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8 september 2012,797 820 A framework, with embedded FTA, to enable business networks to evolve towards sustainable development Cristiano Cagnina, b*and Denis Loveridgec adg Joint research Centre, Institute for Prospective and Technological
and a model of how companies create enduring continuity needed for sustainable development (Brundtland 1987). This paper suggests a dynamic framework of continual learning to enable businesses to anticipate
this differs from the triplebotttomline approach (Elkington 1998.**Corresponding author. Email: cristianocagnin@gmail. com ISSN 0953-7325 print/ISSN 1465-3990 online 2012 Taylor & francis http://dx. doi. org/10.1080/09537325.2012.715488 http
://www. tandfonline. com Downloaded by University of Bucharest at 05:04 03 december 2014 798 C. Cagnin
and D. Loveridge Sustainability can be defined as the capability of an organisation to persist into the long-term future:
Hence, business sustainability evolves from the linear concept of a value chain introduced by Porter (1985) or the current paradigm of supply chain management or value nets (Bovet and Martha 2000a, 2000b, 2000c, 2000d, 2000e.
The analysis of value within a firm (Porter 1980, 1985a, 1985b,1991, 1997), through the integration of customers into the chain (Mcstravic 1999) and later the incorporation of suppliers/deliverers as well as customers (Bovet and Martha 2000
and identify sources of interrelationships between business units (O'sullivan and Geringer 1993). Developments in this approach,
In this paper, a new concept of networked sustainability (Cagnin 2005) is introduced as an evolution of the value Net value is redefined to be a triple-bottom-line balance of the creation of economic, environmental and social values to and by all actors within a business's network:
the redefinition is based on universal principles (Covey 1997) shaped by six dimensions of sustainability (Bursztyn et al. 1999;
Loveridge 1999; Cagnin 2005), namely social (S), spatial-technological (ST), economic (E), ecological (Ec), political (P) and values-norms (V)( acronym SSTEEPV.
In this context, Section 2 outlines that current models responsible for moulding a business's competitive advantage sustainably are weak in the nature of stakeholders'involvement in strategic partnerships.
There is a rising importance in comprehending the advantages that firms can gain from network relationships (Hoffman 2000)
to Be downloaded by University of Bucharest at 05:04 03 december 2014 A framework, with embedded FTA, to enable business networks 799 represented by a triple-bottom-line balance or the creation of economic, environmental and social values to and by all actors within the network.
and Watts 2002) are the cornersstone of networked sustainability. Moreover, the value activities in the network must align
Finally, Section 5 summarises the main conclusions and outlines implications for policy and subsequent decision-making. 2. Analysis of existing tools and their gaps Since the 1990s, a range of tools have been brought in to help companies design their path
network and organisational culture (Caldow and Kirby 1996. The situation seems to rely on the ability to build a group of generic behaviours or actions over
Downloaded by University of Bucharest at 05:04 03 december 2014 800 C. Cagnin and D. Loveridge Table 1. Existing tools and their relation to the PDCA cycle.
Chehebe (1998), ISO (2012), D'Avignon (1996), Cajazeira (1997), Donaire (1999), Maimon (1999), Accountability (1999), BSI (2003.
and how these generally relate to the PDCA (plan do check act) cycle (Campos 1992;
SIGMA 2001), which describes the layer behind business management systems. The continuous improvement cycle found in the PDCA is the key process for driving learning and innovation in an organisation.
they need to be integrated to be considered as‘primary'for the Downloaded by University of Bucharest at 05:04 03 december 2014 A framework, with embedded FTA,
Cagnin (2005. development and delivery of responsible products and services across the network throughout their life cycle.
These are needed the activities for the creation of value in sustainable development (Cagnin 2005. Appendix 3 summarrise the main characteristics of these value activities.
Theactivities Model (Figure 1) is based on the quantum leaps model devised by Shelton (1997), which describes the necessary capabilities needed to transform our organisations
These are assumed to be critical to a business's sustainable Downloaded by University of Bucharest at 05:04 03 december 2014 802 C. Cagnin and D. Loveridge development,
subjective and able to self-organise (Maturana and Varela 1980, 1997; Capra 1997; Dempster 1998,2000;
Maturana 1998. 3. 2. Basis for the management framework and roles that FTA can play The proposed management framework aims to support the achievement of a business with aligned socioeconomic environmental performance across its network that helps firms develop a participaativ process throughout to shape a common vision of sustainable development
to be pursued by all actors involved in the system. Moreover, it should link the activities that need to be performed at each stage to build an organisation's ability to know itself (how things are done in the present),
enabling the design of the necessary actions to achieve the desirable future (how things ought to be done according to the business's and its networks'vision).
and interaction, being transparent and accountable to stakeholders (Brinch-Pedersen 2003). Hence, firms should use the evolutionary lessons as a main step in integrating sustainable development into the business model.
According to Gertler and Wolfe (2002), networked learning enables a process of adaptation that is participatory and interactive and in
which social relations and the communication of insights and knowledge (Georghiou et al. 2008) are critical for successful outcomes.
through processes and tools that enable spaces for inclusive dialogue to take place (Shelton 1997; Cagnin 2005;
Boden et al. 2010; Cagnin, Amanatidou, and Keenan 2012. Embedding this form of dialogue in the proposed management framework improves the ways in
which stakeholders are perceived by one another and also the ways that they are involved in decision processes. In turn, these lead to further mutual experimentation and collaborative learning.
Collaborative learning is the basis of this evolutionary leap founded on an inclusive and active dialogue among all parties in the network:
and attach concrete meaning and actions to the business's values (Giversen 2003). Trust must be achieved by developing the confidence of all parties in every link of the network's intent and behaviour (Lund 2003.
To build this kind of trust, all parties need to engage, as equals, in dialogue through an inclusive approach (Olsen 2003).
Downloaded by University of Bucharest at 05:04 03 december 2014 A framework, with embedded FTA, to enable business networks 803 The development of effective and lasting partnerships is critical,
requiring a common identity (a true feeling of who‘we'are as partners as well as of who each actor is as individuals)
and of legitimacy (important to sustain credibility, recognition and success)( Hardis 2003). Trust cannot be taken for granted
what is possible (Shelton 1997). The expression‘meta-learning'was created by Losada (1999) and defined as‘the ability of a team to dissolve attractors that close possibilities for effective action
and to evolve attractors that open possibilities for effective action'.'Meta-learning can also be understood as the ability to learn how to learn
and/or think (Losada 2001). According to Losada (1999), high-performance teams need an inclusive dialogue approach for all stakeholders in the network.
It seems to be critical to creating a continual collaborative learning process across the network and brings value to all the involved parties,
Moreover, FTA supports one to deal with complexity (Saritas 2006) to process and interpret weak signals, wild cards (Amanatidou et al. 2012;
Könnölä et al. 2012) and alternative options (Bezold et al. 2009; Boden et al. 2010; Cagnin and Könnölä, forthcoming) to support decisionmakking All these are critical to reconcile creativity and rational analysis (Shelton 1997;
Cagnin 2005. Also, these are required to link learning and strategy to a long-term common vision of where an organisation wants to position itself within possible alternative futures.
These include partners 'and stakeholders'views of what the future might entail. It also considers where all actors see themselves both individually and collectively within these alternative futures.
The link between learning and strategy around a common vision in the network enables trust to be developed across the system through participatory instruments.
These take into consideration the diversity of views across the network and the collective articulation of visions and expectations.
such a common vision to be pursued across the system should be based upon the mutual positioning of network actors in relation to future needs (Cagnin, Amanatidou, and Keenan 2012.
Capra 1997; Dempster 1998,2000; Maturana 1998; Cagnin 2005) between actors need to be reinforced to allow the coordination
and mobilisation of necessary skills and resources towards a common target, aligning therefore strategy and operations across the system.
Hence, FTA plays a significant role in anticipating and managing disruptive and transformattiv changes and does so by providing spaces for mutual appreciation,
Downloaded by University of Bucharest at 05:04 03 december 2014 804 C. Cagnin and D. Loveridge Table 2. Contributions of FTA.
The dynamism of a swarm or a network may be thought of as autopoiesis (Maturana andvarela 1980),
Sympoiesis (Dempster 1998) attempts to describe the boundaryless nature of system behaviour (more will be said about sympoiiesi later)
Downloaded by University of Bucharest at 05:04 03 december 2014 A framework, with embedded FTA, to enable business networks 805 Foresight cannot remove the uncertainties any business faces
Foresight can also expose a range of equally likely paths into the future that may permit more insightful decisions to be made by a business.
Equally, Al Haig's dictum that‘vision without discipline is daydream'(Haig 1984) is necessary to prevent the outcomes of foresight becoming too expansive.
The Maturity Model suggested in Table 3 (Cagnin 2005) uses the notion of evolution in
The design of the Sustainability Maturity Model is founded on universal principles as well as the maturity of behaviours that can lead to the development of a mature business throughout its network of relationships (Cagnin 2005)
and considers a number of other related attempts (Perlman and Takacs 1990; Katzenbach and Smith 1993;
Eckenfelder 1997; Elrod and Tippett 1999; Berg et al. 2002; Kwak and Ibbs 2002; von Zedtwitz 2002;
Rosenbeer 2003; Verweire and Berghe 2003; Entovation International 2004; Losada and Heaphy 2004; Fredrickson and Losada 2005.
As a reminder, the model seeks to enable a common strategy and/or strategies aligned across the network,
founded on a shared vision for sustainable development to be pursued by all actors, with interdependent and agreed roles;
a cooperative interactive network rooted in communication channels that allow relevant and agreed information to flowfreely to create a common base of knowledge shared among partners to ensure that trust is enhanced;
and Downloaded by University of Bucharest at 05:04 03 december 2014 806 C. Cagnin and D. Loveridge Table 3. Business sustainability maturity model.
Maturity levels 3-Managed with no 4-Excellence at corproate 5-High-performance Value activity 1-Ad hoc 2-Planned in isolation integration level sustainability net Strategy-Overhead,
driven by regulation, complaints, management directives and cost of accidents and impacts-No processes or controls in place
and no support from leadership/senior management-Success depends on individual efforts; change factors as an unpredictable serendipity-Sustainability functionally isolated;
firm's main objective is to gain capital efficiency-Objectives only partly known-Systematisation of existing practices-Objectives identified
but not in alignment with business target (to gain operational efficiency)- Supporting mechanisms are informal,
according to needs (access to past information)- Policies defined and the firm has strengths in doing similar work;
inter-group learning-Values (universal principles) embedded in every process Downloaded by University of Bucharest at 05:04 03 december 2014 A framework, with embedded FTA,
and rational analysis become complementary (Continued) Downloaded by University of Bucharest at 05:04 03 december 2014 808 C. Cagnin
functional silos removed (information flow)- Systemic processes/systems Downloaded by University of Bucharest at 05:04 03 december 2014 A framework, with embedded FTA,
In this context and according to Hock (1999), enterprises must be able to combine, with harmony, order and chaos, competition and cooperation,
Maturana andvarela (1980) agree when affirming that every organism has the power to self-generate by means of autopoiesis,
which implies continuous auto-production and reproduction (Maturana and Varella 1997): autopoietic systems produce and are a product of themselves (Rocha 2003).
Interpreting complex systems from the perspective of ecosystems, Dempster (1998) coined the expression sympoietic systems, indicating three main differences, related to key system characteristics between autopoiesis and sympoiesis:
1. autopoietic systems have defined self boundaries, while sympoietic systems do not; 2. autopoietic systems are self-produced,
Dempster (2000) concludes that these differences mean that autopoietic systems are oriented homeostatic, development, centrally controlled, predictable and efficient,
According to Rocha (2003), complex systems require interactivity: in the same way, it is not possible to understand living systems without perceiving the systemic relationshhip of cells
The stronger the interactions between the Downloaded by University of Bucharest at 05:04 03 december 2014 810 C. Cagnin and D. Loveridge components of the network,
and in one's own emotions (Fell and Russell 1994; Damasio 1996; Maturana 1998; Losada 1999,2001;
Fredrickson and Losada 2005) is crucial for choosing a sustainable path to life or for moving the whole system towards higher levels of sustainable development.
Dialogue and information-sharing, founded on trust, are pre-requirements. Features of universal ethics or universal principles and those of respect (Zohar 1990;
Cagnin 2000) can be linked with Losada's notions of high-performance teams and organisations: individuaal and corporations should have the ability to respect each other.
These might be the necessary characteristics to enable actors within business networks to perform at higher levels
and to improve their quality of life. Included here are respect and responsibility built upon inclusive dialogue and active participation,
along with conflicts, generating transparency, development (Giversen 2003; Larsen 2003) and ability to live with the paradox of chaos and order, competition and cooperation, through sympoietic system capability.
Social change implies that people within a society must change: this happens either through encounters outside the specific social system or via reflections through language (Maturana and Varela 1997.
Dialogue, respect and emotions for others'feelings are critical; the emotions of individuals build their rationality (Damasio 1996) and their human actions (Maturana 1998.
Basic emotions are thus the basis of the operationalisation of living organisms, and these change as the environment changes.
according to Tuomi (2011), is critical to address some of the epistemic and ontological assumptions that underlie much of the current FTA practice.
Downloaded by University of Bucharest at 05:04 03 december 2014 A framework, with embedded FTA, to enable business networks 811 Table 4. Business sustainability management framework. s e i t i v i t C a-b U s s e i t
and preparing the whole network to walk into a higher sustainability maturity level 5th Maturity Level Downloaded by University of Bucharest at 05:04 03 december 2014 812 C. Cagnin
what is involved in managing a business towards sustainable developmmen within the Brundtland criteria (Brundtland 1987).
Progress towards sustainable development may depend on building dynamic partnerships among these three pillars (Holliday, Schmidheiny, andwatts 2002.
which can be achieved through FTA APPROACHES and methods (Cagnin et al. 2008). This is a key aspect for policy interventtion Ultimately,
Denis Loveridge is Honorary Visiting professor at Manchester Institute of Innovation research (MIOIR), Manchester Business school, University of Manchester, after 44 years in industry.
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to enable business networks 817 Appendix 2. Existing business sustainability tools and research outcomesdimensions of sustainability Institutional-Business activities Economic Environmental Social Political Spatial Cultural Strategy Principles and Values Visions Proposed Proposed Proposed Proposed Proposed Proposed
EM Operations Measure Performance GRI GRI GRI Downloaded by University of Bucharest at 05:04 03 december 2014 818 C. Cagnin
whom and how Downloaded by University of Bucharest at 05:04 03 december 2014 A framework, with embedded FTA,
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