Andre Nijhof, Jaap Schaveling and Nicolette Zalesky
Organizational change involves optimizing a firm’s sustainability performance. The purpose of this paper is to explore how strategic orientations concerning the interface between…
Abstract
Purpose
Organizational change involves optimizing a firm’s sustainability performance. The purpose of this paper is to explore how strategic orientations concerning the interface between business and society influence organizations’ sustainability performance. To explain how different strategic orientations – especially stewardship and instrumental orientations – impact sustainability performance, dynamic managerial capability theory is explored.
Design/methodology/approach
Ours is an inductive, qualitative study based on the template analysis of interviews conducted among sustainability managers from stock-listed multinational corporations headquartered in the Eurozone.
Findings
Corporations with a stewardship orientation develop different dynamic managerial capabilities underlying sustainability performance than corporations that apply a more instrumental orientation. Results also show an “in-between” position: an equidistant orientation.
Research limitations/implications
This study proves the emergence of different dynamic managerial capabilities that depend on companies’ strategic orientation, but follow-up research based on appreciative inquiry is needed to investigate the development of these capabilities over time.
Practical implications
For achieving a higher level of sustainability performance, a stewardship orientation offers a stronger foundation than an instrumental orientation. Also companies with an equidistant orientation have a better sustainability performance than companies with an instrumental orientation, but based on a more central corporate level. The strategic orientation must be grounded in the development of fitting dynamic managerial capabilities that include an emphasis on shared cognition of long-term objectives, inclusion of stakeholders and setting objectives. Also strong internal and external ties, leadership of the CEO, educational background and how to deal with lack of knowledge are important aspects of managerial social and human capital.
Social implications
Due to its focus on the sustainability performance of companies and the identification of the supporting dynamic managerial capabilities, this paper is socially highly relevant.
Originality/value
Previous research has focused on strategic orientation, but little to no research has investigated how various strategic orientations toward the interface between business and society impact sustainability performance or what role dynamic managerial capabilities might play in the related change process.
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Anuschka Bakker, Jaap Schaveling and André Nijhof
This paper aims to determine the influence of governance mechanisms on sustainability and outreach of microfinance institutions (MFIs). Corporate governance has been identified as…
Abstract
Purpose
This paper aims to determine the influence of governance mechanisms on sustainability and outreach of microfinance institutions (MFIs). Corporate governance has been identified as a key bottleneck in strengthening MFIs’ sustainability (financial performance) and increasing their outreach (social impact).
Design/methodology/approach
First, a literature study to give insight in the microfinance sector is provided. Subsequently, the data research has been performed based on the statistics of one of the funds of a Dutch independent investment manager, which is focused on responsible investments in developing countries. Hierarchical multiple regression analyses were conducted to examine the association between governance mechanisms and the respective dependent variables.
Findings
The results show that boards of a MFI with insiders (for example, employees) are a significant predictor of sustainability. Regulation impacts sustainability significantly in a negative way. Overall, the study shows that only a limited number of variables influence the sustainability and outreach of an MFI.
Research limitations/implications
The limitation of the studied investment fund is that it invests in expanding and mature MFI’s. So the results of this research can only be generalized to expanding and mature MFI’s.
Practical implications
The governance mechanisms that are recommended in the industry guidelines and which are studied here are often not relevant in respect to sustainability and outreach of MFIs. The approach to microfinance governance should be broadened by focusing more on stakeholders and the decision making process in an MFI.
Social implications
Good governance is key for the microfinance institutions and even more complicated than for regular companies that do not have a double bottom line (sustainability and outreach). to be successful in the future, and for clients to reach the best end result, it is essential that the governance mechanisms that influence the bottom line are determined.
Originality/value
Not much research has been done with respect to the governance mechanisms, which have impact on the sustainability and outreach of MFIs.
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André Nijhof, Gilbert Lenssen, Ludwig Roger and Henk Kievit