Exploring the integration of corporate sustainability into strategic management: A literature reviewJournal of Cleaner Production

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Authors
Sabrina Engert, Romana Rauter, Rupert J. Baumgartner
Year
2015
DOI
10.1016/j.jclepro.2015.08.031
Subject
Renewable Energy, Sustainability and the Environment / Strategy and Management / Industrial and Manufacturing Engineering / Environmental Science (all)

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Accepted Manuscript

Exploring the integration of corporate sustainability into strategic management: A literature review

Sabrina Engert, Romana Rauter, Rupert J. Baumgartner

PII: S0959-6526(15)01120-8

DOI: 10.1016/j.jclepro.2015.08.031

Reference: JCLP 5997

To appear in: Journal of Cleaner Production

Received Date: 20 March 2014

Revised Date: 20 July 2015

Accepted Date: 10 August 2015

Please cite this article as: Engert S, Rauter R, Baumgartner RJ, Exploring the integration of corporate sustainability into strategic management: A literature review, Journal of Cleaner Production (2015), doi: 10.1016/j.jclepro.2015.08.031.

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Exploring the integration of corporate sustainability into strategic management: A literature review.

Sabrina Engert*, Romana Rauter, Rupert J. Baumgartner

Institute of Systems Sciences, Innovation and Sustainability Research, University of Graz,

Merangasse 18/1, 8010 Graz, Austria *Corresponding author. Tel.: +43(0)316-380 7332.

E-mail addresses: sabrina.engert@uni-graz.at (S. Engert), romana.rauter@uni-graz.at (R.

Rauter), rupert.baumgartner@uni-graz.at (R.J. Baumgartner).

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ABSTRACT

The commitment of companies to corporate sustainability has been frequently discussed in theory and practice. Such a commitment to corporate sustainability demands a strategic approach to ensure that corporate sustainability is an integrated part of the business strategy and processes. Therefore, this article is aimed at exploring the integration of corporate sustainability into strategic management, providing a framework of interrelated issues based on the existing literature in this research field. A literature review of 114 peer-reviewed scientific journal articles, including a content analysis, was conducted. The literature review revealed that: (1) the number of related publications on the topic has been growing throughout the last few years; (2) the explored research field has been mainly grounded on traditional strategic management research, but has also been enriched by interdisciplinary know-how from a corporate sustainability perspective; and (3) there is a need to foster empirical research in this research field. While the concept of corporate sustainability arises in several areas of research, a common or unifying basis, as well as the identification of issues that influence the integration into strategic management, has failed. The review outlined the issues most commonly addressed and helped to develop a framework, derived from organizational influences, internal and external drivers, and those factors supporting or hindering the integration of corporate sustainability into strategic management. The literature review provides a summary of the most important issues that emerged in this field, and provides new opportunities and challenges that need to be addressed by further research.

Keywords: Strategic Management; Corporate Sustainability; Corporate Sustainability

Integration

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ACCEPTED MANUSCRIPT 3 1 Introduction

Driven, by ecological and social trends, company environments are rapidly changing (UNEP, 2013; GRI, 2013; IPCC, 2014). In this context, there has been an increasing interest in changing businesses towards corporate sustainability (Moon, 2007; Baumgartner, 2014, online 2013). However, companies have also been struggling to move forward. Managers have been recognizing that the integration of corporate sustainability is an important topic, but they just rarely consider it in strategic management (Kiron et al., 2012; Kiron et al., 2013,

McKinsey, 2014). Nevertheless, considering corporate sustainability in business strategies and processes has become one promising way to cope with the aforementioned changes. Since decisions related to corporate sustainability are taken at a strategic level, there has also been increased scientific interest in the subject of strategic management as related to the integration of corporate sustainability in a company’s strategy, vision and culture (Stead and Stead, 2000;

Jin and Bai, 2011).

The basis of strategic management theory has been shaped by several key authors (e.g.

Chandler, 1962; Ansoff, 1965) and comes from military science (Bracker, 1980). Chandler (1962) highlighted the relationship between organizational structure and strategy, whereas

Ansoff (1965) discussed the basics of the concept of strategic management. Strategic management is about choosing a unique position for a company, i.e. doing things differently or better than competitors, and in a way which typically lowers costs or better serves customer needs (Porter 1979). This then gives rise to some form of competitive advantage (e.g.

Penrose, 1959; Mintzberg, 1978; Grant, 1991). Central to strategic management is the strategy itself. According to Mintzberg (1978, p. 935) ‘strategy in general, and realized strategy in particular, will be defined as a pattern in a stream of decisions’. In his study he argues that ‘the field of strategic management cannot afford to rely on a single definition of strategy’ (Mintzberg, 1987a, p. 11). One definition would be that corporate strategy explains the meaning and vision of a company to internal and external stakeholders while defining the boundaries of corporate policies, and thus contributes to a better understanding of corporate identity and culture (Mintzberg, 1987b). Mintzberg et al. (1998) described ten different schools of thought that focus on the strategy formation process and emerge in management practice. Johnson et al. (2008) and Zhang et al. (2013) stated that corporate strategy is the combination of strategic analysis, choice, and implementation. Hill and Jones (2008) described the analysis of internal and external company environments and the selection of corporate strategies as strategy formulation; whereas strategy implementation means putting the selected strategies into action. However, research has not only focussed on the strategy