Sustainability Performance - Essay Example

Running Header: Sustainability Performance Student’s Name: Instructor’s Name: Institution: Course Code: Date of Submission: No. of Words: 2781 Executive summary This report was commissioned to study into the sustainability performance policies and practices in their effectiveness in different organisations. The report chose to use two international banks namely: Barclays Bank and Standard Chartered Bank as case studies. This report has established that for many years many organizations have been faced with the dilemma on how make good use of the available resources for optimal and sustainable performance. Further, it has been found out that Even though the executives are very much aware of some of the underlying environmental and social aspects that will be used to address the various stakeholders’ interests especially those of the employees, they only put their focus in just 1 year let alone 2 years or even six years interests. Sustainability in performance is at the core of the companies’ business. In addition, the two banks have been in operation for over 150 years and about 90% of their profits are derived from Asia, Africa and the Middle East. In general, Top leadership in the companies, supports employee engagement by creating a comfortable environment to work in. in addition, the staff is encouraged to demonstrate good behaviors. Finally, the communication structure is also very favorable and employees are talked in a very enthusiastic manner. Introduction In many years, many organizations have been faced on the dilemma on how they should manage their resources for future growth and sustainability. This is perhaps because of the prevailing operating environments which have continued to evolve. Research has shown that many of those organizations that have managed to work sustainability performance issues like the environment, ethical and social polices have managed to make significant improvement in their overall performance. Through good policies, organizations stand a better chance in succeeding both during hard and booming economic times. This is to mean that environmental and ethical and social policies are used to prepare organizations in difficult times ahead. Indeed unpredictable operating environment, demands for enactment of proper policies for the business is very critical. In particular, good governance, leadership and business development, should be key focus in addressing issues related to sustainability performance (Deegan 2004). In many instances, successful businesses tend to focus on long-term policies rather than going for short-term deals which do not ensure sustainability of the business in the long-run. The objective of this report is to evaluate the effectiveness of sustainability performance policies and practices with regard to the Standard Chartered and Barclays Bank and then provide recommendations that will be used by the planners in the banking sector to enhance sustainability in performance. Background information Much has been discussed about organizational stability development. This follows the trend where different business executives engage their businesses in short-term goals without putting more emphasis the way the company will look like in the next years or so. In particular, the business executives are more interested in making big business bonuses in a very short while by taking advantage of the prevailing market fluctuations and the customer base without taking into account the effects of all these actions to the business in the long-run in terms of environmental and ethical and social sustainability. Even though the executives are very much aware of some of the underlying environmental and social aspects that will be used to address the various stakeholders’ interests especially those of the employees, they only put their focus in just 1 year let alone 2 years or even six years. Research shows that many of the businesses after taking off do not reach maturity because of the underlying management challenges and greediness to take advantage of short-term opportunities that the environment presents. Research has further shown that over 75% of those businesses that have long-term plans reach maturity and make good returns for the business unlike their counterparts who wait for the opportunities to emerge. In general, the policies and practices underlying proper environmental and ethical and social management are very critical in ensuring sustainability of the organization even in the long-run. This is because these policies are used to shape the future that the business wants. Sustainability performance Definition: Even though there is no commonly agreed definition of the term sustainability performance in organizations, many of the scholars at a point agree that such elements as organizational resources such as people, finances, environmental and other ethical and societal factors should appear in the definition of the terminology. This is to mean that environmental and social issues are particularly regarded as key pillars to realizing sustainability in performance. In order to better understand the definition sustainable performance, organizations also need to factor in what entails focusing and agitating adaptation to the emerging business opportunities and challenges, the role of employees in achieving sustainable development and how they should be treated as a very essential asset, and the organizational structure that takes into consideration the business needs and the ways in which the available capabilities can be improved. Review of literature It is not sufficient to claim that the organization has achieved a higher performance without taking into account what is required to sustain that high performance. In any given time whenever the business performs highly, it is always important to evaluate the internal factors such as employees’ commitment and capabilities and the external environment occurrences that may interfere with sustaining good performance. Sustainability performance policies and practices in an organization are expected to be put in place in order to address the social and environmental needs in order to ensure that good performance is sustained for long. According to De Waal’s (2006), the definition of high performance is very critical. This is because it highlights the importance of having various policies and practices that can be enacted in order to sustain this performance. High performance in organizations means good financial results as opposed to those posted by the peers in the industry for relatively longer period. In order to adapt to this, the business executives ought to look into ways the organizational structure can be realigned towards improving and enhancing the available capabilities. The ethical and social policies and practices within the organization are aimed at ensuring good people management practices are emphasized on. The importance of ethical and social policies is to people at work place are treated fairly and honesty and integrity prevails when comes to the matter of handling the workers. This expects that employee development should be given priority. This can be done in so many different ways. First and foremost, the policies address fair work place where every employee is regarded and valued as key contributor to the overall performance. This is especially important in creating trust and loyalty at work place. Justice and fairness are also some of the elements that ethical and social policies should address. In addition, in any organization that wants to achieve and sustain high level of performance, ethical leadership must be the order of the day. This is to mean that in all the decisions the executive makes and enacts, must take into consideration the needs of other stakeholders and not only the shareholders. The workers care must be top among the organization priorities. A conducive working environment is created by those societal policies that advocate for respect for all employee rights. Further, need to balance between work and personal life should be addressed by the organizations. It’s ethical to create an environment whereby individuals can always have the opportunity to balance between personal life and work life. More importantly in ensuring that all social issues are address, ethical working environment demands that there be balance of interests among all the stakeholders and avoid any form of exploitation. This will especially work in cultivating the required employee motivation at workplace so as to work towards excellent results. Environmental policies and practices on the other hand seek to address the ways in which the companies address issues that surround both its internal and external environment. In sustainability performance, the environment under which the business operates in is very critical. It is important for the company to pay special attention the legal issues that it has to adhere to in terms of corporate social responsibility. This is particularly important in ensuring that the company is focusing on issues that are affecting the community by trying to improve the live of the people in the environment which it operates. This helps in building the company brand and image and consequently in a position to win the customer loyalty and trust. This will further translate into more business for the company. In addition, the environment is also composed of other forces such as the competitors who in this particular pose a very serious challenge to the company’s market. Addressing on external forces is very critical for any company that is interested in ensuring sustainability in its high performance. Further, environmental analysis of different factors such as entry of new companies into the industry and some other forces that may affect the overall performance of the business such as the disposable income of the company customers and the overall performance of the economy (Hassel et al 2005). Findings This research has established that sustainability in performance is at the core of the company business. This is because by all means the banks is dedicated in creating a business empire that is sustainable by focusing on ways in which shareholders’ value can be enhanced given good working relationships and partnerships with the customers. This is because the company is seeking in coming up with ways in which it can enhance and strengthen its relationship with the clients and the customers by ensuring that very positive social and economic impact is created for the business. In particular, the two banks are working towards positive impact by addressing three basic issues namely: contributing enormously to the economic growth of the environment in which it operates, enhancing the struggle towards achieving sustainable finance and finally in leading the way in community events. While enacting the companies’ operating policies, they pay particular attention in integrating the bank’s decisions to the processes that affect both existing and new customers. The banks believe that basic commodities such as water, food and energy availability greatly influence the health status and prosperity of people who are within their reach in places like Africa and Asia. The bank is of the view that by providing financial support to the society in a more effective and responsible manner will enable it create positive impact to the community and at the same time can be used as the instrument of change. Gill James, who is the Head of Sustainability in the Standard Bank, is of the view that this is one of the best approaches to ensuring sustainability in business performance according to AICPA, CICA and CIMA (2010). The banks have particularly taken this step as part of its strategy to keeping close its customer who it has served in a number of years. The banks are particularly concerned with the way they handles their internal operations and how they correlate with the overall performance of the business. The banks for over years have continued to record positive performance and believe that by doing all these, it’s the companies’ objective to ensure that their reputation is sustained and even built further. This is because the company believes that sustainability is all about addressing the interests of various stakeholders to the business. However, protecting these interests for better organizational performance is entirely a big challenge (ACCA and Corporate Register 2004). By taking into consideration the stakeholders’ interests, the company believes is better placed to take care of both environmental and social factors that may influence its performance. The company has also been identified as one of those organizations that make use of the SPM approach to monitor its activities. This is to ensure that everything is going as planned and is supportive to the company’s performance. It is evident that the two Banks are working on social issues more especially those that affect the employees, and the environmental and economic forces such as competition and existence of substitute products and economic forces such as the overall performance of the economy and its influence on the performance of the business. In addition, the companies have gone a step further to determine its sustainability goals and the ways in which they can be measured. This is primary done as a step to making sure that the pre-determined performance is achieved and sustained for a relatively longer period of time. This research has also established that the companies are working towards aligning their sustainability performance objectives against those of other companies as a benchmarking approach to determining their levels of performance with that of the industry (Accenture 2009). Discussion of results The banks have been in operation for over 150 years and about 90% of their profits are derived from Asia, Africa and the Middle East. The companies currently have over 140,000 employees from 125 nationalities. These profits are generated from both wholesale and consumer banking activities. The company’s sustainability in performance has been particularly attributed to way in which the companies value their employees and handles their engagement. This is because the companies recognize the contribution the employees make to the business more especially in the current challenging economic times (AICPA, CICA and CIMA 2010). Based on the review on the two companies’ operations, it has emerged that sustainable in performance by the company, has been as a result of number of environmental and ethical and social policies and practices that the business applies. The company emphasize on the need to focus on the customer who is an important stakeholder and who is part of the company’s operating environment. Customer focus helps the company to change its strategy to meet the ever changing customer demands. No doubt that excellent customer service is given priority by the companies, something that has helped create confidence among the consumers. The banks strongly believe that living by their values will continue creating a conducive environment to do business. The structure and consistency in employee recruitment and management are some of the tools that the companies use to sustain their performance. Top leadership in the company, supports employee engagement by creating a comfortable environment to work in. in addition, the staff is encouraged to demonstrate good behaviors. Finally, the communication structure is also very favorable and employees are talked to in a very enthusiastic manner. Recommendations Given the research findings, it has been established that the company’s long-term sustainability in their performance is attributable to their good governance and their policies and practices on environmental and social and ethical issues. However, there is need to go a step further and work on pending issues so as to ensure sustainability in performance is sustained even a very volatile operating environment (Lorraine et al 2004). The following issues ought to be addressed as part of the company’s effort to ensure sustainability in its performance: Workforce is very critical in any business. However, having such a big workforce without the necessary skills and knowledge may turn out to be a major cost to the business. In this regard therefore, it’s the companies’ obligation to create an environment whereby employees are allowed to share knowledge by peers in other companies. This can possibly be done creating cross-functional links where individuals will be able to relate freely. By doing this, it will be easy for the banks to enhance its customer focus strategies since most of the employees will have learnt various aspects that surround customer needs and how they can be provided for. Information sharing will also play a very major role in informing the company’s marketing intelligence. The companies also ought to come up with ways in which it can measure its performance across different cultural boundaries. This especially important in determining the different environmental and social issues that affect the performance of the business in particular regions. In addition, this will allow for benchmarking its performance especially with those companies that have global outlook and that have continued to excel in performance. Execution and alignment of the company objectives is one of the issues normally challenge many companies in terms of sustainable performance. In this regard therefore, there is need for the bank to ensure that sustainability in performance is not a responsibility for one individual but for everyone starting with the top management. Next, sustainability objectives need to be made more meaningful to each and every department within the organization. Finally, there is need to make sustainability a day-to-day agenda in the decision making processes. This will be important in reminding the management on their obligation towards the company’s performance. References ACCA and Corporate Register 2004, Towards Transparency: progress on global Sustainability reporting 2004, London, ACCA. Deegan, C 2004, “Environmental disclosures and share prices –a discussion about efforts to study this relationship” Accounting Forum, 28, pp. 87-97. AICPA, CICA and CIMA 2010, ‘Evolution of corporate sustainability practices: Perspectives from the UK, US and Canada’, Hassel, L., Nilsson, H and Nyquist, S 2005, ‘The value relevance of environmental performance’, European Accounting Review, vol. 14, pp. 41-61. Lorraine, N.; Collison, D. and Power, D 2004, ‘An analysis of the stock market impact of environmental performance information’, Accounting Forum, 28, pp. 7-26. Accenture 2009, ‘Optimizing Sustainability Performance Management’, ‘A word from the president’, Financial Management, January/February 2011. Read More