Introduction
Aims and Scope of the SBSC (Independent of Architecture)
The SBSC as a Tool for Radical Change Towards Sustainability?
The SBSC as an Agent for Radical Change—a Strawman Argument
Approach | Description | Authors |
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Backcasting and the natural step framework | Backcasting from basic principles for sustainability is an approach looking at a final state of sustainability as a long-term goal and then looking at the necessary operative steps of a unit (e.g. organisation) to reach this goal. This is different from the common business strategy of incremental improvement without a clearly defined final goal. This approach also covers a method for sustainable product development which takes a radical service orientation and questions traditional product sales and which overall “encourages and aids development of products that support society’s transformation towards sustainability” (Byggeth et al. 2007) | |
Sustainable entrepreneurship | Sustainable entrepreneurship looks at entrepreneurs in small ventures and how they develop radically more sustainable products and services, with which they challenge current market practices. It also covers the responses by incumbents and how they integrate sustainability into their product portfolio in the mass market. In addition to studying individual actors, their roles, and contributions to transformation, the concept also covers co-evolutionary processes emerging from these activities | |
Sustainability-oriented innovation (SOI) | Sustainability-oriented innovation is an approach that looks at sustainability transformation within companies, with a focus on the product and service portfolio. It is based on the assumption that companies cannot significantly contribute to sustainability if they do not make their products sustainable. Though starting with basic life-cycle improvements on the product design level, the concept also covers the level of product-service systems and business models that inspire innovation in solutions rather than mere product sales | |
Business models for sustainability (BMfS) | Business model research has become a trend in conventional (strategic) management research. Sustainability scholars adopted the business model perspective because it allows them to explain how companies can overcome barriers against implementing sustainability improvements when they go against the existing business model as represented by the value proposition, infrastructure, customer relationship and financial logic. Adapting or redeveloping the business model to support sustainability make possible changes in the organisation and product portfolio | |
Organisational ambidexterity for driving sustainability innovation | Ambidexterity is about creating organisational structures and processes for enabling companies to simultaneously pursue two innovation modes that often conflict—incremental and radical innovation. Recently, the ambidexterity concept has been adopted by scholars in sustainability and innovation research in order to analyse how conventional firms could embark towards sustainability while also retaining their existing core business |
Implementing Radical Strategic Change with the SBSC: the Case of Transform
In order to capture new market opportunities and to address these important strategic issues, Transform decided to review its current strategy [emphasis added] to integrate environmental and social considerations. (Journeault 2016, p. 223)
Do SBSCs Stabilise Existing Unsustainable Business Models and Practices?
Can a (corporate) SBSC Address Systems-Level Outcomes?
Strategic goals in the SBSC | Performance indicators | |||
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Inputs | Inputs (leverage) | Outputs | Outcomes and impacts | |
Social contribution to communities in need | [$] Corporate donations | [$] Donations by employees, customers, etc. [#, h] Employee and customer volunteers [#] Volunteering activities | [%] Youth participants demonstrating a life plan [%] Youths developing an alternative income generation activity [$] Income earned by occupational group and its members [#] Communities executing forest protection | [%] Households with increased income [%] Households with increased resilience to livelihood shocks |
Tensions and Conflicts Between Different Sustainability Aspects and Their Representation in the SBSC Strategy Map
The Role of Architecture for Goal Integration, Relationships, and Hierarchy
A Primer on Architectures as Representations of Management Priorities—or the Fallacy of Imagining Buildings Without Architecture
The Nature of Goal Representation in Performance Perspectives: Add-on Versus Integration
Critique of Linear Cause-and-Effect Relationships and Systematic Subordination of Environmental and Social Objectives Under Economic Outcomes
False Expectation that the SBSC Architecture must Mirror Earth–Human System Complexities
More Recent SBSC Architectures Mostly Ignored
Transcending hierarchy with semi-hierarchical or even flat architectures often allows an organisation to overcome the subordination of environmental and social goals to economic ones. With multiple top-level goals, such architectures reflect—at least to a certain degree—the higher complexity of the social and ecological systems an organisation is embedded in.This is best explained by outlining the risks involved for organisations in sticking to a strictly hierarchical BSC architecture (van Veen Dirks and Wijn 2002). If management works with a too narrow focus using a limited number of finance-related indicators (e.g. energy savings), sustainability may be marginalised as environmental and social contributions to short-term financial success. Too rigid performance management tools, as represented by the strictly hierarchical SBSC, make it difficult for companies to adapt their product-market mix towards sustainability (van der Woerd and van den Brink 2004, p. 178), ‘‘endanger the survival of the firm in the innovation economy’’ (Voelpel et al. 2006, p. 49) and impede company managers from effectively responding to disruptive environmental changes (Christensen 1997; Christensen and Bower 1996). Innovation and change are, however, necessary to maintain and increase competitiveness in future markets characterised by such disruptive changes and transitions as from fossil to low carbon energy; from combustion and purely private mobility to electric vehicles and shared mobility systems; as well as from conventional consumption goods to environmentally friendly and fair-trade products (e.g. Geels 2012; Penna and Geels 2012). Such strategic renewal, as opposed to operational optimisation, requires long-term investments without an ultimate guarantee of success. Even though Kaplan and Norton’s original conception of the BSC’s learning and growth perspective was intended to provide space for such learning processes, it may be very difficult to realise this potential in a hierarchy dominated by top-level financial goals. In contrast, semi-hierarchical BSCs may foster the incorporation of a ‘future dimension’ into performance measurement systems (Maltz et al. 2003, p. 191) and thus enable ambidextrous organisations with the capability to simultaneously manage incremental and radical change processes within the same organisation (Tushman and O’Reilly 1996; Raisch et al. 2009).
Revisiting the Strictly Hierarchical Architecture: How Integration Enables Sustainability Transformation Despite Linearity
The role of the SBSC architecture for diagnosing sustainability orientation
Outside-in vs. inside-out
The role of theoretical perspectives in interpreting SBSC architecture
These … theoretical perspectives … are important to understand the potential roles of the SBSC for organisations and to better understand the main differences in SBSC architectures.
However, it is important to emphasise here that all SBSC architectures—regardless of value system and related hierarchy—can be grounded in all three theoretical perspectives. (Hansen and Schaltegger 2016, p. 209)
Contingencies, Fit and Misfit in the Use of the Typology of SBSC Architectures
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b1: The SBSC architecture is less advanced than the current organisational value system. In this case, the potential for sustainability integration using less hierarchical SBSC designs is not fully utilised.
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b2: The SBSC architecture is more advanced than the current value system. Strict hierarchical SBSC designs are replaced by less hierarchical versions, although the organisation’s value system is still profit oriented.
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c1: The SBSC architecture is less proactive than the current sustainability strategy.
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c2: The SBSC architecture is more proactive than the current sustainability strategy.
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d: Strong mismatch of corporate strategy (SBSC architecture) and contingency factors.