Sustainable Corporate Strategy Essay November 17, 2018 – Posted in: Buy Cheap Essay Online

How Sustainable Corporate Strategy Can Solve Some Wicked Problems in the World

According to Remington (2013), sustainability challenges are usually known as wicked problems because these challenges are morally evil or wicked instead of good. Haugland (2016) suggests that a problem is wicked and not daunting nor formidable beacuse wicked problems are the ones where people manage with incomplete, controversial, as well as relatively dynamic information with many stakeholders faced by several other challenges. Moreover, wicked problems are the ones who cannot be solved using solely the traditional methods such as scientific and advanced technologies and require continued attention because it cannot be resolved entirely (Remington, 2013). It is apparent that resolving wicked problems need a far greater magnitude of collaboration as well as cooperation that goes beyond the daily job description (Haugland, 2016). Organizations are increasingly incorporating sustainability into corporate-level strategic planning. According to Percy (2000), sustainable business practices are integrated within the companies’ business strategy. The analysis uses real-world examples to demonstrate how sustainable corporate strategy can help to solve some of the wicked global problems. (Sustainable Corporate Strategy Essay)

Wicked Problems in the World

People live in a world burdened with a myriad of large-scale challenges which refuse to disappear like refugee crisis, terrorism, global warming, droughts, and human rights violations. These problems are severe and complicated that it is almost impossible to resolve them. Although security and safety are classified as one of the most daunting issues in the modern world, environmental degradation continues to concern the business world. Watkins (2015) categorizes the five primary wicked problems that the world needs to solve into government, economy, education, health, and climate change.

Government

According to the theory of democracy, majority rules. However, the minority always dictate the decision on most issues (Watkins, 2015). Consequently, many contemporary political systems are vulnerable to manipulation of vital interests or concerns affecting a nation. Governments do not represent the people’s will, and at their best, only a half is reflected. Typically, they only reflect the will of a few individuals who are wealthy with who strongly influence the political systems through legalized bribery (Watkins, 2015). The government requires an urgent and radical overhaul to serve the will of the people rather than a few minorities.

Economy

From an economic perspective, income asymmetries have broadened in over two-thirds of all the global economies. According to Beddoes (2012), global economists argue that rising inequality is one of the leading socio-political and economic challenges in the modern world. The income disparity causes additional and cumulative societal problems like increased drug abuse, poor mental and physical health as well as increased incarceration (Mackey & Sisodia, 2014). There is the need for a robust review of the entire economic and corporate systems to create a fairer and just world (Mackey & Sisodia, 2014).

Education

According to Watkins (2015), every country worldwide is reforming their education systems to provide the best education for all, yet they are adopting approaches used in the past leading to alienation of millions of children. The systems do not work because there is no reward guarantee for the academic-oriented students while the un-academic remain neglected and marginalized. Most of the education systems do not appreciate and nurture the abilities beyond mathematics, science, languages, and sports; hence most brilliant individuals do not realize their brilliance (Watkins, 2015).

Health

Many health sectors around the world use outdated healthcare systems that do not adapt to the dynamic environment characterized by the ever-growing population of the elderly. According to Watkins (2015), the population of the pensioners in Europe is projected to increase from 30 to 50 percent by 2050 which will continue to increase pressure on the health resources. Besides, China and Japan are experiencing similar problems. Moreover, healthcare has become commercialized which further exacerbates the global health situation (Watkins, 2015).

Climate Change

The problem of climate change continues to daunt the international economy. The current global projections of greenhouse gas emissions pose a significant threat to economic growth as well as environmental sustainability. Also, the projected rise in the global temperatures if left unaddressed could adversely impact the initiatives to maintain vital ecosystems, adapt to extreme events, as well as protect health. Climate change is a wicked problem since it has scientific and economic complexities, some of which have more profound uncertainties, pronounced ethical dilemmas, and disagreements on what the problem is (The World Bank, 2014). With businesses being the significant contributors to climate change through their practices, concerted policy measures and sustainable corporate strategy could help to solve the problem of environmental sustainability.

The Wicked Problems of Global Sustainability

The concept of sustainability continues to become a global concern within the contemporary business environment. It is a rapidly growing lens by which customers, employees, societies, governments, and shareholders are judging businesses. Today’s organizations are expected to adopt sustainable business approaches and practices that ensure environmental sustainability. The role of sustainability now goes beyond ecological conservation as the need to behave responsibly becomes a critical component of corporate strategy and business operations. Businesses face and are forced to adjust to the broad range of disruptive environmental forces including globalization, intense competition for natural resources, and technological advancements. These forces are challenging business models of many sectors and forces organizations to be more accountable and transparent with all its stakeholders both internal and external (PWC, 2018). Amid the growing uncertainties on the future of energy costs, carbon emission policies, accessibility, and availability of natural resources such as water, firms worldwide are awaking to the reality of environmental sustainability as a critical business factor. At the same time, there are facing greater scrutiny about their impact on the society which is increased further by the proliferating use of the social networking sites where workers are holding their organizations accountable for their welfare, sourcing, product quality, as well as corporate culture (PWC, 2018).

Sustainable Corporate Strategy as a Solution to some Wicked Global Problems

Sustainable Corporate Strategy

Oertwig et al. (2017) suggest that a successful sustainable corporate development requires companies to define and enforce a pragmatic strategy. Powerful initiatives must be adequately planned, implemented, and monitored to improve sustainability performance. In the sustainable corporate strategy, a company must consider the economic, environmental, and social perspectives of their business operations. Performance within these three aspects constitutes a company’s sustainability performance (Oertwig et al., 2017).

Corporate social responsibility (CSR) is a concept often synonymous with sustainable corporate strategy. It is an automatic business strategy which helps organizations to become socially accountable for the impact of their business operations on the environment and society to itself, stakeholders, and the public. The model ensures that companies ethically conduct business. The model involves a broad range of approaches incorporated in the corporate business strategy including partnering with the local communities, socially responsible investments, building a healthy relationship with workforce and clients, as well as environmental sustainability and protection.

Addressing the wicked problem of responsible innovation

A sustainable corporate strategy that incorporates design thinking can help to solve the problem of responsible innovation. Pavie and Carthy (2014) studied the major players within the French financial sector to determine how implementing design thinking approach can help to resolve the wicked problem of responsible innovation. The debate on responsible innovation within different areas has focused mainly on the emergence of new technologies that may cause unknown risk to the society driving the need for responsible development (Pavie & Carthy, 2014). Responsible innovation is growingly considered a corporate imperative. It is a wicked problem because the implementation of responsible innovation regardless of the business sector involves a string of factors each having different specificities and characteristics. The competitiveness of innovation further emphasizes the wicked nature of responsible innovation (Pavie & Carthy, 2014).

According to Pavie and Carthy (2014), design thinking method can be effective in addressing wicked problems of integrating responsible innovation in business processes. The approach can self-incorporate within and adjust to the innovation processes of a company, hence can contribute to the inclusion of responsible innovation. It provides a method for evaluating an innovation through the lens of responsible innovation, responsibility principle, and determine potential innovative and responsible products (Pavie and Carthy (2014). Besides, design thinking can help to monitor and manage the potential consumer, environmental, and social impacts of innovation throughout its lifecycle. Some successful companies like IDEA have adopted the method of design thinking as a sustainable corporate strategy to develop its products. According to the company, the creative problem-solving approach “brings together what is desirable from a human point of view with what is technologically feasible and economically viable” (IDEA, 2018).

Corporate Social Responsibility (CSR) to resolve the sustainability problem

Today’s organizations are incorporating CSR as part of their sustainable corporate strategy. The strategy aims at minimizing the detrimental impacts of business processes and activities like energy use, emissions, recycling, and waste management on the environment. CSR strategy focuses on green business approaches which ensure that the practices and activities are sustainable. Through this strategy, businesses can reduce their environmental impact, thereby reducing the amounts of greenhouse gas emissions which has been projected to be increasing rapidly. This will help to resolve the problem of global warming that is currently impacting the ecosystem adversely. Corporate practices such as creating recyclable products, product lifecycle optimization, and buying locally to save fuel costs are some of the CSR practices that can help to reduce the environmental impact of businesses. Similarly, responsible sources such as using recycled materials as well as sustainable timber can help to resolve the problems associated with global sourcing. Also, companies should create efficient distribution networks and deal only with environmentally-conscious suppliers and distributors.

Different companies have successfully adopted the CRS as a corporate strategy for resolving the problem with environmental sustainability. Google, one of the largest global corporations is an excellent example of a successful company that continues to operate to improve society. The company employs a mix of CSR strategies including the most widely successful environmental policy known as Google Green (Mondo, 2016). This policy as a part of the company’s sustainable corporate strategy ensures efficient use of resources and support for renewable energy sources. The plan has significantly improved the firm’s environmental citizenship as it has decreased its overall power requirements by half. Ben & Jerry’s, a Vermont-based brand is another example of a company that prioritizes social and ecological issues besides donating to many other charity organizations as well as movements. CSR is the foundation of the firm’s business operations which dates to the 1980s. It has sustainability programs and uses only fair-trade ingredients (Mondo, 2016). Target has also donated over $875 million to support education alone in addition to supporting local and environmental initiatives within communities (Mondo, 2016).

Green Human Resource Management

As the corporate world is going global, surveys show that businesses are growingly becoming aware of the importance of going green and implementing different environment management approaches (Ahmad, 2015). In the modern business environment, Green Human Resource Management (GHRM) has become a critical corporate strategy in which the role of HR departments is fundamental. Ahmad (2015) suggests that human resource is a significant contributor to implementing a sustainable corporate strategy. Evidence suggests that most global employees feel committed to environmental sustainability initiatives because the contemporary workers are engaged and satisfied with the companies adopting proactive green initiatives (Ahmad, 2015).

Green HRM practices include two key aspects which are eco-friendly environmental practices and preservation of knowledge capital (Ahmad, 2015). According to Bombiak and Marciniuk-Kluska (2018), a critical element of GHRM practice involves motivating the workforce to undertake eco-friendly activities within the organization. Research shows that green compensation is an essential tool to support environment management (to Bombiak & Marciniuk-Kluska, 2018). By including elements of green HRM within the organizational compensation programmes, the administration can encourage green attitudes amongst the workforce. Another green HRM practice is to promote employees to adopt green initiatives, a concept known as green empowerment.

The green HRM initiatives as a part of the sustainable corporate strategy of an organization can help to significantly reduce the business impact on the environment since this is a collective approach owned and implemented throughout the company. Also, green remuneration and compensation programmes can help to reduce the income disparities that continue to inflict many global economies. Income inequality is one of the wicked problems within the economic scope. Evidence suggests a significant income inequality within the global economy (Watkins, 2015). Sustainable human resources practices can help to resolve this global problem. Ramasamy, Inore, and Sauna (2017) investigated the impact of GHRM implementation in the corporate body. Results from the survey suggest that GHRM practices mainly in recruitment and selection, training and development empowerment and compensation helps a company to go green.

Recommendation

Businesses must incorporate the concept of sustainable development in their business processes and policies through sustainable corporate strategy. It does not mean that businesses need to invent new management methods, but instead requires them to refine the systems, practices, as well as policies. They need to enhance the management systems through increased accountability to all the stakeholders as well as continued improvement of reporting practices like sustainability reporting. Regardless, it is important to note that sustainable corporate strategy can help to address some of the wicked problems in the world especially the ones related to environmental sustainability. Problems like income inequalities and climate change can be solved by businesses, who are the key contributors, incorporating green practices within their corporate strategy. Importantly, the fight against wicked global problems is a global initiative that requires efforts from all players around the world.

Conclusion

The paper aimed to discuss how sustainable corporate strategy can help to solve some of the wicked problems in the world. The discussion categorized wicked problems into economic, health, education, government, and climate change. The sustainable corporate strategy can be used to address the wicked problems related to climate change, responsible innovation, and overall environmental sustainability. Design thinking method has been used and found effective in solving the wicked problem of responsible innovation. IDEA has adopted the approach of design thinking as a sustainable corporate strategy to develop its products. CSR as a corporate strategy can help businesses to become more socially and environmentally responsible, thereby reducing their adverse impact on the environment and increasing societal benefits. Large companies like Google, Target, and Ben & Jerry’s all have adopted the CSR strategy as a sustainable development initiative. Besides, organizations are increasingly integrating the concept in their corporate strategy. Similarly, green HRM practices like green compensation, training, and recruitment are some of the elements of a sustainable corporate strategy.

Reference

Ahmad, S. (2015). Green Human Resource Management: Policies and Practices. Cogent Business & Management2(1), 1030817.

Beddoes, Z. M. (2012). For Richer, For Poorer. The Economist13.

Bombiak, E., & Marciniuk-Kluska, A. (2018). Green Human Resource Management as a Tool for the Sustainable Development of Enterprises: Polish Young Company Experience. Sustainability10(6), 1739.

Haugland, B. (2016). Solving “Wicked Problems” – The Road to A Better World? – DNV GL Blog – Sustainability. Retrieved 23 October 2018, from https://blogs.dnvgl.com/sustainability/2016/05/solving-wicked-problems/

IDEA. (2018). Design Thinking: A Method for Creative Problem Solving. Retrieved 23 October 2018, from https://www.ideou.com/pages/design-thinking

Mackey, J., & Sisodia, R. (2014). Conscious Capitalism, With A New Preface by the Authors: Liberating the Heroic Spirit of Business. Harvard Business Review Press.

Mondo. (2016). Corporate Social Responsibility: How it Impacts Business in 2016 | Mondo. Retrieved 23 October 2018, from https://www.mondo.com/corporate-social-responsibility-2016/

Oertwig, N., Galeitzke, M., Schmieg, H. G., Kohl, H., Jochem, R., Orth, R., & Knothe, T. (2017). Integration of Sustainability into The Corporate Strategy. In Sustainable Manufacturing (pp. 175-200). Springer, Cham.

Pavie, X., & Carthy, D. (2014). Addressing the Wicked Problem of Responsible Innovation Through Design Thinking. SZTE GTK, Szeged, pp. 13-27

Percy, S. W. (2000). Environmental Sustainability and Corporate Strategy: Why A Firm’s “Chief Environmental Officer” Should Be Its CEO. Corporate Environmental Strategy7(2), 194-

PWC. (2018). Strategic Sustainability. Retrieved 23 October 2018, from https://www.pwc.com/gx/en/services/sustainability/responsible-corporate-strategy.html

Ramasamy, A., Inore, I., & Sauna, R. (2017). A Study on Implications of Implementing Green HRM in the Corporate Bodies with Special Reference to Developing Nations. International Journal of Business and Management12(9), 117.

Remington, S. (2013). Wicked Problems and their Resolution. Retrieved 23 October 2018, from https://he.kendallhunt.com/sites/default/files/uploadedFiles/Kendall_Hunt/Content/Higher_Education/Uploads/Remington_Doucette_1e_Ch2.pdf

Watkins, A. (2015). Top 5 Wicked Problems the World Desperately Needs to Solve. Retrieved 23 October 2018, from https://www.elephantjournal.com/2015/07/top-5-wicked-problems-the-world-desperately-needs-to-solve/

World Bank. (2014). A Wicked Problem: Controlling Global Climate Change. Retrieved 23 October 2018 from http://www.worldbank.org/en/news/feature/2014/09/30/a-wicked-problem-controlling-global-climate-change

Dividend Policy for Apple Company

Dividend policy forms a set of regulation or guidelines that a firm applies in making the decision regarding the number of its earnings that will be paid out to the shareholders.

  1. How much cash has the firm accumulated over time? (5 marks)

Whereas dividend payout represents the measure of a firm financial strength applies in the essential analysis of stock for investment, the cash accumulated is used by the investors with the aim of receiving the invested dividends. Apple Inc. accumulated cash on a trailing period of twelve months’ basis is valued at 2.13$ for every company share on an annular basis. Based on the company stock closing price of 107$ the accumulated cash from the investment made by the apple firm is valued at 1.98% (Clarke &Boersma, 2017). however, the annually accrued cash by the apple firm to continue to increase with the fast expansion of the company in recent years. The total accumulated cash for the firm for the past five years is $41.6 billion.

  1. How has the company returned cash to its owners? (Has it paid dividends or bought back stock?) (10 marks)

The gross dividend for Apple Inc. is valued at $5.996 billion for the last six months of the company operation. The combined net income for the for the last two quarters of the company operation is 18.32$ billion. From the company revenue the cash that has been returned to the owners’ accounts for approximately 25% in the last three years. Apple Inc. returns the cash to its owners in the form of dividend payout that is done on a quarterly basis. As the revenue of the company continues to increase the firm dividend payout ratio is also expected to rise.

  1. How does this firm’s dividend policy compare to those of its peer groups in the industry? (5 marks)

Different firms have varying dividend policies depending on the sector, shareholders, and market where the company operates. Apple firm similarly have varying dividend policies compared to its competitors in the electronic and computing industry like Samsung Inc. and Lenovo Inc. the dividend payout ratio for apple company is currently higher than other firms such as Samsung Inc. the dividend payout ratio for apple company is valued at 32.7% compared that of the industry where it operates value at 23.5% averagely. However, firms such as Dell Inc. and hp Inc. are registering a higher revenue growth percentage compared to Apple Inc. (Clarke & Boersma, 2017). In summary, the dividend policies for apple allows its shareholders to benefit highly compared to other firms like Hp and Dell.

References

Clarke, T., & Boersma, M. (2017). The governance of global value chains: Unresolved human rights, environmental and ethical dilemmas in the apple supply chain. Journal of Business Ethics143(1), 111-131.

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