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Business sustainability is a process through which business entities control their finances, opportunities, obligations, environmental and social risks. Generally, the three aspects affect the planet, profit, and customer base of a business. It is also vital to note that business sustainability targets social equity, environmental protection, and economic development. The achievement of all the three aspects enhances sustainable business development.
The most important function of a business is profit maximization. Modern developments in the field of business management have gone a long way in analyzing other aspects of a business.
Sustainability is one of the important aspects of a business that has been identified. This implies that such a business can survive any challenge due to its friendly connection to healthy environmental, social, and economical systems. Apart from the contribution of such businesses to an economy, a healthy ecosystem between the business environment and people is also enhanced.
The World Council of Development (WCED) advocates for development with the aim of meeting the present needs without infringing the rights and privileges of the future generations. If any business entity satisfies this aspect, then it definitely promotes a sustainable business development. This can be achieved by adhering to quite a number of recommended practices.
Engagement by stakeholders is extremely important toward the sustainability of an organization. Information gathered from employees, customers, and the neighboring population assist organizations in coming up with decisions that incorporate stakeholders’ interests.
Another important requirement for sustainability is the incorporation of environmental management system in a company’s management. This provides processes and structures that necessitate environmental-friendly practices. Organizations such as ISO 14001 usually offer such services.
Controls and measurements are also necessary in achieving sustainability. Hence, organizations should be transparent to scrutiny from any external body. This provides a means of reporting the company’s achievements. Moreover, life cycle must also be analyzed. This involves the analysis of social and environmental effects of the products and services offered by a company. The ability of a firm to attract and retain employees is also an integral measure of sustainability.
A company can ensure sustainability in numerous ways. For instance, the use of paperless or timber-less office, use of green energy such as solar energy in running machineries may indeed be instrumental in enhancing sustainability.
CSR, Corporate Objectives, and Strategic Intent
Corporate social responsibility (CSR) is a self-regulating mechanism that is usually integrated into a business model of an organization. The corporation ensures that appropriate measures are put in place. The latter will ensure total compliance with the ethical standards, existing law, and international standards. Corporate objectives are the primary principles that guide daily running of a business entity.
They offer the much needed guidelines for policy making, development of agenda and secondary objectives. They also enhance the set goals of an organization.
On the other hand, strategic intent is the planning mechanism adopted by an organization on how to achieve its vision. Strategic intent also enables a company to formulate its specific development path according to the desired future. Therefore, strategic intent is destiny-oriented and the winning formula of a company.
For a company to achieve its CSR, the set objectives should be geared toward achieving sustainability. Since the strategic intent defines the future, sustainability implies coming up with a realistic goal that will ensure the strategic intent is achieved. Therefore, CSE of an organization is dependent on the organization’s strategic intent and its objectives.
Approaches to CSR
When analyzing CSR, three approaches are used. These approaches are Neoclassical, Ecocentric, and Ecological modernization of a business. The neoclassical approach views CSR as a requirement of an organization in order to avoid legal actions, fines, license revokes, and loss of customer base. Any aspect outside the aforementioned elements may be enforced by a regulatory measure.
In ecocentric business, a company addresses CSR from an ethical point of view. In this case, sustainability is part of a company’s policy and strategy. Ecological modernization of a business is the balance between the two aspects. It targets development without harming stakeholders. CSR is achieved by ensuring sustainability of all the three aspects of a business.
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The best of the three approaches to CSR is the ecological modernization of a business since it takes into account all the necessary requirements of a sustainable business. Profit, people, and the environment are also considered in this approach. The latter approach ensures that all the parts required for a business to function effectively are available in the future.
This approach is also realistic compared to the ecocentric business approach to CSR. it does not care about the survival of a business especially if the environment and social responsibilities are achieved. However, the economical aspect of a business is highly likely to be ignored. This exposes a business to numerous vulnerabilities. Hence, its economic value is not preserved for the future.
The neoclassical business approach to CSR is the simplest one to achieve. It is also realistic in nature. A company will always be on the right side of the law and also be able to remain profitable when this approach is followed since it is the most important aspect of a business. However, a business entity that does not entrench social responsibility in its agenda cannot set goals for the future. Such companies may easily fail to plan for the future sustainability.