Nature of Corporate Sustainability - Research Proposal Example

Accounting theory research Introduction Sustainable development is considered as an action plan that is generally implemented by organisations for ensuring responsibility accounting in their operations and actions so that resources are used in such a manner that it is available for future generations as well. Sustainable development is increasingly gaining importance as rapid depletion of resource due unplanned consumption has brought in attention worldwide. Sustainability is a concept or principle which states that the finite resources should be consumed in such a manner that it has sufficient time for replacing the consumed quantity so that the same can be enjoyed for a long period of time by present as well as for future generations (Pearce and Atkinson, 1993). The subject of this research is one of the important aspects of sustainable development. Since sustainable development is a very broad concept, the paper will focus on corporate sustainability. Corporate sustainability is an evolving paradigm in context of corporate management and is considered as an alternative to traditional profit maximisation and growth model. Sustainable development focus on maintaining a balance between environment and social capital and economic growth, and their concept is well reflected through the methodologies of corporate sustainability. Corporate sustainability recognises that while organisational growth and profitability are of utmost importance, the same should not have negative effect on societal values and environment (Wilson, 2003). Corporate sustainability was considered appropriate for research purpose in this paper because it comprises elements of various ongoing debatable subjects, namely, sustainable development, stakeholder theory, corporate social responsibility and corporate accountability theory. These four factors form the prime pillars of the subject of this research. Corporate sustainability was considered as an appropriate subject also because of the fact that businesses play an important role in meeting requirements of sustainable development through innovation and recognition of sustainable opportunities (Wilson, 2003). Research question and problem Recent surveys and studies suggest that in next two decades, the demand for various natural and economic resources will be increasing at an alarming rate, as a consequence of rapid growth in population and demand for sources of basic necessity. As market is growing to fulfil consumer needs, the strain it may cause to natural resources in near future will result in significant business risks and critical shortage of resources. The business landscape is trending towards corporate sustainability because of numerous factors; one of these factors is the going concern principle. The principle suggest that a business is suppose to operate for an indefinite period of time and in the present situation, sustainability is very important for continuing business for a long period of time (Holling, Berkes and Folke, 1998). Since resources are the main source of concern in the present business world, the paper focuses on determining various measures through which resource shortage can be mitigated and compromise on essential resources can be delayed for the future generations (Holling, Berkes and Folke, 1998). The research problem that has been clearly identified is declining quantity of resources while the demand for the same is continuously growing. The research question that has been developed in context of the problem discussed earlier was: How does corporate sustainability contribute towards conservation of resources? Literature review The literature review presents perspectives of different authors in context of corporate sustainability and its development for resource conservation and responsible consumption of the same. Corporate sustainability: What is it and where does it come from Wilson (2003) stated that corporate sustainability is a fragmented adaptation of sustainable development where various elements of the concept are borrowed from well-established notions such as corporate accountability theory, stakeholder theory and corporate social responsibility. The author recognized and explained contribution of various broad concepts and their underlying disciplines towards development of corporate sustainability. Sustainable development, for instance, combines social justice, economics, law and environment management for developing a common societal goal for corporate sustenance. Additionally, corporate social responsibility and stakeholder theory focus on moral philosophy and strategic management respectively so as to present ethical and business argument in the favor of implementation of sustainable goals in organization for resource management. Corporate accountability theory also presents favorable argument for incorporation of sustainable practices in organizations on the basis of business law. Multiple levels of corporate sustainability Marrewijk and Werre (2003) explained that there is no specific definition of corporate sustainability as it is a customized process that provides specific solution for specific issues and problems in an organisation. The authors described corporate sustainability as a multi level framework comprising various factors such as transparency, stakeholder engagement, public disclosure and human capital. The authors highlighted 4Ps of corporate sustainability, namely, principles, people, profit and planet. They further added that these factors determine various ambition levels of a complete corporate sustainability (CS) system. These levels are pre-CS, compliance driven CS, caring CS, synergistic CS and holistic CS. These levels start with minimum or little interest towards corporate sustainability to maximum incorporation of the same in organizational structure. In context of these levels, the authors have also described role of external factors, stakeholders as well as that of the government in achieving the same in the paper. Measuring corporate sustainability Atkinson, Hett and Newcombe (2000) acknowledged that the concept of sustainable development has attracted attention of government and has become a subject of discussion and concern at national and international level. Consequently, corporations are under tremendous pressure from government regarding demonstration of their contribution towards national sustainability goals. The authors, in their study, advised measures that businesses should adopt for improving their reporting practices and environmental accounting. The authors added that the importance of measuring corporate sustainability has been recognized at international level; consequently, various frameworks such as natural resources account, environmental protection expenditure and pollutant flow account have been proposed by international bodies such as United Nations so as to lend transparency in business practices. The business case for corporate sustainability: literature review and research options Salzmann, Ionescu-Somers and Steger (2005) have discussed corporate sustainability from a number of perspectives in their paper. Their research on corporate sustainability can be classified as theoretical and empirical studies. The theoretical studies focuses on relationship between financial and social performance while empirical studies focus on examining corporate sustainability approaches adopted by companies and managers in their practices. The authors determined that on several occasion negative link was established between financial and social performance. They ascertained that often managers emphasizes more on financial gain and reduces expenditure on development of social capital for personal gain in the form of compensation. However, in a number of organizations it was observed that strategies have been adopted for holistic development of management structure so that balance between economic development and social development is established. Organizational change for corporate sustainability Dunphy, Griffiths and Benn (2014) suggested that organisational change is an essential part of corporate sustainability. They questioned the viability of existing organisation models with respect to sustainability in their literary work and proposed modifications for maintaining health existence of individuals, organisation and the overall society. The authors proposed that most organisations need to modify their business practices in the present economic situation so that they can generate socially beneficial products in a responsible manner. The authors discussed about corporate scandals such as Enron and explained that organisational innovation and practices such as triple bottom line approaches are critical necessities for long term survival of organisations. They further mentioned that virtues of neo liberal economics or economic rationalism need to be replaced by that of stakeholder capitalism for incorporating corporate sustainability. Beyond the business case for corporate sustainability Dyllick and Hockerts have made additional contribution in their paper so as to develop an extended framework regarding corporate sustainability. The authors explained that corporate sustainability should be based on three kinds of capitals, namely, economic, natural and social capital. Additionally, Dyllick and hockerts proposed that managers need to meet certain criteria for incorporating sustainability in their practices. These criteria are socio-efficiency, eco-efficiency, socio-effectiveness, eco-effectiveness, ecological equity and sufficiency. The authors explained that the primary characteristics of socially sustainable companies are value addition to various communities within which it operates and development of human capital and social capital in these communities. These companies ensure that social capital is managed in such a way that stakeholders understand the motivation underneath and consentaneously agrees with the value system of the company. Corporate sustainability and organizational culture Linnenluecke and Griffiths (2010) tried to establish relationship between organizational culture and corporate sustainability and made further contribution towards research subject. Organizational culture is being considered because resources are influenced by it to a certain extent. It was ascertained by the authors that principles of corporate sustainability can be implemented successfully, only if it has a positive influence on the value, assumptions and beliefs of employees in an organization. The authors deduced that for integration of sustainability in various levels of corporate practices, alteration in overall organizational culture is very important. This alteration can be imparted through training, performance evaluation and information sharing. The authors additionally established that employees under different organizational culture perceived importance and role of corporate sustainability in a different manner. Corporate sustainability strategies: sustainability profiles and maturity levels Baumgartner and Ebner (2010) investigated in a number of organizations in context of their sustainability practices and inferred that most organization explain their sustainability efforts through sustainability reporting, even so the sole purpose of the Endeavour is often unclear. In this paper, the authors provided various corporations that are committed to sustainability, an opportunity to verify and justify their consistency with respect to implementation of relevant strategies. The authors described economical, ecological and social dimensions of corporate sustainability. The economical dimension focuses on innovation, technological collaboration, clean procedures, knowledge management and sustainable purchase. The ecological dimension is primarily associated with environmental impact of resource consumption and emission of residual discharges in the environment. Lastly, the social dimension emphasizes on ethical behavior, motivation, corporate governance and human capital development. Corporate sustainability–integrating environmental and social concerns Schaefer (2004) attempted to develop a better understanding of integration of environment management and corporate sustainability in utility organization. This research paper relevant to the ongoing research because the author selected a utility organization which presents a very neat perspective of ecological aspects of corporate sustainability that has been discussed earlier. It was ascertained from the case presented by Schaefer that these organizations are undertaking deliberate efforts of assessing environmental and social issues and measures of sustainability therein. However, it was also gathered by the author that the company and its similar counterparts are yet to achieve a completely sustainable environment as the process is complex and engaging. Alongside, it also requires the organizational members to invest sufficient time in this regard. STEPS: a knowledge management maturity roadmap for corporate sustainability Robinson, et al. (2006) suggested in their review that need of sustainability is growing in various manufacturing and construction companies as demand for clean energy, sustainable processes and innovation is increasing rapidly. It was further established by the authors that sustainability has taken key position in context of stakeholder management and viability of long term existence of the organizations. In past few years, knowledge management has been considered as a centrally important factor with reference to corporate sustainability. The authors further added that knowledge management and knowledge transfer are being considered as crucial because of the role it plays in facilitating innovation and idea generation which are very important for resource management. Research findings The research primarily aims at developing a better and deeper understanding of the various factors that influences growing resource shortage and role of corporate sustainability in minimising the resource gap. It was ascertained that corporate sustainability when incorporated by organisations, they seek various conventional and unconventional measures of improving resource consumption and reducing wastage of the same. Act of corporate sustainability is not applicable on private organisations only; government and other public organisations are accounted as well. Development of optimum corporate sustainability is only possible when contribution is made on behalf of every organisation. The objective of this research paper is to study various theories related to sustainable development and critically assess them so that various elements of sustainable development can be recognised which may help in resource management. Resource management is a complicated process and require major changes in the overall system. The researcher aims at understanding and recognising those changes that organisations need to incorporate for resource conservation. Additionally, various scholarly published articles has been analysed in this paper which present different perspectives regarding corporate sustainability. The researcher would but utilising these information as well for determining importance of corporate sustainability in resource management. Role of accounting theories Corporate sustainability is a holistic approach to resource conservation and consequently requires involvement of various theoretical perspectives. The researcher tried to evaluate the role of certain specific accounting theories in context of the research subject. These theories include stakeholder theory, legitimacy theory, institutional theory, positive accounting theory. According to organisational theorists and economists, organisations in the present business world, function in a globalised economic system that is dependent on the ecological system, which is being continuously exploited and exhausted for resources. The usefulness of institutional theory has been demonstrated by a number of authors in context of development of ecologically sustainable organisation. However, some theorists proposed that the institutional theory require to be extended for understanding its role in sustainability. Under institutional theory, the possible method of gaining sustainability is possible only through adaptation. The adaptation measures ranges from environmental audits to waste management (Jennings and Zandbergen, 1995). It has been established in recent studies that stakeholder theory plays an important role in instituting corporate sustainability. The stakeholder theory classifies sustainability in three categories: weak, strong and balance sustainability. Weak sustainability signifies that decline in natural resources can be compensated using human and other man-made resources while high sustainability indicates that limits should be drawn regarding economic growth since most resources are exhaustible in nature. Balanced sustainability exists between both extremes and implies that resources should be consumed responsibly and substitutes should be located where natural capital is highly affected by economic growth (Steurer, 2005). Positive accounting theory is mainly related to choice of accounting method that enhances an organisation’s self-interest and helps in cost minimisation through alignment of competing interests. The concept of positive market theory has evolved from the efficient market hypothesis and because of this reason, it can be considered irrelevant in context of corporate sustainability unless an indirect relationship is established therein (Milne, 2002). The legitimacy theory is relevant to the subject of this paper in a broad sense because it is often cited in context of environmental and social accounting. Alongside, it focuses on disclosures in reporting for efficiently describing relationship between various sources of capital (O’Donovan, 2002). Data collection It was ascertained that for gathering sufficient information which can provide appropriate answer to the research question in this paper, the researcher require to undertake both primary as well as secondary data collection methods. For secondary data, the researcher will take in consideration various peer-reviewed articles, scholarly journals, books and online databases. The researcher will conduct online survey for collecting primary data as well as research on online database, annual reports from companies and news articles on sustainability. It was determined that it is important to study pre-published reviews as well as locating fresh perspectives through primary research to have a complete solution of the problem that has been discussed in the research question. The primary research will be conducted using semi structure interview where a set of 10 close ended questions that reflect impact of corporate sustainability on resource management and conservation will be asked to respondents. The researcher selected close ended questions because these are time efficient, convenient to answer and enable access to easily interpretable data. The researcher has selected online survey method because mail survey may not prove cost effective and is time consuming as well. It is an established fact that random participation minimises biasness but for understanding role of corporate sustainability in resource management, the research will gather samples from corporate houses and business organisations. Importance of ethical consideration in the research Research ethics are defined as various guiding boundaries within which a researcher is suppose to conduct the research. Research ethics act as governing principles that help researcher to coordinate various activities in context of the research. In context of this paper, ethical consideration is necessary because it promotes the objective of the research such as credibility of information and knowledge and minimisation of error. Research ethics prevent misrepresentation, falsification and/or fabrication of data. Ethical consideration in the paper will ensure carefulness, openness, confidentiality, honesty, integrity and objectivity in the research process (Recker, 2013). At UTAS, undertaking ethical approval is very important while conducting research. The university ensures that all research activities therein are conformed to accepted ethical standards. The ethic committees of the university include committee for social science research, medical and health based research and research that may involve experimentation and observation of animals. Research that involve human participation involve require monitoring and approval from relevant committee. Researchers require submitting application related to ethical approval based on guidelines that has been specified by ethics committee of the university. Additionally, researchers are responsible for notifying head of academic unit and that of ethics committee in case any kind of adversity is observed (UTAS, 2011). Research questions 1. Do you think optimum conservation of resources can be ensured through corporate sustainability? 2. Does sustainable development have negative impact on resource allocation and management? 3. Is concept of sustainability applicable on human, financial and social capital? 4. Is skill development and training of human resources is a method of ensuring sustainable practices? 5. Is traditional approach of ensuring economic well-being sufficient for resource conservation? 6. Does excessive creation of economic wealth result in compromising future needs? 7. Can corporate sustainability develop balance between future needs and present growth? 8. Can sustainability be nurtured by depending more on renewable energy sources and other resources? 9. Do various factors such as technology, information, human resources, process and ethics play any role in sustainable development? 10. Does corporate sustainability require environment assessment for avoiding pitfalls in the process? Rationale The above mentioned questions indicate nature of corporate sustainability and method of developing the same in an organisation. Some of the questions are selective in nature so as to determine whether method of sustainable development differs among organisations and industries. The answers when obtained will help the researcher in highlighting role of various soft resources such as information and procedures in resource conservation. 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