The Development of Sustainability
Strategic Management Assessment Tool
From a Systematic Literature Review to a Conceptual Framework
Yenny Sari, Akhmad Hidayatno*
Department of Industrial Engineering, Faculty of Engineering
Universitas Indonesia
Jakarta, Indonesia
* Corresponding author email:
[email protected]
Abstract—With the increased of interest in how organizations are contributing to the achievement of a more sustainable world, there is a growing need for a better way to develop, assess and measure organizations sustainability performance. In organizations, the best way to achieve this is by initially selecting balanced sustainability indicators. This paper discussed a three-stage systematic literature review that being deployed as the research framework and reviewed 63 selected articles out of 875 papers from Science Direct database. It identified two major approaches were used in selecting sustainability indicators: criteria-based and model-based. Based on our review, both approaches have their strengths and weaknesses which are dependent on the organizations’ level of sustainability understanding and efforts. The review also showed that both approaches have similar popularity in publication: 57% for criteria-based and 43% for model-based. At the end, the paper showed that model-based approach was chosen to develop the conceptual framework, in which a set of sustainability indicators will be formulated and embedded to the model, but the indicators will be selected based on the different sustainability effort levels of the organizations. For future direction, the conceptual framework will be developed using the underlying concept of Sustainability Strategic Management into an assessment tool namely Sustainability Strategic Management Assessment Tool; it is a set of methods, forms or maps that organizations can use to measure the readiness level in initiating sustainability efforts or to chart the progression in achieving their target of sustainability.
Keywords—criteria-based approach; model-based approach; sustainability indicator; Sustainability Strategic Management Assessment Tool; systematic literature review
I.
I
NTRODUCTIONOrganizations are facing more challenges in the globalized
world because society now demands them to be also
responsible on creating a more sustainable world. They are
forced to think the impact of their actions in a more diverse
way to include social responsibility and environment
responsibility. Sustainability, with the concept of “triple
bottom line” which was originated by John Elkington [1] in
1994, has been growing as a “trending topic” recently. It is no
longer a paradox; it is now about how to turn this challenge or
opportunity into day-to-day management decisions to achieve
advantage in both financial performance and corporate
sustainability [2]. A study conducted by Harvard Business
Review which involved thirty large corporate organizations
suggests that sustainability becomes to play role to create
innovation in technology as well as organization that led to the
financial benefit of the organization [3]. The application of
sustainability concept has been interpreted differently by
industry and academia. For example, Unilever, a well-known
consumer goods manufacturer in Indonesia, helped to develop
the welfare of farmers and suppliers of raw materials or to
reduce the use of chemicals that had negative impacts to the
environment through its “Sustainable Living Plan” program.
Djarum Foundation, a prominent foundation in Indonesia,
built building and laboratory facilities for universities through
its corporate social responsibility program. Some related
studies ([4], [5], [6], [7]) revealed that the sustainability
concept has been applied in many aspects such as performance
measurement, economic, educational and social life; industry
and academia were also awared of it. By using the search
engine
http://scholar.google.com/
and keywords of
“sustainability”, the fact of 3.120.000 results (as December
10
th, 2016) supported that the research topic in this field is also
a hot topic.
the strategic level that incorporating sustainability as another
key success factor, how the triple bottom line concept can be
integrated to the stages of strategic management process.
In term of managing the business processes, a
methodology for Business Process Improvement which
formed by [12] described that the initial phase of seven-step
Business Process Improvement is the need of readiness
assessment. To measure the readiness level of an organization
before any business process improvements are made, an
assessment tool that designed appropriately is obviously
needed. Readiness of an organization can be measured through
a well-designed assessment tool so that the result of its
assessment provides the foundation for the analysis or
improvement. The involvement in Indonesian government
program of “Increasing the competitive advantage through the
implementation of ISO 9001:2008 in 50 Micro, Small and
Medium Enterprises in East Java, Indonesia” giving practical
experience that the improvement of a management system
required an assessment tool to identify the gap. The
government guidelines for implementation showed that the
“Gap Analysis Checklist” as an assessment tool was
formulated based on the requirements of ISO 9001: 2008
clauses in order to identify the gap between the current
condition of an organization and its conformity towards the
requirement of ISO 9001. The results of the assessment were
accordingly used as the platform for designing a relevant
quality management system. Lean Assessment Tool (LAT)
was developed by [13] as an assessment tool that can help
organizations to understand the major issues, problems, and
potential solutions in the area of manufacturing in accordance
to lean deployment. LAT was applied by [14] to 20 hi-tech
industries in China, [15] explained that the LAT comprises the
quantitative measurement and qualitative dimensions such as
time effectiveness, quality, process, cost, human resources,
delivery, customer and inventory. For that same purpose, the
development of a Sustainable Strategic Management
Assessment Tool (SSMAT) is necessary; SSMAT will be a set
of methods, forms or maps that organizations can use to assess
their readiness in initiating sustainability efforts or to chart
their progression in achieving their target of sustainability.
For the purposes of designing SSMAT, thus, there are
some main issues, namely "What sustainability indicators will
be used? How the indicators should be selected? How to
measurement process should be done? Is there any framework
should be constructed to carry out the assessment process?".
To assess sustainability performance of an organization, it was
necessary to formulate a list of sustainability indicators. There
are two primary approaches in selecting good indicators:
A.
Criteria-based approach
Many publications showed that the formulation of
indicators in the sustainability assessment often used the
concept of sustainability or Triple Bottom Line which
comprises three aspects: people, profit and planet. The
sustainability indicators can be derived from literature review
([16], [17]) or selected based on some criteria ([18], [19]). It
designed a general set of sustainability indicators that are
suitable to be applied in all sectors but it was limited to a
specific industry [18] meanwhile [19] derived sustainability
indicators to assess an eco-industrial park, those specific
indicators were limited to be used for any other industries.
B.
Model-based approach
Some sustainability assessments were also done through
the development of a model. For example, [20] proposed the
sustainability aspect into the Balanced Scorecard method [21],
known as the Sustainability Balanced Scorecard (SBSC). Four
previous internal researches during 2014 to 2015 related to the
implementation of SBSC in different manufacturing
organizations (cigarette, footwear, furniture and motorcycle
spare parts manufacturer) showed that the use of sustainability
metrics were limited to some metrics such as waste
percentage, local employee or energy consumption. During the
four studies were conducted, it was found that there were
differences on placing the perspective of sustainability among
four perspectives of Balanced Scorecard. Hence, the process
of formulating sustainability indicators and the determination
of the assessment model as a basis to determine the indicators
allows some research opportunities to be developed.
It now turned out as a research question, between
criteria-based and model-criteria-based approach, which one will be chosen
for formulating or selecting the sustainability indicator in
developing SSMAT. Long-term research purpose is to achieve
the design of Sustainable Strategic Management Assessment
Tool (SSMAT) which functions as an assessment tool or a
performance measurement system to assess readiness level of
the implementation of Sustainable Strategic Management in
organization. Short-term goal is to conduct a systematic
literature review to provide viewpoint and foundation for the
conceptual models of SSMAT. This short-term goal is the
purpose of this review article.
II.
R
ESEARCHM
ETHODTABLE I. THREE STAGES OF SYSTEMATIC LITERATURE REVIEW AS RESEARCH METHOD
Stage Activities
Stage 1
Planning the review
Review basic concepts of sustainability and perform meta-analysis on sample of 15 related published articles, which aimed to:
a. Gain comprehensive understanding
b.Identify the terms for searching articles and publication year
•Terms that being used to search for the paper in title, abstract, and keywords are: (sustainability indicator OR sustainability metric) AND (sustainability assessment OR sustainability performance OR performance measurement OR sustainability performance measurement) AND (corporate sustainability OR corporate sustainability model OR strategic management)
•Publication year: 2010 - 2016 c. Determine targeted publishers
•Targeted publishers: Science Direct, Emerald, Springer, Taylor & Francis, Wiley
•In this review paper, the review process is initially attempted to Science Direct
d.Define criteria for classifying the articles to support the analysis
Stage 2
Conducting the review
Selection of articles to be reviewed, based on the terms and criteria defined in previous stage:
a. From title, abstract and keywords: filtering the papers with the defined terms. Total search: 875 articles.
b.From full paper, skimming reading on introduction, research methods and conclusions, to select valid articles for the review, classifying articles according to the classification criteria. Valid: 63 articles (7.2%)
c. From selected full paper: focused reading, deep understanding and analysis about sustainability indicator and corporate sustainability
Stage 3
Reporting & Dissemination
a. After selecting articles (2nd round of previous stage) from
electronic database Science Direct and after 30% reading (3rd round on previous stage),
b.Prepare initial draft of the review result to be published in the international conference.
c. Conclude main aspects of Systematic Literature Review and future directions for conceptual frameworkof SAT to assess sustainability initiatives in corporate level
Source: adapted from [22], modified from [24]
III.
R
ESULTS&
D
ISCUSSIONSAfter the planning stage of systematic literature review, the
review process continued by searching the articles from
scientific database Science Direct, gave the result of 875
articles whose titles, abstracts or keywords fitted the defined
terms and publication years, then by skimming reading to
introduction, research methods and conclusions, there were 63
(or 7.25% of 875) articles valid as selected papers for further
analysis. For 63 selected article, the meta-analysis was
performed to collect information about: (a) authors, (b)
publication year, (c) publisher name, (d) industry sector, (e)
dimensions of sustainability indicators (environment,
economic or social), qualitative or quantitative indicators, (f)
underlying concept to formulate the indicators/models, and (g)
outcoming model/framework. The following results and
discussions were made based on the meta analysis.
TABLE II. TWO PRIMARY APPROACHES IN FORMULATING INDICATOR, WITH THEIR STRENGTHS & WEAKNESSES
Approach Strengths Weaknesses
Criteria based approach
•Provides a general set of common sustainability indicators to easily be chosen
•These common indicators also available for specific industry
•Can be easily integrate with the current organization strategy as new key performance indicators
•Indicators in a criteria can be difficult to choose due to its similarities
•Selection of the indicators can be subjective without
measuring the appropriateness and quality
of the indicators used. A right way of filtering the indicators is necessary. •Organizations might have
difficulties in identifying whether they have achieved sustainability or not
Model based approach
•Create clear ideal model how a sustainable organizations operates and functions. •The gap between ideal and
current conditions will make it easier to plan and develop process and activities •Create a more robust
sustainability indicators because it is based on a proven ideal model
•With the ideal model in sight, organizations can develop stages to measure their closeness on achieving their ideal conditions
•Debates of how ideal model is actually ideal
•Some models are industry specific, that might not easy to generalized
•Some models might required a major changes in the current strategy of the organizations
As mentioned previously, it was found that there were two
primary approaches in formulation and selecting sustainability
indicators, and based on the review, both approaches have
their strengths and weaknesses as described as follows in
Table II. Then, both approaches were set as the criterion for
classification. For criteria-based approach, it was found that
some research determined the indicators directly (from
literature review and underlying concepts then the indicators
were formulated) or indirectly (a particular mechanism was
applied to filter a set of indicators that being derived from
literature review and underlying concept). Table III showed
that, from these 63 selected articles, there were 43% in
model-based approach and 57% articles in criteria-model-based approach.
For the criteria-based approach, it still can be divided into:
43% is those were not using any filtration methods (directly)
to formulate the indicators and 14% is using certain filtration
methods (indirectly).
TABLE III. DISTRIBUTION 63 ARTICLES INTO TWO PRIMARY APPROACHES
Approach Publications
9 articles(14% of 63)
Fig. 1. Distribution of number of publications per year. (Above) for topics of sustainability indicators or models, (bottom) for specific classification. Notes: CNF: criteria-based approach no filtration, CF: criteria-based with filtrations, M: model-based)
Descriptive statistics based on selected papers were
conducted. Fig. 1 showed that articles within these topics of
interest (i.e. sustainability indicator or corporate sustainability
model) have been increasing for the last five years, from 5
articles in 2012 to 23 articles in 2016. The same trend was also
occurred to the articles which used criteria-based approach
with no filtration (CNF) and model-based approach (M), there
were 2 articles of CNF in 2012 increasing to 11 articles in
2016 and 1 articles of M in 2012 increasing to 9 articles in
2016. Given the number of articles, 1 article of criteria-based
model with filtration (CF) in 2012, no related publication in
2011, 2012 and 2013, and 3 articles in 2016; it indicated
articles of criteria-based approach with filtration were rare and
had no trend in quantity year to year. Table IV showed that
Journal of Cleaner Production was the main journal that
contributed to this topic of interest, it gave 26 publication or
41% of 63 selected papers, it followed by International Journal
of Production Economics (6.3% of 63).
From Table V, it can be seen that about 33% of the
selected articles were discussing about sustainability indicator
or corporate sustainability model for general corporations,
meanwhile 67% of them discussing the same issue for specific
industry sectors which majority covered the sectors of supply
chain & logistics, public service, information technology,
manufacturing, tourism, university and micro small and
medium enterprise.
For model-based approach, there were 27 articles that
being selected because they discussed the development of
sustainability models using certain basic concepts.
TABLE IV. DISTRIBUTION OF MAIN JOURNALS
Publisher Name # of
article
Journal of Cleaner Production 26
International Journal of Production Economics 4
Applied Energy, CIRP Annals - Manufacturing Technology, Conference on Sustainable Manufacturing, Expert Systems with Applications, Journal of Environment Management, Renewable and Sustainable Energy, Tourist Management,
2 for each publisher
Accounting Forum, Cities, Ecological Indicators, Energy Policy, Environmental Science & Policy, Future Generation Computer Systems, Journal of Business Research, Journal of Project Management, Journal of Purchasing & Supply Management, Journal of Strategic Information Systems, Journal of World Business, Management and Control of Production and Logistics, Management Journal, Procedia, Recourses Policy, Science and Justice, Sustainable Production and Consumption, The British AccountingReview
1 for each publisher
Table VI mapped the underlying concepts that used to develop
the model year by year. Given the percentage of usage,
Business Process Management was placed as the
most-frequent-used underlying concept, with the percentage of
usage was 37%. It was followed by Corporate Sustainability
and Supply Chain Management as the second and third highest
percentages, with the percentages of usage were 33% and 22%
respectively. Some models were discussed as below. The
framework in [69] suggested the future search about the
relationship between sustainability practices and
organizational performance, in which sustainability practices
were divided into two different strategies: exploitation
(sustainability practices that aimed to make organization more
efficient through incremental improvement) or exploration
(sustainability practices that challenged the organization to
explore for innovation). The articles ([64], [84]) were aimed to
introduce the effect of strategic management on managing
business process or corporate sustainability, [66] proposed on
how a systemic approach, that built on three complementary
modules: strategic, tactical and operational, could integrate
sustainability strategies into all corporate business activities.
Sustainability performance indicators were integrating into
logistics and supply chain by [68], it used the
multi-methodological approach which began with process mapping
and data collecting and ended by mathematical and simulation
model for making decision.
TABLE V. DISTRIBUTION OF INDUSTRIAL SECTORS
Industry Sector Percentage # of articles
General corporation 33 21
Specific industry 67 42
Total 100 63
For 42 specific industry sector, there were: # of articles
Supply Chain & Logistics
(e.g. retailer, port, logistics service provider) 6 Public Service
(e.g. urban design, water service, park, electricity) 5 Information Technology (e.g. green IT,
service centre, telecommunication service) 3 Manufacturing, Tourism, University,
Micro Small Medium Enterprise
3 for each industry Automotive, Energy,
Forestry, Mining, Textile
2 for each industry Fashion, Fishing, Forensic, Hospital,
Local Government, Project Management
1 for each industry
4
1
5
5
8
17
23
0 5 10 15 20 25
2010 2011 2012 2013 2014 2015 2016
N
u
m
b
er
of
ar
ti
cl
es
2 1
2 2
4 5
11
1
0 0 0
1 4
3
1
0
3 3 3
8 9
0 2 4 6 8 10 12
2010 2011 2012 2013 2014 2015 2016
N
u
m
b
er
of
ar
ti
cl
es
Publication Year
TABLE VI. DISTRIBUTION OF UNDERLYING CONCEPTS
Article
(Year) Developed models
Underlying Concept *) A B C D E F G
Urban Water Service Sustainability
Assessment of Supply Chain Sustainability
Framework
v
[85] (2017)
Product life cycle phases
*) A for Business Process Management, B: Corporate Sustainability,
C: Supply Chain Management, D: Triple Bottom Line, E: Engineering
Management, F: Balanced scorecard, G: Product Life Cycle
Reference [72] also discussed on measuring the performance
of sustainable supply chain using three constructs: supplier
partnership performance, production performance and
delivery/logistic performance. The risk management approach
was used by [71] to identify sustainability-related supply chain
risks by measuring risk priority number using the concept of
Failure Mode and Effect Analysis.
IV.
C
ONCLUSIONSThis paper described on how the three-stage systematic
literature review gave a scientific contribution in providing,
for the best of authors’ understanding, a helicopter-view about
the expansion of the publications related to the interest topic.
It started from (i) planning the literature review by defining
specific terms to search the articles, determining targeted
publisher, publication year and classification criteria, (ii)
conducting the review by skimming the title, keywords,
abstract and reading the introduction, methodology and
conclusion of selected articles, then (iii) reporting the result by
concluding main issues and providing guidance for future
directions. Regarding to the interest topic i.e. the development
of Sustainable Strategic Management Assessment Tool
(SSMAT), the systematic literature review filtered only 63
articles or 7.2% out of 875 articles from Science Direct
electronic database, however, the distribution of number of
publications has shown an uptrend within last five years. It
identified two primary approaches that were used in designing
the sustainability assessment i.e. criteria-based approach
(assessment indicators were derived directly or indirectly from
literature review) or model-based approach (the development
of a certain model was done prior to the formulation of the
assessment indicators).
For future direction, in term of the development of the
conceptual framework for Sustainable Strategic Management
Assessment Tool (SSMAT), it will used model-based
approach, the formulation of sustainability indicators will be
used criteria-based approach with no filtration methods and
the indicators will be designed various to the different
sustainability maturity level of organization. Indicators can
comprise of quantitative and qualitative ones. Business
Process Management, Corporate Sustainability Model or
Supply Chain Management will be studied further to
determine the constructs of the model. The model will be
developed for general corporations and will be validated by
applying it to some case studies such as logistic providers or
transportation industries.
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