Chapter 11, Performance Measurement in Decentralized Organizations, has an artic

Question

Chapter 11, Performance Measurement in Decentralized Organizations, has an article "In Business" listed on the bottom of page 495. It deals with the concept of Sustainability. Please compose an essay to demonstrate your understanding of Sustainability. Why is it important today? What is the role of management in supporting sustainability and how will it affect companies as we continue through the 21st century? (SEE BELOW for Text book article)


SUSTAINABILITY AND THE BALANCED SCORECARD
The Sustainable Investment Research Analyst Network (SIRAN) studied changes in the sustainability reporting practices of the Standard & Poor’s (S&P) 100 companies from 2005 to 2007. Eighty-six of the S&P 100 companies had corporate sustainability websites as of 2007, an increase of 48% since 2005. Forty-nine of the S&P 100 companies published sustainability reports in 2007, up 26% from 2005.
Graham Hubbard, a professor at the University of Adelaide, recommends incorporating sustain- ability reporting into the balanced scorecard by adding two categories of measures related to social performance and environmental performance. Social performance measures focus on a company’s philanthropic investments, community service, and employee safety and satisfaction. Environmental measures focus on a company’s energy and water use per unit of output and its waste generation and disposal performance.

Explanation / Answer

Business sustainability is defined as managing the triple bottom line - a process by which companies manage their financial, social and environmental risks, obligations and opportunities. These three impacts are sometimes referred to as profits, people and planet.

However, this approach relies on an accounting based perspective and does not fully capture the time element that is inherent within business sustainability. A more robust definition is that business sustainability represents resiliency over time – businesses that can survive shocks because they are intimately connected to healthy economic, social and environmental systems. These businesses create economic value and contribute to healthy ecosystems and strong communities.

Business sustainability requires firms to adhere to the principles of sustainable development. According to the World Council for Economic Development (WCED), sustainable development is development that “meets the needs of the present without compromising the ability of future generations to meet their own needs.” So, for industrial development to be sustainable, it must address important issues at the macro level, such as: economic efficiency (innovation, prosperity, productivity), social equity (poverty, community, health and wellness, human rights) and environmental accountability (climate change, land use, biodiversity).

Importance of sustainability

The role of management in supporting sustainability includes:

Planning and procedures: Planning and procedures play a crucial role in embedding sustainability into the day to day operations of your business. Achieving the goals and strategies set by senior management will rely, in part, on setting up the right work systems and clear procedures. Providing information, training or mentoring will ensure that all employees understand what is expected of them. Another crucial factor is making sure that the procedures are applied consistently. This requires commitment from employees to apply the procedures and from management to allocate the time and equipment needed.

Workforce planning: Workforce planning can help to ensure you have the right people with the right skills who are available where and when you need them. In the sustainability context it is about making sure you have the right skills to carry out your sustainability activities and achieve your goals.

This means analysing your current job roles and available skills and your future needs for specific sustainability skills. You can use this comparison to design new job roles and amend existing jobs to meet your sustainability needs. You can also use it to plan and budget for recruitment, training and development.

Retention strategies: staff retention is another workforce issue that connects with sustainability. High staff turnover can damage your reputation and can make it harder to recruit the right people. Recruiting staff is also costly when you consider advertising costs, time spent culling and interviewing and the time and money invested in training new staff.

Retention strategies are often aligned to social sustainability issues. You may need to address workplace bullying and discrimination. Or you might be able to improve retention rates by establishing a culture of collaboration and providing structured staff development and progression opportunities.

Workplace culture: Managing your workplace culture can encourage your team to work together to achieve your sustainability and business goals. Defining the organisation’s values so that they are aligned to your sustainability goals is the first step. Making sure these values are reflected in decision making, management practices and operating procedures will help to establish a workplace culture of shared values and clear expectations of attitudes and behaviours.

Clear expectations for acceptable practice will encourage individuals to apply procedures such as turning off lights and can encourage suggestions for further improvements.

Operational procedure: Improving sustainability does not mean they have to create a whole set of new procedures. It’s often about identifying the areas that need updating and planning how to incorporate the sustainability focus into existing procedures.

They might decide to update your standard operations procedures to specify energy efficient practices and equipment optimisations. Or it might mean spelling out new requirements for purchasing materials or contracting suppliers

Managing their performance: There are many areas you could focus your efforts in terms of planning and creating SOPs for a sustainable business. Things to think about include:

Affect of sustainability on companies as we continue through the 21st century

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.