Sustainability in Internal Decision Making

Answer

Sustainability in Internal Decision Making

Sustainability has become a mainstream trend in business development. The concept of sustainability in today’s business world is more than window-dressing. In business, the term refers to the ability of a company to manage and coordinate its social, financial and environmental risks as well as their obligations and opportunities to ensure an ethical, responsible and ongoing success. It also refers to the ability of a business to survive shocks over time (Willard, 2012). Businesses adopt sustainable practices for various reasons including increasing their market base, gaining competitive edge and boosting shareholders value. In this dynamic society, businesses adopting sustainable practices play a crucial role in combating sustainable challenges (McIntyre et al, 2009). This essay will, therefore, explore in detail the concept of sustainability management, provide examples of different types of sustainable information, and discuss the importance of using sustainability information for internal decision making.

A sustainable business should be able to survive social, economic and environmental shocks bound to occur over time to enable them create economic value, build strong communities and contribute to building healthy ecosystems (Molthan-Hill, 2014). Sustainability also, refers to the collection of strategies and policies adopted by businesses to minimize any environmental impacts they may have on future generations. Businesses harbor certain socio-economic such as efficient ways of utilizing natural resources and ecological concerns such as the impacts of pollutants on the economy. These three are the core pillars of sustainability, which each and every business has to take into account.

In business, the model of sustainability is referred to as the Triple Bottom Line, which goes beyond the short- term focus on profits. These Triple Bottom Line also, referred to as the pillars of sustainability, are environment, needs of the present generations and future generations and the economy. Sustainability is an ethical aspect of any business (Molthan-Hill, 2014). It is a complex issue for managers because it challenges them to apply right resource management techniques to manage their consumption in the most sustainable manner.

The main goal of sustainable management is to replenish resources to prolong their consumption. They should be replenished at the same rate as that of consumption. Companies are developing sustainable market-oriented strategies which match its business environment demands and meet its customer’s needs and expectations.  Businesses are moving from industrial food processing to organic which are both environmental friendly and safe for human consumption (McIntyre et al, 2009). Many companies are using wind power, solar energy and green spaces. This form of energy reduces pollution produced from fossils burning. Companies are able to cut on costs because it is free and eliminate the problem of blackouts because its supply is limitless. Financial institutions have gone paperless promoting conservation of our trees as well as use of carbon-free operations (United Nations and International Roundtable Meeting on Finance and the Environment, 2001).

Sustainability is an important decision making concept among many businesses. However, only a small portion has taken a proactive approach towards effective management of sustainability. Several businesses are developing different ways of marketing their products, managing its internal affairs, brands, reputation and their overall strategy (Willard, 2012). A sustainable business enjoys several benefits. There is increased shareholder engagement and high rate of retaining employees. A business engaging in sustainable practices can reduce its costs significantly (McIntyre et al, 2009). For instance, if a company adapts better waste management techniques such as recycling or waste reduction, they can be able to save on the costs as well as reduce their environmental impact.

Sustainability is also beneficial in building a company’s reputation, reducing risks and reducing management costs because it can be used as a mitigating tool. It allows development of managerial competencies which helps businesses to identify any risks and take fast and efficient counteractive measures. In addition, it enhances a business reputation increasing brand loyalty, company value and attracts highly qualified and experienced employees. On the other hand, sustainability can also harm a business (Willard, 2012). Many businesses may focus on making profits neglecting their role in managing the social, environmental and economic factors. This may lead to damaged reputation, loss of a company’s financial value, high employee turnover and customer boycotts.

Managing sustainability is complex because it involves bringing together various stakeholders including the community, environmentalists, economists, managers among others. Companies have difficulties obtaining the right information to propel them towards sustainability (McIntyre et al, 2009). Companies are using software play to collect, analyze and set targets within which it will operate and performance management software to measure performance indicators among employees. Organizations have increased sustainability reporting to present their organization values, governance models and to show links between its commitment towards a sustainable economy and its business strategy (McIntyre et al, 2009). This reporting is beneficial because it provides room for measuring, understanding and communicating a business social, economic, environmental and governance performance giving room for setting new goals and managing change effectively.

Sustainability information plays a crucial part in an organization internal decision making process.  Sustainability is not limited to the external stakeholders. It also applies within an organization, to employees and shareholders.  Companies in, most situations, release sustainable reports to bow to external pressure and are always in defensive positions trying to show hove responsible they are (McIntyre et al, 2009). This should not be the case because sustainability reports are meant to be motivated by a company’s internal values and appreciation of its awesome work. Sustainability information is important in making internal decision because it allows managers to incorporate its stakeholder expectations in the organization’s mission and allows the management to assess employee performances. This information can be used to develop new managerial competencies to handle unforeseen risks, identify weakness in their products and making the necessary improvements, make investment decisions and enhance labor relations among the employer and employees (Corporate Social Responsibility and Sustainable Business, 2009)

Conclusion

Sustainability focuses on ensuring that a business is able to deliver value over a period of time. Businesses integrating the concept of sustainability into its business strategy gives a company competitive edge, retain employees and reduce costs significantly. It is built on social, economic and environmental pillars with the goal of efficient utilization. Sustainability information helps managers to make decisions, to assess risks and opportunities for growth. It enhances customer loyalty, brand loyalty, reduces labor turnover, increase company value and attract competent and highly experienced employees. Sustainable reports helps build and maintain business trust.