Concept of Sustainability and its Relationship to the Triple Bottom Line - Coursework Example

International Business Review and describe the concept of sustainability and its relationship to ‘the Triple Bottom Line.’ In your view, can neo-liberal globalised capitalism be reconciled with sustainable economic development? Introduction The aim of this essay is to examine whether the neoliberal and globalised capitalism can be reconciled with the concept of sustainable economic development. As a way of answering this question, a brief review of the concept of sustainability and its relationship to the notion of the triple bottom line for organisations is presented. Also, a brief review of the globalisation, its driving factors, process and effects are presented. Lastly, the question of whether the concept of sustainability can be reconciled with the current form of capitalism which is characterised by globalisation and neoliberal politics is addressed. The Concept of Sustainability The concept of sustainability arises from the nature of capitalism, which is to grow capital. In general, business organisations under the capitalist system are concerned with maximising profits by efficiently utilising their resources and reducing the costs that they incur in the course of their operations. Because business organisations operate in societies that are shaped by political, social and cultural values, business organisations have an influence on these factors of the society. Similarly, the operations of business organisations affect the various aspects of the societies in which the businesses exist. It is important to note that sustainability is not restricted to business organisations. Given that the activities of many other parties in the society affect the activities of business organisations, it follows that businesses, governments other parties are stakeholders to the issue of sustainability. In general, sustainability is defined as the approach to development that is characterised by the need to utilise resources carefully so that the motivation for making profits in the current times does not undermine the ability of the current and future generations to make profits in the future (Zollinger, 2007, p. 4). From this definition, it can be seen that the concept of sustainability defines the approach that should be used in pursuit of development. The focus of development, under the approach of sustainability, is to utilise resources with a focus on preserving the capacity of the resources to support the economic development of future generations. Neag and Bucata (2015, p. 18) note that the concept of sustainable development presupposes various approaches to the process of economic development. The same authors argue that under sustainability, the focus is on creating an environment that is compatible with the physical, social and economic environment. Also, the focus of sustainable development is on ensuring that organisations can make profits over the long-term (Neag & Bucata, 2015, p. 19). Thus, it can be seen that the concept of sustainability emphasises the need for the process of economic development to strike a balance with the other competing needs of social wellbeing and preservation of the environment. The Relationship between Sustainability and the Triple Bottom Line The notion of the triple bottom line refers to the approach that organisations should take when carrying out their business activities. The essence of the concept is that the objectives of organisations should be concerned with three key issues: the ecological environment, the welfare of the societies in which the organisations operate and the need for the organisations to be profitable (Wild & Wild, 2015, p. 31). Therefore, the triple bottom line notion means that instead of organisations being solely concerned with how to maximise their financial profits, they should focus their attention on how to address the environmental and welfare issues of the societies in which they operate. The basis of the concept of the triple bottom line is that organisations have symbiotic relationships with the societies in which they exist (Martens & Raza, 2010, p. 282). This implies that the activities that organisations conduct as part of their business operations affect the ecological environment as well as the welfare of communities. The operations of organisations, in this case, refer to production, marketing and other processes that are conducted as part of the mandate of companies. Also, it implies that the state of the society, the physical environment and natural resources have a direct impact on the activities of business organisations. Therefore, organisations can be sustainable by implementing the notion of triple bottom line in their operations. Neo-liberal Global Capitalism The term neoliberal global capitalism refers to the current economic system that has been largely shaped by the forces of globalisation. On the other hand, globalisation refers to the process of increasing level of political, economic, cultural and technological integration among institutions and economies (Wild & Wild, 2015, p. 32). What this definition implies is that as a result of globalisation, an increased level of integration among economies in the world is witnessed in the current times. Within the context of business organisations, globalisation is defined by the need for business organisations to access markets in various parts of the world and to access production facilities that exist in different countries (Wild & Wild, 2015, p. 32). In other words, globalisation, within the context of business operations, has shaped the manner in which companies produce and market their products. Now, businesses can outsource some of the activities in their supply chain that the organisations feel are non-core. Moreover, organisations can now access markets that are in various geographical regions, thanks to globalisation. To understand the concept of neoliberal capitalism, it is important to point out that globalisation takes place within the context of political decisions. In general, business organisations operate in societies which are governed by rules and regulations. The rules and regulations that exist in any society at any given time form a major factor that affects the operations of business organisations. Similarly, globalisation is a product of changes in the regulatory environment in various countries (Colander, 2006, p. 61; Rousova, 2009, p. 4). Changes in laws and regulations in different countries make it easy for businesses to offshore their non-core operations and access markets in various parts of the world with ease (Mayer & Gereffi, 2010, p. 3). Therefore, neoliberal global capitalism can be defined as the current global political and economic system that is characterised by the development of liberal politics across countries in the world as a way of enhancing the development of the world in which the economies are more integrated economically, politically, culturally and technologically. Sustainability and the Neo-Liberal Globalised Capitalism: Can the Two be Reconciled? To answer the question of whether or not sustainability and neo-liberal globalised capitalism can be reconciled, it is important to consider the necessity of reconciling the two. Globalisation presents particular problems to the society. The problems arise from the various aspects of globalisation and the manner in which they affect various sections of the society. A good example of the problems which globalisation causes in the society is the effect of the spread of multinational organisations on communities. One of the defining characteristics of globalisation is the rapid growth of multinational organisations that were once based in the west (Zollinger, 2007, p. 2). Because of technological and regulatory changes, such organisations can now access markets as well as spread the activities of their supply chains across geographical boundaries (Zollinger, 2007, p. 2). However, it has been argued that as much as globalisation, through the spread of multinationals, fuels overall economic development in different regions in the world, it also increases the level of inequality in different parts of the world (Zollinger, 2007, p. 3). This means that globalisation has contributed to economic development in the world but failed to ensure that wealth is distributed proportionately. The Economist (2007) observes that a typical example of inequality is the income disparity between business managers and the average employees of corporations across the world. It is further stated that although the value of top companies in the world has been increasing over time, thanks to globalisation, the gap between the rich and the poor has remained wide in many parts of the world (The Economist, 2007). As well, it is important to point out that the process and nature of globalisation contravene the basic principles of sustainability. Martens and Raza (2010, p. 281) argue that as much as globalisation may lead to a more integrated and economically prosperous world, it may jeopardise attempts to achieving social equity by fuelling income disparities across and between regions. It is also argued that globalisation threatens the ecological balance that exists in the world and that this presents various ecological problems (Martens & Raza, 2010, p. 282). Similarly, Berger (2014) points out that globalisation-related inequality has two major causes: disproportional increase in incomes and a fall in incomes among the poor in various parts of the world. Furthermore, it is observed that the sophisticated and integrated nature of the process of globalisation threatens the ecological balance of the world (The Economist, 2007). The pursuit of economic growth occurs at the expense of intense exploitation of the natural resources of the world and this has far-reaching ramifications to the society. Najam, Runnalls and Halle (2007, p. 11) identify several issues that underscore the unsustainable nature of the current form of neoliberal and globalised capitalism. It is argued that that since the current form of capitalism emphasises the need for exploiting finite resources at the global scale to fuel economic growth, it directly goes against the principle of sustainable use of global resources which are finite (Najamet al., 2007, p. 11). It is also argued that economic progress under globalisation has contributed to an unhealthy exploitation of natural resources and degradation of the ecological environment (Najam et al., 2007, p. 13). Interestingly, it has been pointed out that degradation of the external environment threatens the livelihoods of the economic poor in various parts of the world (Berger, 2014). This is the case for communities that directly rely on the natural environment for their sustenance. More so, Najam eta al. (2007, p. 17) point out that ecological degradation as a result of globalisation not only threatens the livelihoods of the affected communities but also poses danger to the lives of the wealthy. Therefore, it is clear that the need for reconciling the neo-liberal and highly globalised version of capitalism, which is currently in use, and the concept of sustainability arises from the observation that these two concepts contravene each other in the first place. The need for economic development that fuels globalisation works against the principles of sustainability. Also, the two concepts of sustainability and globalisation can be reconciled. In other words, it is possible to achieve sustainable development in the current age of globalisation. However, for the world to achieve sustainable globalisation, particular problems have to be addressed. The problems in question range from lack of the most appropriate theoretical models that can be used to reconcile neoliberal and globalised capitalism with the concept of sustainability to practical challenges on how sustainability can be incorporated in the process of globalisation. Makasi and Govender (2015, p. 342) are of the opinion that one of the major challenges associated with reconciling globalisation with sustainability relates to the lack of reliable theoretical models that can be used to achieve this objective. It is pointed out that in the current literature, it is evident that scholars disagree on how to define sustainable development as well as the actual aspects of globalisation that need to be sustained (Makasi & Govender, 2015, p. 344). The models that are in current use focus on defining sustainability in three basic ways: the welfare of the society, efficient use of natural resources and safety of the environment (Makasi & Govender, 2015, p. 344). Hence, sustainability is defined in terms of the needs of the society, the manner in which the natural resources are utilised and the extent to which the natural environment is protected from destruction. Regarding the manner in which sustainability should be measured within the context of globalisation, it is stated that there is a need to develop a composite index that can be used to determine the extent to which the world is progressing in a sustainable manner (Martens &Raza, 2010, p. 286). Currently, the Sustainable Society Index, which is an amalgamation of various indicators, is used to measure the extent to which societies are sustainable (Martens &Raza, 2010, p. 287). However, this indicator does not sufficiently measure the extent to which the globalisation process is occurring sustainably. Another important set of challenges that have to be tackled for the concept of sustainability to be reconciled with the current version of neoliberal and globalised capitalism relates to the practical aspects of the process of globalisation. Many authors have proposed various practical measures that can be taken to ensure that economic development that occurs alongside globalisation is sustainable. Importantly, these suggestions are based on how particular aspects of the process of globalisation can be reconciled with matching aspects of sustainability. For example, the United Nations Department of Economic and Social Affairs (UN DESA) (2013, p. 2) argues that there is a need for a radical shift in the development strategies that are in use, given the failure of the current strategies to help the world achieve sustainable economic development. It is further argued that rising inequalities, environmental disasters and other issues indicate that the current model of globalisation is not sustainable and needs to be changed (UN DESA, 2013, p. 3). On a different note, Waller-Hunter and Jones (2002, p. 54) state that for the current process of economic development within the context of globalisation to be sustainable, it is necessary to improve the manner in which policies are made and coordinated at the international level. Given that policies, as part of governance, are important determinants of the shape that the process of globalisation takes, it is important to ensure that the right policies are developed and implemented (Waller-Hunter & Jones 2002, p. 55). In the same vein, Neag and Bucata (2015, p. 19) stress the need for redefining the social and economic objectives of development within the context of globalisation. It is suggested that for global development to be sustainable, it is necessary to tackle the practical challenges of globalisation like the state of poor countries, the need for an adaptive legislative environment and to restructure production processes to match the needs of the society and the environment (Neag & Bucata, 2015, p. 19). Conclusion The main conclusion that can be drawn from the discussion is that it is possible to reconcile the concept of sustainability to the current form of capitalism that is defined by the use of neoliberal politics and globalisation. In other words, it is possible to achieve sustainable economic development that takes into account the needs of the ecological environment, the society and the main purpose of organisations, which is to increase capital. However, for this approach to be successfully implemented, it is important that the main issues of concern be addressed. Various issues that make it difficult for the current model of capitalisation to be sustainable have been identified. Essentially, globalisation, which is characterised by an increased level of integration among nations and the growth of multinational corporations, has led to economic prosperity. However, the process has compromised the ecological environment, natural resources and the welfare of communities in various regions of the world. Therefore, for globalisation to be reconciled with the concept of sustainable development, there is a need to first develop the right theoretical models that can be used for the purpose. Also, it is necessary to address the practical aspects of how the process of globalisation should be governed as a way of making the current form of neoliberal and globalised capitalism sustainable. References Berger, N. (2014, June 23). Theorist Eric Maskin: Globalisation in increasing inequality. The World Bank, Feature Story. 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The effects of globalization on sustainable development and the challenges to global governance.Paper on behalf of the Swiss Agency for Development and Cooperation (SDC) on the occasion of the Certificate Course “Sustainable Development” at the University of Berne.Retrieved from http://www.kingzollinger.ch/pdf/uz_referat_e.pdf Read More