Category Archives: Economic

Sustainability’s Infrastructure

Ethnographies of the global value chain of certified tea (SUSTEIN)

By Hannah Elliott, Martin Skrydstrup and Matthew Archer.

Why SUSTEIN?

Currently, the world’s tea industry is on a race with time to source tea sustainably before 2020. But what is “sustainable tea” and how do we know if tea is sustainable or not? This project entitled SUSTEIN (SUStainable TEa INfrastructure) will focus on this question by way of looking at localized translations of transnational sustainability standards in Kenya, United Arab Emirates and corporate headquarters in Europe. We aim to advance our understanding of the global value chain of certified tea.

3 Research lines

The theoretical objective is to venture beyond the notion of global value chain by reinterpreting sustainable supply chain management through the concept of infrastructure, a notion anthropologists and other social scientists have deployed in recent years to emphasize the political and temporal aspects of networks such as transnational supply chains. We hope that this concept will allow us to better comprehend how sustainable certification schemes manifest in global value chains.
SUSTEIN consists of three sub projects, which each address a core question posed by the project:

  • How does certification shape agrarian production in the form of cultivation and factory processing, and vice versa? Who benefits from which sustainability standards? (Line A)
  • How does certification influence the valuation of tea, assessed in terms of taste, grade and price? How is the value of certification performed and capitalized? (Line B)
  • How do corporate professionals and independent auditors distinguish between “sustainable/unsustainable”? What lines of evidence are recognized? (Line C)

Each of these questions will be answered by the corresponding research line:

tea plantation
Tea plantage in Kericho; one of SUSTEIN’s field sites.

Research line A

explores agrarian questions, enquiring into the ways contemporary drives towards sustainability shape and are shaped by modes of tea production in Kenya. The research focuses on the institution of the tea plantation and its associated factories and outgrower farms, all key components of the infrastructure of sustainable tea. The tea plantation has been described as having a “dual character” (Besky 2008: 1); it has its roots in British colonialism while being contemporarily positioned in international markets for certified sustainable commodities. This research line enquires into what ‘sustainability’ comes to mean and materialise within this apparently contradictory setting. How do contemporary measures seeking to ensure sustainable tea production, such as certified standards, affect the way tea is produced in the context of the plantation? And to what extent do longer-standing modes of plantation production endure through the present, in turn shaping contemporary sustainability ideologies and practices? The research line addresses these questions through ethnographic inquiry. The researcher will spend time with the people working on tea plantations and in factories certified by different certification bodies and on the farms of outgrowers contracted to supply the companies owning plantations with supplementary sustainable tea. Through interviews and participant observation, the ethnographer will enquire into the social, political and ethical worlds surrounding sustainable tea production in contemporary Kenya.

Research line B

will follow through on the plantation and factory sites to the auction sites in Mombasa and Dubai. Ethnographic fieldwork will be conducted in the Jebel Ali Free Zone in Dubai with no tax regulations, no strict labor laws nor import/export duties, making it the perfect infrastructural hub to blend and pack tea according to corporate logic. Likely as an outcome of this, the Dubai Tea Trading Centre has since its establishment in 2005 risen to re-export 60% of the world’s tea production. These volumes are predominantly traded on virtual platforms.
In contrast, the Mombasa Tea Auction holds two weekly auctions under the auspices of the East African Tea Trade Association (EATTA), which conforms to national regulations (Tea Act of Kenya & Tea Board of Kenya). Recently, this auction site voted “against the mouse and for the hammer,” maintaining the tradition of the Dutch auction style vs. virtual trading. The ethnography for this research line will move between these two sites, following tea blenders who purchase in Mombasa vs. Dubai and investigating tea expertise and technologies as it pertains to the valuation of certified tea.

Research line C

builds on these ethnographies of production and exchange to try and understand the relationship between corporations and standards/certification regimes. There is a tension between these groups of actors whereby standards organizations such as the Rainforest Alliance and Fairtrade International need to appear independent in order for their certifications to remain credible while at the same time remaining sensitive to the financial obligations of for-profit corporations in order to promote “buy-in.”
This research line will draw on interviews with people working in these organizations and participant observation at sites where they interact, including industry conferences and trade fairs. These are the sites where sustainability is negotiated as both a concept and as a set of practices. With that in mind, interview questions will focus on, among other things, the extent to which specific agricultural and trading practices are integrated into broader definitions of sustainability and their manifestation in different certification regimes, the challenges of maintaining a critical distance between certifiers and corporations, and the way standards govern markets and, crucially, vice versa.

The grant

SUSTEIN is made possible by the Sapere Aude Starting Grant (meaning “dare to know”), awarded by the Danish Council for Independent Research (DFF). The Sapere Aude program “is aimed at younger, very talented researchers, who at the time of the application deadline and within the last eight years have obtained their PhD”. The Sapere Aude program targets “top researchers who intend to gather a group of researchers, in order to carry out a research project at a high, international level.”

Reference

Besky, S. (2008) ‘Can a plantation be fair? Paradoxes and possibilities in Fair Trade Darjeeling tea certification’. Anthropology of Work, XXIX: 1, pp. 1-9.


Hannah Elliott is a post-doc in the Department of Management, Society, and Communication at Copenhagen Business School, having recently finished her PhD at the University of Copenhagen. She is responsible for research line A.

Martin Skrydstrup is an associate professor in the Department of Management, Society, and Communication at Copenhagen Business School and is the principal investigator of SUSTEIN. He is also responsible for research line B.

Matthew Archer is an assistant professor in the Department of Management, Society, and Communication at Copenhagen Business School and is responsible for research line C. He recently completed his PhD in environmental studies at Yale University and is interested in corporate sustainability and sustainable finance.


Closing remarks

In a year we hope to update BOS readers about how far we are with answering our research questions. In the meantime, we invite you to swing by our offices at Dalgas Have for a cup of tea.
The SUSTEIN project runs from 1 July 2018 to 30 June 2020.
For further information about the project, please contact the principal investigator, Martin Skrydstrup, at msk.msc@cbs.dk.

The BUSINESS Model is Dead: Long Live the Organizational Value Model!

By Oliver Laasch.

An ApPeaRange!

Business models are logics of value proposition (Pr), creation (Cr), exchange (Ex) and capture (Ca). When closely looking at sustainability business models, it becomes clear that these ‘value functions’ are not only shaped by a commercial logic, but also by one of sustainability. Many of sustainability business models include further logics of social welfare (e.g. social enterprises), and government (e.g. private-public partnerships) (Laasch, 2018b). If a homogeneous commercial business model was an orange, these business models are more like a heterogeneous mixture between an apple, a pear and that orange, an ApPeaRange! Their value logics are not homogeneously commercial, but heterogeneous mixtures.

Strange Fruit Everywhere

Heterogeneous value logics like the one of sustainability business models are widespread. Imagine you peel an orange and find an apple inside:

Over half of the FTSE100 corporations have integrated a responsibility logic into their business model descriptions (Laasch & Pinkse, 2018). Many large businesses, such as LEGO, as well as SMEs are family-run, integrating their commercial logic with a family logic (Laasch & Conaway, 2015). We may also think of the Chinese semi-conductor producer Goodark blending commercial logic with a spiritual logic of Confucianism; the German car supplier Allsafe with its humanistic logic of freedom and responsibility; or the Brownie bakery Greyston with its commercial value logic firmly wrapped around a social welfare logic (Laasch et al., 2018). Once opening our eyes to the variety of ‘values’, of normative orientations and purposes businesses are oriented towards (Randles & Laasch, 2016), the perceived number of companies adhering to a purely commercial value logic shrinks considerably. While the purely commercial business model might not be entirely dead, it sure shouldn’t be considered the norm. And then there are entirely non-commercial organizations with value logics.

Comparing APPLE and Oranges: Yes!

Isn’t comparing a commercial organization, for instance, Apple and noncommercial organizations, let’s say a church, like comparing Apple and oranges? Yes, cheap pun intended:

“…a commercial business like Apple. With a customer value proposition (Pr) of high quality and high-end design, it depends on highest-standard production processes (Cr) and on the ability to maintain high margins (Ca).”

Laasch, 2018b: 165.

It appears we have found a purely commercial value logic, one that deserves the name BUSINESS model. Can we analyze a non-business organization, for instance a church, the same way?

“…shaped by an institutional logic of religion. It may pursue a value proposition of spiritual salvation (Pr), by helping believers to live according to religious values through the provision of religious services from marriages and funerals to humanitarian aid (Cr), and exchange value in a global network of churches (Ex).”

Laasch, 2018b: 165.

It appears non-business organizations, while not having a BUSINESS model per se, do have an organizational value model of value proposition, creation, exchange and capture. Freeing the organizational value logic from its commercial business origins enables us to take a fresh look at any kind of organization: Churches, universities, NGOs, governments, your favorite sports club, you name it! Organizational value logics lend themselves to study, design, and improve all kinds of organizations.

How to Farm Strange Fruits?

It has been argued that one of the main challenges of our times is to create companies and other organizations shaped by alternative logics, be it the one of sustainability, or of social welfare. We have seen that many organizations already have heterogeneous value logics. How to change the ones that don’t? Three interrelated manifestations of organizational value logics together form an organizational value model:

  • Cognition: An organizational value logic manifests in organizational members’ cognitive structures, their mental models and related decision making.
  • Activities: Value logics manifest in the logic of action of the activity systems through which an organization’s value model is enacted.
  • Artefacts: Value logics materialize in physical form, as texts, or images, such as a business model description in the annual report, factory layouts, or products.

Changing an organization’s value logic can start in any of its manifestations. For instance, as a corporate responsibility strategy circulated through a multinational retailer, the document’s responsibility logic was translated into peoples’ mental models, new activities and structures (Laasch, 2016, 2018a). In the companies Goodark, Allsafe, and Greyston mentioned above, new practices centered on a humanistic value logic (Laasch et al., 2018; Laasch, Dierksmeier, & Pirson, 2015) changed the networks of practices’ enacting their business models (Boons, Laasch, & Dierksmeier, 2018; Laasch et al., 2015). The emerging field of business model sociology provides further insight into such change processes (Laasch, 2018c).

Oliver Laasch is an Assistant Professor of Strategy at the University of Nottingham Ningbo China, founder of the Centre for Responsible Management Education and a visiting professor at the University of Tübingen’s Global Ethic Institute. Currently, he is a part of Copenhagen Business School’s Governing Responsible Business (GRB) World Class Research Environment Fellowship program.


References and Materials

If you enjoy strange fruits, have a look at the ‘apples and oranges’ audioslides with a more ‘academic’ presentation.

  • Boons, F., Laasch, O., & Dierksmeier, C. 2018. Assembling organizational practices: The evolving humanistic business model of Allsafe, 6th Asian SME Conference. Tokyo.
  • Laasch, O. 2016. Business model change through embedding corporate responsibility-sustainability? Logics, devices, actor networks. University of Manchester, Manchester.
  • Laasch, O. 2018a. An actor-network perspective on business models: How ‘Being Responsible’ led to incremental, but pervasive change. Long Range Planning, [DOI 10.16/j.lrp.2018.04.002].
  • Laasch, O. 2018b. Beyond the purely commercial business model: Organizational value logics and the heterogeneity of sustainability business models. Long Range Planning, 51(1): 158-183.
  • Laasch, O. 2018c. Business model sociology: Exploring alternative lenses (not only) for the study of alternative business models. CRME Working Papers, 4(4).
  • Laasch, O., & Conaway, R. 2015. Principles of responsible management: Glocal sustainability, responsibility, ethics. Mason: Cengage.
  • Laasch, O., Dierksmeier, C., Livne-Tarandach, R., Pirson, M., Fu, P., & Qu, Q. 2018. Humanistic management performativity ‘in the wild’: The role of performative bundles of practices, 32nd Annual Australian & New Zealand Academy of Management (ANZAM) Conference. Auckland.
  • Laasch, O., Dierksmeier, C., & Pirson, M. 2015. Reality proves possibility: Developing humanistic business models from paradigmatic practice. Paper presented at the Academy of Management Annual Convention, Vancouver.
  • Laasch, O., & Pinkse, J. 2018. How the leopards got their spots: A typology of corporate responsibility business models, 3rd Annual Conference on New Business Models. Sofia.
  • Randles, S., & Laasch, O. 2016. Theorising the normative business model (NBM). Organization & Environment, 29(1): 53-73.

A framework for assessing the potential of behaviour change for global decarbonisation

By Kristian Steensen Nielsen

Addressing climate change requires an urgent implementation of far-reaching solutions. Policy-makers and natural scientists have mainly offered supply-side solutions to solving the climate problem, such as widespread adoption of new or innovative technologies. While of critical importance, strictly prioritising supply-side solutions is unlikely to deliver the necessary greenhouse gas (GHG) emissions reductions within the desired time frame. An often-overlooked demand-side solution is behaviour change, which can offer both immediate and long-term reductions in GHG emissions.

There is an urgent need for rapid decarbonisation to reduce the magnitude of climate change. The Paris Agreement reflected this urgency in its formulation of ambitious goals to keep the global temperature increase below 2°C and preferably 1.5°C. Since the Paris Agreement, researchers—often affiliated with the Intergovernmental Panel on Climate Change (IPCC)—have with accelerated frequency been building scenarios for potential pathways to reach the temperature goals.[1] These far-reaching—and arguably radical—pathways involve urgent transitions to renewable energy sources and the majority assumes the use of carbon dioxide removal (CDR) technologies, such as afforestation or bio energy with carbon capture and storage (BECCS). Neither of the pathway scenarios take behavioral changes into account despite the fact that studies have shown its potential to reduce GHG emissions. For example, Thomas Dietz and colleagues (2009) found that a national implementation of behavioural changes in the United States could reduce U.S. households’ direct emissions by 20% within 10 years (representing 123 million tons of CO2). Although not sufficient single-handedly, behaviour change can help speed up the decarbonisation of societies.

 

Three dimensions of behaviour change

To identify the potential of behavioural changes to reduce GHG emissions, it is critical to consider three dimensions[2]:

  1. the technical potential (TP) of a behaviour, or the emissions reduction achieved if an individual or a target population collectively adopted the behaviour;
  2. behavioural plasticity (BP), or the proportion of the technical potential achievable through the most effective behavioural interventions; and
  3. feasibility of initiatives (IF) to induce change, which refers to the likelihood that the most effective interventions are achievable within a target population.

Focusing exclusively on either of the three dimensions will result in skewed analyses from which only imperfect interventions can be developed. For example, substituting a GHG-intensive behaviour with a less GHG-intensive alternative (e.g., flying to Bermuda on vacation versus vacationing in one’s own country) will promise a high TP but the extent to which people are willing to make such a behavioural substitution may be less promising (BP) and so might the feasibility of achieving the behavioural change across a large population (IF). Conversely, a behaviour could be easy to change (e.g., getting people to shut off lights in unoccupied rooms) and feasibly be implemented in a large population, yet hold a very low TP and therefore even in the aggregate fail to reduce emissions by much.

Identifying the most promising target behaviours

The task of researchers (across disciplines) in collaboration with policy-makers and companies is to identify the behaviours with the highest potential to reduce GHG emissions while considering all three dimensions in cohesion. Making such calculations is no easy task—as the dimensions may vary substantially between and within countries—but neither is adopting innovative technologies at a massive scale. However, focusing on both supply- and demand-side solutions will heighten the likelihood of achieving the Paris goals.

[1] Rogelj et al., 2018.

[2] Dietz et al., 2009; Vandenbergh & Gilligan, 2017.

 

References

Dietz, T., Gardner, G. T., Gilligan, J., Stern, P. C., & Vandenbergh, M. P. (2009). Household actions can provide a behavioral wedge to rapidly reduce US carbon emissions. Proceedings of the National Academy of Sciences106(44), 18452-18456.

Rogelj, J., Popp, A., Calvin, K. V., Luderer, G., Emmerling, J., Gernaat, D., … & Krey, V. (2018). Scenarios towards limiting global mean temperature increase below 1.5° C. Nature Climate Change8(4), 325.

Vandenbergh, M. P., & Gilligan, J. M. (2017). Beyond Politics. Cambridge University Press.


Kristian Steensen Nielsen is a PhD Fellow in environmental behaviour change at Copenhagen Business School. His research interests are self-control, behaviour change, and environmentally significant behaviour.

 

Pic by Duncan Harris, Flickr.

The not-so-sharing economy

By Attila Marton

With the rise of Airbnb and Uber into the elite club of Silicon Valley superstar firms, the sharing economy has become an accepted business concept and social practice. Apart from the fact that sharing economy platforms (SEPs), such as Airbnb and Uber, are very savvy in playing labelling games (most of them have little to nothing to do with actual sharing), they are also very savvy in purposefully blurring established institutional boundaries and categories – most prominently, categories of employment and labour. By facilitating the “casual participation” of private individuals as users of their services, SEPs can gain significant advantages over well-established incumbents as they disrupt mature markets and labour structures as well as challenge long-held wisdoms of how to organize the creation and distribution of value.

It’s a thing now

The sharing economy is here to stay. Although, it is not yet clear whether the sharing economy will turn out to be as big a thing as the hype surrounding it suggests. Just to give some indicative numbers; The Economist estimates that the consumer peer-to-peer rental market is worth $26 billion, McKinsey predicts that the sharing economy will rise to $335 billion in revenues by 2025. In Denmark, 10% of the population has participated in the sharing economy in some form, while the Danish government announced a sharing economy strategy. At least it is safe to say that the hype is real and so are the expectations for high returns on the investments made into sharing economy platforms.

Something new, something old

The sharing economy, in its contemporary digitally platformed version, is the result of the confluence of three developments:

  • The rise of access-over-ownership as consumers are increasingly okay with paying for services and servitised products rather than to buy stuff. Streaming services, such as Netflix and Spotify, are telling examples. When we say access-based consumption or on-demand economy, we typically refer to this development.
  • The rise of peer-to-peer networks, which allow for direct inter- and transactions between peers coordinated by trust and reputation mechanisms. Think eBay and YouTube – typical examples of what we sometimes call the peer-to-peer economy or collaborative economy.
  • Allocating idle resources in order to tap into privately owned resources (assets and labour) and to promote more economical and sustainable use of resources as a result. Examples are IKEA’s second-hand campaign or renting out idle storage space via sharemystorage.com. Terms such as collaborative consumption and circular economy typically refer to this notion.

None of these developments is, of course, new nor exclusive to the sharing economy. Clans have been sharing food and tools since the dawn of humanity. Donating blood peer-to-peer has been around for at least half a century and the allocation of idle resources in brick-and-mortar second-hand shops even longer. The same applies to digital varieties of these practices; sharing files or selling/buying peer-to-peer online have been around since the 1990s (eBay was founded in 1995, Napster in 1999, Wikipedia in 2001). What is new is how these developments come together under specific technological, economic and cultural circumstances.

Mature technologies of automation enable private individuals to casually participate in economic activities as they self-service on dedicated platforms, which run automated matchmaking algorithms. Network effects attract larger groups of participants, increasing the economic value of those platforms (and of the corporations owning them). Thus, the coordination of casual participants has become a highly profitable business model. Culturally, these developments have become socially acceptable and appropriate as the new narrative of the Web 2.0 propagates “sharing is caring” and a general fascination with technological wizardry.

Four generic types of sharing economy platforms

An important outcome of above developments is that established institutional categories are becoming blurred, and static boundaries are becoming fluid. SEPs purposefully utilize these fluid boundaries to their advantage – be it between firms and markets (are Uber drivers employees or self-employed?), between internal and external resources (Airbnb hosts bring their own assets and have all the risks), and between private and business spheres (participants monetize and commodify their private life into assets), to name but only the most important examples. In our research (with Ioanna Constantiou, Dept. of Digitalization, CBS, and Virpi Tuunainen, Dept. of Information and Service Economy, Aalto University), we found that successful SEPs are very good at exploiting these boundary fluidity for their purposes. We identified four generic types we call the Franchiser, Chaperone, Principal, and Gardener.

  • The Franchiser aims for tight control over the platform participants and high rivalry among the service providers. The prototypical example is Uber, exploiting boundary fluidity by treating its drivers like employees while making them compete for fares dictated by Uber’s algorithm.
  • The Chaperone aims for loose control over the participants and high rivalry among the service providers. This is, of course, the Airbnb model; Airbnb exploits boundary fluidity by treating its participants like community members expected to follow norms and values while making the hosts compete like micro-entrepreneurs, who set their own prices based on Airbnb’s recommendation.
  • The Principal aims for tight control over the participants and low rivalry among the service providers. For instance, Handy (a per-task labour platform) treats its service providers like employees by making them sign contracts while the service providers participate in tenders based on standardized prices dictated by Handy.
  • Finally, the Gardener aims for loose control over the participants and low rivalry among the service providers. For instance, Couchsurfing (facilitating short-term, free-of-charge accommodation) leaves it to the participants to coordinate their accommodation while eliminating rivalry among the hosts by not allowing them to charge money.

Not so obvious implications

What each of these four types have in common is that they all rely on the casual participation of their user base; that is, their users typically operate on smaller scale, use their personal resources, and are less experienced than traditional service providers and professionals (not only in terms of delivering services but also protecting oneself against exploitative business practices).[1] Combined with digitalisation, such casualness provides unprecedented sources for creating value and disguises large portions of the labour of the participants.

It is the degree to which this hidden labour has become the core of the business models of Uber, Airbnb, Handy, and Couchsurfing, that is really new.

To name just two examples. By means of the app and data-driven algorithms, Uber obviously replaces taxi dispatchers. Not so obvious, however, is the hidden labour provided by the Uber riders who, by scoring their rides, control the service quality. This used to be the purview of employed and paid middle managers. Likewise, Airbnb does not only profit from on-boarding private individuals as hosts (instead of hiring professional concierges) but also from the marketing those hosts provide not just for themselves but for Airbnb, the corporation – hidden labour, which would have traditionally required to pay marketing specialists.

It is a not-so-sharing economy we are dealing with. In fact, the sharing economy is the quintessential expression of a new logic of capital accumulation in the digital economy, where large portions of labour are disguised as casual (or even pleasurable) participation in the name of self-servicing and sharing. These forms of hidden labour are not unintended consequences; they are essential parts of the platform business model, as they sustain the digital systems and algorithmic operations of those platforms in order to make “sharing” not only economically viable but, above all, profitable. As a result, the historically and culturally important institution of sharing (in the true sense of the word) is thinned out and replaced by the logic of the platform economy, the micro-entrepreneurial ethos of monetizing every aspect of one’s “everydayness”, and the precarity of depending on demand.


Attila Marton is Associate Professor at the Department of Digitalization at Copenhagen Business School. He  focuses the interplay between information management and digital memory studies and the question how we will remember and forget the past in the future.His research can also be found on Academia and ResearchGate.

Academic Reference

[1] See Katz, V. 2015. “Regulating the sharing economy,” Berkeley Technology Law Journal (30:385).

Photo by Fancycrave on Unsplash

 

Consider also our post from last week, dealing with the topic of sharing.

Hybrid organizing in the face of grand challenges

By Ali Aslan Gümüsay.

Sharing is not always caring

In 2015, thousands of refugees arrived in Europe. A recent paper by Kornberger and colleagues (2017) zooms in on the “Train of Hope”, a civil society organization that organically gained exclusive operational command at Vienna’s main train station during this refugee crisis. The paper is a critical reflection on much of the current sharing economy ‘hype’. In contrast to cases of “collaborative consumption”[1], where platform companies such as AirBnB or Uber offer (share?) other people’s resources, this is an exemplary case of engagement and sharing without expectations for direct individual return: a sharing of a concern for social well-being.[2] Sharing then becomes caring.

Hybridity everywhere

What is Train of Hope? It is probably something of a platform and social movement blend that combines various skills like first aid, translation and accommodation services. It is a hybrid organization – and such hybrids seem to pop up everywhere lately. These novel forms of organizing combine different logics, orders of worth, value spheres, organizational forms and/or identities – struggling for a value(s) synthesis.[3] I see incubators, social ventures, ateliers, fab labs struggling to organize, represent and scale – and find their diverse pursuits fascinating, enriching and complementary. They do hybrid organizing in and for society and are frequently novel, digital, flexible, fluid, cross-boundary, multi-jurisdictional, and temporary forms.

Grand challenges & novel forms of organizing

Why now? A potential answer may lie in the types of challenges our societies face. Scholars from the field of management and organization studies speak of “grand challenges”[4] that are complex, uncertain, and multi-jurisdictional phenomena.[5] They represent fundamental, global societal concerns of ecological or social nature that require coordinated and collective efforts of multiple actors, including business firms, governments, civil society, and academia – as well as new forms of (hybrid) organizing.

Together with Emilio Marti (Erasmus University Rotterdam), Hannah Trittin (Leuphana University Lüneburg), and Christopher Wickert (VU University Amsterdam), I have initiated a scientific network that will be funded by the German National Science Foundation (DFG). The network will zoom in over the next three years on the interrelationship between grand challenges and new forms of organizing. Such organizations attempt to tackle the various sustainable development goals from climate change, decent work and sustainable growth, gender equality, populism and racism, societal cohesion, responsible consumption and production, to sustainable cities and communities.

A Janus face

The scientific network takes the vantage point in the assumption that such new forms of organizing often have a Janus face. They are both potential cause and solution for certain grand societal challenges. On the one hand, social entrepreneurial ventures[6], online communities such as Wikipedia and Linux[7], crowd science projects like Foldit, Galaxy Zoo and Polymath[8], and social initiatives like “Train of Hope” promise novel means to tackle these challenges. On the other hand, they also create new ones. For example, crowdsourcing and other new forms of platform-organized work crafted along the surge of the digital economy[9] often fuel the proliferation of precarious, self-employed and low-paid work that undermines social welfare systems and thus endanger modern democracies.[10] Likewise, in her recent book “Weapons of Math Destruction”, O’Neil (2016) describes how the (ab)use of new, seemingly efficient big data management techniques can promote, rather than reduce, racism, inequality and discrimination. Clearly then, novel hybrid forms of organizing promise many opportunities to tackle grand challenges – yet also create new (grand) challenges for society.


Ali Aslan Gümüsay is a Postdoctoral Researcher at the University of Hamburg and Research Fellow at Vienna University of Economics & Business. Twitter: @guemuesay

 

[1] Botsman & Rogers, 2010.

[2] Gümüsay, 2018.

[3] Gümüsay, 2017.

[4] George, Howard-Grenville, Joshi, & Tihanyi, 2016.

[5] Ferraro, Etzion, & Gehman, 2015.

[6] Mair & Martí, 2006.

[7] Garud, Jain, & Tuertscher, 2008.

[8] Franzoni & Sauermann, 2014.

[9] Bauer & Gegenhuber, 2015; Boes, Kämpf, Langes, & Lühr, 2016.

[10] Morozov, 2015.

References

Bauer, R. M., & Gegenhuber, T. 2015. Crowdsourcing: Global search and the twisted roles of consumers and producers. Organization, 22(5): 661–681.

Boes, A., Kämpf, T., Langes, B., & Lühr, T. 2016. “Lean” und “agil” im Büro: Neue Formen der Organisation von Kopfarbeit in der digitalen Transformation, Working Paper Forschungsförderung. Düsseldorf: Hans-Böckler-Stiftung.

Botsman, R., & Rogers, R. 2010. Beyond zipcar: Collaborative consumption. Harvard Business Review, 88(10): 30.

Ferraro, F., Etzion, D., & Gehman, J. 2015. Tackling Grand Challenges Pragmatically: Robust Action Revisited. Organization Studies, 36(3): 363–390.

Franzoni, C., & Sauermann, H. 2014. Crowd science: The organization of scientific research in open collaborative projects. Research Policy, 43(1): 1–20.

Garud, R., Jain, S., & Tuertscher, P. 2008. Incomplete by Design and Designing for Incompleteness. Organization Studies, 29(3): 351–371.

George, G., Howard-Grenville, J., Joshi, A., & Tihanyi, L. 2016. Understanding and Tackling Societal Grand Challenges through Management Research. Academy of Management Journal, 59(6): 1880–1895.

Gümüsay, A. A. 2017. Unpacking entrepreneurial opportunities: an institutional logics perspective. Innovation: Organization & Management, 1–14.

Gümüsay, A. A. 2018. COMMENTARY: Sharing is caring: From material to socio-material sharing. Academy of Management Discoveries. [Forthcoming]

Kornberger, M., Leixnering, S., Meyer, R., & Hoellerer, M. 2017. Rethinking the Sharing Economy: The Nature and Organization of Sharing in the 2015 Refugee Crisis. Academy of Management Discoveries. https://doi.org/10.5465/amd.2016.0138.

Mair, J., & Martí, I. 2006. Social entrepreneurship research: A source of explanation, prediction, and delight. Journal of World Business, 41(1): 36–44.

O’Neil, C. 2016. Weapons of math destruction: how big data increases inequality and threatens democracy. London: Allen Lane.

Pic: SDGs, circle, by UN WMO; edited.

‘Just Sustainabilities’ in a World of Global Value Chains

By Stefano Ponte.

What if we used our size and resources to make this country and this earth an even better place for all of us: customers, Associates, our children, and generations unborn? What if the very things that many people criticize us for—our size and reach—became a trusted friend? 

Excerpt from ‘Leadership in the 21st Century’, speech by Lee Scott, then CEO of Walmart, Bentonville, Arkansas, 24 October 2005 (as in Humes 2011: 102)

Whenever we engage in consumption or production patterns which take more than we need, we are engaging in violence.

Vandana Shiva, Earth Democracy: Justice, Sustainability, and Peace (2016: 102)

A New Era

Human activity is having major impact on the earth and its biosphere, to the point that geologists have now defined a new era – the Anthropocene – to reflect this phenomenon. For some, this is a period that started in the late 18th century with a marked increase in fossil fuel use, and that has accelerated dramatically since the middle of the 19th century. During this time, human action has overshadowed nature’s work in influencing the ecology of the Earth. Global sustainability crises, such as climate change, the acidification of oceans, and the ‘sixth great extinction’ of planetary life characterize this period of great turbulence in the relation between humanity and nature.

Others question the focus on humanity as an undifferentiated whole in the term ‘Anthropocene’, and propose a different term to explain the same result: Capitalocene, ‘the era of capitalism as a world-ecology of power, capital and nature’ (Moore 2016: 6). This term shifts focus away from the putative duality of human-nature relations and towards capitalism as a way of organizing nature. From a Capitalocene perspective, major changes in the world-ecology started taking place already in the mid-15th century – with a progressive transition from control of land as a way to appropriate surplus value, to control of land as a way of increasing labour productivity for commodity production. In other words, it is not enough to simply examine what capitalism does to nature and how humanity can solve global sustainability challenges through innovation in technology and business models. We need to conceptualize power, value and nature as thinkable only in relation to each other.

Sustainability Management

In addition to cost, flexibility and speed, sustainability management has become another key element of contemporary capitalism. The practices that corporations enact to address sustainability issues are also (re)shaping the existing spatial, organizational and technological fixes that are needed to ensure continuous capital accumulation.  Geographically, production is moving to locations that can meet basic sustainability specifications in large volumes and at low cost; organizationally, multi-stakeholder initiatives on sustainability have come to play a key role in global value chain (GVC) functioning; labour conditions among suppliers are under pressure from the need to meet increasing environmental sustainability demands from lead firms; and the need to verify sustainability compliance has led to the adoption of new technologies of measurement, verification, and trust.

The ‘business case’ for sustainability has been by and large solved – lead firms do not only extract sustainability value from suppliers, but also benefit from internal cost savings, supplier squeezing, reputation enhancement and improved market capitalization. As the value of goods increasingly depends on their intangible properties (including those related to sustainability) than on their functional or economic value, sustainability management becomes a central function of corporate strategy – filtering through organization, marketing, operations and logistics. Lead firms in GVCs are leveraging sustainability to extract more information from suppliers, strengthen power relations to their advantage, and find new venues of value creation and capture.

The business of sustainability is not sufficient as a global solution to pressing climate change and other environmental problems. It is doing enough for corporations seeking to acquire legitimacy and governance authority. This legitimacy is further enhanced through partnerships with governments and civil society groups. Some of this engagement is used strategically to provide ‘soft’ solutions to sustainability concerns and to avoid more stringent regulation. While the business of sustainability is leading to some environmental improvements in some places, and better use of resources in relative terms in some industries, the overall pressure on global resources is increasing. The unit-level environmental impact of production, processing, trade and retail is improving. But constantly growing consumption, both in the global North and in the global South, means that in the aggregate environmental sustainability suffers.

What To Do

Public actors at all jurisdictional levels need to put in place orchestration strategies that improve the actual achievement of sustainability goals, and activists and civil society groups should identify and leverage pressure to strengthen the effectiveness of orchestration. But these strategies have to be informed by the realities of the daily practices, power relations and governance structures of a world economy that is organized in global value chains. Orchestration is more likely to succeed when a combination of directive and facilitative instruments is used; when sustainability issues have high visibility in a global value chains; when the interests of private and public sectors are aligned, and when orchestrators are aware of the kinds of power that underpin the governance of value chains and act to reshape these power configurations accordingly.

A path towards ‘just sustainabilities’ means addressing inequality – since it drives competitive consumption and leads to lower levels of trust in societies, which makes public action more difficult; it entails focusing on improving quality of life and wellbeing, rather than growth; it demands a community economy and more public consumption; it involves meeting the needs of both current and future generations and at the same time reimagining these ‘needs’; it demands a paradigm of ‘sufficiency’, rather than maximization of consumption; it recognizes that overconsumption and environmental degradation impacts on many people’s right to enjoy a decent quality of life; and it requires a different kind of ‘green entrepreneurial state’, which also caters to these needs. Just sustainabilities necessitate building a social foundation for an inclusive and stable economic system that operates within our environmental planetary boundaries; and it demands business to behave responsibly (within its organizational boundaries and along value chains) to maintain its social license to operate.

This text is based on excerpts of Stefano Ponte’s forthcoming book Green Capital, Brown Environments: Business and Sustainability in a World of Global Value Chains, Zed Books: London. The book is based on 20 years of research on sustainability and global value chains, and builds from empirical work on several agro-food value chains (wine, coffee, biofuels) and capital-intensive industries (shipping and aviation).

Stefano Ponte is Professor of International Political Economy in the Department of Business and Politics, Copenhagen Business School and the former academic co-director of the Sustainability Platform at CBS. Twitter: @AfricaBusPol


Selected books for further reading on this topic:

Agyeman, J. 2013. Introducing just sustainabilities: Policy, planning, and practice. Zed Books.

Dauvergne, P. 2016. Environmentalism of the Rich. MIT Press.

Humes, E. 2011. Force of nature: The unlikely story of Wal-Mart’s green revolution. HarperBusiness New York.

Jackson, T. 2009. Prosperity without growth: Economics for a finite planet. Routledge.

Moore, J. 2016. Anthropocene or Capitalocene? Nature, history, and the crisis of capitalism. PM Press.

Shiva, V. 2016. Earth democracy: Justice, sustainability and peace. Zed Books.

 

Pic by Marufish, Flickr.

Wonder Tech and the Institution of Gender

by Jeremy Moon

“I didn’t realize that I was a woman until I went to the US.”

This was the rather arresting comment of a keynote speaker at the WonderTech Summit in Copenhagen, organized by a group of, mainly female, IT professionals. The speaker in question (a Senior Vice President of a leading MNC and leader of a women’s innovation initiative) explained that this awakening to gender was because in her home country, Denmark, she was used to being treated as another ‘person’ and, by inference, equal to men.

I have noted elements of equality in Denmark in: the extent of public funding for schools (overwhelmingly mixed sex) and parental leave; and the involvement of fathers in parenting. However, this is not to suggest that there is no gender institution in Denmark. The speaker referred to her disappointment that Denmark was only ranked 14th in the World Economic Forum Report for Women, and some other speakers alluded to the institution of gender in the tech industry and higher education in Denmark, and the way it worked against women.

Gender as an Institution – marco, meso and micro level

This comment struck me as a nice illustration of the idea of gender as an institution[1]: the way gender delineates the largely taken for granted roles of men and women. At the systemic (macro) level there are the respective norms, laws and rules. At the organizational (meso) level gender regimes shape the ‘way things are done here’. At the individual (micro) level there are the gendered practices in daily interactions. Of course, the gender institution is manifest in different ways in different places as illustrated by the aforementioned speaker’s contrast of its operation in Denmark and the USA.

So what, I wondered, would be the approach to this issue recommended at the conference whose purpose was ‘to celebrate the achievements of women in the industry and inspire diversity in tech’?

I was interested in the way participants addressed gender in their contexts. The aforementioned speaker advised that women disappointed in job / promotion applications, should not complain but try harder and better next time. Another speaker referred to a role model for women in blockchain entrepreneurship who advised ‘not to talk about gender’. The emphasis was upon innovation and taking initiatives at the individual level, and the numerous awards that were made enabled yet more such personal stories to be told. Wilma Rudolph was a used as a role model by one speaker (check out her amazing story of overcoming obstacles of socio-economic means and physical disability alone).

Network merit

Another key theme of the conference was at the meso level but focusing not on the oppressive organization, but on women’s self-help networks for mentoring, capacity building, career modelling, and sheer encouragement. The conference was replete with evidence of network organizations and social enterprises working in the field.

All this was so positive. The conference speakers and participants seem confident in their abilities to work professionally and effectively. There was little sense of inferiority or ‘being a woman’ in their organizations. How representative or scalable are these stories?

Too little attention on the political level

Which leads to my final observation that there was little attention to the systemic, or political, level of the gender institution to advance the careers of participants at WonderTech, even though the conference did give cases of ‘solving problems for people, businesses, and the planet’ (e.g. how ICT could be deployed to address systemic obstacles to equality for women in developing countries?).

Solving Problems for People, Businesses, and the Planet.

Can the inspiring individual stories and the network values and achievements carry the day or will more political action along the lines of the suffragettes or #MeToo be required? This might be to increase female participation in Tech science education, to increase women leaders in the Tech industry, and to enable women not to need ‘to feel like women’ – at least when doing so is a sign of adverse effects of the gender institution?[2]

 

[1] The subject of a forthcoming paper with Lauren McCarthy (more when it is published)

[2] Former Soviet countries lead the EU rankings of women in the tech workforce, presumably a legacy both of their policies of enrolling the brightest students in specialist maths high schools, and of current practices of selecting equal numbers of boys and girls in these schools, and encouraging girls to study computer science at university https://www.ft.com/content/e2fdfe6e-0513-11e8-9e12-af73e8db3c71


Jeremy Moon with some help from Marjahan Begum, Plamena Cherneva, Lavinia-Cristina Iosif-Lazar and Lauren McCarthy.

Jeremy Moon is professor at the Department of Management, Society and Communication, member of the Governing Responsible Business Environment and holds the VELUX Chair of Corporate Sustainability, all at Copenhagen Business School.

 

Pic by Jennifer C, Flickr.

A Taxonomy of Sustainable Business Model Patterns

By Florian Lüdeke-Freund & Sarah Carroux.

In recent years, so-called “sustainable business models” are increasingly gaining in importance in both practice and research.[1] There is hope that business models and business model innovation could, for instance, support the diffusion of ecologically and socially-beneficial products and services in the market.[2] Despite the growing interest, there still exists a lack of systematically-generated knowledge about the different shapes (or “patterns”) such business models can take. Hence, our research project aims to provide a comprehensive and up-to-date overview of presently known business model patterns that can contribute to the diffusion of ecologically and socially beneficial innovations. We developed a structured patterns system, a new taxonomy, of 45 patterns organized into 11 groups, including experts’ expectations for their contributions to sustainable value creation.

Key Objectives of the Study

A broad range of business models are being discussed in current scientific and applied literature. These are often identified as “patterns”.[3] Following Christopher Alexander, a pattern theory pioneer from the field of architecture, a pattern basically represents a solution to a reoccurring problem.[4] What makes patterns so special is that their solutions can be applied in different contexts. For instance, a window is a universal solution for the problem of a lack of lighting in a room. A window exists in different variations and can be applied in various contexts (e.g., for residential buildings, skyscrapers, small windows, large windows etc.). Similarly, business model patterns can be understood as replicable and modifiable solutions to reoccurring business challenges. For instance, the “freemium” business model can not only be used for online services such as Spotify, but also to market high-quality medical services that, depending on patient type, are offered either for “free” or for a “premium” (e.g. Aravind, an eye-care service provider in India).[5] The key objectives of this study are (i) to consolidate the current knowledge about business model patterns with the potential to support sustainable innovations, i.e. to develop a new taxonomy, and (ii) to prepare the foundations for a “sustainable business model pattern language”.[6]

Methodology

We identified a total of 102 potential business model patterns in the relevant literature. These were critically assessed and duplicates or irrelevant items were eliminated, resulting in a sample of 45 patterns. These were reviewed and organized into groups by 10 international experts to condense the large number of patterns in a way that allowed recognizing a systematic order. In the second survey round, the international experts were asked to assess the patterns with respect to their potential contributions to ecological, social, and economic value creation. This enabled us to develop a structured patterns system, a taxonomy, of 45 patterns organized into 11 groups, including experts’ expectations for their contributions to sustainable value creation.

 

Results and Practical Implications

The patterns system is comprised of 45 patterns that were each allocated to one out of the 11 identified groups according to their problem-solution combination. The following groups of sustainable business model patterns were found:

  1. Pricing & revenue patterns
  2. Financing patterns
  3. Eco-design patterns
  4. Closing-the-loop patterns
  5. Supply chain patterns
  6. Giving patterns
  7. Access provision patterns
  8. Social mission patterns
  9. Service & performance patterns
  10. Cooperative patterns
  11. Community platform patterns

These groups can be characterized based on (i) their specific problem-solution combinations (e.g., solving the problem of limited access to health care through a specific pricing model), and (ii) their expected ecological, social, or economic effects (i.e. their expected contribution to sustainable value creation). The patterns system is highly practice-oriented, given the input provided by the experts. For instance, it could be used as an instrument in innovation workshops. Furthermore, our patterns system could be used in combination with business model innovation tools such as the Business Model Canvas, the Business Innovation Kit, or the Smart Business Modeler. Our pattern taxonomy is based on an essential principle in business and innovation: “learning by example”. Companies that want to integrate sustainability into their business models can refer to our taxonomy for guidance and inspiration and use it as a catalogue that also includes practical examples. This means that companies do not have to start from scratch and, instead, can learn from the experiences of others and use these to progress towards sustainability. All-in-all, our sustainable business pattern taxonomy is an efficient and effective instrument that enables practitioners and scholars alike to benefit from vast years of experience. The sustainable business model pattern taxonomy is dynamic in nature and can be easily expanded with new patterns and examples. It can already be used for online business modelling by using the Smart Business Modeler.

[1] Lüdeke-Freund, F. & Dembek, K. (2017): Sustainable Business Model Research and Practice: Emerging Field or Passing Fancy?, Journal of Cleaner Production, Vol. 168, 1668-1678. [ DOI | ResearchGate ]

[2] Boons, F. & Lüdeke-Freund, F. (2013): Business Models for Sustainable Innovation: State of the Art and Steps Towards a Research Agenda, Journal of Cleaner Production, Vol. 45, 9-19. [ DOI | ResearchGate ]

[3] E.g., Remane, G.; Hanelt, A.; Tesch, J. & Kolbe, L. M. (2017): The Business Model Pattern Database — A Tool for Systematic Business Model Innovation, International Journal of Innovation Management, Vol. 21, No. 1, Article No. 1750004. [ DOI ]

[4] Alexander, C.; Ishikawa, S.; Silverstein, M.; Jacobson, M.; Fiksdahl-King, I. & Angel, S. (1977): A Pattern Language: Towns, Buildings, Construction. Cambridge, MA: Oxford University Press. [ Website ]

[5] Breuer, H. & Lüdeke-Freund, F. (2017): Values-Based Innovation Management: Innovating by What We Care About. Houndmills: Palgrave Macmillan. [ Website ]

[6] Lüdeke-Freund, F.; Bohnsack, R.; Breuer, H. & Massa, L. (forthcoming): Research on Sustainable Business Model Patterns – Status quo, Methodological Issues, and a Research Agenda, in: Aagaard, A. (ed.): Sustainable Business Models. Houndmills: Palgrave.


Florian Lüdeke-Freund is a Lecturer at ESCP Europe Business School, Berlin, where he also holds the Chair for Corporate Sustainability. Since 2013, Florian facilitates the research hub www.SustainableBusinessModel.org.

Sarah Carroux is a research associate and doctoral candidate at the University of Hamburg. As member of the Chair of Management and Sustainability, lead by Prof. Timo Busch, Sarah researches topics related to sustainable finance with a strong focus on impact investing, as well as the business case for sustainability and sustainable business models

 

Pic by Eli Duke, Flickr.