By Pete Tashman

It is undeniable that the natural environment is becoming less hospitable for businesses and their stakeholders, and that the chief cause of this unfortunate change is us. To worsen matters, shortages in natural resources, land, and water are driving many firms to increase their exploitative behavior in a vicious cycle. Indeed, others are distancing themselves from such behavior with “best-practices” in corporate sustainability, but these practices seem largely symbolic and have done little to slow the worst trends in planetary degradation. Finally, a small number of firms have a different approach -innovative business models and practices that restore or regenerate damaged ecological systems.

In the article “A Natural Resource Dependence Perspective of the Firm: How and Why Firms Manage Natural Resource Scarcity,” I attempt to untangle some of the drivers of these divergent firm responses to increasingly harsh ecological conditions by answering recent calls to better integrate nature into our social science approaches to the issue. While the core organizational theory in the article is resource dependence theory (businesses depend on nature for land, water, air, and natural resources), I argue that organizational theory alone is insufficient for explaining how nature impacts firms and why they respond in wildly diverging ways. I then situate resource dependence arguments in the  socioecological systems (SES) framework, the interdisciplinary scholarly effort championed by Nobel Laureate Elinor Ostrom, which considers the humanity and nature as linked together in nested complex adaptive systems. In this case, the SES are the focal systems, which are defined by geographic areas and the resources, stakeholders, governance structures, norms, beliefs, and power struggles within them. Ostrom and others favor this approach for making sense of the interdependence between humanity and nature because it accommodates any open systems theoretical approach from any discipline, including most of our own organizational theories.

With this in mind, the article better integrates resource dependence theory into the SES framework by extending into the natural realm, arguing that ecosystem dynamics within SES and organizational use of those ecosystems feedback onto one other in positive and negative ways. Organizations can, in turn, reduce ecosystem uncertainty in ways that help or harm those ecosystems, depending on whether they increase their exploitation of those ecosystems or choose paths that aim to restore or regenerate them. Exploitation yields short-term gains in resource inventories for firms, but creates long-term uncertainty through additional damage to ecology. Conversely, restoring and regenerating ecosystems result in fewer resources for firms in the short-term, but reduce long-term uncertainty because they are sustainable practices.

While harming or protecting local ecology is within the power of any one firm, global ecosystem management requires collective action to bridge practices together in interlinked or nested geographies. Firms that continue to exploit nature use corporate political strategies to slow and constrain regulatory solutions and use misinformation to appeal to ideology. Firms that act sustainably are smaller and less powerful, and work more ably through social movements to influence public opinion, policy, and practice diffusion.

Ultimately, many of us are already aware of the issues and behaviors highlighted in the article. Its novelty lies in highlighting the SES framework and its view of human-ecology interactions as situated in complex adaptive SES. Its intention is to bring more management scholars into the SES fold, where natural and social scientists are reconciling their different theories of knowledge to better explain and solve the state of affairs in which we find ourselves.

The article also offers public sector and non-governmental practitioners one explanation of why private sector organizations have diverging responses to the various ecological crises facing us. With a better understanding of the drivers of these responses, they can fine tune their approaches via governmental and non-governmental regulations and steer the private sector onto more sustainable pathways.

Reference:

Tashman, P. 2021. A natural resource dependence perspective of the firm: How and why firms manage natural resource scarcity. Business & Society, 60(6): 1279-1311.