An intentional profit-generating strategy can be detrimental to a sustainable organisation

Jayani Chakravarti and Frédéric Basso

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Sustainable organisations have to be profitable to maintain their economic and social activity. However, prior literature finds that people are reluctant to associate profitability with sustainability, which leads to negative judgement. Through experimental evidence, the current research supports this idea but shows that profitability actually backfires within sustainable organisational contexts when it is intentional, rather than unintentional. Results indicate that consumers use a zero-sum heuristic on resource allocation when they are presented with a green product that is intentionally (vs. unintentionally) profit-generating. They infer from intended (vs. unintended) profitability that the organisation devoted greater resources to make profit rather than to make the product more sustainable. This product thus appears less sustainable to consumers and they are less interested in buying it. The article concludes with a discussion on the implications of this research for sustainable organisations.

Keywords: corporate sustainability; green product; morality; tainted altruism; zero-sum heuristic; Department of Psychological and Behavioural Science (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2021-03-10
New Economics Papers: this item is included in nep-env and nep-hme
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Published in Journal of Cleaner Production, 10, March, 2021, 287. ISSN: 0959-6526

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:108167

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