Organizational ecosystem embeddedness and its implications for sustainable fit strategies

This paper offers an integrated theoretical model of the ecosystem embeddedness of organizations and it suggests three clusters of sustainable fit strategies which firms can use to achieve long-term competitive advantage. Specifically, we argue that firms depend on ecosystem health and ecosystem services, while simultaneously impacting ecosystems as an unavoidable byproduct of their operations (their ecological footprint). Combining the constructs of organizational ecosystem dependence and organizational ecosystem impact allows us to capture the interdependence of relationships and interactions between human organizations and nature. We then draw on Pfeffer and Salancik’s resource dependence theory (1976) to argue that type of dependence on, control over, and availability of substitutes to ecosystem services determine the level of firm dependence on ecosystems, in turn affecting firm effectiveness and robustness. We further suggest four types of firm impacts on ecosystem health: negative, less negative, positive and neutral; based on these types, we categorize organizational strategies into four clusters: “business-as-usual,” “harm-reduction,” “investing in natural capital“, and “footprint-neutral” strategies. Strategic utilization of the latter three clusters has the potential to provide the firm a sustainable fit with the ecosystems on which it depends. These sustainable fit strategies, which are derived from the theoretical model, thus lay the groundwork for further theoretical development and for practical application. The paper closes with suggestions for future research.