How are social and environmental concerns addressed in strategic decisions within companies perceived to be leaders in sustainable development?
|Dr. Tima Bansal|
Shurniak Professor of International Business
Room 2N34, Richard Ivey School of Business
The University of Western Ontario
London, Ontario N6A 3K7 Canada
Tel: 519-661-3864 Fax: 519- 661-3959
|There is an increasing demand on corporations to make responsible decisions. Consumers, stakeholder groups and governments expect corporations to consider social, environmental, and financial issues in strategic decisions. In response, strategic management researchers and practitioners alike have force-fit social and environmental concerns within existing strategic management frameworks. As a result, managers understand that following regulations and responding to urgent and feasible stakeholder demands is a prudent risk-minimization strategy. And, if the firm can profit from acting in a socially and environmentally responsible manner, then managers will choose to do so.|
But, most strategic decisions do not fall neatly into risk management and profit maximization models. The risks of not responding to environmental and social concerns, or the opportunities from doing so are often not tangible, immediate or easy to measure (Bansal & Roth, 2000). So, for example, it is not clear how the top management team of a chemical company chooses between locating its facility in Saudi Arabia, where margins are higher but employees are at some risk, and locating its facility elsewhere in Asia? How these soft, normative, and ambiguous issues are incorporated into the hard realities of meeting shareholder expectations are not understood. The research question guiding this study is: how are social and environmental concerns addressed in strategic decisions within companies perceived to be leaders in sustainable development?
Given the paucity of research on the social aspects of strategic issues, we use qualitative data to develop rich theoretical insights inductively. The sample of 19 companies used in this research is drawn from a group of companies perceived to be leaders in social issues, because of the need to focus on firms that are responding to the social aspects of strategic issues. I conducted 132 interviews, relied on archival data sources, and conducted within and between company analysis.