Fifty shades of green: How microfoundations of sustainability dynamic capabilities vary across organizational contexts

• Date: 01 November 2017
• Author: Geoffrey Wood,Karoline Strauss,Jan Lepoutre
• Published date: 01 November 2017
• DOI: http://doi.org/10.1002/job.2186

SPECIAL ISSUE ARTICLE

Fifty shades of green: How microfoundations of sustainability

dynamic capabilities vary across organizational contexts

Karoline Strauss

1

|Jan Lepoutre

1

|Geoffrey Wood

2

1

ESSEC Business School, Cergy, France

2

Essex Business School, University of Essex,

Colchester, U.K.

Correspondence

Karoline Strauss, ESSEC Business School, 3,

avenue Bernard Hirsch, CS 50105 Cergy,

France.

Email: strauss@essec.edu

Summary

Because making progress on sustainability‐related challenges will require organizational change

for most organizations, understanding sustainability dynamic capabilities is of utmost importance.

In this theoretical paper, we aim to identify the microfoundations of such sustainability dynamic

capabilities on the one hand but, consistent with recent work in this research stream, we do so in

a way that is sensitive to the dynamism of the organizational environment. We propose that the

microfoundations of sustainability dynamic capabilities will take different forms in different con-

texts. We contrast moderately dynamic contexts characterized by frequent yet relatively predict-

able change with highly dynamic contexts in which changes are rapid and not predictable.

Achieving sustainability in these different types of contexts poses different types of challenges,

relies on different forms of employee behaviors, and is consequently enabled by different individ-

ual‐level characteristics and different organizational practices and processes. Our paper calls for a

more serious consideration of context in investigating how employees' behaviors can affect sus-

tainability at the organizational level, and outlines the implications for organizational policy and

practice. We explore directions for future interdisciplinary research on sustainability that focuses

on individuals and their interactions while also taking the environment within which organizations

operate into account.

KEYWORDS

employee green behavior, microfoundations, pro‐environmental behavior, sustainability

1|INTRODUCTION

Organizations pursuing a sustainable development strategy do “not

merely seek to do less environmental damage but, rather, to actually

produce in a way that can be maintained indefinitely into the future”

(Hart & Dowell, 2011, p. 1466). To understand how sustainability, as

a collective phenomenon at the organizational level, can be achieved,

we “need to understand the constituent parts that make it up: individ-

uals and their social interaction”(Barney & Felin, 2013, p. 139)—in

other words, its microfoundations.

To date, a substantial body of research on sustainability has

employed an organizational‐level approach, focusing on, for example,

how sustainability at the level of the organization is related to financial

performance (Albertini, 2013; Etzion, 2007). On the other hand, there

has been a surge in organizational behavior and organizational psychol-

ogy research on individual‐level employee behaviors that are pre-

sumed to contribute to sustainability, such as pro‐environmental or

“green”behaviors (see Lo, Peters, & Kok, 2012; Lülfs & Hahn, 2014;

Norton, Parker, Zacher, & Ashkanasy, 2015; Young et al., 2015 for

reviews). This growing literature has provided useful insights into

how these behaviors are motivated (e.g., Graves, Sarkis, & Zhu,

2013), how organizations can promote them through their practices

(e.g., Norton, Zacher, & Ashkanasy, 2014; Paillé, Chen, Boiral, & Jin,

2014) or through targeted interventions (e.g., Unsworth, Dmitrieva, &

Adriasola, 2013), and how leaders can support them (e.g., Kim, Kim,

Han, Jackson, & Ployhart, in press; Robertson & Barling, 2013).

However, there has been little research bridging organizational‐

level and individual‐level approaches to sustainability. Although sus-

tainability is assumed “to result to a large extent from the aggregation

of a multitude of green behaviors in the workplace”(Boiral, Paillé, &

Raineri, 2015, p. 12), we know little about how these employee behav-

iors can enable organizations to become more capable of dealing with

the challenges of sustainability. Yet the value of individual‐level theo-

ries of employee “green”or pro‐environmental behavior ultimately lies

in their link to sustainability at the firm level (cf. Devinney, 2013). In

this paper, we aim to bridge this macro–micro divide in sustainability

Received: 15 March 2016 Revised: 15 December 2016 Accepted: 13 January 2017

DOI: 10.1002/job.2186

1338 Copyright © 2017 John Wiley & Sons, Ltd. J Organ Behav. 2017;38:1338–1355.wileyonlinelibrary.com/journal/job

research by providing a framework that outlines how the

microfoundations of sustainability dynamic capabilities across different

contexts.

We contribute to the literature in the following ways: First, we

develop the concept of sustainability dynamic capabilities. Organiza-

tions engaging in “proactive environmental”or sustainability strategies

are confronted with specific challenges, because incorporating sustain-

ability as a business concern requires the balancing and alignment of

business objectives with environmental outcomes. As a specific subset

of dynamic capabilities, we therefore propose sustainability dynamic

capabilities as those capabilities that enable an organization to recon-

figure its resource base, to deal with the dynamism resulting from such

“proactive environmental”or sustainability strategies.

Second, we take a microfoundational approach to sustainability

dynamic capabilities that consider the individual‐level components of

these organizational‐level capabilities (Felin, Foss, Heimeriks, &

Madsen, 2012). We specifically focus on employee behaviors as key

microfoundations. Focusing on employee behaviors—which have been

the focal point of much organizational behavior and organizational psy-

chology research on “greening organizations”(Boiral et al., 2015;

Norton et al., 2015; Ones & Dilchert, 2012)—allows us to integrate this

body of research with the strategic management literature on

sustainability.

By integrating strategic management theory with organizational

psychology research on pro‐environmental behavior, we aim to con-

tribute to both bodies of literature and provide directions for future

interdisciplinary research on sustainability, proposing bridges between

the macro–micro divide that focus on individuals and the interactions

between them, while also taking into account the context within which

organizations operate. Doing so is important, as we have learned that,

in moving towards more sustainable organizations, details matter too

much to be overlooked. If we want to bridge the gap between good

intentions and actual behaviors, we must be sensitive to the details

that may hamper our intentions to turn into environmental progress

(Blok, Gremmen, & Wesselink, 2015; Derksen & Gartrell, 1993; Ertz,

Karakas, & Sarigöllü, 2016).

Importantly, we propose that we are likely to get to a better

understanding of how organizational sustainability can be realized only

if we take a more contextualized perspective on the microfoundations

of sustainability dynamic capabilities. Extant literature suggests that

the efficacy of organization‐level capabilities depends on the context

in which they need to operate. In contemplating the micro‐level drivers

and facilitators of organizational sustainability, we must be careful not

to consider them as generic to all different contexts:

We strongly advise avoiding the temptation to apply

general prescriptions to the analysis of environmental

strategies, and recommend using a contingent lens

instead. Improving corporate environmental performance

is urgent for a sustainable world, but environmental

management demands a specific analysis of each firm

and its business and general context (Aragón‐Correa &

Rubio‐López, 2007, p. 375).

Although organizational contexts can vary on many dimensions

(Dess & Beard, 1984; Milliken, 1987), our focus in this paper is the

unpredictability of the context in which a firm is operating. Drawing

on Eisenhardt and Martin's (2000) conceptualization of dynamic capa-

bilities, we argue that the microfoundations of sustainability vary

depending on the dynamism of the situation in which an organization

finds itself that results, at least in part, from an organization's

sustainability strategy. In moderately dynamic contexts, different

capabilities are likely to be required to achieve sustainability than in

highly dynamic contexts (Eisenhardt, 1989). Consequently, the

microfoundations for sustainability are also likely to vary.

In organizational psychology and organizational behavior research,

however, individual “green”behaviors and factors at the organizational

level (e.g., pro‐environmental leadership) are generally considered to

contribute to sustainability irrespective of the context within which

the organization operates. By outlining how the microfoundations of

sustainability dynamic capabilities vary depending on the dynamism

of the organization's context, we provide a framework that allows for

a more nuanced (and hopefully more practical) perspective. We high-

light that factors that constitute microfoundations of sustainability in

some contexts paradoxically fail to support sustainability in others.

Our model also brings microfoundations of sustainability dynamic

capabilities into focus, which have not yet been investigated. We back

up our theoretical arguments through recourse to a range of practical

examples from a wide range of industries.

1.1 |Organizational capabilities for sustainability

Research on sustainability has shown that going beyond simply com-

plying with environmental regulations is difficult, and requires a spe-

cific set of capabilities (Aragón‐Correa & Sharma, 2003) to deal with

the changes and complexities involved. The concept of capabilities is

rooted in the resource‐based theory of the firm (Barney, 1991;

Wernerfelt, 1984). In this perspective, organizational performance is

the result of an organization's resources, defined broadly as “anything

which could be thought of as a strength or weakness of a given firm”

(Wernerfelt, 1984, p. 172), or the organization's tangible and intangible

assets. While it initially started as a theoretical project to refocus the

emphasis of strategy scholarship away from an exclusive interest in

the external environment and towards explaining superior organiza-

tional performance as a result of organizational features (Barney,

1991; Wernerfelt, 1984), the resource‐based view of the firm was also

challenged on a lack of attention to the external environment and in

particular its changing nature (Teece, Pisano, & Shuen, 1997). In seek-

ing to understand dynamic capabilities, Teece et al. (1997) provided a

framework to explain superior organizational performance in the face

of changing environmental conditions, and the concept quickly gained

traction after its initial introduction. Dynamic capabilities are defined

as repeatable organizational patterns of action that enable the organi-

zation to evolve its resource base and keep it aligned with the changing

demands placed on it by its context, or to initiate these very changes

(Eisenhardt & Martin, 2000; Sanchez, Heene, & Thomas, 1996; Teece

et al., 1997). The concept of dynamic capabilities focuses on the pro-

cesses by which organizations are capable of integrating, reconfiguring,

gaining, or releasing resources and competences to generate superior

performance in response to a dynamic environment, but is not con-

cerned with the origins of this dynamism. Eisenhardt and Martin

STRAUSS ET AL.1339