The Interaction of Cognitive Frame and Performance Measurement Scope on Managers’ Selection of Sustainable Suppliers

• In Event: Sustainability and Pay Transparency

Abstract

Pressure on corporations from their stakeholders to not only return a business profit, but also demonstrate sustainability present an ongoing challenge. Due in part to the multiple and potentially contradictory dimensions of sustainability, how corporate managers respond to stakeholders demands can have long lasting effects on the organization and society. Some organizations have responded to this challenge by implementing performance measurement systems (PMS) which vary in scope, to help direct attention towards sustainable goals. Yet, prior research is inconclusive regarding the effectiveness of broad PMS scope in directing organizational actors towards more sustainable decisions. Furthermore, research suggests that the decision makers' cognitive processes are important to corporate decision making in the sustainability context. Currently, it appears that a business case cognitive frame, which directs organizational actors to undertake only those sustainable actions that will yield a financial benefit, dominates organizational decision making. Therefore, scholars have called for more research to enhance our knowledge and understanding of managerial cognition related to sustainability. I respond to that call by mobilizing paradox theory; an alternative form of cognition posited to better support managerial decisions when competing logics exist. My objective is two-fold. Under experimental conditions, I investigate if and how cognitive frames can moderate the effect of a broad versus narrow PMS. The results reveal that managers who approach decision making under a broad PMS and a paradoxical cognitive frame make more sustainable managerial judgments than managers making decisions using a business case cognitive frame and/or a PMS that is narrow in scope. These findings are important given the social and environmental implication of judgments surrounding sustainability.

Author

• Nadra Pencle, Ball State University