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J Bus Ethics (2013) 112:241255 DOI 10.1007/s10551-012-1245-2
Instrumental and Integrative Logics in Business Sustainability
Jijun Gao Pratima Bansal
Received: 28 October 2011 / Accepted: 5 February 2012 / Published online: 15 February 2012 Springer Science+Business Media B.V. 2012
Abstract Prior research on sustainability in business often assumes that decisions on social and environmental investments are made for instrumental reasons, which points to causal relationships between corporate nancial performance and corporate social and environmental commitment. In other words, social or environmental commitment should predict higher nancial performance. The theoretical premise of sustainability, however, is based on a systems perspective, which implies a tighter integration between corporate nancial performance and corporate commitment to social and environmental issues. In this paper, we describe the important theoretical differences between an instrumental and integrative logic in managing business sustainability. We test the presence of each logic using data from 738 rms over 13 years and nd evidence of integrative logic applied in business.
Keywords Business sustainability
Corporate social commitment
Corporate environmental commitment
Instrumental approach Integrative approach
Simultaneous decision-making
Introduction
A wealth of knowledge on business sustainability has accumulated. Much of the research on organizational responses to social and environmental issues, however, has been framed around an instrumental logic, i.e., how rms can benet from addressing societal concerns (Ferraro et al. 2005; Margolis and Walsh 2003). Under this logic, corporate social and environmental investments are framed as response to stakeholder pressures that presumably carry signicant nancial implications (Agle et al. 1999; Chiu and Sharfman 2011).
Firms following an instrumental logic typically discriminate social and environmental issues from other traditional strategic issues such as product design and new investment (McWilliams and Siegel 2001). They tend to manage various social and environmental issues discretely and sequentially, as if such decisions are emerging distractions. Such a tendency articially polarizes business and society, as if the two are at odds and need to be reconciled. This approach reinforces the tension between business demands and social expectations, which can create a self-fullling paradox (Lewis 2000; Smith and Lewis 2011), further polarizing business and society. Managers seek immediate nancial gains from their social and environmental investments, rather than embracing the tension among the economic, social and environmental elements of the system and creatively integrating solutions into rm...