article 1

Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment

* Correspondence to: Martina K. Linnenluecke, UQ Business School, The University of Queensland, Brisbane, Queensland 4072, Australia.E-mail: [email protected]

Business Strategy and the EnvironmentBus. Strat. Env. 18, 432–452 (2009)Published online 6 December 2007 in Wiley InterScience(www.interscience.wiley.com) DOI: 10.1002/bse.609

Subcultures and Sustainability Practices: the Impact on Understanding Corporate Sustainability

Martina K. Linnenluecke,* Sally V. Russell and Andrew Griffi thsUQ Business School, The University of Queensland, Brisbane, Queensland, Australia

ABSTRACTIn this paper we present fi ndings of how employees from a single organization understand corporate sustainability. Responses from 255 survey participants indicate (1) that dif-ferences exist in how employees understand corporate sustainability and (2) that these differences can be partially explained by the presence of organizational subcultures and by differences in employee awareness of the organization’s sustainability practices. In particular, fi ndings reveal that employees from a subculture with a stronger emphasis on hierarchical and bureaucratic values emphasize an economic understanding of corporate sustainability. Implications for research and practice are discussed. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.

Received 19 June 2007; revised 23 October 2007; accepted 24 October 2007

Keywords: corporate sustainability; subcultures; sustainability practices; understandings

Introduction

THE CONCEPT OF CORPORATE SUSTAINABILITY HAS GAINED IMPORTANCE IN RECENT YEARS AS ORGANIZATIONS

face pressures to address environmental and social problems that they cause directly or indirectly (Starik

and Marcus, 2000). Many companies now publish reports on sustainability themes (Xie and Hayase,

2007), and the number of such publications is growing (Kolk, 2004). In general, however, there exists

little agreement over what constitutes corporate sustainability and how to best achieve it (Bansal, 2005; Hopwood

et al., 2005). Current approaches to corporate sustainability are varied and range from attempts to adapt products

and processes to minimize resource use and environmental pollution, and/or to improve relations with the com-

munity and other stakeholder groups (Crane, 2000; Gonzáles-Benito and Gonzáles-Benito, 2006). In order to

achieve more far-reaching transformations, some organizations have also initiated programs to change their values

and beliefs in order to develop a ‘greener’ and more ‘socially responsible’ organizational culture (Crane, 1995).

Past research has suggested that organizations progress through various stages in their pursuit of corporate sus-

tainability, and that each stage leads to a more refi ned understanding of the concept, which is then shared throughout

the organization (e.g. Dunphy et al., 2003; Hunt and Auster, 1990; Roome, 1992). This focus on the overall adoption

of corporate sustainability by fi rms has largely treated the individual organization as a ‘black box’ (Howard-Grenville,

2006), and does not account for intra-organizational differences when responding to sustainability issues. Yet orga-

nizational leaders, management and change agents often face internal barriers and resistance when attempting to

implement sustainability-oriented changes (Dunphy et al., 2003), as organizational members hold different beliefs

about sustainability issues and thus accept, interpret and operationalize the term differently (Faber et al., 2005).

Subcultures and Sustainability Practices 433

Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 18, 432–452 (2009) DOI: 10.1002/bse

Some scholars have begun to look inside the ‘black box’ by calling for attention to managerial understandings,

interpretations and perceptions (Andersson and Bateman, 2000; Egri and Herman, 2000; Sharma, 2000), as well

as subcultural differences (Crane, 1995; Harris and Crane, 2002), in order to explain different intra-organizational

responses to sustainability issues, and to offer a more complex picture of how corporate sustainability is understood

within an organization (Howard-Grenville, 2006). In this study, we further build on this literature by investigating

(1) what similarities or differences exist in how employees within a single organization understand corporate

sustainability and (2) whether the presence of organizational subcultures or differences in employee awareness

of the organization’s sustainability practices can offer insights into variances in the understanding of corporate

sustainability.

Both of these points might help organizational leaders, management and change agents to develop a range of

more sophisticated and tailored programs for the successful adoption of corporate sustainability, and provide novel

insights into how best to approach change management issues. These points also contribute to the existing debates

and existing literature on understanding corporate sustainability.

Although the concept of corporate sustainability has been investigated theoretically (Jennings and Zandbergen,

1995; Starik and Rands, 1995), there have been few empirical studies on the issue of similarities and differences

in understanding and implementing corporate sustainability within organizations. To date, most organizations

assume homogeneity of views on corporate sustainability – these views are normally articulated in an organiza-

tion’s annual report or corporate sustainability document. As an extension of this, much of the organization and

natural environment (ONE) literature has concluded that policies, reports and mission statements that attribute

some value to sustainability equate to sustainability action (Sharma and Vredenburg, 1998).

Furthermore, few studies have attempted to understand what impact organizational subcultures or differences

in employee awareness of the organization’s sustainability practices have on employees’ understandings of corpo-

rate sustainability. The organizational culture concept has been frequently cited within the corporate sustainability

literature (e.g. Stead and Stead, 1992; Welford, 1995), which can be attributed to its signifi cance as a conceptual

bridge between the normative prescriptions underlying corporate sustainability principles and the social realities

of everyday organizational life (Crane, 1995). The central idea is that organizations will display a ‘greener’ and

more socially responsible culture when moving towards sustainability (Crane, 1995), which implies that it is pos-

sible for organizations to display a unifi ed ‘sustainable’ corporate culture, and that culture can be the outcome of

effective managerial manipulation and control (Crane, 1995; Harris and Crane, 2002).

The notion of a unifi ed organizational culture has attracted criticism in the organizational culture literature.

Research suggests that organizational culture is rarely characterized by normative cultural unity, and more com-

monly fragmented into multiple subcultures (Sackmann, 1992). Cultural unity has also been challenged in the

sustainability literature. Crane (1995), for example, suggests that the notion of a single ‘green’ culture represents

a symbolic meaning rather than a realistic assessment of an organization. In a later study, the fi ndings by Harris

and Crane (2002) indicate that the diffusion of a ‘green’ culture is hindered by the presence of various subcultures,

as they impede the diffusion of a common set of sustainability values and beliefs. To date, empirical studies linking

cultural fragmentation and corporate sustainability are limited in number, with Harris and Crane (2002) and

Howard-Grenville (2006) being notable exceptions.

In this study, we fi rst investigate the diversity of understandings of corporate sustainability. Rather than further

adding to the plethora of existing defi nitions, we focus on differences in the understanding of corporate sustain-

ability among employees of a single organization, and whether such differences are related to the presence of

organizational subcultures. In the following sections, we develop hypotheses about the interrelation of organiza-

tional subcultures, employee awareness of the organization’s sustainability practices, and corporate sustainability.

These hypotheses are tested using a quantitative research design within the context of a single case organization.

We conclude the paper by discussing fi ndings and implications for future research.

Understandings of Corporate Sustainability

In their recent qualitative study, Russell et al. (2007) demonstrated that individuals hold different understandings

of corporate sustainability. These understandings are (1) a corporation working towards long-term economic

434 M. K. Linnenluecke et al.


performance; (2) a corporation working towards positive outcomes for the natural environment; (3) a corporation

that supports people and social outcomes or (4) a corporation with a holistic approach. The four understandings

align with different theoretical conceptions of corporate sustainability in the literature, which vary on the degree

to which corporate sustainability means economic sustainability (Banerjee, 2001; Dyllick and Hockerts, 2002;

Gladwin et al., 1995a), or is broadened to include environmental and social issues (e.g. Dunphy et al., 2003).

Corporate Sustainability as Economic Sustainability

The term corporate sustainability has been used in the traditional strategy and management literature to refer to

economic performance, growth and long-term profi tability of organizations (e.g. Peteraf, 1993; Porter, 1985). The

major assumption behind this understanding of sustainability is that the fi rm operates in the interests of its owners

– its shareholders – through maximizing their wealth (Fowler and Hope, 2007). Thus, it becomes imperative for

management to expand consumption of the fi rm’s products and services in order to increase profi ts. Ecologically

and socially desirable investments that do not directly benefi t the fi rm’s shareholders should not be undertaken

(Friedman, 1970; Levitt, 1958), as they lead to inferior returns compared to other businesses (White, 1996). Several

studies have shown, however, that engagement with the natural environment can improve fi rm performance and

contribute to a competitive advantage (e.g. Hart and Ahuja, 1996; Sharma and Vredenburg, 1998), which suggests

that the realization of economic sustainability alone is not suffi cient for the overall sustainability of corporations.

This broadening of the understanding of corporate sustainability is regarded as the most important departure of

the concept from orthodox management theory (Gladwin et al., 1995b).

Corporate Sustainability as Ecological Sustainability

The second understanding of corporate sustainability, ecological sustainability, is based on the premise that orga-

nizations are not separate from the natural environment but are located and operate within it (e.g., Sharma, 2003).

Organizational activities can have a signifi cant negative impact on the environment, for example through the emis-

sion of waste (Hart, 1995, 1997) or the exploitation of natural resources (Jennings and Zandbergen, 1995; Stead and

Stead, 2004). In turn, environmental quality can impact on business activities, as evident through the impact of

climate change (Winn and Kirchgeorg, 2005). Some commentators argue that radical shifts in business practices

and strategic thinking are necessary to bring about a lasting reversal of current levels of environmental destruction

(Hart, 1997; Shrivastava, 1995b). Central to the understanding of ecological sustainability is therefore the challenge

for organizations to move beyond pollution control or prevention and to operate within the carrying capacity of

ecosystems by minimizing resource use and their ecological footprint (Hart, 1995; Sharma, 2003).

Corporate Sustainability as Social Sustainability

The recent attention towards social sustainability results from trends such as globalization and privatization, requir-

ing businesses to assume wider responsibilities towards various stakeholder groups and the social environment

in which they operate (Carroll, 1999; Dunphy et al., 2003; Freeman, 1984). Numerous studies have been published

on business-related social issues, including occupational health and safety, discrimination, business ethics, fraud,

corporate philanthropy, minority concerns, community welfare and stakeholder demands (Carroll, 1979; Preston,

1985; Shrivastava, 1995a). More recently, new concepts such as ‘corporate social sustainability’ (Dyllick and

Hockerts, 2002) and ‘socially sustainable businesses’ (Gladwin et al., 1995b) have emerged. In general, social

sustainability means an organization (1) pays attention to its internal staff development, (2) attempts to deal

proactively with its community base and (3) engages with its stakeholders.

A Holistic Understanding of Corporate Sustainability

The holistic understanding of corporate sustainability results from an integration of the previous perspectives

(Dyllick and Hockerts, 2002). The connection between the three perspectives is also refl ected in the works of

Dunphy et al. (2003), van Marrewijk (2003) and Young and Tilley (2006). For organizations, this implies the need



to simultaneously improve social and human welfare while reducing their ecological footprint and ensuring the

effective achievement of organizational objectives (Sharma, 2003). While some scholars assume that corporate

sustainability is only achieved when an organization con siders these three perspectives (Bansal, 2005; Dyllick and

Hockerts, 2002), others have adopted a broader systems approach and argued that organizations should consider

interrelations with their environments on various dimensions, such as the individual, organizational, political–

economic, socio-cultural and ecological–environment levels (Starik and Rands, 1995). Such a broad approach,

however, presents major operationalization challenges for organizations (Sharma and Ruud, 2003). This study

therefore focuses on the holistic inclusion of the elements of the tripartite model.

Infl uences on the Understanding of Corporate Sustainability

In this section, we aim to establish a link between the understanding of corporate sustainability and factors that

have potential effects on shaping its meaning and interpretation, such as organizational culture (Zammuto and

Krakower, 1991) and organizational sustainability practices (Sharma, 2000). To date, studies have mainly focused

on overall organizational responses to conditions in the external environment (e.g. Post and Altman, 1994) but,

as noted by Dutton and Jackson (1987), the internal environment of organizations also has a major effect on

meanings and interpretations. First, we examine the concept of organizational culture.

Organizational Culture

Since its emergence in the 1970s and 1980s (e.g. Deal and Kennedy, 1982; Pettigrew, 1979), the concept of orga-

nizational culture has become one of the most infl uential and controversial terms in management research and

practice (Denison and Mishra, 1995). Defi nitions of organizational culture range from notions of accepted behav-

ioral rules, norms and rituals (e.g., Trice and Beyer, 1984) to shared values and beliefs (e.g., Baker, 1980; Schwartz

and Davis, 1981) and shared patterns of understanding or meaning (Louis, 1985; Smircich, 1983). One frequently

cited defi nition is Schein’s (2004) three-level typology of culture, as it encapsulates the various defi nitions (Crane,

1995). Schein’s typology identifi es three cultural dimensions: the observable culture (the visible organizational

structure, processes and behaviors), espoused values (strategies, goals and philosophies) and underlying assumptions (unconscious perceptions, thoughts and feelings, which form the source of values and action).

Although many organizational culture defi nitions refer to what is ‘shared’ and ‘common’ among organizational

members (e.g., Louis, 1985; Schein, 2004), not all researchers agree with the view that organizational members

belong to the same, unifi ed organizational culture (e.g. Gregory, 1983; Hofstede, 1998). Martin (2002) captures

these differences by characterizing three theoretical views to examine organizational culture. These are (1) the

integration perspective, based on the assumption that each organization has a homogeneous culture with a

common set of values and beliefs, (2) the differentiation perspective, based on the assumption that several sub-

cultures with separate and distinct values can exist within an organization, and (3) the fragmentation perspective,

based on the assumption that values and beliefs of organizational members are changing over time, leading to

patterns of impermanent consensus and ambiguity within the organization.

The differentiation perspective is of principal interest to this study and outlined subsequently. In the differen-

tiation perspective, organizational culture is still defi ned on the basis of what is shared, yet at the level of groups

within an organization rather than at the organizational level (Martin, 2002; Zammuto, 2005). The existence of

subcultures has been confi rmed in a number of studies, and they were found to form around hierarchical levels

(Riley, 1983), organizational roles (Hofstede, 1998; Schein, 1996; van Maanen and Barley, 1984), personal net-

works, as well as individual differences such as ethnicity and gender (Martin, 2002).

The potential subculture formation we examine in this study is around different value profi les displayed by

organizational members (Zammuto, 2005). The value dimension has been of particular interest for the assessment

of organizational culture (Ashkanasy et al., 2000; Jones et al., 2005), as values are considered to be central to an

organization’s culture and are seen as a reliable and assessable representation (Howard, 1998; Ott, 1989). Based

on the notion of values, the competing values framework (CVF) of organizational culture was developed by Quinn



and his colleagues (Quinn, 1988; Quinn and Kimberly, 1984; Quinn and Rohrbaugh, 1981), and has been used

in several studies to profi le cultural values (e.g. Zammuto and Krakower, 1991).

The four-cell CVF, depicted in Figure 1, explores competing demands within organizations on two dimensions

(Quinn and Kimberly, 1984). The internal–external dimension refl ects whether the organization is focused on its

internal dynamics or on the demands of its external environment (Zammuto et al., 2000). The fl exibility–control

dimension represents organizational preferences for structuring, coordination and control and is similar to the

distinction by O’Reilly and Chatman (1996) between formal and social control systems (Zammuto, 2005). As a

consequence of these two dimensions, four different culture types are formed.

Organizational cultures with high human relation values support cohesion and morale among employees. This

is achieved by means such as human resource development, open communication and participative decision-

making (Jones et al., 2005; Zammuto et al., 2000). This culture type has also been referred to as ‘group culture’

as it is associated with participation through teamwork (Denison and Spreitzer, 1991; Parker and Bradley, 2000;

Zammuto and Krakower, 1991). Coordination and control are achieved through decentralized decision-making

and cooperation. Individual compliance with organizational mandates results from trust and commitment to the

organization (Zammuto et al., 2000; Zammuto and Krakower, 1991).

Organizational cultures with high open system values place importance on growth and resource acquisition

through the promotion of adaptability, visionary communication and adaptable decision-making (Zammuto et al., 2000; Zammuto and Krakower, 1991). This culture type has also been referred to as ‘developmental culture’ because

of its external orientation on innovation and change (Denison and Spreitzer, 1991; Parker and Bradley, 2000;

Zammuto and Krakower, 1991). Structurally, there is an emphasis on informal coordination and control and horizontal

communication. Individuals are motivated by the signifi cance or ideological appeal of their tasks (Zammuto et al., 2000;

Zammuto and Krakower, 1991).

Organizational cultures with high internal process values have a focus on achieving stability and control through

formal means such as information management, precise communication and data-based decision-making (Jones

Figure 1. The competing values FrameworkSource: Adapted from Jones et al. (2005) and Zamnuto et al. (2000).



et al., 2005; Zammuto et al., 2000). This culture type has also been refered to as ‘hierarchical culture’, as it involves

conformity, the enforcement of rules and attention to technical matters (Denison and Spreitzer, 1991; Parker and

Bradley, 2000; Zammuto and Krakower, 1991). Structurally, there is an emphasis on vertical communication and

formal rules, policies and procedures for coordination and control. Individual compliance is enforced through

rules and regulations (Zammuto et al., 2000; Zammuto and Krakower, 1991).

Organizational cultures with a rational goal orientation promote effi ciency and productivity, which is realized

through goal-setting, planning, instructional communication and centralized decision-making (Jones et al., 2005).

This culture type has also been referred to as a ‘rational goal culture’ because of its emphasis on outcomes and

goal fulfi llment (Denison and Spreitzer, 1991; Parker and Bradley, 2000; Zammuto and Krakower, 1991). Structur-

ally, the rational goal model is related to centralized decision-making. Individuals are motivated by beliefs that they

will be rewarded for competent performance leading to desired organizational goals (Zammuto et al., 2000;

Zammuto and Krakower, 1991).

These four culture types are ideals, and show an internally consistent picture of four sets of value outcomes and

the means by which they can be attained. This does not mean, however, that they are incompatible and mutually

exclusive (Jones et al., 2005; Zammuto et al., 2000). All four culture types coexist in a single organization (Quinn,

1988; Quinn and Kimberly, 1984), which has also been empiri cally supported (Howard, 1998; Zammuto and

Krakower, 1991).

Corporate Sustainability Practices

Further aspects of the organizational context that help to shape understandings and interpretations of sustain-

ability by organizational members are the sustainability practices of the organization, including issue legitimation

as part of the organizational identity (Sharma, 2000), the integration of environmental indicators into employee

performance evaluation (Sharma, 2000) and employee knowledge of the corporate sustainability policy (Ramus

and Steger, 2000).

Issue Legitimation as Part of the Organizational IdentityIssues are events, trends or developments that organizational members recognize as having some effect on the

organization (Dutton and Dukerich, 1991; Dutton et al., 1983). In the context of sustainability, issues may be

legitimated as part of the corporate identity: either on the basis of an internal economic focus or on a broader

corporate environmental focus. In the former case, the interpretation of sustainability issues is constrained by a

corporate identity that emphasizes the maximization of short-term fi nancial performance objectives. In the latter,

economic considerations may be balanced by the need for a greater external environmental orientation (Miles,

1987; Sharma, 2000; Sharma et al., 1999).

Integration of Environmental Indicators into Employee Performance EvaluationThe acceptance and implementation of sustainability principles and innovative environmental solutions may yield

positive economic returns only over the long term, and carries a probability of failure and high outcome uncer-

tainty. Environmental protection can only be achieved if long-term thinking and opportunity-seeking behavior are

fostered (Sharma, 2000). Uncertainties therefore need to be offset by environmental performance evaluation

criteria that are open-ended, long-term oriented and balanced with the organization’s economic goals (Sharma,

2000).

Employee Knowledge of the Corporate Sustainability PolicyThe publication of a corporate sustainability policy is a way for an organization to disseminate information about

corporate sustainability concepts, and to demonstrate to employees that such concepts are endorsed and enacted

within the organization (Ramus, 2002). The publication of a sustainability policy necessarily entails some degree

of introspection and is therefore likely to increase awareness about corporate sustainability within the organization.

A written sustainability policy also forms the overall framework from which other sustainability components result,

such as environmental management systems, audits, assessments and reports (Gunningham et al., 1998).



Hypotheses

In this study, we seek to investigate the link between organizational subcultures, employee awareness of corporate

sustainability practices and differences in understanding corporate sustainability. Each quadrant of the CVF, or

culture type, represents a set of valued outcomes and a coherent managerial ideology about how to achieve them.

Managerial ideologies – broad management philosophies embedded in society – are imported into organizations

through mechanisms such as management education or professional training, and shape the way people think

and behave within them (Zammuto, 2005; Zammuto et al., 2000). In this context, Zammuto et al. (2000) note

that the quadrants of the CVF are similar to major managerial ideologies identifi ed by Barley and Kunda (1992)

as being prevalent in western society during the past century. The quadrants also refl ect the four major theoretical

streams in organization theory analyzed by Scott (2003). As a result, all quadrants together outline major develop-

ments which have emerged in both managerial ideologies and organizational theory over time (Zammuto et al., 2000), and have become institutionalized into current thinking. These developments are reviewed below to develop

hypotheses on the relation between each culture type and the understandings of corporate sustainability.

Theories and ideologies underlying the internal process quadrant are characterized by their focus on eco nomic

per formance. The internal process quadrant parallels the ideology of Barley and Kunda (1992) on scientifi c man-

agement (Zammuto, 2005; Zammuto et al., 2000), which is directed towards the maximization of economic gains

by means of rationalized production processes (Taylor, 1911). The quadrant is also comparable to Scott’s (2003)

classifi cation of closed–rational system models, which portray organizations as tools to achieve preset ends and

place emphasis on formalized, bureaucratic structures to improve organizational effi ciency and economic perfor-

mance (Scott, 2003; Zammuto et al., 2000). The focus on formalization suggests that there are cognitive and

motivational limitations of individuals that constrain employee choices and action within the organization (Scott,

2003). Such limitations are likely to restrict the understanding and enactment of corporate sustainability, as they

do not encourage employees to take on pro-active and innovative environmental activities (Griffi ths and Petrick,

2001; Post and Altman, 1994; Ramus, 2005).

Hypothesis 1a. Employees from a subculture with a high internal process orientation will place greater emphasis on

an economic understanding of corporate sustainability.

In addition to an internal process culture orientation, other organizational aspects might lead to an economic

understanding of corporate sustainability. If sustainability issues carry a negative association in the corporate

identity, this is likely to support an economic understanding of corporate sustainability by employees. Furthermore,

if the organization only uses economic or short-term indicators for performance evaluation, this is likely to encour-

age a focus on short-term returns and profi ts of the organization rather than a broader sustainability focus. Also,

if employees are not aware of the organization’s corporate sustainability policy, they have no knowledge of the

organization’s sustainability goals and practices. Therefore, we argue the following.

Hypothesis 1b. Employees with low awareness of the corporate sustainability practices (including issue legitimation, integration of environmental indicators into performance evaluation and employee knowledge of the corporate sustain-ability policy) will place greater emphasis on an economic understanding of corporate sustainability.

Theories and ideologies underlying the human relations quadrant place greater emphasis on ‘human factors’

and interpersonal relations, but are also mostly focused on internal arrangements of the organization. This quad-

rant refl ects the human relations ideology of Barley and Kunda (1992; Zammuto, 2005; Zammuto et al., 2000),

which pays attention to work condi tions, social interaction and group affi lia tion. While this emphasis on human

factors suggests a parallel to the social understanding of corporate sustainability, the human relations quadrant is

largely oriented towards the internal arrangements of the organization and parallels Scott’s (2003) classifi cation

of closed–natural system models (Zammuto, 2005; Zammuto et al., 2000). Despite the human relation emphasis,

this internal focus is likely to restrict an orientation towards the external social (and natural) environment of the

organization. We therefore found that a clear link to the social understanding or to any of the three other under-

standings of corporate sustainability was not supported by the extant literature. Similarly, we found that a clear

link of the social understanding to any particular culture type was not supported either, as social sustainability



contains notions of both an internal orientation (i.e. towards staff development) as well as an external orientation

(i.e. towards the community and stakeholders).

Theories and ideologies underlying the rational goal quadrant highlight the importance of the wider environ-

ment for the organization, and the need for rational planning and organizing in light of environmental demands.

The quadrant corresponds to the system rationalism ideology of Barley and Kunda (1992), which focuses on plan-

ning, fore cast ing, con trolling and the design of the organizational structure and decision processes to match the

external environment. It is also analogous to Scott’s (2003) classifi cation of open–rational system models. In this

quadrant, the effi cient use of resources, planning and goal setting, and the adequacy of organizational structures

in light of the environment are valued highly. These aspects, in particular the effi cient use of resources and the

avoidance of adverse effects on the environment, are essential to the environmental understanding of corporate

sustainability.

Hypothesis 2a. Employees from a subculture with a high rational goal orientation will place greater emphasis on an

environmental understanding of corporate sustainability.

Further aspects might lead to an environmental understanding of corporate sustainability. If sustainability issues

carry a positive association in the corporate identity, this is likely to discourage an economic understanding of

corporate sustainability by employees. Furthermore, if the organization uses environmental, or long-term, indica-

tors for performance evaluation, this is also likely to discourage economic thinking. Also, if employees are aware

of the organization’s corporate sustainability policy, they might have a better understanding of organization’s

sustainability goals and practices. Therefore, we argue the following.

Hypothesis 2b. Employees with high awareness of the corporate sustainability practices (including issue legitimation, integration of environmental indicators into performance evaluation and employee knowledge of the corporate sustain-ability policy) will place greater emphasis on an environmental understanding of corporate sustainability.

The open system quadrant parallels Scott’s (2003) classifi cation of open–natural system models, which highlight

the importance of the external environment in affecting the behavior and structure of organizations. The open

system model also refl ects the organizational culture and quality ideology of Barley and Kunda (1992), which

emphasizes moral authority and employee commitment to manage in turbulent environments. Both the rational

goal and open systems have an external orientation and include themes such as the effi cient use of resources and

the recognition of the wider social and economic environment. We therefore suggest the following.

Hypothesis 3a. Employees from a subculture with a high open system orientation will place greater emphasis on a

holistic understanding of corporate sustainability.

As the legitimation of environmental issues, the use of long-term oriented indicators for employee performance

evaluation and awareness of the organization’s corporate sustainability are likely to dis courage an economic under-

standing of corporate sustainability, we argue the following.

Hypothesis 3b. Employees with high awareness of the corporate sustainability practices (including issue legitimation, integration of environmental indicators into performance evaluation and employee knowledge of the corporate sustain-ability policy) will place greater emphasis on a holistic understanding of corporate sustainability.

Method

The aim of this study was to investigate differences and similarities in the understanding of corporate sustain-

ability among members of a single organization, and to see whether and how such differences are related to the

presence of organizational subcultures. A quantitative survey instrument was administered to study organizational

culture, awareness of corporate sustainability practices and understandings of corporate sustainability. A quantita-

tive approach was considered to be most appropriate for this study in order to grasp different culture profi les and



understandings among a large number of participants within the organization studied. Furthermore, this approach

provided an effective means to examine specifi c relationships between organizational culture, awareness of the

organization’s sustainability practices and corporate sustainability understandings. In prior quantitative studies it

has been demonstrated that survey research can generate information about shared employee perceptions that is

not easily accessible with qualitative methods (Zammuto, 2005; Zammuto and Krakower, 1991).

Sample

Data were collected from a large Australian corporation operating within the transportation industry. Participants

were selected on a convenience basis and recruited from a broad range of business groups and hierarchical levels

of the organization. Participants were asked to complete a paper-based survey with the measures described below.

In total, 685 survey forms were distributed, of which 260 were returned, representing a response rate of 38 percent.

Five of the received surveys were excluded due to incomplete responses. The average age of respondents was 40.2

years, ranging from 18 to 65 years, with 31.4 percent being female and 68.6 percent being male. Mean company

tenure was 12.7 years, and 66.2 percent of respondents indicated that they had at least tertiary level undergraduate

education.

Measures

Organizational CultureThe survey instrument for organizational culture was based on the CVF of Quinn and Kimberly (1984). The fi rst

fi ve questions in this section of the survey, adapted from Zammuto and Krakower (1991), used a scenario-based

approach and asked participants to distribute 100 points among four descriptions based on the similarity of their

own organization to the organization outlined in the description. Each of the four descriptions represents one of

the quadrants, or value orientations, in the CVF (Zammuto, 2005). For example, the question labeled ‘organiza-

tional character’ had the following four descriptions.

Organization A is a very personal place. It is a lot like an extended family. People seem to share a lot of them-

selves (human relation values).

Organization B is a very dynamic and entrepreneurial place. People are willing to stick their necks out and take

risks (developmental values).

Organization C is a very formalized and structured place. Formal procedures generally govern what people do

(internal process values).

Organization D is very production oriented. A major concern is with getting the job done. People aren’t very

personally involved (rational goal values).

The resulting numerical data for each description were adjusted in order to correct for mathematical errors and

to ensure that the total score for each of the fi ve items was equal to 100 points. Next, a score was calculated for

each value orientation (human relations, developmental, internal process and rational goal) by averaging the points

from the corresponding descriptions across the fi ve questions. For example, the human relation value score was

determined by adding up the points at items 1A, 2A, 3A, 4A and 5A, and then dividing the outcome by fi ve. The

resulting four value orientation scores formed the individual competing values profi le for each respondent.

The scenario-based approach of the CVF has been adapted by a number of studies (Parker and Bradley, 2000;

Zammuto and Krakower, 1991) and has been found to be a valid survey instrument for the assessment of organi-

zational culture (Kwan and Walker, 2004). Although other operationalizations of the CVF (e.g. Quinn and Spre-

itzer, 1991) use Likert scales to measure the presence or absence of each value orientation rather than their relative

weighting, Zammuto (2005) suggests that the ipsative response format yields more interpretable results. Assess-

ment of scale reliability indicated that Cronbach’s alpha was 0.66 for the human relation scale, 0.65 for the

developmental scale, 0.73 for the internal process scale and 0.49 for the rational goal scale. This compares relatively

well to fi ndings from other studies utilizing the CVF. Shortell et al. (1995), for example, reported in a larger study

(n = 7337) that Cronbach’s alpha was 0.79 for the human relations scale, 0.77 for the developmental scale, 0.70

for the internal process scale and 0.47 for the rational goal scale.



Legitimation of Environmental IssuesWe adapted two items from Sharma (2000) to measure organizational members’ perceptions of their organiza-

tion’s corporate identity in regard to environmental issues. Respondents were asked to what extent they perceived

their company as an environmental leader in the industry, and to what extent they considered the reduction of

environmental impact of operations as central to their company’s identity. Cronbach’s alpha for this scale was

0.71.

Integration of Environmental Indicators into Employee Performance EvaluationTo measure this construct, we adapted three items from Sharma (2000). Respondents were asked to report on

the extent to which environmental indicators had been included in reward and planning systems. In addition, the

third item asked about the extent to which environmental and economic performance indicators were balanced.

Cronbach’s alpha for this scale was 0.70.

Knowledge of Corporate Sustainability PolicyThis part of the survey consisted of 13 items that asked respondents to indicate their level of knowledge about the

organization’s sustainability policy. The list of items was adapted from a study on employee environmental initia-

tives by Ramus and Steger (2000), with the original wording being changed from environmental to sustainability

policy. The fi rst sustainability policy question asked about employee knowledge of the general published sustain-

ability policy, whereas the other 12 policy questions were more specifi c, and asked about sub-policies of the main

sustainability policy statement. The alpha reliability coeffi cient for this scale was 0.91.

Understanding Corporate SustainabilityWe developed three ipsative questions to measure the understanding of corporate sustainability. An initial list of

items was developed based on the understandings of corporate sustainability adapted from Russell et al. (2007)

and a detailed review of the corporate sustainability literature. Items were subsequently refi ned through discus-

sions with three experts from the ONE fi eld. A draft version of the survey with the understandings scale was

presented to the sustainability manager of the organization, and was pre-tested with 30 employees. The resulting

items were related to ‘information and decision-making’, ‘strategy’ and ‘outcomes’. Each of these three items

included an economic, environmental, social and holistic description, representing the four distinct sustainability

understandings. For example, the item named ‘information and decision-making’ had the following four

descriptions:

organization A predominantly seeks economic and fi nancial information as the basis for decision-making

(economic understanding);

organization B seeks information on natural resource consumption and uses this information in decision-

making (environmental understanding);

organization C has strategies that emphasize and value people within the organization and the community

(social understanding);

organization D seeks information on economic, environmental and social implications and makes decisions

based on system thinking (holistic understanding).

Similar to the scenario-based approach of the competing values measure, respondents were asked to distribute

100 points among these four descriptions, based on the similarity of their own organization to the organization

outlined in the description. The resulting numerical data for each description were corrected for mathematical

errors, and a score was calculated for each understanding by averaging the points from the corresponding descrip-

tions across the three questions. The resulting four understanding scores formed the individual understanding

profi le for each respondent. Cronbach’s alpha was 0.78 for the economic understanding scale, 0.56 for the envi-

ronmental understanding scale, 0.38 for the social understanding scale and 0.57 for the holistic understanding

scale. Due to the low reliability of the social understanding scale this scale was excluded from further analysis.



Data Analyses

Data were analyzed in two stages using the Statistical Package for the Social Sciences (SPSS), Version 15. First,

we conducted a two-step cluster analysis to identify the presence of subcultures in our sample. Five subcultures

were identifi ed from this analysis and are described in detail in the following results section. Then we conducted

regression analyses to test the three hypotheses. The membership of each participant in one of the fi ve subcultures

was dummy coded, and the resulting cluster membership variable was included as predictor variable in the regres-

sion analysis. One of the fi ve clusters had a high internal process orientation; therefore we used membership in

this cluster as a predictor variable for the economic understanding of corporate sustainability. Similarly, one cluster

displayed a high rational goal orientation, and membership in this cluster was included as a predictor variable for

the environmental understanding of corporate sustainability. Another cluster had the highest open system orien-

tation of all clusters in the analysis, and membership in this cluster was included as predictor variable for a holis-

tic understanding of sustainability. The variables ‘issue legitimation’, ‘integration of environmental indicators into

employee performance evaluation’ and ‘employee knowledge of the sustainability policy’ were also included as

predictor variables into each of the three regression analyses.

In order to reduce the impact of the dependency relations that exist between the ipsative variables, we conducted

three separate regression analyses, one for each hypothesis. By avoiding using all scales from the sustainability

understandings as an ipsative set at once, the scores did not meet the criterion for pure ipsativity (Jones et al., 2005). A similar approach has been used successfully in other studies (Jones et al., 2005; Shortell et al., 1995). By

using only one of the understandings as a dependent variable in each of the analyses, we further reduced the

impact of the dependency relations between the understandings. Prior to conducting the regression analysis and

testing the propositions of this study, we assessed the statistical assumptions of normality, linearity and homosce-

dasticity by examining the residual plots and concluded that these were met for the analysis. The sample size was

considered adequate for a regression analysis (Hair et al., 2006). We also controlled for the possible effects of age,

gender, education and tenure by using sequential regression.

In order to minimize bias arising from self reported data, participants were encouraged to answer all questions

honestly, and were assured of confi dentiality and anonymity. When variables are measured at the same time and

from a single source, as in this study, common method bias may also be a problem and result in an infl ation of

the true association between constructs (Williams and Brown, 1994), although more recent research has suggested

that research invalidation is implausible as a result of common method bias (Doty and Glick, 1998; Spector, 2006).

We tested the potential impact of common method bias using a Harman single factor test (Podsakoff et al., 2003)

and found that our results were not signifi cantly affected.

Results

Identifi cation of Subcultures

The cluster center mean scores and the number of respondents in each of the fi ve clusters are reported and

graphically presented in a map for each cluster in Figure 2. The maps show the relative emphases that each cluster

places on the different quadrants in the CVF (Zammuto and Krakower, 1991).

Employees belonging to the fi rst cluster, which we named the high internal process cluster (20.0% of the sample),

had the strongest emphasis on internal process culture (mean score 69 points), and the lowest emphasis on the

other three culture types. Literally interpreted, employees belonging to this fi rst cluster perceived their culture to

be signifi cantly more hierarchical and bureaucratic and less humanistic, innovative and effi cient than employees

from other clusters. Employees in the second cluster, which we named the moderate internal process cluster (29.4%

of the sample), also had a strong emphasis on internal process culture (mean score 42 points), yet to a lesser extent

than the high internal process cluster. Therefore, these employees perceived their culture as predominantly

hierarchical.

Employees in the third cluster, which we named the rational goal/internal process cluster (15.3% of the sample),

exhibited a strong emphasis on both the internal process and rational goal culture. This means that employees

belonging to this cluster perceived their culture to be relatively hierarchical and effi cient. Employees in the fourth



Figure 2. Culture profi les of Clusters



cluster, named the balanced cluster (23.5% of the sample), showed a more balanced culture profi le. Employees in

this cluster had the lowest internal process culture orientation (mean score 20 points) and the highest develop-

mental score (mean score 23 points) of all clusters within the sample. Employees in the fi nal cluster, which we

named the human relations cluster (11.8% of the sample), had the highest emphasis on human relation values (mean

score 44 points). Thus, employees belonging to this cluster perceived their culture to be more humanistic than

employees from other clusters.

Multiple Regression Analysis

Table 1 shows the means, standard deviations and intercorrelations for all variables.

The results of the regression analysis suggested that the independent variables accounted for signifi cant vari-

ance, R2 = 0.312, F(4, 231) = 20.257, p < 0.001, in the economic understanding of corporate sustainability. Both

the membership in the high internal process cluster and employee knowledge of the corporate sustainability policy

explained a signifi cant unique variance in the economic understanding of sustainability. Specifi cally, membership

in the high internal process cluster (β = 0.294) represented the best unique predictor of an economic understand-

ing of corporate sustainability, while employee knowledge of the corporate sustainability policy presented the

second best unique predictor (β = −0.171) and was negatively related to the economic understanding of corporate

sustainability.

The sequential regression reported in Table 2 also demonstrates that, once variance due to the demographic

variables was removed in Step 1, the independent variables still predicted a signifi cant amount of variance in the

economic understanding of corporate sustainability: change in R2 = 0.241; p < 0.001. The results also showed a

signifi cant direct effect of tenure on an economic understanding of corporate sustainability. This was not surpris-

ing, as the economic understanding was the most dominant within the organization, and therefore employees

with longer tenure were more likely to have adopted this understanding. These fi ndings provide support for

Hypothesis 1a and partial support for Hypothesis 1b.

For the environmental understanding of corporate sustainability, the results of the regression analysis showed

that the independent variables accounted for signifi cant variance: R2 = 0.133, F(4, 231) = 6.874; p < 0.001. This

result was consistent once variance due to demographic variables was removed: change in R2 = 0.103; p < 0.001.

While membership in the rational goal/internal process cluster explained a signifi cant unique variance in the envi-

ronmental understanding of corporate sustainability, it was negatively related (β = −0.167). None of the other

predictor variables were signifi cant unique predictors. This fi nding does not support Hypothesis 2a or 2b.

For the holistic understanding of corporate sustainability, the results of the regression analysis suggested that

the independent variables accounted for signifi cant variance in the dependent variable: R2 = 0.190, F(4, 231) =

9.351; p < 0.001. Again, this result was consistent once variance due to demographic variables was removed: change

in R2 = 0.131; p < 0.001. Both the integration of environmental indicators into employee performance evaluation

and employee knowledge of the corporate sustainability policy explained a signifi cant unique variance in the holis-

tic understanding of sustainability. Specifi cally, employee knowledge of the corporate sustainability policy (β =

0.217) represented the best unique predictor of a holistic understanding of sustainability, while integration of

environmental performance indicators into employee performance evaluation (β = 0.198) was the second best

predictor. These fi ndings do not support Hypothesis 3a, but provide partial support for Hypothesis 3b. The results

of the regression analyses are summarized in Table 2.

Discussion and Implications

We proposed that both subcultural fragmentation of the organization and employee awareness of the organization’s

sustainability practices are infl uential in shaping employees’ understandings of corporate sustainability. Although

to date most organizations assume homogeneity of views on corporate sustainability, we found empirical support

in this study to suggest that subcultural fragmentation of the organization as well as differences in employee

awareness of the corporate sustainability practices are linked to differences in employee understanding of corporate



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Dependent variable: Economic understanding of corporate sustainability

Step 1 Step 2

Independent variables B β B β

Gender −4.856 (3.595) −0.097 −1.734 (3.153) −0.035Age −0.092 (.167) −0.044 −0.216 (0.150) −0.104Tenure 0.378 (.163) 0.190* 0.516 (0.142) 0.258***Education 3.567 (1.377) 0.171* 1.465 (1.233) 0.070Membership high internal process cluster 17.024 (3.319) 0.294***Legitimation −3.225 (2.071) −0.117Integration −3.763 (2.285) −0.125Policy −5.811 (2.370) −0.171*R2 0.070** 0.312***Adjusted R2 0.055 0.288Change in R2 0.241***

Dependent variable: Environmental understanding of corporate sustainability

Step 1 Step 2


Gender 0.759 (1.264) 0.044 0.451 (1.227) 0.026Age 0.046 (0.059) 0.065 0.045 (0.058) 0.062Tenure −0.073 (0.057) −0.107 −0.081 (0.055) −0.118Education −1.095 (0.484) −0.153* −0.622 (0.477) −0.087Membership rational goal/internal process cluster −3.702 (1.375) −0.167*Legitimation 1.287 (0.801) 0.136Integration 1.114 (0.876) 0.107Policy 0.964 (0.909) 0.083R2 0.029 0.133***Adjusted R2 0.013 0.103Change in R2 0.103***

Dependent variable: Holistic understanding of corporate sustainability

Step 1 Step 2


Gender 4.812 (2.391) 0.146* 3.220 (2.278) 0.098Age −0.102 (0.111) −0.074 −0.024 (0.107) −0.018Tenure −0.069 (0.108) −0.052 −0.123 (0.102) −0.094Education −1.123 (0.916) −0.081 0.021 (0.884) 0.002Membership balanced cluster 2.790 (2.335) 0.077Legitimation −0.453 (1.489) −0.025Integration 3.953 (1.629) 0.198*Policy 4.865 (1.723) 0.217**R2 0.058** 0.190***Adjusted R2 0.042 0.161Change in R2 0.131***

Table 2. Results of regression analysesa

a Standard errors are in parentheses.* p < 0.05.** p < 0.01.*** p < 0.001.



sustainability. Overall, the analysis shows that both different organizational subcultures, assessed on the level of

values and beliefs, and differences in employee awareness of corporate sustainability practices have a signifi cant

impact on how employees understand corporate sustainability differently.

There was evidence to suggest that employees who reported their perceived organizational culture as high on

internal process values placed a greater emphasis on the economic understanding of sustainability (Hypothesis

1a). The internal process culture is based on theories and ideologies that focus on economic performance (e.g.,

Barley and Kunda, 1992; Scott, 2003; Zammuto et al., 2000), which are similar to the assumptions underlying

the economic understanding of corporate sustainability. The inward focus of the internal process culture on

control, accountability, rational rules, procedures and formalized decision-making seems to provide the context in

which organizational members interpret corporate sustainability.

Furthermore, we found partial support to suggest that employees with low awareness of the corporate sustain-

ability practices (including issue legitimation, integration of environmental indicators into performance evaluation

and employee knowledge of the corporate sustainability policy) will place greater emphasis on an economic under-

standing of corporate sustainability (Hypothesis 1b). While our results suggested that a lesser knowledge of the

corporate sustainability policy was a signifi cant predictor for the economic understanding of corporate sustain-

ability, issue legitimation and integration of environmental indicators into performance evaluation were not

signifi cant predictors. This implies that the communication of the concept of corporate sustainability has an

important impact on the understanding of individuals.

Hypothesis 2a, which stated that employees from a subculture with a high rational goal orientation will place

greater emphasis on an environmental understanding of corporate sustainability, was rejected. Although the ratio-

nal goal culture has an external orientation, employees who perceived their culture to be high on rational goal

values (rational goal/internal process cluster) did not have a signifi cantly higher understanding of environmental

sustainability. However, employees who were in the rational goal/internal process cluster perceived not only a high

rational goal orientation, but also an almost equally high internal process orientation. This subculture there-

fore emphasized the control end of the CVF with reliance on formal mechanisms of coordination and control,

which might have limited the extent to which employees understand corporate sustainability as environmental

sustainability.

The orientation of employees in the rational goal/internal process cluster towards both rational goal values and

internal process values might also explain why no support was found for Hypothesis 2b, which suggested that

employees with high awareness of the corporate sustainability practices (including issue legitimation, integration

of environmental indicators into performance evaluation and employee knowledge of the corporate sustainability

policy) will place greater emphasis on an environmental understanding of corporate sustainability.

An orientation towards an open system culture was not found to be a signifi cant predictor for the holistic under-

standing of corporate sustainability (Hypothesis 3a). Although employees in the balanced cluster had the highest

emphasis on open system values, they showed a rather balanced culture profi le and no clear high emphasis on

the open system quadrant. This might explain why membership in the balanced cluster was not found to be a

signifi cant predictor in our analysis. However, there was partial support for Hypothesis 3b, which stated that

employees with a high awareness of the corporate sustainability practices (including issue legitimation, integration

of environmental indicators into performance evaluation and employee knowledge of the corporate sustainability

policy) will place greater emphasis on a holistic understanding of corporate sustainability. Both the integration of

environmental indicators and employee knowledge of the corporate sustainability were found to be signifi cant

predictors for a holistic understanding of sustainability.

Our study has shown that an emphasis on the internal process culture was strongly related to an emphasis on

the economic understanding of sustainability. In particular, our fi ndings revealed that employees who belong to

a subculture with a stronger emphasis on hierarchical values (the high internal process cluster), and who have less

knowledge of the corporate sustainability policy, have a higher emphasis on an economic understanding of cor-

porate sustainability. On the contrary, employees who belong to a subculture with a low emphasis on internal

process culture (the balanced cluster) did not display a holistic understanding of sustainability. Rather, the integra-

tion of environmental indicators into employee performance evaluation and a high awareness of the corporate

sustainability policy were found to be related to a holistic understanding of corporate sustainability. These fi ndings

have signifi cant implications for both research and practice.



From a management perspective, fi ndings from this study suggest two main implications. The fi rst implication

arises for the diffusion of knowledge about corporate sustainability throughout the organization, which is an

important aspect for successfully implementing corporate sustainability (Cramer, 2005; Siebenhüner and Arnold,

2007). It appears that attempts to communicate the concept of corporate sustainability to organizational members

have to be tailored to address different understandings, and should explain the various dimensions of the concept

so that employees with different understandings can relate to it. Furthermore, our fi ndings suggest that the pub-

lication of a corporate sustainability policy as well as the integration of environmental indicators into employee

performance evaluation constitute important elements for creating awareness and understanding of corporate

sustainability.

The second implication arises for attempts to initiate ‘green’ organizational culture change. Past research has

shown that top managers often perceive organizational culture to be unitary (e.g., Harris and Ogbonna, 1998),

and thus initiate organization-wide programs to change the overall culture of their organization to become ‘greener’

or more socially responsible. However, there are several accounts of diffi culties and failures in implementing such

change attempts (e.g. Molinsky, 1999), which has been attributed to underlying values and beliefs that are deeply

embedded and institutionalized into the organization and therefore highly resistant to change (Harris and Crane,

2002). In particular, past initiatives to overcome the defi ciencies of the traditional bureaucratic and hierarchical

model have been largely unsuccessful (Parker and Bradley, 2000).

While many managers might see their change efforts constrained by the underlying organizational values and

belief structure (Harris and Crane, 2002), our fi ndings suggest that a focus on overall culture change programs

is insuffi cient to address the presence of organizational subcultures and the complex internal dynamics of the

organization. We therefore argue that the recognition of subcultures is an important variable when attempting to

change organizational culture. It is beyond the scope of this paper to offer a detailed discussion of organizational

culture change for corporate sustainability, but we agree with Harris and Ogbonna (1998) that culture change

programs might need to be subdivided into tailored subcultural change initiatives and need to consider the change

willingness of different subcultural groups. This could be achieved through the consultation and involvement of

employees in change efforts.

Furthermore, it seems to be important that managers are aware of differences in power and status among

organizational subcultures (Harris and Ogbonna, 1998; Howard-Grenville, 2006). A dominant internal process

culture within an organization is likely to impede the organization’s ability to address environmental and social

issues, and could thus potentially hinder any movement towards environmental, social or holistic understandings

of sustainability which are more in line with ‘green’ culture change. Individuals in subcultures that are more

conducive to environmental, social or holistic understandings may be hindered by a dominant internal process

culture that predicts an economic understanding of corporate sustainability.

From a research perspective, the quantitative method used in this study – a survey across the organization – pro-

vides support for previously qualitative fi ndings that subcultural fragmentation within an organization is related

to intra-organizational differences regarding sustainability issues (Harris and Crane, 2002; Howard-Grenville,

2006). The analysis on a subcultural level shows that quantitative research on an aggregated organizational level

cannot suffi ciently assess subcultural differences. Implications therefore arise for researchers to consider the

engagement with sustainability practices on multiple levels of the organization, and to account for intra-organiza-

tional differences.

Directions for Future Research

The broader fi nding that organizational subcultures and employee awareness of the organization’s sustainability

practices are related to variances in understanding corporate sustainability highlights paths worthy of future

research. First, while this study includes employees from various organizational levels, future research could gain

valuable insights into organizational subcultures by including organizational level as a control variable. This was

not possible in the present study due to restrictions from the case organization. Organizational leaders often view

the organizational culture as less hierarchical than do employees from lower levels of the organization (Zammuto,

2005). It is therefore likely that organizational leaders have a different understanding of corporate sustainability



than lower levels of the organization, particularly given the fact that sustainability initiatives are often introduced

in a top-down approach (see, e.g., Harris and Crane, 2002). Whether this supports the assumption made by sus-

tainability researchers that sustainability values are disseminated in a top-down approach as well will be subject

to further research.

Second, future research might refi ne the research instrument used in this study. Descriptions have been rather

broad for this initial investigation, yet future research might consider differences not only between, but also within,

understandings. Within understanding variance may be related differently to culture and value differences within

the organization. This was particularly evident for the social understanding, which comprises a broad variety of

themes and concepts. Third, future research might also investigate how transformations in both organizational

culture and sustainability understandings are possible, given the cultural and understanding fragmentation in the

case organization. Last, future research could extend this study to see whether fi ndings are also applicable to

organizations from other sectors and countries.

By testing the hypotheses, this study presents fi ndings of how corporate sustainability is understood differently

by employees from a single organization. The study makes a contribution to the current sustainability literature,

which largely assumes homogeneity of organizational culture and views on corporate sustainability. Findings

indicate that (1) there exist differences in how employees from a single organization understand corporate sustain-

ability and that (2) these differences can be partially explained by the presence of organizational subcultures and

by differences in employee awareness of the organization’s sustainability practices. In particular, fi ndings reveal

that employees from a subculture with a stronger emphasis on hierarchical and bureaucratic values have a higher

emphasis on understanding corporate sustainability as economic sustainability.

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Documents

sustainability issues

sustainability themes

organizations subcultures

organizational leaders

organizational members

subcultural differences

change management issues

single organization