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Sustainability in Practice: A Qualitative Case Study Exploring the Perceptions of Corporate Managers

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Sustainability  in  Practice  

A  Qualitative  Case  Study  Exploring  the   Perceptions  of  Corporate  Managers    

  Master  Thesis  

Ellen  Danielsson,  Sara  Nordkvist   2012-­‐05-­‐25  

 

Supervisor:  Konstantin  Lampou  

This qualitative case study seeks to explore and understand how managers work with and perceive the sustainability engagement of a large multinational corporation. The analytical framework used was based on the techniques and procedures of grounded theory as described by Corbin and Strauss (2008), following the key concepts of theoretical sampling and constant comparison of findings. The findings of this study show that engaging in sustainability is a complex process where clear targets and communication is perceived to be crucial for the sustainability performance of the corporation. However, if sustainability is driven by business and becomes a natural part of the everyday work of managers it is perceived as profitability work and a ticket to play. By describing the work, stories, and perceptions of managers working in a corporation, the findings of this study can contribute to contemporary research on sustainability that is often normative in its nature, only telling corporations what to do, but not how this can be done and how it can be perceived. This study also helps inform practitioners, managers as other stakeholders, of how a sustainability engagement affects everyday work.

Key Words: Corporate Sustainability, Sustainability Engagement, Managers Perceptions, Qualitative Case Study, Sustainability Work, Sustainability in Practice, Sustainability in Operations, Sustainability as a business driver.

 

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Table of Contents

1. Introduction... 3  

1.1 Logic of Disposition ... 5  

2. The Context and Research of Corporate Sustainability ... 6  

2.1 Corporate Sustainability ... 6  

2.2 Normative Research on Corporate Sustainability... 7  

2.3 Research as Inspiration for the Subject of the Study... 9  

3. Research Method ... 10  

3.1 Philosophical Orientation ... 10  

3.2 Research Design ... 12  

3.3 Collection and Analysis of Data ... 13  

3.3.1 Purposive Sampling ... 13  

3.3.2 Non-standardized interviews ... 14  

3.3.3 Documentation... 16  

3.3.4 Analysis through Constant Comparison and Theoretical Sampling... 17  

4. Findings ... 18  

4.1 The Case Company... 18  

4.2 Sustainability Engagement is a Ticket to Play ... 19  

4.3 Sustainability Engagement Mainly Driven by Business ... 21  

4.4 A Top-Down Bottom-Up Approach to Sustainability... 22  

4.5 Self-Involvement Crucial for Sustainability Work... 23  

4.6 Approaching Sustainability in a Multinational Way ... 25  

4.7 Integrating Sustainability into Operations is a Complex Process... 26  

5. Discussion ... 28  

6. Conclusion ... 30  

6.1 Implications for Researchers ... 31  

6.2 Implications for Practitioners ... 31  

8. References... 33  

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1. Introduction

Sustainability as a management idea has got much attention over the last decade and an increasing number of corporations are recognizing the importance of engaging in sustainability (Ardenfors et al. 2011; Epstein & Roy, 2001). The general idea and understanding of corporate sustainability is that corporations shall take economic, social, and environmental responsibility of their operations (Porter & Kramer, 2006, 2011; Wikström, 2010; Baumgartner & Ebner, 2010). As brought forward in a report presented by KPMG (2011), there has been a change in attitudes among corporations during the 21th century from considering sustainability engagement as an “optional but nice” activity to see it almost as mandatory (KPMG, 2011). The growing engagement in corporate sustainability is also affected by and affects many stakeholders such as consumers, customers, investors, employees, and local communities that have different interests and demands on the sustainability work of corporations (Freeman, 1984; Sahlin-Andersson, 2006).

Much of the contemporary literature on corporate sustainability brings forward the importance of integrating sustainability activities into core business and overall corporate strategy in order to achieve benefits and business opportunities trough undertaking sustainability (e.g.

Porter & Kramer, 2006, 2011; McWilliams et al. 2006; Prahalad, 2006). However, researchers (e.g. Epstein & Roy, 2001; Baumgartner & Ebner, 2010, Wikström, 2010; White, 2009) have also highlighted difficulties of implementing sustainability into action due to competing organizational constraints and the complexity of driving it through a large organization. By this, much of the modern research on sustainability brings forward guidance on how to implement sustainability into core business and operations, such as; the importance of not making sustainability added work; the importance of avoiding internal trade-offs between business focus and sustainability engagements, and why it is valuable to have well formulated sustainability targets. Consequently, much of the contemporary literature on sustainability can be seen as normative in its design, focusing on how to engage in sustainability but not on how this engagement affects the overall organization. There is less research focusing on how the sustainability engagement of corporations looks like in practice, how it affects the organization and every day work of corporations, and how it is perceived among managers and employees. In addition, there is not much qualitative research elaborating on the sustainability engagement of corporations that provides descriptions of actual activities and real-life examples from the everyday work of corporations. Such studies could help extend the

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knowledge among researchers and practitioners of the work, processes and perceptions of the people within the corporation engaging in sustainability. Notable, is that the depiction and understanding of the meanings and cognitions of the members of an organization is of importance (Nelkin & Brown, 1984, cited in Gephart 2004:455), but are often neglected in organizational research in general (Gephart, 2004:455). Existing research on sustainability is not an exception. According to Isabella (1990), studies of the cognitive dimension can serve as compliment to studies of issues and relationships brought about by more traditional approaches to research (Isabella, 1990:7).

Although many studies have a normative approach to sustainability, few have tried to identify and understand the interpretations and cognitions of sustainability. This lack of attention implicates a limited knowledge within research of how sustainability as any other management idea affects the operations and everyday work for members of a corporation. If a more nuanced picture within research describing the perceptions and processes of the sustainability engagement within business life would be presented, this would generate valuable knowledge for both researchers and practitioners.

To illustrate the challenges corporations may encounter when engaging in sustainability one could take a step back and compare these with challenges that may occur for any individual that wants to live and act according to general existing moral, ethical, and environmentally responsible norms and ideas. One often knows what is considered as moral and ethical living, but it is harder to actually live and act according to such ideas in everyday life. The individual will notice that some norms and ideas are easier to apply on one’s life situation than others, and some actions demand more effort than the expected moral, ethical, and environmental value they create. It is perhaps an easy change in lifestyle to ride a bike to work instead of going by car, but perhaps it is harder to recycle all waste and knowing that all services and products bought did not violate human rights when being produced. With this in mind, one can look upon the increasing sustainability engagements of corporations and understand that it is a long process of much effort needed to be put in when it comes to behavioral changes, knowledge building, and new ways of doing things.

To investigate how the sustainability work of a corporation is perceived among the members of an organization, qualitative research is suitable, since it can provide insights that are difficult to produce with quantitative research (Gephart, 2004:455). An appropriate way of generating in-depth knowledge of the work processes and perceptions of organizational

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members is by conducting a case study to get insights from people working within a corporation (Yin, 1981). This qualitative case study tries to explore new insights and contribute to research on sustainability with knowledge of how members of an organization, in this case managers within a large multinational corporation, operates and perceive the sustainability work of the corporation. The perceptions and activities of managers are interesting because they can be seen as the heart of the organization, keeping the body of operations going (Isabella, 1990:9). Thus, the purpose of this study is to further explore and understand how managers work with and perceive the sustainability engagement within the corporation. The study, which interprets the actual human processes that constitute real-life organizational settings, will widen the knowledge among both researchers and practitioners of sustainability as a management idea and corporate activity. In order to meet the purpose of this study, two research questions have been formulated; How do managers in the corporation work with sustainability in practice? How do the managers perceive the sustainability engagement and work of the corporation?

This study is not meant to be a guide on how to approach sustainability, nor an evaluation of whether the sustainability work of our case company is successful or not. Rather, the study aims to describe the work, stories, and perceptions of the managers working in the corporation. The findings can be of value for and inform both researchers and practitioners about the processes and perceptions of sustainability in a real life context.

1.1 Logic of Disposition

The logic of disposition and research design of this study on sustainability in practice is based on the techniques and procedures of qualitative research associated with grounded theory as they are recommended by Corbin and Strauss (2008).

Within the section ‘The Context and Research on Corporate Sustainability’ the context, background, and complexity of corporate sustainability is described. In this second section, examples are given of the contemporary research on sustainability and why it can be considered normative and not to present the whole picture. This section is summarized by explaining how the literature presented informed the study.

After elaborating on the research and context of corporate sustainability, the ‘Research Method’ of this study is presented. Here, a thorough description of how the exploratory case study was designed and conducted is presented. The use of purposive sampling of managers

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and constant comparison of the findings, which constituted the foundation of this study, is presented and how the qualitative research and analysis was conducted is also described.

Within the ‘Findings’ section, the perceptions and stories of the managers of the case company is presented together with findings from other sources such as the case company’s sustainability report and web site. Here, the method of constant comparison and theoretical sampling guided our analysis and narrative presentation of the findings from the study.

In the ‘Discussion’, the findings are summarized guided by the research questions of this study. The main findings of the study are then summarized in a model.

Finally, in the ‘Conclusion’, concluding remarks are made and the implications of the findings of this study for contemporary research on sustainability and practitioners are discussed.

2. The Context and Research of Corporate Sustainability

2.1 Corporate Sustainability

Today, there is an ongoing discussion about sustainable development all over the world. The general understanding of sustainability builds much on the Report from the World Commission on Environment and Development: Our Common Future, in which sustainable development is defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987). The report made several contributions to the discussion about sustainability and made the concept a central topic on both social, political, and business agendas by for example stating that global environmental problems result both from the enormous poverty of the South and the unsustainable production and consumption in the North. The report also helped broaden the definition of sustainability from mainly having an environmental focus to also encompass the entire range of human values (Kajikawa, 2008; WCED, 1987). This have contributed to the idea of corporate sustainability, which today in general terms implies for corporations to take economic, social, and environmental responsibility for their operations1 (Porter & Kramer, 2006, 2011; Wikström, 2010; Baumgartner & Ebner, 2010). Furthermore, corporations face increased pressures from both their internal and external stakeholders to be responsible in

1Sustainability is achieved only when there is full reconciliation between (1) economic development; (2) meeting, on an equitable basis, growing and changing human needs and aspirations; and (3) conserving limited natural resources and the capacity of the environment to absorb the multiple stresses that are a consequence of human activities” (Hay & Mimura, 2006, cited in Kajikawa, 2008:218).

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their business conduct when it comes to all three aspects of their business (Adams & Frost, 2008:288; von Geibler et al. 2006:334-335). For example, the improvement of labour practices in various industries has been of increasing concern in society after several alarming reports concerning the level of wages and the employment of children in multinational corporations. This has led to increased societal demands on corporate responsibility and the widely and rapidly development of company and industry codes of conduct (Epstein & Roy, 2001).

There is an increased awareness among corporations of the importance of making sustainability an integral part of business and to work proactively to minimize risks to achieve long-term performance (von Geibler et al. 2006:335). However as discussed in the introduction, it is many times easier to talk about and engage in sustainability at a planning stage, but harder to make those plans and engagements reality. Corporate sustainability is, and has always been, a debated management idea. This is much because of the long held belief in the business community that there is a trade-off between meeting social and ethical demands, and financial returns. Thus, corporate sustainability is in general perceived to violate the objective for corporations of gaining profits and to generate shareholder value (Friedman, 1970; Sahlin-Andersson, 2006). In addition, many corporations find it hard to know how to engage in sustainability and integrate sustainability issues into their business routines and strategies (Baumgartner & Ebner, 2010:76-77; Epstein, 2009:21). Large corporations also often have complex organizational structures with many different business streams, functions, and projects going on in the same time (Keeble et al. 2003:150). Noteworthy is that many researchers state that undertaking a sustainability strategy is a complex process for most corporations, especially when operating globally, due to the need of taking both multinational and local perspectives into consideration (Epstein & Roy, 2001). Despite this complexity, several reports (e.g. KPMG, 2011) show that almost every large multinational corporation in the world today are engaging in sustainability in one way or another. Thus, there is a demand and request for guidance within the field.

2.2 Normative Research on Corporate Sustainability

Much of the contemporary research and guiding literature on corporate sustainability discusses how corporations should engage in sustainability and the benefits of this engagement. This could perhaps be as an effect of the continuous questioning of the sustainability engagements of corporations by some researchers (e.g. Friedman, 1970;

Karnani, 2010) and the organizational challenges associated with changing the mindset of a

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corporation in order to integrate sustainability thinking into operations (Epstein, 2009).

Contemporary research and frameworks on sustainability state that corporations can avoid for their sustainability engagement to be questioned, and describe how it can be a source of increased performance, if made an integral part of the business. According to Epstein and Roy (2001), in order to do this successfully, corporations must examine the various elements that relate to their current strategies and core business and assess whether and how their business unit strategies could have an impact on sustainability issues such as employee rights, human rights, and environmental protection (Epstein & Roy, 2001). This could be considered as an example of research contributing with clear instructions and normative guidance on what to do and consider being a corporation engaging in sustainability. However, less are the descriptions of how the process of integrating sustainability into strategy and core business can look like in practice. As illustrated in the introduction, talking about being a sustainable actor is one thing, but to really proceed with these activities in everyday operations is something else. When taking part of the guidance on how to successfully make sustainability an integral part of business, one cannot avoid wondering how this is dealt with in practice.

In addition, according to much research on corporate sustainability, corporations should also involve stakeholders and review their concerns (Porter & Kramer, 2006, 2011; Borglund, 2008:55-57; Epstein, 2009:20). According to this research, corporations can achieve a higher level of trust from their stakeholders and society in general if doing this. However, less is the guidance on how to weigh the focus and importance of one’s own corporate core and strategy compared with the demands from stakeholders. According to Jensen (2010), there is always a fine balance of when corporations should give away for external pressures and when corporations should focus on their own operations (Jensen, 2010:32). Nevertheless, descriptions and the processes of how this is conducted are harder to find in the contemporary literature on corporate sustainability.

According to Epstein (2009), managers often see it as a paradox to simultaneously improve environmental, social, and financial performance, and are often primarily measured on how successfully they deliver on profits (Epstein, 2009:19). Furthermore, according to White (2009), it is important to ensure that sustainability is not considered as added work in work processes when making sustainability an integral part of business (White, 2009:386). Less is the descriptions and illustrations on how these challenges actually look like in reality and how they are perceived within a real life context. Such knowledge could widen the understanding of implications on operations by contributing with wider and more nuanced descriptions of

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corporate sustainability. Furthermore, contemporary research from a managerial perspective showing their perceptions of sustainability within an organizational context is not so elaborated in general. Often the sustainability engagement of corporations is discussed at a corporate level (see for example; Epstein, 2009; Epstein & Roy, 2001; Baumgartner & Ebner, 2010; Porter & Kramer, 2006, 2011).

According to much of the contemporary research on corporate sustainability (e.g. Porter &

Kramer, 2006, 2011; Prahalad, 2006; McWilliams et al. 2006) a corporation’s sustainability engagement should be considered as a possible source of business opportunity, innovation, and competitive advantage. Furthermore, stated by Porter and Kramer (2011), sources of competitive advantages can be found for example by reviewing customer satisfaction, resource usage, logistics, distribution, employee productivity, and procurement with a lens of sustainability (Porter & Kramer, 2011). In addition, it is also argued argue that a sustainability strategy needs to fit with the corporate values, commitment, and goals that guide the general strategic orientation of the corporation (see for example; Baumgartner & Ebner, 2010:87-88;

Epstein & Roy, 2001:591; White 2009:386). However, it is harder to find more thorough descriptions in research on how this is done in practice, of how corporations organize to achieve these advantages. Epstein (2009:2) gives some examples of different approaches to sustainability. He describes that some corporations have developed coherent sustainability strategies and agendas on how to manage their social and environmental impacts. Others have identified the social and environmental effects of their operations, developed a corporate sustainability statement, and made progress in defining policies that confront sustainability issues. Some corporations have improved work streams, product design, and performance evaluations but do not have an integrated agenda that includes sustainability in day-to-day decision-making (Epstein, 2009:20).

2.3 Research as Inspiration for the Subject of the Study

In the initial stages of this study, contemporary research on corporate sustainability was gone through in order to get inspiration and a subject to study, as suggested by Corbin and Strauss (2008). The purpose of this study was to explore new insights and contribute to contemporary research on corporate sustainability with more in-depth stories and observations from managers of the case company. Thus, the context and research of corporate sustainability needed to be elaborated on to be able to contribute to existing literature on corporate sustainability with a more nuanced study describing processes and perceptions from within a large corporation.

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Research and other published material on sustainability also guided the choice of case company, since it helped in describing what characterized a corporation genuinely engaging in sustainability. Research on corporate sustainability furthermore guided the choice and the purposive sampling of managers, due to the low representation of such studies taking in several organizational levels. In addition, it provided inspiration on how to capture the perceptions on the managers working in a real-life context. In the initial stages of this research, turning to the literature also helped to formulate themes and questions for the first meetings and interviews at the case company. After the first interviews, questions and concepts derived from analysis of the data could itself be used to inform coming interviews (Corbin & Strauss, 2008). Although new questions and concepts emerged from each interview, the literature helped demonstrate the overall intent of the research, which was useful when taking the initial contact with the case company and in the first meetings with managers working there. Being well prepared on the subject also facilitated the understanding of what was being said during the interviews and informed probing questions.

3. Research Method

In order to explore and understand how managers work with and perceive the sustainability engagement within the corporation, an inductive qualitative approach was chosen to be able to study the reality of managers within their context. The study was designed as a case study to generate new empirical findings, with the purpose of contributing to existing theory, and not to test the validity of existing theory in practice. The analytical framework used was built on the basics of qualitative research and the techniques and procedures for grounded theory as described by Corbin and Strauss (2008). This framework was used to produce fresh understandings about relationships between social actors and how these interactions construct reality. This is something that has to be done in the context of what is being studied and by constantly letting the collection of data and analysis inform one another (Glaser & Strauss, 1967; Suddaby, 2006).

3.1 Philosophical Orientation

According to Morgan and Smircich (1980:499), it is important for researchers studying organizations and developing organizational theory to reflect upon and be explicit about their view on knowledge, the nature of the values and beliefs they bring to their study, and how it affects their research. This is in line with Suddaby (2006) who claims that researchers must be clear about their position in the research process and engage in constant self-reflection to

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make sure that personal biases, world-views, and assumptions are taken into consideration when collecting, interpreting, and analyzing data. The underlying assumptions of this research are those of interpretivist ontology and interpretivist epistemology (Hatch, 2006:12-15;

Morgan & Smircich, 1980). Interpretivist ontology rests on the assumption that human beings do not passively react to an external reality, rather they impose their internal perceptions and ideals on the external world and by this actively create their realities (Berger & Luckmann, 1966; Weick, 1979, cited in Isabella, 1990:9-10; Morgan & Smircich, 1980). Interpretivist epistemology assumes that knowledge can only be created and understood from the point of view of the individuals who work in a particular organization as they act and make sense of what is happening based on their experience of that situation and memories and expectations brought to it (Hatch, 2006:13).

These assumptions have guided both the research design and been implicit in the analyses and conclusions drawn from the empirical findings in this study. As the purpose of this research is to explore managers’ perceptions of sustainability work, an interpretivist approach is appropriate, since the objective of interpretative research is to understand the actual production of meanings and concepts used by social actors in real settings, how they directly experience everyday realities (Gephart, 2004:456-457). Noteworthy is that the findings of this study reflect our interpretation of what has been said and what we have observed (Corbin &

Strauss, 2008:163). However, as there may be many different understandings and interpretations of reality among these managers, so are our understandings of their experiences filtered through our own experiences (Hatch, 2006:13). Consequently, a reflection over one’s own values and beliefs when taking part of the managers’ stories is necessary to reach as objective interpretations as possible. The fact that we were two researchers who conducted this study also made it possible for us to see if we interpreted the stories told by the managers in a similar way. It made it possible for us to minimize the risk that our personal biases affected the interpretations and to create a shared perception of the reality as constructed within the corporation. However, a totally objective reality is not possible to reach, since the findings of this study will be based on the perceptions of the managers and consequently socially constructed within their context. How these managers interpret reality is in turn based on their individual values and beliefs. Consequently, how values and beliefs may affect the findings of this study is something to be taken into consideration both as researchers and readers of this study. The knowledge resulting from this study is what we know for the time being (Corbin & Strauss, 2008:2). The frame of reference,

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the perspective thorough which people view an event may shift, changing their interpretations of reality, leading to new knowledge (Mc Call, 1977; Starbuck, 1976, cited in Isabella, 1990:8). However, a theory grounded in practice will yield new empirical findings to contribute to existing theory (Glaser & Strauss, 1965; Suddaby, 2006).

3.2 Research Design

In order to get an insider perspective and explore how managers perceive sustainability work, a case study was conducted on a large Swedish multinational corporation. The corporation is operating in the consumer goods industry and has production facilities and conduct sales in many countries all over the world. The choice of case company was based on the fact that it for long has been engaged in sustainability and has achieved several awards and high ratings for its sustainability work. A case study can be defined as “a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context and using multiple sources of evidence” (Robson, 2002:178, cited in Saunders et al. 2009:145-146). It is a “research strategy which focuses on understanding the dynamics present within single settings” (Eisenhardt, 1989:534). A case study therefore made it possible for us to get at the inner experience of managers, to determine how meanings are formed in their context, and to discover variables of practical and theoretical importance (Corbin &

Strauss, 2008:12). The single case approach was selected because it gave the opportunity to study a corporation in-depth by conducting interviews with the purpose of getting information and descriptions from managers involved in the sustainability engagement and work of the corporation. It made it possible to explore the research questions and to gain insights to contribute to existing theory with new empirical findings (Saunders et al. 2009:233).

According to Dubois and Gabbe (2002), depth is more valuable than breadth given from multiple cases, since without a deep understanding of actors, events and organizational dynamics cannot be properly understood and thereby findings not be of significant value.

The primary goal with a case study is not to be able to generalize the findings. Rather, we seek to explore the perceptions of managers in our specific research setting (Eisenhardt, 1989;

Saunders et al. 2009:158). However, even if generalization of the findings is not the goal of this study, the findings can be of value for and inform both researchers and practitioners about the perceptions of sustainability in a real life context.

The analytical framework used in this study is based on the basics of qualitative research and the techniques and procedures for grounded theory as described by Corbin and Strauss (2008).

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The ideas of grounded theory were first developed by Glaser and Strauss (1967) and have been elaborated on further into more recent versions of today. Grounded theory builds on the two key concepts of constant comparison and theoretical sampling. Constant comparison means that empirical findings are collected and analyzed simultaneously and theoretical sampling means that key decisions about which empirical findings to be collected next are guided by the accumulated insights from the ongoing analysis (Glaser & Strauss, 1967, Suddaby, 2006). This approach is appropriate when seeking to extend existing theory with new empirical findings collected by continuous interviews and observations (Saunders et al.

2009:592) and when one wants to contribute to the knowledge of how organizational members interpret reality (Suddaby, 2006). The purpose of grounded theory is to bring forth new understandings about relationships between social actors and how these relationships and interactions construct reality (Glaser & Strauss, 1967). Consequently, grounded theory is suitable for this study since the purpose is to explore and understand how managers work with and perceive the sustainability engagement within the corporation.

3.3 Collection and Analysis of Data

To explore how managers get involved in and perceive the sustainability work of a corporation, data was collected through a variety of sources, which is one of the features of case study research (Robson, 2002:178, cited in Saunders et al. 2009:145-146). The main source used was non-standardized interviews with managers to get a picture of how the sustainability work in the particular case company was organized and the perceptions of managers responsible for sustainability in their daily work. The corporation’s sustainability report and various publications of the corporation’s sustainability work on their web page and in media were also consulted to supplement the interviews and to broaden our understanding of the sustainability work of the corporation. Much about an organization, its structure, and how it functions that is not immediately showing in interviews can be learned by studying for example reports and other published material about the corporation (Corbin & Strauss, 2008:39).

3.3.1 Purposive Sampling

The choice of managers to interview was made through purposive sampling, which according to Neuman (2005, cited in Saunders et al. 2009:237, 239) is used when working with very small samples such as in a case study research and when one wish to select cases that are particularly informative. Purposive sampling is also suitable when building grounded theory (Strauss & Corbin, 1998; Patton, 1990, cited in Pratt, 2009:859). The interviewees were

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selected through a dialogue with one of the top-managers responsible for the sustainability engagement of the corporation. This person could guide us and help us get access to relevant managers for this study. A schedule was set up for the interviews with the identified managers and some managers were added as the study progressed and the answers given by the interviewees gave rise to new concepts to be further explored.

The choice of managers as interviewees was based on the assumption that managers as a collective are at the heart of the cognitive mind of an organization. Managers’ views on various organizational occurrences serve as interpretations to shape meanings of other organizational participants (Keisler & Sproull, 1982, cited in Isabella, 1990:9-10). According to Gephart (1984) and Prahalad and Bettis (1986, all cited in Isabella, 1990:9-10), managers’

interpretations become the dominant reality or logic that may influence the constructed realities of others. It is from the social architecture of managers that organizations draw meaning and significance (Bennis & Nanus, 1985; Pfeffer, 1981, 1982, cited in Isabella, 1990:9-10). Therefore, the collective viewpoints of managers are important in order to understand the perceptions of sustainability within an organization. These insights also guided the theoretical sampling of our study.

In order to discover the collective interpretations of managers and to make these represent viewpoints from various levels and functional areas of the organization, interviews were conducted with top managers and business unit managers within various units. Five interviews were held with managers at head quarter level (HQ), some of them having experience of working in, or in close collaboration with the business units, and three interviews were held with managers at business-unit level (BU). The functional areas represented were sourcing, sales, and plant management. Interviews were conducted until the same themes reoccurred and saturation in the findings was reached. Saturation is one of the primary means of verification in grounded theory and a researcher must continue to collect data until no new evidence appears (Strauss & Corbin, 1998, cited in Suddaby, 2006:636).

3.3.2 Non-standardized interviews

The choice of non-standardized interviews as our main source of data collection was based on the fact that this technique is advantageous when the purpose of the research is exploratory and when it is necessary to understand the reasons for the research participants’ attitudes and opinions (Cooper & Schindler, 2008, cited in Saunders et al. 2009:323; Saunders et al.

2009:324). Non-standardized interviews give the opportunity to ask for further explanations

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from the interviewees or for them to build on their responses. This is important since we are adopting an interpretivist epistemology in this study and seek to understand the perceptions that the research participants ascribe to the sustainability work of their corporation. Non- standardized interviews also make it possible for interviewees to lead the discussion into areas of their choice in relation to the topic discussed (Silverman, 2007, cited in Saunders et al.

2009:324), which is the goal of interviews when conducting grounded theory.

Five of the interviews were carried out as face-to-face conversations, while three were telephone interviews. Each interview lasted for approximately thirty-five minutes. In addition, before starting these interviews, a pre-study made up of three unstructured interviews were carried out with the top-manager responsible for the sustainability work of the corporation, who also helped in selecting the managers for the coming interviews. Table 2 below illustrates the process of collecting data during this study.

Table 2: Pre- and Case Study interviews The Pre-Study

Position Date Interaction Duration

Top manager responsible for sustainability 2011-02-16 Face-to-face 1 hour Top manager responsible for sustainability 2011-03-06 Face-to-face 1 hour Top manager responsible for sustainability 2011-03-14 Face-to-face 1 hour

The Case Study

Position Date Interaction Duration

BU Manager A 2012-04-11 Telephone 35 min

HQ Manager B 2012-04-11 Face-to-face 28 min

HQ Manager C 2012-04-11 Face-to-face 30 min

HQ Manager D 2012-04-12 Face-to-face 30 min

HQ Manager E 2012-04-12 Face-to-face 45 min

BU Manager F 2012-04-19 Telephone 1 hour

BU Manager G 2012-04-20 Telephone 32 min

HQ Manager H 2012-04-23 Face-to-face 40 min

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The unstructured interviews were more as conversations during the pre-study in which we discussed potential topics of interest for this study, shared experiences about sustainability work, made comparisons to literature on sustainability, reports and publications about the corporation’s sustainability work, and actualities in the business community. The analysis derived from these unstructured interviews became the point of departure for the direction of this study. By analyzing these interviews we found that the core of the conversations was the myriad of normative literature, guidelines and frameworks telling corporations what to do and the difficulty of knowing how to do it, and how the sustainability strategy and targets of the corporation were perceived and received among managers. As advocated by Corbin and Strauss (2008:199-200), the analysis derived from these unstructured interviews then informed the coming more structured interviews with the other managers. From the analysis we were able to indentify themes for the coming interviews, themes that in turn were informed by and constantly updated after each interview, which according to Corbin and Strauss (2008) is a main fundament of grounded theory. Examples of identified themes are:

perceptions of sustainability in general, how sustainability affects operations and everyday work, how to measure sustainability, and the integration of corporate and sustainability strategies. To cover the identified themes, we used open questions (e.g. How does the sustainability engagement of the corporation affect your daily work? and How do you perceive the sustainability engagement of the corporation?) to allow for the interviewees to describe the involvement and perceptions of their sustainability work by themselves, without being guided by specific questions, and which encouraged them to give extensive answers with the possibility to both reveal attitudes and facts (Grummit, 1980, cited in Saunders et al.

2009:337).

3.3.3 Documentation

The interviews were audio-recorded and notes were taken during the interviews. These recording techniques are appropriate when posing open questions were interviewees are allowed to speak freely and when discussion becomes a natural part of the answers (Saunders et al. 2009:320-321). Since a large amount of information was given by the interviewees, audio-recording made it possible for us to listen to and interpret the answers given once more.

Using both audio-recording and note-taking made it possible for us to register what the interviewees said, expressions and verbal cues, and how they said it, facial expressions and non-verbal cues (Mishler, 1986, cited in Corbin & Strauss, 2008:28; Saunders et al.

2009:339). Of course only what the interviewees said, expressions and verbal cues were

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possible for us to interpret during the telephone interviews. However, we still believe that suffiecient information for interpretation was given from these interviews. Audio-recording also provide an accurate and unbiased recording with the possibility of controlling the reproduction of the answers given in this study (Saunders et al. 2009:341).

As recommended by Robson (2002, cited in Saunders et al. 2009:334), the notes and recordings were immediately after each interview compiled into main themes and categories of responses. This is also in line with Corbin and Strauss (2008:163) who state that coding should begin soon after an interview, since the first data serve as a foundation for further data collection and analysis. After the final interview, each transcript was reviewed and certain sections recorded on a separate piece of paper to get an overview of the core of an individual’s statements and to code these into final categories. Pieces of information that a number of participants repeated informed our analysis and generated new empirical theory.

The final categories are reflected in the headings under the section ‘Findings’.

Since transcription of notes and recordings is time-consuming (Saunders et al. 2009:485-486), only certain sections were transcribed, sections judged to be of particular importance to reach the purpose of this study. This made it possible for us to analyze the findings during the time for the interviews and to inform our work further. This is in line with Glaser and Strauss (1965:6) who claim that a fieldworker does not have to code all or any of the notes. Coding can also be made implicitly in the minds of the researchers and little more is likely to be learned by explicit coding after data collection. It could be argued that relevant data will be lost if not coded properly (Saunders et al. 2009:334). However, since the interviews were carried out during a limited amount of time, the material remained fresh in our minds during the whole study even though it was not explicitly written down.

When conducting interviews, it is of outmost importance to respect the integrity of the people being interviewed and to ensure them with internal and external anonymity (Saunders et al.

2009:193-196). To ensure for the case company that the information given by them was to be handled with care, a confidentiality agreement was signed at the beginning of this study. An agreement was also made not to publish the name of the corporation or the managers being interviewed.

3.3.4 Analysis through Constant Comparison and Theoretical Sampling

As evident in the previous sections, this study was conducted sequentially and analysis was present throughout the study. The different themes and categories were identified

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continuously to inform the research process. As explained by Yin (1981), when conducting a qualitative case study, little conceptual framework us there to guide the researcher to begin with. Questions and concepts around which to organize the narratives and stories given from the participants of the study need to be developed and to be flexible for modification as the analysis progresses (Yin, 1981). Analysis based on the grounded theory approach requires for data and theory to be constantly compared throughout the data collection and analysis process to arrive at new categories and concepts to generate new empirical theory (Isabella, 1990:12).

Continuous questioning was one important analytical tool in our theoretical sampling, empirical findings, and ongoing analysis in order to be able to better understand and think about what ideas and data we needed to be looking for both in earlier data collections and what to consider in future ones. This helped us to probe deeper into our data (Corbin &

Strauss, 2008:69). Whole through our data collection and analysis, constant comparison of data was fundamental for our findings (Corbin & Strauss, 2008:73). Gradually a pattern of categories and some iteration in our data and empirical findings were showing, something that guided the summarizing and analyzing of the empirical findings during the research process.

In between interviews, we continuously reflected during the whole process of collecting the empirical findings. The insights during these reflections then were the engine that drove the analysis and theoretical sampling. The constant comparison proceeded until theoretical saturation was reached (Suddaby, 2006). All these sequential steps were taken in order to be able to understand how the managers work with and perceive the sustainability work of the corporation. To present these findings we used a narrative approach suitable for a case study (Yin, 1981).

4. Findings

4.1 The Case Company

The case company has a long history of sustainability engagement. Several managers describe sustainability as being incorporated into the DNA of the corporation and that the long-term thinking has been there since its foundation. However, the sustainability focus has not always been as explicit and gone under the same labels that are used today. The corporation has for several years produced environmental reports and been engaged in social activities. However, the corporation has now taken a wider approach to sustainability including both the economic, social, and environmental responsibilities and effects of their operations and has achieved

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several awards for their sustainability work. The corporation’s sustainability engagement and recognition was further reinforced by a reorganization made to get sustainability more into focus within the organization. Sustainability is now a top management function with the head of sustainability reporting directly to the CEO. By this reorganization the sustainability strategy became a natural part of the overall corporate strategy and the sustainability work got as much space in top executive meetings as other issues critical for the business (HQ Manager E). As part of developing the sustainability strategy, the top management team responsible for sustainability compiled a set of new and more explicit targets to make sustainability even more central in the everyday work of managers in the organization. These targets were made long term and are supposed to permeate operations of the whole multinational corporation.

This was a natural part of extending the sustainability work of the corporation due to its nature of being target driven.

“Being a corporation with a foundation in engineering it lies within our tradition and culture to measure operations” (HQ Manager E).

The corporation is organized in a head quarter (HQ) and many business units (BUs) operating all over the world. Each BU has their top management team, which are responsible on the deliverance on the strategy and targets set by HQ. Within the many BUs there are plants, sales functions, sourcing functions, and additional support functions. We entered the corporation some time before these new extended sustainability targets were published externally and left just before they were about to be communicated internally. Hence, this study explores managers views on their involvement and perceptions as it was for this time being.

4.2 Sustainability Engagement is a Ticket to Play

Regardless of which manager we spoke to during our interviews, there was a general understanding of the benefits of engaging in sustainability and that it was in the best interest of the corporation to deliver on its sustainability performance. As stated by one manager, sustainability brings value in many forms. Engaging in sustainability makes the corporation get and keep the right people on board, enables for us to show that we are a healthy company among and to build trust for our products (HQ Manager B). As described by one manager, the sustainability engagement is a “ticket to play”, meaning that it is expected from a corporation within their business to engage in sustainability (HQ Manager C).

The competitors of the case company also have sustainability agendas, but several managers perceive that they are a head of their competitors when it comes to sustainability. “We have

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achieved several awards for our sustainability work. However, I would say that we are sometimes much better than we show. You always have to weigh how much to push a concept. Sustainability is in our genes and we should not have to prove everything by being loud. Perhaps we are a bit humble and Swedish in that sense. Other corporations that do not have as much to show sometimes get a stronger sustainability label than us because they show everything. However, this is a fine balance you see. If we are too loud, we run the risk of lowering our credibility and if we are too silent, we do not get the chance of showing what we doing” (HQ Manager C).

The critical aspect of sustainability for the business was explicitly stated by one HQ manager in stating that:

“Our sustainability strategy and targets have the objective of minimizing risks, increase sales, and lower costs for overall business. Through our sustainability strategy and targets we want to communicate that the undertaking of these targets is the ticket to play in our business, both internally and for suppliers” (HQ Manager H).

Especially when it comes to sales, managers express the value they perceive is created by the corporation’s sustainability engagement. The managers talk about that more and more customers and consumers are demanding for sustainable suppliers when it comes to environmental and ethical issues and how employees are treated (HQ Manager C).

Furthermore, “To be able to be a part of green public procurements, a sustainability engagement is necessary” (HQ Manager E).

“Our customers have their own sustainability ratings of their suppliers as guidance for whom to buy from. Sustainability engagement is important from a seller’s perspective and it is important to be able to show the deliverance on sustainability, at least when it comes to large customers” (BU Manager A).

“Corporations that want a green profile search for green suppliers. In addition, we evaluate our suppliers from our Supplier Performance Standards. It is a loop where customers evaluate us from a sustainability perspective, while we in turn evaluate our suppliers” (HQ Manager D).

One manager describes how the sustainability report is important in sales meetings to show how the corporation works with sustainability, something that is appreciated by the customers (BU Manager A). Another manager says “When meeting customers, I use to refresh my knowledge about our sustainability work and take part of updated material to be able to answer questions from customers” (BU Manager G). These efforts show that the managers believe in the sustainability work of the corporation and are proud to be able to show it to their customers, furthermore they perceive it strengthens the relationships with customers.

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“Customers choose us because we can show the whole history of our products, where all the material comes from” (HQ Manager C).

However there is still an internal questioning among some managers if the sustainability engagement is making up for the costs that come with it. “I have always understood that our sustainability work is an important part of our organization and in sales situations by offering added value to customers. However, it is hard to put that added value on an invoice” (BU Manger A). “Hopefully the sustainability engagement creates customer loyalty in the end, and I believe that a customer relationship founded in values and not only prize has the potential of being more long-term. In the end of the day, also our customer can leverage on our sustainability investments” (HQ Manager E). However some sustainability engagements seem to be of growing importance to get customers. “Increasingly our customers are asking for different sustainability certificates because the consumers are asking for it” (BU Manager G).

“We have won many great deals with large customers thanks to our sustainability engagement. Together with other factors, such as prize and quality they chose us before our competitors” (HQ Manager D).

4.3 Sustainability Engagement Mainly Driven by Business

When asked about why the corporation is engaging in sustainability, the managers without hesitation stated that it is all about the business, to make profits. As described by one manager, it is crucial for the sustainability engagement to drive profits and value, otherwise it would be dangerous to the survival of the corporation (HQ Manager E). However, the sustainability engagement is also about risk minimizing. “If we do not work in line with the sustainability targets and just focus on minimizing costs we risk to stand there with “Black Pete” and child labour and rain forest usage among suppliers and the outcome of that could be anything or everything” (HQ Manager H).

The HQ managers do not perceive any trade-off between the sustainability engagement and of generating profit and shareholder value.

“We look upon our sustainability engagement as a strength for our value creation. If we lower our resource usage, there is money to save right away. That is why I like to call our sustainability work for profitability work. That is the right way to approach the matter” (HQ Manager E).

“In the end of the day we are counting on making profit and generating shareholder value with our sustainability engagement. But on the way we can satisfy the demands of other

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stakeholders. By our sustainability engagement we want to become an attractive and profitable corporation” (HQ Manager H). Also, investors are increasingly seeing the potential of the corporation after the reorganization of the sustainability function. “When I could read in the media that people were advised to invest in our “ethical corporation”, we celebrated here at the office” (HQ Manager E). Another manager describes how approximately twenty percent of their investors are investing because of the sustainability profile of the corporation.

Many of them are evaluated on sustainability parameters as well and are required to make a quality check of their investments (HQ Manager D). However, it is still in general perceived as a challenge to convince investors of the value creation of the sustainability engagement.

“Our greatest challenge is to explain for financial analysts that our sustainability engagement creates value. It is important to talk so that the stakeholders understand.

It is easier to explain sustainability to a customer than to an analyst. They often want to put what you do into an excel sheet and that can sometimes be hard with sustainability performance” (HQ Manager E).

4.4 A Top-Down Bottom-Up Approach to Sustainability

The new management function makes the overarching sustainability work a top-down approach. However, managers working in this function emphasize the importance of every employee to take their responsibility and to contribute with input on how the sustainability work and performance of the corporation can be improved. The sustainability function is responsible for setting the overarching agenda, policies, and targets. In this process, various reference groups and networks are consulted to get an understanding of what the goals should contain. “It is important to reach out to the organization to see the feasibility and level of importance of issues. There is no idea to have targets if no one finds them important” (HQ Manager B). Consequently, a bottom-up approach is used to get input for the agenda, policies, or targets being set. “The sustainability strategy and targets are absolutely no desk top products. The BUs have very much been a part of developing them. However, not every target suggested can be included. If we have too many targets they will not be sharp enough” (HQ Manager H). The final decisions of the strategy and targets are taken by top management (HQ Manager D).

The overarching targets are after being set communicated to the various business-units, which in turn are responsible for breaking them down and developing business plans for how to turn the goals into practice, how they are going to work to achieve the goals. The intention with the overarching goals is for them to be well-defined and measurable in order to facilitate this work. The business plans are then reported on back to the top managers. In this way, “the

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development of targets can be described as a loop were both people from headquarters and business-units take part” (HQ Manager B).

“Since it is the top management team responsible for sustainability that develops the overall targets and the business-units in turn that must deliver the sustainability achievements, it is important for the business-units to get ownership of their sustainability engagements” (HQ Manager B).

This is something they get by adapting the targets to their particular business.

“Sustainability should not only be something that the specialists are working with. If one is president over a business-unit, then it is this person who is responsible for delivering on the business financial targets, as well as the environmental and social targets” (HQ Manager E).

Furthermore, one should remember that sustainability work is not only formal structures of strategies and targets, but is also something that exists more informally in the corporate culture. “The biggest things of sustainability are the stuff that is not written, it is not the policies, it is not the code of conduct or the targets, it is the relationship building, it is the communication, and the awareness building. It is not that stuff that you perhaps will see on the job description or even in any to do list for sustainability” (HQ Manager B).

4.5 Self-Involvement Crucial for Sustainability Work

When it comes to questions regarding how the sustainability work of the corporation is structured and if the intentions with this work are met, the views differ between HQ and BU managers. Some of the managers in this study do not have sustainability targets among their top five goals. They explicitly state that the nature of their goals depends on the priorities of the person they are reporting to, which sometimes makes sustainability an area of choice. For some managers, sustainability is a natural part of their daily work in for example evaluating suppliers or health and safety issues at their production site. Sometimes the sustainability engagement seems to be more about the values and beliefs of the individual. One manager describes how this can lead to a conflict of resources, how employees sometimes want to engage more in sustainability but are not allowed or are being told not to, since it undermines the ability for the unit to achieve some of its other targets on which it is being measured and have to report back on to top management. “The sustainability engagement of the BU depends on the interest for sustainability of one’s supervisor and if it is a natural part of one’s daily work in that particular unit” (BU Manager A). “The sustainability engagement becomes what every employee makes it, for example some people are into sustainability on a personal level.

However, it is important that it is not conducted at the expense of the business targets of the

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organization. As it is now, HQ is externally communicating overarching sustainability targets for the whole organization. However, the BUs only communicates business targets for their operations. As I see it today, the sustainability work of our corporation is not a part of everyday work, at least not in the BUs” (BU Manager F). Several BU managers highlight the need for more distinct targets to get sustainability work into practice,

“We know maybe what the company’s overall goals are, but there is nothing at our level. There are no targets for us to reach. In that way, involvement depends on each person’s awareness about sustainability issues. I do not feel any certain demand to deliver on sustainability internally. However, it is a natural part of my work when working with customers and suppliers. I do not think everybody looks upon sustainability as I do and since think it is important I use the thinking in my everyday work” (BU Manager A).

Another manager questions for whom the sustainability targets are actually stated.

“Is it HQ that has put the targets on themselves, because I have never seen the targets? The targets I get from my BU are only financial targets. Do not get me wrong, I sympathize with the sustainability engagement of our corporation, but if I am not following my primary targets, the financial ones, and instead engage in CSR, I get into a position of needing to defend those activities to my supervisor since I put my focus away from delivering on the targets set on my operations. What should I then say? HQ wanted this? No, that would not work. If I put it like this, if HQ wants me to deliver on sustainability why is it not communicated by regular processes? If new claims on you come on the side of regular claims, this will end up in a conflict of resource usage and where to focus. If this sustainability engagement is supposed to work in reality, it must be integrated into the regular targets” (BU Manager F).

Important to note, however, is that lots of sustainability work seems to be carried out in the daily operations, even if it not explicitly labelled as sustainability activities or required by HQ. “In my unit, which can be seen as a support function of a BU, everybody is trained in CSR activities. We did this on our own initiative but it was appreciated by HQ as well. The reason we took this initiative was to be prepared for potential future demands to be put on us”

(BU Manager F).

“As it is today, we do not have any direct sustainability targets from top management, if one does not count our targets concerning work place accidents. But we have been working with our ISO 140001 and OSHAS 180012 certificates for a very long time”

(BU Manager G).

“We get our targets from the BU president as a part of a budget plan, however there are not so often environmental targets involved. Today I would say that the sustainability targets are not clearly communicated from HQ down to us in BUs and I do not have any specific targets from

2 For more information on ISO and OHSAS standards, see www.iso.org. and www.ohsas.org.

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my superior concerning sustainability” (BU Manager G). “Due to our ISO 14001 and OSHAS 18001, we have targets focusing on environmental and work place conditions as a result of our yearly certificate audits. This could be everything from lowering CO2, to decrease packaging, or to lowering workplace noise. We focus on these targets in order to keep our certificates, not to be able to report back to HQ” (BU Manager G).

One way of explaining the discrepancies between HQ and BU managers when it comes to the sustainability engagement seems to be a lack in communication. “I perceive our organization as a top-down organization and I think the overall sustainability targets should be communicated internally and not just externally so that we can be a part of and contribute to the work” (BU Manager G). One finding when conducting the interviews was also that not many of the BU managers know what is said in the sustainability report and what overall sustainability targets that have been set for the coming years. Meanwhile, HQ managers use the same wording and examples that are used in the sustainability report.

When reading the overall targets to one manager during an interview, he replied: “Ok, something is happening and this looks bright for the future. Knowing this, I have support for demanding targets for my department. Of course we want to act proactively and give suggestions on targets” (BU Manager F). Even if the feeling you sometimes get when meeting the managers is that they are not that involved in the sustainability work and that HQ as well as BU managers have thoughts on how this work can be better structured, there is a genuine will among all for it to constantly improve. HQ managers wanted more targets and a clearer internal structure on how to measure the sustainability performance and showed awareness of the potential internal conflict between targets. BU managers asked for more guidance in their sustainability work and a more explicit connection between the sustainability engagement and operations. When talking about their company, managers seem to be proud of representing a corporation that takes its responsibility and also understand why it is of importance for the corporation to engage in. Several managers emphasize that there is no resistance to sustainability per se, but rather they wish for the sustainability targets to be more specific and communicated more explicitly throughout the organization.

4.6 Approaching Sustainability in a Multinational Way

For a multinational corporation operating in many countries all over the world, the surrounding environment has an impact on the sustainability engagement taken on by the corporation. As explained by one manager,

References

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