Academic journal article Academy of Educational Leadership Journal

Cognition & Risk Perception in Business Environmental Sustainability Education

Academic journal article Academy of Educational Leadership Journal

Cognition & Risk Perception in Business Environmental Sustainability Education

Article excerpt


Serious global environmental challenges such as climate change, loss of biodiversity and other pollution issues are creating substantial risks and associated strategic opportunities for business enterprises. Many experts suggest that rapid responses are required from all societal institutions to include government, industry and academia. Nevertheless, many leaders in these institutions still deny the criticality of these problems and, as a result, the rate of adaptive change is frustratingly slow. This paper uses the theories of cognitive and behavioral decision sciences to forward an integrative framework seeking to explain why business executives may inappropriately discount such environmental risks as well as their responsibilities in addressing these challenges. Following an articulation of the key variables in this framework, the author then suggests practical classroom strategies that have been used in executive, graduate and undergraduate business education to counteract judgment biases and errors that predispose individuals to deny their responsibilities in addressing the imperatives of environmental sustainability. Educators as well as internal and external change agents and consultants will find this paper useful in promoting environmental awareness and responsible decision making.

"We can't solve problems by using the same kind of thinking we used when we created them" Albert Einstein

"All real change is grounded in new ways of thinking and perceiving....Different ways of thinking lead to different ways of acting" Peter Senge


This monograph forwards a conceptual framework useful in analyzing the potential impact of various cognitive heuristics on environmental risk and opportunity assessment within the business context. Following articulation of some of the key elements in this framework, the model is then used to develop educational strategies designed help students address some of the challenges of corporate environmental responsibility. These educational approaches have specific relevance in courses where the skills of ethical discernment and associated critical thinking are paramount. Relevant courses might include business ethics, corporate social responsibility (CSR), business in society or any course in a functional area addressing ethics and CSR.

This analysis is predicated upon the following premises and associated logic:

1 . Present and future organizational leaders need to accurately perceive emerging global realities and make decisions based upon a sound understanding of the risks and opportunities relevant to their operating environment. One important area of strategic risk and opportunity grows out of the ubiquitous environmental impacts of our increasingly industrialized civilization. The term corporate environmental responsibility will be used to delineate those responsibilities that a firm has in relation to potentially negative externalities produced by the organization's production processes.

2. The ability of decision makers to perceive and respond to challenges of corporate environmental responsibility ultimately depends upon the quality of individual human judgment and associated cognitive information processing. These mental processes are in turn significantly influenced by predictable cognitive biases and potentially dysfunctional mental shortcuts cognitive heuristics) that may cause some decision makers to ignore important risks and/or fail to recognize emergent strategic opportunity (Messick and Bazerman, 1996). These judgmental dynamics will be described as a form of bounded rationality, a term more fully explored in subsequent sections.

3. Innovative educational strategies can be deployed based upon an understanding of the dynamics of bounded rationality and associated systematic cognitive bias. These strategies can be used by business educators to improve veridical problem detection and combat dangerous denial and or discounting of potentially calamitous environmental problems. …

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