How to Save a Leaky Ship: Capability Traps and the Failure of Win-Win Investments in Sustainability and Social Responsibility
Can managers enhance social responsibility while also improving profitability? Research demonstrates that there are “win-win” investments that improve both socially desirable outcomes and the bottom line, from energy and the environment to wages and workplace safety. Yet many such opportunities are...
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| Format: | Article |
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Academy of Management
2019
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| Online Access: | http://hdl.handle.net/1721.1/121086 https://orcid.org/0000-0001-7476-6760 |
| _version_ | 1826206403721691136 |
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| author | Lyneis, John Landry Sterman, John |
| author2 | Massachusetts Institute of Technology. Institute for Data, Systems, and Society |
| author_facet | Massachusetts Institute of Technology. Institute for Data, Systems, and Society Lyneis, John Landry Sterman, John |
| author_sort | Lyneis, John Landry |
| collection | MIT |
| description | Can managers enhance social responsibility while also improving profitability? Research demonstrates that there are “win-win” investments that improve both socially desirable outcomes and the bottom line, from energy and the environment to wages and workplace safety. Yet many such opportunities are not taken—money is left on the table. Here we explore this puzzle using the case of energy efficiency in a large research university, a setting that should favor implementation of win-win actions. However, despite a long time horizon, large endowment and pro-social mission, the university failed to implement many programs offering both large environmental and financial benefits. Using ethnographic field study and panel regression we develop a novel simulation model integrating energy use, maintenance, and facilities renewal. We find that the organization inadvertently fell into a capability trap in which poor performance prevented investments in win-win opportunities and the capabilities needed to realize them, perpetuating poor performance. Escaping the trap requires investments large enough and sustained long enough to cross tipping thresholds that convert the vicious cycle in to a virtuous cycle of better performance, greater investment and still better performance. We discuss how the organization is escaping from the trap and whether the results generalize to other contexts. |
| first_indexed | 2024-09-23T13:29:14Z |
| format | Article |
| id | mit-1721.1/121086 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T13:29:14Z |
| publishDate | 2019 |
| publisher | Academy of Management |
| record_format | dspace |
| spelling | mit-1721.1/1210862022-10-01T15:32:41Z How to Save a Leaky Ship: Capability Traps and the Failure of Win-Win Investments in Sustainability and Social Responsibility Lyneis, John Landry Sterman, John Massachusetts Institute of Technology. Institute for Data, Systems, and Society Sloan School of Management Lyneis, John Landry Sterman, John Can managers enhance social responsibility while also improving profitability? Research demonstrates that there are “win-win” investments that improve both socially desirable outcomes and the bottom line, from energy and the environment to wages and workplace safety. Yet many such opportunities are not taken—money is left on the table. Here we explore this puzzle using the case of energy efficiency in a large research university, a setting that should favor implementation of win-win actions. However, despite a long time horizon, large endowment and pro-social mission, the university failed to implement many programs offering both large environmental and financial benefits. Using ethnographic field study and panel regression we develop a novel simulation model integrating energy use, maintenance, and facilities renewal. We find that the organization inadvertently fell into a capability trap in which poor performance prevented investments in win-win opportunities and the capabilities needed to realize them, perpetuating poor performance. Escaping the trap requires investments large enough and sustained long enough to cross tipping thresholds that convert the vicious cycle in to a virtuous cycle of better performance, greater investment and still better performance. We discuss how the organization is escaping from the trap and whether the results generalize to other contexts. 2019-03-26T12:38:33Z 2019-03-26T12:38:33Z 2016-03 2019-02-28T17:52:57Z Article http://purl.org/eprint/type/JournalArticle 2168-1007 http://hdl.handle.net/1721.1/121086 Lyneis, John, and John Sterman. “How to Save a Leaky Ship: Capability Traps and the Failure of Win-Win Investments in Sustainability and Social Responsibility.” Academy of Management Discoveries 2, no. 1 (March 2016): 7–32. https://orcid.org/0000-0001-7476-6760 http://dx.doi.org/10.5465/AMD.2015.0006 Academy of Management Discoveries Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf Academy of Management MIT web domain |
| spellingShingle | Lyneis, John Landry Sterman, John How to Save a Leaky Ship: Capability Traps and the Failure of Win-Win Investments in Sustainability and Social Responsibility |
| title | How to Save a Leaky Ship: Capability Traps and the Failure of Win-Win Investments in Sustainability and Social Responsibility |
| title_full | How to Save a Leaky Ship: Capability Traps and the Failure of Win-Win Investments in Sustainability and Social Responsibility |
| title_fullStr | How to Save a Leaky Ship: Capability Traps and the Failure of Win-Win Investments in Sustainability and Social Responsibility |
| title_full_unstemmed | How to Save a Leaky Ship: Capability Traps and the Failure of Win-Win Investments in Sustainability and Social Responsibility |
| title_short | How to Save a Leaky Ship: Capability Traps and the Failure of Win-Win Investments in Sustainability and Social Responsibility |
| title_sort | how to save a leaky ship capability traps and the failure of win win investments in sustainability and social responsibility |
| url | http://hdl.handle.net/1721.1/121086 https://orcid.org/0000-0001-7476-6760 |
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