Business Cases for Sustainability – A Stakeholder Theory Perspective

[We’re pleased to welcome authors Stefan Schaltegger and Jacob Hörisch of Leuphana University, Luneburg and Edward Freeman of Darden Business School.  Schaltegger, Hörisch and Freeman recently published an article in Organization & Environment entitled “Business Cases for Sustainability: A Stakeholder Theory Perspective,” which is currently free to read for a limited time. Below, the three authors reflect on the inspiration for conducting this research:]

33048305825_efac4c4770_oWhat motivated you to pursue this research?

More and more private companies are voluntarily releasing statistics concerning how often they receive requests for their subscribers’ information, on what grounds the requests are made, and how many subscribers’ data has been disclosed. These statistics are bundled in transparency reports and their release has generally been seen as shedding light on otherwise secretive government activity, be it surveillance practices undertaken by intelligence agencies, by security intelligence agencies, or by law enforcement agencies. I wanted to understand a few things in my course of research: would companies that were not facing intense socio-economic pressures produce voluntary transparency reports that robustly revealed government surveillance practices? How effective are voluntarily produced transparency reports, generally, in shedding light on corporate and government activity? And what might be the impacts of standardizing these sorts of voluntary reports, and how might such standardization come about?

Were there any specific external events—political, social, or economic—that influenced your decision to pursue this research?

Countries around the world are grappling with the issue of government access to telecommunications data. The issue has become particularly poignant given revelations of international spying undertaken by Western countries, as well as a range of existing and proposed laws in Europe and North America that would facilitate police and security services’ access to communications information. However, governments have tended to be deeply secretive in how they use existing powers or how they would actually use proposed powers. Private companies’ voluntarily produced transparency reports, which provide statistics and narrative accounts of how often and on what grounds governments request access to companies’ data, act as a novel way of shining a light upon government practice. I was motivated to understand just how much these reports genuinely shed light on government practice and how much they cast shadows over the politics and policies of communications surveillance.

In what ways is your research innovative, and how do you think it will impact the field?
There is an extensive literature on corporate social responsibility documents and the extent to which those documents make private firms transparent, as well as a literature discussing the importance of rendering government surveillance transparent to the public. What is novel about my research is it explores how private firms’ reports are produced in contravention of state desires or interests and, thus, how transparency reporting can happen outside of situations where the market or government are clamoring for revelations of firm behavior. Core to my findings is that voluntarily produced reports could potentially be standardized to enhance comparability across firms and the reports’ revelatory nature, but that any such standardization may conceal as much about firm behavior as it reveals. Ultimately, this research advances the scholarly and public policy debate over how (in)effective private firms’ reports’ are in advancing the state of knowledge of government surveillance activities versus concealing some aspects of such activities.


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Talent Management in the Public Sector: How to Explain Different Approaches?

education-1580143_1920 (1)[We’re pleased to welcome author Dr. Marian Thunnissen of Fontys University of Applied Sciences. Dr. Thunnissen recently published an article in Public Personnel Management entitled “Talent Management in Public Sector Organizations: A Study on the Impact of Contextual Factors on the TM Approach in Flemish and Dutch Public Sector Organizations,” which is currently free to read for a limited time. Below, Dr. Thunnissen recounts how her research began and developed.]

PPM_C1 template_rev.inddDorien and I were each working on a study on talent management (TM) in the public sector. While we met each other several time at academic conferences we were intrigued by the differences in the TM approached adopted by the public sector organizations under study. What could explain that the public sector organizations in the Dutch study all aimed for an exclusive and performance oriented talent approach, while the Flemish governmental entities opted for an inclusive approach? This interesting phenomenon was for us the starting point to compare our data and to explore what characteristics of the external and internal context could explain the differences.

While analyzing the data we realized that using theory on institutional mechanisms was insufficient to explain what happened and we decided to include institutional logics in our conceptual model. The data indeed shows that multiple factors in the organizational context affect the intended TM strategy. Market pressures resulting from the external labor market (and the position as an employer on that market) and budgetary constraints, as well as institutional pressures have an effect as well. Moreover, we found that ‘attributes’ of the organization filter the institutional mechanism. In our study the composition of the workforce combined with internal economy measures can be an explanation for choosing a specific TM approach. But most of all organizational culture seems to be crucial (e.g., Stahl et al., 2012; Kontoghiorghes, 2016). Yet, we have seen that the influence of organizational culture cannot be separated from the logics adopted by the actors in the dominant coalition. Moreover, the research also indicates that the origins of the key employees – being public service works or classic professionals such as the academics – has an significant impact on organizational culture and the logics dominant in the organization (Greenwood et al, 2011; Thornton et al., 2005). This is an important theoretical contribution of the paper. The impact of belief systems has been mentioned by Meyers and Van Woerkom (2014) and Nijs et al. (2013) but not yet studied in empirical TM research. Nonetheless, the data points out that the mechanisms, actors and logics are entangled and not easy to separate.

All in all, the data supports our statement that TM is not an instrumental, rational and independent process. Although key actors in the dominant coalition take notice of the contextual factors, TM also proves to be an intuitive and micro-political process. Therefore, our comparison highlights the importance of an institutional and organizational fit, but in particular the significance of a consistent ‘talent mindset’ embedded in organizational culture and leadership style (also see Stahl et al., 2012; Kontoghiorghes, 2016). We think that it is necessary for HR and managers in practice to show consideration for the potential impact of ‘tangible’ mechanisms such as labor market pressures and economy measures, but also to be more aware of the influence of personal beliefs and logics regarding talent and how to deal with those mechanisms and logics in the decision process.

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Text Classification for Organizational Researchers: A Tutorial

baby-84626_1920[We’re pleased to welcome author Dr. Stefan Mol of the University of Amsterdam. Dr. Mol recently published an article in Organizational Research Methods entitled “Text Classification for Organizational Researchers: A Tutorial,” which is currently free to read for a limited time. Below, Dr. Mol reflects on the inspiration for conducting this research:]

07ORM13_Covers.inddWhat motivated you to pursue this research?
Machine Learning assisted text analysis is still uncommon in organizational research, although its use holds promise. Most manual text analysis procedures conducted by researchers in this field are about the assignment of text to categories such as in thematic and template analyses. However, manual classification of text becomes laborious and time consuming (and sometimes subject to reliability issues) when one needs to do this for a sizeable amount (hundreds of thousands or millions) of pieces of text. An alternative is to use automatic text classification systems that can be constructed by researchers, which allow them to speed up the process of labeling or coding large sets of textual data. The design and building of text classifiers could be of use for various areas of organizational research. Our aim was to illustrate how this could be done and provide a tutorial. We used the example of building a text classifier to automatically sort job type information contained in job vacancies. The importance of validating the results of text classification was demonstrated through data triangulation, using expert input. We believe that the use of this procedure among organizational researchers can improve reliability and efficiency in analysis that involves classification.
What has been the most challenging aspect of conducting your research? Were there any surprising findings?
Building classifiers involves several rounds of training, testing, and validation before they can be deployed in practice and the most challenging aspect is training the classifier and choosing the parameters in such a way that the results are valid from the standpoint of application. The classifier we built for the job analysis task was able to recover job task sentences with high precision as assessed by an expert in the field, although the classifier was initially trained with minimum expert input. Our results thus suggest that job vacancies are a reliable alternative source of job information that can augment existing approaches to job analysis. More generally, we believe this also suggests that wider use of text classification holds promise for organizational research in a broader sense.
What did not make it into your published manuscript that you would like to share with us?
One class of techniques that are now increasingly applied in the area of text classification are word embeddings. Word embeddings map each word to vectors of real numbers. The similarities among word vectors can be used to quantify and categorize the meaning of words in specific contexts. We initially planned to include a short discussion about this but we decided not to because these techniques warrant more in depth discussion which go beyond the scope of our current article. However, organizational researchers interested in recovering context specific meaning of words may benefit from the specific approach taken with word embeddings and we recommend them to get to know these techniques as well.

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Call for Papers: Small Group Research

SGR_48_3_Covers.inddSmall Group Research is currently seeking manuscript submissions. Small Group Research is an international and interdisciplinary journal presenting research, theoretical advancements, and empirically supported applications with respect to all types of small groups. Each quarterly edition contains in-depth articles on trends, case studies and the latest research by top human resource scholars and industry experts.

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Is Business Ethics Too Important to be Left in the Hands of Business: A Democratic Alternative?


[We’re pleased to welcome author Carl Rhodes of the University of Technology, Sydney. Rhodes recently published an article in Organization Studies entitled “Democratic Business Ethics: Volkswagen’s Emissions Scandal and the Disruption of Corporate Sovereignty,” which is currently free to read for a limited time. Below, Rhodes reflects on the inspiration for conducting this research:]

Cover image for latest issue of Organization Studies

When people think of business ethics they normally imagine what businesses can or should do to be judged as ethical.  Whether the focus is on breaches of ethical norms by corporations, or models for the achievement of ethical business, the common approach is that it is organizations themselves who are the ethical agents.

This assumption is limited because it fails to account for how corporate responsibility does not necessarily arrive through the voluntary actions of corporations themselves. In response, in my own research I have been exploring a more democratic and socially focussed understanding of how business ethics is practiced.  The results were recently published in my article in Organization Studies called ‘Democratic Business Ethics: Volkswagen’s Emissions Scandal and the Disruption of Corporate Sovereignty’

The 2015 Volkswagen emission scandal illustrates what I call democratic business ethics; an ethics where citizens and the institutions of civil society hold corporations to account for their actions, and in so doing disrupt the self-interested abuse of corporate power.  At the time the scandal broke, Volkswagen was the world’s largest auto manufacturer, and a company widely heralded for its environmentalism and its corporate social responsibly activities.  Despite impeccable ethical credentials, the scandal revealed a corporation whose success had been boosted by sophisticated cheating on fuel emission tests.

The paper shows how Volkswagen was brought to justice for its actions not because of its own proclaimed ethics or moral hubris, but because of the interaction of individuals and institutions from outside of business, in this case NGOs, scientists, law makers, government agencies, the media, and the general public.  This was a demonstration how business ethics manifested in the interruption of a flagrant case of corporate fraud, deceit and criminality.

The paper develops the idea of democratic business ethics by focussing on how civil society in particular can and should ensure that corporations are made morally responsible for what they do. This is an ethics made practical through forms of dissent and contestation that redirect power away from centres of organized wealth and capital, returning it to its democratically rightful place with the people.

The conclusion is that business ethics is far too important to be left in the hands of business, and needs to be exercised in the democratic sphere so that corporations are serving society rather than the other way around.

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Do Economic Profit Companies Walk their Compensation Talk?

[We’re pleased to welcome author Mark E. Haskins of University of Virginia. Haskins recently published an article in the Compensation & Benefits Review entitled “Do Economic Profit Companies Walk their Compensation Talk? which is currently free to read for a limited time. Below, Haskins explains the significance of his research in the context of his other works:]


This paper is the third in a series of Compensation & Benefits Review articles that explored the relationship between economic profit (EP) and executive compensation.  The first one, “Pay for Performance:  Keep it Simple and Value Focused,” Vol. 43, No. 2, 2011, described a four-step process for adjusting EBITDA, a widely used performance metric to evaluate operating managers, to approximate EP, a more shareholder-oriented profit metric. It was argued that the proposed approach could be easily understood and used by non-financial operating managers, rewarding and incenting them to the extent that earnings exceeded a risk-adjusted return on capital.

A second article, “Executive Compensation:  Do Economic Profits Matter?” Vol. 46, No. 5/6, 2014, sought to establish benchmarks for the share of EP that was actually paid to the executive teams at the largest public companies in the U.S.  The endeavor was unsuccessful, not due to the lack of data, but to the very weak, almost non-existent link between estimated EP and yearly “Named Executive Officer” (NEO) Average Total Compensation (NEO-ATC).  By far, the dominant empirical explanation for the differences in cross-company executive compensation levels was the difference in company size, whether measured by total assets or revenue.   The only statistically significant relationship between estimated EP and NEO-ATC was a slightly higher increase in compensation for companies reporting increases in estimated EP compared to those reporting decreases.  Among the reasons offered for the inability to find meaningful empirical benchmarks was that so few companies, in that study’s large sample, might actually employ an EP basis so that whatever patterns existed would be the proverbial “needle in the haystack”, and thus difficult to identify.

In this third investigation, a matched set of public companies was crafted to assess yearly NEO-ATC levels in those companies that report using EP (the EP firms) for executive compensation purposes versus a group of competing companies who do not.  Again, and as detailed in the article, although there is a stronger empirical relationship between changes in EP and changes in yearly NEO-ATC over the five years studied (2011-2015), there is no evidence of a strong cross-company relationship between yearly NEO-ATC levels and estimated EP, even within the sample of EP firms.  In short, EP appears to have had more theoretical appeal than discernible applicability to management and boards of directors.


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Breaking the Paradox: Understanding How Teams Create Developmental Space

action-2277292_1920[We’re pleased to welcome author Karin Derksen of the Free University of Amsterdam (Vrije Universiteit). Derksen recently published an article in the Journal of Management Inquiry entitled “Breaking the Paradox: Understanding How Teams Create Developmental Space,” which is currently free to read for a limited time. Below, Derksen reveals her motive for pursuing her research and some of the challenges and findings:]

The motive that pursued our research

In the Netherland organisations are ever more working with teams, because teams have the potential to outperform individuals. However, teams struggle to make that happen. In previous research a model of developmental space for teams was developed to indeed outperform individuals as a team. Teams create developmental space in their interactions by undertaking four activities: creating future, reflecting, organizing and dialoguing. It appears that the more developmental space teams create the better their results. While creating developmental space, teams need to focus on the performance (creating future and organizing) and sensemaking (reflecting and dialoguing) orientations. These two orientations appear to be at odds with each other in other words, a paradox. How teams experience and handle this paradox and whether this is a critical success factor for them is not yet clear. Therefore, our research question is: How do teams experience and handle the developmental space paradox and what effect does that have?

Research challenges and surprising findings

There is a rapid growth of research on paradoxes. However, the commonalities across studies remain unclear, with each study presenting its own solutions to handling paradoxes. We picked up the challenge to present an overview of the literature about handling paradoxes and empirically test the findings. Unraveling the process of handling paradoxes by studying the literature led us to the idea that handling paradoxes involves a process of making choices, consciously or unconsciously, in which each choice influences the next step taken. Bringing the outcomes of different studies together, we discern the three following steps in the process of handling paradoxes: 1) recognizing the paradox; 2) responding to the paradox; 3) deploying coping strategies. In our study we present these steps in an overview and tested this empirically. Recognizing the paradox and embracing the two sides of the paradox seem to fuel team success.

JMI_72ppiRGB_powerpointStay up-to-date with the latest research from the Journal of Management Inquiry and sign up for email alerts today through the homepage!