We discussed the outside-in perspective, the inside perspective and the inside-out perspective and all the actors and actions that are part of those. But I think we forgot a little bit to draw the line between the different perspectives and take a look at the whole, how the perspectives stand in relation to each other on a more strategic level. So let’s take a short look at the strategic orientation of each:
The outside-in perspective is the one that reacts to strong signals from outside. The company realizes the immediate need to react in order to stay competitive or even keep the legitimacy to operate. Apart from reactive actions there is not much effort towards sustainability.
The inside perspective has a very strong driver that doesn’t really react to influences from outside but rather goes with the flow of society and sees the opportunities of its internalized sustainability thinking.
The Inside-out perspective is highly strategic oriented and tries to proactively create competitive advantage by being ahead of the curve and pushing others to follow through e.g. legislation or change in consumer behavior.
Imagine now that there are 3 companies within the same industry and every one of them follows another of those 3 perspectives. Which one would have an advantage and what factors need to be considered? The following factors I came up with:
– Role of sustainability
Sustainability issues can play a rather marginal role in an industry or can be a major issue, like in oil or IT. Depending on how important sustainability is different strategic actions have either little or high impact on competitors, end consumer or the wider stakeholder network.
– Regulatory structure
Certain industries have strict laws to which companies have to abide, where as others are rather loose. Depending on this and the speed and ease of new laws being passed companies can use the regulatory structure to build competitive advantage in terms of sustainability.
– Political influence
I just thought politics is always important.
– Business case for sustainability
In some industries it is easier to find or create a business case for sustainability than in others due. Production and material oriented industries might find better materials or optimize processes for sustainability, whereas service industries might have more difficulty in finding a business case.
– Public remoteness
Depending on how closely the public is attached to an industry companies can make use of that by giving more weight to it in terms of stakeholder theory.
After I came up with those factors I came to the conclusion that it really depends on the industry which strategic path a company can pursue and how effective it might be. So I suggest that if you want to comment on this blog entry, please comment on the factors I came up with; maybe some don’t fit, there are important ones missing, or some can be merged together. What you could also do is take a specific industry and test how well those factors work out for analysis.
Don’t slaughter me, it’s not the outcome of years of research 😉
Cu on Monday!