The Corporate Challenges of Sustainable Development - Case Study Example

Student’s name) (Course code+name) (Professor’s name) (University name) (Date of submission) Sustainability in an organization is about transformation of how people are thinking of their leaders in challenging economic situations and myths. People in modern worlds face problems related to poverty and ecological destruction. For example, the residents of Yarloop town are faced with ecological challenges due to the refinery in the area. In Daily (1991), Scientists claims that nature and people are separate entities living in the same world. There is no interconnection between ecology and socialism. Bansal (2002), stated that people do struggle to survive and only the fittest do survive. The Alumina towers refinery is exploiting all natural resources in the region at the expense of the residents with the aim of profit maximization, which would in return improve the quality of life of the people. In this case the people are suffering more due to the fumes and have even fled away from the town. However there are still some who find it beneficial as it adds to the economy of the town, which in the long run is not available. Humans do not feel the connection of their lives with nature since it is being overexploited. An economy is encompassed in a large ecological and social system that uses materials and energy from the environment (Daly, 1991). Thus communitarian’s idea should be adopted, being part of the larger ecosystem and society (Stead and Stead, 1994). The people of Yarloop demand a fair treatment of the environment where directors have responsibility towards the long-term effects of their decisions to the community and environment. Many managers however, like Alumina Towers Refinery manager, do not find the concept of sustainability applicable because the management systems have to be made too; yet economic decisions do not give humans and environmental resources financial values. This makes it almost impossible to rate the environmental and social benefits and costs in relation to economics. Alumina Tower refinery is a manufacturing industry located in Yarloop near Darling Ranges. It deals with manufacturing aluminum from its raw form, bauxite. Its existence has cased adverse effects in the health of the residents due to the fumes it produces. Some had to relocate for the sake of the safety of their children. Recently the refinery has declared an intention of expanding its production, which it claims is forced by technological advancement. The residents are not up to it because they know that more risks to their health are expected. The refinery however argues that the economic benefits of the expansion will be profitable to all. Change management in an organization With the rapid growth in technological development, change is inevitable. However many organisations do not achieve the intended change or end up having more negative effects. There are therefore various approaches discussed to help have a successful change (Kotter, 1996). The applicable model that is used to understand and successfully manage organizational change is the Kurt Lewin model in 1940. This model is the freeze, change, and refreeze model. The unfreeze three stage model involves preparation of the organization to accept change which involves breaking the existing system to a new way of operation. Reasons should be given to show why the existing system can not be continued for example due to declining sales, customer satisfaction worries, and inadequate financial results. Everybody including the society at large should be notified of the change. For a successful preparation the starting point should be the core, challenging the values, behaviors, beliefs and attitudes that define it. For example, in Yorloop the manufacturing and refinery firm needs to increase its production; the existing technologies must be changed in order to accommodate the expansion and the pollution that comes with it. Otherwise the adverse effects will take more of the profits in trying to redirect and correct them. Change then comes in when cutting down on the systems methodologies is implemented. Strong reactions in people are evoked. For example the residents of Yarloop are for the opinion that the increment of production will continue to affecting their families’ health. This is a crisis being created. The residents already have complained of various illnesses that have been brought up by the plant. These include nose bleeding, skin rashes, blisters, thinning of hair, lethargy, and nausea. They are not willing to risk their lives further for the sake of the sector. The uncertainty brought about by the unfreeze stage takes time before people can embrace it. The benefits that the people will get from the change should be outlined in order to make acceptance easy. Communication and time are the key issues for a successful change. People should be given time to understand the change and feel part of the organization throughout the process. Refreezing happens when all the changes have taken place and people have accepted it. Refreeze is characterized by a stable organization that uses the changes at all times. With stability, the employees and society are comfortable. Change is important in every organization and sustainability has to go with it. Exploitation of resources and the consequences that come with it should be considered in every change. Without the refreezing stage employees are trapped in the transition without the knowledge of how to do things which makes it difficult to do things to full capacity and an effective change initiative becomes impracticable. Ways of sustaining the changes made should be implemented for example, leadership support, and creation of a reward system, feedback systems, and adaptation of the organization structure. If these three steps are followed by an organization then the organization is bound to thrive (Kotter and Schlesinger, 1979). Lewin’s theory has been criticized that it only accommodates small-scale samples. There is an emergent approach that sees change as rapid and inconsistent as it comes. It argues change as a process of learning where responses to the environmental changes (internal and external) are essential in an organization (Todnem, 2005). This approach lays its emphasis on readiness for change and facilitation of change instead of providing for particular steps to be followed in every change initiative. This approach too has its own share of criticism. The performance of an organization is dependent on the situational variables which vary from organization to organization thus making the strategies used and responses vary (Dunphy and Stace, 1993). Change resistance The foundation of change in the Yarloop refinery is acceptance by residents. The expansion of the plant will have adverse effects in the health of the residents which in return will affect the capacity of the employees who are mostly from the area. With the advancement of technology to expand the refinery even the emissions should be tackled in order to tackle the cost benefit challenge. Human beings go through denial, anger, bargaining, depression, and acceptance when they grieve. Time should be given for all these stages of grief and enough communication put in place to educate the people on the benefits and costs of this expansion. Not everyone benefits though and sometimes some losses are necessary for success to follow (Ross, 1973). Sustainability Sustainability is the essence of being responsible socially and environmental friendly. An enterprise/ organization should be based entirely on sustainability. This adds value to stakeholders as well as making money for them. Sustainability means minding the effect of the decisions made to every one involved in the organization and the ultimate effect to the economic, social and ecological systems. Ideas and programs of an organization have to be challenged and changed for sustainability to exist. The issue of emissions that affect the health of residents and workers has to be addressed first to accommodate sustainability. The refinery is in consideration to the stakeholders who include community members, employees and customers for sustainability to exist (Senge, 2007). Stakeholders make a great contribution towards the organization through normative principles. Stakeholders are considered in terms of how managers represent their interests to them. The normative theory of stakeholder analysis shows the responsibilities of companies in regard to stakeholders. They ought to be considerate in the health and lifestyle (comfort) of the stakeholders since they are the main contributors to the company. If the refinery puts the interests of the stakeholders first then the shareholders’ interests will fall into place. This theory links values morals, and philosophy into the companies profile and purpose (Collins, 2001). The stakeholders’ interest in the refinery is legitimate because they add intrinsic value to the company. The relationship between the company and stakeholders is a reflection of the company’s principles and values. The Alumina refinery should have fundamental moral principles in place to be used in decision-making. The company’s action should portray ethics and honoring the claims of stakeholders is essential whether or not the strategic interests of the company are served in these claims. For sustainability to thrive, managers ought to stop thinking in terms of satisfying the market expectations at the expense of stakeholders and long-term goals. This is because shareholders who are the market interest of the company can trade out any time but the stakeholders are indispensable (Mintzberg, et al, 2002). Factory workers are more important than the CEO in a company but are valued less because of their position. They, as stakeholders, contribute a lot to the success of the business. Team work is essential for leadership in a company. Sustainability as a corporate strategy Environmental, governance, ethical, and social factors are the drivers to financial performance. Compliance to social, safety, environmental, and health regulation alone does not matter in this technological world and businesses that deal with these will be out of the market sooner than expected. These challenges should be tackled head on for long term profitability. In an organization doing well in the context of environment and social responsibilities is not enough form of sustainability. Conscious strategic decisions are made to incorporate sustainability. A course of sustainability that is followed puts into consideration hard goals (market share capturing and financial goals achievement) and soft goals (management culture crafting) that establishes values and guides the business into making decisions that contribute to a sustainable future (Avery and Bergsteiner, 2005). A sustainable strategy in business balances the objectives of a prosperous economy, environmental stewardship and social responsibility for stakeholders. Attending to environmental challenges helps in attaining economic goals that as a result provide a means for social responsibility achievement. Sustainable strategies use few resources and optimize the value of shareholders and stakeholders (Placet, et al, 2005). Sustainable culture Cultures of sustainable strategies are nurtured in business for it to be sustainable. Culture defines the manner in which things are done in an organization. An organization is a social organism that should be respected. The people in an organization are driven towards a certain mission and their existence is beyond their self interest (Schneider, 2000). The difference in reasoning and thinking can lead to misunderstandings in change management and project collapse. In the town of Yarloop the residents need to understand the theories and ideologies behind the planned expansion in order to accept the change. This is an inductive way of thinking. Thus a successful foundation for sustainability needs values as guidance to decision making. For a long term survival connection between the systems of the environment and truthfulness are required (Schneider, 2000). If the community people were valued then the political intrusion would be avoided because the people would be self-managing and committed to their resources (Sergiovani, 1992). A culture of trust is the most important in change management and sustainable organization. This is something the people of Yarloop have lost in the management of the Alumina refinery and the government at large. They are not willing to embrace change because they believe their cries will not be heard. They have suffered greatly because of the emissions of the company and yet nothing has been done. Caldwell and Karri, (2005) stated that even doctors have ascertained that the ailments are caused by the fumes and emissions but still no action. Recommendations For change to effectively take place in the town of Yarloop the issue of culture and trust must be addressed. The people ought to know the reality of the situation at hand (Caldwell and Karri, 2005). The vision of adding intrinsic value to the company will thus be shared and a commitment enhanced. The culture of sharing knowledge as it is called is different from that of sharing information, which is just plain data and can be equated to giving orders. In this technological era every person should be given a chance to participate in generating ideas and sharing views and opinions. A strategy and vision should be developed to guide the implementation of the change. Key stakeholders in society lead the change so they should be put together through organizational change in order for success to be achieved. Communication is essential in change management to ensure continuity of the implementation. The management of Alumina tower refinery should be in a position to know that technology might be necessary but not enough to realize benefits. For value to be created people are needed and that is why change management is essential. A lot of focus on technology alone will generate other issues downstream that will make the benefits difficult to achieve. Conclusion Change is both personal and international and the process of change is referred toes a grief period for the stakeholders. Three stages of change are essential in planning to implement the kind of change needed. This creates the motivation of stakeholders to change. Effective communication and empowerment of the people through the process of change ensures a good transition. In Yarloop community culture sustainability is not present which means that the change of the refinery will take a long process. 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