Sustainability within Strategic Management

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Sustainable corporate management adopts financial, environmental and social performance in order to realise competitive advantage.

From a business point-of-view, the concept of "sustainability" can be depicted by means of the four dimensions: market, financial, social and environmental (see figure). A sustainable corporate strategy actively and complimentarily applies these four dimensions of corporate performance.

 


The systematic consideration of all sustainability dimensions within the strategy process allows additional benefits to be realised, e.g.:
  • Risk reduction
  • Increased efficiency
  • Improved image
  • Differentiation strategy 
  • Innovation
During the assessment of strengths, weaknesses, opportunities and threats within the initial stage of the strategy formulation process, as well as during the development and assessment of strategic options, the traditional perspective is supplemented by the sustainability dimensions. During the strategy development and implementation process it is ensured that ideas are followed by actions.

 

 

The broader view & including environmental and social aspects & frequently enables surprising insights and helps in achieving interesting new strategic positions.

The sustainability aspects are then cascaded down within the management system. For example, central environmental and/or social aspects are embedded (next to market and financial aspects) within objectives and incentives. Furthermore, strategic monitoring, e.g. with a Sustainability Balanced Scorecard, supports the achievement of sustainability targets.

 

Literature: Schmid-Schönbein, Rufer, Braunschweig: Sustainability: Living off Interest, not Capital, iO new management no. 5 2004 pp. 16 - 23. ("Sustainability management goes beyond pure risk management & it adopts environmental and social performance in order to realise competitive advantage.")

The inclusion of environmental and sustainability aspects within corporate strategy is a focus of E2 strengthened by personal ties with the strategic consultancy B&RSW AG located in the same building.