Question:
Describe about the Sustainability?
Sustainability is being able to withstand and go on living in an environment into the future. In terms of business, sustainability management is about incorporating social, economic and environmental factors into business decisions. Rather than short-term profits, it involves more emphasis on future long term goals for business.
Being a sustainable business doesn’t mean one needs to sacrifice the bottom line. In the long run, a sustainable business proves to be more profitable as they adapt and grow with the changing market. It can provide us with a competitive advantage and allows to differentiate the business from the competition.
(The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line, Bob Willard, 2005.)
A For-Profit Company adopts Organisational Sustainability to help the organization incorporate and institutionalize sustainability into their strategic management, systems and culture.
In all business sectors, Sustainability is becoming a very big issue. Various natural factors such as climate, environment, population growth and social inequity are redefining the competitive landscape, and needs a lot of intervention and are demanding higher levels of attention, transparency and social responsibility from corporate entities. In order to create optimum value creation for the organisation and stakeholders, In recent years, a number of companies have completely redefined their business strategies in line with principles of. A sustainability framework is becoming especially important and prominent for leading organizations that are looking for ways to create synergies between various operational demands, rather than being locked into a sub-optimizing tradeoffs’ mindset. (https://www.reconstructingvalue.com/uploads/2/4/7/1/24717392/course_outline_strategy_for_a_sustainable_world.pdf, 2012)
Sustainability is a major issue of all organizations and remains a key agenda and sustainable practices are more necessary than ever before because the world’s resources are limited and must be harnessed in an efficient and sustainable manner.
There are both Internal and external Sustainability Issues (Alman)
Siemens is a 165-year-old integrated technology company present in about 190 countries, with business activities in the Energy, Healthcare, Industry, and Infrastructure and Cities sectors. Siemens employs about 370,000 employees and runs 188 major R&D facilities, which generated around €78 billion (US$104 billion) in revenues in 2012. Siemens’ sustainability program has three categories: “Business Opportunities, Walk the Talk, and Stakeholder Engagement. Growth of its Environmental Portfolio is a priority in the Business Opportunities category and contributes to the company’s “One Siemens” framework of creating value.”
( World Resources Institute/ (https://www.wri.org/sites/default/fil, 2012)
SIEMENS is a very strong partner of sustainability, their environmental portfolio is a very important pillar of their business success, the lifeblood of this organization is innovation and sustainability is the guiding principle. It is a creator of business opportunities and thus needs to be anchored, however the path is not smooth and challenges remain.
The concept of sustainability had a huge impact on Mr. Werner von Siemens, who realized very early on that sustainability was a concept with great potential for an innovative company .The good principles of business ie Efficiency and growth on one hand and responsibility for society and environment on the other, – were not mutually exclusive but mutually reinforcing. Thus the concept of sustainability that drives the economic, environmental and social progress, pointing towards good business opportunity is the dominant factor for its great strategy and activities of Siemens for the past 165 years.
The concept of sustainability is not only recognized and given huge importance to but is also practiced at the Board Level in Siemens. An extensive and comprehensive sustainability program was launched in 2009 where Siemens declared that it is fully committed to the goals of Global Compact and the CEO Water Mandate of the United Nations. To adhere to sustainability issues, very active cooperation is provided with organizations viz. World Business Council for sustainable development, the Global Reporting initiative, the World Economic Forum and World Resources Institute.
External assessments conducted in 2012 prove that Siemens is heading on the right path. In The Dow Jones Sustainability Index, Siemens was named as the “world’s most sustainable industrial company”.
Outstanding results were also achieved from the Carbon Disclosure Projects where the score was 98 out of 100. In the fiscal year of 2012, products worth €33.2 Billion were generated enabling the customers to reduce their emissions by 332 million tons at the same time.
Siemens has a proper definition of sustainability: “Sustainability is the guideline principle of Siemens. Siemens has partnered with sustainability and has embarked to act responsibly on behalf of future generations in order to achieve economic, environmental and social progress” (Siemens Sustainability Report , 2012).
To handle the sustainability management efficiently, countrywide, Siemens has set up a Sustainability Advisory Board stewarded by the Chief Sustainability Officer who is also a member of the Board. The Board meets twice a year and through professional and active initiatives, has contributed to various successful sustainability programs.
Conclusion is drawn from over the years how sustainability is handled, thought about and talked about by the practicing managers in relation to the organizations. Thus qualitative description by managers has been deduced. These were not “check-box surveys” that the firms were doing but more in depth conversations with the managers as they framed some ideas as to how to handle organizational sustainability. To bring clarity in the framework of sustainability, ‘FOUR CONCEPTIONS OF ORGANIZATIONAL SUSTAINABILITY’ were framed. (Elizabeth Kurucz, 2012)
These Four Conceptions serve as frames for thinking and talking sustainability. These frames are interpretive mechanisms and that help us to organize our experience and help us to guide the actions by simplifying and condensing the world we observe.
Again with sustainability as the buzzword….actual to possible…where actual means “what is” and possible means probable in the future. Crossing the two dimensions, we have the 2×2 metrics delineating four diverse and distinguishable conceptions of organizational sustainability. These are Trading, Aligning, Adapting and Synthesizing.
A “Trading Approach” – Management with a Trade-Off view…Conception of sustainability focuses on “what we do” i.e. which is aimed at meeting the operating plan and thus maximizing value imposed by the stakeholders. In other words, it is done to keep the organization going.
An “Aligning approach” implies “ What we could do” ie expansion with a Trade-off view. For example if an individual holds an idealist enterprenual idea of the sustainability focused possibilities for the organization, and those themes are large absent from the actual organizational aspects, ie staying focused on “ what we do”….a lack of alignment between societal and organizational values are occur.
An “Adapting approach” signifies “who we are” ie to accept and mould as per organizational sustainability development ie simultaneous value creation for all organizational stakeholders.
A “Synthesizing Approach”- Transformation with an integrative view, seeks a synthesis of global forces and objectives i.e. economic value creation, removing social injustice, environmental rehabilitation, conservation along with other financial objectives of the organization. The sustainability focus here it to upgrade an inclusive stakeholder view to create value broadly for the society. The usefulness of this framework is that it triggers reorientation of the organization to new growth opportunities.
|
Features |
Four Conceptions of Organisational Sustainability |
|||
|
Value Creatiopn Mode |
Trading |
Aligning |
Adapting |
Synthesyzing |
|
Activity/ Identity/ Motivator |
What we do |
What we could do |
Who we are |
Who we could be |
|
Sustainability Objective |
Maximize organizational value subject to local stakeholder constraints |
Maximize organizational value subject to globally local stakeholder constraints |
Simultaneous value creation for all organizational stakeholders |
Leverage inclusive stakeholder view to create value for the org and broad global society |
|
What is sustained |
Competitive operations/ Licence to operate local stakeholder relationships |
Organizational Growth-Licence to operate ” Globally” local stakeholders |
Stakeholder value industry advantage core values and organizational self Image |
Corporate BrandCore Values and Global Human Welfare |
|
Usefulness of a sustainability( Triple Bottom Line Framework |
As a negotiating Frame, Mitigate risks by negotiating Trade-Offs |
As a negotiating Frame: Mitigate Risks, exploit growth opportunities by negotiating Trade-offs in the new market |
As an Integrative Frame to build sustainable competitive advantage and organizational identity by leveraging interdependencies |
An integrating Frame, provoke organizational reorientation by broadening conceptions of context and capabilities |
All the sustainability initiatives adhere to the business conduct guidelines providing a legal and ethical framework of the business activities. These business guidelines cover rules both within and also with external partners and general public. Within the framework of the business guidelines, close collaboration with stakeholders helps in addressing complex interlocking sustainability issues. It maintains an intense dialogue with the supply chain and external stakeholders.
In the Fiscal year 2012, Siemens have also laid huge emphasis on the following areas of R&D Projects. Ensuring Long-term future viability, enhancing technological competitiveness and Optimizing the allocation of R&D Resources.
The R&D activities in the energy sector are dedicated to developing processes and transmission of electrical energy. The key R&D Areas are focused in development of
“One Siemens – Our path to sustainable value creation
As a highly “ integrated Technology “ company they have a very strong setup. The framework of the company’s sustainable development is “One Siemens” which defines the company’s metrics for revenue growth, capital efficiency, profitability and optimization of the capital structure. (Siemens Annual Report, 2012)
LANGUAGE for goal achievement of Siemens: For leveraging revenue, more efficiently use of capital more profitably and optimize the use of capital structure, can be thus defined in the metrics of “ONE SIEMENS” framework. Thus all these aspects combined into one provides basis for generating sustainable increase in the value.
This is an example of their integrative mindset. They are using “ One Siemens “ as a vehicle of sustainable value creation for profitability and customer satisfaction. It is clearly an example of win-win situation. Customer satisfaction can be viewed in terms of the cost (cheaper), quality (good) and ecological impact of the product.(win win win situation)
The basis of success is the “pioneering spirit”.”Innovation Driven Markets” is the key factor on which the activities are focused on.along with long-term growth potential.Contineous strengthening of the portfolio and also further expanding of the environmental portfolio is done to play a leading role in these markets. (Siemens Annual Report, 2012)
To be a pioneer in the Technology driven markets, Siemens has been extremely innovative for their future core business processes.. The power of innovation is strengthened by leveraging synergies worldwide thereby partnering with different premier research institutes
Provide a leading environmental portfolio: provides protection to environment and climate byprocuring different products and solutions.
The main focus to be a strong local partner to the customers and at the same time be closer to the markets, throughout the world.. That’s why apart from playing a leading role in the industrial countries- Siemens is also successfully producing and developing more and more innovative products and solutions in the emerging countries. “The professionalism and expansion of the services offerings is another of the strategic aims since innovative services harbor a wealth of new business opportunities and intensify customer loyalty” (Siemens Annual Report, 2012)
It includes concepts like Growth in emerging markets, expansion of service business and intensify customer focus
One needs to excel to be ranked as the top most in everything one does. In Siemens the extraordinary dedicated employees to a long way to continuously expand their knowledge while promoting equal opportunity and nurturing cooperation among men and women from different countries and cultural backgrounds. “ Nuclear and unambiguous commitment to integrity guides us in our ongoing pursuit of business success.”Actions are governed by binding principles to which the customers, suppliers and employees are expected to adhere to. (Siemens Annual Report, 2012)
It touch bases concepts like
Encourage lifelong learning and development, Empowerment of the diverse people worldwide, stand for integrity.
Thus ONE SIEMENS sumarises its values and principles and quotes: “We will emerge from the current economic crisis with renewed strength. Supported by our new Company-wide program to reduce costs, increase productivity, enhance efficiency, and improve our processes and market access, One Siemens- Our framework for sustainable value creation-is pointing our way forward”.
As an INTEGRATED TECHNOLOGY Company, Siemens have a virtually unparalleled position in the global markets- a position that’s made them a true partner of trust to the customers , the shareholders and the employees worldwide.
Acting sustainably and creating new business opportunities (Siemens Sustainability Report , 2012)
Making a concrete contribution to sustainable development and seizing business opportunities – that is the standard and Goal that has been set for the activities.
Why and how is sustainability important to the enterprise: It has always been crucial for the long term success of the enterprise. In order to quench our hunger for food and thirst for water, and energy needs, we have to do a lot more with much less as already about 1.5 % of the earth’s resources have been harnessed.
As a supplier of infrastructure Siemens have helped the society to progress with its varied range of products and solutions. After all everyone involves gains from involving practice and Theory in vocational training.
Along with various project partners, Siemens researchers developed a new recipe for plastic made primarily of renewable resources and CO2. It is a mixture containing polyhydroxybutyrate (PHB), whose main components are made from renewable raw materials such as palm oil and starch. Since PHB is brittle, polypropylene carbonate (PPC) from BASF, it is added to make it softer. PPC consists of 43 % carbon dioxide (by weight), which is obtained from power plant emissions using a separation process. In addition to being transparent, biodegradable, and resistant to light, PPC can be easily further processed. (https://www.siemens.com/innovation/en/news/2012/e_inno_1213_2.htm, 2012)
In Contribution to sustainable development, “Siemens caters to optimum EFFICIENCY thus taking full RESPONSIBILITY very seriously, thereby leading to GROWTH with its innovative products and solutions and services .Also helps customers tap new business opportunities”. (Siemens Sustainability Report , 2012)
“ Sustainable practices and economic common sense are by no means conflicting concepts on the contrary; Especially for innovation driven companies like Siemens sustainable practices offer great potential that we aim to exploit consistently- for our customers, the environment and not the least for our own business success.” (Siemens Sustainability Report , 2012)
Siemens have partnered with Dong Energy and provided solutions in wind energy. “Clean electricity in 6000 households from every turbine…..amazing performance by Siemens off the coast of Great Britain”.
Customer statement in Energy sector: “cooperating trustfully with Siemens for years. They share passion and enthusiasm for increasing production of electricity from wind and utilizing wind energy to the optimum and to bring down energy cost on long term basis……thereby aligning with the organizational sustainability.
The Siloam Hospital Group is introducing high quality and affordable healthcare in Indonesia, which has a diagnostics use. It is a medical device and is connected to a remote device of Siemens, thus helping with maximum device availability and lower cost ownership.
Best example of synthesizing: Sustainability Conception
The software company INOSIM , working closely with Siemens caters to the biological and chemical industry. This software has reduced the costs significantly
Here the management is with an integrative view, they are adapting ……
Siestorage, which has partnered with Siemens, supplies renewable power energies to companies like Enel. This is where Siemens modular energy system comes into being.
.This is a synopsis related to the future business and caters to forward looking statements . Also Siemens in 2012 various reports and news items coming out of them, reiterating their support for their organizational sustainability. This Report only supports the fact that how the concept of sustainability is driven with respect to business , the environment and the society, thereby contributing substantially to a sustainable development. In Siemens efficiency is leveraged at the same time increasing customer benefit thereby increasing sustainability to the external stakeholders with various products and solutions.
1. The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line, Bob Willard, 2005., Viewed on 6th February, 2015; https://toolkit.smallbiz.nsw.gov.au/part/17/83/355
2. Reconstrucvtive Value: Building Leadership for sustainability: by Elizabeth Kurucz, Barry Colbert and David Wheeler. Viewed on 6th February, 2015: https://www.reconstructingvalue.com/uploads/2/4/7/1/24717392/course_outline_strategy_for_a_sustainable_world.pdf 2012
3. World Resources Institute: Aligning Profit and Environmental sustainability: Stories from the Industry ( Working Paper): Viewed on 7th February, 2015: https://www.wri.org/sites/default/files/pdf/aligning_profit_and_environmental_sustainability_stories_from_industry.pdf
4. Sustainability Report, 2012 of Siemens: viewed on 5th February, 2015: https://www.siemens.com/about/sustainability/pool/en/current-reporting/siemens-sr2012.pdf
5. Reconstructing Value: Leadership Skills for a sustainable World by Elizabeth Kurucz; Viewed on 7th February, 2015: https://books.google.co.in/books.
6. Siemens Global Website: wiewed on 7th February, 2012; https://www.siemens.com/innovation/en/news/2012/e_inno_1213_2.htm
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