Sustainability Marketing

New directions and practices

Rishi Raj Sharma, Tanveer Kaur, Amanjot Singh Syan

• Publisher: Emerald Publishing Limited
• Year: 2021
• ISBN:
  9781800712461
• Topic: Business
• Subtopic: Marketing
• Index: Business

With changing business needs and increased levels of consumer awareness concerning social and ecological issues, organisations need to realign their profitability strategies in order to demonstrate their engagement with sustainable practices.
Sustainability Marketing: New directions and practices explores how an increase in customer's desire for sustainable products can form a key part of new marketing strategies. The authors shed new light on strategies that capture the benefits of sustainability from an ecological, social and profitability standpoint in business, while explaining the strategic intent required for building marketing strategies that will provide a competitive advantage.
The book harnesses the Triple Bottom Line concept by highlighting the significance of developing, refining, and implementing marketing strategies with a key focus on sustainability, in order to leave a positive impact upon the planet and people. Sustainability Marketing provides solutions to scholars, marketers and decision makers aiming to gain an advantage in businesses where sustainability is increasingly prioritised.

Part I

Marketing Scenario in the 21st Century

Chapter 1

Brief History of Business and Its Sustainability

Chapter Key Highlights

After reading this chapter, you will be able to:

• Understand the major milestones in the history of business management.
• Define the term sustainability and sustainable development.
• Analyse the significant role of sustainability in business.
• Identify and understand the phases of business sustainability.
• Outline the steps involved in creating a more sustainable business strategy.

1. Introduction

Globalization, technological advancement and increasing diversity have essentially put organizational challenges into hyper drive. After almost a full century, organizations have come to a point where they have realized that the ideologies and practices that worked before are just not enough in the present business scenario. With the traditional management, it is possible to comply with the business, market and legal regulations but for boosting the level of growth and innovation in organization, engagement of people to a whole new level is needed. The traditional top down approach is now a thing of the past. Success of an organization in today's business environment needs an inspiring and participatory management style.

As market is considered as the most powerful institution, business is automatically the most powerful entity in this institution. Business is responsible for almost all the activities taking place around us such as construction of buildings and houses, production of food that we eat and production of clothes, automobiles, energy, etc. This does not imply that it is the business alone that can generate solutions in the society but owing to its huge power with regard to ideation, production, and distribution, business can be best positioned to bring in the change that is required at the current stage.

Due to the extensive role and importance of business in every sphere of life, it is crucial to enhance the sustainability of business in all aspects – economic, social and environmental. Sustainability is recognized as a megatrend that has a huge impact on every sector of life. Thus, understanding the significance of business sustainability is of utmost importance in the present era characterized with devastating impacts of business organizations on the society and environment.

2. Brief History of Business Management

The fundamental processes of business management have been subject to continuous development ever since they first evolved. These processes include how to organize, coordinate and direct human activity for achieving the collective goals. The twentieth century is considered as the most important time frame when most of the changes in business and its management were witnessed. This century can be divided into timeline of different periods and all these periods focus on transition and change over time and each time period is indicative of a dominant set of ideas, beliefs and practices. This periodization is based on the insights of researchers – Wren and Bedeian (2009), Kipping (2002), and Barley and Kunda (1992).

i. 1900–1940 – Scientific management

The idea of considering management as science developed in the early years of twentieth century. It primarily emphasized on improving productivity and efficiency with the help of approaches such as division of labour, standardization, centralization and hierarchy. Here, the management approach was ‘top-down’ with strict control over people and business processes.

The first period was primarily dominated by the ideas and practices of scientific management which were introduced by Frederick Taylor. He presented scientific management as a complete opposite of the ‘rule-of-thumb or traditional knowledge’ that were prevalent in the business management earlier. It spread in such a manner as never seen before and was also introduced into the public sector. Taylor's ideas were similar to those of Max Weber and Henry Fayol. Henri Fayol (1937) developed a general theory of management for state and as well as industry. The works of Taylor and Fayol were further developed and disseminated by thinkers such as Lyndall Urwick (Brech, Thomson, & Wilson, 2010).

ii. 1940–1960 – Humanistic or behaviouristic management

The second period was the era of the welfare state, which was linked to processes like industrialization and post-world war recovery. Here the Tayloresque ideas and practices were still considered important, but there was a change which can be seen in the work of Peter Drucker (1954). He was the first modern management guru who showed that management is about the use of fixed procedures or ‘management-by-objectives’. This diversification of management was caused by the behavioural revolution of the social sciences. These ideas were also used by public administration for establishing welfare policies.

During the 1950s and 1960s, the business organizations were becoming more complex and this marked the introduction of functional organizations and the Human Resource (HR) movement. Firms started considering the importance of the human factor with regard to production processes and productivity. In this time period, the tools like goal setting, job descriptions and performance reviews were developed.

iii. 1960–1980 – Strategic management

In the third period, the focus was on the role and restructuring of top management, top-down budgeting and the increasing popularity of Henry Mintzberg's (1973) ideas. His ideas stressed on the strategic importance of a manager as the manager was regarded as a ‘figurehead with ceremonial duties’. This was the result of the merger and acquisition wave of the 1960s which led to creation of large, diversified private conglomerates. In this period, there was a huge shift from shop floor to boardroom. Moreover, the increasing importance of strategic management was seen in this period along with the growth of some abstract management concepts. The spread of management was so wide that it not only affected large firms, but also the small organizations.

In the 1970s, the focus changed to the process of resource allocation. Tools such as Strategic Planning (GE), SWOT and Growth Share Matrix (BCG) were developed and used for formalization of the strategic planning processes. Moreover, contingency theories were also developed after several decades of using ‘best practice’ and ‘one-size-fits-all’ solutions.

iv. 1980–2000 – Popular and individualized management

In the fourth period, the main focus was on the increasing importance of the role and behaviour of the top management. The spread of concepts related to strategic management led to the individualization and popularization of management. The other reason behind this was the effect of the changing circumstances. In this period, New Right and monetarism (neoliberal politics) emerged, which supported the role of the individual and favoured restructuring of economics and finance for curing the recessions of the 1970s.

In 1980s, the business environment became very competitive. Due to the introduction of management consultancy industry, Competitive Advantage came out as the first priority for all organizations in this period. Tools such as six sigma, total quality management (TQM), and Lean manufacturing were introduced and used for measuring processes and improving productivity. TQM was a solution for the decreasing productivity and recession of the 1970s. In this period, the employees' involvement in collecting data increased, however, the decision-making power was still in the hands of top management. The top managers set goals for managing people and maintaining control in the organization.

In the 1990s, due to the approaches such as neoliberalism, the management's focus on the long-term change declined. The management welcomed quick and dramatic changes and adopted radical methods like Business Process Reengineering (Hammer & Champy, 1993) and concepts like ‘shareholder value’. The focus was now on the short term financial success. In 1990s, the processes like benchmarking and business process reengineering also gained popularity. Other tools such as Strategy Maps and Balance Scorecards were introduced as a part of more holistic organization.

v. 2000–present – Critical management

In 2000s, organizations started to focus on utilization of technology for value creation and growth. The era of using Big Data started during this period. Concepts like Blue Ocean Strategy and Value Innovation were also introduced due to oversaturation of existing market space. Since 2000, management has been criticized in industry as well as government sector. This criticism is different from that in other periods, and it marked the change which had an impact on development and distribution of management, particularly outside the industrial sector. The concepts focussing on the short term gains and shareholder value were delegitimized due to a number of fraud cases that took place. Moreover, there was a rise of anti-guru gurus who stood against the dominance of managers and management (Kipping & Engwall, 2002; Micklethwait & Wooldridge, 1997; Pinault, 2000). In this period, the concept of ‘blame it on the manager’ had a sharp rise with critical assessments of the management ideologies (Hoopes, 2003; Pearson, 2009).

The latest trend that is going on in business management is integration of sustainability into the strategic and functional areas of business. These concepts are discussed in detail in the proceeding sections of this chapter.

3. Concept of Sustainability

Sustainability has arisen as a key imperative in the present corporate picture. Researchers believe that the sustainability challenge will dominantly influence the organization's economic value, competitiveness, corporate personality and survival in coming years (Latessa et al., 2010; Lubin & Esty, 2010). Anthropogenic activities pose a significant threat to the society and also to the planet on the whole. This paradox of consumption oriented marketing philosophy leaves a significant room for embedding sustainability in the total business operations and processes (Hahn, Preuss, Pinkse, & Figge, 2014; Rockstrom et al., 2009; Slawinski & Bansal, 2012).

The report by Brundtland Commission's titled as ‘Our Common Future’, in 1987 introduced the term ‘Sustainable Development’ and states that the ‘concept is concerned with satisfying the needs of existing generation without risking the needs of coming generations’ (WCED, 1987). According to corporate culture, Sustainability indicates meeting the needs of present stakeholders along with focusing on the needs of forthcoming stakeholders (Alameeri et al., 2018). In the course of attaining ecological and social goals, sustainability is evolving as an essential concern for businesses around the globe (Goleman & Lueneburger, 2010; Van der Byl & Slawinski, 2015).

Sustainability is often considered synonymous to ecological sustainability (Peattie, 1995) and Corporate Social Responsibility (CSR) (Montiel, 2008). This similarity overshadows the overall significance of sustainability as the holistic concept of sustainability includes social, economic, and environmental aspects clubbed together (Obermiller et al., 2008). The lack of harmony amongst these philosophies has created confusion for the academicians and corporate executives as well. Henceforth, holistic research on sustainability remained in the infancy stage, so more light needs to be thrown upon the grey areas. This field has been explored and extended due to the proactive efforts of researchers (Nulkar, 2014) and business houses for undertaking the challenges of sustainability in order to gain competitive advantage. Nevertheless, the three pillars of sustainability such as people, planet and profit are internally consistent and also com...