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The concept of corporate sustainability has gained importance in recent years in both organizational theory and practice. While there still exists a lack of clarity on what constitutes corporate sustainability and how to best achieve it, many scholars suggest that the pathway for the adoption of corporate sustainability principles leads via the adoption of a sustainability-oriented organizational culture. In this paper, we provide a closer examination of this suggested link between the cultural orientation of an organization and the pursuit of corporate sustainability principles. Specifically, we seek to assess (1) what constitutes a sustainability-oriented organizational culture, (2) whether it is possible for organizations to display a unified sustainability-oriented organizational culture, and (3) whether organizations can become more sustainable through culture change. Directions and challenges for practical management and future research are identified and outlined.
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Corporate sustainability and organizational culture
Martina K. Linnenluecke *, Andrew Griffiths
1
UQ Business School, The University of Queensland, Brisbane, Queensland 4072, Australia
1. Introduction
There has been much written espousing principles of sustain-
able development and the need for corporations to pursue
sustainability practices (e.g., Sharma, 2003). In recent years, many
organizations have introduced or changed policies, products and/
or processes to address pollution, minimize resource use, and to
improve community and stakeholder relations (Crane, 2000).
Several scholars, however, maintain that these changes are
insufficient as they are only superficial and not conducive to the
formation of sustainable organizations and industries (Hart &
Milstein, 1999; Senge & Carstedt, 2001). They argue that in order to
fully respond to environmental and social challenges, organiza-
tions will have to undergo significant cultural change and
transformation (Post & Altman, 1994; Stead & Stead, 1992;
Welford, 1995). The central idea is that organizations will have
to develop a sustainability-oriented organizational culture when
moving towards corporate sustainability (Crane, 1995).
The organizational culture concept has become popular within
the sustainability literature as it provides an access point for the
fields of Human Resources and Organizational Behavior to enter as
explanations for an organization’s sustainability performance.
However, there is little theoretical underpinning on what actually
constitutes a sustainability-oriented organizational culture.
Furthermore, there exist only generic prescriptions on how
organizations can realize and implement sustainability-oriented
culture change (e.g., Halme, 1997). Extant models and theories on
sustainability-oriented culture change have been criticized for an
over-reliance on simplified formulae for cultural change, and a lack
of insight into how culture change might occur (Harris & Crane,
2002; Newton & Harte, 1997). These models do often not
specifically address how culture change should be initiated,
monitored and become subject to managerial intervention and
control. In this paper, we therefore seek to assess (1) what
constitutes a sustainability-oriented organizational culture, (2)
whether it is possible for organizations to display a unified
sustainability-oriented organizational culture, and (3) whether
organizations can become more sustainable through culture
change.
2. What is corporate sustainability?
In order to examine the potential link between the cultural
orientation of an organization and the pursuit of corporate
sustainability principles, we first review and explore the concept
of corporate sustainability. We argue that although this concept
has received much attention in recent organizational and manage-
ment studies, there is still little insight into how the adoption of
corporate sustainability practices can be achieved inside organiza-
tions. Furthermore, we outline how the concepts of corporate
sustainability and organizational culture share similarities across
various dimensions and provide a conceptual foundation for a
more thorough analysis on sustainability-related culture change.
The concept of corporate sustainability originates from the
broader concept of sustainability, which itself was shaped through
a number of political, public and academic influences over time
Journal of World Business 45 (2010) 357–366
ARTICLE INFO
Keywords:
Corporate sustainability
Organizational culture
Competing values framework
Culture change
ABSTRACT
The concept of corporate sustainability has gained importance in recent years in both organizational
theory and practice. While there still exists a lack of clarity on what constitutes corporate sustainability
and how to best achieve it, many scholars suggest that the pathway for the adoption of corporate
sustainability principles leads via the adoption of a sustainability-oriented organizational culture. In this
paper, we provide a closer examination of this suggested link between the cultural orientation of an
organization and the pursuit of corporate sustainability principles. Specifically, we seek to assess (1)
what constitutes a sustainability-oriented organizational culture, (2) whether it is possible for
organizations to display a unified sustainability-oriented organizational culture, and (3) whether
organizations can become more sustainable through culture change. Directions and challenges for
practical management and future research are identified and outlined.
ß2009 Elsevier Inc. All rights reserved.
* Corresponding author. Tel.: +61 7 3346 9326; fax: +61 7 3346 8166.
E-mail addresses: m.linnenluecke@business.uq.edu.au (M.K. Linnenluecke),
a.griffiths@business.uq.edu.au (A. Griffiths).
1
Tel.: +61 3346 8172; fax: +61 7 3346 8166.
Contents lists available at ScienceDirect
Journal of World Business
journal homepage: www.elsevier.com/locate/jwb
1090-9516/$ – see front matter ß2009 Elsevier Inc. All rights reserved.
doi:10.1016/j.jwb.2009.08.006
(Kidd, 1992). These influences include the conservation movement
of the early twentieth century, the environmental and counter-
technology movements in the 1960s and 1970s (e.g., Ben-David,
1975; Farvar & Milton, 1972), the ‘‘no growth’’ philosophy which
emerged in the 1970s (e.g., Daly, 1974; Meadows, Meadows,
Randers, & Behrens, 1972), as well as contributions from the
discipline of ecology (e.g., Riddell, 1981). During the 1980s, social
issues became more prominent, including human rights, the
quality of life as well as poverty, especially in less developed
countries (Sharma & Arago
´n-Correa, 2005). Public pressure
increased for new approaches to environment and development,
and to integrate environmental protection with a development
that would ultimately lead to an alleviation of poverty.
The concept of sustainability became known on a global level
through the report Our Common Future by the World Commission on
Environment and Development (WCED, 1987), an entity of the
United Nations also known as the Brundtland Commission. The
WCED related sustainability to environmental integrity and social
equity, but also to corporations and economic prosperity by coining
the term sustainable development, defined as ‘‘development that
meets the needs of the present without compromising the ability of
future generations to meet their own needs’’ (WCED, 1987, p. 43).
The 1992 Earth Summit in Rio de Janeiro resulted in widespread
acceptance of this definition by business leaders, politicians and
NGOs (Dyllick & Hockerts, 2002). For organizations, it implied the
challenge to simultaneously improve social and human welfare
while reducing their ecological impact and ensuring the effective
achievement of organizational objectives (Sharma, 2003).
Based on the WCED definition, as well as on influences from the
strategy and management literature, a variety of subsequent
definitions emerged of sustainability in relation to organizations,
also referred to as corporate sustainability. These definitions vary on
the degree to which they classify corporate sustainability as either
mainly ecological concern (Shrivastava, 1995) or as social
responsibility of an organization (Carroll, 1999), or broaden the
concept of corporate sustainability to integrate corporate eco-
nomic activities with organizational concern about the natural and
the social environment (Dunphy, Griffiths, & Benn, 2003; Dyllick &
Hockerts, 2002; van Marrewijk, 2003). Some scholars also use the
term ‘‘corporate social responsibility’’ to describe the integration of
social, environmental, and economic concerns into an organiza-
tion’s culture, decision-making, strategy, and operations (e.g.,
Berger, Cunningham, & Drumwright, 2007). The resulting variety
of definitions has created confusion and impediments in the
pursuit and implementation of corporate sustainability, as
organizational members find it difficult to interpret and oper-
ationalize the term (Faber, Jorna, & van Engelen, 2005).
While there is not only disagreement concerning the concept of
corporate sustainability, there is also a lack of clarity on how to
best implement corporate sustainability in organizational practice
(Daily & Huang, 2001). Past research has mainly focused on the
overall adoption of sustainability practices by firms and related
classifications schemes (e.g., Azzone & Bertele
´, 1994; Dunphy et al.,
2003; Hunt & Auster, 1990). The primary drivers behind this
adoption process were thought to be factors external to the
organization, such as environmental regulation and standards set
by governments, or pressures resulting from customers groups and
the community. The organization itself, however, was largely
treated as a ‘‘black box’’ (Howard-Grenville, 2006).
Several recent studies have pointed to internal organizational
pressures for the adoption of sustainability practices, such as staff
turnover due to decreasing firm loyalty and workplace satisfaction
(Wilkinson, Hill, & Gollan, 2001). These studies identify internal
organizational factors, such as top management support, human
resource management, environmental training, employee empow-
erment, teamwork and reward systems, as important aspects for
achieving corporate sustainability (Daily & Huang, 2001; Wilk-
inson et al., 2001). Other authors argue that more far-reaching
changes in employee values and underlying assumptions are
required for organizations to truly achieve corporate sustainability
(Crane, 2000; Purser, 1994). Together, these studies suggest that
corporate sustainability is a multifaceted concept that requires
organizational change and adaptation on different levels.
On a surface level, the adoption of corporate sustainability
principles becomes visible through technical solutions, the
publication of corporate sustainability reports, the integration of
sustainability measures in employee performance evaluation, or
employee training. This provides the context for the adoption of
sustainability practices (Dunphy et al., 2003). On a value level, the
adoption of corporate sustainability principles takes place through
changes in employees’ values and beliefs towards more ethical and
more responsible values (Crane, 2000). On an underlying level, the
adoption of corporate sustainability principles requires a change in
core assumptions regarding the interdependence of human and
ecological systems (Purser, 1994). The different levels of corporate
sustainability suggest a parallel to the different dimensions of
organizational culture (Schein, 2004): the observable culture (the
visible organizational structure, processes and behaviors),
espoused values (strategies, goals and philosophies), and underlying
assumptions (unconscious beliefs and perceptions which form the
ultimate source of values and action).
3. The concept of organizational culture
The concept of organizational culture first emerged in the 1970s
and 1980s (e.g., Hofstede, 1981; Ouchi & Price, 1993; Pettigrew,
1979; Schwartz & Davis, 1981), and soon became one of the most
influential but also most controversial concepts in management
research and practice (Crane, 1995; Jarnagin & Slocum, 2007). The
concept has been interpreted very differently and there is a lack of
consensus regarding a common definition of the term (Ashkanasy,
Broadfoot, & Falkus, 2000). Culture theorists have suggested a
variety of definitions, ranging from notions of accepted behavioral
rules, norms and rituals (e.g., Trice & Beyer, 1984), to shared values,
ideologies and beliefs (e.g., Schwartz & Davis, 1981), and, at an
underlying level, shared patterns of meaning or understanding
(e.g., Louis, 1985; Smircich, 1983). One frequently cited definition
is Schein’s (2004) abovementioned three-level typology of culture,
as it extends through and includes various concepts and cultural
dimensions (Crane, 1995; Linnenluecke, Russell, & Griffiths, in
press).
Despite the variety of interpretations and cultural dimensions, a
number of common themes and similarities can be identified in
organizational culture research (Parker & Bradley, 2000). First,
concepts used to identify and define organizational culture tend to
overlap between studies; consequently, several scholars have
attempted to develop frameworks to categorize important
dimensions and to provide a conceptual foundation for the study
of organizational culture (e.g., Hofstede, 1981; House, Javidan,
Hanges, & Dorfman, 2002; Schein, 2004; Quinn, 1988). Second,
values, ideologies and beliefs are considered to be particularly
important for understanding an organization’s culture and have
been viewed as a reliable representation (Howard, 1998; Ott,
1989). The assessment and measurement of organizational culture
has therefore typically focused on organizational values. A third
and important aspect of cultural research has been the role of an
organization’s culture (and its underlying values and ideology of
management) in hindering or fostering the implementation of
managerial innovations (e.g., reengineering, total quality manage-
ment) or technological innovations (e.g., flexible manufacturing
technologies, enterprise resource planning systems) (Zammuto,
Gifford, & Goodman, 2000).
M.K. Linnenluecke, A. Griffiths / Journal of World Business 45 (2010) 357–366
358
Organizational culture is often cited as the primary reason for
the failure of implementing organizational change programs.
Researchers have suggested that while the tools, techniques and
change strategies may be present, failure occurs because the
fundamental culture of the organization remains the same
(Cameron & Quinn, 2006). A number of studies have provided
empirical support for these claims (e.g., Cameron et al., 1993;
Jarnagin & Slocum, 2007). Their findings suggest that the
successful implementation of culture change for corporate
sustainability might be largely dependent on the values and
ideological underpinnings of an organization’s culture, and that
these in turn affect how corporate sustainability is implemented
and the types of outcomes that can be observed.
We use the competing values framework (CVF) of organiza-
tional culture (Quinn, 1988; Quinn & Kimberly, 1984; Quinn &
Rohrbaugh, 1983) to discuss the relationship between corporate
sustainability and organizational culture. While no single culture
framework is exhaustive and captures every relevant aspect, we
base our discussion on the CVF as it was empirically derived, has
been validated in previous research, and captures most of the
proposed dimensions of organizational culture (Cameron &
Quinn, 2006; Howard, 1998). Furthermore, the CVF has previously
been employed in studies on culture change (e.g., Zammuto et al.,
2000), and aligns with well-known and widely accepted
categorical schemes that outline how people think, how they
organize their values and ideologies, and how they process
information (Barley & Kunda, 1992; Cameron & Quinn, 2006;
Quinn, 1988). The CVF and its application are discussed in greater
detail below.
4. Cultural orientations: competing values in organizations
The four-cell CVF illustrates the competing demands within an
organization on two separate and competing dimensions (Quinn &
Kimberly, 1984). The internal-external dimension reflects whether
the organization is focused on its internal dynamics, or on the
demands of its external environment. The flexibility-control
dimension reflects organizational preferences for structuring,
coordination and control, or for flexibility. Organizations which
emphasize the control end of the dimension tend to rely on formal
mechanisms of coordination and control, such as rules, policies,
direct supervision, financial planning, and budgets to enforce
compliance with behavioral norms. Contrary, organizations which
emphasize the flexibility end tend to rely more on social
coordination and control through internalization of beliefs,
training, participation, commitment, socialization and peer pres-
sure, to achieve desired outcomes and behaviors (Zammuto, 2005;
Zammuto et al., 2000). Resulting from these two competing
dimensions, four different quadrants (or cultures types) are
formed.
The CVF and characteristics of each culture type are presented
in Fig. 1. Organizational cultures that are dominated by human
relation values (upper left quadrant) promote cohesion, partici-
pation and morale among employees. This is achieved by means
such as training, development of human resources, open
communication, employee involvement and participative deci-
sion-making (Jones, Jimmieson, & Griffiths, 2005; Zammuto et al.,
2000). Coordination and control are achieved through decen-
tralized decision-making and cooperation. Individual compliance
with organizational mandates results from trust, tradition and
long-term commitment to the organization. Organizational
cultures that are dominated by open systems values (upper right
quadrant) place more emphasis on growth and resource acquisi-
tion through the promotion of adaptability, change and readiness,
visionary communication, and flexible decision-making. Struc-
turally, there is an emphasis on informal coordination and
control, and horizontal communication. Individuals are moti-
vated by the significance or ideological appeal of their tasks
(Linnenluecke et al., in press; Zammuto et al., 2000; Zammuto &
Krakower, 1991).
Organizational cultures that are dominated by internal process
values (lower left quadrant) promote stability and control through
formal means such as information management, precise commu-
nication, and data-based decision-making (Jones et al., 2005;
Zammuto et al., 2000). This culture type has also been
refereed to as ‘‘hierarchical culture’’, as it involves conformity,
Fig. 1. Competing values framework. Source: Adapted from Jones et al. (2005),Linnenluecke et al. (in press) and Zammuto et al. (2000).
M.K. Linnenluecke, A. Griffiths / Journal of World Business 45 (2010) 357–366
359
the enforcement of rules, and attention to technical matters
(Denison & Spreitzer, 1991; Kerr & Slocum, 1987; Parker & Bradley,
2000). Coordination and control are achieved through vertical
communication, policies and procedures. Individual compliance is
enforced through rules and regulations. Organizational cultures
that are dominated by rational goal values (lower right quadrant)
promote efficiency and productivity, which is realized through
goal-setting, planning, instructional communication and centra-
lized decision-making (Jones et al., 2005). Structurally, the rational
goal culture is related to centralized decision-making. Individuals
are motivated by beliefs that they will be rewarded for competent
performance leading to desired organizational goals (Linnenluecke
et al., in press; Zammuto et al., 2000; Zammuto & Krakower, 1991).
Although these four culture types appear to be incompatible
and mutually exclusive, they can and do coexist within an
organization (Jones et al., 2005; Zammuto et al., 2000), although
some values are likely to be more dominant than others (Quinn &
Kimberly, 1984). Each quadrant emphasizes different aspects of
the organization: people, adaptation, stability, and task accom-
plishment. These issues are important for every organization, and
the opposing quadrants highlight the dilemma for organizational
managers to find a balance between stability and adaptation as
well as people versus task accomplishment. Ideally, organizational
managers can achieve a balance between the competing demands
(Zammuto et al., 2000). Previous research, however, has docu-
mented that most organizations develop a dominant culture type
which is characterized by one (or more) of the culture types
identified above (Cameron & Quinn, 2006). A bureaucratic
organization, for example, would be dominated by an internal
process culture and would value formal procedures and regulation,
while this organization would place less emphasis on adaptability
and change. Organizations that display a strong overemphasis of
one culture type are likely to become dysfunctional (Quinn, 1988).
For instance, a strong orientation towards internal process values
(lower left quadrant) might result in a rigid bureaucracy which is
highly resistant to any change efforts (Kerr & Slocum, 1987;
Zammuto et al., 2000).
5. Cultural orientations and corporate sustainability
This paper seeks to examine what constitutes a sustainability-
oriented culture by referring back to the traditional concept of
organizational culture. Specifically, it is examined whether there is
a link between organizations that emphasize a certain organiza-
tional culture type (characterized by one or more of the four
different culture types of the CVF) and the adoption of corporate
sustainability principles. Essentially, each quadrant, or culture
type, represents a set of valued outcomes and a coherent
managerial ideology about how to achieve them. Managerial
ideologies (i.e., broad management philosophies embedded in
society) are imported into organizations from the institutional
environment through means such as management education or
professional training, and shape the way people think and behave
within them (Zammuto, 2005; Zammuto et al., 2000). Therefore, it
can be assumed that different organizational culture types
influence how employees understand and enact corporate
sustainability (Linnenluecke et al., in press).
In this context, Zammuto et al. (2000) note that there is a direct
parallel between the quadrants of the CVF and the major
managerial ideologies identified by Barley and Kunda (1992) as
being prevalent in western society during the past century. The
quadrants also reflect the four major theoretical streams in
organization theory analyzed by Scott (2003). As a result, all
quadrants together outline major developments that have
emerged in both managerial ideologies and organizational
theorizing over time and have become institutionalized into
current thinking (Zammuto et al., 2000). These developments are
reviewed below to develop propositions on the relation between
each culture type and the adoption of corporate sustainability. We
acknowledge that an organization’s culture can be characterized
one or more of the culture types identified in the CVF (Cameron &
Quinn, 2006), yet for purposes of conceptual clarity we have
developed propositions for each distinct culture type.
5.1. Theoretical proposition (1)
Theories and ideologies underlying the internal process
quadrant are characterized by their focus on economic perfor-
mance, and a general omission of the wider organizational
environment. The internal process quadrant corresponds to Barley
and Kunda’s (1992) ideology of scientific management, which is
directed towards the maximization of economic gains through
rationalized production processes (Taylor, 1911). The hierarchical
structure, the enforcement of and the conformity with rules are
highly effective under relatively stable environmental conditions
and allow maximization of the production of goods and services
(Cameron & Quinn, 2006). The internal process quadrant also
corresponds to Scott’s (2003) classification of closed-rational
systems models (Zammuto, 2005; Zammuto et al., 2000), which
portray organizations as tools to achieve preset ends with
formalized structures to improve organizational efficiency and
economic performance. The focus on formalization suggests that
there are cognitive and motivational limitations of individuals
which constrain employee choices and action within the organiza-
tion (Scott, 2003), and restrict the understanding and enactment of
sustainability (Griffiths & Petrick, 2001; Linnenluecke et al., in
press; Post & Altman, 1994; Ramus, 2005).
Based on this discussion we propose that organizations
dominated by an internal process culture will place greater
emphasis on economic performance, growth and long-term
profitability in their pursuit of corporate sustainability (Peteraf,
1993; Porter, 1985). The major assumption behind this under-
standing of corporate sustainability is that the organization seeks
to maximize the production of goods and services. While efficiency
(i.e., the elimination of waste and redundancy) is valued in a
hierarchical culture, it is defined as a simplification of products,
services and processes in order to achieve cost reductions,
maximize production, and pursue economic outcomes (Cameron
& Quinn, 2006). From this point of view, it becomes imperative for
management to expand consumption of the firm’s products and
services in order to increase profits (Eden, 1996) – any efficiency
gains do not mean that the organization considers the larger
ecological and social systems within which it resides (Senge &
Carstedt, 2001).
Several scholars (Arago
´n-Correa & Sharma, 2003; Hart, 1995;
Russo & Fouts, 1997) maintain that the realization of economic
sustainability (i.e., the maximization of profits, production and
consumption) alone is not sufficient for the overall sustainability of
corporations. This broadening of the understanding of corporate
sustainability is regarded as the most important departure of the
concept from orthodox management theory (Gladwin, Kennelly, &
Krause, 1995). Empirical evidence has shown that engagement
with the natural environment can enhance firm performance (e.g.,
Sharma & Vredenburg, 1998). Organizations that are narrowly
focused on achieving economic outcomes alone might miss out on
sustainability innovations and business opportunities that a focus
on sustainability creates (Senge & Carstedt, 2001). Researchers
have argued that the implementation of innovative products,
services and business models is unlikely to happen without room
for flexibility, learning and change (Dunphy et al., 2003).
Organizations which are dominated by internal process values
and seek to introduce a commitment to corporate sustainability
M.K. Linnenluecke, A. Griffiths / Journal of World Business 45 (2010) 357–366
360
might experience a strong tension between their existing culture
based on stability and control, and a need to introduce curiosity,
exploration and flexibility (Senge & Carstedt, 2001). These
organizations might therefore only pursue corporate sustainability
initiatives when they unambiguously translate into a competitive
advantage for the firm measured by traditional bottom-line
focused metrics and measurement systems (Berger et al., 2007).
5.2. Theoretical proposition (2)
In contrast to the internal process quadrant, theories and
ideologies underlying the human relations quadrant place great
emphasis on social interaction, interpersonal relations, employee
development and the creation of a humane work environment.
Organizations with a culture characterized by human relation
values are largely focused on their internal arrangements. The
human relations quadrant reflects Barley and Kunda’s (1992)
human relations ideology, which pays attention to work condi-
tions, social interaction and group affiliation. The quadrant also
parallels Scott’s (2003) classification of closed-natural systems
models (Linnenluecke et al., in press; Zammuto et al., 2000;
Zammuto, 2005), which acknowledge informal structures and the
need to align diffusing and conflicting goals, as well as the
existence of multiple interests and motives within organizations
through informal structures and arrangements (Scott, 2003).
Following from this emphasis on social interaction and
interpersonal relations, we propose that organizations dominated
by a human relations culture will place greater emphasis on
internal staff development, learning and capacity building in their
pursuit of corporate sustainability. This suggests that an organiza-
tion with a high human relations orientation accepts responsibility
for contributing to the process of renewing and upgrading human
knowledge and skill formation, and is a strong promoter of equal
opportunity, workplace diversity and work-life balance as work-
place principles (Dunphy et al., 2003). It adopts a strong and clearly
defined corporate ethical position on issues such as discrimination,
business ethics, and fraud. The focus on internal staff development
also suggests that the organization invests in human potential and
capital, learning and education, and is interested in pursuing
environmental health and safety, human welfare and wellbeing, as
well as equitable and social just practices to achieve improved
employee skills, satisfaction, commitment, and productivity (Daily
& Huang, 2001; Dunphy et al., 2003; Gollan, 2000; Wilkinson et al.,
2001).
Previous research suggests that a strong focus on social or
human relations values within an organization can support or
attract social entrepreneurship (Berger et al., 2007). Social
entrepreneurs display many of the characteristics traditionally
associated with new business entrepreneurs, for instance, they are
innovative, determined, and resourceful. However, rather than
investing in a new business venture, social entrepreneurs invest
their time and energy in advocating corporate sustainability
principles within the organization and often assume considerable
career risks while doing so (Berger et al., 2007). This suggests that
employees within an organization dominated by internal process
values have potentially strong non-economic interests, however, it
might become challenging to focus on or to justify the authenticity
of the organization’s business purpose and goals. The organization
might experience a tension between creating a business venture
and pursuing a social purpose (Berger et al., 2007; Brammer &
Millington, 2008).
5.3. Theoretical proposition (3)
Theories and ideologies underlying the rational goal quadrant
highlight the importance of the wider environment for the
organization, and the need for rational planning and organizing
in light of environmental demands. The quadrant corresponds to
Barley and Kunda’s (1992) systems rationalism ideology which
focuses on planning, forecasting, controlling, and the design of the
organizational structure and decision processes to match the
external environment. The quadrant is also analogous to Scott’s
(2003) classification of open-rational systems models, which
address how to organize systems rationally while facing varying
environmental demands and which emphasize the efficient use of
resources, planning and goal setting, and the adequacy of
organizational structures in light of the environment (Linnen-
luecke et al., in press).
Therefore, we propose that organizations dominated by a
rational goal culture will place greater emphasis on resource
efficiencies in their pursuit of corporate sustainability. This
understanding of corporate sustainability reflects the growing
awareness on the part of managers in the corporation that there
are advantages to be gained by proactively instituting corporate
sustainability practices which are directed toward reducing costs
and increasing operational efficiency. However, when evaluating
efficiency, it is necessary to consider its impact on the environment
and society. Efficiency defined solely as cost reduction and the
simplification of product, process and service flows (see internal
process quadrant) is insufficient to achieve corporate sustain-
ability. In addition, such efficiencies will only provide limited
competitive advantage for organizations, as they can be easily
copied by competitors.
Resource efficiency means that there are real advantages to be
gained by proactively instituting sustainability practices, espe-
cially if these practices are directed towards reducing costs and
increasing operational efficiency. Some organizations capitalize on
these cost savings and reinvest them in their employees to achieve
sustainable longer-term gains by building the appropriate human
systems that support value-adding and innovation. For example,
Scandic Hotels have had considerable success at reducing and
eliminating waste and using these cost savings to build their
employee skill base (Nattrass & Altomare, 1999). This new
efficiency focus has led to huge cost savings, reduced ecological
impacts and enhanced the reputation of the corporation.
Many organizations use human resources and environmental
policies and practices to reduce costs and increase efficiency.
Investment in training may involve expense but result in
compensating added value through increased quality of products
and services. Technical and supervisory training is augmented with
interpersonal skills training. Teamwork is encouraged for value-
adding as well as cost-saving purposes, and external stakeholder
relations are developed for business benefits. ISO 14000 systems
are integrated with TQM and OH&S systems or other systematic
approaches with the aim of achieving eco-efficiencies. Sales of by-
products are encouraged as are cooperative relationships with
other members of the supply chain with the aim of waste
reduction.
5.4. Theoretical proposition (4)
The open systems model parallels Scott’s (2003) classification of
open-natural systems models which highlight the importance of
the external environment in affecting the behavior, structure and
life changes of organizations. Underlying themes are evolutionary
learning and adaptation (Weick, 1969), the importance of
discretionary behavior and autonomy (Trist, 1981), a recognition
of the wider social and economic environment (Miller & Rice,
1967), exchanges with the environment through resource depen-
dency (Pfeffer & Salancik, 1978), as well as social pressures
from institutional constraints (DiMaggio & Powell, 1983). The
open systems model also reflects Barley and Kunda’s (1992)
M.K. Linnenluecke, A. Griffiths / Journal of World Business 45 (2010) 357–366
361
organizational culture and quality ideology, which emphasizes
moral authority, social integration, quality, flexibility, and
employee commitment to manage in turbulent environments
(Linnenluecke et al., in press).
Therefore, we propose that organizations dominated by an open
systems culture will place greater emphasis on innovation for
achieving ecological and social sustainability in their pursuit of
corporate sustainability. The understanding behind corporate
sustainability as ecological sustainability is based on the assump-
tion that organizations are not separate from the natural
environment, but are located and operate within it (Sharma,
2003). Organizational activities can have significant negative
impacts on the natural environment, for instance through
pollutant emissions or resource exploitation (Jennings & Zandber-
gen, 1995). In turn, environmental quality can impact on
organizational activities, as evident through the impacts of climate
change (Linnenluecke et al., 2008; Winn & Kirchgeorg, 2005). Some
commentators argue that radical shifts and innovations in business
practices and strategic thinking are necessary to bring about a
lasting reversal of current levels of environmental destruction (e.g.,
Shrivastava, 1995). In order to achieve ecological sustainability,
organizations are challenged to move beyond pollution control or
prevention and to operate within the carrying capacity of the
natural environment by minimizing their resource use and
ecological footprint (Hart, 1995, 1997; Linnenluecke et al., in
press; Sharma, 2003).
The understanding of corporate sustainability as social
sustainability results from trends such as globalization and
privatization, requiring organizations to assume wider responsi-
bilities towards various stakeholder groups and the communities
in which they operate (Carroll, 1999; Dunphy et al., 2003; Freeman,
1984). Numerous studies have been published on business-related
social issues, including corporate philanthropy, minority concerns,
community welfare, and stakeholder demands (e.g., Carroll, 1999;
Shrivastava, 1995). These various issues have been summarized
into concepts such as ‘‘corporate social sustainability’’ (Dyllick &
Hockerts, 2002) and ‘‘socially sustainable businesses’’ (Gladwin
et al., 1995). In general, social sustainability means an organization
which attempts to deal proactively with its community base, and
engages with its stakeholders by providing a business venture that
serves a social purpose (Linnenluecke et al., in press).
This section has outlined a relationship between organizational
culture and corporate sustainability orientation. It appears that
there is not a single type of sustainability-oriented culture.
Employees who belong to different organizational cultures types
show different orientations towards corporate sustainability and
are inclined to understand corporate sustainability differently. We
suggest here that the ideological underpinnings of organizational
culture influence how corporate sustainability is implemented and
the types of outcomes that can be achieved, which parallels
observations by Zammuto et al. (2000) on the outcomes of
organizational innovations. Employees from different culture
types place emphasis on different aspects in their pursuit of
corporate sustainability, ranging from a focus on internal staff
development, resource efficiency, or environmental protection and
stakeholder engagement.
6. Can organizations display a unified ‘‘sustainable’’ culture?
This section discusses whether organizations can display only
one unified organizational culture or whether there exist sub-
group differences among different entities or employee groups.
Although organizational culture definitions refer frequently to
what is shared and common among organizational members (e.g.,
Louis, 1985; Schein, 2004), not all researchers agree with the view
that organizational members belong to the same, unified
organizational culture (e.g., Gregory, 1983; Hofstede, 1998; Riley,
1983; Sackmann, 1992; Schein, 1996). Besides such conceptual
distinctions, organizational researchers have operationalized the
concept differently, and have employed different methodological
approaches to study the different cultural dimensions of Schein’s
typology (Ashkanasy et al., 2000). Martin (2002) captures these
differences in her characterization of the field consisting of three
theoretical views of cultures in organizations, namely the
integration, differentiation and fragmentation perspectives. The
integration and differentiation perspectives are of principal
interest to this paper, and are outlined subsequently.
6.1. Integration perspective
The integration perspective focuses on the existence of unified
cultures within organizations and assumes that there is organiza-
tion-wide consensus among employees around a set of shared
assumptions, values and beliefs (Martin, 2002). Such consensus is
viewed as desirable because it creates consistency in perceptions,
interpretations and actions of organizational members, and fosters
unity of purpose and action (Zammuto, 2005). Much popular and
scholarly attention has been focused on the hypothesis that
cultural strength, defined as the extent to which cultural values and
beliefs are widely shared and strongly held throughout the
organization (O’Reilly, 1989; O’Reilly & Chatman, 1996; Saffold,
1988), improves financial performance (Denison, 1984; Sørensen,
2002). This hypothesis is based on the presumption that there are
performance benefits from a strong corporate culture due to
enhanced coordination and control as well as increased motivation
and goal alignment among organizational members (e.g., Deal &
Kennedy, 1982; Ouchi & Price, 1993; Peters & Waterman, 1982;
Sørensen, 2002).
Many integration studies portray organizational leaders as
culture creators or transformers – high-ranking managers who
have the capacity to envision and enact a strong culture with
loyalty and commitment, leading to increased productivity and
performance benefits (Jarnagin & Slocum, 2007; Martin, 2002).
Early research on the culture-performance relationship, however,
provided little supporting empirical evidence for any linkages
between a ‘‘strong culture’’ and firm performance (Denison &
Mishra, 1995; Gordon & DiTomaso, 1992; Siehl & Martin, 1990).
Later, several researchers advanced the view of the culture-
performance relationship and adopted a contingency approach by
arguing that strong organizational cultures are only related to high
levels of performance if they fit the organizational strategy and can
adapt to changing environmental conditions (Kotter & Heskett,
1992; Sørensen, 2002). Strongly and widely held cultures that do
not fit to an organization’s strategic context are seen as likely to
negatively affect firm performance. Studies which embrace this
view (e.g., Denison & Mishra, 1995; Gordon & DiTomaso, 1992;
Kotter & Heskett, 1992; Sørensen, 2002) could confirm a positive
link between cultural strength and firm performance (Zammuto,
2005).
The culture-performance relationship model of the integration
perspective has proven to be popular in the sustainability
literature where it is commonly seen as a means to promote
greener corporate management, strategy and marketing (Crane,
1995), and to improve corporate environmental performance
(Dodge, 1997). Principally, the major prescription for organiza-
tional leaders is to develop a strong and highly integrative
sustainability-oriented organizational culture, which permeates
and unites corporate members and fosters a sense of identity and
commitment to common corporate environmental goals and
aspirations (e.g., Dodge, 1997). Conceived thus, a strong sustain-
ability-oriented corporate culture requires consensus of environ-
mental values and beliefs between individual employees and their
M.K. Linnenluecke, A. Griffiths / Journal of World Business 45 (2010) 357–366
362
organization (Crane, 1995). These sustainability-oriented values
are assumed to be promoted by firm founders or top management
and then disseminated among employees, so that they are widely
shared and held by all members of the organization (e.g., Dodge,
1997; Hoffman, 1993; Welford, 1995).
Regarding the interrelation between organizational culture and
the adoption of corporate sustainability, the integration approach
creates the following expectations: (1) that employees throughout
the organization would be part of the same organizational culture,
and (2) that these employees would also share similar attitudes
towards corporate sustainability. However, such views of a unified
organizational culture have not only been under considerable
criticism in the organizational culture literature, but have also
been challenged more recently in the corporate sustainability
literature (Crane, 1995; Harris & Crane, 2002; Howard-Grenville,
2006). Crane (1995), for example, suggests that the notion of a
single sustainability-oriented culture represents rather a symbolic
meaning than a realistic assessment of an organization’s culture.
Furthermore, the integration perspective does not deal adequately
with the incongruence between individual values and dominant
organizational values (Hoffman, 1993). Several researchers have
therefore emphasized cultural diversity and variety in organiza-
tions (e.g., Scott, 2003), as characterized by the differentiation
perspective (Martin, 2002).
6.2. Differentiation perspective
The differentiation perspective is similar to the integration
perspective in that organizational culture is defined on the basis of
what is shared yet at the level of groups within an organization
(Martin, 2002; Zammuto, 2005). However, there are differences in
the extent to which differentiation researchers acknowledge that
subcultures can coexist with some form of organization-wide
consensus (Martin, 2002). While some suggest that subcultures
exist within the context of a larger, overarching ‘‘common’’
organizational culture (e.g., Trice & Beyer, 1984), others deny the
possibility of a dominant organizational culture and argue that
many organizations can be most accurately described as multi-
cultural (Gregory, 1983).
The existence of subcultures has been confirmed in a number of
studies (Howard-Grenville, 2006). They can form within an
organization around hierarchical levels (Jermier, Slocum, Fry, &
Gaines, 1991; Riley, 1983) or around distinctions based on
organizational roles, such as department (Hofstede, 1998),
function, and occupation (Schein, 1996; van Maanen & Barley,
1984). Subcultures can also emerge around personal contacts and
networks, as well as individual demographic differences such as
ethnicity and gender (Martin, 2002). Contrary to the integration
perspective, the differentiation approach therefore creates the
following expectations on the interrelation between organiza-
tional culture and the adoption of corporate sustainability: (1) that
different subcultures can exist throughout an organization, and (2)
that members of each subculture hold different attitudes towards
corporate sustainability which are distinct from that of other
subcultures.
6.3. Managerial relevance
In order to move towards corporate sustainability, it appears
that leaders have to abandon a purely economically driven
paradigm and achieve a more balanced set of socially and
environmentally responsible values. Some commentators, such
as Hart and Milstein (2003), have argued that organizations need to
consider their exposure to social and environmental events, not
only in the present, but also in the future, as a means of generating
sustainable value. In accordance with the integration perspective,
leaders have been assumed to be in a position for developing and
implementing sustainability-oriented organizational culture
change (Percy, 2000; Ramus, 2001, 2002). Existing theories and
models of corporate culture that integrate sustainability issues
generally centre on a cascade of values from top management to
lower levels of the organization (Crane, 1995; Harris & Crane,
2002). Thus, many authors assume that corporate sustainability
values and principles promoted by top management will be widely
shared and held by all organizational members (e.g., Hoffman,
1993; Welford, 1995), and that changes in the values of top
management will translate into changes in actual practice
throughout the organization (Howard-Grenville, 2006; Jarnagin
& Slocum, 2007).
The differentiation perspective contests the view that values
exhibited by top management will be automatically disseminated
and held equally by all members throughout the organization.
Harris and Crane’s (2002) findings, for instance, indicate that the
diffusion of a sustainability-oriented culture is hindered by the
presence of various subcultures. Other studies point to organiza-
tional rigidities and organizational conservatism (Scho
¨n, 1971)as
well as institutionalized assumptions and ideologies within and
across organizations (Abrahamson & Fombrun, 1994; Harris &
Crane, 2002) as barriers to organizational culture change. Parker
and Bradley’s (2000) study, for example, highlights that past
initiatives to overcome the deficiencies of the traditional bureau-
cratic model have been largely unsuccessful, with hierarchical
culture still the dominant culture type in public organizations.
While the more overt aspects of organizational culture may be
changed, the organization’s underlying assumptions remain often
stable and are difficult to access through managerial control (Beer,
Eisenstat, & Spector, 1990; Molinsky, 1999).
While such findings seem to be discouraging for leaders who
wish to implement sustainability-oriented culture changes, it is
nonetheless possible to identify positive avenues and practical
implications in this paper. A study conducted by Linnenluecke et al.
(in press) points to the importance of creating an organizational
context which is conducive to the adoption of corporate
sustainability. An engagement with corporate sustainability
practices, particularly the publication of a corporate sustainability
policy as well as the integration of environmental performance
indicators in employee evaluation, was found to be an important
aspect in shaping how organizational actors understand corporate
sustainability. Similarly, Harris and Crane’s (2002) study suggest
that it is possible for organizational change agents as well as
external organizational stakeholders (e.g., consumer groups and
regulators) to advance the adoption of corporate sustainability
principles, although such attempts might be moderated by the
power and resources available to such actors.
Furthermore, an understanding of differences and similarities
between subcultures can help organizations to develop a range of
more sophisticated and tailored programs for the successful
adoption of sustainability practices, and provide novel insights into
how best to approach change management issues (Linnenluecke
et al., in press). Employees from different culture types place
emphasis on different aspects and outcomes in their pursuit of
corporate sustainability, which suggests that they are also
receptive to different aspects of organizational communication
and organizational change programs. In other words, an under-
standing of organizational values provides potential insights into
generating contingent-based change programs for corporate
sustainability implementation.
7. Conclusion and future research
This paper has provided a closer examination of the concept of
corporate sustainability and its link to organizational culture. First,
M.K. Linnenluecke, A. Griffiths / Journal of World Business 45 (2010) 357–366
363
this paper sought to assess what constitutes a sustainability-
oriented organizational culture by referring back to the traditional
concept of organizational culture. The CVF has provided a
framework for discussing how ideological underpinnings of
organizational culture influence how corporate sustainability is
implemented and the types of outcomes that can be achieved.
Employees from different culture types place emphasis on
different aspects in their pursuit of corporate sustainability,
ranging from a focus on internal staff development, resource
efficiency, environmental protection or stakeholder engagement.
Second, we sought to assess if it is possible for organizations to
display a unified sustainability-oriented organizational culture.
While the integration perspective of organizational culture
generally assumes that organizations have only one dominant
culture with organization-wide consensus among employees
around a set of shared assumptions, values and beliefs, this view
is contested by the differentiation perspective. According to the
differentiation perspective, different subcultures can exist
throughout an organization, and members of each subculture
can hold different attitudes towards corporate sustainability which
are distinct from that of other subcultures.
Third, we asked if organizations can become more sustainable
through culture change. This paper has identified a number of
important barriers and limitations for sustainability-related
culture change, including organizational rigidity and the existence
of organizational subcultures throughout the organization. How-
ever, the adoption of corporate sustainability principles can occur
at several different dimensions. Our paper suggests that changes
on the surface level, for example through the publication of
corporate sustainability reports, the integration of sustainability
measures in employee performance evaluation, or employee
training, can provide a conducive context for changes in employ-
ees’ values and beliefs or even in core assumptions.
We suggest several avenues and directions for future research.
The proposed relationships between organizational culture and
corporate sustainability will require further exploration. It seems
apparent that organizations have to abandon the dominant design
and assumptions of the bureaucratic organization, and similar
claims have been made by a number of authors in other studies
(e.g., Stead & Stead, 1992). It also seems apparent that the ‘‘ideal’’
culture profile for corporate sustainability needs to be low on
internal process values, and high on open systems values, yet to
date there is little empirical support to support his claim. We
believe that an important issue for the future will be studies
designed to understand the complexities of the relationship
between organizational culture and corporate sustainability.
Already some studies (Linnenluecke et al., in press; Ramus,
2001, 2002) have attempted to develop and use existing measures
as a means to understand the relation between organizational
culture and the pursuit of corporate sustainability.
Second, an interesting avenue of future research is the
investigation of how culture change can be achieved in the
presence of different subcultures, and how this changes the
corporate performance on economic, social and environmental
aspects. A third interesting avenue worthy of future research is the
relation between individual values and organization values. The
values of employees and managers in organizations are phenom-
ena that have captured much attention from researchers,
practitioners, social critics, and the wider public. Despite this
interest, there is a lack of agreement on what values are and how
they influence individuals (Meglino & Ravlin, 1998). Hoffman
(1993) argues that a congruent fit between an individual’s values
and that of the organization’s culture is important. In case of
incongruence, individuals can either chose among compliance, a
resolution to change the corporate values, or resignation from the
organization. As Hoffman’s study is based on the assumption of a
unified organizational culture, a more detailed investigation of
individual values and organizational values seems useful. Future
research could address whether and how values of top manage-
ment or dominant organizational actors become disseminated
throughout different subcultures, and how this helps to facilitate
the adoption of corporate sustainability.
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