The Coevolution of Sustainable Strategic Management in the Global Marketplace

Abstract

Sustainable strategic management emerged from the coevolution of strategic thinking in today’s sustainability challenging business environment. Business ecosystems, designed to create socially and ecologically responsible economic opportunities for their members, have emerged as excellent structures for implementing sustainable strategic management strategies along the whole pyramid of coevolving developed, developing, and undeveloped markets. Both the business ecosystem leaders and niche players in these whole pyramid business ecosystems have critical roles to play in formulating and implementing potentially profitable strategies that help reduce the human footprint and improve the quality of human life. Ecosystem leaders need to be responsible for creating and shepherding their business ecosystems’ visions of a sustainable future, and niche players need to be responsible for providing the ecosystem with an innovation trajectory designed to make those visions a reality.

Keywords

sustainable strategic management strategic management coevolution business ecosystems global markets sustainability

Introduction

The OPEC oil embargo of 1973 clearly demonstrated that the causes and effects of turbulence in the business environment go well beyond the boundaries of economic activity, spilling into politics, social welfare, and ecological concerns. After the embargo, economist E. F. Schumacher (1979, p. 5) said, “Things will never be the same again,” and they have not. Since the embargo, competition for goods and services has become truly global; developing and undeveloped markets (such as China and India) have joined the global marketplace in a big way; advances in technology have transformed the way humans work, communicate, and live; and there are now unprecedented levels of consumer advocacy, social activism, and legislation aimed at changing the way organizations do business.

Sustainability, a fringe social concern when the OPEC embargo occurred, has grown into a central issue in human consciousness today (Aburdene, 2005; Edwards, 2005; Hawken, 2007; Senge, Smith, Kruschwitz, Laur, & Schley, 2008; Speth, 2008). As sustainability has become central in society, it has also become a central concern in the business environment. Peter Senge (2011) calls the rising sustainability consciousness in the business environment “a profound shift in the strategic context” of business organizations, and three recent surveys of approximately 3,000 global business executives in virtually all the world’s industries bear him out (Haanaes et al., 2011; Kiron, Kruschwitz, Haanaes, Reeves, & Goh, 2013; Kiron, Kruschwitz, Haanaes, & Velken, 2012). In the 2011 survey, researchers found that firms fully embracing sustainability as a key strategic issue were able to successfully implement profitable preemptive strategies in new socially and ecologically positioned market space, and they also found that firms that were only casually adopting sustainability as a strategic initiative were unable to effectively compete in this new market space. In the 2012 survey, 90% of the responding executives said that implementing sustainability strategies is now or will soon be a competitive necessity for their organizations, and 70% said that they have put sustainability on their strategic agendas within the past 6 years. In the 2013 survey, 50% of the responding executives said that they had changed their basic business models to incorporate sustainability because of the strategic opportunities that it provides them, a full 20% increase over the previous year’s survey. In summarizing their results, these authors of the 2012 survey concluded, “The sustainability movement [is nearing] a tipping point” (Kiron et al., 2012, p. 69).

Survey results such as these make it clear that competitiveness in today’s sustainability-rich world requires that business organizations develop strategies and processes that are economically competitive, socially responsible, and in balance with the cycles of nature, referred to as sustainable strategic management (SSM). In this article, we will examine SSM in some depth. We explore how SSM has emerged from the coevolution of business strategy and the turbulent environment in which it is practiced, and we will explore the advantages business ecosystem structures have for implementing SSM. We will also look at the development of an SSM strategic portfolio that can provide competitive advantages by serving the needs of the whole economic pyramid in the developed, developing, and undeveloped markets of the world. Finally, we will conclude with a comprehensive model of SSM in today’s complex, rapidly changing global marketplace.

The Coevolution of SSM

Coevolution is a biologically rooted concept demonstrating that interdependent entities evolve and change in concert with one another over time (Ehrlich & Raven, 1964). In his Gaia Theory, James Lovelock (1979, 1988) expanded the application of coevolution to the dynamic relationships between biological and geological systems, and since then the concept has been applied to numerous disciplines, including the organizational sciences.

Spiraling Organization–Environment Dynamics

Coevolutionary research in the organizational sciences has concluded that organizations and their environments are locked into perpetual coevolutionary cycles of change in which the ever increasing turbulence of the business environment leads to more flexible, innovation-driven organizational structures and processes (Flier, Van Den Bosch, & Volberda, 2003; Lampel & Shamsie, 2003; Lewin, Long, & Carroll, 1999; Lewin & Volberda, 1999, 2003a, 2003b; Pfeffer, 1993; Porter, 2006; Volberda & Lewin, 2003). Terry Porter (2006) identified six characteristics of coevolution from the scientific and organizational literature: specificity, reciprocity, simultaneity, adaptability, boundary spanning, and permanence.

Of the six, the dynamics between reciprocity and permanence are particularly important for understanding the true nature of environment–organization coevolutionary cycles. By itself, reciprocity portrays the organization–environment cycle as a two-dimensional circular process in which environmental changes lead to organizational adaptations, which lead to environmental changes, which leads to organizational adaptations, and so on. But two-dimensional circles do not fully portray the fact that the coevolutionary dance between organizations and their environments is a perpetual process that leaves each entity permanently changed; whereas circular dynamics imply that organizational selection–adaptation cycles may eventually lead back to the same place, spiral dynamics (Beck & Cowan, 1996; Wilber, 1996) demonstrate that the reciprocal environment–organization change process results in both organizations and their environments continuously morphing into something different over time.

Spiral dynamics imply that upwardly spiraling environment–organization coevolutionary processes result in shifts in organizational consciousness. These shifts to higher levels of consciousness naturally emerge in order to help organizations adapt and survive environmental changes, and each of these shifts is accompanied by new core values and ways of thinking. Thus, the coevolutionary interactions between organizations and their environments lead to more complex worldviews based on new values and new thought processes. In this regard, the spiraling process is virtually infinite in nature (Beck & Cowan, 1996; Wilber, 1996).

Spiraling Upward Toward Sustainable Strategic Management

The field of strategic management has spiraled through four stages of development as it has coevolved with the increasingly complex and turbulent business environment over the past 50 years: business policy, strategic planning, strategic management, and sustainable strategic management. Each of these stages represents a new level of strategic consciousness with new values, new processes, and new ways of thinking. Below we discuss this spiraling coevolutionary process.

The prosperous years following World War II led to the tremendous growth of corporations and the emergence of strategic (or long-range) planning. Prior to this, most firms engaged in business-level policy formulation, an internal process of integrating business-level functions and efficiently allocating resources among them. As the environment became more turbulent, strategic planning emerged. Strategic planning is typically a top management process characterized by annual planning retreats and planning reviews spanning 5-year planning horizons. This top down, annual activity is typically a purely rational process involving scanning the environment, planning where the firm wants to go, and deciding on the steps to take to get there. Strategic planners provide extensive data analyses of both the internal and external environment to executives who allocate resources to implement the strategic plan. In this process, strategy formulation is viewed as a separate process from strategy implementation, and thinking about strategy is viewed as separate from doing it (Rothaermel, 2013).

Strategic planning spiraled into strategic management in response to an increasing need for environmental vigilance. Unlike strategic planning, strategic management is a continuous process that involves the efforts of top managers to fit their organization to its environment by developing competitive advantages built on capabilities that are not easily duplicated (Barney, 1991) in order to achieve organizational goals. Traditionally, the primary intent of strategic management has been to facilitate a firm’s ability to use adaptive learning (Senge, 1990) to increase market share and competitive position within well-defined industry boundaries.

Spiraling upward from strategic management to SSM necessarily begins with a shift in thinking regarding the basic relationship between the economy, society, and the natural environment. Strategic managers now and into the future will have to guide their organizations away from the assumption that unlimited economic growth is both possible and desirable on a finite planet and toward the assumption that economic activity can only exist over the long term if it protects and improves the lives of the planet and its people. Thus, SSM is a more socially and ecologically responsible strategic framework that has emerged from the upwardly spiraling coevolutionary interactions between the sustainability-rich business environment and the strategic interests of business organizations.

In SSM the reciprocal, coevolutionary interactions between the business environment and the firm’s capabilities result in improved triple-bottom-line performance. The positioning of the firm in an attractive market coevolves with building unique resources and capabilities that cannot be imitated by competitors, which, in turn, results in superior performance. The SSM process expands the scope of traditional strategic management to include to the greater society and ecosystem, representing the next coevolutionary stage in strategic management, as depicted in Figure 1.

Figure 1.

Coevolution of SSM.

Business Ecosystems: Ideal Structures for SSM

SSM requires a framework for industry analysis that reflects the symbiotic relationship that the firm has with the greater society and ecosystem. With a primary focus on competitive dynamics, traditional industry analysis virtually ignores the nonmarket context in which competition takes place. However, today’s sustainability-rich business environment provides organizations with a strategic context that is complex, discontinuous, rapidly changing, and composed of coevolving developed, developing, and undeveloped markets, all of which are embedded in the natural environment (Hart, 1995, 1997). It is therefore imperative for SSM that traditional industry analysis be expanded to account for this discontinuous, complex environment in which firms compete.

As discussed above, coevolution provides SSM with a valid framework for incorporating the larger context of the business landscape (Mahon & McGowan, 1998; Moore, 1993, 1996). Whereas in traditional industry analysis the structure of the industry influences the conduct of the firm, which, in turn, influences the performance of the firm, in coevolutionary industry analysis these three factors are seen as circular, interactive, and spiraling, meaning that the structure of the industry both influences and is influenced by the conduct and performance of firms. In coevolutionary industry analysis, industry boundaries are blurred and the industries in which the firm competes are to a certain extent a matter of choice.

To effectively respond to this shift in strategic context, organizations must develop self-renewing change-oriented structures that encourage organizational members to continuously explore improving the sustainability performance of current products/services and innovating new, more sustainable products/services (Volberda & Lewin, 2003). Such structures can enhance the social, human, and natural capital of organizations while simultaneously meeting customer needs and creating economic value for the firm. The business ecosystem (Moore, 1993, 1996) provides such a structure. Within the business ecosystem structure, the industry is viewed as a community of coevolving firms that have coalesced around some form of innovation and/or shared vision. As with traditional predator–prey interactions, these organizations formulate and implement strategies to compete (to eat) and to cooperate (to avoid being eaten). Competition is not between individual firms so much as it is between communities of firms sharing complementary products and/or services, similar processes and capabilities, and—most important—a shared vision. Cooperation among the organizations in the ecosystem extends beyond direct suppliers and buyers to include all the participants in the value-creating community, including the relevant stakeholders. They are interdependent in that they coevolve with one another, leading to a shared fate (Moore, 1993) or a “strategic community of destiny” (Gueguen, Pellegrin-Boucher, & Torres, 2006).

The business ecosystem structure can be viewed as a public good because it facilitates collective actions in networks where multiple contributors with differing interests can join together in a common cause (Iansiti & Levien, 2004a; Moore, 1996, 2006). These structures can also be viewed as enterprises tied together and extended by shared strategic visions and codes of conduct (Post, Preston, & Sachs, 2002a, 2002b). Thus, business ecosystems guided by strategic visions of sustainability can provide the organizing structures for firms to work together as agents of social change for a more sustainable world (Bies, Bartunek, Fort, & Zald, 2007).

Business ecosystems are networks of niches occupied by ecosystem members connected by shared platforms. At the heart of successful business ecosystems are clearly defined, forward-looking visions shared by all ecosystem members rather than by well-defined boundaries resulting in specific industry practices. These members are generally composed of an ecosystem leader (keystone firm) and its niche players, and their roles are to collectively focus their entrepreneurial efforts on complementary, value-creating functions within the ecosystem (Iansiti & Levien, 2004a, 2004b; Moore, 1993, 1996, 2006).

The shared platforms are sets of solutions made accessible to ecosystem members by ecosystem leaders through established standards and interfaces within the ecosystem. Ecosystem leaders draw the boundaries and define the relationships among ecosystem members, and they provide these platforms so that they and their niche players can effectively cocreate value. These platforms allow ecosystem members to develop shared ecosystemic competencies that enable the business ecosystem to preserve lasting competitive advantages (Gueguen et al., 2006; Iansiti & Levien, 2004a, 2004b; Moore, 1993, 1996, 2006).

Each member’s contributions to the business ecosystem are developed somewhat independently in a modular design. Essentially, the various entrepreneurial niches filled by ecosystem members are viewed as self-contained modules that have been aligned around the ecosystem’s shared vision. This modularity of contributions is often envisioned as solution stacks that build on one another and interact at designated system interfaces. Modularity is a major determinant of ecosystem structure and definition. Once the interaction between the module and its interface with the system is established, then the task structure develops to accomplish the work. Thus, as modularity increases with disruptive technological change, the number and diversity of firms within the business ecosystem tends to increase. Visions, values, and ideas provide the organizational blocks for building the definition of the business ecosystem where sharing, trading, competing, and volunteering establish a new coevolving economic community (Iansiti & Levien, 2004a, 2004b; Moore, 2006).

Both collaboration and space are fundamental concepts for building viable business ecosystems (Iansiti & Levien, 2004a, 2004b). Collaboration among ecosystem members is necessary to develop the system of complementary capabilities needed to create value for multiple stakeholders. Space (also known as market space, white space, opportunity space, or blue oceans) is the concept of new market domains that exist in the minds of the ecosystem entrepreneurs. Kim and Mauborgne (2005) characterized space as unknown market niches where demand is created, not fought over as within traditional industry borders. These unknown niches provide new value creating opportunities in the new market space, often leading to system-wide change (Laszlo & Zhexembayeva, 2011).

Thus, the business ecosystem is a cooperative structure that facilitates the development of complementary businesses and other organizations within a given space (Moore, 2006). In essence, this multisector, multistakeholder structure guided by a shared vision creates space where ecosystem members can explore what is possible, making it ideal for open innovation and change. An innovation trajectory can be expected of all ecosystem members because their value-added comes from their ability to innovate on their own.

The business ecosystem structure allows members to focus on managing their own niches due to the stable, well-defined relationships with other members. This frees up human energy, time, financial resources, and so forth that would be used to manage the relationship complexities in more uncoordinated systems to be invested directly in vision-driven innovation and market creation. Of course, this assumes that there is widespread trust underlying the relationships within the business ecosystem (Putnam, 2000; Tymon & Stumpf, 2003), and it assumes that members of the ecosystem will share in its stewardship. If trust and shared stewardship are not present, then negative relationship complexities can develop within the ecosystem that threaten its long-term survival since all parts of the system must remain healthy for the ecosystem to thrive (Iansiti & Levien, 2004a; Moore, 2006).

Business ecosystems can be quite heterogeneous. They may include competitors, other business organizations, and organizations from the citizen sector (nongovernmental organizations [NGOs], trade associations, etc.; Drayton & Bundich, 2010; Waddock & McIntosh, 2011). These citizen sector partners can help the profit-oriented ecosystem members to creatively and profitably address pressing ecological and social concerns. Partnerships with citizen sector stakeholders open up avenues for the business ecosystem members to explore new market space, to lower costs, and to develop innovative opportunities along with addressing critical social and ecological needs, which vary according to the type of market in which the business ecosystem is competing (Drayton & Budinich, 2010).

The Coevolving Markets of the World

As mentioned earlier, the global business environment today is composed of coevolving developed, developing, and undeveloped markets embedded in the natural world (Hart, 2005). Significant wealth and income inequities exist both within and between these markets. Although these markets are often characterized by their geographical location, they are more accurately portrayed in terms of their specific demographics and varying socioeconomic factors. For example, while China is generally considered a developing market and the United States is generally considered a developed market, both in fact include all three market segments within their borders. The coevolving undeveloped, developing, and developed markets of the world offer major opportunities and challenges for organizations with an SSM portfolio of businesses if they are willing to engage in dialogue-based generative (creative) learning processes that allow them to think and act differently regarding these unique markets.

Developed Markets

The developed markets are the world’s richest. These markets, which include the United States, Canada, the European Union, Japan, and others, are the world’s largest producers and consumers of goods and services, and they have controlled the global marketplace for most of its history. The United States and European Union alone control 63% of the global wealth (Durden, 2010). In addition to controlling a large percentage of the wealth, the developed markets collectively have a very large human footprint. For example, the United States has less than 5% of the global population but uses about a quarter of the world’s fossil fuels (Worldwatch Institute, 2011).

Corporate footprints in many of the resource intensive industries such as chemicals are also extremely large because of the massive amounts of matter and energy that flows through them (their entropic flow). These industries are typically based on older technologies that have limited environmental performance improvement potential (Hart, 2005). Thus, a primary need in the developed markets is to reduce corporate and consumer footprints while providing consumer value through sustainable, innovative products.

Within the developed markets of the world, growth segments have emerged in response to the rising public concern about social and ecological issues and their resulting impacts. For example, 84% of American adults can be considered some shade of green, mirroring their counterparts around the world. Both the food and nonfood organic markets have grown rapidly over the past few years, and sustainable product introductions are growing in most industries today (Ottman, 2011).

Undeveloped Markets

The world’s undeveloped markets include the 4.6 billion people on the planet living on US$4 or less per day. These markets are primarily in rural China, India, Africa, and Latin America, and they provide unique opportunities and challenges for businesses to make positive contributions to a sustainable world. These markets are typically village-based with people living at subsistence levels. People tend to live off the land with little involvement in the money economy, so these markets are often characterized by poverty, isolation, disease, exponential population growth, and environmental degradation. As such, these markets have been labeled the base of the pyramid (BoP).

BoP markets are heterogeneous, being segmented by different characteristics across regions, countries, and industry sectors, making them fragmented and difficult to obtain appropriate scale when entering. These markets are typically characterized by poor socioeconomic conditions and reliance on informal markets, and competing in them requires formulating strategies that are quite different from developed market strategies (Hart, 2005; London & Hart, 2011; Prahalad, 2006; Prahalad & Hart, 2002; World Bank, 2008).

However, firms that successfully formulate such strategies have the chance to compete in markets worth approximately 1.3 trillion U.S. dollars. These markets offer numerous win-win opportunities for businesses to earn a profit while serving the needs of the poor in their own communities. For example, both the low-income health care market and the low-income housing market offer significant opportunities for business operating at the BoP (Dean & McMullen, 2005; Drayton & Budinich, 2010; Hart, 2005; London & Hart, 2011; Porter, 1995; Prahalad, 2006; Prahalad & Hart, 2002).

Developing Markets

A lifestyle and culture that became common in Europe, North America, Japan, and a few other pockets of the world in the 20th century is going global in the 21st century. A large consumer class has emerged in the developing markets where industrialization has brought increasing consumer demand for goods and services. Nearly half of the 1.7 billion people in today’s consumer class live in the developing markets of India, China, Indonesia, and so forth. Developing markets can be characterized as a mixture of the rural poor, the urban slum dwellers, and the refugees, with the growing, increasingly affluent consumer class. This results in myriad social and environmental issues. As Hart (2005) notes, developing markets represent the collision of the money economy with nature’s economy, where meeting future consumer demands without exceeding the carrying capacity of the planet is the major challenge. Because of this, developing markets can be viewed as hybrid developed–undeveloped markets (and are treated as such in the discussion below).

SSM Competitive Strategies

SSM competitive strategies expand the scope of Porter’s (1985) generic competitive strategies to ones that create shared value for both the firm and the greater society and ecosystem (Porter & Kramer, 2011). Shared value is created through the dynamic capabilities that make triple-bottom-line performance possible. SSM strategies are what organizations that “stand for sustainability” do (Stead & Stead, 2000). It is through these strategies that the philosophies and ethics of SSM become tangible, because SSM strategies are designed as vehicles for operationally integrating the ecosystem and the greater society into strategic decision-making processes. SSM strategies vary in content depending on their scope, markets, customer needs, and purpose. SSM strategies exist in a hierarchy according to strategy level and are typically characterized as multisector strategies requiring broad collaboration with stakeholders that create shared value within the business ecosystem at each level in the strategy hierarchy. Thus, SSM strategies provide valuable avenues for bringing the ecological, social, and economic dimensions of an organization’s strategic vision of a sustainable world to life. The choice of the content of the SSM competitive strategy depends on the commitment to sustainability at the top management level, the specific characteristics of markets that reflect unique consumer needs, and the firm’s position within its business ecosystem.

SSM Strategies for Developed/Developing Markets

SSM competitive strategies for the consumer-driven developed and developing markets share the goal of reducing the entropic flow through the business ecosystem while creating sustainable solutions for consumer needs and economic value for the firm. As discussed above, the human and corporate footprints are extremely large in developed and developing markets, thereby stressing the carrying capacity of the planet. These strategies are designed to provide the firm with cost and differentiation competitive advantages (Porter, 1985) through improved ecological and social value added. Eco-efficiency strategies and socio-efficiency strategies are the cornerstones of these SSM competitive strategies.

Eco-Efficiency Strategies

Eco-efficiency, often referred to as pollution prevention (pioneered by 3M), involves developing cost-competitive advantages by eliminating or reducing resource depletion, materials use, energy consumption, emissions, and effluents. Eco-efficiency is an effective adaptive learning process that seeks improved sustainability performance in present operations. Eco-efficiency techniques include things such as redesigning pollution and waste control systems, redesigning production processes to be more environmentally sensitive, using recycled materials from production processes and/or outside sources, using renewable energy sources, increasing the durability and service intensity of goods and services, and so forth. Thus, eco-efficiency requires core competencies in operations and logistics. Environmental value added is created because eco-efficiency techniques provide the capabilities for firms to enhance both their economic and environmental performance. Innovation is the strategic driver in improving eco-efficiency, and there is now significant research that demonstrates a direct relationship between eco-efficiency, competitiveness, and financial performance (Esty & Winston, 2008; Laszlo, 2008; Stanwick & Stanwick, 2005).

Socio-Efficiency Strategies

Socio-efficiency strategies enhance both social and human capital while contributing to the organization’s economic sustainability (Dyllick & Hockerts, 2002; Figge & Hahn, 2004, 2005, 2006; Hockerts, 1999). Socio-efficiency involves creating stakeholder value by connecting the investments in social and human capital to the firm’s core business strategy (Holliday, Schmidheiny, & Watts, 2002). It entails viewing human capital as an important instrumental asset in the value creation process.

One way to improve socio-efficiency in organizations is through innovative human resource practices that develop human capital by focusing on the long-term capabilities of the workforce. This involves designing jobs to be economically, intellectually, and socially fulfilling, thereby enhancing both the personal development of employees and the economic sustainability of the firm. Such practices lead to higher levels of performance in organizations, increasing social value added at each stage of the value chain.

Socio-efficiency also requires viewing the social capital of the firm, the business ecosystem, and the community as instrumental in value creation. Organizational culture, reputation, and stakeholder relationships are intangible resources that can afford the firm competitive advantages. As previously discussed, the social capital built between ecosystem members (ecosystemic competences) may afford business ecosystems unique advantages. Being a good corporate citizen in the communities in which members of the business ecosystem operate helps build social and reputational capital both internally and externally, contributing positively to the profit potential of the firm.

Eco-efficient capabilities are currently more highly developed and more prominent in firms than are socio-efficiency capabilities. The primary reason for this discrepancy is that the economic value created by eco-efficiency is for the most part more easily and precisely measured, and thus it is more tangible than the value created by socio-efficiency, which consists largely of intangible resources and capabilities (Esty & Winston, 2008).

Product Stewardship Strategies

Strategies designed to provide a firm with competitive advantages by allowing it to ecologically and socially differentiate its products and services from its competitors in the marketplace are referred to as product stewardship strategies (Hart, 1995, 1997). Product stewardship strategies focus on improving an organization’s ecological and social footprints by offering products and services that are safer, more affordable, less materials and energy intense, more recyclable, more biodegradable, more durable, less wasteful, and so forth. Product stewardship strategies require capabilities for gathering and assessing the environmental and social impacts of a firm’s products and services across the open-system value chain; thus, these strategies are based on core competencies such as innovation, product development, sales, and marketing.

Hart (1995) described product stewardship as a logical strategic step for firms that have achieved eco-efficiency. Essentially, he said that once firms establish production processes that reduce costs by better managing and protecting the earth’s rare, nonsubstitutable, nonduplicatable natural resources, they are in a position to differentiate their products and services in the marketplace based on their sustainability features. Thus, he said that product stewardship strategies provide firms with both cost-leadership and differentiation competitive advantages that can be sustained over a long period of time.

Product stewardship strategies can lead to improvements in the firm’s reputation, perceived legitimacy, and brand equity, all of which are intangible resources that are difficult to imitate by competitors. Also, product stewardship efforts are more effective if all of the firm’s stakeholders are involved in the firm’s product/service development processes from the beginning. This allows the firm to build a wide variety of stakeholder perspectives into its products/services.

The effectiveness of product stewardship strategies can be enhanced by participation in eco-labeling and social labeling programs. An eco-label or social label designates that the firm has exercised ecological and/or social stewardship over its products and services across its value chain. An example of an eco-label is the Forest Stewardship Council’s wood certification program, and an example of a social label is Fairtrade International. Participating in such programs allows firms to more easily inform consumers about the sustainability features of their products and services, and it provides outside verification that products and services meet certain sustainability standards. Research indicates that approximately 28% of consumers look to certification labels to determine the credibility of product claims (Ottman, 2011). Starbucks, which leads a business ecosystem based on a shared vision of sustainability, has successfully used both eco-labels and social labels to effectively leverage its brand by social and ecological differentiation. Starbuck’s customers pay a premium price for a cup of fair-trade coffee, demonstrating the relationship between socio-efficiency, social labeling, and competitive advantage.

Climate Change Strategies

Climate change is a central ecological issue that is affecting the economy, the society, and the planet and will continue to do so for generations to come (Barrett, 2012). New business models are needed that can decouple carbon emissions from economic growth, especially in the developing and developed markets of the world where carbon emissions are the highest. Climate change and the resultant increase in natural disasters have put carbon emissions much higher on the agendas of organizational stakeholders. They are demanding indicators of firms’ carbon emissions, and the result has been a significant increase of carbon disclosure in corporate reporting. The most popular means for a firm to disclose its carbon footprint is through its sustainability report, its SEC filings in the United States, or the Carbon Disclosure Project, a multisector partnership formed to assist the international community in carbon emissions reduction (Pinkse & Kolk, 2009). Regardless of whether or not they believe in the science, executives have begun to recognize that climate change is a business reality. McKinsey & Company has long warned that a low-carbon global economy is a pending reality, and business organizations must get ready for it, especially those in transportation, energy, and other heavy industries that are the heart of today’s carbon intensive economy (Enkvist, Nauclér, & Oppenheim, 2008).

Emerging Business Models

A primary sustainability challenge in today’s rapidly growing developed and developing markets is to provide a stream of innovative products and services that are designed, produced, marketed, delivered, consumed, and disposed of in sustainable ways that significantly reduce the firm’s corporate and consumer footprints. Eco-efficiency strategies along with product stewardship strategies, discussed above, are effective in reducing costs and providing a means for ecological and social differentiation that enables firms to capitalize on the green consumer pull in many segments of developed markets.

Achieving sustainability will, however, require that organizations in developed and developing markets create and implement innovative SSM strategies that deliver long-term consumer value in creative ways that protect and enhance the planet’s ecological and social systems and encourage sustainable consumption patterns that are in balance with the carrying capacity of the Earth. For this reason, more business models are being developed that go beyond the shorter run gains achieved by traditional eco-efficiency and socio-efficiency strategies (Stead & Stead, 2009).

One such model suggests that firms can create value for consumers while minimizing environmental and social impacts by emphasizing bundling services, selling end-use value, and ensuring cradle-to-cradle product stewardship. Hawken, Lovins, and Lovins (1999) say, “In the . . . model, value is delivered [to consumers] as a flow of services—providing illumination, for example, rather than selling light bulbs” (p. 146). Customers get the same level of performance from products, but with reduced environmental impacts. This is the model that the late Ray Anderson applied to Interface Carpet’s revolutionary carpet leasing program.

New eco-effectiveness models like this are important because merely redesigning existing products based on eco-efficiency will eventually become a basic business requirement that no longer affords firms competitive advantages. Given this, Ottman (2011) says that “eco or functional innovation” is the next stage of the product innovation process. Ottman (2011) says that “develop[ing] new product concepts that perform the same function as existing products but with significantly less impacts starts with questioning fundamental assumptions” (p. 90).

Sustainable Marketing Strategies

Putting an organization’s product stewardship commitment at the center of its marketing efforts is an essential element of SSM (Kirchgeorg & Winn, 2006). According to Ottman (2011), the idea of product stewardship has led to the emergence of a whole new marketing paradigm that views people not “as mere customers with insatiable appetites for material goods, but as human beings looking to lead full, healthy lives” (p. 45).

This shifting perspective of who and what customers are demonstrates why stakeholder engagement processes with customers are important vehicles for developing consumer learning. Consumer learning allows strategic managers to attend to the consumption end of the value chain by engaging consumers in dialogue about sustainable consumption practices and so forth. Consumers have the capacity and willingness to learn, and it is the role of sustainable marketing to help them learn how to use and dispose of products and packaging responsibly. If organizations provide consumers with useful information, such as life cycle and footprint data, they can facilitate more sustainable consumption. That is why organizations are increasingly educating their customers about things such as how to safely use and dispose of their products (Haanaes et al., 2011).

SSM Strategies for Undeveloped/Developing Markets

As discussed above, the BoP is fragmented market of 4.6 billion poverty stricken people who exist everywhere, especially within the world’s highly populated undeveloped and developing markets. BoP market segments are not fully integrated into the formal market economy, and entering them is difficult because of the inability to scale operations. Within the informal economy there are few channels of distribution, few formal regulations, and few means of financing. Although living at the BoP is certainly very challenging because of the high susceptibility to isolation, disease, illiteracy, crime, degradation, and so forth, these markets offer numerous win-win strategic opportunities for creating long-term economic benefits by helping improve the lives of the poor using effective BoP strategies (Hart, 2005; London & Hart, 2011; Prahalad, 2006; Prahalad & Hart, 2002).

The Coevolution of BoP Strategies

BoP strategies specifically target the low-income demographic to generate revenues by “selling goods to and sourcing products from the BoP” (London & Hart, 2011, p. 9). Two generic strategies have coevolved in BoP market space: one focusing on serving the needs of BoP consumers and the other focuses on serving the needs of BoP producers. Given the coevolutionary nature of BoP market space, the firm may employ either or both strategies to compete in the BoP market.

Typically, organizations enter BoP markets with strategies that focus on the poor as consumers for the goods and services of their corporations (Boyle & Boguslaw, 2007; Kirchgeorg & Winn, 2006). These strategies are generally designed to provide low-cost products and services that address the basic needs of the poor, such as education, health care, sanitation, and clean water (Boyle & Boguslaw, 2007; Hart & Christensen, 2002). Often, these strategies take products created for developed markets, make some adjustments in them for local conditions, and then distribute them in the BoP markets. Such strategies can prove risky, because the products are often not well designed to serve the needs of those at the base of the pyramid. Rather, they merely extract wealth from them in the form of consumer spending (Immelt, Govindarajan, & Trimble, 2009). Such fortune-finding strategies are often viewed as a new form of corporate imperialism (Hart, 2008).

The second generic type of BoP strategy shifts to fortune-creating strategies, which focus on firms cocreating economic opportunities with BoP partners (London & Hart, 2011). These strategies view the poor as coproducers within an inclusive business ecosystem of value creating activities. Fortune-creating BoP strategies have the potential to build economic capacity and generate jobs and income by creating economic opportunities within the local BoP community.

Both types of generic BoP strategies span the informal and formal economies. The challenge is to link the productive assets of both sectors together to cocreate shared stakeholder value. Therefore, successful BoP strategies attempt to combine both the resources and technology found in the formal economy with the indigenous knowledge found in the local community (London & Hart, 2011). BoP strategies involve collaborating and partnering with stakeholders spanning different sectors. Thus, a successful BoP strategy requires building an inclusive business ecosystem by partnering with social entrepreneurs, NGOs, citizen service organizations, governmental entities, competitors, and development agencies (Jenkins & Ishikawa, 2010). The inclusive ecosystem is structured to develop wealth asset builders among the poor themselves. By enabling them to build “sustainable livelihood businesses” (Kirchgeorg & Winn 2006, p. 172) via an inclusive, collaborative ecosystem, the poor become coproducers in the value chain. This helps reduce production costs, distribution costs, and the overall footprint of the business ecosystem while creating jobs, income, and local micro-enterprises.

Ultimately, successful BoP ventures must be able to recover their operating costs and become economically self-sustaining. To do this, they must reach economies of scale in the fragmented BoP market, which is a difficult task to achieve. Hammond (2011) suggests successful scaling strategies for the BoP market should be both global (top-down) and local (bottom-up), where capital and technology can be sourced while paying attention to local challenges and needs. He also notes the importance of building an inclusive ecosystem with multisector stakeholders that provide critical knowledge and multiple sources of solutions.

Such partnerships and alliances with local BoP stakeholders are designed to cocreate “entirely new businesses that generate mutual value” (Hart, 2008, p. xi). Partnering with local social entrepreneurs can assist businesses in unlocking the potential in these BoP markets by providing linkages with local stakeholders that facilitate understanding of local cost structures, local consumer behavior, and so forth (Drayton & Budinich, 2010). These partnerships and alliances serve as mechanisms for deep dialogue with BoP stakeholders, potentially leading to the development of capabilities and strategies that truly serve the needs of the poor. Hart (2008) has developed a BoP Protocol for such inclusive ecosystems, which he says is a “co-venturing process that . . . creatively marr[ies] companies’ and communities’ resources, capabilities, and energies [in order to] bring life to new business ideas and models that exceed what either partner could imagine or create on their own” (p. xi). Successfully developing these partnerships and alliances provides the social capital that is necessary for these inclusive ecosystems to socially embed their BoP strategies into the chosen undeveloped markets (Hart, 2005; Kirchgeorg & Winn, 2006; Sánchez, Ricart, & Rodríguez, 2005).

Corporate perceptions of the BoP market and the resulting strategic initiatives have coevolved and matured since Prahalad and Hart (2002) first introduced the idea of the BoP market space. Originally, the BoP was viewed simply as a huge market of economically restricted consumers ripe for exploitation, but today it is viewed more as a complex market of economic partners who cocreate value across the ecosystem along with helping their communities to meet their basic needs (Gradl & Jenkins, 2011; Jenkins & Ishikawa, 2010; Kirchgeorg & Winn, 2006; London & Hart, 2011). Thus, successful BoP strategies convert poverty into an opportunity for all ecosystem members.

BoP Strategy Implementation

As mentioned above, the critical success factor in implementing a BoP strategy is the ability to construct an inclusive business ecosystem that achieves a scale of operations that covers operational costs. However, there are many barriers to accomplishing this. BoP markets are constrained by systemic challenges ranging from lack of infrastructure to low levels of worker knowledge and skills to limited access to finance among low-income consumers and producers (Jenkins & Ishikawa, 2010). Creating an inclusive ecosystem to overcome these constraints requires entrepreneurial learning regarding navigating the uncharted waters of the BoP market. Thus, the stakeholder engagement dialogue with BoP ecosystem members provides vital input in the implementation process. This stakeholder input is critical for deciding how the inclusive business ecosystem will be framed, funded, supported, and structured (i.e., separate SBUs, internal venture funds, cross-functional teams, spin-offs, etc.).

General Electric’s (GE) reverse innovation strategy, a preemptive strategy, has been successful in engaging BoP stakeholders in cocreating innovative products to address the needs of the BoP market. It is called a reverse innovation strategy because innovations are developed at the base of the pyramid and flow to the top of the pyramid rather than the traditional top-to-base flow. Using this strategy, GE cocreated 100 low-cost health care innovations with its BoP partners with the intention to eventually sell them in developed markets. Thus, GE’s reverse innovation strategy is a BoP strategy that encompasses the whole pyramid, providing sustainable solutions for both the undeveloped and developed markets served by GE’s portfolio of businesses (Immelt et al., 2009). Figure 2 demonstrates this strategic thinking.

Figure 2.

Whole pyramid strategic thinking.

SSM Strategies Depend on Competitive Position

As discussed above, firms serve in one of two competitive positions in a business ecosystem: the ecosystem leader (the keystone firm) or a niche player. Thus, the nature of the SSM strategies formulated and implemented by ecosystem member firms depends on which of these positions they occupy.

Ecosystem Leadership Strategies

Business ecosystem analysis focuses on the critical interactions between the leader’s capabilities and those of its network of business ecosystem partners. The SSM strategies formulated and implemented by ecosystem members will depend heavily on their relative ecosystem position. Three ecosystem positions are identified in the literature: the ecosystem leader, the niche player, and the dominator (Iansiti & Levien, 2004b). Of these, only the ecosystem leader position and niche player position have significant value for creating the type of inclusive, collaborative, trusting relationships required to build effective sustainability-based business ecosystems. On the contrary, the dominator position would likely impede building such relationships because ecosystem dominators typically seek maximum short-run benefits for themselves instead of long-term shared value for all ecosystem members. Thus, dominators negatively affect the overall health and eventual survival of business ecosystems because they extract more value than they contribute (Iansiti & Levien, 2004b). For the remainder of this discussion, we will focus on healthy business ecosystems in which ecosystem leaders and niche players work together to cocreate their common futures (Iansiti & Levien, 2004b; Moore, 2006).

An ecosystem leader is responsible for shaping the vision and structuring the ecosystem based on that vision. An ecosystem leader provides platforms to its niche ecosystem members that assist them in finding sustainable solutions to their problems. The ecosystem leader’s leverage over niche players is determined by the nature of the relationships represented by the degree of coupling with the niche players (Iansiti & Levien, 2004a, 2004b).

Given the complexity and coevolutionary nature of innovating across a multitude of complementary contributors within a business ecosystem, effective ecosystem leadership is essential. Ecosystem leaders are responsible for shaping the vision, core values, boundaries, platforms, and relationships of the business ecosystem, and they are responsible for the ecosystem’s overall health. Healthy business ecosystems have leader firms that can translate their shared visions into platforms that provide ecosystem members with the operating leverage that comes with the ecosystem’s collective actions and community-based learning structures (Iansiti & Levien, 2004b).

Ecosystem leaders essentially serve as a hub in a network of ecosystem member interactions. In this role, leader firms serve to enhance the robustness, the efficiency, and the stability of the ecosystem, opening space for value-sharing opportunities among the niche players and providing sustained competitive advantages for their own firms. Also, ecosystem leaders establish the nature and coupling strength of the relationships in the ecosystem. Coupling strength determines the switching costs of moving between ecosystems for the niche players, and it is an important measure of ecosystem stability (Iansiti & Levien, 2004b). Thus, it is up to the ecosystem leader to find a healthy balance of coupling strength within the business ecosystem.

Ecosystem Niche Player Strategies

Niche players are responsible for formulating specific strategies based on innovation, specialization, and differentiation designed to address customer needs that are unique in their particular markets. Thus, niche players operating in developed markets will likely focus their strategies more on reducing the entropic flow, and niche players operating in undeveloped and developing markets will likely focus their strategies on serving basic human needs within ecological limits.

Niche players often use focused-differentiation strategies based on innovative, disruptive change aimed at carefully segmented target markets. Thus, sustainable innovation with respect to products, services, business models, and markets is a basic business requirement for ecosystem membership. As discussed above, the entrepreneurial niche players are self-contained modules. This modularity defines the contributions of each ecosystem member and is developed somewhat independently. By selecting a specialization that is truly unique and investing in unique capabilities, entrepreneurial niche players can create competitive advantages. Risks, however, arise when a niche firm’s tight coupling with the ecosystem leader results in a lack of mobility between ecosystems and the vulnerability to technological change (Iansiti & Levien, 2004b).

Healthy business ecosystems will often support a large number of niche players for a sustained period of time. For example, software business ecosystems have historically supported numerous niche players that have created a variety of product innovations (Iansiti & Levien, 2004b). Intuit is one such niche player. It has specialized in integrating technology components provided by Microsoft, the ecosystem leader. For more than 25 years, Intuit has coevolved within its ecosystem by developing innovative business and financial management products for small and mid-sized businesses, consumers, and accounting professionals. In 2007, Intuit added sustainability to its vision, creating Intuit Green in order to formalize the sustainability efforts in its core business operations (Intuit Corporation, 2011). Intuit’s movement to a sustainability-focused differentiation strategy demonstrates the coevolutionary nature of a successful niche strategy, where competitive strategies can create shared value within the ecosystem by taking advantage of the opportunities provided by business ecosystem platforms for innovation, specialization, and sustainability.

The SSM Corporate Portfolio

Taking a coevolutionary view of the world’s developed, developing, and undeveloped markets within a sustainability-based business ecosystem structure is an effective approach for creating an SSM corporate portfolio that extends an organization’s planning horizons to include future generations. Within this context, the SSM corporate portfolio takes a whole pyramid approach where corporate strategic decisions (the decisions of scope) are made within the context of addressing the unique needs to create triple-bottom-line value in all three types of markets in the global economic pyramid—developed, developing, and undeveloped (Jenkins & Ishikawa, 2010; see Figure 2). As discussed above, the specific content of these strategies varies according to top management commitment, the unique needs of the market segment, and the firm’s competitive position within its business ecosystem.

The real value of focusing an organization’s SSM portfolio on the whole pyramid lies in the fact that such a portfolio will by definition reflect a deep organizational commitment to making a positive contribution to a sustainable world. In such a portfolio, a firm’s vision, mission, goals, strategies, capabilities, structures, and processes will all in some way embody a commitment to serving the needs of the greater society and ecosystem for generations to come. Thus, establishing a whole pyramid perspective can provide an organization with a sense of meaning and higher purpose that eclipses the firm’s economic success. The firm is not just earning a profit; it is doing so in ways that benefit fellow humans and nature now and in the future. Therefore, infusing a commitment to the whole pyramid in an organization’s SSM portfolio provides a deep foundation for the organization’s continuous transformation to a more sustainable entity.

The purpose of the SSM corporate portfolio is to build capabilities that enhance the firm’s ability to effectively manage its configuration of multimarket strategies so that triple-bottom-line value is created across the whole pyramid. An SSM corporate portfolio provides a framework that allows strategic managers to continually examine and, if necessary, change organizational values, assumptions, and strategies in light of eco- and socio-effectiveness, making positive contributions to social and natural capital. Doing this requires firms to move beyond strategies for eco- and socio-efficiency that allow them to readily calculate the direct economic, social, and ecological costs and benefits of their strategies. Shifting to socio- and eco-effectiveness strategies requires taking a long-term intergenerational perspective that can blur these direct links between actions and outcomes. Thus, a whole pyramid SSM portfolio requires developing corporate-level capabilities that allow the firm to sustain itself by making positive long-term contributions to the planet and its people by becoming an agent of social change.

Taking a whole pyramid approach at the corporate level requires balancing cash flow among the firm’s various lines of SBUs. This may mean using the cash flow from economically successful business lines to fund businesses created to address the opportunities arising from the expanded social and ecological scope of the portfolio. Thus, as Figure 2 demonstrates, taking a whole pyramid perspective may lead firms to use profits from core businesses in developed markets to pursue new market opportunities in developing and undeveloped markets (Hart, 2005). Research in the telecommunications industry conducted by the Harvard Kennedy School found that by conceptualizing the corporate portfolio as a whole pyramid, companies were able to balance their portfolios over time to create positive triple-bottom-line performance. These firms entered developed markets at the top of the pyramid to establish revenue streams and recoup infrastructure investments. This put them in a financial position to provide products and distribution channels for lower-income developing and undeveloped markets with lower average returns per customer. Thus, the whole pyramid portfolio approach increased these firms’ capabilities to meet consumer needs in developed, developing, and undeveloped markets (Jenkins & Ishikawa, 2010).

To fulfill the purpose of the SSM portfolio, strategic managers will need to establish inclusive business ecosystems of multisector stakeholder partners that expand the scope of the firm’s operations. The decisions in terms of who is included in the value chain (suppliers, distributors, franchisees, retailers, and customers) determine the degree of inclusiveness of the business ecosystem. Inclusive business ecosystems are structured to create value throughout the whole pyramid. To create a whole pyramid portfolio, the scope of operations must expand to include the poor as a segment within a much broader overall portfolio, where both local and global partnerships create triple-bottom-line performance (Gradl & Jenkins, 2011). This entails implementing a top-down initiative in which the ecosystem leader creates a platform that supports economies of scope and helps develop ecosystem niche strategies that capture the bottom-up, entrepreneurial learning from local partnerships that enable the ecosystem to develop sustainable solutions to meet consumer needs (Hammond, 2011).

Multisector stakeholder ecosystems are excellent vehicles for establishing effective dialogue that provides for all voices to be heard and for collective stakeholder wisdom to be tapped. These networks provide a neutral space for safe discussion and partnering to solve global issues ranging from economic opportunity to climate change to poverty. Thus, structuring the ecosystem with a high degree of stakeholder inclusiveness allows strategic managers to integrate the complex issues of how to care for future generations, how to care for their organizations, and how to care for the Earth.

In 2009, Coca-Cola structured an inclusive business ecosystem based on its newly developed sustainability platform. The vision underlying this platform is “to create a positive difference in the world” (Coca-Cola Company, 2011, p. 4). The platform establishes specific goals in key areas such as sustainable packaging, healthy living, water stewardship, and climate protection. Progress is measured and reported based on the firm’s triple-bottom-line performance across the whole value chain. Coca-Cola’s sustainability platform underlies the design of its whole pyramid portfolio of strategies targeted toward developed, undeveloped, and developing markets. Being the world’s most recognized brand and largest nonalcoholic beverage company, with a portfolio of more than 300 beverage brands and more than 3,300 different products, Coca-Cola has the resources to move toward a sustainability balanced portfolio. The firm is leveraging its portfolio so cash generated from businesses in developed and developing markets can be invested in its strategies targeted toward undeveloped markets (Coca-Cola Company, 2011).

For example, Coke has established a socio-effectiveness strategy targeting poverty reduction in Zambia and El Salvador. Both countries are major sugar producers and sugar is Coke’s primary agricultural ingredient. Thus, Zambia and El Salvador are integral players in Coke’s supply chain. Both countries are undeveloped markets with high poverty levels. Coke has partnered with its largest bottler, SABMiller, and the highly respected NGO, Oxfam America, to engage in dialogue with poor communities in Zambia and El Salvador to develop strategies for poverty reduction. This process encourages full visibility and inclusion of Coke’s value chain, from sugar growers to sugar producers to bottlers to local customers (Coca-Cola Company, 2011).

Ecosystem members have engaged the Salvadoran government, the Salvadoran Sugar Association, and other stakeholders on ending child labor in sugarcane harvesting. Although the ecosystem value chains support thousands of jobs, they are characterized by seasonal availability, low wages, and no benefits. Thus, Coca-Cola hires third party audit firms and NGOs to assess partner workplaces to assure that they uphold the company’s workplace and environmental standards. The distribution and sale of Coco-Cola products support vital self-employment opportunities, providing income these workers urgently need. Using strategies focused on building human, economic, and social capital, the Coca-Cola business ecosystem provides technical assistance and credit programs to build triple bottom-line capacity at strategic points in the value chain (Coca-Cola Company, 2011).

A Model of SSM in the Global Marketplace

In this article, we discuss how the field of strategic management progressed from business policy to strategic planning to strategic management to sustainable strategic management as it coevolved with the increasingly complex, rapidly changing, sustainability challenged, global business environment. Figure 1 depicts this spiraling, coevolutionary process. Business ecosystems have emerged as ideal structures for corporations pursuing SSM in today’s coevolving developed, developing, and undeveloped markets, where business ecosystem leaders and niche players in these sustainability-driven business ecosystems pursue differing competitive strategies. In the energy- and resource-intensive developed and developing markets, SSM competitive strategies focus on reducing the huge corporate footprints, whereas in the undeveloped and developing markets SSM competitive strategies are designed to serve basic human needs within ecological limits. The SSM corporate portfolio takes a whole pyramid approach in which corporate strategic decisions are made in the context of the sustainability needs of all three types of markets in the global economic pyramid, as Figure 2 depicts.

Figure 3 is a model of the SSM portfolio of competitive SSM strategies for business ecosystems engaging in whole pyramid thinking. The model depicts that regardless of the market, leaders of whole pyramid business ecosystems are responsible for creating and shepherding the central vision that guides them and their niche players as they interact with one another in their coevolutionary dance toward sustainability. The model also depicts that whole pyramid business ecosystem leaders should let the sustainability needs of the various markets guide the goals and content of the ecosystem’s SSM competitive strategies, and it depicts niche players in whole pyramid business ecosystems as interacting with one another to establish a sustainability-driven innovation trajectory designed to facilitate the implementation of specific SSM strategies in the appropriate markets. These innovations may be both technically based and human process based as necessary for reducing entropic flow and improving human quality of life.

Figure 3.

Whole pyramid corporate SSM portfolio.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Author Biographies

Jean Garner Stead is a professor of strategic management at East Tennessee State University. She earned her BS and MA from Auburn University, her MBA from Western Illinois University, and her PhD in Business Administration from Louisiana State University in Baton Rouge. Jean has written extensively with her husband, Ed, in business ethics and organizations and the natural environment. Together they have published five editions of two books: Management for a Small Planet (1992, 1996, 2009) is now in its 3rd edition, and Sustainable Strategic Management (2004, 2013) will soon be published in its 2nd edition. Jean is a founding member and past preconference chair of the Organizations and the Natural Environment Division (ONE) of the Academy of Management.

W. Edward Stead is a professor of management at East Tennessee State University. He earned his BS and MBA from Auburn University, and he earned his PhD in Management from Louisiana State University in Baton Rouge. Ed has written extensively with his wife, Jean, in business ethics and organizations and the natural environment. Together they have published five editions of two books: Management for a Small Planet (1992, 1996, 2009) is now in its 3rd edition, and Sustainable Strategic Management (2004, 2013) will soon be published in its 2nd edition. Ed is a founding member and past chair of the Organizations and the Natural Environment Division (ONE) of the Academy of Management.

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