, my physical presence proved essential. For instance, staff of one company agreed to an interview appointment, but appeared very skeptical and hesitant about this research on the interview day. Only after asking the first question and the participants starting to respond, did the atmosphere become more relaxed, and the interview evolved into a friendly and deep report of experiences. In this one case, it appeared to have been the first time in many years for interviewees to reflect with a business outsider on their internal practices, which would probably have been less insightful if undertaken on the phone.

All interviews started with the open question on what the most outstanding sustainability achievement was for the organization. I deliberately opted to ask about

‘sustainability achievements’ instead of ‘sustainability performance’ for two reasons: firstly, I wanted to avoid interviewees relating to ideas of sustainability performance that are influenced by external sources. For example, the phenomenographic study on understandings of sustainability in organizations by Russell et al. (2007) has only led to a confirmation of the

Triple Bottom Line as it was already established among practitioners and researchers by the time the study was conducted (see Elkington, 1997). By using ‘sustainability achievements’ in my interviews, I aimed to provoke interviewees to speak of what their organizational achievements were, without leading them to think about what other parties might determine them to be (see also Bowden, 2000; Marton, 1986). Secondly, and for the same reason, using

‘sustainability achievements’ allowed staying as close as possible to the lived experience of interviewees. By not using ‘sustainability performance’ at the outset of the interviews, I also avoided confronting interviewees with a concept used in my research that might not relate to their own experiences (Gioia et al., 2013). I assumed thereby a close relation between the meanings of organizational ‘achievements’ and organizational ‘performance’ in the first part of the interview.

This first question, on what was the most outstanding sustainability achievement in the organization, provided the content for the rest of the interview to follow. Other questions then were about how the respective achievements were reached in the organizations, why certain issues were decided to be addressed and particular approaches chosen to address the issues, and what further potential for improvements might exist. These questions served to elaborate the actual experiences and practices of the organization about the before-named outstanding achievements. Also, and in accordance with the methods applied by Sandberg (1994; 2000), statements by interviewees were deepened by follow-up questions on meanings, further

74 explanations, and the provision of examples. As Bowden (2000, p. 10) explains the utility of follow-up questions: “Such questions aim to get interviewees to reflect on what they have expressed, to explain their understanding more fully, and to reveal their way of understanding the phenomenon.” Yet, noteworthy is that all these further questions would not lead to new content in terms of reports of sustainability performance, other than the first question on achievements by the organization.

A second set of questions was asked toward the end of the interview, after all sustainability achievements had been reported and deeply reflected upon. The second set comprised mainly the question of what sustainability performance means to the organization.

It was in this question, after all relevant perceived company experiences had been collected, where I first revealed the conceptual idea of ‘sustainability performance’ and made interviewees reflect on its meaning in their organizational context. This is somewhat different from other phenomenographic studies with organizational members, where the question on the meaning of the phenomenon of interest was placed first in the interviews (O'Leary & Sandberg,

2016; Sandberg, 2000). I positioned the question on the meaning of the phenomenon of interest deliberately at the end of the interview for the above-named reason: to avoid interviews beginning with participants responding with preconceived ideas on the phenomenon rather than their own organizational experiences. This strategy proved worthwhile, as many interviewees struggled to provide a clear answer to what sustainability performance means in their organization, even after lengthy elaborations of their experiences. Some referred at this stage to organizational reporting practices that appeared decoupled from the previous reflections in the interviews. Others again emphasized their own conceptual ideas that constitute sustainability performance for a business. According to Säljö (1994), it is not unusual that interviewees struggle to disclose the actual meaning of their activities. In cases where the answer to this question had not clearly reflected the information previously provided in the

75 interview, a final question was asked about how participants see their meaning of sustainability performance reflected in the experiences they have (the full outline of the semi-structured interviews is provided in Appendix 5).

The set of interview questions was tested before the fieldwork commenced with a community relations consultant in the mining industry as well as an architectural office in

Queensland, Australia. The test interviews showed that a) the questions were understood by interviewees, b) the questions were suitable and profound enough for the development of reports on sustainability experiences that would reach a level of saturation by interviewees, and c) the interview structure was capable of stimulating a deep and thoughtful reflection of interviewees’ experiences in two very diverse cases, i.e., a sustainability-experienced professional, as well as a team with comparatively minor sustainability experiences. Also during the following actual fieldwork, the interview structure allowed participants to deeply reflect and report on organizational practices and experiences. In one instance of a large business, interviewees pointed out that the interview was an interesting reflective exercise.

Another study participant expressed his surprise about how deep the interview went into actual organizational practices.

The interviews were held in English or German and lasted between 46 and 122 minutes.

They were audio recorded, summing up to 1,733 minutes of interview recordings, with an average of 82.5 minutes per interview. I transcribed the recordings verbatim, leading to 571 pages of interview text. Verbatim transcription here means that I also captured in the transcripts all sounds on the recordings that I considered to be potentially relevant for the interpretation of the data, including, for instance, sighing of participants or indicative pauses during their speeches (see also Silverman, 2006). The advantage of detailed verbatim transcribing is that a researcher does not lose any of the data, as one cannot know at the time of transcription whether it is going to be relevant for interpreting the data (Fielding & Thomas, 2008).

The interviews and contact with the research participants followed the requirements of the Australian National Statement on Ethical Conduct of Human Research. The University of

Queensland’s ethics approval letter is attached to this thesis (see Appendix 3).

III.3.4. Data analysis

In analyzing the interview data, I oriented toward the methods applied in the phenomenographic research by Sandberg (1994; 2000). In particular, I aimed, through the data analysis, to answer two questions: 1) What do research participants conceive sustainability performance in businesses to be? 2) How do research participants conceive of sustainability performance in businesses? Together, the conceived meaning and the conceiving acts form the conceptions of sustainability performance in businesses which this study aims to unveil

(Sandberg, 2000).

To approach the first question, I started to read the 21 interview transcripts several times and grouped them into what I understood the different conceptions are which research participants hold. By this first reading and sorting, I was able to differentiate four distinct conceptions of sustainability performance in businesses. In the next step, I read all transcripts again and this time marked all the expressions that might relate to ideas of performance through descriptive and/or in vivo coding. Descriptive and in vivo coding allow one to stay as close to the report as possible, without obfuscating the analysis with one’s own ideas and understandings (Miles et al., 2014; Saldaña, 2016). I further used these codes to create a summary of each interview, in which I outlined major concepts of sustainability performance within the context of each organization. I iterated between my summaries and transcripts, as well as between and within the first four identified groups, for similarities and differences among the organizations. I learned at this stage about another qualitatively distinct conception

77 in the data that I did not clearly apprehend before. This led me to reorder the transcripts into five different conceptions of sustainability performance in businesses.

To approach the second question, I used an unmarked set of interview transcripts in order to not be directed by any of my previous markings. I read the interview transcripts another time and applied again descriptive and/or in vivo coding. This time, I did not direct my attention to conceived meanings, but instead to conceiving acts. To identify acts of conceiving, I focused on expressions of thoughts as well as on descriptions of activities. This distinction between thoughts and activities is in line with previous phenomenographic research which either emphasized cognition, as in education research (Johansson et al., 1985; Marton, 1981, 1986), or practices, as in organization research (Lamb et al., 2011; O'Leary & Sandberg, 2016; Teeter

& Sandberg, 2017). Although I treated the expression of thoughts of research participants and their organizational practices as ontologically linked to together build experiences (see also

Marton & Booth, 1997), I did not suspend any of these attributes in this part of the analysis.

This approach allowed me to align thoughts with actions where either one might have been over- or underrepresented in participant reports. Furthermore, I also devoted attention in this part of the analysis to the broader context in which research participants experience the phenomenon of interest (Durden, 2018; Marton & Svensson, 1979; Säljö, 1994). In particular,

I included in the analysis the roles of internal and external parties, in order to understand the roles of stakeholders in the diverse conceptions to be derived from this analysis.

To derive the categories constituting conceptions of sustainability performance in businesses, I had to apply a strategy to synthesize the up to 250 codes per interview. One such strategy is, for instance, the Gioia methodology, which suggests steps for the aggregation of qualitative data (Gioia et al., 2013). In my phenomenographic analysis, I followed these steps of aggregation, but opted to remain throughout the analysis as close as possible to the reported experiences and the terminology used by interviewees. This means that instead of aggregating

78 to higher orders, where the researcher starts to apply his own interpretations, as suggested by

Gioia et al. (2013), I extracted from the descriptive and in vivo codes recurrent themes through which the experiences take place. In a further step, I formulated along these themes a limited amount of aggregated descriptions and checked, in a last step, whether these aggregated descriptions would cover nearly all of the sustainability-relevant content reported in an interview. After having completed this procedure for all interviews, I cross-analyzed the formulated aggregated descriptions first within groups of shared conceptions, and derived thereby first ideas of within-group categories. This was followed by a comparison of aggregated descriptions across conceptions, to derive the categories describing the phenomenographic outcome space covering all groups. It is particularly in these last steps, in the building of final categories of descriptions, where the phenomenographic researcher relies more on own interpretation to formulate results (Sandbergh, 1997).

I concluded the analysis with a final iterative reading of companies’ understandings of sustainability performance, aggregated descriptions, and the derived categories. I checked for the stability of similarities within groups, and differences across groups. According to my interpretation, no further adjustment of conceptions or of company allocation to conceptions was necessary, indicating that I have reached a faithful stability of the results.

III.3.5. Credibility of the research design

Scholars following positivistic research traditions use criteria of reliability and validity to justify their results. Those following an interpretative paradigm in qualitative research have argued for positivistic conceptions of reliability and validity to be methodologically inappropriate to assess the value of their research (Giorgi, 1994; Sandberg, 2005). Also in phenomenography, the finding of appropriate ways to justify results is subject to scholarly

79 debates (Francis, 1993; Harris, 2011; Johansson et al., 1985; Säljö, 1988; Sandberg, 2005;

Sandbergh, 1997). In justifying my own results, I follow phenomenographers’ suggestions and argue for the credibility of my research findings. In particular, I elaborate here on how far the adopted phenomenographic research design achieves communicative, pragmatic, and transgressive validity (Sandberg, 2005), as well as reliability as interpretative awareness

(Sandberg, 2005; Sandbergh, 1997).

Communicative validity refers to the perceived fulfillment of truth by the researcher

(Sandberg, 2005). I established communicative validity in four different ways throughout the research process. First, once a business confirmed its participation, and before the interviews took place, I informed myself online through everything I could find on the sustainability engagement of the participating company. By going informed into the interviews, I enabled myself as the interviewer to have a better understanding of companies’ own context and experiences. Second, in initial contacts in anticipation of companies’ participation, and right before the interviews took place, I informed interviewees about the purpose of this study and its aim to capture how they internally experience the work on sustainability objectives. A project information sheet, which contained this same information, was disseminated to participants before the interviews (see Appendix 4). Immediately before the interviews, I repeated the context and intentions and responded to participants’ questions about the study.

Third, during the interviews, I would make interviewees expand on aspects of their reports at times, even if they seemed trivial. In follow-up questions, I would also reveal my understanding to interviewees and seek their confirmation or rejection. Through these three means, I created what is termed a ‘community of interpretation’ between researcher and research participants for data collection (Apel, 1972; Sandberg, 2005). As a fourth step, I would engage interviewees in reflecting on my results, which Tracy (2010) suggests, in order to enhance the credibility of qualitative research. Specifically, I sent participating companies their individual results and

80 gave them the opportunity to provide feedback. Companies which made use of the opportunity to provide feedback generally identified with the results. A few made minor additional suggestions only.

Pragmatic validity refers to the need to cross-check whether what interviewees say is also true in their actions (Sandberg, 2005). Regarding this point, this study shows one of its weaknesses, as it was, except for one case, not possible to observe directly how company staff would engage in sustainability performance. Mainly due to time constraints, I had to rely on data collection through interviews. However, there are a variety of ways through which the gathered information can be considered to accord with organizational practices. First, by my going informed into the interviews and showing my understandings in relation to the interviewees’ experiences, opportunities to deviate from common understandings were reduced. Second, in using follow-up questions, I would deliberately ask interviewees for experiences related to how they apply approaches in specific contexts, and I would deepen these examples through further questions. Third, for each major sustainability achievement, I would ask participants for the limitations to these achievements. I would also conclude interviews with a question on whether their approaches of sustainability engagement had failed before. Such counter-checking allowed me during data analysis to understand the limitations of companies’ practices. Fourth, many of the participants showed themselves to be very open during the interviews, disclosing information which is generally not for the public. Such information included general lack of staff motivation for sustainability engagement, forms of bullying of sustainability staff by superior managers, discussion of company failures, but also the disclosure of intentional malpractices with backing from top management. These reports were essential in understanding company experiences. Overall, the data does not seem to me to contain information that would not be reflected in organizational practices.

As a third form of validity in qualitative research, transgressive validity suggests research findings to be indeterminately truthful by transgressing the boundaries of the researcher’s own research design (Sandberg, 2005). For instance, as larger corporations often serve more than one industry sector, findings of this study can be considered as valid for many other sectors too. Sectors beyond the targeted sample structure of an automotive supply chain

(see Tables 6 and 7) which participating companies operate in, are chemistry, construction, electronic systems, energy, mechanical engineering, food and beverage, homeware, and financial services. From a viewpoint of gender dominance in the reports, women were relatively less represented among interviewees. Both women and men were interviewed in eleven of 21 interviews. Compared to ten interviews with only male interviewees, five interviews were held with only female representatives of management staff.

Another decisive method that adds to communicative, pragmatic, and transgressive validity, is the hermeneutic reading and analysis of the transcripts (Sandberg, 2005). In accordance with this method of data analysis, I counterchecked every relevant statement within the context in which it appeared, within the whole transcript, and with other transcripts within the group of conception holders, as well as with transcripts in which other conceptions dominated. This method adds to communicative validity by leading to a coherent interpretation of results across the full data set. It adds to pragmatic validity, as the reports of individual experiences are cross-checked and only considered as valid if either a) other companies with the same conception share these experiences, or b) other companies following other conceptions differ in their experiences (Åkerlind, 2005; Marton, 1986). This continuous cross- checking of similarities and differences adds further to transgressive validity, as it forces the researcher to reinterpret the data until the results are stable across all related experiences within the data set.

Sandbergh (1997) argues that instead of following a positivistic conception of reliability in phenomenography, researchers should rather demonstrate how they exerted interpretative awareness. “Interpretative awareness means to acknowledge and explicitly deal with our subjectivity throughout the research process” (Sandbergh, 1997, p. 209). In this research project, I followed this notion in several instances. First, the interview questions are open for interviewees to interpret themselves what sustainability achievements are to them within their own organizational contexts. I would lead interviewees to central concepts of sustainability only if I perceived their report to go too much off-topic, yet only after making interviewees elaborate on their points. This was twice the case, when interviewees would expand first on the economic performance of their organizations, whereas I would later direct them to their experiences of social and environmental dimensions of sustainability. In other cases, where interviewees asked me for ‘hints,’ I made them aware that what counted was their own interpretation only. Another instance where I constrained myself to organizational experiences was by making the businesses themselves choose who should attend the interviews. While I requested a group interview with staff in management positions of different sustainability-relevant departments, the actual participation of interviewees was at the discretion of the organizations.

During data analysis, the strategy to reduce the phenomenographer’s influence on data interpretation is phenomenological reduction (Sandbergh, 1997). I followed phenomenological reduction by refraining consciously from my own ideas influencing my interpretation. In contrast, the arguments had to stem from the data, meaning that arguments could only be descriptions of experiences as reported by study participants. As outlined above for hermeneutic reading, the iteration and reflection between findings on the basis of phenomenological reduction is a continuous process in phenomenographic data analysis. If carried out rigorously, these methods help researchers to bracket out their own ideas, and

83 support them in concentrating on the data as the only source of truth (Brinkmann & Kvale,

2015). As a result, phenomenographic researchers re-sort their transcripts several times according to the conceptions interpreted as prevalent in the data. The re-sorting of transcripts during the analytical process, had, in my experience, tremendous value. Moments of transcript re-sorting were the culmination of results stabilizations, in which interpretations were dismissed that appeared over weeks as stable or as correct. Interpretative awareness, through phenomenological reduction, led me to concentrate on what is given in organizations’ experiences, as well as to resume the analysis until interpretations reached stability across all reported experiences.

Another means by which I withheld the development of my own prior understandings of conceptions and categories throughout the study, was to purposefully not read the doctoral thesis by Nichols (2018) until I had completed my own data analysis and write-up of results.

Nichols (2018) undertook her phenomenographic research on sustainability practices on the same campus, but under different supervision and about one year in advance of my own project on sustainability performance in businesses. Bracketing out the contribution by Nichols allowed me to further concentrate on the experiences expressed in my data, as opposed to seeking joint relations between the studies.

III.4. Chapter Summary

Phenomenography is a research design that aims to describe the various conceptions people hold about a phenomenon of interest. I have adopted a phenomenographic approach to studying sustainability performance in businesses because it offers to reveal diverse conceptions of sustainability performance, leads to a hierarchical order of these conceptions, and creates a novel perspective on the subject matter without having to rely on inaccessible, non-existing, or

84 incomparable ‘hard’ performance data. To gain access to more than 20 business organizations,

I used the case of convention of sustainable supply chain management in the automotive industry. Phenomenographic methods defined how I chose research participants along the automotive supply chain, how I structured and conducted the interviews, and how I analyzed the data, as well as the following presentation of results.

Chapter IV

Five Different Ways in which Sustainability Performance Occurs in

Businesses

IV.1. Chapter Introduction

This fourth chapter presents a descriptive response to the primary research question of how sustainability performance occurs in businesses. To answer this question, I undertook a phenomenographic study of 21 businesses operating within the automotive value chain ‘from mine to car.’ Phenomenography aims to reveal the different conceptions by which research participants understand and experience a phenomenon of interest.

The following results of the phenomenographic study shed new light on the challenges the sustainability service industry faces if it aims to enable sustainability performance in businesses. The study reveals that sustainability performance occurs in businesses in five different ways that are not yet accounted for in the practices of the sustainability service industry. These five different ways are: (1) sustainability performance as the meeting of customer and regulatory requirements, (2) sustainability performance as the reduction of operational costs, (3) sustainability performance as the mitigation of risks to the business, (4) sustainability performance as the prevention of risks to business operations, and (5) sustainability performance as innovation that enables the achievement of societal sustainability aims. In the following sections, I provide a descriptive analysis of these five conceptions of sustainability performance along their categories of description. The four identified categories of description are: risk profiles, framing of sustainability performance, the creation and use of management structures, and approaches to solution finding. The five conceptions, and their

Sustainability performance is…

Conceptions Conception I: Conception II: Conception III: Conception IV: Conception V:

… to meet customer … to reduce … to mitigate risks to … to prevent risks to … to innovate for the Categories of and regulatory operational costs the business business operations achievement of societal Description requirements sustainability aims

Risk profile: Competitiveness of the conventional business Acceptance as a business business risks Facilitation of the business Risk profile: Security of business Long-term existence of sustainability business

External horizon operations the business risks

Framing of Being compliant with Harnessing financial Meeting stakeholder Managing stakeholder Enabling of societal sustainability customer and regulatory benefits through resource expectations expectations sustainability aims performance requirements efficiency

Systems to identify and Structures to understand Creation and use of Structures as needed to manage potential for Structures that enhance Long-term establishment and manage stakeholder sustainability achieve compliance with improvements; structures accountability toward of specialized R&D expectations, as well as management structures requirements as needed to realize stakeholders structures operational impacts improvements

Internal horizon Innovating on core Solution finding for Satisfying customers and Investing in process Following or exceeding Developing or applying production technology or sustainability issues regulators optimization established best practices new leading practices products Table 8: Five different ways in which sustainability performance occurs in businesses

87 particular forms of appearance in companies’ experiences along the four categories of description, are illustrated in Table 8.

Before going into the analysis of the phenomenographic results, the chapter informs readers further about how to interpret the phenomenographic results and their presentation.

Following the in-depth analysis of the five conceptions of sustainability performance, the chapter concludes with an elaboration on the structure of the results as a conclusive phenomenographic outcome space, as well as on the research participants’ distribution along the identified conceptions. The distribution of research participants along the phenomenographic outcome space shows that resource producers, like e.g. mining companies, can have a more sophisticated conception of sustainability performance than most of the sampled companies of the automotive industry. The results also show that small and medium- sized companies can outperform large corporations with regards to their conception of sustainability performance. The results suggest that these differences occur because of different risk profiles the sampled companies have to cope with. Finally, I will highlight that the promotion of management approaches do not yet consider these differences of conceptions of sustainability performance with the example of companies’ certification against ISO 14001.

IV.2. On the Interpretation and Presentation of the Results

The five conceptions that will be described in the following sections are each held dominantly by the interviewed staff in participating businesses. Dominance of one held conception does not preclude that other conceptions can be held and followed within the same organization.

Conceptions derived through phenomenographic studies are, amongst others, contextual, meaning that they appear in a certain time or space, or in particular situations (e.g., Åkerlind,

2005; Marton, 1981; Marton & Pong, 2005; Säljö, 1988; Walsh, 2000). Conceptions found in

88 phenomenographic studies are also known to sometimes build on each other (O'Leary &

Sandberg, 2016; Sandberg & Targama, 2007). This means that organizations and their staff can apply different understandings, depending on the matter in question and the situations in which they ought to act. Säljö (1988) formulated the varying appearance of conceptions succinctly in the example of studied individuals in educational settings:

The first assumption is that conceptions of reality are not considered as residing within individuals. In other words, people do not have specific conceptions of phenomena in the world around them (…) People may – and do – have a tendency to use particular conceptions of reality in a number of settings or in relation to a number of problems, but they cannot always be assumed to adopt that particular perspective on reality (Säljö, 1988, p. 42).

The results presentation will indicate, on occasion, that I found such multiple holding of conceptions also among the participating businesses’ understandings of sustainability performance. However, in cases where participating companies revealed during the interviews to hold multiple conceptions, interpretations of one’s own experiences were based on the vantage point of the dominant conception held. I will return to this notion of dominance amidst other conceptions in Section IV.8., which expands on the structure and distribution of the results.

The following sections contain direct quotes from the data which have at times been amended to either enhance readability or to protect the identity of participating companies. I translated quotes from interviews in German into English. Round brackets indicate where I have left out parts in the data due to irrelevancy, while allowing readers to still apprehend the context within which highlighted statements have been made. Highlighted statements are in italics for readers to spot with more ease the parts in the data to which the analysis refers.

Square brackets, in turn, either indicate parts in the data which I amended to obfuscate the

89 identity of companies, or additional sounds or pauses in the recordings captured in the transcriptions, or words added to enhance readability and comprehensibility of the quotes.

IV.3. Conception I

Sustainability performance is to meet customer and regulatory requirements

Environmental regulation has grown and influenced business operations since the 1970s

(Hoffman, 1999, 2001). Since the 1990s, industrial customer pressure on companies to comply with environmental and social requirements has also increased (Corbett & Kirsch, 2001;

Seuring & Müller, 2008). Sustainable supply chain management is now a common approach of large corporations in order to mitigate sustainability risks across partners in the value chain

(Sheffi & Blanco, 2018). As a result, companies throughout supply chains may now be facing requirements from both regulators and their customers to engage in more sustainable practices.

IV.3.1. Risk profile

Companies that receive demands from customers or regulators on sustainability practices understand compliance with these requirements to be a necessary condition to be accepted as a business (see also Clarkson, 1995; Seuring & Müller, 2008). As Company 5 describes its perceptions of risk in the context of regulation:

C5S1: And in case we fail to get the, to reach standards they gave us, they will; we have to under the penalty. Not only tell us ‘oh no, you fail,’ or, or that’s all. You have to improve it, or something like that. They give us the penalty. And you have to pay a lot of money. And then we can, have to be closed, the factory. Stop the operations. Yeah. RES: That’s a real risk?

C5S1: Yes, yes.

Similarly, Company 7 describes how it perceives the risks of not complying with the requirements of customers. In this case, interviewees describe their perceptions about complying or not complying with a customer requirement to produce an extended sustainability report:

C7S3: But if we do not do that, we will be blocked. C7S2: Yes, of course, that’s the issue. They would put us somewhere on red in their portal. I was there when [the client] said: ‘Take your time. I recommend you to take a year for that. Take a year to produce the report.’ Then they put you on yellow. But at some point, after one year, they will come back to you and ask: ‘What is the progress on that?’ And if you do not have it by then, they will keep you on yellow or put you on red.

These two examples show that companies following the first conception perceive non- compliance with regulatory or customer requirements to have high risk implications for their own operations. In both cases, the associated risk of regulators not accepting a business to operate, or a customer not accepting a supplier anymore, implies that the organization loses its legitimacy of being a reliable business. The legitimacy of the business is, however, a necessary condition for organizational survival (Hannan & Freeman, 1984). If organizational survival is an aim of the business, compliance with the requirements of customers and regulators is a fundamental mandatory condition. Furthermore, the risk of being out of business is perceived by these companies to have a certain immediacy when the business is found to be non- compliant.

IV.3.2. Framing of sustainability performance

In accordance with the risk profile of companies found to follow this first conception, their framing of sustainability performance stems from the requirements posed by customers and regulators. This means that sustainability topics and issues that these companies work on originate primarly from the demands that customers and regulators raise. Thereby, it is not relevant whether something is required by either customers or regulators, as companies do not necessarily differentiate internally in their approach to these parties’ requirements. This non- differentiation is evident in the following exchange between the staff of Company 7 on the nature of the requirement to have an environmental management system implemented according to the norm ISO 14001:

RES: Are there any other points about which you say that your customers influence what your company can achieve in its sustainability engagement? Or how do you perceive this in general? C7S1: [sighing] No, you need to see this more comprehensively. [pause] There is a law that requires us to be certified against 14 0 1 or 14001. C7S3: No, this is a customer requirement. C7S1: But it is also… C7S3: There is no corresponding law. C7S1: Yes, it is a customer requirement. But it is a… C7S2: There is no… C7S1: It is not, it is not based on a law? C7S2: No. C7S1: These are our main drivers.

In this excerpt from the interview with Company 7, interviewee C7S1 first states that legal requirements are the primary reason for the adoption of an environmental management system and is then corrected by colleagues on this point. This dialogue shows how internally

92 the source of the requirement is of minor importance, as both regulators and customers are perceived within the company as main drivers of the work on environmental aspects. That both customers and regulators constitute together main drivers of a company’s sustainability engagement is also evident in the interview with Company 5:

C5S1: Uhm, [country name] regulations of environment, we now follow up. And every quarter, every three months, they come here to investigate. Yes, they do some measurement. And after that, during the inspections, we have no issues of the environment. And I think, at this moment, with these government things, we can do. But anyway, to compare with the requirements from the customer, maybe example like [customer name] and [customer name], there are still a lot of things we have to do. And now we have the [audit] report from [customer name]. We have to follow up with this.

Here, the interviewee compares the requirements of regulators and customers, and says that in order to meet the requirements of the latter, the company still needs to achieve compliance. One can further see how the company internally perceives and processes requirements from both parties in the same manner: regulators inspect, measure, and then communicate what further performance requirements are to be met; customers conduct an audit and then communicate in a report which requirements are yet outstanding. Irrespective of the source of requirements, the company “follows up” once the requirements are expressed.

Similar procedures are also described by Company 7:

C7S2: For environmental management, it is often the case that regulatory requirements lead us to do something. This is very often the case because here in [country name] the surveillance by regulators becomes more and more. We are, for instance, a company that needs to adhere to the industry emissons guideline. This means that every three years, the regulators automatically come into our company, the surveillance. And that’s when a lot is coming up. That’s just how it is. They go into details and then you may, you might have to do something in that area. C7S3: And they are very persistent. C7S2: Or emission measurement, if it’s not sufficent yet. Then one must intervene

again. So, it’s just a lot about regulatory requirements in environmental management.

Also for Company 7, the approach is to follow up with requirements, in this case exemplified by regulatory practices. Once expectations are communicated directly to the company, actions will become defined. This approach, which is shared by Companies 5 and 7, is indicative of a reactiveness to external demands. This reactiveness expresses itself also in companies otherwise not knowing what they are expected to do, as the following example indicates:

C5S1: Actually, but we, we don’t have an overview, an overview. Because I want to, to go in detail, step by step. So, the first, we have to understand what we have to do. And then we, we reach to the next one: how to do it. But now we don’t have know[ledge] what we have to do.

IV.3.3. Creation and use of sustainability management structures

In order to be able to react to externally raised requirements, a company needs management structures through which these demands can be processed. Environmental managers are present in many companies either because it is nowdays a legal requirement or because the amount of work in this area needs long-term dedicated staff. However, in all instances reported as part of this conception, management structures are created for the purpose of meeting customer and/or regulatory requirements. Management structures are hence also created in accordance with these requirements: long-term demands are responded to with long-term management structures, while short-term demands are responded to with short-term management structures.

The ad hoc nature of sustainability management structures became in this conception most evident in the interview with Company 7:

C7S3: This means that we do not have a lot of staff who are only in charge of taking care of such processes. In our company we usually check ‘who is available to also work on this topic?’ Or alternatively, sometimes one reaches the point where you need somebody to support you. These structures grow in accordance with demand, but we do not have, like in coporations, a department with such and such many staff. This was also the issue when we just asked ‘What is Ms [colleague’s name] doing now?’ Well, Ms [colleague’s name] is supposed to do something else now again, despite her being employed for sustainability management, meaning to maintain the system [to respond to customers’ supplier surveys]. Well, it’s just communicated that she is now needed for other things again. And then you have to do it yourself again. I think our issue is that we always take on topics which are not part of our area, don’t we? That is, I think; is that right? I think one has to understand how this works here. Here you won’t find 10 staff members who are dedicated to sustainability topics only. These structures grow only if they are really required. But it’s not the case here that we just say, ‘Let’s establish a department for that and let’s see what kind of tasks we can process through it.’ C7S2: Unfortunately not. C7S3: Instead, it is growing here like everything else is.

Two more aspects about ad hoc management structures for sustainability will be highlighted here. First, the establishment of these management structures depends on demand for these structures. Without demand, which is, within this conception, external demand, management structures for sustainability would not be established. This is supported by

Companies 5 and 7 both associating with sustainability performance their acceptance as a reliable business, meaning to be generally able to operate as a business according to the requirements of partners and regulators. To respond to sustainability requirements through management structures is hence similar to the growth or establishment of other management structures. C7S3 is suggesting this nature of the creation of sustainability management structures by saying that these grow “like everything else” in the company, which is upon demand from external parties. Second, the above excerpt from the data also gives an example of how sustainability management structures get used, depending only on what is needed at a certain point in time. As a result, sustainability management structures can be assembled and disassembled according to temporary needs to meet customer and/or regulatory requirements.

IV.3.4. Solution finding for sustainability issues

Solution finding for sustainability issues is by companies following this conception focussed on satisfying customers and regulators. Here I will highlight the variation of what it can mean to satisfy customers and regulators. First, the following excerpt from the interview with

Company 5 shows how meeting external requirements is the primary and dominating focus of their own endeavors:

RES: Uhm, so you mentioned quality management system, ISO 9001, yeah? This is like the next big step in management system that you plan, yeah? C5S1: Yes. RES: Why do you want to do that? C5S1: Uhm, because the purpose is that to [pause] meet the requirements, to meet the requirements from the customers. Because some uh, not uh, customer, customers doesn’t care about only the quality and the production. They care about some other things. They come here, too, and they want to see how we can uhm, how we are managing the, the whole process of the administrations, environment, and uh, labor; and how we care, health care, everythings, not only about the production. So, and we have uh, met some uh, some problems in administrations. And we want to, to control everything. Uh, how to say? So, ISO, ISO 9 uhm, 9001 is the good choice for not only manager, managing uh things; about everythings from the start of the, of the; to the end. I just think so. RES: You just think so, yeah? C5S1: Yes, I just think so. RES: I just wanted to ask you: why do you think it is a good choice? C5S1: [light laughter] RES: Do you know why, why you think it is a good choice in this context? If you say you want to control – and you mention environment, labor, health; production quality, of course; and so on – why ISO? C5S1: I just uh, give you the answer: Uhm, I want to meet the requirements from the customer.

This example illustrates how sustainability management is followed only from a viewpoint of satisfying customers (or regulators). The actual sustainability topics

(environmental performance, workplace conditions, etc.) and their corresponding issues that may result from business operations do not find attention in their own right, but only through what an external party expects to be achieved.

Second, there is some relativity in what it means to satisfy customers and regulators, as performance can be subject to negotiation. For instance, the following excerpt handles a conflict of goals between the company aiming to achieve compliance, and the energy management system requiring the setting of targets that ought to be achieved:

RES: If you are through your major production plants technologically constrained [in increasing your energy efficiency], why do you write down such a goal at all? C7S1: This is exactly what I’m saying! ‘Kids, let’s keep it on the back-burner and opt for another, lower goal!’ Because I will have to have this discussion then again with the auditor. The auditor will come here and say: ‘Why did you not implement this?’ And I will start then again to say: ‘Well because [sighing], because it…’ C7S2: Yeah, yeah, those arguments again.

As part of this excerpt, staff members of Company 7 stated that due to the need for longevity of investments into major manufacturing plants, optimization potentials for resource efficiency are limited. However, regulators require the company to adopt an energy management system in order to benefit from subsidies on energy prices. Company 7 aims for compliance to meet regulatory expectations and to benefit from the financial incentives. Yet, as the example shows, what it means to comply with requirements to implement an energy management system can be subject to negotiation with auditors.

Third, interviews have shown that businesses can also adopt measures for mere compliance purposes. As the focus is on meeting those requirements, internal motivation for implementation can be underdeveloped, leading to a lack of any substantial application of

97 measures. Company 7 makes this clear in the context of its supplier code of conduct as well as its sustainability report:

C7S1: This is now a requirement in the automotive industry. It gets implemented. Full stop. Its content doesn’t matter.

Fourth, the focus on satisfying regulatory expectations can also lead businesses to invest in major innovations (Porter, 1991). This became evident in the interview with Company 8, which is, in its sustainability management, not predominantly following this first conception, but which engaged in an innovation heralded as a technological breakthrough by following the same understanding of sustainability performance:

RES: Why did you decide to work on this innovation? (…) C8S2: This was simply because of the RDE law. This law is also much older than the so-called diesel scandal. It all started much earlier, when the European Commission began dealing with real driving emissions. And, more or less, when this became public, we weren’t the only ones. Others looked into this issue as well. Because we had to.

The underlying notion that brings all four types of solution finding for sustainability issues together under one conception, is that companies have to engage with these measures.

The measures are all set by requirements of regulators or customers. There is, in none of the examples reported by participants, an intention by companies to voluntarily go beyond meeting those requirements. In fact, interviews with companies following this first conception show generally a lack of their own self-developed motivation to work on sustainability targets. These companies can also perceive their sustainability engagement as “an irksome activity” (C7S2) alongside their efforts to be a reliable business. This is very different from companies which understand how to harness financial benefits through extensive efforts for resource efficiency, which will be described in the next section.

IV.3.5. Summary of Conception I

Companies that predominantly follow the first conception of sustainability performance as meeting requirements of customers and regulators are enticed into their sustainability engagement through risks of not being accepted as a reliable business. In accordance with this perception, companies aim to address risks by complying with requirements which are externally raised by customers or regulators. The management structures that companies create to meet the requirements of customers and regulators can be long- or short-term, depending on the nature of the requirements. While there are various forms through which companies aim to satisfy customers and regulators, from non-implementation to technological breakthroughs, their sustainability engagement rests on an externally-driven motivation which enforces the adoption of compliance measures.

IV.4. Conception II

Sustainability performance is to reduce operational costs

The implementation of management systems is common among modern businesses, with the

ISO 14001 environmental management system counting more than 300,000 certified organizations worldwide.19 As the previous first conception has shown, the adoption of management systems is nowadays a major component of sustainable supply chain management practices. There are, however, also a range of companies which adopt similar management approaches, yet without pursuing certification in accordance with standards. This second conception of my findings lays out how the prevalence of management systems and similar

99 approaches supports businesses in their goal of reducing operational costs through resource efficiency.

IV.4.1. Risk profile

In the previous conception, I have outlined how companies adopt management systems because they are required by external actors. In this second conception, companies that adopt the logic of a management system, amongst others, make sense of these approaches by applying it to their own internal needs. A prevalent and general need of businesses is to keep production costs at a minimum in order to maximize profits (Friedman, 1970). The ability to create profits is one indicator of business competitiveness. Another way to grasp the competitiveness of a business is through a comparison of production costs with competitors in the market. Also this perspective on competitiveness demands that businesses hold production costs at bay. The loss of competitiveness is an ongoing concern and thus a common risk of business operations. In comparison to the risk of being accepted as a reliable business, as emphasized in the first conception, the risk of competitiveness in this second conception is less immediate, but is of a long-term nature. Competitiveness has accordingly a relatively high-risk intensity, as it determines the long-term ability of the business to serve its markets.

Some of the companies which follow this second conception describe fittingly how their sustainability engagement arose from their internal needs for maintaining or enhancing competitiveness:

C19S1: The final goal is to make a profit. And back then the danger has been recognized that profits are not generated anymore as they could be. And there was another influential reason: our owner had good connections to Japan. He has shown interest in their practices and understood ‘what they are concerned about, those types of wasting, I’ve got plenty of them everywhere in my enterprise.’ And this became his biggest motivation. What his father was as an inventor, is

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what he became as a process innovator, an advocate of process innovation. And he turned it into a passion that required the entire workforce to follow, without ifs, ands, or buts.

This excerpt from the interview with Company 19 provides an insight into how this form of sustainability engagement results from internal business needs to maintain a good profit-level as a basis of operations. The interest in Japanese management culture, which laid the foundation for widespread approaches to process optimization nowadays, is a means to an end for profit generation. Also, companies which do not embrace management systems in an enthusiastic manner may still engage in approaches that likewise lead to an orientation toward the reduction of production costs. The following account is from an innovation context through which Company 3 aimed for the reduction of costs resulting from its production:

C3S1: And then we were not allowed anymore to deliver our wastes to disposal sites. Then it went to the incineration. Then the prices exploded. And then, well, necessity is the mother of invention, isn’t it? We were always doing trials in parallel. At some point we reached the break-even-point, leading us to say ‘Yes, now we can do it; now it is worth it to invest in such a large-scale plant.’

The correspondence to internal business needs is further indicated by practices that companies would also use in typical sustainability-unrelated interests of cost reduction. The example given above describes an investment rationale that guides decision-making for innovation of process optimization (see also Pedersen et al., 2017). This investment rationale, and its fixation on payback periods, is prevalent in the sustainability context of all companies following this second conception. Yet, also in other contexts, for instance in the process management orientation of Company 19, the alignment with internal needs and practices is emphasized:

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C19S3: The more we exchanged about [sustainability], the more we talked about it, the more it became evident how much it fits into our overall context. There is no contradiction. To the contrary, all these instruments, tools, which existed before, could excellently be integrated into this subject. We can actually claim: ‘Yes, we have only been making it public since 2015, but all those topics, which we describe and work on, have already a quite long history [in our company].’ This means also that our credibility is accordingly high.

Some of the companies which follow the conception of sustainability performance as the reduction of operational costs also emphasize how much this form of engagement is “logic,”

“common sense” and even “easy” within their respective contexts. However, this internal fit with business aspirations and practices needs first to be apprehended and also developed. The last excerpt contains, for instance, the notion of an internal deliberation of what sustainability and engagement thereof could mean in their own company. For others, like those whose adoption of environmental management systems is externally driven, the internal sense-making unfolds around how to use this mechanism for their own purposes. An insight into this turn from external demands for the adoption of management systems to an internal logic of cost reduction was provided by Company 14:

C14S1: Yeah, yeah, customers are the most important part, because they require you to follow international standards, like ISO. And then, if you are in accordance with all paragraphs of the standards, this invites all plants to define their own objectives. And then we have clear on what we are spending our resources, because mostly electricity, that is the main resource. (…) Because even the standard itself requires to have objectives. They are not telling us what objectives we are going to work on. But according to our, we say common sense, it is clear that energy should be one of them.

Here the interviewee starts to elaborate on how it was, in the first place, the customer’s will for the company to adopt management systems according to ISO norms. It also contains the information that those ISO norms require companies to define objectives without specifying what these objectives should be. But then, when converting these requirements into the

102 interviewee’s own understandings and priorities, a focus on costs (i.e., “spending”) takes over.

In comparison with the previous conception on meeting the expectations of customers and regulators, a translation into a company’s own business needs is taking place that provides the organization a clear reference point that appears as “common sense.” The common sense part within this conception is the reduction of costs to enhance the competitiveness of the business.

IV.4.2. Framing of sustainability performance

Businesses that aim to reduce operational costs through their sustainability engagement frame their achievements through the concept of resource efficiency. The concept of resource efficiency underlies the notion of ‘doing more with less’, meaning to decouple (increasing) production needs from previous levels of resource utilization. Yet, wherever production of goods takes place, resources are required as input factors and lead to transformed resources as output factors. Resource efficiency is thus an ongoing concern in manufacturing businesses and is nowadays apprehended to require management approaches for continuous improvement.

There are two major streams of organizational activities that form part of businesses’ interest in resource efficiency. The first stream concentrates on reducing costs by reducing either the need for input factors or the occurrence of non-usable, sometimes cost-increasing output factors. Input factors that could be reduced are primary resources that make up the product (e.g., metals, minerals, and other materials), and secondary resources that are required during the production process (e.g., energy to transform materials and other auxiliary supplies), as well as tertiary resources in the form of infrastructure needed for the production to be effective (e.g., buildings, plants, transportation networks, etc.). Output factors, in turn, are either minimized or aimed to be (re-)usable for other purposes. The latter forms part of the second stream which focuses on the recyclability of production materials and/or products, as

103 well as the recycling content of products. In this second stream, resource efficiency is aimed for in cases where the primary production of input factors is more expensive than their supply as secondary, recycled materials. Within the companies interviewed for this study, recycling needs due to cost incentives were particularly relevant in the aluminum, copper, and lead value chains.

Within this conception, needs for cost reduction in business operations dominate ideas of environmental protection or other sustainability concerns. (Human resource management appears as a notable exemption to this rule.) In fact, a range of interviewees named the relative importance of costs vis-à-vis other considerations by stating how, for instance, environmental protection is an indirect achievement. The following excerpt shows how one interviewee is first expressing the company focus on costs, and then pauses in what she is saying when considering its environmental implications:

RES: I think all these examples are about reducing your use of energy. C18S1: [confirmative noise] RES: Why do you do that? C18S1: Well, first we are doing that because it saves costs. [pause] And also [pause] to preserve the environment.

In another case, an interviewee makes reference to international climate change discourse as an explanation of the company’s engagement, but then points also to the relatively minor importance of those discussions vis-à-vis the internal relevancy of costs:

RES: Did the developments in the [industry] play a role for that or was it a mere intrinsic consideration of costs? C3S1: Well, it was also part of the discussions around CO2 emissions. We would like to save CO2 emissions as far as we can, and so on. So, this was also a bit the case. But it was more a side issue. More important were the costs.

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That resource efficiency projects are directed toward the reduction of costs is also made explicit in the interview with Company 14. In this excerpt, the interviewee also provides an insight into how financial considerations do accordingly frame the understandings of staff, while other, indirect aims, play a minor role:

C14S1: That is a very good thing, because we save money. Indirectly, of course, we have reduction of energy, okay? And less impact to the environment. But people are not thinking of that.

Furthermore, companies also disclosed in interviews how an internal orientation of cost reduction is translated into the achievement of environmental protection through resource efficiency. That there is a discrepancy between an internal framing of engagement and performance, and an external communication of engagement and performance, is formulated clearly by Company 16. In this excerpt, the interviewee elaborates on the sourcing of secondary metals which get recycled in the production process:

C16S1: The less money you have to pay for, let’s say, a kilogram of alloying elements, the higher are the unwanted accompanying elements which are, so to say, part of the scrap metal. And you’ve got to check: what can I process in my plants? This is about an optimization curve. But the actual concern is the taking of advantage of price differences among the different raw materials, the different qualities of scrap metals. Through that you create economic [pause] success. A second aspect is of course the exposure of environmental aspects in the sense of those sustainability and environmental discussions. To say, to make it public and say ‘We are using resources and those are…’ That is an argument which is always valid and important. To say, ‘Metals are without any loss of quality infinitely recyclable.’

The examples show how within this second conception, companies engage in measures of externally communicated resource efficiency while maintaining internally a framing of engagement for the reduction of production costs. The reduction of production costs through

105 resource efficiency does, however, also require tremendous efforts in terms of resource management and analysis of improvement potentials. While individual companies emphasize how well ambitions of resource efficiency align with their already existing practices, others had yet to adopt relevant measures to understand their potential for process optimization. For many of the interviewed companies, the adoption of a management system was a first decisive step toward better understandings of resource utilization in their own business. The next section highlights how management structures are established by companies following this conception, with the aim to harness financial benefits through resource efficiency.

IV.4.3. Creation and use of sustainability management structures

As modern-day businesses, particularly in the manufacturing sector, operate with a vast amount of different resources, their engagement for continuous improvement of resource efficiency is a complex task. It requires the documentation of resource use throughout operations, the measurement and control of resource use, analysis of measured data, assessement of deviations and improvement potential, calculations for investment options to enhance resource efficiency, and decision-making processes in which projects for resource efficiency are evaluated amidst other investment opportunities. For systematic recycling, the establishment of supply networks and purchasing routines needs to be added to efforts of investment and production calculations.

Depending on how companies set their priorities for resource efficiency, either individual resource utilization like energy or production materials is the focus, or companies take a broader view, encompassing all utilized physical resources.

The complexity of the task remains similar for each resource use, while the scope within a business varies with management attention. Indeed, in this second conception, companies emphasize the role of top management attention for sustainability engagement. Above, in

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Section IV.4.1., an excerpt from the interview with Company 19 names how the owner of the business developed a passion for process optimization and resource efficiency, demanding that all staff participate in these efforts. In other instances, environmental managers bemoan the lack of management support for their work. In such cases where management support is rather weak, the company maintains a comparatively rudimentary interest in cost reductions (e.g., a strong focus on the reduction of energy costs) as well as an interest in formally running a management system to satisfy customer expectations. One such situation is discernible in

Company 15, where environmental managers operate management systems and implement projects in accordance with limited attention by higher management staff:

C15S1: Well, the two of us, we take this subject very seriously, I’d say. We would like to push these things here and can on occasions bring up our ideas a bit… C15S2: Bit by bit we are more accepted here… C15S1: Yes, it got better. C15S2: …and get also more freedom to do this work. This wasn’t always the case. [giggling] C15S1: Yeah, this wasn’t always the case. In the meantime, we are also allowed to attend a training, aren’t we? [laughing] C15S2: Yeah, whether we do something and… Initially, many of our intentions were smiled at. C15S1: But actually, often it’s the case that something works because of cost savings. If we can save energy, and that is costs which we can save; or in the case of pressurized air, which is also costs. C15S2: That’s always the easiest way to sell it upwards. [giggling] C15S1: Then; that’s the easiest to sell upwards.

Irrespective of top management support and the number of staff dedicated to ambitions of cost reduction, most companies predominantly following this conception operate a systematic approach to resource efficiency. A systematic approach to resource efficiency means that related management tasks are undertaken on an ongoing basis by dedicated staff.

An ongoing necessity to work on resource efficiency is exemplified in the associated need for

107 continous improvement, supported by the establishment of management systems. Patterns of a management system for continuous improvement are, in this context, described by Company

16:

C16S1: Continuous work means simply to focus constantly on this task scope or perspective. This means that you have to include it into your reporting system; that there are targets; and that there is a steady target-performance analysis. This also means that the attention is also not only on bookkeeping, or on production data, but that one also integrates energy data into this perspective.

The wide diffusion of management systems in the automotive industry has contributed to many companies in this sector pursuing, accordingly, a systematic approach to cost reduction through resource efficiency. Management systems have also contributed to companies developing or increasing their internal transparency to better understand their own resource use in production and performance. Company 17, which is one company emphasizing the establishment of its management systems as a sustainability achievement, describes the ongoing nature of its resulting engagement:

RES: So, we talked about energy. You mentioned gas, pressurized air, leakages, water, and waste. How do you decide what you would look at and what you would not look at? C17S1: Well, in those cases, we look at everything. C17S2: Everything. C17S1: This is the basis, these things. This is a living process. It’s conducted this way; it’s conducted this way. And from these things, you can read out the diverse priorities we set, for instance, on energy. Right? And from those priorities, which I can see thereby, one needs to take measures. Whether those measures are taken, though, is another story. I can only make people aware of it if [pause], if asked about it, and name the priorities. Right?

This excerpt from the interview with Company 17 shows also that, despite a running management system and dedicated staff controlling for various resource use, there can remain

108 an open issue of resulting actions. On the one hand, the management system approach enables awareness through transparency on saving potential. On the other hand, whether this awareness leads to actions, depends further on management and staff making use of this awareness. Also in the case of Company 17, top management support is a decisive enabling, but also hindering factor.

Another challenge shared across companies is the integration of the workforce into management efforts for resource efficiency. Company 17, as many others, aims to engage staff operating machinery in related efforts and provides training to encourage more resource efficient behavior:

RES: You mentioned earlier that the implementation of this system wasn’t an easy undertaking. C17S1: It doesn’t have to be. If something does not exist, nothing is easy. You first have to develop everything. You even have to train people on how they should behave and need to steer them to behave accordingly. People usually don’t do this voluntarily, saying ‘Oh yes, we’ve always been waiting for this.’ Their old processes and old behaviors are very routinized and much more convenient for them.

In order to motivate staff to handle resources more efficiently at the workplace, many of the companies following this conception would have programs or incentive schemes for employees to submit improvement suggestions. Improvement suggestions would usually be embraced by management if they lead to savings in operations, but are not constricted to the harnessing of financial benefits. These programs or schemes signify how the idea of resource efficiency, and its potential of cost savings, spans the entire resource-handling workforce. For management systems alike, the programs and schemes for employee participation are used by businesses to not miss any potential for savings.

Some companies following this conception of cost reduction have, however, a less systematic management approach. In such cases where resource efficiency is less driven

109 through management systems, companies still follow the logic of creating internal transparency on cost-relevant resources, analysing data, identifying potential, and working on solutions. In

Section IV.4.1, an experience of Company 3 was mentioned about the need to find a solution to the increasing costs of waste disposal. After long-term investment into research and development (R&D), an innovation was achieved that solved the issue from the company’s perspective. Subsequently, the R&D efforts were temporarily discontinued:

RES: Does that mean that you thought ‘All right, we are outstanding in what we are doing and now …’ C3S1: ‘We are self-sufficient and that’s, that’s good for now.’ RES: How long did this remain good? What is the timeframe here? C3S1: Uhm, well, we put the plant in 2012 into operation. At the end of, I’d say 2015, that’s when we started again to think about this issue. RES: What did you do in between? C3S1: [questioning sound] RES: What did you do in between? C3S1: In between we did, uhm [light laughter], we enjoyed [our success].

The example names a three-year break in efforts to drive innovation on related resource efficiency. The efforts were taken up again by the company only when previous performance status was lost due to increasing production levels. Overall, it is an example of how companies can also create project-dependent structures to work on a resource-based cost issue. Project- dependent structures can subsequently get disassembled or used differently once a satisfactory solution is achieved, according to internal business needs.

IV.4.4. Solution finding for sustainability issues

The orientation of businesses to apprehend sustainability performance as the reduction of operational costs provides a distinct framework for self-motivated identification of

110 sustainability issues and solution finding. As costs of resource use are operational, they are also inseparable from running a business. In other words, costs are and will always be part of business operations, and managers can only aim to optimize their processes and thus resource use. Business operations exist, however, not because of costs, but to render goods and services to customers (e.g., Coles et al., 2016). This means that aims of cost reduction will always stand behind the priority of customer satisfaction. As customer expectations of goods and services evolve over time, patterns of resource use also change in business operations. Attempts of costs minimization through resource efficiency are thus continuous tasks, as costs remain and vary over time, with changing production patterns and fluctuating market prices for production materials.

The minimization of costs through resource efficiency has various implications for the extent to which efforts will be made to find solutions to sustainability concerns. One interviewee describes the ideal perceived situation:

C17S1: The coils or plates, whatever, are inserted. The oven is heated up. Now I only need to push a green button and then the whole thing starts. That’s when I reach energy use in production. The plates will accordingly be inserted, run through the oven, will be taken up by robots, will be pressed, hot formed, and finally taken up by employees and laid into a container. Now, this is the ideal situation, which we would like to have. When we reach this situation, there is no waste. This is when we produce. This is when we earn money.

In this example, it is evident that measures of resource efficiency are secondary to the priority of goods production. Further, it highlights how the creation of waste during production is associated with factors that are only associated directly with the production process, here with energy use. Yet, when the production of goods is the primary focus in accordance with customer specifications, attempts to be resource-efficient have technical and physical limits:

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C16S1: In our external communication, we say that what we do is ecologically sound. And ecological soundness means that we use efficient technology. We say that we need energy. There are physical – how to say? – requirements. They lead us to need a lot of energy. But what we need, we constrict ourselves to use only what is technologically necessary. And we try to come as close as possible to this technologically necessary minimal use. There is, as we say, also a change in philosophy or approach. But surely, to begin with, this is about costs.

Technological and physical conditions of production are hence a first constraining factor to attempts of resource efficiency in business operations. Furthermore, the focus on costs of production and investment rationales that define the merits of optimization projects constitute a second constraining factor, as the following excerpt from the interview with

Company 18 shows:

RES: Concerning the evaluation of production data, energy use, but perhaps also the avoidance of waste, is there anything you could yet do better? Is there any further untapped potential for improvement? C18S1: For energy use, I don’t see much potential. But for the reduction of waste, I see vast potential. Yes, there is. RES: Why would you not make use of it yet? C18S1: Yeah, because our possibilities are constrained and uhm, yeah [sighing]. That’s difficult. That is; how should I say it? [pause; flicking sound] You’ve got certain points around which you calculate the value of the goods that you produce. And as long as the prices fit and suit, there is not much incentive to invest more into the issue and to improve further. So, there is always the question: What do I have to invest to improve further? And if the investment doesn’t result in a relation to improvements, well, in a beneficial relation to improvements, then people avoid undertaking it. So you always ask first: what’s the benefit? And there are many things, which, because it is also quite difficult to produce in this sector, that leads one to say: ‘No, we won’t do it this way.’ Because the focus is on costs.

The excerpt suggests that investment rationales, which serve, on the one hand, as guidance for decision-making, can, on the other hand, also restrict the implementation or pursuance of improvement potential. It further shows how in some companies the perception of costs stands in relation to the prices one can achieve on the market. Price/cost considerations

112 and the search for financial benefits relativize what companies aim to achieve through their sustainability engagement (Hahn et al., 2018). However, the sample of this study also contains companies which focus less on price/cost considerations, but yet, as all others within this conception, apply an investment rationale when making decisions on solutions to sustainability issues.

Another limitation in addressing sustainability engagement through process optimization arises with companies coming closer to reaching technologically feasible improvements and having depleted the more evident opportunities of investments in resource efficiency. One interviewee explained this relationship between decreasing value addition, but increasing investment costs for further improvements:

C8S1: But I have to say that also the Europen Union advocated an annual 2% target for energy efficiency. But I think they got tremendous opposition for that, because the operationalization of this target is difficult. And I can understand that, because it is difficult. It’s difficult because the procentual reduction is not linear, due to the compound effect. One has to understand that at the beginning there is higher potential than toward the end. At the beginning, I pick the easier projects with quick amortizations. And then I get a curve which is becoming flat. And what is at the end, if I want to do that, that costs loads of money. And then there are also these general numbers: if I want to reduce from 100% to 10%, then it’s as expensive as trying to further reduce the 10% to 1%.

Irrespective of the accuracy of the numbers conveyed in this except and their applicability to all businesses following this conception, the message conveyed is that investment-improvement-ratios for resource efficiency decrease over the lifespan of a company’s sustainability engagement. Also, the previous example of Company 18 resonates with this notion, as initially some investments are made, but eventually cease as efforts become too expensive. Other companies also considered investments for resource efficiency in core production technology to be unfeasible, as customers would not be willing to cover resulting price increases. Together, these notions signify that, through contemporary approaches to

113 resource efficiency in businesses, investments are rather made into patterns of resource use during production that are more evident and under a business’s own control. In contrast, companies following this conception make fewer investments for resource efficiency into the technological conditions which determine their production patterns, as these are often under the control of suppliers of machinery.

With a continuous approach to the reduction of production costs, changing customer needs and production patterns, and price fluctuations that determine cost perceptions, there is, within this conception, no clear end to solution finding for sustainability issues (Bjørn &

Hauschild, 2013). Sustainability performance as the reduction of operational costs is an ongoing task throughout the existence of a business. One interviewee anticipated the open- endedness of this approach:

C19S1: But I’ve got to say, that visionary about what is the end, what is the goal, I can’t see that yet clearly in our case. Earlier, we talked about the example of [client’s name] and said, yes, you can explain in your strategy how you are doing sustainability. Or you take it as given and say ‘Everything we do is part of sustainability.’ Or you say: ‘No, our vision is that we will have above our business strategy a sustainability strategy.’ Uhm, I don’t think that enough people are yet thinking about that here in sufficient detail. But we have reached a level, a remarkable level, which we are proud of.

IV.4.5. Summary of Conception II

Companies following the conception of sustainability performance as the reduction of operational costs address business-generic concerns of competitiveness. In enhancing competitiveness, resource efficiency serves as a concept of engagement with sustainability connotations. Companies need to develop internal transparency on resource use to understand their own potential for cost reduction through resource efficiency. Nowadays, many companies use their management systems as defined by international norms to develop, maintain, and

114 derive benefits from internal transparency on resource utilization. However, companies also establish project-specific management structures to find and implement solutions to cost and resource-related issues. While leading to efficiency gains, solution finding to sustainability issues remains, within this conception, constrained by cost perceptions, investment rationales, and technological feasibility under current patterns of production.

IV.5. Conception III

Sustainability performance is to mitigate risks to the business

Vast research has affirmed that external stakeholders raise expectations on business practices and thereby spur sustainability engagement (e.g., Adams & McNicholas, 2007; Delgado-

Ceballos et al., 2012; Epstein & Wisner, 2006; Freeman, 1984; Hahn et al., 2015; Henriques &

Sadorsky, 1996; Jones, 1995; Mitchell et al., 1997; Montiel & Delgado-Ceballos, 2014;

Waddock et al., 2002; Wood & Jones, 1995). The previous two conceptions have shown how first, regulators and customers set requirements on business practices for sustainability, and second, how businesses make sense of those requirements for their internal needs. In this third conception, the expectations raised go beyond those of regulators and customers to cover a range of other actors, like current and future employees, local political decision-makers, community members, NGOs, investors, and the general public. Businesses understand that to meet these stakeholders’ expectations can facilitate their plans and ambitions in various forms.

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IV.5.1. Risk profile

Because businesses are part of the societies in which they operate, they depend on the benevolence of a range of societal actors to pursue their goals (Dobbin, 1994; Freeman, 1984;

Hannan & Freeman, 1984; Meyer, 2010). Beyond setting up their operations in accordance with regulatory and customers’ expectations, businesses depend throughout their lifetime on decisions of external actors to support their projects and ambitions (Mitchell et al., 2016). From a risk perspective, this dependence shows itself in two ways. First, there is a range of support relationships that a company relies on in pursuing its business-generic goals (Desai, 2018;

Freeman, 1984; Hill & Jones, 1992; Mitchell et al., 2016):

C19S1: The success of the whole thing is, on the one hand, that we save costs or save resources, meaning we have advantages from an economic perspective. On the other hand, there is also an effect on the workforce, on the community, meaning everywhere where we can benefit from an improved reputation. Or even if we steer it consciously via our marketing, where we communicate that we are doing the one thing or the other. We also combine it with our [products] and so on. Or, also, if one considers how we use the resources of [town name], leading also the rest of the community to agree later on if we would like to expand our business, etc. This acceptance, and this success, they are very diverse.

This example from Company 19, which follows itself predominantly the previous conception on the reduction of operational costs, shows how the engagement for economic purposes can extend into the meeting of stakeholder expectations. By meeting stakeholder expectations, the company benefits in different ways other than economically. Broadly speaking, with a good reputation, the company is more accepted by a variety of stakeholders in its plans and ambitions. Another example is how engagement for internal goals along stakeholder expectations can improve employee participation. In the following example, stakeholder expectations are expressed through industry awards:

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C4S1: But a, someone, some guy told me I am the chasing guy to get award. But I said: ‘no, award not my target.’ My target is the employee engagement through the award, not through money. It’s not exchanged by money; the award is exchanged by our competency and our performance. (…) That’s why we have good target, I mean the good safety, good quality.

These examples from Companies 4 and 19 have in common that they handle rather business-generic purposes while aiming for support from respective stakeholders. For this reason, a corresponding lack of performance would also result in a lack of support by those stakeholders, which would be detrimental to business ambitions. The resulting type of risk is thus that stakeholders would not faciliate the business as they otherwise could, turning the achievement of business goals at least more difficult. This form of risk is a conventional business risk, which is therefore rather sustainability-unrelated.

The second way in which businesses’ dependence on stakeholder support becomes evident is when stakeholder expectations exceed business-generic concerns (Mitchell et al.,

2016). Stakeholder expectations exceed business-generic concerns if they raise expectations beyond demands of compliance and resource efficiency, and hence address broader sustainability discourses. The resulting risks are therefore sustainability-related risks by going beyond mere business-internal agendas. Accordingly, Table 8 distinguishes between conventional business risks and sustainability-related risks, as it is in this conception where a gradual change from business-internal needs to more societal needs is taking place in the sustainability engagement of companies. However, both types of risks are combined into one conception as they both address stakeholder faciliation of the business.

For matters of brevity, one paramount example in the data shall be highlighted here for how companies work on sustainability-related risks and thereby faciliate their projects:

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RES: My first question to you is: what is your company’s so far most outstanding sustainability achievement? [pause] [questioning sounds] [pause] C1S3: Uh, well, I think, the work that we do with the local communities is pretty outstanding. And it’s considered by external parties to be that, not by us. Uhm, in the last three years we won awards in this state, because our major operations and projects are in [region name] at the moment. Uhm, and, that has been an enabler for us to work more effectively with the traditional owners and the other they uhm, the other communities. And that’s been instrumental in helping us get uhm, projects progressing uhm, at pace through the various approval chains. Later in the same interview C1S1: So, you know, when you go out for an approvals process, and you’ve done that; if you’ve answered everyone’s questions effectively before you go out for public comment - there are no public comments. C1S4: Which helps the government. C1S1: Which helps the government to approve this or this. Later in the same interview C1S3: So, basically, we would look at everything we do from this, this perspective usually. And we, we progress our projects by getting rid of the, you know, threats. And once we have uhm, satisfied ourselves that a critical threat has passed, then, or a number of critical threats have passed, and some opportunities had been exploited, the project may move forward.

Company 1 is one of the interviewed businesses following predominantly this third conception by working on sustainability aspects that exceed generic business concerns and aims thereby to have its projects facilitated by stakeholders. The exceeding of business-generic concerns is in this example the work on communities surrounding the company’s projects, particularly in finding agreements with diverse community members. The project facilitation is exemplified for project approval processes, in which decision-makers, like local governments, have a stake. In these processes, the company puts further an emphasis on working “effectively” with its stakeholders to augment the “pace” for project approvals.

Generally, companies adopting sustainability engagement by following this conception

118 perceive a range of risks (here: “threats”) that might not halt, but eventually slow down the progressing of projects. These risks can also cause the company additional costs, which should be avoided for matters of efficiency. A positive stance toward the meeting of stakeholder expectations is hence understood by companies following this third conception, to result in opportunities for enhanced achievements of their aims.

IV.5.2. Framing of sustainability performance

In this third conception, businesses understand sustainability through the expectations that external stakeholders have for their operations. In contrast to the previous conception on the internal relevance of cost reduction, the focus is put here on wider expectations that exist external to the business and also go beyond the requirements of regulators and customers. A first source to understand external expectations is an active screening of what stakeholders raise about one’s operations, as the following example shows:

RES: How did you reach the point of sustainability engagement where you are now? (…) C6S1: Uhm, I think, to be honest, it’s a, it’s a lot of understanding the industry, you know? Looking at trends, patterns; understanding what your, what NGOs are talking about. So, there’s a lot, recently there’s a lot of discourse among NGOs on sustainable [resource]. So, you need to react to that as well. And then you slowly see that your [major downstream manufacturers], especially your, your (…) – what do you call it? – your competitors in uhm, uhm; your [major downstream manufacturers], especially those European ones, which are more open to the idea of sustainability; [other company name], [other company name], they were the pioneers, opening up the idea, coming up with a sustainability policy. So, all this is about foresight. Okay, you know, [other company name] has done that. Alright. You know, [other company name] has their policy. So, it’s time that we, you know, start reacting to that.

In this excerpt, one can determine two sources of external epectations that have high relevancy within this conception. The first source is the expectations of civil society. Company

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6 states here clearly how the discourses of NGOs on its industry have relevancy for understanding the scope of its own sustainability engagement as yet achieved. A second source is the activities of other players in the market which raise expectations. Here, the focus is less on meeting requirements of customers, than following international trends pertaining to the industry. In both instances, the company reacts to external expectations.

Stakeholder expectations and trends thereof are also enshrined in international guidelines which companies follow to define their own practices. As with the previous example of Company 5, which adopts an ISO certification primarily because it is a requirement of a customer, also in this third conception, companies adopt practices because they represent expectations of broader defined stakeholders, also generally refered to as ‘best practices.’ The

‘best’ in best practices is, however, more a rhetorical device than a statement about the effectiveness of approaches (see also Patton, 2015, p. 189ff.). The effectiveness of approaches is less relevant for companies following ‘best’ practices, other than to follow stakeholder expectations. The following excerpt of the interview with Company 20 records such a situation, in which the interviewee outlines the reasoning behind why their sustainable supply chain management programs build on a supplier code of conduct as a mangement tool, and audits of suppliers as management procedures:

C20S1: After all, these are elements which all guidelines which deal with the matter encompass as part of due diligence, meaning, the communication of expectations and identification of risks as well as the surveillance of risks. So, it is also oriented toward that. If you look at the OECD Due Diligence Guidance or the UN Guiding Principles, these are things which you would find there as well (…)

The following of benchmarks is a further crucial source for businesses to understand sustainability expectations of external stakeholders (Graafland et al., 2004). Benchmarks serve to understand what the current best practices are that are equated with expectations that need

120 to be met. Also on this notion, Company 6 provides an insight into its approach, which is a strong focus on what other companies have succesfully done, and to adopt the same or similar practices:

C6S1: And if you read on how companies like [other company name], or [other company name], you can read all their case studies; (…) you can read all their case studies and how they are actually on the ground; with their [suppliers], engaging. So, the, the blueprint is there to follow.

A further utility of benchmarks is to understand one’s own performance in comparison with other companies, particularly since large corporations are nowadays assessed by sustainability rating agencies. These rating practices set an incentive for companies to meet expectations, as expressed in respective guidelines and/or benchmarks. The orientation toward benchmarks was most explicitly stated in the interview with Company 8:

C8S1: If you understand yourself as a benchmark company – and that’s currently a bit the philosophy at [company name] – then you also want to be close to the benchmark with your performance. Perhaps you do not want to be the benchmark, but at least a benchmark-knower. This is actually our goal, that we progress toward reducing those gaps. RES: Was this also your motivation for introducing a target, to be able to orient toward the benchmark? C8S1: Well, we are working on ratings. We are also getting rated (…) But we can still check how we perform in those ratings and assess how we would like to perform in them. Where in those ratings would we ideally fit? How would it fit to the company’s history? And we have currently a clear mandate from our top management to improve our performance accordingly.

In line with the rating agencies as conveyors of benchmark performance appears also in this conception the role that sustainable investments potentially play in concurrent practices.

Interestingly, none of the 21 companies interviewed in this study emphasized the role of investors or shareholders in driving their sustainability performance. But it is only within this

121 third conception and its orientation toward the meeting of stakeholder expectations that investors, shareholders, or stock exchanges are named in interviews at all. Company 20 named shareholder requests as receiving, to a certain extent, a higher importance among other stakeholder requests; Company 1 pointed out that its internal governance system serves the function of accountability toward shareholders; and Company 2 explained how it prepares different sustainability reports, depending on stock exchange requirements. In addition, the following excerpt of the interview with Company 2 suggests that the orientation toward investor and/or shareholder interests is also part of the reason why the company engages in sustainability through a lens of risk mitigation:

RES: Why does your company have overall this risk orientation toward sustainability topics? C2S3: Overall orientation… [C2S1, C2S2, and C2S3 discussing in local language] C2S3: Uhm, we follow the SDGs uh, and also we have the sustainable development plans. It’s also basically for the international trend. And also our clients and investors, they also pay attentions on this part. So, what we; for, for internal strategic plans, we did pay more attention on these parts. And also for the future, we should pay more attention to these kind of parts.

Together with the framing of sustainability performance as the meeting of stakeholder expectations, appears thus an emphasized notion of risk mitigation as part of this third conception. Risk mitigation means that companies aim to minimize the risks that they face through external stakeholder expectations of their performance. It is further a ‘mitigation’ as companies react to stakeholder expectations, meaning that they get to know through the communication of external actors what those risks are and how they should be considered as relevant to their operational contexts. Yet, risk mitigation, as a way of dealing with sustainability concerns, is an approach to react to stakeholder expectations, but appears at the

122 same time, as the last excerpt has shown, to be part of what stakeholders expect companies to do to meet their expectations.

IV.5.3. Creation and use of sustainability management structures

In order to meet stakeholder expectations, businesses need to take two types of measures: first, they need to adopt practices as defined in stakeholders’ expectations; second, they need to be able to communicate about their practices to their external stakeholders. Within this third conception, companies emphasize management structures they create to achieve accountability toward stakeholders (see also Rasche & Esser, 2006; Vigneau et al., 2015). What it means to create management structures for accountability on sustainable practices, is thoroughly described by Company 20:

C20S1: We started (…) in approximately 2011 to establish sustainability management in a systematic manner and to anchor it in the corporation. And, uhm, of course we first looked at: what are the fundamental expectations of our stakeholders? What are actually the themes which we should particularly work on? (…) And, uhm, within our corporation, the divisions previously worked already on some of the sustainability themes [based on what they considered as relevant for themselves]. (…) Once we identified our themes to work on, which are basically energy efficiency, (…) occupational health and safety, environmental management, uhm (….) diversity, of course procurement, but also employee satisfaction (…); uhm, we first had to check: how transparent are we? How much robust data do we have on our current performance on these themes and on what we want to achieve? So, these were very prepatory works for a concrete objective, which we had to do first. We initially had to establish processes to create, to be able to create a systematic transparency. (…) It was first necessary to create a unitary transparency throughout the corporation. And once we had this, we could suggest measures to the board (…). This led us then to, I think in 2013 for the first time, to define clear targets with quantitative goals. So we could define them systematically and suggest to the board, which approved them and said ‘That’s how we’re going to do it’. And then we created a monitoring system and a related internal reporting process, which we professionalized, so to say. (…) And the integration into the management board compensation was done one or two years later. This was possible once the processes obtained a required robustness, because everything that is part of the management board compensation needs to be based on a [pause] process with

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little realm for mistakes, so that it passes the control of chartered accountants.

This example demonstrates clearly how, in the first place, the business’s own engagement with sustainability is dependent on stakeholder expectations. It further shows how companies need first to understand their own performance with regard to stakeholder expectations in order to understand what they would have to do. Depending on the size and complexity of the company, this can require tremendous efforts of creating an internal transparency, particularly if corporate divisions pursue, more or less, a life on their own, as indicated in the above example. Furthermore, external stakeholders, here signified as chartered accountants, need to be able to survey and proof the plausibility of performance data. However, what is described in this excerpt is the creation of a management structure for internal accountancy.

To make the purpose of these internal structures complete, there must be an interface with external stakeholders to create a corresponding accountability. Company 6 describes the need for this external accountability to have its adoption of best practices recognized:

C6S1: And the whole issue about accountability. Inside we can say ‘oh hey, yeah, we gonna set 10,000 [suppliers as a target]; we gonna set things…’ But we need to be externally accountable, too. People, there are stakeholders, they must look at it and come to you to say that ‘wow, okay, they have done things; they have shown results. We can safely say that, yeah, they walk the talk and they have their hands on what they have set up to do. And they have really created change. And we’ve seen a lot of best practices out there.’ So, you know, that external assurance, that external endorsement, I think, will play a crucial role in any sustainability engagement undertaken by any organization.

Public reporting on sustainability engagement is nowadays a practice that most of the firms studied would adopt to communicate to stakeholders, irrespective of whether the reporting follows the guidelines of the Global Reporting Initiative (GRI) or others. Another

124 means of keeping external stakeholders informed on a company’s own practices and performance is through dialogues, partnerships, or other forms of exchanges that companies frequently make use of. Yet, what is currently spreading as a new best practice is the establishment of a sustainability committee as a management structure in the organization, that includes a range of external stakeholders (Eberhardt-Toth, 2017). Sustainability committees incorporate the need for accountability by allowing external stakeholders to have insight into internal practices, and, at the same time, to receive external feedback on performance within this internal structure (see also Desai, 2018). Company 12 stipulates its corresponding perception of the establishment of a sustainability committee:

C12S2: And I think, what is also a nice success; well, I’m not sure, maybe it just happened to us; is the sustainability committee. C12S1: Yes. C12S2: We have now independent, high-ranking experts, who advise us on sustainability, with whom we exchange on a regular basis. C12S1: Yes, we’ve got [number] members in our sustainability committee. Independent consultants, so to say, which gets accepted. Uhm, but it’s, it’s quite difficult to illustrate this in terms of work, because it’s quite unique. C12S2: [confirmative noise] C12S1: Well, but yes. To put it simply, one can generally conceive of it as external stakeholder participation. The company accepts it; and particularly the management board, that it is attached to the management board; that we receive external advice on sustainability. This is a major success.

This excerpt from the interview with Company 12 shows that it is not clear with what motivation the sustainability committee was established within the corporation. “Maybe it just happened to us” indicates that this establishment could be due to an external source or pressure.

Other companies partaking in this study affirm that the establishment of a sustainability committee is now part of meeting investor expectations (Company 2) and also a new international trend (Company 6). Further, the excerpt shows that there is (or was) a certain

125 degreee of reluctance within Company 12 to receive that external advice on its sustainability practices. The phrasing around company ‘acceptance’ of that new internal structure conveys an impression that external participation first needed to be acknowledged as beneficial by the top management, i.e., the management board. Overall, within this third conception, companies note the role of leadership as necessary to drive sustainability engagement, particularly in the case of large and complex organizations.

To complement management structures that create internal transparency and external accountability, companies require staff that work accordingly on relevant topics of sustainability. While the topics that companies choose to work on can be diverse (see above the example of Company 20), there is, within this conception a recurrent approach of businesses working on risk mitigation. It is well established in the literature that risk mitigation is, for instance, the function of sustainable supply chain management (Hartmann & Moeller,

2014; Klassen & Vereecke, 2012; O’Rourke, 2014; Roehrich et al., 2014; Short et al., 2016).

However, companies following this third conception can also set up departments which do overall approach all sustainability topics from a vantage point of risk mitigation. The management of sustainability as part of risk management is best exemplified through the report of Company 2:

C2S3: Because, for the internal function of our department, you can basically understand uh, it’s kind of like uh, risk warning. Like, we are gathering the information from the third party or our, you know, think tank [i.e., sustainability committee]; to gather this kind of information. Then we are warning or suggest to other departments they can improve, improve, they improve the skills, or something, to, to, you know, to fill this kind of gap, to improve their skills in the processing work. So, that’s for the internal. It’s kind of like, we only do the risk warning. We are gathering the information from the whole site, and then we, we, we warning or suggest them. And for the specific steps, maybe we need to do the, you know, they make the decision what they will need to do this part.

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Also in this excerpt, the orientation toward stakeholder expectations is clear through the collection of information on risks from external sources. Then, the internal sustainability management department transfers those identified risks to the relevant operational structures, where potential solutions need to be defined in accordance with the type of risk. What a risk and a solution to it are, however, remain subject to what external stakeholders might expect from a company.

IV.5.4. Solution finding for sustainability issues

The strong focus on risk mitigation that companies following this third conception have, provides also a tenacious framework for efforts to find solutions for sustainability issues. As outlined above, risk mitigation is a management approach that aims to obtain support from more broadly defined stakeholders of one’s operations. Business operations are hence perceived as performing well if there are no sustainability risks associated with them:

RES: What is the specific goal of the partnership with [other company name]? C6S1: Well, the specific goal, very simply put is to understand the challenges faced in the (…) supply chain and eventually, with the responses gathered, to formulate actions and long-term plans to systematically solve these issues in the (…) supply chain, so that we have sustainable supply of [resource] for the industry.

The above excerpt makes this point in the case of resource supply chains, stating that challenges (i.e., risks) need to be identified first within the supply chain and then addressed through yet to be defined actions. Also remarkable is the view of the interviewee that sustainability of resource supply chains is regarded as business operations which are issue-free, meaning free of risks. As Company 6 is among those companies that strongly rely on stakeholders and/or a benchmark to express/show what sustainability engagement should be,

127 the potential risks in supply chains are also defined by external actors. In a nutshell, an issue- free supply chain is, in this context, a supply chain for which external stakeholders acknowledge the company to use best practices to mitigate pre-identified risks. The need for issue-free operations is also emphasized by Company 1, here in a context of stakeholder consultation during the plannning phase of an industrial project:

RES: You said earlier uhm, ‘we try to find mutually beneficial situations (…) with our key stakeholders’. How do you do that? [questioning sound] RES: How do you do that, finding mutually beneficial situations? C1S4: Yeah, well, we are actually trying to talk to them. C1S1: So, there’s a couple things, you know. I can, you know, again of the [project name] experiences. So, social license to operate – we don’t talk about that. We talk about performance. And that demystifies part of that in the business, is understanding what good performance looks like for our stakeholders and us. It’s giving more work, but; you know, if we are talking about the [project name], we are talking infrastructure corridors. Uhm we, and our orientation, when we speak to the pastoral station owners, we speak ‘we need to do the road corridor 100 meters wide from point A to point B.’ But, and say: ‘How would you do it? And where could we not put the road? Where would be areas of sensitivity?’ So, by having that shared value, we are able to avoid heritage sites and minimize impact to the pastoral operations. We ended up with a shorter road, and a cheaper road (…). Now, the other thing is, there is no conflict associated with that process, because everyone knew where the road is gonna be. They were part of the decision-making process; which builds a sustainable legacy for the business that there is no conflict associated to it.

The approach of Company 1 is to create beneficial situations for both the company and its stakeholders. In the above excerpt, staff of Company 1 describe its need to build a road

“from point A to point B.” That there could be issues arising through the building of that road is a pre-identified risk, as other stakeholders (here: pastoral station owners) hold rights to use that land too. The sustainability performance part of this infrastructure development project is consequently to engage with stakeholders to identify sensitive areas of value to them and thereby to avoid conflicts. Hence, also in this context, the sustainability of a business operation

128 is regarded as not causing any conflicts, by minimizing detrimental effects to stakeholders. In order to achieve this performance, Company 1 refers to and evaluates concepts of good engagement with stakeholders. In the above excerpt, one can see that Company 1 prefers a

“shared value” orientation (Dembek et al., 2016; Porter & Kramer, 2011), understood as creating a mutually beneficial situation for the company and its stakeholders, as opposed to a

“mystified” concept of “social license to operate” (Owen, 2016; Owen & Kemp, 2013). In evaluting these concepts of sustainability engagement, Company 1 rather relies on the one that appears to resonate more with the need of developing the industrial project, while having stakeholder support for its undertaking.

Other companies aiming to have their operations facilitated by stakeholders use their performance in benchmarks to mitigate associated risks. Performance in benchmarks means to orient toward what stakeholders or other organizations suggest best practices to be and to abide by these suggestions. In more narrow terms, the benchmark can be direct competitors in the market that drive the adoption of best practices. Company 12 brought this orientation up in the context of persuading the top management about the adoption of new practices:

C12S2: Sometimes it’s also conducive if competitors are doing it already. C12S3: Yes, yes. [laughing] C12S1: Correct, I just wanted to say it. Benchmarks are also decisive; to orient toward competitors and to argue through that, to push for the development of themes.

Companies following this third conception also aim to receive feedback from stakeholders to understand their own performance. Such an instance is named by Company 20.

The following excerpt reflects first on a point in time when the internal sustainability management was in the process of being set up:

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C20S1: One thing we hadn’t done back then was a comprehensive stakeholder survey, in the sense of finding out what is important to them. This was, from our point of view, not so useful. We knew already what our major points of engagement should be and focused on finding ways to work on them. However, we have done a comprehensive stakeholder survey last year to check our set-up and to receive that feedback on our performance. Back then we rather concentrated on targeted stakeholder contacts and information we had already, which we had already, or alternatively also on guidelines and ratings etc.

In this case, the stakeholder survey serves as a back-up, to apprehend if approaches are in line with stakeholder expectations. Performance is consequently measured through whether stakeholders acknowledge the company to have adopted best practices. What it means to perform in response to stakeholder expectations is for companies following this conception rather indefinite, as sustainability remains itself an evolving concept that changes over time with varying emphasis that stakeholders place on themes and their issues (Mahon & Waddock,

1992). Companies do, over time, also change the themes they work on, depending on what their stakeholders convey to be of relevance. The interview with Company 2, amongst others, showed also that its previous (and ongoing) philanthropic engagement, as well as its current ambitions to establish an external accountability based on risk mitigation, follow the same understanding of sustainability performance.

Within this third conception, companies do also appear outstanding by aiming to be benchmark leaders. To be a benchmark leader means, however, that the company remains oriented toward what is defined as best practice, as well as toward stakeholder expectations, while aiming to lead through its own practices. When benchmark leaders develop new approaches to sustainability issues, they remain oriented to the expectations of external stakeholders in defining what they have to do, meaning that the ultimate assessment of performance remains the perception of external stakeholders. This notion of ‘best practice’ ‘to meet’ stakeholder expectations differs from the idea of ‘leading practice’ which aims ‘to manage’ stakeholder expectations, as the next and fourth conception lays out.

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IV.5.5. Summary of Conception III

Companies are required to meet stakeholder expectations, as they depend on stakeholder support in pursuing business plans and ambitions (Freeman, 1984). With the rise of sustainability discourses among stakeholders, companies are also required more and more to work on expanded sustainability agendas that go beyond matters of compliance and resource efficiency. This third conception elaborates on how an approach of risk mitigation permeates an understanding of sustainability performance of businesses and shapes their internal management arrangements to create accountability toward stakeholders. In line with the approach of risk mitigation, companies aim to follow best practices of sustainability engagement, which are determined through benchmarks and stakeholder expectations.

IV.6. Conception IV

Sustainability performance is to prevent risks to business operations

Many companies across the world, particularly in extractive industries, have experienced costs of conflict (Franks et al., 2014). Businesses experience conflict when stakeholders organize to protest, peacefully or violently, against their operations. As the study by Franks et al. (2014) suggests, conflicts affecting extractive industries can cost a medium to large-scale industrial operation about US$ 20 million per week of delayed production. In comparison to the risk mitgation approach outlined in the previous conception, businesses following the fourth conception of sustainability performance proactively aim to avoid significant operational risks that result from stakeholder agitations about business unsustainability.

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IV.6.1. Risk profile

Businesses are dependent on the ability to operate in stable environments in which their investments are safe and in which the production of goods and services can unfold for the generation of economic benefits. Whenever this stability in the organizational environment is threatened, businesses face a situation in which their economic productivity is at risk.

Economic productivity is a crucial guarantor of organizational survival. To avoid situations in which the security of the business is threatened by unrest in the organizational environment, companies need to find means by which they can hold conflict at bay (see also Owen, 2016).

How far businesses can be threatened in their operational activities, is explained by Company

RES: You said earlier that you realized, after operating here in the [region name], that there is a need for agreements. How did you determine this need? C9S1: Well, because it’s a, again, it comes back to what does our pace of this reciprocity look like. And, and, and what the business needs, and what the business wants, is surety that it can go and mine and not be stopped. Putting it very simply. So, so, the agreement is about saying: ‘We wanna go and mine this land. We will undertake that we will do cultural heritage surveys,… bla bla bla bla bla, (…) We are not doing this just because we are nice. There’s, there’s a business case for doing it. RES: Was there an imminent threat of land uhm, access loss? Yeah? C9S1: Absolutely, yeah. (…) There’s always, there’s; well, there was. And uhm, uhm, the uhm [pause]; in the, as I said, in the, in the most recent boom, there was one particular group where there were a lot of difficulties in coming to an agreement with them. And had we not, it would have majorly affected what we are able to do in our [operations]. And if we didn’t have that right, we wouldn’t be able to [deliver the product]. So uhm, it was a really good example of, you know, if we didn’t get it right, it wasn’t gonna happen.

This excerpt demonstrates how the security of business operations, understood as being able to produce and deliver products to customers, can be a further paramount motivator to engage in sustainability. The interviewee refers here to a first agreeement made with

132 indigenous people, without which the company could have experienced significant threats to its operations. In this example, the business made an agreement with one local stakeholder group in a pre-operational stage, meaning prior to a business expansion, to benefit from an economic boom period. However, the interviews with companies following this fourth conception also show that high risk levels exist nowadays throughout the life of the business, if it is contested by stakeholders. Stakeholders potentially include everyone within communities who feels affected by industrial operations. An example is provided by Company

10:

RES: Why do you have this approach toward community development as you just described it in your organization? C10S1: Because to not do it that way is stupid. It’s just silly. You, you, you cannot go into somebody’s country, into somebody’s backyard and be so arrogant to think just because you have a license to operate there, that you will be able to do that without going through that kind of process with them. It’s just, you know, those days are long, long gone. I mean, that might have happened, you know, a hundred years ago. But it, it, it does; and there are governments around the world that you can probably still get away with it; if you went and paid the government, you probably would still get away with it. But as far as we are concerned, that’s, that’s unacceptable. So, yeah, to us, we do it this way because it is a good business, ethically and morally right; you know what I mean? But it’s good business. I mean, if you’ve got, 90% of the people that interact around, in, through your business are feeling uhm, are feeling, listen to, [are] comfortable that things are happening right, you have no, you have very little issues. If you don’t, the issues just mount up, mount up and your business gets flooded anywhere. So… RES: What kind of, what kind of issues can one think about in such a context? C10S1: So, you know, for instance, if you, if you didn’t communicate with the, the people where you gonna mine, and then you start mining and all people hear all day and all night, is your mining going because it is a 24-hour operation. How long it’s gonna be before they’ve got newspapers, they’ve got the government, they’ve got regulators, they’ve got [emphasis:] everybody down on you all the time?

The rhetoric used by the interviewee shows how an approach to address stakeholder needs is, within this conception, an imperative of operating a good business. It further refers to

133 how conflict can arise over time, eventually affecting the business detrimentally. Management approaches, like community engagement, are meant to prevent these detrimental effects.

Detrimental effects to business operations can result from the agitation of all kinds of actors, while the source of unrest in the organizational environment can potentially be everybody, too.

Yet the threat to business operations is more intense when protests are nationally or internationally organized. Company 11 describes such experiences:

C11S1: It’s a little bit frustrating because it means with the modern anti-mining uhm, movement, I guess you’d call it, it basically invites them all in to come and pick over your project, before you’ve even finalized the footprint and have a really good idea of what you are going to do. So, I guess it’s creating awareness and [light laughter] letting the enemy in uhm, from day one. So, it just makes it that much harder. Later in the same interview C11S1: And there are professional protesters that are just there for the [pause] buzz like getting out and being protesters and being at the edge of the law.

Perceiving the security of businesses within a sustainability context as a risk leads to a distinct conception of sustainability performance. As with other conceptions, this externally induced risk profile affects how businesses frame what sustainability, and, consequently, what sustainability performance is; how they respond to needs by creating distinct management structures; and how they determine what appropriate solutions for sustainability issues are.

IV.6.2. Framing of sustainability performance

Companies that face detrimental effects on the security of their business due to allegations of business unsustainability adopt practices with the paramount aim of preventing risks to their operations. Preventing risks means to anticipate what issues of unmet stakeholder expectations exist and to address these issues as well as can be done. Risk prevention is also an approach of

134 controlling for risk emergence. The representative of Company 10 has put his related view in a nutshell:

RES: Maybe you can elaborate more, what is the ‘stupidity’ in not doing the community development approach uhm, community engagement approach that you have? C10S1: Ah, because, because for me, if you are doing nothing, people will create something. Always. So, so, (…) the way I’ve lived my life is, what I can’t control, I can’t control and I don’t lose any sleep about it. I never lost any sleep about what I can’t control in my life. But what we can control, we, we have an obligation to work on what we can control. So, we have control, to be able to bring people together to have that outcome wherever possible. And if we don’t, then it’s stupid. That’s, that’s what I meant by it, you know?

Sustainability of business practices is also, within this conception, determined by stakeholder expectations. In comparison to the previous conception, in this fourth conception, stakeholder expectations are more locally expressed or in reference to local conditions than emerging from national or international discussions. National or international stakeholders in this conception do not appear as benchmark communicators, as in the foregoing third conception, but through local agitation that opposes business operations. The previous excerpt suggests also that at the local level, stakeholders might be very agile in framing their expectations. In accordance with the development of local needs and expectations, companies facing risks to the security of their operations need to be abreast of the potential risks.

Companies following this conception hence have a need to thoroughly understand the communities in which they operate and how expectations are developed and expressed among their members:

C9S1: So, the first thing you start with is know-, knowing and understanding who it is you are dealing with. So, you don’t walk in and say ‘we want to make an agreement with you.’ The first thing you do is know and understand who it is you are dealing with; how they work; how they communicate with each other; how power moves in that group. Because if it’s about who you are going; if you

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are going to engage with people to find out what their needs and wants are, you’ve got to make sure you are talking to the right people.

As part of these processes, companies realize that local stakeholder expectations can deviate from other company experiences or what otherwise standardized procedures or perceived best practices would deliver:

C10S1: And we had a little laugh to ourselves and said: ‘but that’s what we think they want. We don’t know what they want.’ So, we went up there and we listened to what they want. Yeah, some of the things we had on the white board they want; some of the things that we had on the white board they don’t want; and some of the things that we didn’t have on the white board, they want. So, you know, it’s, it’s truly understanding what the community; where they are coming from; what the cultural aspects are. You know?

Yet, the approach followed in this conception to prevent risks to the business is not merely taken by identifying local needs and wants and meeting them. Given the amount of diverse expectations different types of stakeholders can have, affected companies express that there is a need to manage stakeholder expectations. What it means to manage stakeholder expectations was clearly stated in the interview with Company 9:

RES: So, do you really have a chance to achieve what you are trying to do, let’s say to understand the community without, how it would function probably also without your interference? C9S1: (…) Yeah; so, we’ve been there a long time before we actually got around to realizing that we needed to have agreements with people. Uhm, so, and, and of course, the thing is with, with any negotiation process, such as an agreement actually is, is that, it’s about managing expectations about what you can and you can’t do in terms of what you can and can’t agree to. And, and the primary thing, driver behind that is that we are not government. Uhm, so yeah, it’s always about, it’s about managing expectations.

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This excerpt contains the notion that companies are potentially also understood by stakeholders to be in a position of delivering government functions. It demonstrates also that local stakeholders and the variety of expectations they may raise about a controversial industrial project can exceed what businesses consider to be part of their role within communities. To be able to manage stakeholder expectations to avoid potential risks, businesses need to develop a thorough understanding of stakeholders and their expectations, as well as to anticipate what the risks are they need to control. Hence, the management of stakeholder expectations stands above these other practices of controls and understanding, and frames their perception of what sustainability and performance outcomes from this engagement should be.

IV.6.3. Creation and use of sustainability management structures

To be able to understand stakeholders and their expectations, to control for related risks, as well as to be able to proactively manage expectations, requires businesses to set up structures with dedicated staff carrying out these tasks. The size and hence social and environmental impact of an industrial operation might determine stakeholder reactions, as well as companies’ needs for dedicated staff. The following excerpt provides an example of a company following this conception and its approach to rehabilitation of the land on which its operations take place:

RES: How do you approach rehab within [your company]? (…) C10S1: Well, technically, it, it, it’s uhm; so, if I go back to the history of the [region name] operations uhm, we didn’t know what we didn’t know. So, what we did, from a rear point of view, was that we developed a research station. So, so we had some of the PhD, first PhD students around. Our research is second to none. And we did that for 20 years. We did, we did non-stop research on, on what’s the best way to rehabilitate. So, our rehabilitation was good, but we want to be great. We want to be; we wanted to put it back the way it was. And over the last 20 years, we’ve spent millions and millions and millions of dollars on, on understanding how to get it, get it right. So, that’s first steps. A lot of research

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to understand what it is that we need to do.

This example describes the circumstances of a company aiming to minimize its environmental impact on the site where its operations take place. A clear focus is set on understanding what constitutes the ecosystems on that site, and to engage researchers in filling gaps in that knowledge. When it comes to managing stakeholder expectations in communities, the approach is also to develop knowledge, in this case to understand the wants and needs of people. Companies that aim to be abreast of those wants and needs require, likewise, dedicated staff who engage with stakeholders to understand their expecations:

C9S1: So, at the end of the day, you have to ask people what they think, one way or another. You either do that in a focus group or uhm, or you do it by survey. My preference will always be that you have that conversation one on one. For, I got staff; we got people in each of these towns that are having those conversations all the time. So, in terms of setting up a focus group to talk about a particular uhm, uhm, element. Yes, we would in the case of closure, because it’s a new topic. It’s not something you talk about every day.

For some extractive industries, community relations management is nowadays an ongoing task. For this task, companies engage specialized staff in distinct departments. Yet there are also occasions that require different formats of engagement, as the above example indicates. A further means by which companies can understand stakeholder expectations and engage in a dialogue with them, is to provide stakeholders a direct contact opportunity. The following excerpt contains an example how a communication team handles the grievances of community members:

C10S1: I give you an example. So, the other uhm, last week we had a phone call coming from a gentleman that said: ‘Your mining is driving me crazy. I can’t sleep. What you gonna do about it?’ So, [colleague’s name] from our communications

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rang this gentleman and said: ‘Where do you live?’ And he told her. And she said: ‘So, we are not mining in your area.’ He said, he said: ‘Aah, it’s driving me crazy.’ So, they had a conversation and worked out that it was roadworks. It had nothing to do with us. He was assuring that it was us mining. So, through that conversation, [colleague’s name] took him through the process and said: ‘This is where we are mining. This is what we are doing.’ All the way. ‘We have this community consultation that goes on. You’re more than welcome to come down to that.’ Da, da, daa. ‘Or you are more than welcome to ring back anytime. Here is my number. Ring my number and we will have a conversation.’ So, he was very, very happy. He is still upset because he’s getting woken. But it’s not us. It’s somebody completely different. But then, the day he made a comment, just before he hung up, and he said: ‘But it’s still sad that you mined all [forest name].’ And, basically we don’t. ‘Who told you that we did that?’ He goes: ‘Oh, I just heard that.’ So, she took him through the process about what we do. So, we’ve got a guy that was actually completely disgruntled, thought that we were the worst people in the world and has now walked away and is a supporter, because we had a conversation. And he had an ability to be out to complain. If we didn’t do this, if we didn’t do some of these things, that guy’s anger would build and build and build and, you know, he would create some more angst with people. And then all of a sudden, you’ve got a crowd out in front of your gate saying: ‘I don’t want your trucks and you people going to work, because we don’t want you to do that.’

This example shows how the company maintains processes through which it interacts with stakeholders (i.e., grievance hotline, community consultation) to be able to respond directly to their expectations. It emphasizes further the necessity for the company to turn opponents of its operations into supporters. It puts also into context how structures for interaction with stakeholders are perceived as a necessity to prevent risks of stakeholder agitation against the company.

In comparison to the reports of companies following Conception II and Conception III, in this fourth conception, companies do not elaborate anymore on whether the top management is driving or impeding sustainability engagement. In this fourth conception, top management support appears, rather, as given:

C10S1: What I can tell you about today is that I’ve just been to [headquarters] two weeks ago in front of the CEO and the executive team there, and none of them [pause] publicly, socially, over a couple of beers, they all speak exactly the same way

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and that’s always about what’s the right thing to do and a sustainable thing to do. That’s what they talk. So, you know, it’s; you know, even when we were having a beer and there’s no, there’s no professors and there’s no media, that’s what they talk.

One reason for a comparatively stronger prevalence of management support might indeed be the sensing of a necessity of these forms of sustainability engagement in running the business amidst potential threats to operations. The other reason, which adds to the first one, is that interviewees of these companies frequently describe learning processes that the industry and senior managers, as well as staff members in general had to go through in past decades.

The notion is that the agitation against extractive industries has provoked among some of these companies new practices of how business should operate. The novelty of practices becomes more evident concerning the idea of ‘leading practices’ that companies following this conception aim to develop or apply, which separates them further from companies following other conceptions.

IV.6.4. Solution finding for sustainability issues

In Conception III companies are named to follow ‘best practices’ which are formulated in international guidelines, by rating agents, or by other stakeholders. In this fourth conception, companies aim instead to follow ‘leading practices.’ Company 11 emphasizes that there is substantial value and difference of meaning in using this nuanced rhetorical alteration:

RES: So, you mentioned initially, it’s like best practice; you are setting best practice. In how far do you, do you… C11S1: We prefer the term leading practice rather than best practice. RES: Ah, leading practice? C11S1: Yeah.

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RES: What do you mean by that? Like, compared to peers in the market? C11S1: Yeah, compared to other people and other mines. So, yeah uhm, I mean I was environment supervisor at the [site name] mine. So, without blowing my trumpet too much, I guess, I just, I like to do things as well as they can be done. So, if there is someone doing rehabilitation better, we would explore it and, and take that on board.

Two points define leading practice as opposed to best practice. First, leading practice is about “doing things as well as they can be done.” Second, when an organization engages on a sustainability issue by developing or applying leading practice, the comparison with other companies is on outcomes and related practices, as opposed to just on practices. In Conception

III, in which companies adopt best practices, companies are generally very oriented toward what other actors do and prescribe as practices to be adopted. In turn, in Conception IV, what other actors do and prescribe as best practices is of minor relevance. Relevant is whether there are existing practices which would lead the company to have better sustainability outcomes, or whether the business itself can develop better practices that lead to better outcomes. In other words, leading practice is about finding ways in which an issue can be addressed as well as it can possibly be. To address an issue as well as it can be means further to harness the available state of knowledge, as Company 10 explains with the example of rehabilitation:

RES: Is there anything you can do better about rehab? C10S1: Uhm, at this stage, I don’t think so. I, I, I think, I think; no, I haven’t said that. I’m sure in a few years’ time we will go: ‘Oh, why are we doing this?’ (…) But as it stands (…) today, I think our rehab is recognized as world class best practice (…). So, so, yeah, the answer to that would be: If there is, I don’t know what there is.

This excerpt demonstrates that the practices which Company 10 has adopted for its rehabilitation of mine sites are supposedly according to the state of available knowledge of what can be done. Another excerpt used above has already highlighted how the same company

141 has greatly invested in a research station with the aim to understand how best to do rehabilitation at its site(s). This interviewee also noted that the ultimate goal of rehabilitation is “to put it back the way it was,” which would, in an ideal case, mean that once the industrial operations have ceased, the previously existing ecosystems on the site(s) would be fully restored. Irrespective of whether this full restoration is possible, the way companies perceive engagement for sustainability takes here a distinct direction that is separate from all other conceptions of sustainability performance by aiming to do the best that possibly can be done.

However, as the elaboration so far on this fourth conception has highlighted, the sustainability engagement of companies is not an end in itself. The ultimate aim is to prevent risks to business operations. Leading practice and the prevention of risks to the business are linked to each other, as doing the best one can possibly do aims to reduce the opposition to industrial projects. This connection is more evident in the following excerpt:

RES: What about radioactive waste that usually comes along with [resource] mining? C11S1: Yeah, well the fact it’s only mildly radioactive uhm, and [number] parts per million uranium and about [number] thorium. Uhm, all that stays on site. So, in, in the processing plant, we will actually have protection for workers and things like that in certain areas, where the uranium is temporarily concentrated. But the uranium and thorium basically stay at, stay on site in a waste tray that is neutral. The rock itself, which is quite acidic once we’ve processed it, gets neutralized with limestone on site. Again, that is a big advantage where, unlike [other company name] where they basically ship their ore to [other country name], the uranium goes with that to [other country name]. That’s why they initially have a lot of attention from the anti-uranium people because basically the [other country name] government has been asked to deal with [country name] uranium that’s been disposed off in [other country name]. So, we think what we are doing actually puts those anti-uranium people back in their box, because nothing is leaving site. We’ve, we’ve got to get our; the uranium is very hard to remove from zirconium uhm, from so many other things. So, it’s only really pure products is what is driving the economics of our project. And the fact we are working out how to do it.

This excerpt describes how there is an oppostion by an organized stakeholder group against operations within the same industry. The company has to deal with this opposition. Yet,

142 in addressing the issue, the company does not refer to how it complies to regulatory requirements, follows standards, or best practices. What it stipulates to do instead is “to work out” how it can operate its business in a way that addresses effectively the accusations that opponents raise. In developing these practices, the company aims to silence its opponents.

Hence, what is considered here as sustainability engagement is the development of leading practices that addresses sustainabiltiy issues potentially as well as they can be addressed.

Notwithstanding this, the ultimate aim of this engagement is to prevent risks to the business and to keep operations going.

IV.6.5. Summary of Conception IV

Companies that have experienced or learned from others’ experiences of conflict with local stakeholders, which potentially threaten the security of business operations, aim to prevent those risks. To prevent risks to the security of their operations, companies do not only meet stakeholder expectations, but they also aim to manage these expectations by defining what is possible, and what is otherwise not possible. Companies following this fourth conception set up management structures through which they can understand stakeholder expectations around their operations and how they might best address them. In addressing stakeholder concerns, companies develop or apply leading practices, meaning practices by which they can achieve the best possible outcome and which are in accordance with the current state of knowledge.

However, this form of sustainability engagement is not an end in itself, as it ultimately aims to prevent risks to business operations through stakeholder agitation.

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IV.7. Conception V

Sustainability performance is to innovate for the achievement of societal sustainability aims

In the fifth conception of sustainability performance, companies engage in major innovations for their core products and/or production technology which enable the achievement of societal sustainability aims. Such societal aims are expressed in government decisions with nation- or cross-country-wide implementation requirements. The two companies which were found to follow this conception innovate for the achievement of a country’s transtition to a more renewable energy supply and for the achievement of regulatory emission targets. The focus on core products and production technology goes well beyond all other examples of innovation encountered in reports of companies following Conceptions I to IV of sustainability performance. In particular, both companies explained how they achieved major technological innovations which were previously considered as impossible in their sectors. Furthermore, in comparison to all other participants in this study, the two companies represented in this fifth conception are, in their existence as organizations, tightly coupled to government decisions.

The ability to serve future societal aims and to innovate for their achievements, are therefore critical aspects for the survival of their businesses.

IV.7.1. Risk profile

The two companies that were found to follow this fifth conception of sustainability performance exist with strong dependency on government decisions. However, the two companies have different experiences, as government decisions on sustainability targets are for each either a threat to their existence or an opportunity for existence. For Company 21, the

144 political decision of the country in which it operates to have a higher intake of renewable energy in the grid is a threat to its operations:

RES: Why did you decide in your company to work on this issue? (…) C21S1: Well, because we simply; to put it rakishly: if we do not show the commitment to participate in societal, let’s say decisions, adapt to challenges, and make our contributions, we will ultimately lose our legitimacy to exist. [We would] lose the support from politicians, because it will be increasingly difficult for politicians to make decisions in favor of our industry, but also to have appreciation in the society to have this industry in [country name], if it doesn’t make a contribution or is even an obstacle to the energy transition and the achievement of the 2-degree-goal. Later in the same interview C21S1: Yes, as said, also due to an instict of self-preservation. Well, if we wouldn’t do that and would lose the, let’s say benevolence, or the support of politicians in this environment, then we wouldn’t have, we wouldn’t have any prospects anymore in [country name]. (…) To name a strong incentive: we exist in an environment of political protection through [a variety of] relief measures (…) that unburden us from costs. These measures have political expiry dates, which always need to be renegotiated and proceeded, and which are also publicly criticized (…) If any of those bricks would break off, we would have to shut down. And this is principally a motivation to show politicians our, our uhm, our commitment, our, our, our uhm, contributions and our efforts, that we are participating in the implementation of this goal.

The threat which Company 21 finds itself confronted with is twofold: first, its existence depends on “an environment of political protection” which would jeopardize the business if it ceased its current extent. Second, the government has taken energy political decisions to which the operations of Company 21 could be an “obstacle.” This mix of political dependency for existence and the potential loss of accompanying support due to goal-conflicting operations leads Company 21 to take measures that prolong its survival as a business.

Company 15 has a similar, but different experience, as the political aim to reduce air emissions in vehicles constitutes an opportuntiy for its existence:

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RES: Is the success of your company, meaning in sales, is it still depending on government subsidies? C15S2: Subsidies? RES: Yes. C15S2: Not dependent. C15S1: Not really, no. C15S2: At the moment there are none anymore. RES: But they are an incentive to bring new products to the market, for instance? C15S2: Yes. C15S1: Yes, yes. RES: Okay. C15S1: Yes. And I mean, the products we had before, we sold them in quantity. And then, at some point, the market is, well, full, isn’t it? Or, there are those new cars that we also equip, but somehow, I mean… C15S2: Well, when… C15S1: It always has to continue, doesn’t it? [laughing]

This excerpt of the interview with Company 15 expands on the extent to which the sales of air emission technology for vehicles depend on government subsidies that are usually offered by the time regulatory value limits have decreased. While there is no dependence on government subsidies, the excerpt conveys the information that with value limits set, and related products distributed, there will be a certain point in time where the market is saturated.

It indicates, amongst other issues, that the market for air emission technology for vehicles is not dynamic, but depends on government regulation. Customers do not usually buy air emission technology based on its properties alone, but depending on whether it meets regulatory value limits. With new tighter value limits set by regulators, the market opens up and Company 15 can sell new products again. “It always has to continue” signifies the relationship between decreasing value limits over time and the opportunity of Company 15 to launch its new products. Without government regulation, the market that Company 15 serves would largely not exist. Hence, government regulation and its developments is an opportunity for the

146 existence of this business. Like Company 21, Company 15 needs for its long-term existence to serve the achievement of societal goals.

IV.7.2. Framing of sustainability performance

While political institutions can make decisions on targets and related developments for the nation, they face limitations when it comes to developing the technology necessary to achieve these targets. Governments depend on businesses and their specialized engineers in R&D departments to develop technologies. Company 15 makes this dependency explicit:

RES: What would you say are the main criteria that drive your research and development efforts? [pause] Well, in developing new products. What defines the product of the future? [pause] C15S1: Well, it has at least to meet the [regulatory] value limits, and even fall below them… C15S2: Yes. C15S1: …so that we are in the future, ready for the future. Doesn’t it? (…) RES: So, is there a continuous race toward value limits… C15S2: Yes. RES: …toward what is necessary to achieve? C15S1: Well, I think politicians can’t decide something, if there isn’t yet the technology to achieve it, can they? RES: Yes. C15S2: Yes, yes, of course. C15S1: I mean, of course they could do it, but the users are going to ask then: ‘What shall I do? There’s nothing I can mount.’ C15S2: If there wouldn’t be the technology, no car could be approved anymore.

However, the aforementioned risk profile of companies following this fifth conception and their own dependence on government decisions for long-term survival adds a critical aspect

147 to this view. As part of this conception, the dependency is of a two-way nature in that not only governments depend on companies for the development of technologies, but these companies also depend for their existence on governments. As the representative of Company 21 formulates it, they form together a “community of destiny” to enable the achievement of societal aims:

C21S1: In our own interest, also from the viewpoint of our publicity, our reputation, it is necessary and reasonable to develop means and to implement them, if economically feasible, to demonstrate to politicians that this is not a one-way street. They are doing something for us. Thus, to develop offers for the objectives which are documented for society in political decisions. We would like to implement here an energy transition. We would like to achieve in [country name] the 2-degree, the 1.5-degree-goal. To implement this, this is the responsibility, in which we see ourselves. This is, so to say, a quid pro quo- situation, to legitimize the trust of politicians, and also to develop offers to politicians to realize, and eventually to support, what the industry can do, if the conditions, particularly the conditions of energy politics, are given for such investments. This is; it is a certain community of destiny in which we find ourselves with politics.

This mutual dependency between businesses and governments is very different from the experiences of other study participants. For instance, in the innovation experience of

Company 8 noted under Conception I, the direction is clearly one-way, by the company reacting once a law has been adopted. Innovation in Conception II appeared to be independent from political decisions in terms of companies being solely concentrated on finding ways, amongst others through innovation, to reduce operational costs. In Conception III, interviewees barely refer to innovation other than the development of tools for best practice implementation or changes in internal decision-making orientations. In Conception IV, where companies aim to do the best that can possibly be done to manage stakeholder expectations, government expectations through regulation play a minor role. The symbiosis of businesses and government

148 decisions, symbolized as “communities of destiny” for the achievement of societal goals, is hence a distinct feature of Conception V.

IV.7.3. Creation and use of sustainability management structures

The two companies that follow this fifth conception of sustainability performance did not refer, when elaborating on their major sustainability achievements, to separate management structures that were created. Instead, both companies make, in this context, use of long-term established R&D teams.20 These R&D teams form an integral part of the business, as they secure its future development and thus its existence. This integrality showed itself in the interviews in a rather subtle manner, for instance by Company 21 refering to “we” as the initiators of the innovation, as opposed to the naming of separate management structures:

RES: What is so far the most outstanding sustainability achievement of your company? C21S1: That we developed a technology, (…) Later in the same interview RES: How did you achieve this? C21S1: Through a quite lengthy, technically challenging, bumpy process. We started in the early 2000s, I think it was 2002 when we tried for the first time to (…)

That R&D forms an integral part of the company is likewise formulated by Company

15. In the following excerpt, a very initial cooperation is mentioned, in which the later successful product innovation was considered impossible to achieve. The excerpt also shows that within R&D structures, the knowledge, skills, and capabilities of individuals are conducive for successfully driving major innovation processes:

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C15S2: Yes, this is our product. At [other company name] they thought it wouldn’t work. We also thought that initially, too, that we wouldn’t make it work. But we had a very, very good physicist and he managed to wangle it in three years’ time.

Furthermore, Company 21 indicated some of the tasks conducted within the R&D team and for a 10+-year innovation process:

RES: How did this process look like in your company, to achieve that? C21S1: Well, measurements, analyses, model building, control, recirculation, verification, new measurement, improved measurements, new measurement technology; a completely different measurement technology, which then met the requirements. (…)

One step that Company 21 emphasizes as part of its long-term innovation process is the development of new measurement technology in cooperation with a supplier. The new measurement opportunities enable the company to understand its own production technology better. It is but one example where R&D efforts require outsider expertise to advance ambitions of major changes in production patterns.

IV.7.4. Solution finding for sustainability issues

The innovations in core production technology or products that companies undertake as part of this fifth conception enable the achievement of societal sustainability aims. This means that these companies do not themselves achieve sustainability goals, but they enable society to achieve its goals through corresponding innovations. In the case of Company 21, interviewees emphasize that they enable unprecedented systemic efficiency in CO2 emissions resulting from how the energy grid can be operated if its innovation will become fully implemented in all its facilities:

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C21S1: We are not saving CO2 at our operations (…). But the systemic efficiency of the whole [energy] system in which we work, will be significantly increased through that flexibility. Meaning, the integration of renewables; the avoidance of hot stand-by power plants, which run in an idle or on an accompanying minimal capacity to provide the adjustment of deviations of supply in the grid; such things, for instance. Also, the mere fact that controllable fossil power plants need to run at a non-optimal operating point. We can save all this from the demand-side. Thereby we save systemic CO2 emissions.

Also in the case of Company 15, the company does not enhance its own sustainability performance outcomes, but it enables, through its product innovations, the achievement of societal aims. In this context, the achievement of societal aims is enabled through products which get used by other parties:

RES: What is so far the most outstanding sustainability achievement of your company? [pause] C15S1: That we, in all those years, contribute [pause] to make the air cleaner. Isn’t that it? [pause] This is the, these are the… C15S2: Through, and through,… C15S1: Through our products. C15S2: …through our products. C15S1: This is practical protection of the environment.

However, the interview with Company 15 has also shown that there remain limitations to innovations for the achievement of societal objectives. In this particular case, where societal goals are defined by regulatory value limits, market imperfections are prevalent. Both the supply and the demand side do not orient toward the sustainability issue itself (i.e., air purity) but toward regulatory value limits as the sole point of reference. Company 15, supplying the products, keeps innovating with the aim to serve future value limits:

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C15S1: So, we keep developing, to extract more, to filter out more, so that we are prepared when regulators will reduce the value limits.

Buyers of products from businesses like Company 15 do likewise focus on what regulation stipulates is the value limit to achieve by current standards. While regulatory value limits can represent the best available technology, they can also undermine it, as companies develop ahead of regulatory requirements to be prepared for future changes in value limits. In the following excerpt, a certain perversity in this sytem is revealed, with, on the one hand, suppliers of new technology for future value limits, and, on the other hand, a compliance- seeking industry:

C15S2: We are producing two types of [products]. One is our own [product], which we distribute ourselves, and the other one we deliver to [certain clients]. (…) C15S1: So, we could be better. C15S2: So, we could, we could make the air more clean, but it would be similarly exhausted. It shall just be sufficient, but not anymore for the next level. That’s when one has to buy new [products].

This excerpt denotes that within the larger industrial context, there is a certain interest in not going beyond what regulatory value limits require. In addition, as stipulated further above, solution providers like Company 15 have an interest in being able to launch new products when value limits are decreased. Without regulatory intervention and its formulation of what the societal goals are by which the industry has to abide, the market for sustainable products would be very limited by current orientations.

A final limitation to solution finding within this conception arises concerning the technology used in production. The emphasis on securing the long-term existence of the business includes its major assets in the form of capital-intensive production technology. Even if companies that follow this fifth conception of sustainability performance engage in

152 innovations that are within their profession’s paradigmatic breakthroughs of technological development, there remain constraints to the achievement of sustainability goals:

RES: Is there anything one could have done better regarding the [innovation]? C21S2: [sighing] Perhaps one could have started earlier. In principle we worked quite intensively on it, meaning we as [company name]. (…) No, we’ve been quite meticulous. So, I think we could not have done more, meaning, have reached more, because there are also limits. In principle, we reached our limits, the limit of what is technically achievable. One couldn’t have achieved more.

To overcome constraints inherent in long-term technological assets, one representative of Company 8 also asserts that governments need to develop external design changes. External design changes might be required to make capital-intensive investments for sustainability causes manageable amidst market imperfections, as well as to help businesses reconsider their own orientations toward the achievement of sustainability goals. However, the few interviewees contemplating such external conditions of business operations during the interviews did not include in their reports any detailed suggestions on what those external design changes could be, other than those that provide protection for long-term investments of businesses.

IV.7.5. Summary of Conception V

Sustainability objectives which governments adopt as societal aims can present a threat or an opportunity to the existence of businesses. Businesses which are, for their existence, very dependent on political decisions, appear in this fifth conception to have a comparatively strong mission to serve the achievement of societal aims. Businesses following this conception of sustainability performance innovate with regard to their core production technology and/or products that enable society to achieve its sustainability aims. Companies thereby make use of

153 long-term established R&D structures that are an inherent part of their organizations. Their technological developments are understood to be breakthroughs within the respective industries. However, there remain limitations to the achievement of societal aims in this conception, which are, in the given examples, stemming from market and technological conditions of production.

IV.8. On the Structure and Distribution of the Five Conceptions of Sustainability

Performance in Businesses

In this section, I expand on the structure within the phenomenographic results of five conceptions of sustainability performance in businesses, as well as on their distribution in the sample. Concerning the structure of these results, I will expand on three perspectives: the internal and external horizons within these results (Durden, 2018), and structural aspects of the conceptions (Marton & Booth, 1997; Marton & Pong, 2005), as well as the extent to which the five outlined conceptions form a hierarchy (Marton, 1981; Marton & Booth, 1997; Tight, 2016;

Walsh, 2000).

IV.8.1. Internal and external horizons of the phenomenographic results

In a recent contribution, Durden (2018) argues that phenomenographers have largely omitted contextual aspects within which researched conceptions take distinct shape. In his own research, Durden (2018) shows that previous studied conceptions of price have a further external layer of categories. He thus suggests that phenomenographers distinguish in their research designs between an internal horizon, denoted by the phenomenon of interest, and an

154 external horizon, which constitutes the context within which the phenomenon of interest occurs.

In the research design of the study presented here, I took account of the external horizon during the data analysis. In particular, I paid attention to the roles of business-external actors

(see Section III.3.4.). Due to the integration of the roles of external actors, happenings in the organizational environment remained a recurring feature during the data analysis. In the data analysis, business risks emerged as a stable category of description across the reported experiences. I further distinguished business risks by whether they result from conventional business risks (i.e., sustainability-unrelated risks) or from sustainability-related risks. The distinction between an external horizon of business risks and an internal horizon of the closer phenomenon of interest (i.e., sustainability performance in businesses) is indicated in Table 8.

As opposed to the findings by Durden (2018), the external horizon identified in this study is not a separate entity from the internal horizon. In the study by Durden (2018), categories of the external and internal horizons form distinct dimensions that define a matrix of conceptions. In the present study, the internal horizon results from the attributes of the external horizon that a business is confronted with. In other words, the type of risk determines organizational responsiveness by developing an internal management approach in correspondence with a risk-specific conception. This is an unconventional result for a phenomenographic study, as phenomenography does not aim to explain conceptions, but, rather, to describe their variation (Marton, 1981). The identification of an explanatory category in this study might be due to the phenomenon of sustainability performance being inseparable from risks to businesses, as suggested by the findings of this study.

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IV.8.2. Structural aspects and the experiences of variation by research participants

Marton and Booth (1997), as well as Marton and Pong (2005), have noted that conceptions in phenomenography have referential and structural aspects. Referential aspects are defined as “a particular meaning of an individual object (anything delimited and attended to by subjects)”

(Marton & Pong, 2005, p. 336). Structural aspects are defined as “the combination of features discerned and focused upon by the subject” (Marton & Pong, 2005, p. 336). Harris (2011) claims that this distinction between referential and structural aspects is (like the distinction between the internal and external horizon) less theoretically grounded, but, rather, a useful tool for researchers to break down conceptions into their intertwined parts.

Highlighting the structural aspects of the identified five conceptions allows for further valuable insights into research participants’ framing of sustainability performance. In particular, the appearance of the structural aspects in the data shows that research participants make sense of their own dominantly held conception in light of the existence of other conceptions. To enable readers to see this insight, Table 9 dissects the five conceptions by their referential and structural aspects.

Conceptions Referential aspects Structural aspects Sustainability performance is about Focus on requirements by customers and I complying with requirements regulators Sustainability performance is about the Focus on the responsible handling of II reduction of operational costs resources Sustainability performance is about the Focus on other stakeholders who can III faciliation of the business facilitate the business Sustainability performance is about the Focus on other stakeholders who can IV security of business operations jeopardize the business Sustainability performance is about the Focus on societal sustainability aims as V future existence of the business expressed in government decisions Table 9: Referential and structural aspects of the identified five conceptions of sustainability performance in businesses

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During the fieldwork for this study, interviewees have frequently and subtly expressed that they differentiate their own sustainability engagement from those of others. For matters of brevity, I will describe only few examples of how such differentiation along the potential variance of conceptions of sustainability performance is evident in the data.

One outstanding example is the report by Company 19, which dominantly holds

Conception II. On the one hand, interviewees at Company 19 stated that their engagement goes clearly beyond marketing purposes, meaning beyond what customers demand as requirements

(i.e., Conception I). On the other hand, Company 19 reported that it assessed the sustainability of some of its products on matters of, for instance, GHG emissions and risks of child labor in the supply chain, which are themes more likely to be raised by stakeholders in Conception III, considering the company’s context. Notwithstanding an awareness of a probably increased negative impact, Company 19 emphasized a positive stance toward its products, based on considerations pertaining to criteria of the utilized resources. Thereby, the report by Company

19 showed that there is some understanding about the existence of Conceptions I and III, and that this company anchors its positioning on Conception II.

Another example for how a company differentiates its dominantly held conception from those of others was comprehensible in a rather random statement in the interview with

Company 20. One interviewee described how, within this corporation, individual plants used to have their own approaches to environmental management, which was about the reduction of costs (i.e., Conception II). The interviewee stated that, from a corporate perspective and its ambitions to meet stakeholder expectations (i.e., Conception III), it is irrelevant whether plants have an orientation toward cost reduction when approaching sustainability topics. In another instance, an interviewee of Company 8, which also dominantly holds Conception III, claimed that its corporation does not have to deal with the displacement of indigenous people, i.e., a stakeholder group that distinctly appeared in reports pertaining to Conception IV affecting

157 business operations. In another example of a business dominantly holding Conception III, an interviewee at Company 1 mentioned randomly that, for its organization, the existence of costs of conflict (i.e., Conception IV) is a “rumour.” In all these instances, companies dominantly following Conception III draw lines between their own sustainability engagement and those pertaining to neighbouring Conceptions II and IV.

Two of the interviewed companies dominantly holding Conception IV showed, when being asked about what sustainability performance means in their organization, that these organizations do, in other departments, also follow Conception III. While the reports of experiences of interviewed staff focused on the security of the business, the management of stakeholder expectations, and the development of leading practices, this last question led staff of those two companies to talk about sustainability reporting and key performance indicators at the corporate level (i.e., aspects pertaining to Conception III). Finally, companies dominantly holding Conception IV frequently expressed a certain degree of difficulty around not being understood by local stakeholders to deliver government functions. This is, indirectly, a differentiation from Conception V, where companies innovate to enable the achievement of politically decided sustainability aims. As named above, in Conception V, politics and businesses form a community of destiny, with both being dependent on one another.

Companies holding dominantly Conceptions I and V did not indicate in the reports that they would differentiate between their own engagement and those of other organizations.

Company 7, which holds mainly Conception I, also showed traits of Conception II. Company

5, in turn, solely focuses on Conception I. Companies 15 and 21, both dominantly holding

Conception V, also elaborated on practices in accordance with Conception II. In many other cases, when referring to regulatory requirements, companies with diverse conceptions showed that they remain simultaneously also followers of Conception I. This means that, despite companies frequently showing that they differentiate their own dominantly held conception

158 from others, also follow other conceptions within the same organization. In all instances, the dominantly held conception would also be the hightest conception included in the report, meaning that more subtly appearing orientations would stem from lower ranking conceptions.

The way that research participants experience the variance of conceptions of sustainability performance, and how they differentiate themselves along these lines, is crucial for the stability of the presented phenomenographic results. These insights demonstrate how the presented five conceptions are not only derived from the phenomenographic analysis, but are also, in their variance, part of the experienced reality of research participants. Given that research participants frequently distinguish their experiences from others according to the identified conceptions, this suggests also that there might, at this point in time and by current business practices, be no other prevalent conceptions of sustainability performance. Thus, the identified phenomenographic outcome space of sustainability performance in businesses is, within the obtained data, exhaustive, conclusive, and stable.

IV.8.3. The hierarchy of conceptions in these phenomenographic results

As a general rule in phenomenographic studies, results ought to have a structural logic that needs to be presented as a hierarchy of conceptions (Marton, 1981; Marton & Booth, 1997;

Tight, 2016; Walsh, 2000). A hierarchy of conceptions means that these are ordered by levels of sophistication, usually depending on results according to the categories of description. Here

I will highlight how the identified conceptions of sustainability performance stand in a hierarchy according to two of the categories of description: risk profiles and solution finding for sustainability issues.

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Figure 7: The hierarchical logic of the identified five conceptions by their risk intensities

Table 8 showed that two different risk profiles form crucial categories of description according to the identified phenomenographic results: conventional business risks, which are rather sustainability-unrelated for representing risks that would also exist without sustainability discourses, and sustainability business risks. Section IV.8.1. explained how these risk profiles constitute an external horizon within this phenomenographic outcome space that triggers organizational responsiveness. Figure 7 offers now an additional visualization of how these diverse risk profiles are arranged hierarchically by their risk intensities for businesses.

Companies dominantly following Conception I face high risk intensities as the requirements they have to fulfill determine their acceptance as a business by customers and regulators. The acceptance by these primary stakeholders has an effect on the ability of the organization to operate as a business (see also Clarkson, 1995). The risk of diminishing competitiveness, which is fundamental in Conception II, is in most instances less immediate, and hence, I suppose, has a lower risk intensity for the business than the acceptance by customers or regulators. The figure also indicates that a sustainability risk awareness comes into being at Conception II, but that this awareness remains far behind the prevalent business risk in this conception, i.e., operational costs (see Section IV.4.2.). As a third element in this

160 chain, appears the facilitation of the business by other, secondary stakeholders. The relatively low risk intensity in Conception III does not mean, however, that businesses face here ‘no risks,’ but that these risks affect the organization less intensely in their ability to execute core business functions.

As stated in Section IV.5.1., Conception III is a space within these phenomenographic results where conventional business risks get displaced by sustainability business risks. Both categories share the facilitation of the business by stakeholders as a key risk. Hence, the visualization of sustainability business risks in Figure 7 begins with a relatively low risk intensity. This is followed by a higher risk intensity in Conception IV, where businesses aim to secure their business operations from stakeholder agitation. Finally, in Conception V, its adopters maintain the long-term existence of the business which they would risk if not innovating along societal sustainability aims. The hierarchy of conceptions has thus two central features: first, a gradual replacement of conventional business risks by sustainability business risks; and second, the increasing intensity of sustainability business risks.

With the growing intensity of sustainability business risks, the sophistication with which businesses aim to find solutions to address sustainability issues increases also. The intensity of solution finding is growing along the conceptual hierarchy: from finding ways to satisfy customers and regulators (Conception I), to investing in cost-effective process optimization

(Conception II), to adopting purported ‘best’ practices as communicated by stakeholders or in benchmarks (Conception III), to harnessing and augmenting the state of knowledge in applying or developing leading practices (Conception IV), to – as the highest represented form – long- term R&D on core production technology or products that enable the achievement of societal sustainability aims (Conception V). The various excerpts displayed in the results presentation

(see Sections IV.3. to IV.7.) convey how the sophistication develops along these conceptions

161 from, amongst others, meaningless compliance-seeking behavior, up to complex technological developments that were previously thought to be impossible.

Figure 8: A circular hierarchy of conceptions of sustainability performance in businesses, showing also the prevalence of research participants by their dominantly held conceptions; black arrows indicate the direction to the next, more sophisticated conception of sustainability performance in businesses but do not suggest direct developmental forces regarding business practices; the grey arrow indicates the potential relationship between innovation for the achievement of societal sustainability aims and the possibilities for future regulation; asterisks (*) mark companies without an ISO 14001 environmental management system certification.

Conception V and its proclivity to lead businesses to enable the achievement of sustainability aims has a further noteworthy connotation. As societal sustainability aims are driven in this conception by government decisions that guide societal behavior and development, innovations for their achievement enable also regulation of the future. Therefore,

Conception V stands potentially in relation to Conception I, by determining what future

162 regulation will be possible. Figure 8 depicts, accordingly, the phenomenographic outcome space as a circular hierarchy of conceptions, with the last conception enabling the first.

IV.8.4. The distribution of research participants within the identified outcome space

Figure 8 shows also how in this research, participating companies are distributed along the outcome space by their dominantly held conceptions of sustainability performance. The majority of participating businesses dominantly hold Conception II and Conception III.

Furthermore, Figure 8 indicates the companies which are not formally certified for the environmental management system ISO 14001. The latter means that a sustainable supply chain program, which focuses, for instance, on suppliers demonstrating their ISO 14001 certification, would not capture the diversity of the conceptions businesses hold when they perform on sustainability objectives.

Conception Conception Conception Conception Conception I II III IV V By positions in value chains Resource producers 1 3 Resource processors 1 2 2 1 Combined resource 2 producers and processors First-tier suppliers 1 5 1 1 Car manufacturer 1 By interviewees’ locations Australia 1 3 Asia 1 3 Europe 1 7 3 2 By number of employees worldwide 1 - 1,000 2 3 1 1 1,000 - 10,000 2 2 1 10,000 - 100,000 1 2 2 100,000+ 1 3 By product categories Metalliferous products 2 4 5 3 2 Non-metalliferous 4 2 products Table 10: The distribution of research participants along the phenomenographic results, according to criteria used in the sampling strategy to maximize variation of experiences17

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Table 10 shows further how the distribution of research participants evolves along the presented results, looked at through criteria used in the sampling strategy to maximize variation of experiences. A few points are noteworthy about this distribution. First, all companies, which predominantly follow Conception II, operate in Europe and are either first-tier suppliers or resource processors. Second, all companies which predominantly follow Conception IV operate in Australia and are resource producers. This distribution does not mean that resource producers in Australia are ‘more sustainable’ than first-tier suppliers or resource processors in

Europe. However, the distribution suggests that resource producers can have a more advanced conception of sustainability performance in businesses than companies further downstream in the supply chain. Therefore, the widespread assertion that sustainability problems are more prevalent in lower levels of supply chains (e.g., Hartmann & Moeller, 2014; Plambeck et al.,

2012; Sheffi & Blanco, 2018; Villena & Gioia, 2018) falls short of considering the potential of advanced performance understandings in upstream sections.

Another noteworthy observation can be made considering the distribution of companies by their size. One could from this distribution argue that small and medium-sized companies have a higher propensity to predominantly follow Conceptions I and II, whereas large companies have a higher propensity to predominantly follow Conception III. This observation would support the assertion in the literature about how, in comparison to large companies, small and medium-sized companies operate in an opaque space with less need to be accountable toward broader defined external stakeholders (Hillary, 2004; Villena & Gioia,

2018). However, the distribution also shows that small and medium-sized companies can also predominantly follow Conceptions IV and V, and thus possess, in their approaches to sustainability performance, more sophistication in comparison to many large organizations.

Also from this perspective, an existing assertion held in the literature falls short of considering advanced conceptions of sustainability performance in experienced reality.

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In spite of these interesting additional insights, any interpretation of these distributional results needs to be apprehended with caution. On the one hand, it cannot be the aim of this phenomenographic study to clarify how all actors in specific industries, by their sizes, locations, products etc., perform on sustainability objectives. As the next chapter will discuss, the performance of individual companies depends on configurations of their organizational environments. On the other hand, none of the sampled companies can be considered as representative of their industry. The sampling strategy did not aim to be representative of entire industry populations, but to maximize variation in businesses’ experiences of sustainability performance. Focusing on this actual aim of the sampling strategy, Table 10 shows how the four chosen criteria to maximize variation in the sample were successful: three of the four criteria led to the integration of companies into the sample which are distributed across the whole phenomenographic outcome space.

IV.9. Chapter Summary

In this chapter, I have presented, from a phenomenographic assessment, the resulting five different ways in which sustainability performance occurs in businesses. The five conceptions of sustainability performance range from compliance seeking behavior to organizations making long-term investments in R&D for their core production technology or products to enable the achievement of societal sustainability aims. I have also described how these five conceptions are influenced by the risk profiles the businesses face, as well as how research participants draw boundaries around their own holding of conceptions and those of others. Furthermore, I elaborated on how risk profiles, as well as approaches to solution finding for sustainability issues, determine the hierarchy of the identified conceptions. Through this structure, the phenomenographic results are exhaustive, conclusive, and stable. The results thus constitute a

165 faithful representation of the diversity of performance experiences businesses have when engaging for sustainable development.

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Chapter V

Toward a Theory of Sustainability Performance in Businesses

V.1. Chapter Introduction

This research project set out with a problematization of assumptions pertaining to contingency theory that are implicitly held by practitioners of a sustainability service industry, as well as by business sustainability scholarship. The primary tenet of contingency theory is that there is no one best way to deploy structures and practices to achieve optimal performance of businesses

(Donaldson, 2011; Lawrence & Lorsch, 1969). The best way to organize internally for effective task completion depends on factors emanating from the organizational environment to which businesses must adapt (Donaldson, 2011; Lawrence & Lorsch, 1969). For practitioners of the sustainability service industry, the corresponding implicit assumption is that there is no one best way to enable sustainability performance in businesses. For researchers in this space, the corresponding implicit assumption is that researched phenomena will be contingently effective.

The discussion of these assumptions in Chapter II has viewed their adoption to be implausible, according to the current state of knowledge. In particular, fundamental concepts of contingency theory (i.e., the deployment of management approaches for the generation of sustainability performance, the configuration of the organizational environment affecting sustainability performance, and a comprehensive conceptualization and operationalization of sustainability performance) are not established for the subject area. Furthermore, the discussion considered that issues of business unsustainability and contingency theory rest on diverging research paradigms. As a result, the scholarship reviewed in this thesis is not yet in a position to explain the phenomenon of sustainability performance in businesses. It also means that the

167 sustainability service industry operates without evidence-based guidance on effective approaches to address business unsustainability.

To address this impasse in research and real-world practices, I undertook an empirical investigation into how sustainability performance occurs in businesses (Chapters III and IV). I approached this primary research question through a phenomenographic research design, which is built on an interpretative paradigm. Through a phenomenographic assessment, I have revealed in Chapter IV that sustainability performance occurs in businesses in five different ways.

In this chapter, I will discuss these findings with a focus on what they imply for a contingency-based theory of sustainability performance in businesses. The following delineation of a theory of sustainability performance in businesses is based on contingency theory to the extent that I take its fundamental concepts as the point of departure. and elaborate on how the presented phenomenographic results lead to corresponding new insights. The following discussion of the results allow for the formulation of first propositions that conceptually build on each other as in contingency theory, thus culminating in a new theory of sustainability performance in businesses. Beyond the delineation of pillars of a new theory, this chapter includes the findings’ implications for other relevant concepts, models, and assumptions that are established in contemporary business sustainability research.

V.2. The Organizational Environment in a Contingency-Based Theory of Sustainability

Performance in Businesses

In classical contingency theory, which seeks to explain the achievement of economic performance by businesses, the organizational environment is understood as determined by markets or technological conditions (Lawrence & Lorsch, 1969). In more recent applications

168 of contingency theory to contexts of business sustainability, researchers used alternate aspects to define what the organizational environment is. For instance, Aragón-Correa and Sharma

(2003) refer to uncertainty, complexity, and munificence to describe conditions in the organizational environment that affect business adoption of environmental strategies. Husted

(2000) considers expectation gaps of social issues raised by stakeholders (Wartick & Mahon,

1994) to determine what ‘fitting’ strategies and structures managers should deploy. Also,

Schmitz et al. (2019) build on stakeholders as the organizational environment when studying how perceived regulatory pressure affects the availability of slack resources for the pursuance of proactive environmental strategies. In contrast to these previous configurations of the organizational environment, the current study suggests that conceptions of sustainability performance in businesses are contingent on externally originating risk profiles that these organizations need to cope with for effective and efficient operations.

The risk profiles identified in this study jeopardize the short- to long-term effective and efficient functioning of a genuine business model the organizations pursue. This identification of a category of description that has for research subjects an external origin is an untypical finding for a phenomenographic study (see also Durden 2018). The fact that risk profiles form an inherent part of research subjects’ understandings and experiences of sustainability performance underlines the roles external actors take in shaping responsiveness by businesses.

Specifically, the experiences of businesses point to a variety of stakeholders that shape the risk profiles affecting the effective and efficient functioning of the business model (see also Eesley et al. 2016, Fineman and Clarke 1996, Hyatt and Berente 2017).

A few scholars have considered that businesses primarily respond to risks when engaging for sustainability (Fineman & Clarke, 1996; Owen, 2016; Shrivastava, 1995a). In particular, Shrivastava (1995a) argued, while drawing from Beck (1992a, 1992b), that post- industrial societies are shaped by a plethora of risks that humans cause through their logic of

169 wealth. Shrivastava proposed further that traditional managerial approaches, which focus on production, will require a shift toward a focus on risks. The phenomenographic results support this perspective and bring to light the detailed extent to which the sustainability engagement of businesses is a response to risks emerging from the organizational environment.

Proposition 1a: In a contingency-based theory of sustainability performance in businesses, the organizational environment consists of stakeholders imposing risk profiles on business-generic operations.

Previous research has made various claims on stakeholders and issue salience in business sustainability contexts, yet without considering that there are different risk profiles that stakeholder actions impose on businesses. For instance, Mitchell et al. (1997) theorized that stakeholder salience depends on their power, legitimacy, and the urgency of their concerns.

Another example is the research by Bansal (2003) on how business-internal issue identification and selling affects organizational responsiveness on environmental matters. Also, the contribution by Zollo et al. (2013) on the characteristics of change initiatives suggests that there are different degrees of organizational responsiveness which are influenced by external aspects.

What unites these three examples from the literature is that they suggest various degrees of organizational responsiveness on sustainability issues without consideration of a potential diversity of risk profiles along which businesses need to act. This means also that scholars seem to follow certain framings of sustainability performance in which their research takes place

(see also Section V.6.). While these studies have advanced knowledge on how organizational responsiveness can vary within certain risk scenarios, we do not know yet under what conditions businesses enhance their sustainability performance by addressing also other, more

170 intense risk profiles. Following from Proposition 1, the latter would require the evolution of organizational environments to advance the sustainability performance in businesses.

Proposition 1b: Stakeholder (and/or issue) attributes influence the degree of organizational responsiveness within a certain risk profile.

Proposition 1c: Changes in organizational responsiveness beyond a certain risk profile require corresponding changes in the organizational environment that imposes the risk profile on the business.

V.3. Conceptualizing and Operationalizing Sustainability Performance in a Contingency-

Based Theory of Sustainability Performance in Businesses

Sustainability, and the related ambitions of sustainable development, have, to date, been ambiguous in their meanings and difficult to translate into business contexts (Lankoski, 2016;

Meuer et al., 2019; Nason et al., 2018). This is particularly the case due to the most agreed on definition of sustainable development by the Brundtland Commission being near impossible to operationalize (Banerjee, 2003; Montiel & Delgado-Ceballos, 2014). The 2030 Agenda for

Sustainable Development, with its 17 SDGs and 169 sub-targets, offers a more detailed framework, but is formulated as an agenda for nation states, complex to assess, and anthropocentric in its ambitions (Hoffman & Jennings, 2015; see also Banerjee, 2003).

Scientists emphasize, in turn, the natural conditions of planet Earth and the sustaining of life support functions as natural fundamentals of sustainable development (Ripple et al., 2017;

Ripple et al., 2020; Whiteman et al., 2013). In either case, the translation of sustainability objectives into operationalizable concepts and measurable constructs remains missing in the business sustainability field (Montiel & Delgado-Ceballos, 2014; Nason et al., 2018; Starik &

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Kanashiro, 2013; Whiteman et al., 2013). Without a universal conceptualization and operationalization, the idea of ‘business sustainability’ remains illusively vague and dependent on interpretations of issues by firms and their stakeholders.

The findings of this study support the notion that, in the absence of a universally agreed on meaning of an ‘ideal sustainable business’ (e.g., Starik & Rands, 1995), firms and their stakeholders engage in their own constructions of what sustainability performance is. The above discussion about the role of the organizational environment in imposing risks on business operations, which, in turn, determine understandings of sustainability performance, has already indicated this complexity. The phenomenographic study’s findings, that businesses understand sustainability performance in five different ways, also supports previous insights about the diversity of sustainability discourses (Hartmann & Uhlenbruck, 2015; Lankoski, 2016), the dynamics of these discourses (Mahon & Waddock, 1992), and their varying effects and relevance for organizations (Husted, 2000; Rowley & Berman, 2000). This means that from a perspective of businesses engaging for sustainable development, the concept of sustainability performance – in absence of a universal operationalizable understanding – needs to be apprehended by the experiences of these businesses in addressing issues raised in their organizational environments. These are very different conditions compared to the application of classical contingency theory, for which universal understandings of economic performance are available and continuously measured (Nason et al., 2018).

Proposition 2a: The business-internal framing of sustainability performance is contingent on the risk profiles imposed by the organizational environment.

The matter of understanding what sustainability performance for a business is, is further complicated by the possibility of holding multiple conceptions. Conceptions revealed in

172 phenomenographic studies are, amongst others, contextual, meaning that they can vary also among individuals in dependence of situationally experienced reality (Åkerlind, 2005; Säljö,

1988). Previous studies have already highlighted diversity of sustainability frames based on cognition and managerial sensemaking (Hahn et al., 2014), organizational sub-cultures

(Howard-Grenville, 2006; Kok et al., 2019; Linnenluecke et al., 2009), or an emerging hybridity of organizational structures (Haigh & Hoffman, 2014). The findings of this study adds to this literature by suggesting that while staff in businesses deal with different stakeholders and hence different organizational environments (Delmas & Toffel, 2008;

Mitchell et al., 2016), they can also adopt diverging frames of sustainability performance (see also Wood & Jones, 1995).

Proposition 2b: Businesses can pursue multiple frames of sustainability performance which are contingent on contextual perceptions of risks imposed by organizational environments.

V.4. The Deployment of Management Approaches and Proactivity in the Pursuance of

Sustainability Performance in Businesses

Businesses deploy management approaches when engaging for sustainable development. The problematization of contingency assumptions in Chapter II highlights tools, mechanisms, and procedures as management approaches for the contemporary sustainability engagement of businesses. Through the phenomenographic study, I identified the creation and use of management structures as a category of description of experiences of sustainability performance in businesses. ‘Management structures’ appears terminologically closer to

‘organizational structures’ that classical contingency scholars theorized on (Donaldson, 2001;

Lawrence & Lorsch, 1969).

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The results of this study show that management structures emphasized as being used by businesses depend on the pursued understanding of sustainability performance. These management structures are distinctly deployed in each conception to the extent that businesses, in their reports on internal experiences of sustainability performance, would not emphasize the use of management structures corresponding to other conceptions.

Therefore, management approaches are not universally effective across all conceptions, but rather ‘fit’ to one certain understanding of sustainability performance. This means that designs of management approaches are only conducive for the pursuance of particular conceptions of sustainability performance. For instance, a company predominantly following

Conception III would neither emphasize the use of ad hoc management structures, nor of management systems, nor of long-term established R&D teams. Instead, the company would seek effective means to meet its stakeholder expectations for which it needs to create accountability. Other management approaches can be deployed by these businesses to meet stakeholder expectations, as they are, for instance, promoted in initiatives based on benchmarks. But the dominant purpose of the deployment of management approaches in

Conception III remains the creation of accountability toward stakeholders (cf. Rasche & Esser,

2006; Vigneau et al., 2015).

Likewise, a business that has adopted Conception IV due to intense risks of stakeholder agitation that jeopardizes the security of operations, cannot tackle these risks by adopting only an environmental management system or other non-fitting approaches. Businesses interviewed that predominantly follow Conception IV did not once make reference to management system approaches when reporting on their sustainability performance. However, this does not mean that these businesses do not make use of environmental management systems. Figure 8 shows that two out of three of the businesses predominantly following Conception IV have also formally adopted environmental management systems in accordance with the international

174 standard ISO 14001. Yet, when elaborating on their most outstanding sustainability achievements, staff of these businesses did not mention that their organizations have these environmental management systems. In contrast, for most businesses predominantly following

Conception II, the establishment of management systems was a focal part of their reports on sustainability achievements. A match is therefore required between the design of management approaches and the conceptions of sustainability performance, for their deployment to be meaningful, and hence effective.

These findings suggest further that the deployment of a certain management approach is ineffective if its design does not correspond with the followed conception of sustainability performance. One example of an obvious ineffectiveness is given in Section IV.3.4., in which an interviewee at Company 7 declares that the content of its supplier code of conduct and its sustainability report do not matter for the organization. While sustainable supply chain management programs are conducted with an understanding of sustainability performance corresponding to Conception III, the suppliers who have to react to these demands by their customers can react, like Company 7, by adopting Conception I (i.e., a focus on meeting customer requirements). Sustainability reports and supplier codes of conducts have, as part of sustainable supply chain management, the purpose of meeting stakeholder requirements and of demonstrating commitment to stakeholder concerns. From a perspective of a company predominantly following Conception I, the adoption of these tools has no meaning outside the fulfillment of its performance understanding. In other words, as long as involved customers show themselves satisfied with the mere adoption of tools, suppliers – whose engagement is constrained to Conception I – perceive neither an external nor an internal incentive to go beyond the achieved compliance with costumer requirements.

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Proposition 3a: The effectiveness of the deployment of management approaches is contingent on their fit to pursued conceptions of sustainability performance.

Furthermore, the findings relativize vast research on internal motivations for sustainable engagement and its emphasis on an existing ‘proactiveness’ in businesses’ approaches. For instance, scholars inquire into determinants of proactivity in strategic sustainability management (e.g., Aragón-Correa & Sharma, 2003; Buysse & Verbeke, 2003;

Darnall et al., 2010; Schmitz et al., 2019; Sharma & Vredenburg, 1998). Also in the case of stage models of business sustainability, scholars illustrate that internal determinants cause varying degrees of proactivity and achievement (e.g., Benn et al., 2014; Gunningham et al.,

2003; Maon et al., 2010; Valente, 2012; Winn & Angell, 2000). For the deployment of management systems, scholars find likewise that there are varying degrees of proactivity across businesses (Boiral, 2007). However, the findings of this phenomenographic research suggests that ‘proactivity’ is a relative concept in the business sustainability context. According to the results of this study, all conceptions of sustainability performance are predetermined by risk profiles that stem from the organizational environment. This means that also in the business sustainability context, organizations and their management do not have full agency over their internally pursued approaches (see also Meyer, 2010). The findings rather support scholars who stress that sustainability performance is primarily determined by business-external forces

(e.g., Delmas & Toffel, 2004, 2008; Georgallis, 2017; Mitchell et al., 2016; Shnayder et al.,

2016; Wood & Jones, 1995). ‘Proactivity’ in business engagement for sustainability is thus a relative concept, as the proactive approaches that businesses can take are, at root, reactions to risk profiles imposed by the organizational environment. Therefore, proactivity in sustainability engagement is rather a quality criterion of organizational responsiveness by which businesses anticipate risks.

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In support of the findings of previous studies, I suppose that the degree of proactivity in sustainability engagement in a business results from the availability, development, and use of internal determinants (see also Delmas & Toffel, 2004; Wood, 1991). Among the most often identified internal determinants of business sustainability (see Table 3) are top management commitment (e.g., Andersson & Bateman, 2000; Banerjee, 2001; Bebbington et al., 2009;

Greening & Gray, 1994; Gunningham et al., 2003; Muller & Kolk, 2010; Ramus & Steger,

2000), organizational culture (e.g., Gond et al., 2012; Howard-Grenville, 2006; Linnenluecke

& Griffiths, 2010; Linnenluecke et al., 2009; Shrivastava & Hart, 1995; Wiesner et al., 2018), and the integration of sustainability into performance management (e.g., Dahlmann et al., 2017;

Gond et al., 2012; Haque & Ntim, 2018; Ramus & Steger, 2000; Shrivastava & Hart, 1995;

Wiesner et al., 2018; Yin & Schmeidler, 2009). In accordance with the above discussion of the configuration of the organizational environment, internal determinants of business engagement for sustainability are also, to date, only assessed on their effects within certain conceptions of sustainability performance (see also Section V.6.).

Proposition 3b: Internal determinants of business sustainability (e.g., top management support, organizational culture, or the integration of sustainability into performance management) affect the degree of proactivity in pursuing sustainability performance once the business has been responsive to a risk profile imposed by the organizational environment.

V.5. The Interpretative Paradigm Underlying a Contingency-Based Theory of Sustainability

Performance in Businesses

The formulated propositions in this chapter for a contingency theory of sustainability performance in businesses take as a point of departure that organizations are tightly connected

177 to their organizational environments (DiMaggio & Powell, 1983; Hannan & Freeman, 1984;

Meyer, 2010; Meyer & Rowan, 1977; Pfeffer & Salancik, 1978). In previous, classical contingency theory, organizations are considered to be related to organizational environments only by reacting to signals while pursuing universal ideas of economic performance (Nason et al., 2018; Schreyögg, 1980). Other than the reaction to external signals, companies have been thought of as exerting full agency over their operations and choices over the organizational environment (Lawrence & Lorsch, 1969). This one-sided relatedness causes a paradigmatic inconsistency within classical contingency theory (Schreyögg, 1980). The phenomenographic results of this study, and thereupon derived propositions, point toward a way out of this inconsistency.

The outlined propositions suggest that all organizational pursuance of sustainability performance in businesses results from risk profiles imposed by stakeholders. Yet, while businesses react to these risk profiles, their impositions are themselves reactions by stakeholders to the performance of businesses (Devinney, 2009; Lange & Washburn, 2012;

Wood & Jones, 1995). In line with the five discovered conceptions of sustainability performance, this means that: a) businesses would not face pressures from customers or regulators, if their performance corresponded to their expectations; b) businesses would not face strong market pressure for cost reductions, if their performance corresponded to market dynamics; c) businesses would not face reduced support or even d) agitation against their operations by stakeholders, if their performance corresponded to their expectations; and e) businesses would not face risks about their future existence, if their performance corresponded to future expectations of societies in which they operate. The unidirectionality of classical contingency is thus implausible, as stakeholders need to act on businesses’ performance in order to create the named risk profiles. Consequently, business and stakeholder interpretations

178 of sustainability performance are ontologically symbiotic: the one would not exist without the other (Wood & Jones, 1995).

The intertwined relationship between stakeholder actions and businesses’ framing of sustainability performance confers that ideas of performance originate from the organizational environment. As noted above, in the business sustainability field, there is, to date, no universal approach available to comprehend and assess what ‘business sustainability’ and the related optimal performance is (see also Lankoski, 2016; Montiel & Delgado-Ceballos, 2014; Nason et al., 2018). Rather, ideas of sustainability performance are socially constructed (Berger &

Luckmann, 1967) and depend on the discourses that managers and stakeholders create when making sense of business impacts on societies and the natural environment (Maguire & Hardy,

2009; Phillips et al., 2004; Weick, 1979; Weick et al., 2005). The findings of this study make the interrelationships of actors’ interpretations and conceptions of performance explicit, as businesses enact sustainability performance in a variety of different ways, while their staff and managers perceive to respectively follow suitable approaches within this variance.

Furthermore, these findings do not allow one to conclude what ‘optimal’ sustainability performance is, other than to suppose that businesses seek to effectively address the risk profiles that organizational environments impose on them.

In a nutshell, businesses cannot conceive of sustainability performance other than to refer to externally created risk profiles based on interpretations of what sustainability performance is. One can thus only know of achieved sustainability performance by taking into consideration the risk profiles businesses are exposed to, how stakeholders assess performance, and how firms experience their performance in these terms. An agreement about how to universally interpret sustainability performance, and accordingly, an institutionalization of how businesses create and experience sustainability performance, would not change an interpretative ontology and epistemology underlying the phenomenon. A universal

179 sustainability performance framework that is operationalizable in a business context would be conducive for an institutionalization of sustainability performance assessment. Also an institutionalization of an understanding and an according assessment of sustainability performance would eventually, like a universal understanding and assessment of economic performance, remain stable only as long as it does not turn problematic (Berger & Luckmann,

1967).

The delineated contingency theory of sustainability performance in businesses thus accords with scholars who regard an interpretative paradigm as conducive to explain sustainability challenges (Fineman & Clarke, 1996; Geels, 2010; Greenwood et al., 2015;

Hoffman & Jennings, 2015), but points to limitations for those who seek to establish a unifying sustainability vision (e.g., Dyllick & Muff, 2016; Gladwin et al., 1995; Shrivastava, 1995a).

The findings of this study rather support the notion of tensions and paradoxes inherent in the normative ambition of pursuing social, environmental, and economic goals in an equally effective manner (Hahn et al., 2018; Hahn et al., 2015; Matthews et al., 2016). It supports the idea of paradoxes in business sustainability, as there is, by contemporary understandings and experiences, not one ideal way in which businesses can engage for sustainability performance.

The findings also add a further level to the complexity of business sustainability through the revealed diverse risk profiles that organizational environments impose on businesses. Despite this addition to the complexity of paradoxes, the diverse risk profiles bring clarity to an assumption of proponents of a paradox theory of business sustainability (e.g., Hahn et al.,

2018). Instead of assuming that managers exert agency in acknowledging paradoxes that entice them to work on otherwise unaddressed sustainability issues, the findings of this study suggest that business engagement for sustainability objectives stems from risks to the organization.

Therefore, instead of assuming managerial agency, managers might rather acknowledge that to not work on sustainability issues conveyed to them as part of their risk profiles would mean

180 that their sustainability performance remains – from both their stakeholders’ and from a business perspective – suboptimal.

V.6. On the Following of Conceptions by Business Sustainability Researchers, Conception

Mismatching, and the Quest for the Financial Business Case

The above discussion indicates that scholarship seems to restrict research endeavors to certain conceptions of sustainability performance. In this section, I will expand on this claim by providing examples in which such a constriction to certain understandings of the phenomenon takes place. I will further suggest that, in alignment with what Wood and Jones (1995) labelled as ‘stakeholder mismatching,’ there is a phenomenon of ‘conception mismatching’ in research designs aiming to understand sustainability performance in businesses. I will conclude with thoughts on what this could also mean for scholars in search for the financial business case.

First, I would like to provide examples for the claim that scholars follow in their research designs different conceptions of sustainability performance without yet having been able (or directed) to distinguish these differences. A first example is the recent contribution by

Schmitz et al. (2019) in which the authors explain, through a quantitative analysis, how far a strong regulatory environment affects firms’ ‘proactive environmental strategies.’ A measure of strong regulatory environment is clearly attributable to what the results of this study contain in Conception I, i.e., the meeting of customer and regulatory requirements. As a measure of

‘proactive environmental strategy’, the study by Schmitz et al. (2019) uses a construct containing pollution prevention practices, aspects of resource handling that pertain more to

Conception II, as well as management commitment. The finding of the study by Schmitz and her colleagues that strong regulatory pressure drives intrinsic motivation for environmental engagement, can thus be reinterpreted using the presented phenomenographic outcome space

181 of sustainability performance in businesses. Companies facing strong regulatory pressure might be focusing on pursuing sustainability performance as meeting requirements of compliance, while not (yet) having developed a thorough approach to benefit from the reduction of operational costs through resource efficiency. The degree of proactivity for the latter might indeed depend on management foresight, amongst other internal determinants.

However, Schmitz and her colleagues’ suggestion that regulation eradicates proactivity is based on these authors’ assumption that only the two constructs measured by them capture the full variance of conceptions of sustainability performance. The renewed interpretation offered here is that there are companies that follow Conception I without yet grasping the relevance of

Conception II, and that companies following Conception II more ‘proactively’ perceive regulatory pressure to be of less relevance in framing their performance (see also López-

Gamero et al., 2010 where this distinction appears more clearly in the results). This does not, however, mean that the one necessarily eradicates the other.

An example of how scholars adopt in their research design a dichotomy between

Conception II and III is the contribution by Hyatt and Berente (2017). Hyatt and Berente studied how far the pressure of internal and external stakeholders leads to different practices by companies. In their findings, these authors stress that the pressure by internal stakeholders would lead to ‘substantive’ engagement, and the pressure by external stakeholders to

‘symbolic’ engagement. To assess what ‘substantive’ performance is, these researchers asked respondents whether their companies go beyond environmental compliance and have a high commitment to managing environmental matters. These aspects refer, in the first place, to a potential understanding corresponding to Conception II. As ‘symbolic’ performance, these researchers asked respondents whether their companies care about their public reputation based on environmental performance and whether they are among the leaders in adopting environmental standards, as well as whether the company has adopted a strategy that

182 legitimizes its operations. These latter aspects refer to an understanding of sustainability performance corresponding to Conception III. Hence, Hyatt and Berente (2017) affirm the relative importance of internal management to effectively adopt Conception II, as opposed to a comparatively more important externally oriented management when following Conception

III (see also Weber & Saunders-Hogberg, 2018). However, this does not imply that the one is more ‘substantive’ or more ‘symbolic’ than the other, because what Hyatt and Berente assess are two very different understandings of sustainability performance in businesses.

It appears further, that a lot of business sustainability research which aims to take a more comprehensive stance in assessing sustainability performance in businesses, focuses on understandings pertaining to Conception III. This is certainly true for a large part of the concurrent CSP literature and the widespread use of, for instance, the KLD data set. KLD data reflects interests in compliance, resource efficiency, and philanthropy, amongst others (see the appendix in Waddock & Graves, 1997), and thus reflects minimal expectations on company behavior as raised in public discourses. Also, the focus on assessing issues of interest to investors (Eesley et al., 2016; Entine, 2003; Stubbs & Rogers, 2013) marks KLD and similar data sets as spurring an understanding of sustainability performance in accordance with

Conception III (see Sections IV.5.2. and IV.5.3.). Likewise, researchers who are interested in how companies adopt sustainable supply chain management programs follow Conception III with its focus on risk mitigation (see Section IV.5.3.). Novel theorists also remain accordingly constrained in their elaborations. For instance, Nason et al. (2018) show an understanding pertaining to Conception III by referring to stakeholders who identify with a firm and who continually provide feedback on performance along a diversity of reference points. In their theory of social performance, feedback loops assist managers to decide with what measures to respond to stakeholder expectations. Nason and colleagues also attempt to delineate a distinction between stakeholders that identify with a firm and provide performance feedback,

183 and other stakeholders that do not identify with a firm and would not provide that feedback.

However, in a context of sustainability performance, the idea that only firm-identified stakeholders provide feedback seems to misrepresent protesting stakeholders who aim to stop businesses from continuing their operations, which is a risk inherent in Conception IV. In fact,

I remain, to date, unaware of any work in the business sustainability literature that aims to grasp understandings of sustainability performance in businesses that would go beyond Conception

III.

That researchers themselves constrain their inquiries to lower levels of potential sustainability performance in businesses is problematic if the purpose of this field is to advance knowledge for relevant societal transitions (Hoffman, 2016; Landrum, 2018). It is particularly problematic if researchers perceive that what they research is how companies would make major changes to their core production technologies and products that enable the achievement of societal sustainability aims (i.e., Conception V), while their research participants actually aim for cost reduction (i.e., Conception II) or risk mitigation (i.e., Conception III). Wood and

Jones (1995) previously observed from the CSP literature that many researchers would make claims about correlations between stakeholder expectations and CSP data results, while not specifying whether the expectations of stakeholders are adequately reflected in the data used to measure CSP. Wood and Jones coined this phenomenon as ‘stakeholder mismatching.’ In a similar vein, I argue that vast business sustainability scholarship could suffer from ‘conception mismatching’ in that it does not yet grasp the variance of conceptions of sustainability performance in businesses but produces claims about the sustainability of business practices which are unreflected in the breadth of real-world experiences. The presented phenomenographic results provide researchers a first opportunity to reassess how far conception (mis-)matching is taking place between their research designs and the rhetoric they use in formulating the relevance of their findings for sustainability transitions.

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Last but not least, the findings of this study, and the notion of conception mismatching, potentially have implications for inquiries into CSP-CFP correlations. The scholarly quest for the financial businesses case of sustainable engagement has been plagued for a long time by inconsistent findings (Margolis & Walsh, 2003). More recent studies into CSP-CFP correlations tend toward supporting the argument that better social performers get financially rewarded (Barnett, 2019; Wood, 2010). However, the results of this study suggest a caveat to the generalization of those correlations: if CSP data is by its own design following an understanding of sustainability performance corresponding with Conception III, then on these measures well-performing firms would benefit in the long run from a) enhanced risk mitigation practices, and b) stakeholders supporting these firms. On the other hand, if firms dominantly hold Conception II, but are assessed on broader Conception III measures, then researchers would interpret their findings with a conception mismatch. A company following Conception

II could be doing well in reducing its operational costs and thus enhance its financial performance (Darnall et al., 2008). This would, however, not mean that the enhanced financial performance in the data stems from the broader measurement of CSP. Likewise, a company could develop sound financial performance due to its ability to hold local protests at bay. Also in this case, the basis of comparatively better financial performance might not lie in the measured CSP aspects, but in other approaches that are not captured in the construct, as they pertain to a diverging conception of sustainability performance. The message here for researchers who work on these inquiries, is that while all firms can experience enhanced financial performance when they address their risks effectively, the interpreted correlations with financial performance need to match companies’ risk profiles (see also Barnett, 2019).

Accordingly, more specification of the risk profiles of businesses in research samples could lead to better explanations about when and how engagement for sustainable development pays off.

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V.7. Chapter Summary

The findings of the phenomenographic study, discussed through a lens of contingency theory, lead to the formulation of novel propositions for a theory of sustainability performance in businesses. Firstly, the study’s findings suggest that the organizational environment consists of stakeholders shaping risk profiles to business operations. Secondly, businesses’ framing of sustainability performance is contingent on the risk profiles that are imposed on them by their organizational environments. Thirdly, the effective deployment of management approaches depends on whether these approaches ‘fit’ to the risk profiles they ought to address. This viewpoint dissolves a paradigmatic inconsistency in classical contingency theory, by suggesting that stakeholders interpret business performance on sustainability objectives, and thereupon determine what sustainability performance in businesses is and how it can be effectively pursued.

Furthermore, this chapter has discussed how the study’s findings are relevant for a renewed understanding of outputs in business sustainability scholarship. In particular, I have argued that researchers in this space also take on conceptions of sustainability performance in their research designs, and need to start reflecting on constraints they create thereby for the real-world relevancy of findings. There appears to exist a problem of ‘conception mismatching’ in business sustainability scholarship, in that scholars research phenomena that do not correspond to the claims they produce. Finally, I have related the notion of conception mismatching with studies on CSP-CFP correlations and suggested that researchers need to specify the risk profiles of companies in their samples to better explain when and how firms harness financial rewards for their sustainability engagement.

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Chapter VI

Implications for the Sustainability Service Industry

VI.1. Chapter Introduction

In Chapter II, I introduced the sustainability service industry as a new audience for research findings of business sustainability scholarship. I define the sustainability service industry by two characteristics: first, these actors all reside outside of the businesses that they address; second, these actors provide services that ought to enable sustainability performance in the addressed businesses. In this second discussion chapter, I derive implications for the sustainability service industry that result from the problematization (Chapter II) and the phenomenographic study of 21 organizations operating along the automotive value chain

(Chapters III, IV, and V). The problematization highlighted that the sustainability service industry operates largely without evidence-based guidance, as the business sustainability scholarship reviewed in this thesis is not yet in a position to explain how sustainability performance occurs in businesses. The phenomenographic study, in turn, has described and explained how sustainability performance occurs in businesses in five different ways, depending on the risk profiles imposed to businesses by stakeholders in the organizational environment.

The five implications in this chapter represent a challenging agenda for change in the sustainability service industry that should, in the long run, result in more effective service practices. When writing in this chapter about the actors of the sustainability service industry, I refer to their homogeneous distinction by the above definition. A heterogeneous appearance of these actors suggests, however, that not all of the industry might identify in the same manner with the following implications. I argue, though, that if actors of the sustainability service

187 industry claim to enable sustainability performance in businesses, they will also have to consider how sustainability performance actually occurs in businesses, and how they could deliver more effective service practices accordingly.

VI.2. Implication I

To enable sustainability performance in businesses more effectively, actors of the

sustainability service industry need to discontinue unconsidered assumptions of contingent

effectiveness of management approaches

This thesis argues that the sustainability service industry operates with unclear performance expectations, which result from management approaches that its actors promote for adoption by businesses. These management approaches are primarily tools, mechanisms, and procedures stemming from sustainability-unrelated fields, and which are consequently unsystematic in their effectiveness. With unsystematic effectiveness, management approaches like ‘policy,’

‘due diligence,’ ‘management system,’ ‘risk assessment,’ or ‘systems in place,’ amongst others, can be interchangeably applied (cf. Mori Junior et al., 2017). This situation of the promotion of sustainability-unrelated management approaches, combined with unsystematic performance expectations and their interchangeable application, suggests that the sustainability service industry assumes, at the macro level, that there is no one best way to enable sustainability performance in businesses. This assumption is a central tenet of contingency theory (Lawrence & Lorsch, 1969). It applies to the sustainability service industry from a macro perspective, because individual actors of this industry can promote diverging management approaches for perceived effectiveness, while they might not be aware that they

188 share the assumption of contingent effectiveness as a larger group of actors following similar purposes and approaches.

The results of the phenomenographic study suggest that following the assumption that there is no one best way to enable sustainability performance in businesses cannot be upheld without distinguishing how businesses understand sustainability performance. The study shows that businesses create and make use of distinct types of management structures according to the risk profiles they address, as well as how they subsequently frame sustainability performance for their organizations. For instance, in Conception V, R&D structures are established long term to develop new technological means to enable the achievement of societal sustainability aims; in Conception I, in turn, (and partly in Conception II) R&D structures are used in an ad hoc fashion for the purpose of achieving compliance (or for the harnessing of cost reduction benefits). The way R&D structures are deployed in Conception I would not meet the needs of companies following Conception V, and vice versa. Likewise, companies following Conception IV create and use management structures to better understand and manage their impacts on society and the environment; in Conception II, in turn, companies use management structures that facilitate the identification of potential to reduce operational costs through resource efficiency. Also here, the management structures in the former do not meet the needs of the latter, and vice versa. As a result, management approaches are, in the reality of business experiences, not interchangeably applicable. To the contrary, their effective application depends on the conceptions of sustainability performance held by each business.

Actors of the sustainability service industry who aim to enable sustainability performance in businesses more effectively, will therefore need to discontinue the, so far, unconsidered assumption of contingent effectiveness. Instead, actors of the sustainability service industry need to pay closer attention to what businesses aim to achieve through their engagement. To promote adequate management approaches, actors of the sustainability service

189 industry have to clarify beforehand: a) what is the most effective management approach to tackle a particular sustainability challenge of a business? and b) how does the identified management approach fit into what the business to be addressed understands as sustainability performance? If there is a fit between the identified management approach and the understanding of a business about its sustainability performance, actors of the sustainability service industry can be more certain that their promotion of the management approach will lead to an effective application. If there is, however, a misfit, actors of the sustainability service industry should seek alternative ways to effectively address the sustainability challenge of the business.

VI.3. Implication II

To enable sustainability performance in businesses more effectively, actors of the

sustainability service industry need to differentiate between conceptions of sustainability

performance

To be able to identify when the promotion of certain management approaches fit with a business, actors of the sustainability service industry need to differentiate in their practices the diverse ways in which sustainability performance occurs in businesses. If actors of the sustainability service industry do not engage in a differentiation accordingly, they could miss the potential for more effective contributions to sustainable development. They could also miss the potential for discerning performance from underperformance in the businesses they address.

There are three basic criteria that would fulfill the differentiation of sustainability performance in businesses. a) Actors of the sustainability service industry need to be

190 knowledgeable about the existing differences of understanding sustainability performance and how they affect the engagement by the businesses they aim to address. To be knowledgeable about these differences means to be informed, for instance, by research like the one presented here, about trends in the diverging approaches businesses take, as well as how developments in the discourses of stakeholders might shape these understandings and alterations. b) Actors of the sustainability service industry need to make an effort accordingly to incorporate into their service designs the internal understandings and practices of businesses before they render their services. This second criterion prescribes that actors of the sustainability service industry might have to develop new means to enhance their knowledge of the businesses they aim to work with. This suggestion is thus similar to what is practiced in the business community as

‘know your customer’, or ‘KYC’: to thoroughly know the internal understandings and practices of a business before management approaches will be promoted to address its sustainability challenges. c) Actors of the sustainability service industry need to design their services in such a way that they can adjust to the experienced reality of sustainability performance in the businesses they address. This means that there can also not be a one-size-fits-all solution in the promotion of management approaches. Rather, depending on the diverse existing understandings of sustainability performance in businesses, actors of the sustainability service industry need to suggest context-fitting solutions to sustainability challenges.

VI.4. Implication III

To enable sustainability performance in businesses more effectively, actors of the

sustainability service industry need to take into account the diverse ways in which firms

operate within conceptions, as well as across conceptions, of sustainability performance

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Beyond the need, outlined above, for differentiation between conceptions of sustainability performance in businesses, there are two further dimensions that actors of the sustainability service industry need to take into account in their practices for these to become more effective: a) there are within one conception differences between businesses in how they enact the conception, and b) businesses can pursue multiple conceptions at the same time, demanding a differentiation across conceptions of sustainability performance.

To take into account how businesses implement a conception, actors of the sustainability service industry will need to identify the internal organizational settings that are conducive or hindering an effective sustainability engagement. Business sustainability researchers have identified a myriad of diverse internal determinants that can have both positive and negative effects, depending on their use for sustainability causes. In Section V.4., I highlighted the examples of top management support, organizational culture, and the integration of sustainability into performance management. Other examples that I identified as part of my literature review are: settings of corporate governance; structural, functional, operational, strategic, and personnel integration; organizational capabilities; organizational learning; internal and external communication; stakeholder responsiveness; decision-making processes; leadership styles; the availability of internal change agents; employee motivation, awareness, and attitude; the qualifications of employees; and resource capacities, amongst others (see also Table 3). Readers might be overwhelmed by this list of internal determinants, as it appears to concern the entire organizational life of a business. Actors of the sustainability service industry will thus have to make a reasonable, empirically grounded choice of determinants to capture the internal organizational life of businesses they work with, and which can support (or hinder) their engagement for sustainable development. The aim of such assessments should be to incorporate into service practices the enhancement of internal

192 organizational settings, as this would potentially boost effectiveness of management approaches to solve issues of unsustainability.

To take into account how businesses operate across conceptions of sustainability performance, actors of the sustainability service industry will have to combine the identification of conceptions businesses hold (i.e., criterion b in Implication II) with the internal organizational settings that enable (or hinder) the pursuance of these conceptions. It is possible, and also very likely, that businesses have different internal organizational settings for the pursuance of diverging conceptions of sustainability performance. For instance, in Section

IV.8.2., I provided the example of Company 20 that pursues simultaneously Conceptions II and III in different parts of the organization. Accordingly, it is possible that an organizational

(sub-)culture that favors Conception II or III prevails in the respective organizational structures, while being less pronounced in structures with diverging conceptions. This means that an organizational culture supportive of Conception II might prevail in one part of the organization, but not in others, and an organizational culture supportive of Conception III might prevail in another part of the organization, but again not in others. In order to best address potentials of performance (and underperformance), actors of the sustainability service industry need to understand these differences inside the businesses they address. Also from this viewpoint, services that ought to enable sustainability performance in businesses will be more effective if they can take into account the different internal settings in relation to the diverse conceptions held in businesses. Actors of the sustainability service industry following this suggestion would tap into new grounds of apprehending sustainability performance in businesses across conceptions, and should therefore provide researchers insights into their practices and results.

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VI.5. Implication IV

To enable sustainability performance in businesses more effectively, actors of the

sustainability service industry will also have to increase risks to businesses to entice the

development of novel solutions for the most pressing sustainability challenges

The results of the phenomenographic study (Chapter IV) and their inherent hierarchical logic

(Section IV.8.3.) suppose that businesses take on more sophisticated approaches to sustainability performance when they face intense risks to their operations. Conceptions IV and

V, which are the most sophisticated conceptions among the study’s findings, are both based on severe risks to businesses that affect their operations or long-term existence. Correspondingly, actors of the sustainability service industry who would like to motivate businesses to invest in the development of new leading practices based on the state of knowledge, or to invest in the development of new knowledge that leads to alterations in practices, or of core production technologies and products, will have to consider how to establish relevant risks to the businesses they address.

This suggestion, that actors of the sustainability service industry need to increase risks to the businesses they work with, comes with a major caveat. According to the reports of sustainability performance in the data I analyzed for this study, there is no indication that actors of the sustainability service industry are part of the creation of risk profiles that lead to the adoption of the more sophisticated Conceptions IV and V. In Conception IV, the stakeholders who establish risks to business operations are local communities, particularly local stakeholders with land use rights that coincide with land use rights of the concerning companies, or otherwise well-organized protesters. In Conception V, the critical stakeholder is

194 the government that makes political decisions that impose risks to (or alternatively opportunities for) the existence of the business. In this case, the political decisions are more incisive for the industry than other regulatory requirements; the incisiveness of these political decisions for the industry can also not be compared to laws that require businesses to adopt management approaches, as, for instance, in US and EU legislations on due diligence approaches to mitigate risks of conflict minerals in supply chains. In both risk profiles of

Conceptions IV and V, the critical stakeholders appear thus as different from actors of the sustainability service industry. This poses the question whether actors of the sustainability service industry could, by their current practices, entice more sophisticated understandings of sustainability performance in businesses. However, if actors of the sustainability service industry claim to enable sustainability performance in businesses, they need also to deal with the question of how they can contribute to the development of effective solutions to pressing sustainability challenges. The findings of this study suggest that a primary way forward to persuade businesses for the development of novel solutions, is through the creation of risks to their operations.

VI.6. Implication V

To enable sustainability performance in businesses more effectively, actors of the sustainability service industry need to understand and enhance their practices in accordance

with their role in shaping, as well as promoting, conceptions of sustainability performance

Actors of the sustainability service industry influence how businesses perceive and react to their risk profiles which are imposed on them by the organizational environment. On the one hand, actors of the sustainability service industry could be directly involved in shaping risk

195 profiles for businesses and are thus part of the organizational environment. This would, for instance, be the case when an NGO engages in advocacy work for businesses to adopt management approaches that ought to effectively address issues of unsustainability. On the other hand, actors of the sustainability service industry could also be taking a mediating role between businesses and the risk-imposing organizational environment. This would, for instance, be the case if a sustainability certification scheme proposes to businesses risk mitigation measures for issues raised by NGOs and other, more strongly opposing actors. In either case, actors of the sustainability service industry shape and promote certain risk profiles, which they need to understand if they want to enhance their own practices for more effectiveness.

The above discussion of Implication IV has proposed that actors of the sustainability service industry might not be part of shaping risk profiles of Conceptions IV and V. This suggests, in turn, that these actors might restrict their roles to the shaping and promotion of

Conceptions I, II and III. Actors of the sustainability service industry, which, perhaps inadvertently, shape and promote the following of Conception I by businesses, are sustainable supply chain managers. Suppliers that have not (yet) started to follow any of the higher conceptions, respond to customer requests with a focal interest in compliance. As part of

Conception II, a plethora of consultancies exist that promote resource efficiency practices that aim to reduce operational costs for their clients. In Sections IV.5.1. and IV.8.3., I suggest how both of these conceptions address business-generic risks which are rather sustainability- unrelated.

Actors of the sustainability service industry that work on sustainability-related risks of businesses could therefore be restricting their practices to the promotion of Conception III. As part of this third conception, companies focus on the adoption of purported ‘best’ practices as they are promoted by stakeholders and by benchmarking initiatives. They are only supposed

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‘best’ practices, as the development of practices according to the state of knowledge, as well as the advancement of knowledge to improve practices, are distinct to Conceptions IV and V.

I also identified Conception III to be based on the lowest risk intensity to businesses in comparison to all other conceptions (see Figure 7). In summary, this means that the majority of actors of the sustainability service industry promotes as good perceived management approaches for adoption by firms, while these actors’ practices are nested within a low-intensity risk profile. This focus on low risk profiles constrains actors of the sustainability service industry in driving businesses to develop novel solutions to sustainability challenges.

Actors of the sustainability service industry who aim to enable effective solutions to sustainability issues caused by businesses will therefore have to reconsider how they shape and promote certain conceptions of sustainability performance. To better understand and enhance their practices, actors of the sustainability service industry should a) critically assess their own practices in shaping and promoting sustainability performance in businesses. This means that actors need to identify their own understandings and approaches within the spectrum of conceptions of sustainability performance that exist, and reconsider whether and how they might effectively address sustainability challenges of businesses. Another suggestion is that b) actors of the sustainability service industry should, once they have identified their role in driving certain conceptions, deal with the conceptions’ inherent limitations to the development of effective solutions. This thesis names limitations to solution finding as part of conceptions in Sections IV.3.4., IV.4.4, IV.5.4, IV.6.4, and IV.7.4. respectively. Furthermore, after classifying their approaches to sustainability performance, as well as their inherent limitations, c) actors of the sustainability service industry need to make their roles and limitations part of public discourses. Public and open dialogue about concurrent practices and limitations will be conducive to make also other actors, like governments, better understand possibilities of

197 sustainability achievements, as well as for what issues solutions need yet to be developed to effectively address business unsustainability.

VI.7. Chapter Summary

This chapter speaks to actors of the sustainability service industry by providing suggestions on how they could improve their practices to enable, more effectively, sustainability performance in businesses. Five implications outline how these actors would need to make themselves aware of the diverse ways in which sustainability performance occurs in businesses; what it means for their own practices in driving certain understandings and their inherent limitations; as well as what it means to address businesses which follow certain or diverse understandings with organizational setting that enhance or disable performance. If followed, the suggestions might be challenging to actors of the sustainability service industry. Further research is needed to apprehend how the five implications can be turned into practices, as well as to understand whether related changes in service practices will enhance businesses’ contributions to the achievement of sustainability objectives.

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Chapter VII

Where to From Here?

VII.1. Summary of Findings and Contributions

In this research project, I have introduced the sustainability service industry as a group of actors that aims to enable sustainability performance in businesses. According to the current state of knowledge in business sustainability scholarship, it is not evident what performance rationales the sustainability service industry uses to address businesses. By looking for assumptive relations between the practices of the sustainability service industry and scholarship on internal determinants of business sustainability, I revealed shared field assumptions of contingent effectiveness. By showing how field assumptions of contingency are yet unattended and unclarified, I contribute to business sustainability scholarship a new viewpoint on its own practices that, to date, do not sufficiently consider the real-world implications of research findings. The research agenda in Chapter II contributes therefore to moving the field toward the development of theory that helps to inform practitioners how to enable, more effectively, sustainability performance in businesses.

I consequently investigated how sustainability performance occurs in businesses through a sample of 21 organizations operating along the automotive value chain. I used a phenomenographic research design that takes as a point of departure the way research participants understand and experience the phenomenon of interest. I thereby show how sustainability performance occurs in businesses in five different ways, ranging from business approaches to complying with the requirements of customers and regulators, to more sophisticated long-term innovation efforts to enable societal sustainability aims. The five conceptions of sustainability performance are presented on the basis of four categories of

199 description, which define the experiences businesses have in accordance with their understandings of sustainability performance. The study revealed further one category of description, the profile of risks businesses face in their organizational environment, as pivotal in developing conceptions of sustainability performance.

These findings provide new perspectives on the subject area of business sustainability scholarship. First, the identified phenomenographic outcome space of five conceptions offers a ‘map’ of business experiences through which scholars can better understand the forms of sustainability performance they study. Second, this map of business experiences can help identify issues in the literature where scholars engaged in what I term ‘conception mismatching,’ i.e., when researched phenomena might not match to the experiences of sampled businesses. Third, the identification of risk profiles as being a more pivotal category of description supports the notion of previous sustainability scholars who suggested risks to be the primary driver of business engagement for sustainable development (e.g., Fineman &

Clarke, 1996; Owen, 2016; Shrivastava, 1995a). The latter finding calls for researchers to devote more attention to how the formation of risks to the genuine business model underlies potentially most of contemporary sustainability engagement of organizations.

The results of the phenomenographic study allowed for a thorough discussion of their implications for a contingency-based theory of sustainability performance in businesses. By focusing on the three major concepts, as well as the research paradigm underlying classical contingency theory, I delineated how the findings of this study enhance our ability to explain sustainability performance in businesses. Future researchers can use the seven propositions I derived from the discussion to inform their research, to inquire into their appropriateness, and to engage further in the development of theory of sustainability performance in businesses.

Based on the findings of this study, I finally formulated a challenging agenda for change in the sustainability service industry. The five implications described will be challenging for

200 these actors to follow, as they partly demand engagement on prospective terrain that researchers might have to comprehend first. Clearly, actors of the sustainability service industry will not be able to meet these challenges alone, but will require further assistance in understanding their own practices in light of the possibilities that exist to enable sustainability performance in businesses.

There are four additional findings of this study that enhance our understanding of business practices in sustainability contexts. First, the results of the phenomenographic study suggest that extractive companies upstream in value chains can follow more sophisticated conceptions of sustainability performance than the downstream automotive industry. This finding, at least, calls for more attention to actual business practices by scholars proposing that problems of sustainability performance are rather an upstream than a downstream phenomenon

(cf. Hartmann & Moeller, 2014; Plambeck et al., 2012; Sheffi & Blanco, 2018; Villena & Gioia,

3018). Second, the results suggest that small and medium-sized businesses can follow more sophisticated conceptions of sustainability performance than large corporations. This finding also calls for scholars to take into account the actual experiences of businesses in engaging for sustainability rather than to make projections of performance based on perceptions and estimations only (cf. Hillary, 2004; Villena & Gioia, 2018; Wickert et al., 2016).

A third interesting and additional finding of this study is that businesses apparently adopt the same logic when aiming to comply with customer or regulatory requirements. So far, a common notion is that compliance with regulatory requirements is a starting point of sustainability engagement for businesses (e.g., Porter & Kramer, 2011; Steger, 2004). The identified first conception with its combination of compliance with regulatory and customer requirements might direct researchers’ attention to a new way of apprehending how clients – either as business clients or as end consumers – drive sustainability performance in businesses through their expectations.

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The fourth additional finding of this study is the uniqueness of businesses which depend on their existence on government decisions, and therefore build a community of destiny with governments to meet societal aims. This form of organizational existence is different from private or public companies operating under free-market conditions, as well as from state- owned enterprises, and has, to my knowledge, not yet been identified in the business sustainability literature. Researchers might want to start to direct more inquiries to this form of organizational existence, particularly if these companies invest in major innovations on their core production technology or products that enable the achievement of societal sustainability aims.

The latter two findings also support the idea that effective regulation is essential to drive sustainability performance in businesses. The phenomenographic outcome space is framed by companies aiming to be accepted as businesses now (Conception I) and in the future

(Conception V). In both cases, governments, through political decisions, laws, and regulations, define the operating space of business existence. Governmental decision makers, like other actors in the sustainability service industry, will thus have to locate the desired optimal sustainability performance of businesses within the spectrum of how businesses can experience this phenomenon, and make corresponding decisions on how best to solve issues of unsustainable development.

VII.2. Limitations of this Research

There are five limitations to this study. First, considering that there are many millions of businesses in the world, a limitation is that this study’s sample of 21 organizations will not capture the diversity of the experiences businesses have worldwide on sustainability performance. At least, one cannot exclude the possibility that there are businesses whose

202 experiences differ from what I identified here as the phenomenographic outcome space of sustainability performance in businesses. It is, for instance, possible that there are organizations whose dominant conception is based on a lower form of sophistication than what I identified here as Conception I. This could be the case for organized crime, for instance, which holds a strong connection to the communities in which it operates (i.e., where it has a strong social performance) while neglecting to abide by laws and regulation (see e.g., Fukuyama, 1995).

However, this study focused on formal businesses to which, to my knowledge, other forms of organizing do not apply, and which were thus not of interest to this study. It is also possible that there are companies which experience a higher form of sustainability performance than what I identified as Conception V. This could be the case where there are markets with perfect information, where customers make purchasing decisions based on the ‘best sustainable products’ available, and where companies innovate under conditions of full information for

‘best sustainable production.’ To my knowledge, such conditions for best sustainable production do not exist by current purchasing/consumption and production practices (see also

Section IV.7.4. on market limitations as part of Conception V). At least, for the industries covered in this study, such conditions do not exist. Other industries might differ. Concerning the five conceptions, the reports of research participants affirm that they are exhaustive, conclusive, and stable (see Section IV.8.2.). Future research will have to reveal how far the here identified five conceptions prevail also in other industrial contexts.

Second, some of the descriptions of conceptions are based on the experiences of a few companies only. This is particularly the case for Conceptions I and V, which were predominantly held by only two companies each in the sample. Also, Conception IV is based on the experiences of three companies only. Certainly, more data to analyze and on which to build these conceptions could reveal further details than what the sampled companies reported in the interviews. However, considering the hermeneutic reading of all interview transcripts,

203 the phenomenographic outcome space, with its four categories of description, is based on all

21 experiences in the sample. Therefore, more data on company experiences for those conceptions could have enriched insights, but would not necessarily lead to different results.

This concerns also the oil and petrochemicals industry, which, unfortunately, I was not able to incorporate into the sample. Experiences from this industry could have enriched the data, but there is no evident reason to suggest that this industry has different experiences than those identified in this study.

A third limitation is that I was not able to fully capture in the interviews how the diverse companies experience innovation for sustainability. Innovation was an appearing theme during field work. In accordance with the idea of theoretical sampling, I aimed to interview leading engineers in companies where previous interviewees named innovation as part of their sustainability experiences. I requested further interviews at four of the participating companies, but only in one case was I granted the opportunity to additionally capture experiences by staff who are in charge of major R&D operations. Innovation appeared as a relevant theme in

Conceptions I, II, IV, and V; the least in Conception III. Future research will have to clarify how far there are further differences in how businesses experience innovation for the achievement of sustainability objectives.

Fourth, this study omitted to investigate the engagement of individuals inside organizations which researchers are interested in as ‘green workplace behavior’ (Francoeur et al., 2019). On three occasions during data collection, interviewees named green office behaviors, like the reduction of paper use for printing, or the switching-off of computers overnight. In all three instances, these examples of attempts by individuals to change behavior of colleagues did not fit into the predominant conceptions held in the organizations, and were also seen as being limited in their effectiveness. This study focused on organizational experiences, as opposed to the experiences of individuals which do not fit into predominantly

204 held conceptions in the organization. From this perspective, there could be aspects of environmental performance in organizations which were not captured in this study.

Researchers interested in the behavior of individuals could, however, take the notion of dominant conceptions of sustainability performance on board for their studies, to better understand if attempts of individuals to change behaviors of colleagues are more effective if these attempts fit into other organizational aims.

The fifth limitation concerns the qualitative nature of this study, as it was not possible for me to incorporate quantitative performance measures to assess differences among participating companies. In this sense, one cannot state that a company predominantly following Conception V is ‘more sustainable’ than a company following a conception with a lower sophistication of sustainability performance. Furthermore, I was also not able to observe how research participants generate sustainability performance in their organizations. The results need thus to be used with some caution regarding their meaning. What they show, however, is that there are companies that are more willing than others to invest in novel solutions to issues of unsustainability if those investments facilitate their operations and existence as a business.

VII.3. Further Opportunities for Future Research

There is a range of study opportunities in relation to the results presented here, and which go beyond the research agenda in Chapter II. First, as conceptions about phenomena are contextual

(Åkerlind, 2005; Marton, 1981; Marton & Pong, 2005; Säljö, 1988; Walsh, 2000), it is worthwhile to explore how far conceptions of sustainability performance in businesses change over time, and what might be the conditions by which these changes take place. For instance, some of the five conceptions presented in this study might have been less pronounced in

205 business practices in the past, i.e., before sustainability discourses took off globally (cf.

Hoffman, 2001). In the same manner, one could reason that future discourses and risks imposed on businesses will lead to changes in the outcome space of conceptions of sustainability performance. Future research can thus repeat this phenomenographic study on sustainability performance in businesses to assess to what extent alterations take place. Studies of the organizational environment, like discourse analysis of stakeholders and actors of the sustainability service industry, can complement phenomenographic studies to better understand the conditions of change in business practices and conceptions thereof.

There is also good reasoning to conduct a further phenomenographic study on sustainability innovation in the near future. A phenomenographic study on innovation for the achievement of sustainability objectives would potentially complement the findings of this study on resource production and manufacturing sectors, as well as the study on sustainability practices in the hospitality sector by Nichols (2018). Both studies identified innovation as being part of the higher conceptions of practices and performance. Yet, as highlighted above as part of limitations to this study, there remains a vast realm to understand and capture the diversity of innovation in businesses as part of sustainability engagement. An interesting sector for a phenomenographic study on sustainability innovation could be the apparel industry with value chains comprising the production and processing of natural as well as synthetic fibers. Such a phenomenographic study on the apparel industry should also aim to include proclaimed sustainability leaders like Patagonia, Inc. (O'Rourke & Strand, 2017; Rattalino, 2018;

Trebilcock, 2009) to help the field better understand where within the spectrum of conceptions this, so far, by scholars supposed leadership is located.

Another opportunity to develop knowledge on the conceptions of sustainability performance identified in this study is to inquire into further details, phenomena, and concepts that appear as part of these conceptions. One way to provide these further insights could be to

206 use case study methods on companies fulfilling criteria as described here by the categories of description for each conception. For instance, as only two companies participating in this study predominantly follow Conception V, and both in different ways through emphasized risk and opportunities of business existence, there is a need to better understand how far this opportunity/threat dichotomy leads to more nuanced differences in approaches to sustainability performance. Likewise, case studies into Conception I could describe and explain further the similarities and differences in companies’ approaches to comply with either customer or regulatory requirements. Also, a case study design could clarify the extent to which sustainability performance as part of Conception V sets the basis for future performance as part of Conception I, as suggested in Figure 8. Furthermore, comparative case studies of, for instance, mining companies following Conception III and IV could show how and why companies have similar approaches to the sustainability performance of peers in the industry, but differ in how they actually enact sustainability performance.

One major point of interest could be to understand how researchers and practitioners can make use of the conceptions identified to drive businesses toward adopting more sophisticated forms of sustainability performance. On the one hand, an implication for the sustainability service industry in Chapter VI suggests that the increase of risks to businesses could trigger the adoption of higher conceptions of sustainability performance. Research would have to accompany such endeavors and clarify how far interventions that increase risks to businesses actually lead to more advanced sustainability performance. On the other hand, pursuance of the idea of developmental phenomenography (Bowden, 2000; Bowden & Green,

2005) and of variation theory (Åkerlind et al., 2014) to enable recipients of education services to adopt more sophisticated conceptions, could endow the field with new means to enable more effectively sustainability performance in businesses. For such purposes, researchers would have to apply methods of educational interventions with phenomenographic analysis in

207 organizations, and seek to understand how best to enable changes in the adoption of conceptions by decisive organizational members. These inquiries would be crucial for the sustainability service industry to further learn what other opportunities exist to drive sustainability performance in businesses.

Considering the model for a contingency theory of sustainability performance in businesses presented in Chapter V, there is research needed to better understand the organizational environment. In particular, it seems to date not clear how stakeholders themselves, including actors of the sustainability service industry, make sense of what business sustainability is, and thus sustainability performance in businesses. Some scholars have already used sense-making as a theoretical lens to understand how businesses frame their sustainability engagement (Basu & Palazzo, 2008; Cramer et al., 2004; Perey, 2015; van der Heijden et al.,

2010). However, if businesses are, in fact, reactive to risk profiles stemming from the organizational environment (see Chapter V), then scholarship also needs to understand sense- making processes of the diversity of stakeholders involved in the creation of these risks.

Stakeholders’ processes of sense-making of what business sustainability is, and thus sustainability performance in businesses, could be conceptualized as antecedents of the formation of sustainability discourses. As part of such inquiries, future researchers could also clarify how aspects of heterogeneity among actors of the sustainability service industry contribute to differences in the sense-making of sustainability performance, as well as in approaches to drive relevant performance in businesses. Accordingly, research could reveal more cues about the creation of risk profiles to the generic business model through sustainability challenges, as well as about the trajectories of societal sustainability transitions one can expect from current practices of businesses that are driven by stakeholders.

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VII.4. Concluding Remarks

Today’s modern societies face a number of severe sustainability challenges that can affect the functioning of life supporting ecosystems (Ripple et al., 2017; Ripple et al., 2020; Rockström et al., 2009). There is widespread agreement that causes of unsustainable development lie in the activities in which humans engage through business organizations (Purser et al., 1995;

Shrivastava, 1995a, 1995b; Throop et al., 1993). Engagement for sustainable development is, nowadays, an inherent part of business practices, but has not yet led to a turn toward effectively addressing issues of business unsustainability (Dyllick & Muff, 2016; Landrum, 2018;

Whiteman et al., 2013).

This thesis provides a new perspective on how business engagement for sustainable development might affect societies’ chances for sustainability transitions. Starting from an argumentation about unclear performance expectations of a sustainability service industry, this study has shown how to better understand sustainability performance in businesses, and, accordingly, how actors of the sustainability service industry should consider changing their own practices for more effective changes in business practices. The five revealed conceptions of sustainability performance in businesses allow researchers and practitioners alike to locate the practices they study and/or promote within a spectrum of performance conceptions. Each of these five conceptions has its benefits in driving performance on sustainability objectives within businesses, but also constraints with regard to the extent of effectiveness societies can expect. Businesses appear to only address sustainability challenges through investments in

R&D that lead to major changes in core production technology and/or products, if the existence of the business itself stands in strong relation to the particular challenge.

While the phenomenographic research design has proven to be valuable for revealing this new perspective on sustainability performance in businesses, it has also an inherent bias

209 that limits its use to depict trajectories for sustainability transitions of societies. As the point of departure in phenomenographic research is the understandings and experiences of research participants about the phenomenon of interest, this research cannot look beyond what solutions there could be other than the existence of business organizations as we know them. The emphasis on the continuance of operations by a genuine business model is distinct throughout the results of the phenomenographic study. In other words, sustainability performance in business appears to serve the maintenance of businesses for efficient and effective operations.

In how far there could be, and should be, other forms of organizing for human purposes than current business models, cannot be subject to a phenomenographic study. The results of this study can be used, however, to re-interpret widespread business engagement for sustainable development, to work on the identified conditions under which businesses engage in the development of novel solutions to sustainability challenges, and as a first structure for a theory that explains sustainability performance in businesses.

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Appendices

Appendix 1

Extended version of Table 4: Researched phenomena in the literature on internal determinants of business sustainability (364 empirical + 46 conceptual peer-reviewed papers)

Explained business Studies Percentage of sustainability phenomena studies in the literature sample Adoption or application of Adams (2002), Adams and Frost (2008), Ahmed et al. (2018), Albelda Pérez et al. (2007), Álvarez-García et al. (2018), 26.6% management tools, Arenas and Ayuso (2016), Arrive and Feng (2018), Banerjee (2001), Battaglia et al. (2016), Bebbington et al. (2009), Bohas mechanisms, and and Poussing (2016), Borland et al. (2016), Bowen et al. (2001), Busco et al. (2018), Cousins et al. (2004), Dalla Via and procedures Perego (2018), Damert and Baumgartner (2018), de Villiers et al. (2016), Delgado-Ceballos et al. (2012), Delmas and Toffel (2008), Domingues et al. (2016), Durach and Wiengarten (2017), Egan and Tweedie (2018), Engert and Baumgartner (2016), Fernández-Gago et al. (2018), Fuente et al. (2017), Gabler et al. (2017), García-Meca and Pucheta-Martínez (2018), George et al. (2016), Ghahramani (2016), Gond et al. (2012), Griffith and Bhutto (2008), Hillary (2004), Hofmann et al. (2018), Jiang et al. (2018), Jovanović and Filipović (2016), Kuzey and Uyar (2017), Labelle et al. (2018), Latan et al. (2018), S. H. Lee and Ha-Brookshire (2018), Leonidou et al. (2017), Lévesque et al. (2018),, J. Li et al. (2017), Lisi (2018), Lodhia and Jacobs (2013), Lozano (2012), Luthra et al. (2016), Kaspersen and Johansen (2016), Kitsikopoulos et al. (2018), Klettner et al. (2014), Majumdar and Sinha (2018), Marco-Fondevila et al. (2018), Martens and Carvalho (2016), Massa et al. (2015), Mohammadfam et al. (2016), Mohanty (2018), Mokhtar et al. (2016), Moktadir et al. (2018), Morioka and Carvalho (2016), Murillo-Luna et al. (2007), Murmura et al. (2018), Mustapha et al. (2017), Mzembe et al. (2016), Nejati et al. (2017), Neri et al. (2018), Nikolaou et al. (2018), Oelze et al. (2016), Ololade and Rametse (2018), Ormazabal et al. (2018), Pagell and Wu (2009), Panwar et al. (2016), Parker and Chung (2018), Pasricha et al. (2018), Passetti and Tenucci (2016), Paulraj et al. (2017), Pedersen et al. (2017), Pedersen et al. (2018), Pertusa-Ortega et al. (2018), Pipatprapa et al. (2017), Preuss (2005), Pucheta-Martínez and López-Zamora (2018), Rao and Tilt (2016), Rebelo et al. (2016), Richert (2017), Rodríguez-Ariza et al. (2017), Salim et al. (2018), Sarvaiya et al. (2018), Schnittfeld and Busch (2016), Searcy et al. (2008), Shafer and Lucianetti (2018), Sharma (2000), Sharma and Vredenburg (1998), Simas et al. (2013), Stevens et al. (2005), Stubbs and Higgins (2014), Sundin and Brown (2017), Thakker and Rane (2018), Thijssens et al. (2016), Tseng et al. (2018), van Bommel (2011), Vieira et al. (2017), Walker et al. (2008), Z. Wang et al. (2016), Weaver et al. (1999a,b), Welford and Frost (2006), Witjes et al. (2017), Zhang et al. (2017), Zhu et al. (2007) Perceptions of leadership, Aguilera et al. (2007), Allais et al. (2017), Alonso-Almeida et al. (2017), Aragón et al. (2016), Arnold (2017), Baumgartner 16.1% reputation, performance, and Rauter (2017), Baselga-Pascual et al. (2018), Bhambri and Sonnenfeld (1988), Blome et al. (2017), Borland et al.

211 etc. resulting from (2016), Brockhaus et al. (2017), Caldera et al. (2018), Carroll (1979), C. H. Chang (2018), Dahlmann et al. (2008), Delmas sustainable engagement and Toffel (2004), Dobes et al. (2017), Dooley (2017), Durdyev et al. (2018), Formentini and Taticchi (2016), Ghahramani (2016), Hafenbrädl and Waeger (2017), Hemingway and Maclagan (2004), Hemingway and Starkey (2018), Henriques and Catarino (2016), Husted (2000), Jabbour and de Sousa Jabbour (2016), Jones et al. (2017), Latan et al. (2018), X. Li and Hamblin (2016), Linnenluecke and Griffiths (2010), Littlewood et al. (2018), Longoni and Cagliano (2018), Lozano (2015), Lozano and von Haartman (2018), Kabongo and Boiral (2017), Khan et al. (2018), Kitsikopoulos et al. (2018), Maak et al. (2016), Mangla et al. (2017), Marco-Fondevila et al. (2018), Martens and Carvalho (2016), I. K. Mitchell and Walinga (2017), R. K. Mitchell et al. (2016), Nason et al. (2018), Ormazabal, Rich, et al. (2017), Ormazabal, Sarriegi, et al. (2017), Osagie et al. (2016), Pacheco et al. (2018), Pedersen et al. (2018), Poldner et al. (2017), Rao and Tilt (2016), Rauter et al. (2017), Rodrigues et al. (2017), Schaltegger and Burritt (2018), Shevchenko et al. (2016), Shrivastava (1995), Siyambalapitiya et al. (2018), Sroufe (2017), Sully de Luque et al. (2008), Tate and Bals (2018), Z. Wang et al. (2018), Wickert et al. (2017), Wiesner et al. (2018), Wood (1991), York et al. (2016) Variable constructs of Baselga-Pascual et al. (2018), Bernard et al. (2018), Y. K. Chang et al. (2017), Chassé and Courrent (2018), Cuadrado- 8.5% combined social and Ballesteros et al. (2017), Cui et al. (2018), Elijido-Ten (2017), Galbreath (2016, 2017, 2018), Gold et al. (2017), Gupta et al. environmental (2017), Jonkutė and Staniškis (2016), Labelle et al. (2018), Lamb and Butler (2018), Lau et al. (2016),21 Maas (2018), performance Macaulay et al. (2018), Maletič et al. (2016), Mishra (2017), Mousavi et al. (2018), Muller and Kolk (2010), Nadeem et al. (2017), Oh et al. (2017), Pasricha et al. (2018), Petrenko et al. (2016), Rothenberg et al. (2017), Rodríguez-Ariza et al. (2017), Shahzad et al. (2016), Waddock and Graves (1997), Waldman et al. (2006), Yasser et al. (2017), J. Zhang et al. (2018), Y. Zhang et al. (2018), Zhao et al. (2016) Variable constructs of Aboelmaged (2018), Ahmed et al. (2018), Ardito and Dangelico (2018), Bernal-Conesa et al. (2017), Cai and Li (2018), C. 8.3% environmental H. Chang (2016, 2018) Delmas and Pekovic (2018), Dixon-Fowler et al. (2017), Dubey et al. (2017), Durach and performance Wiengarten (2017), Glass et al. (2016), Graafland (2016), Huang and Li (2017), Klassen and Whybark (1999), Liao and Long (2018), Littlewood et al. (2018), Longoni et al. (2018), Luthra et al. (2016), Masri and Jaaron (2017), Mohanty (2018), Paulraj et al. (2017), Phan et al. (2018), Reimer et al. (2018), Shaukat et al. (2016), Song and Yu (2018), Sugita and Takahashi (2015), Tabassi et al. (2016), Testa et al. (2016), Testa, Iraldo, et al. (2018), Walls and Berrone (2017), Yusof et al. (2017), Zaid et al. (2018), Zhu et al. (2007) Environmental technology Brockhaus et al. (2017), Brones et al. (2017), Chauhan and Singh (2018), Chugh et al. (2016), Coles et al. (2016), Dooley 7.1% and/or practice adoption (2017), Franco (2017), Garrone et al. (2018), Govindan et al. (2016), Kanda et al. (2016), Kong et al. (2016), Kubule et al. (without use of variable (2016), Laguir et al. (2016), Lim et al. (2017), Mak et al. (2018), Meath et al. (2016), Nikolaou et al. (2018), Ormazabal et constructs) al. (2018), Pace (2016), Paul et al. (2017), Penz and Polsa (2018), Pinheiro et al. (2018), Ramanathan et al. (2017), Resta et al. (2016), Singh and Sushil (2017), Sureeyatanapas et al. (2018), Tseng et al. (2018), Veleva et al. (2017), Zailani et al. (2017) Willingness, commitment, Annunziata et al. (2017), Banerjee (2001), Bode and Singh (2018), Boiral and Heras-Saizarbitoria (2017), Brickson (2007), 7.1% orientations, Buil-Fabregà et al. (2017), Busco et al. (2018), Collier and Esteban (2007), S. Cooper et al. (2017), Hart (1995), Jansson et understandings, etc. for al. (2017), Jardon and Dasilva (2017), Jiang et al. (2018), Jurkiewicz and Giacalone (2016), J. W. Lee et al. (2018), S.-Y. sustainable engagement Lee (2008), Maleksaeidi et al. (2018), Paillé et al. (2016), Pellegrini et al. (2018), Raineri and Paillé (2016), Rodell et al. (2017), Quazi (2003), Sáez-Martínez et al. (2016), Shafer and Lucianetti (2018), Shahbazi et al. (2016), Smith et al. (2016), Sonenshein (2016), Taylor and Curtis (2018), L. Zhang et al. (2018)

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Variable constructs of Afsar et al. (2018), Baker et al. (2006), Boiral et al. (2018), Chen et al. (2016), R. W. Cooper et al. (2000), De Roeck and 5.1% ethical behavior, corporate Farooq (2018), Desai and Kouchaki (2017), Graves and Sarkis (2018), Lin et al. (2018), Ma’ayan and Carmeli (2016), citizenship, or citizenship Maignan et al. (1999), Mo and Shi (2017), Newman et al. (2017), Peake et al. (2017), Razzaque and Hwee (2002), Sguera et behavior for the al. (2018), Tosti-Kharas et al. (2017), Waldman et al. (2017), Y.-D. Wang and Sung (2016), Y. Wang (2018), Way et al. environment (2018) Content of annual or Adnan et al. (2018), Bowman and Haire (1975), Campbell (2000), Cowen et al. (1987), Cucari et al. (2018), Fuente et al. 4.9% sustainability reports (2017), García-Sánchez and Martínez-Ferrero (2017), Giannarakis et al. (2018), Helfaya and Moussa (2017), Hoang et al. (2018), Hussain et al. (2018), Jaggi et al. (2018), Jizi (2017), Kolsi and Attayah (2018), Kuzey and Uyar (2017), Lau et al. (2016), Mahmood and Orazalin (2017), Muttakin et al. (2018), Pucheta-Martínez and Gallego-Álvarez (2018), Pucheta- Martínez and López-Zamora (2018) Decision-making Aguilera and Jackson (2003), Alt and Craig (2016), Bansal et al. (2018), Bowen (2002), Fok et al. (2016), R. K. Mitchell et 3.4% al. (2016), Musbah et al. (2016), Nikolaou et al. (2018), Park and Stoel (2005), Peillex and Ureche-Rangau (2016), Schaltenbrand et al. (2018), Smith et al. (2016), Sonenshein (2016), Terlaak et al. (2018) Variable constructs of Blome et al. (2017), Damert and Baumgartner (2018), Darko et al. (2018), del Mar Miras-Rodriguez et al. (2018), Dubey et 3.4% environmental technology al. (2017), Liao and Long (2018), Littlewood et al. (2018), Luthra et al. (2016), Nejati et al. (2017), Panwar et al. (2016), and/or practice adoption Pasricha et al. (2018), Pedersen et al. (2017), Pedersen et al. (2018), Rodriguez and Wiengarten (2017) Strategic integration Acquier et al. (2018), Adams and Frost (2008), Albelda Pérez et al. (2007), Battaglia et al. (2016), Bonn and Fisher (2011), 2.9% Gandhi et al. (2018), Gond et al. (2012), Kurucz et al. (2017), Simas et al. (2013), Sundin and Brown (2017), Waldman et al. (2006), Weerts et al. (2018) Variable constructs of Agle et al. (1999), Bacq and Eddleston (2018), Bamgbade et al. (2017), Cho et al. (2017), Deckop et al. (2006), Johnson and 2.7% social performance Greening (1999), Luthra et al. (2016), Panwar et al. (2017), Reimer et al. (2018), Shaukat et al. (2016), Zaid et al. (2018) Issue-specific Carmichael et al. (2018), Coles et al. (2016), Dahlmann et al. (2017), Haque and Ntim (2018), Kubule et al. (2016), Melville 2.4% environmental et al. (2017), Pirani and Arafat (2016), Resta et al. (2016), Schulze and Heidenreich (2017), Shahbazi et al. (2016) performance Product development Alänge et al. (2016), Dangelico (2017), de Medeiros et al. (2018), Filimonau and Krivcova (2017), Melander (2017, 2018), 2.4% Ortiz-de-Mandojana et al. (2016), Poldner et al. (2017), Sihvonen and Partanen (2016), Zimmerling et al. (2017) Propensities to innovate or Horbach and Jacob (2018), Inigo and Albareda (2016), Jakobsen and Clausen (2016), Liao (2018), Lopes et al. (2017), 2.2% to adopt innovative Mothe and Nguyen-Thi (2017), Peng and Liu (2016), Scarpellini et al. (2018), Zhou et al. (2018) practices Adoption or Abuzeinab et al. (2017), Kurucz et al. (2017), Rajala et al. (2016), Rauter et al. (2017), Reficco and Gutiérrez (2016), 2.0% implementation of Reficco et al. (2018), Roome and Louche (2016), Wry and York (2017) sustainable business models Philanthropy Kim and Kim (2016), Muller and Whiteman (2016), Oh et al. (2018), Panwar et al. (2016, 2017), Pasricha et al. (2018), 2.0% Peake et al. (2017), Peillex and Ureche-Rangau (2016) Development, adoption, or Delmas and Toffel (2008), Glennie and Lodhia (2013), S. H. Lee and Ha-Brookshire (2018), Morais and Silvestre (2018), 1.7% implementation of Panwar et al. (2016), Ramus and Steger (2000), D. D. Wang et al. (2018) initiatives or partnerships

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Organizational Busco et al. (2018), Fernández and Camacho (2016), Passetti et al. (2018), Rego et al. (2017), Witjes et al. (2017), Zollo et 1.5% development to more al. (2013) sustainable engagement Organizational Adams (2017), Azmat and Rentschler (2017), Bansal and Roth (2000), Bansal (2003), Perrault and Clark (2016), 1.5% responsiveness Wijethilake et al. (2017) Responsible buying Cambra-Fierro et al. (2008), Drumwright (1994), Maignan and McAlister (2003), Park and Stoel (2005), Rahbauer et al. 1.2% (2016) Issue-specific social Belot and Waxin (2017), Bouten and Hoozée (2016), Briscoe and Joshi (2017), Gupta et al. (2017) 1.0% performance Adaptation to climate Galbreath et al. (2016), Gasbarro and Pinkse (2016), Herrmann and Guenther (2017) 0.7% change Issue-specific ethical Ding et al. (2016), Karmann et al. (2016), Taylor and Curtis (2018) 0.7% performance Other document content Adnan et al. (2018), Dalla Via and Perego (2018), Hanna et al. (2000) 0.7% Participation in Ben-Amar et al. (2017), Eberhardt-Toth (2017), Hsu and Chang (2017) 0.7% sustainability indices Perceptions of ethical Ciocirlan (2017), Methot et al. (2017), Yoshikawa and Hu (2017) 0.7% behavior Other disclosure practices Liu and Zhang (2017), McBrayer (2018) 0.5% Results in rankings by Calza et al. (2016), Landry et al. (2016) 0.5% third parties Development of Greening and Gray (1994) 0.2% organizational structures Disaster control Seele (2017) 0.2% Investments into D. D. Wang et al. (2018) 0.2% technology and/or practice adoptions Perceptions of Testa, Boiral, et al. (2018) 0.2% organizational benefits Personal health and safety Akter et al. (2018) 0.2% behavior Variable constructs of Parisi (2013) 0.2% stakeholder involvement and perceptions

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Appendix 2

Extended version of Table 5: Data sources in the literature on internal determinants of business sustainability (364 empirical peer-reviewed papers)

Data sources in research on Studies Percentage of internal determinants of studies in the business sustainability literature sample Estimations and perceptions Aboelmaged (2018), Afsar et al. (2018), Ahmed et al. (2018), Álvarez-García et al. (2018), Akter et al. (2018), Alonso- 48.6% by company staff in surveys Almeida et al. (2017), Annunziata et al. (2017), Arrive and Feng (2018), Bacq and Eddleston (2018), Baker et al. (2006), Bamgbade et al. (2017), Belot and Waxin (2017), Bernal-Conesa et al. (2017), Bhambri and Sonnenfeld (1988), Blome et al. (2017), Bode and Singh (2018), Bohas and Poussing (2016), Boiral et al. (2018), Bowen et al. (2001), Buil-Fabregà et al. (2017), Cai and Li (2018), Cambra-Fierro et al. (2008), C. H. Chang (2016, 2018), Chassé and Courrent (2018), Chugh et al. (2016), R. W. Cooper et al. (2000), Dahlmann et al. (2008), Dangelico (2017), Darko et al. (2018), de Medeiros et al. (2018), De Roeck and Farooq (2018), del Mar Miras-Rodriguez et al. (2018), Delgado-Ceballos et al. (2012), Delmas and Pekovic (2018), Delmas and Toffel (2008), Desai and Kouchaki (2017), Ding et al. (2016), Domingues et al. (2016), Dubey et al. (2017), Durach and Wiengarten (2017), Durdyev et al. (2018), Elijido-Ten (2017), Fok et al. (2016), Galbreath (2018), Galbreath et al. (2016), Gasbarro and Pinkse (2016), Gold et al. (2017), Graafland (2016), Graves and Sarkis (2018), Greening and Gray (1994), Griffith and Bhutto (2008), Hafenbrädl and Waeger (2017), Henriques and Catarino (2016), Herrmann and Guenther (2017), Hillary (2004), Horbach and Jacob (2018), Huang and Li (2017), Jakobsen and Clausen (2016), Jansson et al. (2017), Jardon and Dasilva (2017), Jiang et al. (2018), Jonkutė and Staniškis (2016), Jovanović and Filipović (2016), Karmann et al. (2016), Khan et al. (2018), Kim and Kim (2016), Klassen and Whybark (1999), Kong et al. (2016), Latan et al. (2018), J. W. Lee et al. (2018), S. H. Lee and Ha-Brookshire (2018), S.- Y. Lee (2008), Leonidou et al. (2017), X. Li and Hamblin (2016), Liao (2018), Liao and Long (2018), Lin et al. (2018), Lisi (2018), Littlewood et al. (2018), Longoni et al. (2018), Lozano and von Haartman (2018), Luthra et al. (2016), Ma’ayan and Carmeli (2016), Maignan et al. (1999), Majumdar and Sinha (2018), Mak et al. (2018), Maleksaeidi et al. (2018), Maletič et al. (2016), Marco-Fondevila et al. (2018), Martens and Carvalho (2016), Masri and Jaaron (2017), Melville et al. (2017), Mo and Shi (2017), Mohammadfam et al. (2016), Mohanty (2018), Mokhtar et al. (2016), Mothe and Nguyen-Thi (2017), Mousavi et al. (2018), Muller and Kolk (2010), Murillo-Luna et al. (2007), Murmura et al. (2018), Musbah et al. (2016), Nejati et al. (2017), Newman et al. (2017), Nikolaou et al. (2018), Ololade and Rametse (2018), Ormazabal, Rich, et al. (2017), Ormazabal, Sarriegi, et al. (2017), Ormazabal et al. (2018), Pacheco et al. (2018), Paillé et al. (2016), Panwar et al. (2016, 2017), Parisi (2013), Park and Stoel (2005), Parker and Chung (2018), Pasricha et al. (2018), Passetti et al. (2018), Passetti and Tenucci (2016), Paul et al. (2017), Paulraj et al. (2017), Peake et al. (2017), Pedersen et al. (2017), Pedersen et al. (2018), Pellegrini et al. (2018), Peng and Liu (2016), Pertusa-Ortega et al. (2018), Phan et al. (2018), Pipatprapa et al. (2017), Pirani and Arafat (2016), Quazi (2003), Ramus and Steger (2000), Raineri and Paillé (2016), Razzaque and Hwee (2002), Rodell et al. (2017), Rodriguez and Wiengarten (2017), Sáez-Martínez et al. (2016), Salim et al. (2018), Scarpellini et al. (2018), Schulze and Heidenreich (2017), Sguera et al. (2018), Shafer and

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Lucianetti (2018), Sharma (2000), Sharma and Vredenburg (1998), Sihvonen and Partanen (2016), Siyambalapitiya et al. (2018), Song and Yu (2018), Sureeyatanapas et al. (2018), Stevens et al. (2005), Sully de Luque et al. (2008), Tabassi et al. (2016), Taylor and Curtis (2018), Testa, Boiral, et al. (2018), Testa et al. (2016), Testa, Iraldo, et al. (2018), Thakker and Rane (2018), Tosti-Kharas et al. (2017), Tseng et al. (2018), van Bommel (2011), Veleva et al. (2017), Waldman et al. (2006), Waldman et al. (2017), Y.-D. Wang and Sung (2016), Y. Wang (2018), Z. Wang et al. (2018), D. D. Wang et al. (2018), Z. Wang et al. (2016), Way et al. (2018), Weaver et al. (1999a,b), Yusof et al. (2017), Zaid et al. (2018), Zailani et al. (2017), L. Zhang et al. (2018), Zhou et al. (2018), Zhu et al. (2007) Narratives and reports by Abuzeinab et al. (2017), Acquier et al. (2018), Adams (2002), Adams (2017), Adams and Frost (2008), Alänge et al. 33.0% company staff in interviews (2016), Albelda Pérez et al. (2007), Allais et al. (2017), Aragón et al. (2016), Arenas and Ayuso (2016), Arnold (2017), Azmat and Rentschler (2017), Banerjee (2001), Bansal and Roth (2000), Bansal (2003), Battaglia et al. (2016), Bebbington et al. (2009), Bhambri and Sonnenfeld (1988), Bode and Singh (2018), Borland et al. (2016), Bouten and Hoozée (2016), Bowen et al. (2001), Bowen (2002), Brockhaus et al. (2017), Brones et al. (2017), Busco et al. (2018), Caldera et al. (2018), Cambra-Fierro et al. (2008), Chauhan and Singh (2018), Coles et al. (2016), S. Cooper et al. (2017), Dahlmann et al. (2008), de Villiers et al. (2016), Dobes et al. (2017), Drumwright (1994), Egan and Tweedie (2018), Engert and Baumgartner (2016), Fernández and Camacho (2016), Formentini and Taticchi (2016), Franco (2017), Filimonau and Krivcova (2017), Gabler et al. (2017), Garrone et al. (2018), George et al. (2016), Glennie and Lodhia (2013), Ghahramani (2016), Griffith and Bhutto (2008), Hemingway and Starkey (2018), Hillary (2004), Hofmann et al. (2018), Hsu and Chang (2017), Jonkutė and Staniškis (2016), Kabongo and Boiral (2017), Kanda et al. (2016), Kaspersen and Johansen (2016), Kitsikopoulos et al. (2018), Klassen and Whybark (1999), Kubule et al. (2016), Laguir et al. (2016), Lévesque et al. (2018), Lodhia and Jacobs (2013), Longoni and Cagliano (2018), Lopes et al. (2017), Lozano (2015), Majumdar and Sinha (2018), Mak et al. (2018), Mangla et al. (2017), Martens and Carvalho (2016), Masri and Jaaron (2017), Massa et al. (2015), Melander (2018), Morais and Silvestre (2018), Morioka and Carvalho (2016), Mzembe et al. (2016), Oelze et al. (2016), Ololade and Rametse (2018), Ormazabal, Rich, et al. (2017), Ormazabal, Sarriegi, et al. (2017), Osagie et al. (2016), Pace (2016), Pacheco et al. (2018), Pagell and Wu (2009), Parker and Chung (2018), Passetti et al. (2018), Passetti and Tenucci (2016), Pedersen et al. (2017), Penz and Polsa (2018), Pinheiro et al. (2018), Preuss (2005), Rahbauer et al. (2016), Rajala et al. (2016), Ramanathan et al. (2017), Rauter et al. (2017), Rebelo et al. (2016),, Rego et al. (2017), Reficco and Gutiérrez (2016), Reficco et al. (2018), Resta et al. (2016), Roome and Louche (2016), Sarvaiya et al. (2018), Schnittfeld and Busch (2016), Shahbazi et al. (2016), Sharma and Vredenburg (1998), Singh and Sushil (2017), Siyambalapitiya et al. (2018), Stubbs and Higgins (2014), Sroufe (2017), Sundin and Brown (2017), Tate and Bals (2018), Thijssens et al. (2016), Tseng et al. (2018), Veleva et al. (2017), Vieira et al. (2017), Walker et al. (2008), Welford and Frost (2006), Wiesner et al. (2018), Wijethilake et al. (2017), York et al. (2016), Zhou et al. (2018), Zimmerling et al. (2017) Other documents, Acquier et al. (2018), Adnan et al. (2018), Alänge et al. (2016), Aragón et al. (2016), Arenas and Ayuso (2016), Bansal 18.4% newspapers, studies, and Roth (2000), Bansal (2003), Belot and Waxin (2017), Borland et al. (2016), Bouten and Hoozée (2016), Briscoe and websites, reports etc. Joshi (2017), Brones et al. (2017), Busco et al. (2018), Cho et al. (2017), Coles et al. (2016), Damert and Baumgartner (2018), de Villiers et al. (2016), Dooley (2017), Drumwright (1994), Engert and Baumgartner (2016), Greening and Gray (1994), Gupta et al. (2017), Hanna et al. (2000), Hillary (2004), Kanda et al. (2016), Kaspersen and Johansen (2016), Klettner et al. (2014), Kolsi and Attayah (2018), Labelle et al. (2018), Laguir et al. (2016), Landry et al. (2016), Lévesque et al. (2018), Longoni and Cagliano (2018), Lopes et al. (2017), Lozano (2012), Mangla et al. (2017), Marco-Fondevila et

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al. (2018), Martens and Carvalho (2016), Meath et al. (2016), Mohammadfam et al. (2016), Morais and Silvestre (2018), Morioka and Carvalho (2016), Muller and Whiteman (2016), Mzembe et al. (2016), Oelze et al. (2016), Pacheco et al. (2018), Parker and Chung (2018), Passetti et al. (2018), Pucheta-Martínez and López-Zamora (2018), Preuss (2005), Rajala et al. (2016), Rauter et al. (2017), Reficco and Gutiérrez (2016), Reficco et al. (2018), Roome and Louche (2016), Schaltenbrand et al. (2018), Schnittfeld and Busch (2016), Schulze and Heidenreich (2017), Shahbazi et al. (2016), Sharma and Vredenburg (1998), Sundin and Brown (2017), Tate and Bals (2018), van Bommel (2011), Vieira et al. (2017), Wijethilake et al. (2017), York et al. (2016), J. Zhang et al. (2018) Commercial third-party Adnan et al. (2018), Ardito and Dangelico (2018), Agle et al. (1999), Baselga-Pascual et al. (2018), Belot and Waxin 18.1% databases (e.g., rating (2017), Ben-Amar et al. (2017), Bernard et al. (2018), Calza et al. (2016), Cho et al. (2017), Cuadrado-Ballesteros et al. agencies) (2017), Cucari et al. (2018), Cui et al. (2018), Damert and Baumgartner (2018), Deckop et al. (2006), Dixon-Fowler et al. (2017), Eberhardt-Toth (2017), Elijido-Ten (2017), Fernández-Gago et al. (2018), Galbreath (2016, 2017, 2018), García- Meca and Pucheta-Martínez (2018), García-Sánchez and Martínez-Ferrero (2017), Glass et al. (2016), Gupta et al. (2017), Haque and Ntim (2018), Helfaya and Moussa (2017), Jizi (2017), Johnson and Greening (1999), Kuzey and Uyar (2017), Labelle et al. (2018), Lamb and Butler (2018), Landry et al. (2016), Lau et al. (2016), J. Li et al. (2017), Liu and Zhang (2017), Maas (2018), Macaulay et al. (2018), Marco-Fondevila et al. (2018), McBrayer (2018), Melville et al. (2017), Mishra (2017), Nadeem et al. (2017), Oh et al. (2017), Oh et al. (2018), Ortiz-de-Mandojana et al. (2016), Peillex and Ureche-Rangau (2016), Perrault and Clark (2016), Petrenko et al. (2016), Pucheta-Martínez and Gallego-Álvarez (2018), Reimer et al. (2018), Rodríguez-Ariza et al. (2017), Rothenberg et al. (2017), Schulze and Heidenreich (2017), Shahzad et al. (2016), Shaukat et al. (2016), Sugita and Takahashi (2015), Terlaak et al. (2018), Waddock and Graves (1997), Waldman et al. (2006), Walls and Berrone (2017), D. D. Wang et al. (2018), Yasser et al. (2017), J. Zhang et al. (2018), Y. Zhang et al. (2018), Zhao et al. (2016) Public company reports Acquier et al. (2018), Adnan et al. (2018), Aragón et al. (2016), Ardito and Dangelico (2018), Belot and Waxin (2017), 11.8% Boiral and Heras-Saizarbitoria (2017), Bowman and Haire (1975), Campbell (2000), Cowen et al. (1987), Dalla Via and Perego (2018), Damert and Baumgartner (2018), Eberhardt-Toth (2017), Fuente et al. (2017), García-Meca and Pucheta- Martínez (2018), Helfaya and Moussa (2017), Hoang et al. (2018), Hussain et al. (2018), Jaggi et al. (2018), Kanda et al. (2016), Kolsi and Attayah (2018), Kuzey and Uyar (2017), Landry et al. (2016), Klettner et al. (2014), Lodhia and Jacobs (2013), Longoni and Cagliano (2018), Mahmood and Orazalin (2017), Morais and Silvestre (2018), Morioka and Carvalho (2016), Muller and Whiteman (2016), Muttakin et al. (2018), Oelze et al. (2016), Passetti et al. (2018), Pucheta- Martínez and López-Zamora (2018), Rajala et al. (2016), Rauter et al. (2017), Reficco et al. (2018), Roome and Louche (2016), Sundin and Brown (2017), Thijssens et al. (2016), Veleva et al. (2017), Yasser et al. (2017), J. Zhang et al. (2018), Zhao et al. (2016) Observations, note-taking Aragón et al. (2016), Arnold (2017), Bansal and Roth (2000), Bansal (2003), Battaglia et al. (2016), Bebbington et al. 9.9% during meetings, workshops, (2009), Bouten and Hoozée (2016), Brones et al. (2017), Busco et al. (2018), Coles et al. (2016), de Villiers et al. (2016), site visits etc. Dobes et al. (2017), Drumwright (1994), Engert and Baumgartner (2016), Henriques and Catarino (2016), Jonkutė and Staniškis (2016), Kabongo and Boiral (2017), Klassen and Whybark (1999), Kubule et al. (2016), Lévesque et al. (2018), Lopes et al. (2017), Massa et al. (2015), Morais and Silvestre (2018), Mzembe et al. (2016), Pagell and Wu (2009), Poldner et al. (2017), Reficco et al. (2018), Resta et al. (2016), Richert (2017), Roome and Louche (2016), Shahbazi et al. (2016), Sundin and Brown (2017), Thakker and Rane (2018), Wijethilake et al. (2017), Witjes et al. (2017), Zimmerling et al. (2017)

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Narratives and reports by Abuzeinab et al. (2017), Azmat and Rentschler (2017), Battaglia et al. (2016), Bhambri and Sonnenfeld (1988), Chauhan 6.3% stakeholders or experts in and Singh (2018), S. Cooper et al. (2017), Glennie and Lodhia (2013), Lévesque et al. (2018), Lozano (2015), Moktadir et interviews al. (2018), Mzembe et al. (2016), Pace (2016), Poldner et al. (2017), Rahbauer et al. (2016), Rajala et al. (2016), Reficco and Gutiérrez (2016), Reficco et al. (2018), Singh and Sushil (2017), Sundin and Brown (2017), Tate and Bals (2018), Wijethilake et al. (2017), York et al. (2016), Zimmerling et al. (2017) Stakeholder or expert Carmichael et al. (2018), Gandhi et al. (2018), Govindan et al. (2016), Hoang et al. (2018), Klassen and Whybark (1999), 4.9% consultations Lim et al. (2017), Majumdar and Sinha (2018), Maleksaeidi et al. (2018), Mangla et al. (2017), Mohanty (2018), Ormazabal, Rich, et al. (2017), Ormazabal, Sarriegi, et al. (2017), Resta et al. (2016), Rodrigues et al. (2017), Searcy et al. (2008), Sureeyatanapas et al. (2018), Thakker and Rane (2018), Z. Wang et al. (2016) Non-commercial third-party Belot and Waxin (2017), Ben-Amar et al. (2017), Briscoe and Joshi (2017), Calza et al. (2016), Y. K. Chang et al. (2017), 4.4% databases Chen et al. (2016), Dahlmann et al. (2017), Ding et al. (2016), Fernández-Gago et al. (2018), Giannarakis et al. (2018), Gupta et al. (2017), Horbach and Jacob (2018), Klassen and Whybark (1999), Oh et al. (2018), Peake et al. (2017), Terlaak et al. (2018) Site-specific performance Coles et al. (2016), Kubule et al. (2016), Pirani and Arafat (2016), Resta et al. (2016), Shahbazi et al. (2016) 1.4% measurements Business-unrelated study Desai and Kouchaki (2017), Sguera et al. (2018) 0.5% participants Electrophysiological data of Waldman et al. (2017) 0.3% study participants Estimations and perceptions Schaltenbrand et al. (2018) 0.3% by company staff in experiments Estimations and perceptions Domingues et al. (2016) 0.3% by experts in surveys

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Appendix 3

Ethics approval letter by the University of Queensland

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Appendix 4

Project information sheet provided to research participants

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Appendix 5

Outline of the semi-structured interviews

First set of questions:

1) What is your organization’s so far most outstanding sustainability achievement?

The following questions 2) to 5) were repeated for each achievement interviewees named as part of their answer to question 1):

2) How did your organization reach this achievement? 3) Why did your organization decide to work on this particular issue? 4) Why did your organization choose this approach to the issue? 5) Is there anything your organization could have done better with regards to this achievement?

Supplementary question at the end of the first set, if not named yet before:

6) What was an unsuccessful approach to a sustainability issue in your organization, if any?

Second set of questions:

7) What is the meaning of sustainability performance in your organization?

Supplementary question at the end of the second set, if the answer to question 7) did not evidently reflect the previous interview content:

8) How do you see your organization’s understanding of sustainability performance reflected in your experienced sustainability achievements?

Follow-up questions that were used throughout the interview to deepen the content and interviewees’ reflections on what has been said: a) What do you mean by…? b) Can you please explain further…? c) Can you please provide an(other) example for…?

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Endnotes

1) http://www.ecolabelindex.com, accessed on 17th December 2019.

2) http://www.oecd.org/corporate/mne/mining.htm, accessed on 18th June 2019.

3) https://www.sec.gov/opa/Article/2012-2012-163htm---related-materials.html, accessed on 18th June 2019. Despite the ongoing suspension of Section 1502 of the Dodd-Frank Act by the U.S. Securities and Exchange Commission, affected companies maintain conflict minerals due diligence and reporting practices; see e.g., https://www.intelligize.com/why-the-conflict-minerals-rule-refuses-to-die/, accessed on 18th June 2019.

4) http://ec.europa.eu/trade/policy/in-focus/conflict-minerals-regulation/regulation- explained/, accessed on 18th June 2019.

5) https://drivesustainability.org/wp-content/uploads/2018/07/Material-Change_VF.pdf, accessed on 18th June 2019.

6) https://www.ey.com/Publication/vwLUAssets/EY-Are-you-ready-for-conflict-minerals- reporting/$FILE/EY-Are-you-ready-for-conflict-minerals-reporting.pdf, accessed on 18th June 2019.

7) https://www.rcsglobal.com/, accessed on 18th June 2019.

8) https://enoughproject.org/reports/powering-down-corruption, accessed on 18th June 2019.

9) https://www.apple.com/supplier-responsibility/pdf/Apple-Conflict-Minerals-Report.pdf, accessed on 18th June 2019.

10) https://investor.gm.com/static-files/f995efa6-1046-4ede-8ff6-97a402ead20e, accessed on 18th June 2019.

11) See e.g., http://www.intertek.com/conflictminerals/, accessed on 18th June 2019; https://www.scsglobalservices.com/services/conflict-minerals-reporting, accessed on 18th June 2019; or https://www.tuv.com/world/en/conflict-minerals-solution-service.html, accessed on 18th June 2019.

12) In reviewing the literature published in the Journal of Cleaner Production, only sociological articles of business management and organization studies were considered for inclusion in the sample.

13) The tables contain multiple entries for studies to which more than one category applies.

14) Throughout this research project, I communicated with staff from up to 100 different business organizations; no one ever opposed this view; many confirmed or bemoaned inadequacies of sustainable supply chain management practices; only one representative from the oil industry claimed to not understand what this research is about.

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15) One of the initial contacts suggested adding cobalt to this list due to its relevancy for the industry while related public pressure was at a peak. However, this suggestion was not followed, as the discussions of cobalt sourcing concentrate on business practices in the DRC. To incorporate businesses operating in the DRC into this study seemed impractical because of budget constraints, amongst other reasons.

16) https://www.vda.de/en/association/members/manufacturer-group-III.html, accessed on 20th July 2017.

17) While the actual number of sampled businesses is 21, Table 7, as well as Table 10, show 22 entries. One business captures two categories in these tables. To maintain anonymity for research participants, the double assignment is not resolved.

18) This applies also to the initial intention to spend up to four days at each participating company, as laid out in the project information sheet (see Appendix 4). Right from the beginning of the fieldwork, it became evident that the addressed companies are not interested in having a researcher visiting for multiple days, and that their participation is feasible only through an interview.

19) https://www.iso.org/iso-14001-environmental-management.html, accessed on 14th October 2019.

20) Both companies confirmed the use of long-term established R&D teams in their feedback on the results of this study.

21) The categorization for Lau et al. (2016) is assumed, as the paper does not provide any specification on the variable constructs and their coverage of social and/or environmental dimensions.

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