Institut für ökologische Wirtschaftsforschung gGmbH GELENA Gesellschaftliches Lernen und Nachhaltigkeit 13th International Conference of the Greening of Industry Network: Partnerships for Sustainable Development July 2 - 5, 2006, Cardiff Organizational Learning to Integrate Sustainability Bernd Siebenhüner/Marlen Arnold Oldenburg University GELENA Research Group Social Learning and Sustainability Oldenburg University

Agenda 1.Background 2.Framework 3.Findings 4.Consequences

Background: Claims for Learning in Concepts of Sustainable Business  Triple bottom line (Bowden, et al. 2001, Elkington 1997),  Company oriented sustainability (COSY) (Schneidewind 1994, Schneidewind, et al. 1997),  Corporate social responsibility (European Commission 2002, Ruggie 2002, Clarkson 1995)  Corporate sustainability (Dyllick, Hockerts 2002, Gladwin, et al. 1995, Schaltegger, et al. 2003, Shrivastava, Hart 1995a, Welford 1997)

Background: Implications  Many claims for the need of organisational learning towards sustainable development  Little empirical knowledge in the field  Attempt to focus on less researched influencing factors of organisational learning  Research of organisational handling of businesses  in 3 business fields: Mobility, Housing & Construction, Information & Communication Technologies

Framework: Sustainable Learning Defining Organisational Learning towards Sustainable Development  Changes in organisational routines, activities, and communication...  that result from changes in organisational knowledge and value base,  that address sustainable development  that lead to actual improvements

Framework: Forms of Learning and Changes  Single-loop learning:  Adaptive learning, changes in operations and outputs  Error correction, strategies, culture and values remain unchanged  Double-loop learning:  Strategies and values are changed/transformed  Often reflexive process  Incremental changes:  Adjustments in product and process designs  Additive technologies, limited adaptations  Radical changes:  New or far-reached changed processes, products and services  New forms of satisfying given needs

Conceptual Framework Culture Values and norms Communication Leadership styles Conflicts Culture Values and norms Communication Leadership styles Conflicts External Influences Market pressures Public/stakeholder demands Legal & technological requirements Consultants External Influences Market pressures Public/stakeholder demands Legal & technological requirements Consultants Organisational Learning: Single-loop learning Double-loop learning Organisational Learning: Single-loop learning Double-loop learning Structure Hierarchical structures Staff & job rotation Reflexive mechanisms Structure Hierarchical structures Staff & job rotation Reflexive mechanisms Behaviour Change agents Intrapreneure Behaviour Change agents Intrapreneure

Our Study  Case studies of 6 German medium-sized and large corporations  3-6 interviews in each company, personal visit and additional telephone interviews  Period: between May and October 2004  Interviews with management, sustainability department and research & development department  Additional questionnaire

Framework: Our Sample  Criteria  Sustainability related changes in product or process designs (successful/positive examples)  Stakeholder integration (dialogues, participating concepts)  General sustainability strategies with observable effects  Success stories in the fields of:  Mobility (1 medium-sized businesses, 1 large company)  Housing & Construction (2 medium-sized businesses)  Information & Communication Technologies (2 large companies)

Findings: Learning  Medium-size businesses have a higher potential for radical change than large companies  Double and single loop learning observed in both groups Process Results Single-loop Learning Double-loop Learning Incremental changes Large company (Mobility) Large company (I&C), Large company (I&C) Radical changes 2 SMB (H&C), SMB (Mobility)

Findings: Influencing Factors Structure:  Seize is important for the range of changes or results  Staff factors had barely influence  Reflexive mechanisms  Housing & construction companies:  target-driven learning mechanism  formal communication (manual, trainings) and top-down diffusion of new knowledge  Companies I&C:  well structured research & development processes drive learning and innovation  project and team work, platforms  Mobility companies:  guideline-driven learning processes  flexible organisational structure, self-organized teams

Findings: Influencing Factors (2) Organisational culture:  Culture matters for learning  Large firms: „good German corporate governance“:  stakeholder demands are taken seriously  companies in fear of loss of reputation  elaborate sustainability reporting schemes  Medium-size firms: management commitment crucial for „sustainability culture“  Conflicts often occurred between economic (market) demands and sustainability objectives

Findings: Influencing Factors (3) Behavioural factors:  change agents played in most cases an important role combined with a participatory culture of decision making  Medium-size firms: change agents were in management functions  Large firms: Change agents mostly in sustainability units or R&D departments (I&C) External factors:  Stakeholder pressures in case of large firms highly relevant  Markets often hindering than supportive of sustainability initiatives  Contacts to external research institutions (e.g. universities) promoted sustainability initiatives  Legal requirements partly support sustainability changes

Conclusions  Proactive sustainable learning is impossible without „intrapreneurial“ change agents  Organisational structures are necessary to pass and implement information, knowledge and learning effects into the organization  Structural provisions do not suffice  Cultural factors no sufficient explanation for radical changes  Paradox: The higher the penetration of sustainable learning effects into the organization is the more a firm needs internal maintenance. (leadership, structure, …)  Management commitment essential, in particular in SMB  Transparency and publicity will be needed to allow stakeholders to monitor firm activities

Consequences  Large firms: need new institutions to implement the learning effects as well as new structures to anchor the learning effects deeply into the organization   focus not only on platforms, but on human resource development: team work, project work  SMB: need new organizational structures to bundle and codify knowledge   focus on platforms (codifying and transferring knowledge)  Change agents (Manager) with a high sustainable orientation is not enough, there is also a cooperative leadership necessary (internal participation (transferring and integrating knowledge)  How to develop markets towards sustainability from consumer and producer sides?

Thank you for listening!