Responsible management.
There is increasing growing approvals of the advantageous effects the responsible companies have on their stakeholders such as employees, business partners, customers, investors, community, shareholders, governments, and the environment. Corporate management has elucidated that long-term business success in establishing and developing good relationships with various stakeholders. The need for responsible management has risen above average, and an impressive amount of literature on this topic has emerged. It has been viewed as a rebalancing society, enhancing leadership, institutional character, and stakeholder harmonization. Business managers have then understood that engaging in the sustainability issue brings benefits to companies, the environment, and society.
Conversely, all managers to ask themselves paradoxical questions like, ‘Why responsible management?’ Thus, this paper purpose of presenting the concepts of responsible management and sustainability of various companies. Due to the increasing resource-fragile and existence of a worker-centric world, there is a scant opportunity for addressing changes in doing ‘responsible management.’
Many companies are suffering losses due to a lack of responsible management. A responsible company is the one that benefits both the macro and microenvironment it operates in and addresses any negative impacts that might result and fixes them. According to Larry Fink, BlackRock’s CEO, all shareholders should purposely positively impact society. It suggests that decision-makers should make responsible decisions, considering the impacts of those decisions from a social and environmental view and balancing them against those of financial gain. Again, the application of sustainable business practices affects the company positively socially, economically, and environmentally. Therefore, being responsible is being sustainable and sound.
A business with responsible management automatically builds trust and strengthens its relationship with all its stakeholders, enabling it to achieve more excellent value with time. Application of sustainable business practices helps businesses reduce costs driving innovation simultaneously, and these two are positive contributors to the success of a company. The world is becoming a global village. As a result, companies need to move to a tipping point of engagement, which will consider a responsible business as essential in any business venture and not just a ‘nice to have.’ Competitive edge among businesses has also significantly increased, and therefore for them to remain competitive, they need to view sustainability as a necessity. As food for thought, increasing customer awareness and relevant regulations also have tremendous impacts for a sustainable business.
Daniel Runde states that there has been a shift in Corporate Social Responsibility (CSR). Many companies have started recognizing the importance of aligning their projects with strategic business goals that can improve the employees’ skills the competitive advantage of it, serving their members fully. People tend to believe that companies impact society’s responsible businesses nurturing a more cohesive society hence a sustainable economic system. Other companies approve the potential of responsible practices to help in risk management, access to capital, cost savings, customer relationships, higher profits, employee satisfaction, the sustainability of operations, innovating, etc. Management should ensure that the company maintains excellent and sound practices to all stakeholders and does away with negative impact/externalities that might cause its failure. They should rethink/restructure their business model and mobilize resources to achieve desirable deliverables hence sustainability.
Every business desires to achieve long-term success. Therefore, for responsible business, managers need to identify critical areas that need more focus to achieve long-term financial value and benefitting society at the same time. It helps companies define their global priorities and aspirations of 2030, thus making their contributions towards the Sustainable Development Goals (SDGs) in line with SDG delivery. The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, represents an unprecedented opportunity to eliminate poverty and put the world on a sustainable path. They also provide a shared blueprint for peace and prosperity for people and the planet. At its heart are the 17 Sustainable Development Goals (SDGs), including partnerships for goals, reduced inequalities, responsible consumption and production, peace and justice, decent work and economic growth, industry, innovation, infrastructure, gender equality, etc. Therefore, they wh calls for actions of all businesses. Governments worldwide have already agreed on these goals, and it’s upon the companies and their stakeholders to take action. The SDGs have impacted different companies in different ways. In some, the outcome is short, i.e., small wins, specific accomplishments, while in others, the impacts are long-termed. Other companies have witnessed a new hierarchy of outcomes and impacts ranking from the purpose(environmental and spiritual) at the top, followed by social and psychological and financial and economical at the bottom. Also, reporting is a critical link between a company’s values and goals, showing its action to achieve those goals. There are changes from traditional to modern approaches.
INPUTS (Resources) OUTPUTS (Deliverables)
The external focus is on both the impacts and outcomes.
However, companies do not necessarily report on their social and environmental practices because following the regulation is voluntary. SDGs encourage companies to give reports as a way to improve their transparency and accountability. Simultaneously, reporting instruments have diversified and evolved. A KPMG survey of corporate responsibility reporting in 2017 found that more than 60% of companies across all industry sectors are now reporting on corporate responsibility. These instruments include global initiatives and ISO standards. A company recommends using external assurance such as an auditor as it increases the report’s recognition and creditability, improving its accuracy, enabling better decision-making resulting in business success.
Other companies apply to greenwash in their activities to appear more socially and environmentally conscious than they are, thus misleading customers, and it eventually backfires. Stakeholder management is also an important aspect. Identifying stakeholders and getting to know their needs and expectations is vital as it helps companies produce in line with the stakeholder’s preferences hence more profits. Again, stakeholder’s interests should not collide but be in harmony for sustainability achievement. Companies should develop overall strategies to help managers, teams, and all the other individuals become effective in their daily roles. Regularly communicating with them and updating them in case of any issues is vital. There should not exist stakeholder sovereignty but good governance. Also, stakeholder’s interest should be t harmony and not conflicting. No stakeholder should have self benefiting goals other than those set by the whole company. These establish a sound relationship, feeling trusted and relevant, and understanding among the shareholders and
thus successfully meeting project objectives.
This article has various implications for management and organization in the 21st-century. It implies exposure to current and future managers to more challenges compared to the past. Managers should continuously come up with ways of improving their skills and those of the other stakeholders. For, they should look for other country’s new management strategies. They should accept the fact that no matter what, no country that has answers for all questions. For example, Japan has many aspects in its management techniques compared to those of the USA but is lagging in feminism progression. Again, it is unwise to ignore others’ tactics, resulting in a more significant competitive gap. Managers are also facing greater challenges in today’s world, such as; high staff turnover. Managers need to create smart and realistic visions and coordinate for their achievement. Managers are responsible for building new structures and cultures that suit all the stakeholders within the organization. Technological advancements are exposing many organizations to challenges as they lack the expertise to operate the new machines. Today smaller organizations have come up with labor division, enabling them to produce quality goods, thus more significant market share hence higher profit margins. Organizations should follow the SDGs goals for success and sustainability.