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How executives experience the conflicting demands of sustainable business, and how they resolve these tensions in decision-making.
Businesses are under pressure to become socially and environmentally sustainable, but this creates difficulties in decision-making, as executives need to reconcile competing social, environmental and economic demands. Most of the solutions proposed to this problem have focused either on improving information and analysis (Zapico, 2014), on cognitive approaches (Hahn, Preuss, Pinkse, & Figge, 2014) or on organisational issues, such as shared values (Epstein, Buhovac, & Yuthas, 2015). However, there has been very little work looking at the integrated set of capabilities that organisations might need to be able to address multiple tensions. We therefore set out to understand how executives experience the conflicting demands of sustainable business, and how they resolve these tensions in decision-making.
Using critical incident technique, we collected data about 45 decisions to understand how executives experienced the problem of resolving tensions caused by sustainability considerations. We find four archetypes of decisions, requiring different types of capabilities — including information and analysis, and also broader organisational capabilities used in order to become adept at including social and environmental considerations in their decision-making. These are important capabilities to develop: decisions pervade organisations, and are central to our ability to build a socially, environmentally and economically sustainable future.