Business Sustainability Report at Gorilla Health Bars - Example

Business Sustainability Report for Gorilla Health Bars Student Name: ID: Subject: Code: Lecturer: Executive summary This report analyses the sustainability profile of Gorilla Health Bars in Australia. The company is currently incurring huge costs in heating and cooling its premises and transporting raw materials. Gorilla production process also consumes a lot of water which raises the operational cost. The report relied largely on available relevant literature on corporate sustainability. The literature reviewed in this report, generally supports the argument that integration of sustainability into organisational processes and practices is beneficial to a business. Sustainability improves the public image of a company and its financial position in the long-run. Gorilla Health bars can achieve sustainability by improving the functionality of its premises to conserve internal heat and repel excess external heat. The business can also source raw materials near its existing production facility to reduce transport cost. Finally, the business should explore processes that reduce water consumption and water recycling. Successful implementation of these strategies would improve Gorilla Health bars sustainability profile for public image and its profitability as well. Table of Contents Business Sustainability Report for Gorilla Health Bars 1 Executive summary 2 1 Introduction 4 2 The concept of corporate sustainability 5 3 How corporate sustainability will benefit Gorilla Health Bars 7 4 Recommendations 8 References 10 1 Introduction Business sustainability as a concept gained prominence in the 20th century, leading into the 21st century (Idowu & Filho, 2009). From late 20th century to present time, it has become increasingly clear that businesses have to adopt environmental, economic and social sustainability (Carroll & Buchholtz, 2014). Sustainability as a business concept should be understood as the actions geared towards meeting present needs without compromising the ability of future generations to meet their own needs (Alblas, Peters, & Wortmann, 2014). While some scholars such as (Friedman, 2007)argue that businesses ought only to be concerned with profit maximization, it is prudent also to agree with the reality that the business does not exist in isolation. The business exists in a society and must exploit resources sustainably, minimize environmental pollution and support societal development (White, 2009). Sustainability does not only improve corporate social responsibility outlook of a company, but it also enhances organizational efficiency and profitability (Hawkins, 2006). Gorilla Health Bars is a four-year-old company that seeks to improve its sustainability situation. Currently, Gorilla Health Bars incurs huge operational costs in premises heating and cooling, water consumption and supply chain logistics. The management of Gorilla Health Bars hopes to improve the company’s public reputation and long-run profitability through a sound sustainability profile. The aim of this report is to analyse the current situation, practices and aspects of Gorilla Health Bars and how they can be improved to make the business more sustainable. The report contains three main sections which are: The concept of corporate sustainability Why corporate sustainability will benefit Gorilla Health Bars How Gorilla Health Bars can implement corporate sustainability This report analyses information from secondary sources including journals, books, newspapers and credible websites. The main limitation for this research is that the researcher does not rely significantly on primary data which is more accurate. Primary data is time-consuming and expensive to collect. However, the researcher has ensured the credibility of the secondary sources of information. 2 The concept of corporate sustainability According to the classical view of the economy, the primary goal of any business is profit maximization. This view holds that a business should only be concerned on purely economic affairs and leave other social concerns to other institutions in the society (Hawkins, 2006). According to Friedman (2007), a major proponent of capitalism, a business lowers its efficiency by engaging in social endeavours. This reduces profits and wages, increasing prices and leads to economic collapse. In such a scenario, the stakeholders; shareholders, customers and employees will lose significantly. Friedman (2007) holds the view that corporate social responsibility can be better achieved if the business increases its profitability through open competition sticking to the stipulated laws. From this point of view, it clear that opponents of corporate responsibility do not advocate for businesses to make sustainability a primary focus. Society in the 21st century is more sensitive on the environmental impact of the human race on resources and environment (Haanaes, Jurgens, & Rangan, 2013). Businesses can no longer measure their productivity solely on financial growth. Multinationals have particularly adopted sustainability reporting as a measure of productivity (Crittenden, Crittenden, & Pitt, 2011). This highlights the importance society attaches to sustainability practices by businesses. Sustainability reports are indeed very important to investors, employees, customers and concerned groups. Sustainability reporting increases transparency and accountability of companies. According to UNEP (United Nations Environmental Programme), sustainability reporting demonstrates an organisation’s long-term economic value in sustainable development (United Nations Environment Program (UNEP), 2015). This breaks away from the classical view of the business and economy that advocates profit maximisation at the expense of sustainability. Essentially, sustainability improves the public image of a company (Krauss & Britzelmaier, 2012). It is, therefore, highly important for businesses to align their strategies and practices in a sustainable way. Businesses have to abide by some key rules in order to achieve sustainability. For example, the rate of consumption of renewable resources should not exceed their regeneration. The rate of consuming non-renewable resources should not exceed production of renewable resources (Alblas et al, 2014). Even though these rules are difficult to achieve in most cases, they communicate the primary focus of sustainability and resources exploitation. Businesses have to minimise wastage of resources that take a relatively longer time to regenerate (Hong, Jungbae, & Rawski, 2012). While this approach to sustainability improves public image, it also results in less input, minimal wastage and more output. This reduces consumption of raw materials and eventually the production cost (Haanaes et al, 2013). The business achieves production efficiency in cost reduction and profit maximisation. Clearly, sustainability can also be relied on to improve the profitability of a business. 3 How corporate sustainability will benefit Gorilla Health Bars Gorilla Health Bars will improve its competitiveness by portraying the image of being a sustainable business. Gorilla Health Bars targets the mass market mainly in Australia. The Australian population just like the rest of the world is aware of climate change and resource wastage caused by capitalism and consumerism (D'Souza, Taghian, Lamb, & Peretiatkos, 2006). It is critically important for Gorilla Health Bars to distance it brand from a negative image associated with wastage. Gorilla Health Bars will be appealing to a target market that is very sensitive to harmful industrialization. It is important to note that Gorilla Health Bars have a unique positioning in the market as an alternative to other snack bars with high levels of chemicals and calories. Gorilla Health Bars will be improving the brand positioning further by introducing a sustainability dimension to be brand. The packaging can include a message relating to the product being manufactured sustainably. Sustainability will, therefore, be critically important to Gorilla Health Bars’s competitiveness in the market. Gorilla Health Bars will be able to achieve resource optimization through minimal wastage. This will ultimately result into reduced raw material and variable costs for Gorilla Health Bars. In the long-run Gorilla Health Bars will improve production efficiency and profitability by manufacturing its snack bars in a sustainable system. However, this can only be achieved if the business analyses its sustainability plans to ensure they do not impact negatively on the cost of production in terms of operational strategy adopted. Apart from cost reduction, Gorilla Health Bars will also be able to attract more funding into the future through stock markets if it maintains the image of a sustainable business. Public financing is usually a cheaper expansion strategy for growing business as opposed to loans. Sustainability will indeed be financially beneficial to Gorilla Health Bars’s operation particularly in the long-run. 4 Recommendations Gorilla Health Bars has taken more than three years to be profitable. The company took this long to achieve profitability partly due to the high production costs involved. Gorilla Health Bars incurs high electricity costs for heating its premises during winter and cooling it during summer. Gorilla’s production process consumes a large amount of water that increases the overall cost. The company also spends a lot more in transporting raw materials to its production facility. These aspects of Gorilla Health Bars business lower its sustainability profile significantly. Gorilla Health Bars can achieve sustainability by implementing the following suggestions. Firstly, the company should ensure their premises does not lose or gain heat fast due to weather change. The company can choose to construct a new facility with solid bricks to avoid the problem or improve the current premises. The latter is cost-effective for Gorilla Health Bars due to financial limitation. The company can cover the internal wall sides of the premises with a heat-resistant material. This will improve the ability of the premises to retain heat and prevent extreme heat from outside into raising internal temperatures. Gorilla Health Bars will in effect lower heating and cooling costs significantly. Secondly, Gorilla Health Bars must analyse the production process to minimize use of excess water where it is possible. Gorilla Health Bars might also consider recycling water to use in processes that will not affect product quality such as cooling and heating. This will lower water consumption and ultimately the overall cost of the final product. Finally, Gorilla Health Bars should consider improving supply chain efficiency by sourcing closer to the production facility. This will lower the cost of transporting raw materials such as dried fruit and cereals for the company. The company will, therefore, have minimal environmental impact and consume less fuel in transporting the raw materials. Clearly, sustainability is beneficial to a company in two main aspects. Sustainability improves the public image of a company to investors, customers and interested people. Sustainability also reduces production wastage to improve financial viability of a business in the long-run. Gorilla Health Bars can improve its sustainability profile by reducing electricity, water and fuel costs in the suggested changes. The changes will position Gorilla Health Bars in the market as a company that consumes resources sustainably to benefit future generations. This will improve its competitiveness and industry positioning. The changes will also improve the company’s profitably in both short-term and long-term periods of the business. It is, therefore, imperative that Gorilla Health Bars considers sustainability as critically strategic. References Alblas, A., Peters, K., & Wortmann, H. 2014. Fuzzy sustainability incentives in new product development: An empirical exploration of sustainability challenges in manufacturing companies. International Journal of Operations and Production Management ,Vol.34 (4), pp.513-545. Carroll, A., & Buchholtz, A. 2014. Business and Society: Ethics, Sustainability, and Stakeholder Management. Cengage Learning. Crittenden, V. L., Crittenden, W. F., & Pitt, L. F. 2011. Implementing global corporate citizenship: An integrated business framework. Business Horizons , vol.55 (1), pp.445-455. D'Souza, C., Taghian, M., Lamb, P., & Peretiatkos, R. 2006. Green products and corporate strategy. Society and Business Review , pp.101-112. Friedman, T. L. 2007. The World Is Flat: A Brief History of the Twenty-First Century. D&M Publishers Incorporated. Haanaes, K., Jurgens, J., & Rangan, S. 2013. Making Sustainability profitable. Harvard Business Review , Vol.91 (3), pp.110-114. Hawkins, D. 2006. Corporate Social Responsibility: Balancing Tomorrow's Sustainability and Today's Profitability. Palgrave Macmillan. Hong, P., Jungbae, J., & Rawski, G. 2012. Benchmarking sustainability practices: evidence from manufacturing firms. Benchmarking: An International Journal , Vol.19 (4/5), pp.634-648. Idowu, S., & Filho, W. 2009. Global practices of corporate social responsibility. springer. Krauss, P., & Britzelmaier, B. 2012. Corporate sustainability management: evidence from Germany. Journal of Global Responsibility ,Vol. 3 (2), pp.248-282. United Nations Environment Program (UNEP). Available online at: resource-efficiency > Business > Sustainable and Responsible Business > Corporate Sustainability Reporting. Retrieved May 15, 2015, from United Nations Environment Program (UNEP): http://www.unep.org/resourceefficiency/Business/SustainableandResponsibleBusiness/CorporateSustainabilityReporting/tabid/78907/Default.aspx [Accessed 15 May 2015] White, P. 2009. Building a Sustainability strategy into the business. Corporate Governance ,Vol. 9 (4), pp.386-394. Read More