Paradoxes in corporate sustainability : examining managerial responses through cognitive framing and sensemaking perspectives

Organizational leaders constantly face paradoxical tensions in navigating their firms’ corporate sustainability. Yet, they often differ in their interpretations and responses to these tensions. In an attempt to explain the variance in managerial responses, Hahn, Preuss, Pinkse, and Figge (2014) examined how two ideal-type frames – a business case frame and a paradoxical frame – affect managerial sensemaking on corporate sustainability. Nevertheless, our understanding on (1) how these cognitive frames drive actual firm behaviors in response to paradoxical tensions in corporate sustainability, (2) if and when these cognitive frames result in superior corporate sustainability performance, and (3) the role of social learning in managerial sensemaking of paradoxical tensions in corporate sustainability remain limited. I attempt to address these knowledge gaps in a series of three papers within my thesis. In my first essay, I apply a cognitive frames perspective to examine how a business case frame and a paradoxical frame drive varying firm behaviors across four types of paradoxical tensions in corporate sustainability, namely performing (goals), learning (knowledge), belonging (identity), and organizing (processes). I leverage on the literature on behavioral theory of the firm (goals), organizational learning (knowledge), organizational identity (identity), and embedded/peripheral corporate sustainability (processes) to predict how firms with different managerial cognitive frames will respond differently. My second essay builds on the first essay by quantitatively testing if and when chief executive officers’ (CEOs) paradoxical frame can lead to superior corporate sustainability performance (CSP). Adopting a cognitive-linguistic approach to measure CEOs’ paradoxical frame, I found that CEOs’ paradoxical frame generally did not have significant effects on CSP in the subsequent year. In addition, I found that stakeholder recognition of CEOs’ environmental and social efforts strengthened the relationship between CEOs’ paradoxical frame and CSP. My third essay adopts an inductive approach to examine the interactions between decision makers and their firms’ stakeholders on corporate sustainability issues. Grounding my insights in conference observations and interviews, I observed that decision makers engaged in a two-way coactive vicarious learning with their peers and stakeholders on corporate sustainability issues. This two-way mechanism of learning while educating their peers and stakeholders in turn provided new knowledge that influenced how decision makers made sense of the coopetition paradox in corporate sustainability. I draw attention to the use of discursive texts by decision makers and stakeholders as a means of coordinating and controlling joint action among firms and stakeholders on corporate sustainability. As a whole, my thesis offers a more nuanced understanding of the role of decision makers’ cognitive frames and stakeholder interactions in determining how firms vary in their corporate sustainability actions and performance outcomes.Doctor of Philosoph