Keywords

Introduction

There is no lack of indicators suggesting that, until recently, companies’ engagement in the domain of corporate social responsibility (CSR) was mainly part of adaptive and reactive strategies for (re)legitimization in relation to stakeholders, especially crucial for business performance, such as employees, consumers, the local community, and the public authorities. Current times, however, see a significant change of scenario and prospects. The worldwide economic and financial crisis exploded in 2008 has engendered new interpretations and proposals which tend to reconceptualize the links between market organizations and the contexts in which they operate, and stress a business model based on the valorization of social resources and needs with the aim of creating ‘integrated value ’—economic, social and environmental—over the long term (e.g. Butera 2009; Esty and Winston 2009; Laszlo 2008; Louche et al. 2010; Lubin and Esty 2010; Nidumolu et al. 2009; Porter and Kramer 2011; Smith and Lenssen 2009).

Put briefly, we find two tenets at the core of this reorientation: (a) the conviction that corporate conducts intended to include the needs of the relevant stakeholders can constitute a lasting source of competitive advantage; (b) an emphasis on the need to incorporate attention to socio-environmental issues directly into corporate strategy, making it structurally inherent to all the links in the value chain and in the everyday management of the company’s core operations, as well as, inevitably, in its support processes (such as human resource management). These most recent views represent a further stage in the evolution of the CSR discourse, in which the drive to shift socially relevant instances from the periphery to the centre of business is accentuated, starting from emerging needs or those intensified by the current crisis (e.g. in the areas of health, services to families and the elderly, the fight against the exploitation of environmental resources). These new contributions invite to a deeper understanding in the business world, as well as among stakeholders in the public and non-profit sectors, of how current social issues and demands can concur to redefining markets and therefore of how the capacity to deal with them might form the basis for an enterprise’s long-term success.

The above reference to the current economic crisis is decisive here. This phase represents not only the time frame of the empirical research on which this chapter draws, but also a period during which, more than ever before, there has been an endeavour to reconsider corporate behaviour from the point of view of its mechanisms of ordinary functioning, rather than only in terms of its final effects. In other words, this is a singularly favourable moment in which certain ideas can translate into actions. The terrain is now really ready for the development of advanced concepts of corporate sustainable innovation which emphasize the integration of economic and socio-environmental objectives into the central core of the strategic-productive processes of business activity and their realization as a source of competitive advantage. These are notions which have been around for some time, to a certain extent, although they have been often tacitly considered visionary, or they have been treated through simple categorizations within which sustainability ‘is “boxed up” as economic + environmental + social’ (Couper et al. 2009: 69). It is our intention here to offer support to this view by referring to the results of a qualitative research on a sample of Italian enterprises. The business model of these organizations seems to revolve around a dual dynamic of ‘valorization of the context’: by this expression we mean, on the one hand, inclusion in the corporate strategy of social demands and resources aimed at greater concern for the environment, the quality of local community life, and the rights and development of persons within and outside workplaces; and, on the other hand, a tendency to produce economic and social value downstream of market activity, earning profits by virtue of the ‘context value’ generated.

In the organizational experiences analysed by this study, the creation of integrated value is based on innovations undertaken through mechanisms already cited in the literature as able to render companies more effective in economic and social-ecological terms (e.g. Lehni 2000; Shaetegger et al. 2004); this is especially the case of product redesign and process re-engineering. But, more generally, the driver of innovative action by most of these enterprises appears to be their tendency to act in a socially proactive manner by developing—to use an incisive image once proposed by Sethi (1975)—an aptitude for considering the directions of social change, with its needs and emerging problems. It is this rethinking of the market, with a propensity to grasp and frequently anticipate the new needs and expectations of consumers, citizens, or specific stakeholders that enables the competitive differentiation of market offer and therefore the construction or expansion of the business target. Among current interpretations, the one most akin to this indication is probably provided by Porter and Kramer with their shared value principle, which implies “creating economic value in a way that also creates value for society by addressing its needs and challenges” (2011: 4).

It should be made clear from the outset that the relevance of the organizational situations examined does not derive from the possibility of establishing a direct correlation between crisis pressures and certain choices made by these enterprises in the field of sustainable innovation . This is all the more so because, in a number of our cases, investments in this area originate from corporate history and culture (and, as we shall see, this fact as such warrants attention). Rather, the landscape emerging from the study seems significant because it documents the feasibility of business models based on a virtuous link between sustainability and competitive innovation, which are consistent with the notions put forward with increasing insistence by management literature in front of the current uncertainties.

The slice of reality depicted by the research suggests considerable heterogeneity in the processes by which the linkage between economic priorities and socio-environmental concerns can be sought and achieved in corporate performance. Nonetheless, at a general level, and within the limits of the exploratory scope of the study, it has been possible to identify a set of central and recurring elements in the sustainable actions of the enterprises observed. In what follows, after a brief description of the study and by concentrating specifically on two cases examined in the research, we shall delve into three distinctive mechanisms which apparently generate these companies’ ability to create and integrate values of different kinds, and which we accordingly call ‘generative dynamics’. The final section considers the study’s implications from a perspective whereby the main challenge for re-launching capitalism coincides with the possibility of transforming the needs of the social environment from constraints to business opportunities which can fuel the creation of integrated value .

Outline of the Empirical Research

Site and Methodology

The empirical research on which this article is based was part of a broader research project entitled ‘New Business Models’ conducted in a 10-month period between 2010 and 2011.Footnote 1 The purpose of the field study was to analyse in what way social demands for the valorization of a given context generate sustainable innovation among a sample of ten Italian enterprises which—as reported by a number of ‘privileged witnesses’Footnote 2—displayed an already existing commitment to the inclusion of social and environmental concerns in business management.

Besides the requirement of visible traces of a sustainability -oriented strategy,Footnote 3 a second guiding criterion for selecting the sample was the heterogeneity of the companies in five respects:

  1. 1.

    Size, so as to examine the situations of both small-to-medium organizations and large ones in terms of number of employees;

  2. 2.

    Sector, whose variety, besides reflecting the fundamental difference between business-to-business and business-to-consumer activities, extends beyond traditional domains (such as the food and construction sectors) to more recently defined markets highly exposed to the changes brought about by technological evolution, which are by definition characterized by a need to pursue innovation as a normal competitive requirement (such as IT service suppliers, cross-media communications, and renewable energy);

  3. 3.

    Geographical location, by selecting organizations with headquarters in different areas of central and northern Italy (from Lombardy to Trentino, and from Piedmont to the Marche);

  4. 4.

    Sustainability approach, by selecting organizations with a vocation to human and social sustainability, organizations with an environmental vocation, and organizations with relevant practices in both these areas;

  5. 5.

    Phase of the organizational life cycle, with start-up dates ranging from the mid-twentieth century to the year before the research.

From a methodological point of view, the case studies were carried out using a qualitative approach (Yin 2009). This choice seemed to be especially suited for grasping not only overt actions and outcomes, but also interpretations and expectations, as well as possible tensions, arising from the practice of sustainability . The assumption underlying the adoption of this approach was therefore that such more intangible factors critically affect the strategies, impacts, and issues entailed by an organizational trajectory in sustainable innovation . The main strength of the qualitative case study lies in the multiplicity of data sources used (Eisenhardt 1989), which allows an all-around analysis of the specific organizational reality observed. Accordingly, field data were produced from documentary materials and semi-structured interviews (8–10 for each case study), as well as informal conversations, with organizational members. The interviewees were representatives of senior management and key informants in the crucial areas of sustainable innovation (such as production, marketing, or human resources management), the latter, especially for medium and large organizations, from different hierarchical levels. In addition, as the opportunity arose, direct observations were made of the ‘scene of the site’ during visits to the organizations (sometimes held continuously for several days) and by attending specific events (such as internal meetings). The checklist used both in fieldwork and in the interpretation phase related to nine central thematic areas: the history and profile of the company; its organizational and strategic model; its climate and culture; human resource management practices; relationships with stakeholders; the economic-financial dimension of sustainability ; the human–social dimension of sustainability; the environmental dimension of sustainability; and future prospects.

The situated nature and the small number of the organizational situations observed, combined with the known limitations to generalize in qualitative case studies, conferred upon the research project an exploratory character. This acknowledged, it was believed that, by virtue of the criteria used in the selection of this set of organizations, the reality studied could be, to a certain degree, indicative—albeit not representative—of some current trends in the country.

The Sample and Two Exemplary Cases

Given that it is impossible here to provide a detailed description of the ten organizations investigated and of their specific trajectories in sustainable innovation , Table 27.1 shows the composition of the sample according to its main internal differentiation factors and sketches the sustainability profile of their business models.

Table 27.1 Composition of the sample
Full size table

These enterprises manifest a set of features which recent literature has identified as constituting the bases of environmental and/or social sustainable innovation (e.g. Epstein 2008). We find a long-term orientation, with an initial willingness—which is apparent both in the history of the more mature companies and in the initial phases of those in existence for only a few years—to expect, but also to wait for, tangible returns in competitiveness. Then there is timeliness, that is, adopting from the outset sustainability as a factor in strategic thinking rather than adapting to contextual pressures. We also note anticipation, which is closely connected with timeliness and is the ability to position oneself in the vanguard and—one might add—in a position to be in prior compliance with public regulations which may have a significant impact on practices within the sector (e.g. increasingly stringent European laws on ecological requirements in manufacturing processes).

More broadly, in these enterprises’ business activities, we note a propensity to combine several value logics and to generate values of different kinds. It does not seem unplausible to see certain aspects of the idea of ‘overall value added’ into the strategies conceived and then pursued by a good number of these organizations, an idea which, according to Ricotti (2010), distinguishes the ‘well-being company’. This notion is very different from the typical financial one of ‘economic value added’ (EVA), which emphasizes the value of a company in terms of profit, with the aim of rewarding risk capital. The overall value added constitutes the synthesis or recomposition of multiple values which concur to create well-being for an enterprise, within the enterprise, and among those who interact with it (e.g. clients or local communities).

This said, in what follows we shall refer primarily to a couple of specific cases examined in the research. The two cases can be considered somewhat exemplary because the recent trajectories of these organizations tend to exhibit very explicitly such a capacity to generate (and, first of all, acknowledge and mobilize) a plurality of wellness values in business activities, condensing—so to speak—a set of elements that in other case studies we find to a varying extent.

Loccioni

Loccioni is a group involved in the measurement and control of industrial products and processes. By means of a high degree of technological innovation and the centrality given to research, it has developed distinctive expertise in the automotive, environment, health, and energy sectors. Organizational reality and culture are still strongly influenced by the founder, Enrico Loccioni, who comes from a family of sharecroppers originally from the small town of the Marche where the headquarters of the company are located. He started his first business venture in the production of electrical systems, soon providing this activity with three unique elements that would be strengthened as key aspects in the subsequent evolution of the company: (a) the choice of working only with large industrial groups (including, today, important international clients such as Ferrari and Porsche); (b) attention to the search for innovative solutions, that is, offers tailored to the client’s needs through ‘unique projects’ (instead of catalogue solutions); and (c) the consequent care for the relational dimension, through the development of an organizational model based—both internally and externally—on trust relationships and knowledge sharing. Its current functioning by matrix organization and business units allows Loccioni to devote itself to multiple lines of activities, but also to inaugurate new ones grafting them onto those already established, and these conditions do not seem unconnected with the increases in sales recorded since 2008, during one of the most critical phases of the economic crisis.

The company’s orientation to integrate people and knowledge is the basis of several sustainability practices. As for human resource management, recruitment does not exist in a traditional sense, since the selection of an employee often precedes a clear definition of job roles to which she will be assigned. One of the primary recruitment channels, also expressing a singular openness to local territory’s resources and needs, is the project ‘Blue Zone’, which is part of a wider initiative of continuing education desired by the founder since the 1970s. Addressed to local students at all school levels in order to stimulate positive synergies between school and the world of work, annually the project results in the selection of about thirty candidates among high school and university graduates, who can then start a career in the group. In addition to the ‘before phase’, Loccioni manages in a special way also the ‘after phase’ and often supports former employees who become self-employed, by entrusting them with parts of work orders, offering hospitality in its premises to carry out technical processes, and including them in its business network (which, on the other hand, can be enriched by the opportunities brought about by these new entrepreneurs).

Aside from the support to the launch of this sort of spin-offs, the propensity to network—generating both business and social impacts—emerges through at least a couple of other projects. The first is ‘Nexus’, a permanent laboratory for promoting entrepreneurial culture in the region which monthly gathers practitioners from various worlds (entrepreneurs, artisans, academics, media and sport professionals) in order to encourage them to share their respective experiences and perspectives. The second project, named ‘Land of values’, involves a partnership with some local B&Bs and restaurants where the company directs its visitors, thus creating economic advantages for these stakeholders and obtaining reputational benefits for itself. As for environmental sustainability , a sphere in which Loccioni has actively engaged over the last decade (with the use of lighting control systems, condensing boilers, solar panels, and geothermal heat pumps), the most interesting project is the ‘Leaf Community’. This is the first fully integrated sustainable community in Italy, where some Loccioni’s employees live in a carbon neutral house, move with electrical and hydrogen cars, bring children to a solar energy school, and work in eco-efficient buildings that employ renewable energy sources (e.g. the reuse of rainwater). The Leaf Community has developed through the involvement of the territory and of some large international companies, which participate with the aim of testing and implementing new eco-compatible devices. Besides being an indirect but effective investment in communication, this sort of open-air laboratory has led to the creation of a new business unit called Loccioni Energy Technologies.

Vita

Vita is a publishing company whose aim is to give voice to the Italian non-profit world and to represent the viewpoint of Italian and international civil society by fostering dialogue between the heterogeneous actors that contribute to its pluralism (profit and non-profit organizations, groups of citizens of different national origin, etc.). It was founded in the early 1990s by a group of journalists formerly involved in a programme of Italy’s state television titled the ‘Courage to live’, in particular through the initiative of its conductor who is currently president and editorial director of the company. For several years, the entrepreneurial activity of Vita consisted essentially in the production of the weekly publication ‘Vita non-profit magazine’, a low-cost magazine launched with the political purpose of putting at the centre of collective discussion the experiences of societal actors who normally have no access to media and positions of power. This goal was—and is—pursued, on one hand, by representing the interests of the third sector and, on the other, by valorizing the specificity of the various components of this world. Through ups and downs, this model has been consolidated without resorting to public funding and solely by means of proceeds from the sale of the magazine. As a matter of fact, in the early 2000s the publication could count on 25 thousand readers and on the creative contribution of a large editorial board with a varied set of competences and professional backgrounds. In those same years, once achieved a balanced budget, the company expanded participation in the shareholding structure also among non-profit organizations, which previously had not been included to prevent them from sharing the debts of the launch phase.

Over the past decade, Vita has grown significantly and has taken the form of a content company operating in areas of action which, although distinct, are integrated by the basic values and purposes of the organization: to deepen experiences and news neglected by other media; to set up a permanent laboratory for providing new impulses to the non-profit sphere and other civil society actors; and to preserve its own independence in the dialogue with multiple stakeholders (e.g. public institutions as for issues regarding the status of the non-profit sector). Currently, the publishing activity related to the magazine retains its relevance and is strengthened by the enhancement of the marketing and advertising function, an increased emphasis on international trends, and the monthly publication of inserts (e.g. about economy and socially responsible investment, environmental sustainability , second-generation immigrants in Italy). Along with this, today two additional lines of activities are gradually expanding. The first supports companies in launching CSR programmes and non-profit organizations in the implementation of marketing and fund-raising strategies; here, one of the main aims is to encourage mutual knowledge and cooperation between for-profit and third-sector actors (among clients there are corporate actors such as Nike, Novartis, and Unicredit Group). The second new business area deals with Internet-based communication through a web portal consisting of multiple sections, which are devoted to: job offer and search (with free insertions); laws, funding opportunities and calls for tender regarding social projects; charitable donations (through a service that connects donors directly to non-profit recipients); a collection of best practices in the promotion of a shared culture of European civil society; the development of cultural relations between Africa and Europe; and public and private initiatives in the field of CSR. Furthermore, the online channel of the company allows to obtain a significant amount of news which normally are not reported by the Italian and international press.

Basically, Vita’s present situation poses several challenges at two levels: the organizational level, with an effort to improve the coordination of the (not always converging) positions of people who contribute in various ways to the organization’s offer; and the business level, with the goal of increasing sales of the magazine, the customer portfolio of the company’s consulting activity, and traffic to the web portal. In this context, what appears to be definitely significant is the recent decision to go public. This choice is not aimed at paying dividends, but instead entails the deliberate and internally shared intent to raise capital for sustaining future development plans; in its promoters’ view, not only is it consistent with the company’s traditional policy of being autonomous (through a diffuse shareholder base), but it also demonstrates the viability of a market organization that transforms economic value into social value.

The First Dynamic: Innovative Sustainability Between Cultural Embeddedness and Exploration

Within the frame outlined above, the sample reveals a first key dynamic which seems to have played a crucial role in the development of these organizations’ sustainability trajectories and which especially concerns their cultural dimension and their collective learning processes. In this regard, it should be pointed out that, in many of these companies, conceptions and values exist and have become routinized (or are in the process of being institutionalized), which: (a) revolve around instances which can be related to sustainability ; (b) are linked with strong convictions held by the founders and/or other internal influential people and at the same time have developed through the history of the enterprise and its organizational traditions; and (c) have come, or are tending, to ‘personalize’ the organization compared with other ones, giving it some sort of DNA which supports the exercise of certain collective competences, among them openness to experimentation and continuing learning that is crucial for innovation.

The Founder/Entrepreneur as a Catalyst for Sustainable Innovation

The first element to be emphasized is the influence of the founding entrepreneur or the group of persons who have set up and launched the company, all of whom tend to maintain a leading role in the current ownership and organizational structure. Among the corporate trajectories analysed, the role performed by this individual variable is not a component of the ‘sustainability formula’ but rather a catalyst for the activation of other organizational drivers of sustainable innovation. The decisive impact of the entrepreneurs/founders undoubtedly relates to their personality traits. It is not rare, in fact, to find charismatic leadership processes, which are clearly evident in the evolution of Loccioni and Vita. More than personality, however, it is the persona of the founders which has left a clear imprint on these companies, where reference to ‘persona’ encompasses the entire baggage (which we might justifiably call ‘heritage’) of experiences gained since their childhoods, and which subsequently led to the set-up and management of business. It is the history of the entrepreneurs/founders which proves to be crucial, and which consists, among other things, of specific events (some of them traumatic, such as the wartime experiences of the founders of Foppapedretti and Ferrero), ‘illuminating’ experiences (such as the period spent by the founder of MEG in the USA), relationships in civil society (which formed the basis of both the WIS and the Vita projects), family affiliations, and strong ties to specific areas of the country and their socio-cultural traditions (as very visible in some of the ways Loccioni does business as well as in market activities of the Habitech district).

The personal repertoire of the entrepreneur, or of the group of founders, has frequently been a significant incubator of business experience ever since the initial decisions and operations. The principal vehicles whereby all this was assembled and conveyed into the business sphere were the conceptions of reality and the value systems acquired, developed, and shared by these individuals in their broader life courses, which were imported and refined, and above all tested (and usually corroborated), in the management and challenges of organizational activity. In other words, the cultural and identitarian references of these individuals have formed a powerful and long-lasting matrix (even more so in the various cases where they continue to play a managerial role) in the creation process of their companies’ cultures, by orienting the collective activation of sense-making codes relative to the common perception—within the organization—of the unique nature of their competences and of their market style.

Not only is worth noting the influence of this kind of entrepreneurs on the development of their companies’ cultures, which is consistent with the findings of classic research on the role of the founder in the creation of organizational culture (e.g. Schein 1983). Also to be emphasized is the frequent direct inclusion in the belief and value systems translated by the entrepreneur into the company’s activities of principles and models of action which presuppose a commitment to sustainability . The role of these ‘premises of meaning’ is evident in the creation and management of WIS, Vita and Habitech, but it is also apparent in the cases of MEG (through the incidence of the Catholic upbringing of the founder) and Loccioni, where work relationships reproduce the responsibility and risk-sharing model typical of the sharecropping system practised in the founder’s home area and by his family.Footnote 4

A Participative and Incremental Development of Organizational Culture

In most cases, therefore, the history and vision of the entrepreneur have provided essential coordinates and criteria used from the outset to define organizational goals and strategies. It is mainly through this channel that the enterprise acquired socially and environmentally significant options already in its start-up phase, when business practices and solutions, later subject to market’s assessment, were developed and tested. This does not, however, imply a deterministic process of influence along the lines of the reductionist view of ‘cultural engineering’ (Alvesson and Sveningsson 2008), which maintains that a company’s culture can be shaped unilaterally from above, without considering that it must somehow be connected with the actual shared experiences of organizational members. The evolution of the companies studied confirms that the figure itself of the leader—as typified by founders, by major shareholders or even by professional managers—is embedded within the dynamics of the organizational culture and not above them (Hatch 2004).

This more socially constructed dimension of the organizational culture seems to have emerged since the beginnings of many of these companies. So, it is true that during this phase, the founders tend to surround themselves with collaborators possessing features (values and aspirations, as well as professional abilities) which correspond to their own vision, as very clear in the case of Loccioni, and this represents undeniably one of the most effective ways through which their power to steer their businesses in the desired directions is expressed. However, their influence is not exercised by forging meaning codes which give sense to collective action, but rather by the capacity to support dissemination of such codes by favouring constant experimentation with distinctive ‘ways of doing things’, on the one hand, and the subsequent collective understanding of the nexus between the vision underlying practices and the results achieved, on the other. Applying a seminal concept from Pfeffer (1981), one might say that the decisive contribution made by these entrepreneurs to creating corporate cultures imbued with sustainability springs primarily from a symbolic type of leadership action. The success of this action, however, must necessarily pass through the interpretative acts by which other members of the firm, particularly those responsible for managing critical activities (such as research and development, manufacturing and marketing), actively ‘contextualize’ the principles and messages which come from on high in everyday operations.

It is through dynamics more complex than those evoked by the seductive image of culture shaping, therefore, that our entrepreneurs’ visions have penetrated organizational life, materializing in specific activities and orienting the single functions most crucial for the core business. This dispersion mechanism—by which the options underlying creation of the business and its market positioning are translated and, possibly, evolve—seems to be closely linked with what Butera (2009) calls the ‘integration forces’ of a company pursuing high economic and social performance ‘which are based on the values of the founders, and which develop by means of a shared method for putting them into everyday practice’ (p. 22), and which reveal the circular relationship between ‘non-ordinary entrepreneurs and their creations’ (ibid.).

These considerations enable us to focus more directly on the innovative capacities of the companies studied. There is no doubt that, in several of the cases, we find the ability to create and offer products excelling in certain areas (or even just one), and to which clients attach real value. As Christianson (1997) has noted, and as exemplified by Vita’s strategy, this ability is a constant feature of innovative organizations because it is a decisive factor for differentiating in the market when other performance conditions (such as capitalization resources) are inferior to those of the competitors. But it is especially in the mechanisms by which organizational culture develops that we can identify a key to explaining the link between sustainability and innovation in these organizations’ activities. Such mechanisms relate not only to the creation phase of the organizational culture, but also to the adjustments made to it over time. More precisely, we see in these enterprises’ trajectories the importance of processes of ‘incremental cultural change’ (Gagliardi 1986; Swanson 1999) for their current performance in the market. It is true that this type of change involves experimentation with practices and competences more or less innovative compared with the past. But this is achieved, and is successful, to the extent that the value options underlying new types of behaviour are coherently inserted into the web of meanings and values already in effect and available within the organization, expanding or even reinforcing them. Based on this dynamic, the changing needs and opportunities which arise in a company’s day-to-day management induce the adoption of new values integrable with the traditional ones, contrary to what happens in two other situations: ‘apparent cultural change’, which consists in the mere adoption of patterns of behaviour defined entirely by the nucleus of original values; and the more traumatic ‘cultural revolution’, by which radical strategic transformations based on traits of collective identity in open conflict with the previous situation (for example, from the concept of the environment as a resource to be exploited to that of the environment as a value for stakeholders) are implemented by means of the socially rather costly removal of the old organizational styles of action (e.g. through high personnel turnover).

Here, cultural incrementalism means that it is the combination of a series of competences and value patterns developed as much through organizational traditions as by later reorientations of business policies which mainly determines the current position of the companies observed. A relevant example of this is the path followed by Vita, whose current business orientation in three areas (publishing, consultancy, and web-based communication) derives from cross-fertilization between its initial commitment to valorize social grassroots experiences and a later, wider, focus on contributing to a pluralistic development of civil society based on the inclusion and interdependence of its various actors.

The impression given by a number of cases is that the implementation of evolutionary (and not radical) changes, together with internal dissemination processes of priorities and the inclusion of external stakeholders (see the next section), has supported what Walker (2009) has called the ‘sense of agency’ of individuals (entrepreneurs and managers in core organizational positions) who set up and coordinate corporate activities marked by sustainable innovation . Most of the key figures working, or who have worked, in the companies analysed are both extremely pragmatic and idealistic. The more visionary aspect, so to speak, of their concept of business seems to have been maintained, and even strengthened, by the sharing, extension, and progressive attainment of a certain corporate project, as shown, particularly, by the gradual consolidation of the non-conformist business choices of Vita and MEG.

Organizational Learning Processes in the Emergence of a Sustainable Business Model

The above-cited cultural evolution mechanisms seem essential for the organizational learning processes underpinning the sustainable innovation conducts of the companies studied.

Firstly, although the level of individual competences is still crucial, there is a capacity of the enterprise as a whole to generate and maintain knowledge independently of single persons. What influences the management of business and its innovative development is not knowledge and creative solutions located ‘in the heads’ of people (or of certain people), but rather the fact that they are transferred and incorporated into collective practices to become institutionalized within forms of knowledge circulating within a network of social as well as formal relationships. The experience of Loccioni in technology-intensive sectors is paradigmatic. In this company headed by an entrepreneur with no specific technological training, shared learning experiences able to impact on production and services delivery are constantly activated within a network of professional and personal relationships involving workers even after they have left the company to set up their own businesses.

Secondly, the know-how which represents an intangible and decisive resource for these companies, one which is difficult to reproduce in other organizational contexts, does not simply lie in a technical repertoire (such as sector-specific knowledge, operational procedures, or systems for monitoring the environment). In line with what contended above about the influence of cultural and identitarian dimensions, these components intertwine with wider meaning codes on the collective mission to generate, support, and adapt the ‘knowledge’ on which organizational conduct is constructed. To be reiterated is that this type of learning, which is inevitably technical and socio-cultural at the same time (Gherardi 2005), seemingly characterizes also the companies operating in highly technological sectors (such as Loccioni).

Drawing on an expression commonly used at Loccioni—the neologism ‘tradinnovation’—we may also suggest a more general, and perhaps more incisive, interpretation of the learning style which supports the sustainable business models emerging from our sample. In particular, a fruitful interpretation is to be found in the notion of organizational learning developed by March (1991) as the ability to place oneself as consistently as possible at a point of equilibrium between learning as exploitation and learning as exploration. By this, it is meant that a fundamental, and relatively common, aspect of the processes of learning and skills development within our companies coincides with a tendency to make extensive use of previously discovered and consolidated ways to define and address problems and to derive the maximum benefit from them, while at the same time remaining open to innovation and the unexpected. This equilibrium also seems to be fostered by the direct inclusion of an orientation towards experimentation and the challenges of ‘being in the market’ in the original nucleus of the value options of these organizations, first of all in the strictly technological ones but also, recognizably, in others (such as Vita).

Consequently, there is also a role for paradoxical factors in the experiences of the companies analysed, to the extent that ‘order’ does not preclude obtaining resources from ‘disorder’. In this sense, the above-mentioned processes of incremental change are not necessarily as linear and immediate as one might think. It is harder, however, to grasp the explicitly contradictory elements emphasized by certain radical studies on learning processes which generate innovation, such as Stark’s (2009) intriguing theory of the ‘sense of dissonance’. This theory has at its heart the idea that in today’s scenario of market uncertainty and changeability, the organizational learning and ‘reflexivity’ which yield business success are based on ambiguity. According to this logic, ‘an entrepreneurial rivalry of performance principles […] exploits the indeterminate situation by keeping open diverse performance criteria rather then by creating consensus about one set of rules’ (2009:16): by keeping ‘multiple “orders of worth”’ active (p. 11)—for example, economic and ethical values—a company succeeds in producing a ‘generative friction’ (p. 16) which enables it to operate within multiple ‘games’ and to manage the conflicting expectations of multiple stakeholders. To the extent that this theory sees the possibility to generate resources for innovation in the ‘power’ of contradiction, through the constant co-presence of alternative approaches, it is difficult to identify points of contact with our study. On the other hand, a series of suggestions offered by Stark are quite significant in the light of the situations investigated. In particular, in these experiences business action is often—to use the author’s words (and in a Schumpeterian sense)—‘destructive’ and ‘recombinant’, but with an emphasis also on the latter term. Business-as-usual categories are called into question, and the repertoire of criteria and resources available for company performance is redefined by the intermingling of heterogeneous logics. This dual movement is at the basis of the core business of several of our enterprises, from WIS (whose mission is to provide quality health services at low cost) to Habitech (through the original ways in which it combines the aims of public initiatives with managerial strategies similar to venture capital). And in Vita’s decision to be publicly traded, the potential of the break-up/reassembly movement appears to be disruptive, with the absence of financial remuneration for investors and the distribution of ‘social dividends’ linked to the public value of organizational performance. As it is somehow possible to grasp in some passages of Stark’s work, the generative dissonance of innovation does not simply require the coexistence of various options which can be activated as alternatives to each other, but that these criteria interact among themselves. This is precisely the process we can find in the combination of multiple value principles implemented by most of the companies studied.

The Second Dynamic: Stakeholder Engagement Between Centripetal and Centrifugal Moves

Besides the dynamic of learning as exploitation and exploration simultaneously, we may identify a second mechanism, this too somewhat paradoxical, at the basis of the investigated companies’ capacity for sustainable innovation : the interplay of centripetal and centrifugal forces in their normal business functioning. The former concern the creation of a cultural identity connected with the development of these companies’ distinctive competences in the market and in the sustainable management of their activities. As noted before, this process of organizational ‘individuation’, supported by the original value systems of the founding group and fuelled by the internal dissemination of shared meanings, renders the cognitive and value maps underpinning collective action idiosyncratic and, in certain respects, almost self-referential (at least insofar as they are not validated by the market response). At the same time, however, the expansion mechanism we have already identified ‘vertically’, through the refining and strengthening of the company’s distinctive mission, is re-proposed ‘horizontally’ in the form of an uninterrupted movement towards the extension and opening of the company’s business to the outside; all this nourished prevalently by the cultural schemes themselves at the core of the organization’s identity.

This mechanism of extension is very visible in two situations which can occur together. The first is when organizational evolution is accompanied by substantial size growth, diversification of areas of activity, or even internationalization (e.g. Ferrero, Engineering, Loccioni, TheBlogTV, and Vita). The second significant case is that of the companies operating in sectors with a high rate of technological change (Loccioni, MEG, Engineering, Habitech, and TheBlogTV): these areas naturally favour multi-sector expansion and pressures to cross borders, with cross-fertilization among different domains of activity (especially between ideation and production processes) and the emergence of forms of lateral collaboration between the organization and crucial interlocutors in the business environment, such as clients and suppliers (e.g. in the co-design of products).

Aside from this, what is most striking is the inclusive approach of our companies towards their socio-economic stakeholders. Within our sample, there is a common propensity to bring the experiences, instances, and competences of a series of context stakeholders directly into strategies for creation and construction of products, with decisive effects on the capacity for, and the results of, sustainable innovation.

In this regard, we may cite the crucial role played, in the innovative activities of Habitech and Innogest, by the development of synergies among resources and among conceptions of local business development deriving, on one hand, from the business world and, on the other, from the institutional sphere. A pattern of seeking contributions from, and constructing service with, key stakeholders clearly emerges from Vita’s conducts. This is manifest first of all in the concrete translation of a desire to give voice to actors of the Italian non-profit sector and to offer a participatory laboratory for stimulating civil society to become a continuing force. But Vita’s propensity for openness sustains itself also through its engaging in dialogue with government initiatives (for example, as a contributor to the Italian debate on the status of non-profit organizations) and the for-profit sector (providing customer-tailored consultancy on CSR projects). The case that provides the best example of how stakeholder involvement and partnership building generate resources for production processes and value distribution is Loccioni. Here, the mission to integrate ideas, people, and technology in innovative ways involves extremely distinctive networking approaches, where the technical and professional component intertwines with elements of interpersonal knowledge and trust to create opportunities for the participants (individual growth, the acquisition and use of know-how, and new commercial prospects). This is apparent in a number of its practices, from the ‘Nexus’ network to the ‘Leaf Community’ project, but the most striking example—a form of constant reinvention of corporate boundaries—is offered by the practice of supporting the start-up of independent activities of its former employees, and mediating their entry into Loccioni’s business circuits, to the benefit of both the firm and the spin-off.

Among the ties created by these companies is to be noted a pervasive process of interdependence with the territory. As has been seen (e.g. Becattini et al. 2009; Trigilia and Burroni 2009), being rooted in a territory is a distinctive feature of the Italian entrepreneurial system and of the development processes of the Italian socio-economic texture generally. Therefore, it is no coincidence that the sense of belonging to distinctive local communities and the pressure to participate in their evolution tend to be mirrored by the culture and practices of the organizations we studied and to influence their sustainable business models. This is, of course, highly visible in the action of those organizations that work for the economic and business development of a given area as a part of their mission, such as Habitech and Innogest. Nevertheless, the role of these social ties is clear in the whole sample and across its size and sector categories. For instance, we find it in the numerous and diversified forms of collaboration between MEG and public institutions and universities in Piedmont, as well as Ferrero’s continuous investment in the creation of workplace well-being for its employees (mostly residing in the local community). Once again, the experience of Loccioni is particularly instructive. We have already mentioned the influence of local culture, based on small-farmer values of mutual trust and risk sharing, on the business vision of Loccioni’s founder and on a set of practices (support for the independent careers of employees, recruiting candidates from local schools, etc.) which generate significant benefits above all for individuals in the local community. Also to be re-emphasized is a creative form of participation in community life, with very immediate consequences, in which the company has been engaged for some years. This is the project tellingly titled ‘Land of Values’, which entails the regular involvement of hotels and restaurants representing the eno-gastronomic culture of the Marche Region in Loccioni’s ‘care’ activities for customers and visitors. In this case, mutual benefits of the collaboration with actors from the company’s surrounding community (improvement of the company’s reputation, acquisition of new customers for the partners) are directly created by valorising local culture, professionalism, and assets.

This interdependence with the local dimension also exists‚ and has significant organizational effects, where the company’s trajectory is associated with processes of geographical business expansion. In these situations, in fact, it is possible to find a direct connection between the local matrix of certain styles of action and the organization’s ability to operate effectively in more global arenas. This is the case not only of Habitech and Innogest, which are progressively extending beyond regional borders services and practices already successfully applied in Trentino and Piedmont, but also of other organizations such as Loccioni itself. For this company, reference to typical elements of its home territory (including values, relationships, and concepts of quality work) has translated into a competitive resource for its internationalization strategies. To reverse—or, rather, complete—the well-known adage that one has to think globally to know how to act locally, we might say that the sustainable innovation capacity of some of these organizations also works in the opposite direction (‘think locally, act globally’).

Ultimately, the building of interdependencies with social and economic stakeholders shows a constant push for inclusion, to be mainly understood as incorporation of their voice (needs and interests, competences, and contributions) into the company. But the aspect leading to the depiction of the second dynamic of sustainable innovation as a virtuous balance between ‘centrifugal’ and ‘centripetal’ forces is, more generally, the following: in most of the companies analysed, these mechanisms for attuning to the instances and resources of the context have concurred to strengthen the already existing orientation to sustainability, thereby integrating its self-propulsive elements (rather than diminishing them) and promoting its evolution in phases of organizational change.

The Third Dynamic: The Emerging Link Between Citizenship Behaviours in and of the Company

The third dynamic which appears to have facilitated the creation of shared value across all the companies in the sample consists of a series of mechanisms for the management and involvement of organizational personnel.

Firstly, the essential role of human resources dynamics in the pursuit of sustainability appears to be evident from the fact that these organizations’ members are undoubtedly among the main beneficiaries of their social responsibility practices. We observe this in the presence of a positive organizational climate based on respect for individual needs and autonomy, and on collaborative relational models which have a significant impact on the quality of life in the workplace. The most interesting findings, however, concern key processes in the personnel management cycle. This occurs in the recruitment stage, where—contrary to current rhetoric on the benefits of employment flexibility for both companies and individuals—open-ended contracts, with their connotations of stability and reciprocal commitment over the long term, are usually conceived and used as a fundamental prerequisite for operating consistently with organizational strategy. An eloquent aspect of the integration of human resource management practices into the framework of sustainable innovation strategies is the propensity to use selection criteria which assess the skills and potential of candidates with direct reference to the organizational mission, so that evaluation of a person as a whole, taking account of all of her characteristics (such as values, openness to relationships and change, and previous—not only professional—experience), often prevails over the job description concerning the work to be carried out. This holistic approach to the evaluation of job candidates and newcomers not only characterizes the two organizations oriented to political and social ends (Vita and WIS), as would be expected, but is also evident in other cases, such as MEG and Loccioni. Another domain cultivated by our organizations, and frequently at an advanced stage (especially in the more structured companies), is that of employee development, career, and incentive schemes. A good example, in this regard, is offered by the continuing investment made by companies such as Loccioni and Ferrero; today, the latter occupies a front-line position in Italy with its corporate wellness system which provides a wide range of services for the work–life balance needs of its employees (from on-site corporate childcare to health services).

On the other hand, in the enterprises studied, human resources are not only among the stakeholders subject to sustainability actions; they also tend to represent an essential means for the attainment and success of those same practices. In most of the companies, the valorization of personnel appears to be indispensable for the production of context value because everyday organizational reality moves from impacts on the human resource (which are themselves crucial for sustainability ) to impacts of the human resource, by which we mean outcomes generated by the employees’ active role in the management of core and support processes (production of goods and services, delivery of services to clients, etc.), in the dynamics of stakeholder engagement, and, even further upstream, in the internal dissemination of a sustainability-driven culture. In this regard, going back to our previous discussion on the development of a distinctive cultural ‘character’ within these organizations, we would stress that the majority of them are able to generate, sustain, and utilize employees’ personal commitment to organizational goals and in particular to the elements most closely tied to sustainable innovation . Considering this from an internal branding perspective (Barrow and Mosley 2005; Rosethorn et al. 2009), we may emphasize the capacity of the companies examined to serve various symbolic needs and aspirations that individuals bring into working life.

In sum, the pervasiveness of sustainability instances in the organizational life of these companies leads us to discern a direct relationship between ‘citizenship of a company’ (another well-known concept for expressing an organization’s engagement with context values) and ‘citizenship in a company’, which refers primarily to the cultural mechanisms of involvement and participation of employees in the priorities pursued by the company (Podsakoff et al. 2000). Our case studies decisively suggest that citizenship ‘inside a company’—if oriented to socially significant goals—is essential for generating reliable sustainability conducts towards the company’s ‘external context’. More generally, by stressing that one of the organizational capacities crucial for the institutionalization of sustainable business strategies lies in the interpersonal communication of cultural priorities, we offer support to the ideas of scholars (such as Cohen 2010) who call for an end to the tendency—in theory and in practice—to treat personnel management and the area of corporate sustainability as parallel rather than strictly interdependent domains.

Concluding Remarks: Business Innovation as the Integration of Social Responsibility and Social Opportunity

The case studies of the research outlined in this chapter appear to indicate the feasibility, all the more in the current scenario, of business models revolving around sustainability -oriented strategies that generate integrated value . These are models in which sustainability, in its various dimensions, and above all in how they intertwine, can drive innovation. In a nutshell, the primary condition that has characterized these companies’ development path is their ‘activation’ of sustainability principles in terms not only of social responsibility, but also of social opportunity, making these the cornerstones of their market positioning. As Butera (2009) suggests, this profile should not be understood as an ideal-typical condition, but as something that can be pursued by normal companies built to last.

The experiences that we have investigated confirm, firstly, the role of certain drivers of sustainable innovation which the most recent literature has already begun to examine. At least three of them can be inferred from our discussion: (1) the ‘precociousness’ and long-term orientation of investments in sustainability strategies; (2) the collective (re)production of relatively shared interpretations, starting from the decision-making levels of the organization, on the significance of sustainability for corporate objectives and operations; and (3) the structural incorporation in organizational core processes of innovative tools and solutions generated by a commitment to sustainable action.

The chapter has especially considered certain dynamics underpinning these organizations’ capacity to generate integrated value which satisfies business requirements and the emerging needs of society. We have dwelt in particular on the key role of three mechanisms or sources of creative tension (given some apparently paradoxical features), at the basis of the sustainable innovation patterns observed. Such processes are those oriented to reach a delicate balance between, respectively: (a) valorization of organizational tradition and openness to exploration; (b) centripetal and self-propulsive forces (protecting and strengthening distinctive competences developed within the company) and centrifugal forces (leading to the acquisition of competences and stimuli for action from the relationship with external stakeholders); and (c) involvement of organizational members as, on the one hand, ‘targets’ and, on the other, ‘vehicles’ of sustainable action.

As a whole, the organizational experiences we have outlined lend support to the idea that in the near future CSR practices can, or must, be linked to business practices as never before. To return to one of our initial points, it is quite certain that the strategic implications of CSR are largely still unexplored (McWilliams et al. 2006; Porter and Kramer 2006) and that new ways must be found to address the challenges raised by the need to regard social issues as constituent elements of corporate activity. In this respect, our concept of integration of different well-being values is consistent with the stress placed by Porter and Kramer (2011) on the possibility/necessity of creating economic value through the creation of social value: an opportunity that they view as capable of transforming capitalism and becoming ‘one of the most powerful force driving growth in the global economy’ (p. 15).

From this standpoint, these organizations’ socially oriented strategies are innovative not only because they seem able to generate an overall value added by the creation, integration, and distribution of multiple values, but also because this condition is the result of two interconnected elements: a recognition of the wider and more dynamic context factors which affect the company’s performance and which can determine whether it is successful in the long term; and the organization’s capacity to concentrate its efforts on ‘divergent’ CSR practices (Misani 2010), which represent a true source of competitive advantage due to their marked differentiation and scant imitability in the market (unlike ‘convergent’ practices, modelled on conventional forms of CSR that are easily accessible to others).

Finally, all this leads inevitably to move the focus of analysis on the actions and the involvement of other actors such as public institutions and civil society groups. Allowing and expecting an active role of these stakeholders in the process of creating integrated business value means calling explicitly into question the company-centric approach of the initial phases of CSR, that is, the assumption that companies’ solitary efforts (however enlightened) in addressing social problems can generate lasting positive impacts. After all, such an expanded vision is fully in line with the original systemic connotation of sustainability as an inherently pluralistic challenge which, as noted in the trajectories of our organizations, necessarily extends beyond the sphere of businesses’ autonomous initiative.