|
Article Excerpt
As we enter the 21st century, "sustainability" has become a critical issue for the world and for business (Anderson, 1998; Hawken, et al., 1999; Prahalad & Hammond, 2002; Scientific American, 2005; UN Global Compact, 2004). Although the term "sustainability" means different things to different people, in essence it is concerned with "meeting the needs of people today without compromising the ability of future generations to meet their own needs" (World Business Council for Sustainable Development, 2005). From a business perspective, sustainability has been defined as a "company's ability to achieve its business goals and increase long-term shareholder value by integrating economic, environmental and social opportunities into its business strategies" (Symposium on Sustainability, 2001). Evidence is accumulating rapidly that corporate social-environmental performance may be strongly associated with financial and marketplace success (Cusack, 2005; Dow Jones Sustainability Indexes, 2005; Innovest Strategic Value Advisors, 2006), and that the investment community and corporate executives/directors appear to be focused increasingly on the degree to which firms are managed sustainably (Dixon, 2003; Margolis & Walsh, 2001).
Why are companies increasingly committing themselves to sustainability strategies, what key implementation challenges are they experiencing, and what role is the Human Resource function playing in their firms' sustainability journeys? To illuminate these issues, we talked in depth with key executives at nine large, public, multinational firms rated among the world's best for their handling of environment, governance, social responsibility, stakeholder management, and work environment issues: Alcoa, Bank of America, BASF, The Coca Cola Company, Eastman Kodak, Intel, Novartis AG, Royal Philips, and Unilever.
Initially, our inquiry was shaped by many well-established theories relating to organization strategy, leadership, and systems alignment (Labovitz & Rosansky, 1997; Nadler & Tushman, 1997; Quinn, 1996; Ulrich, et al., 1999). As a system-wide phenomenon, sustainability also clearly involves change management (Kotter, 1996), employee engagement (Ashkenas, et al., 1995; Katzenbach, 2000; O'Malley, 2000), and organizational learning and inquiry (Argyris & Schon, 1996). Many strategic human resource management scholars offer helpful perspectives on HR's role (e.g., Jamrog & Overholt, 2004; Ulrich, 1997; Wright & McMahan, 1992), particularly in regard to HR and sustainability (Doppelt, 2003; Bradbury, et al., 2005; Losey, et al., 2005).
From the beginning, it was clear to us from the relevant literature that understanding the sustainability-related successes and challenges of each firm would require examining the degree to which sustainability was central to their corporate strategy, had the strong support of senior management, and was being measured and operationally enacted through the alignment of organizational systems. We expected that achieving the relatively high level of success evidenced by these companies would be associated with a strong alignment between a comprehensive array of hard and soft organization elements as structure, information systems, performance management systems, culture, and competencies (cognitive, technical, interpersonal).
Because of the complex and evolving nature of the phenomena we sought to learn about, we were mindful to stay open to discovering factors whose relevance was not initially evident to us but that only emerged as we iterated through our data collection, analysis, and sense-making process. For example, the degree to which there was an explicit emphasis on a system of metrics to measure the organization's performance on a broad array of sustainability attributes emerged over the course of our data gathering as another key factor to take into consideration. Still another was the degree to which core values critical to sustainable development were deeply ingrained in these sample firms, whose success and rich history extended back for an average of more than 100 years. We also discovered the importance of considering the degree to which the disparate functional areas responsible for sustainability elements (e.g., environment, ethics and governance, health and safety, product social impact, community and external relations, labor relations, talent management and worker engagement) were being integrated holistically (Savory, 2006). This in turn sensitized us to the need to account for the degree to which organizations on their sustainability journey were engaging a broad array of stakeholders, such as suppliers, customers, and governmental and nongovernmental organizations (Pleon, 2005).
Because human resources are widely viewed as a key factor in an organization's ability to build and sustain competitive advantage, HR can play a critical role in business enterprises. The Human Resource Planning Society defines five key knowledge areas for HR practitioners: HR strategy & planning, leadership development, talent management, organizational effectiveness, and building a strategic HR function (Vosburgh, 2006). Researchers and practitioners alike are only beginning to investigate the specific roles that HR might be playing to help firms foster greater sustainability. Losey and colleagues (2005) saw many opportunities in the realm of sustainability for HR to bring important operational competencies and exert strategic leadership. Hitchcock and Willard (2006) took the view that "Sustainability is at its core an issue requiring organizational change and cultural change." Areas in which they saw HR professionals as potentially making a strong contribution were in organization development, especially for their facilitation and conflict management skills, change management, culture change, and alignment of human resource and other systems and processes. At the same time, however, they pointed out: "Unfortunately, few in HR are well versed in sustainability." As a result, because of the lack of HR involvement in most sustainability efforts, they argued that many organizations are making many unnecessary implementation mistakes.
They may be right. Strategic imperatives relating to sustainability are moving up the agenda of business leaders and boards of thousands of companies, but these issues generally seem to remain off the radar screen and at the fringes of awareness for most of the HR field (Pucik, 2005). The authors' anecdotal observations indicate that HR for the most part has been lacking the orientation and competencies, particularly in the global context, in the broad realm of sustainability as it is currently being practiced in leading corporations around the world. As a result, business discussions about critically important sustainability issues may be missing those who have a deep understanding of implicit HR challenges. Thus, a critical goal for the HR field as a whole is to develop the individual competencies, collaborative strategies, and organizational capabilities required to support their organizations' sustainability journeys. But what exactly are the areas of greatest potential contribution and which capabilities are most important for the HR community to develop? The purpose of this study was to examine important factors associated with moving organizations toward greater sustainability and the role that Human Resources is and might be playing in that journey.
Methods
To investigate these issues, we used an independently developed list of "The Global 100 Most Sustainable Corporations in the World" (1) as the universe of companies to study. The methods used in The Global 100 study included nontraditional drivers of risk and shareholder value including companies' performance on social, environmental, and strategic governance issues. We drew from this list of large, public, multinational companies a convenience sample of nine firms: Alcoa, Bank of America, BASF, The Coca Cola Company, Eastman Kodak, Intel, Novartis AG, Royal Philips, Unilever. As shown in Exhibit 1, the firms represented diverse industry sectors, were founded between 1895 and 1968, and in 2006 averaged over 119,000 employees and $38 billion in revenues. Five were headquartered in the United States and four in Europe. (2)
For each firm, we interviewed one or two top executives with broad and deep knowledge both of sustainability issues and HR activities in...
|
