Organizing capabilities and performance in the scope of business sustainability

Hellvig, Juliana; Nobre, Farley Simon Mendes

doi:10.1590/1678-6971/eRAMC240126

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Knowledge, Strategy, and Innovation • RAM, Rev. Adm. Mackenzie 25 (3) • 2024 • https://doi.org/10.1590/1678-6971/eRAMC240126 copy

Organizing capabilities and performance in the scope of business sustainability¹ 1 The authors would like to thank the Academic Publishing Advisory Center (www.capa.ufpr.br) of the Federal University of Paraná for the assistance with English language translation and developmental editing.

Organizando capacidades e desempenho no contexto da sustentabilidade empresarial

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

Purpose:

Organize concepts of capabilities and business performance (BP) within the scope of business sustainability (BS).

Originality/value:

Concepts of capabilities and performance are fragmented in the BS literature. Therefore, we argue the need for more in-depth studies to organize them. This research identifies and organizes categories of capabilities and BP about BS-oriented organizations, bringing new perspectives on how organizations can better use their resources towards sustainable development.

Design/methodology/approach:

With the support of content analysis techniques, we conducted a broad integrative review of capabilities and performance in the scope of BS. Concepts were categorized into two analysis frameworks regarding capabilities and BP, respectively.

Findings:

Findings: Based on these two frameworks, first, nine core capabilities were identified and classified into the strategies of the Natural Resource-Based View (NRBV), in order to analyze them into time (short and long-term) and spatial (organization internal and external environments) perspectives. Following that, we identified conceptualizations for BP focusing on one or more BS domains (economic, social, and environmental). Finally, we deduced propositions, including discussions on how capabilities and BP can be constituted into intertemporal and spatial lines, to create a better connection between business and society, accommodating tensions and solving grand societal challenges, such as poverty and climate change.

KEYWORDS:
business sustainability; capabilities; performance; integrative review; grand societal challenges

Core capabilities	Conceptualization
Sustainability impact assessment (SIA)	To develop indicators and goals for BS, according to organization context, holistically integrating BS into strategy and based on corporate governance and management of economic, environmental, and social impacts, permeating decisions, processes, routines, products, and services.
Stakeholder management (STAK)	To meet environmental and social needs, concerns, and interests of stakeholders other than shareholders – and respond to their demands -, that is, actors who affect or are affected by companies.
Communication on BS to civil society (COMMU)	To communicate BS practices both internally and externally to stakeholders.
Sustainability-oriented innovation (SOI)	To innovate in order to solve economic, social, and environmental problems, both incrementally and radically (ambidexterity), through knowledge sharing, corporate innovation, and sustainable entrepreneurship.
Dynamic capabilities and resilience (DCR)	To adapt in order to cope with rapid changes and economic, environmental, and social uncertainty, creating resilience – associated with perpetuity.
Partnerships (PART)	To build collaborative networks and strategic alliances with various players, such as academia, competitors, suppliers, entrepreneurs, and regulatory agencies, mutually reinforcing institutions in order to exchange information and co-create solutions – including those for the industry – and aiming to influence public policies.
Sustainable human resources management (HUMA)	To develop employee skills and train them, managing human resources in alignment with BS concepts and practices.
Environmental management (EM)	Management of environmental practices, including better use of natural and energy resources and raw materials, and control of waste generation and greenhouse gas emissions. Assessment of impacts on biodiversity, complying with laws and sanctions, willingly avoiding environmental damage.
Sustainable supply chain management (SUPP)	To evaluate and select supply chains according to BS criteria. When not possible, encourage the supply chain to adopt better BS practices and track them.

Strategy	Drivers	Temporality	Resources	Capabilities from the IR
Pollution prevention (PP)	Pollution, consumption, waste	Today	Internal	Environmental management
Product stewardship (PS)	Civil society, transparency, connectivity	Today	External	Sustainability impact assessment
				Stakeholder management
				Communication on BS to civil society
				Partnerships
				Sustainable human resources management
				Sustainable supply chain management
Clean technologies (CT)	Disruption, clean tech, footprint	Tomorrow	Internal	Dynamic capabilities and resilience
Clean technologies (CT)	Disruption, clean tech, footprint	Tomorrow	Internal	Sustainability-oriented innovation
Bottom of the pyramid (BoP)	Population, poverty, inequity	Tomorrow	External

Strategy	Capabilities from the IR	Popularity or frequency	Weight
Pollution prevention (PP)	Environmental management	10	10
Product stewardship (PS)	Sustainability impact assessment	57	128
	Stakeholder management	21
	Communication on BS to civil society	19
	Partnerships	12
	Sustainable human resources management	11
	Sustainable supply chain management	8
Clean technologies (CT)	Sustainability-oriented innovation	18	33
Clean technologies (CT)	Dynamic capabilities and resilience	15	33
Bottom of the pyramid (BoP)		0	0

BP categories	Description of indicators/concepts
Economic domain	Indicators such as cash flow, sales volume, market-to-book ratio, volatility, return on assets (ROA), return on equity (ROE), return on investment (ROI), Tobin’s Q, productivity, assets, earnings per share, earnings before interest and taxes (EBIT); and competitiveness
Environmental domain	Indicators such as consumption and expenses related to raw material, water, energy, and fuel; energy efficiency; greenhouse gas emissions; waste generation; and environmental management
Social domain	Indicators such as talent management, salaries, working conditions, occupational health and safety, training, job quality, employee satisfaction, diversity and equal opportunities, workers’ rights in the supply chain, product responsibility, consumer relations, external policies (lobbying and campaigns); reputation; and brand equity
Social-economic domain	Indicators that encompass the examples under social and economic domains in this table
Social-environmental domain	Indicators that encompass the examples under social and environmental domains in this table
Environmental-economic domain	Indicators that encompass the examples under environmental and economic domains in this table
Holistic domain	Indicators that encompass examples in the environmental, economic, and social domains in this table

BP categories	2016-2020	2010-2015	2004-2009	Sum
Economic	17	12	0	29
Environmental	7	2	0	9
Social	6	0	0	6
Social-economic	1	0	0	1
Social-environmental	3	1	0	4
Environmental-economic	2	0	0	2
Holistic	41	19	3	63

Editora Mackenzie; Universidade Presbiteriana Mackenzie Rua da Consolação, 896, Edifício Rev. Modesto Carvalhosa, Térreo - Coordenação da RAM, Consolação - São Paulo - SP - Brasil - cep 01302-907 - São Paulo - SP - Brazil
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[1] Correspondence concerning this article should be addressed to Farley Simon Mendes Nobre, Avenida Prefeito Lothário Meissner, 632, Jardim Botânico, Curitiba, Paraná, Brazil, ZIP code: 80210170. Email: f.nobre@ufpr.br

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Organizing capabilities and performance in the scope of business sustainability1 1 The authors would like to thank the Academic Publishing Advisory Center (www.capa.ufpr.br) of the Federal University of Paraná for the assistance with English language translation and developmental editing.

Organizando capacidades e desempenho no contexto da sustentabilidade empresarial

ABSTRACT

Purpose:

Originality/value:

Design/methodology/approach:

Findings:

Organizing capabilities and performance in the scope of business sustainability¹ 1 The authors would like to thank the Academic Publishing Advisory Center (www.capa.ufpr.br) of the Federal University of Paraná for the assistance with English language translation and developmental editing.