MBA Research

Trend #5: Sustainability (Green, Climate Change, Etc.)

Business Trend

In our ongoing conversations with the business community*, we asked them to identify business trends impacting the workplace. One trend garnering lots of discussion is the emphasis on sustainability (green, climate change, etc.)


Workplace Implications

The increased focus on sustainability is driven by many factors. This includes the strain on food, water, and energy from the increased population; the growing worldwide middle class’s demand for more goods; and concerns over natural disasters and disruptions to supply chains.

The focus on sustainability is creating the need for expertise in many fields and is impacting competition. A company’s ability to do business with another company or entity may depend on its sustainability position. Major retailers and consumer product companies such as Walmart, Apple, and Microsoft are building sustainability requirements into their supplier contracts. These companies have also established sustainability hubs to spark innovation and collaboration. U.S. companies in retail, transportation and logistics, public services, manufacturing, agriculture, architecture, and energy sectors are forming corporate social responsibility (CSR) committees to govern “green” activities and have increased participation in publicly available sustainability-disclosure reports.

Natural disasters and extended supply chains create additional strain on resources and threaten the provision of goods and services. The ability to withstand evolving threats and hazards and rapidly recover from disruptions has been elevated to a presidential mandate. The federal government is establishing sustainability requirements as part of the General Services Administration (GSA) process. This national initiative has further heightened the need to not only reduce and reuse resources, but to also identify alternative sources.


Classroom Implications

The business functions most impacted by sustainability are purchasing, production, product development, facilities management, supply-chain management/logistics, and marketing. Students need to understand how sustainability impacts each function and the complexities that are likely to emerge as consumers and major buyers focus more on sustainability as part of their buying habits. Students should explore the trade-offs associated with pursuing a particular sustainability path. One such trade-off, for example, involves using hybrid/electric cars. As oil usage decreases electricity usage increases, both are limited resources that impact the environment in different ways. Product pricing and the ability to recover costs associated with sustainability efforts should also be examined.

 

*Finance Executive Advisory Panel, Columbus, OH, May 21, 2013
*Marketing Executive Advisory Panel, Dublin, OH, May 22, 2013
*Management and Administration Executive Panel, Dublin, OH, May 23, 2013