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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
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    File URL: http://www.iese.edu/research/pdfs/DI-0462-E.pdf
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    References listed on IDEAS

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    1. 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.
    2. Vergin, Roger C. & Qoronfleh, M. W., 1998. "Corporate reputation and the stock market," Business Horizons, Elsevier, vol. 41(1), pages 19-26.
    3. 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.
    4. 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.
    5. 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.
    6. Edward Freeman, R. & Evan, William M., 1990. "Corporate governance: A stakeholder interpretation," Journal of Behavioral Economics, Elsevier, vol. 19(4), pages 337-359.
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    Cited by:

    1. Govindan, Kannan & Madan Shankar, K. & Kannan, Devika, 2016. "Sustainable material selection for construction industry – A hybrid multi criteria decision making approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 1274-1288.
    2. repec:gam:jsusta:v:10:y:2018:i:2:p:445-:d:130890 is not listed on IDEAS
    3. Marika Swieszczak & Krzysztof Swieszczak, 2016. "Misje wybranych bankow z perspektywy koncepcji CSR / Missions of Selected Bank from the Perspective of CSR Concept of Socially Responsible Businesses Based on the RESPECT Index," Annales. Ethics in Economic Life, University of Lodz, Faculty of Economics and Sociology, vol. 19(3), pages 143-153, September.
    4. Ricart, Joan E. & Rodriguez, Miguel A. & Sanchez, Pablo, 2004. "Sustainability in the boardroom: An empirical examination of Dow Jones sustainability world index leaders," IESE Research Papers D/577, IESE Business School.

    More about this item

    Keywords

    Sustainable development; corporate governance; knowledge management;

    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

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