Sustainability as a Fundamental Factor in Cal Management - Essay Example

? Why sustainability must become a fundamental factor in the calculus of management A review of literature Sustainability as a fundamental factor in cal management Sustainable development in management is an important venture in the corporate world as asserted by McElroy (2010), tensions exhibited with the use sustainability in relation to organizational activities such as strategic management and measurement of performance. As mentioned in earlier discussions, sustainable development refers to a conservancy driven development that seeks to assure the needs of the present day while conserving future needs for future generations. Thesis The concepts of sustained development is based on the ideas of ensuring that the basic needs of the poor population is given precedence and the idea of protecting the world’s resources against delimitations effects brought about by modern technology which may affect the ability of the available resources to gather for the needs of the future generations. It should also be noted that all aspects of development, whether social or economic, need to be measured in terms of sustainability. These efforts, however, if met by companies and or corporate bodies should be rewarded. However, historical experiences show that such rewards have rarely occurred. If this has to be done, measurement and strategic management is an inevitable requirement. Major changes in political will and economic policy need to be put in place to control use of resources in a manner that does not comply with the principles of sustainability. Such measures can include legislations, positive rewards to complying companies just to mention a few. In a research conducted in Japan by Michael Angelo and Cortez, in 2011 at the Asia Pacific University to establish how challenges related to social and environmental performance affect financial performance, any environmental innovation geared towards sustainability impacted positively on market performance. In addition, an increase in the short-term liabilities was attributed to the investment placed on environmental innovation in terms of cost of maintenance corporate social responsibility cost. Similarly, while markets’ concern about environmental conservation takes precedence in economic measures, social expenses is not their major concern as they presumably take this as a government responsibility. It is important that as we work towards economic stability, leaders should be able to Measure Company’s performance in more systematic ways. These way organizations will play an important role towards a competitive and suitable society. Based on the above-mentioned fact, most leaders today have adopted the strategy through reduction of the company’s socio-environmental impacts in the world as well as drawing limits to risks posed on the environment such as global warming. This is done through enhanced ecological management practices, sustainable use of the available resources and care for the natural resources. An emerging trend is where executives and top management officials are beginning to exhibit transparent operations with regards to finances and accountability in a manner that go beyond use of ancient performance measures. This behavior is as a result of increasing compulsion for companies to take responsibility for the non-financial effects. On the other hand, the general ideas of sustainability are geared towards the enhancement of valuable features with an intention of reaching them out to the upcoming generations. Two theories have been adapted to explain the meaning of this statement; preservation and development version and resilience. The second theory is that of enhancing and maintaining natural and human capital. The adaptation based theory views sustainability as an adaptation route whose approach closely links system theories and complexity theories on self-maintenance. The view relates the internal systems of an organization to external interactions exhibited by the environment. It is worthy to note that as the organization tries to maintain it internal structures, it adapts to the evolving systems in the environment so as to bring out the element of co-existence. Organizations, therefore, should keep their identities as they co exist with the changes brought about by the environment. Sustainable innovation is a necessary requirement for any organizations targeting success to operate in. Capital-based theory defines sustainability as effectiveness. It is linked to TBL and other vital capitals. The theory covers approaches and practices whose sole aim is to satisfy today’s stakeholders while keeping in mind the need to protect and enhance natural and human resources for the future. According to this view, capital means stock that has a potential of yielding a beneficial flow of goods or services as demanded by the future needs of the coming generations of both human and nature. In summary, sustainability in an organization is measured in two different aspects. The first aspect is the ability of an organization to balance with emerging environmental challenges while still maintaining identity. Secondly, capital-based theory views sustainability as the ability to interrelate with the society in a manner that does not lower levels of sustainable resource balance. It is important to use modern impact measurement and modeling method to assess or detect problems in an organization. The use of methods such as AQBLSC should be used as opposed to the conventional BSC method. This is because BSC approach has a number of weaknesses limiting its ability to give reasonable measurements and models. Research shows that the use of BSC has not been able to offer satisfactory measurement models of relating indices to pointers. Two approaches address satisfactorily impact assessment issue; quotient based footprints and system dynamics. In the quotient based developed by McElroy (2008), called the social footprint, McElroy codes the social and environmental sustainability using the quotient; S=A/N Where S is the organization’s sustainability performance A is the actual socio-environmental impacts In addition, N is the normative impact on equal carrying capacity as socio-environmental impact. This quotient enables managers and the executive measure bottom line economics, ecological impacts and social sustainability with ease. The system dynamics approach is used to measure and predict effects of balanced scorecard interventions, strategy, and changes in policy on organizational performance. This system is used in combination with AQBLSC to allow for clear hypothetical requirements on causal influences. In conclusion, the use of the methods discussed on this paper will serve as an open avenue for organizational stakeholders in the assessment of performance. References Choi, T.-M. (2012). Fashion supply chain management: Industry and business analysis. Hershey, PA: Business Science Reference. Epstein, M. J., & Manzoni, J. F. (2008). Performance measurement and management control: Measuring and rewarding performance. Bingley, UK: Emerald JAI. McElroy, M., Jorna, R. & Van, J (2007). Sustainability Quotients and the Social Footprint. Corporate Social Responsibility and Environmental Management 15, 223-234. Vaiman, V., & Vance, C. (2008). Smart talent management: Building knowledge assets for competitive advantage. Cheltenham, UK: Edward Elgar. Read More