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The effect of sustainable development on strategic business decisions / by Anthony J. Karwowski.

by Karwowski, Anthony J.

Sustainable development -- Decision making

Strategic planning

v, 122 leaves : ill. ; 29 cm.

Advisor: Dr. William Gleason.

Committee members: Roger Austria, Dr. Bruce Thompson.

Business strategy -- Laws and regulations -- Management philosophy -- Market expectations -- Product design & cost -- Competition -- Benefits -- The SDD tool -- Summary.

A movement based on Sustainable Development has recently been gaining momentum in the global business community. It is meant to tie economic growth with environmental protection. Proponents of this movement feel that industrial activity can be successfully promoted around the world within the framework of sound economic growth, environmental protection, and social equity. During the 1992 United Nations Conference on Environment and Development, the Business Council for Sustainable Development was created to formulate a global strategy for Sustainable Development and establish guidelines for its implementation. In fact, 120 nations agreed to these guidelines at the Earth Summit held in Rio de Janeiro, during June of 1992. Sustainable Development has simply been defined as development that meets the needs of the present without compromising the ability of future generations to meet their needs. The commitment shown by the many nations at the Earth Summit in 1992 to Sustainable Development is proof of its growing importance to the world marketplace. It is the intent of this thesis to study the effects of Sustainable Development on the strategic decisions businesses make to position themselves to be more competitive. The product of this paper will be a device to help in making strategic business decisions, called the SDD TOOL (Strategic Development Decision Tool). The SDD TOOL is intended to be used by business managers to analyze their opportunities to participate in business strategies based on Sustainable Development.

The paper will begin in Chapter 1 with background information on different business strategies and a description of Sustainable Development which will contain information about its origin, substance, goals, and implementation. The concept of the SDD TOOL will be introduced later in Chapter 1 as a tool for business managers to better manage the many complex issues and demands of Sustainable Development. Also in Chapter 1 the issues that form the major parameters of the SDD TOOL will be presented. Additional chapters will follow that will detail and prove the importance of the major parameters to the SDD TOOL. The six major parameters are: · Chapter 2 – Laws & Regulations · Chapter 3 – Management Philosophy · Chapter 4 – Market Expectations · Chapter 5 – Costs and Design · Chapter 6 – Competition · Chapter 7 – Perceived Benefits. The six chapters on the major parameters will be interwoven to develop the SDD TOOL in Chapter 8. Chapter 8 will present some of the key factors to successfully follow Sustainable Development business strategies such as relying on sound economic profit motives and having a committed management philosophy towards sustainable business practices. An argument will be made to justify the disparity of involvement among firms in following a path towards greater Sustainable Development. Some firms will be in a position to become very proactive and be more sustainable than others. These firms will correctly meet the demands of the major parameters of the SDD TOOL to be successful in following Sustainable Development business strategies.

But there will be firms, because of their market position and management philosophy, that will not react towards implementing sustainable business practices. These firms may be cash poor and cannot afford to make a strategic change towards sustainable manufacturing or product design. Or the market they compete in cannot support a major product change to become more sustainable. For some reason these firms cannot meet the many demands of the major parameters of the SDD TOOL to become major participants in the move towards Sustainable Development. The strategic choices of all of the above firms is based on their respective competitive positions in their market structures at a particular point in time. And these competitive positions are in a constant state of flux as the markets expand and contract based on technological innovations and consumer purchasing attitudes. Therefore the firms must constantly review their strategic positions towards Sustainable Development. The strength of the SDD TOOL, as it will be shown in the later chapters of this thesis, is that it can be used as a management tool to help make these strategic reviews and choices. The SDD TOOL is a survey based tool consisting of a set of questions for each of the six major parameters of the TOOL as outlined in this paper. The answers to the questions will be placed into a matrix format that will facilitate scoring the relative importance of the parameter to the firm’s ability to follow sustainable business practices. Each answer will be assigned a rating weight based on its importance to the parameter. And each answer will receive a competence level based on how favorable the answer is towards following sustainable business practices. The sum of the products of the rating weights times the competence levels for the answers will yield the matrix score for a firm. Higher scores will indicate a more suitable match for a firm to follow sustainable business practices. In summary, the SDD TOOL will be presented as a powerful and flexible tool to be used as a catalyst for more in-depth analysis of any firm’s market position and its ability to effectively participate in business strategies based on Sustainable Development principles.

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