Promoting Strategic Management Systems for Sustainable Business Models: Ideas and Guidance

Introduction

In the past couple of years, organisations have been faced with growing calls to focus, not only on financial returns but also on environmental, social, and governance issues within the sphere of the organisation’s influence, which implies integrating the notion of sustainability into the organisational framework and operating model. With these renewed calls for sustainability practices and principles in the organisational context, paradigms have shifted, and organisations are beginning to appreciate why financial performance is now inextricably linked to a robust sustainability strategy. A recent report by Mckinsey emphasised the idea that a robust synergy between sustainable business models and strategic management systems creates increased competitive advantage for the organisation. In addition, the Global Reporting Initiative (GRI) found that long-term shareholder value is created when sustainability is integrated into the organisation’s overall strategic framework. Tesla, Patagonia, and Unilever are all examples of organisations that have built sustainable business models via strategic management systems.

Evolution Of Strategic Management Systems And Sustainable Business Models

The Industrial Revolution, which began in the mid-18th century, necessitated the emergence of the concept of Sustainability in business operations. Though sustainability in business has taken on different names and evolved in forms over several decades. Sustainability and the industrial revolution are interdependent upon each other as sustainable goals induce industrial revolution and industrial revolution facilitates sustainability (Vivek et al., 2022).

In the 19th and early 20th century, some early environmentalists, such as John Muir and Henry David Thoreau, raised concerns about the impact of industrialization on the natural environment, leading to environmental awareness.

The mid-20th century ushered in more hope for sustainability as governments began to introduce environmental regulations in response to growing pollution and environmental degradation. The environmental movement in the United States, which is broad in scope, responded to growing industrialization, population, and pollution, as well as to resource exploitation (Lazarus, 2004), resulting in the establishment of agencies like the U.S. Environmental Protection Agency (EPA) in 1970 and landmark environmental laws like the Clean Air Act (1970) and Clean Water Act (1972) in the United States.