Sustainable business development strategies and implementation

Sustainable Business Development

In the last years, the business world has developed in a manner that triggered a shift in the business philosophy of many companies. The shift was reflected in a nuanced approach on the main objective of any corporation (maximizing profits) towards maximizing profits with a keen outlook on the effect of the company activity on society, on the community, on the environment etc. This meant that the company became an entity much closer linked and submersed in the environment (social, human or natural) that it was part of than before, where all actions of the company would be judged and evaluated against a strict set of conditions and whose behavior would reflect in the overall activity and profits.

This paper aims to examine the presence of sustainable business societal philosophies and practices in the organization, while looking at the different factors that played a role in shifting philosophies within organizations from the distinct, isolated profit-making perspective and towards a more concerned approach towards the environment (human or natural) in which the company developed its business. The paper would also aim to examine how stakeholders began to evaluate the performance of the company not only based on the economic or financial performance of the firm, but also on its societal dimension of sustainable business.

Against this background, there are several internal and external factors that are worth analyzing and that had the most important impact on the mentioned shift. An important external factor was the consumers, who became much more aware and interested on the nature of the products or services they were using. This meant that, upon a purchase, the consumer would be interested to learn more about where the product was made and under what conditions. The way the product was made, including the conditions the workers worked in or the impact on the environment. Price was no longer the most important element in the purchasing decision making process. Consumers understood that, eventually, a negative impact on the human or natural environment would negatively impact them as well, in the end.

Another important external factor that played a role in businesses changing their philosophy and approach and shifting towards sustainable development was the regulations and regulatory frameworks that governments began to introduce. Again, this was done because of a significant wave of pressure from consumers and from the society. From a moment onwards, there was a distinct set of sustainable norms that companies needed to abide by in order to function properly and lawfully. This external factor played a tremendous role in reforming the companies' philosophy, including because these entities could not simply adopt regulations and practices without changing the mentality and philosophy according to which they functioned.

Looking at the social dimension of sustainable business development, there are several elements worth mentioning. First, of all the different dimensions of sustainability, this is the most difficult to capture, mainly because of its qualitative nature and the lack of a set of criteria that would determine what sustainable social business development is (Geibler, 2006). The reason for this becomes clearer when compared to the environmental dimension of sustainable business. This can be clearly quantified by looking at obvious examples of a positive or negative impact that the business has on the nature around it. If there is a leak at a plant, the negative effect will be immediately seen in nature.

On the other hand, the social dimension cannot be as clearly defined. One can agree that a socially sustainable business development will create working opportunities for the people in a community, will provide reasonable wages and good working conditions. These seem as basic criteria to start from, but things become more complicated when this is analyzed over a longer period of time. Some of the positive effects of sustainable business development are not immediately translated into quantifiable elements. A program that the business might launch in the community could have perceivable benefits in the not so near future or not at all, if factors do not come into play.

On the other hand, some of the companies can exercise a proactive approach by using risk identification and assessment factor methodologies that would be able to reveal for the decision factors in the organization the societal impact of the business development and whether this is socially sustainable or not. The risk identification and assessment factor process would include a clear analysis of the community in which the business is present, of its main activities and areas of development and of the domains where the company can make a different. The risk identification phase would let the company know whether its development, at any point, might have a negative impact for the community of which it is a part.

In the end, the business will be evaluated not only by the shareholders (who, as shareholders, are looking primarily towards profit maximization), but also by all stakeholders. Several relevant issues should be discussed here. First, even the shareholders move away from a simple, plain evaluation based solely on profits. They understand that a socially sustainable business development feeds, in the medium and long-term, into the company's profits, with all financial implications deriving from that.

If one looks at the stakeholders, as a larger group that includes the shareholders, the customers are likely to play an essential role in the evaluation of the company. As pointed out previously in the paper, consumers no longer base their purchases on simple assessments of price and quality, but look at the social impact the company plays, how the company development impacts lives and communities, including their own. Consumers will just be more aware of the societal dimension of sustainable business and will consider this in their evaluation.