Abstract
The objective of the chapter is to develop an organizational sustainability index based on development indicators from 1980 to 2019. The sample is made up of the aggregation of low, low middle, upper middle, and high income countries constructed by the World Bank. High-income economies had the least sustainable organizations in 1980 with an index value of -13.8, while in 2019 its value was 25.7. On the other hand, the lower middle-income countries had an increase of 15.2, going from -9.2 in 1980 to 5.9 in 2019. Similarly, the upper middle-income economies went from -3.8 in 1980 to 6.6 in 2019, with a growth of 10.48. Low-income countries started with the highest levels of sustainability among the four categories with 1.6; in 2019 the value of the calculated index was 5.20, that is, a growth of only 3.5 units.
TopIntroduction
The complexities and challenges faced by modern organizations force them to evolve and change their structures to respond to social, economic, and environmental challenges. All organizations must operate in an environment with risks and uncertainty (Rivera & Rivera, 2019). In order to achieve higher levels of efficiency and sustainability, stability and coherence must be balanced with flexibility and change capacity (Carayannis et al., 2014). Due to the above, in recent years there has been a considerable increase in research in the field of organizational sustainability.
Within this diversity, most of the works can be classified into four groups: theoretical research, sustainable supply management, impacts of human behavior on the organization and case studies or empirical research. The first group includes the works of Moizer & Tracey (2010) on causal loops diagrams, Thomas & Lamm (2012) about elemental categories, Carayannis et al. (2014) covering governance, Evans et al. (2017) on business models, Islam et al. (2018) covering strategic alliances, and Mazutis et al. (2020) about organizational sustainability frames. While some relevant studies on sustainable supply management are Ageron et al. (2012) dealing with sustainable supply management, Silvestre (2015) in developing and emerging economies, Moldavanova & Goerdel (2017) referring to social connectedness, Bastas & Liyanage (2019) about management approaches.
Unlike most of the literature focused on efficiency and business models, there is a branch of management research focused on how human behaviors impact organizations, some of the works in this category include Linnenluecke & Griffiths (2010) on cultural backgrounds, Smith (2011, 2012) covering cultural and structural barriers, Florea et al. (2012) dealing with multicultural values, Wals & Schwarzin (2012) on dialogic interaction, Carmeli et al. (2017) about ethic of care, Vodonick (2018) in respect to resistance to change, and Soderstrom & Weber (2019) on situational interactions.
The literature on organizational sustainability also abounds in empirical research with large volumes of data or detailed information on a specific case. This category is broad and classifying the articles in it requires a chapter dedicated to it, however, some relevant works are Michelon & Parbonetti (2010), Boiral & Paillé (2011), Paulraj (2011), Eccles et al. (2014), Santora et al. (2015), Merwe (2016), De Freitas et al. (2017), Lopes et al. (2017), Sroufe (2017), Batista & Francisco (2018), Yu et al. (2018), and Grecu et al. (2020).
Key Terms in this Chapter
Organization: Association of people who interact with each other and use resources of various kinds in order to achieve certain objectives or goals.
Governance: Rules and principles by which the company is governed when developing its operations. This includes interaction with all its stakeholders such as customers, suppliers, competitors, among others.
World Bank: International organization specialized in finance whose main activity is helping developing countries that need financial support through loans or credits and that are in a situation of poverty.
Moving Average: Averages calculated from artificial subgroups of consecutive observations.
Standard Score: Variable that is used in statistics to compare data from different samples or populations and is defined as the number of standard deviations that a given value takes with respect to the mean of its sample or population.
Index: type of economic data of statistical nature that allows an analysis of the economic situation, both past, present, and future, of a territory or entity.
Income: All profits that are added to the total budget of an entity, whether public or private, individual or group. In general terms, income is both the monetary and non-monetary elements that accumulate and that consequently generate a consumption-profit circle.
Macroeconomics: Field that studies the global functioning of the economy as an integrated whole, in order to explain the evolution of economic aggregates.