Sustainability Assignment Analysing Business Ethics & Sustainable Culture

Question

Task: Instructions

Entrepreneurs see customer needs that others ignore and identify innovative solutions before others see the value. Therefore, curiosity and marketplace awareness are critical to entrepreneurial success. For this entrepreneurship assignment, you are supposed to write a short report on the topic “Innovations that will shape the future”.

The Case Study (Rushe, D. (2021). A tiny Alaska town is split over a goldmine. At stake is a way of life) is available on Blackboard, and you can find it online here:

https://www.theguardian.com/us-news/2021/jun/22/alaska-haines-village-salmon-fishing-gold-mine

This sustainability assignment must follow the academic integrity guidelines stated in the Business Programmes Assessment and Study Handbook or the Law Programmes Assessment and Study Handbook and use the required referencing style.

ANSWER THREE OF THE FOLLOWING FIVE QUESTIONS

Question 1 (Developing an Ethical Culture)
Drawing on the assigned reading (Nicholson et al., 2017) and the course content for Week 5, develop an argument against the Palmer Project mine that draws on an indigenous perspective on the relationship between people and the natural world. Your answer should refer to facts and examples from the Case Study.

Question 2 (Business and its Stakeholders)
The Palmer Project mine has many stakeholders. Draw on the assigned reading* (Freeman, 2013) and the course content for Week 6 to explain what the project would need to consider if it was to follow Freeman’s “new story of business”. Your answer should refer to facts and examples from the Case Study.

* If you are not able to access the required reading for Week 6 (Freeman, 2013) the following blog posts cover the same material.

Hodgkins, J. (2017, December 1). It Is Time to Replace the Old Story of Business with a New Narrative. https://blogs.darden.virginia.edu/ibis/2017/12/01/professor-ed-freeman-it-is-time-to-replace-the-old-story-with-a-new-narrative/??

Hodgkins, J. (2017, December 15). The New Story of Business: Towards a More Responsible Capitalism. https://blogs.darden.virginia.edu/ibis/2017/12/15/professor-ed-freeman-the-new-story-of-business-towards-a-more-responsible-capitalism/

Question 3 (The Deep Causes of Sustainability Problems)
In Week 8 we asked you to pay attention to your consumption of single-use plastic. Based on that experience and on the ‘Systems Iceberg’ model discussed in Week 9, explain some of the things that would need to change at the ‘Underlying Structures’ level and at the ‘Mental Models’ level in order for society’s consumption of single use plastic to significantly reduce.

Question 4 (The Business Case for Sustainability)
Imagine that you run a sustainable tourism company around the Chilkat River. Drawing on the required reading (Whelan & Fink, 2016) and the course content for Week 10, list three business benefits that you might experience because of your commitment to sustainability, and clearly and fully explain why you could expect these benefits to occur. Your answer should refer to facts and examples from the Case Study.

Question 5 (The Social Responsibility of Business)
The ‘Modern Social Contract' approach to the social responsibilities of business holds that “since the corporation depends on society for its existence and continued growth, there is an obligation for the corporation to meet the demands of that society rather than just the demands of a targeted group of customers” (Ghillyer, 2020, p. 68).

Do you think the social contract approach would support or oppose the Palmer Project? Explain your answer, drawing on the assigned reading (Ghillyer,?2020) for Week 11, and on facts and examples from the Case Study.

Reference List?
Freeman, R. E. (2014, January 26). Business is about purpose. https://www.youtube.com/watch?v=7dugfwJthBY??

Ghillyer, A. (2020) Management without conscience. In Business Ethics Now (pp 66-67) McGraw-Hill Education. [Available via ‘Course Resources’, Week 10]?

Nicholson, A., Spiller, C., & Pio, E. (2019). Ambicultural governance: Harmonizing Indigenous and western approaches. Journal of Management Inquiry, 28(1), 31-47. [Available via ‘Course Resources’, Week 5]?

Rushe, D. (2021). A tiny Alaska town is split over a goldmine. At stake is a way of life. Available at: https://www.theguardian.com/us-news/2021/jun/22/alaska-haines-village-salmon-fishing-gold-mine

Whelan, T., & Fink, C. (2016). The Comprehensive Business Case for Sustainability. Available at: https://hbr.org/2016/10/the-comprehensive-business-case-for-sustainability

Answer

Answer 1

As per the case considered in this sustainability assignment, Palmer-project is a sulphide-sulphate project that is located in the coastal-southeast Alaska, whose fundamental objective is to establish diverse metal-mines with silver, zinc, copper and gold. It is currently at exploratory stage; however, as Dowa has taken over this project it has given new impetus to this project (Rushe, 2021). It is estimated that this project would benefit approximately 300 people living in adjoined communities by creating jobs in diverse metal-mine. However, a range of different ethical issues has already arisen in this project, which must be considered before it steps into the next stage. “Haines” is the nearest indigenous community to the Saksaia Glacier Palmer project and poses a significant threat to this community. In South-Eastern Region of Alaska, the climate crisis has already led indigenous people to face negative consequences. The project is waiting for approval and after getting the same, final project work will be initiated.

Tribal community is extremely worried about consequences of this project as there would be huge risks of contamination from mine as it has potential to destroy ecosystem and damage lives of Salmon fish. This project is likely to benefit people by creating jobs and is most likely to generate large profit in long-term. However, project or business that is unable to contribute to well-being of society is not worth continuing as businesses are part of the world and hence they should care about their stakeholders including community (Nicholson et al. 2019). Palmer Project has not focused on involving indigenous community and has not considered well-being of its key stakeholder that is community. Lack of coordination and communication between this stakeholder and palmer project authority has led to the rise of ethical issues. Even leader of Haines tribal community is afraid of speaking up regarding their issues concerning Palmer project (Rushe, 2021). Haines community depends largely on fisheries for their earnings and hence, damages caused to lives of Salmon Fish will also threaten lives of people belonging to Haines Community. According to Chief executive of Constantine, main investor and stakeholder of Palmer project, project authority is aware of concerns of Haines Community and they will always ensure that project will not pose any threat to local community.

However, as there are many previous records concerning destruction of fisheries due to contamination from mines, according to authority of “Alaska Clean Water Advocacy”, this presents significant risk of polluting public water along with destroying fishery resources (Alaskapublic.org, 2019). Therefore, it is essential to note that, Palmer project is likely to face resistance from indigenous community and hence, final implementation of this project will be challenging. As cited by Nicholson et al. (2019), businesses and indigenous culture are often not in conflicts with each-other. Previously, various projects were able to establish a positive relationship between natural world and business through ethical governance. However, Palmer project is recognised as profit-oriented until now as focus of this project is to generate economic wealth instead of focusing on cultural integrity. Business success is not only dependent upon wealth creation; however, also on its intention to carry out business activities in an ethical and sustainable manner. Constantine has taken no significant step to integrate natural world with this project as it aimed only at creating jobs for community rather than aiming at ensuring proper well-being of community.

Besides that, community is largely dependent also upon elements of natural environment such as fish, eagles and bears as millions of tourists visit this place every year to witness beauty of world’s “largest convocation of bald eagles” (Rushe, 2021). However, water pollution will not only destroy lives of salmon fishes; however, will also destroy entire ecosystem by resulting in death of a number of wild lives such as eagles as bald eagles require very good food-base for their survival and their main food is Salmon. Hence, with destruction of wild lives, there will be significant decline is number of tourists visiting Alaska for watching convocation of eagles, and it will close the income of people living in indigenous community. Therefore, to be successful fundamental attention should be on developing an ethical culture by adopting am bicultural approach through which it can ensure success while considering well-being and best-interests of indigenous community (Nicholson et al. 2019). To enhance acceptance amongst tribal communities, an effective strategic decision-making approach should be undertaken for ensuring collective well-being. Nicholson et al. (2019), in their article, illustrated ways “Kaitiakitanga Stewardship Approach” can be adopted for carrying out business activities in sustainable manner by following principles of a strategic-decision-making model.

Wakat?, an organisation that followed this approach, placed cultural integrity at core of its business for ensuring adherence to ethical principles and it considered interests of “iwi”, an indigenous community through empowerment. It allows for development of inter-relatedness between ecosystem and businesses (Marques & Baker, 2019). Therefore, to reduce ethical risks, Palmer-project authority should also comply with this approach in management and planning processes that would help it in developing ways of taking care of natural resources in an optimal manner.

Answer 2

Freemans “new story of business” emphasised restructuration of business by reviewing their responsibilities and roles towards their stakeholders. Entire focus of Freeman’s book was on sustainability and corporate-social responsibility of businesses for ensuring that businesses are capable of creating value for their stakeholders while generating profit. Freeman further differentiated ways value creation for shareholders and stakeholders is different and ways both aspects should be emphasised (Freeman, 2014). Stakes of different stakeholders are closely involved in Palmer Project and major stakeholders of this project are not only Constantine-Metal Limited and Dowa; however, also Haines community and leader “Alaska Clean Water Advocacy” and so on. However, Palmer project authority has not yet taken any proper measure for considering all stakeholders’ interest, which is often evident in their lack of initiative towards collecting or accepting issues and inputs of stakeholders.

This is perhaps due to reliance on out-dated hierarchical business models according to which business executives are responsible solely for profit maximisation of shareholders (Hodgkins, 2017, December 1). Palmer Project is focused on creating summer jobs for people after landslide for facilitating purchase of homes; however, lack of initiative for involving Haines community for strategic decision-making has caused stakeholders to develop dissatisfaction and it is enhancing risk of facing resistance issues during implementation stage of this project. Therefore, it this project would follow “New story of business” by Freeman, it would have required to consider certain principles while continuing with decision-making and planning process. For example, it would have required to emphasise responsible capitalism according to which businesses are not only responsible for making profit or generating economic wealth’ however, also responsible for creating values for creating value for stakeholders by adopting ethical business approach instead of adopting an profit-driven business approach to treat them ethically (Harrisonet al. 2019).

Freeman reviewed stakeholder theory and distinguished concepts of shareholders and stakeholders. According to him, stakeholders and businesses are interdependent and hence, businesses should capture stakeholder interdependence by creation of value. Businesses must focus on encompassing shared values in all their activities that influence stakeholders including the community (Hodgkins, 2017, December 15). Therefore, it is vital for Constantine authority to consider best interests of Haines community rather than focusing only on profit generation. Major principles of “New Story of Business” are based upon fact that businesses should be able to adopt stakeholder approach and should collaborate with stakeholders for creation of value. Hence, Constantine should have involved Haines community and its leaders actively during planning and decision-making stage for ensuring creation of shared value by understanding concerns of Haines community and determining best ways of having a positive influence on community. Constantine Metal-Resources would have to follow three principles:

Businesses’ purpose does not only involve profit-generation
Ethics and business should go hand-in-hand
Human-nature is complicated and hence, they are able to collaborate for creation of value

sustainability-assignment-a

Figure 1: Principles of Freeman’s “New story of business”

Besides that according to chief executive and other shareholders of Constantine, they are aware of concerns of Haines community. For this they are working on this project in ways that will not pose a major threat to community (Rushe, 2021). However, Haines community is not aware of this and hence, some conflicts have arisen amongst anglers and other ibdigenus people living in Haines community regarding ways this project will bring negative consequences by causing deaths of fishes and eagles. According to arguments of Freeman, for businesses to operate uninterruptedly, it is essential for the leaders to determine businesses’ influence on all stakeholders rather than considering impact on stakeholders, who are involved actively in business. For this, an example of Nestle has been provided as this organisation prioritised shared value by ensuring positive impact on its stakeholders including community and other individuals. “Little Yellow-Bird” is also committed to sustainable sourcing of products for ensuring its avoidance to negative impact on community.

Stakeholder-Theory of Freeman views enterprises in term of their relations with big set of stakeholders or partners (Harrison et al. 2019). Thus, enterprises following this theory must be able to work for best interests of stakeholders who do not only influence their business; however, businesses also influence them. Constantine should have kept into account risks of Haines community and fishermen who are dependent upon Salmon fishes for their earning in case of deaths of fishes due to contamination from mine.

Apart from that, it should have communicated formally with directors of “Alaska Clean Water Advocacy”, which is a powerful stakeholder and has potential to stop project work, as there is evidence of water pollution and destruction of fisheries due to contamination from mines in previous projects. Constantine is likely to face significant resistance from these stakeholders, which requires proper communication with “Alaska Clean Water Advocacy” to communicate precautions it has already taken for reducing negative impact on water and fishes. Hence, it is essential for identifying problems and needs of different stakeholder groups (Brajer-Marczak et al. 2021).

Answer 4

Tourism businesses around Chilkat River should adopt a sustainability approach as fishes are inhabitants of Chilkat River and therefore, there should be avoidance of causing any damage to these lives. This region’s Indigenous people are dependent largely on fishes for earnings. Fundamental objective of sustainable tourism business should be to integrate ethical approach with profitability approach for operating successful business. Principles of a sustainable business include creation of shared values, optimum use of natural resources, reduction of negative impact on community and other stakeholders (Whelan & Fink, 2016). For enhancement of stakeholder loyalty and reduction of any potential regulatory risks it is essential to adopt ethical approach.

sustainability-assignment-b

Figure 2: Benefits of sustainable-tourism business around Chilkat River

Most importantly, sustainable businesses are likely to gain customer loyalty through their initiatives for making the world better for everyone by reducing their negative impact on people and resources. As stated earlier, traditional business-models are focused on value-creation for shareholders only, which is not enough for ensuring sustainability of businesses in long-run. However, businesses following new business models can identify that it is possible to generate economic wealth by addressing and identifying social issues, which intersect with businesses. There is much evidence, where companies were able to experience a significant increase in their profit margin by embedding a sustainability approach at core of their business that helped in creation of stakeholder-value and ensuring customer loyalty.

An awareness regarding environmental and social sustainability influences altruism that influences customers positively by enhancing customer loyalty (Panda et al. 2020). Therefore, sustainable tourism business on the banks of Chilkat River can derive maximum benefits by adopting a sustainability approach. Sustainable tourism business will ensure sustainability by protecting lives of fishes by reducing wastes and by using natural resources such as water in an optimal way.

Enhanced engagement by stakeholders through ethical approach can enhance opportunities for businesses in gaining maximum competitive advantage over their competitors as customers nowadays prefer businesses that care for environment and its people to have positive influence on their bottom line. Sustainable tourism encompasses both sustainable development and tourism through environmental protection (Ryglová et al. 2018). Through sustainable tourism the business will be able to gain immense support from tribal communities that will help in avoiding chances of resistance in operating business. Besides that, as there will be no risk of damage to lives of fishes or other wild lives such as eagles and bears and it will create a sustainable ecosystem. Tourists will be attracted towards this destination as bald eagles are special attractions of Southeastern Alaska (Rushe, 2021). It will help in enhancing profit of tourism business by attracting tourists from different places. In this context an example can be provided for analysing ways sustainable approach can benefit businesses in terms of profitability. Allbirds is a shoe company, which has always aimed at presenting its business in a purpose-driven manner as consumers nowadays want businesses to utilise their money in supporting well-being of society and community. Allbirds communicated its commitment to sustainability with its customers for gaining their loyalty.

It helped this business to become one of fastest growing companies across world. It also focused on using sustainably sourced materials for reducing their footprints on environment that further aided in reducing environmental risks as climate changes are likely to have significant negative impact on supply-chain, which can stop entire business activities. In case of tourism, climate changes will cause businesses to face huge losses as it will disrupt tourist travel to a significant extent. Hence, a sustainable approach would help this business to avoid risk of facing consequences related to climate change and hence, it will ensure effective risk management. Indigenous Community-participation in development of sustainable tourism can help in making informed decisions by providing insights into ways businesses can derive maximum benefits from specific area (Ngocet al. 2021). Hence, by adopting sustainable and ethical approach tourism business around Chilkat River will encourage participation of Haines Community for gaining their inputs on ways this place can be beneficial for this business. Tourism company will be able to determine best ways of reducing risks of facing issues related to scarcity of resources by placing sustainability at core of its business. As part of social-responsibility, this business will create jobs for local indigenous people that would further improve its image amongst its stakeholders and it will help this company to reduce its expenditure as there will be less expenses required for recruiting local people. This would also help it to gain immense support from local government that would help it to ensure its survival in long-run. Therefore, commitment to sustainability will ensure its profitability, survival and tourist loyalty.

Reference List

Alaskapublic.org (2019). The Palmer Project, a mining prospect outside Haines, could transform into a large-scale operation Retrieved on 18th October 2021 fromhttps://www.alaskapublic.org/2019/12/09/the-palmer-project-a-mining-exploration-outside-haines-could-transform-into-a-large-scale-operation/

Brajer-Marczak, R., Marciszewska, A., & Nadolny, M. (2021). Selected Determinants of Stakeholder Influence on Project Management in Non-Profit Organizations. Sustainability, 13(16), 8899. Retrieved from https://www.mdpi.com/2071-1050/13/16/8899/pdf

Freeman, R.E. (2014). Business is about purpose. Retrieved on 16th October 2021 from https://www.youtube.com/watch?v=7dugfwJthBY

Harrison, J. S., Barney, J. B., Freeman, R. E., & Phillips, R. A. (Eds.). (2019). The Cambridge handbook of stakeholder theory. Cambridge, UK: Cambridge University Press.

Harrison, J. S., Felps, W., & Jones, T. M. (2019). Instrumental stakeholder theory makes ethically based relationship building palatable to managers focused on the bottom line. Academy of Management Review, 44(3), 698-700. Retrieved from https://scholarship.richmond.edu/cgi/viewcontent.cgi?article=1085&context=management-faculty-publications

Hodgkins, J. (2017, December 1). It Is Time to Replace the Old Story of Business with a New Narrative. Retrieved on 18th October 2021 fromhttps://blogs.darden.virginia.edu/ibis/2017/12/01/professor-ed-freeman-it-is-time-to-replace-the-old-story-with-a-new-narrative/

Hodgkins, J. (2017, December 15). The New Story of Business: Towards a More Responsible Capitalism. Retrieved on 18th October 2021 fromhttps://blogs.darden.virginia.edu/ibis/2017/12/15/professor-ed-freeman-the-new-story-of-business-towards-a-more-responsible-capitalism/

Marques, B., & Baker, A. B. A. (2019). Rural Landscape Signatures. Acta Architecturae Naturalis, 5, 37-51. Retrieved from https://scholar.google.com/scholar?as_ylo=2017&q=Kaitiakitanga+stewardship-approach&hl=en&as_sdt=0,5

Ngoc, P. B., Tien, N. H., & Trang, T. T. T. (2021). Current Path to Community Based Sustainable Tourism Development of Khanh Hoa Province in Vietnam. Sustainability assignment PalArch's Journal of Archaeology of Egypt/Egyptology, 18(09), 508-525. Retrieved from https://archives.palarch.nl/index.php/jae/article/download/9335/8637

Nicholson, A., Spiller, C., & Pio, E. (2019). Ambicultural governance: Harmonizing Indigenous and western approaches. Journal of Management Inquiry, 28(1), 31-47. Retrieved from https://journals.sagepub.com/doi/pdf/10.1177/1056492617707052

Panda, T. K., Kumar, A., Jakhar, S., Luthra, S., Garza-Reyes, J. A., Kazancoglu, I., & Nayak, S. S. (2020). Social and environmental sustainability model on consumers’ altruism, green purchase intention, green brand loyalty and evangelism. Journal of Cleaner production, 243, 118575. Retrieved from https://derby.openrepository.com/bitstream/handle/10545/624197/JCLEPRO-D-19-07333R1-pages-2,27-60.pdf?sequence=1

Rushe, D. (2021). A tiny Alaska town is split over a goldmine. At stake is a way of life. Available at: https://www.theguardian.com/us-news/2021/jun/22/alaska-haines-village-salmon-fishing-gold-mine

Ryglová, K., Rašovská, I., Šácha, J., & Maráková, V. (2018). Building customer loyalty in rural destinations as a pre-condition of sustainable competitiveness. Sustainability, 10(4), 957. Retrieved from https://www.mdpi.com/2071-1050/10/4/957/pdf

Whelan, T., & Fink, C. (2016). The Comprehensive Business Case for Sustainability. Retrieved from https://hbr.org/2016/10/the-comprehensive-business-case-for-sustainability

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