Business ethics (business and society)
Sustainable development is a form of development that matches with current existing needs without interfering with the capacity of future generations to acquire their own needs. It comprises of two major concepts which include, the ‘concept of needs’ and the ‘idea of limitations’. The concept of needs stipulates that the essential needs of the most poor in the world should be given an overriding priority. On the other hand, the idea of limitations, which is enforced by able state of technology and social union, states that the environment should meet both current and future needs. However, how and whether the system embraces economic, social and environmental goals to ensure a superior life for all stakeholders in the society both for current and future generation remains a debate. Sustainable development has various ramifications of the system particularly to business owners. It particularly impacts the mining industry negatively (Crane and Matten, 2010).
Generally, all descriptions of sustainable development enable us to view the universe like a system which unites time and space (Crane and Matten, 2010).This is because, when the world perceives the universe as a system over space, it is able to learn that air pollution from one nation could have an impact on the other. On the other hand, when the universe perceive the world as a system over time, it begins to recognize that, for instance, farming practices, which were conducted in the past, affect the current agricultural activities. In addition, the world also learns that, current economic enforcements will have some degree of ramifications on the future generations.
The concept and notions of sustainable development pose a significant number of challenges to the world of business as well. Most corporations have adapted policies and codes and have and have acted in accordance with the goals as sustainable effective governance. However, it is difficult to judge whether they have acted in the name of promoting their contribution to the well being of the society or to achieve and maintain a competitive advantage over their rivals (Crane, A. & Matten, 2010). Over the past decade, corporations have become informed of the environmental and social pressures affecting business. A good number of marketing scholars have argued that new demands create handsome opportunities for growing organizations. For that reason, they proposed innovation as one of the best ways in which businesses can acquire sustainable growth .They have further argued that corporations that fail to embrace such innovation face adverse effects in the long run. However, the truth is that, business executives have experienced rough times while coping with sustainable development. In essence, their innovation schemes are normally inadequate to accommodate the much complicated and unpredictable nature of upcoming demands. In order to incorporate the culture of sustainable development, companies need to come up with tangible strategies. Unlike the conventional market innovation managers that come up with the corporate culture of sustainability must not only beware of the constraints of environmental and social pressures but they ought to consider the future generations as well.
The introduction of the concept of sustainable development has raised a variety of questions for business scholars. Such questions include: does the leadership structure of corporations that incorporate social and environmental policies differ from that of other corporations? Could meeting the needs of other stakeholders interfere with creating shareholders value? On the other hand, some sections of scholars have argued that businesses can “do well by doing good” (Godfrey, 2005; Margolis, 2007; Porter and Kramer, 2011). This statement is tied on the notion that meeting the expectations of employees for example as well as ideal customer service can expressly generate value for shareholders. It is also related to the notion that failure to meet the expectations of stakeholders can significantly hamper the value of shareholders.
The innovation of social and environmental policies can have detrimental effects on the wealth of shareholders. In essence, sustainability is in itself, is a form of agency cost. Business executives often get rewards as a result of formulating social and environmental policies in their organizations. However, there are also negative results attached with such undertakings. It forces organizations to change their attention to other issues that are of less significance. A short term emphasis on making value for shareholders may lead to an absolute loss of value in the longer tenure through the lack of creating essential investments that are in progress and product safety and quality are guaranteed (Godfrey, 2005).
A short term move in the name of decision making normally translate to a considerable loss of profit. It forces business owners to make moves that increase profit while unknowingly reducing shareholders wealth over the longer tenure. As a result, this negatively affects other stakeholders. For instance, failure to invest in control mechanisms of higher quality may lead to the production of inferior products. Subsequently, this would not only result to the loss of customers but it will force the corporation to reduce prices thereby jeopardizing the cooperation’s brand. Furthermore, it may force a corporation to get an elevated cost structure. For example, companies may be obliged to pay their workers living rather than market salaries. Marketing scholars have argued that businesses, which fail to work under such policies, will not only be competitive but sustainable as well. They successfully thrive in the ever competitive world of business. Corporations that attempt to tackle social as well as environmental issues have significantly underperformed (Godfrey, 2005).
A good example where the culture of sustainable development can be embraced is the mining industry (Dungan, P. (1997). Sustainable development in the mining industry is essential since it comes with a great number of benefits to the government, the industry and the community at large. However, the fact is that the innovation of such a concept can have adverse effects, particularly to the mining industry. Proponents of the concept of sustainable development in the mining industry have argued that the incorporation of the system poses complex problems to the mining industry. Basically, sustainable development must include the protection and conservation of the environment. A vital question that even disturbs scholars in the mining industry is how mining can be practiced without causing pollution (Dungan, 1997).
Another question is how a mining site can be restored to its normal condition. Finally, in a bid to conserve and protect the environment, the mining industry may be required to leave some deposits, whether resourceful or not, untouched as mining them will mean failure on the part of miners to conserve the environment. It often applies where the land in question posses’ cultural importance. A less significant aspect of sustainable development is its ethical element. It requires that the benefits as well as costs be accounted for and shared reasonably. This obliges mining companies to identify individuals who are likely to be affected by mining practices (Porter, and Kramer, 2011). The salient beneficiaries in this case would include the employees, buyers, suppliers and investors. The rest will comprise of families of workers, local communities and others who might be at risk due to the social, economic and environmental effects of the mining activity. Secondly, it requires that the benefits and costs be identified from the point of view of the projects’ stakeholders. Such requirements create a substantial amount of challenges for mining.
One of the problems realized in this case is that the natural criteria of establishing benefits and costs are associated with a number of dangers. One of such hazards is the assumption that a monetary value can be attached to all costs. In addition, those costs that lack monetary value are generally overlooked. In essence, these two assumptions are defective (Crowther and Caliyurt, 2006). One grave mistake that can be committed by a development supporter is to present substitutes of market value or even financial settlement in instances where a substitute is unavailable to people for something whose worth from their point of view cannot be valued at monetary terms. The second danger is an assumption closely linked to the first two and majorly linked to the analysis of benefits and costs. In particular, not all costs are measured in terms of market value. Therefore, establishing costs and identifying the worth of benefits calls for a critical assessment by all the stakeholders involved or else projects will continue be incompatible with the objectives of sustainable development.
All these concerns are naturally ethical since they involve the just distribution of benefits and costs which emanate from resource mining. Another aspect of sustainable development is effective and efficient resource mining. One interesting thing is that it is not normally considered in deliberations of sustainable development. This is due to the fact that a lot of people perceive efficiency to be in obvious collision with the protection of the environment and the seeking of social justice. In essence efficiency entails achieving objectives and goals without creating the unnecessary loss of value (Porter, and Kramer, 2011). The proficient use of resources will capitalize on social environmental and economic benefits .Inefficient use of resources has been described by marketing scholars as one method of overlooking the philosophies of conservation. Consequently, it hinders the just distribution of benefits and costs. The inefficient use of the existing resources leaves scanty resources for the future generations.
Generally, externalizing costs that are linked with mining is a type of inefficiency. It means that something which is regarded as valuable is treated as worthless. One of the major issues surrounding sustainable development is the need to establish the worth of natural resources in precise and reasonable ways and then to mine such resources in techniques that do not unnecessarily damage the value of resources that are reserved both for current and future generations (Dungan, 1997). One key aspect that should be considered while embracing the concept of sustainable development is accountability (Gray, Owen and Adams, 1996). This is because it enhances trust. It enables stakeholders to assess performance against commitments of the public as well as the philosophies of sustainable development that is formulated by mining companies. Dedication to sustainable development offers opportunities for shaping best practice and attracts the cooperation of stakeholders. It aids in forming a social environment whereby solid research is accepted and respected hence enabling conversation other than condemnation and accord building other than conflicts and confrontation.
Ultimately, since sustainable development is one of the major issues bedeviling society, it requires virtually all organizations and individuals to familiarize themselves with the issues that affect their wellbeing and take immense responsibility for their deeds. Governments for instance, need to educate businesses and all the people in the society on the importance of embracing sustainable developments otherwise multinational industries will continue to register losses. In essence, governments require a broad variety of policies, regulations, laws and guidelines to tackle social and environmental risks so that they can maximize economic as well as social benefits from practices such as mining and expand development opportunities which is attached to mining investment (Crane & Matten, 2010). .In the end, there should be a mining policy which preserves adequate flexibility to ensure that a balance is reached between optimizing revenue from mining practices while at the same time enabling mining stakeholders a reasonable amount of returns on their investments (Dungan, 1997).
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