Sustainability refers to the capacity of a business to have no significant negative impact on the local or global community, environment, society or the economy. These businesses strive to meet the triple bottom line (TBL) which consists of people, planet and profit. This means that the businesses demonstrate their commitment to CSR through catering for people, the planet and profit. For people, it means that the organization has fair business practices that are beneficial toward the employees and the community at large. For the planet, it means that the practices of the business do not bring any harm to the environment. Lastly, in terms of profit, it means that the business has economic value and it creates an economic impact to all stakeholders in it.
Sustainability and financial success
Sustainability is a key element in the achievement of success for a business. It also creates businesses that have sustainable competitive advantage which propels them into prosperity for the future. The economic environment that today's businesses operate requires sustainable financial planning which is critical for ensuring that the organizations remain profitable and do not face bankruptcy. Sustainability is also about the commitment of the organization to proper planning and implementation of its business strategies and initiatives. To be sustainable, the business needs to be conscious and have organized effort in allocating its resources and spending them to ensure that they are spent in the way that achieves the greatest impact for the business.
In a survey that was conducted by the United Nations Global Compact and Accenture on more than 750 chief executives from close to 100 countries, it was found that 72% of them felt that through the business having sustainability strategies and initiatives, there is strengthening of the brand, creation of trust and reputation with consumers and also other stakeholders. This ultimately leads to the business being financially successful. 66% of the respondents of this survey felt that sustainability was a critical issue in the development of their businesses Lacy, Cooper, Hayward, & Neuberger, 2010()
Many of the large companies in U.S. have continued to introduce sustainability strategies and they have aligned these strategies with their overall business strategy. This is according to a report from Deloitte which was reporting the results of a survey which indicated the importance of sustainability strategies to the future of businesses. 98% of the survey respondents felt that when the sustainability strategies were introduced and aligned with the business' priorities and strategies, there is increase in revenue for the organization that stems from two major directions. The first is from a decrease in the cost of production of services and goods and secondly is by gaining more market share Deloitte, 2010()
A report of another survey conducted by BSR on sustainability found that it influences the business value cycle in three dimensions. The first is product design which leads to a reduction in cost of production as a result of changing the various aspects of the product such as weight of material, packaging, transportation costs and fuel used. Second is consumer engagement and use which leads to an increase in the company's market share and lastly, end of use which leads to increase in value of the company's products and services BSR, 2010()
Financial and non-financial stakeholders
Lowe's financial stakeholders include the company investors and shareholders who provide the capital for the business and have interest in the success of the company. Secondly, there is the government to which Lowe pays taxes and which has an indirect influence to the company's policies by setting national policies which the company must follow. There are also the company employees who provide the required human resources for the company. Customers are also stakeholders since they are the end users of the products of Lowe. Lowe's suppliers are also financial stakeholders who provide the company's products and services to the end users Choi & Wang, 2009()
Non-financial stakeholders include the community at large which is indirectly affected by the activities of the business. There are also the trade unions and other advocacy groups which provide protection for the staff of Lowe Choi & Wang, 2009()
Effect of economic and non-economic business decisions on stakeholders
All business decisions that are made, whether economic or non-economic, have either a positive or negative effect on all stakeholders in the business. These effects come about as a result of the role played by stakeholders in the activities of the business. The various stakeholders of Lowe have a particular interest or concern about the company. Therefore, any decisions made will affect this interest or concern and thus affect the stakeholders. This brings about demands or responses from stakeholders which the business decision makers need to follow in order to prevent any crises from arising. The business has a responsibility of fulfilling all interests of the stakeholders and these needs to be taken into consideration by ensuring the business decisions that are made are in line with the interest of the stakeholders Greenwood, 2007()
In terms of sustainability, the economic and non-economic decisions that are made surrounding sustainability will affect all stakeholders either negatively or positively. The shareholders may be affected by being required to give more money to the company in order to increase the capital available for purchase of green equipment. To the customers, it could lead to an reduction or increase in the pricing of the product based on the change in the product design. To the community, they will be impacted by having a cleaner environment as the company will conduct activities that ensure the environment is kept clean.
Effect of business decisions on profits when stakeholder reactions are taken into account
The reaction of stakeholders should be taken into account when making business decisions. This is what is stipulated as per the stakeholder model. However, it is important to analyze each of the reactions to categorize them into four descriptions. The first are the supportive reactions which should be involved in the decision making. The second are the marginal reactions which are low threat but need to be monitored to ensure they remain as low threats. The third are the non-supportive reactions which are a high threat but bring about low cooperation with the stakeholders. The management should defend the business against such reactions. The last are the mixed blessings which are high threat and high cooperation reactions. The management should collaborate with the stakeholders to ensure that the threat is mitigated and the right decision is made Lawrence, Weber, & Post, 2005()
However, in the decision making process, the management needs to remember that each stakeholder has a separate interest in the business. Therefore, the reactions should be analyzed according to the stakeholder group and their interest in the business. All in all, the business decisions need to be aligned so that they bring about a decrease in the cost of production which passes on these to the consumer and at the same time increase consumer value and market share which in turn increases revenue for the company Rasche & Esser, 2006()
Analysis of the sustainability of Lowe
Lowe has a strong policy on sustainability which portrays the company's commitment to sustainability. The company strives to provide customers with products, packaging and services that are environmental-friendly and at low prices. The company also educates employees, suppliers and customers on the importance of conserving resources, reducing and recycling waste. Thirdly, the company strives to use resources such as energy, water, materials, and fuel that are friendlier to the environment in terms of reduction of emissions.
The company has a long list of sustainability goals and objectives which it constantly reviews to ensure that it is meeting these set goals and objectives. The company also engages all its stakeholders in its sustainability efforts. It ensures that suppliers engage in activities that are friendly to the environment and which maintain an environment that is safe and comfortable. It also ensures that the shopping environment for the consumers.
Comparison to competitors
Lowe is stronger than its competitors in their sustainability. Unlike its competitors, the company has a commitment to environmental issues. It conducts regular corporate social responsibility (CSR) activities that are centered on their commitment to the environment. The company also conducts consumer education on how they can contribute towards a sustainable environment.
In regards to company and employee relations, the company uses its employees as its ambassadors for its sustainability activities. Lowe has a commitment to the communities in which it operates and that is the reason behind its CSR activities. Additionally, its products are designed, packaged and transported in the way which minimizes negative impact to the environment.
Lowe Company believes that sustainable growth and maximization of stakeholder value into the future is essential for its growth. The company believes that in order to grow, it needs to pay careful attention to the needs of the consumers and to provide superior quality and value in its products…