Defining competition culture :

The Compete quadrant represents a cross between an external, organization-oriented focus and a
focused organizational structure(Igo & Skitmore, 2006)
(Fiordelisi & Ricci, 2014) :Externally oriented - The competition-oriented culture (termed
“market culture type” in the CVF). This type of culture focuses on the organisation's external
effectiveness by pursuing enhanced competitiveness and emphasising organisational
effectiveness, fast response, and customer focus. These companies usually attach the highest
priority to customers and shareholders and judge success based on such indicators as market
share, revenues, meeting budget targets, and profitability growth. (Helfrich et al., 2007)
(Igo & Skitmore, 2006)
Tends to be results orientated and concentrate on
getting the job done and its members value competitiveness, diligence, perfectionism,
aggressiveness and personal initiative.
(Linnenluecke et al., 2009)
The quadrant corresponds to the system rationalism ideology of Barley and Kunda (1992), which
focuses on planning, forecasting, controlling and the design of the organizational structure and
decision processes to match the external environment. It is also analogous to Scott’s (2003)
classification of open–rational system models. In this quadrant, the efficient use of resources,
planning and goal setting, and the adequacy of organizational structures in light of the
environment are valued highly.
(Linnenluecke & Griffiths, 2010)
Organizational cultures that are dominated by rational goal values (lower right quadrant)
promote efficiency and productivity, which is realized through goal-setting, planning,
instructional communication and centralized decision-making (Jones et al., 2005). Structurally,
the rational goal culture is related to centralized decision-making. Individuals are motivated by
beliefs that they will be rewarded for competent performance leading to desired organizational
goals (Linnenluecke et al., in press; Zammuto et al., 2000; Zammuto & Krakower, 1991).
Negative effect on sustainability :
emphasizes profit and bottom line measures and is underlined by the concept of rational action.
Its leaders are inclined to be hard-driving producer’s
intent on outperforming competitors and being at the forefront of their field of
endeavour by maintaining stability and control. .- if the competitors are moving ahead in
sustainability it will follow and pursue sustainability.
A Market culture, working towards clear and rational goals that are achieved through high
productivity and economical operation (Igo & Skitmore, 2006).
are anchored in this quadrant do things quickly for immediate gain, focus heavily on bottom line
measures of profitability, and relentlessly acquire resources that give them a competitive
advantage. (Igo & Skitmore, 2006)
They place a premium on efficiency and measurable outcomes. (Fiordelisi & Ricci, 2014)
(Felipe et al., 2017)
Market culture is recognized as being clearly concerned with a goal (or objective)
accomplishment culture type. Hence, the predominant corporate values inherent to this culture
are productivity, effectiveness, competitiveness and results optimization. These organizations
normally stress gaining prestige, status and profitability and their main purpose is to end in
transactions (i.e., exchanges, sales, contracts), with other parties, in the hope of achieving
competitive advantages [Cameron quinn 2011]. In market organizations, both internal and
external transactions (exchanges of value) are viewed in market terms.In effective market
organizations, value flows between their different members and stakeholders, with minimal cost
and delay.
HARRIS AND CANE 2002 - Where managers believed that attempting sustainable growth would
negatively influence traditional performance measures (such as sales, profits or market share), they
suggested that few tangible manifestations of green organizational culture would be present. A manager
illustratively stated:
Since environmentally friendly decisions cost money and I'm paid to generate profit, I fail to see the merits
in going green. I cannot make choices that negatively affect company profits – I don't have that right
(Industrial products firm, middle-ranking functional manager).
Hur and Kim (2017) – You can see individuals in a competition oriented organization -
Masculinity, another Hofstede dimension, is a performance-orientated characteristic of
individuals who seek achievement, assertiveness, heroism, material success, ambition, and
competitiveness (Hofstede, 1980, 1984), and is driven mainly by achievement and recognition.
Such individuals strive for advancement at the expense of others and superior performance at any
cost (Vitell et al., 1993). As such, they may sacrifice formal ethical codes to achieve their
objectives (Vitell et al., 1993; Yoo & Donthu, 2002). Indeed, the evidence appears to show that
masculinity can be negatively related to firms’ ethics (Scholtens & Dam, 2007) and ethical
sensibility (Blodgett et al., 2001). Masculine individuals are more likely to engage in unethical
behaviors that bring personal financial gains (Chang & Ding, 1995) and are more likely to
tolerate the questionable behaviors of others (Cohen et al., 1992).
(Linnenluecke & Griffiths, 2010)
However, when evaluating efficiency, it is necessary to consider its impact on the environment
and society. Efficiency defined solely as cost reduction and the simplification of product, process
and service flows (see internal process quadrant) is insufficient to achieve corporate
sustainability. In addition, such efficiencies will only provide limited competitive advantage for
organizations, as they can be easily copied by competitors.
Fiordelisi & Ricci, 2014)
Hartnell et al. (2011) suggest that the competition-oriented culture exhibits a strong positive
association with financial effectiveness: these companies are inclined to integrate external
environmental information to construct clear and coherent goals to increase organisational
members' attention toward profitable activities (Cameron et al., 2006; Chao et al., 1994).
Sustainability may not always be profitable especially in the short term.
(Fiordelisi & Ricci, 2014)
These companies usually attach the highest priority to customers and shareholders and judge
success based on such indicators as market share, revenues, meeting budget targets, and
profitability growth. (Helfrich et al., 2007)
Finally, organizations with an external focus and an emphasis on control, labeled rational
cultures, are characterized by clarity of tasks and goals. They place a premium on efficiency and
measurable outcomes. – this may be negative depending on the meaning of efficiency it implies.
(Igo & Skitmore, 2006)
A Market culture, working towards clear and rational goals that are achieved through high
productivity and economical operation. Tends to be results orientated and concentrate on
getting the job done and its members value competitiveness, diligence, perfectionism,
aggressiveness and personal initiative. Its leaders are inclined to be hard-driving producer’s
intent on outperforming competitors and being at the forefront of their field of
endeavour by maintaining stability and control.- if the competitors are competing in terms of
economic measures market shares revenues and profits – cut throat nature of industry – it is
highly likely it will ignore sustainability.
(Bhuiyan et al., 2020)
Employees in outcome-oriented organizations might be incentivized to prioritize outcomes above
all else, potentially leading to a lack of attention to ethical or moral dimensions in conducting
business activities. As a consequence, stakeholders such as customers could face neglect or
disregard in favor of achieving the intended outcomes. Additionally, outcome-oriented
organizations might be more reluctant to adopt corporate social responsibility (CSR) practices
due to the perceived additional costs associated with implementing such practices (Friedman,
1970; Karnani, 2011). Consequently, these organizations could be less inclined to engage in
socially responsible business activities and might prioritize financial gains over ethical
considerations.
(Fietz & Günther, 2021)
Market cultures pursue cost reduction, process improvement, resource efficiency (minimizing
input and maximizing output), and competitor orientation as their corporate sustainability
strategy. However, such an approach is likely to be insufficient to achieve true sustainability
because it does not explicitly emphasize the implementation of new technologies, innovation, or
change and is primarily focused on meeting the legal environmental requirements and reacting to
competitors (Linnenluecke/ Griffiths 2010). Studies have shown that clan and market cultures are
not preferable to promote corporate sustainability (Vodonick 2018); depending on the market
environment and internal and external stakeholders, firms should either adopt an adhocracy or a
bureaucracy culture.
Negative effect on Sustainability reporting :
(Bhandari et al., 2022) - In the competition-oriented culture, organizations implement aggressive
strategies to expand market capital, acquire other firms, and attack competitors’ market position
(Cameron et al. 2014). The emphasis is on good relations with investors, growth in profitability,
and increase in market share through competition. This environment potentially increases
pressure to engage in unethical practices.
Own text - Competition culture often prioritizes short-term financial gains over long-term
sustainability concerns. This emphasis on immediate profitability can discourage organizations
from investing resources into comprehensive ESG reporting and disclosure. For example,
companies may focus on maximizing profits by minimizing costs associated with environmental
or social responsibility initiatives rather than allocating resources towards robust ESG reporting
systems.
Additionally, disclosing sensitive information related to environmental, social, or governance
practices can have negative consequences or risks for organizations—such as reputational
damage—which may deter them from engaging in transparent reporting.
Furthermore, implementing robust ESG reporting systems incurs costs such as data collection,
analysis, and external assurance services – expenses that some companies may be reluctant to
bear due to competitive pressures.
Own text - Competition culture and sustainability are two concepts that are often at odds with
each other. Competition culture is characterized by a focus on winning, often at the expense of
others. Sustainability, on the other hand, is focused on preserving resources for future
generations. One of the challenges in achieving sustainability in a culture of competition is that
short-term thinking often prevails. Companies and individuals are motivated by immediate gains,
rather than long-term benefits.
why a competitive subculture within an organization can lead to less sustainability and ESG
(Environmental, Social, and Governance) reporting:
Short-Term Focus: A highly competitive environment may drive organizations to prioritize
short-term gains over long-term sustainability goals. This can result in reduced reporting on
sustainability initiatives, as resources and attention are directed toward immediate profitability.
Resource Constraints: Competition can lead organizations to allocate limited resources primarily
to core business activities, leaving fewer resources available for sustainability reporting and
initiatives.
Lack of Collaboration: A hyper-competitive culture may discourage collaboration both internally
and externally. Sustainability reporting often requires cross-functional cooperation and
partnerships with other organizations, which may be less prioritized in a highly competitive
environment.
Privacy Concerns: Organizations in competitive industries may be more cautious about
disclosing sensitive sustainability information, such as proprietary technologies or supplier
relationships, fearing that competitors could exploit this information.
Regulatory Avoidance: In some cases, highly competitive organizations may attempt to avoid
regulatory scrutiny by keeping a lower profile on sustainability and ESG reporting, especially if
they believe stringent regulations could hinder their competitiveness.
Focus on Cost Cutting: Intense competition can lead organizations to prioritize cost-cutting
measures, which may include reducing investments in sustainability reporting and initiatives,
especially if they are perceived as non-essential to immediate financial goals.
Pressure to Meet Financial Targets: In a competitive subculture, organizations may feel pressured
to meet or exceed financial targets at all costs. This can divert attention away from sustainability
and ESG reporting, which may not have immediate financial benefits.
Pressure to Cut Costs: Intense competition can create pressure to cut costs across the board,
which may extend to reducing investments in sustainability reporting systems and personnel.
(Kalyar et al., 2013)
A competitive culture, for instance, focuses on personal achievements, conflict and controlling
others rather to develop collaborative environment (Cooke and Rousseau, 1988). In a
competitive culture, individuals prioritize their own achievement even at the expense of others,
and probability to pay attention to others is minimal. Therefore, stakeholders’ demands and
interests are more likely to be neglected and social responsibility would be poor (Galbreath,
2010).
(Kucharska & Kowalczyk, 2019)
Hur and Kim (2017) demonstrated the negative effect of the masculinity dimension
on the environmental responsibility. Cox, Friedman, and Tribunella
(2011); Gallego‐Álvarez and Ortas (2017); Park, Russell, and Lee
(2007); and Peng, Dashdeleg, and Chih (2014) confirmed the negative
effect of a masculine management style on CSR perception. On the
basis of the above, we have formulated the following hypothesis:
H1. Masculine culture—identified with competitiveness
and assertiveness—has a negative impact on
CSR practice.
(Bhuiyan et al., 2020)
Outcome orientation refers to a culture in which management places a strong emphasis on
achieving results and outcomes, prioritizing the end results rather than the methods or processes
used to attain them (Robbins et al., 2013). In organizations with an outcome-oriented culture,
managers tend to value actions that lead to tangible achievements, and the focus is primarily on
measurable outcomes rather than the ethical aspects of the processes involved. This mindset can
lead to a potential disregard for ethical considerations and stakeholder rights in the pursuit of
desired results, particularly financial goals.
Positive effect on Sustainability :
They place a premium on efficiency and measurable outcomes. (Fiordelisi & Ricci, 2014).
Finally, organizations with an external focus and an emphasis on control, labeled rational
cultures, are characterized by clarity of tasks and goals. They place a premium on efficiency and
measurable outcomes. – this may be positive depending on the meaning of efficiency it implies.
(Fiordelisi & Ricci, 2014)
Highly competition-oriented cultures tolerate change and instability and even trumpet these
values, such that changing everything – including the CEO – would be perceived as a natural
step.
(Igo & Skitmore, 2006); Its leaders are inclined to be hard-driving producer’s
intent on outperforming competitors and being at the forefront of their field of
endeavour by maintaining stability and control. .- if the competitors are moving ahead in
sustainability it will follow and pursue sustainability.
Competition culture creates a compelling incentive for companies to engage in ESG reporting. In
a highly competitive market, businesses understand that consumers increasingly prioritize
sustainability when making purchasing decisions. By showcasing their commitment to
sustainable practices through comprehensive ESG reports, companies can differentiate
themselves from competitors and attract environmentally conscious customers.
Linnenluecke et al., 2009) - Therefore, we propose that organizations dominated by a rational
goal culture will place greater emphasis on resource efficiencies in their pursuit of corporate
sustainability. This understanding of corporate sustainability reflects the growing awareness on
the part of managers in the corporation that there are advantages to be gained by proactively
instituting corporate sustainability practices which are directed toward reducing costs and
increasing operational efficiency.
(Linnenluecke & Griffiths, 2010)
However, when evaluating efficiency, it is necessary to consider its impact on the environment
and society. Efficiency defined solely as cost reduction and the simplification of product, process
and service flows (see internal process quadrant) is insufficient to achieve corporate
sustainability. In addition, such efficiencies will only provide limited competitive advantage for
organizations, as they can be easily copied by competitors.
Resource efficiency means that there are real advantages to be gained by proactively instituting
sustainability practices, especially if these practices are directed towards reducing costs and
increasing operational efficiency. Some organizations capitalize on these cost savings and
reinvest them in their employees to achieve sustainable longer-term gains by building the
appropriate human systems that support value-adding and innovation. For example, Scandic
Hotels have had considerable success at reducing and eliminating waste and using these cost
savings to build their employee skill base (Nattrass & Altomare, 1999). This new efficiency
focus has led to huge cost savings, reduced ecological impacts and enhanced the reputation of the
corporation.
Many organizations use human resources and environmental policies and practices to reduce
costs and increase efficiency. Investment in training may involve expense but result in
compensating added value through increased quality of products and services. Technical and
supervisory training is augmented with interpersonal skills training. Teamwork is encouraged for
value-adding as well as cost-saving purposes, and external stakeholder relations are developed
for business benefits. ISO 14000 systems are integrated with TQM and OH&S systems or other
systematic approaches with the aim of achieving eco-efficiencies. Sales of byproducts are
encouraged as are cooperative relationships with other members of the supply chain with the aim
of waste reduction.
(Osei et al., 2023)
, even though incentives can easily encourage employees to achieve the stipulated sustainability
practices, it is argued that supply chains are likely to introduce sustainability practices due to
external pressures and the quest to improve profitability.
With respect to the environmental, occupational, and public health and safety dimension,
outcome-oriented organisations are likely to pay attention to environmental protection to avoid
the costs associated with noncompliance with respect to environmental rules and regulations and
providing employees' occupational health and safety.
(Bhuiyan et al., 2020) : The outcome-oriented culture dimension was found to promote CSR
practices in relation to the accountability of external stakeholders and the environmental,
occupational, and public health and safety dimensions of CSR. Therefore, given the extant
literature highlights a positive association between CSR practices and organisational
performance (Kao et al., 2018; Shen et al., 2016; Albahussain, 2015; Saeidi et al., 2015), it is
expected that outcome-oriented organisations are likely to practice CSR to improve performance,
thereby meeting the interests of stakeholders
Positive effect on Sustainability reporting :
(Bhandari et al., 2022) - Alternatively, Arya and Mittendorf’s (2007) theoretical model
demonstrates that competition among firms enhances disclosure quality. Although disclosure
involves proprietary costs, the authors argue that withholding information can reduce the
visibility of firms among analysts and in competitive settings, firms opt to enhance disclosure
quality to attract attention. In another theoretical paper, Arya and Mittendorf (2005) argue that
enhancing disclosure quality ‘‘keep[s] competitors at bay’’ and adjusts expectations of
competitors, even if it means disclosing proprietary information.
Benchmarking: In a competitive subculture, organizations are more likely to benchmark their
sustainability and ESG performance against industry peers. This comparison encourages them to
collect, analyze, and report data to demonstrate their competitive advantage. (Bhandari et al.,
2022) - Further, Ali, Klasa, and Yeung’s (2014) empirical findings suggest that reduced
competition creates an opaque information environment. Cheng, Man, and Yi (2013) find that
firms that face less competition have lower accruals quality and have a more opaque information
environment. The authors show that even in an oligopoly, when the firms in the industry are
homogeneous, the quality of financial reporting is higher, due to increased competition. These
findings are consistent with the theoretical arguments of Hart (1983) and Raith (2003), who
claim that competition serves as a disciplining mechanism for managers.
Peer Pressure: A competitive environment creates peer pressure among organizations to excel
not only in their core operations but also in sustainability practices. This pressure often results in
increased reporting to showcase achievements.
Recognition and Awards: Competing organizations often vie for industry awards and
recognitions related to sustainability and ESG performance. To be in contention, they must
enhance their reporting efforts to showcase their initiatives.
Investor and Shareholder Expectations: Investors and shareholders, who are critical stakeholders,
may push organizations to compete in terms of sustainability and ESG reporting. They seek
transparency and disclosure of ESG-related risks and opportunities, driving organizations to
report more comprehensively.
Customer Demands: Competitive organizations are attuned to customer demands for sustainable
products and services. Meeting these demands often requires robust reporting to demonstrate
environmental and social responsibility.
Media and Public Scrutiny: A competitive environment can lead to increased media and public
scrutiny. Organizations may invest in sustainability reporting to manage their public image and
avoid negative publicity.
Risk Mitigation: Competition encourages organizations to identify and mitigate risks, including
those related to sustainability. To demonstrate proactive risk management, they often report on
their sustainability initiatives and measures taken to address potential issues.
Regulatory Compliance: Competitive organizations are more likely to stay abreast of evolving
ESG regulations. They invest in reporting to ensure compliance with legal requirements and
avoid penalties or regulatory setbacks.
Strategic Advantage: Robust sustainability and ESG reporting can confer a strategic advantage in
the marketplace. Competitive organizations recognize that such reporting can differentiate them
from rivals and attract conscientious consumers and investors.
Peculiar literature to “E”:
Positive effect on “E”:
(Linnenluecke et al., 2009)
Theories and ideologies underlying the rational goal quadrant highlight the importance of the
wider environment for the organization, and the need for rational planning and organizing in
light of environmental demands.
In this quadrant, the efficient use of resources, planning and goal setting, and the adequacy of
organizational structures in light of the environment are valued highly. These aspects, in
particular the efficient use of resources and the avoidance of adverse effects on the environment,
are essential to the environmental understanding of corporate sustainability.
(Linnenluecke & Griffiths, 2010)
However, when evaluating efficiency, it is necessary to consider its impact on the environment
and society. Efficiency defined solely as cost reduction and the simplification of product, process
and service flows (see internal process quadrant) is insufficient to achieve corporate
sustainability. In addition, such efficiencies will only provide limited competitive advantage for
organizations, as they can be easily copied by competitors.
Resource efficiency means that there are real advantages to be gained by proactively instituting
sustainability practices, especially if these practices are directed towards reducing costs and
increasing operational efficiency. Some organizations capitalize on these cost savings and
reinvest them in their employees to achieve sustainable longer-term gains by building the
appropriate human systems that support value-adding and innovation. For example, Scandic
Hotels have had considerable success at reducing and eliminating waste and using these cost
savings to build their employee skill base (Nattrass & Altomare, 1999). This new efficiency
focus has led to huge cost savings, reduced ecological impacts and enhanced the reputation of the
corporation.
Many organizations use human resources and environmental policies and practices to reduce
costs and increase efficiency. Investment in training may involve expense but result in
compensating added value through increased quality of products and services. Technical and
supervisory training is augmented with interpersonal skills training. Teamwork is encouraged for
value-adding as well as cost-saving purposes, and external stakeholder relations are developed
for business benefits. ISO 14000 systems are integrated with TQM and OH&S systems or other
systematic approaches with the aim of achieving eco-efficiencies. Sales of byproducts are
encouraged as are cooperative relationships with other members of the supply chain with the aim
of waste reduction.
With respect to the environmental, occupational, and public health and safety dimension,
outcome-oriented organisations are likely to pay attention to environmental protection to avoid
the costs associated with noncompliance with respect to environmental rules and regulations and
providing employees' occupational health and safety.
Negative effect on “E”:
(Linnenluecke et al., 2009)
subculture therefore emphasized the control end of the CVF with reliance on formal mechanisms
of coordination and control, which might have limited the extent to which employees understand
corporate sustainability as environmental sustainability.
(Linnenluecke & Griffiths, 2010)
However, when evaluating efficiency, it is necessary to consider its impact on the environment
and society. Efficiency defined solely as cost reduction and the simplification of product, process
and service flows (see internal process quadrant) is insufficient to achieve corporate
sustainability. In addition, such efficiencies will only provide limited competitive advantage for
organizations, as they can be easily copied by competitors.
Peculiar literature to “S”:
Positive effect on “S” :
(Linnenluecke & Griffiths, 2010)
However, when evaluating efficiency, it is necessary to consider its impact on the environment
and society. Efficiency defined solely as cost reduction and the simplification of product, process
and service flows (see internal process quadrant) is insufficient to achieve corporate
sustainability. In addition, such efficiencies will only provide limited competitive advantage for
organizations, as they can be easily copied by competitors.
Resource efficiency means that there are real advantages to be gained by proactively instituting
sustainability practices, especially if these practices are directed towards reducing costs and
increasing operational efficiency. Some organizations capitalize on these cost savings and
reinvest them in their employees to achieve sustainable longer-term gains by building the
appropriate human systems that support value-adding and innovation. For example, Scandic
Hotels have had considerable success at reducing and eliminating waste and using these cost
savings to build their employee skill base (Nattrass & Altomare, 1999). This new efficiency
focus has led to huge cost savings, reduced ecological impacts and enhanced the reputation of the
corporation.
Many organizations use human resources and environmental policies and practices to reduce
costs and increase efficiency. Investment in training may involve expense but result in
compensating added value through increased quality of products and services. Technical and
supervisory training is augmented with interpersonal skills training. Teamwork is encouraged for
value-adding as well as cost-saving purposes, and external stakeholder relations are developed
for business benefits. ISO 14000 systems are integrated with TQM and OH&S systems or other
systematic approaches with the aim of achieving eco-efficiencies. Sales of byproducts are
encouraged as are cooperative relationships with other members of the supply chain with the aim
of waste reduction.
(Osei et al., 2023)
, even though incentives can easily encourage employees to achieve the stipulated sustainability
practices, it is argued that supply chains are likely to introduce sustainability practices due to
external pressures and the quest to improve profitability.
(Bhuiyan et al., 2020) : The outcome-oriented culture dimension was found to promote CSR
practices in relation to the accountability of external stakeholders and the environmental,
occupational, and public health and safety dimensions of CSR. Therefore, given the extant
literature highlights a positive association between CSR practices and organisational
performance (Kao et al., 2018; Shen et al., 2016; Albahussain, 2015; Saeidi et al., 2015), it is
expected that outcome-oriented organisations are likely to practice CSR to improve performance,
thereby meeting the interests of stakeholders
Negative effect on “S” :
(Kalyar et al., 2013)
A competitive culture, for instance, focuses on personal achievements, conflict and controlling
others rather to develop collaborative environment (Cooke and Rousseau, 1988). In a
competitive culture, individuals prioritize their own achievement even at the expense of others,
and probability to pay attention to others is minimal. Therefore, stakeholders’ demands and
interests are more likely to be neglected and social responsibility would be poor (Galbreath,
2010).
(Bhuiyan et al., 2020)
Outcome orientation refers to a culture in which management places a strong emphasis on
achieving results and outcomes, prioritizing the end results rather than the methods or processes
used to attain them (Robbins et al., 2013). In organizations with an outcome-oriented culture,
managers tend to value actions that lead to tangible achievements, and the focus is primarily on
measurable outcomes rather than the ethical aspects of the processes involved. This mindset can
lead to a potential disregard for ethical considerations and stakeholder rights in the pursuit of
desired results, particularly financial goals.
(Bhuiyan et al., 2020)
Employees in outcome-oriented organizations might be incentivized to prioritize outcomes above
all else, potentially leading to a lack of attention to ethical or moral dimensions in conducting
business activities. As a consequence, stakeholders such as customers could face neglect or
disregard in favor of achieving the intended outcomes. Additionally, outcome-oriented
organizations might be more reluctant to adopt corporate social responsibility (CSR) practices
due to the perceived additional costs associated with implementing such practices (Friedman,
1970; Karnani, 2011). Consequently, these organizations could be less inclined to engage in
socially responsible business activities and might prioritize financial gains over ethical
considerations.
Peculiar literature to “G”:
Positive : (Osei et al., 2023) - As rational culture focuses on stimulating employees’
performance through incentives, it is expected to influence the internal not external integration of
firms (Zu et al., 2010).
Increased scrutiny: Intense competition naturally leads to increased scrutiny from competitors,
investors, and regulators. This heightened attention can incentivize companies to improve their
corporate governance practices and ensure their disclosures are accurate and transparent.
Benchmarking and best practices: Observing and learning from successful competitors can
inspire companies to adopt best practices in corporate governance and disclosure. This can lead
to a positive ripple effect throughout the industry, raising the overall standard of transparency
and accountability.
Market pressure: In a competitive market, investors are increasingly demanding companies with
strong corporate governance and ethical practices. This pressure can incentivize companies to
improve their governance practices in order to attract capital and retain investor confidence.
Negative :Since the orientation of this culture is external and being highly competitive, ethical
codes and corporate governance mechanisms may seem a cost will ignore or not focus on such
issues.
Pressure to meet unrealistic expectations: When companies are constantly pushed to outperform
competitors, it creates immense pressure on executives and employees. This pressure can lead to
unethical behavior such as exceeding risk tolerances, engaging in accounting fraud, or
concealing negative information.
Erosion of ethical standards: In a hyper-competitive environment, ethical considerations can be
easily brushed aside in the pursuit of success. This can lead to a culture of dishonesty, where
employees feel justified in taking unethical shortcuts to achieve goals.
Lack of transparency: Companies under pressure to maintain a competitive edge may be less
transparent in their disclosures. This can include withholding critical information from investors,
regulators, and the public.
Discouragement of dissent: When all focus is on winning, there is little room for dissent or
questioning of the status quo. This can stifle creativity and innovation, and prevent important
concerns from being brought to light.
State the hypothesis statement quoting mixed reasons in literature mixed theoretical and
empirical arguments :
How its written in the main paper we are following on financial reporting –
Since the mixed theoretical and empirical arguments make it difficult to make a directional
prediction ex ante, we state the hypothesis in the null form:
OUR hypothesis statements :
H1: Sustainability /ESG disclosure/reporting is not associated with competition corporate culture
orientation.
OR
Competition subculture orientation is not associated with sustainability /ESG
disclosure/reporting
OR if anything better can be written, please advise.