Sustaining Sustainability - A qualitative study on how a company's performance management system (PMS) is used to navigate the co-existing pressures of sustainability and profitability

Sammanfattning

This paper examines the escalating pressures on organizations to adopt sustainable practices in response to the climate crisis. The urgency to address sustainability concerns has driven the enactment of reporting legislation, necessitating an exploration of challenges on this topic. Amidst growing demands for sustainable practices, there is a literature gap concerning the practical use of Performance Management Systems (PMS) in response to sustainability pressures. This study aims to fill this gap by investigating how organizations navigate the simultaneous pressures of sustainability and profitability using their PMS. Drawing upon institutional theory, this study explores the co-existence of sustainability and profitability logic within an organization. The research underscores the crucial role of Sustainability Control Systems (SCS) in facilitating the stickiness and spread of sustainable practices by structurally managing compromises. Additionally, we found that to sustain sustainability there is a need to create a business case for it. Furthermore, we found that in situations of conflicting logics, if sustainability KPIs can be significantly improved, managers are willing to tolerate short-term profitability decline but not a long-term one.