Who doesn’t want to be green these days?! In light of climate change, most publicly visible business organizations are expected to contribute their share in reducing their carbon footprint—if they want to maintain their social licence to operate in most modern markets. Accordingly, sustainability practices at organizations are a subject of much debate, especially since several companies have been criticized for paying nothing more than lip service while failing to act (e.g., Basu and Palazzo 2007; Delmas and Burbano 2011). They engage in so-called “greenwashing”—when everyday business practices inside the organization are largely decoupled from corporate claims and policies, leading to the fact that the organization does not actually fulfill its own promises and standards.

This incongruence is not, however, surprising. To truly integrate sustainability across the private sector, sweeping and potentially costly changes may be needed across organizational governance and internal practices—from different legal forms and board mandates to widespread adoption of multi-faceted accounting practices (Metz and Rathert 2022). In addition to structural, multi-level changes, a simple focus on translating and integrating stated goals into the workforce’s day-to-day business can already go a long way.

In this article, we explain why sustainability policies and practices are often disconnected by using the theoretical notion of decoupling—the separation of structure from action and outcomes. We explain how the research style of organizational ethnography can help companies identify when and how organizational realities get in the way of truly integrating sustainability initiatives and what they can do about it. We argue that an organization needs to understand its own workings from a cultural perspective on both a formal and an informal level first to decode and solve issues with integrating sustainability policies.

Decoupling marks a disconnect

The concept of decoupling refers to disconnects between two of three elements—formal policies, daily practices, and intended outcomes. Traditionally, research focused on how organizations sometimes formally adopt policies to respond to demands from their environment, but do not actually change their practices (Meyer and Rowan 1977). For example, to respond to pressures from the environment to appear sustainable, companies would start corporate social responsibility (CSR) initiatives as signals to the market, but neglect to make substantive changes to ways of working. Such “symbolic management” resulted in aforementioned claims of “greenwashing” (Jackson et al. 2014; Marquis, Toffel and Zhou 2016) or “organizational hypocrisy” (Brunsson 2002).

Some decoupling makes strategic sense – but not for sustainability

For organizations, decoupling can also be a useful strategy for managing conflicting demands (Westphal and Zajac 1998). It allows organizations to delay responding to unclear public demands, win some time, and figure things out—up until the point that it results in a loss of legitimacy for the organization or it becomes clear that policies and practices make sense for the organization. The degree of coupling between policies and practices is actually a trade-off between efficiency and resilience because tight coupling can actually be restrictive (Roberts 2004). Also, the decoupling of structure and action is not always intentional from a corporate perspective, but can also occur due to a lack of internal capabilities (Boxenbaum and Jonsson 2017).

Many sustainability attempts are not fully coupled, leading to no positive environmental outcomes

Decoupling can be a rational organizational response intended to balance conflicting, tricky demands from the market. Consumers claim to want sustainable products, but they look for low prices. Other stakeholders are calling for firms to become social and environmental actors, yet regulatory support and incentives are lagging, especially in certain industries. Some companies set up a sustainability team and do not fully fund it before having the market assurance that it is actually necessary to do business. Some companies give teams a sustainability mandate and the budget to create new initiatives, yet those initiatives fail to produce social or environmental value—only colourful sustainability reports printed on recycled paper. Decoupling may have served legitimacy needs just fine in the short term—but at the expense of really doing something. Whatever the reasons and policies, this is the year that many companies are realizing that it is time to take sustainability seriously.

Organizations can no longer respond to sustainability challenges symbolically

Firms must integrate sustainability policies to maintain their licence to operate today and tomorrow—no matter the reasons for decoupling sustainability policies and practices from each other. The role of companies in society is widening beyond just providing products and services. Legitimacy demands cannot be fed with symbolic responses anymore; social and environmental regulations are increasing or on the horizon; consumer behavior and attitudes are shifting; and ultimately business organizations are expected to reduce social and environmental harm and even generate net planetary benefits from their actions.

The problem is – how can companies identify the barriers to fully integrating sustainability?

Researchers have studied how decoupling can lead to coupling. Sometimes what started out as symbolic work can evolve into tighter links between policies and action as environmental situations shift or employees take their work more seriously than intended. Qualitative research in organizations can help uncover barriers and enablers to this transition.

The power of ethnography for understanding decoupling

We can illustrate the organizational problems that may emerge from decoupling with a real-life anecdote from the business world, albeit not a sustainability issue: A decade ago during our own PhD research in a large German automotive company (see Mai 2015), we became first-hand witnesses to an organizational event that shook up the workforce of an automotive communications unit. By shadowing members of the workforce for a period of 12 months, conducting informal coffee and water cooler conversations, nosing around, and just being a “fly on the wall,” it became methodologically possible to observe how decoupling unfolded in practice.

The former head of communications had introduced a software-assisted set of new processes called “communications scorecard” that were meant to survey, measure, control, and improve the performance of all public relations activities conducted by the employees of eight different communications departments. It became an internal policy that all members of the communications unit, including all of its departments, had to use the system to meticulously log and assess the effectiveness of their daily tasks. While the system cried out “micromanagement” like no other, implementation was publicly heralded as a full success and an ingenious move that symbolized “advancement through technology” (for more details see Lindberg and Ostermann 2009, 50). However, ethnographic research inside the communications unit during the same time revealed a different, unpublished counter-story emerging among staff.

In practice, using the communications scorecard system on a day-to-day basis was not as straightforward for all members of the various communications departments. In fact, it turned out to be a laborious hassle that consumed valuable work time without adding any benefits for those who had to feed it with data. While the system was designed to capture certain types of quantifiable communications activities—e.g., those that could be measured in click rates, unique visitors, reposts, social media mentions, etc.—employees who were conducting other kinds of activities were struggling to represent the “effectiveness” of their work using the narrow-minded logics baked into the system.

For instance, a group of corporate historians was engaged in various long-term historical-research projects, networking activities with vintage car aficionados and clubs, retrieving original car-model specs for interested fans, and the long-term symbolic (yet legally relevant) cultivation of historical brands the company owned. Many of these business-relevant activities could not be properly represented by the communications scorecard system, nor could their effectiveness be properly assessed, given that the assessment criteria had not taken these types of activities into account when they had been programmed in the first place.

Nevertheless, all communications employees were religiously expected to work with the system as it was “mandated from above.” So they typed in their activities of the day every evening in whatever fashion they deemed fit for the sheer sake of feeding the system. After a while, several employees who could not represent the value of their work in the system found ways of working around and undermining it, simply to appear compliant and be able to continue their business as usual. It is important to note that they did not rig the system out of malicious intent. Instead, they wanted to be able to continue fulfilling their actual day job.

Having figured out the internal mechanics—i.e., what types of information would trigger management and what would leave them alone—feeding the system became something of a game. For instance, there was a traffic-light system meant to indicate the current status of activity to management. An informal rule of thumb that employees embraced, however, was toAlways put everything on green or yellow, never on red, to keep management off your back.” As a consequence, management thought that everything was well when observing the communications scorecard, that effectiveness of activities was high, and that there were only a few pending issues. The formal image that was created this way, however, often had little in common with the actual inner-departmental realities.

Overall, the communications scorecard and the policy of using it were seen to bring little value for improving any working practices for parts of the workforce. In fact, several employees complained that the additional effort and time they had to put into the communications scorecard actually ate away valuable time and energy needed for their regular tasks. They felt even less efficient with the performance measuring system in place that was originally intended to measure and improve performance. In short, the communications scorecard had not been properly designed to capture and represent the multiple working practices and organizational realities inside the heterogeneous communications unit.

Even when issues with the system were vocalized by critical employees, changes were not made, as development by an external provider had already been too costly, and further iterations were not accounted for. Advocates of the system who were in management positions feared that openly voiced critique from the bottom would question their investment altogether, making them look bad in front of top management. It shows that even when organizations learn about decoupling between policy, practice, and outcome, there might be other interests—such as power dynamics, political interests, and individual egos of unit leaders—that prevent change a company would actually benefit from.

By taking an insider’s view, participating in organizational reality, and observing the day-to-day business practices of members of the workforce, we gained insights into the internal workings of the company, which little resembled what was communicated externally. What happened on the informal level was nothing like what was proclaimed to take place on the formal level. Policy and practice clashed tremendously, not only rendering the workforce less efficient then intended but also giving management a wrong image of reality. A similar approach can be chosen to solve the decoupling issue between sustainability policies and practices.

Ethnography can help uncover sustainability implementation gaps

By talking with, and observing, the actual people who are meant to work with the formalized sustainability policies in their day-to-day organizational life, ethnography can achieve the following four things, which we will explain in more detail: (1) identify when policies were (unintentionally) set up to fail; (2) double down on whether practices will achieve outcomes; (3) surface the formal social structures that keep people following the wrong rules; and (4) spot internal power dynamics and other informal social structures.

1. Identifying when policies were (unintentionally) set up to fail

In large business organizations, many employees eventually encounter the experience that certain processes are introduced by management that simply do not seem to fit into their daily business—no matter how hard they try to implement them in practice. Sometimes, these “formal rules”—e.g., the official policy or mandate—were not well-suited for organizational capabilities or in the first place. As the organizational ethnographer John Brewer points out,

Workers often try to follow the formal rules but have to engage informally in practical reasoning and ad hoc practices to operationalize them when the formal rules are incapable of meeting the job at hand, such that fulfillment on the organization’s formal goals requires informal organizational rules, tacit knowledge and discretion. However, workers have to make it look as if the formal rules were followed as part of the organization’s coercive control, so engage in further ad hoc practices to ensure the paperwork conforms to procedures. (2006, 314)

When policies do not fit everyday capabilities and realities, employees may pretend to comply on a surface level to meet managerial demands, while they continue to covertly engage in their established ways of working. This can be reinforced by management who are primarily concerned with the appearance of compliance.

While this response may have served the organization just fine in past years, shifting demands call for policies that can be taken seriously inside the organization. For example, in addition to focusing on completing sustainability reports, organizations can look deeper to see if actions reported on are actually creating real sustainability changes, and how to optimize them. Confidential interviews with sustainability task owners or departments can uncover when policies and initiatives are more about signalling than substance. Managers can critically assess which initiatives are worth coupling and which should be divested.

2. Doubling down on whether practices will achieve outcomes

So-called “means-ends decoupling” is when there is little or no relation between daily practices and intended outcomes (Bromley and Powell 2012). For example, developing CSR reports can make an organization good at reporting, but not good at achieving social and environmental value or minimizing harm (Chatterji and Toffel 2010).

Ethnographic research can be helpful for identifying when a firm has become good at a practice, but that practice does not create outcomes, and what the barriers are. Often the mandate simply ends at the report, yet the employees working on reports have become knowledgeable about actions that could be taken to create impact. Interviewing CSR employees can surface opportunity areas for next steps.

3. Surfacing the formal social structures that keep people following the wrong rules

Companies usually formulate distinct tasks, goals, job positions, hierarchies, and rules by which human beings are assigned activities in an outcome-oriented, orderly way. The contingency of actions is restricted and governed through predetermination, rules, regulations, and procedures that are made explicit and binding. Modern business organizations thus “exhibit…relatively highly formalized social structures” (Scott 1987, as cited in Weick 1995, 70). Through these social structures, human actions become determinable, traceable, repeatable, and less inclined to personal and/or arbitrary decisions because they are bound to behavioural expectations. This is what is generally known as formalization (Luhmann 1964). When the process of organizing is formalized and controlled to a strong degree, bureaucracy emerges (Weber 2008).

In their formalized role as employees of a company, people have to follow a set of “behavioral expectations” (Luhmann 1964, 37) and “membership rules” (38) to remain part of the company. For instance, a predetermined and codified process of how to conduct a particular piece of work marks such behavioral expectation. The agreement to “play along” constitutes the social contract between the member and the business organization (Handy 1999). If that contract is broken, termination of membership may occur; they might get fired.

Hence, the way people inside a company act and interact with each other is determined by a superordinate framework called the “organizational social structure” (Hatch and Cunliffe 2006, 101). It broadly “refers to relationships among people who assume the roles of the organization and to the organizational groups or units to which they belong (e.g. departments, divisions)” (101). Based on Max Weber’s (1947) conceptualization of ideal bureaucracy (as cited in Hatch and Cunliffe 2006), the formal social structure of a modern organization can be commonly defined along the lines of “division of labor,” “hierarchy of authority,” and “formalized rules and procedures” (103–105).

As a result, sustainability policies may not be implemented because employees have gotten used to responding to implicit demands for symbolic management. On the surface, managers may feel satisfied that policies or departments exist, but employees may find themselves in largely symbolic positions and fail to create substantial outcomes. Employees may be happy to work on projects of personal interest, and “play along,” while harbouring dissatisfaction that their firm is not doing more.

4. Spotting internal power dynamics and other informal social structures

Decoupling differs by organizational factors, such as internal power dynamics, and the firm’s unique context (e.g., Westphal and Zajac 2001). In addition to formal roles, members also take on informal roles “in those situations that cannot affect membership, because inferences from behaviors to continuation or termination of membership are excluded” (Luhmann 1964, 49). When there is an absence of predetermination through rules and regulations—when behaviours and situations are subject to rationales unspecified by the organization—employees act in their informal role (cf. Hatch and Cunliffe 2006).

Consequently, organizational social structures are not restricted to the formal level. Informal social structures emerge based on friendship, love, seniority-based authority instead of position-based authority, and so on, because the organization cannot regulate and control every aspect of work (Luhmann 1964). These informal social structures affect how employees interact, collaborate with each other, and conduct their work; they strongly determine how a company operates in day-to-day practice.

Informal social structures can be responsible for a lack of integrated sustainability initiatives. But organizational ethnography has the power to uncover them and reveal their tacit cultural workings. With its help, better initiatives can be designed that actually harness these informal social structures.

Conclusion

The decoupling of policies, practices, and outcomes is no longer acceptable when it comes to sustainability. Organizational ethnography can be helpful to decode the formal and informal social structures of a company from a cultural perspective. Steps companies can take include the following:

• Pursue a bottom-up approach; embrace the perspective of the workforce in their multiplicity; and cover a broad range of different business units, departments, positions, hierarchical levels, tenures, and even sites.
• Employ a mix of qualitative methods from the playbook of organizational ethnography, such as participant observation and shadowing of people’s daily business, semi-structured open-ended interviews, casual water cooler conversations, and document analysis of internal communication.
• Ground findings in other empirical research and academic theory, thereby explaining not only what people do but why they do it. The “why” behind the “what.”

This understanding enables an organization to design new processes that fit into the day-to-day business reality, expectations, and practical constraints of the workforce. Your organization has likely taken major steps in starting sustainability initiatives. It’s time to make them real.

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