Organizational Change for Corporate Sustainability

Citation

Lindemanns, M. (2004), "Organizational Change for Corporate Sustainability", Personnel Review, Vol. 33 No. 2, pp. 259-263. https://doi.org/10.1108/00483480410518095

Organizational Change for Corporate Sustainability is an advocacy for making social and ecological considerations part of corporate thought and action, and ultimately building competitive advantage through social and ecological sustainability. The text is strongly action‐oriented, encouraging the reader to maximise his/her influence in the change process towards the “sustaining corporation” (p. 62).

The book consists of three parts: chapters 1 to 3 set the scene, describe the environment and motivators for organizations today, and depict how the ideal organization might look like. Chapters 4 to 6 illustrate how organizations can move along the path to the sustaining corporation. Chapters 7 to 9 deal with the implementation of changes, via incremental or transformative modes, and discuss leadership issues.

The authors commence by setting the context for their message. This is that the life on our planet is threatened; the eco‐system is running down. Poverty looms over huge parts of the world population. One of the reasons for this situation is how corporations act today. Corporations are in an unprecedented position of power and wealth. Their actions have an enormous impact on the state of our planet. How can we reshape the corporation to continue the health of our planet, and to secure human survival and social justice? We need to find new values and new patters of living and working. In the authors’ view, corporate change is needed to resolve the crisis. The background for the current need for change is complemented with a very brief history of the corporation and managerial thinking. In the prevalent neo‐liberal thinking many inputs are assumed to be free of change – in particular ecological and community costs have been defined out of economics and business. These views have contributed to creating the threats to humanity which we are facing today. The authors conclude that change is needed.

The underlying tenet is that sustainability concerns need not only be discussed at an intellectual level, but also need to find their way into corporate action and be considered by consumers, who will ultimately and collectively be able to influence behaviours of corporations. This book concentrates on the element of corporate action, which can be influenced by a variety of stakeholders in corporations. The integrating thread throughout the text is a comprehensive sustainability phase model developed by the authors. The model describes development in six distinct phases along the two dimensions human sustainability and ecological sustainability. The ultimate stage and goal is the “sustaining corporation”, the authors’ view of the ideal organization.

Before proceeding to describe the path towards the sustaining corporation, the book addresses the question of why corporations should become “responsible global citizens” (p. 29).

The authors identify external and internal drivers for change. External pressures are formed by an increased and more informed audience demanding change. Citizens are questioning the negative effects of industrialization and globalization. NGOs and national governments have begun to redefine roles and policy making. The internal driver for change towards sustainability is business value. Costs are caused by non‐compliance and penalties, by loss of reputation and public trust (e.g. Nike and BP scandals), and by sour community relations. On the other hand, through being an employer of choice, producing less waste, and increasing innovation, profitability could be increased. The authors claim that it is intelligent corporate self‐interest, which will motivate commitment to sustainability.

Chapter 3 outlines the “sustaining corporation” (p. 62), the author's view of the ideal organization for the future. This organization “accepts responsibility for contributing to the process of renewing and upgrading human knowledge and skill formation in the community and society generally and is a strong promoter of equal opportunity, workplace diversity and work‐life balance as workplace principles” (p. 84). People are seen as valuable in their own right. “The organization becomes an active promoter of ecological sustainability values and seeks to influence key participants in the industry and society in general. Environmental best practice is espoused and enacted because it is the best thing to do. Nature is valued for its own sake” ” (p. 84).

A picture is created through the description of a multitude of anecdotes and partial success stories in different organizations. The blurredness of this picture may be due to the nature of the corporation of the future, being constantly changing, including hybrid forms of organization, forming new types of work relationships, and customising products. The sustaining corporation is the last stage in the six‐step path model to social and ecological sustainability.

The main part of the book (chapters 4 to 6) is devoted to the description of the phase model of sustainability, including numerous examples and anecdotes of companies having realised steps along or of the path:

1. 1.

   Rejection. Employees and subcontractors, as well as the environment are simply regarded as resources to be exploited.

2. 2.

   Non‐responsiveness. Business strategies are dominated by financial and technological factors, neither taking into account most aspects of human resource management, nor ecological considerations.

3. 3.

   Compliance. Senior management seek to comply with environmental laws and see the firm as a “decent employer”. However, financial and technological factors still dominate business strategies.

4. 4.

   Efficiency. At this stage a systematic attempt is made to integrate human resource functions into a coherent HR system to reduce costs and increase efficiency. Poor environmental practice is seen as a source of avoidable cost, and ecological issues are systematically reviewed.

5. 5.

   Strategic pro‐activity. The workforce skills mix and diversity become integral elements of corporate and business strategies. Proactive environmental strategies aiming to achieve ecological sustainability are regarded as a source of competitive advantage.

6. 6.

   The sustaining corporation.

The authors stress that this phase model, while including typical stages of development, is not necessarily the path taken by individual corporations (skipping, ambiguity, regression are possible). Chapters 4 to 6 outline the major steps that organizations need to take in moving beyond rejection and non‐responsiveness. According to the authors, at the beginning of the journey, corporations can benefit from proactively focussing on compliance first. Going forward from compliance, the next step could be achieved by gaining sustainable efficiencies through cost reduction, value adding and innovation and flexibility. Even further up the path lies pro‐activity. Sustainability becomes a strategic advantage. All of these steps are illustrated with numerous examples and anecdotal evidence, and the main points for action are summarised in list form. Different levels of action are considered (e.g. culture, strategy, cost management, reputation management).

The third and last part of the book (chapters 7 to 9) deals with the implementation of change: chapter 7 describes how to progress incremental change, chapter 8 outlines the route of transformative change, and chapter 9 discusses issues of leadership in change. The authors point out that the choice of changing mode or tools depends on the situation and on the objectives of the corporation. The incremental path and the transformative path are two alternative approaches to change. Both pathways are described for a number of progressive routes within the six‐step sustainability model, and are made actionable through more detailed step programs. The last chapter of the book (chapter 9) is concerned with leadership in change towards sustainability. This chapter includes bullet point advice for change leaders, stages in achieving change agent mastery, and a description of useful skills for change leaders. On a more humanistic note, values of empathy, caring and love are discussed. The different internal and external stakeholder groups in corporate change are described, and their potential for action and impact is underlined.

Overall, the book is easy to read, clearly written and well presented. The layout is reader friendly, including numerous subtitles and summary lists. The list approach at the end of each chapter will not appeal to every reader, but seems to underline the “can do” action‐appeal to practitioners. The main target audience appear to be practitioners in organizations. Nevertheless, the book should also be useful for researchers and students of organization or management, and especially the human sustainability elements will be of interest for an HRM audience.

Organizational Change for Corporate Responsibility is a refreshing change from other books concerned with social justice and the survival of our planet. It addresses these fundamental issues without bitterness, and in a simple and plain style, with a “can do” attitude. We are used to seeing the fate of the world as a daunting topic, nearly too complex to be discussed at all. The plain textbook style may make social and environmental problems more accessible for managers and students. While the pathways and step lists given in the book are likely to be either too rigid or too general for individual practitioners in specific situations, they can provide useful take‐off points for strategic planning and thinking.But does the book really reach its goal, to advocate change and motivate readers to contribute to changing their corporation? The external and internal drivers for change named by the authors appear to be motivators for large international corporations that underlie high media pressure and regulatory scrutiny. Even in large corporations, it seems not to be true yet in today's reality that self‐interest and external pressures alone act as a strong enough motivator for environmentally friendly and socially responsible behaviour for every company. For this tenet to hold, in my view the world would require even more sophisticated, informed, and proactively engaged consumer groups and clients. An element that could add to the book's advocacy is a clearer formulation of the moral and ethical imperative for changes, and this driver should hold true for any kind of corporation.

This book may cause a lot of cynicism. We are not used to seeing terms like “caring and love” (p. 272) or “cosmocentric consciousness” (p. 270) in a strategy text. However, the coherent message that emerges throughout the book is that environmental and social issues should be part of corporate thought and action. This message is both timely and true. Even if the book falls short of its ultimate goal to engage the reader into actively changing their corporation, the authors deserve enormous credit for creating a text that could potentially engage a broad audience in the discussion of sustainability.