Exploring the nexus between corporate digitalisation and environmental sustainability: The moderating role of slack resources

Author/s Sebastiano Cupertino, Gianluca Vitale
Publishing Year 2024 Issue 2024/1 Language English
Pages 22 P. 87-108 File size 318 KB
DOI 10.3280/MACO2024-001005
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

This paper investigated if high digitalisation exposure allows companies to reduce their environmental impacts. Further, the study also deepened the critical role of available slack resources by analysing their possible moderating effects on the relationship between the firm’s higher digitalisation exposure and environmental performance. Adopting the unbalanced panel data approach, the authors performed 5 years fixed-effects regression analysis on a sample of 5,481 non-financial listed companies’ data derived from the Refinitiv ESG universe, as well as considering the annual constituents lists of the STOXX® Global Digitalisation index. Findings showed digitalisation positively affects specific environmental performance. Moreover, results highlighted that available slack resources negatively moderate the relationship between the firms’ higher digitalisation exposure and the sustainable management of resources in internal business and procurement processes. Accordingly, slack resources could stress the profit maximisation logic penalising corporate sustainability.

Keywords: Business Digitalisation Exposure, Corporate Environmental Sustainability, Slack Resources, Fixed-Effects Regression, Moderation Analysis

  1. Abdul, K., Hangjung, Z., Ananth, C. (2021), Digital transformation and environmental sustainability, Sustainability, 13(3), 1530.
  2. Aksin-Sivrikaya, S., Bhattacharya, C.B. (2017), Where Digitalization Meets Sustainability: Opportunities and Challenges, in Osburg, T., Lohrmann, C. (eds), Sustainability in a Digital World, CSR, Sustainability, Ethics & Governance, pp. 37-49, Springer, Cham. DOI: 10.1007/978-3-319-54603-2_3
  3. Allison, P.D. (1999), Multiple Regression: A Primer, Thousand Oaks, California and London, Pine Forge Press.
  4. Anastasiadou, E., Alkire. L., Röndell, J. (2021), Digitalisation for sustainability: Conceptualisation. Implications and Future Research Directions, in Ekman, P., Dahlin, P., Keller, C. (eds), Management and Information Technology after Digital Transformation, pp. 43-52, Routledge.
  5. Andersen, M.L, Dejoy, J.S. (2011), Corporate social and financial performance: the role of size, industry, risk, R&D and advertising expenses as control variables. Business Society Review, 116(2), pp. 237-256.
  6. Argilés-Bosch, J.M., Garcia-Blandon, J., Martinez-Blasco, M. (2016), The impact of absorbed and unabsorbed slack on firm profitability: Implications for resource redeployment, In: Resource redeployment and corporate strategy, pp. 371-395, Emerald Group Publishing Limited. DOI: 10.1108/S0742
  7. Bag, S., Gupta, S., Kumar, S. (2021a), Industry 4.0 adoption and 10R advance manufacturing capabilities for sustainable development, International Journal of Production Economics, 231, 107844.
  8. Bag, S., Pretorius, J.H.C., Gupta, S., Dwivedi, Y.K. (2021b), Role of institutional pressures and resources in the adoption of big data analytics powered artificial intelligence, sustainable manufacturing practices and circular economy capabilities, Technological Forecasting and Social Change, 163, 120420.
  9. Baiyere, A., Salmela, H., Tapanainen, T. (2020), Digital transformation and the new logics of business process management, European journal of information systems, 29(3), pp. 238-259. DOI: 10.1080/0960085X.2020.1718007
  10. Bourgeois III, L.J. (1981), On the measurement of organizational slack, Academy of Management Review, 6(1), pp. 29-39.
  11. Bradley, S., Wiklund, J., Shepherd, D. (2011), Swinging a double-edged sword: the effect of slack on entrepreneurial management and growth, Journal of Business Venturing, 26(5), pp. 537-554.
  12. Bughin, J., Catlin, T., Hirt, M., Willmott, P. (2018), Why digital strategies fail, McKinsey Quarterly, 1, pp. 61-75. -- Available at: https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/why-digital-strategies-fail#/.
  13. Castellano, N., Felden, C. (2021), Management control systems for sustainability and sustainability of management control systems, Management Control, 2, pp. 5-10. DOI: 10.3280/MACO2021-002001
  14. Chiarini, A. (2021), Industry 4.0 technologies in the manufacturing sector: Are we sure they are all relevant for environmental performance?, Business Strategy and the Environment, 30(7), pp. 3194-3207.
  15. Crovini, C., Ossola, G., Marchini, P.L. (2018), Cyber risk. The new enemy for risk management in the age of globalisation, Management Control, 2 Suppl., pp. 135-155. DOI: 10.3280/MACO2018-SU2007
  16. Cupertino, S., Vitale, G., Taticchi, P. (2023), Interdependencies between financial and non-financial performances: a holistic and short-term analytical perspective, International Journal of Productivity and Performance Management, 72(10). DOI: 10.1108/IJPPM-02-2022-0075
  17. Cyert, R. M., March, J. G. (1963), A behavioral theory of the firm, Prentice-Hall, Englewood Cliffs, NJ.
  18. Daniel, F., Lohrke, F.T., Fornaciari, C.J., Turner, R.A. (2004), Slack resources and firm performance: A meta-analysis, Journal of Business Research, 57, pp. 565-574. DOI: 10.1016/S0148-2963(02)00439-3
  19. Del Vecchio, P., Di Minin, A., Petruzzelli, A.M., Panniello, U, Pirri, S. (2018), Big data for open innovation in SMEs and large corporations: Trends, opportunities, and challenges, Creativity and Innovation Management, 27(1), pp. 6-22.
  20. Demartini, M., Evans, S., Tonelli, F. (2019), Digitalization technologies for industrial sustainability, Procedia Manufacturing, 33, pp. 264-271.
  21. Djoutsa Wamba, L., Sahut, J. M., Braune, E., Teulon, F. (2020), Does the optimization of a company’s environmental performance reduce its systematic risk? New evidence from European listed companies, Corporate Social Responsibility and Environmental Management, 27(4), pp. 1677-1694.
  22. Dubey, R., Gunasekaran, A., Childe, S. J., Papadopoulos, T., Luo, Z., Wamba, S. F., Roubaud, D. (2019), Can big data and predictive analytics improve social and environmental sustainability?, Technological Forecasting and Social Change, 144, pp. 534-545.
  23. Forth, P., Reichert, T., de Laubier, R., Chakraborty, S. (2020), Flipping the odds of digital transformation success, Boston Consulting Group, 1, -- available online at: https://www.bcg.com/publications/2020/increasing-odds-of-success-in-digital-transformation
  24. Freeman, R.E. (1984), Strategic Management: A Stakeholder Approach, Boston, Pitman Publishing.
  25. Friedman, M. (2007), The social responsibility of business is to increase its profits, in Zimmerli, W. C., Holzinger, M., Richter, K. (eds), Corporate ethics and corporate governance, pp. 173-178, Berlin, Heidelberg, Springer. DOI: 10.1007/978-3-540-70818-6_14
  26. Green, W.H. (2008), Econometric analysis, 6th ed, Upper Saddle River, N.J., Prentice Hall.
  27. Groves, R. M., Fowler Jr., F. J., Couper, M. P., Lepkowski, J. M., Singer, E., Tourangeau, R. (2011), Survey methodology, Hoboken, New Jersey, John Wiley & Sons.
  28. Gunasekaran, A., Spalanzani, A. (2012), Sustainability of manufacturing and services: Investigations for research and applications, International Journal of Production Economics, 140(1), pp. 35-47.
  29. Gupta, S., Drave, V. A., Dwivedi, Y. K., Baabdullah, A. M., Ismagilova, E. (2020), Achieving superior organizational performance via big data predictive analytics: a dynamic capability view, Industrial Marketing Management, 90, pp. 581-592.
  30. Ha, L.T., Huong, T.T.L., Thanh, T.T. (2022), Is digitalization a driver to enhance environmental performance? An empirical investigation of European countries, Sustainable Production and Consumption, 32, pp. 230-247.
  31. Hair Jr., J.F., Fávero, L.P. (2019), Multilevel modeling for longitudinal data: concepts and applications, RAUSP Management Journal, 54(4), pp. 459-489. DOI: 10.1108/RAUSP-04-2019-0059
  32. Hair Jr., J.F., Black, W.C., Babin, B.J., Anderson, R.E. (2014), Multivariate Data Analysis, 7th ed., Upper Saddle River, New Jersey, Pearson Education International.
  33. Hanelt, A., Busse, S., Kolbe, L. M. (2017), Driving business transformation toward sustainability: exploring the impact of supporting IS on the performance contribution of eco‐innovations, Information Systems Journal, 27(4), pp. 463-502.
  34. Kiel, D., Müller, J. M., Arnold, C., Voigt, K. I. (2017), Sustainable industrial value creation: benefits and challenges of industry 4.0, International Journal of Innovation Management, 21(8), 17400151.
  35. Kohtamäki, M., Parida, V., Patel, P.C., Gebauer, H. (2020), The relationship between digitalization and servitization: The role of servitization in capturing the financial potential of digitalization, Technological Forecasting and Social Change, 151, pp. 119804.
  36. Kotarba, M. (2017), Measuring digitalization-key metrics, Foundations of Management, 9(1), pp. 123-138.
  37. Li, F. (2016), Endogeneity in CEO power: a survey and experiment, Investment Analysts Journal, 45(3), pp. 149-162. DOI: 10.1080/10293523.2016.1151985
  38. Li, Y., Dai, J., Cui, L. (2020), The impact of digital technologies on economic and environmental performance in the context of industry 4.0: A moderated mediation model, International Journal of Production Economics, 229, 107777.
  39. Mancini, D., Piedepalumbo, P., Lavorato, D. (2023), Il contributo di Management Control alla ricerca su tecnologie digitali e sostenibilità, Management Control, 2, pp. 5-18, DOI: 10.3280/MACO2023-002001
  40. Manyika, J., Chui, M., Bughin, J., Dobbs, R., Bisson, P., Marrs, A. (2013), Disruptive technologies: Advances that will transform life. Business, and the global economy, 180, pp. 17-21, San Francisco, CA: McKinsey Global Institute, -- available online at: https://www.mckinsey.com/~/media/mckinsey/business%20functions/mckinsey%20digital/our%20insights/disruptive%20technologies/mgi_disruptive_technologies_full_report_may2013.pdf.
  41. McAfee, A., Brynjolfsson, E. (2012), Big data: The management revolution, Harvard Business Review, 90(10), pp. 60-68.
  42. Mellahi, K., Wilkinson, A. (2010), A study of the association between level of slack reduction following downsizing and innovation output, Journal of Management Studies, 47(3), pp. 483-508.
  43. Modi, S. B., Cantor, D.E. (2021), How coopetition influences environmental performance: role of financial slack, leverage, and leanness, Production and Operations Management, 30(7), pp. 2046-2068.
  44. Montemari, M., Nielsen, C. (2021), Big data for business modeling: Towards the next generation of performance measurement systems?, Management Control, Suppl. 1, pp. 5-10. DOI: 10.3280/MACO2021-001-S1001
  45. Nantee, N., Sureeyatanapas, P. (2021), The impact of Logistics 4.0 on corporate sustainability: a performance assessment of automated warehouse operations, Benchmarking: An International Journal, 28(10), pp. 2865-2895. DOI: 10.1108/BIJ-11-2020-0583
  46. Nohria, N., Gulati, R. (1996), Is slack good or bad for innovation?, Academy of Management Journal, 39(5), pp. 1245-1264. DOI: 10.5465/256998
  47. Niehoff, S. (2022), Aligning digitalisation and sustainable development? Evidence from the analysis of worldviews in sustainability reports, Business Strategy and the Environment, 3(5), pp. 2546-2567.
  48. Nisar, Q.A., Nasir, N., Jamshed, S., Naz, S., Ali, M., Ali, S. (2021), Big data management and environmental performance: role of big data decision-making capabilities and decision-making quality, Journal of Enterprise Information Management, 34(4), pp. 1061-1096. DOI: 10.1108/JEIM-04-2020-0137
  49. Oláh, J., Aburumman, N., Popp, J., Khan, M.A., Haddad, H., Kitukutha, N. (2020), Impact of Industry 4.0 on Environmental Sustainability, Sustainability, 12, 4674.
  50. Orhangazi, È. (2008), Financialization and the US Economy, Cheltenham, Edward Elgar Publishing.
  51. Paolini, A. (2022), Integrated data management: New perspectives for management control, Management Control, Suppl. 2, pp. 5-14. DOI: 10.3280/MACO2022-002-S1001
  52. Paoloni, P., Manzo, M., Procacci, V. (2023), The impact of the pandemic crisis on the digital transition process of Italian SMEs, Management Control, Suppl. 2, pp. 83-107. DOI: 10.3280/MACO2023-002-S1005
  53. Preston, L.E., O’Bannon, D.P. (1997), The corporate social-financial performance relationship: a typology and analysis, Business and Society, 36(4), pp. 419-429. DOI: 10.1177/000765039703600406
  54. Qontigo (2022), ISTOXX INDICES. STOXX® Global Digitalisation Index, -- available online at: https://www.stoxx.com/document/Bookmarks/CurrentFactsheets/IXDIGITG.pdf.
  55. Refinitiv (2022), Environmental. Social and Governance (ESG) scores from Refinitiv. May 2022, -- available online at: https://www.refinitiv.com/content/dam/marketing/en_us/documents/ methodology/refinitiv-esg-scores-methodology.pdf.
  56. Robaina, M., Madaleno, M. (2020), The relationship between emissions reduction and financial performance: are Portuguese companies in a sustainable development path?, Corporate Social Responsibility and Environmental Management, 27(3), pp. 1213-1226.
  57. Rossato, C., Castellani, P. (2020), The contribution of digitalisation to business longevity from a competitiveness perspective, The TQM Journal, 32(4), pp. 617-645. DOI: 10.1108/TQM-02-2020-0032
  58. Seidel, S., Recker, J., vom Brocke, J. (2013), Sensemaking and sustainable practicing: functional affordances of information systems in green transformations, MIS Quarterly, 37(4), pp. 1275-1299. -- http://www.jstor.org/stable/43825792.
  59. Shahzad, A. M., Mousa, F.T., Sharfman, M. P. (2016), The implications of slack heterogeneity for the slack-resources and corporate social performance relationship, Journal of Business Research, 69(12), pp. 5964-5971.
  60. Stolterman, E., Fors, A.C. (2004), Information Technology and the Good Life, in Kaplan, B., Truex, D. P., Wastell, D., Wood-Harper, A.T., DeGross, J.I. (eds), Information Systems Research. IFIP International Federation for Information Processing, 143, pp. 687-692, Boston, MA, Springer. DOI: 10.1007/1-4020-8095-6_45
  61. Symeou, P.C., Zyglidopoulos, S., Gardberg, N.A. (2019), Corporate environmental performance: Revisiting the role of organizational slack, Journal of Business Research, 96, pp. 169-182.
  62. Truant, E., Broccardo, L., Dana, L. P. (2021), Digitalisation boosts company performance: an overview of Italian listed companies, Technological Forecasting and Social Change, 173, 121173.
  63. Vola, P., Gelmini, L. (2022), Climate change skills for the new CFOs. A preliminary analysis on TCFD by Italian listed companies, Management Control, 2 Suppl., pp. 189-209. DOI: 10.3280/MACO2022-002-S1009
  64. Vitale, G., Cupertino, S., Taticchi, P. (2023), Analysing the role of available organisational slack resources in affecting environmental performance. A structural equation modelling approach, Measuring Business Excellence, 27(3), pp. 341-363. DOI: 10.1108/MBE-09-2022-0110
  65. Yang, Y., Yang, X., Xiao, Z., Liu, Z. (2023), Digitalization and environmental performance: An empirical analysis of Chinese textile and apparel industry, Journal of Cleaner Production, 382, 135338.
  66. Zhor, S. (2018), Organisational slack resources and innovation adoption process: the moderating effects of Management Control System (MCS), in ICEBA 2018: Proceedings of the 2018 International Conference on E-Business and Applications, New York, NY, USA, pp. 10-17. Association for Computing Machinery. DOI: 10.1145/3194188.3194193

Sebastiano Cupertino, Gianluca Vitale, Exploring the nexus between corporate digitalisation and environmental sustainability: The moderating role of slack resources in "MANAGEMENT CONTROL" 1/2024, pp 87-108, DOI: 10.3280/MACO2024-001005