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This is the accepted version of a paper published in Corporate Governance : The International
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Citation for the original published paper (version of record):
Eriksson, D. (2016)
A balance model of theoretical sustainability: Framework and propositions.
Corporate Governance : The International Journal of Effective Board Performance, 16(1):
21-34
https://doi.org/10.1108/CG-01-2015-0006
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A Balance Model of Theoretical Sustainability – Framework and
Propositions
STRUCTURED ABSTRACT
Purpose: This describes and discusses a balance model of theoretical business sustainability, in
order to leverage the inferior side, so as to enhance performance.
Design/Methodology/approach: A conceptual description and discussion are provided; along
with an empirical depiction.
Findings: The empirical illustration presents one organization that embodies the goals of
theoretical business sustainability in the marketplace and society.
Research implications: Further research is needed to enhance our understanding of the
phenomenon and performance of business sustainability in supply chains.
Practical implications: Findings highlight that there is no justification for practitioners to strive
consistently for anything other than theoretical business sustainability, and stakeholders need to
push organizations in that direction.
Originality/Value: The paper contributes to our understanding of what should be done and
why business sustainability performance should be improved in supply chains.
Keywords: business sustainability, concurrent engineering, corporate social responsibility,
supply chain management
Paper type: Conceptual paper
A Balance Model of Theoretical Sustainability -
Framework and Propositions
1 Introduction
A recent increase in concern for the planet earth is evident in both research and practice (e.g.,
Fassin and Van Rossem, 2009; Aguinis and Glavas, 2012; Winter and Knemeyer, 2013).
However, over and over again, we see evidence of companies that fail to meet the moral
expectations of their stakeholders (Svensson and Bååth, 2008). People continue to commit
actions with an apparent lack of concern for those they affect (Batson and Thompson, 2001;
Batson, 2011)
The concept of sustainability has evolved from being concerned mainly with environmental
issues to a broader perspective that includes economic, environmental, and social aspects
(Asif et al., 2011). Sustainable development may nowadays be defined as development which
meets the economic, environmental, and social needs of the present, without compromising
the ability of future generations to meet their own needs (WCED, 1987; Elkington, 1997).
Corporate Social Responsibility (CSR) is defined similarly as: “…context-specific
organizational actions and policies that take into account stakeholders’ expectations and the
triple bottom line of economic, social, and environmental performance…” (Aguinis and
Glavas, 2012, p. 855).
According to Fassin and Van Rossem (2009), the concepts of sustainability and CSR are
considered interchangeable by both scholars and practitioners. However, an important
distinction between the two concepts is that sustainability has a clear focus on long-term
aspects, while CSR (relatively speaking) focuses more on short-term aspects (Bansal and
DesJardine, 2014). Corporate efforts that relate to either of the concepts will be referred to
here as business sustainability.
Our discussion is limited to a view of theoretical business sustainability, which we define as a
utopic state, where the needs of the current generation are met, while simultaneously
improving the opportunity for future generations to meet their needs. Our definition and the
subsequent balance model of behavioral business sustainability are borrowed and modified
from the four hierarchical behavioral levels proposed by Raiborn and Payne (1990).
Here, we apply and classify these into four behavioral levels of business sustainability: (i)
theoretical – refers to the fact that behavioral issues of business sustainability may not be
attainable, but it is the ideal level of behavior that the marketplace and society should strive to
achieve; (ii) practical – behavioral issues of business sustainability can mostly be achieved
with diligent efforts; (iii) currently attainable – behavioral issues of business sustainability
that are not praised, but accepted by society, reflecting behavior normally exhibited by
individuals; and (iv) basic standard –behavioral issues of business sustainability that are
acceptable in strict legal terms, but do not comply with the spirit of the law. These will be
discussed further in the section on Defining Sustainability.
Morality and ethics often discussed with regard to these behavioral concepts. ‘Morality’ refers
to an immediate, inner sense of right and wrong, while ‘ethics’ are social constructs of what is
rationalized as right and wrong (Eriksson, 2014, p. 5).
1.1 Relevance and objective
Business sustainability research in a supply chain context consists of a plethora of different
approaches and focus. Two common distinguishable areas are factors: (i) limiting and (ii)
driving business sustainability. Eriksson and Svensson (2015) use three business
sustainability factor categories: (i) drivers, (ii) facilitators, and (iii) inhibitors. These are
similar to those of Perry and Towers (2013) who address drivers and inhibitors of business
sustainability.
We label all factors of business sustainability related to drivers and facilitators (e.g. demand,
expectation, and regulation) of business sustainability in the marketplace and society as
‘requested’. Factors related to inhibitors (e.g. limitations, restrictions and obstacles) issues of
business sustainability are labeled as ‘possible’.
Given a topic of business sustainability, what is requested and what is possible may or may
not be in balance. This tipping-point of two key areas are under attention here, as we focus on
how to move towards enhanced contemporary efforts at business sustainability. Despite the
increased attention paid to business sustainability in current research and practice, there are
some important issues, of which three will be addressed to provide a relevant foundation for
our current topic.
First, research related to supply chain management (SCM) has focused mainly on small-scale
empirical investigations and conceptualizations, and lacks a theoretical foundation (Burgess et
al., 2006; Ashby et al., 2012). It is argued that researchers are reluctant to move beyond
established theories into more innovative territories (Craft, 2012). Aguinis and Glavas (2012)
propose that restoring this balance can help to better understand the roles of predictors,
mediators, moderators, and outcomes of business sustainability. Moreover, it can help to
understand how business sustainability can be built into already demanding workloads and
perhaps even enhance work performance, which is related to the next issue.
Second, despite a large body of empirically derived knowledge, it has evidently proven
difficult to implement issues of business sustainability in supply chains (Mamic, 2005;
Svensson and Bååth, 2008). The manner in which we address the first two areas of
insufficient research addresses the third issue of providing relevance to the current paper.
Third, the research focus in the area of business sustainability has been focused on
organizational processes, and not the underlying mechanisms that generate corporate behavior
in the context of business sustainability (Aguinis and Glavas, 2012; Eriksson and Svensson,
2014).
Subsequently, the objective is to describe and discuss a balance model aimed at moving
towards theoretical business sustainability, focusing on the dimensions ‘possible’ and
‘requested’.
We address all three previously mentioned issues: (i) this research draws on a literature
review based on a large integrated body of empirical and conceptual research; (ii) we suggest
one approach to facilitate the implementation and monitoring of business sustainability issues;
and (iii) besides focusing on efforts to improve business sustainability issues, we incorporate
a balance model that is based on the underlying mechanisms and thus explains why the
various should be implemented and monitored.
Consequently, we provide a conceptual model based on insights and knowledge from
literature on how to improve business sustainability in the marketplace and society. We also
provide suggestions on how practitioners may implement state-of-the-art knowledge on
business sustainability into their supply chains.
2 Conceptualization
The balance model is based on both the literature and empirical demonstration. It draws from
different streams of literature in an attempt to understand how sustainability should be
pursued in practice. This is sometimes seen as steps towards theory creation, but in this case,
it is perhaps best described as ‘theory building’ (Svensson, 2013, p. 469). We do not,
however, claim that we build theory in this particular paper, but follow the logic of abduction
(Kovács and Spens, 2005) to combine different ideas in order to more effectively reflect the
reality that we study. As such, this research subscribes to the critical realist ontology
(Bhaskar, 1978; Danermark et al., 2003) which is both acceptable and common in social
science (Aastrup and Halldórsson, 2008; Rotaru et al., 2014; Eriksson, 2015).
3 Literature Review
3.1 Key Elements of Sustainability
Sixteen elements that drive, facilitate, and/or inhibit sustainability have been identified
(Eriksson and Svensson, 2015). The focus here will be on the examples and
conceptualizations that make up these elements.
Several stakeholders that are external to supply chains are able to dictate the ways, or reward
certain ways, in which business is conducted. Non-governmental organizations (NGO) can
coordinate social movements and apply pressure for change (Teegen et al., 2004).
Governmental intervention is a major catalyst, and public policy and legislation are critical for
sustainable development (Worthington et al., 2008). Consumers create the demand to which
companies try to cater, and, by requesting sustainable products and services, they force
organizations to rethink their value propositions (Svensson and Wagner, 2012). Other external
stakeholders, such as investors and labor organizations, are also associated with increased
pressure to improve business sustainability (Teegen et al., 2004; Perry and Towers, 2013).
The competitive strategy of the company is related to consumer demand (Porter, 1996). Low-
cost strategies have been linked with increased commoditization, which have proven
counteractive to issues of business sustainability as a result of, for example, low supplier
interaction (Cousins, 2005) and competitive pressure to reduce costs (Hoejmose et al.,
2013a) . Moving from what has mainly been an external stakeholder perspective, we now
focus on elements within the supply chain.
Elements internal to the supply chain can be separated into two main groups of managerial
and structural, which are not mutually exclusive. Collaboration beyond corporate boundaries
in supply chains enables improved business sustainability through, for example, partnership
programs (Strand, 2009) and continuous improvements (Fang et al., 2010). Closely related to
collaboration is transparency, which may manifest itself in information sharing (Eckerd and
Hill, 2012) and traceability (Pagell and Wu, 2009).
In essence, it could be argued that there is a need for a holistic approach to the supply chain
when addressing issues of business sustainability (e.g., Ashby et al., 2012), requiring efforts
