Revision of a literature review of Sustainable Business Development

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Comments,

This Is great topic to write about. I think the organization of the paper is really good. But, the beginning is a little confusing and long. The end of the paper is really good and using the sources against one another to make a point is very good. Overall, the paper is a good read and very informative. I have listed comments throughout and questions below that you may want to consider.

Negatives to sustainable business?

Public or private companies?, both ? You talk a lot about shareholders? May not apply to all?

Are there examples for the pillars to help the reader better understand ?

What are the benefits of sustainable business? Real life examples?

Why are companies opposed to going sustainable? Cost? Or not educated on topic?

Sustainable Business Development

Introduction Comment by Lisha Zhang: Insert a “abstract” before the introduction.

Every business organization wants to generate enough revenues, which would outweigh its costs and would result in healthy profits for its stakeholders. In order to achieve this objective business organizations try to reduce their cost of goods and increase their revenues by selling its products to large number of customers or large quantities to the current customers. Business organizations increase their revenue with increase in its production capacities, affecting the depletion of natural resources. If such growth is desired without proper planning and consideration of its future outcome it would result in early contamination of the natural resources and would help in distorting of the natural balance. (Setosa, 2007) Comment by Matthew DiGiacomo: Is this the only way? Or just one of ? or the best way?

In order to survive in the current business environment, contemporary business organizations strive their best to plan for their future outcomes considering their current organizational resources in such a manner that would result in a sustainable outer environment that would ensure health of other living beings in the outer environment of the territory in which the business operates. (Schoenherr, 2012)

It is the social responsibility of a business organization being an artificial person to design its operations in such a manner that would ensure health and safety of all other living beings in the environment. Or in other words the outcome of the operations of the business organization would not be considered as hazardous for the society as a whole. Keeping in mind the well-being of the society business organizations have to develop with the passage of time, thus it is the desire of every business organizations to develop in such a manner that would ensure health and safety of the outer environment or in other words to ensure sustainable growth. (Schoenherr, 2012) Comment by Matthew DiGiacomo: Is this true ? Comment by Matthew DiGiacomo: Is this the meaning of sustainable growth ? or just a benefit ?

If growth is desired by the business organizations without taking into consideration the sustainability of the outer environment a time in future will nearly came that there will be no natural resources left for our offspring. Thus, organizations must ensure sustainable growth in order to save the future of our upcoming generations.

A business organization also wants to obtain sustainable competitive advantage over its competitors by introducing differentiated quality goods and services to its customers at competitive prices. A business organization also strives to increase its customer base. All such activities could possibly result in distortion of the natural balance of resources if not properly planned. (Hopwood, 2005)

What is Sustainable Development Comment by Matthew DiGiacomo: Great !

According to the Brutland Report, sustainable development is defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (World, 1987) As per the definition there are two important parts, which comprises sustainable development. The first one is satisfaction of current needs, which may include, but not limited to poverty elevation social equality and being a good contributor to the economic development of the territory in which it operates. Th other important part of the definition is the concern for saving enough resources future generation to enable them to fulfill their needs. The word sustainability dated back to 18th century. And was used for consumption of forestry yield in Germany. They have called sustainability as balancing the consumption of forest items with the reproduction of the same with the passage of the time. (Setosa, 2007) Comment by Matthew DiGiacomo: What are these in terms or running a business? examples?

Three Pillars of Sustainability

The building of sustainability is based on the three pillars of the economy, society and environment as a whole. Together these pillars construct the building of sustainability, the strong presence of these pillars ensure sustainable development, absence of any of these would result in demolition of the sustainability building. Following are the detailed discussions on each of the pillars. In the current business organizations these three pillars are converted into objectives, which could be measured in terms of organization defined key performance indicators. Although, current practices have added another pillar to the list of these three pillars and cultural diversity is also considered as another pillar of the organizational sustainable development. (Bebbington, 2001) Comment by Matthew DiGiacomo: Consider rewording. Also, expand on this pillar if its mentioned? Does it have significance?

Economy Comment by Matthew DiGiacomo: I’m Confused. Is this theory of sustainable business only for public companies ? what about private business? Or economics on a bigger scale?

This pillar represents the increase in the value of the organization in financial terms and its contribution towards the overall economy of the organizational home country. Profit maximization for the stakeholders of the organization and appreciation of the owner’s equity is the objective of this pillar. (Stokke, 1991) The objective of this pillar is broader in terms and is not limited to the individual’s share appreciation, but is used in a broader sense of the economy and economical benefit could be given weightage over the individual benefit of the shareholder.

Environmental Pillar Comment by Matthew DiGiacomo: Maybe add an example to help clarify the significance and how environment relates directly to business ?

This pillar represents the environment in which the business operates. This pillar also has a broader view and provides that the organization must do its best to minimize not only its current harmful effects on the environment, but also strive to reduce the hazardous effects caused as a result of past activities of the organization itself or other business organization. The care for the environment would add value to the organization as organization itself is the part of the environment and any hazardous effects of the environment would directly affect the organizational outcomes, due to effects on the organizational inputs. Human and other resources that comprise as the input to the organizational resources could be directly affected from the hazardous effects of the environment, which may cause disruption in the organizational processes and outcomes of the organization may not be considered as beneficial to the organization. (Setosa, 2007)

The two pillars discussed above in combination comprise the eco-efficiency as healthy environment would ensure healthy economy and both are important for each other. These two pillars also introduce the fact of using the current environmental resources economically would result in the eco-efficiency and thus would lead towards sustainable organizational growth. This concept is in best interest of the organization, as every business organization desires to reduce its cost of production, which could be easily done with the help of using less environmental resource in an efficient way, thereby reducing the cost of the final product of the organizations. (Schoenherr, 2012)

With the introduction of this concept, business organizations have introduced environment friendly business equipment like machinery and other processing tools, which help in the production of environment friendly products leading towards sustainability of the business organizations. Application of these concepts although added some additional costs to business operations of the organizations, but in the long term it would not only benefit the organization, but its benefits would be extended to the environment and economy of the world. (Kolk, 2010) Comment by Matthew DiGiacomo: What if companies can’t afford this expensive equipment? Are there other method to comply with this pillar ? - Good example!

Social Pillar

The third and less effective pillar of the sustainable development is elimination of the social differences and imbalances that are currently in practice. The other two pillars of the sustainability are developed enormously with the passage of time, but this pillar is still in the development phase. Without this pillar organizations cannot enjoy the benefits of the sustainability as this is the last and most important pillar of this phenomenon and the possibility of its occurrence is totally dependent on it. As the business leaders know that without the existence of a just and equitable world there could be no sustainability imagined. This is the reason, which given birth to the fourth pillar of cultural diversity, if we want to achieve the social pillar we must accept the cultural diversity of the individual input to the business organization. (Hopwood, 2005) Comment by Matthew DiGiacomo: Why Comment by Matthew DiGiacomo: Most important ? but least effective ? Comment by Matthew DiGiacomo: Talk more about?

Why Sustainable Business Development Important and Its Importance for Multinational Organizations

The importance of sustainability is evident from the above paragraphs as it would not only result in the fulfillment of current organizational needs, but would also enable the future generations fulfill their needs. The objective of the business organizations could be achieved easily if they focus on the broader objective of society, environment and economic benefit by utilizing the environmental resources in an efficient manner and also by dealing with the human resources in a just and equitable manner. (Bebbington, 2001)

Two School of Thoughts of Sustainable Development

Many experts have their own views regarding the sustainable development and there are many other concepts such as corporate footprints and corporate social responsibility that share some of the tranches of the sustainable development. There are two schools of thoughts in dealing the sustainable development and the expenditure on such projects. The first one is held by Clive Gifford and the second on is held by Olav Schram Stokke. Comment by Matthew DiGiacomo: What similarities ? what differences ? why is this method better to be learning about than these two?

Gifford View on Sustainable Development Comment by Matthew DiGiacomo: What are the positives to these views?

In the book “sustainable development”, Gifford puts forward his view over the sustainable development in business organization. He considers the sustainable development as an expense for the business organizations and stated that it is not in the best interest of the shareholders and breach of the director’s fiduciary relation to the shareholders to act in their best interest. Gifford considers the current financial impact of these activities ignoring its future benefits to the society as a whole (Gifford, 2004). Comment by Matthew DiGiacomo: Only Public companies?

He says that it is expense on part of the organization as it would increase the current cost of the organizational products as a result of implementing eco-friendly practices in the organizations. He also holds the view that such practices are impracticable as social equality is not possible. He considered the directors of the organization implementing these practices in breach of their fiduciary relationship to the shareholders of the organization.

O Stokke Opinion on the Sustainable Development Comment by Matthew DiGiacomo: What are the negatives to these views?

On the other hand O Stokke has a visions that such expenditure should be seen as marketing and goodwill which is soon going to be converted to be an asset, as such expenditure will direct more customers to the organization and this will add up to the goodwill and brand of the company since people nowadays are willing to spend more on a product that has been produced by a company pursuing greener ways and sustainable development. This source is also of the opinion that companies should not only spend on environment what they consumed but they should act as the responsible citizens of the society and should add value to the society in every possible way.

Different from Gifford, Stokke considered both the long-term and short-term effect of the expense that could be incurred on aligning organizational practices with the sustainable practices. Re-arranging the organizational practices could result in expense for the time being, but the organization can benefit itself with sale of its products to large number of customers as the customer base would be increased as a result of the sale of eco-friendly products, which would increase its goodwill and many customer would come to buy the organizational. Other benefit to the organization would be that economic use of the environmental resources would decrease the cost of the organizational products. (Stokke, 1991)

Judgment

With the growth in the industry and its hazardous effects on the environment, the topic of sustainability has achieved prime importance in the eye of business organizations. Contemporary business organizations have changed its objectives as a result its demand and need from the customers as the hazardous effects of the industry has direct impact on them as well. (Stokke, 1991)

Both of the sources present two different ideas for the expenditure made on the sustainable development, although the bases of the ideas are the same, but the two are different in outlook as the first one urges a company to just fulfill what is required while the second one participates into the detailed sustainable development and considers it as a responsibility of the companies.

After taking into consideration the importance and the point of view of different authors, it could be concluded that sustainable practices must be introduced in business organizations, as it would not only ensure the present of the business organizations and overall human race, but would also ensure the fulfillment of our future generation’s needs. It would ensure the effective utilization of current resources and its reproduction for our future generations. Safety of health would reduce the cost of organizational products as a result of possible disruption in the production processes. Comment by Matthew DiGiacomo: Is there a negative ? Could sustainable practices be difficult to implement and destroy a business ? short term problems?

Future of the Sustainable Practices

Considering the current developments in the field of sustainable development, organizations have enormously developed these practices and they could be assumed that if the pace of the growth remained in this pace, they would lead towards sustainability in the future of the business organizations. The reason for success could be the desire and awareness of the customers and it benefits to the organizations in terms of increase in their goodwill and span of customers. These factors could decide the future of the sustainability in the business organization’s practices. (Baker, 2006)

Conclusion

This literature review aims to read by all business operators. In order to achieve current objectives of the business organizations and preserve some resources for our offspring, sustainable practices must be adopted in the business organizations. It would not only help the business organizations in increasing their revenues, but would also help them preserve their environmental natural resources for their future generations. This would also lead towards reduction of cost as eco-friendly goods production would lead towards economic use of the environmental resources. Comment by Lisha Zhang: Add “acknowledgement” after conclusion. See the literature review checklist.

Bibliography Baker, S. (2006). Sustainable Development . London: Routledge. Bebbington, J. (2001). Sustainable Devlopment: a review of the international development, business and accounting literature. Accounting Forum. Gifford. (2004). Sustainable Development. Oxford: Heinemann Library. World Commission on Environment and Development (1987). Our Common Future. Oxford: Oxford University Press. Hopwood, B. (2005). Sustainable Development: Mapping Different Approaches. London. Kolk, A. (2010). International business, corporate social responsibility and sustainable development. International business review, 119-125. Schoenherr, T. (2012). The Role of Environmental Management in Sustainable Business Development: A Multi-Country Investigation. International Journal of Production Economics, 116.128. Setosa, D. I. (2007). Sustainable Development and International Business. Journal of Social Issues, 63(1), 199-212. Stokke, O. (1991). Sustainable development. London: F. Cass in association with the European Association of Development Research and Training Institutes (EADI), Geneva.