View
2
Download
0
Category
Preview:
Citation preview
Spiritual Capabilities
1
BUILDING SPIRITUAL CAPABILITIES TO SUSTAIN SUSTAINABILITY-
BASED COMPETITIVE ADVANTAGES*
Jean Garner Stead, PhD
Professor of Strategic Management
East Tennessee State University
Department of Management and Marketing
PO Box 70625
Johnson City, TN 37614
423-341-1130
steadj@etsu.edu
W. Edward Stead, PhD
Professor of Management
East Tennessee State University
Department of Management and Marketing
PO Box 70625
Johnson City, TN 37614
423-341-1214
steade@etsu.edu
*An earlier version of this paper was presented to the Management, Religion, and
Spirituality Interest Group, 2010 Academy of Management meetings in Montreal.
Spiritual Capabilities
2
BUILDING SPIRITUAL CAPABILITIES TO SUSTAIN SUSTAINABILITY-
BASED COMPETITIVE ADVANTAGES
RUNNING HEAD: Spiritual Capabilities
5-10 KEY WORDS: Sustainability, spirituality, spiritual capabilities, spiritual
intelligence, spiritual capital, coevolution, spiral dynamics, competitive
advantages, resource-based view, core competencies
ABSTRACT
There is a rapidly growing global sustainability movement afoot putting significant
pressures on business organizations for greater social and ecological responsibility. As
a result of these environmental pressures, firms are now faced with the task of
integrating sustainability into their core strategic management processes. Such
integration is an upwardly spiraling coevolutionary process that leads organizations to
a higher level of existence based on the sacredness of humankind and nature. Firms
operating at this level are prepared to develop intangible spiritual capabilities that
contribute to the development of sustainability-based core competencies that are
valuable, rare, and difficult to imitate, thus providing them with sustainable
sustainability-based competitive advantages.
Spiritual Capabilities
3
BUILDING SPIRITUAL CAPABILITIES TO SUSTAIN SUSTAINABILITY-
BASED COMPETITIVE ADVANTAGES
There is a rapidly growing global movement afoot that is putting real pressure on
business organizations to function in sustainable ways (Edwards, 2005; Hawken,
2007). As a result, the business environment today is rife with demands for greater
social and ecological responsibility on the part of organizations. These demands add
further complexity to the already highly complex and turbulent web of resource
scarcities, competitive dynamics, institutional requirements, customer demands,
investor demands, and so forth that business organizations currently face.
Sustainability, meeting the needs of human beings now and for posterity, is an idea
that is simple to state but highly complex to understand and practice. Its complexity
comes from many factors. It is global, it looks deeply into the future because of its
focus on future generations, it has both short-term and long-term economic, ecological
and social dimensions, and it has many of its own contradictions, conundrums, and
tradeoffs. To complicate matters further, sustainability has deep spiritual roots in the
transcendent value of nature and humankind forever.
Given the complexity of sustainability, it should come as no surprise that integrating
it into the strategic processes of business organizations is highly complex. Doing so
will require a total strategic transformation for most firms (Laszlo and Zhexembayeva,
2011; Stead and Stead, 2009). They must find new ways of meeting customer
demands while using less resources and energy, generating no non-reusable, non-
renewable, and/or non-recyclable wastes, having a minimal carbon footprint, and
Spiritual Capabilities
4
contributing to global social and economic equity (Winston, 2009). Making this
strategic transformation requires firms to develop sustainability-based capabilities that
can be tied together in ways that build the core competencies that provide firms with
the competitive advantages necessary to earn short-term and long-term profits in
ecologically and socially responsible ways (Laszlo and Zhexembayeva, 2011; Lovins
and Cohen, 2011; Stead and Stead, 2009).
Capabilities are “tangible and intangible assets that enable a firm to take full
advantage of the other resources it controls” (Barney and Hesterly, 2010: 66).
Capabilities are specific skill sets that can be creatively composed in various and
sundry ways to build unique core competencies that provide the firm with sustainable
competitive advantages (Prahalad and Hamel, 1990). Thus, firms generally have
numerous capabilities that can be arranged into a few core competencies that provide
them with sustained competitive advantages.
Capabilities useful for building sustainability-based core competencies are numerous
and complex. Tangible capabilities such as life cycle analysis, pollution prevention,
full-cost accounting, and effective change management processes, and intangible
capabilities, such as a good sustainability reputation, positive economic, social, and
ecological community relationships, and an ethical system grounded in sustainability,
are some examples. These tangible and intangible capabilities range from scientific to
technological to organizational to spiritual (Laszlo and Zhexembayeva, 2011, Stead
and Stead, 2009).
According to Laszlo and Zhexembayeva (2011: 217), even though there are many
questions that must be answered about humankind’s pursuit of sustainability, “a
Spiritual Capabilities
5
collective spiritual transformation that de-emphasizes acquisition and domination over
nature [is]…dictated by the stark realities of 7 (soon 9) billion people living on a small
planet.” Many now say that while short-term profitability can be temporarily enhanced
by developing only tangible sustainability capabilities, the ability of firms to survive
and thrive in the long term will require developing intangible capabilities that support
a deep spiritual commitment to the land and its people (Laszlo and Zhexembayeva,
2011; MIT Sloan Management Review and The Boston Consulting Group, 2011; Stead
and Stead, 2009). Whereas the tangible capabilities may together provide firms with
cost-saving and revenue-generating benefits, they are unlikely to support the
development of the ‘disruptive innovations’ necessary for long-term survival during
the sustainability revolution (Laszlo and Zhexembayeva, 2011).
Thus, in a nutshell spiritual capabilities are necessary for sustaining sustainability. In
this paper we will explore the idea that spiritual capabilities, including spiritual
intelligence and spiritual capital (Aburdene, 2005; Malloch, 2008; Zohar and
Marshall, 2000; Zohar and Marshall, 2004), provide organizations with valuable, rare,
difficult to imitate competitive advantages that help organizations develop and embed
sustainability into their strategic management processes.
The Sustainability Movement and Rising Levels of Consciousness
Numerous scholars have noted that there is a fundamental shift taking place in human
consciousness today. Regardless of whether it is called the ‘great emergence’ (Tickle
2008; McLaren 2007), the ‘blessed unrest’ (Hawken, 2007), the ‘sustainability
Spiritual Capabilities
6
revolution’ (Edwards, 2007), or the ‘rebirth of the soul’ (Chopra, 2001), there is
definitely a rise in consciousness happening regarding the relationship between the
health of the planet and the people who inhabit it. The new consciousness involves a
complex network of social, ecological, economic, cultural, political, and intellectual
dimensions with sustainability at its heart. Hawken (2007:12) expresses it this way:
“The movement expresses the needs of the majority of people on Earth to sustain the
environment, wage peace, democratize decision making and policy, rejuvenate public
governance…and improve their lives...”
In researching the movement, Hawken (2007) began with the idea that there are at
least 100,000 environmental and social justice organizations globally committed to
achieving some aspect of sustainability, but he soon discovered that the number is
closer to a million. He found these organizations to be quite diverse, focusing on a
wide variety of global, regional, and local issues.
Edwards (2005) describes the movement as a transformation from the industrial
revolution to the sustainability revolution. He says that the sustainability revolution is
currently following the developmental path typical of all social revolutions: genesis,
critical mass, and diffusion. He says that the revolution had its beginnings (its genesis)
in the 1970s and 1980s, and that it is currently in the process of building the necessary
critical mass and worldwide diffusion. Speth (2008) agrees with both Hawken and
Edwards that there is a revolutionary new sustainability-based consciousness arising
that focuses on concerns for the Earth and its people. Aburdene (2008) describes this
rising consciousness as a new ‘megatrend’ that is bottom-up, participative, and
spiritually charged.
Spiritual Capabilities
7
Chopra (2001) comments extensively on the spiritual nature of the new
consciousness. He believes that the rising new consciousness is humanity’s yearning
to reconnect with its soul, and he believes this idea is consistent with the tenets of
quantum theory. Quantum theory has led to the understanding that all reality is
interrelated; the world is essentially a seamless whole with all life interdependent and
coevolving. According to Chopra (2001), if the theory of the cosmos is ultimately the
theory of how God’s mind works, as Einstein believed, then this holistic, integrated
view of the world provides the framework to connect humanity’s mind, body, and
spirit into one.
Thus the sustainability movement, with its rising spiritual consciousness and its
worldwide cries for economic equity, fair trade, social justice, local preservation, clean
air and water, safe food, safe consumer products, and so forth, has become a major
force permeating virtually all aspects of society and nature, including the business
arena. Further, sustainability is now laying down deep roots in the global business
environment. A recent survey of 3000 business executives around the globe found that
the responding organizations actually increased their financial investments in
sustainability during the recent recession, and it found that 70% of the respondents
planned to continue to increase their sustainability investments in 2011 and beyond
(MIT Sloan Management Review and The Boston Consulting Group, 2011). Statistics
like these show that commitment to sustainability is rising very rapidly; and as it does,
the survival of business organizations will be increasingly influenced by how well
firms can develop the capabilities that allow them to adapt to this sustainability-
infused business environment.
Spiritual Capabilities
8
Integrating Sustainability into Management Is a Coevolutionary Process
Coevolution is a biologically rooted theory demonstrating that interdependent entities
evolve and change in concert with one another over time (Ehrlich and Raven, 1964;
Lovelock, 1979, 1988; Margulis and Hinkle, 1991). Since its inception, coevolution
theory has crossed its biological boundaries into the organizational sciences (Flier,
Van Den Bosch, and Volberda, 2003; Lampel and Shamsie, 2003; Lewin, Long, and
Carroll, 1999; Lewin and Volberda, 2003a; Lewin and Volberda, 2003b; Porter, 2006;
Volberda and Lewin, 2003). Porter (2006) identified six characteristics of
coevolutionary change processes gleaned from the biological, geological, and
organizational literature: specificity, reciprocity, simultaneity, adaptability, boundary
spanning, and permanence. She demonstrated that the relationships between business
organizations and their environments exhibit all six of these characteristics.
Pfeffer (1993) referred to contemporary management theories as a ‘weed patch’ of
contradictory frameworks because, despite their sound intuitive logic and solid
research support, management theories often provide divergent explanations of
organizational survival. Some, such as strategic choice and resource-based theories,
explain how organizational survival is a function of organizational adaptation. Others,
such as population ecology and institutional theories, explain how organizational
survival is determined via environmental selection. Thus, some management theories
suggest that good management is very important for organizational survival, while
Spiritual Capabilities
9
others marginalize its importance (Lewin and Volberda, 2003b; Volberda and Lewin,
2003).
Coevolution theory is now recognized as an overarching theoretical umbrella that
unites these seemingly dichotomous explanations of organizational survival. From a
coevolutionary perspective, there is a perpetual selection-adaptation cycle at work in
which changes in environmental selection criteria are met with organizational efforts
to develop the capabilities to adapt to these environmental changes (Lewin and
Volberda, 2003b; Porter, 2006). Over time, the increasingly complex and rapidly
changing gaggle of selection criteria results in the emergence of new organizational
forms that are more flexible, more change oriented, more innovative, and less
bureaucratically controlled (Flier, Van Den Bosch, and Volberda, 2003; Lewin and
Volberda, 1999; Volberda and Lewin, 2003).
As discussed above, sustainability is a primary contributing factor in today’s
increasingly complex, increasingly turbulent business environment. This means that
sustainability plays a critical role in today’s coevolutionary environmental selection-
organizational adaptation cycles. The message that organizations must be ecologically
and socially responsible in pursuit of economic success is resonating from all corners
of the business environment today, and these calls for improved sustainability
performance mean that today’s organizations must incorporate sustainability values,
strategies, and capabilities into their adaptation efforts if they want to survive.
Coevolution Is a Spiraling Process
Spiritual Capabilities
10
Of the six characteristics of coevolution identified by Porter (2006), the dynamics
between reciprocity and permanence seem particularly important for understanding the
true nature of the current environmental selection-organizational adaptation cycle. By
itself, reciprocity portrays the cycle as a circular process in which environmental
changes lead to organizational adaptations, which lead to environmental changes,
which leads to organizational adaptations, and so on. However, while the two-
dimensional circle of reciprocity may be a reasonable approximation of this
relationship, it does not fully portray the fact that the coevolutionary dance between
organizations and their environments is a process of perpetual change that leaves each
entity permanently changed.
By shifting the image of the coevolutionary relationship between environmental
selection and organizational adaptation from a two-dimensional circle to a three-
dimensional spiral, we can more thoroughly understand the perpetual nature of
coevolutionary change processes. Whereas circular dynamics imply that
organizational selection-adaptation cycles may eventually lead back to the same place,
spiral dynamics (Graves, 1970, 1974; Beck and Cowen, 1996; Wilber 1996, 2000)
demonstrates that the reciprocal environment-organization change process results in
both continuously morphing into something different over time.
Spiral dynamics, developed by Graves (1970, 1974) and further expanded by Beck
and Cowan (1996) and Wilber (1996, 2000), says that changes in human
consciousness result from spiraling coevolutionary processes. According to the theory,
life conditions are always getting more complex. These increasing complexities of life
create new cultural, psychological, cognitive, and biophysical problems that cannot be
Spiritual Capabilities
11
solved at the current level of human consciousness. Thus, a higher level of
consciousness emerges to deal with these new problems. According to spiral
dynamics, higher levels of consciousness naturally emerge in order to help humans
adapt and survive life’s changes. Human consciousness coevolves as humans develop
more complex mental models of the world that allow them to handle new problems.
This means that the spirals are open systems where new ways of thinking will emerge
as life conditions get more complex. In this regard, the spiraling process is virtually
infinite in nature.
According to the theory, each coevolving shift in human consciousness is
accompanied by a shift in core value systems. Each of these value systems represents a
specific biophysical-psychological-spiritual-cultural relationship that responds to
changing, complex environmental conditions. These value systems shape the decision
making of individuals, organizations, and cultures. They are organized in hierarchical
tiers along the rising spiral, with each new value system including and transcending
the ones below. The lower tier value systems (tier one) reflect fundamental human
needs, and the upper tier value systems (tier two) reflect the wholeness of existence.
Whereas tier one value systems are somewhat static in nature, tier two value systems
represent a flow of transformational spirituality that is holistic and integral. After the
humanistic needs of the first tier values are met, humans begin to question the
fundamental assumptions about how they see the world. According to Beck and
Wilber (2008), the first 100,000 years of human existence have been spent in tier one
value systems, but they believe the cutting edge of humanity today is taking the
‘momentum leap’ to second tier values that Graves (1974) predicted years ago. In a
Spiritual Capabilities
12
coevolutionary shift of this magnitude, past success will not guarantee future success.
Rather, the new life conditions warranting such a shift will require new ways of
thinking, paradigm shifts on the part of individuals, organizations, and societies in
order to adapt and survive.
As demonstrated above: (1) sustainability is at the heart of the current transcendence
of humankind from tier one to tier two in the spiral, and (2) organizations that survive
this transcendence will do so because they have the capabilities to adopt the new
values, new ways of thinking, and new ways of doing things that are necessary for
them to make the fundamental economic, social, and ecological transformation to a
tier two value system. Further, the spiraling dynamics of coevolutionary change
strongly suggest that the transcendence to a more sustainable tier two state of being for
organizations will result in the emergence of more complex, flexible organizational
forms capable of facilitating this transformation.
Spiraling Toward Sustainability-Based Management Is a Spiritual Journey
Thus, organizational survival in today’s sustainability rich, spiraling coevolutionary
business environment will require organizations to make the deep paradigmatic shifts
necessary for transforming themselves into sustainable organizations. Such shifts will
need to be based on a core belief in the sanctity of nature and humankind, including
future generations. Research by Bansal and Roth (2000) and Egri and Herman (2000)
suggest that when strategic leaders in organizations hold deep core beliefs such as
Spiritual Capabilities
13
these, their organizations are more likely to institute shared sustainability-centered
ethical systems.
Many have suggested over the years that sustainability-based ethical systems are
spiritual in nature. Spiritual fulfillment is a higher-level (tier two) aspiration (Wilber
(1996, 2000) that is a uniquely human characteristic. Spirituality is generally defined
in the literature as relating to the search for meaning in people’s lives (Driver, 2007;
Gull and Doh, 2004). When people speak of being spiritually fulfilled, they use terms
like purpose, joy, happiness, love, peace, creativity, and beauty. Pruzan and Mikkelsen
(2007) interviewed 31 spiritually motivated executives and found that things like love,
caring for others, purpose, compassion, divinity, and service were primary motivators
for these executives.
As mentioned earlier, Arburdeen (2008) and Chopra (2001) both describe the rising
sustainability consciousness as a spiritual phenomenon. Naturalist and conservationist
Aldo Leopold (1949) said over 60 years ago that adopting the ‘land ethic’ would
require humans to take a more spiritual view of their relationships to each other and to
nature. Pioneer ecological economist E. F. Schumacher (1973, 1977) echoed this
sentiment, saying that a societal shift toward sustainability represents a shift to a
higher (tier two) level of human consciousness that is more organic, more inwardly
focused, more heartfelt, and more spiritual. In the same vein, ecological economist
Herman Daly (1977) said that pursuing sustainability requires realizing that a belief in
a high quality of life for posterity is the highest of humankind’s ethical and spiritual
aspirations (its ‘ultimate ends’). Thus, we contend the upward transformation to more
Spiritual Capabilities
14
sustainable management systems requires that organizations develop sustainability-
based spiritual capabilities.
The development of spiritual capabilities involves the development of both ‘spiritual
intelligence’ and ‘spiritual capital’. Gardner (1993) said that human intelligence is
multifaceted, with each person having different intelligences that coexist and develop
relatively independent of one another. Most common among these human intelligences
is rational intelligence, generally referred to as IQ (intelligence quotient).
Theoretically, a high IQ reflects a high ability to solve logical problems. Goldman
(1996) demonstrated that emotional intelligence (EQ) is as important as IQ. EQ is a
measure of people’s awareness of other people’s feelings as well as their own. As
such, it is the source of human compassion, empathy, and motivation. EQ has been
shown to be especially important within the business context. For example, Walter,
Cole, and Humphrey (2011) report that a strong research link has been established
between EQ and effective leadership attitudes and behaviors.
In the past decade or so, spiritual intelligence (SQ) (Zohar and Marshall, 2000;
2004) has gained attention. This is the intelligence that humans use to solve problems
of value and meaning. It is a means of integrating internal and external experiences,
which facilitates this problem solving (Hyde, 2004; Vaughan, 2002), and it enables
humans to adapt to coevolving life conditions (Beck and Wilber, 2008). SQ helps put
human behaviors and lives within a larger context of meaning, and thus it serves as the
foundation of both IQ and EQ. Unlike other species, human beings search for meaning
and value in what they do because they are driven by questions regarding why they
exist and what their lives mean. Humans have a longing to feel a part of a larger
Spiritual Capabilities
15
purpose, something toward which they can aspire. SQ allows them to be creative, to
use their imaginations, and to change their rules. It allows them to think out of the box
and to play with the boundaries of their existence. It is this transformative
characteristic that distinguishes SQ from IQ and EQ. Whereas both IQ and EQ work
within the boundaries of the situation, SQ allows individuals to question whether or
not they want to be in the situation in the first place. SQ facilitates the dialogue
between reason and emotion, between mind and body. It provides the ability to
integrate all the intelligences. Thus, it is a transcendent intelligence (Sisk and Torrance
(2001) that enables the paradigm shift from tier one to tier two values (Graves, 1970,
1974; Beck and Cowan, 1996; Wilber, 2000).
As managers within the organization increase their levels of SQ, this becomes
transformative for the organization. This transformative process is a critical adaptive
mechanism for coevolving to tier two values according to Beck and Wilber (2008).
The result of the transformation is the creation of spiritual capital, a kind of wealth
earned by acting not out of short-term bottom-line gain, but by serving fundamental
human needs. This facilitates the creation of shared values that serve both
organizational and societal needs (Porter and Kramer, 2011). This type of wealth helps
to create a sustainable world while nourishing and sustaining the human spirit. In
essence it exists in the soul of an organization, defining its fundamental core values
and purpose (Zohar and Marshall, 2004), and thus it provides the foundation for
implementing an organizational vision of sustainability.
As managers develop high levels of spiritual intelligence and spiritual capital, they
learn to nurture, renew, and sustain the core purpose of the whole human enterprise.
Spiritual Capabilities
16
The spiritual capabilities they glean from this become the glue, the cultural foundation
that binds people together. They provide organizational members with a moral and a
motivational framework, an ethos, a spirit. This spirit transcends, sustains, and
enriches both material capital and social capital. In other words, it embeds the
organizational culture with spirit (Zohar and Marshall, 2004). Further, this spirit can
enhance managers’ understanding and commitment to a core value of sustainability.
The transformative powers of spiritual capabilities can give managers the deeper
insights they need to understand why contributing to humanity’s efforts to “meet the
needs of the present without compromising the ability of the future generations to
meet their own needs” (World Commission on Environment and Development
1987:8) is critical for their organizations’ survival.
Spiritual Capabilities and Sustained Competitive Advantage
Let us briefly review. There is a rising global consciousness that centers on creating an
ecologically, socially, and economically sustainable world for current and future
generations. This rising sustainability consciousness with its tier two value systems that
support environmental and social responsibility is deeply penetrating the business
environment, meaning that business organizations are now faced with the need to craft
efficient and effective sustainability-based strategic management systems that support
their efforts to earn profits in socially and ecologically sensitive ways. Sustainability is a
concept with deeply spiritual roots. Thus, integrating sustainability into strategic
management systems requires that organizations develop spiritual capabilities (spiritual
Spiritual Capabilities
17
intelligence and spiritual capital) that support and enhance their ability to achieve
competitive advantages.
According to the resource-based view (RBV) of the firm (Barney, 1986; Barney, 1991;
Wernerfelt, 1984), organizational competitive advantages are achieved through the
effective management of internal resources. Firm performance is a function of the types
of resources (tangible and intangible capabilities) developed and exploited by managers
through strategies that accomplish organizational goals. Resources that provide a
competitive advantage to the firm, known as core competencies, must be valuable, rare,
and difficult to imitate, and they must be strategically combined and deployed to build
competitive advantages. Hart (1995) contends that the RBV should be expanded to
include natural resources as sources of sustained cost and differentiation competitive
advantages, and the research of Russo and Fouts (1997) supports Hart’s contentions.
They found that natural resource capabilities can improve both organizational
performance and profitability.
As noted earlier, the spiritual capabilities that support sustainability are intangible. The
aesthetic value of nature and humankind cannot be touched or displayed. However, it can
certainly be experienced, and it can certainly stir the spirit when it is. Researchers from
the MIT Sloan Management Review and The Boston Consulting Group (2011) found that
leading firms in the sustainability revolution, such as Unilever, Johnson and Johnson,
New Belgium Brewing, and Proctor and Gamble, place a very high value on
sustainability-based intangibles like these. They found these firms to have deep values for
the conservation of natural resources, and they found that the firms strongly believe that
valuing such intangibles improves their long-term competitiveness. These firms develop
Spiritual Capabilities
18
ways to measure these intangibles, even though such measurements are fraught with
problems that render their accuracy suspect. However, to these firms the measurements,
despite their potential inaccuracies, show that they place a high value on these intangible
capabilities.
Colbert (2004) has extended the RBV framework by examining it through the lens of
complexity theory. He contends that reframing RBV in terms of complex adaptive
systems allows for a more holistic, less reductive examination of some of the most
strategic, yet difficult, aspects of RBV, including causal ambiguity, social complexity,
and system-level resources. Thus, according to RBV, the more causally ambiguous,
socially complex, and holistic the resources, the more difficult it is for competitors to
imitate them, thus offering a sustained competitive advantage to the firm (Barney, 1986;
Barney, 1991; Colbert, 2004; Grant 1991; Reed and DeFillippi, 1990; Schoemaker,
1990).
We contend that spiritual capabilities underpinning sustainability-based core
competencies meet the established criteria for creating sustained competitive advantages
for organizations operating in today’s sustainability-rich business environment. First of
all, they are valuable to the firm. As mentioned above, leaders with deeply held beliefs
that nature and humankind are sacred are more likely to develop sustainability-based
ethical systems to under gird their strategic processes and actions (Bansal and Roth,
2000; Egri and Herman, 2000). Such organizations will be inclined to recognize and
assign power to stakeholders that represent the interests of the planet and its people
(Freeman, 1984; Freeman and Gilbert, 1988; Hart and Sharma, 2004; Starik, 1995; Stead
and Stead, 2000), and organizations that respond to sustainability stakeholder concerns
Spiritual Capabilities
19
will consciously work to develop and improve their sustainability-based capabilities
(Sharma and Vredenburg, 1998).
Secondly, spiritual capabilities supporting sustainability-based core competencies are
currently rare. Organizations today seem to understand well that performing in more
ecologically and socially responsible ways can improve their profitability. Cutting energy
and materials use and creating less pollution and wastes are widely recognized
sustainability-based ways to achieve lower-cost competitive advantages in today’s
business environment, and creating and promoting ecologically and socially responsible
products and services is widely understood to create differentiation-based competitive
advantages for firms. However, few organizations seem to have made the fundamental
transformation from traditional profit-oriented ethical systems to systems driven by
deeply held values for the sacredness of the land and its people. Whereas the profit
motive by itself can allow organizations to save money and sell goods and services by
being more ecologically and socially aware, those rare organizations with a deep
understanding of and commitment to sustainability are more capable of seeing beyond the
current low hanging fruit strategies to a future where fundamental transformational
change at the deepest level of organizational cultures will be required. The respondents to
the survey conducted by the MIT Sloan Management Review and The Boston Consulting
Group (2011) reported that picking the low hanging sustainability fruit (such as energy
improvements) can take organizations only so far. Tying sustainability efforts to short-
term profits is a good entrée into a broader sustainability commitment, but firms that
never go beyond short-term commitments (called ‘laggards’ by the survey researchers)
Spiritual Capabilities
20
will eventually lose their competitive edge to those who make a deep long-term
commitment to sustainability (called ‘embracers’).
Thirdly, imitating spiritual capabilities is very difficult to do because they are holistic,
socially complex, and causally ambiguous. The holistic nature of spirituality and spiritual
fulfillment is well established. Recall the earlier discussion that spirituality is a tier two
aspiration that is more holistic and integral than the tier one aspirations below it (Beck
and Wilber, 2008). Driver (2007) refers to spirituality as a ‘developmental gestalt’
centered on humans’ search for lifelong meaning. It is not about seeking temporary
thrills. It is about seeking lasting joy and deep fulfillment from the whole of one’s life.
The search for meaning permeates one’s religious life, organizational life, family life,
social life, recreational life, and so forth. It is an eternal search for one’s soul and true
nature. Although spirituality and religion are not synonymous, many see it as a search for
God, which they see as the ultimate wholeness.
Spirituality is also socially complex. Social complexity generally refers to the fact that
human relationships are highly complex phenomena that are difficult to understand and
systematically manage with any real certainty. Barney and Hesterly (2010) give
interpersonal relationships among managers, the dynamics of an organization’s culture,
and the reputation of a firm with its customers as examples of socially complex factors in
business organizations. As mentioned earlier, spirituality is a human concept that can
touch virtually every aspect of one’s life, and as such it has broad, complex social
dimensions. For example, Judge and Kammeyer-Mueller (2011) demonstrate that
happiness (one of the key outcomes of spiritual fulfillment) is a complex societal value
that manifests itself in numerous ways in most all cultures across the globe.
Spiritual Capabilities
21
Finally, spirituality is clearly causally ambiguous. Causal ambiguity has its base in
bounded rationality, the idea that the ability to make rational decisions is limited because
of imperfect information systems. As the term causal ambiguity suggests, the cause-effect
nature of situations is obfuscated, making them hard to understand and evaluate
rationally. Causal ambiguity exists because problems, ideas, processes, and so forth, are
ill defined and complicated. According to Reed and DeFillippi (1990), causal ambiguity
is a legitimate barrier to imitation of sustainable core competencies. The holistic, socially
complex nature of spirituality renders it causally ambiguous by definition. The meaning
of life is very personal, and yet it is pursued in a world with others who are pursuing their
own meaning. Senge (1990) seemed to understand this when he said that the way to
establish a spiritual relationship between employees and their organizations is to tie
employee visions directly to the shared vision of the organization, allowing employees to
pursue their own spiritual fulfillment via the long-term success of the organizations.
Conclusions
In sum, we know that the rapidly growing global movement to sustainability is putting
pressures on business organizations to earn their profits in ways that contribute to the
greater social and ecological good. It is widely accepted in both academe and industry
that organizational survival now and in the future will depend on firms being able to
efficiently and effectively integrate sustainability into their strategic cores. We along with
others contend that such integration requires that organizations transform to a higher level
of existence based on the belief in the sacredness of humankind and nature. We contend
Spiritual Capabilities
22
that firms operating at this level are prepared to develop intangible spiritual capabilities
that can contribute to the development of sustainability-based core competencies that are
valuable, rare, and difficult to imitate.
Given these contentions, we make the following propositions:
Proposition 1: Intangible sustainability-based spiritual capabilities can contribute
significantly to the development and maintenance of organizational core competencies
that provide sustained competitive advantages that help the firm meet its economic needs
while serving the needs of society and protecting the natural environment.
According to the RBV, proposition 1 can be true only if sustainability-based spiritual
capabilities have value, are rare, and are difficult to imitate. Thus we make the following
propositions:
Proposition 2: Intangible sustainability-based spiritual capabilities are valuable.
Proposition 3: Intangible sustainability-based spiritual capabilities are rare.
Proposition 4: Intangible sustainability-based spiritual capabilities are difficult to imitate.
Further, according to the RBV, proposition 4 can be true only if sustainability-based
spiritual capabilities are holistic, socially complex, and causally ambiguous. Thus we
make the follow propositions:
Proposition 5: Intangible sustainability-based spiritual capabilities are holistic.
Spiritual Capabilities
23
Proposition 6: Intangible sustainability-based spiritual capabilities are socially complex.
Proposition 7: Intangible sustainability-based spiritual capabilities are causally
ambiguous.
As we believe we have demonstrated in the discussion above, the logic and content of
these propositions has a solid foundation in the literature. On the other hand, none of
these propositions have been fully empirically tested. Thus, the next step is to do so. The
answers received should provide important insights in the search for ways to make sure
that sustainability-based core strategic competencies can be sustained in business
organizations.
References
Aburdene, Patricia: 2005, Megatrends 2010: The Rise of Conscious Capitalism.
Charlottsville, VA: Hampton Roads Publishing.
Bansal, Pratima and Kendall Roth: 2000, ‘Why Companies Go Green: A Model of
Ecological Responsiveness’ Academy of Management Journal 43(4): 717-736.
Barney, J: 1986, ‘Strategic Factor Markets: Expectations, Luck, and Business Strategy’
Management Science 32: 1231-1241.
Spiritual Capabilities
24
Barney, J: 1991, ‘Firm Resources and Sustained Competitive Advantage’ Journal of
Management 17: 99-120.
Barney, J. and W. Hesterly: 2010, Strategic Management and Competitive Advantage,
Third Edition. Upper Saddle Ridge, NJ: Pearson Education, Inc.
Beck, Don and Christopher Cowan: 1996, Spiral Dynamics: Mastering Values,
Leadership and Change. Oxford, UK: Blackwell.
Beck, Don and Ken Wilber: 2008, ‘Explanation of Spiral Dynamics Integral, Courtesy of
Clare Graves’ video.google.com/videoplay?docid=3637777359401476371.
Chopra, D: 2001, ‘The Soul’ Imagine. M. Williamson (editor), New York: New
American Library.
Colbert, B: 2004, ‘The Complex Resource-Based View: Implications for Theory and
Practice in Strategic Human Resource Management’ Academy of Management Review
29(3): 341-358.
Daly, Herman E: 1977, Steady State Economics. San Francisco: W. H. Freeman.
Driver, Michaela: 2007, ‘A “Spiritual Turn” in Organizational Studies: Meaning Making
or Meaningless?’ Journal of Management, Spirituality & Religion 4(1): 56-86.
Spiritual Capabilities
25
Edwards, Andrés R: 2005, The Sustainability Revolution: Portrait of a Paradigm Shift.
Gabriola Island, BC: New Society Publishers.
Egri, Carolyn P. and Susan Herman: 2000, ‘Leadership in the North American
Environmental Sector: Values, Leadership Styles, and Contexts of Environmental
Leaders and Their Organizations’ Academy of Management Journal 43(4): 571-604.
Ehrlich, Paul R. and Peter H. Raven: 1964, ‘Butterflies and Plants: A Study in Co
evolution’ Evolution 18: 586-608.
Flier, Bert, Frans A. J. Van Den Bosch, and Henk W. Volberda: 2003, ‘Co-evolution in
Strategic Renewal Behaviour of British, Dutch and French Financial Incumbents:
Institutional Effects and Managerial Intentionality’ Journal of Management Studies
40(8): 2163-2187.
Freeman, R. Edward: 1984, Strategic Management: A Stakeholder Approach. Boston
MA: Pitman.
Freeman, R. Edward and Daniel R. Gilbert, Jr: 1988, Corporate Strategy and the Search
for Ethics. Englewood Cliffs, NJ: Prentice-Hall.
Spiritual Capabilities
26
Gardner, H: 1993, Frames of Mind: The Theory of Multiple Intelligences. London:
Fontana.
Goleman, D: 1996, Emotional Intelligence. New York: Bantam Books.
Grant, R: 1991, ‘The Resource-Based Theory of Competitive Advantage’ California
Management Review 33(3): 114-135.
Graves, C: 1970, ‘Levels of Existence: An Open System Theory of Values’ The Journal
of Humanistic Psychology 10(2): 131-154.
Graves, C: April: 1974, ‘Human Nature Prepares for a Momentous Leap’ The Futurist,
72-87.
Gull, G. A. and J. Doh: 2004, ‘The “Transmutation” of the organization: Toward a More
Spiritual Workplace’ Journal of Management Inquiry 13(2): 128-139.
Hart, Stuart L: 1995, ‘A Natural Resource-Based View of the Firm’ Academy of
Management Review, 20(4): 986-1014.
Hart, Stuart L. and Sanjay Sharma: 2004, ‘Engaging Fringe Stakeholders for Competitive
Imagination’ Academy of Management Executive 18(1): 7-18.
Spiritual Capabilities
27
Hawken, Paul: 2007, Blessed Unrest. New York: Viking Press.
Hyde, B: 2004, ‘The Plausibility of Spiritual Intelligence: Spiritual Experience, Problem
Solving and Neurial Sites’ International Journal of Children’s Spirituality 9(1): 14-18.
Judge, Timothy A. and John D. Kammeyer-Mueller: 2011, ‘Happiness as a Societal
Value’ Academy of Management Perspectives 25(1): 30-41.
Lampel, Joseph, and Jamal Shamsie: 2003, ‘Capabilities in Motion: New Organizational
Forms and the Reshaping of the Hollywood Movie Industry’ Journal of Management
Studies 40(8): 2190-2210.
Laszlo, Chris and Nadya Zhexembayeva: 2011, Embedded Sustainability: The Next Big
Competitive Advantage. Sheffield, UK: Greenleaf.
Leopold, Aldo: 1949, A Sand County Almanac. New York: Random House.
Lewin, Arie Y., Chris P. Long, and Timothy N. Carroll: 1999, ‘Co evolution of New
Organizational Forms’ Organization Science 10(5): 535-553.
Lewin, Arie Y. and Henk W. Volberda: 1999, ‘Prolegomena on Co evolution: A
Framework for Research on Strategy and New Organizational Forms’ Organization
Science 10(5): 519-534.
Spiritual Capabilities
28
Lewin, Arie Y. and Henk W. Volberda: 2003a, ‘Beyond Adaptation and Selection
Research: Organizing Self-Renewal in Co-evolving Environments’ Journal of
Management Studies 40(8): 2109-2110.
Lewin, Arie Y., and Henk W. Volberda: 2003b, ‘The Future of Organization Studies:
Beyond the Selection-Adaptation Debate’ In The Oxford Handbook of Organization
Theory, eds. Haridimos Tsoukas and Christian Knudsen, 568-595. New York: Oxford
University Press.
Lovelock, James: 1979, Gaia: A New Look at Life on Earth. London: Oxford University
Press.
Lovelock, James: 1988, The Ages of Gaia. New York: Bantam Books.
Lovins, L. Hunter, and Boyd Cohen: 2011, Climate Capitalism: Capitalism in the Age of
Climate Change. New York: Hill and Wang.
MIT Sloan Management Review and The Boston Consulting Group: 2011,
‘Sustainability: The “Embracers” Seize Advantage’ MIT Sloan Management Review
Winter: 4-27.
Spiritual Capabilities
29
Malloch, Theodore Roosevelt: 2008, Spiritual Enterprise: Doing Virtuous Business. New
York: Encounter Books.
Margulis, L. & Hinkle, G: 1991, ‘The Biota and Gaia: 150 years of support for
Environmental Sciences’ Scientists on Gaia 11-18. Cambridge MA: The MIT Press.
McLaren, Brian D: 2007, Everything Must Change: Jesus, Global Crises, and a
Revolution of Hope. Nashville, TN: Thomas Nelson.
Pfeffer, Jeffrey: 1993, ‘Barriers to the Advance of Organizational Science: Paradigm
Development as a Dependent Variable’ Academy of Management Review 18(4): 599-620.
Porter, Michael and Mark R. Kramer: 2011, ‘Creating Shared Value’ Harvard Business
Review Jan-Feb: 63-77.
Porter, Terry B: 2006, ‘Co evolution as a Research Framework for Organizations and the
Natural Environment’ Organization and Environment 19(4): 1-26.
Prahalad, C. K., and Gary Hamel: 1990, ‘The Core Competence of the Corporation’
Harvard Business Review May-June: 79-91.
Pruzan, Peter and Kirsten Pruzan Mikkelsen: 2007, Leading with Wisdom: Spiritual-
based Leadership in Business. Sheffield, UK: Greenleaf Publishing Limited.
Spiritual Capabilities
30
Reed, R. and R. DeFillippi: 1990, ‘Causal Ambiguity, Barriers to Imitation, and
Sustainable competitive Advantage’ Academy of Management Review 15: 88-102.
Russo, Michael V. and Paul A. Fouts: 1997, ‘A Resource-Based Perspective on
Corporate Environmental Performance and Profitability’ Academy of Management
Journal 40(3): 534-559.
Schumacher, E. F.: 1977, A Guide for the Perplexed. New York: Harper and Row.
Schumacher, E. F.: 1973, Small Is Beautiful: Economics as if People Mattered. New
York: Harper and Row.
Schoemaker, P. J. H: 1990, ‘Strategy, Complexity and Economic Rent’ Management
Science 36: 1178-1192.
Senge, Peter M.: 1990, The Fifth Discipline: The Art and Practice of the Learning
Organization. New York: Doubleday/Currency.
Sharma, Sanjay and Harrie Vredenburg: 1998, ‘Proactive Corporate Environmental
Strategy and the Development of Competitively Valuable Organizational Capabilities’
Strategic Management Journal 19: 729-753.
Spiritual Capabilities
31
Sisk, D. and E. Torrance: 2001, Spiritual Intelligence: Developing Higher
Consciousness, Buffalo, NY: Creative Foundation Education Press.
Speth, James Gustave: 2008, The Bridge at the Edge of the World. New Haven, CT: Yale
University Press.
Starik, Mark: 1995, ‘Should Trees Have Managerial Standing? Toward Stakeholder
Status for Non-Human Nature’ Journal of Business Ethics 14: 207-217.
Stead, Jean Garner, and W. Edward Stead: 2000, ‘Eco-Enterprise Strategy: Standing for
Sustainability’ Journal of Business Ethics 24(4): 313-329.
Stead, Jean Garner, and W. Edward Stead: 2009, Management for a Small Planet, 3rd
Edition. Armonk, NY: M. E. Sharpe.
Tickle, Phyllis: 2008, The Great Emergence: How Christianity Is Changing and Why.
Grand Rapids, MI: Baker Books.
Vaughan, F: 2002, ‘What is Spiritual Intelligence?’ Journal of Humanistic Psychology
42(2): 16-18.
Spiritual Capabilities
32
Volberda, Henk W., and Arie Y. Lewin: 2003, ‘Co evolutionary Dynamics Within and
Between Firms: From Evolution to Coevolution’ Journal of Management Studies 40(8):
2111-2136.
Walter, Frank, Michael S. Cole, and Ronald H. Humphrey: 2011, ‘Emotional
Intelligence: Sine Qua Non of Leadership or Folderol?’ Academy of Management
Perspectives 25(1): 45-59.
Wernerfelt, B: 1984, ‘A Resource-Based View of the Firm’ Strategic Management
Journal 5: 171-180.
Wilber, Ken: 2000, Integral Psychology: Consciousness, Spirit, Psychology, Therapy,
Boston: Shambhala Publications, Inc.
Wilber, Ken: 1996, The Theory of Everything. Boston: Shambhala Publications, Inc.
Winston, Andrew: 2009, Green Recovery: Get Lean, Get Smart, and Emerge from the
Downturn on Top. Boston, MA: Harvard Business School Press.
World Commission on Environment and Development. 1987. Our Common Future.
Oxford, UK: Oxford University Press.
Recommended