Sustainability in Global Business - Research Paper Example

Sustainability in Global Business Contents Contents Introduction 2 Future business scenario rationale 3 Major challenges 6 Sustainable innovation strategy 7 Concluding remarks 9 References 10 Introduction This study shall focus on sustainability of global business in 2050. There is a fluctuating scenario of business trends in global context. Demand and supply plays a major role in determining whether a business will be successful in long term or not. Global players are emerging from across the world and this in turn is changing geopolitical landscape. The rapid rise of political and economic conditions of some countries in the future years shall be dependent on large populations and high economic growth. A business can be stated as sustainable if it has minimal impact on local or global environment, community, economy or society. In global context a business should strive efficiently in order to meet triple bottom line. Sustainability can be achieved by global business if sustainability principles are incorporated in business decision making, environmental friendly goods are supplied by firms, traditional competition is managed more efficiently and business is highly committed towards environmental principles. This study shall focus on major challenges that would be faced by firm in nearby future. It would even encompass a sustainable innovation strategy which will help in providing competitive advantage and value in 2050 business scenario. Future business scenario rationale Globalization has provided immense opportunities to many large organizations. Growing interconnectedness resulted from globalization that was highly reflected on flow of technology, information, services, people, goods and capital across the globe. Certain aspects of globalization will be altered in the coming years but revolution of information technology shall remain unaltered. The mega trend is expected to shape substantiality of a firm. Around the world developing and developed countries would benefit from world economy gains (Andersen, 2006). Fastest growing consumer markets would initiate growth of world class multinationals. Western countries are focusing on international economic dynamism. Adaptability and accessibility of advanced technology would increase by 2050. Vision for 2050 is to develop such business environment that can lessen the impact on environment (Bennett, 2006). Figure1 represents the population growth by 2050. Macroeconomic scenario encompasses numerical GDP projections, sectorial activity, population and household income. Figure 1: Population of EU (Source: Grant, 2002) There are 22 sectors within EU member states. These sectors comprise of 10 energy intensive industries, 3 service sectors, 6 non intensive energy firms and energy supply and agriculture sector. Figure1 states the projection of population growth and this increase in percentage clearly indicates that fertility rates will increase above life expectancy gains. Increase in population even outlines that market opportunities will increase for a firm in European Union (De Wit and Meyer, 2004). Simultaneously it can be assumed that there will be significant rise in population across the globe. GDP projection of EU as highlighted in figure 2 highlights the trend of recovery from economic crisis. From 2010 to 2050 it is expected GDP per capita shall show an increase by 1.7 (Ferguson and Ferguson, 2006). Labour supply on the other hand is greatly associated with declining or slow growing population due to ageing. Figure 2: GDP of EU (Source: Haberberg and Rieple, 2005) As per the projections shown in figure 2, the highest growth rate is observed in time interval of 2015 to 2030. On the contrary declining labour force and productivity growth shall result into lower growth in overall context. The industry wise growth as per EU vision of 2050 has been outlined in figure3. Figure 3: Economic Structure of EU (Source: Henry, 2011) Figure 3 clearly states that service sector is bound to witness a rapid pace of growth for the coming years. Future business scenario is more favourable in service or non energy intensive industry in comparison to other sectors. It can be stated that businesses operating during 2050 needs to be more concerned about advanced technology and reduced environmental impact (Hitt, Duane and Hoskisson, 2012). On basis of the projection it can be outlined that share of respective industries will witness a turmoil. Less of labour availability might negatively impact business but rise in projected population or GDP clearly portrays a desirable growth in consumer product sector or services. There is one sector which is likely to decline in the coming years – construction industry. The major reason behind this is low demand and demographic changes (Joyce and Woods, 2005). On the other hand, equipment goods industry is more likely to be the most profitable segment in 2050. This is due to high rise in demand and shift in global trend towards creative or modernized equipments. Food and beverage industry is also likely to witness a major growth in the future (Peng, 2013). However in European member states textile industry is bound to witness failure due to highly competitive world regions. Major challenges Political, legal, environmental and economic factors are likely to disrupt market position of a firm. These factors are taken into consideration while setting up a business in a new region. For instance expansion of Unilever into any geographical region demands for a stable political condition. This kind of stability can only be achieved when political environment is well aligned with business objectives or goals (Ulwick, 2005). Economic conditions outline the GDP growth, household income, availability of funds or rather purchasing power of consumer market. It can be stated that instable economic scenario results into failure of a business in a specific region. Environmental standards are a matter of concern for many firms such as Volkswagen and Unilever. The reason behind this is product manufacturing process in both these firms greatly affects external environmental conditions (Simerson, 2011). Every country possesses certain environmental norms and regulations. An organization setting up its business in a location needs to obey such laws in order to sustain their operations for long term. Legal factors are also country specific but in some dimensions there are great deal of similarity. Like employee conditions are similar for firms operating in global market (Wintzer, 2007). On the other hand, ethical standards have to be maintained by a firm to deliver high quality products to customers. A direct risk for an organization in coming years would be in context of socio political and environmental risks. There are certain positive changes which are likely to happen by 2050 in business environment scenario. However the major challenge for global business in the nearby future is raising environmental concern (Stonehouse, Hamill, Campbell and Purdie, 2000). Firms need to adopt best strategies so as to meet environmental standards and achieve sustainability. Increasing rate of industrial growth will create a negative impact on environment. This affect cannot be reduced to a great extent. It would appear to be a challenge for global business since they need to explore market opportunities without polluting environment. Socio-political conditions are also likely to change in the coming years. This is simply because more laws or regulations would emerge in 2050 (Thompson and Strickland, 2003). Social conditions are closely knitted with customer behaviour, attitude and perceptions. These factors are beyond control of a firm and cannot be eradicated efficiently from the system. On the other hand, intense competition in global market will enhance the level of these challenges to be faced by global business in 2050. Sustainable innovation strategy In the present scenario firms basically focus on innovation strategy to compete in global market place. This study has highlighted the business environment of 2050. Innovation and technological advancements will be an area of prime focus in the coming years. In order to sustain business operations globally it is essential to implement such a strategy that can facilitate exploring maximum market opportunities. Political conditions are expected to project a fluctuating condition in the coming years. The best way to eradicate this issue is by collaboratively working with government (Lasserre, 2003). Government conditions needs to be analyzed appropriately by global business. These regulations or norms needs to be incorporated within business framework. It would support a business to achieve long term goals or objectives. A sustainable strategy is one which enables a firm to achieve short term goals as well as sets a platform for future objectives. In political context this form of strategy can be framed by being aligned with government’s mission and values. On a broader context political conditions cannot be controlled by a firm and any political issue can only be resolved through maintain ethical standards (Mcfarlin and Sweeney, 2008). Environmental limitations can also be dealt effectively by adopting best standards or practices. Technological advancements will be witnessed in the future years and global business has to determine a medium through which business goals can be achieved and environmental impact can be reduced. Scarcity of natural resources shall be a major problem for global business in 2050. This can be prevented by focusing more on renewable resources and developing concept of optimum utilization (Cummings and Wilson, 2005). Resources need to be utilized effectively so as to ensure that there is no scarcity for other firms. Utilization of technology based devices might help in eliminating the problem of natural resources. It can enable a firm to focus more on business strategy and objectives. Environmental degradation of a region can be prevented by operating ethically. These ethical standards will not only comprise of taking into consideration customer interests but even societal interests. Business operations need to be performed in such a manner that maximum benefits are created for society, community, customers, etc. Ethics play a major role in this context as common interests can only be addressed by following ethical standards. Flexibility is an essential component for firms going to operate in 2050 (Mintzberg, Ahlstrand and Lampel, 2008). Global business needs to constantly upgrade its market situation by adopting advanced technology within its system. Innovative strategy for achieving sustainability is to have accessibility of modernized equipments and methods. For instance, companies like Volkswagen and Unilever is currently focusing on developing environmental friendly strategies so as to sustain their global operations until 2050 (Stacey, 2005). On the other hand, strategic approach is even inclined towards reducing labour capital so as to reduce overall manual error and increase pace of business operations. Concluding remarks Global business operations witness a lot of challenges in the market place. There are different business sectors which are expected to be profitable in 2050. A wide array of changes should be observed in global industry. The most profitable business segment in the coming years would be food industry, technical equipment industry, etc. However construction industry shall witness a declining growth in future years due to demographic changes. Textile industry in European markets is likely to witness a major turmoil in comparison to other region. The trend of market competition will even notice a shift due to growing customer expectations or demands. Technological advancements in the coming years will transform human capital into modernized tools or equipments. It can be stated on basis of projections that high GDP growth in EU will initiate success of many firms operating in this region. 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