Sustainability by Dissociation: Categorization, Divestitures and Organizational Boundaries
Open Access
Author:
Gehman, Joel A
Graduate Program:
Business Administration
Degree:
Doctor of Philosophy
Document Type:
Dissertation
Date of Defense:
June 04, 2012
Committee Members:
Raghu B Garud, Dissertation Advisor/Co-Advisor Raghu B Garud, Committee Chair/Co-Chair Linda K Trevino, Committee Member Forrest Scott Briscoe, Committee Member Rebecca Lynn Henn, Special Member
Keywords:
sustainability categorization divestitures organizational boundaries actor network theory shareholder proposals ratings
Abstract:
Sustainability has emerged as an increasingly important category of concern. Reflecting this shift, organizations are being evaluated on the basis of sustainability criteria. Firms in particular may find themselves rated as unsustainable because of their portfolios of businesses. I propose a cultural perspective on organizational boundaries. I theorize that when confronted with negative sustainability ratings, rather than decoupling their unsustainable practices symbolically or displacing them substantively, firms might instead choose to divest them altogether. Seen from this perspective, firms achieve sustainability by dissociation. Using an unbalanced panel of diversified firms from 1992 to 2010, I test whether negative sustainability ratings are related to divestitures, and whether the strength of this relationship is moderated by the extent to which firms are targeted by shareholder activists, and whether or not firms engage in sustainability reporting. Drawing on my analysis, I discuss implications for our understanding of organizational boundaries, as well as divestitures research, categorization theory, and sustainability research.
