Sustainable goals as part of strategic development or just a nice add-on?
- 6 min read
Typically, the process of strategy development for firms is shaped by the external and internal factors. The external factors are driven by global natural and societal environment issues, which are analysed towards their impacts on the industry. Based on the industry analysis, firms would be able to identify their competitive advantages and to design their strategy.
Related to the natural environment, the United Nations (UN) has formulated the importance of the seventeen Sustainable Development Goals (SDGs) that includes to: end poverty and hunger; protect the planet; bring prosperity, peace, and justice. The UN believe these goals are the blueprint to achieve a better and more sustainable future for all, as they address the global challenges, which should be achieved by 2030.
Within the hospitality industry, although traditionally government plays a more active role for sustainable environment initiatives, an increasing number of industrial stakeholders are contributing by having sustainable oriented goals integrated in their business strategy. Increasing number of companies incorporate a Corporate Social Responsibility (CSR) programme into their business strategy (Frynas & Yamahaki, 2016). Next to the stimulation from the government, the economic value of CSR has been another – if not the main – driver for firms to implement CSR. ABN AMRO Bank predicts savings of EUR 37 million for the Dutch hotel sector on a yearly basis and a saving for the Dutch society of EUR 40 million a year on prevention of future environmental costs (ABN AMRO, 2017). Calculated on savings per room rate per day is EUR 0.94, which means a meaningful cost saving for the hotel companies.
However, the CSR programme has not always been integrated as part of their strategic development. Moreover, due to the absence of the clear strategic sustainable goals, these various CSR practices lead to unclear integration of stakeholders’ roles and their impacts to the industry. Several theoretical approaches are possible to analyse the behaviour of companies that leads to sustainable practices (Satyro et al., 2017).
Within the HTH Research Centre, Andriew Lim and Arjan van Rheede explore the theory of Strategy-as-Practices (S-as-P) (Jarzabkowski & Paul Spee, 2009; Satyro, Sacomano, Contador, Almeida, & Giannetti, 2017) for a better understanding on how sustainability can be seen as part of the competitive advantage achieved by an integrated business strategy. Through their research, they attempt to show how S-as-P theory can be used in analysing the implementation of sustainable business strategies within the hospitality industry.
S-as-P is part of a change in approach in contemporary social sciences, where practice has emerged as a key concept for understanding central questions about how agency, structure, individual action, and institutions are linked to social systems, cultures and organisations (Golsorkhi et al., 2010). By applying S-as-P, which consists of praxis, practices and practitioners, a better understanding on whether CSR should be an add-on or a fully integrated strategic issue within the hospitality industry.
The preliminary results of this research have been presented to academic community during two different occasions in September 2018. Arjan van Rheede presented at the Corporate Responsibility Research Conference in Leeds, and Andriew Lim presented at the European Institute for Advanced Studies in Management International Conference on Tourism Management and Related Issues in Prague. The research is being finalised and will be submitted for publication in an academic journal.
ABN Amro. (2017). Circulaire economie in de hotellerie. Retrieved July 1, 2018, from https://insights.abnamro.nl/download/109451/
Frynas, J. G., & Yamahaki, C. (2016). Corporate social responsibility: Review and roadmap of theoretical perspectives. Business Ethics, 25(3), 258–285. https://doi.org/10.1111/beer.12115
Golsorkhi, D., Rouleau, L., Seidl, D. and Vaara, E. (2010). Cambridge Handbook of Strategy as Practice. Cambridge: Cambridge University Press.
Jarzabkowski, P., Balogun, J., & Seidl, D. (2007). Strategizing: The challenges of a practice perspective. Human Relations. https://doi.org/10.1177/0018726707075703
Jarzabkowski, P., & Spee., A. P. (2009). Strategy as practice: A review and future directions for the field’. International Journal of Management Reviews, 44(0), 69–95.
Porter, M. E., & Kramer, M. R. (2011). The big idea: creating shared value. Harvard Business Review, 89(January/February), 62–77.
Sachs, J. D. (2012). From millennium development goals to sustainable development goals. The Lancet, 379(9832), 2206–2211. https://doi.org/10.1016/S0140-6736(12)60685-0
Satyro, W. C., Sacomano, J. B., Contador, J. C., Almeida, C. M. V. B., & Giannetti, B. F. (2017). Process of strategy formulation for sustainable environmental development: Basic model. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2017.08.128
Seidl, D., & Whittington, R. (2014). Enlarging the Strategy-as-Practice Research Agenda: Towards Taller and Flatter Ontologies. Organization Studies, 35(10), 1407–1421. https://doi.org/10.1177/0170840614541886
Vaara, E., Kleymann, B., & Seristö, H. (2004). Strategies as discursive constructions: The case of airline alliances. Journal of Management Studies, 41(1), 1–35.
Welch, D. & Yates, L. (2018). The practices of collective action: Practice theory, sustainability transitions and social change. Journal for the Theory of Social Behaviour, 48(3), 288-305.