Sustainable growth: Combining ecological issues into strategic planning

Keyword: Ecology, Strategic Planning, Sustainability

ABSTRACT: Twenty-first century, come into view for a growing number of businesses and also its
environmental issues are emerging with increasing frequency as strategic problems. If human activity is to be
sustainable, then strategic behavior of companies must take account of the structural elements. Researchers
in the western societies are trying to realize how the companies amalgamate the sustainability issues into
their strategies. No such study has been reported on companies operating in the Asian countries especially on
Bangladesh. This paper reports the findings of a case study research on this issue, which was conducted on
three local and multination companies operating in Bangladesh. Two frameworks were applied to analyze the
nature and extent of integration of environmental management practices into the organizational strategic
planning process. The study reveals that the majority of the sample companies have well-developed
environmental management systems in place which satisfies the requirements of the strategic planning
criterion of the business excellence framework. There is no plethora report or findings on these issues but
here the researchers tried to conduct an empirical study which gave some expected findings at least.

1 OBJECTIVES OF THE STUDY is no plethora works in Bangladesh in this regard

This study is empirical and have highlighting and
evaluating the relevant issues on Bangladesh such as
ecological transformation of the modern
organization, industrial ecology, environmental
drawbacks of production, framework conditions for
industrial-ecological capacity and capability,
corporate greening Process and best environmental
practices in an organization. Within these topics, the
researcher mixed lot of information regarding
Bangladeshi reputed companies who are trying hard
to adopt environmental issues then incorporated it to
their strategic planning.
2 SCOPE AND METHODOLOGY OF THE
STUDY
The study is complete empirical one. No primary
data has been collected except some sort of
interviews have been taken in unstructured way to
let know about company’s strategic planning
regarding environmental issues. The total samples
were three reputed company such as Unilever, Glaxo
SmithKline and Berger paints. In addition, review all
the websites of respected institutions for updated
information. In the other hand, the researchers have
also reviewed several foreign research works. There
specifically. This is why, the researchers found some
interest to do some works based on several
secondary literature and present status of
Bangladesh over ecological issues.
3 INTRODUCTION
Research and industrial practice within industrial
ecology today still focuses much more on the
industrialized countries and as well as developing
countries. It is also faraway additional concerned
with industrial responsibility towards future
generations than of today’s problems of global
distributive impartiality. This is followed by
arguments for why industrial ecological principles
may favorably be engaged in the organization to a
larger extent than now, and how this can contribute
to the further development of industrial ecology as a
discipline (Buen Jørund, 2001). Business
organizations, large and small, are wrestling with the
stress of environmental performance (Kolluru,
1993). Changes in business operations have been
occurring throughout the modern environmental era,
but incremental alteration are no longer adequate;
whole new ways of mechanized and running natural
resources are emerging to provide somewhere to
stay environmental requirements. Conceptualizing

Electronic copy available at: http://ssrn.com/abstract=1302271

organizational purpose in terms of sustainable
economic and environmental performa nce signals a
major shift in thinking about the impact and
significance of ecological factors. What were once
viewed as by-products of industrial progress are now
seen as societal problems (James E. Post and
Barbara W. Altman, 1994)? The concept of
sustainability has been introduced to combine
concern for the well-being of the planet with
continued growth and human development. Though
there is much debate as to what the word actually
suggests, we can put forth the definition offered by
the World Commission on Environment and
Development: "Meeting the needs of the present
without compromising the ability of future
generations to meet their own needs." In its original
context, this definition was stated solely from the
human point of view. In order to embrace the idea of
ecology with intrinsic value, the meaning must be
expanded to allow parts of nature to meet their own
needs now and in the future (The Hannover
Principles, 2000).1 Industrial ecology is directly
related with the industry policy that is why company
must draw ecological guideline for himself.
4 ECOLOGICAL TRANSFORMATION OF
THE MODERN ORGANIZATION
The importance of environmental matters is
reinforced by the massive amount of indications that
send the message to business. Three distinct forms
of environmentalism appeared between the 1970s
and the 1990s, each emphasizing a different mixture
of legal, market, and value-based or ethical
considerations.
4.1 Observance based environmentalism:
It is always important for the central government to
implement environmental practices in any type of
organizations through different legal agencies as per
observation. Organizational current statutes,
administrative regulations and court decisions have
resistant a central public policy message of societal
concern for the environment.
4.2 Market driven environmentalism:
To a business community eager to improve
efficiency, productivity and the bottom line,
pollution prevention warranted a close look. Today’s
1 to product, to obsolete product, and to ultimate
The Hannover Principles, Design for Sustainability Prepared
for EXPO 2000, The World’s Fair Hannover, Germany
William McDonough & Partners
Electronic copy available at: http://ssrn.com/abstract=1302271
businesses are complete based on market demand
and also it is operated as per market driven way.
That is why, it is important for the organization that
environmentalism should be maintain by market
driven way.
4.3 Value -driven environmentalism:
Marketing experts discovered that consumers were
willing to act on their environmental values and vote
with their dollars. Sales of environmentally- friendly
goods rose sharply, and such “green”. Politicians
also discovered the ability of environmental issues to
stimulate voter support or hostility. Media attention
grew as city newspapers named environmental
reporters and editors; some carried regular
environmental features.
4.4 Barriers to Change into environmentalism
Sustainable development cannot be achieved without
substantial co-operation and involvement of
business. Since formidable barriers obstruct
management efforts to transform the way a firm’s
strategic decisions are made and routine operations
conducted. An extensive review of published and
unpublished case studies of manufacturing and
service firms dur ing the past three years has led us to
conclude that there are two basic types of barriers:
industry barriers which reflect the special and unique
features of the business activity in which the firm
engages; and organizational barriers that are not
unique to environmental problems, but which affect
a firm’s capacity to deal with any form of change,
including environmental change(Gore, 1992;
Schmidheiny, 1992).
5 INDUSTRIAL ECOLOGY
Definition of industrial ecology, which clearly
shows that a holistic approach to energy and
environmental questions forms part of the
fundament for industrial ecology “Industrial
ecology is the means by which humanity can
deliberately and rationally approach and maintain a
desirable carrying capacity, given continued
economic, cultural and technological evolution. The
concept requires that an industrial system be viewed
not in isolation from its surrounding systems, but in
concert with them. It is a system view in which one
seeks to optimize the total materials cycle from
virgin material, to finished material, to component,
disposal. Factors to be optimized include resources,
energy, and capital”(Graedel and Allenby 1995).

There is still disagreement both among researchers
and industry representatives about what principles
and practices are actually included in industrial
ecology. While most researchers and practitioners
would agree that the unit of analysis is material and
energy flows, views differ widely as to (den Hond
2000):
1. Whether industrial ecology should restrict itself
to describing these material and energy flows, or
engage in analyzing the systems for managing
them, or even suggest improvements to these
systems; and
2. What the system boundaries should be?
Industrial ecology is a new concept; the
discipline is so far a collection of very different
terms and strategies with different scope, rather
than a clearly defined and unitary theory
specifying clear strategies for its industrial
implementation (O’Rourke et al. 1996).
It is possible to shape out a set of fundamental
characteristics of industrial ecology. However, this
does not prevent different actors from claiming that
everything from incremental improvements in
existing environmentally injurious products in a
limited geographic area, to radical change in the
global industrial system in an environmentally
friendly direction, fall within industrial ecology.
Industrial ecology, which includes physical,
biological, chemical, organizational and institutional
aspects of material and energy flows, as well as the
flows’ transboundary character.
Fundamental elements of industrial ecology
Industrial-ecological research and practice today
have much in common with ecological
modernization, which is a generic term for
descriptions and analyses of established government
and economic actor’s response to pressure for action
in environmental matters. Ehrenfeld (1994) claims
that what he calls the industrial ecology paradigm is
based on the following fundamental elements:
1. The globe is a closed ecological system. The
goal is therefore regarded to be to optimize
material cycles – both in terms of capital-,
energy- and resource use – from raw material via
processed material and product to waste product.
Design for the environment is also central in this
regard.
2. The ecosystem has been developed in a close
relationship with each other. Nature has intrinsic
value, visualized through economic activity, and
human beings therefore have an ethical and
moral responsibility towards nature.
3. Sustainability means that human and natural
capital is maintained intact independently of
each other. In other words, industrial ecology
often operates with a” strong” definition of
sustainability. A” weaker” definition would only
require that the sum of human and natural capital
is kept intact.
4. Economic activity based on services, not goods,
is given priority. Quality of life is emphasized
rather than living standards. Taking
technological realism as a point of departure, the
precautionary principle, including a conscious
product policy and life-cycle assessment, should
be employed to meet uncertainty.
6 FRAMEWORK CONDITIONS FOR
INDUSTRIAL-ECOLOGICAL CAPACITY
AND CAPABILITY
In addition, it is important to note that not only the
material infrastructure is insufficient. The
organizational and institutional infrastructure in
these countries has clear weaknesses as well. This
conditions is environmental and energy technology
transferred from the developed to developing
countries. There are several things are involved such
as economic and financial framework conditions;
Cognitive and informational framework conditions;
and Technical framework conditions.
6.1 Changes in framework conditions:
Some of the most important causes of this change
are that the environmental technology industry in
existing markets, environmental requirements
following the whole lifecycle of products are
emerging in developing countries and form the basis
for global industrial environmental standards. Again,
bi- and multilateral donors try to provide the
necessary framework conditions for private
investment and the establishment of new businesses
in the environmental and energy sectors. (Jansen
1994).
6.2 Production and consumption faces of the
same problem:
Industrial production has contributed to the
improvement of our quality of life. For most of us it
is difficult to imagine not having access to consumer
goods ranging from electronics, textile, foodstuff
and beverages to sophisticated transport and
communication means. However, while consuming,
we usually do not recognize the environmental costs
involved because they are externalized (Kennedy,
1996). The underprivileged sectors of society have
to bear the consequences from pollution and the loss
of biodiversity, natural landscapes and cultural
heritage. Manufacturing still depends mainly on the
extraction of natural resources and much less on the
use of recycled materials (Hall, 1991 and Reborati,
1999). Production does not exist without
consumption; hence consumers are also responsible
for the negative drawbacks from their adopted
lifestyle. Environmental education is a medium to
long-term measure that can help to change
consumption and lifestyles towards the preference of
products that are less resource and more labor-
intense (Hawken, 1993, pp. 116-22). This way
environmental damage could be prevented in first
place and expensive costs related to clean-ups and
rehabilitation measures could be economized.
Production that creates high levels of employment
under fair conditions also contributes to a better
distribution of wealth.
6.3 Industrial development and the environment:
The early industrialization in Bangladesh was based
on the expansion of the primary sector and the
import of raw materials. When the Government
initiated a development shift towards import
substitution and began to build up an independent
national industry. These different periods of
industrial growth have originated a strong and
diversified industrial sector, with a noticeable trend
towards manufacturing industrie s. The limits to
growth-oriented industrialization were obvious
decades ago, when socio-economic inequities and
environmental impacts became evident. However,
governmental policies still continued to stimulate
investment in industrial production regardless of the
possible scope of resulting environmental trade-offs.
Often more sound developments are prevented in
view of the actual and expected benefits from the
global economic market and from elevated
consumption levels.
7 ENVIRONMENTAL DRAWBACKS OF
PRODUCTION
Environmental impacts are often considered
necessary side effects of development or the price to
pay in order to achieve progress (Furley, 1996;
Hesselberg, 1992; Weissman, 1993). The
atmosphere, watercourses, oceans and holes in the
ground left open from previous mining activities are
treated as natural recipients for the waste resulting
from extraction, transportation, production and
consumption. However, industries are certainly not
the only factors that put pressure on the
environment. Agricult ure, mining, forestry, fisheries,
transport, housing, leisure and tourism also leave
their footprints on the environment. Among the most
severe impasses directly and indirectly related to
production in general are:
1. Unrestricted exploitation of non-renewable
natural resources such as minerals and
petroleum;
2. Monoculture production systems in agriculture
and forestry, over fishing and overuse of
freshwater resources in industry and agriculture;
3. Contamination of soil, water and air due to
production processes;
4. Generation of waste and inadequate final
destination of used products;
5. Reduction of biodiversity due to deforestation,
erosion, and soil impermeable;
6. Climate change in response to the emission of
greenhouse gases and damage to the ozone layer.
7.1 Air pollution and industrial production:
For being small and numerous these firms are often
excluded from the public pressure to become
cleaner. Small-scale industries usually do not have
the funds to upgrade their processes. They have to
rely on government financial support or other low
interest funding schemes to improve their
environmental performance.
7.2 The contamination of freshwater:
Bangladesh is the country with the greatest general
great quantity in freshwater resources. Nevertheless,
there are certain regions and cities that are already
facing severe water shortages. Most of the large
urban agglomerations already have to rationalize the
distribution of drinking water during some periods
of the year such as capital city Dhaka and
commercial capital Chittagong city. . Local
governments often lack effective measures to protect
water quality or to avoid the waste of water. Public
policies may further underline unequal access to
water; as industry, e.g. does not pay for the water
extracted from rivers or wells and receives subsidies
for piped water. Recently, it was not even
recognized as irresponsible or criminal to extract
clean water from the river and to then deliver it in a
polluted state, after having used it in production
processes. Most industrial production processes
depend on clean water. Hence industries should also
have a vested interest in the conservation of water
resources. Nevertheless, the prevailing principle
among business is still to deliver water of lower
quality. Lot of concerned or related project has
failed to improve the water quality of this river
system. Together with domestic sewage, storm water
and garbage these diffuse emission sources add to
local and regional water pollution. Small industries
usually do not have the necessary funds to become
properly equipped with technology to reduce
emissions or to restructure their production
processes.
7.3 Waste generation and management:
Waste generation has grown into a critical
environmental impact. Soil contamination and
irregular disposal of toxic waste are common
problems in many urban-industrial agglomerations.
There is also the imminent problem of the depletion
of valuable land as industrial waste tips. Industries
still produce large amounts of residues, which are
sold, incinerated or deposited on their own premises
and on specific public disposal areas. There is also
the possibility of the waste being dumped illegally
or transported out of the region. Severe
environmental impacts are related to the toxic leach
ate and the contamination of the soil and
underground water from irregularly dumped waste.
Often local governments and the industry prefer to
fix the problem by burning the waste. The
incineration of residues does not solve the problem,
it rather creates new ones. It bur ns valuable
resources and it produces toxic emissions, which can
be reduced only to a certain extent through filtering.
It also produces ashes that require adequate
treatment, which involves extra costs. According to
Robins and Kumar (1999) the implementation of
eco-efficiency involves the following steps:
1. Reducing material intensity of goods and
services
2. Lowering energy input.
3. Reducing the dispersion of toxic waste and
by-products.
4. Maximizing sustainable use of renewable
resources.
5. Extending product durability.
6. Increasing service intensity of goods and
services.
8 THE CORPORATE GREENING PROCESS
Research on the creation of environmentally
responsible business enterprises is relatively limited.
Much of the writing on environmental management
derives from reports in industry trade press,
practitioner journals, and compendia by industry
experts (Kolluru, 1993). Three themes stand out:
1. There is a need for more co-operative
relationships between business, Government,
and society if the environment is to be
effectively protected;
2. There is a need for new frameworks which
account for environmental costs; and
3. A number of “best practices” companies are
creating useful models for environmental
improvement.
9 ENVIRONMENTAL IMPACT ON
ORGANIZATIONS
Direct impact:
In the marketplace, demand for environmentally
friendly products has become a powerful force. For
example, CNG is getting popularity day by day as a
fuel in Bangladesh. Unilever, Reckit, Glaxo, Berger,
square, Pran and other giant companies and groups
to come up with ways to solve its enormous solid
waste and minimize its use of polystyrene
packaging. In addition, organizations need to
reengineer the way they work to ensure
sustainability of resources. New technologies are
being harnessed to reduce destructive ecological
impacts of pollution and resource depletion.
Substitutes are also being developed to achieve
sustainability. For example, the automobile
companies have produced prototype electric cars to
address the air pollution problems in major cities of
the world. In Japan, Tokyo Power and Electric has
also designed and built a prototype electric car for
the same purpose (Volvo Environmental Report,
1996).
9.1 Indirect im pact:
The indirect impact that most organizations face
come from four main gro ups of stakeholders (i.e.
consumers, employees, government, and
corporations). These groups have pressured many
firms to take a hard look at their environmental
performance. Sadgrove (1992) reports that 39 per
cent of adults in the UK buy green products as far as
possible and a further 20 per cent buy them
whenever they see them. Gallup’s survey has also
found that 9.5 million out of Britain’s 20.8 million
households are ``very concerned’’ or ``extremely
concerned’’ about green issues. Nearly all the rest
are ``concerned’’, with a mere 8 per cent expressing
indifference. Some authors also emphasize that the
society is ``entering the era of corporate image’’, in
which consumers will increasingly make purchases
on the basis of a firm’s whole role in society, .ie.
how it treats employees, shareholders and local
neighborhoods (Russo and Fouts, 1997). Incorporate
environmental considerations into their strategic
planning to assure its customers and citizens
throughout the world to prove that it is sensitive to
the environment, and that it is acting in a socially
responsible manner (Certo, 1997, p. 56).
9.2 Employees:
An environmentally friendly corporation will portray
a better image and will be able to attract not only
more customers but also a more able and dedicated
team of workers. The employees’ views on a firm’s
environmental performance and its compatibility
with their values profile affect their willingness to
work for that firm. A study of McKinsey covering
403 senior executives from around the world
revealed that 68 per cent of them agreed that
organizations with a poor environmental record
would find it increasingly difficult to recruit and
retain high caliber staff (Fischer and Scot, 1993).
9.3 Government:
Statements made by various governments expressing
their desire to have a cleaner environment create
pressures on organizations and companies to study
the possible environmental consequences closely
before making decisions. Furthermore, compulsory
environmental audits and stricter legislation in many
countries have put pressures on organizations to
place more focus on environmental issues.
Incentives and recognition awards for model
companies have also been offered in many countries.
9.4 Corporations:
At the corporation level, management feels
threatened when they realize that their business
rivals are incorporating environmental issues into
their strategic planning before themselves. Some
argue that companies which fail to observe the green
ethic would lose out on opportunities in the market
place (Hamid, 1997a). It is argued that if human
economic activity is to be sustainable, then strategic
behavior of companies must take account of the
structural elements. These elements demand
strategic choices of technology and product/market
that minimize destructive impact and work within
ecological limits (Thoorp et al., 1993).
9.5 Environmental strengths:
The Company’s environmental strengths were found
to include:
(1) Strong leadership commitment;
(2) Capable people;
(3) Positive program initiative s; and
(4) Active leadership role on regional/national
issues.
9.6 Problems related with planning:
Four problem areas were identified:
(1) Commitment not effectively translated to a
workable action plan;
(2) External programs being most advanced and
internal programs less sophisticated;
(3) Lack of a comprehensive risk management
program; and
(4) Insufficiently strong leadership below the top
management ranks.
Most of the cases, organization itself is a decision
maker that whether they will follow
environmentalism in their strategic planning or not.
10 BEST ENVIRONMENTAL PRACTICES IN
AN ORGANIZATION
The best practices of environmental leadership have
shown below:-
1. A mission statement and corporate values that
promote environmental advocacy five out of the
seven case study companies have mission
statement and corporate values to promote
environmental advocacy.
2. A framework for managing environmental
initiatives all the seven companies have well-
developed framework for managing
environmental initiatives.
3. Green process/product design at least five of the
seven companies use green product/ process
design approach.
4. Environmentally focused stakeholder partnership
most of these companies have stated partnerships
with their suppliers and customers for being
green.
5. Internal and external education initiatives not
enough information is available to evaluate
(Quazi A Hesan, 2001).
 for Product Policy and Other Sustainable Practices”, paper
CONCLUDING REMARKS presented at “Green Goods: The Second International Conference
a nd Workshop on Product Oriented Policy”, Stockholm.

This empirical study has studied a lot of secondary
literature relating environmentalism and industrial
ecology. The thing is that no literature found in
Bangladesh related that is why researchers
developed some literature based on complete
secondary literature which is related with USA, UK,
Brazil, Netherlands etc. It is always difficult to
include environmental issues in strategic planning
within a Bangladeshi reputed company because it is
costly in Bangladesh perspective. However,
multinational companies and other local reputed
companies are trying hard to include ecological
issues into their strategic planning in Bangladesh.
11 TABLE
Table 1. Strategic planning process by Sample Company (Field
Interview)
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