Post on 21-Nov-2014
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment
* Correspondence to: Martina K. Linnenluecke, UQ Business School, The University of Queensland, Brisbane, Queensland 4072, Australia.E-mail: m.linnenluecke@business.uq.edu.au
Business Strategy and the EnvironmentBus. Strat. Env. 18, 432–452 (2009)Published online 6 December 2007 in Wiley InterScience(www.interscience.wiley.com) DOI: 10.1002/bse.609
Subcultures and Sustainability Practices: the Impact on Understanding Corporate Sustainability
Martina K. Linnenluecke,* Sally V. Russell and Andrew Griffi thsUQ Business School, The University of Queensland, Brisbane, Queensland, Australia
ABSTRACTIn this paper we present fi ndings of how employees from a single organization understand corporate sustainability. Responses from 255 survey participants indicate (1) that dif-ferences exist in how employees understand corporate sustainability and (2) that these differences can be partially explained by the presence of organizational subcultures and by differences in employee awareness of the organization’s sustainability practices. In particular, fi ndings reveal that employees from a subculture with a stronger emphasis on hierarchical and bureaucratic values emphasize an economic understanding of corporate sustainability. Implications for research and practice are discussed. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.
Received 19 June 2007; revised 23 October 2007; accepted 24 October 2007
Keywords: corporate sustainability; subcultures; sustainability practices; understandings
Introduction
THE CONCEPT OF CORPORATE SUSTAINABILITY HAS GAINED IMPORTANCE IN RECENT YEARS AS ORGANIZATIONS
face pressures to address environmental and social problems that they cause directly or indirectly (Starik
and Marcus, 2000). Many companies now publish reports on sustainability themes (Xie and Hayase,
2007), and the number of such publications is growing (Kolk, 2004). In general, however, there exists
little agreement over what constitutes corporate sustainability and how to best achieve it (Bansal, 2005; Hopwood
et al., 2005). Current approaches to corporate sustainability are varied and range from attempts to adapt products
and processes to minimize resource use and environmental pollution, and/or to improve relations with the com-
munity and other stakeholder groups (Crane, 2000; Gonzáles-Benito and Gonzáles-Benito, 2006). In order to
achieve more far-reaching transformations, some organizations have also initiated programs to change their values
and beliefs in order to develop a ‘greener’ and more ‘socially responsible’ organizational culture (Crane, 1995).
Past research has suggested that organizations progress through various stages in their pursuit of corporate sus-
tainability, and that each stage leads to a more refi ned understanding of the concept, which is then shared throughout
the organization (e.g. Dunphy et al., 2003; Hunt and Auster, 1990; Roome, 1992). This focus on the overall adoption
of corporate sustainability by fi rms has largely treated the individual organization as a ‘black box’ (Howard-Grenville,
2006), and does not account for intra-organizational differences when responding to sustainability issues. Yet orga-
nizational leaders, management and change agents often face internal barriers and resistance when attempting to
implement sustainability-oriented changes (Dunphy et al., 2003), as organizational members hold different beliefs
about sustainability issues and thus accept, interpret and operationalize the term differently (Faber et al., 2005).
Subcultures and Sustainability Practices 433
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Some scholars have begun to look inside the ‘black box’ by calling for attention to managerial understandings,
interpretations and perceptions (Andersson and Bateman, 2000; Egri and Herman, 2000; Sharma, 2000), as well
as subcultural differences (Crane, 1995; Harris and Crane, 2002), in order to explain different intra-organizational
responses to sustainability issues, and to offer a more complex picture of how corporate sustainability is understood
within an organization (Howard-Grenville, 2006). In this study, we further build on this literature by investigating
(1) what similarities or differences exist in how employees within a single organization understand corporate
sustainability and (2) whether the presence of organizational subcultures or differences in employee awareness
of the organization’s sustainability practices can offer insights into variances in the understanding of corporate
sustainability.
Both of these points might help organizational leaders, management and change agents to develop a range of
more sophisticated and tailored programs for the successful adoption of corporate sustainability, and provide novel
insights into how best to approach change management issues. These points also contribute to the existing debates
and existing literature on understanding corporate sustainability.
Although the concept of corporate sustainability has been investigated theoretically (Jennings and Zandbergen,
1995; Starik and Rands, 1995), there have been few empirical studies on the issue of similarities and differences
in understanding and implementing corporate sustainability within organizations. To date, most organizations
assume homogeneity of views on corporate sustainability – these views are normally articulated in an organiza-
tion’s annual report or corporate sustainability document. As an extension of this, much of the organization and
natural environment (ONE) literature has concluded that policies, reports and mission statements that attribute
some value to sustainability equate to sustainability action (Sharma and Vredenburg, 1998).
Furthermore, few studies have attempted to understand what impact organizational subcultures or differences
in employee awareness of the organization’s sustainability practices have on employees’ understandings of corpo-
rate sustainability. The organizational culture concept has been frequently cited within the corporate sustainability
literature (e.g. Stead and Stead, 1992; Welford, 1995), which can be attributed to its signifi cance as a conceptual
bridge between the normative prescriptions underlying corporate sustainability principles and the social realities
of everyday organizational life (Crane, 1995). The central idea is that organizations will display a ‘greener’ and
more socially responsible culture when moving towards sustainability (Crane, 1995), which implies that it is pos-
sible for organizations to display a unifi ed ‘sustainable’ corporate culture, and that culture can be the outcome of
effective managerial manipulation and control (Crane, 1995; Harris and Crane, 2002).
The notion of a unifi ed organizational culture has attracted criticism in the organizational culture literature.
Research suggests that organizational culture is rarely characterized by normative cultural unity, and more com-
monly fragmented into multiple subcultures (Sackmann, 1992). Cultural unity has also been challenged in the
sustainability literature. Crane (1995), for example, suggests that the notion of a single ‘green’ culture represents
a symbolic meaning rather than a realistic assessment of an organization. In a later study, the fi ndings by Harris
and Crane (2002) indicate that the diffusion of a ‘green’ culture is hindered by the presence of various subcultures,
as they impede the diffusion of a common set of sustainability values and beliefs. To date, empirical studies linking
cultural fragmentation and corporate sustainability are limited in number, with Harris and Crane (2002) and
Howard-Grenville (2006) being notable exceptions.
In this study, we fi rst investigate the diversity of understandings of corporate sustainability. Rather than further
adding to the plethora of existing defi nitions, we focus on differences in the understanding of corporate sustain-
ability among employees of a single organization, and whether such differences are related to the presence of
organizational subcultures. In the following sections, we develop hypotheses about the interrelation of organiza-
tional subcultures, employee awareness of the organization’s sustainability practices, and corporate sustainability.
These hypotheses are tested using a quantitative research design within the context of a single case organization.
We conclude the paper by discussing fi ndings and implications for future research.
Understandings of Corporate Sustainability
In their recent qualitative study, Russell et al. (2007) demonstrated that individuals hold different understandings
of corporate sustainability. These understandings are (1) a corporation working towards long-term economic
434 M. K. Linnenluecke et al.
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
performance; (2) a corporation working towards positive outcomes for the natural environment; (3) a corporation
that supports people and social outcomes or (4) a corporation with a holistic approach. The four understandings
align with different theoretical conceptions of corporate sustainability in the literature, which vary on the degree
to which corporate sustainability means economic sustainability (Banerjee, 2001; Dyllick and Hockerts, 2002;
Gladwin et al., 1995a), or is broadened to include environmental and social issues (e.g. Dunphy et al., 2003).
Corporate Sustainability as Economic Sustainability
The term corporate sustainability has been used in the traditional strategy and management literature to refer to
economic performance, growth and long-term profi tability of organizations (e.g. Peteraf, 1993; Porter, 1985). The
major assumption behind this understanding of sustainability is that the fi rm operates in the interests of its owners
– its shareholders – through maximizing their wealth (Fowler and Hope, 2007). Thus, it becomes imperative for
management to expand consumption of the fi rm’s products and services in order to increase profi ts. Ecologically
and socially desirable investments that do not directly benefi t the fi rm’s shareholders should not be undertaken
(Friedman, 1970; Levitt, 1958), as they lead to inferior returns compared to other businesses (White, 1996). Several
studies have shown, however, that engagement with the natural environment can improve fi rm performance and
contribute to a competitive advantage (e.g. Hart and Ahuja, 1996; Sharma and Vredenburg, 1998), which suggests
that the realization of economic sustainability alone is not suffi cient for the overall sustainability of corporations.
This broadening of the understanding of corporate sustainability is regarded as the most important departure of
the concept from orthodox management theory (Gladwin et al., 1995b).
Corporate Sustainability as Ecological Sustainability
The second understanding of corporate sustainability, ecological sustainability, is based on the premise that orga-
nizations are not separate from the natural environment but are located and operate within it (e.g., Sharma, 2003).
Organizational activities can have a signifi cant negative impact on the environment, for example through the emis-
sion of waste (Hart, 1995, 1997) or the exploitation of natural resources (Jennings and Zandbergen, 1995; Stead and
Stead, 2004). In turn, environmental quality can impact on business activities, as evident through the impact of
climate change (Winn and Kirchgeorg, 2005). Some commentators argue that radical shifts in business practices
and strategic thinking are necessary to bring about a lasting reversal of current levels of environmental destruction
(Hart, 1997; Shrivastava, 1995b). Central to the understanding of ecological sustainability is therefore the challenge
for organizations to move beyond pollution control or prevention and to operate within the carrying capacity of
ecosystems by minimizing resource use and their ecological footprint (Hart, 1995; Sharma, 2003).
Corporate Sustainability as Social Sustainability
The recent attention towards social sustainability results from trends such as globalization and privatization, requir-
ing businesses to assume wider responsibilities towards various stakeholder groups and the social environment
in which they operate (Carroll, 1999; Dunphy et al., 2003; Freeman, 1984). Numerous studies have been published
on business-related social issues, including occupational health and safety, discrimination, business ethics, fraud,
corporate philanthropy, minority concerns, community welfare and stakeholder demands (Carroll, 1979; Preston,
1985; Shrivastava, 1995a). More recently, new concepts such as ‘corporate social sustainability’ (Dyllick and
Hockerts, 2002) and ‘socially sustainable businesses’ (Gladwin et al., 1995b) have emerged. In general, social
sustainability means an organization (1) pays attention to its internal staff development, (2) attempts to deal
proactively with its community base and (3) engages with its stakeholders.
A Holistic Understanding of Corporate Sustainability
The holistic understanding of corporate sustainability results from an integration of the previous perspectives
(Dyllick and Hockerts, 2002). The connection between the three perspectives is also refl ected in the works of
Dunphy et al. (2003), van Marrewijk (2003) and Young and Tilley (2006). For organizations, this implies the need
Subcultures and Sustainability Practices 435
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to simultaneously improve social and human welfare while reducing their ecological footprint and ensuring the
effective achievement of organizational objectives (Sharma, 2003). While some scholars assume that corporate
sustainability is only achieved when an organization con siders these three perspectives (Bansal, 2005; Dyllick and
Hockerts, 2002), others have adopted a broader systems approach and argued that organizations should consider
interrelations with their environments on various dimensions, such as the individual, organizational, political–
economic, socio-cultural and ecological–environment levels (Starik and Rands, 1995). Such a broad approach,
however, presents major operationalization challenges for organizations (Sharma and Ruud, 2003). This study
therefore focuses on the holistic inclusion of the elements of the tripartite model.
Infl uences on the Understanding of Corporate Sustainability
In this section, we aim to establish a link between the understanding of corporate sustainability and factors that
have potential effects on shaping its meaning and interpretation, such as organizational culture (Zammuto and
Krakower, 1991) and organizational sustainability practices (Sharma, 2000). To date, studies have mainly focused
on overall organizational responses to conditions in the external environment (e.g. Post and Altman, 1994) but,
as noted by Dutton and Jackson (1987), the internal environment of organizations also has a major effect on
meanings and interpretations. First, we examine the concept of organizational culture.
Organizational Culture
Since its emergence in the 1970s and 1980s (e.g. Deal and Kennedy, 1982; Pettigrew, 1979), the concept of orga-
nizational culture has become one of the most infl uential and controversial terms in management research and
practice (Denison and Mishra, 1995). Defi nitions of organizational culture range from notions of accepted behav-
ioral rules, norms and rituals (e.g., Trice and Beyer, 1984) to shared values and beliefs (e.g., Baker, 1980; Schwartz
and Davis, 1981) and shared patterns of understanding or meaning (Louis, 1985; Smircich, 1983). One frequently
cited defi nition is Schein’s (2004) three-level typology of culture, as it encapsulates the various defi nitions (Crane,
1995). Schein’s typology identifi es three cultural dimensions: the observable culture (the visible organizational
structure, processes and behaviors), espoused values (strategies, goals and philosophies) and underlying assumptions (unconscious perceptions, thoughts and feelings, which form the source of values and action).
Although many organizational culture defi nitions refer to what is ‘shared’ and ‘common’ among organizational
members (e.g., Louis, 1985; Schein, 2004), not all researchers agree with the view that organizational members
belong to the same, unifi ed organizational culture (e.g. Gregory, 1983; Hofstede, 1998). Martin (2002) captures
these differences by characterizing three theoretical views to examine organizational culture. These are (1) the
integration perspective, based on the assumption that each organization has a homogeneous culture with a
common set of values and beliefs, (2) the differentiation perspective, based on the assumption that several sub-
cultures with separate and distinct values can exist within an organization, and (3) the fragmentation perspective,
based on the assumption that values and beliefs of organizational members are changing over time, leading to
patterns of impermanent consensus and ambiguity within the organization.
The differentiation perspective is of principal interest to this study and outlined subsequently. In the differen-
tiation perspective, organizational culture is still defi ned on the basis of what is shared, yet at the level of groups
within an organization rather than at the organizational level (Martin, 2002; Zammuto, 2005). The existence of
subcultures has been confi rmed in a number of studies, and they were found to form around hierarchical levels
(Riley, 1983), organizational roles (Hofstede, 1998; Schein, 1996; van Maanen and Barley, 1984), personal net-
works, as well as individual differences such as ethnicity and gender (Martin, 2002).
The potential subculture formation we examine in this study is around different value profi les displayed by
organizational members (Zammuto, 2005). The value dimension has been of particular interest for the assessment
of organizational culture (Ashkanasy et al., 2000; Jones et al., 2005), as values are considered to be central to an
organization’s culture and are seen as a reliable and assessable representation (Howard, 1998; Ott, 1989). Based
on the notion of values, the competing values framework (CVF) of organizational culture was developed by Quinn
436 M. K. Linnenluecke et al.
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and his colleagues (Quinn, 1988; Quinn and Kimberly, 1984; Quinn and Rohrbaugh, 1981), and has been used
in several studies to profi le cultural values (e.g. Zammuto and Krakower, 1991).
The four-cell CVF, depicted in Figure 1, explores competing demands within organizations on two dimensions
(Quinn and Kimberly, 1984). The internal–external dimension refl ects whether the organization is focused on its
internal dynamics or on the demands of its external environment (Zammuto et al., 2000). The fl exibility–control
dimension represents organizational preferences for structuring, coordination and control and is similar to the
distinction by O’Reilly and Chatman (1996) between formal and social control systems (Zammuto, 2005). As a
consequence of these two dimensions, four different culture types are formed.
Organizational cultures with high human relation values support cohesion and morale among employees. This
is achieved by means such as human resource development, open communication and participative decision-
making (Jones et al., 2005; Zammuto et al., 2000). This culture type has also been referred to as ‘group culture’
as it is associated with participation through teamwork (Denison and Spreitzer, 1991; Parker and Bradley, 2000;
Zammuto and Krakower, 1991). Coordination and control are achieved through decentralized decision-making
and cooperation. Individual compliance with organizational mandates results from trust and commitment to the
organization (Zammuto et al., 2000; Zammuto and Krakower, 1991).
Organizational cultures with high open system values place importance on growth and resource acquisition
through the promotion of adaptability, visionary communication and adaptable decision-making (Zammuto et al., 2000; Zammuto and Krakower, 1991). This culture type has also been referred to as ‘developmental culture’ because
of its external orientation on innovation and change (Denison and Spreitzer, 1991; Parker and Bradley, 2000;
Zammuto and Krakower, 1991). Structurally, there is an emphasis on informal coordination and control and horizontal
communication. Individuals are motivated by the signifi cance or ideological appeal of their tasks (Zammuto et al., 2000;
Zammuto and Krakower, 1991).
Organizational cultures with high internal process values have a focus on achieving stability and control through
formal means such as information management, precise communication and data-based decision-making (Jones
Figure 1. The competing values FrameworkSource: Adapted from Jones et al. (2005) and Zamnuto et al. (2000).
Subcultures and Sustainability Practices 437
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et al., 2005; Zammuto et al., 2000). This culture type has also been refered to as ‘hierarchical culture’, as it involves
conformity, the enforcement of rules and attention to technical matters (Denison and Spreitzer, 1991; Parker and
Bradley, 2000; Zammuto and Krakower, 1991). Structurally, there is an emphasis on vertical communication and
formal rules, policies and procedures for coordination and control. Individual compliance is enforced through
rules and regulations (Zammuto et al., 2000; Zammuto and Krakower, 1991).
Organizational cultures with a rational goal orientation promote effi ciency and productivity, which is realized
through goal-setting, planning, instructional communication and centralized decision-making (Jones et al., 2005).
This culture type has also been referred to as a ‘rational goal culture’ because of its emphasis on outcomes and
goal fulfi llment (Denison and Spreitzer, 1991; Parker and Bradley, 2000; Zammuto and Krakower, 1991). Structur-
ally, the rational goal model is related to centralized decision-making. Individuals are motivated by beliefs that they
will be rewarded for competent performance leading to desired organizational goals (Zammuto et al., 2000;
Zammuto and Krakower, 1991).
These four culture types are ideals, and show an internally consistent picture of four sets of value outcomes and
the means by which they can be attained. This does not mean, however, that they are incompatible and mutually
exclusive (Jones et al., 2005; Zammuto et al., 2000). All four culture types coexist in a single organization (Quinn,
1988; Quinn and Kimberly, 1984), which has also been empiri cally supported (Howard, 1998; Zammuto and
Krakower, 1991).
Corporate Sustainability Practices
Further aspects of the organizational context that help to shape understandings and interpretations of sustain-
ability by organizational members are the sustainability practices of the organization, including issue legitimation
as part of the organizational identity (Sharma, 2000), the integration of environmental indicators into employee
performance evaluation (Sharma, 2000) and employee knowledge of the corporate sustainability policy (Ramus
and Steger, 2000).
Issue Legitimation as Part of the Organizational IdentityIssues are events, trends or developments that organizational members recognize as having some effect on the
organization (Dutton and Dukerich, 1991; Dutton et al., 1983). In the context of sustainability, issues may be
legitimated as part of the corporate identity: either on the basis of an internal economic focus or on a broader
corporate environmental focus. In the former case, the interpretation of sustainability issues is constrained by a
corporate identity that emphasizes the maximization of short-term fi nancial performance objectives. In the latter,
economic considerations may be balanced by the need for a greater external environmental orientation (Miles,
1987; Sharma, 2000; Sharma et al., 1999).
Integration of Environmental Indicators into Employee Performance EvaluationThe acceptance and implementation of sustainability principles and innovative environmental solutions may yield
positive economic returns only over the long term, and carries a probability of failure and high outcome uncer-
tainty. Environmental protection can only be achieved if long-term thinking and opportunity-seeking behavior are
fostered (Sharma, 2000). Uncertainties therefore need to be offset by environmental performance evaluation
criteria that are open-ended, long-term oriented and balanced with the organization’s economic goals (Sharma,
2000).
Employee Knowledge of the Corporate Sustainability PolicyThe publication of a corporate sustainability policy is a way for an organization to disseminate information about
corporate sustainability concepts, and to demonstrate to employees that such concepts are endorsed and enacted
within the organization (Ramus, 2002). The publication of a sustainability policy necessarily entails some degree
of introspection and is therefore likely to increase awareness about corporate sustainability within the organization.
A written sustainability policy also forms the overall framework from which other sustainability components result,
such as environmental management systems, audits, assessments and reports (Gunningham et al., 1998).
438 M. K. Linnenluecke et al.
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Hypotheses
In this study, we seek to investigate the link between organizational subcultures, employee awareness of corporate
sustainability practices and differences in understanding corporate sustainability. Each quadrant of the CVF, or
culture type, represents a set of valued outcomes and a coherent managerial ideology about how to achieve them.
Managerial ideologies – broad management philosophies embedded in society – are imported into organizations
through mechanisms such as management education or professional training, and shape the way people think
and behave within them (Zammuto, 2005; Zammuto et al., 2000). In this context, Zammuto et al. (2000) note
that the quadrants of the CVF are similar to major managerial ideologies identifi ed by Barley and Kunda (1992)
as being prevalent in western society during the past century. The quadrants also refl ect the four major theoretical
streams in organization theory analyzed by Scott (2003). As a result, all quadrants together outline major develop-
ments which have emerged in both managerial ideologies and organizational theory over time (Zammuto et al., 2000), and have become institutionalized into current thinking. These developments are reviewed below to develop
hypotheses on the relation between each culture type and the understandings of corporate sustainability.
Theories and ideologies underlying the internal process quadrant are characterized by their focus on eco nomic
per formance. The internal process quadrant parallels the ideology of Barley and Kunda (1992) on scientifi c man-
agement (Zammuto, 2005; Zammuto et al., 2000), which is directed towards the maximization of economic gains
by means of rationalized production processes (Taylor, 1911). The quadrant is also comparable to Scott’s (2003)
classifi cation of closed–rational system models, which portray organizations as tools to achieve preset ends and
place emphasis on formalized, bureaucratic structures to improve organizational effi ciency and economic perfor-
mance (Scott, 2003; Zammuto et al., 2000). The focus on formalization suggests that there are cognitive and
motivational limitations of individuals that constrain employee choices and action within the organization (Scott,
2003). Such limitations are likely to restrict the understanding and enactment of corporate sustainability, as they
do not encourage employees to take on pro-active and innovative environmental activities (Griffi ths and Petrick,
2001; Post and Altman, 1994; Ramus, 2005).
Hypothesis 1a. Employees from a subculture with a high internal process orientation will place greater emphasis on
an economic understanding of corporate sustainability.
In addition to an internal process culture orientation, other organizational aspects might lead to an economic
understanding of corporate sustainability. If sustainability issues carry a negative association in the corporate
identity, this is likely to support an economic understanding of corporate sustainability by employees. Furthermore,
if the organization only uses economic or short-term indicators for performance evaluation, this is likely to encour-
age a focus on short-term returns and profi ts of the organization rather than a broader sustainability focus. Also,
if employees are not aware of the organization’s corporate sustainability policy, they have no knowledge of the
organization’s sustainability goals and practices. Therefore, we argue the following.
Hypothesis 1b. Employees with low awareness of the corporate sustainability practices (including issue legitimation, integration of environmental indicators into performance evaluation and employee knowledge of the corporate sustain-ability policy) will place greater emphasis on an economic understanding of corporate sustainability.
Theories and ideologies underlying the human relations quadrant place greater emphasis on ‘human factors’
and interpersonal relations, but are also mostly focused on internal arrangements of the organization. This quad-
rant refl ects the human relations ideology of Barley and Kunda (1992; Zammuto, 2005; Zammuto et al., 2000),
which pays attention to work condi tions, social interaction and group affi lia tion. While this emphasis on human
factors suggests a parallel to the social understanding of corporate sustainability, the human relations quadrant is
largely oriented towards the internal arrangements of the organization and parallels Scott’s (2003) classifi cation
of closed–natural system models (Zammuto, 2005; Zammuto et al., 2000). Despite the human relation emphasis,
this internal focus is likely to restrict an orientation towards the external social (and natural) environment of the
organization. We therefore found that a clear link to the social understanding or to any of the three other under-
standings of corporate sustainability was not supported by the extant literature. Similarly, we found that a clear
link of the social understanding to any particular culture type was not supported either, as social sustainability
Subcultures and Sustainability Practices 439
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contains notions of both an internal orientation (i.e. towards staff development) as well as an external orientation
(i.e. towards the community and stakeholders).
Theories and ideologies underlying the rational goal quadrant highlight the importance of the wider environ-
ment for the organization, and the need for rational planning and organizing in light of environmental demands.
The quadrant corresponds to the system rationalism ideology of Barley and Kunda (1992), which focuses on plan-
ning, fore cast ing, con trolling and the design of the organizational structure and decision processes to match the
external environment. It is also analogous to Scott’s (2003) classifi cation of open–rational system models. In this
quadrant, the effi cient use of resources, planning and goal setting, and the adequacy of organizational structures
in light of the environment are valued highly. These aspects, in particular the effi cient use of resources and the
avoidance of adverse effects on the environment, are essential to the environmental understanding of corporate
sustainability.
Hypothesis 2a. Employees from a subculture with a high rational goal orientation will place greater emphasis on an
environmental understanding of corporate sustainability.
Further aspects might lead to an environmental understanding of corporate sustainability. If sustainability issues
carry a positive association in the corporate identity, this is likely to discourage an economic understanding of
corporate sustainability by employees. Furthermore, if the organization uses environmental, or long-term, indica-
tors for performance evaluation, this is also likely to discourage economic thinking. Also, if employees are aware
of the organization’s corporate sustainability policy, they might have a better understanding of organization’s
sustainability goals and practices. Therefore, we argue the following.
Hypothesis 2b. Employees with high awareness of the corporate sustainability practices (including issue legitimation, integration of environmental indicators into performance evaluation and employee knowledge of the corporate sustain-ability policy) will place greater emphasis on an environmental understanding of corporate sustainability.
The open system quadrant parallels Scott’s (2003) classifi cation of open–natural system models, which highlight
the importance of the external environment in affecting the behavior and structure of organizations. The open
system model also refl ects the organizational culture and quality ideology of Barley and Kunda (1992), which
emphasizes moral authority and employee commitment to manage in turbulent environments. Both the rational
goal and open systems have an external orientation and include themes such as the effi cient use of resources and
the recognition of the wider social and economic environment. We therefore suggest the following.
Hypothesis 3a. Employees from a subculture with a high open system orientation will place greater emphasis on a
holistic understanding of corporate sustainability.
As the legitimation of environmental issues, the use of long-term oriented indicators for employee performance
evaluation and awareness of the organization’s corporate sustainability are likely to dis courage an economic under-
standing of corporate sustainability, we argue the following.
Hypothesis 3b. Employees with high awareness of the corporate sustainability practices (including issue legitimation, integration of environmental indicators into performance evaluation and employee knowledge of the corporate sustain-ability policy) will place greater emphasis on a holistic understanding of corporate sustainability.
Method
The aim of this study was to investigate differences and similarities in the understanding of corporate sustain-
ability among members of a single organization, and to see whether and how such differences are related to the
presence of organizational subcultures. A quantitative survey instrument was administered to study organizational
culture, awareness of corporate sustainability practices and understandings of corporate sustainability. A quantita-
tive approach was considered to be most appropriate for this study in order to grasp different culture profi les and
440 M. K. Linnenluecke et al.
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
understandings among a large number of participants within the organization studied. Furthermore, this approach
provided an effective means to examine specifi c relationships between organizational culture, awareness of the
organization’s sustainability practices and corporate sustainability understandings. In prior quantitative studies it
has been demonstrated that survey research can generate information about shared employee perceptions that is
not easily accessible with qualitative methods (Zammuto, 2005; Zammuto and Krakower, 1991).
Sample
Data were collected from a large Australian corporation operating within the transportation industry. Participants
were selected on a convenience basis and recruited from a broad range of business groups and hierarchical levels
of the organization. Participants were asked to complete a paper-based survey with the measures described below.
In total, 685 survey forms were distributed, of which 260 were returned, representing a response rate of 38 percent.
Five of the received surveys were excluded due to incomplete responses. The average age of respondents was 40.2
years, ranging from 18 to 65 years, with 31.4 percent being female and 68.6 percent being male. Mean company
tenure was 12.7 years, and 66.2 percent of respondents indicated that they had at least tertiary level undergraduate
education.
Measures
Organizational CultureThe survey instrument for organizational culture was based on the CVF of Quinn and Kimberly (1984). The fi rst
fi ve questions in this section of the survey, adapted from Zammuto and Krakower (1991), used a scenario-based
approach and asked participants to distribute 100 points among four descriptions based on the similarity of their
own organization to the organization outlined in the description. Each of the four descriptions represents one of
the quadrants, or value orientations, in the CVF (Zammuto, 2005). For example, the question labeled ‘organiza-
tional character’ had the following four descriptions.
Organization A is a very personal place. It is a lot like an extended family. People seem to share a lot of them-
selves (human relation values).
Organization B is a very dynamic and entrepreneurial place. People are willing to stick their necks out and take
risks (developmental values).
Organization C is a very formalized and structured place. Formal procedures generally govern what people do
(internal process values).
Organization D is very production oriented. A major concern is with getting the job done. People aren’t very
personally involved (rational goal values).
The resulting numerical data for each description were adjusted in order to correct for mathematical errors and
to ensure that the total score for each of the fi ve items was equal to 100 points. Next, a score was calculated for
each value orientation (human relations, developmental, internal process and rational goal) by averaging the points
from the corresponding descriptions across the fi ve questions. For example, the human relation value score was
determined by adding up the points at items 1A, 2A, 3A, 4A and 5A, and then dividing the outcome by fi ve. The
resulting four value orientation scores formed the individual competing values profi le for each respondent.
The scenario-based approach of the CVF has been adapted by a number of studies (Parker and Bradley, 2000;
Zammuto and Krakower, 1991) and has been found to be a valid survey instrument for the assessment of organi-
zational culture (Kwan and Walker, 2004). Although other operationalizations of the CVF (e.g. Quinn and Spre-
itzer, 1991) use Likert scales to measure the presence or absence of each value orientation rather than their relative
weighting, Zammuto (2005) suggests that the ipsative response format yields more interpretable results. Assess-
ment of scale reliability indicated that Cronbach’s alpha was 0.66 for the human relation scale, 0.65 for the
developmental scale, 0.73 for the internal process scale and 0.49 for the rational goal scale. This compares relatively
well to fi ndings from other studies utilizing the CVF. Shortell et al. (1995), for example, reported in a larger study
(n = 7337) that Cronbach’s alpha was 0.79 for the human relations scale, 0.77 for the developmental scale, 0.70
for the internal process scale and 0.47 for the rational goal scale.
Subcultures and Sustainability Practices 441
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
Legitimation of Environmental IssuesWe adapted two items from Sharma (2000) to measure organizational members’ perceptions of their organiza-
tion’s corporate identity in regard to environmental issues. Respondents were asked to what extent they perceived
their company as an environmental leader in the industry, and to what extent they considered the reduction of
environmental impact of operations as central to their company’s identity. Cronbach’s alpha for this scale was
0.71.
Integration of Environmental Indicators into Employee Performance EvaluationTo measure this construct, we adapted three items from Sharma (2000). Respondents were asked to report on
the extent to which environmental indicators had been included in reward and planning systems. In addition, the
third item asked about the extent to which environmental and economic performance indicators were balanced.
Cronbach’s alpha for this scale was 0.70.
Knowledge of Corporate Sustainability PolicyThis part of the survey consisted of 13 items that asked respondents to indicate their level of knowledge about the
organization’s sustainability policy. The list of items was adapted from a study on employee environmental initia-
tives by Ramus and Steger (2000), with the original wording being changed from environmental to sustainability
policy. The fi rst sustainability policy question asked about employee knowledge of the general published sustain-
ability policy, whereas the other 12 policy questions were more specifi c, and asked about sub-policies of the main
sustainability policy statement. The alpha reliability coeffi cient for this scale was 0.91.
Understanding Corporate SustainabilityWe developed three ipsative questions to measure the understanding of corporate sustainability. An initial list of
items was developed based on the understandings of corporate sustainability adapted from Russell et al. (2007)
and a detailed review of the corporate sustainability literature. Items were subsequently refi ned through discus-
sions with three experts from the ONE fi eld. A draft version of the survey with the understandings scale was
presented to the sustainability manager of the organization, and was pre-tested with 30 employees. The resulting
items were related to ‘information and decision-making’, ‘strategy’ and ‘outcomes’. Each of these three items
included an economic, environmental, social and holistic description, representing the four distinct sustainability
understandings. For example, the item named ‘information and decision-making’ had the following four
descriptions:
organization A predominantly seeks economic and fi nancial information as the basis for decision-making
(economic understanding);
organization B seeks information on natural resource consumption and uses this information in decision-
making (environmental understanding);
organization C has strategies that emphasize and value people within the organization and the community
(social understanding);
organization D seeks information on economic, environmental and social implications and makes decisions
based on system thinking (holistic understanding).
Similar to the scenario-based approach of the competing values measure, respondents were asked to distribute
100 points among these four descriptions, based on the similarity of their own organization to the organization
outlined in the description. The resulting numerical data for each description were corrected for mathematical
errors, and a score was calculated for each understanding by averaging the points from the corresponding descrip-
tions across the three questions. The resulting four understanding scores formed the individual understanding
profi le for each respondent. Cronbach’s alpha was 0.78 for the economic understanding scale, 0.56 for the envi-
ronmental understanding scale, 0.38 for the social understanding scale and 0.57 for the holistic understanding
scale. Due to the low reliability of the social understanding scale this scale was excluded from further analysis.
442 M. K. Linnenluecke et al.
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
Data Analyses
Data were analyzed in two stages using the Statistical Package for the Social Sciences (SPSS), Version 15. First,
we conducted a two-step cluster analysis to identify the presence of subcultures in our sample. Five subcultures
were identifi ed from this analysis and are described in detail in the following results section. Then we conducted
regression analyses to test the three hypotheses. The membership of each participant in one of the fi ve subcultures
was dummy coded, and the resulting cluster membership variable was included as predictor variable in the regres-
sion analysis. One of the fi ve clusters had a high internal process orientation; therefore we used membership in
this cluster as a predictor variable for the economic understanding of corporate sustainability. Similarly, one cluster
displayed a high rational goal orientation, and membership in this cluster was included as a predictor variable for
the environmental understanding of corporate sustainability. Another cluster had the highest open system orien-
tation of all clusters in the analysis, and membership in this cluster was included as predictor variable for a holis-
tic understanding of sustainability. The variables ‘issue legitimation’, ‘integration of environmental indicators into
employee performance evaluation’ and ‘employee knowledge of the sustainability policy’ were also included as
predictor variables into each of the three regression analyses.
In order to reduce the impact of the dependency relations that exist between the ipsative variables, we conducted
three separate regression analyses, one for each hypothesis. By avoiding using all scales from the sustainability
understandings as an ipsative set at once, the scores did not meet the criterion for pure ipsativity (Jones et al., 2005). A similar approach has been used successfully in other studies (Jones et al., 2005; Shortell et al., 1995). By
using only one of the understandings as a dependent variable in each of the analyses, we further reduced the
impact of the dependency relations between the understandings. Prior to conducting the regression analysis and
testing the propositions of this study, we assessed the statistical assumptions of normality, linearity and homosce-
dasticity by examining the residual plots and concluded that these were met for the analysis. The sample size was
considered adequate for a regression analysis (Hair et al., 2006). We also controlled for the possible effects of age,
gender, education and tenure by using sequential regression.
In order to minimize bias arising from self reported data, participants were encouraged to answer all questions
honestly, and were assured of confi dentiality and anonymity. When variables are measured at the same time and
from a single source, as in this study, common method bias may also be a problem and result in an infl ation of
the true association between constructs (Williams and Brown, 1994), although more recent research has suggested
that research invalidation is implausible as a result of common method bias (Doty and Glick, 1998; Spector, 2006).
We tested the potential impact of common method bias using a Harman single factor test (Podsakoff et al., 2003)
and found that our results were not signifi cantly affected.
Results
Identifi cation of Subcultures
The cluster center mean scores and the number of respondents in each of the fi ve clusters are reported and
graphically presented in a map for each cluster in Figure 2. The maps show the relative emphases that each cluster
places on the different quadrants in the CVF (Zammuto and Krakower, 1991).
Employees belonging to the fi rst cluster, which we named the high internal process cluster (20.0% of the sample),
had the strongest emphasis on internal process culture (mean score 69 points), and the lowest emphasis on the
other three culture types. Literally interpreted, employees belonging to this fi rst cluster perceived their culture to
be signifi cantly more hierarchical and bureaucratic and less humanistic, innovative and effi cient than employees
from other clusters. Employees in the second cluster, which we named the moderate internal process cluster (29.4%
of the sample), also had a strong emphasis on internal process culture (mean score 42 points), yet to a lesser extent
than the high internal process cluster. Therefore, these employees perceived their culture as predominantly
hierarchical.
Employees in the third cluster, which we named the rational goal/internal process cluster (15.3% of the sample),
exhibited a strong emphasis on both the internal process and rational goal culture. This means that employees
belonging to this cluster perceived their culture to be relatively hierarchical and effi cient. Employees in the fourth
Subcultures and Sustainability Practices 443
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
Figure 2. Culture profi les of Clusters
444 M. K. Linnenluecke et al.
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
cluster, named the balanced cluster (23.5% of the sample), showed a more balanced culture profi le. Employees in
this cluster had the lowest internal process culture orientation (mean score 20 points) and the highest develop-
mental score (mean score 23 points) of all clusters within the sample. Employees in the fi nal cluster, which we
named the human relations cluster (11.8% of the sample), had the highest emphasis on human relation values (mean
score 44 points). Thus, employees belonging to this cluster perceived their culture to be more humanistic than
employees from other clusters.
Multiple Regression Analysis
Table 1 shows the means, standard deviations and intercorrelations for all variables.
The results of the regression analysis suggested that the independent variables accounted for signifi cant vari-
ance, R2 = 0.312, F(4, 231) = 20.257, p < 0.001, in the economic understanding of corporate sustainability. Both
the membership in the high internal process cluster and employee knowledge of the corporate sustainability policy
explained a signifi cant unique variance in the economic understanding of sustainability. Specifi cally, membership
in the high internal process cluster (β = 0.294) represented the best unique predictor of an economic understand-
ing of corporate sustainability, while employee knowledge of the corporate sustainability policy presented the
second best unique predictor (β = −0.171) and was negatively related to the economic understanding of corporate
sustainability.
The sequential regression reported in Table 2 also demonstrates that, once variance due to the demographic
variables was removed in Step 1, the independent variables still predicted a signifi cant amount of variance in the
economic understanding of corporate sustainability: change in R2 = 0.241; p < 0.001. The results also showed a
signifi cant direct effect of tenure on an economic understanding of corporate sustainability. This was not surpris-
ing, as the economic understanding was the most dominant within the organization, and therefore employees
with longer tenure were more likely to have adopted this understanding. These fi ndings provide support for
Hypothesis 1a and partial support for Hypothesis 1b.
For the environmental understanding of corporate sustainability, the results of the regression analysis showed
that the independent variables accounted for signifi cant variance: R2 = 0.133, F(4, 231) = 6.874; p < 0.001. This
result was consistent once variance due to demographic variables was removed: change in R2 = 0.103; p < 0.001.
While membership in the rational goal/internal process cluster explained a signifi cant unique variance in the envi-
ronmental understanding of corporate sustainability, it was negatively related (β = −0.167). None of the other
predictor variables were signifi cant unique predictors. This fi nding does not support Hypothesis 2a or 2b.
For the holistic understanding of corporate sustainability, the results of the regression analysis suggested that
the independent variables accounted for signifi cant variance in the dependent variable: R2 = 0.190, F(4, 231) =
9.351; p < 0.001. Again, this result was consistent once variance due to demographic variables was removed: change
in R2 = 0.131; p < 0.001. Both the integration of environmental indicators into employee performance evaluation
and employee knowledge of the corporate sustainability policy explained a signifi cant unique variance in the holis-
tic understanding of sustainability. Specifi cally, employee knowledge of the corporate sustainability policy (β =
0.217) represented the best unique predictor of a holistic understanding of sustainability, while integration of
environmental performance indicators into employee performance evaluation (β = 0.198) was the second best
predictor. These fi ndings do not support Hypothesis 3a, but provide partial support for Hypothesis 3b. The results
of the regression analyses are summarized in Table 2.
Discussion and Implications
We proposed that both subcultural fragmentation of the organization and employee awareness of the organization’s
sustainability practices are infl uential in shaping employees’ understandings of corporate sustainability. Although
to date most organizations assume homogeneity of views on corporate sustainability, we found empirical support
in this study to suggest that subcultural fragmentation of the organization as well as differences in employee
awareness of the corporate sustainability practices are linked to differences in employee understanding of corporate
Subcultures and Sustainability Practices 445
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
Mea
nsSt
. Dev
.1
23
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Hol
istic
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Inte
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0.7
310
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atio
nal G
oal
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10
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.45*
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.49
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Hum
an R
elat
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.18*
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.26*
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0.6
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Legi
timat
ion
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grat
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licy
2.99
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−0.3
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*0
.91
Tabl
e 1.
Cor
rela
tion
tabl
e**
. Cor
rela
tion
is s
igni
fi can
t at
the
0.0
1 le
vel 2
-tai
led.
*. C
orre
latio
n is
sig
nifi c
ant
at t
he 0
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leve
l 2-t
aile
d.N
= 2
55. S
cale
rel
iabi
litie
s (a
lpha
s) a
re r
epor
ted
on t
he d
iago
nal.
Gen
der
Cod
ed: M
ale
= 0
, Fem
ale
= 1.
446 M. K. Linnenluecke et al.
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
Dependent variable: Economic understanding of corporate sustainability
Step 1 Step 2
Independent variables B β B β
Gender −4.856 (3.595) −0.097 −1.734 (3.153) −0.035Age −0.092 (.167) −0.044 −0.216 (0.150) −0.104Tenure 0.378 (.163) 0.190* 0.516 (0.142) 0.258***Education 3.567 (1.377) 0.171* 1.465 (1.233) 0.070Membership high internal process cluster 17.024 (3.319) 0.294***Legitimation −3.225 (2.071) −0.117Integration −3.763 (2.285) −0.125Policy −5.811 (2.370) −0.171*R2 0.070** 0.312***Adjusted R2 0.055 0.288Change in R2 0.241***
Dependent variable: Environmental understanding of corporate sustainability
Step 1 Step 2
Independent variables B β B β
Gender 0.759 (1.264) 0.044 0.451 (1.227) 0.026Age 0.046 (0.059) 0.065 0.045 (0.058) 0.062Tenure −0.073 (0.057) −0.107 −0.081 (0.055) −0.118Education −1.095 (0.484) −0.153* −0.622 (0.477) −0.087Membership rational goal/internal process cluster −3.702 (1.375) −0.167*Legitimation 1.287 (0.801) 0.136Integration 1.114 (0.876) 0.107Policy 0.964 (0.909) 0.083R2 0.029 0.133***Adjusted R2 0.013 0.103Change in R2 0.103***
Dependent variable: Holistic understanding of corporate sustainability
Step 1 Step 2
Independent variables B β B β
Gender 4.812 (2.391) 0.146* 3.220 (2.278) 0.098Age −0.102 (0.111) −0.074 −0.024 (0.107) −0.018Tenure −0.069 (0.108) −0.052 −0.123 (0.102) −0.094Education −1.123 (0.916) −0.081 0.021 (0.884) 0.002Membership balanced cluster 2.790 (2.335) 0.077Legitimation −0.453 (1.489) −0.025Integration 3.953 (1.629) 0.198*Policy 4.865 (1.723) 0.217**R2 0.058** 0.190***Adjusted R2 0.042 0.161Change in R2 0.131***
Table 2. Results of regression analysesa
a Standard errors are in parentheses.* p < 0.05.** p < 0.01.*** p < 0.001.
Subcultures and Sustainability Practices 447
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
sustainability. Overall, the analysis shows that both different organizational subcultures, assessed on the level of
values and beliefs, and differences in employee awareness of corporate sustainability practices have a signifi cant
impact on how employees understand corporate sustainability differently.
There was evidence to suggest that employees who reported their perceived organizational culture as high on
internal process values placed a greater emphasis on the economic understanding of sustainability (Hypothesis
1a). The internal process culture is based on theories and ideologies that focus on economic performance (e.g.,
Barley and Kunda, 1992; Scott, 2003; Zammuto et al., 2000), which are similar to the assumptions underlying
the economic understanding of corporate sustainability. The inward focus of the internal process culture on
control, accountability, rational rules, procedures and formalized decision-making seems to provide the context in
which organizational members interpret corporate sustainability.
Furthermore, we found partial support to suggest that employees with low awareness of the corporate sustain-
ability practices (including issue legitimation, integration of environmental indicators into performance evaluation
and employee knowledge of the corporate sustainability policy) will place greater emphasis on an economic under-
standing of corporate sustainability (Hypothesis 1b). While our results suggested that a lesser knowledge of the
corporate sustainability policy was a signifi cant predictor for the economic understanding of corporate sustain-
ability, issue legitimation and integration of environmental indicators into performance evaluation were not
signifi cant predictors. This implies that the communication of the concept of corporate sustainability has an
important impact on the understanding of individuals.
Hypothesis 2a, which stated that employees from a subculture with a high rational goal orientation will place
greater emphasis on an environmental understanding of corporate sustainability, was rejected. Although the ratio-
nal goal culture has an external orientation, employees who perceived their culture to be high on rational goal
values (rational goal/internal process cluster) did not have a signifi cantly higher understanding of environmental
sustainability. However, employees who were in the rational goal/internal process cluster perceived not only a high
rational goal orientation, but also an almost equally high internal process orientation. This subculture there-
fore emphasized the control end of the CVF with reliance on formal mechanisms of coordination and control,
which might have limited the extent to which employees understand corporate sustainability as environmental
sustainability.
The orientation of employees in the rational goal/internal process cluster towards both rational goal values and
internal process values might also explain why no support was found for Hypothesis 2b, which suggested that
employees with high awareness of the corporate sustainability practices (including issue legitimation, integration
of environmental indicators into performance evaluation and employee knowledge of the corporate sustainability
policy) will place greater emphasis on an environmental understanding of corporate sustainability.
An orientation towards an open system culture was not found to be a signifi cant predictor for the holistic under-
standing of corporate sustainability (Hypothesis 3a). Although employees in the balanced cluster had the highest
emphasis on open system values, they showed a rather balanced culture profi le and no clear high emphasis on
the open system quadrant. This might explain why membership in the balanced cluster was not found to be a
signifi cant predictor in our analysis. However, there was partial support for Hypothesis 3b, which stated that
employees with a high awareness of the corporate sustainability practices (including issue legitimation, integration
of environmental indicators into performance evaluation and employee knowledge of the corporate sustainability
policy) will place greater emphasis on a holistic understanding of corporate sustainability. Both the integration of
environmental indicators and employee knowledge of the corporate sustainability were found to be signifi cant
predictors for a holistic understanding of sustainability.
Our study has shown that an emphasis on the internal process culture was strongly related to an emphasis on
the economic understanding of sustainability. In particular, our fi ndings revealed that employees who belong to
a subculture with a stronger emphasis on hierarchical values (the high internal process cluster), and who have less
knowledge of the corporate sustainability policy, have a higher emphasis on an economic understanding of cor-
porate sustainability. On the contrary, employees who belong to a subculture with a low emphasis on internal
process culture (the balanced cluster) did not display a holistic understanding of sustainability. Rather, the integra-
tion of environmental indicators into employee performance evaluation and a high awareness of the corporate
sustainability policy were found to be related to a holistic understanding of corporate sustainability. These fi ndings
have signifi cant implications for both research and practice.
448 M. K. Linnenluecke et al.
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
From a management perspective, fi ndings from this study suggest two main implications. The fi rst implication
arises for the diffusion of knowledge about corporate sustainability throughout the organization, which is an
important aspect for successfully implementing corporate sustainability (Cramer, 2005; Siebenhüner and Arnold,
2007). It appears that attempts to communicate the concept of corporate sustainability to organizational members
have to be tailored to address different understandings, and should explain the various dimensions of the concept
so that employees with different understandings can relate to it. Furthermore, our fi ndings suggest that the pub-
lication of a corporate sustainability policy as well as the integration of environmental indicators into employee
performance evaluation constitute important elements for creating awareness and understanding of corporate
sustainability.
The second implication arises for attempts to initiate ‘green’ organizational culture change. Past research has
shown that top managers often perceive organizational culture to be unitary (e.g., Harris and Ogbonna, 1998),
and thus initiate organization-wide programs to change the overall culture of their organization to become ‘greener’
or more socially responsible. However, there are several accounts of diffi culties and failures in implementing such
change attempts (e.g. Molinsky, 1999), which has been attributed to underlying values and beliefs that are deeply
embedded and institutionalized into the organization and therefore highly resistant to change (Harris and Crane,
2002). In particular, past initiatives to overcome the defi ciencies of the traditional bureaucratic and hierarchical
model have been largely unsuccessful (Parker and Bradley, 2000).
While many managers might see their change efforts constrained by the underlying organizational values and
belief structure (Harris and Crane, 2002), our fi ndings suggest that a focus on overall culture change programs
is insuffi cient to address the presence of organizational subcultures and the complex internal dynamics of the
organization. We therefore argue that the recognition of subcultures is an important variable when attempting to
change organizational culture. It is beyond the scope of this paper to offer a detailed discussion of organizational
culture change for corporate sustainability, but we agree with Harris and Ogbonna (1998) that culture change
programs might need to be subdivided into tailored subcultural change initiatives and need to consider the change
willingness of different subcultural groups. This could be achieved through the consultation and involvement of
employees in change efforts.
Furthermore, it seems to be important that managers are aware of differences in power and status among
organizational subcultures (Harris and Ogbonna, 1998; Howard-Grenville, 2006). A dominant internal process
culture within an organization is likely to impede the organization’s ability to address environmental and social
issues, and could thus potentially hinder any movement towards environmental, social or holistic understandings
of sustainability which are more in line with ‘green’ culture change. Individuals in subcultures that are more
conducive to environmental, social or holistic understandings may be hindered by a dominant internal process
culture that predicts an economic understanding of corporate sustainability.
From a research perspective, the quantitative method used in this study – a survey across the organization – pro-
vides support for previously qualitative fi ndings that subcultural fragmentation within an organization is related
to intra-organizational differences regarding sustainability issues (Harris and Crane, 2002; Howard-Grenville,
2006). The analysis on a subcultural level shows that quantitative research on an aggregated organizational level
cannot suffi ciently assess subcultural differences. Implications therefore arise for researchers to consider the
engagement with sustainability practices on multiple levels of the organization, and to account for intra-organiza-
tional differences.
Directions for Future Research
The broader fi nding that organizational subcultures and employee awareness of the organization’s sustainability
practices are related to variances in understanding corporate sustainability highlights paths worthy of future
research. First, while this study includes employees from various organizational levels, future research could gain
valuable insights into organizational subcultures by including organizational level as a control variable. This was
not possible in the present study due to restrictions from the case organization. Organizational leaders often view
the organizational culture as less hierarchical than do employees from lower levels of the organization (Zammuto,
2005). It is therefore likely that organizational leaders have a different understanding of corporate sustainability
Subcultures and Sustainability Practices 449
Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse
than lower levels of the organization, particularly given the fact that sustainability initiatives are often introduced
in a top-down approach (see, e.g., Harris and Crane, 2002). Whether this supports the assumption made by sus-
tainability researchers that sustainability values are disseminated in a top-down approach as well will be subject
to further research.
Second, future research might refi ne the research instrument used in this study. Descriptions have been rather
broad for this initial investigation, yet future research might consider differences not only between, but also within,
understandings. Within understanding variance may be related differently to culture and value differences within
the organization. This was particularly evident for the social understanding, which comprises a broad variety of
themes and concepts. Third, future research might also investigate how transformations in both organizational
culture and sustainability understandings are possible, given the cultural and understanding fragmentation in the
case organization. Last, future research could extend this study to see whether fi ndings are also applicable to
organizations from other sectors and countries.
By testing the hypotheses, this study presents fi ndings of how corporate sustainability is understood differently
by employees from a single organization. The study makes a contribution to the current sustainability literature,
which largely assumes homogeneity of organizational culture and views on corporate sustainability. Findings
indicate that (1) there exist differences in how employees from a single organization understand corporate sustain-
ability and that (2) these differences can be partially explained by the presence of organizational subcultures and
by differences in employee awareness of the organization’s sustainability practices. In particular, fi ndings reveal
that employees from a subculture with a stronger emphasis on hierarchical and bureaucratic values have a higher
emphasis on understanding corporate sustainability as economic sustainability.
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