Sustainable Business in Sustainable Society - Literature review Example

Sustainable Business in Sustainable society

• Introduction

The sustainability of a business operation involves long term thriving of the venture. In order to ensure that, the organizations create a harmonious relationship with the stakeholders, that includes the customers, employees as well as the society and the government (Finkbeiner et al., 2010). The sustainable nature of a business venture suggests that the company has designed its operations in such a way that the firm and the industry will sustain for a long period of time. In order to accomplish that, the firms often ensure that all the supporting factors which are responsible for the success of the business are taken care of, in order to sustain the symbiotic relationship between them (Thomas and Lamm, 2012). This paper talks about the idea that suggests that the only viable future for the business organizations is to become a sustainable business within a sustainable society. In this context the concept of CSR has been discussed and the proposition of the idea that it is motivated by profit making. The strategic options for an organisation in terms of its viability of being a sustainable company have been covered.

• Discussion
  • Sustainability

According to Smith (2011), the sustainability of an organisation is associated with its ability to thrive its business for a long time by making sure that it can successfully face all the challenges posed by the macro and micro environment in which the company operates. These challenges include being supported by the stakeholders and to create a strong corporate image of the firm, which is highly essential for developing a competitive advantage that is essential for its survival in the industry. Benn, Dunphy and Griffiths (2014) have further mentioned that the sustainability can also be discussed in terms of the society and the environment. The firms take initiatives to make sure that the society or community in which it operates is being taken care of so that they can continue their operation seamlessly and make future growth (Thomas and Lamm, 2012). In terms of the stakeholder theory, it has been mentioned that any entity that is directly or indirectly influenced by the business operations of a company can be called the stakeholder (Brower and Mahajan, 2013). Typically the stakeholder of a company includes the customers, the employees, the government, the society or the community, the environment, the suppliers and the distributors along with its competitors.

In order to run a business in a sustainable and ethical manner, the organization should ensure that their interest is being met and that the firm can have their support in the future. Hopwood, Mellor and O'Brien (2005) have mentioned that the discussion of sustainability conducted in several literatures is mostly focused on the benefits and impact on the society and the eco system. This is mostly because of the fact the organizations are being questioned for the long term ill effects that it can have on the community in which it operates. Owing to the increase in the competitiveness in the global business scenario, the companies often resort to unethical means that can often bring negative impact on the community and the environment. This as a result, poses as a big threat to the sustainability of the organisations and also to the interest of the stakeholders (Verbeke and Tung, 2013). Moon (2007) has mentioned that in several cases the firms tend to over exploit the resources that include both natural and human resources. A sustainable organisation often makes sure that the human work forces are not exploited in an unethical manner; and that the interest of the employees in terms of perks and privileges are fulfilled.

In the perspective of the environmental sustainability, it can be stated that the firms needs to reduce their impact on the environment which is mostly assessed in terms of carbon footprint and raw materials procurement (Dempsey, 2011). Thus, it is imperative for the firms to make sure that the negative impact on the environment can be reduced as much as possible. A sustainable firm is one that have the minimum negative impact on the stakeholders especially on the community and on the eco system in which it is operating and at the same time it should also have a strong positive impact on them.

• • Sustainability and Corporate Social Responsibility (CSR)

From the organisational perspective, the corporate social responsibility (CSR) and the sustainability are closely interrelated to each other. As mentioned by Griggs et al. (2013) the CSR activities of a firm includes fulfilling the responsibility of an organization that it has for the society or the community around it. The idea of CSR has surfaced from the concept of giving back to the society as a token of gratitude and to maintain a harmonious relationship with it. Wheeler and Beatley (2014) have further stated that an organization cannot survive or sustain without the support of the society in which it thrives, therefore in order to create a long term relationship with it, it needs to take care of its interests and take initiatives for its development. Thus, the CSR activities of a firm often involve taking care of social development in order to make sure that a mutually beneficial relationship is developed.

The social responsibilities of a company are therefore necessary to ensure sustainability of business operations. According to Werbach (2013), the future viability of a business is largely dependent on the sustainable nature of the business venture and the society in which it is operating. This statement indicates that in order for a company to be able to maintain its business venture in the future and to make sure that it can have a strong competitive advantage; it requires having a sustainable business model. The sustainability of the organisation also determines its corporate image is highly essential to attract some of the external stakeholders such as the customers and the investors. As mentioned by Tantalo and Priem (2014), the sustainable business model plays a major role in attracting the investors which is highly essential for the business growth. In this aspect it has been mentioned that the CSR activities are mostly motivated by the long term benefits of the companies and not merely for the sense of philanthropy. According to Harrison and Wicks (2013), building a corporate image is also a major part of developing the brand image and competitive advantage among the rivals. The firm with the most prominent and positive corporate image is most likely to attract the customers owing to the positive image that the company has created among them. Werbach (2013) have further stated that the CSR activities are mostly based on creating a symbiotic system that can help both the parties to survive and sustain. Therefore, can be considered as a one sided act of generosity, but rather it is combined effort of co-existence (Susnienė and Vanagas, 2015). The society needs the organisations so that they can have a better standard of living through the new products and service development by the firms. Moreover, the business operations of an organisation can also improve the economy of the community by generating more jobs and to facilitate more cash flow. At the same time, the companies also need the support of the community to operate in seamless manner. The human work force is one of the major assets of an organization and it is imperative for the firms that the employees should be properly taken care of, so as to reduce employee turnover rate and increase the overall performance of the firms.

There are several examples that can be cited in this context, such as the case of Starbucks and Coca-Cola. These two companies are best known for their CSR activities which include social development in underprivileged areas and to take care of eco system. Starbucks ensures that the raw materials are obtained by sustainable procurement, without impacting the eco system (Hamann et al., 2015). Likewise Coca Cola has also taken several steps to take care of the community and the environment itself. Mostly in the developing countries and especially in the underprivileged areas, the company has offered aid to develop the community by offering free education and food supplies. Moreover, since the manufacturing operations of the company require a large amount of water, so Coca Cola has taken the initiative to conserve rain water as an effort to reduce the impact on the ecosystem (Sauerbronn, Faria and Barros, 2014). However, in certain cases the companies have also face negative impact for neglecting their sustainability practices. It has been alleged that Apple Inc. does not have any concerns for their workers, after a series of suicide was committed at one of its supplier firms in China (Chan, 2013). This clearly indicates that Apple has failed to take care of the interest of the workers which forms a major part of the community. Moreover, it has also come to surface that the company has conducted unethical sourcing of raw materials from developing countries like in Africa. These activities of Apple have prominently impacted its corporate image that can potentially influence its business operations.

As mentioned by Moon (2007), if the CSR activities of a company are motivated by long term profit making by building a strong corporate image, then it can have a strong implication in the way the organisations operate. The companies have become more focused in conducting PR events to communicate their CSR activities with the stakeholders. This as a result allows the companies to create a positive corporate image in the industry among the stakeholders. Coomer (2013) has mentioned that the CSR should be given more importance and should be considered as a part of the business operations. A large number of organisations have started to publish sustainability report that clearly highlights the initiatives taken by the company to operate in a sustainable manner and within a sustained environment. It is expected that the firms should be transparent about their operations and should focus more on creating value for the entire community in order to foster long term growth. Thus, it has been stated that as the CSR activities in certain cases can be motivated by profit making in the long run, therefore the firms should avoid having myopic approach towards their business and should take care of the interests of the stakeholders.

According to Boons et al. (2013) the CSR activities of a firms also allows developing a good working relationship with the local government, which is quite essential for running the business in a seamless manner and to also receive political support in certain cases. The government is one of the major external stakeholders, who seek to bring social development in the region. Therefore any effort taken by an organization to do the same aligns with the interest of the government. Furthermore, in several nations, the local authorities try to encourage the firms to adopt CSR activities and to operate in sustainable manner, by offering them with perks and privileges and support in their venture.

As mentioned by Bansal and DesJardine (2014), the sustainability of an organisation is directly related to the way in which it has oversees its corporate social responsibilities. The increase in the competitiveness in the global business scenario has compelled the firms to seek out for new ways to survive in the industry. In this effort they often try to achieve short term results and avoid their social responsibilities, which can be considered as an added cost for the company. This as a result increases the operational risk of the firm, and putting negative impact on its sustainability. Therefore, it is suggested that the firms should make certain changes in their business operations that will help them to strengthen its sustainability and will allow long term thriving of the business venture (Dempsey, 2011). The firms should avoid myopic decisions that are only focused on the short term profit making. Instead they need to redesign their organizational mission and vision in such a manner that they are focused on the long term goals of the firm that also includes taking care of the interests of all the stakeholders. In order to achieve that, the organisations need to incorporate the social responsibility as a part of the mainstream activity of the organisation. Furthermore, the firms should be able to focus in the long term activities that will not help it to foster sustainability but also will help to create sustainable society (Smith, 2011). Thus, it can be stated that the firms should consider the society and the external community as part its stakeholders and its value generation should also encompass them.

• Conclusion

The organisational sustainability can be considered as the only viable future for the business houses. The highly competitive business environment has made it essential for the firms to create a strong competitive advantage among the rivals. In order to accomplish that nurturing long term sustainability is crucial for the firms. Organisational sustainability helps to create a mutually beneficial relationship between the organisations, and the society and the external environment in which they operate. It has been also revealed from the study that the CSR can motivated by the long terms profit earnings. The CSR activities help the organisations to develop a strong corporate image that in turn can attract a large number of external stakeholders, like the customers and the investors. Thus, it has been stated that its implication has a prominent impact on the way the firms operate, especially on the grounds of disclosing their sustainability report and maintaining transparency. It has been further discussed in order for the firms to maintain sustainability in needs to focus on the long terms value generation for the stakeholders and to meet their interests. The CSR activities should be incorporated as a mainstream function of the organizations. Thus, it can be stated that the engaging in the CSR activities is essential to foster long term sustainability in the future.

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