Journal of Business Research 69 (2016) 418–425

Contents lists available at ScienceDirect

Journal of Business Research

Modeling corporate sustainability strategy

Antonio Lloret ⁎
Instituto Tecnológico Autónomo de México, México

a r t i c l e i n f o a b s t r a c t

Article history: This study uses empirical information to demonstrate the analysis of a corporate sustainability model and pre-
Received 1 February 2015 sents five leading Mexican companies as illustrative examples of sustainable, long-term firms whose strategic
Received in revised form 1 April 2015 plans incorporate three views of sustainability: market-industry, resource-based, and institutional-based. By
Accepted 1 June 2015
considering all three domains, companies better position themselves to adapt to the restrictions imposed by
Available online 26 July 2015
the economic, social, and environmental systems. Competitive success requires a constant awareness of the con-
Keywords:
ditions under which the company may lose or generate value, and a company’s competitiveness reflects its long-
Analysis of corporate sustainability term performance and relationships within the industry and with competitors. Sustainable companies demon-
Market-industry view strate successful long-term performance amid the restrictions imposed by economic, social, and environmental
Resource-based view systems by developing a strategy that sustainably generates and captures value into the future. Sustainable prac-
Institutional-based view tices are central to a company’s business model and survival because a strategy of targeted, enduring actions af-
Corporate social responsibility fords competitive advantages.
© 2015 Elsevier Inc. All rights reserved.

1. Introduction waste management processes represent environmental limitations.

These restrictions, when not considered within the strategy, may limit
A company's competitiveness reflects its long-term performance firm competitiveness and, therefore, performance. Neglecting to consider
and relationships within the industry and with competitors. A compet- social, environmental, and economic restrictions is similar to assuming
itive company is constantly aware of the conditions required for value that business decisions are linear.
generation. A company must understand how to generate sustainable Conceptually, corporate sustainability stems from the broader con-
value through a strategy that meets organizational goals. According to cept of sustainable development and represents a construct parallel to
Thompson, Peteraf, Gamble, and Strickland (2012), strategy consists of corporate social responsibility (Montiel, 2008). For Gladwin, Kennelly,
the competitive movements and business management employed to and Krause (1995), sustainable development is the process of achieving
grow the business, to attract and satisfy consumers, and to successfully human development in an inclusive, connected, equitable, prudent, and
compete through operations that work toward organizational targets. secure manner. For Shrivastava (1995), sustainability with an environ-
For Porter (1996), strategy represents company activities that fit together mental emphasis achieves total quality environmental management,
or a theory for creating competitive advantages (Barney & Hesterly, sustainable competitive strategies, technology investment, and corpo-
2012). When this strategy is accompanied by activities that create, gener- rate population impact control. For Starik and Rands (1995), sustain-
ate, and capture value (Osterwalder & Pigneur, 2010), the company ability is the ability of one or more entities, either individually or
becomes more competitive. A strategically directed model can create a collectively, to exist and flourish for the long term. Bansal (2005) intro-
firm that is competitive in the long term. duces the concept of corporate sustainable development based on three
The emphasis on long term is significant as sustainability implies principles: economic, social, and environmental integrity (Bansal, 2005;
continuity; however, a broader term for sustainability is necessary to Shrivastava, 1995; Starik & Rands, 1995).
include environmental sustainability, social endurance and economic Given that sustainability practices are key to a company's survival,
stability. Therefore, sustainable competitive advantage implies perma- targeted sustainable actions within a company's strategy are likely to
nence amid the restrictions imposed by economic, social, and environ- become a source of competitive advantage. This approach is aligned
mental systems. For example, the production capacity of a plant is an with a business case for corporate sustainability that includes several
economic limitation, individual preferences for goods and services rep- perspectives (Boons & Lüdeke-Freund, 2013; Carroll & Shabana, 2010;
resent social limitations, and scarce inputs such as energy, water, or Schaltegger, Lüdeke-Freund, & Hansen, 2012). One perspective asso-
ciated with corporate social responsibility is firm attempts to influence
⁎ School of Business, ITAM, Río Hondo No. 1, Col. Progreso Tizapán, C.P. 01080, México
societal expectations for firm behavior. This perspective, usually asso-
D.F., México. Tel.: +52 55 56284000x3447. ciated with stakeholder management, requires that companies act
E-mail address: [email protected]. responsibly toward consumers, investors, and the government and

http://dx.doi.org/10.1016/j.jbusres.2015.06.047
0148-2963/© 2015 Elsevier Inc. All rights reserved.
 A. Lloret / Journal of Business Research 69 (2016) 418–425 419

responsibly manage internal firm affairs by motivating employees governance represents a business model for sustainability that indi-
in ways that create value for the company (Eesley & Lenox, 2006; rectly addresses stakeholder expectations. Fig. 1 depicts the firm's
Freeman, Harrison, Wicks, Parmar, & de Colle, 2010; Henriques & strategy.
Sadorsky, 2008). A strategy that incorporates all of these elements can create a com-
Other approaches suggest that environmental performance and pany with faster reactions to environmental changes. Reduced exposure
financial performance correlate. This perspective is embodied in the to risk through a long-term vision generates value. A discussion of each
literature on financial and environmental performance (Clarkson, Li, element follows.
Richardson, & Vasvari, 2008; King & Lenox, 2001; Orlitzky, Schimdt,
& Rynes, 2003). The results of the literature suggest that a firm that 2.1. Market-based view
works actively to improve environmental performance also achieves
positive financial performance over time. Other approaches to compet- The first element of competitive strategy is based on cost leadership
itiveness and sustainability address the strategic exploitation of re- and the company's differentiation or benefits (Porter, 1985). The
sources and capacities. This approach is embedded in the resource- element is evident from the laws of supply and demand: the catalysts
based notion of the firm (Barney, 1991), the natural resource-based for individual preferences and the generators of operating margins.
view of the firm (Aragón-Correa & Sharma, 2003; Hart, 1995; Hart & Demand represents the perceived benefits customers acquire from the
Ahuja, 1996), the complementary assets (Christmann, 2000), or the goods or services produced by the company. These perceived benefits
resource-dependent perspectives of stakeholders (Kassinis & Vafeas, represent differentiation and can be measured by the distance between
2006; Sharma & Henriques, 2005). Another perspective suggests that the availability of payment and the price paid. Thus, the company that
institutional conditions to act in socially responsible ways modify firm offers more perceived benefits than the competition will grow and gen-
behavior (Bansal & Clelland, 2004; Campbell, 2007; Hoffman, 1999; erate more value. Sustainability, from the perspective of differentiation,
King & Lenox, 2000). is an element that enhances firm attributes and achieves differentiation
All these approaches combined into a model for sustainability may to improve value.
prove complex as these schemes interplay among them. According to Competitive strategy, however, involves company exploitation of
Epstein and Roy (2001), senior managers recognize the importance of the average cost of operation through strategic actions that reduce
formulating a strategy that includes corporate social responsibility but this cost. By comparing the average cost with the market price, the
experience difficulty in execution. Decision making involves multiple company obtains an operating margin. With standardized merchandise
levels of analysis, which a singular framework may not capture and and a price generated by the market, the company is more competitive
explain (Delmas & Montes-Sancho, 2010). Aligned business and sus- if higher margins are the result of lower average costs. By reducing costs,
tainability strategies reflect the nature and extent of the opportunities a firm can lower prices so that consumers perceive more of a benefit
associated with sustainable development with respect to the creation when choosing that company. This ratio of benefits less cost provides
of value for the firm. stronger financial performance and, over the long term, sustainable
Social, economic, and environmental constraints are not simply competitiveness. The literatures that address this issue indicate that a
analytical concepts but represent drivers that a firm can use to align company that improves its environmental performance also achieves
the business model to business strategy. Short-term adjustments to positive financial returns over time (Albertini, 2013; King & Lenox,
meet these constraints, although expensive, can become differentiators 2001; Orlitzky et al., 2003). Porter and van der Linde (1995) posit that
that, in the medium to long term, increase firm competitiveness. lower pollution should mean higher productivity because pollution is
This study characterizes corporate sustainability as the possibility a form of wasted resources (Porter & van der Linde, 1995). Whether a
to create value through executed strategies that consider economic, green strategy is cost-effective is a question that stems from this ap-
environmental, and social restrictions in line with Bansal's (2005) proach; research into the subject has not produced a definitive answer
work. This study builds on previous research to construct a model for (Orlitzky et al., 2003), but has shown that a more relevant question
corporate sustainability. The study explains the main strategic domains is understanding how and when a green strategy is cost-effective
presented in the literature and acknowledges the significance of ad- (Howard-Grenville, Nash, & Coglianese, 2008; King & Lenox, 2001;
dressing the restrictions imposed by economic, societal, and environ- Margolis & Walsh, 2003; Siegel, 2009).
mental factors. Section 1 discusses the theoretical development and
presents the model for corporate sustainability. Section 2 discusses 2.2. Resource-based view
sustainability practices in Mexican firms and uses the empirical results
of a survey performed in Mexico to demonstrate perceptions of the A second element in the model of corporate sustainability is the
three strategic domains by Mexican firms. Section 3 illustrates how a vision of resources and capacities (Aragón-Correa & Sharma, 2003;
selection of public firms in Mexico have applied the model for corporate Barney, 1991; Hart, 1995; Hart & Ahuja, 1996; Russo & Fouts, 1997).
sustainability by examining the firms' sustainability strategies. Finally, According to this vision, the company proposes the use and exploitation
the study presents a conclusion and suggests future research to enhance of strategic assets, resources, and capacities based on tangible and intan-
the model. gible assets to remain competitive. This position considers a company's
resources and capacities to be accretive when they are valuable, rare,
2. Theory development: a model for corporate sustainability inimitable, and adaptable to the organization in a purely entrepreneur-
ial context or as an extension of natural resources (Hart, 1995). Strategic
A model of corporate sustainability will generate and capture value assets are subject to the biophysical limitations imposed by the environ-
subject to the limitations imposed by economic, environmental, and ment itself. Additionally, Hart (1995) posits that biophysical limits
social systems. A company strategy must consider the long term to imposed can be a source of competitive advantage. One way to obtain
ensure competitiveness. This study argues that companies can better new capacities and resources based on the limitations of natural re-
address restrictions when a business strategy considers three domains: sources is to develop a sustainable vision for the company. Companies
1) competitive strategy, in which strategies for differentiation and costs may acquire advantages by reducing waste, designing new products
are the main drivers, 2) the vision for firm-specific resources and capa- and technologies, integrating stakeholders into the decision-making
bilities, and 3) institutional theory. The incorporation of these three process and, most significantly, developing a long-term vision (Hart,
approaches into the business strategy will enable the firm to effectively 1995). This is the clearest link between ecology, the environment, and
pursue its goals (Peng, Sun, Pinkham, & Chen, 2009). Additionally, the company and it interplays with the market-based view through
sound leadership with a decision-making approach based on corporate cost advantage and conservation strategies. Additionally, businesses
420 A. Lloret / Journal of Business Research 69 (2016) 418–425

Fig. 1. Conceptual model of corporate sustainability limited by economic, environmental, and social factors and the interplay of sustainable leadership, corporate governance and stake-
holders' management domains.

that depend on natural resources and that are subject to the varying 2.4. The stakeholder's domain
availability of natural resources are vulnerable, such as mining and
manufacturing companies or food and beverage producers. This vulner- Another element linked to the previous three elements and consid-
ability ensures the generation of value if strategically managed. In ered in the corporate social responsibility literature is the stakeholders'
summary, the sustainability of the business requires the creation and approach (Harrison & Freeman, 1999). This domain addresses the vari-
application of strategic actions consistent with environmental limita- ous groups with a stake in the company including direct and indirect
tions encountered over time. Additionally, the resource-based view stakeholders such as neighbors, employees, investors, financial compa-
of the firm supports complementary assets (Christmann, 2000) or nies, government, and media. These stakeholders can create pressure on
the resource-dependent perspectives from stakeholders (Kassinis & the firm to act according to their interests, provide the company with
Vafeas, 2006; Sharma & Henriques, 2005). These perspectives imply resources such as concessions, labor, information, and supplies, or
that resources and capabilities become strategic assets that achieve even impose costs through direct or indirect pressure from the media,
a competitive advantage stemming from within the firm. This study NGOs, and neighbors (Clarkson, 1995). Stakeholder management en-
addresses strategies that exploit resources that, considering the limita- tails deliberate actions to manage stakeholder concerns while simulta-
tions and restrictions, generate firm value. neously pursuing company objectives (Eesley & Lenox, 2006; Freeman
et al., 2010; Henriques & Sadorsky, 1999; Hoffman & Georg, 2012;
Oligastri, 2009) and that of employees because sustainable competitive
2.3. Institutional-based view practices require human resources to align with firm strategy. Investing
in individuals to create cooperative relations, and employee training
The third element is institutional theory, or new institutionalism. leads to greater commitment and increased trust that lowers costs with-
This theory has recently been explored in the management literature in the firm (Lyman, 2008). The stakeholder management approach
by Peng et al. (2009) and has multiple implications for business and requires consideration of direct and indirect firm relations to find non-
the environment (Hoffman, 1999; Hoffman & Georg, 2012; Hoffman & market strategies for the generation of value.
Ventresca, 1999). Peng and colleagues, however, propose that compet-
itive advantages stem from the institutional limits established external
to the company. This study establishes institutional vision as an indis- 2.5. Sustainable leadership
pensable phenomenon for understanding corporate sustainability.
Based on the classic definition, institutions represent the precepts, The sustainable approach to leadership is composed of building ties
laws, rules, codes, customs, and traditions that determine behavior. with communities, collaboration among stakeholders, and promoting
Institutions establish the limits within which individuals, companies, long-term sustainable values. This is in contrast to non-sustainable
and governments may act. The main attribute of institutions is that leadership, which adopts a short-term view that can risk sustainability.
they lend certainty to business transactions and reduce transaction Sustainable leadership leads to superior business performance and
costs. Therefore, the institutional theory of the company indicates that resilience (Avery & Bergsteiner, 2011). The three strategic-based
the regulatory or cognitive framework of the environment establishes views incorporate sustainable leadership principles in different forms
the limits within which the organization moves, formally and infor- because these principles steer the organization toward corporate sus-
mally. The company must have an institutional vision to be sustain- tainability. Although strategic leadership is broad in scope, strategic
able because firms are subject to regional, national, international, execution focuses mostly on the institutional-based view in the form
and self-regulatory mechanisms that guide conduct. The capacity to of soft regulation based on informal institutions and hard regulation
adapt to institutional conditions generates long-term strategies that based on formal institutions. These regulations create the behavior
generate value. norms of people and firms. Leadership actions bind and perform
 A. Lloret / Journal of Business Research 69 (2016) 418–425 421

accordingly. For instance, ethics and responsibility are a set of institu- Muñoz-Piña (2007), using a sample of 60,000 Mexican firms, support
tions that influence firm behavior. Corporate governance causes institu- these previous results and conclude that the main driver of participation
tions to comply with different regulations, soft and hard. The set of is the threat of regulatory sanctions. Montiel and Husted (2009) find
rules and norms that drives corporate behavior is often what drives that the early adoption of voluntary programs in Mexico is explained
firm success. Sustainable leadership practices, when efficiently applied, by access to international markets and the ability to obtain relevant in-
create informal institutions embedded in firm culture. These informal formation from industry associations (Montiel & Husted, 2009). Perez-
institutions facilitate the firm's sustainability, considering that the Batres, Miller, Pisani, Henriques, and Renau-Sepulveda (2011) also
long-run vision is one that encompasses limits and boundaries that analyzed the Clean Industry Program and find that firms in “dirtier”
only a leader can overcome. Sustainable leadership practices are a useful industries and those located near the US border are more likely to par-
approach. Internal and external stakeholders will pressure the firm to ticipate in voluntary programs. The authors also find support for the
pursue sustainable practices, and the leaders must consider how to cre- idea that firms that have previously participated in a “supranational”
ate shared value (Porter & Kramer, 2011). program such as the UN Global Compact are very motivated to partici-
Leadership practices reflect the resource and resource dependent- pate. Finally, Aigner and Lloret (2013) surveyed large Mexican firms
based views. The practices further separate into three main approaches and found that companies are active in the areas of business where
within the resource-based view: practices that address internal re- environmental sustainability is relevant. According to the study results,
sources (for instance, employee-oriented practices), corporate gover- Mexican companies are in the early stages of development along the
nance practices, and practices concerning external stakeholders. sustainability “learning curve” (Aigner & Lloret, 2013).
Although Mexico is not known for being on the cutting edge of
2.6. Corporate governance environmentalism or a leader in firm environmental practices, Mexico
represents a rapidly developing country in both economic and social
Although corporate governance is unique to each company, some terms and is recognizing the parallel demand for environmental and
universal elements exist. Corporate governance controls the internal economic development.
and external actions of managers, employees, and external business
stakeholders. The corporate governance framework also outlines the 3.2. Results and discussion
obligations, privileges, and roles of board members or directors to
ensure that these individuals do not exploit company resources. Com- The study conducted a survey of the adoption of environmental
panies may also include the role of organizational shareholders and sustainability practices among firms including factors such as the moti-
their corporate voting responsibilities in the framework. Establishing vation for adoption, future adoption plans, decision-making responsibil-
a sound corporate governance framework provides tools to enhance ity, and internal/external challenges. The survey also explored the
internal capabilities to face long-term sustainability challenges. adoption of environmental sustainability practices and the link with
The three subsets of strategic views are resource dependent – firm competitiveness. The sample consisted of 103 self-selected firms
leadership, stakeholder management, and corporate governance. representing the six primary business sectors in the Mexican economy.
The three views relate externally to the market-, resource-, and The sample is highly skewed toward large firms. A total of 78.9% of the
institutional-based views and to successful firm strategies that meet sample firms has over 500 employees although the size of Mexican
economic, societal, and environmental domain requirements. The next firms is quite different, and approximately 90% of firms are small or
section uses empirical information from Mexican firms to examine the medium-sized. However, the development of environmental orienta-
drivers of sustainability practices. The study applies the corporate sus- tion, or the implementation of environmental practices among Mexican
tainability model to discuss the link between the drivers and the firms, occurs among larger firms. Larger firms typically possess an
model. The study provides a summary of the main research findings awareness of environmental sustainability as a significant factor for
from the Mexican firms with respect to the environment and sustain- competiveness and a desire to identify means to attain industry leader-
ability. Finally, the study provides information and particular actions ship. The study used the survey results originally reported in Aigner and
from several firms that support the ideas for the sustainability model. Lloret (2013) to show the drivers of sustainability practices from the
perspective of the corporate sustainability business model developed
3. Theory in practice in this study.

3.1. Mexican firm's sustainability practices as reported in the literature 3.3. Market-based view

Environmental and social responsibility case studies and small data The market-based view argues that sustainability is embedded in
analysis at the corporate level in Mexico suggest internal and external the firm through benefits and cost leadership. Firms seeking sustainabil-
pressures to adopt sustainability and corporate social responsibility ini- ity are typically also seeking new markets and perceive that consumers
tiatives. The majority of these initiatives address philanthropy or firm demand their goods and services hold sustainable attributes. This sur-
reputation as the primary drivers of such activities (González-Lara, vey finds that opening new markets (34.6%) and cost savings (25.2%)
2008; Weyzig, 2007). However, other types of empirical analysis at are drivers of sustainable practice adoption. No support was found for
the plant level suggest that environmental regulation is central to envi- branding or corporate image as drivers of sustainability as suggested
ronmental management initiatives within Mexico. by Blackburn (2012). In the manufacturing sector alone, cost savings
Dasgupta, Hettige, and Wheeler (2000) study the effects of regula- are more significant (50%) than opening new markets (40%). Opening
tion, plant-level management policies, and other factors on the environ- new markets implies that firms are seeking to enter markets that
mental compliance of Mexican firms. The authors conclude that with demand sustainability practices, such as international markets or
weak regulation, subsidized environmental management training may as suppliers of a value chain. These results support the findings of
provide a useful complement to uncertain conventional enforcement. Montiel and Husted (2009) and Perez-Batres et al. (2011). However,
Ruiz-Arredondo, Rivera-Planter, and Muñoz-Piña (2006) analyze the the results do not find support for the theory that firms expect branding
incentives for manufacturing firms to adopt subsidized programs such benefits and image improvements from the adoption of sustainability
as the Clean Industry Program, Mexico's flagship voluntary regulatory practices, which suggests that Mexican firms remain in the early stage
initiative. The authors conclude that regulatory enforcement, previous of the learning curve. The majority of firms (92.5%) state that the adop-
fines, or initiated legal processes result in the adoption of environmental tion of environmental sustainability practices improves the bottom line,
management practices. Blackman, Lahiri, Pizer, Rivera-Planter, and which is supported by the market-based view of the firm and the
422 A. Lloret / Journal of Business Research 69 (2016) 418–425

Table 1
ALSEA (2014) social responsibility.

Market-based view Resource-based view Institutional-based view

*Provides accessibility to multiple restaurants in *With nine distribution centers, centralized *Social responsibility includes all aspects of
multiple regions. A total of 142 restaurants in support areas ensure the success and business planning and operations.
Mexico, Argentina, Chile, and Colombia. efficiency of its operations. *The company has a social responsibility
*Differentiating strategies of brands such as *In 2012, the company invested more than committee, which is comprised of the top
Starbucks, Domino's, Burger King, Chili's, California 221,683 h in worker training with an executives of the company.
Pizza Kitchen, PF Changs, Pei Wei, Italiannis and average of eight hours per employee. *In 2012, the Mexican Center for Philanthropy
The Cheesecake Factory. Many with sustainable *The company saw a 17% increase in job named them a Socially Responsible Company.
strategies. creation in 2011. *The company contributes to the public policy
*Efficient distribution channel to reduce costs to *A total of 81% of their inputs is from local issues that impact their operations. The company
achieve an operating margin of 12% on average. suppliers. operates within the law and according to the
*A total of 232 million customers across the region. I*ncorporated change in 720 establishments highest ethical standards.
*The competitive strategy is based on a differentia- such as lighting for high-efficiency *The company participates in the National
tion strategy by opening new markets. In most equipment. *A 9.1% reduction in energy Chamber of Fast Food Restaurants.
brands, sustainability has been an engine. consumption seen within a year. *The company respects the norms regulating
*All Alsea water consumption comes from economic competition, monopolistic practices,
public services. Waterless urinals installed in and free market competition.
the facilities save 2800 m3 a year.

Table 2
Compartamos Banco (2014) sustainability.

Market-based view Resource-based view Institutional-based view

*A 79.8% customer retention rate in Mexico, *Construction of the SAP platform in Mexico *The Great Place To Work Institute considers
64.3% in Guatemala, and 74.6% in Peru. to optimize, organize, and standardize all the group one of the best places to work in
*Aterna opened a new business; signature company operations. Mexico.
micro-insurance with 3.2 million policies in *The average age of its employees is 31.1 *They had weekly contact with 77.34% of
Mexico. *Product differentiation and access years; a significant asset is the age of customers in 2012.
to financial instruments to the base of the employees. *Developed an Index of Consumer Protection
pyramid. *The number of employees in 2012 was aligned to the parameters of the international
*More than 2.5 million customers, many with 14,780; an increase of 11.1% compared to initiative of the “SMART Campaign.” An inde-
no previous access to credit. 2011. pendent certification to publicly recognize
*Guatemala expansion with growth rates of *Implemented the “Waste Separation for financial institutions that meet adequate
218% compared to 2011. SEAS” a program gaining significant achieve- standards of care in the treatment of clients.
*Portfolio credits equivalent to 1.4 billion in ments in three months of operation in 2012 *The first and only Latin American company to
2014; an increase of 25.4% over 2011. with more than 8382 kg of recycled material. support the Gender Equality Project of the
*Compartamos Banco is the industry leader in *Trained 337 employees in financial educa- World Economic Forum.
new market microfinance region wide and tion to impart this knowledge to clients and 100% of its employees are certified annually in
serves millions of people with no access to fi- avoid problems such as indebtedness. the Code of Ethics and Conduct, which renews
nancial services. Particularly those belonging a commitment to ethical behavior.
to the base of the pyramid. *Since 2009, 2% of annual net profits went to
social responsibility and sustainability.
For the second consecutive year, the company
won the Socially Responsible Company award
from the Mexican Center for Philanthropy

Table 3
CEMEX (2014) sustainable development.

Market-based view Resource-based view Institutional-based view

*Operational efficiency and cost *Established a 10-year strategic agreement with IBM *During 2012, the company concluded global
leadership drives Cemex's under which the company provides best-in-class IT integration of an advanced enterprise platform
competitive strategy. services and business processes. based on SAP.
*The company has increased *In 2012, the company consolidated its leadership in *The company invested $1.5 billion pesos in bonds,
operations in the Asian market the use of alternative low-carbon fuels achieving a demonstrating the strong support that exists for
and the operating margin using a replacement rate of 27%. CEMEX in global capital markets.
least-cost strategy. *The company encourages employees to volunteer *The company reduced the amount of debt maturing
*The company has developed in their communities, supports community services in March 2015 to approximately $750 million and
innovative products with greater infrastructure, promotes education, and provides paid all required repayments under the new
profit margins. training opportunities. financing agreement up to February 2017.
*Many of their products are *By rotating its managers from one country to *In 2010, the company began a three-year
tailored to meet consumer another and from one area of operations to another, partnership with the International Union for
demands. the company has increased the experience and *Conservation of Nature (IUCN) to strengthen its
*Locations in more than 50 knowledge diversity of its employees. approach to water issues.
countries across five continents. *Mapping of over 2000 sites with CEMEX cement,
I*ntegrated products meet the concrete, and aggregates in infrastructure for
specific needs of their customers comparison with areas identified as areas with
rather than standardized goods. water scarcity.
*The products address several *Cemex has invested in R&D for profitable and
construction needs and are of alternative energy solutions.
high quality.
 A. Lloret / Journal of Business Research 69 (2016) 418–425 423

Table 4
Industrias Peñoles (2014) sustainable development.

Market-based view Resource-based view Institutional-based view

*Largest producer of silver, gold, zinc, lead, *Increased investment in fixed assets and *Since January 2011, IFRS adopted for all financial
and sodium sulfate in Latin America. exploration of 23.1% in 2012 compared to statements.
*The company has entered the renewable 2011. *Clean Industry certificate from PROFEPA.
energy industry for plants and subsidiaries. *Water reuse systems that cater to loss by *Fourteen of its operations certified according to ISO
*Sustainable production has achieved evaporation. 14001.2004.
efficiency and cost reductions. *Community investment in 2012 *Declared a socially responsible company by CEMEFI.
*Investments in the construction of gold amounted to 12 million pesos to promote *Operated under the standards of FM Global.
and silver were approved that will increase self-sufficiency in the regions of operation. *Operated under the principles of internal control based
their market share of local production. *Started phase II Wind Power Project on criteria established by the Committee of Sponsoring
operations by adding 30 MW to the Organizations of the Treadway Commission.
capacity of the wind farm La Ventosa *Formalized sustainable development mission as part of
(Oaxaca). the business model.
*Opened a new central laboratory after an
investment of $14.5 million.
*A total of 3.7% of energy consumed is from
renewable energy.

Table 5
Grupo Pochteca (2014) sustainability.

Market-based view Resource-based view Institutional-based view

*Vertically integrated into the raw materials *Uses business intelligence to minimize risk *The first Mexican company to obtain the
and paper industry. and for the design of sourcing strategies. Certificate of Responsible Distributor by
*Over 8000 monthly customers monthly in 500 *Has 238,000 m2 of warehouses nationwide the NACD.
cities in Mexico. with a capacity of 79,000 m2 for storing dry *First Mexican company to receive FSC
*The company has the largest product portfolio goods and 15.2 million liters for liquids. certification.
(4200 products through its subsidiaries). *The company has 1063 employees in Mexico. *Compliance with applicable quality
*Operates in Guatemala, El Salvador, Costa *During 2012, the company decreased water standards worldwide in the protection and
Rica, and Brazil. consumption by 14% and energy by 17% com- management of chemicals regulation.
*In April 2009, the company announced the pared to 2011 and 2013. *Savings achieved in *Clean Industry certification from
acquisition of the Shell lubricants plant in the liters/person rate. PROFEPA.
Mexico, located in Leon, Guanajuato to help *From January 1, 2011, the company
their vertical integration. adopted the NIFS for all its financial results.
*Have laboratories that allow applications ac- *The group has “regulations,” which
cording to customer needs. enforce standards in all operations.
*Consistent world-class suppliers that stan- Compliance with these standards increased
dardize the quality production processes. by 7.3% compared to 2011.
*An audit confirmed ISO 9000 certification.

creation of competitive advantage supported by Andersen and Zaelke argument for the resource-based view in the corporate sustainability
(2003), Holliday et al. (2002), and the seminal work of Porter (1985) model is that resource limitations and restrictions, if embedded within
and Porter and van der Linde (1995). the strategy, are likely to increase firm competitiveness. Such a firm
has internalized the restrictions and will apply the value of sustainabil-
3.4. Resource-based view ity to the decision-making process.

The resource-based view proposes the use and exploitation of 3.5. Institutional-based view
strategic assets or resources by the firm to remain competitive. The
firm must assess the value, rarity, inimitability, and strategic alignment Institutional theory proposes that competitive advantages stem
of resources (Barney, 1991). Additionally, the firm is subject to the from the institutional limits established within, and external to, the
biophysical limitations imposed by the environment (Hart, 1995). company. Institutions create the incentive for corporate sustainability
Resources are significant for all firms surveyed. For instance, at least adoption because institutions cause firm behavior adaptations that
56.4% of firms are actively engaged in environmental sustainability, comply with societal expectations. Institutions create internal norms
and the leading areas are energy resources conservation (78.6%) of conduct that respond to sustainability demands. Firms use different
and waste reduction (75.1%) followed by environmental risk control institutional mechanisms at various levels depending on the required
(74.8%). For the manufacturing sector alone, environmental risk control, level of enforcement. The majority of firms in the survey use metrics
waste reduction, and product manufacturing are the main concerns of or report environmental performance through the Global Reporting
resource management. This finding is consistent with Perez-Batres Initiative (31%), ISO 14001 or 14031 (24%), and Triple Bottom Line
et al. (2011) who state that strategic resources drive sustainability deci- (21%). These reports are self-enforced informal institutions that shape
sions when enforcement is considered. The results also found that firms strategic firm decisions. The leading reason for firm adoption of sustain-
rank conservation practices with cost savings as follows: energy re- able practices is compliance with environmental regulations (63.6%).
sources conservation (57.3%) and waste reduction (56.8%) as areas These results are consistent with the findings of Ruiz-Arredondo et al.
most likely to deliver costs savings followed by natural resources con- (2006) and Blackman et al. (2007). The results show that national and
servation (83.0%) and water resources management (81.6%). For 70% international regulations drive strategic decisions for sustainable prac-
of firms, resource conservation strategies are likely to increase profits. tices. Institutional schemes are central to strategic decision making,
These results are consistent with the discussion and examples on the are often overlooked, and could achieve a competitive edge if consid-
value of sustainability contained in Chapter 3 of Blackburn (2012). The ered in a corporate sustainable model.
424 A. Lloret / Journal of Business Research 69 (2016) 418–425

3.6. The stakeholder domain 4. Conclusions

This domain addresses the direct and indirect interests of various This study employs relevant business and sustainability literature
groups associated with the firm (Clarkson, 1995). Stakeholder manage- to develop a business model for corporate sustainability. The study sug-
ment entails deliberate actions to manage stakeholder concerns while gests an analytical scheme that allows the firm to generate and capture
simultaneously pursuing strategic decisions (Hoffman & Georg, 2012). value subject to the restrictions and limitations imposed by economic,
In the survey, 81.5% of firms indicated that collaborating with environ- social, and environmental restrictions. A strategy that embeds three
mental organizations presents a business opportunity, but only 23% domains, a market-industry view, a resource-based view, and an
considered such collaboration a problem. The study investigated volun- institutional-based view, in conjunction with domains related to stake-
tary employee involvement in the development of environmental holders, sustainable leadership, and corporate governance can address
sustainable strategies, and most firms indicated that employees are sustainability restrictions. The study discusses each view, applies empir-
involved at least to some extent on a voluntary basis, while fewer are ical information to show the drivers that Mexican firms perceive to be
involved when pushed by the company. Other stakeholders that influ- significant for sustainability, and discusses these drivers within the
ence firm business decisions are shareholders (40.2%) and the local context of the developed model.
community (31.4%), whereas socially responsible investment funds The business model for corporate sustainability considers a long-
(56.7% stated “no affect” on firm decisions) and educational institutions term strategic view ensuring competitiveness. Companies can better
(46.4% stated “no effect” on firm decisions) followed by competitors address such sustainability restrictions with strategies that seek dif-
(40.3%), NGOs (39.6%), and environmental support groups (37.1%) ferentiation and costs' movements as the main drivers and by incorpo-
were less influential. Mexican educational institutions have only recently rating resource and capability strategies to address environmental
become involved in sustainability studies, and no socially responsible and societal restrictions. Companies should comply with institutional
investment funds existed in Mexico at the time of the survey. schemes that shape firm behavior. The literature has extensive discus-
sions on these strategic-based views; however, this study uses the dif-
ferent views as a frame to show how to achieve a corporate
3.7. The sustainable leadership domain sustainability model by merging rather than separating each view.

The sustainable approach to leadership involves building ties with

Acknowledgments
communities, collaborating with stakeholders, and promoting long-
term sustainable values (Avery & Bergsteiner, 2011). The three
The author wishes to thank Asociación Mexicana de Cultura, A.C. for
strategic-based views incorporate the sustainable leadership principles
its support in the preparation of this paper, Dennis J. Aigner for his valu-
in different forms because they represent action to steer the organiza-
able comments, the SMLA organizers for their continuous support and
tion toward corporate sustainability. In the survey, when firms were
two anonymous referees for their helpful comments and suggestions.
asked to describe their environmental sustainability practices five
years from now, the majority of firms (92%) responded that environ-
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