BLOOMINGTON, Ind. – Amid concerns over sustainability issues, ranging from climate change, widening inequality, to the global pandemic, the Indiana University Kelley School of Business served as co-host to the inaugural Conference on Innovations to Tackle Global Sustainability Challenges.
Stephanie Wang, assistant professor of international business and strategy, served as program chair. Jeff McMullen, the David H. Jacobs Chair in Strategic Entrepreneurship and professor of entrepreneurship, was one of the presenters. The IU Center for International Business Education and Research, housed in the Institute for International Business, organized the virtual conference along with CIBERs at George Washington University and the Georgia Institute of Technology.
Stephanie Wang
The theme of the conference on May 20-21 was “Innovations to Tackle Global Sustainable Challenges.” Panel topics included, “Organizational Sustainability Initiatives – Multinationals vs. Entrepreneurs,” “Corporate Social and Environmental Innovation” and “Corporate Sustainable Development – Developed vs. Emerging Markets Multinational Companies.” The closing panel focused on practitioners’ views – “what managers say.”
Wang said she felt very honored to serve as the program chair. “I am a firm believer that research should be not only scholarly rigorous but also managerially relevant,” she said. “Through our two-day conference, we were able to highlight this important research agenda, exchange ideas among scholars from different disciplines (one of the panels also included scholars in the natural sciences) and promote dialogues between scholars and practitioners.”
Nearly 200 people attended the conference via Zoom from locales all over the world.
We asked Wang and McMullen to summarize the conference and broader issues involving Corporate Social Responsibility through a Q&A:
How would you describe the state of change in this area compared to where our global society was 10 to 20 years ago?
Wang: “We live in times where sustainability issues, ranging from climate change, widening inequality to the global pandemic, are pressing and needed to be addressed. We have witnessed, both in academia and industry, the heavy shift from shareholder capitalism — i.e., firms seek profits — to stakeholder capitalism — i.e., firms seek long-term value creation by incorporating the needs of all stakeholders and society at large.
“There is growing management research aiming to advance our understanding of the connections and tensions between economics, society, and environments. International business scholars are in a particularly unique position to study sustainability challenges because such grand challenges involve interactions among individuals and organizations across borders. For example, traditionally, international business scholars have focused on examining the causes and consequences of the globalization of production and the governance of global value chains. Now, scholars have turned to sustainability implications associated with geographic dispersion and disintegration of production and trade.
“The fact that we had 192 participants who joined this conference worldwide indicates the shared interests in this research agenda.”
Jeff McMullen
There are a variety of definitions of corporate social responsibility, and this can be the result of the different interests represented. For example, companies may see it as a business strategy while others, such as activists or government officials, may see it as “spin” or as voluntary regulation. The first panel focused on how sustainability efforts may different between multinational companies and entrepreneurs. Please explain the differences and how they may vary internationally in terms of perception?
McMullen: “There are two major ways that multinational companies and entrepreneurs differ in how they tackle sustainability efforts like those encompassed by Corporate Social Responsibility. One involves the centrality of the cause to the organization. For example, many entrepreneurs create — by themselves or with others — ventures for the explicit purpose of addressing a social and/or an environmental concern. In these cases, sustainability can be both intent and outcome of the venture.
“In contrast, less sustainably inclined entrepreneurs may resemble multinational corporations in that their organization may start out focused on the creation of economic value for customers, but then become increasingly conscious of any external social or environmental costs that their activities might generate for third parties beyond the consumer and investors.
“Given the increased visibility and footprint of multinational companies, it should be no surprise that they feel pressure to minimize these external costs even more than entrepreneurs might. It may weigh on the conscience of both entrepreneurs and CEOs of Fortune 500 firms, but the latter are likely to be held accountable by a wider net of diverse stakeholders with varying interests even when the company complies with laws and current norms, as both are always changing.
“This points to the second major difference between entrepreneurs and multinational companies. Owing to the latter’s visibility and footprint, they cannot experiment to the same degree as entrepreneurs in terms of how best to mitigate such external costs, whether real or perceived. Instead, they find themselves having to engage in considerably more planning in the hopes of preventing such costs in the first place. Unfortunately, this necessary caution can slow innovation, which can include, in some instances, the very innovations that could have otherwise yielded sustainability improvements.
“Finally, these differences are likely to be magnified between local, indigenous entrepreneurial ventures which may fly under the radar of all but the most directly connected stakeholders versus international behemoths which may feel compelled to use the most stringent standards of any of the countries in which they operate for all their operations regardless of local requirements. They may do so for pragmatic reasons — to minimize the transaction costs of business. Or, they may do so for political reasons — to immunize themselves from being targeted by social activists, be they predatory or well-intended.
What challenges do business scholars face in researching this topic?
McMullen: “There are many challenges for business scholars who wish to research sustainability. First is the term itself. Sustainability has many different meanings, depending on your audience. Some definitions are strict and absolute and others more liberal and relative. Second, sustainability is a phenomenon that is inherently multi-level, affecting individuals, organizations, nations and the globe, to name only some of the possibilities.
“Consequently, what might look sustainable when analyzing the firm may be revealed to be unsustainable at the national level, and what might seem sustainable at the national level could prove unsustainable globally.
“Third, sustainability involves time such that what is sustainable for a week may not be over the course of a year, and what has been sustainable for the last 200 years, may not be for 200 more. Fourth, sustainability tends to refer to real costs in terms of energy or qualities of matter — i.e., hectares of fertile soil, liters of oil, while economics and accounting (the language of business) employ financial costs. The two can easily be at odds, owing to disparities in the purchasing power of parties involved, such that improvements to the bottom line simply do not translate into productivity improvements in the sustainability sense of the word. Addressing issues like these almost always involves complex solutions with numerous moving parts. It is difficult to isolate effects and determine what improves outcomes under such complexity in a manner that meets the rigors of scientific knowledge — and to do so in 30 double-spaced pages, which tends to be the limit of most journal articles.
One of the panels addressed how disasters influence innovation and how corporations, researchers, and communities collaborate to develop new technology to improve living conditions. It’s doubtful that many consumers generally think of corporate philanthropy in this way. What kinds of examples of did presenters offer? What kind of broader applications come from innovations developed under these circumstances?
Wang: “Natural disasters include earthquakes, floods, hurricanes or any other calamities that can cause human suffering, destroy infrastructures and harm the economy. The idea we discussed in the panel focused on how large corporations have become increasingly influential in addressing disaster funding gaps. Corporations, particularly locally embedded ones, have the capacity and technologies to improve the effectiveness of disaster responses, which goes beyond the quantity of aid and reflects in the speed of responses and the match between the responses to the urgent needs. This panel echoed what has been mentioned in all panels in terms of the importance of cross-sector collaboration – that corporations, governments and non-government organizations need to collaborate on a wide range of social and environmental challenges. “
How did the conference help to inform future research in this area?
McMullen: “If nothing else, the conference helped scholars interested in this topic know that they are not alone in their interest, nor are they alone in the challenges they face. Through panels and subsequent discussions, scholars and practitioners in some cases were able to surface the common concerns they face. There is power in naming the problem and turning scores of scholars’ attention to solving the same problem. The conference did this repeatedly.”
The inaugural conference only featured talks and discussions by leading scholars and corporate executives. Future conferences will include paper submissions and development workshops. Wang thanked the team “behind the scenes,” including Christine Everett and Ryan Craven from Indiana University, Robert Orttung, Anna Helm, Alexis Gaul and Nevena Yakova from George Washington University, and John McIntyre and James Hoadley from George Tech University.