Sustainability and branding: An integrated perspective

Sustainability is increasingly drawing the attention of scholars, policy makers, and companies, as the latter are recognizing the necessity and opportunities of implementing sustainable practices in their operations. Marketing plays a substantial role in both applying such initiatives and promoting them, which can be greatly supported through brands. We suggest that firms can use their brands to promote the value of sustainability to their industrial customers, consumers, and other stakeholders. This may be achieved through branding activities that emphasize the firm's sustainability practices and their impact on stakeholders. Expressing sustainability actions as the measurable and relatable outcomes they yield and associating them with brands have the potential to further facilitate this integration of sustainability and branding. A framework and guidelines for sustainability practices that may be employed in this process of integrating operations and marketing are discussed.     

Stakeholder influences on sustainability practices in the Canadian forest products industry

We examined how managers' perceptions of different types of stakeholder influences in the Canadian forestry industry affect the types of sustainability practices that their firms adopt. Both influences involving withholding of resources by social and ecological stakeholders and those involving directed usage of resources from economic stakeholders were found to drive such practices. We found that the industry and its stakeholders have moved beyond a focus on early stages of sustainability performance such as pollution control and eco‐efficiency. However, more advanced practices, such as those involving the redefinition of business and industrial ecosystems where firms locate in a region so that they can exchange and utilize wastes generated by other firms, are in their infancy. Stakeholders and firms in the industry are focused on the intermediate sustainability phases involving recirculation of materials and redesign of processes including sustainable harvesting of lumber. Copyright © 2004 John Wiley & Sons, Ltd.     

Do‐no‐harm versus do‐good social responsibility: Attributional thinking and the liability of foreignness

Research summary: The efforts of multinational corporations to be socially responsible do not always engender positive evaluations from overseas stakeholders. Drawing on attribution theory, we argue that two heuristics guide stakeholders in evaluating firms' social performance: foreignness and the valence of firms' social responsibility. We provide evidence from a field study of secondary stakeholders and an experimental study involving 129 non‐governmental organizations. Consistent with attribution theory, the liability of foreignness is minimized when firms engage in “do‐good” social responsibility (focused on proactive engagement creating positive externalities) but is substantial when firms engage in “do‐no‐harm” social responsibility (focused on attenuating negative externalities). In online supporting information, Appendix S1, we demonstrate that these evaluations have consequences for whether stakeholders subsequently cooperate, or sow conflict, with firms. Managerial summary: There is no guarantee that efforts to be socially responsible will improve multinational corporations' relations with overseas stakeholders, such as customers, governments, and activists. In a field study and an experiment, we unpack when foreign firms suffer from harsh stakeholder evaluations. Foreign firms especially suffer from harsh evaluations when they conduct “do‐no‐harm” CSR rather than “do‐good” CSR. Stakeholders attribute the motive for foreign firms' do‐no‐harm CSR to managerial interests and shareholder pressures, perceiving a wedge between managers and owners (who may be unmotivated to reduce the negative impacts of their business activities) and local stakeholders (who bear the social costs). A practical implication is that foreign firms gain more from highlighting do‐good rather than do‐(no)‐harm CSR initiatives. Copyright © 2015 John Wiley & Sons, Ltd.     

Sustainably superior versus greenwasher: A scale measure of B2B sustainability positioning

Business-to-business (B2B) buyers are finding it increasingly difficult to judge the true sustainability of supply chain partners (Oruezabala & Rico, 2012). Yet three-quarters of buyers in the OECD report they will dismiss potential supply chain partners who fail to meet sustainability criteria (Pierre, 2008). B2B firms then, cannot afford any confusion over their sustainability practices and positioning. Unfortunately, there are no sustainability positioning measures for firms to assess this, and there is no agreed upon operationalization of a highly sustainable firm vs a weakly sustainable firm. As such, this research creates a B2B sustainability positioning scale and taxonomy. First, interviews with buyers and marketing managers determine perceptions of supplier sustainability practices and defines B2B levels of sustainability. Second, exploratory and confirmatory scale development studies are conducted with 578 experienced industrial buyers. The resulting B2B sustainability positioning scale shows that a sustainably superior positioning for B2B addresses five key factors: (1) sustainability credibility, (2) concern for environmental impact, (3) a careful consideration of stakeholders, (4) resource efficiency, and (5) a holistic philosophy. This scale is intended as a tool to help B2B marketers understand and better leverage their sustainability practices and communications around sustainability.“We're trying to be cleaner and greener: We recycle waste and switch things off. We use paper from responsibly managed forests whenever possible. We ask our printers to actively reduce waste and energy consumption. We check out our suppliers' working conditions...”– The back jacket of books from DK Publishers, 2018.     

The relationship between corporate social responsibility and shareholder value: an empirical test of the risk management hypothesis

Do shareholders gain when managers disperse corporate resources through activities classified as corporate social responsibility (CSR)? Strategy scholars have recently developed a theoretical model that links such activities to shareholder value when a firm suffers a negative event; we test key portions of this theory of the ‘insurance‐like’ property of CSR activity. We posit that such activity leads to positive attributions from stakeholders, who then temper their negative judgments and sanctions toward firms because of this goodwill. We extend the risk management model by theorizing that some types of CSR activities will be more likely to create goodwill and offer insurance‐like protection than other types. We delineate several firm and event specific characteristics that we expect to influence the link between CSR activities and an insurance effect. We then test our model using an event study of 178 negative legal/regulatory actions against firms throughout the 11 years from 1993–2003. We find that participation in institutional CSR activities—those aimed at a firm's secondary stakeholders or society at large—provides an ‘insurance‐like’ benefit, while participation in technical CSRs—those activities targeting a firm's trading partners—yields no such benefits. We conclude by considering the implications of our findings for future theorizing and research into the economic value of CSR engagement. Copyright © 2008 John Wiley & Sons, Ltd.     

Stakeholder management in complex product systems: Practices and rationales for engagement and disengagement

Collaboration with stakeholders has become a cornerstone of contemporary business; however, absolute collaboration is not trouble-free. The present study explores how and why firms engage and disengage external stakeholders in their value-creating activities in complex product systems over time. From the existing research on stakeholder management, we know that actor roles, strategies, reasons and challenges of engaging external stakeholders in innovation and business activities vary across contexts. However, additional research is needed to construct a more comprehensive understanding of the practices as well as their rationales by which firms engage or disengage external stakeholders in complex product systems. Our empirical study of a European district development megaproject improves the current understanding of stakeholder management in complex product systems contexts. We derive nine practices and four rationales that timely describe the engagement and disengagement of external stakeholders. The study develops a processual model of stakeholder management in complex product systems with implications for both stakeholder management literature and managerial practice.     

Mind the gap: The interplay between external and internal actions in the case of corporate social responsibility

Research summary : We explore the effect of the interplay between a firm's external and internal actions on market value in the context of corporate social responsibility (CSR). Specifically, drawing from the neo‐institutional theory, we distinguish between external and internal CSR actions and argue that they jointly contribute to the accumulation of intangible firm resources and are therefore associated with better market value. Importantly, though, we find that, on average, firms undertake more internal than external CSR actions, and we theorize that a wider gap between external and internal actions is negatively associated with market value. We confirm our hypotheses empirically, using the market‐value equation and a sample comprising 1,492 firms in 33 countries from 2002 to 2008. Finally, we discuss implications for future research and practice. Managerial summary : Companies often accumulate intangible assets by taking internally and externally oriented CSR actions. Contrary to popular beliefs, the data show that they undertake more internal than external ones: firms do more and communicate less. How does a potential gap (i.e., a misalignment) between internal and external CSR actions affect a firm's market value? We find that although together (the sum of) internal and external actions are positively associated with market value, a wider gap has negative implications. In other words, firms do not realize the full benefits of their internal actions when such actions are not externally communicated to key stakeholders, and to the investment community in particular. This negative association with market value is particularly salient in CSR‐intensive and the natural resources and extractives industries. Copyright © 2015 John Wiley & Sons, Ltd.     

Cooperation with international NGOs and supplier assessment: Investigating the multiple mediating role of CSR activities in SMEs

Nontraditional supply chain stakeholders, such as non-governmental organizations (NGOs), may be able to affect the adoption of CSR practices in supply chains. However, little is known about how companies cooperate with international NGOs to handle supplier assessment. Using partial least squares structural equation modelling, we establish a parsimonious model that links cooperation with international NGOs to supplier assessment through three CSR dimensions: economic, environmental and social. Data collected from eight thousand SMEs in the transportation industry generally support the hypotheses. Moreover, our findings reveal that SMEs' size matters in the relationships between cooperation with international NGOs, CSR practices, and supplier assessment. Overall, this paper provides unique insights into the role that SME CSR activities play in the relationship between cooperation with international NGOs and supplier assessment.     

NGOs and the creation of value in supply chains

Research Summary: Firms and nongovernmental organizations (NGOs) often collaborate to establish new supply chains. With a formal model, we analyze how NGOs can alleviate market failures and improve supplier economic inclusion while strategically interacting with firms. We account for the specific goals of the NGO and the need to induce collaboration between firms and their suppliers. The analysis reveals a “valley of frustration,” when NGO efforts benefit all actors but only marginally the firm. We also show that more powerful firms might prefer to internalize NGO functions, while firms with lower bargaining power and higher investment requirements are better off collaborating with NGOs. Finally, we study NGOs-firms matching patterns and find that firms with higher bargaining power match with NGOs holding stronger capabilities. Managerial Summary: This article analyzes interactions between firms and nongovernmental organizations (NGOs) aiming to improve the economic inclusion of suppliers or to promote the adoption of specific (e.g., sustainable) practices. For firm executives, this study shows the constraints and benefits associated with working with NGOs, the conditions under which integration of NGO functions is preferable as well as the types of NGOs that offer better prospects for a successful collaboration. For NGO executives, it highlights the need to provide enough economic incentives to firms and suppliers alike to ensure their collaboration and the trade-offs associated with this constraint, in particular, if NGO capabilities are limited. Overall, the study provides a comprehensive understanding of how NGO activities can influence value creation in a vertical value chain.     

Leveraging value in multi-stakeholder innovation networks: A process framework for value co-creation and capture

To develop innovative solutions for complex societal and scientific challenges, organizations need to move beyond the boundaries of single firms and engage in collaborative networks. In these networks, multiple, diverse stakeholders are working together to co-create innovative value. Co-creation in a network creates new challenges in terms of changed processes and outcomes. Guided by grounded theory methodology, we explore these aspects by studying a public–private partnership involving 57 stakeholders. We take the number and diversity of stakeholders into account to shed light on the distinct processes through which value is co-created and captured. We also identify the types of value outcomes that accrue to the network and its participants. Overall, we present a multi-level cyclical process framework for leveraging value in multi-stakeholder collaborations and visualize these collaborations as a value space in which all stakeholders are uniquely positioned. In doing so, this study provides novel insights into the systemic, multi-actor nature of value co-creation and supports collaborators in maximizing value for both individual stakeholders and the network as a whole.     

Understanding the impact of symbolic and substantive environmental actions on organizational reputation

Research in corporate environmental practices has shown that stakeholders impose coercive and normative forces that drive firms to perform environmental protection actions. However, limited attention has been placed on how different constituents of stakeholders value the firm's environmental actions. By focusing on industry peers as a constituent of stakeholders, we examine how the firm's environmental actions impact its reputation. Based on institutional theory and signaling theory we propose that symbolic environmental actions negatively affect reputation, whereas substantive actions improve firm's reputation among its peers. Building on the notion of signaling process, the authors also observe that a firm's reporting practices moderate positively the negative effect of symbolic actions. Data from a sample of 213 publicly traded firms operating in polluting industries from 2006 to 2013 support these results. The findings emphasize the danger of using symbolic actions to signal environmental commitment in a context of high-involvement information search and opportunistic behaviors.     

The sustainability syndicate: Shared responsibility in a trans-organizational business model

This paper proposes design principles for the ‘sustainability syndicate’: shared responsibility among diverse stakeholders for sustainability; an agenda for unifying economic and ethical rationales; and plural governance based primarily on markets, contracts and collaborative relationships. The paper suggests a research agenda directed at issues that constrain sustainability syndicates. Syndication's contributions to sustainability build upon its trans-organizational structures for shared responsibility. Syndication works as an insurance cooperative that reduces the financial burden of risk. In addition, members could rent skill sets from other stakeholders, reduce barriers to entry into bigger projects, and improve efficiencies. As underlying sustainability are both economic and ethical rationales for shared responsibility, sustainability syndicates induct diverse non-commercial stakeholders into inclusive settings. A unifying agenda in these settings, as it grapples with externalities and constructs welfare-enhancing solutions, enhances sustainability brand differentiation. Plural self-governance, as it corrects for failures of individual self-governance modes, enables market making and market access, reduces transaction costs in contracting, and enables members to build the trust and commitment necessary for collaborations. Sustainability syndicates obviate the need for command-and-control interventions. Although institutional, performance and instrumental constraints still remain, syndicate business models offer potentially game-changing strategies in sustainability marketing.     

Reducing food waste and food insecurity in the UK: The architecture of surplus food distribution supply chain in addressing the sustainable development goals (Goal 2 and Goal 12.3) at a city level

The paradox that tonnes of food is wasted while people go hungry has raised concern from national and international authorities. In developed countries, reducing these problems has focused on surplus food distribution as a ‘win-win’ solution contributing to sustainable development goals. While the existing literature acknowledges the role of third-sector organisations, research on the supply chain of surplus food distribution and the coordination among actors is limited. This research explores actors and organisations in the value chain of surplus food distribution at the city level. Based on semi-structured interviews and participant observation, our findings highlight the need for a coordinated effort between actors as an essential arrangement to capture the value of surplus food. Despite the close cooperation, hierarchical power relationships exist between organisations in the supply chain. We unpack challenges in the surplus food supply chain, such as lack of a legislative framework for food donations and organisational sustainability issues that have forced third-sector organisations to work independently to reduce the uncertainties of food quality and quantity. We shed light on the practical implications by highlighting how multiple stakeholders could improve the efficiency of surplus food distribution.     

Competing for government procurement contracts: The role of corporate social responsibility

Research Summary: This study examines whether corporate social responsibility (CSR) improves firms’ competitiveness in the market for government procurement contracts. To obtain exogenous variation in firms’ social engagement, I exploit a quasi‐natural experiment provided by the enactment of state‐level constituency statutes, which allow directors to consider stakeholders’ interests when making business decisions. Using constituency statutes as instrumental variable (IV) for CSR, I find that companies with higher CSR receive more procurement contracts. The effect is stronger for more complex contracts and in the early years of the government‐company relationship, suggesting that CSR helps mitigate information asymmetries by signaling trustworthiness. Moreover, the effect is stronger in competitive industries, indicating that CSR can serve as a differentiation strategy to compete against other bidders. Managerial Summary: This study examines how companies can strategically improve their competitiveness in the market for government procurement contracts—a market of economic importance (15–20% of GDP). It shows that companies with higher social and environmental performance (CSR) receive more procurement contracts. This effect is stronger for more complex contracts, in the early years of the government–company relationship, and in more competitive industries. These findings indicate that firms’ CSR can serve as a signaling and differentiation strategy that influences the purchasing decision of government agencies. Accordingly, managers operating in the business‐to‐government (B2G) sector could benefit from integrating social and environmental considerations into their strategic decision making.     

Environmental sustainability in fashion supply chains: An exploratory case based research

In recent years, both researchers and practitioners have devoted attention to environmental sustainability issues in the fashion industry, but, despite the topic's relevance, a structured analysis of the problem is missing.This paper presents the results of exploratory case-based research aimed at identifying three factors: the drivers that push companies to adopt “green” practices, the different practices that can be used to improve environmental sustainability, and the environmental KPIs measured by fashion companies. Results include a comparison of two approaches pursued by established international companies with green-positioned brands with the efforts of small firms that have adopted alternative supply chain models.     

Do ratings of firms converge? Implications for managers,investors and strategy researchers

Research summary : Raters of firms play an important role in assessing domains ranging from sustainability to corporate governance to best places to work. Managers, investors, and scholars increasingly rely on these ratings to make strategic decisions, invest trillions of dollars in capital, and study corporate social responsibility (CSR), guided by the implicit assumption that the ratings are valid. We document the surprising lack of agreement across social ratings from six well‐established raters. These differences remain even when we adjust for explicit differences in the definition of CSR held by different raters, implying the ratings have low validity. Our results suggest that users of social ratings should exercise caution in interpreting their connection to actual CSR and that raters should conduct regular evaluations of their ratings. Managerial summary : Ratings of corporate social responsibility (CSR) guide trillions of dollars of investment, but managers, investors, and researchers know little about whether these ratings accurately measure CSR. In practice, there are examples of highly rated firms becoming embroiled in scandals and the same firm receiving sharply different ratings from different rating agencies. We evaluate six of the leading raters and find little overlap in their assessments of CSR. This lack of consensus suggests that social responsibility is challenging to measure reliably and that users of these ratings should be cautious in drawing conclusions about firms based on this data. We encourage the rating agencies to regularly validate their data in an effort to improve the measurement of CSR. Copyright © 2015 John Wiley & Sons, Ltd.     

An incubation perspective on social innovation: the London Hub – a social incubator

In the context of incubators, particularly those that are driven to achieving social objectives, this paper investigates core processes that support the development of social innovation. Social innovation, as this paper argues, is underpinned by a new form of social collaboration and engagement built upon strong forms of sharing knowledge and learning. Coupled with this is the element of social capital reinforced by entrepreneurship and leadership that promotes sustainability in the community. These factors drive innovative thinking and ways of engaging among stakeholders in order to create new forms of socio-economic impact. Such value-creating activity occurs in firms that operate within incubators involving a wide range of stakeholders who work through networks to co-create and meet social challenges. Through a case study of a social incubator and an incubatee, we demonstrate the core processes that irradiate the argument on social innovation. The contribution of this paper is threefold: First, social innovation is an emerging area of research, of which there is a dearth in terms of examining the processes empirically. We address the gap in this field by demonstrating the value of social collaboration and engagement using different innovation models. Second, we establish links between social innovation and incubation using the concept of social capital. This allows us to achieve our third contribution: exemplification of a dyadic value-based partnership and collaboration processes between an incubator and an incubatee, through activities driven by social innovation that aim to have social impact. The paper concludes with practice implications and suggests directions for future research.     

Does engagement in corporate social responsibility provide strategic insurance‐like effects?

Research summary : This study examines whether the stock and bond prices of firms engaging in corporate social responsibility (CSR) can benefit from insurance‐like effects during occurrences of negative events. Our results suggest that in the face of negative events, engagement in CSR on a continuous, long‐term basis provides insurance‐like effects on both the stock and bond prices of firms. Nevertheless, the effects are found to quickly disappear following the occurrence of a second, or subsequent, negative event. Although our results clearly indicate that firms need to allocate some of their available resources to long‐term strategic CSR activities, managers must also realize that in a crisis communication, they will probably be able to use their CSR claims on one occasion only. Managerial summary : The purpose of this article is to examine whether firms engaging in corporate social responsibility (CSR) can benefit from insurance‐like effects during occurrences of negative events. We find that on the occurrence of a negative event, long‐term CSR engagement does have insurance‐like effects. We also find that these insurance‐like effects may quickly disappear following the occurrence of a second negative event. Managers of firms with a long history of CSR activities need to realize that in a crisis communication, they can probably use their claims of adherence to CSR only once. Copyright © 2015 John Wiley & Sons, Ltd.     

Marketing capabilities and innovation-based strategies for environmental sustainability: An exploratory investigation of B2B firms

While emerging literature on sustainability shows that environmentally responsible strategies can contribute to competitive advantage and enhanced financial performance, little is known about specific marketing capabilities that lead to sustainable consumption behavior, and whether implementing such strategies leads to firm competitive advantage. Using the case method approach, this study explores marketing-related strategies and practices pertaining to sustainable consumption as reported by leading sustainable firms in the B2B context. We examine case studies of forty seven B2B firms and identify key marketing capabilities that tie to innovation-based sustainability strategies, sustainable consumption behavior and firm performance. We use our findings to develop a conceptual framework linking marketing capabilities to innovation strategies for firm sustainability, sustainable consumption behavior and firm competitive advantage, and put forward propositions for future research.     

Strategic Value Assessment and Explorative Learning Opportunities with Customers

This study recognizes that collaboration with customers for new product development may bring important financial benefits to firms, but at the same time may seriously hamper explorative learning. Many firms are approached by customers with requests to develop new products for them. While such requests may strengthen customer relationships and result in short‐term financial gains, it may force a firm in technologically undesirable directions. As a result, many firms struggle with the dilemma of, on the one hand, responding to customer requests, and on the other hand, safeguarding the long‐term competitive position of the firm. Firms with strong customer ties are particularly prone to this dilemma. Drawing on opportunity recognition literature, capability monitoring literature as well as goal setting theory, the authors have developed a framework arguing that Strategic Value Assessment (SVA) can help resolve this. SVA is defined as an a priori business evaluation of the value of a particular innovation collaboration, based on anticipated long‐term strategic benefits. It helps innovative firms to focus on collaboration with customers with lead user status and to develop intense relationships, allowing for more effective knowledge transfer and learning. The framework is tested using data collected from a sample of 136 business‐to‐business firms in the Netherlands. The sampling frame was a panel of small and medium‐sized high‐tech enterprises. The study finds positive direct and indirect effects of SVA on explorative learning. In addition, the findings show that the intense collaboration/learning relationship is positively moderated by customer lead user status, and negatively moderated by customer dependence. The findings suggest that SVA is a useful heuristic for managers to utilize opportunities for innovation involving collaboration with customers.