Strategy Meets Sustainability

How Mathematical Frameworks Can Enhance Strategic Analysis for Sustainable Development

Abstract

Sustainability pressures are profoundly reshaping competitive landscapes across industries. Organizations face growing demands from regulators, stakeholders, and markets to integrate sustainable development into their strategic decision-making, moving beyond compliance toward genuinely sustainability-informed competitive strategies (Sedovs, Volkova & Ludviga, 2025). In this context, the analytical frameworks through which managers model competitive situations become critically important, as they determine which factors become visible in strategic reasoning and which remain hidden. Among the most significant mathematical paradigms used to model competitive interactions, two stand out as foundational: game theory and systems theory. The former models competition as strategic interactions between rational actors seeking optimal outcomes (Ramani & De Giovanni, 2026), while the latter models competition as dynamic behavior emerging from feedback loops, accumulations, and circular causality (Weaver et al., 2025). Both paradigms have been applied to sustainability-related problems, and each offers distinct analytical capabilities supporting sustainability integration into strategic reasoning.

Nevertheless, many organizations still struggle to meaningfully connect sustainability to their competitive strategic reasoning (Sedovs et al., 2025), in part because strategic management remains anchored in a firm-centric paradigm that privileges short-term performance over long-term systemic outcomes (Bansal et al., 2024; Davis & DeWitt, 2025). While organizational and cultural barriers are well documented, less attention has been given to the role of mathematical modelling frameworks as enablers of sustainability integration, and to how formal representations of competitive situations can make sustainability factors visible, quantifiable, and actionable within strategic decision-making. This paper addresses that gap by examining how game-theoretic and systems-theoretic frameworks can support the integration of sustainable development into strategic management, aiming to develop a conceptual framework that demonstrates how each paradigm contributes to making sustainability an integral part of competitive strategic analysis.

To this end, the study employs a semi-structured literature review, integrating literature from mathematical modelling of competition in strategic management and sustainability science, an approach consistent with recent research highlighting the need for integrated analytical frameworks in sustainability-oriented strategic management (Weaver et al., 2025; Sedovs et al., 2025). This design enables a structured comparison of each paradigm's analytical capabilities while drawing on interdisciplinary insights.

The resulting framework is structured around four analytical lenses: (1) temporality, from game theory's sequential and repeated interaction models to systems theory's continuous dynamic modelling; (2) causal structure, contrasting linear strategic reasoning with circular causality and feedback loops; (3) accumulation and depletion, exploring how each paradigm captures resource stocks and environmental degradation over time; and (4) decision orientation, comparing optimal move identification with adaptive intervention in system structure.

By shifting focus from values-based and reporting-oriented approaches toward the analytical foundations of strategic reasoning, the paper demonstrates that mathematical frameworks are not merely technical tools for competitive analysis but essential enablers of sustainability-informed strategy.

References

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Davis, G. F., & DeWitt, T. (2025). Can strategy address the climate crisis without losing its essence? Journal of Management Studies, 62(2), 1003–1013. https://doi.org/10.1111/joms.13083

Ramani, V., & De Giovanni, P. (2026). Circular economy business strategies and public schemes: A game theory-based survey. International Transactions in Operational Research, 33, 2827–2869. https://doi.org/10.1111/itor.70031

Sedovs, E., Volkova, T., & Ludviga, I. (2025). Sustainable development and strategic management: What is on the horizon in our non-ergodic world research? Sustainable Futures, 9, 100414. https://doi.org/10.1016/j.sftr.2024.100414

Weaver, M., Fonseca, A. P., Tan, H., & Pokorna, K. (2025). Systems thinking for sustainability: Shifting to a higher level of systems consciousness. Journal of the Operational Research Society, 1–14. https://doi.org/10.1080/01605682.2025.2486698