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                                                                                                                        IMS approach
      An integrated management                                                                                            to corporate
    systems approach to corporate                                                                                        sustainability
            sustainability
                                                                                                                                           353
                                      Muhammad Asif
                      School of Management and Governance,                                                                  Received May 2010
                  University of Twente, Enschede, The Netherlands                                                            Revised June 2010
                                                                                                                            Accepted July 2010
                                         Cory Searcy
               Department of Mechanical and Industrial Engineering,
                      Ryerson University, Toronto, Canada
                                       Ambika Zutshi
                        School of Management and Marketing,
                      Deakin University, Burwood, Australia, and
                                         Niaz Ahmad
                   National Textile University, Faisalabad, Pakistan

Abstract
Purpose – This paper seeks to describe an integrated management systems (IMS) approach for the
integration of corporate sustainability into business processes.
Design/methodology/approach – An extensive review of published literature was conducted.
Building on existing research, the paper presents an original framework for structuring the integration
of corporate sustainability with existing business infrastructure. The framework is supported by a
detailed set of diagnostic questions to help guide the process. Both the framework and the diagnostic
questions are based on the “Plan-Do-Check-Act” cycle of continuous improvement.
Findings – The paper highlights the need for a systematic means to integrate sustainability into
business processes. Building on that point, the paper illustrates how an IMS approach can be used to
structure the entire process of managing, measuring, and assessing progress towards corporate
sustainability.
Practical implications – The paper should be of interest to both practitioners and researchers. The
framework and diagnostic questions will help guide decision makers through the process of building
sustainability into their core business infrastructure. Since the framework and diagnostic questions
provide the flexibility to accommodate specific organizational contexts, it is anticipated that they will
have wide applicability.
Originality/value – The paper makes several contributions. The framework provides a systematic
approach to corporate sustainability that has not been elaborated on in previous publications. The
unique set of diagnostic questions provides a means to evaluate the extent to which corporate
sustainability has been integrated into an organization.
Keywords Integrated management systems, Management systems, Corporate sustainability,
Stakeholders, Corporate strategy
Paper type Conceptual paper
                                                                                                                          European Business Review
                                                                                                                                  Vol. 23 No. 4, 2011
                                                                                                                                          pp. 353-367
                                                                                                                  q Emerald Group Publishing Limited
The authors’ thanks are due to the Editor and reviewers for their valuable comments on earlier                                             0955-534X
drafts of this article.                                                                                              DOI 10.1108/09555341111145744
EBR    1. Corporate sustainability
23,4   Managers in many corporations are under increasing pressure to address the issue of
       sustainability. From a corporate perspective, sustainability encompasses economic,
       environmental and social issues that have business implications. Corporate
       sustainability has its theoretical roots in stakeholder theory. Stakeholder theory
       recognizes that organizations have obligations not only to shareholders, but also to other
354    interest groups such as customers, suppliers, employees and the wider community,
       amongst many others (Freeman, 1984). Meeting the demands of these stakeholders is
       necessary for a variety of reasons, including sustaining a continued supply of resources
       and for legitimation reasons (DiMaggio and Powell, 1983; Suchman, 1995). Any
       approach to corporate sustainability must, therefore, have an explicit focus on
       stakeholder requirements.
          As Seuring and Muller (2008) highlight, early conceptualizations of sustainability
       had a relatively narrow focus on environmental protection. In recent years, however,
       there has been growing recognition that environmental protection is only a sub-set of
       corporate sustainability. As Hart (1997, p. 133) explains:
          Those who think that sustainability is only a matter of pollution control, are missing the big
          picture [. . .] focusing on sustainability requires putting business strategies to a new test,
          taking the entire planet as the context in which they do business.
       Similarly, Dyllick and Hockerts (2002) pointed out that a myopic interpretation of the
       term “sustainability” misses several important criteria which organizations have to
       fulfill in order to be sustainable. Corporate sustainability is now widely conceptualized
       in terms of the “triple bottom line” (TBL) (Elkington, 1999). In short, this means that
       organizations need to explicitly consider the environmental, economic and social
       impacts (positive and negative) of their activities (Edgeman, 1998; Edgeman and
       Hensler, 2001; Hediger, 1999). This concept is also symbolized in literature by “triple P
       (planet, people, and profit)” which implies that a company creates more value over the
       long run and encounters fewer risks if it takes into consideration the environmental
       (planet), social (people), and financial issues (profit) as compared to a company that
       focuses merely on the profit (Asif et al., 2008; Dyllick and Hockerts, 2002; Holliday, 2001;
       Salzmann et al., 2005; Shrivastava, 1995). Moreover, the outcomes from the various
       impacts need to be addressed simultaneously and in an integrated manner for a
       sustainable competitive advantage. This concept of sustainability is shown in Figure 1.
       The figure illustrates three key concepts. First, it shows that earlier conceptualizations
       of sustainability had environmental connotations and thus presented a narrow view of
       the concept. Second, the figure highlights that sustainability is frequently discussed in
       the literature using the terms “triple P” and “TBL”. These are essentially two different
       perspectives on the same concept. Finally, Figure 1 shows that sustainability is a critical
       aspect of overall business continuity. Corporate sustainability heavily emphasizes the
       need to meet key stakeholder requirements in a systematic manner. This in turn
       provides the organization with legitimacy and a license to continue its business. The
       stakeholder perspective is further discussed later in the paper.
          Corporate sustainability is a dynamic concept and the specific environmental,
       economic, and social aspects and priorities that an organization focuses on will
       continually change. This can be attributed to three main reasons. The first is the
       influence of internal and external environmental factors on the organization’s resources.
IMS approach
                                       Environmental
                                        considerations                                         to corporate
                                      (the old concept)                                       sustainability

            Triple P
                                         Corporate
                                                                   Triple bottom line
                                                                 (economic, social, and
                                                                                                         355
       (people, planet, and
                                       sustainability
             profit)                                                environmental)



          Stakeholder                                                 Stakeholder
                                    Business continuity                feedback                       Figure 1.
           feedback
                                    (legitimacy / license                                           The concept
                                         to operate)                                            of sustainability


These could include changes in government regulations, the political environment, the
emergence of a new competitor or even a change in the senior management team. Second,
the legitimacy, urgency, and power of the organization’s key stakeholders are
continuously changing (Mitchell et al., 1997). Third, the complexity of business
operations has dramatically increased over time. Organizations now face diverse
challenges, both anticipated and unanticipated, such as rapidly changing market
conditions, coordination of operations at a global level, and an increased reliance on
outsourcing. Addressing the challenges of corporate sustainability, therefore, requires a
flexible approach in which organizations continuously scan their environment to
proactively identify priority issues so that their business strategies can be adapted
accordingly. In other words, the dynamic concept of sustainability requires
organizations to develop the capacity to continuously address emerging issues.
   In recognition of these challenges, a number of management systems (MSs) have
emerged to help managers systematically address an organization’s key stakeholder
requirements. Examples include MSs for environment, corporate social responsibility,
quality, and occupational health and safety. Given their focus on methodically
addressing stakeholder requirements, these MSs provide interesting leverage points for
integrating sustainability issues into mainstream business processes. There is,
nevertheless, a need to explore how organizations can capitalize on their experience with
standardized MSs to more systematically integrate sustainability issues throughout the
organization, and to assess the success or failure of the integration efforts.
   This paper contributes towards filling this gap by presenting an integrated
management systems (IMS) approach to corporate sustainability. The paper adopts an
explicitly multidisciplinary approach to sustainability integration and contributes to
theory and practice in two ways. First, it presents a framework to integrate
sustainability with business processes. The framework is based on the PDCA cycle of
continuous improvement. Second, the paper presents a structured set of diagnostic
questions to evaluate the extent of integration. Together, the framework and diagnostic
questions promote the vertical and horizontal integration of sustainability into
mainstream business infrastructure. The remainder of the paper is organized into three
sections. Section 2 presents an overview of the literature on corporate sustainability and
the integration of MSs. Section 3 presents the conceptual framework, which provides
EBR    the basis for structuring management, measurement, and assessment efforts associated
23,4   with corporate sustainability and its integration with corporate infrastructure. The
       paper concludes with a brief summary and a discussion of areas for future research.

       2. Snapshot of corporate sustainability literature
       The literature on sustainability is widely dispersed. As a starting point, Glavic and
356    Lukman (2007) present a useful overview of terms and definitions related to
       sustainability. Many publications have explored the notion of corporate sustainability
       such as Bansal (2005), Bansal and Roth (2000), Bhattacharyya (2010), Isaksson (2006),
       Pojasek (2007), Shrivastava (1995), Silberhorn and Warren (2007) and Stainer and
       Stainer (1997). The business case for corporate sustainability has also been widely
       discussed by a number authors, including Dyllick and Hockerts (2002), Seuring and
       Muller (2008), Salzmann et al. (2005) and Weber (2008).
          Beyond the above-mentioned publications, several authors have focused on
       addressing specific aspects of corporate sustainability. For example, in discussing the
       strategic and stakeholder-oriented management of sustainability, Huff et al. (2009) and
       Solomon (2010) emphasized the need for strong corporate governance and
       accountability infrastructure to institutionalize the concept. Other representative
       examples from the literature include operationalization of the concept of corporate
       sustainability (Bansal, 2005), Du Pont’s model of sustainability (Holliday, 2001),
       integrating sustainability with existing business processes (Garvare and Isaksson,
       2001), integrating sustainability into the supply chain (Linton et al., 2007) and a
       description of tools to facilitate the achievement of sustainability goals (Pojasek, 2007).
       The literature has provided an enhanced understanding of approaches to sustainability
       and a foundation on which future research needs to be based. However, work remains in
       several areas, particularly in determining how to go beyond tools and techniques to
       develop organization-wide sustainability. Sustainability must become a critical aspect
       of mainstream business MS.
          The measurement of corporate sustainability has been the focus of numerous
       papers, including Adams and Frost (2006), Isaksson and Garvare (2003), Keeble et al.
       (2003), Labuschagne et al. (2005), Searcy et al. (2007) and Searcy (2009). The Global
       Reporting Initiative (GRI, 2006) also provides a recommended framework for
       organizations interested in reporting on their sustainability performance. However,
       despite the wide-ranging measures and tools available for organizations and their
       stakeholders to understand, implement and maintain elements of sustainability, the
       question remains on how to integrate sustainability into the day-to-day operations of
       organizations through their integration with mainstream business MSs.
          Smith and Lenssen (2009) and Searcy et al. (2006) have suggested that the case for
       sustainability is strong when it is integrated with mainstream business processes. While
       the existing literature on sustainability does provide a theoretical foundation, it does not
       provide the guidance needed to integrate the sustainability concept into business
       processes (Rocha et al., 2007). Work, thus, is required to develop a framework to facilitate
       the integration of sustainability with core business strategies and processes.
          For insights into how such a framework may be approached, research on IMS is
       instructive. To cater to the needs of different stakeholders, organizations employ
       individual MSs such as those covering the areas of environment, corporate
       social responsibility, quality, and occupational health and safety. As the number
of independent MSs grow within an organization, there is a need to integrate them into an           IMS approach
overall business MS to facilitate understanding, improve usability, and minimize                      to corporate
redundancies. An IMS gives rise to the structures and processes that facilitate the
integration of MSs and their associated stakeholder expectations and requirements into               sustainability
business processes. With that in mind, an IMS is conceptualized as a set of inter-connected
processes that share the same human, material, information, infrastructural, and financial
resources in order to achieve a composite set of goals (Karapetrovic, 2003). An important                          357
feature of an IMS is the development of an infrastructure for integrated continuous
improvement along various dimensions of strategy and operations. For a further
discussion of IMS, the interested reader is referred to Asif et al. (2009), Rocha et al. (2007),
Karapetrovic (2003), Wilkinson and Dale (1999) and Zutshi and Sohal (2005).
    The integration of MSs and corporate sustainability decisions are driven by
stakeholder pressure and requirements. An essential feature of both is to design
business processes in a way that yields value for the stakeholders and balances it with
the organizational vision, goals, strategies, and resources. Given the inherent similarities
in terms of focus, organizations ideally should be able to address both in a synergistic
manner. This is particularly important because the focus of sustainability is on the
design of business processes that yield value along social, ecological, and economic
dimensions. An IMS could provide the necessary governance mechanism and
infrastructure for sustainable processes, continuous improvement of those processes,
and could also embed sustainable processes in the social, technical, and behavioral side
of the enterprise. However, the literature on the integration of sustainability into
business processes through IMS is limited. The key reason is because the research on
IMS is emerging (Karapetrovic, 2002; Karapetrovic and Jonker, 2003). Furthermore, the
concept of corporate sustainability (Shrivastava, 1995; Welford and Gouldson, 1993;
Wood and Logsdon, 2001) is also emerging. The relatively limited literature on
sustainability through integration of MSs is summarized in Table I. The publications
listed in the table describe the essentials of integrating sustainability into business
processes. However, work in this area is in its embryonic stages and additional research
is required. There is a need to extend the existing research and to develop a framework
to support the integration of sustainability throughout the entire organization.
The following section contributes to this need.


Author                          Main theme

Rocha et al. (2007)           Integration of MSs could provide a framework for integrating
                              corporate sustainable development into business processes
                              Integration of sustainable development needs to be considered
                              from both a micro and macro perspective in order to ensure its
                              effectiveness
Jørgensen (2008)              Integration of MSs could pave the way for sustainable development
                              Organizations need to carry out integration at three levels –
                              correspondence, generic, and integration
Oskarsson and Malmborg (2005) Integration of MSs provides a necessary roadmap for sustainable                      Table I.
                              development                                                                A summary of the
Fresner and Engelhardt (2004) Corporate sustainability could be achieved in a stepwise approach     literature on corporate
                              consisting of cleaner production followed by integration of MSs and   sustainability through
                              sustainable product service design                                         integration of MSs
EBR                     3. The conceptual framework
23,4                    The integration of sustainability into business processes can be facilitated through an
                        IMS approach. Such an approach provides both the flexibility and clarity needed to
                        address the many issues associated with the management, measurement, and
                        assessment of corporate sustainability. Building on that premise, a conceptual
                        framework for corporate sustainability through the integration of MSs is shown in
358                     Figure 2. The framework builds on previous research conducted by:
                           .
                              Mitchell et al. (1997) who described a typology of stakeholders in relation to their
                              requirements;
                           .
                              Choo (1996), Daft and Weick (1984) and Weick (1987) who elaborated on
                              environmental scanning to provide an informed understanding of the
                              environment in which an organization operates; and
                           .
                              Asif et al. (2009), Jørgensen (2008) and Zeng et al. (2007) who highlighted various
                              levels of integration and how integration alters activities at each organizational
                              level.
                        The framework also builds upon the research of:
                           .
                              Rocha et al. (2007) by considering various perspectives on corporate
                              sustainability integration; and
                           .
                              Fresner and Engelhardt (2004) and Oskarsson and Malmborg (2005) by
                              providing an integrated use of MSs to address key stakeholder requirements.

                        As Figure 2 shows, the process of integrating sustainability starts with the identification
                        of key stakeholders and their requirements. Unarguably, organizations are under
                        pressure from a wide variety of primary and secondary stakeholders. A detailed
                        environmental scan, including an assessment of strengths, weaknesses, opportunities,
                        and threats and a stakeholder analysis, can assist a manager in determining what


                                            Plan                                                                                   Do                                 Check

                            Stakeholder
                           requirements                                                         MSs to address
                                                   (To determine the urgency, legitimacy, and




                                                                                                  stakeholder                                    Integrated MS
                                                                                                                                                                                                        Economic
                             Quality
                                                      power of stakeholder requirements)




                                                                                                 requirements                              • Corporate governance
                                                                                                                                                                       Sustainable business processes



                                                                                                                                             and strategy
                                                            Environmental scanning




                           Environment
                                                                                                    QMS                                    • Integrated objectives
                             Enacting                                                                                                      • Integrated manuals
                            responsibly                                                             EMS              Systemization of      • Integrated procedures
                                                                                                                                                                                                        Ecological




                            Employees                                                                                   stakeholder        • Structures (integrated
                          health & safety                                                         OH & S                 demands             functions, audits, and
                                                                                                                   (integration of MSs)      trainings)
                            Financial
                                                                                                                                           • Integrated processes
                             probity                                                                 SA
                                                                                                                                           • CI infrastructure
                          Transparency                                                                                                     • Routines
                                                                                                                                                                                                        Social




                                                                                                   Others                                  • Integrated reviews
Figure 2.                     Other
The framework for          requirements
                                                                                                                 Act (innovation and learning)
corporate sustainable
development through
an IMS approach         Notes: MS, management system(s); QMS, quality MS; EMS, environmental MS; OH&S, occupational health and
                        safety; SA, social accountability; CI, continuous improvement
is important, what is not, and the level of urgency and priority to be given to various      IMS approach
issues. It is particularly noteworthy to identify the legitimacy and urgency of                to corporate
stakeholder demands, as well as the relative power (and potential conflict) of the
different stakeholders to influence the business, given that they (the legitimacy, urgency,    sustainability
and power of stakeholders) change over time. Environmental scanning is, thus,
a mechanism for identifying key stakeholder demands and prioritizing them within a
framework of constrained resources. Building on the environmental scan, organizations                  359
make sense of their surroundings and also develop the appropriate context for
adaptation and response (Choo, 1996).
    Figure 2 also shows that organizations may deploy a number of different MSs to meet
key stakeholder requirements. These MSs guide the behavior of a system and thus
provide a systematic way to execute a function consistently over a period of time.
Among the most prominent of the standardized MSs are the ISO standards for quality
management (ISO 9001), environmental management (ISO 14001), customer satisfaction
and complaints systems (ISO 10001, 10002, 10003), and quality and environmental
auditing (ISO 19011). Managers could choose implementation and external, independent
certification of internal MSs depending upon stakeholder demands. However, one
potential consequence of implementing a number of individual MSs is that it could give
rise to competing priorities, confusion, and mutual incompatibilities (McDonald et al.,
2003; Salomone, 2008; Wilkinson and Dale, 2001; Zeng et al., 2007). This highlights the
need and benefit of integration to bring the disparate MSs into mainstream business
processes. The essential feature of an IMS is that it develops an integrated system to
address stakeholder demands in a systematic manner. This is labeled as “systemization
of stakeholder demands” in Figure 2.
    Integration transforms the organization through a number of fundamental changes
at the strategic, tactical, and operational levels. For instance, at the strategic level,
it provides a mechanism for increased interaction with stakeholders and, thus, a
pathway to address their demands through channeling organizational resources. At the
tactical level, it focuses on the design of an integrated management manual, procedures,
and processes, and on developing the criteria and norms by which integration could be
evaluated. At the operational level, the work instructions and work activities are
integrated. Supporting activities such as auditing and general administration are also
designed accordingly in order to promote efficiency, save resources, and reduce
confusion amongst employees at the operational level.
    Figure 2 also shows that learning and innovation along the various dimensions of
sustainability is required for continuous improvement. At its core, there is a need to
consolidate sustainability experiences into organizational processes. New knowledge
needs to be integrated with both the explicit and tacit knowledge of the corporation.
Integration with explicit knowledge will focus on manuals, procedures, databases,
work instructions, and other key documents. Integration with tacit knowledge will
focus on employees’ experiences and skills. The integration of new knowledge and
novel experiences will help better prepare the organization to address the anticipated
and unanticipated challenges associated with corporate sustainability.
    Figure 2 shows that the integration of MSs provides the structures and routines for
sustainable business processes. In order to bring and maintain continuous
improvement, the process is designed around the PDCA cycle (Deming, 1994) which,
essentially, provides a meta-routine for continuous improvement along the various
EBR    dimensions of corporate sustainability. The integrated management reviews provided
23,4   by an IMS are an important means of facilitating a broader focus on the environmental,
       social, and economic aspects – which lie at the core of corporate sustainability.
       Integration of MSs helps build a strong case for corporate sustainability.
           The framework in Figure 2 shows an overview of how to integrate sustainability
       into business processes. Its main purpose is to structure thinking about how to
360    organize the integration of sustainability within the specific context of an organization.
       It focuses attention on the essentials of corporate sustainability and provides a starting
       point for integrating sustainability with other organizational imperatives. Further
       details on the management, measurement, and assessment of sustainability integration
       are provided in the next two sub-sections.

       3.1 Management of sustainability integration
       Identifying stakeholder demands and then incorporating them into business processes
       requires a systematic approach characterized by planning, managing resources,
       designing processes, and continuous improvement. This requires a meta-management
       approach to corporate sustainable development. Meta-management implies
       management of the whole enterprise (Foley, 2005). While some authors have
       advocated the use of a systems approach in the integration of MSs (Jonker and
       Karapetrovic, 2004; Karapetrovic, 2003; Karapetrovic and Jonker, 2003; Rocha et al.,
       2007), a meta-management approach is advocated here for two reasons. First, it avoids
       the vocabulary connotations associated with the use of the term “systems” (as in
       “systems approach” or “systems” for management of quality, environment, etc.).
       Second, it explicitly refers to the management of the whole enterprise rather than
       management of individual sub-systems, which are normally labeled as (standardized)
       MSs. Meta-management is, thus, the management of various sub-systems at a higher
       level of abstraction, logic, and inquiry.
          Meta-management adopts a stakeholder-oriented approach to management of the
       enterprise. This is consistent with the approach required by corporate sustainability.
       Meta-management starts by scanning the environment in which the organization
       operates so that managers can get an understanding of the challenges and opportunities
       their organization faces. This, in turn, allows managers to make more informed
       decisions as they set the business direction and formulate a sustainability strategy. Once
       the organizational vision and strategies are set, it is important to ensure that integration
       takes place at all organizational levels, horizontally and vertically. As previously
       indicated, integration focuses on different sets of activities at different organizational
       levels. At the strategic level, it is about “stakeholder dialogue” – considering their
       requirements and also communicating how the organization addresses their
       expectations. At the tactical level, integration deals with designing organizational
       structures, policies, and processes, as per stakeholder requirements, as well as a system
       for their evaluation. At the operational level, it is about the execution of tasks in an
       integrated manner, followed by evaluation of the implemented processes and systems.
          The integration of sustainability with key organizational activities is required at all
       the levels, both vertically and horizontally. Vertical integration is required to make
       sure that the elements of organizational strategy cascade down to all levels and, thus,
       create a fit among organizational objectives, targets, and processes. Horizontal
       integration relates to the management efforts intended to integrate various processes,
chains, departments, and positions; and also includes structures and competencies              IMS approach
(Hardjono et al., 1996). The fit among organizational objectives and activities at the            to corporate
tactical and operational level is necessary, since the alternative is unintegrated
stand-alone processes that create confusion for employees and, invariably, ineffective          sustainability
and inefficient use of resources. Such processes then run the risk of being rolled back
soon after their implementation – thus making the whole program a failure (Hayes and
Upton, 1998; Porter, 1996).                                                                              361
   The integration of sustainability into business processes requires continuous
interaction with stakeholders, and innovative ways of designing, reviewing and
updating business processes. Its very dynamic nature requires development of internal
competencies and the institutional knowledge to deal with emerging issues and their
impacts on the organization. The framework for corporate sustainability is erected upon
the PDCA cycle which provides the basis for the meta-management of sustainability
integration. To summarize, the meta-management approach to sustainability:
   .
      starts from stakeholder dialogue to ensure effective communication with
      stakeholders;
   .
      promotes vertical and horizontal integration to ensure fit among various
      processes at different organizational levels;
   .
      develops the competencies and institutional knowledge for sustainability; and
   .
      provides meta-routines for continuous improvement.

It is suggested that organizations need to develop a shared interpretation of knowledge
to effectively deal with emerging problems and to understand their organization and
their surroundings better (Daft and Weick, 1984; Weick, 1987). Nijhof et al. (2005) cite a
need of representation, contribution, and subordination in order to develop a collective
mind that results in individual actions converging in joint actions aimed at meeting the
overall interests, that is, corporate sustainability. Based on the joint actions, shared
history, and other interrelations, a shared image develops which results in better
understanding of the organizational social system.

3.2 Measurement and assessment of corporate sustainability integration
Evaluation of the extent to which sustainable development has been integrated is a
central point conveyed by the framework. This builds on the well-known axiom, “what
gets measured, gets managed”. It is, therefore, important to determine how corporate
sustainability initiatives would be evaluated. To develop the measurement and
assessment of sustainability, it is helpful to revisit the earlier discussion on the general
framework of integration (Figure 2). As the framework implies, the evaluation of
sustainability can be based on the dynamic interaction with stakeholders and the extent
of integration at various organizational levels. Building on this point, a set of key
questions could be used to structure the evaluation of the extent to which corporate
sustainability has been integrated. A representative set of questions is provided in
Table II. It is important to note that Table II is intended to support the conceptual
framework shown in Figure 2. While Figure 2 is intended as an overview of how to
integrate sustainability into business processes, Table II provides additional detail on
each element of the PDCA cycle and, thus, provides explicit and practical insight into
how this may be accomplished. In other words, Figure 2 shows insight into what
EBR
                         Key questions to evaluate the extent of integration of corporate sustainability
23,4
                                                                       Plan
                         Strategic management Stakeholder dialogue process
                         of corporate         Does the organization employ some mechanism to identify stakeholder
                         sustainability       requirements?
362                                           Does the organization employ some mechanism to meet stakeholder
                                              requirements?
                                              Does top management put economic, ecological, and social issues on its
                                              agenda?
                                              Are the implications of economic, ecological, and social aspects, in the specific
                                              context of the organization and its business processes, understood by
                                              individuals?
                                              Is there a mechanism to identify sustainability indicators and to reach
                                              mutually acceptable outcomes?
                                              Is there any mechanism to address conflicting stakeholder views?
                                              Setting values and objectives
                                              Does the organization define the business case for sustainability?
                                              Does the organization define the norms and values for corporate
                                              sustainability?
                                              Do organizational objectives relate to effective management of environmental,
                                              economic, and social aspects?
                                              Do the sustainability indicators measure progress to achieve corporate
                                              goals?
                                              Is the integration addressed in the organization’s strategic plans?
                                              Securing top management commitment
                                              How has top management demonstrated its commitment to corporate
                                              sustainability?
                                              Are the resources for integration (human, financial, material, informational,
                                              and infrastructural) planned upfront?
                                                                        Do
                         Integration          Is the integration addressed at the tactical and operational levels (horizontal
                                              and vertical integration)?
                                              Do management manuals address social, ecological, and economic aspects in
                                              an integrated manner?
                                              Do the procedures address social, ecological, and economic aspects in an
                                              integrated manner?
                                              Are the organization’s strategic plans aligned with the tactical and
                                              operational processes and activities (vertical integration)?
                                              Are the organizational processes (horizontally) integrated with each other?
                                              Do the organization’s business processes create value for economic,
                                              environmental, and social welfare?
                                              Do employees have sufficient knowledge to achieve sustainable business
                                              processes?
                         Developing           Does the organization manage its internal knowledge of sustainability?
                         competencies         Does the organization promote “heterogeneous sustainability knowledge”
                                              development (i.e. explicit knowledge in organizational repositories and
                                              databases, and tacit knowledge of employees) to promote its greater buy-in by
                                              employees and to make it more sustainable?
Table II.                                     Does the organization update its knowledge of sustainability?
List of key questions                         Does the organization develop collective knowledge and a shared image of
to evaluate the extent                        sustainability?
of integration                                                                                                     (continued)
Key questions to evaluate the extent of integration of corporate sustainability
                                                                                                       IMS approach
                                                                                                         to corporate
                                                Check
Evaluation              Does the organization employ some mechanism to evaluate the outcomes of
                                                                                                        sustainability
                        integration of sustainable development?
                        Are the objectives related to social, economic, and environmental aspects
                        realized?
                        Do the assessment teams have required competencies?
                                                                                                                 363
                        Do employees have the time and resources to carry out an assessment,
                        including data collection and analysis?
                        Are the management reviews carried out regularly to evaluate the stakeholder
                        requirements and the extent of integration of sustainability in business
                        processes?
                        Does management remain alert to new issues?
                        How is management informed of emerging or urgent issues?
                        Are sustainability results communicated to key stakeholders?
                        Do the stakeholders have a medium to provide feedback to the organization?
                        Is there any mechanism for reporting the sustainability outcomes?
                        Does management promote learning from old experiences and responses?
                                                 Act
Learning and            Does the organization employ some mechanism for continuous improvement
innovation              along various dimensions of business?
                        Are the previous experiences incorporated into organizational business
                        process?
                        How have previous organizational experiences been incorporated into various
                        knowledge repositories?
                        How does the organization ensure that learning to be sustainable and
                        responsible remains an essential strategic imperative and not an ad hoc
                        process or a one-time activity?                                                        Table II.


constitutes an IMS approach to corporate sustainability while Table II provides insight
into how to execute that approach.
    The assessment of integration should be based on data collected during the
integration process. The data obtained could be compared with the past internal data
of the company, industry norms, regulator specifications, or voluntary initiatives. It is
important to emphasize that the measurement and assessment are valuable only when
they are used for review and improvement.
    The results of the assessment need to be communicated to the key stakeholders
(both internal and external). This may occur formally through sustainability reporting
frameworks such as GRI, via company annual reports or websites, or informally
through personal/organizational stories/experiences in order to strengthen employees’
pride and commitment (Nijhof et al., 2005). The communication with stakeholders is
also important for legitimacy reasons.

4. Conclusions and future research directions
Corporate sustainability seeks the development of organizational processes and systems
that will position organizations to anticipate and meet the demands of present and future
generations of stakeholders. This, in turn, puts an emphasis on the need to address
economic, ecological, and social aspects simultaneously and in an integrated manner.
While corporate sustainability has gained significant attention in both academia
EBR    and industry, there are difficulties in building it into core business infrastructure and
23,4   there is a clear need for a framework to guide its systematic integration.
          The integration of MSs provides a needed reference point. The integration of MSs,
       like corporate sustainability, is a stakeholder-driven initiative and, thus, provides a
       mechanism for determining and then addressing stakeholder demands. Existing MSs,
       therefore, provide an important leverage point for integrating sustainability with
364    existing business infrastructure. An IMS approach to corporate sustainability provides
       a basis for:
           .
             developing needed governance mechanisms and organizational structures;
           .
             continuous improvement of corporate sustainability initiatives through
             integrated management reviews; and
           .
             creating routines to integrate corporate sustainability into business processes.

       This paper provides an original process for the integration of sustainability into
       mainstream business processes. The integration process consists of identifying
       stakeholder requirements, systemization of their demands, and then addressing those
       demands in an integrated manner. Integration also builds social and technical structures
       to ensure that business processes meet not only the economic concerns of the enterprise
       but also the ecological and social concerns of broader society. As the paper emphasizes,
       the integration of sustainability could be organized using a meta-management
       approach. It focuses on integration at the strategic level, thus minimizing the chances of
       conflicting stakeholder demands. It also promotes integration throughout the
       organization from both a vertical and horizontal perspective.
           This paper also develops a set of original questions to structure thinking about how
       to evaluate an integration process. As the questions highlights, top management
       commitment is required throughout the entire process of integrating corporate
       sustainability with existing business infrastructure. As the paper further notes,
       sustainability integration needs to become a regular feature of organizational strategy
       and the decision-making process in order to consistently cater to the emerging needs of
       stakeholders. Measurement and assessment provide a means for monitoring the success
       of these efforts and provide the impetus for triggering continuous improvement.
           The paper concludes that integration of MSs provides an important means for
       corporate sustainability when carried out in a systematic manner. It also corroborates
       the finding of Rocha et al. (2007) that an IMS facilitates the integration of sustainability
       into business processes and, thus, a separate ISO standard is not required for corporate
       sustainability. Further research could focus on how the meta-management of
       integration of sustainability unfolds in practice, and whether the diagnostic questions
       mentioned in this paper provide a basis for structuring the integration of sustainability
       into business processes.

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Corresponding author
Muhammad Asif can be contacted at: m.asif@utwente.nl


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Corporate sustainability

  • 1. The current issue and full text archive of this journal is available at www.emeraldinsight.com/0955-534X.htm IMS approach An integrated management to corporate systems approach to corporate sustainability sustainability 353 Muhammad Asif School of Management and Governance, Received May 2010 University of Twente, Enschede, The Netherlands Revised June 2010 Accepted July 2010 Cory Searcy Department of Mechanical and Industrial Engineering, Ryerson University, Toronto, Canada Ambika Zutshi School of Management and Marketing, Deakin University, Burwood, Australia, and Niaz Ahmad National Textile University, Faisalabad, Pakistan Abstract Purpose – This paper seeks to describe an integrated management systems (IMS) approach for the integration of corporate sustainability into business processes. Design/methodology/approach – An extensive review of published literature was conducted. Building on existing research, the paper presents an original framework for structuring the integration of corporate sustainability with existing business infrastructure. The framework is supported by a detailed set of diagnostic questions to help guide the process. Both the framework and the diagnostic questions are based on the “Plan-Do-Check-Act” cycle of continuous improvement. Findings – The paper highlights the need for a systematic means to integrate sustainability into business processes. Building on that point, the paper illustrates how an IMS approach can be used to structure the entire process of managing, measuring, and assessing progress towards corporate sustainability. Practical implications – The paper should be of interest to both practitioners and researchers. The framework and diagnostic questions will help guide decision makers through the process of building sustainability into their core business infrastructure. Since the framework and diagnostic questions provide the flexibility to accommodate specific organizational contexts, it is anticipated that they will have wide applicability. Originality/value – The paper makes several contributions. The framework provides a systematic approach to corporate sustainability that has not been elaborated on in previous publications. The unique set of diagnostic questions provides a means to evaluate the extent to which corporate sustainability has been integrated into an organization. Keywords Integrated management systems, Management systems, Corporate sustainability, Stakeholders, Corporate strategy Paper type Conceptual paper European Business Review Vol. 23 No. 4, 2011 pp. 353-367 q Emerald Group Publishing Limited The authors’ thanks are due to the Editor and reviewers for their valuable comments on earlier 0955-534X drafts of this article. DOI 10.1108/09555341111145744
  • 2. EBR 1. Corporate sustainability 23,4 Managers in many corporations are under increasing pressure to address the issue of sustainability. From a corporate perspective, sustainability encompasses economic, environmental and social issues that have business implications. Corporate sustainability has its theoretical roots in stakeholder theory. Stakeholder theory recognizes that organizations have obligations not only to shareholders, but also to other 354 interest groups such as customers, suppliers, employees and the wider community, amongst many others (Freeman, 1984). Meeting the demands of these stakeholders is necessary for a variety of reasons, including sustaining a continued supply of resources and for legitimation reasons (DiMaggio and Powell, 1983; Suchman, 1995). Any approach to corporate sustainability must, therefore, have an explicit focus on stakeholder requirements. As Seuring and Muller (2008) highlight, early conceptualizations of sustainability had a relatively narrow focus on environmental protection. In recent years, however, there has been growing recognition that environmental protection is only a sub-set of corporate sustainability. As Hart (1997, p. 133) explains: Those who think that sustainability is only a matter of pollution control, are missing the big picture [. . .] focusing on sustainability requires putting business strategies to a new test, taking the entire planet as the context in which they do business. Similarly, Dyllick and Hockerts (2002) pointed out that a myopic interpretation of the term “sustainability” misses several important criteria which organizations have to fulfill in order to be sustainable. Corporate sustainability is now widely conceptualized in terms of the “triple bottom line” (TBL) (Elkington, 1999). In short, this means that organizations need to explicitly consider the environmental, economic and social impacts (positive and negative) of their activities (Edgeman, 1998; Edgeman and Hensler, 2001; Hediger, 1999). This concept is also symbolized in literature by “triple P (planet, people, and profit)” which implies that a company creates more value over the long run and encounters fewer risks if it takes into consideration the environmental (planet), social (people), and financial issues (profit) as compared to a company that focuses merely on the profit (Asif et al., 2008; Dyllick and Hockerts, 2002; Holliday, 2001; Salzmann et al., 2005; Shrivastava, 1995). Moreover, the outcomes from the various impacts need to be addressed simultaneously and in an integrated manner for a sustainable competitive advantage. This concept of sustainability is shown in Figure 1. The figure illustrates three key concepts. First, it shows that earlier conceptualizations of sustainability had environmental connotations and thus presented a narrow view of the concept. Second, the figure highlights that sustainability is frequently discussed in the literature using the terms “triple P” and “TBL”. These are essentially two different perspectives on the same concept. Finally, Figure 1 shows that sustainability is a critical aspect of overall business continuity. Corporate sustainability heavily emphasizes the need to meet key stakeholder requirements in a systematic manner. This in turn provides the organization with legitimacy and a license to continue its business. The stakeholder perspective is further discussed later in the paper. Corporate sustainability is a dynamic concept and the specific environmental, economic, and social aspects and priorities that an organization focuses on will continually change. This can be attributed to three main reasons. The first is the influence of internal and external environmental factors on the organization’s resources.
  • 3. IMS approach Environmental considerations to corporate (the old concept) sustainability Triple P Corporate Triple bottom line (economic, social, and 355 (people, planet, and sustainability profit) environmental) Stakeholder Stakeholder Business continuity feedback Figure 1. feedback (legitimacy / license The concept to operate) of sustainability These could include changes in government regulations, the political environment, the emergence of a new competitor or even a change in the senior management team. Second, the legitimacy, urgency, and power of the organization’s key stakeholders are continuously changing (Mitchell et al., 1997). Third, the complexity of business operations has dramatically increased over time. Organizations now face diverse challenges, both anticipated and unanticipated, such as rapidly changing market conditions, coordination of operations at a global level, and an increased reliance on outsourcing. Addressing the challenges of corporate sustainability, therefore, requires a flexible approach in which organizations continuously scan their environment to proactively identify priority issues so that their business strategies can be adapted accordingly. In other words, the dynamic concept of sustainability requires organizations to develop the capacity to continuously address emerging issues. In recognition of these challenges, a number of management systems (MSs) have emerged to help managers systematically address an organization’s key stakeholder requirements. Examples include MSs for environment, corporate social responsibility, quality, and occupational health and safety. Given their focus on methodically addressing stakeholder requirements, these MSs provide interesting leverage points for integrating sustainability issues into mainstream business processes. There is, nevertheless, a need to explore how organizations can capitalize on their experience with standardized MSs to more systematically integrate sustainability issues throughout the organization, and to assess the success or failure of the integration efforts. This paper contributes towards filling this gap by presenting an integrated management systems (IMS) approach to corporate sustainability. The paper adopts an explicitly multidisciplinary approach to sustainability integration and contributes to theory and practice in two ways. First, it presents a framework to integrate sustainability with business processes. The framework is based on the PDCA cycle of continuous improvement. Second, the paper presents a structured set of diagnostic questions to evaluate the extent of integration. Together, the framework and diagnostic questions promote the vertical and horizontal integration of sustainability into mainstream business infrastructure. The remainder of the paper is organized into three sections. Section 2 presents an overview of the literature on corporate sustainability and the integration of MSs. Section 3 presents the conceptual framework, which provides
  • 4. EBR the basis for structuring management, measurement, and assessment efforts associated 23,4 with corporate sustainability and its integration with corporate infrastructure. The paper concludes with a brief summary and a discussion of areas for future research. 2. Snapshot of corporate sustainability literature The literature on sustainability is widely dispersed. As a starting point, Glavic and 356 Lukman (2007) present a useful overview of terms and definitions related to sustainability. Many publications have explored the notion of corporate sustainability such as Bansal (2005), Bansal and Roth (2000), Bhattacharyya (2010), Isaksson (2006), Pojasek (2007), Shrivastava (1995), Silberhorn and Warren (2007) and Stainer and Stainer (1997). The business case for corporate sustainability has also been widely discussed by a number authors, including Dyllick and Hockerts (2002), Seuring and Muller (2008), Salzmann et al. (2005) and Weber (2008). Beyond the above-mentioned publications, several authors have focused on addressing specific aspects of corporate sustainability. For example, in discussing the strategic and stakeholder-oriented management of sustainability, Huff et al. (2009) and Solomon (2010) emphasized the need for strong corporate governance and accountability infrastructure to institutionalize the concept. Other representative examples from the literature include operationalization of the concept of corporate sustainability (Bansal, 2005), Du Pont’s model of sustainability (Holliday, 2001), integrating sustainability with existing business processes (Garvare and Isaksson, 2001), integrating sustainability into the supply chain (Linton et al., 2007) and a description of tools to facilitate the achievement of sustainability goals (Pojasek, 2007). The literature has provided an enhanced understanding of approaches to sustainability and a foundation on which future research needs to be based. However, work remains in several areas, particularly in determining how to go beyond tools and techniques to develop organization-wide sustainability. Sustainability must become a critical aspect of mainstream business MS. The measurement of corporate sustainability has been the focus of numerous papers, including Adams and Frost (2006), Isaksson and Garvare (2003), Keeble et al. (2003), Labuschagne et al. (2005), Searcy et al. (2007) and Searcy (2009). The Global Reporting Initiative (GRI, 2006) also provides a recommended framework for organizations interested in reporting on their sustainability performance. However, despite the wide-ranging measures and tools available for organizations and their stakeholders to understand, implement and maintain elements of sustainability, the question remains on how to integrate sustainability into the day-to-day operations of organizations through their integration with mainstream business MSs. Smith and Lenssen (2009) and Searcy et al. (2006) have suggested that the case for sustainability is strong when it is integrated with mainstream business processes. While the existing literature on sustainability does provide a theoretical foundation, it does not provide the guidance needed to integrate the sustainability concept into business processes (Rocha et al., 2007). Work, thus, is required to develop a framework to facilitate the integration of sustainability with core business strategies and processes. For insights into how such a framework may be approached, research on IMS is instructive. To cater to the needs of different stakeholders, organizations employ individual MSs such as those covering the areas of environment, corporate social responsibility, quality, and occupational health and safety. As the number
  • 5. of independent MSs grow within an organization, there is a need to integrate them into an IMS approach overall business MS to facilitate understanding, improve usability, and minimize to corporate redundancies. An IMS gives rise to the structures and processes that facilitate the integration of MSs and their associated stakeholder expectations and requirements into sustainability business processes. With that in mind, an IMS is conceptualized as a set of inter-connected processes that share the same human, material, information, infrastructural, and financial resources in order to achieve a composite set of goals (Karapetrovic, 2003). An important 357 feature of an IMS is the development of an infrastructure for integrated continuous improvement along various dimensions of strategy and operations. For a further discussion of IMS, the interested reader is referred to Asif et al. (2009), Rocha et al. (2007), Karapetrovic (2003), Wilkinson and Dale (1999) and Zutshi and Sohal (2005). The integration of MSs and corporate sustainability decisions are driven by stakeholder pressure and requirements. An essential feature of both is to design business processes in a way that yields value for the stakeholders and balances it with the organizational vision, goals, strategies, and resources. Given the inherent similarities in terms of focus, organizations ideally should be able to address both in a synergistic manner. This is particularly important because the focus of sustainability is on the design of business processes that yield value along social, ecological, and economic dimensions. An IMS could provide the necessary governance mechanism and infrastructure for sustainable processes, continuous improvement of those processes, and could also embed sustainable processes in the social, technical, and behavioral side of the enterprise. However, the literature on the integration of sustainability into business processes through IMS is limited. The key reason is because the research on IMS is emerging (Karapetrovic, 2002; Karapetrovic and Jonker, 2003). Furthermore, the concept of corporate sustainability (Shrivastava, 1995; Welford and Gouldson, 1993; Wood and Logsdon, 2001) is also emerging. The relatively limited literature on sustainability through integration of MSs is summarized in Table I. The publications listed in the table describe the essentials of integrating sustainability into business processes. However, work in this area is in its embryonic stages and additional research is required. There is a need to extend the existing research and to develop a framework to support the integration of sustainability throughout the entire organization. The following section contributes to this need. Author Main theme Rocha et al. (2007) Integration of MSs could provide a framework for integrating corporate sustainable development into business processes Integration of sustainable development needs to be considered from both a micro and macro perspective in order to ensure its effectiveness Jørgensen (2008) Integration of MSs could pave the way for sustainable development Organizations need to carry out integration at three levels – correspondence, generic, and integration Oskarsson and Malmborg (2005) Integration of MSs provides a necessary roadmap for sustainable Table I. development A summary of the Fresner and Engelhardt (2004) Corporate sustainability could be achieved in a stepwise approach literature on corporate consisting of cleaner production followed by integration of MSs and sustainability through sustainable product service design integration of MSs
  • 6. EBR 3. The conceptual framework 23,4 The integration of sustainability into business processes can be facilitated through an IMS approach. Such an approach provides both the flexibility and clarity needed to address the many issues associated with the management, measurement, and assessment of corporate sustainability. Building on that premise, a conceptual framework for corporate sustainability through the integration of MSs is shown in 358 Figure 2. The framework builds on previous research conducted by: . Mitchell et al. (1997) who described a typology of stakeholders in relation to their requirements; . Choo (1996), Daft and Weick (1984) and Weick (1987) who elaborated on environmental scanning to provide an informed understanding of the environment in which an organization operates; and . Asif et al. (2009), Jørgensen (2008) and Zeng et al. (2007) who highlighted various levels of integration and how integration alters activities at each organizational level. The framework also builds upon the research of: . Rocha et al. (2007) by considering various perspectives on corporate sustainability integration; and . Fresner and Engelhardt (2004) and Oskarsson and Malmborg (2005) by providing an integrated use of MSs to address key stakeholder requirements. As Figure 2 shows, the process of integrating sustainability starts with the identification of key stakeholders and their requirements. Unarguably, organizations are under pressure from a wide variety of primary and secondary stakeholders. A detailed environmental scan, including an assessment of strengths, weaknesses, opportunities, and threats and a stakeholder analysis, can assist a manager in determining what Plan Do Check Stakeholder requirements MSs to address (To determine the urgency, legitimacy, and stakeholder Integrated MS Economic Quality power of stakeholder requirements) requirements • Corporate governance Sustainable business processes and strategy Environmental scanning Environment QMS • Integrated objectives Enacting • Integrated manuals responsibly EMS Systemization of • Integrated procedures Ecological Employees stakeholder • Structures (integrated health & safety OH & S demands functions, audits, and (integration of MSs) trainings) Financial • Integrated processes probity SA • CI infrastructure Transparency • Routines Social Others • Integrated reviews Figure 2. Other The framework for requirements Act (innovation and learning) corporate sustainable development through an IMS approach Notes: MS, management system(s); QMS, quality MS; EMS, environmental MS; OH&S, occupational health and safety; SA, social accountability; CI, continuous improvement
  • 7. is important, what is not, and the level of urgency and priority to be given to various IMS approach issues. It is particularly noteworthy to identify the legitimacy and urgency of to corporate stakeholder demands, as well as the relative power (and potential conflict) of the different stakeholders to influence the business, given that they (the legitimacy, urgency, sustainability and power of stakeholders) change over time. Environmental scanning is, thus, a mechanism for identifying key stakeholder demands and prioritizing them within a framework of constrained resources. Building on the environmental scan, organizations 359 make sense of their surroundings and also develop the appropriate context for adaptation and response (Choo, 1996). Figure 2 also shows that organizations may deploy a number of different MSs to meet key stakeholder requirements. These MSs guide the behavior of a system and thus provide a systematic way to execute a function consistently over a period of time. Among the most prominent of the standardized MSs are the ISO standards for quality management (ISO 9001), environmental management (ISO 14001), customer satisfaction and complaints systems (ISO 10001, 10002, 10003), and quality and environmental auditing (ISO 19011). Managers could choose implementation and external, independent certification of internal MSs depending upon stakeholder demands. However, one potential consequence of implementing a number of individual MSs is that it could give rise to competing priorities, confusion, and mutual incompatibilities (McDonald et al., 2003; Salomone, 2008; Wilkinson and Dale, 2001; Zeng et al., 2007). This highlights the need and benefit of integration to bring the disparate MSs into mainstream business processes. The essential feature of an IMS is that it develops an integrated system to address stakeholder demands in a systematic manner. This is labeled as “systemization of stakeholder demands” in Figure 2. Integration transforms the organization through a number of fundamental changes at the strategic, tactical, and operational levels. For instance, at the strategic level, it provides a mechanism for increased interaction with stakeholders and, thus, a pathway to address their demands through channeling organizational resources. At the tactical level, it focuses on the design of an integrated management manual, procedures, and processes, and on developing the criteria and norms by which integration could be evaluated. At the operational level, the work instructions and work activities are integrated. Supporting activities such as auditing and general administration are also designed accordingly in order to promote efficiency, save resources, and reduce confusion amongst employees at the operational level. Figure 2 also shows that learning and innovation along the various dimensions of sustainability is required for continuous improvement. At its core, there is a need to consolidate sustainability experiences into organizational processes. New knowledge needs to be integrated with both the explicit and tacit knowledge of the corporation. Integration with explicit knowledge will focus on manuals, procedures, databases, work instructions, and other key documents. Integration with tacit knowledge will focus on employees’ experiences and skills. The integration of new knowledge and novel experiences will help better prepare the organization to address the anticipated and unanticipated challenges associated with corporate sustainability. Figure 2 shows that the integration of MSs provides the structures and routines for sustainable business processes. In order to bring and maintain continuous improvement, the process is designed around the PDCA cycle (Deming, 1994) which, essentially, provides a meta-routine for continuous improvement along the various
  • 8. EBR dimensions of corporate sustainability. The integrated management reviews provided 23,4 by an IMS are an important means of facilitating a broader focus on the environmental, social, and economic aspects – which lie at the core of corporate sustainability. Integration of MSs helps build a strong case for corporate sustainability. The framework in Figure 2 shows an overview of how to integrate sustainability into business processes. Its main purpose is to structure thinking about how to 360 organize the integration of sustainability within the specific context of an organization. It focuses attention on the essentials of corporate sustainability and provides a starting point for integrating sustainability with other organizational imperatives. Further details on the management, measurement, and assessment of sustainability integration are provided in the next two sub-sections. 3.1 Management of sustainability integration Identifying stakeholder demands and then incorporating them into business processes requires a systematic approach characterized by planning, managing resources, designing processes, and continuous improvement. This requires a meta-management approach to corporate sustainable development. Meta-management implies management of the whole enterprise (Foley, 2005). While some authors have advocated the use of a systems approach in the integration of MSs (Jonker and Karapetrovic, 2004; Karapetrovic, 2003; Karapetrovic and Jonker, 2003; Rocha et al., 2007), a meta-management approach is advocated here for two reasons. First, it avoids the vocabulary connotations associated with the use of the term “systems” (as in “systems approach” or “systems” for management of quality, environment, etc.). Second, it explicitly refers to the management of the whole enterprise rather than management of individual sub-systems, which are normally labeled as (standardized) MSs. Meta-management is, thus, the management of various sub-systems at a higher level of abstraction, logic, and inquiry. Meta-management adopts a stakeholder-oriented approach to management of the enterprise. This is consistent with the approach required by corporate sustainability. Meta-management starts by scanning the environment in which the organization operates so that managers can get an understanding of the challenges and opportunities their organization faces. This, in turn, allows managers to make more informed decisions as they set the business direction and formulate a sustainability strategy. Once the organizational vision and strategies are set, it is important to ensure that integration takes place at all organizational levels, horizontally and vertically. As previously indicated, integration focuses on different sets of activities at different organizational levels. At the strategic level, it is about “stakeholder dialogue” – considering their requirements and also communicating how the organization addresses their expectations. At the tactical level, integration deals with designing organizational structures, policies, and processes, as per stakeholder requirements, as well as a system for their evaluation. At the operational level, it is about the execution of tasks in an integrated manner, followed by evaluation of the implemented processes and systems. The integration of sustainability with key organizational activities is required at all the levels, both vertically and horizontally. Vertical integration is required to make sure that the elements of organizational strategy cascade down to all levels and, thus, create a fit among organizational objectives, targets, and processes. Horizontal integration relates to the management efforts intended to integrate various processes,
  • 9. chains, departments, and positions; and also includes structures and competencies IMS approach (Hardjono et al., 1996). The fit among organizational objectives and activities at the to corporate tactical and operational level is necessary, since the alternative is unintegrated stand-alone processes that create confusion for employees and, invariably, ineffective sustainability and inefficient use of resources. Such processes then run the risk of being rolled back soon after their implementation – thus making the whole program a failure (Hayes and Upton, 1998; Porter, 1996). 361 The integration of sustainability into business processes requires continuous interaction with stakeholders, and innovative ways of designing, reviewing and updating business processes. Its very dynamic nature requires development of internal competencies and the institutional knowledge to deal with emerging issues and their impacts on the organization. The framework for corporate sustainability is erected upon the PDCA cycle which provides the basis for the meta-management of sustainability integration. To summarize, the meta-management approach to sustainability: . starts from stakeholder dialogue to ensure effective communication with stakeholders; . promotes vertical and horizontal integration to ensure fit among various processes at different organizational levels; . develops the competencies and institutional knowledge for sustainability; and . provides meta-routines for continuous improvement. It is suggested that organizations need to develop a shared interpretation of knowledge to effectively deal with emerging problems and to understand their organization and their surroundings better (Daft and Weick, 1984; Weick, 1987). Nijhof et al. (2005) cite a need of representation, contribution, and subordination in order to develop a collective mind that results in individual actions converging in joint actions aimed at meeting the overall interests, that is, corporate sustainability. Based on the joint actions, shared history, and other interrelations, a shared image develops which results in better understanding of the organizational social system. 3.2 Measurement and assessment of corporate sustainability integration Evaluation of the extent to which sustainable development has been integrated is a central point conveyed by the framework. This builds on the well-known axiom, “what gets measured, gets managed”. It is, therefore, important to determine how corporate sustainability initiatives would be evaluated. To develop the measurement and assessment of sustainability, it is helpful to revisit the earlier discussion on the general framework of integration (Figure 2). As the framework implies, the evaluation of sustainability can be based on the dynamic interaction with stakeholders and the extent of integration at various organizational levels. Building on this point, a set of key questions could be used to structure the evaluation of the extent to which corporate sustainability has been integrated. A representative set of questions is provided in Table II. It is important to note that Table II is intended to support the conceptual framework shown in Figure 2. While Figure 2 is intended as an overview of how to integrate sustainability into business processes, Table II provides additional detail on each element of the PDCA cycle and, thus, provides explicit and practical insight into how this may be accomplished. In other words, Figure 2 shows insight into what
  • 10. EBR Key questions to evaluate the extent of integration of corporate sustainability 23,4 Plan Strategic management Stakeholder dialogue process of corporate Does the organization employ some mechanism to identify stakeholder sustainability requirements? 362 Does the organization employ some mechanism to meet stakeholder requirements? Does top management put economic, ecological, and social issues on its agenda? Are the implications of economic, ecological, and social aspects, in the specific context of the organization and its business processes, understood by individuals? Is there a mechanism to identify sustainability indicators and to reach mutually acceptable outcomes? Is there any mechanism to address conflicting stakeholder views? Setting values and objectives Does the organization define the business case for sustainability? Does the organization define the norms and values for corporate sustainability? Do organizational objectives relate to effective management of environmental, economic, and social aspects? Do the sustainability indicators measure progress to achieve corporate goals? Is the integration addressed in the organization’s strategic plans? Securing top management commitment How has top management demonstrated its commitment to corporate sustainability? Are the resources for integration (human, financial, material, informational, and infrastructural) planned upfront? Do Integration Is the integration addressed at the tactical and operational levels (horizontal and vertical integration)? Do management manuals address social, ecological, and economic aspects in an integrated manner? Do the procedures address social, ecological, and economic aspects in an integrated manner? Are the organization’s strategic plans aligned with the tactical and operational processes and activities (vertical integration)? Are the organizational processes (horizontally) integrated with each other? Do the organization’s business processes create value for economic, environmental, and social welfare? Do employees have sufficient knowledge to achieve sustainable business processes? Developing Does the organization manage its internal knowledge of sustainability? competencies Does the organization promote “heterogeneous sustainability knowledge” development (i.e. explicit knowledge in organizational repositories and databases, and tacit knowledge of employees) to promote its greater buy-in by employees and to make it more sustainable? Table II. Does the organization update its knowledge of sustainability? List of key questions Does the organization develop collective knowledge and a shared image of to evaluate the extent sustainability? of integration (continued)
  • 11. Key questions to evaluate the extent of integration of corporate sustainability IMS approach to corporate Check Evaluation Does the organization employ some mechanism to evaluate the outcomes of sustainability integration of sustainable development? Are the objectives related to social, economic, and environmental aspects realized? Do the assessment teams have required competencies? 363 Do employees have the time and resources to carry out an assessment, including data collection and analysis? Are the management reviews carried out regularly to evaluate the stakeholder requirements and the extent of integration of sustainability in business processes? Does management remain alert to new issues? How is management informed of emerging or urgent issues? Are sustainability results communicated to key stakeholders? Do the stakeholders have a medium to provide feedback to the organization? Is there any mechanism for reporting the sustainability outcomes? Does management promote learning from old experiences and responses? Act Learning and Does the organization employ some mechanism for continuous improvement innovation along various dimensions of business? Are the previous experiences incorporated into organizational business process? How have previous organizational experiences been incorporated into various knowledge repositories? How does the organization ensure that learning to be sustainable and responsible remains an essential strategic imperative and not an ad hoc process or a one-time activity? Table II. constitutes an IMS approach to corporate sustainability while Table II provides insight into how to execute that approach. The assessment of integration should be based on data collected during the integration process. The data obtained could be compared with the past internal data of the company, industry norms, regulator specifications, or voluntary initiatives. It is important to emphasize that the measurement and assessment are valuable only when they are used for review and improvement. The results of the assessment need to be communicated to the key stakeholders (both internal and external). This may occur formally through sustainability reporting frameworks such as GRI, via company annual reports or websites, or informally through personal/organizational stories/experiences in order to strengthen employees’ pride and commitment (Nijhof et al., 2005). The communication with stakeholders is also important for legitimacy reasons. 4. Conclusions and future research directions Corporate sustainability seeks the development of organizational processes and systems that will position organizations to anticipate and meet the demands of present and future generations of stakeholders. This, in turn, puts an emphasis on the need to address economic, ecological, and social aspects simultaneously and in an integrated manner. While corporate sustainability has gained significant attention in both academia
  • 12. EBR and industry, there are difficulties in building it into core business infrastructure and 23,4 there is a clear need for a framework to guide its systematic integration. The integration of MSs provides a needed reference point. The integration of MSs, like corporate sustainability, is a stakeholder-driven initiative and, thus, provides a mechanism for determining and then addressing stakeholder demands. Existing MSs, therefore, provide an important leverage point for integrating sustainability with 364 existing business infrastructure. An IMS approach to corporate sustainability provides a basis for: . developing needed governance mechanisms and organizational structures; . continuous improvement of corporate sustainability initiatives through integrated management reviews; and . creating routines to integrate corporate sustainability into business processes. This paper provides an original process for the integration of sustainability into mainstream business processes. The integration process consists of identifying stakeholder requirements, systemization of their demands, and then addressing those demands in an integrated manner. Integration also builds social and technical structures to ensure that business processes meet not only the economic concerns of the enterprise but also the ecological and social concerns of broader society. As the paper emphasizes, the integration of sustainability could be organized using a meta-management approach. It focuses on integration at the strategic level, thus minimizing the chances of conflicting stakeholder demands. It also promotes integration throughout the organization from both a vertical and horizontal perspective. This paper also develops a set of original questions to structure thinking about how to evaluate an integration process. As the questions highlights, top management commitment is required throughout the entire process of integrating corporate sustainability with existing business infrastructure. As the paper further notes, sustainability integration needs to become a regular feature of organizational strategy and the decision-making process in order to consistently cater to the emerging needs of stakeholders. Measurement and assessment provide a means for monitoring the success of these efforts and provide the impetus for triggering continuous improvement. The paper concludes that integration of MSs provides an important means for corporate sustainability when carried out in a systematic manner. It also corroborates the finding of Rocha et al. (2007) that an IMS facilitates the integration of sustainability into business processes and, thus, a separate ISO standard is not required for corporate sustainability. Further research could focus on how the meta-management of integration of sustainability unfolds in practice, and whether the diagnostic questions mentioned in this paper provide a basis for structuring the integration of sustainability into business processes. References Adams, C. and Frost, G. (2006), “Accessibility and functionality of the corporate web site: implications for sustainability reporting”, Business Strategy and Environment, Vol. 15 No. 4, pp. 275-87. Asif, M., DeBruijn, E.J., Fisscher, O.A.M. and Steenhuis, H.-J. (2008), “Achieving sustainability three dimensionally”, paper presented at the 4th International Conference on Management of Innovation and Technology (2008-ICMIT), Bangkok.
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