The past few decades have seen some of the biggest companies in the world suffer huge losses in reputation as a result of scandals that could have been prevented if there had been an adherence to ethical rules and regulations (Seretny & Seretny, 2012). The scandals have occurred across all industries, from the oil spills of BP in the gulf, to the combined issues that led to the global recession in 2008. In recent years, some of the biggest scandals include the Volkswagen emissions scandal and the Tesco accounting fraud case, for which a few executives are currently facing prosecution. The trend is the same; several characteristics of the corporate world combine to create pressure and opportunities for the unethical and fraudulent activities to take place. Competition is stiff, and in a situation where success is gauged by how one exceeds the expectations of analysts and forecasters, the management is normally put in a situation where they can literally push boundaries and cross lines in order to be seen to be successful. Further, most of the time the rules are never explicit enough to define where the lines are. It is because of this that the idea of business ethics and corporate governance is important. This is why the article Strategic Leadership of Corporate Sustainability by Robert Strand (2014) was chosen for critical review.
The subject area being reviewed is how the concepts of corporate sustainability and strategic leadership are being incorporated into each other at the top level management. Strategic leadership normally focuses on a small group of leaders with the overall responsibility for everything that happens within the organization. The rationale is that since they occupy the highest levels of the organization, they are in the best position to have a significant effect on the organizational outcomes (Finkelstein, et al., 2009). Corporate sustainability, on the other hand, explores the concept of the triple bottom line; the integration of economic, social and environmental considerations on the part of the company (Dyllick & Hockerts, 2002). The way this incorporation is happening is through the inclusion of top management positions in the highest level of the organization, dedicated mainly to the corporate sustainability; the so called chief sustainability officers (Strand, 2014). This article looks to answer the questions of why this trend is becoming increasingly popular, and what impact, if any, these positions have in the organizations in which they are introduced (Strand, 2014).
The methodology used comprised of three critical steps; the first being the replication of an earlier study, the first of its kind that investigated the effect of the introduction of these positions at the highest levels in the organization (Strand, 2013). The second step was the expansion of the dataset of the top management level positions identified through the collection of data from more publicly traded companies. The last step was the collection of information after an in-depth investigation of these positions and their effects through interviews of relevant individuals. This methodology is efficient because it is based on concepts from an already published research process. It is essentially broadening the scope of the earlier research by Strand (2013) and investigating whether the results found can be replicated. However, in the information gathering stage (step C), the information gathered is only from a single perspective, that of the top level management. The effects of these positions, if they are to reflect the true intentions of the strategic leadership theory, should be able to have an effect on the outcomes of the whole organization (Hambrick, 2007).
The article starts by pointing out two important leadership elements of the modern organization, the power of the top level management and the need to incorporate the social and environmental together with the economic. In the past, the main goal of any organization was to make money for its shareholders. Today, people have realized that there is much more than the fiduciary obligation. Value is therefore put into organizations that are guided by the principles of sustainability; that there should not only be value for present generations, but also for generations of the future (Seretny & Seretny, 2012). However, looking at the incorporation of sustainability into the organization as something that only happens at the highest levels might be an approach that is too narrow in scope. Most of the day to day decisions, where there are ethical and sustainability dilemmas are made at much lower levels in the organization. This article proceeds based on the assumption that the biggest ethical and sustainability decisions will be made at the highest level, and that these will then affect the rest of the organization. While this is true, there is need to include or at least consider the idea that sustainable leadership is only successful when ideal can be replicated all the way down in an organization.
Even then, the methodology that is used provides a lot of evidence and context on operations in various organizations. The presentation of the evidence in terms of quotes from interviewees offers context and makes it easier to understand when reading through. The article found that the top level sustainability related positions were either reactively or proactively installed. However, there was no consensus on whether their removal was a sign of failure or a sign of success of the initial installation (Strand, 2013). The top level sustainability related positions are indicators of what the company deems important or symbolically significant. But what the article does is present an opportunity for further research, especially on how these positions can be utilized to create proper bureaucratic standards and positions throughout the organization. The fact that the article does not arrive at a conclusive conclusion on the second part could be because of the approach taken, especially with regards to the strategic leadership theory and the focus on positions at the top, rather than how to create a culture of accountability and sustainability in the organization (Menz, 2012).
This article tackles an important issue in terms of organizational ethics; that of corporate social responsibility. It essentially investigates the effectiveness of steps to make sustainability part of organizational fabric, and not necessarily something the organization does every once in a while. Still, given the importance of this to the average new age consumer, perhaps a more comprehensive approach would be more effective, expanding on the model investigated by Strand (2013) to include all levels of the organization from the top down.
Most of the huge ethical scandals that have taken place in the past decade have involved companies that were otherwise trusted to deliver quality products safely. It is perhaps this disappointment, and the realization that offering blanket trust to companies is what is pushing the consumer to regard the issue of sustainability more seriously. This article is important in as much as it recognizes the importance of that. However, there is need for such research to go beyond the top level management when it comes to sustainability and its incorporation into the strategic management. Efforts should go further than what can only be seen as symbolic to actual action across all levels of the organization.
Dyllick, T. & Hockerts, K., 2002. Beyond the business case for corporate sustainability. Business Strategy and the Environment, 11(2), pp. 130- 141.
Finkelstein, S., Hambrick, D. & Cannella, A., 2009. Strategic leadership: theory and research on executives, top management teams and boards. 1st ed. Oxford: Oxford University Press.
Hambrick, D., 2007. Upper echelons theory: An update. Academy of Management Review, 32(2), p. 334343.
Menz, M., 2012. Functional top management team members: A review, synthesis, and research agenda. Journal of Management, 38(1), pp. 45- 80.
Seretny, M. & Seretny, A., 2012. Sustainable Marketing- A New Era in the Responsible Marketing Development. Foundations of Management, 4(2), pp. 63- 77.
Strand, R., 2013. The chief officer of corporate social responsibility: A study of its presence in top management teams. Journal of Business Ethics, 112(4), p. 721734.
Strand, R., 2014. Strategic Leadership of Corporate Sustainability. Journal of Business Ethics, 123(1), p. 687706.
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