The effect of senior management behaviours on sustainable development performance

Abstract

The main objective of this study is to contribute to understanding the relationship between the cultural style of senior management teams and sustainable development in an international mining group. Sustainability has become a business imperative and this study examines the behaviours of senior management teams in terms of their cultural norms and the influence their behaviours have on the success of executing a strategy for sustainable development.An initial theoretical model was developed to test 11 hypotheses, which related to the influence of different cultural management styles on triple-bottom-line performance along with the influence of governance processes for sustainable development and the strategic effectiveness of the organisation. A total of 13 organisations within the international mining group participated in the study which resulted in 66 members of senior management teams responding to a web-based survey using the Organisational Culture Inventory® (OCI®) to measure cultural norms. The survey was augmented with questions relating to perceptions of the strategic effectiveness and sustainable development performance of the organisation. The results of the survey were analysed using structural equation modelling (SEM) Partial Least Squares (PLS) and the statistical package PLS-Graph. There are a number of reasons for the selection of -this PLS technique, a key one of which is the ability of the technique to handle small sample sizes.The theoretical framework of the initial model was found to be highly reliable although there were issues with discriminant validity of the measurement model. The model was subsequently refined with the sustainable development performance of the organisation being reflected by the social, environmental and governance dimensions in the final model. Three additional hypotheses were also included in the final respecified model, following from research noted in the literature review of the mediating influences on the relationship between culture and performance and evidence of intervening variables found in the analysis of the initial model. This final respecified model was found to be valid and reliable.The findings from this study make an original contribution to the literature on the culture-performance relationship. Evidence was found that a constructive cultural management style where senior management teams behave in humanistic-encouraging and affiliative ways is a significant predictor of sustainable development performance. In addition, this cultural management style is the only style directly influencing the social, environmental and governance dimensions of sustainable development performance. In contrast, aggressive/defensive and passive/defensive management styles were found to influence sustainable development performance indirectly. Evidence was also found for the effect of the three cultural management styles being explained to some extent by the strategic effectiveness of the organisation. The passive/defensive management style was also found to have a highly detrimental effect on strategic effectiveness.There are limitations to every study and while cognisant of these limitations, this study offers both theoretical and practical contributions. The findings of this study suggest there may well be benefits for the international mining group, which aspires to differentiate itself from its competitors through leading the industry sector in sustainable development performance, in understanding the existing culture within its senior management teams and the role it may have on sustainable development performance. In particular, if superior sustainable development performance is desired, and the current culture which is best described as aggressive/defensive and does not reflect these constructive norms, then decision-makers could consider taking action to shift the culture towards more humanistic-encouraging and affiliative behaviours which are more likely to support the long-term sustainability goals of the organisation.