The document discusses the need to rethink and update business knowledge to better address today's dynamic business environment. It outlines criticisms of existing management, accounting, marketing, and other business theories, noting they often take an incremental approach and do not fundamentally address challenges like climate change, ethics, and sustainability. The document calls for cross-disciplinary, policy-relevant research to help conceptualize the relationship between business, society and the environment. Some potential areas for future research mentioned include the roles of business and short-term thinking versus long-term sustainability, and integrating social and environmental factors into measures of business success.

1. Updating the stock of business knowledge
for a better future
Prepared by: Fentaw L. (Ph.D.)
Date: March 27-03- 2021
BDU

2. 2
Outlines
»Dynamics of the business environment
»Existing theories and practices
»the need for a rethinking business knowledge
»Future Research and points of discussion

3. 3
Dynamics of the business environment
»The increase in world and local dynamics; environmental change, rising
uncertainty, growing complexity and universal Anxiety is impacting
citizens throughout the globe (Bennet & Bennet, 2004; 2007)
»Having moved from the information age to the knowledge age,
everything moves faster, farther, and gets intertwined with other people,
societies, and technology.
»Companies collaborate instantly around the world, people work from
home, virtual connectivity gets heavier, money moves faster among
nations, and organizations move from control oriented to empowered
workforces.

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Dynamics of the business environment
» Business environment, which refers to all the elements existing outside the
boundary of the organization that have the potential to affect all or part of the
organization, is the most dynamic and uncertain, creates problems for
management (Milliken, 1987).
» Businesses do not operate in a vacuum but rather in a dynamic environment
that has a direct influence on how they operate and whether they will achieve
their objectives.
» This external business environment is composed of numerous outside
organizations and forces that we can group into seven key sub environments:
» economic, political and legal, demographic, social, competitive, global, and
technological.
» Each of these sectors creates a unique set of challenges and opportunities for
businesses.

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Dynamics of the business environment

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Dynamics of the business environment
» Other forces, such as natural disasters, can also have a major impact on
businesses.
» The U.S Gulf Coast Hurricane hit in 2005,
» an explosion on the Deep water Horizon oil-rig in April 2010, which killed 11
workers and sent more than 3 million barrels of oil into the Gulf of Mexico.
» The event played out for more than 87 days, severely affected the environment,
businesses, tourism, and people’s livelihoods.
» Global oil conglomerate has spent more than $60 billion in response to the
disaster and clean-up.
» To complete successfully, business owners, managers and leaders at all levels
must deal with the increasing speed, unpredictability, and complexity of their
environment (Alex, David & Lewis, 2015).

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Existing theories and practices: management
» Davenport (2001, p.47) proposed that managers in the future must adapt their activities
to the new challenges they face. They must move:
» from overseeing work to doing it
» from organizing hierarchies to organizing communities
» from imposing work designs and methods to understanding them
» from hiring and firing workers to recruiting and retaining them
» from building manual skills to building knowledge skills
» from evaluating visible job performance to assessing invisible knowledge achievements
» from ignoring culture to building a knowledge-friendly culture
» from supporting the bureaucracy to fight it off

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Existing theories and practices: management
»Several fields of business research have witnessed occasional calls
for new approaches, along with insightful work on what is wrong with
current approaches.
»Kallio and Nordberg (2006) argued that, despite the growing volume
of research on organizations and the natural environment, “the
environmental dimension remained more or less an adjunct” to
standard management approaches and research.
»They argue that adopting environmental issues in current research
mainly serves to legitimize business-as-usual approaches, but that
“the fundamental orientation of the discourse has not essentially
changed”.

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Existing theories and practices: management
» Gladwin, Kennelly, and Krause (1995) argued for a new paradigm for
management theory and research, positing that
» “our theories have implicitly encouraged organizations to behave in ways that
ultimately destroy their natural and social life-support systems” .
» More recently, the occurrence of corporate scandals has given rise to
contemplation of what “organizational goodness” involves and what role there is
for managerial motivations and moral agency (Heugens, Kaptein, & Van
Oosterhout, 2008; see also Muller & Kolk, 2010).
» The question is whether such calls will help management research move beyond
incremental adaptation of existing approaches and generate sufficient responses
to the changes and challenges that companies and society are facing.
» These and other authors’ arguments appeal for fundamentally rethinking the
foundations of management research.

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Existing theories and practices: Accounting
»In the field of accounting in particular, critical accounting has
emerged quite some time ago, with those focusing on social
and environmental accounting being critical of existing models
and their limitations;
»Perhaps more than in management, the gap to the mainstream
here has been particularly wide.
»This gap does not mean that there have not been wider
reflections on the discipline.

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Existing theories and practices: Accounting
»Gray (2001) found little evidence over the past 30 years for the
ability of accounting research to examine critical environmental or
social challenges.
»There continues to be a demand for accountants in an ever-
changing global business environment (United States Department of
Labor, 2009).
»Yet, accounting curriculums and pedagogical methods in colleges
and universities are not keeping up with an evolving global business
world, especially with adding learning experiences in accounting
courses that mimic real-world situations accountants’ face.

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Existing theories and practices: Accounting
»The current use of lectures does not create learning opportunities
for students to develop or enhance a professional skill set
(Lightweis, 2011; Sharifi, McCombs, Fraser, & McCabe, 2009).
»According to the authors, more attention should be given to
behavioural research leading to the development of core
accounting theories that can handle present realities with the aim
of solving contemporary issues in accounting.

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Existing theories and practices: Accounting
»Due to the advent of information technology and research
development, the accounting profession in recent times has
made significant improvements and innovations in the way
financial information are processed and disclosed (e.g., IFRS).
»However, the emergence of cyber-crime in banking transactions
and other online businesses has created a new demand for
accountants to develop extra skills to mitigate the threat as well
as to proficiently report financial information to stakeholders in a
timely and efficient manner (Remi, 2006).

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Existing theories and practices: Accounting
»Inanga and Schneider (2005) stated that there exist a wide
divergence between accounting theory and practice due to its
unrealistic nature and lack of applicability in our dynamic
business environment.
»Most of the accounting theories are not applied by practicing
accountants due to some challenges in accommodating them
and how they can be measured, captured, track and analyzed
in monetary terms (Carro, Ocon & Lindemann, (2017); Dandago
(2015) and BelkaouiRiahi (2014) thereby creating a gap in the
field.

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Existing theories and practices: accounting
»Based on the foregoing accounting critiques, scholars are interested in
solving the problem of accounting figures distortion caused by
»inflation or deflation, the inability of the traditional or conventional
accounting to address issues relating to environmental cost
accounting, inflation accounting, human Resources accounting,
sustainability accounting, corporate reputation, Islamic accounting,
electronic accounting, auditing practice etc.
»Again, the matter is more complicated in the sense that accounting
researchers have not being able to develop theories that is 100% of the
discipline, rather theories are borrowed from other discipline which make
the preferred accounting research process to lack philosophical grounding
(Aruwa, 2019).

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Existing theories and practices: accounting
» conventional management and financial accounting does not meet the needs of
today’s manufacturing and competitive environment.
» as a result of the various criticisms of management accounting practice, the
chartered institute of Management Accountants made recommendations to
address some of the contemporary issues such as
» target costing, Activity based Management (ABM), Advanced manufacturing
Technology(AMT), Computer–aided Design (CAD), Computer aided-
manufacturer (CAM), Total Quality Control (TQC), Materials requirement
planning (MRP), Total Quality Management (TQM), Just In-Time (JIT), Life
Cycle costing etc.
» As to financial accounting, Adoption of IFRS is the one among others.

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Existing theories and practices: marketing
»Similar criticisms have been raised in marketing.
»Literature revealed that marketing research have become too
focused on execution, methodological precision, and technological
sophistication (MacInnis, 2005; McAlister, 2005; Stealin, 2005).
»This points to a more generic limitation of the marketing discipline
that has granted only scant attention to quality of life, corporate
citizenship, stakeholders beyond the boundaries of the firm or wider
society (e.g., Sheth & Sisodia, 2005; Sirgy, 2008; Wilkie, 2005).

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Existing theories and practices: marketing
»And while the domain of marketing has been labelled as ranging
from
» the study of the macro to the micro,
» the organization to the consumer,
» capitalist practice to social welfare, and
» the local to the global” (MacInnis, 2005),
»its tendency of “closing in on itself” (Staelin, 2005) does not appear
to encourage new ways of thinking in the mainstream of marketing
research or a move beyond business as usual in marketing practice.

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Existing theories and practices: marketing
»the rapid proliferation of media platforms and the rapid change in the
marketplace are the two biggest unifying themes in contemporary
marketing .
»The ever increasing number of marketing options and the
competition for mindshare among consumers and businesses are
real-world challenges that result from these rapid changes.
»Central to the contemporary issues in marketing are the concepts of
» ‘technology’, ‘social media’ and ‘brand management’.

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Existing theories and practices: marketing
»Specifically, the following are the five contemporary marketing
issues that are currently affecting managerial and innovative
processes in the business environment and demanding future
research (Gilgoff, 2012; Getz, 2007; Hawthorne, 2018; Plaza,
2009; Thomas, 2011).
»Faith-based marketing (Religious Marketing)
»Event-tourism marketing
»Marketing for the 4th Industrial Revolution (4IR Marketing)
»Google AdWords Marketing
»Near-Field Communication (NFC Marketing)

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the need for a rethinking business knowledge
»Novel perspectives in management and organization theory that
respond to emerging economic, environmental, and social challenges
require fundamental and radical, rather than incremental deviations
from established ways of thinking (Stead & Stead, 1994; Gladwin et al.,
1995).
»Ferraro, Pfeffer, and Sutton (2005) argued that social science theories
tend to perpetuate themselves by referring to a set of assumptions and
specific language that become taken for granted.
»Breaking out of this “iron cage” or “normal science straight jacket” (Daft
& Lewin, 1990) is particularly challenging for novel and unconventional
research conceptualizing a new future for business.

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the need for a rethinking business knowledge
»The complexity and multiplicity of economic, environmental, and
social challenges make it difficult, if not impossible, to visualize a
“quick fix” to conceiving and establishing alternative and more
inclusive business approaches to cope with these challenges.
»However, examining the implications of using an embedded
perspective of business, nature, and society offers management
scholars a number of important research questions for future study.

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the need for a rethinking business knowledge
»In his Article, “Demystifying the Struggles of Private Sector
Paradigmatic Change: Business as an Agent in a Complex Adaptive
System,” Mike Valente (2010) develops a three-phased process
model that provides a preliminary conceptualization of what it might
take to shift the business paradigm.
»The success of this shift is dependent on
» a consequential shift at the societal level,
» The recipient role of business for this broader shift and,
» role of business as an agent in the process of creating new opportunities that
sustain the life-supporting environmental and social systems.

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the need for a rethinking business knowledge
» In an article, “Beyond Adaptation: Resilience for Business in Light
of Climate Change and Weather Extremes,” Linnenluecke and Griffiths (2010)
argue that physical impacts from climate change need to be considered in
management studies on organizational resilience and adaptation.
» Even though the physical impacts of climate change can affect many sectors,
including manufacturing, extraction, construction, transportation, agriculture,
tourism, insurance, and banking (e.g., Munich Re, 2009; Pinkse & Kolk, 2009;
Hoffman, 2006; Hoffmann, Sprengel, Ziegler, Kolb, & Abegg, 2009).
» Management scholars, in turn, need to offer the theoretical models that permit
the design of effective organizational responses (Winn et al., in press).

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the need for a rethinking business knowledge
»The other issue of prime relevance is the question of the role and objective
function of businesses.
»The predominant focus on shareholder wealth creation seems to have
aggravated rather than alleviated the crisis currently facing (Figge & Hahn,
2008), although no clear alternative approaches have emerged either.
»It appears doubtful that the shareholder wealth thinking that dominates
both the academic and the practitioner discourse is well suited for all types
of business and entrepreneurial activities, given that listed companies,
though often large and prominent, represent only a very small proportion of
ventures (Hahn & Scheermesser, 2006).

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the need for a rethinking business knowledge
»Together with the short-term focus of corporate strategy and decision
making (Mosakowski & Earley, 2000), which is difficult to reconcile with
the longer term focus of sustainable development (Held, 2001), rethinking
the role and objective function of businesses in a wider environmental and
societal context appears inevitable.
»In their contribution “Knowledge Management and Performance
Measurement Systems for SMEs’ Economic Sustainability “Cardoni et al.
(2020) argued that in continuously changing and unpredictable
environments, sustainability has become a key goal for business success,
and the sustainable management of financial, human, environmental, and
social resources is a critical issue for business strategy and survival.

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the need for a rethinking business knowledge
»In such context, environmental and social sustainability are
equally relevant for financial success.
»Companies are facing a knowledge economy where everything
rapidly changes, demanding a capacity to continuously readapt
themselves to confront the new challenges.
»Knowledge and knowledge management (KM) have become a
primary source to support firms’ innovation and sustain
economic survival (Abiola, 2013).

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the need for a rethinking business knowledge
»According to the knowledge-based view, the knowledge located in
various places within the firms,
»Such as employees, organizational culture, routines, policies,
systems, and documents, is the main asset used to reach and
sustain competitive advantages, since it is unique and hard to
replicate and replace.
»Knowledge exploitation and exploration are the two basic
conflictual tensions that must be adequately managed while
implementing knowledge based processes in order to link
innovation and KM.

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the need for a rethinking business knowledge
»The former is defined as the use and further development of
existing competencies (Liu, 2006), refers to the processes of
adopting, adapting and applying existing knowledge (March,
1999; Liu, 2006).
»This level of existing knowledge and experience is essential for
adopting incremental knowledge actions (Marengo, 1991, 1993).
»The latter is related to the pursuit of new competencies (March,
1991), reflect the firms’ ability to acquire new knowledge rather
than use the existing level of knowledge and experience (Liu ,
2006).

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Future Research and points of discussion
»Papers and panel proposals must be cross-disciplinary, research driven,
and demonstrate policy relevance and clarity of thought.
»Whether originating
»from social, ethical, and environmental challenges,
»from reflections on the fundamentals of any particular academic
business discipline and its predominant focus, contribution, and
societal relevance, or
»from the limitations of existing approaches in light of rapid changes in
the nature and context of business,
»the time seems suitable to fundamentally rethink the theoretical
foundations across the broad field of business research and practice.

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Future Research and points of discussion
» The need for paradigm shift from Knowledge exploitation to exploration in the
stock of business knowledge.
» the role and purpose of business and management in the light of challenges
such as
» Mitigating physical impact from climate change, Securing social cohesion,
business ethics.
» The conceptualization of business, nature, and society.
» the short-term focus of corporate strategy and decision making vs. the longer
term focus of sustainable development .
» environmental and social sustainability for financial success
» Paradigm shift from management to leadership

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Future Research and points of discussion
» Future research seeks to theoretically explain some of the areas, where
knowledge gap exist as a result of the inability of the traditional accounting
theories to address present day reality.
» Contemporary issues in financial and managerial accounting, e.g.,
» social and environmental accounting,
» human resource accounting, inflation accounting,
» sustainability accounting, etc.
» Additional skills required by accountants to respond to the emergence of cyber-
crime in banking transactions and other online businesses.
» Whether the shareholder wealth thinking well suited for all types of business and
entrepreneurial activities.

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Future Research and points of discussion
»Contemporary issues in marketing such as
»the rapid change in technology, media platforms and
marketplace,
»marketing options and the competition for mindshare among
consumers and businesses
»brand management,
»Faith-based marketing (Religious Marketing)
»Event-tourism marketing
»Marketing for the 4th Industrial Revolution (4IR Marketing)
»Google AdWords Marketing
»Near-Field Communication (NFC Marketing)

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Summary
»In sum, I would be delighted if this conference is to serve as an ignition
spark that inspires scholars toward developing novel approaches,
rethinking theoretical and methodological foundations, and adopting
new perspectives into the role of business in a world full of vital
economic, ecological, and social challenges!