Professional Documents
Culture Documents
Week 1
Corporate Sustainability
Acknowledgement:
The powerpoint slides used in this topic have been adapted from materials developed by Dr Nick Mangos and Maz
Demosthenous of the Flinders Business School, and their kind assistance in developing this topic is gratefully
acknowledged.
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Four Pillars of Corporate Sustainability
Concept
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2. Sustainable Development
Sustainable development is a broad concept that combines:
> Economic
> Social Justice
> Environmental Science
> Environmental Management
> Business Management
> Politics and
> Law
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Role of Sustainable Development
> Not to be left in the exclusive hands of government
regulators and policy makers
> Industry has a significant role to play in achieving
sustainable development.
> Industry needs to be more proactive role in balancing the
economics with social equity and environmental protection.
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Supporting Sustainable Development
Sustainable Development is as much an economic necessity as it
is an
> environmental and
> social necessity
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Sustainable Development contributes to
Corporate Sustainability in TWO ways
1. Sets out areas that corporation should focus:
> Environmental
> Social
> Economic performance
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Corporate Social Responsibility and Sustainable
Strategic Management (SSM)
Whether Corporations care about SSM is determined by their levels of
Corporate Social Responsibility (CSR) and stakeholder consideration
and salience.
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CSR is based on four philosophical theories
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Stakeholder Issues in Business Strategies
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Goal of Stakeholder Theory
> To help corporation strengthen relationships with external
groups in order to develop a competitive advantage
Stakeholders include:
> shareholders
> Investors
> Employees
> Customers
> Suppliers
The article Wilson (20031) in this weeks readings falls short in
including what he sees as primary stakeholders.
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5. Corporate Governance/Accountability
and SSM
Definition of Corporate Accountability:
Accountability is the legal or ethical responsibility to provide an
account or reckoning of the actions for which one is held
responsible..referring to ones duty to explain, justify or report on his
or her actions (Wilson, 20031, p. 4).
This definition is based on the principal and agent contract relationship
where the shareholders are the principals and the corporate manager
is the agent. Sometimes called Agency theory / agency law.
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Corporate Contracts
> Explicit and implicit contracts are entered into by the
corporations with other stakeholder groups and these
contracts for the basis of corporate accountability
relationships.
> It is the nature of the relationship between corporate
managers and society at large that defines corporate
accountability theory.
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Sustainability John Elkington (1997)
Elkiington (1997, in Wilson,20031) UK consulting argues that:
..companies should report on their environmental, social, and
economic performance not just financial performance
Elkington3 suggest that this is accounting on:
> Environmental
> Social
> Economic performance
As a Triple Bottom Line reporting:
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Sustainable Strategic Management: An
Evolutionary Perspective
> Second half of the 19th century and the 20th century through
ideas of Smith, Taylor and Weber, ideas of Effectiveness
and efficiency were the prime success factors in
management focus for manufacturing activities. These
were narrow and economic in nature.
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6. Sustainable Strategic Management: An
Evolutionary Perspective (continued)
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6. Sustainable Strategic Management: An
Evolutionary Perspective (continued)
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Emergence and Growth of SSM continued
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Emergence and Growth of SSM continued
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SSM Strategy Formulation
> Strategic management formulation needs to be more inclusive of
stakeholder needs and wants as well as the societal and
ecological/biological sectors.
> It is an expansion of the neoclassical model to an open system as
depicted in figure 3. (Stead and Stead, 20082, p. 74).
> Included here is stakeholder needs, society and Biological nutrients as
well as the neoclassical economic activities.
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An Enterprise Strategy Perspective on SSM
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Reference List
1. Wilson (2003) Corporate Sustainability: What is it and Where does it come
from Ivey Business Journal, pp 1-5, March/April 2003
2. Stead, J, G and Stead E., (2008) Sustainable Strategic Management: an
evolutionary perspective, International Journal Sustainable Strategic
Management. Vol. 1, No. 1. pp. 62-81
3. Elkington, J. (2004). Enter the triple bottom line. The triple bottom line: Does it
all add up, pp. 1-16.
http://kmhassociates.ca/resources/1/Triple%20Bottom%20Line%20a%20hist
ory%201961-2001.pdf
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