A full list of the Leonardo Centre's published research papers, reports and working papers.


How the Role of the Chief Sustainability Officer Is Evolving to Shape Business Strategies
In collaboration with Emeritus, this report investigates the evolving roles of sustainability executives and suggests the maturity framework for businesses to measure the efficacy of sustainability strategies.

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In partnership with HSBC, the Leonardo Centre published a new report on 31 May 2023: 'The evolution of corporate behaviour to tackle biodiversity challenges’ which examines how companies across all sectors and regions globally, have addressed biodiversity in the last two decades.

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Published Papers

Author: Simone Cenci

Journal: The Journal of Finance and Data Science

We show that a systematic underestimation of ex-ante identification of causal structure generates a series of overlooked biases in empirical studies in finance. We discussed the practical implications of these biases and suggested strategies to address them. 

Authors: S. Cenci, Matteo Burato, Marek Rei, and Maurizio Zollo.

Journal: Nature Communications

Abstract: In this paper, we provide a systematic characterisation of corporate sustainability behaviour over the last ten years, and an analysis of the sustainability strategies of companies with carbon emissions aligned with the climate targets set out by the Paris Agreement.

AuthorsM. BuratoS.Cenci

JournalProceedings of the National Academy of Sciences USA (PNAS)

Abstract: System thinking is a crucial cognitive framework to enable individual pro-environmental behavioral changes. Indeed, a large body of literature has shown a significant and positive association between individuals’ system thinking capacities and perceptions of the threat posed by climate change. However, individual behavioral changes play a limited role in addressing climate change compared to large organizations involved in a significantly larger share of economic activities. Do organizations exhibit system thinking capacities? Here, we conjecture that system thinking is a cognitive framework observable at an aggregated group level and, therefore, organizations, not just individuals, can exhibit characteristic levels of system thinking. We conceptualize a definition of organizational system thinking and develop an empirical method to estimate it using a large body of textual data from business organizations. Then, we show that system thinking organizations are more likely to lower emissions and align them with the pathways required to meet the climate targets set by the Paris Agreement. Finally, we discussed the theoretical and policy implication of our study. Overall, our results suggest that system thinking is a relevant organization-level cognitive framework that can help organizations align their emissions with global climate targets.

Author: S.Cenci.

Journal: Journal of Sustainable Finance & Investment

Abstract: To allocate capital to its most sustainable use, market participants need information on companies' sustainability plans and initiatives. This information is disclosed in sustainability reports, but the disclosure process is largely unregulated and voluntary. When do sustainability reports convey relevant information? To answer this question we estimate the heterogeneous effects of nonfinancial disclosure on analysts' estimates of earnings and firms' equity values. We have found that the information content of nonfinancial disclosure is larger when firms are subject to greater information asymmetry, and when nonfinancial information is integrated within a financial context. Moreover, positive responses have a long-lasting impact while negative shocks are corrected within a short window. Overall, our work suggests that market participants' interest in standalone nonfinancial information is limited, and integrated reporting increases the value of sustainability reports.

Authors: Vuori, N., Laamanen, T., Zollo, M.

Journal: Journal of Management Studies (2023)

Abstract: We investigated the role of heuristics in decision-making in infrequent and heterogeneous organizational processes. In our multiple-case study, we tracked individual managers' knowledge, how managers collectively articulated and codified knowledge, and how they used it in mergers and acquisitions (M&A) decision-making. We developed a process model that explains (a) the evolution and the interplay between heuristics and causal knowledge and (b) the implications of these processes for decision-making. More precisely, we found that some managers possessed and used rough heuristics – heuristics developed via limited or non-existent firsthand experience. Because rough heuristics were often faulty, they led to errors if used in a different context. In contrast, other managers possessed and used causal knowledge – knowledge explaining causal regularities in the environment. Causal knowledge was associated with higher quality decision-making and better performance in subsequent acquisitions. The problem that our focal companies faced was that causal knowledge often evaporated during attempts at collective articulation and codification, causing the conversion of causal knowledge into rough heuristics. We contribute to the organizational heuristics literature by improving our understanding of the role of heuristics in infrequent and heterogeneous organizational processes. At a more general level, we contribute to the capabilities development literature by identifying three paths that capabilities development can take. We also offer important implications for managers.

Authors: Simone Cenci and Stephen Kealhofer

Journal: Journal of Finance and Data Science (2022)

Capital structure theories are often formulated as causal narratives to explain which factors drive financing choices. These narratives are usually examined by estimating cross–sectional relations between leverage and its determinants. However, the limitations of causal inference from observational data are often overlooked. To address this issue, we use structural causal modeling to identify how classic determinants of leverage are causally linked to capital structure and how this causal structure influences the effect-estimation process. The results provide support for the causal role of variables that measure the potential for information asymmetry concerning firms’ market values. Overall, our work provides a crucial step to connect capital structure theories with their empirical tests beyond simple correlations.

Authors: Emanuele Bettinazzi, Maurizio Zollo

Journal: Strategic Management Journal 

In this article, we study how a firm's stakeholder orientation affects the performance of its corporate acquisitions. We depart from prior literature and suggest that orientations toward employees, customers, suppliers, and local communities will affect longterm acquisition performance both directly and through its interactions with process characteristics, such as pre-acquisition relatedness and post-acquisition integration. Analyses of data on a sample of 1884 acquisitions show overall a positive association between acquirers' stakeholder orientation and acquisition performance. In addition, we find support for a positive moderation of business relatedness on the performance impacts of stakeholder orientation. Structural integration has a similarly positive moderation effect only for some of the stakeholder categories.

Authors: Maurizio Zollo, Mario Minoja, Vittorio Coda

Journal: Strategic Management Journal 

We develop an integrative approach to the study of strategic management in a fourstep logical sequence. First, we discuss one of the rare conceptual frameworks of integrated firm strategy introduced by Coda (1984). Second, we focus on competitive, growth, and stakeholder strategies and identify four integrative mechanisms underlying the creation of joint outcomes from the combination of different strategic choices. Third, we study how these mechanisms might allow specific binary combinations of strategic choices to create higher levels of value for stakeholders. Lastly, we study the likelihood of alternative threeway bundles of strategies to generate the highest expected value. This analysis identifies two bundles of strategic decisions that can potentially maximize performance outcomes.

Author: Christine A. Hemingway

Book Series: Research in Ethical Issues in Organisations, Volume 21

The approach comprises two main points. First, it is argued that corporate social responsibility (CSR) develops within organisations, over time, in four general phases. Also, that practitioner attitudes are moving away from the dominant phase of social responsibility as public relations activity (Hemingway, 2013). The financial crash of 2008 was the catalyst for this marked gear shift in the awareness of organisational ‘ethics’ and ‘morality’ (SR) that was previously confined to the concerns of the business ethics scholars. Second, that, in general, the legitimacy and credibility of SR in business schools has been lagging behind that shift; due to misunderstandings about its relevance, the obsession with performance metrics and a lack of political will in some cases. Ways forward are suggested for research, teaching and practice.

Author: Hemingway, C.A. and Starkey, K.

Journal: The Journal of Business Ethics

This article uses the life stories approach to leadership and leadership development. Using exploratory, qualitative data from a Forbes Global 2000 and FTSE 100 company, we discuss the role of the turning point (TP) as an important antecedent of leadership in corporate social responsibility. We argue that TPs are causally efficacious, linking them to the development of life narratives concerned with an evolving sense of personal identity. Using both a multi-disciplinary perspective and a multi-level focus on CSR leadership, we identify four narrative cases.

We propose that they helped to re-define individuals’ sense of self and in some extreme cases completely transformed their self-identity as leaders of CSR. Hence, we also distinguish the momentous turning point (MTP) that created a seismic shift in personality, through re-evaluation of the individuals’ personal values. We argue that whilst TPs are developmental experiences that can produce responsible leadership, the MTP changes the individuals’ personal priorities in life to produce responsible leadership that perhaps did not exist previously. Thus, we appropriate Maslow’s metaphorical phrase ‘A falling of the veils’ from his discussion of peak and desolation experiences that produce personal growth. Using a multi-disciplinary literature from social theory, moral psychology and social psychology, we present a theoretical model that illustrates the psychological process of the (M)TP, thus contributing to the growing literature on the micro-foundations of CSR.

Authors: Higgins, C., Tang, S., & Stubbs, W. Article in press. 

Journal: Journal of Business Research

Hypocrisy creates significant challenges for managers and stakeholders. Knowledge of its nature and causes is extensive; however, understandings of its implications for management practice are limited. This study draws on the transparency literature, notably Schnackenberg and Tomlinson's (2016) disclosure, clarity and accuracy framework, to show that the way in which information is presented affects the way hypocrisy manifests and how it can be addressed. We analysed the sustainability reports of three financial services companies in Australia over a five-year period and found that in addition to minimising duplicity, transparency can increase engagement with the competing expectations facing companies. Despite its limitations, sustainability reporting offers insights in to the nature, causes and implications of organisational hypocrisy.

Authors: Uzoma Ojike and William R. Sheate

Journal: Journal of Environmental Management

This research explored the use of spatial analysis and ecosystem services to aid the decision-making process at local level.  The aim was to outline a more holistic approach to sustainability that ensures the interactions and interdependencies of relevant factors are considered in the decision-making process and to develop more appropriate policies. Using a regeneration case study, this research employed the use of spatial analysis tool, Geographic Information System, to map and quantify the impacts of the regeneration scheme on ecosystem services and associated sustainability issues, and, subsequently, impacts of the local community. Furthermore, this was used to develop policies to mitigate these impacts. The results of this research developed a framework for integrating ecosystem services at project level, a checklist for practical application and simple quantification for ecosystem services to aid in decision making.

Authors: Maurizio Zollo, Alessandra Dodich, Vincenzo Vastola, Nicola Canessa, Chiara Crespi, Daniella Laureiro Martinez, Stefano N Cappa

Journal: WP

Addressing sustainable development challenges requires fundamental shifts in the individual capacity to anticipate and embed the long-term and collective consequences of decisions and actions. This paper contributes to the identification of effective learning processes aimed at influencing the development of sustainability-related dispositions. To do so, we test the relative effectiveness of meditative training, compared to passive and active controls, on the development of sustainability-related decision outcomes and associated neuro-psychological dispositions. A randomized controlled trial (RCT) with 80 graduate business students finds evidence of the efficacy of a 4-week, 16-hour, (sahaja yoga) meditation training in enhancing sustainable decision-making and related psychological dispositions (self-transcendence, cooperativeness) and reducing Machiavellianism (willingness to manipulate others against their self-interest). The data also show neuro-plastic adaptation of grey matter density in the right inferior frontal gyrus, connected to attentional and emotional self-regulation, as well as conflict resolution in decision-making, including inter-temporal trade-offs.

AuthorsBrusoni S., Laureiro D., Tata A., Zollo M.

Journal: Journal of Management Studies (2019)

This study builds upon March and Simon’s proposition that individual‐level differences must be considered when explaining decision‐making performance. We extend their discussion on the importance of decision‐makers’ attention to explain heterogeneous patterns of exploration and exploitation within the same uncertain environment. We develop a model of decision‐making under uncertainty in which ‘working memory’ – i.e., the ability to hold multiple elements in mind to actively process them – explains the emergence of heterogeneity in exploration‐exploitation choice patterns. We validated the model in a laboratory study and two replications involving 171 individuals. Our findings show that differences in working memory allow us to identify individuals who are more likely to choose exploration over exploitation appropriately, and thus achieve higher performance. We discuss the implications for management theories, and re‐propose the work of March and Simon as a unifying framework that still can be used to generate and test managerially relevant hypotheses.

AuthorsCambrea, D.R., Tenuta, P., and Vastola, V.

JournalManagement Decision, published online (2019)

The purpose of this paper is to investigate the impact of gender diversity on corporate cash holdings by scrutinizing different positions covered by female board directors.

AuthorsDodich A, Zollo M, Crespi C, Cappa SF, Laureiro Martinez D, Falini A, Canessa N. et al.

JournalBrain and Behavior, Vol: 9, ISSN: 2162-3279 (2019)

While cross‐sectional studies have shown neural changes in long‐term meditators, they might be confounded by self‐selection and potential baseline differences between meditators and non meditators. Prospective longitudinal studies of the effects of meditation in naïve subjects are more conclusive with respect to causal inferences, but related evidence is so far limited.

Here, we assessed the effects of a 4‐week Sahaja Yoga meditation training on gray matter density and spontaneous resting‐state brain activity in a group of 12 meditation‐naïve healthy adults.

Compared with 30 control subjects, the participants to meditation training showed increased gray matter density and changes in the coherence of intrinsic brain activity in two adjacent regions of the right inferior frontal gyrus encompassing the anterior component of the executive control network. Both these measures correlated with self‐reported well‐being scores in the meditation group.

The significant impact of a brief meditation training on brain regions associated with attention, self‐control, and self‐awareness may reflect the engagement of cognitive control skills in searching for a state of mental silence, a distinctive feature of Sahaja Yoga meditation. The manifold implications of these findings involve both managerial and rehabilitative settings concerned with well‐being and emotional state in normal and pathological conditions.

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PowerPoint version available from Erkko Autio. This canvas builds on and extends the business model canvas by Strategyzer AG. Hyperlinks point back to Strategyzer. 



Authors:  Bammer, Gabriele, O’Rourke, Michael, Burgman, Mark et al

Journal: Nature

Published: 13 January 2020

Expertise in research integration and implementation is an essential but often overlooked component of tackling complex societal and environmental problems. We focus on expertise relevant to any complex problem, especially contributory expertise, divided into ‘knowing-that’ and ‘knowing-how.’ We also deal with interactional expertise and the fact that much expertise is tacit. We explore three questions. First, in examining ‘when is expertise in research integration and implementation required?,’ we review tasks essential (a) to developing more comprehensive understandings of complex problems, plus possible ways to address them, and (b) for supporting implementation of those understandings into government policy, community practice, business and social innovation, or other initiatives. Second, in considering ‘where can expertise in research integration and implementation currently be found?,’ we describe three realms: (a) specific approaches, including interdisciplinarity, transdisciplinarity, systems thinking and sustainability science; (b) case-based experience that is independent of these specific approaches; and (c) research examining elements of integration and implementation, specifically considering unknowns and fostering innovation. We highlight examples of expertise in each realm and demonstrate how fragmentation currently precludes clear identification of research integration and implementation expertise. Third, in exploring ‘what is required to strengthen expertise in research integration and implementation?,’ we propose building a knowledge bank. We delve into three key challenges: compiling existing expertise, indexing and organising the expertise to make it widely accessible, and understanding and overcoming the core reasons for the existing fragmentation. A growing knowledge bank of expertise in research integration and implementation on the one hand, and accumulating success in addressing complex societal and environmental problems on the other, will form a virtuous cycle so that each strengthens the other. Building a coalition of researchers and institutions will ensure this expertise and its application are valued and sustained.

Authors:  Arndt, Burgman et al

Journal: Conservation Research, Policy and Practice

We discuss the factors influencing the relationship between government policy-makers and scientists and how they affect the use of science in policy. We highlight issues related to context, values, culture, timeframes, communication and interpersonal relationships, providing insights from policy-makers and scientists. A spectrum of working strategies is given with examples of practical mechanisms that improve the effective use of science in policy. The shared governance model is a relatively mature approach with the potential to overcome many of the barriers discussed. At its core, shared governance, or co-production, invites policy-makers and scientists to develop and manage research priorities collaboratively. We explore the primary features of a successful shared governance arrangement, exemplified by the collaborative working model between the Australian Government Department of Agriculture and the Centre of Excellence for Biosecurity Risk Analysis. We conclude by outlining the advantages and disadvantages of the co-production of research priorities by scientists and policy-makers and present the learnings from its implementation in the biosecurity sector in Australia.

Authors: Vercammen, A. and Burgman, M.

Journal: Conservation Biology

Environmental decisions are often deferred to groups of experts, committees, or panels to develop climate policy, plan protected areas, or negotiate trade‐offs for biodiversity conservation. There is, however, surprisingly little empirical research on the performance of group decision making related to the environment. We examined examples from a range of different disciplines, demonstrating the emergence of collective intelligence (CI) in the elicitation of quantitative estimates, crowdsourcing applications, and small‐group problem solving. We explored the extent to which similar tools are used in environmental decision making. This revealed important gaps (e.g., a lack of integration of fundamental research in decision‐making practice, absence of systematic evaluation frameworks) that obstruct mainstreaming of CI. By making judicious use of interdisciplinary learning opportunities, CI can be harnessed effectively to improve decision making in conservation and environmental management. To elicit reliable quantitative estimates an understanding of cognitive psychology and to optimize crowdsourcing artificial intelligence tools may need to be incorporated. The business literature offers insights into the importance of soft skills and diversity in team effectiveness. Environmental problems set a challenging and rich testing ground for collective‐intelligence tools and frameworks. We argue this creates an opportunity for significant advancement in decision‐making research and practice.

Author: Jonathan Pinto

Journal: Current Opinion in Environmental Sustainability

This paper briefly reviews recent interesting work in the field of sustainable organizations research, encompassing domains such as institutional theory, resource-based view, stakeholder theory, framing, and paradox theory. Drawing on these it develops a Multifocal framework for developing Intentionally Sustainable Organizations (ISO), which, inter alia, incorporates and applies new concepts such as balanced bifocal stakeholder management and paradox approach to organization design to this field. It makes the case that the Icehotel in Jukkasjarvi, Sweden, is an ISO and presents evidence that it manifests all aspects of the theorizing in this paper.

Author: Jonathan Pinto

Journal: International Journal of Management Reviews

In this paper: One of the fundamental and recurring issues in performance management is the adoption of a simplistic, short‐term, narrow, metrics‐oriented approach, which often results in unintended negative outcomes, some of which could be disastrous. This paper makes the case that the key to preventing this syndrome lies at the intersection of paradox and stakeholder theories. Both theories encourage a more complex, long‐term, holistic, balanced approach to management. Stakeholder theory focuses on addressing the many (sometimes conflicting) goals of multiple stakeholders, and paradox theory provides insights into how this challenging task (i.e. of simultaneously addressing multiple conflicting priorities) can be accomplished. Thus, the former provides the ‘what’ and the latter the ‘how’ of effective organizational performance management. Accordingly, the literature at the intersection of both theories (composed of 69 scholarly outputs), was reviewed, and in so doing, identified seven domain areas and 21 constructs, all of which implicitly deal with either performance management or its communication, thereby lending support to this paper's thesis. The implications of this review for both theory and practice, including the role of paradoxical cognitive mechanisms, is discussed.

Authors: Dragana Radicic and Jonathan Pinto

Journal: Sustainability

Based on the two knowledge dimensions of availability and accessibility, this study investigates the influence of cooperation with external organizations on technological, product, and process innovations. Using longitudinal data from Spanish manufacturing firms, we estimate dynamic random-effects probit models and thus take into account that technological innovations exhibit persistent behavior. We find that cooperation with suppliers and universities is positively associated with both product and process innovations. However, sectoral analysis according to technological intensity reveals that cooperation with suppliers increases the propensity to technological innovation in industries with a higher degree of technological intensity, while cooperation with universities increases the likelihood of innovation in industries with a lower degree of technological intensity. Moreover, empirical results indicate a high degree of true or genuine state dependence in both types of innovations. Based on these findings, we discuss the theoretical, managerial, and policy implications of the study.

Authors: Rafael A. Calvo, Dorian Peters and Stephen Cave

Journal: Nature Machine Intelligence (2020)

Working Papers

Authors: Simone Cenci, Marek Rei, and Maurizio Zollo

Under Review

Authors: Zollo, M., Profeta, P., Amore,M., Trebelsi, L.

Details to follow soon

AuthorsZollo, M., Vastola V. Dodich A. Laureiro-Martinez D., Cappa S. Canessa C., Brusoni S.

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AuthorsVastola, V., Alonso-Martinez, D

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Authors Hemingway, C.A., Han. H., Vastola, V. and O’Neill, I.

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AuthorsBaker, K., Tang, S.,Sweatapple, C., Ward, S., & Butler, D.

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AuthorsTang, S., & Bowen, F.

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AuthorsVastola, V, Russo, A

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 Authors: Zollo, M., Profeta, P., Amore,M., Trebelsi, L.

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Authors: Zollo, M., Snoeren, P., Mahoney, J., Neuman, K., Bettinazzi, E.

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Authors: Zollo, M., Bettinazzi, E., Schjiven, M., Valentini, G.

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Authors: Zollo, M., Schreier, M., Prandelli, E.

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