The Crossroads between Digitalization and Sustainability: Implications for Societies, Markets, and Firms

Dear colleagues,

Firms commit to sustainability in order to meet stakeholders needs (Crane et al, 2008) whilst they innovate to convert demand changes into wealth opportunities (Forcadell & Aracil, 2017, 2019; Mishra, 2017). There is an important amount of research linking innovation and sustainability from different angles (Barnett, 2007; Ratajczak and Szutowski, 2016). From a macro perspective, the process by which sustainable strategies at the company-level scale up to the macro level was addressed by the United Nations in the Sustainable Development Goals (UN, 2015). This initiative constitutes the most important program aimed at fostering sustainability in collaboration with governments and private companies (Horn and Grugel, 2018). The Sustainable Development Goals directly approach industry innovation as one of the specific goals as well as indirectly in most of the goals.

In this Special Issue, we are interested in extending and deepening analyses of the relationship between sustainability and digitalization. The body of literature on the sustainability–digitalization relationship is still at the embryonic stage (Brenner, 2018) with few exceptions (Flyverbom et al, 2019; Scherer et al, 2016). Digitalization of business activity is referred to the strategic transition from a traditional to a digital approach (Barnir et al, 2003), affecting the business as a whole (Bleicher and Stanley, 2016; Steiber and Alange, 2015). The digitalization process, as opposed to earlier technological advances, is sudden. In particular, the Internet conceptualizes a rapidly changing environment (Eisenhardt and Sull, 2001; Salmador and Bueno, 2005) in terms of industry definition and strategy-formation processes. Today, 40% of the world’s population is digitally connected versus just 5% in 1995 (OECD, 2018). This means that we are in the early stages of the digital era, which opens up a wide range of opportunities but also presents important challenges for firms and society as a whole. The imperative digital transformation grants a deep rearrangement of industry boundaries, shifts in consumer preferences, and a strong remodeling of how competitors and stakeholders interact with the organization. In this context, digital technologies offer the opportunity to create competitive advantages whilst, at the same time, they constitute a challenge to survive in this hyper-dynamic environment. From a firm-level perspective, digitalization allows firms to increase their efficiency (Loebbecke and Picot, 2015) and reach new clients and/or markets (Autio and Zander, 2016). From an individual perspective, digitalization meets the requirements of agility, transparency, and 24/7 product availability. From a society level, digitalization can improve productivity growth, transform private and public services and enhance social wellbeing (OECD, 2018). However, there are several drawbacks within the digital transformation, such as its impact on jobs whereby is human labour being replaced by machines (Loebbecke and Picot, 2015) as well as important issues regarding data collection, security and privacy.

The rise of the digitalization is urging us to rethink corporate sustainability. We are particularly interested in considering novel concepts in new contexts and developing new relationships to enhance our theoretical and managerial understanding of sustainability in the digital age. This Special Issue invites contributions that extend existing research on sustainability by incorporating the current digital environment. Contributions to this Special Issue should relate to corporate sustainability and digitalization from a broad-minded perspective regarding phenomena, contexts and theoretical approaches. We encourage wide-ranging methodological approaches, including conceptual, quantitative or qualitative papers. Specifically, we view the potential for advancement in this field on the following levels: society (country, institutions, and developed vs. developing), industry/market and firm (corporate, competitive and intra-firm). Specific topics within the intended scope of this Special Issue include, but are not restricted to, the following:

Society

• Negative effects of digitalization. For example, how are firms dealing with challenges associated with loss of privacy and security in the treatment of personal data? How are individuals coping with diseases (i.e., nomofobia) associated with the intensive use of technological devices?
• Which specific features within a particular institutional setting enable or prevent the development of strategies related to digitalization and sustainability. For example, how do born-global firms design and implement sustainable strategies when expanding internationally across different institutional settings?
• How is digitalization challenging stakeholders’ power status quo and how can this affect a firm’s sustainability strategy.
• How does the digital transformation enable MNCs and other agents to better address the Sustainable Development Goals challenge?
• How do private organizations’ sustainable initiatives scale up to the macro level? Does the digital transformation allow the scope and reach of firms’ sustainable actions to be extended?
• Which specific domains within sustainability (i.e., environmental, social or governance) are more affected by the digital transformation?
• What is the potential for digitalization to facilitate access to specific products and services by the bottom-of-the-pyramid?
• What are innovative measurements to advance the quantification of both digitalization and sustainability?

Industry

• Is there a link between digital disruption and sustainable engagement? For example, are incumbent firms facing digital disruption from new entrants based on a differentiated sustainable-related approach or vice-versa?
• How do sustainable strategies complement, foster and/or enhance corporate digitalization efforts?
• From the demand perspective, how do consumers perceive the sustainability strategies in the digital era? Which attributes do they value most?
• Are there differences in the combination of sustainability and digitalization among industries, for example, services sectors vs. manufacturing industries?
• Digitalization promotes a creative destruction process that devastates certain industries and at the same time allows the emergence of new ones. What is the role of corporate sustainability in this context?

Firm

• How do companies react to the threats associated with digitalization? Do they implement combined strategies that involve, at the same time, digital and sustainable actions?
• Which new business opportunities have emerged from the intersection between digital business models and sustainability?
• Do different categories of digital transformation, i.e., business, processes and business model innovations, promote various sustainable initiatives with different levels of intensity?
• Do individual-level characteristics (i.e., managers, company founders’ education and/or values) promote the corporate engagement of sustainability in the context of digitalization?

REFERENCES

Autio, E., & Zander, I. (2016). Lean internationalization. In Academy of Management Proceedings (Vol. 2016, No. 1, p. 17420). Briarcliff Manor, NY. USA.

Barnett, M.L. (2007). Stakeholder influence capacity and the variability of financial returns to corporate social responsibility. Academy of Management Review, 32(3): 794-816.

BarNir, A., Gallaugher, J. M., & Auger, P. (2003). Business process digitization, strategy, and the impact of firm age and size: the case of the magazine publishing industry. Journal of Business Venturing, 18(6): 789-814.

Bleicher, J., & Stanley, H. (2016). Digitization as a catalyst for business model innovation a three-step approach to facilitating economic success. Journal of Business Management, 12: 62-71.

Brenner, B. (2018). Transformative Sustainable Business Models in the Light of the Digital Imperative—A Global Business Economics Perspective. Sustainability, 10(12): 4428.

Crane, A., McWilliams, A., Matten, D., Moon, J., & Siegel, D. S. (2008). The Oxford handbook of corporate social responsibility. Oxford Handbooks.

Eisenhardt, K.M., & Sull, D.N. (2001). Strategy as simple rules. Harvard Business Review, 79(1): 106-119.

Forcadell, F. J., & Aracil, E. (2019). Can multinational companies foster institutional change and sustainable development in emerging countries? A case study. Business Strategy & Development, 1-15.

Forcadell, F. J., & Aracil, E. (2017). Sustainable banking in Latin American developing countries: Leading to (mutual) prosperity. Business Ethics: A European Review, 26(4): 382-395.

Flyverbom, M., Deibert, R., & Matten, D. (2019). The Governance of Digital Technology, Big Data, and the Internet: New Roles and Responsibilities for Business. Business & Society, 58(1): 3–19

Horn, P., & Grugel, J. (2018). The SDGs in middle-income countries: Setting or serving domestic development agendas? Evidence from Ecuador. World Development, 109: 73-84.

Loebbecke, C., & Picot, A. (2015). Reflections on societal and business model transformation arising from digitization and big data analytics: A research agenda. The Journal of Strategic Information Systems, 24(3): 149-157.

Mishra, D. (2017). Post-innovation CSR performance and firm value. Journal of Business Ethics, 140: 285-306.

OECD (2018). Achieving inclusive growth in the face of the digital transformation and the future of growth. Report to G20 Finance Ministers. Organization for Economic Cooperation and Development. Washington D.C.

Ratajczak, P., & Szutowski, D. (2016). Exploring the relationship between CSR and innovation. Sustainability Accounting, Management and Policy Journal, 7(2): 295-318.

Salmador, M.P., & Bueno, E. (2005). Strategy-Making as a complex, double-loop process of knowledge creation: four cases of established banks reinventing the industry by means of the internet. Strategy Process, 22: 267-318.

Scherer, A. G., Rasche, A., Palazzo, G., & Spicer, A. (2016). Managing for political corporate social responsibility: New challenges and directions for PCSR 2.0. Journal of Management Studies, 53(3): 273-298.

Steiber, A., & Alänge, S. (2015). Organizational innovation: verifying a comprehensive model for catalyzing organizational development and change. Triple Helix, 2(1): 14.

United Nations (2015). Transforming our world: The 2030 agenda for sustainable development. New York. USA.

Dr. Francisco Javier Forcadell
Dr. Elisa Aracil
Guest Editors

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