Globalization, US Competitiveness and Sustainable Development

Assessing the Environment

Learning Goal 1: Assessing the Environment

• The major objectives of Learning Goal # 1 as stated earlier include– Evaluating Global Impact– Evaluating the Legal Impact– Evaluating the Ethical Environment– Evaluating the Internal Dynamics of the

Organization

Globalization and Sustainable Development

• This module will address the learning objectives of evaluating global impact, and the ethical impact of strategic decision making.

• The decisions we make are impacted by and impact the “Environment”

• Enterprises do not exist in a vacuum! They thrive and fall depending on the context and how effectively they manage that contextual environment.

Globalization and Sustainable Development

• Every term,, we will discuss issues that relate to globalization and sustainable development with the goal of helping us to better assess the global and ethical implications of managerial decisions.

• Let me also mention that other subject area experts will come in to help explore other aspects of assessing the environment,, as well as specific courses in the program.

Framework for Assessing Global and Ethical Impact

• Macro-Economic Infrastructures• Regional Economic Integrations• Multilateral Agreements• Hofstede Value Dimensions• Cultural Convergence and Divergence• Ecological Approach• Triple Bottom Line 3BL Approach

Porter’s Diamond Theory of Competitive Advantage of Nations

• What makes a nation attractive as both Source and Destination for FDI?

• What is the Role of the Government, if any?• What are the implications of Fiscal/Monetary

Policies on the Competitiveness of a Nation?• Innovation

Porter’s Diamond of National Advantage

Hofstede’s Dimension of Cultural Values

Hofstede’s Dimension of Cultural Values

• Culture is the collective programming of a group of a people and it distinguishes them from other people groups.

• Cultural differences should not be minimized, and cultural sensitivity can be critical in business relations.

• Understanding of cultural differences has implications in how managers negotiate, develop and market products and services, and manage employees.

Hofstede’s Dimension of Cultural Values

• Individualistic / Collectivistic– This parameter delineates how personal needs and goals

are prioritized vs. the needs and goals of the group/clan/organization

• Masculine / Feminine– Masculine societies have different rules for men and

women, less so in feminine cultures. Aggressive. Achieving vs Caring, Nurturing

• Uncertainty Avoidance– This parameter measures if people are comfortable with

taking risks, ready to change the way they work or live (low UA) or if people prefer the known systems (high UA).

Hofstede’s Dimension of Cultural Values

• Power Distance– The degree people are comfortable with influencing

upwards. In high PD societies there is acceptance of inequality in distribution of power in society. Ex. employees will not readily give suggestions and feedback to their superiors.

• Time Perspective– Long-term perspective, planning for future,

perseverance values vs. short time past and present oriented.

Hofstede’s Dimension of Values

• Indulgence vs. Restraint– Gratification of human drives related to enjoying

life and having fun vs. regulating and suppressing these needs by means of strict social norms.

Hofstede’s Dimension in Emerging Economies

Triple Bottom Line Approach of Measuring Ethical Impact

• Sustainable Development and Globalization– Role of MNCs

• What is Sustainable Development?• Value Chain and Sustainability.• Strategies to manage sustainability

What is Sustainability

• Two Major Approaches– The Brundtland Commission UN

Report, described sustainable development as, "development that meets the needs of the present without compromising the ability of future generations to meet their own needs". This desire to grow without damaging future generations' prospects is becoming more and more central to business philosophies.

Triple Bottom Line 3BL

– In academic management circles, John Elkington developed the concept of the Triple Bottom Line¨ which proposed that business goals were inseparable from the societies and environments within which they operate. Whilst short-term economic gain could be chased, a failure to account for social and environmental impacts would make those business practices unsustainable.

– The concept goes beyond the traditional notion of CSR or the caring for ecological environment.

3BL

• Triple bottom line (abbreviated as TBL or 3BL) is an accounting framework with three parts: social, environmental (or ecological) and financial. These three divisions are also called the three Ps: people, planet and profit, or the "three pillars of sustainability".

• Some have suggested a fourth pillar, a future oriented approach to sustainability. The fourth pillar focuses on future generations and “Intergenerational Equity”

3BL

• The People concept for example can be viewed in three dimensions - The organization needs, the personal needs and the community issues associated with supplying future people into the business. (True Cost A Documentary)

• Profit is a function of both a healthy revenue stream, which needs a high focus on customer service, coupled with the adoption of a strategy to develop new customers to replace those that exit the market.(Patagonia)

• Planet can be described as efforts to Reduce Reuse and Recycle

3BL

Implications of Sustainability

• Sustainability is all about business. It contributes to the following:

• Revenue increase• Reduction of energy expenses• Waste reduction• Reduction of materials and water expenses• May increase employee productivity, and reduce attrition

expenses • May increase efficiency and eliminate redundancy in the

distribution channel• Sustainable business practices may attract human capital.