Academy of Management Perspectives
February
A
R
T
I
C
L
E
S
Building Sustainable Organizations: The Human Factor by Jeffrey Pfeffer
Executive Overview
Although most of the research and public pressure concerning sustainability has been focused on the effects of business and organizational activity on the physical environment, companies and their management practices profoundly affect the human and social environment as well. This article briefly reviews the literature on the direct and indirect effects of organizations and their decisions about people on human health and mortality. It then considers some possible explanations for why social sustainability has received relatively short shrift in management writing, and outlines a research agenda for investigating the links between social sustainability and organizational effectiveness as well as the role of ideology in understanding the relative neglect of the human factor in sustainability research.
T
here is growing public and business interest in building sustainable organizations and increasing research and educational interest in the topic of organizational sustainability. The Academy of Management has a division called Organizations and the Natural Environment, and there are numerous journals and research papers concerned with ecological sustainability. There are growing numbers of higher education programs focused on sustainability and an Association for the Advancement of Sustainability in Higher Education (Fountain, 2010). Marcus and Fremeth (2009) noted that this enthusiasm for what they called “green management” came from people’s expectations for how managers and the organizations they lead should conduct their business to protect the environment. As
I gratefully acknowledge the advice, encouragement, and inspiration of Nuria Chinchilla from IESE, who encouraged me to think about the issue of human sustainability in both societies and companies. The
References: Ambec, S., & Lanoie, P. (2008). Does it pay to be green? A systematic overview. Academy of Management Perspectives, 22, 45– 62. Bansal, P. (2002). The corporate challenges of sustainable development. Academy of Management Executive, 16, 122–131. Barley, S. R., & Kunda, G. (1992). Design and devotion: Surges of rational and normative ideologies of control in managerial discourse. Administrative Science Quarterly, 37, 363–399. Baron, J. N., & Bielby, W. T. (1980). Bringing the firms back in: Stratification, segmentation, and the organization of work. American Sociological Review, 45, 737–765. Becker, B. E., & Huselid, M. A. (1998). High performance systems and firm performance: A synthesis of research and managerial implications. Research in Personnel and Human Resources Management, 16, 53–101. Blakely, T. A., Collings, S. C. D., & Atkinson, J. (2003). Unemployment and suicide: Evidence for a causal association? Journal of Epidemiology and Community Health, 57, 594 – 600. Bloom, M. (1999). The performance effects of pay dispersion on individuals and organizations. Academy of Management Journal, 42, 25– 40. Blount, S. (2000). Whoever said that markets were fair? Negotiation Journal, 16, 237–252. Budros, A. (1997). The new capitalism and organizational rationality: The adoption of downsizing programs, 1979 – 1994. Social Forces, 76, 229 –250. Cappelli, P. (1999). The New Deal at work. Boston: Harvard Business School Press. Card, D., Dobkin, C., & Maestas, N. (2009). Does Medicare save lives? Quarterly Journal of Economics, 124, 597– 636. Cascio, W. F. (2006). The economic impact of employee behaviors on organizational performance. California Management Review, 48, 41–59. Catalano, R. (1991). The health effects of economic insecurity. American Journal of Public Health, 81, 1148 –1152. Catalano, R., Novaco, R. W., & McConnell, W. (2002). Layoffs and violence revisited. Aggressive Behavior, 28, 233–247. Chandola, T., Brunner, E., & Marmot, M. (2006). Chronic stress at work and the metabolic syndrome: Prospective study. British Medical Journal, 332, 521–525. Colvin, G. (2008, October 16). How Sam’s Club sees the future. Fortune. Retrieved February 15, 2010, from http://money. cnn.com/2008/10/15/news/companies/Wal-Marts_rising_star_ colvin.fortune/index.htm. Cornia, G. A., & Paniccia, R. (Eds.). (2000). The mortality crisis in transitional economies. Oxford, UK: Oxford University Press. Cowherd, D. M., & Levine, D. I. (1992). Product quality and pay equity between lower-level employees and top management: An investigation of distributive justice theory. Administrative Science Quarterly, 37, 302–320. Davis, G. F. (2008). The rise and fall of finance and the end of the society of organizations. Academy of Management Perspectives, 23, 27– 44. Davis, G. F. (2009). Managed by the markets: How finance re-shaped America. Oxford, UK: Oxford University Press. Deaton, A. (2003). Health, inequality, and economic development. Journal of Economic Literature, 41, 113–158. Diener, E., Suh, E. M., Lucas, R. E., & Smith, H. L. (1999). Subjective well-being: Three decades of progress. Psychological Bulletin, 125, 276 –302. Dube, A., Graham-Squire, D., Jacobs, K., & Luce, S. (2007). Living wage policies and Wal-Mart: How a higher wage standard would impact Wal-Mart workers and shoppers. Berkeley, CA: U.C. Berkeley Center for Labor Research and Education. Dudley, S., & Warren, M. (2005). Upward trend in regulation continues: An analysis of the U.S. budget for fiscal years 2005 and 2006. George Mason University, Mercatus Center, 2006 Annual Report, Regulators’ Budget Report 27. Eliason, M., & Storrie, D. (2009). Does job loss shorten life? Journal of Human Resources, 44, 277–302. Ferraro, F., Pfeffer, J., & Sutton, R. I. (2005). Economic language and assumptions: How theories can become self-fulfilling. Academy of Management Review, 30, 8 –24. Ferraro, F., Pfeffer, J., & Sutton, R. I. (2009). How and why theories matter: A comment on Felin and Foss (2009). Organization Science, 20, 669 – 675. Fountain, H. (2010, January 3). Urban environment: Sustainability comes of age. New York Times, Education Life, p. 20. Franks, P., Clancy, C. M., & Gold, M. R. (1993). Health insurance and mortality: Evidence from a national cohort. Journal of the American Medical Association, 270, 737–741. Frey, B. S., & Stutzer, A. (2002). What can economists learn from happiness research? Journal of Economic Literature, 40, 402– 435. Frone, M. R. (2000). Work-family conflict and employee psychiatric disorders: The national comorbidity survey. Journal of Applied Psychology, 85(6), 888 – 895. Frone, M. R., Russell, M., & Barnes, G. M. (1996). Workfamily conflict, gender. and health-related outcomes: A study of employed parents in two community samples. Journal of Occupational Health Psychology, 1(1), 57– 69. Gakidou, E. E., Murray, C. J. L., & Frenk, J. (2000). Defining and measuring health inequality: An approach based on the distribution of health expectancy. Bulletin of the World Health Organization, 78, 42–54. Gallo, L. C., & Matthews, K. A. (2003). Understanding the association between socioeconomic status and physical health: Do negative emotions play a role? Psychological Bulletin, 129, 10 –51. Greenhouse, S. (2009, October 30). BP faces record fine for ’05 refinery explosion. New York Times, p. B1. Hackman, J. R., & Oldham, G. R. (1980). Work redesign. Reading, MA: Addison-Wesley. Himmelstein, D. U., Warren, E., Thorne, D., & Woolhandler, S. (2005). MarketWatch: Illness and injury as contributor to bankruptcy. Health Affairs-Web Exclusive, W5-63–W5-73. Hsu, T. (2010, January 2). Corporate eco-managers turning companies green. San Francisco Chronicle, p. D2. 2010 Pfeffer 45 Jost, J. T. (2006). The end of the end of ideology. American Psychologist, 61, 651– 670. Jost, J. T., Blount, S., Pfeffer, J., & Hunyady, G. (2003). Fair market ideology: Its cognitive-motivational underpinnings. Research in Organizational Behavior, 25, 53–91. Jost, J. T., Nosek, B. A., & Gosling, S. D. (2008). Ideology: Its resurgence in social, personality, and political psychology. Perspectives on Psychological Science, 3, 126 –136. Kaufman, L. (2009, December 20). Coming clean about carbon: Industries disclose emissions to claim the high ground. New York Times, p. B1. Keefe, V., Reid, P., Ormsby, C., Robson, B., Purdie, G., Baxter, J., & Ngati Kahungunu Iwi Incorporated. (2002). Serious health events following involuntary job loss in New Zealand meat processing workers. International Journal of Epidemiology, 31, 1155–1161. Kivimaki, M., Vahtera, J., Pentti, J., & Ferris, J. E. (2000). Factors underlying the effect of organizational downsizing on health of employees: Longitudinal cohort study. British Medical Journal, 320, 971–975. Levy, H., & Meltzer, D. (2001). What do we really know about whether health insurance affects health? (Working Paper No. 6). Ann Arbor, MI: University of Michigan, Economic Research Initiative on the Uninsured. Lynch, J., Davey-Smith, G., Hillemeier, M., Shaw, M., Raghunathan, T., & Kaplan, G. (2001). Income inequality, psychosocial environment and health: Comparisons across wealthy nations. Lancet, 358, 194 –200. March, J. G., & Sutton, R. I. (1997). Organizational performance as a dependent variable. Organization Science, 8, 698 –706. Marcus, A. A., & Fremeth, A. R. (2009). Green management matters regardless. Academy of Management Perspectives, 23, 17–26. Marmot, M. (2004). The status syndrome: How social standing affects our health and longevity. London: Times Books. Marmot, M., & Bobak, M. (2000). International comparators and poverty and health in Europe. British Medical Journal, 321, 1124 –1128. Marmot, M. G., Bosma, H., Hemingway, H., Brunner, E., & Stansfeld, S. (1997). Contribution of job control and other risk factors to social variations in coronary heart disease incidence. Lancet, 350, 235–239. Molotch, H. I., & Boden, D. (1985). Talking social structure: Discourse, domination, and the Watergate hearings. American Sociological Review, 50, 273–288. National Institute for Occupational Safety and Health (2004). Overtime and extended work shifts: Recent findings on illnesses, injuries, and health behaviors (Publication No. 2204-143, May). Washington, DC: Author. Navarro, M. (2010, January 3). Sustainable cultures: A step beyond anthropology. New York Times, Education Life, p. 20. Oswald, A. J. (1997). Happiness and economic performance. The Economic Journal, 107, 1815–1831. Pfeffer, J., & Langton, N. (1988). Wage inequality and the organization of work: The case of academic departments. Administrative Science Quarterly, 33, 588 – 606. Pfeffer, J., & Langton, N. (1993). The effect of wage dispersion on satisfaction, productivity, and working collaboratively: Evidence from college and university faculty. Administrative Science Quarterly, 38, 382– 407. Plambeck, E. L., & Denend, L. (2007). Wal-Mart’s sustainability strategy (Case No. OIT7–71). Stanford, CA: Stanford University, Graduate School of Business. Potosky, A. L., Breen, N., Graubard, B. I., & Parsons, P. E. (1998). The association between health care coverage and the use of cancer screening tests: Results from the 1992 National Health Interview Survey. Medical Care, 36, 257–270. Putnam, R. D. (2000). Bowling alone: The collapse and revival of American community. New York: Simon and Schuster. Rosenbloom, S., & Barbaro, M. (2009, January 25). Greenlight specials, now at Wal-Mart. New York Times, p. BU1. Rousseau, D. M. (2006). The shift in risk from employers to workers in the new employment relationship. In E. E. Lawler III & J. O’Toole (Eds.), America at work: Choices and challenges (pp. 153–172). New York: Palgrave Macmillan. Ryff, C. D. (1989). Happiness is everything, or is it? Explorations on the meaning of psychological well-being. Journal of Personality and Social Psychology, 57, 1069 –1081. Schoen, C., & DesRoches, C. (2000). Uninsured and unstably insured: The importance of continuous insurance coverage. Health Services Research, 35, 187–206. Siegel, P. A., & Hambrick, D. C. (2005). Pay disparities within top management groups: Evidence of harmful effects on performance of high-technology firms. Organization Science, 16, 259 –274. Stave, G. M., Muchmore, L., & Gardner, H. (2003). Quantifiable impact of the contract for health and wellness: Health behaviors, health care costs, disability, and workers’ compensation. Journal of Occupational and Environmental Medicine, 45, 109 –117. Sudano, J. J., & Baker, D. W. (2003). Intermittent lack of health insurance coverage and use of preventive services. American Journal of Public Health, 93, 130 –137. Sullivan, D., & von Wachter, T. (2007). Mortality, mass layoffs, and career outcomes: An analysis using administrative data (Working Paper No. 13626). Cambridge, MA: National Bureau of Economic Research. Tetlock, P. E. (2000). Cognitive biases and organizational correctives: Do both disease and cure depend on the politics of the beholder? Administrative Science Quarterly, 46, 293–326. Walsh, J. P., Weber, K., & Margolis, J. D. (2003). Social issues and management: Our lost cause found. Journal of Management, 29, 859 – 881. Wildman, J. (2003). Income related inequalities in mental health in Great Britain: Analysing the causes of health inequality over time. Journal of Health Economics, 22, 295–312. Wilper, A., Woolhandler, S., Lasser, K. E., McCormick, D., Bor, D. H., & Himmelstein, D. U. (2009). Health insurance and mortality in US adults. American Journal of Public Health, 99, 2289 –2295. Yang, H., Schnall, P. L., Jauregui, M., Su, T., & Baker, D. (2006). Work hours and self-reported hypertension among working people in California. Hypertension, 48, 744 –750.