IDEAS home Printed from https://ideas.repec.org/p/ebg/iesewp/d-0462.html
   My bibliography  Save this paper

Sustainable development and sustainability of competitive advantage: A dynamic and sustainable view of the firm

Author

Listed:
  • Ricart, Joan E.

    (IESE Business School)

  • Rodríguez, Miguel A.

    (IESE Business School)

  • Sanchez, Pablo

    (IESE Business School)

Abstract

Does the need for sustainable development hinder businesses' ability to create value? Is firms' competitiveness negatively affected by considering that need? Evidence that many of today's economic development practices are causing negative environmental and social side-effects continues to pile up. Yet to change the belief that markets and prices by themselves can, must and will take care of any negative impact that companies have on society is a tough objective. To prove that it is possible to do well by doing right, and that, in the long term, the only way to do well is by doing right, is a Herculean task. The purpose of this paper is to contribute to this task. Since the core idea of the paper relates to the role of business in society at large, first of all the authors quickly review the literature concerning this issue. Then, drawing on the resource-based view of the firm and sustainable development literature, the paper presents a proposal for a dynamic and sustainable view of the firm, explaining the normative and instrumental character of its foundations. It shows how sustainable development changes the competitive landscape and in so doing influences the way in which companies develop their resources, capabilities and activities, fostering the persistence of competitive advantages based on knowledge and innovation. The authors conclude by highlighting the changes in corporate governance which inherently come with this new view of the firm.

Suggested Citation

  • Ricart, Joan E. & Rodríguez, Miguel A. & Sanchez, Pablo, 2002. "Sustainable development and sustainability of competitive advantage: A dynamic and sustainable view of the firm," IESE Research Papers D/462, IESE Business School.
    • Handle: RePEc:ebg:iesewp:d-0462
    as

    Download full text from publisher

    File URL: http://www.iese.edu/research/pdfs/DI-0462-E.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Vergin, Roger C. & Qoronfleh, M. W., 1998. "Corporate reputation and the stock market," Business Horizons, Elsevier, vol. 41(1), pages 19-26.
    2. Michael C. Jensen, 2010. "Value Maximization, Stakeholder Theory, and the Corporate Objective Function," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 32-42, January.
    3. Frank Mueller, 1996. "Human Resources As Strategic Assets: An Evolutionary Resource‐Based Theory," Journal of Management Studies, Wiley Blackwell, vol. 33(6), pages 757-785, November.
    4. Davis, Keith, 1967. "Understanding the social responsibility puzzle," Business Horizons, Elsevier, vol. 10(4), pages 45-50.
    5. Edward Freeman, R. & Evan, William M., 1990. "Corporate governance: A stakeholder interpretation," Journal of Behavioral Economics, Elsevier, vol. 19(4), pages 337-359.
    6. Marta Fossas Olalla, 1999. "The resource-based theory and human resources," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 5(1), pages 84-92, February.
    7. Kotha, Suresh & Rajgopal, Shivaram & Rindova, Violina, 2001. "Reputation Building and Performance: An Empirical Analysis of the Top-50 Pure Internet Firms," European Management Journal, Elsevier, vol. 19(6), pages 571-586, December.
    8. Amy J. Hillman & Gerald D. Keim, 2001. "Shareholder value, stakeholder management, and social issues: what's the bottom line?," Strategic Management Journal, Wiley Blackwell, vol. 22(2), pages 125-139, February.
    9. Balaji S. Chakravarthy, 1986. "Measuring strategic performance," Strategic Management Journal, Wiley Blackwell, vol. 7(5), pages 437-458, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giorgia Nigri & Mara Del Baldo & Armando Agulini, 2020. "Governance and accountability models in Italian certified benefit corporations," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(5), pages 2368-2380, September.
    2. Fernando García & Jairo González-Bueno & Francisco Guijarro & Javier Oliver, 2020. "Forecasting the Environmental, Social, and Governance Rating of Firms by Using Corporate Financial Performance Variables: A Rough Set Approach," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    3. Silvana Signori & Leire San-Jose & Jose Luis Retolaza & Gianfranco Rusconi, 2021. "Stakeholder Value Creation: Comparing ESG and Value Added in European Companies," Sustainability, MDPI, vol. 13(3), pages 1-16, January.
    4. Elizabeth-Anne Thomas, 2019. "How Useful Is the Global Reporting Initiative (GRI) Reporting Framework to Identify the Non-financial Value of Corporate Social Performance (CSP)?," CSR, Sustainability, Ethics & Governance, in: Nicholas Capaldi & Samuel O. Idowu & René Schmidpeter & Martin Brueckner (ed.), Responsible Business in Uncertain Times and for a Sustainable Future, pages 37-87, Springer.
    5. Mahoney, Joseph & Asher, Cheryl Carleton & Mahoney, James, 2004. "Towards a Property Rights Foundation for a Stakeholder Theory of the Firm," Working Papers 04-0116, University of Illinois at Urbana-Champaign, College of Business.
    6. Seong Y. Cho & Cheol Lee, 2019. "Managerial Efficiency, Corporate Social Performance, and Corporate Financial Performance," Journal of Business Ethics, Springer, vol. 158(2), pages 467-486, August.
    7. repec:dau:papers:123456789/1059 is not listed on IDEAS
    8. Ferrell, Allen & Liang, Hao & Renneboog, Luc, 2016. "Socially responsible firms," Journal of Financial Economics, Elsevier, vol. 122(3), pages 585-606.
    9. Pascual Berrone & Jordi Surroca & Josep Tribó, 2007. "Corporate Ethical Identity as a Determinant of Firm Performance: A Test of the Mediating Role of Stakeholder Satisfaction," Journal of Business Ethics, Springer, vol. 76(1), pages 35-53, November.
    10. Danny Zhao‐Xiang Huang, 2022. "An integrated theory of the firm approach to environmental, social and governance performance," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1567-1598, April.
    11. Christopher Groening & Vamsi K. Kanuri, 2018. "Investor Reactions to Concurrent Positive and Negative Stakeholder News," Journal of Business Ethics, Springer, vol. 149(4), pages 833-856, June.
    12. Grougiou, Vassiliki & Leventis, Stergios & Dedoulis, Emmanouil & Owusu-Ansah, Stephen, 2014. "Corporate social responsibility and earnings management in U.S. banks," Accounting forum, Elsevier, vol. 38(3), pages 155-169.
    13. Ben-Nasr, Hamdi & Ghouma, Hatem, 2018. "Employee welfare and stock price crash risk," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 700-725.
    14. Lucy W. Lu, 2021. "The moderating effect of corporate governance on the relationship between corporate sustainability performance and corporate financial performance," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(3), pages 193-206, September.
    15. Dimes, Ruth & de Villiers, Charl, 2024. "Hallmarks of Integrated Thinking," The British Accounting Review, Elsevier, vol. 56(1).
    16. Boubaker, Sabri & Chebbi, Kaouther & Grira, Jocelyn, 2020. "Top management inside debt and corporate social responsibility? Evidence from the US," The Quarterly Review of Economics and Finance, Elsevier, vol. 78(C), pages 98-115.
    17. repec:dau:papers:123456789/2550 is not listed on IDEAS
    18. Davide Fiaschi & Elisa Giuliani, 2011. "The impact of business on society: exploring CRS adoption and alleged human rights abuses by large corporations," LEM Papers Series 2011/13, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    19. Andrea Pérez & Carlos López & María del Mar García-De los Salmones, 2017. "An empirical exploration of the link between reporting to stakeholders and corporate social responsibility reputation in the Spanish context," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 30(3), pages 668-698, March.
    20. Ye Cai & Hoje Jo & Carrie Pan, 2012. "Doing Well While Doing Bad? CSR in Controversial Industry Sectors," Journal of Business Ethics, Springer, vol. 108(4), pages 467-480, July.
    21. Mauro Sciarelli & Mario Tani & Giovanni Landi & Ornella Papaluca, 2019. "The Impact of Social Responsibility Disclosure on Corporate Financial Health: Evidences from Some Italian Public Companies," International Business Research, Canadian Center of Science and Education, vol. 12(3), pages 109-122, March.
    22. Kamalesh Kumar & Giacomo Boesso & Giovanna Michelon, 2016. "How Do Strengths and Weaknesses in Corporate Social Performance Across Different Stakeholder Domains Affect Company Performance?," Business Strategy and the Environment, Wiley Blackwell, vol. 25(4), pages 277-292, May.

    More about this item

    Keywords

    Sustainable development; corporate governance; knowledge management;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebg:iesewp:d-0462. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Noelia Romero (email available below). General contact details of provider: https://edirc.repec.org/data/ienaves.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.