Sustainability In Business

908 Words4 Pages
For 20 years or more the world has recognised that the way we do business has a serious impact on the world around us. Now it is increasingly clear that the state of the world around us affects the way we do business’ (KPMG, 2012). The continual call for businesses to be socially and environmentally responsible is due to sustained pressure exerted by a range of stakeholders, including customers, communities, employees, governments and shareholders (Eweje & Perry, 2011). Sustainability is a strategic imperative of the new millennium (Galpin & Whittington, 2012). It is a disruptive trend affecting industries requiring a strategic response (Lacy, Haines & Hayward, 2012) as companies are facing a new world of resource constraints (BCG, 2012). This…show more content…
Murthy (2013) argues that it is critical for competitive advantage to develop and hone sustainability-related resources capability. Businesses gain competitive advantage by building capabilities towards sustainability. These capabilities must be acquired from the top by executive leadership down to frontline supervisors, and most importantly, these capabilities have to be aligned to the strategic agenda so that they can positively contribute to business performance. Murthy (2013) identifies three capabilities drawing from the work of Hart’s theory of the natural resource view as pollution prevention, product stewardship and sustainable development. The focus with pollution prevention is to prevent pollution and emissions; product stewardship involves the entire value chain and the life cycle of products produced by the business; and sustainable development reduces the environmental burden and accrues the economic benefits for…show more content…
It is argued that ‘the goals of the sustainability team and financial team are not well aligned’ (WRI, 2013:3), and as a result they make decisions and evaluate success in different ways. This paper explores the link between resource commitment, the capability building processes and legitimacy enhancement. The enhancement of legitimacy allows increasing levels of resource commitment and consequently of capability building (Arevalo, Castello, De Colle, Lenssen, Neumann & Zollo, 2011). This dissertation argues for two types of legitimacy measures. Firstly, the adoption of corporate codes of conduct, to indicate organisational congruence with societal expectations. Secondly, the use of firm linkages to field-level regulatory bodies, such as accreditation bodies, to indicate social fitness between business and environment (Vergne, 2011). As businesses, comply with regulations, preventing environmental degradations and serving society with needed products and services and at the same time benefitting economically from the activities. Businesses will gain legitimacy ‘as their actions will be perceived to be consistent with stakeholder’s expectations’ (Colleoni,
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