Managing Tensions in Business Sustainability: A frontrunners case study

Abstract

Companies most likely have to manage tensions in the context of business sustainability. A tension can be described as a situation where two or more desirable sustainability aspects seem to be incompatible or are competing for resources. This research aims to contribute to the scientific understanding of tensions in business sustainability by exploring the tensions that companies face in practice and the management approaches used to successfully manage them. First, a tension classification framework is derived by a scientific literature review as well as a categorisation of tension management strategies. Tensions may exist along the decision-making process starting with setting out the strategic direction where tensions primarily exist within and between the issues, temporal and spatial dimensions. Later on, tensions between different strategy implementation options may be faced. Furthermore, tension management strategies can be categorised into three main management approaches: (1) business case approach, (2) trade-off approach, and (3) paradox approach. Second, data was gathered in a multiple-case case study including both medium and large sized Dutch companies in a variety of sectors. All companies are considered frontrunners - regarding business sustainability - in their fields and are most likely to face and manage tension in a comprehensive manner. Semi-structured interviews with key decision-makers in these companies enabled the identification of tensions and strategies used to manage them. The results show that all companies face tensions in the context of business sustainability and use a variety of management approaches to manage them. Tensions exist along the decision-making process, but primarily between social, environmental and economic issues of the issues dimension. Whereas companies are never found to take a business case approach, companies do use a portfolio of various trade-off, paradox strategies and mutual combinations. All companies use the paradox synthesis approach where the tension is transformed into a win-win situation by actively creating new contexts. The results increase the understanding of tensions in business sustainability through its structural analysis of multiple practical cases taking into account a comprehensive variety of management approaches. This provides opportunities both for companies to learn as well as for further research.