Causes of environmental sustainable growth and its future trend6 2. 1. The earth unable to keep up6 2. 2. Traditional growth model reach its edge6 2. 3. Intensive growth is the future7 2. 4. Rules of environmental sustainable growth7 2. 5. Influences of environmental sustainable growth7 3. Vision on sustainable Colourful Corporation8 4.
The barriers/limits to shift to sustainable grow model9 4. 1. Gap between awareness and action9 4. 2. Short-term interests over social and ecological benefits9 4. 3. Inevitable flow of talents9 4. 4. Lack of technology innovation10 5. Strategy10 5. 1Renew corporate culture construction10 5. 2Make investments based on current market demand10 5. 3Prudent investment11 6. Conclusion11 7. Recommendations13 8. References13 Executive Summary The report is prepared to assist the CEO of the Colourful Corporation’s consideration on a financially and ecologically sustainable company in the future.
The CEO has specifically stated that the report needs to identify the conditions that might define a sustainable economy and effect of these on her governance of the Colourful Corporation which could reach the prosperity without growth. The report will base on Colourful Corporation’s interests to define a future vision and strategy that the CEO could consider for a sustainable Colourful Corporation in the future. The report will be presented in the following order: 1. Analysis causes of environmental sustainable growth and its future trend 2. The barriers/limits to shift to sustainable grow model. 3.
Vision on sustainable Colourful Corporation 4. Strategy for sustainable Colourful Corporation The key findings of this report are: 1. Colourful Corporation must transfer to environmental sustainable growth model as it is future tendency. 2. Colourful Corporation need to transfer in a right pace based on current market demand. 3. There are barriers like disunity of consensus and actions, instable flow of talents, absorbed in short-term interests and technology limitation to stop the transition but can be conquer with short-term and long term strategies like unity corporation cultural construction, follow market demand and branding.
Based on the findings of this report, it is recommended that Colourful Corporation should start to invest on sustainable objects but need to be aware the traditional economy model still dominant in the market. So Colourful Corporation should start with short-term plan which is to renew corporation culture construction and start the transfer step by step. Then follow long-term plan which is start prudent investments in intensive growth industry and branding company with environment sustainability. 1. Introduction/Aim Extensive growth has been dominant the world’s economy growth since the industrial revolution.
With the development of productive force, this economic model which is relay on expansion of inputs in order to increase outputs is over the limit of the planet earth, and start to case problems like climate change, biodiversity lost and financial crisis. The Colourful Corporation CEO has aware that in order to avoid this kind continual growth and be sustainable in the future, the Colourful Corporation needs to define a sustainable economy model with future vision and devise strategy for both short and long term development.
So before Colourful Corporation moving forward, a detailed analysis on transfer to environmental sustainable growth should be conducted in order to find a right goal to achieve and a right direction to go. Before commence on this analysis, a number of assumptions need to be made to assist in reaching the findings, including: 1. Colourful Corporation has intention to make investment on all the possible fields. 2. Colourful Corporation is unable to influence the economy or lead the market in a major way like Goldman Sachs or Microsoft Inc. , it only plays a mirror role in the global market as most companies. 3.
Colourful Corporation is a multi-cultural company. Taking into account the assumptions mentioned above, the scope of this report will address the following key factors: 1. Analysis causes of environmental sustainable growth and its future trend 2. Vision on sustainable Colourful Corporation. 3. The barriers/limits to shift to sustainable grow model. 4. Strategy for sustainable Colourful Corporation Even with seven days to prepare, as a guide for a company’s future direction and strategy, this report is under tight time constraint, hence, it is advised that it should not be used for any other purpose than the above stated.
Taking this limitation into account, the author of the report would not be liable for any financial losses that resulted with or against the recommendations given. 2. Causes of environmental sustainable growth and its future trend 3. 1. The earth unable to keep up There are 6. 5 billion people lives at the earth and every one of them needs to use the earth’s resources to survive. With the developing of social and economy, the way of people’s life has undergone a tremendous change that is more than the earth could carry.
The speed that human consumes resources is 0% faster than the earth could take (Lierre Keith, 2009). If this consumption continues like this, by the year 2050, the human will need two earth planets to meet their needs (Scott Spoolman, 2009), but there is only one earth. 3. 2. Traditional growth model reach its edge The US banking crisis of 2008 has shook the world and putted great pressure on global money markets. The banking crisis of 2008 might be characterized as an example of the final stage of a well-known boom-and-bust pattern that has been repeated so many times in the course of economic history.
The reason for it to happen could be simplify to limited resources unable to satisfy endless human wants. However, due to the increased connectivity of today highly interconnected financial system, this crisis is biggest one that the world had so far. Until August 2008, subprime-related and other credit losses or write downs by global financial institutions stood at about 500 billion dollars (L. Laeven, F. Valencia, 2008). Under certain conditions, the traditional development model is like burning. It burns resources and leaves pollution to achieve economy growth.
Many economists had realized this unfixable systemic failure in the current dominant growth economic model. And with the developing of globalization, the systemic failure will case bigger damage each time. 3. 3. Intensive growth is the future The 2008 banking crisis is a warning to the world. People need to stop promoting development by excessive consumption which eventually will leads to depression. Today, the world is in all kinds of trouble including climate change, biodiversity lost and the recent financial crisis which increased social tensions and shortage of resources.
But these also make the world face an opportunity that to improve the quality of life, policies and practices; a chance to encourage more education and communication. And the way to achieve these goals is sustainable development. Reflect past, anthropocentrism which means strong control of nature was the central idea of economic growth. But the environmental crisis makes mankind realize the harmonious coexistence between man and environment is the basis for continuity of humanity. Sustainable development is a product of human social development.
It represents mankind’s reflection on its progress’s relationship with the environment. 3. 4. Rules of environmental sustainable growth Sustainable economic development is designed to manage and protect the natural resources thought control technology and economic development to ensure that the earth’s resources will meet the present and future generation’s needs (Joseph, 2005). According to the rules of sustainable economic growth, a company’s economic development pattern and scale of the ecological environment must be controlled within the permitted capacity.
The company can only use resources from the environment in the “interest”, it can no longer consume its “capital”. In this way, there can be prosperity without growth. 3. 5. Influences of environmental sustainable growth Now days, “environment friendly” became one of the most important symbols of modern enterprises. In the energy filed, all the developed countries are putting funds on researching new energy from water, wind, solar and renewable biology resources (B. Sorensen ;amp; P.
Breeze, 2008). In the transport sector, fuel-cell or other clean energy vehicles has become the representation of every major car companies’ technical development ability. At agriculture area, natural and organic products have become consumer’s preferences. In the urban planning and construction, “ecology design” and “ecological houses” which reduce energy and water consumption has become a sign of construction industry in recent years. 3. Vision on sustainable Colourful Corporation
Base on the analysis above, it can affirmative to say that environmental sustainable development is the future, and economy now is at the transitional stage where economic growth transfer from extensive to intensive. In order to survive and keep competitive in the future, the Colourful Corporation needs to start the transition. It needs to start moving investment to area that has potential on environmental sustainable growth like new energy sector. However, the world is still at very early stage of transition to environmental sustainable development.
There are still huge profits on investing extensive growth industry, if Colourful Corporation drop out all its current investments straight away, there might be a considerable lost on the revenue. Therefore, the Colourful Corporation needs to change its investment direction step by step. Withdraw the investment on extensive growth industries in a planned way and manage to increase inputs on intensive growth industries. In order to achieve a successful transition, the Colourful Corporation need to follow the principles of sustainability by Simon Dresner (2008) which include the following- • Protecting nature Nature is the resources.
The Corporation needs to protect environmental benefits to make sure there are always resources to support its business activities otherwise there are going to be bigger price to pay. • Thinking long-term The company needs to be aware of future development when making business decisions. Think about the benefits or costs in long-term instead of focusing on short-term gains. • Recognizing limits Even Colorful Corporation know the right direction to go, it may takes years to start due to the complex factors in the economy like policies, divergence opinions from shareholders, technology support and inadequate funds.
So Colourful Corporation should not rash on transition. • Practicing fairness When doing business overseas special on developing countries where trend to over-exploitation, the company need to be ethic and fair to the local people and their future generations. • Embracing creativity. Innovation is the key in the transition to sustainable growth. The Colourful Corporation needs to embracing creativity in order to follow the global trend. This could also speed up the process and make company more competitive in the market. 4. The barriers/limits to shift to sustainable grow model .
Gap between awareness and action Although the concept of sustainable development has been generally accepted by the public, history has told that the more advanced way of thinking there is the further distance between it from real life actions. And therefore, it is possible that even most people can be very agree with deforestation, overfishing and other acts of abuse of illegal should be forbid, but when there is conflict between public interests and individual interests, people consciously or unconsciously tend to only care for their personal interests.
Their own social behaviours often lead to species extinction, global warming, and population surge and so on, which is the gap between widespread sustainable growth awareness and real life actions. So Colourful Corporation need to pay attention on its branches especial these locate at overseas. 5. 7. Short-term interests over social and ecological benefits In order to achieve sustainable growth, company must pay great attention on social benefits. As a profit organization, companies must pursue its objective which is maximizing profits.
However, companies also are parts of the society, its business activities must comply with the overall interests of society. The enterprises need to keep a balance between achieve maximum profit goals and implement social responsibility. If all the companies only care for their own interests and ignore the interests of environment and future generations, eventually it will breaks the equilibrium of economic development and ecological environment. Then the ecological environment will not be able to support economic activities. 5. 8. Inevitable flow of talents Human resources are the most important resource to profit organizations.
It is the base for environmental sustainable growth. With the arrival of knowledge economy era, the competition between companies is talents competition. In the market economy, flow of talented people between firms is inevitable. In order to keep sustainable, companies need to be able to prevent the loss of needed talents and according to the market changes and their development strategies to the flow out of unneeded talents to keep competitive in the market. 5. 9. Lack of technology innovation From a long-term point of view, the real source for companies to sustainable grow is technical innovation.
Green technology is the key to environment sustainability. It not only helps companies to produce more with less cost, but also protects the environment. If companies are lack of technology innovation, even they willing to use intensive growth model, they do not have to support to make it happen. There are two main way of innovation that Colourful Corporation could consider: one is to operate independently under the market economic system and rely on their own developing and researching; another is to introduce advanced scientific and technological achievements to use directly, also known as imitation innovation. . Strategy 5. 1 Renew corporate culture construction
The Colourful Corporation needs to let their employees know that the company is changing to environmental sustainable development. The focus of corporate culture will start to change to environmental sustainability. And a series of propaganda activities of the new direction need to be performed. In this way, the company can regulate and unify employees’ values by establishing the correct thinking, spirit and business goals. In the meantime, new rules, operation procedures and work standards need to be established to enterprise employees’ behaviours.
This will not only help Colourful Corporation unify its employee with the new strategy but also will attract related talents to join the company. 5. 2 Make investments based on current market demand The world is changing the way it grows. But so far, it still depends on extensive growth even intensive growth is increase its share. The Colourful Corporation have to realize it might take long years for the world to finish its transfer. As a market follower, it is unwise to be advanced than current market demand.
The company will focus on intensive growth areas that have potential market demand and opportunities, but it does not mean Colourful Corporation need to give up other investments. In order to be flexible and reduce risk on investment built on continual growth, short-term investments will be the recommended choice during the transition period. The Colourful Corporation have to prepare for intensive economy era’s coming, but also need to cooperate with the current dominant extensive economy. 5. 3 Prudent investment
Even there is a trend of investing on sustainable growth sectors like green vehicles and new energy, Colourful Corporation need to be careful on make investment on these immature areas. As they are growing industry and have low market share, there is comparatively high risk and unstable factors involved. Colourful Corporation need to reduce the amount and increase the quantity of its investment to reduce the risks. Especially when doing foreign direct investment as it involves political risks, social and cultural differences and investment barriers.
Sustainable economy is the future. It is the product of economy development. Colourful Corporation need to start moving its investment on intensive growth area. However, due to current economic condition which extensive growth model is still predominating, it is unwise to withdraw the existing investment on traditional growth industries. Transition from extensive growth to intensive growth need to be done step by step. It needs to start now, but the company need to pay attention on follow the current market demand.
During the transition there are some main barriers could slow down the process: 1. People consciously or unconsciously put their personal interests first. 2. Company may choice short-term interests over social and ecological benefits. 3. Inevitable flow of talents may case shortage on professional support. 4. Process of technology development limits the process of transition. Base on the barriers, from Colourful Corporation’ point view, I came with four strategies: 1. Renew corporate culture construction to “environmental sustainable growth”.
Make change on investments’ direction based on current market demand step by step. 3. Prudent investment style. Use smaller amount but more projects to reduce risk. 4. Branding on environmental sustainability These four strategy is aim to help Colourful Corporation keep competitive while on the transition process, and at meantime create intangible asset like branding to prepare for future competition. 7. Recommendations Colourful Corporation needs to start invest on intensive growth area as it is trend of economic development.
But it needs to follow the market demand as over advance than the current market demand will only lead to drop on market share. It is still profitable on extensive growth area, so do not withdraw the existing investment, if necessary Colourful Corporation could invest more but the investments need to be short-term and flexible to withdraw. In short-term, Colour Corporation needs to renew its corporate culture construction base on environmental sustainable growth to set a right direction, then, according to current market condition and start to transfer step by step to set a correct pace.
In long-term, Colour Corporation could start to make small investment on variety environmental sustainable industries to get involved but with low risks. In the meantime, the company also can start to brand the sustainability to attract opportunities for future growth.