Evolution Of Industrial Growth

Executive Summary

In recent years concerns about sustainability and social responsibility (CSR) of businesses have become an increasingly high profile issue in many countries and industries. While attention to the social and environmental impacts of international business is not new, the last years have seen renewed interest due to pressing global problems such as climate change and poverty. This report covers different aspects of the business environment like the history of the origin of environmental emphasis in the context of businesses, business ethics, and the advantages that a business that adopts sustainable strategies would have.

For years, different industries and firms have taken advantage of natural resources to fill their requirements for raw materials and energy. Ecological factors constrained the pre-modern growth conditions before the onset of the industrial revolution. Growth witnessed post the industrial revolution was largely based on an organic energy regime that was mainly based on animal and human muscle power for mechanical power and on biomass for production of heat (Stearns, 2018). Pre-modern restrictions were however, crossed with the industrial revolution, when charcoal and firewood were replaced by coal. The steam engine was the key technology that brought coal into the energy system and this was what formed the basis for the growth of large firms, intensified industrialisation and exponential growths of the economy that were largely based on fossil fuels.

During the second industrial revolution, key inventions, for example, electricity and advances in the chemical industry were able to spur the growth of the economy that was largely driven by the expansion of big businesses (Huberman, Meissner, and Oosterlinck, 2017). That, however, just acted to escalate degradation of the environment that began to accelerate tremendously from the 1950s. Over time, business historians have been able to prove how since the Industrial Revolution, economic growth has been driven by businesses. From numerous studies conducted, it is evident that firms and especially large manufacturing firms made a huge contribution in the commercialisation of new processes and new products which embodied technologies that were innovative and which had critical impacts on the global economy back in the nineteenth century. From studies like this, it would be okay saying that the world was made unsustainable by business. The emergence of modern capitalism can be attributed to the increased growth of manufacturing firms which led them to employ enormous amounts of fossil fuels (Kolk, 2016). The economic expansion that has been witnessed across the globe in the past two centuries has been facilitated by depletion of natural resources and fossil fuels. As such, it is clear that concerns and ideas on the conservation of nature and pollution date back to the nineteenth century.

In what was viewed from a long term perspective, reactions towards the destruction of the environment that came about as a result of the growth of industries came in two different waves. It was during the nineteenth century that the first environmentalism wave occurred and this came to proceed step-by-step with the industrial revolution (Wirtz et al., 2016). This wave had in it, movements that were against pollution and the activities in the wave triggered the establishment of national parks. While the initiatives in this wave were initially isolated and sporadic, as the nineteenth century ended, they gained force. It was also during this period that the evils of cities and industries that social movements across the United States came to be as a result of polluted industries and towns came to being.

In the late nineteenth century and early twentieth century, early steps towards the control of pollution and the creation of businesses that are friendly to the environment were established. It was, however, in the 1960s that social movements that were more forceful and broader emerged (Schaltegger, Hansen, and Lüdeke-Freund, 2016). It was during this environmental awakening that mass movements were mobilized, new institutions developed and organizational bodies developed purposefully for the protection of the environment. In polluting industries that were based mostly in western countries back then, one of the severe challenges that emerged was environmental regulation.

The second wave began in the 1960s and in sharp contrast with the first wave; this phase was based on the expansion of rational models of knowledge and dramatic development of science. While the first wave had been a cultural movement primarily that had limited protesting and mass mobilization capacities, the second wave was mainly a mass movement in which anti-establishment and left-leaning critiques politically of capitalism were seen (Stearns, 2018).

From the 1960s moving forward, the issue of the protection of the environment by businesses grew broader and became even more complicated. The Brundtland report in 1987 introduced environmental issues in the concept of sustainable development. The theme of the report has in the past been paraphrased as "meeting the needs of the present generation without compromising the abilities of future generations in any way to meet their own needs." This report is often translated into a business context and had severe implications for businesses, for example, the report implied that companies could no longer the environment to be a limitless pool of natural capital from which they could draw from without being held liable (Gerasimova, 2017).

In the fields of academic research, the issue of business and the environment began to receive significant attention starting the mid-1980s. The Oxford Handbook of Business and Natural Environment mirrors this development. It was in the 2000s that the "greening" label began to morph into "sustainability slowly.” From this, people began translating sustainability into the business language, and terms like eco-efficiency and the triple bottom line began to be used in corporations across the world (Laszlo and Zhexembayeva, 2017). Presently, scientists argue that the world is currently at the Anthropocene age, which is a new geological age altogether, as a result of the accumulation of human activities.

Business Ethics

While different people attach different meanings to business ethics, it can be generally agreed that business ethics is coming into terms with what is wrong or right within the workplace and doing what is deemed correct (Crane and Matten, 2016). Business ethics involves the study of proper practices and policies in business regarding issues that are potentially controversial, for example, corporate governance, fiduciary, corporate social responsibility, discrimination, bribery, and insider trading. From time to time, business ethics are guided by law, while at other times, a basic framework that could be followed by businesses so that they can gain acceptance publicly are provided by business ethics. The business ethics concept came into being in the 1960s as increasing awareness among companies of societies that are increasingly consumer-based was observed (Trevino and Nelson, 2016). Business ethics ensure that there exists a certain level of trust that is required between various forms of market participants with businesses and consumers. A portfolio manager must, for example, give equal consideration to the portfolios of small individual investors and those of family members. Practices like this would ensure that fair treatment is accorded to the public.

For any business, the law is always the critical starting point. Businesses should still follow all those relevant codes of practices that cover the sectors they operate within. Many companies have taken up developing systems of practice that are voluntary and which regulate their practices within the industries they serve within. Often, these codes are drawn up in extensive consultations with employees, governments, local communities and other different stakeholders (Bowie, 2017). And while it is a fact that all companies need to make profits, their activities must, however, always take into account ethics.

Business ethics are way beyond just moral codes of what is wrong or right; they attempt to reconcile what companies are legally required to do with maintenance of a competitive advantage over other businesses (Pearson, 2017). There are several ways through which a company could display business ethics. For example, in the case of a company that is involved in offering computer services and the sale of electronic components, quality control would be necessary. It would be essential that these components are shipped on time, or the manufacturer of the parts would risk losing contracts that are lucrative (Bowie and Van Vuuren, 2017).

If the department in charge of quality control discovers a defect in any one system, then it would be necessary to do thorough checks on all the components in the shipment. These checks may, unfortunately, however, consume a lot of time and as such delaying the window for on-time shipping. The quality control department could decide to ship the parts in the hope that the other machines are not defective or choose to delay the shipment so that they can be able to test each and everything. If the other devices are faulty, the company could be faced with a firestorm of backlash from the consumers and this could force customers to seek suppliers that are more reliable.

It is, however, not always easy to create hard-and-fast definitions of ethical practices that are sound. It is still necessary for companies to make competitive returns for their shareholders and additionally treat their employees in a manner deemed fair. Companies have responsibilities that are quite wide. Companies should always ensure that their operations minimize any harm on the environment and further work in ways that in no way damage the communities in which they operate (Ferrell and Fredrich, 2015). This is what is referred to as corporate social responsibility.

Since frameworks for moral rights are ubiquitous in business ethics, it would be prudent to talk about their misuses and uses in the analysis of institutions and practices (Shaw, 2016). It is possible to derive a list of rights from consideration of the social conditions that are necessary for one to be able to realize interests or valued capacities. Such a list would provide clear directions for business practitioners for every choice they are faced with.

Structured Plan

It is widely accepted that there is no single accepted method for designing a CSR structure universally. Agendas that are related to CSR are subjective and what works for one company may not necessarily work for other companies (Hui, 2017). The following cyclical framework would be most appropriate in launching a good sustainable strategy.

Identification of the values and norms within the organisation. Identifying stakeholders and their respective salience. Identifying the main issues of concern that are identified by the key stakeholders. Assessment of the meaning of CSR that is most suitable for our organisation. Audit of the practices currently adopted. Prioritisation and implementation of CSR initiatives and changes. Promotion of CSR through the creation of awareness and further involvement of stakeholders. Gaining feedback from different stakeholders.

There is a guide for implementation that has been developed by the International Institute for Sustainable Development, specifically for those companies that operate in an international context. The reason why this guide is used here is that it is quite descriptive of the different steps and also refers to approaches that our company uses.

The first step will involve conducting a CSR assessment. To do this, it will be necessary to assemble a CSR leadership team. After assembling of the team, it will be necessary to develop a working definition of CSR and subsequent identification of legal requirements. Finally, it will be appropriate to review corporate documents, activities and processes and also internal capacities while also identifying and engaging the key stakeholders.

The second step will be about developing a CSR strategy. To effectively do this, it will first be necessary to ensure that the company`s CEO, Top level managers and employees are in support of the initiative. When they fully support the initiative, what will follow next is doing a research so as to identify what other companies are doing and further do an assessment of recognised CSR instruments. After this is done, a matrix of proposed CSR actions should then be prepared. The final step in developing the CSR strategy will be to decide on the direction, boundaries, approaches and focus area for the CSR program.

After the strategy has been developed, the third step will involve developing CSR commitments. This will involve doing a scan of CSR commitments and holding discussions with all the major stakeholders of the company. A working group should then be created aimed at developing the commitments. The final step here will involve preparing a preliminary draft and holding close consultations with all the stakeholders that are affected.

The fourth step will then be about implementation of the CSR commitments. This will encompass development of an integrated CSR structure, preparation and further implementation of a CSR business plan. Measurable targets for purposes of identifying performance measures will then have to be identified. At this step, it will be necessary to engage all employees and any other persons to whom CSR commitments are applicable. CSR training will then be designed and conducted. Additionally, mechanisms for addressing behaviours that are problematic will be established. The final step here will involve creation of both external and internal plans for communication.

After the CSR commitments have been implemented, the fifth step will include assuring about progress and further making reports about it. Here, performance will have to be measured and assured. Stakeholders will then be engaged and reports made on performance, both externally and internally. The sixth and final step will be about evaluation of the CSR program and looking for ways to improve it further. Here while engaging the different stakeholders, opportunities for improvement will be identified.

It is widely assumed that the stakeholder relationship consists of relationships that are mutually engaged, interactive and responsive and which establish the very context of doing businesses in the world we live in today (Moratis and Cochius, 2017). These relationships further create the groundwork for accountability and transparency. And while it has been proven that there is a lot of CSR out there, currently, in the business world, very few companies have CSR programmes that are truly effective. Additionally, even with the small number of companies with CSR strategies that are effective, it appears that the number of companies that have effectively captured the market so as to effectively communicate CSR is even smaller. It appears that most companies are scared of communicating about their CSR (Epstein, 2018). What this means is that very few suppliers, government regulators, employees and average consumers are ever aware of what a company does in terms of CSR. This prevents potential customers of a company`s products from factoring in the CSR efforts of the company whenever they are making their purchase decisions (Charles, Schmidheiny, and Watts, 2017). The company will have to come up with an effective way of communicating its CSR programs to the members of the public. The public must always constantly be provided with reassurances that the firm is in all its dealings ethical and responsible. Additionally, each and every company should always be in a position at all times to demonstrate to its different stakeholders how it goes about integrating the concerns they raise.

Advantages of Sustainability Strategies

Companies have in the past been developing corporate sustainability programs that have been focused on addressing different challenges like greenhouse gas emissions, product sourcing, labour conditions, and water and energy use. Incorporating sustainability strategies into the operations of a business lays the foundation for consistency, compliance and continuous improvement through the creation of a single source of operating procedures and instructions for all of the processes of a company. Incorporating sustainability strategies helps a company by helping it save money, increase its revenues and manage risks in a manner that is effective (Welford, 2016).

With sustainability strategies in place, a business is better positioned to increase its revenue through enhancement of its reputation with customers, the public and any other key stakeholders. Additionally, new revenue streams can also be opened up. A proper example would be an organization charged with solid waste disposal and transportation that identifies nearly $5 million in new money that is derived from processes that are improved for drying of biosolids that could then be sold to farmers. It is not a must that achieving high profitability and growth levels have to work against running businesses that are responsible.

Processes and issues for sustainability should always be part of each and every companies overall performance management practices. Shareholder value can actually be created by incorporation of sustainability considerations into any business model (Doppelt, 2017). Different benefits that will be derived from this will include saving of costs that will be derived from limiting the wastage of natural resources like water and energy, opportunities for growth through the development of products that are innovative, improved brand reputation with a company’s employees and customers and better management of risk.

Sound sustainability programs would go a long way in helping companies reduce their use of raw materials, reduce energy and decrease waste per production unit Carayannis, Sindakis and Walter, 2015. Additionally, programmes that are effective would be important for reducing the costs of compliance which include attendant insurance and accident costs. It is also worth noting that proper sustainability programs are better placed to identify sustainability issues and this goes a long way in improving regulatory compliance at a time when there has been increasing scrutiny (Grant, 2016).

So that a company can maintain a top position in the global marketplace, it would need to prioritise innovation. With the increasing awareness among customers of environmental and social issues, any company could definitely gain a competitive advantage through offering products that are either eco-friendly or which provide value to customers that is real and measurable (Evans et al., 2017). The customers of today seek businesses that are capable of creating services and products that could help solve and address societal issues that are broad. Such a competitive advantage would with no doubt move any company forward and also has the potential of setting new industry standards that are focused on responsible growth. And with the continued recognition by businesses of the links that exist between performance of businesses and CSR, opportunities are presented for management teams to make contributions that are valuable both to the company and even to the external community (Bocken and Short, 2016).

Today, it is observed that upcoming and talented leaders prefer workplace cultures that value CSR, the main intention being so that they can play a part in the improvement of those communities that are around them. Any company that endeavours to embed sustainability and CSR into its business activities demonstrates an organisation that is led by purpose (Laszlo and Cescau, 2017). That is quite for any future leader who has aspirations for a career that is socially conscious. It would thus be appropriate to say that incorporation of sustainability strategies into the operations of a company helps attract top talents.

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