Organizational Sustainability, Legitimacy, and Multinational Companies

Introduction

In recent years, sustainability has received high interest as a topic and therefore it is one of the most researched areas in business and this leads to an increase in the organizations adopting sustainability principles into their corporate strategies (Qorri et al. 2018). The number of organizations that adopt environmental and social responsibilities into their business strategies in addition to classical business targets such as increasing sales, profit maximization, reduction of cost, decreasing stock levels and improvement of quality are increasing (Porter and Kramer, 2006; McKinsey, 2013). According to the recent business ethic literature, researches show that ethical approaches for companies are important and therefore they try to balance between their economic targets and their social and environmental responsibilities (Becker, 2012; Florea et al., 2013). Recently, environmental responsibilities were added to ethical and moral responsibilities of organizations (Sadler-Smith, 2013). Environmental responsibility is an area of ethics which is an extension of the classical anthropocentric science that deals with non-humans such as animals, plants, and ecosystems (Leopold, 1949). The holistic approach of business ethics which integrates social, environmental and economic responsibilities in sustainable development is named as the triple bottom line (Elkington, 1994). In 1994, the English author and activist John Elkington proposed the concept of triple bottom line (TBL), which integrates the considerations of the planet (environment) and the people (society) into the traditional bottom line of a firm (profit) (Elkington et al., 2006, p.27). The holistic approach of the triple bottom line, managers are faced with meeting the current needs of society from economic, environmental and social aspects without compromising future needs (Hahn et al., 2014). In the triple bottom line framework, the social aspect of sustainability is defined as increasing the working conditions and welfare of workers and also society that they operate in (Klassen and Vereecke, 2012); the environmental aspect of sustainability is defined as taking care of the natural resources and reducing the consumption of these resources (Vachon and Mao, 2008); and economic sustainability is defined as organization’s ability to achieve stable profit over a time period (Steurer and Konrad, 2009). There is a lack of research which lacks the triple bottom line of sustainability which offers a holistic perspective which integrates environmental, social and economic aspects at the same time (Abdul-Rashid et al., 2017).