Building Sustainable Business Models

I have just concluded my MBA thesis a week ago where we had to write a business research report in a ‘scientific method.’  This is the most challenging aspect of my academic life as I had never really had to write one and they forgot somehow to tell us during our interview process that the Sustainable MBA programme will stress so much on the ‘scientific methods’ of writing a business report as opposed a strategic document or just using business research methodology, (Arbnor, Ingeman & Bjerke, Bjorn 2009), that business consultants, have been using since the birth of management consultants in 20th century.  Nevertheless, I saw this opportunity as both a challenge and an opportunity to combine the social science theories that I had come across during my internship and explaining and applying it at a practical level, relating language and action at one world at a time, (Arbnor, Ingeman & Bjerke, Bjorn 2009).   After all, this is why I chose to do an MBA degree.  In addition, the whole concept of sustainability, is about linking the world of practical professors with that of the academic professors.  The 20^th century of safeguarding one’s research and development in fear of a competitor gain competitive advantage propagated a culture of closed innovation, (Chesbrough 2003), that has resulted in companies building highly mechanized and specialized operations, (Morgan 2006), in response to market that was mainly driven by stakeholder maximization, with little regard to social rate of investment.  A case in point is Nike.  In 1996 the company accused of violating several human rights related to wages and working conditions.  This scandal for Nike, created ripple effects not only for the mega multibillion dollar enterprise but also sent shock waves to the manufacturing industry.  This revealed that that consumers are no longer satisfied with Nike products until they start seeing real change not only in company policy but also in how they conduct business at a social level.  The irony is this concept is not foreign.  The United Nations Framework Convention Centre (UNFCC) has long spoken about sustainable development and the importance of government involvement at a macroeconomic level.   This means that a country’s trade and fiscal policy needs to build into its national and local strategy.  This vision is noble indeed.  How do nations operationalize this new way of thinking?  Or better yet, how to combine the old way of thinking of private rate of investment (profitability) with social/public rate of investment (people and planet), (Glavan 2008)? Well, I have since identified 3 key points which I would like to share of which is already common knowledge amongst business practitioners:

1.  Private Public Partnerships (PPP) – private sector working in partnership with government to promote socio-economic development

2.       Governance Structures with the motto ‘Think globally, develop locally,’ (UNDP)

3.  Education – educating the consumer at a product level, educating the employee at skill and development level, educating the leaders at a management and business level

This highlights the fact that in the 21^st century of industrial economy, national governments have to simultaneously address sustainable development both in environment and socio-economic terms through investment decision.  Too often national governments formulate and adopt strategies without any real input from private sector as the governance structures are not conductive for the business environment.  Too often the lack of government involvement in R&D results in poor innovation management systems to support the market structures i.e., free or subsidized educational programs to generate more scientists, engineers, doctors etc. 

In summary, the new world order requires us to be team players, both businesses and academia need to rid-the-speak of ‘us’ and ‘them’.  We are batting on the same team.  Academia needs business to create jobs and a quality of life at a micro-level; business needs academia to continue to research and innovate so they will be able to operationalize the scientific findings in a more practical manner.    One cannot live without the other.  Economists call this comparative advantage, David Ricardo et al 1817.  Strategist simply call it a Joint Venture (JV) J.

Come let build sustainable business models in communities we choose to participate in!
Copyright @ Monday August 8, 2011 on BlogSpot by Tambudzai Ndoro, Non-Executive Director of Global Business Assignments Inc,