The Future of Organizations is "Green"

Posted in Marketing & Strategy Articles, Total Reads: 2397 , Published on 28 February 2013
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The future of organizations is "Green". Green here means the Green Strategy of the companies. Nowadays we cannot miss the articles on environmental sustainability, in print, visual media and internet. The latest news that captured the world attention is that of premium Denim Clothing Manufacturer Levis going to launch a new variety of Denim Jeans made of garbage plastic. Earlier the same company engaged in backward integration by developing water less Cotton crops for their production .So why are companies coming with such diversified environment friendly projects?

 

Companies are under real pressure to become both lean and green in their product sourcing, logistics, distribution and operational practices. Companies have largely realized that going green is the need of the hour so that they can have a bright, green and a sustainable future ahead.

Leave alone companies, nations have started competing on being among the world’s strongest green nations. Countries like Korea, Malaysia and Thailand are all part of this new race. Educational systems have also been touched by the waves of green technology; they have decided to revamp the curriculum of schools and colleges and include subjects related to green technology which will hone the entrepreneurial skills of students with respect to this field.

Environmental responsibility has moved from a trend to a business strategy or a tool, it helps companies to achieve differentiation and attain their business goals. Companies are adopting sustainability practices for a number of reasons depending on the industries and geographies in which they operate.

We can see a new approach of marketing tools or strategy that has been evolving which can be called as Green Marketing tools.These Green marketing tools will enhance the companies’ image and will help build loyalty among customers. A simple approach a company takes by adding a green tagline to mails that says “please think green before printing this e-mail” can result in brand loyalty and appreciation from customers. Disclosing the environmental friendly practices of the organization to the shareholders and investors is an upcoming trend.

But what exactly is this Green strategy and Green Marketing tools? How can it become the future and differentiation factor for companies? Can a company aim to achieve competitive advantages through the implementation of green sustainable practice and if yes how? Are any companies already utilising this marketing tool to achieve greater customer satisfaction and competitive advantage? Is it possible to implement the Green strategy in all areas of management like Operations, Systems, Finance, Human Resource, Marketing. This article will try to answer all these questions.

Sustainability can be defined as reducing the carbon footprint by minimizing the waste and conserving the natural resources through innovation, communication and best manufacturing and operating practices. Organizations in today’s scenario try to conduct their business taking into factor the sustainability factor.

According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe. Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising.

For any business to run there should be a strong demand from the customers.Green marketing tools such as eco-label, eco-brand and environmental advertisement will make easier perception and awareness of green products attributes and characteristics, consequently, guiding the customers into purchasing environmentally-friendly products.Applying these policy tools plays an essential role to switch consumer’s actual purchasing behaviour to buy environmental friendly products, therefore, reduce the negative impact of synthetic products on the environment. Media play an important role in supporting the green initiative( Green stories in leading Newspaper Dailies ,magazines, big budget campaigns such as those for Apple’s Greenest Laptops, Toyota Hybrid Cars.

The application of green strategies are now becoming common in the area of operations and marketing .But we can implement this green initiative in the area of finance, Human resource, systems as well.

Implementing Green Strategy in the area of Finance: The concept of Green Finance

It includes financial activities that enhance the financial industry, improve the environment, and promote economic growth. This can be done through

  • Financing green enterprises and technologies
  • Development of tailor made financial products to meet needs of green companies at their different development stages and promote green investors
  • Consideration of environmental risks in lending decision
  • Promotion of Eco-friendly industries
  • Preference to Environmental Auditing and full cost accounting team.

Implementing Green Strategy in the area of Human Resource: The concept of Green Human Resource

It may include all those activities related to human resource including Human resource planning, Recruitment, Selection and training which upholds the idea of Green strategy. This can be done through

  • Paper less job applications, implementing online feedback systems
  • Incentives to employees engaged in CSR activities
  • Green training programmes to employees like effective use of machines, electricity consumption etc.

Implementing Green Strategy in the area of Systems: The concept of Green Systems

  • Efficient cooling of data centres.(the concept of Green Data Centre)
  • Energy saving installations and topology
  • Energy saving server architecture(racks, blades)

Let us now look at how the best of the best companies have adopted these green practices to differentiate themselves in the industry and how they are benefitting from it, along with luring more customers towards their products. Green practices have proven to be successful in all sectors indisputably; in manufacturing and non-manufacturing sectors and in services industry. The following are some examples of companies that have adopted these and have become trend-setters to the ones to follow:

Manufacturing sector shows immense development in this field. Toyota Company offered the Prius, the world’s first mass-market hybrid vehicle which is now sold in over 40 countries. It is world’s one of the least carbon-emitting automobile. The customers are also attracted to this innovation due to the cost they can save on the fuel. DuPont, the chemical manufacturer, has also pitched in by lowering its emissions of airborne carcinogens and greenhouse gases and has appointed an ex-Greenpeace head as the adviser to the board.

The Electronics manufacturing companies, spreading their tentacles in every geographic area today, can surely make a mass green movement. With e-waste piling up, Dell and Hewlett Packard have brought excellent modes of tackling this problem. Dell, through its “no computer should go to waste” recycling program, allows customers to return any Dell-branded or other brand products like computers, monitors or printers back to the company for safe disposal. It owns and operates “e-waste” recycling plants that shred discarded, obsolete computer products into raw materials that can be recycled into the industrial food chain.

Services sector is in no way lagging behind. Wal-Mart tops the list by being extensively eco-friendly. They have launched a long-term plan to power all its stores using 100% renewable energy sources. They are also committed to using and practising the waste-eliminating corporate philosophy.

The question that is curiosity arousing is how the finance and banking sector can implement green strategies. Bank of America is proving time and again that eco-friendly operations can go hand-in-hand with business growth. It has reduced paper usage by 32% from 2000-2005, by efficient use of paper and encouraging online transactions. They have an internal recycling program. An interesting practice they have adopted is to offer employees a $3,000 cash back reward for buying hybrid vehicles, thus promoting this trend. Starbucks with its “bean-to-cup” approach uses coffee cup sleeves made of recycled paper saving roughly 78,000 trees per year since 2006. Starbucks has also partnered up with many environmental organizations like Conservation International and the Earth watch Institute.

The green initiative is thus not just a fad; it has changed the way businesses should proceed for increased customer satisfaction. The future marketers should be aware of this initiative. Marketers should focus on this marketing strategy and must use Green marketing tool. For companies who have not joined the bandwagon, it is high time they pitch in before being left in the dust because the future of companies is in being GREEN!!

This article has been authored by Sanjeev S and Nandini Sudheer from SDM Institute for Management Development (SDM IMD)Mysore


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