The Developing Business - Essay Example

The Developing Business Introduction Sustainability in the realm of a business environment refers to the holistic methodology of management. In business, three foremost sustainability concerns arise relating to environmental, financial, and social concerns. Sustainability aims at embedding better commercial practices of governance, making of ethical organizations, and augmenting social, environmental, and economic responsibilities. Additionally, the business strives to ensure the best interest to inherent society initiatives and responsibilities in the allocation of finances. Hence, there is distribution of risks and conservation of the environment leading to long-term growth and excellence of the organization (Blaga, 2013, p. 20). Apparently, more corporations are getting aware of the necessities of integrating better corporate governance, improved risk management methods, and sufficient business social, financial, and environmental responsibilities that are a pre-requisite for enhanced sustainability. Commercial firms play a fundamental role in the concept of sustainable development, and this is due to their potential to enhance sustainable development and their deleterious effects on the community and ecosystem. Within the essential role that business firms play to achieve sustainable development, social and environmental responsibility has emerged to concretize the paradigm of sustainable development (Schneider, 2014, p. 526). As aforementioned, the three forms of sustainability remains imperative in the maintenance of both societal and organizational needs. Financial sustainability, for instance, ensures that an organization develops structures that focuses on creating significant profit from investments made. Moreover, financial sustainability must focus on embracing the continuous provision of positive outcomes from investment by developing sustainable long-term objectives. On the contrary, environmental sustainability defines an organization’s initiatives and establishment of the structures aimed at significant reduction of causing effects to the surrounding. A business that focuses on environmental sustainability ensures that its operations and daily activities remain friendly to the environment and do not cause climate change, pollution, or degradation. Such environmental sustainable corporations also contribute towards creation and development of policies and initiatives that would enhance environmental safety. On the contrary, social sustainability entails community or societal initiatives aimed at establishing frameworks that ensure survival of its members (Melville, 2010, p. 1). Social sustainability encompasses the availability of various community amenities and needs including agricultural products, friendly environment, and other compulsory social requirements. Social sustainability must ensure the creation of fundamental and durable structures able to support future generations. Consequently, it is imperative to understand that social, environmental, and financial sustainability aims at the attainment of improved and desirable outcomes in both the community and the corporate level. Practical achievement of the above factors defines sustainability (Santos Argueta, and De Barros Pereira, 2014, p. 123). Majorly, sustainability aims at the environmental integrity through management of the environment, social equity embedded in social responsibility, and prosperity in the economy via value creation (Schneider, 2014, p. 527). In addition, sustainability encompasses financial sustenance involving a commitment of an organization in establishing business ventures that would not only provide a profit but also continuously remain relevant. Schneider (2014, p. 527) argues that a principal condition for the occurrence of sustainable models of business is dependent on the overwhelming of the economic-oriented dimension courtesy of a comprehensive dimension of sustainability. Focusing on an institutional perspective, the logic of sustainability is anchored in a variety of civil areas. Firstly, there exists sector of civil society in which a myriad of multiple stakeholders focuses on several objectives that constitute the elements of the sustainable development paradigm. The subjects, in this case, involve protection of the environment, fight against corruption, human rights protection, and a focus on food security. The second sector is available due to the presence of the governance institutions that advance the ideology of sustainable development. Thirdly, the academic sector incorporates theories of sustainable development and its implications for the social, financial, and environmental sustainability. Further, part fourth involves those business firms that strive with the implementation of the innovative models that intertwine the sustainability-oriented dimension to create new openings that are far beyond the traditional activities of the company. To realize sustainability in an organization, all the perspectives of decisions on the economic, social, and environmental performances need a deeper consideration. The Brundtland report elucidates the main reason for a global transformation. It states that incorporating sustainability into the business and social environment is the result of climate change, biodiversity loss, global warming, and increase in poverty. In addition, gender issues, exploding population, violation of human rights create devastating challenges to the business world (Arac and Madran, 2014, p.138). The concept of sustainability has made significant moves beginning at the fringes of the world companies up to topmost agenda for the stakeholders, policy regulators, workforce, and clients. The societies and business executives face ambiguity in understanding the concerns, the implications of these concerns on their respective business organizations, and the means to respond to such issues (Hahn et al, 2014, p.463). Therefore, society and businesses should focus on the financial, social, and the environmental aspects that relate to their economic objectives. Additionally, they should strive to define and interpret the sustainability concerns univalent negative or positive benefits regarding their businesses. Further, in the effort to adopt prudent stances that benefit both the business and the society, the managers ought to develop additional ambivalent elucidations concerning sustainability issues. Therefore, to realize a healthy business environment where all parties involved benefit, it is critical to emphasize on the economic, environmental, and social sustainability. Question one Social and environmental sustainability versus financial sustainability Differences There exist remarkable differences between social, environmental, and financial sustainability mainly in relation to purpose and ultimate objectives. Social sustainability relates to inherent societal concerns relating to their current and future survival mainly in securing better health and security for its members. Societal sustainability emanates amongst members of the community who have concerns or questions degradation of health, climate, or inadequacy of imperative social entities. They initiate structures aimed at securing the future sustainability of their generations. Essentially, the societies have the sole responsibility and incur expenses that would significantly assist its members in sustaining their economy, health, and other social factors. On the contrary, environmental sustainability relates to a business obligation and not societal primary concern. Businesses inflict environmental changes and have the significant responsibility of its regeneration. While society may remain concerned about various corporations’ adverse effects on their surroundings, they only incur costs of influencing businesses to change the situation. Therefore, businesses have the responsibility of reducing activities that otherwise affects the environment negatively. Moreover, businesses incur costs relating to environmental protection. Question Two Implications of the differences on the ways in which Business operate In the bid to respond to the increased pressures from the international, national regulations, and the community, companies gradually need to align themselves towards the adoption these principles. Environmental and social responsibility strategies require incorporation into the companies working methodologies, structures, and the systems of management. In this context, companies must develop relevant mission statements and internal codes that ensure social and environmental protection. Therefore, various companies need to meet specific regulations by changing their ways of operation. They must first develop their strategies to ensure that they incorporate activities that do not harm the environment. Secondly, the particular strategies adopted must be responsible towards bettering the social environment for the purposes of improving the relationships between companies and the shareholders. The financial aspect is incorporated whereby the firms or companies need to use the minimal resources as possible to change the social and the environmental dimensions. It is necessary for businesses to improve their social and environmental scopes to help use little finances in their maintenance (Chun-Juei, 2015, p.49). In the recent past, companies could act in a reactive manner after they face environmental or social issues. Evidently, the companies awaited the crisis to occur and then they set strategies to mitigate them. Due to growing regulations over protection of the environment and the state of the relationships with the stakeholders, companies need to adjust to more proactive methodologies of dealing with issues. Hence, ways of balancing the issues of the environment, the society, and the companies’ finances are taking the center stage. Firms strive to achieve the best for the environment and the society while minimizing expenses. Realizing this situation encompasses embedding the environmental, social and financial issues into the management process and the organizational culture through EMSs (Hahn, 2013, p.463). Business reporting More often than not, the concepts of social, environmental, and financial sustainability have remained incorporated in reporting of the companies’ daily activities. The firms engage themselves in analyzing their activities and use them to report to the external shareholders, the firm’s economic, environmental, and social impacts. The practices and policies reported aim at reducing the negative effects of the externalities (Ameer and Othman, 2011, p. 61). Many organizations have played a role to develop environmental and social reporting and guidelines for assurance. For instance, inherent GRIs reports framework and the 1000 accountability series showing imperative guidelines. Essentially, there has been an increased recognition of the importance of elucidating the performance of companies relating to social and environmental factors. The companies incorporate these issues into their business reviews, management discussions, and financial reports (Danciu, 2013, p.9). Environmental sustainability reporting refers to the activities of giving an account concerning the environmental issues and in addition to the prearranged disclosures of statements of finance. Proper reporting of environmental issues boosts compliance in relation to the legislation requirements for disclosing environmental information (Reilly, 2009, p. 33). For example, countries such as The Netherlands, Sweden, and Australia need by legislation disclosing of certain pieces of environmental information. On the other hand, the Modernization Directive of the EU require disclosure of certain pieces of information related to environmental issues by those listed companies or large organizations (Hanson-Rasmussen, Lauver, and Leter, 2014, p.175). Environmental reporting majorly consists of reports on the performance of the environment as opposed to the reports of environmental management systems. Financial reporting encompasses part of the process of communication. It is the conduit through which transfer of reports and information occurs from the source to receiver. The nature of reporting and its core functions differ depending on the type of organizations and the nature of the receiver and the sender of particular pieces of information. Financial report was majorly a function of delivering internal reports. The reports focused on how the firm and company owners could get an account of the capital and their income (Alexander, & Britton, 2004, p.98). The sustainability report entails the companies’ values and models of governance that demonstrates the relationship that exist between its strategy and the obligation to ensure a sustainable economy in the global context. Reporting in finances aids the organizations to measure the effects caused. Additionally, the companies can align their experiences, manage change, and set goals that meet their financial aspect. Further, the organizations report their material financial effects on the societies, workforce, charities, governments that they directly affect via their activities. Regarding social sustainability reporting, the organizations operate within and they are accountable to the values, beliefs, and norms developed with respect to the interpersonal dynamics and social relationships. The various firms must act to make available the information that concerns the impacts to the environment, contributions that are quality to the society, and the various enhancements made to the culture (Aggarwal, 2013, p. 213). Allocation of resources is on the lines of social consensus that must be developed via discussions, debates, and the actors that are accountable for community sustainable development (Miska, Hilbe, and Mayer, 2014, p.350). The social dimension also involves an organization’s reports on its impacts on the workforce and society. For instance, the Nike Company is known for its equipment relating to sports and its uncouth activities of employing children in the last decade. The company then faced public nightmare relations forcing it to define a mission that eliminates child labor (White, 2009, p.74). Question three Reconciling the views In the bid to reconcile these diverse views, it is critical for the parties involved to have a wider knowledge base and identify the various social agents who can influence the activities of the firms. To put sustainability at the forefront regarding the public discussions, visions of countries and companies need development to focus on the political, societal, and economic dimensions. Therefore, shared visions are indispensable for both the country and companies’ profiles. They need to focus on the kind of society the people are living in, the health of the relationships between these dimensions of social, economic, and the environment. It is essential for companies to build working relationships. Further, enhance the health of the environment, the degree of social integration and hence reduce the amounts of funds used to boost sustainable development (Angeli, 2010, p.22). When focusing on the reconciliation of such varied views, there must be an inclusive dialogue to enable, the parties develop in-depth visions and objectives. These concepts help to set particular foci on the dimensions of the society, the environment and the economics of the companies themselves. Realizing the situation aids in the development and consolidation of the diverse aspects of the firms, the society and the country at large. Further, the consolidation fosters the economy and societal relationship networks. The frameworks of the companies are enhanced ensuring sustainable development, which focuses on all the dimensions of economic, society, and the environment (Angeli, 2010, p.23). Obstacles when reconciling the views Religion poses a complex and ambiguous circumstance that affect the way companies deal with the aspects of the society and the environment. Therefore, it becomes strenuous to combine the indigenous arena of spirituality and the dimensions of sustainable development. However, religion can have positive impacts towards sustainable development. On the other hand, it posits serious challenges. For instance, religion can oppose the integration of the modern issues of the environment into the society holding that their values will disintegrate. As argued by various authors in Pater (2009), it is evident that Christianity instigated an environmental crisis that led to a loss of social and environmental relationships (p.54). The traditions of various societies also offer a wide range of problems when trying to reconcile these viewpoints of sustainable development. The cultural issues prove to be complex having numerous nuances that when discussed, the partners fall into generalization. It is critical for sustainable development to have a clear line between different cultures in order to realize sustainability. Various societies have different degrees of environmental and societal recognition; hence it is crucial for the parties to allow a margin that focuses on this variability to avoid crises of culture. For example to achieve social sustainability in a cosmopolitan community, there is a need to be cognizant of all the varied cultures that the populations exhibit. The situation will boost the relationship between the society and the firms hence enhancing the rate of integration and reduce the financial burden (Pater, 2009, p.58). Question 4 The development of innovative sustainability methodologies has proven to be important challenges for the companies. They face challenges in balancing between the social and environmental responsibilities on one hand and financial responsibilities on the other hand. Further, the managers and CEOs are challenged with the paradox of improving the social, environmental and financial dimensions simultaneously. The business units, therefore, receive pressure to ensure a balance is available in these aspects. Hence, in the future operations of the businesses, the managers, and the CEOs will have the capabilities to ensure a balance between such aspects of sustainability. There will be a flow of the strategies, the systems, the structures, performance measures and effective implementation of core values aimed at sustainability (Hofman et al., 2013, p.162). The big companies and small ones alike will realize the pivotal importance of controlling and managing the environmental, social, and economic performances. The companies will be able to eliminate the impetus to the implementation of the integration of environmental, social, and financial effects. Such impediments include internal factors ranging from the management committees to failure to recognize that sustainability has a lot of benefits if well incorporated. The firms will also be able to develop strategies that evade the impetus that originate from the government regulations, demands from the markets, and the competitors. For example to develop strategies that will avoid the emission of the greenhouse, gasses will fundamentally affect the prices of energy and the products plus services. Hence, the companies will be able to access the global markets to find out new markets for their products and services (Aggarwa, 2013, p. 213). Moreover, the companies will be able to determine the impacts of their services, products, activities, and processes more broadly. The organizations will be at a better position to integrate the social, financial, and environmental effects. In addition, the organizations will see the need to involve fully the various stakeholders in the companies’ strategies and activities. For instance, the way the workforce desires to work for the company and the manner in which the clients wish to purchase the company’s goods. In addition, the desire with which the communities will have to permit the companies a license to operate. Colbert & Kurucz (2007, p.19) assert that, in reporting of the organizations, effective social, environmental, and financial sustainability will ensure a standardized manner in which the organizations report. Firstly, when there increased environmental sustainability, there will be fewer impacts towards the environment and the environmental reports will be effective. There will be no much time wasted in handling the environmental matters compared to when the situation is entirely ignored. The reports, in this case, will entail positive impacts that the organizations have made towards the sustainability of the environment. Secondly, in case of sustainable social relationships the companies involved will have that physically engage the operations of the communities in bettering the quality of their lives. More organizations that engage in healthy social relationships with the surrounding communities will have a great impact on their lives and hence report massive improvement on the quality of the people’s lives. More shareholders will in return engage with the organizations making them utilize the company’s goods and services. Finally, after successful activities that ensure sustainable social and environmental sustainability, businesses will devise methods through which they can better their finances. After a sustained environment is in place, there is a little diversion of the company finances to the deleterious effects of pollution and hence saving of funds (Spangler, 2015, p.70). Reporting by businesses will exhibit a different dimension where all factors of sustainable development must come into play. Through legislations, corporates, companies, businesses, and firms will include methods and activities of classifying, recording, analyzing, and reporting on the environmental, social, and financial impacts of their activities. The situations will enhance the introduction of better technologies that deal with the achievement of sustainability (Klovienė and Speziale, 2014, p. 44) Conclusion Due to globalization and liberalization of the economies, effects that are more devastating are befalling the contemporary environment and social aspect. The firms are producing more to target the global market while neglecting the environment, and they are overtaken by the lucrative global markets and clients through the open online markets and are overlooking the immediate consumers. Without, an integrated business environment, social and economic aspects will soon diminish. Therefore, it is paramount that the firms should merge the economic, social, and environmental concerns to ensure sustainability mainly in relation to the environment and the quality of the lives of the surrounding communities. In addition, societies must increase their awareness towards social and environmental changes. They must strengthen social sustainability networks and initiatives to ensure establishment of quality economic, environmental, and social strategies especially for their future generations. On the contrary, companies must swiftly adapt to the changing economic and social perspectives for sustainability. They must establish viable financial sustainability structures including long-term goals that would enable them meet their financial obligations even during the economic recession. 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