No time got wasted today to find a creative title =)

Hey everyone,

Hmm where to start? I think that the business model on one of the first slides is quite a good starting point. As discussed in class there is a difference between a business model and a strategy. The strategy refers more to the competition and differentiation that takes place outside the elements of the system, which build up the business model. I think that this is a little bit narrow definition of strategy as I see the whole business model as a coherent strategy. But if we argue that strategy is something that deals more with external matters like customers and competitors then I think that sustainability is also more a strategy than ideology nowadays. I have the feeling that many companies have implemented sustainability out of strategic reasons like serving a specific customer segment, differentiating from competitors or simply out of image reasons. Implementing sustainability as an ideology is far bigger step and leads to completely different outcomes. As a strategy sustainability only addresses certain elements within the company, like logistics, products or marketing. As an ideology it has a far more holistic approach that spreads over the whole company and covers all the processes, compartments and elements. In terms of flexibility sustainability as a strategic element is of course easier and faster to implement, but of course the effectiveness suffers from that. Turning sustainability into an ideology can be a very long process. First it has to be accepted as an ideology and only after that it can slowly spread out into the processes. Especially when the company exists already for quite some time, has a history and suffers from path dependence and managerial cognition, the time it takes is even longer. In the case of Interface sustainability became an ideology, but of course also there strategic decisions in the sustainability context play a significant role. Sustainability might have a business case, but nevertheless I think that they really profited from being hyped so much. Their case became very popular and therefore resulted in free promotion on various channels. I think that if more companies would try to pursue that path it might be a lot more difficult for them and some might even fail.

I think that the business case for sustainability depends strongly on society’s demands. After all organizations earn their legitimacy to operate from society who passes on its demands to the system in place. This can be laws which companies have to abide or voluntary agreements towards sustainability which they have to follow in order to stay credible or competitive. Also customers have a word of course! We talked about whether sustainability fits the neo-classical paradigm, and I can only say: yes. The business case for sustainability gets stronger as we demand more from the companies to do. Stakeholder theory and shareholder profit maximization can stay in the game, but they have to accept that certain sustainability efforts are necessary in order to create value and profits. Sustainable business models will become the norm one day and less won’t be accepted!

1 comment
  1. lottaliuksiala said:

    Thanks for the comment! I totally agree with your points. Sustainability needs to become more than just a business case for companies. And it is up to us consumers to demand that from the companies.

    But is it completely up to us? We as consumers of course are responsible to guide the corporate actions with our purchase decisions, but what we want is partly created by marketing communications. For example, imagine if K-group would run a campaign where they would introduce sustainable products in a really cool way, creating a total lifestyle around consuming sustainability. Would it affect peoples perceptions about sustainability? I would say yes.

    Therefore, it’s a two way street: not only society defines whether it’s a profitable to do sustainable business but also the companies themselves define what’s desirable. And this is where marketing steps in. Especially in fields where there are only few big powerful actors like in Finnish retail scene (K-group and S-group). Through marketing communications, corporate actors have a lot of power over how we dress, how we eat and how we live. Who would have thought that they need a internet connection to their phone before they started promoting smart phones? If sustainability lifestyle can be promoted through marketing communication, then this will result in positive cycle: promoting increases sustainable lifestyles, which results in more demand and more promotion of sustainable products.

    So I would argue that especially big corporate actors have the means to also change the social sphere in which they operate. It’s not only about following trends but also creating them!

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