Creating sustainable benefits for stakeholders of organisations using the strategy mapping framework

Abstract

Purpose: This paper investigates the association between organisational commitment and sustainable financial performance where environmental and social issues are integrated into the traditional four perspectives of the strategy map framework. Design/methodology/approach: This study involved a survey administered to executives of medium to large Australian companies. Varimax rotated factor analyses were conducted to reduce a total of 47 items related to components of the balanced scorecard's strategy map to 6 factors - affective commitment, continuance commitment, operations customer and innovation management value-creating processes, CSR value-creating process, customer valued attributes, and growth and productivity financial outcomes. Confirmatory factor analyses were conducted to test the goodness of fit for each measurement model. A structural equation model was used to test three hypotheses for different paths of association between organisational commitment and sustainable financial performance outcomes. Findings/Results: Results reveal that there is an indirect association between affective commitment and financial performance mediated by (a) processes within the internal perspective, and (b) customer valued attributes within the customer perspective. An alternative mediating path through the processes within the internal perspective only was also supported by the results. However, the results indicate that when organisations make community investments, such as donations to the community or community involvement, there is no direct short term financial benefit gained by the organisation. Research limitations/implications: As this study involved a survey and is therefore subject to the usual limitations as acknowledged in the paper. Future research could investigate the effect of a broader range of environmental and social activities within the CSR value-creating process. Practical implications: This study provides an approach to testing the association between organisational commitment, sustainable financial performance, environmental and social issues within the traditional four perspectives of the strategy map framework. Originality/value: This paper adds to the literature by providing evidence about the stakeholders' sustainable benefits related to the indirect association between organisational commitment elements,