Academic journal article IUP Journal of Business Strategy

Inter-Firm Differences in the Sustainability Business Model: A Study on Select Firms from Agri-Food and IT Companies

Academic journal article IUP Journal of Business Strategy

Inter-Firm Differences in the Sustainability Business Model: A Study on Select Firms from Agri-Food and IT Companies

Article excerpt

Introduction

What does a Sustainability Business Model (SBM) look like? An SBM can be defined as one where sustainable development plays an integral role in shaping the core objectives of the firm and consequently its decision making (Wicks, 1996; and Stubbs and Cocklin, 2008). Such business models therefore incorporate a value proposition that reflects a balance between economic, ecological and social needs (Boons and Lüdeke-Freund, 2012) and organizations practicing such models therefore seek 'to deliver economic, social and environmental benefits...through core business activities' (Wilson et al., 2009). A business operating an SBM typically creates, delivers and captures value in a truly sustainable way by providing products and services that improve the quality of people's lives but do so within environmental limits (Uren, 2010).

Although it is not possible to provide a comprehensive prescription of an SBM based on the discussion in this paper, the following discussion draws out the salient features from Mother Dairy, Amul, Nestle, Wipro, Infosys and IBM business models that contribute to sustainability from the business models of select organizations, viz., Mother Dairy, Amul, Nestle, Wipro, Infosys and IBM that contribute to Sustainability. .

Figure 1 shows the internal organizational capabilities and socioeconomic characteristics identified by Stubbs and Cocklin (2008) and groups the characteristics into 'structural' and 'cultural'. Structural characteristics are those that relate to processes, organizational forms and structures, and business practices. Cultural characteristics refer to norms, values, behaviors and attitudes. The distinction between structural and cultural and between internal and socioeconomic is not absolute. There is an overlap in these domains. For example, some characteristics can be partially achieved through internal capabilities, but that also requires changes in the socioeconomic environment, such as eliminating waste and emissions, and implementing closed-loop systems. A long-term focus is required at both the organizational and socioeconomic levels. 'Patient shareholders' is classified as both structural (the ownership structure includes patient shareholders) and cultural ('patient' is a cultural attribute of shareholders) characteristic. In the following section, we discuss the sustainability initiatives of the select companies in the light of SBM given by Stubbs and Coklin. Table 1 shows the components of model suggested by them for business sustainability. The last characteristic, commercial/business characteristic, is added by the author in order to show the linkage between sustainable business activities and commercial activities of the select companies.

The present study focuses on two sectors-agri-food and Information Technology (IT). The rationale for selecting these two sectors is that both are important contributors to the growth and development of the Indian economy over the past many years. We selected three companies from IT sector-Wipro, Infosys and IBM for the present study. The major reason for choosing these three companies is that they are major players in IT sector.

Sustainability at Select IT Companies

Infosys: Infosys was ranked among Newsweek's top 10 green global companies. The company's Software Development Block 5 in Mysore was conferred with the Leadership in Energy and Environmental Design (LEED) Platinum rating by the Indian Green Building Council (IGBC). It is the third Infosys building with a platinum rating. Infosys has a cumulative platinumcertified building area of 780,000 sq. ft.

Wipro: Wipro was rated as "Prime B+" by Oekom, leading European sustainability rater: Wipro was ranked global No. 1 in the IT services sector. The company is recognized as a leader in 'Computer Services and Internet' sector in Dow Jones Sustainability Index-2012 for the 3rd consecutive year. Wipro featured in the Greenpeace Cool IT Leaderboard rankings for the third consecutive year (ranked 5th in 2013). …

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