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dissertation proposal

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dissertation proposal

  1. 1. Embedding Environmental Sustainability within Corporate Strategy; Concept and Implementation Proposal for Honour’s Dissertation Project Supervisor: Dr Hock Tan Matriculation: 40059632
  2. 2. Table of Contents Background to Study..................................................................................................................3 Aim.............................................................................................................................................4 Objectives...................................................................................................................................4 Objective 1.............................................................................................................................4 Objective 2.............................................................................................................................4 Objective 3.............................................................................................................................4 Objective 4.............................................................................................................................5 Initial Review of Literature........................................................................................................5 Introduction...........................................................................................................................5 History of Concepts and Theory’s.........................................................................................5 The Interrelated Economical Perspectives............................................................................6 Development of Embedded Sustainability............................................................................6 Why Embed Sustainability?..................................................................................................7 Models and Theory's on How to Embed Sustainability........................................................7 Energy Industry.....................................................................................................................8 Conclusion.............................................................................................................................9 Research Methods: Description and Justification......................................................................9 Hypothesis and Questions.....................................................................................................9 Secondary Research.............................................................................................................10 Primary Research: Cross Sectional Case Study..................................................................10 Intended Purpose of Case Study ....................................................................................10 Collection of Information...............................................................................................10 Analysis of Information..................................................................................................11 Arrangement of Results..................................................................................................11 Time-line..................................................................................................................................12 References...........................................................................................................................12 References................................................................................................................................13 2
  3. 3. Background to Study Corporate philosophy on environmental sustainability has evolved and changed though the years. Strategists such as Friedman (1970) believed the only social responsibility of business was to make profit. Freeman and Reed (1983) then encouraged businesses to consider the stakeholder. In 1990 The Triple Bottom Line becausebecame popular encouraging people, profit and planet business motives. Current ideas neglect the notion of trade-offs between profit, social value and environmental value, encouraging businesses to embrace all factors to create sustainable value. This is achievable through embedding sustainability into corporate strategy. Corporate embedding of sustainability it is a significant and viable solution which would contribute towards tackling environmental, social and economical issues. There are many pressures driving businesses to embed sustainability however there is a lack of consensus over the techniques of implementation. This can be perceived as a barrier. Therefore there is a requirement to build upon research in this area. Although economic, and social and environmental sustainability are interrelated, the necessity to maintain the planets resource base is essential. Therefore the project will focus upon environmental sustainability. The energy industry is the main current and future actor in the creation of environmental suitability, hence the intended purpose of the research will be to advise mangers in the energy industry on how to embed environmental sustainability into strategy. The opportunity for companies within the energy industry to embed sustainability has relevance to the authors previous study of change management. Conventional companies within the energy industry are currently experiencing miss-alignment with their external environment due to the depletion of the resource base. Currently the issue is not adequately addressed by the energy industry and radical change of strategy towards renewables is now required. The project's investigation into an appropriate strategy for embedding sustainability, via primary research of the The Little Green Company and secondary research into models of embedded sustainability, is intended to provide contribution towards strategy to address miss-alignment within the energy industry. 3
  4. 4. The Little Green Energy Company are experts in designing and installing photovoltaic solar panels within South East England. Theis successful Small to Medium Enterprise (SME) also installs solar thermal, air source heat pumps and LED lighting products. They supply to a mixed market of consumers, commercial buildings and new builds and pride themselves on; their non-standardised approach towards the customer, the product portfolios strong value for money and offering high quality goods. Aim To undertake primary research within The Little Green Energy Company to assist with the investigation of the concept of embedding environmental sustainability and to discover practical strategies for implementing embedded sustainability, particularly within the energy industry. Objectives Objective 1 To describe the concept of embedding environmental sustainably by reviewing and comparing relevant and useful literature and theory. Objective 2 To investigate and identify key models and theoriey’s on how to embed environmental sustainability into corporate strategy. Objective 3 To undertake primary research within ‘The Little Green Energy Company’ (solar panel designer and installer) to assist in answering the question; how can environmental sustainability be embedded into strategy? 4
  5. 5. Objective 4 To make recommendations, based on the analysis of both primary and secondary information, to managers, particularly in the energy industry, who are seeking to take advantage of the opportunity to embed environmental sustainable development into strategy and move beyond corporate requirements. Initial Review of Literature Introduction This section will provide a review of literature in the topic area; embedding environmental sustainability. The body of the review will discuss modern literature, drawing on key theories and models however the review will also provide a historic account of literature in the general area of sustainability. The historic account will display the development of sustainable development theory and concepts. History of Concepts and Theory’s The term ‘sustainable development’ originated from the Brundtland Commission’s report on the global environment and development. The Brundtland Report (1987) defines sustainable development as: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’’ After the publication of the Bruntland Report, Elkington (1997) introduced a measuring system for sustainable development in the interlinked areas of profit, people and planet. Elkington's “Triple Bottom Line” encouraged businesses to take account of the full cost involved in doing business. Although the tTriple bBottom Lline has raised awareness of the positive and negative externalities of businesses, it receives heavy criticism. Sridhar and Jones (2013) disagree with its quantitative economic paradigm and believe it has an 5
  6. 6. understated outlook on what corporate sustainability should aim to be. The criticism reinforces the dissertations focus on the environmental pursuit of businesses. It should be noted that sustainability has a separate definition to sustainable development. Sustainability is the meeting of the sustainable development goal (above definition). For example an environmentally sustainable system maintains a stable resource base for the present and avoids the over exploitation of renewable resource systems for the future generations (Harries, 2003). The Interrelated Economical Perspectives Steger (2004) recognises the need for companies to generate positive externalities. His industry specific perspective is drawn from an unusual research collaboration of the IMD Business School and the World Wildlife Federation (WWF) commission. Steger argues companies should move beyond compliance to make the environment a business principle. This is a positive movement from the 1980's where businesses focused on cheap, fast and better operations and dismisses ideas from 'The Corporation' documentary which labelled big businesses as self-interested psychopaths (The Economist, 2004). However several of his concepts appear to be outdated and controversial. For example Steger's (p8) 'smart zone' concept diagram illustrates that a heavy corporate focus on social-environmental aspects restrict a companies economical value and profits. Development of Embedded Sustainability Laszlo (2005, p.3) contributes to the changing paradigm of sustainability, proposing corporations are no longer perceiving environmental stewardship as a cost, as seen in Steger's model, but an opportunity. Laszlo and Zhexembayeva (2011) explore beyond environmental stewardship, suggesting profit can now be generated by embedding sustainability into a companies core. The book sees 'embedded sustainability' as a necessity for long term growth and believes businesses need to conciser the security of the value chain as of equal importance to the 3 C's of business (customers, capital and competition). 6
  7. 7. Why Embed Sustainability? Laszlo and Zhexembayeva provide a persuasive account of why businesses should embed sustainability. They believe the first motivating force is an increase in transparency due to public annual report requirements and social media. Another drive is the increasing expectations from consumers for high quality, readily available, sustainable products which are a reasonable price. Finally employee and investor expectations of corporate sustainability are rising. Company strategy needs to be consistent with the expectations to engage and retain staff and investors. Laszlo and Zhexembayeva believe the creation of value and competitive advantage is at the centre of these forces, that trade-offs between stakeholder value and shareholder value need not occur and that companies should instead aim to create sustainable value. Therefore, in attempt to advise strategic decision making of businesses towards creating sustainable value (Objective 4), the author will seek to answer the question How does a business strategically respond to the three key market pressures? (Objective 2-3). Models and Theory's on How to Embed Sustainability Hart (2007) believes corporations are the only organizations with the resources, technology, motivation and global reach to achieve sustainability. He believes companies need to move beyond 'greening' towards sustainability and now need to take a top down approach to exploit environmental opportunities. Hart introduces 'The Sustainability Portfolio' as a tool to show a company’s consistency with sustainability. The sustainability portfolio requests companies to rate and question their use of; clean technology, a sustainable vision, pollution prevention and product stewardship. Hart believes a company should have institutionalized each of the factors and that each factor should weigh equally. Epstein and Roy (2003) also contributes towards corporate strategies to target environmental issues. They believe, to integrate sustainability principles into business strategy, managers must quantify the link between social and environmental actions and financial performance. Epstein and Roy provide guidance on how to integrate financially sensible social and environmental initiatives into companies decision-making processes and operations. Epstein and Roy believe, in order to make informed decisions on the correct 7
  8. 8. trade-offs, companies should implement systems to evaluate the potential impacts of sustainability initiatives on financial performance and to discover potential barriers. They believe effective evaluation will assist with choosing sustainability projects with the greatest net value to sustainability and financial performance. Nevertheless models which pay more regard to the external environment will be utilized in this project. Porter's (1985) 'Three Generic Strategies' can discover the conditions under which sustainability can lead to competitive advantage. Kim and Maubourgne's (2004) 'Blue Ocean Strategy' shows how corporate use of strategic value innovation creates markets which were previously non-existent and are supportive of sustainability. Christensen's (1997) 'Disruptive Innovation' leads businesses to commit to transformational change to overcome imbalances in nature such as climate change as he believes incremental change is not sufficient. Energy Industry Steger (2004) provides an industry review of the energy industry which is of high relevancy to this honours project. He highlights the need for companies within the energy sector to radically change their business models, focusing on renewable energy's in order to combat resource depletion and climate change. Eckhart (2006) describes the positive movement of the energy industry towards renewables, from 2005-2006 from the introduction of the Renewable Fuels Standard within the Energy Policy Act. He observes the increasing price of conventional fuel and the reducing cost of renewable fuels in the US. This indicates Steger's desired movement is under-way. Further- more Chinas Business News Weekly (2009) stated that about 19% of global energy consumption originated from renewable sources and that the technical potential for use of renewables exceeds all other potential resources. The growth trends of renewable energy’s, specifiably wind and solar, are illustrated in Global Data's (2013) analysis of the renewable energy industry. Global Data record a 100 Giga Watt (GW) increase from 2011 to 2012 and predict the output from renewable energy will continue to rise. However another key trend predicted is a slow down in European renewable energy markets due to cuts in feed-in-tariffs for solar projects. The global reports analysis of the 8
  9. 9. external environmental influences in the renewable energy sector will help to predict the consequences of embedding sustainability in the energy sector. This will help to provide a balanced argument when making recommendations (Objective 4). Conclusion To conclude, the literature review highlights the essential present and future role private corporations play in achieving environmental sustainability. In the past this role may have been considered as a profit draining responsibility however corporations are now beginning to see environmental issues as an opportunity. The new paradigm which promotes environmental strategies and embedded sustainability is convincing and driven by many factors. There is, however, high controversy over the strategies a business should implement to effectively embed sustainability. This being said the growth of renewables demonstrates businesses in the energy industry are successfully managing to embed environmentally sustainability into their strategies. Therefore, an investigation into a renewable energy company’s strategy should provide industry specific findings which reveal truths over practical strategic choices and models to select to embed sustainability. Research Methods: Description and Justification Hypothesis and Questions The primary and secondary research of the project will attempt to prove and address; 1. Hypothesis: A case study investigation into a renewable energy company’s strategy will reveal truths on how to embed sustainability. 2. Hypothesis: The findings from the primary research (case study) are consistent with models of embedding sustainability. 3. Question: What are the best techniques/ models for embedding environmental sustainability into strategy? 4. Question: How could these models be applied to conventional energy companies to promote the movement to renewable fuels? 9
  10. 10. Secondary Research The secondary research will firstly discover key approaches of embedding sustainability into strategy. The research will then identify supporting and opposing perspectives of the key models in order to examine the reliability, generalizability and validity of the models to the research objectives. The source and currency of the models will also be investigated. The models will be in the general area of sustainability as environmental, social and economic factors are interrelated however models which do not incorporate environmental sustainability will be excluded as they would lack relevancy to the project’s environmental focus. Primary Research: Cross Sectional Case Study Intended Purpose of Case Study The case study investigation of The Little Green Energy Company's sustainability strategy will attempt to reveal the most relevant and feasible models for embedding environmental sustainability particularly within the energy industry context. Collection of Information Access for a case study instigation has been gained via a phone call to a senior engineer within The Little Green Company. A questionnaire research approach has been selected by the author. The majority of the questions will be open-ended in attempt to gain qualitative information. The key areas of investigation will be the company’s decision making process for choosing a sustainable strategy, its selection of sustainability strategy and the implementation. A purposive sampling method will be utilized in order to address the above questions and hypothesis. This method selects informants based on the knowledge they posses (Bernard, 2002). Case studies are useful in accessing a group of knowledgeable informants. The case study will question all staff to ensure higher precision. Managers within the company are more likely to provide informed answers on The Little Green Companyie's sustainability strategy however subordinates should also be able to contribute over how they feel the company chooses and implements its sustainability strategies. 10
  11. 11. The questionnaire will firstly explain purpose of investigation and then ask clear, unambiguous and simple questions which do not lead the informant. The questions will be in a logical order investigating the strategic decision making process though to strategy implementation. The questionnaires will be given directly to the staff mid-December. Analysis of Information A directive content analysis will be utilized to analyse the qualitative information collected. The key variables identified from the main models of embedding sustainability and established links between the variables will determine the coding scheme for the primary data. The text that cannot be categorized will be given a new code. Directive content analysis has been selected in order to show the supporting and non-supporting models of the case study findings. The study should reveal descriptive evidence of the main properties/variables of embedding sustainability and their interrelatedness. A directive content analysis of the case study using all the key variables from the main models of embedding sustainability established from secondary research should identify the strongest models of embedding sustainability for the energy industry. Arrangement of Results Each of the key models and variables identified from secondary research will be listed and the supporting or opposing evidence and from the case study will be described. The strongest correlations will help to conclude over how to embed environmental sustainability into strategy within the energy industry. 11
  12. 12. Time-line References 12 Activity Semester 1 2014 Semester 2 2015 Date 21/11/14 24/11/14 02/12/14 09/12/14 15/12/14 22/12/14 29/12/14 05/01/15 12/01/15 19/01/15 26/01/15 02/02/15 09/02/15 16/02/15 23/02/15 02/03/15 09/03/15 16/03/15 23/03/15 02/04/15 09/04/15 Week 11 12 13 14/Exams 15/Exams Christmas Christmas Christmas 1 2 3 4 5 6 7 8 9 10 11 12 Writing of Literature Review Generation of Questionnaire Questionnaires Collected Research Methods Write up Data Analysis Write up Write up of Conclusions Write up of Recommendations Write up of Limitations Write up of Abstract and Introduction Write up of Acknowledgements Binding Submit Dissertation Exams Christmas Holiday Submitting Proposal and Research Integrity Form Background Research for Literature Review Questionnaire given to Little Green Energy Company Staff Planning of Directive Content Analysis; format and display Establish Coding Scheme and Key Variables and their Interconnectedness based on primary and secondary research analysis Findings from Directive Content Analysis Proof Read, Check and Final Adjustments
  13. 13. References Bernard, H.R. 2002. Research Methods in Anthropology: Qualitative and quantitative methods. 3rd ed. Alta Mira Press , California. China Business Newsweekly (2009) “Research and Markets; Take Time To Analyze New Report on the European Renewable Energy Industry” NewsRX, United States Christensen, C., (1997) “The Innovators Dilemma” Collins Business Essentials, New York Cooke, D.J. and Philip, L. (2001) To treat or not to treat? An empirical perspective. In: Hollin, C.R. ed. Handbook of offender assessment and treatment. Wiley Publishers, Chichester, pp. 3-15 Eckhart, M. (2006) “Renewable Energy Industry: 2005 Review/ 2006 Outlook.” PennWell Corporation ,United States, Barrington, vol.110, no.1 Elkington J. (1997). Cannibals with Forks: The triple bottom line of 21st Century Business, Oxford: Capstone Publishing Epstein, J. M. and Roy, M. (2003) Case for Sustainability: Linking Social and Environmental, Actions to Financial Performance. In: Anupama, M. Journal of Corporate Citizenship, Greenleaf Publishing,Vol.11, No.9, pp. 81-96 Freeman, R. E and Reed, D.L ., (1983) “Stockholders and Stakeholders: A New Perspective on Corporate Governess,” California Management Review, vol.25, no.3, pp.88-106 Friedman, M., (1970) “The Social Responsibility of Business is to Increase its Profits,” New York Times Global Data Ltd (2013) “Renewable Energy Industry in 2013: Expected Trends and Analysis: GlobalData Event Analysis” Global Data Ltd, London Harries, J. (2003) 'Sustainability and Sustainable Development' International Society for Ecological Economics: USA Hart, S, L. (2007) “ Beyond Greening: Strategies for a Sustainable World.” Harvard Business Review 13
  14. 14. Kim, C and Mauborgne, R,. (2004) “Blue Ocean Strategy”. Harvard Business Review vol.81, no.2 Laszlo C,. (2005) The Sustainable Company How to Create Lasting Value Through Social and Environmental Performance, Island Press, Washington DC Laszlo C., and Zhexembayeva, N. (2011) Embedding Sustainability The Next Big Competitive Advantage, Greenleaf Publishing, California Porter, Michael E. (1985) "Competitive Advantage". , Ch. 1,. The Free Press. New York. pp 11-15 Sridhar, K and Jones, G. (2013) “The three fundamental criticisms of the Triple Bottom Line approach: An empirical study to link sustainability reports in companies based in the Asia- Pacific region and TBL shortcomings.”, Springer Science and Business Media, vol.2, no.1 Steger. U,. (2004) The Business of Sustainability Building Industry Cases for Corporate Sustainability. Palgrave Macmillan, Hampshire. The Economist (2004) “The lunatic you work for: If the corporation were a person, would that person be a psychopath?” Available at: http://www.economist.com/node/2647328 Accessed: 02 November 2014. World Commission on Environment and Development, 1987. Our Common Future. Oxford: Oxford University Press 14

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