Academic journal article Journal of Business Economics and Management

The Model for Evaluation of Corporate Strategic Changes in the Context of Climate Change: Plywood Manufacture

Academic journal article Journal of Business Economics and Management

The Model for Evaluation of Corporate Strategic Changes in the Context of Climate Change: Plywood Manufacture

Article excerpt

Introduction

In market economy countries, corporate strategic changes are a continuous phenomenon. This natural process is stimulated by competition, market changes and processes of integration and globalisation of economic systems. They affect virtually all sectors of economic systems as to the increasing competition of business entities and their desire to maintain or strengthen positions in competitive markets on national or international scales.

Nevertheless, in addition to this context, the adopted United Nations Framework Convention on Climate Change (UN 1998) has set economic challenges for global economic systems for decades ahead. As a consequence, businesses have became increasingly engaged in rationalisation of the use of their human, material and financial resources aiming to reduce carbon (1) emissions resulting from production intended to maintain and strengthen competitiveness.

The last decade of the economic system development has shown that corporate strategic changes in the context of climate change are a complicated task for enterprises, which is related to a great risk due to its essentiality and extent. Business entities are facing contradictions: short or mid-term success versus long term sustainable development; efficiency versus creativity; exploitation versus exploration; speed versus time-consuming resource building (Nonaka, Toyama 2002). Economic performance is influenced positively not only by the degree of diversification, for instance, but also by the ability of the company to increase its corporate coherence as the ability to generate and explore synergies of various types (Paulet 2008).

These factors reveal the necessity for complex improvement of the management of corporate strategic changes. It needs solutions, which would give a possibility to an enterprise, acting in the changing economic environment, to rationalise the management of the combination of its human, material and financial resources and other relevant strategic property thus increasing the competitiveness of an enterprise and reducing carbon emissions (UN 1998; EP 2009; EC 2013).

1. Climate change and corporate strategic changes

Physical impacts of climate change are already felt in most parts of the world. In the past decade, Europe has seen an increasing number of extreme weather events (Stern Review 2006). The EU Climate Change Policy is aimed at keeping the global warming below 2[degrees]C compared to the temperature in pre-industrial times (EC 2009). This level is considered sufficient to reduce the probability of irreversible and extremely damaging effects but will not suffice to avoid a change in the currently experienced climatic conditions (UN 1998). A consensus is emerging that addressing climate change will require a cut in global greenhouse gas emissions of at least 50% by the middle of the century--considerably more in developed countries--which will have to bear the brunt of the abatement effort (EP 2009).

In this context, attention needs to be focused on Europe 2020 Strategy on smart, sustainable and inclusive growth and the Roadmap for moving to a competitive low carbon economy by 2050 (EC 2013), which establish the following three key climate change objectives mandatory for all EU Member States: reduce greenhouse gas emissions by 20%, increase the share of renewables in the EU energy mix to 20%, and achieve a 20% improvement in energy efficiency by 2020.

It is evident that in the light of increasing significance of climate change, enterprises will be required to adapt to changing regulatory frameworks--such as constraints on carbon emissions for sectors of energy production, car and aircraft manufacturing, construction, maritime and aviation as well as many other energy intensive industries; or the EU Emissions Trading Scheme (2) (EU ETS; EC 2013)--all of which lead to strategic changes. Furthermore, three key climate change objectives mentioned above will represent at least 20% of EU spending in the period 2014-2020 and therefore be reflected in the appropriate instruments by each EU member state to ensure that they contribute to strengthen energy security, building a low-carbon, resource efficient and climate resilient economy that will enhance Europe's competitiveness and create more and greener jobs (EC 2013). …

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