This is the sustainability era. As the global population grows, we must find new approaches to growth that promote sustainable development and a stable planet. Business is increasingly at the forefront of this shift. Consumers are demanding more responsible products and more responsible decisions from business leaders. Companies are innovating and developing technology solutions to avoid exposure to emerging risks and seize new opportunities. In this new era, organizations must also change their behaviour.
Organisational behaviour is a big component of the sustainability shift. From governments and corporations to churches and schools, organizations are a huge part of the human experience. If humans must change behaviours to act on climate change, protect the natural world and create inclusive prosperity, then organizations must change too. Changes in organisational behaviour hold the potential to enable individual action and accelerate global progress.
Since the Hoffmann Global Institute for Business and Society was established in 2018, the Institute has worked with Organisational Behaviour academic area professors to bring sustainability into the way organisational behaviour is researched and taught at the school.
In this latest edition of Lessons in Sustainability, we share how sustainability features in the Organisational Behaviour area as part of a series that explores sustainability in each of the nine INSEAD academic areas.
Change Behaviour, Change the World
At its core, the study of organisational behaviour is a cross-cutting discipline that seeks to understand human behaviour within the context of the organization. The INSEAD Organisational Behaviour academic area explores psychology, anthropology, sociology and economics to examine how an organisational, social and economic context influences behaviour. This behaviour in turn influences the organization’s context – how it operates, develops and achieves goals. If an organization needs to move to more sustainable operations, understanding the dynamics of organisational behaviour can help.
Decision making, leadership, creativity, diversity, innovation and change management are all covered in the academic area, and all are needed for an organization to chart a course to sustainable operations. To actually change the direction of an organization, the identity and culture must shift. Sometimes, a new hierarchy is needed. Skills in negotiations, dispute resolution, team building and organisational structure put in place a framework to shift towards more sustainable models.
Diversity, inequality and discrimination are also studied in this academic area. These are two areas where organizations can quickly move on the principles of sustainability. Professor Stefan Thau, Chair of the Organisational Behaviour area highlighted the importance of these topics, saying that “understanding how to leverage diversity is central to our leadership education. We believe that leaders can improve the quality of their beliefs and judgment when they invite diverse opinions, viewpoints, and expertise in the team decision-making process. Sustainability related issues are often discussed through the lens of value creation opportunities through social interaction”.
Understanding organisational behaviour provides a competitive advantage for organizations looking to capitalize on the sustainability shift. Bold leadership, agile management and a culture of change can open opportunities in the sustainability space.
A Conversation with the Chair
To explore how INSEAD incorporates sustainability into the academic study of organizations, we sat down with Area Chair Professor Stefan Thau to discuss the work of area professors. Our conversation explored how sustainability is integrated across academics and engagement.
Why is it important for future business leaders to learn about sustainable development practices?
Professor Thau: In today's evolving business landscape, an important aspect of leadership involves creating value not just for shareholders, but also for employees, business partners, and broader society. There's a growing expectation, especially from the upcoming generation, for organizations to balance economic growth with social considerations. This includes issues like fair working conditions, actively reducing inequalities, and contributing positively to the safety of cities and communities. Achieving these goals requires innovative thinking and dedicated individuals willing to invest their efforts. For future business leaders, the challenge and opportunity will lie in steering their organizations towards these objectives.
What does sustainability mean to you in the context of business education?
Professor Thau: The sustainable development goals provide a useful framework for business education and for business decision-makers. These SDGs are broad goals that ideally should not be undermined in the pursuit of economic growth. We can think of these goals as issues we should pay attention to while we grow value through our business activities. For example, how would relocating our business to this part of the country help the community in which we operate? Do we pay people fairly for their efforts and do we offer them opportunities to grow their wealth? Can we rethink the decision to restructure our activities so that it makes things not only more efficient but that doing so also improves the well-being of our employees? It may not always be possible to simultaneously create value for all stakeholders and across all goals, but making people aware of value creation opportunities and giving them the tools to advocate and negotiate for them is a big part of business education today.
How do you teach sustainability in your academic area and what are the main topics?
Professor Thau: We do not have specific classes on sustainability. But issues that are relevant to achieve a sustainable future are quite central to the classes my colleagues offer. My colleagues and I teach students how to make more informed decisions, how to create value, how to implement decisions with others effectively, and how to drive change. All these are useful tools that can help future leaders to both grow the business and to make business and society more sustainable.
From Sustainability Research to the Classroom
After hearing how the behaviour of organizations is tied so closely to sustainability, the Hoffmann Institute connected with professors in the academic area to see how they bring sustainability into their research and into the classroom. The innovation was striking.
Area professors are using innovative techniques such as virtual reality and role-play simulations to teach about organisational behaviour. The Paradoxical Leadership @ FMB case by Professor Ella Miron-Spektor is taught through immersion in VR. Students don a headset to take on the perspective of the next leader of Fundacao Maio Biodiversidade, a conservation organization in Cape Verde, Africa. The case explores the competing demands of conservation and community development. VR immersion exposes tensions in managing diverse teams, while the technology records decisions for analysis and attention allocation via a heatmap.
Sustainability is integrated into the core curriculum, with several cases taught in the MBA Organisational Behaviour 1 class and the MIM Working in Teams course. One is Pavão, a role- play exercise written by INSEAD MBA students and overseen by area professor Eric Uhlmann and others. This case explores how to avoid environmental harm from a dam of wastewater overflowing. Another role-play looks at the dynamics of an environmental consulting agency. To teach team negotiations, the course uses an example of local farmers negotiating for microloans in Africa. And diversity comes into focus in a case on gender and work-family conflict.
Some cases use real-world scenarios to allow students and participants to consider the perspective of organisational leaders. For example, the Rio Tinto and Juukan Gorge cases co-authored by area professor Gianpiero Petriglieri take a deep dive into strategic calculations with moral considerations in business decisions through the lens of a mining company leader facing crisis. Moral approaches to leadership are also covered by Professor Erik van de Loo, with Developing responsible leadership: the case of Fabio Barbosa. A negotiation simulation co-developed by Professor Li Huang, A Global Pandemic: The COVID-19 Vaccine Negotiation seeks to help leaders understand how to produce win-win outcomes. Area Chair Professor Thau co-authored the article on Sustainable development for a better world: Contributions of leadership, management, and organizations. By looking at different aspects of leadership, considering different perspectives and simulating decisions, students and executive participants can better steer organizations towards sustainable outcomes.
Executive education brings in even more examples of organizations mobilizing for sustainability. Professor Eric Uhlmann takes participants through an exercise that uses the Liter of Light initiative to highlight the value of creativity. Liter of Light uses plastic bottles from litter to make cost effective light bulbs, giving a light to study by and a low-cost path to alleviate poverty. Professor Henrik Bresman introduces psychological hazards and resilience in his executive education course, looking at team diversity, psychological safety, mental health and performance.
Professors of Organisational Behaviour are using innovative technology and role play to engage current and future business leaders on what it means to be responsible and deliver value to business and society.
In the sustainability transformation, understanding organisational behaviour is key because changing the behaviour of organizations is key. Visionary leaders with the skills and knowledge needed to lead through a shift in how we work and do business are poised to deliver value to their companies and their communities.
The professors in the INSEAD Organisational Behaviour academic area integrate sustainability into research and teaching, and equip leaders to respond to challenges and make responsible decisions. This is exactly what is needed as more organisations look to lead in the sustainability shift.
The Hoffmann Global Institute for Business and Society Lessons in Sustainability series highlights lessons learned from integrating sustainability into all nine INSEAD academic areas. Stay tuned for more Lessons in Sustainability.