We were happy when the authors of the Point essay invited us to respond to their call for a new, environmentally based, strategy paradigm. We enjoy lively dialogue and debate and believe that important insights often emerge challenging the conventional wisdom. Strategy has become a mature field and reexamining its core foundations makes sense. We ourselves are no strangers to this kind of exercise, having challenged strategy’s neglect of ownership (Foss and Klein, 2019; Foss et al., 2021) and transaction costs (Asmussen et al., 2021), the obsession with “flat hierarchies” among some organizational theorists (and practitioners) (Foss and Klein, 2022, 2023), and the entrepreneurship field’s emphasis on “opportunities” rather than Knightian uncertainty (Foss and Klein, 2012, 2018). In this case, however, we think Bansal et al.’s (2024) proposed reformulation of strategy research introduces more problems than it solves. While we appreciate their bold (and even polemical) challenge, the new strategy paradigm is deeply underspecified, making it difficult to draw out feasible changes to strategy theory and practice. Moreover, the call to replace economic or financial performance as the canonical strategy objective with vague and hard-to-measure environmental goals introduces or exacerbates the agency problems, cronyism, and rent-seeking that good management, governance, and public policy seek to mitigate. As such, we think “classic” strategy thinking has more to offer scholars, practitioners, and policymakers than the proposed new paradigm, partly because it remains unclear exactly what the proposed new paradigm is.

We explain these issues in our Counterpoint and add here some clarification and elaboration. We have additional quibbles with the Point, such as its claim that strategy suffers from an “ecological fallacy” (which we think is incorrect) and the idea that the strategy field is complicit in the ecological crisis (which we think is unsubstantiated). For the sake of brevity, we skip those secondary issues here.

The new, environmentally based strategy paradigm is underspecified.

In our Counterpoint, we questioned the value of tearing down the structure of existing strategy thinking without having anything concrete to put in its place. The Point authors reject huge swathes of theoretical and practical work on addressing climate and sustainability issues including “governance that internalizes externalities,” CSR, and the stakeholder perspective (Bansal et al., 2024). While we also have problems with parts of these literatures and approaches, we see them as (imperfect) attempts to deal with difficult environmental problems with realistic, actionable implications for consumer decisions, firm strategies, investment decisions, and government policy. The Point authors offer only vague substitutes for established thinking: they want their ideas to have real-world impact but offer few specifics on how to “rethink agency,” emphasize “collaboration” and “polycentric governance, “aim for sustainable development,” and “rekindle methods.” The blog post also operates at a high level of generality. Bansal et al. (2024) may see their ideas as so radical that the details can be worked out later. But the underlying issues have debated within “classic” management thought for a longtime, as the Point authors themselves recognize with their references to established literature.

Opening the door to cronyism

Organizations measure performance in different ways, and that is all to the good. Entrepreneurs often value autonomy, pursuing one’s dreams, and making a name as well as financial performance. Family firms provide employment for family members. Nonprofit and social ventures pursue a variety of goals. And yet, as scholars ranging from Friedman (1970) to Hansman (1996) (and we ourselves) have argued, the more subjective and less measurable the outcome, and the more key stakeholders disagree about what to pursue (or even who gets to decide), the harder it is to run the organization effectively. The difficulties in measuring CSR and ESG, let alone something like corporate planetary impact, are well known (King and Pucker, 2021). Imagine now we charge firms with protecting “the regenerative capacity of the Earth” or more generally, “making life worthwhile” (Andrews, 1971), and tasking government regulators as monitors and enforcers.The likely result is increased rent-seeking (for favored regulatory treatment), corruption and cronyism (as firms prosper not from satisfying consumers, but from satisfying the various environmental raters and evaluators), and a system of politicized capitalism (or even worse, socialism) that substitutes the preferences of state planners for those of consumers and producers.

The Editor’s introduction (Wickert and Muzio, 2024) chides us for highlighting these and other costs of stricter environmental regulation without also emphasizing the costs of market-based solutions to environmental problems and the dangers of “corrupt, greedy, and selfish business leaders.” But our point was to illustrate the need for a comparative institutional analysis by correcting what we saw as the Point piece’s unbalanced critique of markets and silence on the downsides of regulatory solutions. And of course we didn’t neglect private-sector corruption—that’s is exactly why we mentioned cronyism which we think is exacerbated by the Point authors’ new direction!

The Point is unnecessarily “alarmist.”

We noted elements of “alarmism” in the Point piece, though we used that term just once, in the abstract of our Counterpoint. The introduction to the Point-Counterpoint(s) exchange took issue with that word, claiming that we misrepresent the IPCC report, that we are “relaxed about the severity of the problem” as well as the “solutions” we “devise,” and that the other Counter-point “indeed exhibit[s] that level of alarmism which would probably leave Foss and Klein gasping.” We were surprised that the editors wrote what is essentially an independent contribution to the debate, rather than the usual, balanced overview, something the Point authors note as well in their blogpost. Because Bansal et al. (2024) also defend themselves against charges of “alarmism” in their blogpost, we should clarify what we meant.

First, “alarmism” in the context of climate debates usually refers to calls by activists like Gretha Thunberg or Just Stop Oil activists for instant, dramatic actions (such as cutting net carbon emissions to zero, immediately) that go far beyond the current political agreements. This is a normative and political position that is not consistent with recent research or consensus documents such as the IPCC report. Second, our Counterpoint doesn’t challenge the notion that climate change is real and will have consequences, many of which will be undesirable (other consequences may be beneficial). We think the main value of strategy is analyzing the benefits and costs of alternative policies (including encouragement of private-sector solutions). We favor careful assessment of these á la the Copenhagen Consensus.

The privileged position of the Point

Despite a range of policy initiatives to reduce the use of carbon-based, nonrenewable energy sources, the world’s use of carbon-based energy is projected to increase until at least 2030. Of course, this has nothing to do with the strategy field and, even if somehow the Point authors’ new strategy paradigm would emerge over the next few years, it would not change this situation. As we emphasize in our Counterpoint, the main reason for the increasing use of fossil fuels is the continuing industrialization of emerging-market economies and the consequent rise of the global middle class and sharp, ongoing reductions in poverty—in short, an expanding world population wishing to live better lives. This is where the “blame” for climate change driven by fossil fuels should be placed.

Because it is uncomfortable for people in wealthy countries to deny to others the same fossil fuel–driven prosperity they have enjoyed, the finger often gets pointed at Big Business, capitalism—or the strategy field. As we noted in our Point, “The overarching problem is how we sustain the economic growth that will continue to reduce poverty and improve lives while dealing appropriately with the various externalities that this economic activity naturally brings about.” Oddly, Wickert and Muzio’s introduction to the exchange implies that we neglect distributional issues. On the contrary, we don’t want to deprive people in the Global South of the lifesaving benefits of economic growth, which is exactly why we warn against reorienting strategy thinking to a perspective we think does exactly that. Defining a path forward that considers both the benefits and the potential costs of economic growth (including environmental impacts) is, as we said in our Counterpoint, “best served by the existing literature, constructs, frameworks, and theories on externalities, market and government failures, and other ideas from conventional strategy, entrepreneurship, organizational economics, and institutional theory. The underlying issues are too important for new and untested paradigms.”