Sub-theme 21: Commensuration and Sustainability: Antecedents, Outcomes, and Processes of Social and Environmental Evaluation Schemes

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Convenors:
Frank Wijen
Erasmus University, The Netherlands
Shon Hiatt
University of Southern California, USA
Rodolphe Durand
HEC Paris, France

Call for Papers


Firms are increasingly held accountable for the societal implications of their behaviour (Bromley & Powell, 2012). Meeting societal expectations requires both more transparency about their operations and more insight into the ‘virtuousness’ of their behaviour. Social and environmental evaluation schemes seek to meet these expectations. The manifestations of these schemes include industry-level, corporate, and product-specific certifications, labels, rankings, ratings, indices, and information disclosure. Applicable criteria and weights vary both across and within different types of schemes (Vogel, 2008). While displaying marked differences, social and environmental evaluation schemes aim to regulate, promote, evaluate, and communicate corporate behaviour in relation to environmental sustainability (e.g., land, air, and water quality) and social equity (e.g., working conditions, wages, corporate philanthropy) (Bansal & Hoffman, 2012; Lewis & Carlos, 2019; Chatterji & Toffel, 2010; Delmas & Grant, 2014; Doshi et al., 2013; King & Lenox, 2000; Lee et al., 2017; Lyon & Maxwell, 2011; Reinecke et al., 2012). Standards and labels direct, incentivize, and prescribe ‘virtuous’ corporate behaviour, so as to induce firms to align their private actions with broader societal interests and to flag the (non)conformity of corporate behaviour to outside stakeholders, such as customers, suppliers, competitors, and civil society. In a similar vein, ratings, certifications, and rankings showcase the degree of corporate and product-related (non)compliance or the relative position vis-à-vis competing firms and products (Gehman & Grimes, 2017; Lee, 2009; Rao, 1994; Wade et al., 2006; York & Lenox, 2014).
 
Evaluation is premised on the assumption of commensurability: quantifying qualitatively different issues and types of behaviour (Espeland & Stevens, 1998). The conversion of social and environmental issues and behaviours into standardized metrics, however, is fraught with limitations, some of which have been highlighted in recent studies. For instance, although many agree upon the necessity to use social and environmental evaluation schemes, it remains unclear whether they actually achieve their intended purposes (Reinecke & Ansari, 2015). Firms may fool such schemes as they foreground their virtuous actions and obscure their noncompliant practices, or, conversely, underplay their social and environmental performance (Kim & Lyon, 2015; Philippe & Durand, 2011). Alternatively, compliance may precede, not follow, scheme adoption (King et al., 2005). Compliance with social and environmental schemes may be unrelated to achieving the envisaged goals (Bromley & Powell, 2012) and depend fundamentally on the granularity of the issue at stake and on the attention structure within the firm (Bansal et al., 2018; Durand et al., 2019). Compliance may even be inversely related to the goals set by their issuers (Wijen, 2014). This can be driven by ambiguity and uncertainty as to the selection and relative importance of the ‘right’ criteria as well as the difficulty to adequately measure specific social and environmental aspects (Wijen & Chiroleu-Assouline, 2019). Finally, evaluation schemes may be unrelated, and even incompatible, with each other (Chatterji et al., 2016), thereby making it difficult, if not impossible, for firms and investors to measure and achieve environmental and socially responsible results.
 
This sub-theme seeks to explore how, why, and when commensuration and corporate social and environmental sustainability are interrelated. Illustrative questions around this nexus include:

  • What are the unintended consequences of social and environmental schemes, and under what conditions are they counterproductive?

  • What design and implementation forms of evaluation schemes are more likely to drive corporate social and environmental performance?

  • What operationalization criteria and modes lead to schemes that are both effective and feasible for issuers and adopters?

  • What measurement characteristics underlie schemes that constitute more effective signals to consumers and other external stakeholders?

  • How do investors react to social and environmental schemes? Why do they do so?

  • To what extent can all social and environmental issues be meaningfully quantified?

  • When and why are rankings and ratings more effective than standards and labels?

  • Under what conditions will social and environmental evaluation schemes drive firms to change their actual behaviour?

  • Can divergent social and environmental criteria be meaningfully integrated into a single metric? And why?

  • Should the criteria of social and environmental schemes be universal or tailored to context-specific conditions?

  • How can social and environmental evaluation criteria and their relative importance be meaningfully identified?

  • What are the sustainability implications of corporate actions with outcome trade-offs among or between social and environmental issues?

  • What types of social and environmental evaluations should policymakers sanction?

  • Should social and environmental evaluations benchmark corporate performance or prescribe absolute performance criteria?

  • Does the coexistence of multiple evaluation schemes facilitate or impede social and environmental improvements at corporate and societal levels?

  • Do social and environmental evaluation schemes distract corporations from implementing larger systemic sustainability transitions, or do they accelerate the widespread adoption of sustainable business practices?

  • Under what conditions are social and environmental evaluation schemes more prone to abuse by their issuers or adopters? What incentives and penalties need to be put in place? Who should enforce these positive and negative sanctions?

 
We solicit research papers addressing these and related questions. We encourage a multitude of approaches, including theory building, case studies, ethnographies, simulations, qualitative comparative analyses, experiments, surveys, panel data analyses, and archival research. We welcome contributions from different disciplines, including accounting, development studies, economics, law, political science, psychology, sociology, and strategy. The converging insights from different approaches and disciplines will greatly advance our understanding of the multifaceted interface of commensuration and corporate sustainability. We aim to publish the best papers in a special issue of a renowned organization and management journal.
 


References


  • Bansal, P., & Hoffman, A.J. (2012): The Oxford Handbook of Business and the Natural Environment. Oxford: Oxford University Press.
  • Bansal, P., Kim, A., & Wood, M. (2018): “Hidden in plain sight: The importance of scale in organizations’ attention to issues.” Academy of Management Review, 43 (2), 217–241.
  • Bromley, P., & Powell, W. (2012): “From smoke and mirrors to walking the talk: Decoupling in the temporary world.” Academy of Management Annals, 6, 483–530.
  • Chatterji, A., & Toffel, M. (2010): “How firms respond to being rated.” Strategic Management Journal, 31 (9), 917–945.
  • Chatterji, A., Durand, R., Levine, D., & Touboul, S. (2016): “Do ratings of firms converge? Implications for managers, investors and strategy researchers.” Strategic Management Journal, 37 (8), 1597–1614.
  • Delmas, M., & Grant, L. (2014): “Eco-labeling strategies and price-premium: The wine industry puzzle.” Business & Society, 53 (1), 6–44.
  • Doshi, A., Dowell, G., & Toffel, M. (2013): “How firms respond to mandatory information disclosure.” Strategic Management Journal, 34 (10), 1209–1231.
  • Durand, R., Hawn, O., & Ioannou, I. (2019): “Willing and able: A general model of organizational responses to normative pressures.” Academy of Management Review, 44 (2), 299–320.
  • Espeland, W., & Stevens, M. (1998): “Commensuration as a social process.” Annual Review of Sociology, 24, 313–343.
  • Gehman, J., & Grimes, M. (2017): “Hidden badge of honor: How contextual distinctiveness affects category promotion among certified B corporations.” Academy of Management Journal, 60 (6), 2294–2320.
  • Kim, E.H., & Lyon, T. (2015): “Greenwash vs. brownwash: Exaggeration and undue modesty in corporate sustainability disclosure.” Organization Science, 26 (3), 705–723.
  • King, A., & Lenox, M. (2000): “Industry self-regulation without sanctions: The chemical industry’s responsible care program.” Academy of Management Journal, 43 (4), 698–716.
  • King, A., Lenox, M., & Terlaak, A. (2005): “The strategic use of decentralized institutions: Exploring certification with the ISO 14001 management standard.” Academy of Management Journal, 48 (6), 1091–1106.
  • Lee, B. (2009): “The infrastructure of collective action and policy content diffusion in the organic food industry.” Academy of Management Journal, 52 (6), 1247–1269.
  • Lee, B., Hiatt, S., & Lounsbury, M. (2017): “Market mediators and the trade-offs of legitimacy-seeking behaviors in a nascent category.” Organization Science, 28 (3), 447–470.
  • Lewis, B.W., & Carlos, W.C. (2019): “The risk of being ranked: Investor response to marginal inclusion on the 100 best corporate citizens list.” Strategic Management Journal, first published online on August 14, 2019: https://doi.org/10.1002/smj.3083.
  • Lyon, T., & Maxwell, J. (2011): “Greenwash: Corporate environmental disclosure under threat of audit.” Journal of Economics and Management Strategy, 20 (1), 3–41.
  • Philippe, D., & Durand, R. (2011): “The impact of norm‐conforming behaviors on firm reputation.” Strategic Management Journal, 32 (9), 969–993.
  • Rao, H. (1994): “The social construction of reputation: Certification contests, legitimation, and the survival of organizations in the American automobile industry: 1895–1912.” Strategic Management Journal, 15 (S1), 29–44.
  • Reinecke, J., & Ansari, S. (2015): “What is a ‘fair’ price? Ethics as sensemaking.” Organization Science, 26 (3), 867–888.
  • Reinecke, J., Manning, S., & von Hagen, O. (2012): “The emergence of a standards market: Multiplicity of sustainability standards in the global coffee industry.” Organization Studies, 33 (5–6), 791–814.
  • Vogel, D. (2008): “Private global business regulation.” Annual Review of Political Science, 11, 261–282.
  • Wade, J., Porac, J., Pollock, T., & Graffin, S. (2006): “The burden of celebrity: The impact of CEO certification contests on CEO pay and performance.” Academy of Management Journal, 49 (4), 643–660.
  • Wijen, F. (2014): “Means versus ends in opaque institutional fields: Trading off compliance and achievement in sustainability standard adoption.” Academy of Management Review, 39 (3), 302–323.
  • Wijen, F., & Chiroleu-Assouline, M. (2019): “Controversy over voluntary environmental standards: A socio-economic analysis of the Marine Stewardship Council.” Organization & Environment, 32 (2), 98–124.
  • York, J., & Lenox, M. (2014): “Exploring the sociocultural determinants of de novo versus de alio entry in emerging industries.” Strategic Management Journal, 35 (13), 1930–1951.
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Frank Wijen is an Associate Professor at the Department of Strategic Management and Entrepreneurship of Rotterdam School of Management, Erasmus University Rotterdam, The Netherlands. His research interests include institutional processes to effectively govern social and environmental issues. Frank published in journals such as ‘Academy of Management Review’, ‘California Management Review’, ‘Organization Science’,’ Organization Studies’, ‘Strategic Management Journal’, and ‘Strategic Organization’, and he was the leading editor of “A Handbook of Globalisation and Environmental Policy. National Government Interventions in a Global Arena” (Cheltenham: Edward Elgar, 2nd edition 2012).
Shon Hiatt is an Associate Professor of Business Administration at the Marshall School of Business, University of Southern California in Los Angeles, USA. As an expert in the agribusiness and energy sectors, he explores issues related to entrepreneurship, strategy, and business sustainability in domestic and international contexts. Shon’s research has been published in numerous academic journals and featured in media outlets.
Rodolphe Durand is the Joly Family Professor of Purposeful Leadership at HEC Paris, France, and the founder and Academic Director of the Society and Organizations Center (S&O), which he launched in 2009. Rodolphe’s primary research interests concern the normative and cognitive dimensions of corporate performance, especially the consequences for firms of identifying and coping with the current major environmental and social challenges.
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