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Can the field of Strategy address climate change effectively and, if so, how?

  • 1.  Can the field of Strategy address climate change effectively and, if so, how?

    Posted 28 days ago

    Amidst the challenges posed by climate change, is strategy scholarship's raison d'être reasonable? This is a question that has been mortifying strategy outsiders like myself. It also seems to be driving a recent exchange among orthodox strategists, as suggested by Anita McGahan who shares links to a recent point-counterpoint debate. It didn't reach, however, the most relevant AOM community and I feel compelled to relay it.

    Wickert, C., & Muzio, D. (2024). What is the strategy of strategy to tackle climate change? Journal of Management Studies 
    Bansal, T., Durand, R., Kreutzer, M., Kunisch, S., & McGahan, A. M. (2024). Strategy can no longer ignore planetary boundaries: A call for tackling strategy's ecological fallacyJournal of Management Studies
    Foss, N. J., & Klein, P. G. (2024). Do we need a 'new strategy paradigm'? NoJournal of Management Studies
    Davis, G. F., & DeWitt, T. (2024). Can strategy address the climate crisis without losing its essence? Journal of Management Studies

    It's worth asking, however, whether counterpoints can go far enough when they remain limited to familiar academic circles. To venture beyond the soothing beam of light cast by AOM's lampshade and its sister journals, readers may want to consider the following ongoing ecological critique of strategy scholarship:

    « More sophisticated but also deceptive is the stakeholder perspective of Foss et al. (2021), Foss and Klein (2018), and Klein et al. (2012). It is more sophisticated because, unlike the abovementioned scholarship, they purport to have a more elaborate understanding of property rights. Yet as tributaries to the free-market commitments of Austrian economics, they shy away from rethinking the firm to move past ahead of the shareholder-centric view. It is thus deceptive because they have concocted another libertarian narrative where bargaining power builds up in the nexus node of equity owners, who generously delegate trivial rights to non-equity stakeholders who lack countervailing powers save for, perhaps, exiting the firm in the kind of apparent free market that Austrian economists crave for:

    In other words, limiting residual decisions and ultimate control rights to equity holders benefits not only the equity holders, but also the firm itself and hence the nonshareholder stakeholders as well. At the same time, firms can allocate the use of rights of various kinds of assets to improve the incentives of various stakeholders. (Foss and Klein, 2018, p. 29).

    They justify this by "the skill with which ownership is exercised to create value" (Foss et al., 2021, p. 320), which they presume to be a competence best exerted by equity owners. However, this not only flies in the teeth of the diversity of organizations observed in the real world (Agafonow, 2020; Hansmann, 2000; Thompson and Valentinov, 2017; Williamson, 1984b), but it also precludes experimentation with new organizational designs to cope with the environmental challenges brought forward by climate change, as Patagonia testifies. »

    An excerpt from: Agafonow, A., & Perez, M. (2024) "In Search of a Non-anthropocentric Middle-range Theory of the Firm: On How the Patagonia Purpose Trust Granted a Controlling Stake to Nature," Ecological Economics, Vol. 217, March, pp. 01-14.

    Available on Research Gate:


    Agafonow, A., & Perez, M. (2024) "Overhauling multinationals for the Anthropocene: How a rogue subsidiary offers a blueprint for sustainable development," Ecological Economics, Vol. 222, August, pp. 01-14.

    Available on Research Gate

    Alejandro Agafonow
    Full Professor
    ESSCA School of Management