Why Firms Delay Reaching True Sustainability

25 Pages Posted: 3 Jun 2016

See all articles by Anton Shevchenko

Anton Shevchenko

York University

Moren Lévesque

University of Waterloo

Mark Pagell

University College Dublin (UCD)

Date Written: July 2016

Abstract

This paper explores a discrepancy between what the literature says about sustainability and how sustainability is actually practiced. Our analysis reveals that we are in a transition era in which firms incrementally offset – rather than eliminate – their negative impacts on the environment and society. We also argue that external stakeholders have yet to create the conditions that would compel firms to become truly sustainable. We further find that a firm's response to external pressure to become truly sustainable greatly depends on its capabilities. For large firms, the decision to become truly sustainable is driven by their ability to manage external stakeholders' expectations, with the most innovative of large firms remaining unsustainable even in the long term. In contrast, small innovative firms guide their decision‐making based on their internal readiness to change and therefore will be the first to reach true sustainability. Finally, and regardless of size, firms that lack an innovation capability are unlikely to become truly sustainable; they will struggle to survive the transition era.

Keywords: optimal stopping risk, stakeholder pressure, sustainability

Suggested Citation

Shevchenko, Anton and Lévesque, Moren and Pagell, Mark, Why Firms Delay Reaching True Sustainability (July 2016). Journal of Management Studies, Vol. 53, Issue 5, pp. 911-935, 2016. Available at SSRN: https://ssrn.com/abstract=2789219 or http://dx.doi.org/10.1111/joms.12199

Anton Shevchenko (Contact Author)

York University ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Moren Lévesque

University of Waterloo ( email )

Waterloo, Ontario N2L 3G1
Canada

Mark Pagell

University College Dublin (UCD) ( email )

Belfield, Dublin 4 4
Ireland

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