Abstract for: A simulation model for corporate sustainability performances. Motivated search, survival ability and learning feedback
Relying on computer simulation and a contingency approach, we analyze the conditions leading firms to implement robust sustainability programs that would ultimately benefit society. We ask two questions: Under what conditions would a firm implement sustainability programs? What would explain difference in sustainability performances in a population of firms? To answer these questions, we develop a formal model that captures differences in firmsí sustainability orientation (economic, legitimacy seeking and ethical orientations), organizational inertia and capabilities. We differentiate sustainability initiatives on three performance dimensions (economic return, legitimacy, and social and environmental value creation) and on their complexity. We found that under standard macroeconomic conditions firms employing simultaneously economic and ethical criteria, not these drivers in isolation, tend to achieve stronger sustainability performances. We also found the relationship between sustainability orientation and sustainability performances to be mediated by 1) the extent to which markets reward firms for social and environmental value creation 2) the extent to which companies are able to turn their intentionality into actions. Three mechanisms explain the results: (i) motivated search, that is the motives that influence individual firms in selecting initiatives; (ii) survival ability of firms in competitive environments;(iii) feedback among initiative implementation, competence building and motivated search.