Strategic Management - Business Strategy for Sustainable Development - Case Study Example

Strategic Management Individual Assignment By Introduction The concept of sustainable development has gained wider acceptance in the recent years as a result of growing concerns over environmental sustainability, optimised resource utilisation, and community welfare. This concept can be simply referred to the development strategy that attempts to meet the needs of the current world without hurting future generations’ ability to meet their needs (Purvis & Grainger, 2013, p.6). Today governmental and non-governmental organisations at different levels are striving to align the concept of sustainable development with their operational strategy so as to render enhanced services to the community and to promote consistent growth of the business (McKellar, 2010, p.136). To support and execute sustainable development in its broader sense, it is necessary for the management to achieve some strategic changes in terms of decision making processes, project cycle, and organisational culture (Business strategies for sustainable development, 1992). This could be attained through the implementation of a strategic environmental analysis system. This paper will discuss what a strategic environmental analysis system is and the essential analysis frameworks in the external and organisational environments. Strategic Environmental Analysis (SEAN) According to Kessler, “Strategic Environmental Analysis (SEAN) is a structured, participatory process to analyse environmental problems and opportunities for development, to identify main actors, and to define strategic goals at early stages.” (Kessler, 2000, p.136). The most notable feature of this system is that it tries to address the inter-relationship between environmental concerns and socio-economic development concerns (Erdmenger, et al, 2000, p.80). The SEAN considers the elements of different conceptual and environmental assessment backgrounds, such as strategic environmental assessment. Another potential feature of this framework is that it tends to be proactive by acting on the early stages of decision making instead of being reactive or defensive (Segnestam et al, 2003). Since SEAN is a potential framework to identify the areas of overlap between environmental and socio-economic development issues, it can better assist the organisation to develop effective but achievable sustainable development goals. SEAN is an effective way to set strategic priorities because it can minimise the complexities and uncertainties involved in the strategic planning process while at the same ensuring that critical issues do not go unaddressed (Dalal-Clayton & Sadler, 1999, p.na). A significant factor contributing to the popularity of this system is that it assesses impacts and defines norms based on human values, and therefore a humanitarian element is always present there. The long term objective of the SEAN is to include environmental concerns in development planning processes by promoting deep understanding of the environmental context and how it is linked to other dimension of sustainable development (Kjörven & Lindhjem, 2002). Development of a SEAN system When it comes to the creation of a strategic environmental analysis system, it is necessary to understand the five phases of the SEAN process including preparation, scoping, detailed studies, synthesis and planning, and follow-up and monitoring (Kessler 2003, p. 135). As the name indicates, the preparation phase involves the general orientation and preparation of the subsequent phases to come. In this phase, the management team also ensures that it has enough skills and expertise to undergo the subsequent phases effectively. A quick analysis is performed in the second phase (scoping) to identify the key issues and knowledge gaps that are posing serious threats to the sustainable development of the organisation. Subsequently, a detailed study of the key issues and gaps is conducted in the third phase in relation to the target group, actor, and/or region. In the synthesis and planning phase, the acquired information is synthesised to define strategic priorities, which in turn would act as inputs for a strategic plan. The final phase is characterised with setting-up of a monitoring system and development of a communication strategy. In this phase, the management team primarily focuses on the institutionalisation of the SEAN process. In order to carry out the SEAN process effectively, it is particularly important to consider some essential analysis frameworks in the external and organisational environments. Kessler provides a detailed analytical framework for the SEAN process considering the needs of the internal and external environments and it appears to be very helpful for creating a SEAN system. This analytical framework has four clusters including environmental context analysis, problem analysis, opportunity analysis, and strategic planning (Hughes, 1998, p.120). These four clusters are comprised of ten analytical tasks that can help the business to ensure that all relevant environmental issues are addressed adequately and cross-sectoral insights are generated (O’Donnell, et al, 2001). The Cluster I includes four tasks. In the Task 1, the key stakeholders are identified in relation to their environmental functions, which are classified as production, carrier, regulation, and cultural (Kessler, 2000). In addition, environmental functions are prioritised on the basis of perceived socio-economic value for stakeholders obtained from studies and analyses. In the Task 2, past and present trends of environmental functions are assessed separately by means of change in quantity and/or quality. A cause-effect framework will be used to analyse the interrelations between different environmental functions whereas relevant political, economical, social, and institutional issues are used to evaluate the changes occurred and how they are linked to environmental trends. An assessment of the impacts of the environmental trends is performed in the Task 3, considering the long-term consequences for current stakeholders, outside communities, and future generations. A trend impact matrix is subsequently used to synthesise results and to attain meaningful outcomes. When risks or economic impacts are measured in a qualitative way, the consequences for shareholders are assessed based on priority concerns such as returns on investments, resource conflicts, and equity. In the Task 4, the associated norms, standards, and thresholds are evaluated in two different perspectives such as bottom-line and ideal situation. The bottom-line focuses on when the current trends would lead to the failure of environmental functions or to unwanted changes in terms of economic or social criteria for stakeholders. The ideal situation reflects a desirable or favourable situation for different actors involved, with respect to environmental qualities and socio-economic values. A qualitative assessment based on different actors’ insights and views is often used because of the difficulty in assessing norms, standards, and thresholds. The Cluster II (problem analysis) is comprised of two tasks – Task 5 and Task 6. It is evident that Tasks 1-4 can assist the organisation to define its key environmental problems in a transparent manner (Groenewegen et, 1996, pp. 72-73). On a priority basis, each of the environmental problems identified should be explained in detail so as to make certain that there is a common understanding of the various aspects of the problem, which in turn is essential to analyse it causes effectively (Dalal-Clayton & Sadler, 1999). According to Kessler, Task 6 can benefit the organisation to establish a link between main causing activities, primary actors and their motivations, root causes, secondary actors, and tertiary actors. Similarly the Cluster III (opportunity analysis) also includes two tasks – Task 7 and Task 8. Task 7 is designed to identify the key environmental opportunities and to classify them as ecological, economic, and institutional. Such a categorisation can aid the organisation to recognise the most promising environmental opportunities and to take immediate steps to respond to them in a proactive manner. Here, packages of interrelated opportunities (which mean opportunities that are capable of reinforcing each other) are also developed to promote the sustainability of the business in the long term. In the Task 8, the opportunities identified in the previous task are elaborated on the basis of their potential to address underlying environmental problems and to add value to the concept of sustainable development. This task also requires the building of strategic partnerships for further realisation of opportunities depending on the opportunity-impact matrix. To set priorities, potentials and obstacles to realise opportunities in a sustainable manner are considered. The Cluster IV (strategic planning) is an integral part of the analytical framework and it involves two tasks- Task 9 and Task 10. In Task 9, a clear vision and strategic goals are set to synthesise information from previous tasks and to utilise them in the best interest of the organisation. In addition, the organisation alto tries to establish coalitions with strategic partners in an effort to perform the Task 9 successfully. The management team may also attempt to achieve the desired changes within the institutions involved through matching strategic choices with the outcomes of an institutional analysis. Finally, the Task 10 enhances the elaboration of a follow-up strategy, giving particular attention to the internal issues facing the organisation. In addition, an environmental monitoring system is established to ensure that the changes implemented are well coordinated and maintained in compliance with stated organisational laws and policies. The Task 10 pays increased attention to external communication and capacity building in order to improve the competitiveness of the firm in the marketplace. This analytical framework comprising of four clusters and 10 tasks is potential enough to meet the needs and wants of the external and organisational environments (Kessler, LEISA Magazine 2000). By performing all the 10 tasks effectively, the organisation can address its internal management issues and respond to the emerging opportunities and challenges in the external marketplace. “SEAN helps address in a systematic way questions that need to be answered when formulating a strategic plan.” (Bakker et al, 2005, p. 31). There are some key concepts that form the foundation of the SEAN process and analytical framework. In an organisational environment, opportunities and initiatives are considered as the strategic building blocks, and therefore, managements take effort to capitalise on the emerging opportunities for change and promising initiatives at different levels rather than simply managing perceived problems. In addition, there is a strong interrelationship between various sustainable development components, and therefore the management is required to focus on this strategic connection to promote the firm’s sustainable development in the real sense. Likewise, it is observed that a strategy would not be effective unless it collaborates with innovators that are ready to adopt improved sustainable development concepts and technologies, and hence strategic partnerships constitute the key concept influencing the SEAN process. Conclusion From the above discussion, it is clear that strategic environmental analysis, commonly abbreviated as SEAN, is a great strategic framework that can support the management decision making by focusing on the inter-relationship between environmental concerns and socio-economic development concerns. Evidences suggest that a well designed and implemented SEAN system can contribute significantly to the concept of sustainable development. Kessler has developed an analytical framework for the SEAN process to support its execution in the external and organisational environments. This analytical framework has four clusters that comprise ten different tasks. Opportunities and initiatives are generally regarded as strategic building blocks, and this concept is the key to the efficient performance of the SEAN system. In addition, it is vital to give particular importance to the concept of strategic partnerships while dealing with the creation of a strategic environmental analysis system. In short, SEAN is a great analytical system supporting sustainable development through defining strategic priorities and reducing the uncertainties involved in the strategic planning process. References Business strategies for sustainable development (1992) Based on Business Strategy for Sustainable Development: Leadership and Accountability for the 90s. 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