A Study Of Sustainability Integration In The Performance Management System: The Case Of An Oil And Gas Company
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Date
2015-05
Authors
George, Roshni Ann
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Abstract
In today's world, overlooking environmental and social impacts in the oil and gas industry can have serious consequences not only for organisations but also for governments and societies. Maintaining organisational legitimacy is largely dependent on an organisation’s ability to effectively reduce environmental and social risks. Forward thinking companies are taking steps to effectively address these issues by implementing solutions that improve sustainable performance. Embedding sustainability in the organisation is vital to increase social and environmental performance but requires the integration of sustainability into the organisation’s performance management systems. However, research on integrating sustainability in performance management systems is still an emerging field. Therefore, the purpose of this study is to contribute to the body of literature by investigating sustainability integration in the performance management systems of an oil and gas company headquartered in a developing country. A qualitative case study research was conducted in the organisation and the primary source of data collected in this study were interviews with managers and executives from the headquarters, two subsidiaries and a supplier. To analyse the data collected, this study utilized the Ferreira and Otley (2009) performance management framework, New Institutional Sociology (NIS) theory and the Gond et al. (2012) sustainability integration framework. The findings reveal increasing incorporation of sustainability into the performance management systems of the case organisation. Furthermore, the sustainability strategy at the corporate organisation influenced the practices of the subsidiaries and supplier. The case organisation’s pathway to sustainability integration commenced from the dormant decoupled strategy, when its performance management systems were still developing and sustainability was managed in response to growing pressures for increased health and safety performance. As employees obtained a deeper knowledge of sustainability issues, integration between the performance management systems and sustainability performance management systems began to occur, which underpinned greater technical and organisational integration of sustainability (move to a compliance-driven sustainability strategy). As a culture shift towards sustainability began to occur in the world, normative and mimetic factors led to a peripheral sustainability integration configuration and tighter coupling between the two performance management systems. While the performance management systems and sustainability performance management systems could currently be described as relatively loosely coupled, there are further signs of tighter coupling between the systems and the promise of a fully integrated sustainability strategy in the future.
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Management , Performance standards, Case studies