Change management and leadership principles
Change management is an ongoing process in an organization. It results from the dynamic nature of business environment. Managing change is often challenging for top managers. Use of efficient change management and leadership principles make change management successful. First, the management needs to embrace system thinking in an organization.
Besides, they need to integrate the three approaches in system thinking in daily running of an organization. The three approaches used in this process are life cycle thinking, stakeholder engagement and complexity thinking. These three approaches make implementation of change successful. Second, management should ensure that there are structured communication channels in the organization.
It helps in disseminating information efficiently to all staff members. Also, it makes it easy to involve most employees in the change management process. Moreover, it helps in minimizing resistance during implementation. Also, change management requires strategic re-positioning and visioning. The organization should be in a position to embrace change at any time.
It can achieve this through coming up with flexible strategic plans. In addition, the organization requires right staffing. The human resource functions need to be aligned to the strategic plans of the organization. It guarantees smooth change management as experience at Unilever Company.
Corporate sustainability
Sustaining corporate phase aims at redefining trade environment in the interest of a sustainable world while giving sustainability a place in the strategies of a firm. The management needs to create a constructive corporate culture that restores long-term feasibility of the organization as an essential part of the society.
Corporate sustainability entails production of sustainable products and services, reorganized supply and production distribution system, building human and relational capital, and social contribution. The mode comprise of seven phases, these are rejection, non responsiveness, compliance, efficiency, strategic pro-activity, and the sustaining corporation.
Efficiency and strategic ‘pro-activity phase’ creates value for the organization. Efficiency stage aims at designing the system. It views human resource system as a means to higher productivity and efficiency. In addition, the phase views environmental management as a foundation of preventable costs for the organization.
The phase emphasizes on reporting, risk avoidance, systematic human resource management, improved efficiency, and engagements.
On the other hand, strategic pro-activity focuses on innovation, engagement with stakeholders to come up with environmental friendly products, supports citizenship to maximize proceeds, and enhance employee retention. The phase requires high level soft skills, flexibility for structural revamp and stakeholder engagement.
Triple Bottom Line
Triple Bottom Line is a reporting mechanism that aims at showing the impact of the business besides its financial performance. Triple Bottom Line reports on economic, environmental, and social performances of the business.
Risk management is a vital role in the organization since it saves the company avoidable losses such as those that were experience at Enron. A company should endeavor to mitigate risks surrounding its business so as to have a favorable report that meets the requirement of Triple Bottom Line reporting framework.
The banking sector faces the risk of fraud and non compliance with the legislative requirements. To mitigate the risks, the banks should organize for periodic reviews of internal processes by independent bodies. The reviews show areas that need correction. Secondly, the bank should have a compliance function.
The department should be tasked with ensuring that the bank complies with the legislative requirements. Also, the bank needs to set up an efficient internal audit and risk management department. The departments continuously review internal processes with an aim of mitigating risk. These measures will ensure that the bank complies with the Triple Bottom Line reporting framework.
In a mining sector, the key sustainability issues are environmental, social economic and country level governance. The mining sector is susceptible to environmental and social issues because activities of these industries affect both human settlement and the environment.
To mitigate risks in this sector, the company needs to closely work with the government in environmental conservation activities. It would help the company minimize the risks resulting from its activities. The mining companies also need to mitigate the negative effects caused by their activities.
Drivers of corporate sustainability
Corporate sustainability results from actions that extend the socially useful life of organizations. It enhances the planet’s ability to maintain and renew the viability of the biosphere and protect all living species. Besides, it augments society’s ability to maintain itself and to solve its major problems, and maintain a level of welfare for present and future generations of humanity.
There are a number of drivers for corporate sustainability. Environmental factors create the need for corporate sustainability. In the 20th century, the world was facing a number of environmental challenges that created the urgency to have a sustainable world.
For instance, there was depletion of vital resources on the earth’s crust. At present, water supply across the world is declining at disturbing rate. Further, emission of carbon dioxide is worrying globally because it results to global warming and depletion of the ozone layer. These environmental factors suggest an immediate need to implement corporate sustainability.
Social factors are drivers for corporate sustainability. Working force and communities put pressure on various institutions to implement corporate sustainability. These pressures results from the urge for a healthy life. This group of people channels their sentiments through nongovernmental organizations. The focus, pressure and engagement of these institutions push corporations towards corporate social responsibilities.
The state of the economy also calls for corporate sustainability. For instance, the recent Global Financial Crisis created the need to have a self sustaining economy which does not over rely on a few sectors. The crisis led to losses in the financial sectors and trade balance. These losses caused massive job loss.
It also affected sources of revenues for a number of people across the globe. Investors act as significant drivers’ of corporate sustainability.
This is achieved when they choose to invest on environmentally friendly ventures. Fifthly, customers’ preferences for environmentally friendly goods push companies to embrace corporate sustainability. Finally, stringent government laws and regulation necessitates companies to embrace corporate sustainability.
Consumption behavior patterns
Consumption behavior patterns and practices play a significant role in implementation of corporate sustainability. Stakeholders are significant players in the implementation of socially and environmentally responsible value chain.
They provide oversight role to any business on the need to approve most of the major decisions in a company. Therefore, changing consumption behavior of the stakeholders helps in ensuring that all value chains are socially and environmentally responsible.
This is not an easy task since the stakeholders have different perspectives on ways of running the organization. Besides, the aim of stakeholders is to maximize profitability of a company and shareholders return. However, these are not the only goals of an organization. Therefore, there is need to find a suitable approach of changing the stakeholders points of views to be environmentally friendly.
A suitable approach to changing the stakeholders’ perception is through dialogue. Dialogues should be well structured and aimed at finding solutions through participative mechanisms. Dialogue aids in incorporating normative and ethical issues. Moreover, it plays a significant role in understanding and modeling differences between key actors.
Dialogue with stakeholder helps in risk management and reduces the risk of unexpected problems. Also, it provides social license to operate smoothly. Finally, dialogue with stakeholder provides insight into future trends and market changes. Before having a dialogue, it is necessary to understand stakeholders’ needs and expectation. An example of effective use of dialogue is as applied in the case of Siemens Company.
The approach entails giving information to stakeholders, gathering information, consulting, bounded dialogue, and open dialogue. Apart from dialogue, the management may also debate with the stakeholders on the way forward. In this case, both teams argue their points out. This approach helps in understanding point of view of the opposing teams better.
Energy efficiency
Energy efficiency makes perfect business sense. All the departments in the organization should be involved in the decision making and implementation of energy efficient strategies. For instance, accountants and managers may deal with allocation of resources in the company. As a way of managing risk, they need to allocate adequate budget, time, and resources for enable implementation of energy efficient strategies.
The team should also monitor and report on the implementation of the project. Accountants should ensure that energy efficient investments compete with other demands for capital. Accountants also help in carrying out life cycle costing of the whole project. This shows the cost of the entire energy savings project.
Therefore, an accountant aids in controlling cost of such projects as a way of managing risks as the management provides oversight leadership.
Households and companies benefit from implementation of energy efficiency measures. The people benefit from low bills, reduced demand for construction of new energy plant, reduced global warming, and low cost of living. The end result is a clean environment for everyone.
Energy efficiency is achieved through use of technology that consumes less energy such as compact florescent bulbs instead of using ordinary bulbs. Behavioral changes such as turning off lights when not in use aid in energy conservation. For companies, energy efficiency reduces costs.
This gives savings to such companies. Secondly, energy efficiency increases employees’ productivity resulting from healthy environment. Thirdly, energy efficiency increases employee involvement in corporate sustainability. Finally, energy efficiency improves teamwork in an organization and lateral communication.
Challenges in implementing sustainability
Sustainability guarantees better life for all in the society. Its benefits, both tangible and non tangible, exceed costs. Therefore, managers should include these practices in the strategic plan of a business. However, this may prove challenging due to a number of reasons. For instance, the primary objective of firms is to maximize profits and shareholders returns.
Implementing sustainability in an organization may conflict with the primary goal of the business. This hinders the management from implementing sustainability. Secondly, implementing some sustainability projects requires huge investments that firms cannot afford.
For instance, construction of green building is beneficial since it results to low utility cost and higher employee productivity. However, companies cannot afford the cost of constructing such buildings. Therefore, cost constrain is a limiting factor towards implementing sustainability.
Thirdly, implementing sustainability may require an overhaul of the usual way of carrying out business for most companies. However, managers can change some internal businesses processes upon receiving approvals from stakeholders. These changes may not be approved hence hindering implementation. Fourthly, the management may lack experienced expertise required to fast tract implementation of sustainability.
This hinders implementation. Also, in certain circumstances, the legislative processes in a country may stop management from implementing sustainability. Finally, management needs to strike a balance between reputation and business, and implementing sustainability.
This occurs when the sustainability project affect a group people. For instance, resettlement of a community to conserve a forest is worthy but may bring conflict within the community hence tarnishing the image of the business. In such cases, management may choose not to implement the sustainability project so as to protect reputation of the business.
Strategic partnerships with various companies help management to overcome some of the challenges. For instance, the management can share cost when in a partnership. Also, partnership helps in protecting the reputation and business of the company.
Business at the base of the pyramid
Companies producing products that target the whole population divide the population in to various categories. This is done according to social classes. The bottom of the pyramid comprises of people within low living standards. It forms the majority in most economies. As one moves up the ladder, the pyramid gets smaller and smaller as living standards of people improves.
This shape is common in developing economies and low income countries. Businesses at the base of the pyramid entail carrying out transactions with citizens at the bottom of the pyramid. Businesses at the base of the pyramid approach to urban sustainability are founded on a number of principles. These are market centric and production centric.
These essential principles aim to reduce poverty through economic and social empowerment and accessibility of goods and services to all. The end result of this principle is availability, accessibility and affordability of goods and services to all citizens.
With the existing stiff competition in the contemporary business dome, businesses gain strategic competitive advantage when they address the direct and indirect needs of people at the bottom of the pyramid.
There are a number of approaches that companies use to lift up living standards of people marginalized in the society. Examples are corporate social responsibilities and product subsidies.
These methods require setting up a fund kitty. In the event that these funds get exhausted, the support offered to the marginalized citizens curtails. Businesses at the base of the pyramid offer sustainable social services to the marginalized communities. This model of carrying out business should be implemented in developing countries. For instance, Unilever Corporation practices the act of doing business with the marginalized.
They package their products in small quantities that are affordable by all. In additional, the company produces low cost products such as toothbrushes. This model of business is economical and efficient for both citizens and businesses.
Stakeholder engagement
Stakeholders refer to a group of people who have interest in a venture and are also able to influence outcome. They often act as the oversight body for organizations. Examples of stakeholders are the state, community, shareholders, creditors, and employees among others. Stakeholders’ engagement helps in smooth running of the business. There are a number of issues that need to be taken into account when engaging stakeholders.
To begin with, communication to stakeholders should be done early in the decisions making process. The message should me meaningful and accessible. This should be done throughout the entire life f the business. Secondly, stakeholder consultation needs to be planned. In addition, the consultation need to be inclusive, should be documented, communicates and a follow up need to carried out.
Thirdly, negotiations and partnerships for the business should be in the best interest of the stakeholders. These negotiations and partnerships should aim at either minimizing cost or increasing benefits. Besides, they should satisfy interest of all stakeholders.
Fourthly, there is need to establish reachable and reactive ways for the stakeholders to raise distresses and complaints about the business throughout the life of the business. Fifthly, there is need to report frequently to the stakeholders on the general performance of the business. The report should highlight the social, economic and environmental performance of the business.
Stakeholders need to be involved directly in project monitoring. In addition, it is necessary to use external monitors such as auditors so as to improve on credibility and transparency. Besides, it is necessary to recognize and prioritize stakeholders’ interests and concerns. Notwithstanding, there is need to have adequate human resource to manage processes of stakeholders engagements, commitments and reports on growth.
Moreover, stakeholders need to be updated frequently on performance of the venture. This should not be done at the time when the company is experiencing problems. Finally, it is necessary to uphold professional code of conduct and ethics when carrying out duties.
An example of a company that reaped the benefits of stakeholder engagement is Manila Water Company. The company developed an active engagement with the shareholders from the onset of the project to its end.