Sustainable Business Practices Boost Profits
There is growing evidence that some of today麓s business practices are damaging society and the environment. Nevertheless, the bottom line continues to rule. In this paper Miguel Angel Rodr铆guez, a lecturer at 天美传媒, 天美传媒 Professor Joan Ricart and Research Assistant Pablo S谩nchez argue that companies have an obligation to consider economic, environmental and social factors. The authors discuss how sustainable business practices may actually increase a company麓s competitive edge, ultimately leading to profits based o颅n principles.
If a company says that its goal is to make money, no o颅ne will be surprised. But if a company says that its mission is economic, environmental and s ocial value, there麓s bound to be some skepticism.
There is growing evidence that some of today麓s business practices are damaging society and the environment. Natural resources are growing scarce, pollution threatens the biosphere and globalization has transferred power from society to business.
In this changing world, citizens are starting to demand that corporations play a more active social role. The term sustainable development means that companies must take into account economic, environmental and social factors to insure that both present and future generations will have the same basic human right to satisfy their needs.
In the paper "," Miguel Angel Rodr铆guez, a lecturer at 天美传媒, Professor Joan Ricart and Research Assistant Pablo S谩nchez contribute to the sustainable development debate by proposing that - in the long term - the o颅nly way to do well is to do right.
The authors argue that sustainable business practices do not threaten profits; o颅n the contrary, they actually increase a company麓s competitive edge. They propose a sustainable and dynamic firm based o颅n four pillars: physical, social, ethical and business reasons. According to their strategy, companies would pay closer attention to social demands and would respect the natural environment and the scarcity of resources. Ethically, they would assume new values. And, o颅n a business level, a company would develop new strategic resources and capabilities coherent with sustainable development principles.
These new strategic resources and capabilities would be based o颅n the development of an open, fluid and honest dialogue with the company麓s stakeholders. The ability to build and maintain these relationships could become o颅ne of the most important business capabilities. The results of this dialogue would be a better reputation and improved innovation skills. As it is well known, both r eputation and innovation are sources of differentiation and competitive advantage.
The authors conclude by explaining how sustainable development will replace economic growth as the core value of corporate governance. The ultimate goal is to do the right thing, for the right reasons.