Business Transformation for a Sustainable Future

Samuel Sebhatu, Bo Enquist, Bo Edvardsson, Samuel Petros Sebhatu, Bo Enquist, Bo Edvardsson

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000411652
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Wirtschaftssethik

Interconnecting the concepts of sustainability, innovation and transformation, this book explains how organizations have successfully transformed themselves and wider society to foster a more sustainable future, and identifies the difficulties and challenges along the way. Part of the Principle of Responsible Management Education (PRME) series, the book promotes a strong voice for meeting sustainability challenges for transformative change in a globalized world through business education and practice.

A transition to a more sustainable way of doing business can only be attained by combining technology with profound system innovations and lifestyle changes. The chapters in the book, each written by a strong and well-recognized team of researchers in the field, open up the discussion about a new partnership between sustainability, innovation, and transformation that includes the global society (big world), the biosphere (small planet), and also requires a deep mind shift. The book presents cases from business (including Ikea and Eataly) and other service networks including the Base of the Pyramid (BoP), and illustrates how these organizations have transformed themselves for a sustainable future. The research perspectives are macro (policies and legislation), meso (institutional practices) and micro (business practices and individual behavior). This book is where research meets real-world business and societal practice. The chapters are grounded in business research, specifically the interdependencies between sustainability, innovation, and transformation, which makes for a robust basis for describing, explaining, and understanding the complex challenges faced by business and society in the 21st century.

The book is intended for graduate- and postgraduate-level students and executive education with implications for practitioners. Furthermore, it contributes to multidisciplinary research in the field of interaction between business and society with a view to extending the firm-centric view to encompass a broader, systemic, and dynamic understanding of business and societal transformation.

1 Business transformation for a sustainable future

Samuel Petros Sebhatu, Bo Enquist, and Bo Edvardsson

Setting the stage

This book is being published a year after the world was first impacted by the COVID-19 pandemic, which became a reality in spring 2020, creating a complex global challenge. Although the chapters were begun before it struck, they were finalized as it progressed. Before the pandemic, economic and social service systems were accelerating, in line with the upward trends of globalization and digital technology. However, the appearance of this highly contagious virus, spreading quickly across the world via global transportation systems and value networks, has had an unprecedented effect. The exact nature and extent of this effect on both business and society is still to be ascertained, but its influence on the contributors to this book is reflected in their chapters. These scholars all agree on the general point that the global economy will not go back to “business as usual.” While it’s clear that the crisis will contribute to a transformation of the world as we know it, dare we hope that it can transform to one that is more inclusive and sustainable?

This book focuses on business transformation meeting global challenges. The aim is to understand how sustainable societal practices can contribute to a broader view of business transformation, and vice versa, in a globalized world. A global transformation agenda that is already in place today is the UN’s Agenda 2030, with its widely known Sustainable Developmental Goals (SDGs),¹ a plan of action for “people, planet, prosperity, peace, and partnership,”² in which nations, cities, companies, and civil society are encouraged to make the transformation to sustainability. Many businesses have already started to outline their own transformation agendas to meet the SDGs. Sustainability and the SDGs are complex and dynamic phenomena, however. Our focus is on transformation, based on proactive and innovative thinking, that results in both a societal and an environmental impact (Rockström & Klum, 2015). We look at transformation processes, presenting innovative and sustainable business practices and describing how to implement these practices in the real world. In a globalized world, businesses are going to need to transform from a strict firm-centric and economic perspective to embrace new societal practices (Laczniak & Murphy, 2012) in order to forge a sustainable future.

The book will also discuss the impact that PRME has made in the last decade with its ongoing fostering of the business transformation process. PRME – “Principles for Responsible Management Education” – is an initiative for business schools which, as part of the UN Global Compact, seeks to establish a process for continuous improvement among institutions of management education to develop a new generation of business leaders capable of managing the complex challenges facing business and society in the 21st century. PRME is helping business schools to focus on “a new era for responsible business.”

This book is where research meets real-world business and societal practice. The chapters are grounded in business research, specifically the interdependencies between sustainability, innovation, and transformation, which makes for a robust basis for describing, explaining, and understanding the complex challenges faced by business and society in the 21st century. The book is intended for graduate- and postgraduate-level students and executive education with implications for practitioners. Furthermore, it contributes to multidisciplinary research in the field of interaction between business and society with a view to extend the firm-centric view to encompass a broader, systemic, and dynamic understanding of business and societal transformation.

The clear message from the Club of Rome’s 50th Anniversary in 2018 was encapsulated by the remark “Don’t tell me the current trends are sustainable” (von Weizsäcker & Wijkman, 2018). So, how to tackle this? There is a challenge for business and society to interpret and navigate the role of business and individuals in this new globalized landscape.

The foundation of the book rests on the following pillars:

• Real cases from business and other service networks;
• Illustrations of how these organizations have transformed themselves, and the society in which they operate, into a sustainable future;
• Identifying the difficulties and challenges that businesses are facing while undertaking their transformation;
• Academic research and theories from a broad range of areas;
• Research perspectives that are macro (policies, legislation), meso (institutional practices), and micro (business practices and individual behavior) and how these are intertwined;
• Its usefulness as a teaching resource (graduate and postgraduate level).

Sustainability is complex, and research needs to point to how the UN SDGs can be realized in different contexts. The 2030 Agenda outlines actions on sustainability for nations, cities, businesses, and civil society to transform the world. The plan includes 17 global goals, which include eliminating poverty, developing innovation and infrastructure, establishing sustainable cities and improving communities, responsible consumption, and climate action. These 17 SDGs demonstrate the scale and ambition of this new universal agenda. Paul Polman, former CEO of Unilever and now the cofounder and Chair of IMAGINE, Chair of the International Chamber of Commerce and board member of UN Global Compact, calls the SDGs “the world’s greatest business plan – the growth story of the century” (Polman, 2020, p. 19). His message is that “we have a small window to act, but it’s a window that’s closing” (Polman, 2020, p. 19). This book focuses on transformation based on proactive and innovative thinking that has a societal and environmental impact (Rockström & Klum, 2015) and will have an effect during this window of opportunity, based on the understanding that business and ethics are intertwined and cannot be separated from each other (Freeman, 1994).

The UN Global Compact anticipates a new, inclusive, and sustainable era for responsible business (Global Compact, 2017). It claims, “Today’s business landscape is characterized by an unprecedented, accelerating, and complex mix and opportunities. Every industry and every sector – in every country – is facing new challenges, which they must confront in a changing operating environment” (Global Compact, 2017).

These challenges should also be embraced by business schools. In the report Business School Ranking for the 21st Century (Pitt-Watson & Quigley, 2019), the authors pose an important question: “Are Business Schools prepared to meet this new era?” The report addresses how business schools, and the courses they offer, are evaluated and ranked. It concludes that the evidence suggests that ranking drives behavior, but perhaps not in the right direction: managers are not being trained to contribute to a sustainable and inclusive 21st-century economy (Pitt-Watson & Quigley, 2019, p. 23); the teaching of quality, sustainability, and business ethics is either minimal or absent. Business schools need to know how to train their students – with efficacy, inclusivity, humanity, and sustainability in mind (Pitt-Watson & Quigley, 2019, p. 5).

For the UN Global Compact’s 20th anniversary a study on Leadership for the Decade of Action has been published (Global Compact, 2020). This Global Compact–Russell Reynolds Associates study on the characteristics of sustainable business leaders highlights that sustainability is a leadership imperative. The time to act is now to meet the 2030 deadline of the SDGs.

With less than 4000 days remaining until the 2030 marker, we need to turn commitment into action. As we set out to recover from the COVID-19 pandemic, now it is the time for all companies to raise their ambition for people, planet and prosperity.

Global Compact, 2020, foreword

Laczniak and Murphy (2012) argue for a broader and more inclusive stakeholder orientation in marketing, moving from a firm-centric to a societal perspective grounded in ethical, macro-oriented, and network views.

Global challenges

Business – and society as a whole – is facing many global challenges to be addressed in this business and societal landscape; they must be understood in a new manner by considering both the details and the landscape as a whole. In this book, we focus on the following global challenges:

• It is time to rethink the “Triple Bottom Line”
• A need for transformation
• Making and taking in the global economy
• Individual/group identity as a tool for inclusion
• Climate change
• The relationship between humanity and nature
• The age of acceleration

A common view of sustainability today is that it consists of three dimensions – social, environmental, and economic – a concept raised by John Elkington in 1993 which he referred to as the “Triple Bottom Line” (TBL) (see Elkington, 1998). Twenty-five years later he revisited the concept and insisted it was time to rethink the TBL (Elkington, 2019). He concludes that the Triple Bottom line has failed in its mission to bury the idea of the single bottom line. It was not intended as merely an accounting system but rather as working toward a triple helix of value creation, a genetic code for tomorrow’s capitalism, spurring the regeneration of our economies, societies, and biosphere (Elkington, 2019).

Discussions about environmental sustainability first began with the publication of Silent Spring (Carson, 1962), which was a milestone and motivated a new “ecological” vision of society. Carson’s book documented the adverse environmental effects caused by the in...