Optimizing Performance Management Systems in the Energy Sector

2528399141_5c14f81238_z[We’re pleased to welcome Rui Vieira of University of Amsterdam. Rui recently published an article in Organization & Environment, entitled “Aligning Strategy and Performance Management Systems: The Case of the Wind-Farm Industry” with co-authors Brendan O’Dwyer of University of Amsterdam and Roman Schneider of University of Minho.]

This article presents a case study examining the problems and possibilities of performance management in a wind-farm company. Drawing on Ferreira and Otley’s (2009) recently developed performance management systems (PMSs)  framework, the study demonstrates how the framework facilitates in-depth, holistic and critical evaluations of existing PMSs, and, how these evaluations can drive the development of revised PMSs which balance economic, social and environmental goals. This integrated focus on PMS evaluation and design is unique as prior work seeking to develop systems to promote and measure sustainable performance tends to establish them in isolation from informed evaluations of existing systems. Drawing on the case analysis, the article proposes a form of ‘sustainable balanced scorecard’ to enable a company to streamline their management decision-making. It also offers guidance for companies on the development of PMSs which can contribute to their survival and growth in a wind energy sector characterized by increasing competition.

An excerpt from the paper:

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We conduct a case study using the Ferreira and Otley (2009) framework applied to a German windfarm company. The article makes three contributions to the literature. First, our integrated focus on PMS evaluation and design is unique as, quite often, earlier work seeking to develop systems to promote and measure sustainable performance establishes them in isolation, independent of evaluations of existing systems (Hubbard, 2009; Lohman, Fortuin, & Wouters, 2004). To our knowledge, this is the first study that uses the Ferreira and Otley (2009) framework explicitly to evaluate a company’s existing PMSs as part of a project aimed at designing a revised PMS. The study also mobilizes Broadbent and Laughlin’s (2009) extension to the Ferreira and Otley framework (2009) in order to place additional analytical emphasis on the organizational context within which a PMS is evaluated and designed. Particular attention is given to contextual factors that affect the nature of PMSs in an effort to also offer a better understanding of the interaction between the design and use of PMSs (Agostino & Arnaboldi, 2012; Henri, 2006). Second, the article offers lessons for companies operating in the wind-energy sector (and more widely) with respect to how they might develop their PMSs to help ensure their continued growth and survival. This is important given the need for wind-farm companies to avoid complacency, as the poor design of PMSs will have far-reaching implications if and when widely predicted increased competition is introduced into the wind-farm sector. Third, we draw on the results of our analysis of the wind-farm company’s existing PMSs to propose a form of “Sustainable Balanced Scorecard” (SBSC) to enable the company to streamline their management decision-making. This proposal adopts an approach that is similar to Hubbard’s (2009) SBSC, which added nonmarket (social and environmental) elements to the traditional BSC. Unlike Hubbard (2009), however, in our development of an SBSC we do not encourage a narrow focus on a single metric. Its aim is to ensure that the selected performance measures fully reflect the organization’s wider stakeholders and strategic value drivers and are consistent with the vision and goals of the organization, thereby increasing the visibility of its critical functions. Furthermore, we argue that Ferreira and Otley’s (2009) framework can also be used in other situations in which the need to achieve a balance between economic, environmental, and social objectives is required, like the “Responsive Scorecard” (Van der Woerd & Van den Brink, 2004).

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*Wind farm image attributed to warrenski (CC)

Rui Vieira is assistant professor of Management Control and Accounting at the University of Amsterdam Business School, The Netherlands and visiting scholar at Instituto de Empresa Business School, Spain and Nordakademie, Germany. He received his PhD in Industrial and Business Studies from the University of Warwick. Rui’s research interests in management accounting are interdisciplinary and qualitative in focus, covering the fields of management control systems, cost accounting, performance measurement, and their organizational and behavioral aspects.

Brendan O’Dwyer is professor of accounting at the University of Amsterdam Business School. He is also the director of the Amsterdam Business School Research Institute. Previously he was head of the Accounting division at the School. Brendan’s research interests are interdisciplinary and qualitative in focus. His academic work has been published in leading international accounting and management journals such as Accounting, Organizations and Society, Contemporary Accounting Research, The European Accounting Review and The Journal of Business Ethics.

Roman Schneider has been Managing Director of many wind companies in German and Poland for many years. He received his diploma in economics from the Hochschule fuer Oekonomie, Berlin, and his MBA from the Nordakademie, Elmshorn. He is currently a PhD student in Entrepreneurial Sciences (Accounting) at the Universidade do Minho, Portugal, and teaches management accounting and financial controlling in the adult education. His research focuses on management control systems and performance measurement in businesses.

Applying a Business Model Perspective to Sustainability Solutions

[We’re pleased to welcome Caroline Gauthier of Grenoble Ecole de Management. Professor O&E_Mar_2012_vol26_no1_Cover_Final.inddGauthier co-authored an article with Bettina Gilomen of Grenoble Ecole de Management in Organization & Environment entitled “Business Models for Sustainability:
Energy Efficiency in Urban Districts”.]

  •  What inspired you to be interested in this topic?

The disruptive nature of many sustainability solutions may be the main barrier to their implementation and dispersal: adopting a business model perspective may help address this problem.

  • Were there findings that were surprising to you?

The implementation of sustainable solutions often relies on projects being implemented and managed collectively, so that organizations need to adapt their business models to deliver value propositions collectively. Some actors are working collectively to deliver innovative solutions for energy efficiency and therefore completely change the rules of the energy supply game.

  • How do you see this study influencing future research and/or practice?

Sustainability issues should be addressed with a collective business models perspective.

The abstract:

The disruptive nature of many sustainability solutions may be the main barrier to their implementation and dispersal: adopting a business model perspective may help address this problem. Previous literature has explored how organizations can convert their supply chains and customer interfaces toward a sustainability focus, but has generally not considered links to other business model elements—such as value propositions and financial models—in exploring business model transitions. Moreover, the implementation of sustainable solutions often relies on projects being implemented and managed collectively, so that organizations need to adapt their business models to deliver value propositions collectively, a phenomenon that research on business models for sustainability should address. This article addresses these issues by exploring changes in business model elements in detail via an in-depth qualitative study of two French sustainable urban projects—Caserne de Bonneand IssyGrid®. Our results show, first, that it is worth considering the role played by business model elements (the value proposition and the financial model) that literature does not usually discuss in enabling the management of or transition to business models for sustainability. Second, considering all four business model elements allows us to develop a typology of their transformations in organizations working toward sustainable solutions. Third, introducing the necessary collective dimension of sustainable solutions highlights the role of agency in facilitating their development and adoption.

You can read “Business Models for Sustainability: Energy Efficiency in Urban Districts” from Organization & Environment free for the next two weeks by clicking here. Want to know about all the latest research from Organization & Environment? Click here to sign up for e-alerts!

Environmental Proactivity: An Economic Booster for Firms?

[We’re pleased to welcome Jesús Valero-Gil of University of Zaragoza. Professor O&E_Mar_2012_vol26_no1_Cover_Final.inddValero-Gil co-authored an article with Pilar River-Torres, Concepcion Garces-Ayerbe, and Sabina Scarpellini of University of Zaragoza in the September 2015 issue of Organization & Environment entitled “Pro-Environmental Change and Short- to Mid-Term Economic Performance: The Mediating Effect of Organisational Design Change” .]

 The relationship between environmental proactivity and financial results in firms has been widely studied, and different conclusions have been obtained. Both from a theoretical and an empirical perspective, numerous authors have come to different and opposite results. This phenomenon inspired a new work in the topic. Given this lack of consensus, the idea that the relationship between environmental and financial performance is not as obvious as it might seem arises. The complexity of the relationship between pro-environmental measures and performance, suggesting that there are certain moderating and mediating variables in this relationship.

The abstract:

The aim of this study is to contribute empirically to the understanding of the economic effects of pro-environmental change in firms. First, we analyse whether pro-environmental changes performed in different sections of firms’ value chain (products, processes and supply and distribution channels) generate positive economic returns in the short- to mid-term. Second, we analyse whether measures implemented by firms to improve environmental performance (pro-environmental change) have been complemented with changes in organisational design, and whether these changes help increase short- to mid-term economic performance. Through an analysis of a sample of 303 firms, we have collected empirical evidence that confirms that pro-environmental change improves short- to mid-term business performance both directly and indirectly, through the mediating effect of improvements in organisational design that often go hand in hand with these processes.

You can read “Pro-Environmental Change and Short- to Mid-Term Economic Performance: The Mediating Effect of Organisational Design Change” from Organization & Environment free for the next two weeks by clicking here. Want to know about all the latest research from Organization & Environment? Click here to sign up for e-alerts!

The Business of Bumble Bees: A Look at the Relationship Between Business and Biodiversity Loss

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Small though they may be, bumble bees play a large part in the environment. As pollinators, bees assist in the reproductive process of flowering plants, including crops that produce food, fiber, drugs, and fuel. More than a third of the world’s crops rely on bees as pollinators, which makes the population decline of bees in recent years particularly alarming. In their article, “Invisible Compromises: Global Business, Local Ecosystems, and the Commercial Bumble Bee Trade,” published in Organization & Environment, authors Carol Reade, Robin Thorp, Koichi Goka, Marius Wasbauer, and Mark McKenna use the bumble bee trade as a lens to explore the complex relationship between global business and ecosystem health, including biodiversity loss. In addition, the article explores ways that businesses can adopt more sustainable practices.

The abstract:

The purpose of this article is to challenge organizational scholars, management educators, and business leaders oae coverto consider more deeply the impact of global business activities on local ecosystems. Drawing on the management, sustainability, and entomology literature, we illustrate the complex relationship between global business and biodiversity loss through the lens of the commercial bumble bee trade. Global firms in this trade rear and supply bees for greenhouse crop pollination. We build on a well-known global strategy framework used in management education by adding a sustainability dimension, and offering propositions for the relationship between global business strategy and the strength of environmental sustainability. We conclude that a locally responsive, place-sensitive business strategy supports the strongest degree of environmental sustainability, and addresses the invisible compromises to ecosystem health that may result from the efforts of global firms to provide otherwise beneficial products and services.

You can read “Invisible Compromises: Global Business, Local Ecosystems, and the Commercial Bumble Bee Trade” from Organization & Environment by clicking here. Want to be notified of all the latest research like this from Organization & Environment? Click here to sign up for e-alerts!

Do Marine Animals Make Effective Mascots?

whale-1406956-mIf you grew up in the United States, there’s a good chance that you were educated about preventing forest fires by Smokey the Bear. Smokey the Bear first debuted in 1944, following on the heels of Disney’s “Bambi” which had been successful in garnering attention for the dangers of wildfires. Over the years, Smokey’s story developed more and more with the scout hat-wearing bear appearing in radio programs, books, comics and on TV. According to the Ad Council, Smokey’s Forest Fire Prevention campaign has helped reduce the number of acres lost annually from 22 million to 8.4 million. But how much of Smokey’s success was due to the fact that he was a cute, cuddly mascot? Could a marine animal accomplish just as much for ocean conservation as Smokey did for forest fire prevention? Daniel Hayden and Benjamin Dills explore this topic in their article “Smokey the Bear Should Come to the Beach: Using Mascot to Promote Marine Conservation” from Social Marketing Quarterly.

The abstract:

home_coverThere is an open question among conservation practitioners regarding whether using flagship specifies to market marine conservation is less effective than using terrestrial species in the terrestrial context. A flagship species is a species selected to act as an ambassador, icon, or symbol for a defined habitat, issue, campaign, or environmental cause. A mascot species has many of the same attributes as a flagship species, but is selected for its communications value instead of its ecological value. Our research indicates that mascot species can be as effective a marketing tool for marine conservation as they have been for terrestrial conservation. Based on our study, there is no evidence that the use of marine mascot species or that confront threats based on fishing and harvesting of aquatic resources perform any differently from other social marketing campaigns that address terrestrial issues.

You can read “Smokey the Bear Should Come to the Beach: Using Mascot to Promote Marine Conservation” from Social Marketing Quarterly for free for the next week by clicking here. Want to get all the latest research like this from Social Marketing Quarterly sent directly to your inbox? Click here to sign up for e-alerts!

Read Organization and Environment’s Special Issue for Free!

challenges-1221258-mCan institutional theorists constitute a society to better the relationship between organizations and the natural environment? What is the current state of the research on carbon disclosure? How have researchers addressed the tensions inherent in corporate sustainability? These topics and more are explored in Organization and Environment‘s Special Issue entitled “Review of the Literature on Organizations and Natural Environment: From the Past to the Future.”

Stephanie Bertels and Frances Bowen collaborated on the introduction to the Special Issue:

In summer 2015, the Organizations and the Natural Environment Division of the Academy of Management will celebrate the 20th anniversary of its first formal oae coverconference program back in 1995. Over the past two decades, a vibrant and engaged scholarly community has generated thousands of empirical and conceptual studies on the complex relationships between organizations and their natural and social environments. Each individual study focuses on specific research questions crafted to meet the rigorous requirements of academic journals. However, too often our journal publishing and professional norms push us to focus on small, incremental contributions to knowledge. Anniversaries can remind us to pause, take stock, and build on the past to shape a new future. The Organization & Environment (O&E) editorial board decided to provide a venue for this anniversary celebration: a special issue where as a community of scholars we can reflect on where we have been, what we have learned, and what remains to be understood to both further our field and help society address pressing environmental challenges.

In this first review issue of O&E, we hoped to draw insight and inspiration from in-depth reviews of specific topics. Our call for articles invited authors to reflect on the state of theory, empirical research, and practice in relation to key questions at the interface of organizations and the natural environment. We sought out comprehensive and analytical reviews of recent research that synthesized, integrated, and extended our thinking. We encouraged authors to anchor their thoughts in detailed retrospection on past and current research, and to identify the key theoretical, empirical, methodological, or practical challenges of future O&E research. There was an enthusiastic response from the community of scholars and in the end, we have assembled a group of six articles. Each offers a stand-alone review of a particular phenomenon within the O&E domain. Together they showcase the wide range of scholarship addressing topics ranging from the macro to the micro foundations of our field.

You can read Organization and Environment‘s Special Issue for free for the next 30 days! Click here to access the Table of Contents. Want to know when all the latest research like this becomes available from Organization and Environment? Click here to sign up for e-alerts!

Are Corporations Really as Green as They Say They Are?

recycle-1-917289-mMore and more, consumers are demanding “green” products. In response, many corporations are developing and marketing merchandise billed as environmentally friendly. But are these corporations choosing to ignore any negative ramifications these products may actually have? Organization and Environment Guest Editor Frances Bowen and Editor J. Alberto Aragon-Correa discuss in their editorial “Greenwashing in Corporate Environmentalism Research and Practice: The Importance of What We Say We Do.”

From the editorial:

Greenwashing is the selective disclosure of positive information without full disclosure of negative information so as to create an overly positive corporate image (Lyon & Maxwell, 2011). Greenwashing is a central empirical phenomenon oae coverwithin organizations’ interactions with the natural environment because it is hard for stakeholders to directly evaluate firms’ environmental performance. This leads to a reliance on firms to signal their environmental quality through environmental reports, advertising, corporate websites, or eco-certification schemes. Increased environmental disclosure without obvious substantive improvements in environmental impacts has fed justifiable skepticism about the gap between what firms say and do on environmental issues (e.g., Dauvergne & Lister 2010; Forbes & Jermier, 2012; Konefal, 2013). Increased environmental disclosure has also provided research questions and empirical data for scholars to analyze greenwashing behavior, its drivers, and its consequences (e.g., Delmas & Burbano, 2011; Du, 2014; Walker & Wan, 2012).

This editorial also introduces the most recent issue of Organization and Environment, which can be read for free for the next 30 days. Click here to view the Table of Contents and here to read “Greenwashing in Corporate Environmentalism Research and Practice: The Importance of What We Say We Do.” Want to know all the latest from Organization and Environment? Click here to sign up for e-alerts!