The objective of the chapter is to understand the multidimensional concept of integrated thinking and propose a set of indicators that enable organizations to identify integrated thinking. The chapter is characterized as qualitative, descriptive, and exploratory. Seventeen semi-structured interviews were conducted with researchers who have developed dissertations and/or theses on integrated reporting. The results were analyzed from content analysis and allowed comparing the dimensions proposed for integrated thinking. The results show that the concept of integrated thinking is multidimensional and has four dimensions: 1) connectivity and systemic view, 2) integrated planning, 3) communication and cooperation, 4) understanding stakeholders. Based on that, it was possible to develop a set of 27 indicators. The findings contribute to the academic literature on integrated reporting, filling research gaps, and the development of integrated thinking indicators contributes to organizational practice, as they enable the identification of integrated thinking.
TopIntroduction
Integrated Reporting (IR) was proposed by the International Integrated Reporting Council (IIRC) with the purpose of providing a simple, reliable and qualified narrative, enhancing accountability and improving dialogue with stakeholders and internal communication (Cheng, Green, Conradie, Konishi & Romi, 2014; Lodhia, 2014; Lai, Melloni, & Stacchezzini, 2018; Adhariani & Villiers, 2018). For IR to be prepared with quality, Integrated Thinking must be rooted in organizational activities (Lodhia, 2014). According to the IIRC (2013; 2021), Integrated Thinking is the effective consideration of the relationships between organizational units and the capitals that the organization uses or affects.
Integrated Thinking can be defined in different ways: an organizational mindset that encompasses the habit of dealing with uncertainties and disturbances (Al-Htaybat & von Alberti-Alhtaybat, 2018); a senior-management attribute of constructively handling tensions between various capitals in strategy, resource allocation, performance measurement and control (Oliver, Vesty & Brooks, 2016); the systematic management of capitals with the aim of providing sustainable profitability (Knauer & Serafeim, 2014); a process that incorporates strategies from different perspectives (financial, environmental, sustainability, governance) and extends the habits of managers and departments, ensuring awareness of the strategy in practice (Guthrie, Manes-Rossi & Orelli, 2017); an internal process that organizations follow to improve the reporting disclosure level (Adhikariparajuli, Hassan, Fletcher & Elamer, 2020).
The presence of Integrated Thinking in organizations reflects their ability to show and communicate the integration of the economic, socio-environmental and governance dimensions in daily decision-making processes (Venter, Stiglingh & Smit 2017; Esch, Schulze & Wald, 2019). In addition to helping with the provision of information about value creation processes and internal and external business relationships (Mio, Marco & Pauluzzo, 2016). Bevilaqua, Neumann and Faia (2020) present a review of the main benefits of Integrated Thinking in organizations, among which the following stand out: a) integration of socio-environmental information; b) reduction of silos; c) assistance in decision making; d) fluidity of information; e) improvements related to strategic aspects.
It is increasingly frequent that organizations seek to adopt integrated thinking in their practices. The motivation to incorporate Integrated Thinking is top-down, through strategies carried out by senior management that consider social, environmental and governance aspects for reporting and decision-making. The execution of Integrated Thinking in practice occurs from the bottom up (bottom-up) as the commitment and engagement between departments and teams makes it possible to spread it across all organizational layers (Bevilaqua et al., 2020).
For it to be effectively adopted and disseminated, Integrated Thinking must be understood at different levels and can be measured reliably, using metrics and instruments capable of measuring its construct. However, even in organizations that adopt IR, it is observed that Integrated Thinking can be confusing for stakeholders (Gunarathne & Senaratne, 2017), as its concept is obscure and challenging, as it is not discussed in depth (Feng et al, 2017; Al-Htaybat & von Alberti-Alhtaybat, 2018).
Therefore, it becomes difficult for organizations to understand, classify, identify and measure Integrated Thinking in practice (Del Baldo, 2017; Churet & Eccles, 2014). Consequently, the results of this difficulty are the faulty or incomplete incorporation of thinking that does not reflect the organizational reality and does not reach the capacity proposed by Integrated Thinking to connect capitals (IIRC, 2013; 2021). Therefore, the issue that drives the discussion of the chapter is “Which dimensions characterize the concept of Integrated Thinking?”.