New Study from PolyU Reveals Organizational Learning’s Critical Role in ESG Resilience

Business Wire India

Researchers from The Hong Kong Polytechnic University investigate the intricate interplay of risk management and opportunity management within ESG in their latest study. Co-led by Dr. Di Fan, the research offers valuable insights into the complex balance that companies grapple with during times of crisis.


Contrary to the popular belief that ESG directly correlates with firm performance, recent research suggests that risk management, a crucial aspect of ESG, might impede a firm’s adaptability. This revelation brings attention to the intricate tension between risk management and opportunity management.


In the latest research to be published in Production and Operations Management, a team of researchers delves into this intriguing conflict. Dr. Di Fan, a key researcher from The Hong Kong Polytechnic University, emphasizes the complexity of managing risks while seizing opportunities during a crisis. Companies must navigate safety standards while rapidly adapting to market changes.


The researchers examined data from 734 Chinese manufacturing firms during the COVID-19 pandemic and found that firms with OHSAS 18001 certification, an internationally recognized occupational health and safety management standard, faced challenges in quickly repurposing production. Dr. Yuxiao Ye, the lead researcher from Tianjin University, explains that while safety standards like OHSAS 18001 are crucial for employee safety, they may inadvertently limit a company’s agility during a crisis.


However, the research also offers hope. Dr. Di Fan highlights that prior manufacturing experience with related products, lessons from the SARS epidemic, and geographic proximity to medical supply producers can help mitigate the rigidity induced by strict safety standards.


Dr. Di Fan emphasizes the importance of building a learning organization. Learning from past crises and diversifying production experiences can help firms become more agile, leveraging past knowledge to inform future actions.


According to Dr. Yuxiao Ye, the key to resolving the tension between risk management and opportunity management lies in organizational learning and adaptation. Organizations that continuously learn and adapt are better equipped to navigate the complexities of crises effectively.


Amid rising ESG concerns, the study from Hong Kong Polytechnic University serves as a timely reminder for companies to carefully evaluate the interplay between their social commitments and adaptability. The research suggests that establishing a learning organization might be the key to achieving a delicate balance between risk and opportunity management, ultimately fostering a more sustainable and resilient business model.