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Sustainable growth: Combining ecological issues into strategic planning

Mohammad Shamsuddoha
Assistant Professor, Department of Marketing, University of Chittagong
E-mail: mdsdoha@gmail.com, mdsdoha@yahoo.com
Hossain Shahid Shohrowardhy
Assistant Professor, Department of Marketing, University of Chittagong
Mohammad Nasir Uddin
Lecturer, Department of Marketing, University of Chittagong

Keyword: Ecology, Strategic Planning, Sustainability

ABSTRACT: Twenty-first century, come into view for a growing number of businesses and also its
environmental issues are emerging with increasing frequency as strategic problems. If human activity is to be
sustainable, then strategic behavior of companies must take account of the structural elements. Researchers
in the western societies are trying to realize how the companies amalgamate the sustainability issues into
their strategies. No such study has been reported on companies opera ting in the Asian countries especially on
Bangladesh. This paper reports the findings of a case study research on this issue, which was conducted on
three local and multination companies operating in Bangladesh. Two frameworks were applied to analyze the
nature and extent of integration of environmental management practices into the organizational strategic
planning process. The study reveals that the majority of the sample companies have well-developed
environmental management systems in place which satisfies the requirements of the strategic planning
criterion of the business excellence framework. There is no plethora report or findings on these issues but
here the researchers tried to conduct an empirical study which gave some expected findings at least.

1 OBJECTIVES OF THE STUDY SmithKline and Berger paints. In addition, review all
the websites of respected institutions for updated
This study is empirical and have highlighting and information. In the other hand, the researchers have
evaluating the relevant issues on Bangladesh such as also reviewed several foreign research works. There
ecological transformation of the modern is no plethora works in Bangladesh in this regard
organization, industrial ecology, environmental specifically. This is why, the researchers found some
drawbacks of production, framework conditions for interest to do some works based on several
industrial-ecological capacity and capability, secondary literature and present status of
corporate greening Process and best environmental Bangladesh over ecological issues.
practices in an organization. Within these topics, the
researcher mixed lot of information regarding 3 INTRODUCTION
Bangladeshi reputed companies who are trying hard
to adopt environmental issues then incorporated it to Research and industrial practice within industrial
their strategic planning. ecology today still focuses much more on the
industrialized countries and as well as developing
2 SCOPE AND METHODOLOGY OF THE countries. It is also faraway additional concerned
STUDY with industrial responsibility towards future
generations than of today’s problems of global
The study is complete empirical one. No primary distributive impartiality. This is followed by
data has been collected except some sort of arguments for why industrial ecological principles
interviews have been taken in unstructured way to may favorably be engaged in the organization to a
let know about company’s strategic planning larger extent than now, and how this can contribute
regarding environmental issues. The total samples to the further development of industrial ecology as a
were three reputed company such as Unilever, Glaxo discipline (Buen Jørund, 2001). Business
organizations, large and small, are wrestling with the resistant a central public policy message of societal
stress of environmental performance (Kolluru, concern for the environment.
1993). Changes in business operations have been
occurring throughout the modern environmental era, 4.2 Market driven environmentalism:
but incremental alteration are no longer adequate;
whole new ways of mechanized and running natural To a business community eager to improve
resources are emerging to provide somewhere to efficiency, productivity and the bottom line,
stay environmental requirements. Conceptualizing pollution prevention warranted a close look. Today’s
organizational purpose in terms of sustainable businesses are complete based on market demand
economic and environmental performance signals a and also it is operated as per market driven way.
major shift in thinking about the impact and That is why, it is important for the organization that
significance of ecological factors. What were once environmentalism should be maintain by market
viewed as by-products of industrial progress are now driven way.
seen as societal problems (James E. Post and
Barbara W. Altman, 1994)? The concept of 4.3 Value -driven environmentalism:
sustainability has been introduced to combine
concern for the well-being of the planet with Marketing experts discovered that consumers were
continued growth and human development. Though willing to act on their environmental values and vote
there is much debate as to what the word actually with their dollars. Sales of environmentally-friendly
suggests, we can put forth the definition offered by goods rose sharply, and such “green”. Politicians
the World Commission on Environment and also discovered the ability of environmental issues to
Development: "Meeting the needs of the present stimulate voter support or hostility. Media attention
without compromising the ability of future grew as city newspapers named environmental
generations to meet their own needs." In its original reporters and editors; some carried regular
context, this definition was stated solely from the environmental features.
human point of view. In order to embrace the idea of
ecology with intrinsic value, the meaning must be 4.4 Barriers to Change into environmentalism
expanded to allow parts of nature to meet their own
needs now and in the future (The Hannover Sustainable development cannot be achieved without
Principles, 2000).1 Industrial ecology is directly substantial co-operation and involvement of
related with the industry policy that is why company business. Since formidable barriers obstruct
must draw ecological guideline for himself. management efforts to transform the way a firm’s
strategic decisions are made and routine operations
4 ECOLOGICAL TRANSFORMATION OF conducted. An extensive review of published and
THE MODERN ORGANIZATION unpublished case studies of manufacturing and
service firms during the past three years has led us to
The importance of environmental matters is conclude that there are two basic types of barriers:
reinforced by the massive amount of indications that industry barriers which reflect the special and unique
send the message to business. Three distinct forms features of the business activity in which the firm
of environmentalism appeared between the 1970s engages; and organizational barriers that are not
and the 1990s, each emphasizing a different mixture unique to environmental problems, but which affect
of legal, market, and value -based or ethical a firm’s capacity to deal with any form of change,
considerations. including environmental change(Gore, 1992;
Schmidheiny, 1992).
4.1 Observance based environmentalism:
5 INDUSTRIAL ECOLOGY
It is always important for the central government to
implement environmental practices in any type of Definition of industrial ecology, which clearly
organizations through different legal agencies as per shows that a holistic approach to energy and
observation. Organizational current statutes, environmental questions forms part of the
administrative regulations and court decisions have fundament for industrial ecology “Industrial
ecology is the means by which humanity can
1 deliberately and rationally approach and maintain a
The Hannover Principles, Design for Sustainability Prepared
for EXPO 2000, The World’s Fair Hannover, Germany desirable carrying capacity, given continued
William McDonough & Partners economic, cultural and technological evolution. The
concept requires that an industrial system be viewed material cycles – both in terms of capital-,
not in isolation from its surrounding systems, but in energy- and resource use – from raw material via
concert with them. It is a system view in which one processed material and product to waste product.
seeks to optimize the total materials cycle from Design for the environment is also central in this
virgin material, to finished material, to component, regard.
to product, to obsolete product, and to ultimate 2. The ecosystem has been developed in a close
disposal. Factors to be optimized include resources, relationship with each other. Nature has intrinsic
energy, and capital”(Graedel and Allenby 1995). value, visualized through economic activity, and
human beings therefore have an ethical and
There is still disagreement both among researchers moral responsibility towards nature.
and industry representatives about what principles 3. Sustainability means that human and natural
and practices are actually included in industrial capital is maintained intact independently of
ecology. While most researchers and practitioners each other. In other words, industrial ecology
would agree that the unit of analysis is material and often operates with a” strong” definition of
energy flows, views differ widely as to (den Hond sustainability. A” weaker” definition would only
2000): require that the sum of human and natural capital
is kept intact.
1. Whether industrial ecology should restrict itself 4. Economic activity based on services, not goods,
to describing these material and energy flows, or is given priority. Quality of life is emphasized
engage in analyzing the systems for managing rather than living standards. Taking
them, or even suggest improvements to these technological realism as a point of departure, the
systems; and precautionary principle, including a conscious
2. What the system boundaries should be? product policy and life-cycle assessment, should
Industrial ecology is a new concept; the be employed to meet uncertainty.
discipline is so far a collection of very different
terms and strategies with different scope, rather 6 FRAMEWORK CONDITIONS FOR
than a clearly defined and unitary theory INDUSTRIAL-ECOLOGICAL CAPACITY
specifying clear strategies for its industrial AND CAPABILITY
implementation (O’Rourke et al. 1996).
It is possible to shape out a set of fundamental In addition, it is important to note that not only the
characteristics of industrial ecology. However, this material infrastructure is insufficient. The
does not prevent different actors from claiming that organizational and institutional infrastructure in
everything from incremental improvements in these countries has clear weaknesses as well. This
existing environmentally injurious products in a conditions is environmental and energy technology
limited geographic area, to radical change in the transferred from the developed to developing
global industrial system in an environmentally countries. There are several things are involved such
friendly direction, fall within industrial ecology. as economic and financial framework conditions;
Industrial ecology, which includes physical, Cognitive and informational framework conditions;
biological, chemical, organizational and institutional and Technical framework conditions.
aspects of material and energy flows, as well as the
flows’ transboundary character. 6.1 Changes in framework conditions:

Fundamental elements of industrial ecology Some of the most important causes of this change
are that the environmental technology industry in
Industrial-ecological research and practice today existing markets, environmental requirements
have much in common with ecological following the whole lifecycle of products are
modernization, which is a generic term for emerging in developing countries and form the basis
descriptions and analyses of established government for global industrial environmental standards. Again,
and economic actor’s response to pressure for action bi- and multilateral donors try to provide the
in environmental matters. Ehrenfeld (1994) claims necessary framework conditions for private
that what he calls the industrial ecology paradigm is investment and the establishment of new businesses
based on the following fundamental elements: in the environmental and energy sectors. (Jansen
1994).
1. The globe is a closed ecological system. The
goal is therefore regarded to be to optimize
6.2 Production and consumption faces of the 7 ENVIRONMENTAL DRAWBACKS OF
same problem: PRODUCTION

Industrial production has contributed to the Environmental impacts are often considered
improvement of our quality of life. For most of us it necessary side effects of development or the price to
is difficult to imagine not having access to consumer pay in order to achieve progress (Furley, 1996;
goods ranging from electronics, textile, foodstuff Hesselberg, 1992; Weissman, 1993). The
and beverages to sophisticated transport and atmosphere, watercourses, oceans and holes in the
communication means. However, while consuming, ground left open from previous mining activities are
we usually do not recognize the environmental costs treated as natural recipients for the waste resulting
involved because they are externalized (Kennedy, from extraction, transportation, production and
1996). The underprivileged sectors of society have consumption. However, industries are certainly not
to bear the consequences from pollution and the loss the only factors that put pressure on the
of biodiversity, natural landscapes and cultural environment. Agriculture, mining, forestry, fisheries,
heritage. Manufacturing still depends mainly on the transport, housing, leisure and tourism also leave
extraction of natural resources and much less on the their footprints on the environment. Among the most
use of recycled materials (Hall, 1991 and Reborati, severe impasses directly and indirectly related to
1999). Production does not exist without production in general are:
consumption; hence consumers are also responsible
for the negative drawbacks from their adopted 1. Unrestricted exploitation of non-renewable
lifestyle. Environmental education is a medium to natural resources such as minerals and
long-term measure that can help to change petroleum;
consumption and lifestyles towards the preference of 2. Monoculture production systems in agriculture
products that are less resource and more labor - and forestry, over fishing and overuse of
intense (Hawken, 1993, pp. 116-22). This way freshwater resources in industry and agriculture;
environmental damage could be prevented in first 3. Contamination of soil, water and air due to
place and expensive costs related to clean-ups and production processes;
rehabilitation measures could be economized. 4. Generation of waste and inadequate final
Production that creates high levels of employment destination of used products;
under fair conditions also contributes to a better 5. Reduction of biodiversity due to deforestation,
distribution of wealth. erosion, and soil impermeable;
6. Climate change in response to the emission of
6.3 Industrial development and the environment: greenhouse gases and damage to the ozone layer.

The early industrialization in Bangladesh was based 7.1 Air pollution and industrial production:
on the expansion of the primary sector and the
import of raw materials. When the Government For being small and numerous these firms are often
initiated a development shift towards import excluded from the public pressure to become
substitution and began to build up an independent cleaner. Small-scale industries usually do not have
national industry. These different periods of the funds to upgrade their processes. They have to
industrial growth have originated a strong and rely on government financial support or other low
diversified industrial sector, with a noticeable trend interest funding schemes to improve their
towards manufacturing industries. The limits to environmental performance.
growth-oriented industrialization were obvious
decades ago, when socio-economic inequities and 7.2 The contamination of freshwater:
environmental impacts became evident. However,
governmental policies still continued to stimulate Bangladesh is the country with the greatest general
investment in industrial production regardless of the great quantity in freshwater resources. Nevertheless,
possible scope of resulting environmental trade -offs. there are certain regions and cities that are already
Often more sound developments are prevented in facing severe water shortages. Most of the large
view of the actual and expected benefits from the urban agglomerations already have to rationalize the
global economic market and from elevated distribution of drinking water during some periods
consumption levels. of the year such as capital city Dhaka and
commercial capital Chittagong city. . Local
governments often lack effective measures to protect
water quality or to avoid the waste of water. Public 4. Maximizing sustainable use of renewable
policies may further underline unequal access to resources.
water; as industry, e.g. does not pay for the water 5. Extending product durability.
extracted from rivers or wells and receives subsidies 6. Increasing service intensity of goods and
for piped water. Recently, it was not even services.
recognized as irresponsible or criminal to extract
clean water from the river and to then deliver it in a 8 THE CORPORATE GREENING PROCESS
polluted state, after having used it in production
processes. Most industrial production processes Research on the creation of environmentally
depend on clean water. Hence industries should also responsible business enterprises is relatively limited.
have a vested interest in the conservation of water Much of the writing on environmental management
resources. Nevertheless, the prevailing principle derives from reports in industry trade press,
among business is still to deliver water of lower practitioner journals, and compendia by industry
quality. Lot of concerned or related project has experts (Kolluru, 1993). Three themes stand out:
failed to improve the water quality of this river
system. Together with domestic sewage, storm water 1. There is a need for more co-operative
and garbage these diffuse emission sources add to relationships between business, Government,
local and regional water pollution. Small industries and society if the environment is to be
usually do not have the necessary funds to become effectively protected;
properly equipped with technology to reduce 2. There is a need for new frameworks which
emissions or to restructure their production account for environmental costs; and
processes. 3. A number of “best practices” companies are
creating useful models for environmental
7.3 Waste generation and management: improvement.

Waste generation has grown into a critical 9 ENVIRONMENTAL IMPACT ON


environmental impact. Soil contamination and ORGANIZATIONS
irregular disposal of toxic waste are common
problems in many urban-industrial agglomerations. Direct impact:
There is also the immine nt problem of the depletion
of valuable land as industrial waste tips. Industries In the marketplace, demand for environmentally
still produce large amounts of residues, which are friendly products has become a powerful force. For
sold, incinerated or deposited on their own premises example, CNG is getting popularity day by day as a
and on specific public disposal areas. There is also fuel in Bangladesh. Unilever, Reckit, Glaxo, Berger,
the possibility of the waste being dumped illegally square, Pran and other giant companies and groups
or transported out of the region. Severe to come up with ways to solve its enormous solid
environmental impacts are related to the toxic leach waste and minimize its use of polystyrene
ate and the contamination of the soil and packaging. In addition, organizations need to
underground water from irregularly dumped waste. reengineer the way they work to ensure
Often local governments and the industry prefer to sustainability of resources. New technologies are
fix the problem by burning the waste. The being harnessed to reduce destructive ecological
incineration of residues does not solve the problem, impacts of pollution and resource depletion.
it rather creates new ones. It burns valuable Substitutes are also being developed to achieve
resources and it produces toxic emissions, which can sustainability. For example, the automobile
be reduced only to a certain extent through filtering. companies have produced prototype electric cars to
It also produces ashes that require adequate address the air pollution problems in major cities of
treatment, which involves extra costs. According to the world. In Japan, Tokyo Power and Electric has
Robins and Kumar (1999) the implementation of also designed and built a prototype electric car for
eco-efficiency involves the following steps: the same purpose (Volvo Environmental Report,
1996).
1. Reducing material intensity of goods and
services 9.1 Indirect im pact:
2. Lowering energy input.
3. Reducing the dispersion of toxic waste and The indirect impact that most organizations face
by-products. come from four main groups of stakeholders (i.e.
consumers, employees, government, and rivals are incorporating environmental issues into
corporations). These groups have pressured many their strategic planning before themselves. Some
firms to take a hard look at their environmental argue that companies which fail to observe the green
performance. Sadgrove (1992) reports that 39 per ethic would lose out on opportunities in the market
cent of adults in the UK buy green products as far as place (Hamid, 1997a). It is argued that if human
possible and a further 20 per cent buy them economic activity is to be sustainable, then strategic
whenever they see them. Gallup’s survey has also behavior of companies must take account of the
found that 9.5 million out of Britain’s 20.8 million structural elements. These elements demand
households are ``very concerned’’ or ``extremely strategic choices of technology and product/market
concerned’’ about green issues. Nearly all the rest that minimize destructive impact and work within
are ``concerned’’, with a mere 8 per cent expressing ecological limits (Thoorp et al., 1993).
indifference. Some authors also emphasize that the
society is ``entering the era of corporate image’’, in 9.5 Environmental strengths:
which consumers will increasingly make purchases
on the basis of a firm’s whole role in society, i.e. The Company’s environmental strengths were found
how it treats employees, shareholders and local to include:
neighborhoods (Russo and Fouts, 1997). Incorporate
environme ntal considerations into their strategic (1) Strong leadership commitment;
planning to assure its customers and citizens (2) Capable people;
throughout the world to prove that it is sensitive to (3) Positive program initiatives; and
the environment, and that it is acting in a socially (4) Active leadership role on regional/national
responsible manner (Certo, 1997, p. 56). issues.

9.2 Employees: 9.6 Problems related with planning:

An environmentally friendly corporation will portray Four problem areas were identified:
a better image and will be able to attract not only
more customers but also a more able and dedicated (1) Commitment not effectively translated to a
team of workers. The employees’ views on a firm’s workable action plan;
environmental performance and its compatibility (2) External programs being most advanced and
with their values profile affect their willingness to internal programs less sophisticated;
work for that firm. A study of McKinsey covering (3) Lack of a comprehensive risk management
403 senior executives from around the world program; and
revealed that 68 per cent of them agreed that (4) Insufficiently strong leadership below the top
organizations with a poor environmental record management ranks.
would find it increas ingly difficult to recruit and Most of the cases, organization itself is a decision
retain high caliber staff (Fischer and Scot, 1993). maker that whether they will follow
environmentalism in their strategic planning or not.
9.3 Government:
10 BEST ENVIRONMENTAL PRACTICES IN
Statements made by various governments expressing AN ORGANIZATION
their desire to have a cleaner environment create
pressures on organizations and companies to study The best practices of environmental leadership have
the possible environmental consequences closely shown below:-
before making decisions. Furthermore, compulsory
environmental audits and stricter legislation in many 1. A mission statement and corporate values that
countries have put pressures on organizations to promote environmental advocacy five out of the
place more focus on environmental issues. seven case study companies have mission
Incentives and recognition awards for model statement and corporate values to promote
companies have also been offered in many countries. environmental advocacy.
2. A framework for managing environmental
9.4 Corporations: initiatives all the seven companies have well-
developed framework for managing
At the corporation level, management feels environmental initiatives.
threatened when they realize that their business
3. Green process/product design at least five of the Separate Environmental Compílanse Not clearly
mission & Safety issues. Works indicated

Company C
seven companies use green product/ process
statement representative is with
design approach. established, responsible to customers
4. Environmentally focused stakeholder partnership incorporating establish to deal with
most of these companies have stated partnerships environmental and implement future issues
with their suppliers and customers for being programs
green.
5. Internal and external education initiatives not
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