Contemporary Management Techniques: Sustainability

Sustainability refers to the balancing of an organization’s short-term and long-term goals across the three performance dimensions: social, financial, and environmental. From a financial perspective, sustainability can be viewed as an attempt by an organization to reduce operational costs and increase revenue by embarking on specific cost-cutting measures. Also, sustainability involves compliance with social and environmental regulations within the jurisdiction in which a firm operates. An organization can implement different measures to attain sustainability, including new product development and innovation: Contemporary Management Techniques: Sustainability.

Also, there are commonsense initiatives that an organization can put in place to attain its sustainability goals. One of the leaders regarding sustainability is Ford Motor Company, which saves money by implementing improvements to its draining system in Michigan. This is just an example of how a firm may achieve sustainability by undertaking innovative initiatives. Other global sustainability leaders include Walmart, McDonald’s, Honda, and Toyota.

Given the successes attained by these multinational corporations, it is clear that sustainability is critical to business success. This paper delves into how SpaceX Company can leverage sustainability to enhance its margins and bolster compliance with environmental and social regulations.

Rationale and Selection of the Technique

One of the reasons for selecting sustainability as an appropriate contemporary management technique for the SpaceX Company is that it is vital in protecting the brand and mitigating risks. The sustainability contemporary management technique is crucial, particularly for companies operating in sectors where competition is predominantly driven by brand and reputation (Eccles et al., 2014). For a company to successfully compete in sectors where competition is largely driven by brand and reputation, it has to hire high-quality human capital. Such high-quality human capital will, among others, implement innovations that will drive the company toward success.

Besides, high-quality human capital is key to implementing sophisticated marketing campaigns and developing new products that align with the demands of the market (Eccles et al., 2014). It is worth noting that there is a direct link between an organization’s reputation and the quality of human capital the organization attracts. If the company reinforces its reputation as one that focuses on making high-quality products and innovation, it is likely to attract the best the market has to offer.

Another rationale for selecting sustainability as one that can help firms attain their objectives is due to the growing market for sustainable goods. Research has indicated that consumers are willing to change their consumption habits to lessen their negative impact on the environment (Eccles et al., 2014). In particular, millennials are willing to pay more for products that contain sustainable ingredients or those that have sustainability claims (Chladek, 2019).

Therefore, embracing sustainability will have a business organization appeal to more consumers in the long term. Significant interest has been drawn to the increasing demand for eco-friendly products, with more consumers willing to purchase products that are recyclable, biodegradable, and sustainable (Chladek, 2019).

Besides, awareness about greenwashing, a practice in which firms falsely claim to be implementing sustainable initiatives, has increased; hence, consumers are likely to conduct a transparency check to establish if the organization is really engaged in sustainable practices. To that end, organizations should embrace sustainability to appeal to more consumers and improve their margins and brand reputation.

The third justification for selecting sustainability as one of the suitable contemporary management techniques is that it facilitates waste elimination. Based on the Toyota production system, there are seven types of waste, including overproduction, unnecessary inventory, defects, and excess motion, among others (Eccles et al., 2014). One of the types of waste that is of concern to firms is inventory waste. This type of waste is of particular concern to manufacturers because, at any given time, inventory is needed, but there is a need to keep it highly controlled.

A company must be able to produce only the inventory that it can successfully control. If inventory stays for too long, it will deprive a company of the much-needed financial resources because more will be used on storage. On the other hand, if a company fails to effectively manage its stock and experiences shortages when customers make orders, it may lose customer loyalty because customers may not be as patient to wait for the next production.

Moreover, another rationale for leveraging sustainability by SpaceX is that it encourages an innovation culture. An organization that supports an innovation culture fosters an environment in which stakeholders can pursue risky and uncertain innovative ventures with the full support of the organizational leadership (Obal et al., 2020). One of the antecedents of an innovative culture is that a company should be willing to overlook short-term success metrics to achieve long-term success (Obal et al., 2020).

One of the short-term objectives an organization should be willing to ignore is the desire to expand an organization’s bottom line. If an organization is interested in long-term success, it means that some investments will be directed to research and development; hence, short-term profits may be quite low. As a result, initiatives like investing in patents will bolster an organization’s sustainability in the long term, even though it will take resources away from the company in the short term.

Patents are crucial in the innovation pursuits of a firm because they are protective barriers to innovation that ensure that a company will benefit from the innovation in the long term. Obal et al. (2020) argue that for sustainability to be an integral part of the business’s strategy and not just a cost-cutting exercise, the case for sustainable innovation must be pronounced. Unilever is one of the examples of companies that have successfully leveraged innovative sustainability (Obal et al., 2020). For instance, while developing products focused on water-stressed locations, Unilever not only worries about reducing water footprint in its production processes but also implements means to reduce water usage on a customer’s end (Obal et al., 2020).

This leads to the production of innovative products that cater to the consumers’ needs besides helping a company overcome production challenges. Acquiring a patent is crucial for new product development because it gives an organization a competitive advantage, protecting it from imitators, and acting as a legal asset that can bolster product performance (Obal et al., 2020). To that end, it has emerged that one of the rationales for adopting sustainability is to foster an innovative culture.

Management Technique – Description of the Technique

Broadly, sustainability refers to the act of aligning with environmental and social regulations and implementing measures to reduce operational costs and bolster revenue. The growing global concerns about climate change, gasoline price hikes, increasing commodity prices, and corporate social and environmental responsibility have led to new expectations on organizations (Blocher et al., 2022). As a result, organizations have adopted the Triple Bottom Line management model, which focuses on social, economic, and environmental performance.

In other words, modern organizations must focus on people, profits, and the planet for them to perform and gain a competitive edge (Blocher et al., 2022). This Triple Bottom Line is what has come to be known as sustainability. Economic sustainability is measured using the traditional ways, whereas social performance refers to the health and safety of organizational employees and other stakeholders. On the other hand, environmental sustainability delves into the impact of a firm’s activities on the environment.

People

Positive organizational values are one of the aspects of sustainability that will go a long way to helping an organization attain sustainability. Unlike in the past, consumers are increasingly showing concern for the challenges associated with sustainability. An organization’s core values influence customers’ purchasing behavior and consumption habits (Blocher et al., 2022). It is worth noting that values are not what is expressed by the organization in words but rather the business practices the organization demonstrates.

For instance, an organization that prides itself on being trustworthy should show this by issuing non-deceptive advertisements. Besides, a business that prides itself on being socially responsible should be seen to be undertaking socially responsible activities such as partnering with others to clean streets.

Further, if corporate responsibility is about taking responsibility, then the firm must demonstrate this in how it treats its stakeholders and the neighboring community. For instance, the organization should ensure that employees’ working conditions and environment are meaningful, safe, and fair (Blocher et al., 2022). Besides, the organization can practice responsibility for the local community by providing financial support through philanthropic initiatives. This responsibility can be extended to consumers by offering them soft value, which may refer to the treatment consumers receive when patronizing the business.

To that end, recent studies have revealed that 70% of end consumers are willing to purchase from a company that is committed to a course that they support (Blocher et al., 2022). In the same breath, 90% of consumers are willing to switch to a comparable brand that demonstrates commitment to corporate responsibility. As a result, businesses are engaging in CR not only to build their reputation but also to bolster their bottom line through enhanced profits.

Planet

This pillar of corporate responsibility delves into the management of an organization’s operations’ impact on the environment. Due to the exacerbating impacts of climate change, organizations have also risen to play a role in reducing the impact of climate change by adjusting their operations and switching to green initiatives (Bergquist, 2017). One of the notable agreements that binds organizations to their commitment to environmental sustainability is the Paris Agreement of 2015, in which 195 countries committed to reducing earth-warming greenhouse gas emissions (Blocher et al., 2022).

The end goal of the agreement is to ensure that companies reduce emissions to the extent that temperatures do not rise by 3.6°F (2°C) (Blocher et al., 2022). Corporations like SpaceX are facing pressure from their respective governments and consumers worldwide to undertake initiatives that will contribute to reduced greenhouse gas emissions.

Organizations’ commitment to cutting earth-warming emissions will particularly affect their production processes since most firms acquire their energy from fossil fuels. Firms will need to adopt greener energy sources to curb the impact of their operations on the environment (Blocher et al., 2022). Another initiative is the need to reduce reliance on non-renewable sources, and instead adopt the usage of renewable sources.

Businesses have also been tasked with the responsibility of monitoring supply chains to ensure that the production processes along supply chains do not negatively impact the environment. Also, waste management is becoming crucial, with firms expected to recycle materials and convert waste to energy in a bid to bolster environmental sustainability. Adopting these interventions will go a long way to ensure organizations preserve natural ecosystems and address the problem of climate change.

Profits

The profit component of the Triple Bottom Line refers to the traditional financial bottom line concerned with the economic viability of the business and its contribution to wealth creation. Any business entity must generate profits to survive in a competitive environment, create jobs, and contribute to overall business growth (Blocher et al., 2022). In the sustainability context, the organization must manage its costs effectively to make a profit.

One of the best ways to attain profit sustainability is by determining prices carefully; such that the company does not overcharge or undercharge. If a business overcharges its customers, it will lose customers, leading to unprofitability. On the other hand, imposing prices that are too low will lead to unprofitability since the firm will not cover production costs.

Application by Other Companies

Toyota

Toyota, one of the world’s leading automakers, implements sustainability initiatives to not only build its reputation but also generate profits. One of the aspects of sustainability Toyota takes seriously is economic viability (profits). The company implements target costing, which implies that design features and manufacturing processes are kept constant until a new model is manufactured (Blocher et al., 2022).

For instance, during the redesign of the Camry model, the company made the running lamps part of the headlamp assembly and the grille part of the bumper (Blocher et al., 2022). The initiative saves time and money for the company, while the end-user benefits due to the incorporation of a crash-resistant bumper.

Walmart

Walmart Inc. is another leading company in terms of sustainability. The company is undertaking initiatives and has made commitments that will go a long way to conserve the climate and lead to the usage of green energy. One of the company’s climate sustainability initiatives is a commitment to the shift toward 100% renewable energy. So far, the company’s energy is 30% renewable.

Besides, the company is committed to curbing energy wastage in its stores by leveraging LED lights in its stores. Further, Walmart has implemented measures to ensure sustainability is upheld along the supply chains. To that end, the company reports the transparency status to its stakeholders by issuing regular reports as part of the retailer’s commitment to transparency.

On social responsibility, Walmart is particularly committed to diversity and inclusion among its customers and suppliers. For instance, as part of the company’s diversity and inclusion initiatives, Walmart sources its products from suppliers of minority-owned, veteran-owned, and women-owned businesses.

Honda

Honda also leverages sustainability as a contemporary management technique. Just like Toyota, Honda is also committed to sustainability through cost management. The target costing technique ensures that the company keeps production costs low for the company to be economically sustainable in the long run (Blocher et al., 2022).

From the climate perspective, the automaker is leading the journey toward a shift to clean energy by starting the production of electric and hybrid vehicles. The company has committed to shifting to 100% production of electric vehicles as a way of contributing to the reduction of the negative impacts of fossil fuels on the environment.

Evaluating/Creating Applicability to the Chosen Company

Environmental Sustainability

One of SpaceX’s leading sustainability objectives is to achieve environmentally safe rocket launches. This is because whenever a rocket is launched, there is a risk of polluting the surrounding environment by the debris that is spread by the force experienced during the launch. In this regard, SpaceX has a lot to learn from NASA which has conducted thousands of environmentally safe rocket launches for over 60 years (NASA, 2018).

One of the measures that SpaceX should implement to reduce the impact on the environment is significant safety and environmental analysis. Among others, the company should conduct simulations, flight tests, and ground tests before launching a rocket (NASA, 2018). This will go a long way to assess the impact of a launch and determine whether it is viable to safely launch it.

Moreover, aligning with environmental regulations before launching a rocket is crucial. The Environmental Protection Agency is one of the regulatory organizations that contains measures that SpaceX can align with to achieve environmental sustainability. Besides, there is the National Environmental Policy Act (NEPA), which has put in place initiatives that can go a long way to ensure environmental safety.

Among the key recommendations in NEPA that are relevant to SpaceX delve into the protection of wildlife and aquatic life such as fish. Since the debris during spaceship launches falls far and wide, there is a likelihood that it can fall into forests or the ocean. As a result, environmental impact analysis will assess the risk before giving the company the green light to launch a rocket.

Notably, SpaceX has contributed to environmental sustainability by incorporating reusable rockets into its operations. For instance, the starship and Falcon 9 rockets are reusable, implying that the company does not need to manufacture new rockets every time there is a launch (SpaceX, 2023). By innovating reusable rockets, SpaceX saves the time it would have used to make new rockets. Besides, the initiative reduces the environmental impact since waste is reduced as the materials used to make rockets will be used for the next rocket.

Economic Sustainability

SpaceX has implemented different measures to achieve economic sustainability. One key measure is the company’s collaboration with the private sector and government agencies. Such collaboration is crucial because it plays a key role in helping the company acquire the necessary resources required to implement rocket launches (Bjärstig, 2017).

Also, the enhanced commercialization of SpaceX’s business model has led to enhanced profits, thus enhancing its economic viability. For instance, NASA has provided the company with resources to facilitate space exploration on multiple occasions. In addition, the company’s diversification to provide broadband services through the starship satellite has generated enhanced income streams.

Social Impact

SpaceX’s initiatives in America and across the globe have positively contributed to people’s lives. One of the positive contributions is the company’s provision of broadband services at relatively low prices. This model has given SpaceX a competitive edge because offering one of the fastest internet speeds at affordable prices leads to customer loyalty (SpaceX, 2023).

Also, SpaceX has generated jobs that have a positive impact on people. In the same breath, the company is committed to diversity in job distribution since minority communities have been absorbed. Additionally, SpaceX invests heavily in education and research initiatives that will enhance space exploration in the future. By investing in people, the company has generated increased interest in STEM subjects, which implies that the future of space exploration is promising.

Conclusion

Sustainability is one of the most feasible contemporary management techniques for SpaceX Company. Sustainability, which involves economic viability, social, and environmental compliance, involves the operational and other initiatives an organization implements to make profits and maintain a positive brand reputation. Sustainability is vital considering a significant number of consumers are likely to patronize businesses that commit to a cause they support. Considering that SpaceX is in a sector where competition is influenced by reputation, the company should adopt this management technique to maintain a positive reputation and make profits.

One of the companies known for implementing successful sustainability initiatives is Toyota Company, which explains why the company is one of the most successful automakers globally. From the environmental perspective, SpaceX has manufactured reusable rockets, which saves time and reduces environmental impact. Economically, the company’s diversification into offering broadband services has created new income streams.

From a social perspective, SpaceX has generated jobs and facilitated interest in STEM education by providing internship opportunities, especially to minority communities. Overall, SpaceX’s commitment to the planet, people, and profits has contributed to its success.

References

Bergquist, A.-K. (2017). Business and sustainability: New business history perspectives. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3055587

Bjärstig, T. (2017). Does collaboration lead to sustainability? A study of public–private partnerships in the Swedish mountains. Sustainability, 9(10), 1685. https://doi.org/10.3390/su9101685

Blocher, E. J., Cokins, G., & Stout, D. E. (2022). Cost management: A strategic emphasis (9th ed.). McGraw-Hill.

Chladek, N. (2019, November 6). Why you need sustainability in your business strategy. Harvard Business School Online. https://online.hbs.edu/blog/post/business-sustainability-strategies

Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835–2857. https://doi.org/10.1287/mnsc.2014.1984

NASA. (2018). 20 18 Annual Sustainability Report. https://www.nasa.gov/wp-content/uploads/2017/06/asr_fy18_web.pdf

Obal, M., Morgan, T., & Joseph, G. (2020). Integrating sustainability into new product development: The role of organizational leadership and culture. Journal of Small Business Strategy, 30(1), 43–57. https://libjournals.mtsu.edu/index.php/jsbs/article/view/1664

SpaceX. (2023). SpaceX Updates. SpaceX. https://www.spacex.com/updates/

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Learning Project: Contemporary Management Techniques Research Paper Assignment Instructions

Choose an organization and select 1 contemporary management technique outlined in Chapter 1 of the Blocher et al. (2022) course textbook that could aid the organization’s key employees in achieving its critical success factors (CSFs). Key employees of an organization are integral in the strategic management of the entire organization or segment. They could be an owner/part owner of the organization and/or an employee with significant decision-making abilities. It is more interesting and beneficial to choose an organization that you are familiar with (e.g., former employer) versus selecting a large, publicly traded organization.

You may not use the balanced scorecard since this contemporary management technique was previously discussed.

Using the electronic databases provided by the Jerry Falwell Library and other sources, search for journal articles in professional peer-reviewed accounting and business journals that pertain to the contemporary management technique chosen.

Write a research paper in current APA format. The paper must be 10–12 pages. The body of the paper must be double-spaced with 1-inch margins and current APA pagination. The font must be 12-point Times New Roman.

The paper must include references from at least 5 different sources, including the Blocher et al. (2022) textbook. Be sure to include a title page and a reference page in addition to the essay pages. The title page and the reference page do not count as part of the page length requirement.

The paper must address the following in order, with these specific headings:

1. Rationale and Selection of the Technique
2. Management Technique – description of the technique.
3. Application by Other Companies
4. Evaluating/Creating Applicability to the Chosen Company
   

   Contemporary Management Techniques: Sustainability

Additional guidelines:

1. Avoid using first and second person (e.g., “I,” “we,” “you,” etc.).

1. You must reference a minimum of 5 scholarly sources in addition to your Blocher et al. (2022) course textbook. Wikipedia, Investopedia, and other popular sources are not considered scholarly sources and should NOT be used. Articles from websites are good supplemental resources, but the bulk should come from scholarly journals. Please be sure to review the Online Writing Center’s webpage, “Choosing Appropriate Resources for Academic Papers,” as it specifically outlines Liberty University’s acceptable resources. A link to the Online Writing Center webpage is provided in the assignment description page on Canvas.

1. Any personal communication (if any) should be cited appropriately within the text; however, citations of personal communication are not needed for the reference section.
2. An abstract and table of contents are not needed.
3. Microsoft Word must be used.

There is only 1 submission attempt for this assignment.

See the Course Syllabus for the Late Assignment Policy. See the Learning Project: Contemporary Management Techniques Research Paper Grading Rubric for more information concerning the point breakdowns.

Note: Your assignment will be checked for originality via the Turnitin plagiarism tool.