This, however, is not the case for most organizations; in fact some even rebel against this change. “Current financial decision-making does not fully capture he value of sustainability-related investments” (Laughlin & Bananas, 2011 The issue is that organizations are just not aware how to correctly get from unsustainable business practices to sustainable business practices. What are the rules? What are the guidelines? Are our customers going to understand what it is we are doing?
Will this makes us more money or cost us more money? All these are reasons motto introduce sustainable business policies and procedures. However, these are all bad reasons not to do it as well. Problem Statement Most companies observe going “green as costly and insignificant to their OTTOMH line and image. This, however, could not be further from the truth. The purpose of this study is to determine if this problem is fact or fiction.
Purpose of Study The importance of determining the difference from organizations believing that becoming more sustainable is a risk they are unwilling to take because of cost, lack of understanding, or lack of framework is tangible or not. Are organizations willing to take risks if they become more educated, or seek out experts to help them become more intangible when it comes to these policies and procedures? It is true that costs are high at the start of any sustainability aerogram or project.
However, the return on investment (ROI) will make the initial startup costs seem insignificant after the social impacts, environmental, impacts, and financial impacts are realized through positive gains. Study Hypothesis If more organizations embraced the concept of sustainability and the Triple- Bottom-Line, the operations would tend to focus less on the profits and more on the human and natural resources that are used to make those profits, enabling the future operations to ensure that what we use today will be able to be used tomorrow.
Chapter 2: Review of Related Literature Strategic Management and Sustainability Most organizations have vision and mission statements that let all stakeholders what the organization values and believe its purpose for existing. Most want to make money in a responsible way is an assumption that many make, however, getting an organization to follow through with this thought can be quite challenging. Getting a framework in place that can start an organization on a sustainable path.
Frameworks like the International Organization for Standardization ISO 26000 social responsibility platform “provides guidance on how businesses and organizations can operate in a socially responsible way” (ISO, 201 0)Using this framework to implement new fundamental goals and initiatives in regards to becoming socially responsible and sustainable, is a key factor in starting an organization off on the right track. Without having to feel that they are greenmailing or not implementing policies and procedures correctly. In general, ISO 26000 acknowledges that ‘social responsibility should be an integral part of a core organizational strategy’ (Hahn, 201 2, p. 452). However, these organizations cannot spend valuable money and time looking as if they are being socially responsible, sustainable, or “green”. This is the definition of greenmailing, where organizations do everything they can to appear “green” without actually doing anything to become “green”.
This is also why a large number Of organizations do not take the first entitled step with strategic management and looking for the best optimization practices when it comes to sustainability and the triple- bottom-line. Triple-Bottom-Line When organizations, or any stakeholder, are looking at why their goal should encompass policy or procedures that all of the environmental and social impacts of their businesses, one of their focus points should be on the Triple- Bottom-Line (TAB) accounting framework to help guide their business.
When we look at the bottom line of a financial statement, we are looking at the profit or loss for that organization, expenses and revenue. The TAB also takes into account the social and environmental impacts that the organization has. For example, American Smelting and Refining Company (SCARCE), a copper mining and smelting company was a very profitable company that was established in 1899. This company is also one of the largest polluters in America responsible for 20 Superfine sites across the United States (EPA, 2009).
A TAB approach would have shown the copper mines polluting and destroying not only the social aspect of the communities around the mines, but the people who live and worked there and the environmental impact to the sites where SCARCE conducted business. This fact, which the focus goes from just expense and revenue’s to impacts on social welfare and environmental concerns. The TAB associates a cost to the secondary and negative effects to how business is conducted and real world impacts that as not taken into account before, and deals with all stakeholders instead of a group of shareholders. Recent research reveals that both pull and push mechanisms exist to motivate organizations towards becoming more sustainable. The “pull” is from organizational leaders who see sustainability as the next frontier in organizational development. The “push” is from market forces and regulatory pressures that are required organizational leaders to consider innovative ways to accomplish their goals while taking into consideration the triple bottom line” (Rodgers & Hudson, 201 1). Every takeover, within a TAB framework is quantified. Their impacts become real dollars and cents, and can be seen on a financial Statement.
It causes managers and business leaders to think at a different level within the business decision framework. This can be a difficult challenge to overcome in many organizations, especially if the skills are not there to take on a whole new systems approach to the accounting department. Creating policies and procedures from scratch in a TAB framework can be very intimidating. Cost of Going Green Typically when looking at cost analysis of going green versus not going green, ever the long term of the investment, going green will usually win out.
However, “in many cases, the sustainable choice is the best choice financially, but loses out to another alternative because of flaws inherent in the cost- benefit analysis” (Epstein & Youths, 2012, p. 27). Most managers look at the high cost of green initiatives and see the large initial impact and not the long term financial gain. Looking to change all incandescent light is a warehouse for example to Lead’s is a large upfront expense. The lights have a cost that is usually 5-10 times greater than a normal incandescent bulb. However, LED lights are cheaper to run and last many times longer.
A break even analysis of an LED vs.. Incandescent cost benefit would show that LED lights are lower wattage, run 41 times longer, are 10 times cheaper to operate and saves absorbs of CO per year per 30 bulbs (Design Recycle Inc, n. D. ). In this example the cost of going is high at first, but the ROI over a period of time always wins out, specifically in this example. However, when conducting the cost benefit analysis managers must also factor in TAB principles and look at sustainability outcomes as well as financial outcomes.
The social outcomes are also important when conducting the cost benefit analysis. When employees are engaged in their workplace and that workplace is engaged with environmentally and socially responsible programs, two-thirds of those employees are more likely to stay with their organization (SHRIMP, 2011 Lower turnover rates and more productive and engaged employees can save a large expense in employee turnover expenses. This also creates loyalty to the company and allows those employees to find meaning in the work that they do.
Aligning employee values with the values of the organization can also cause perceptions of all stakeholders to become favorable to the organization by showing job satisfaction, commitment, and performance increases. (Glass, 2012). Chapter 3: Methodology Us Nee The research required to conduct this study would include surveys that would address the problems of concern in regards to perceptions of green innovations, processes, and policies that most corporations deem to be insignificant or costly.
This survey coupled with non-corporate officer surveys about perceived perceptions of green companies versus non-green companies will provide data for use in comparison to the concerns of the rapports respondents. In the survey given to corporate officers’ questions will be asked that will influence respondents to give responses that achieve a scoring model Of how their perception Of green initiatives will affect their bottom line. Using a rating model to achieve solid quantitative data to determine where the hesitation is based off of.
In regards to the survey given to non-corporate officers, employees will be asked about social, environmental, and economical impacts of green initiatives that companies offer and the perceived value of these programs. Study Participants All participants of these surveys would from the organizations who show hesitation with sustainable business practices. The majority of the surveys would be conducted through the employee e-mail system. An announcement would precede the survey to alert employees of the upcoming research study.
There may be a need to conduct some one on one interviews to ensure that enough participation is achieved if the response from the email surveys is lower than expected. It may be necessary to engage other stakeholders in this process as well if the participation rate at the corporate level is also low. Data Collection Process The process used to collect the data was systematic and collected in such a way as to test the hypothesis and evaluate the outcomes of this research. Preserving the integrity of the data collected and how it was collected was always a priority.
Limiting errors and bias from the participants was ensured through the debriefing process after the surveys and other research Were collected. Sustaining quality assurance practices before the data was collected and quality control during the process were key areas of the entire data collection period. Most of the data will be collected through the corporations -mail system, and the groups of interest within those corporations. The participants will be grouped into categories of executives and employees.