Climate: a changing environment for business

Even as the world is becoming accustomed to the reality of climate change, its impacts are experienced by organizations in the form of more and increasingly disastrous events like storms, droughts and floods, as well as slower changes like sea level rise or changing growing seasons. Unprecedented losses, coupled with equally unprecedented levels of uncertainty around future losses, are already generating major challenges for organizational decision makers. Core to these climatic changes has been the way in which industrial and economic systems have treated the Earth’s natural systems – referred to in the scientific literature simply as “business as usual”. We argue that there is an urgent need to develop the theoretical foundations that can to help firms prepare for surprise (King, 1994), that is, to prepare for the difficult to predict and severe changes which are expected to affect organizational environments. Toward this foundation, we introduce and define “Massive Discontinuous Change” (MDC) as a new and critical construct at the core of building a better understanding of organizational and strategic implications. We then examine applicable management theories for their contributions to inform business strategy in the face of massive discontinuous change, focusing specifically on work in sustainability management, risk management and organizational change. We argue that more of the same equates to business as ususal. The paper closes with suggestions for future directions for management research on massive discontinuous change.