Sustainable Strategic Management, (2004, Armonk, New York: M.E. Sharpe, Inc.).
Written by: Edward and Jean Garner Stead
Reviewed by: Alanya Schofield, November 2008
At some point in their studies, many business and environmental management students find themselves asking, “What is sustainable strategic management (SSM) and how is it different from traditional strategic management?” Edward and Jean Garner Stead saw a void in literature addressing this question holistically, inspiring them to write Sustainable Strategic Management. The book attempts to provide students, practitioners, and academics “with ways to integrate [the] core value of sustainability into their business operations, studies…and everyday lives” (xiv) with a thorough assessment of traditional strategic management practices and industrial ecosystem thinking followed by a detailed, step-by-step discussion of the actions and components crucial to successful SSM.
The book is divided into three primary sections. The first portion outlines the need for sustainable business practices, defines SSM in the context of existing and proposed industrial paradigms, and identifies the primary challenges in making a paradigm shift.
Part II provides a historical overview of the changes in industry over time, discusses the elements to be considered when assessing a firm’s weaknesses and strategic advantages, argues for the importance of a high level of broad stakeholder involvement, lays out the hierarchy of SSM strategies, and suggests new economic assumptions and values instrumental to the success of SSM.
The final portion of the book presents SSM strategies, systems, and processes necessary to successfully implement and evaluate SSM. The book concludes with a brief case-like overview of the successes and failures that Anthony Flaccavento of Appalachian Sustainable Development and Bill Ford of Ford Motor Company have had with certain SSM strategies.
Summary of Key Points:
The initial part of the book provides a persuasive and logical, yet somewhat circuitous, argument for the need for SSM. The later portions provide relatively direct and detailed recommendations for the successful implementation of SSM. The book’s key points and arguments are summarized below:
1. Need for a New Stage of the Industrial Ecosystem: The Steads argue that there are three stages of industrial ecosystems within the continuum of industry. Type I is the classical linear industrial model in which raw materials and energy are made into goods and services with wastes and byproducts being discarded. Type II builds upon type I, but incorporates a degree of energy and material recycling. Type III fundamentally differs from the previous two in that it is a totally closed-loop system with heat as the only byproduct. The book argues that while industry is slowly shifting from type I to type II industrial ecosystems, SSM can only be successfully implemented in a type III industrial ecosystem.
2. Need for a Radical Paradigm Shift: The book contends that a type III industrial ecosystem is only possible with a radical shift in our thinking. Our current values and assumptions are based on the ideas of unlimited growth, personal fulfillment through material goods, and an economy largely isolated from social and environmental concerns (closed circular flow economy). In order to achieve a type III industrial ecosystem and successfully implement SSM practices, we must create a new paradigm that takes into account the greater societal and environmental ecosystems: one that is built around quality of life rather than material goods (open living system economy).
3. Need for Greater Stakeholder Involvement, Generative Learning, and Different Solutions for Different Situations: In order to achieve this paradigm shift, the Steads argue that a wider definition of stakeholders (including nature, human rights, societal health, etc.) is vital and that stakeholder involvement should play a much greater role in business decision making processes. Additionally, we must start thinking in terms of providing for future generations, rather than immediate returns. Finally, it is essential that we take advantage of opportunities to implement more responsible practices in rapidly developing areas while at the same time identifying ways to reduce waste and change resource-intensive consumption patterns in more developed areas.
4. Need for New Economic Assumptions and Societal Values: The Steads present three sustainability-based economic assumptions (limit unlimited growth; natural capital is limited, precious, and often non-substitutional; and people should make rational individual economic choices within the moral dimensions of a meaningful community structure) and eight instrumental values (wholeness, posterity, community, appropriate scale, diversity, quality, dialog, and spiritual fulfillment) that they believe will be necessary to allow successful SSM decision making.
5. Need for New Strategies, Processes, and Systems: The Steads argue that successful SSM will require that:
• Communities of firms with complementary products/services practice coevolution (a step beyond industrial ecology);
• CEOs, Boards, and strategic managers provide true leadership and commitment to sustainability visions, goals, and objectives to achieve meaningful employee and stakeholder buy-in;
• Sustainability values are incorporated into a firm’s vision, specific goals and performance targets are set, and strategies to achieve those goals are implemented;
• Firms develop sustainability-based management systems, operations, infrastructure, marketing, R&D practices, procurement systems, organizational cultures, human resource systems, and learning structures;
• Disruptive technologies are developed and implemented; and
• Performance measurement, finance and accounting, information, and reporting systems are utilized to evaluate the success of SSM strategies in terms of achievement of specific goals, comparison with past performance, and comparison with competitors and other industries.
6. Potential for True SSM Exists: The Steads conclude that economic issues still outweigh environmental and social concerns, making it currently impossible to achieve true SSM. However, as we transition to a type III industrial economy, SSM will play an increasingly important and influential role while at the same time becoming easier to achieve.
Strengths and Weaknesses:
The Steads have a well thought out and intricate vision for SSM. They spend a significant proportion of the book introducing a myriad of historical and contemporary strategic management theories and models to establish the foundation upon which they base their vision. The extensive discussion of various models provides the reader with a broad understanding of changes in industry and sustainability thinking over time while building a solid base for the book’s later arguments regarding SSM.
Drawing upon their vision, the Steads provide concrete suggestions of how to alter and/or expand upon many current theories, models, and practices to achieve SSM. These practical suggestions provide good stepping stones from which students, executives, and managers can begin to develop SSM practices and strategies for specific organizations. Additionally, extensive references to Anthony Flaccavento of Appalachian Sustainable Development, Bill Ford of Ford Motor Company, and many other “forward thinking” managers help to tie the theoretical SSM processes and practices to reality.
The book has two major weaknesses: too much information on certain topics and excessive repetition of some ideas. At times, the book is verbose and repetitive, with key points getting lost in the numerous models and theories presented. However, generally, the book provides valuable summaries at the end of sections and chapters, bringing the reader back to the main point before moving onto the next argument.
Although the Steads readily admit that we face an uphill battle to achieve true SSM, this book provides a solid foundation for students and executives interested in implementing change in their organizations through SSM practices. While much of the information in the first section of the book is common knowledge to Erb students, it provides a good background of key sustainability issues for readers less aware of environmental and social issues. The second and third portions provide practical, well-reasoned, and relatively comprehensive strategies for the successful creation, implementation, and evaluation of SSM practices.