SUSTAINABLE

STRATEGIC
MANAGEMENT
STEPH SUBANIDJA
Historical Perspectives
u The strategic management discipline originated in the 1950s and
1960s.
u Among the numerous early contributors, the most influential
were Peter Drucker, Philip Selznick, Alfred Chandler, Igor
Ansoff,[26] and Bruce Henderson.[6]
u The discipline draws from earlier thinking and texts on 'strategy'
dating back thousands of years.
u Prior to 1960, the term "strategy" was primarily used regarding
war and politics, not business.[27]
u Many companies built strategic planning functions to develop
and execute the formulation and implementation processes
during the 1960s.[28]
Peter Drucker
u Peter Drucker was a prolific management theorist and author of
dozens of management books, with a career spanning five decades.
u He addressed fundamental strategic questions in a 1954 book The
Practice of Management writing: "... the first responsibility of top
management is to ask the question 'what is our business?' and to
make sure it is carefully studied and correctly answered."
u He wrote that the answer was determined by the customer.
u He recommended eight areas where objectives should be set, such
as market standing, innovation, productivity, physical and financial
resources, worker performance and attitude, profitability, manager
performance and development, and public responsibility.[29]
Philip Selznick

u In 1957, Philip Selznick initially used the term "distinctive

competence" in referring to how the Navy was attempting to
differentiate itself from the other services.[6]
u He also formalized the idea of matching the organization's internal
factors with external environmental circumstances.[30]
u This core idea was developed further by Kenneth R. Andrews in
1963 into what we now call SWOT analysis, in which the strengths
and weaknesses of the firm are assessed in light of the
opportunities and threats in the business environment.[6]
Alfred Chandler
u Alfred Chandler recognized the importance of coordinating
management activity under an all-encompassing strategy.
u Chandler stressed the importance of taking a long-term
perspective when looking to the future.
u In his 1962 groundbreaking work Strategy and Structure,
Chandler showed that a long-term coordinated strategy was
necessary to give a company structure, direction and focus.
u He says it concisely, "structure follows strategy." Chandler wrote
that:"Strategy is the determination of the basic long-term goals of
an enterprise, and the adoption of courses of action and the
allocation of resources necessary for carrying out these goals."[13]
Igor Ansoff
u Igor Ansoff built on Chandler's work by adding concepts and
inventing a vocabulary.
u He developed a grid that compared strategies for market
penetration, product development, market development
and horizontal and vertical integration and diversification.
u He felt that management could use the grid to systematically
prepare for the future.
u In his 1965 classic Corporate Strategy, he developed gap analysis to
clarify the gap between the current reality and the goals and to
develop what he called "gap reducing actions".[31]
u Ansoff wrote that strategic management had three parts: strategic
planning; the skill of a firm in converting its plans into reality; and
the skill of a firm in managing its own internal resistance to
change.[32]
Bruce Henderson

u Bruce Henderson, founder of the Boston Consulting

Group, wrote about the concept of the experience
curve in 1968, following initial work begun in 1965. The
experience curve refers to a hypothesis that unit
production costs decline by 20–30% every time
cumulative production doubles. This supported the
argument for achieving higher market share
and economies of scale.[33]
 The Strategic Management Process
External
Analysis

Strategic Strategy Competitive

Mission Objectives
Choice Implementation Advantage

Internal
Analysis

Barney Model
 Strategic Management Model, Wheelen & Hunger
(2016)

Environmental Strategy Strategy Evaluation

and Control
Scanning Formulation Implementation and Control

External Mission
Reason for
Societal
existence
Environment Objectives
General Forces
What results
to
Task Strategies
accomplish
Environment
by when Plan to
Industry Analysis
achieve the
Policies
mission &
Internal objectives Broad
guidelines for Programs
Structure decision Process
Chain of Command making Activities to monitor
needed to performance
Culture Budgets and take
accomplish
Beliefs, Expectations, a plan corrective
Cost of the
Values action
programs
Procedures
Resources
Sequence
Assets, Skills
of steps
Competencies,
needed to
Knowledge do the job Performance

Feedback/Learning

9
SSM

u“Sustainable strategic management”

refers to strategic management
policies and processes that seek
competitive advantages consistent
with a core value of environmental
sustainability
The Triple Bottom Line
Sustainable Strategic Management (SSM) Coevolutionary
Process
The Emergence of Sustainable
Strategic Management
u The Sustainable strategic management (SSM) planning process provides a context in
which intended strategies are formulated and emergent strategies are embraced.
u Emergent strategies are unplanned, bottom-up strategic initiatives that emerge from
either the internal or external environment.
u SSM has emerged from the coevolutionary interactions between organizations, the
society they are a part of, and the planet they exist on.
u It involves developing a set of processes and strategies in organizations that are
economically competitive, socially responsible, and in balance with the cycles of
nature.
u Organizations are generally familiar with the bottom line concept, the triple-bottom-line
image can be more easily integrated into current organizational cultures.
u Sustainable strategic management has emerged from a spiraling coevolutionary dance
between business organizations and their sustainability-rich environments. Sustainable
strategic management involves a set of processes and strategies that include strategic
analysis, strategy formulation, and strategy implementation that are economically
competitive, socially responsible, and in balance with the cycles of nature.
In Search of Sustainability

u The concept of sustainability establish sustainability as both an ideal

end state for a world dominated by business organizations pursuing the
values, principles, and practices of sustainable strategic management,
and a viable transformational process that can help humankind to
achieve this end state.
u The basic scientific concepts that help ground sustainability in well-
established scientific frameworks with regard to the relationships
between economic activity, society, and nature.
u The Earth is a living system, that the relationships among the Earth's
components are coevolutionary, that economic activity on Earth is
subject to the laws of thermodynamics, and that economic activity on
Earth is metabolic in nature.
u At the heart of sustainable strategic management is the understanding
that the impacts of economic activity should be measured on their
ecological and social as well as economic outcomes.
Environmental Analysis for
Sustainable Strategic Management
u The sustainable strategic management process begins with identifying opportunities
and threats in the external environment and then formulating effective strategies for
dealing with them.
u Scanning and analyzing the firm's external environment is increasingly complex due
to the turbulent coevolutionary environmental forces affecting business organizations.
u The coevolutionary forces in the environment are so dynamic and interrelated that
environmental analysis must be based on systems thinking, focusing on developing
information flow, feedback loops, analytical processes, dialogue processes, and so
forth, that will allow organizations to recognize, understand, and capitalize on the
environmental turbulence that surrounds them.
u Given the uncertainty of an external environment characterized by turbulence,
complexity, discontinuity, and change, strategic managers engaged in sustainable
strategic management must develop a systems-based environmental scanning
culture within their organizations.
u This means that macro environmental scanning needs to be expanded to include the
social and ecological sectors, and that traditional industry analysis needs to move
toward a coevolutionary analysis of business ecosystems.
SSM Resource Assessment
u This assessment focuses on the interface between the firm's strategy
and its internal resources.
u It examines the coevolutionary process of resource assessment in
sustainable strategic management (SSM) that entails profiling the
resources and capabilities of the firm using the open-system value
chain as the basic framework, evaluating resources using internal and
external data, and determining which resources or capabilities could
be core competencies and potential competitive advantages for the
firm.
u The SSM resource assessment process takes place at the functional
levels of the firm across the firm's open-system value chain.
u The process of SSM resource assessment includes: an audit of the firm's
resources and capabilities utilizing various data-gathering processes; a
thorough analysis and evaluation of the firm's resources and
capabilities; and a determination of the firm's core competencies, the
cornerstones on which the firm builds its competitive strategies.
u Stakeholder analysis provides additional data on stakeholder impacts
and thus a greater understanding of the organization's footprint.
SSM Competitive Level Strategies

u This chapter focuses on the various strategies a firm can adopt to

achieve a competitive advantage and profitability in an industry or
product/market segment. It explores how strategic managers can
utilize these two coevolving data sets of external and internal
information to build various strategies to gain a competitive advantage
within target market segments. The chapter examines how to choose
the appropriate strategies dependent on the firm's competitive position
and type of market in which its strategic managers have chosen to
compete. Strategic managers must make critical decisions regarding
how to strategically position their firms in their chosen market segments
in ways that provide them with cost and/or differentiation competitive
advantages. They must choose some combination of cost-leadership,
product differentiation, and focus strategies, and they must choose to
implement them preemptively, as second movers, or as late movers.
The effectiveness of Sustainable Strategic Management is dependent
on the market type and relative market position of the firm.
SSM Corporate Level Strategy
u Corporate strategy is the overall plan for a diversified organization. It
focuses on managing the mix, scope, and emphasis of a firm's portfolio
of strategic business units (SBUs), exploiting the synergies among its SBUs,
and deploying capital to each SBU in order to achieve competitive
advantages.
u Corporate strategic options designed to expand the firm's scope
include growing within a single industry, horizontally integrating,
vertically integrating, diversifying the product/market mix, and/or
collaborating with partners in alliance strategies.
u The purpose of the Sustainable Strategic Management (SSM) corporate
portfolio is to build capabilities that enhance the firm's ability to
effectively manage its configuration of multimarket strategies so that
triple-bottom-line value is created across the whole pyramid.
u An SSM corporate portfolio provides a framework that allows strategic
managers to continually examine and, if necessary, change
organizational values, assumptions, and strategies in light of eco- and
socio-effectiveness.
Choosing and Implementing SSM
Strategies
u This session focuses on key strategic management processes and practices
required for successfully choosing and implementing sustainable strategic
management (SSM) strategies in business organizations.
u Strategic choice in SSM begins with strategic managers choosing viable
strategies that will allow their firms to achieve their triple-bottom-line
performance goals in sustainability-rich business environment. Strategic
managers are responsible for identifying, analyzing, and choosing among
alternative SSM strategies at all three strategic levels— functional, competitive,
and corporate. Functionally, firms can implement strategies that enhance the
triple-bottom-line performance of both their primary and supporting value-chain
activities, contributing valuable data for SSM decision making.
u Competitively, firms can seek both cost-based and differentiation-based SSM
competitive advantages by managing the strategic fit between internal,
external variables, choosing strategies that enhance this fit. Strategic managers
must make strategic choices regarding how to configure their firms' whole-
pyramid portfolios into a system in which sustainability-centered synergies
between SBUs can identified and exploited to create sustainable, shared value
for multiple stakeholders.
Organizational Governance and
Strategic Leadership in SSM
u This session focuses on organizational governance and strategic leadership in
this age of sustainability.
u To effectively implement Sustainable Strategic Management (SSM) in modern
business organizations, strategic managers will need two key elements.
u First of all, they will need effective organizational governance mechanisms in place
that will support the alignment of the triple-bottom-line goals of the organization with
the interests of organizational stakeholders.
u It also involves establishing a strategic evaluation and control system, executive review
and compensation system, board of directors, and organizational units that are all
aligned with SSM goals.
u Strategic leadership skills are the second critical element for strategic managers
working to implement SSM. SSM based business ecosystems is designed to
provide organizations with opportunities to come together to do something for
the planet and its people that they cannot do alone. Central to effective
alliance management capability is building strong trusting relationships among
ecosystem members.
 1. Sustainability;
2. sustainable development;
Sustainable Strategic
Management (SSM);
3. strategic management;
SSM sustainability strategies;
4. enterprise strategy;
5. management;
6. ethics;
7. efficiency;
8. effectiveness.
What are the Sustainable
Development Goals?
u The Sustainable Development Goals (SDGs), also known as the Global Goals,
were adopted by the United Nations in 2015 as a universal call to action to end
poverty, protect the planet, and ensure that by 2030 all people enjoy peace
and prosperity.

u The 17 SDGs are integrated—they recognize that action in one area will affect
outcomes in others, and that development must balance social, economic and
environmental sustainability.

u Countries have committed to prioritize progress for those who're furthest behind.
The SDGs are designed to end poverty, hunger, AIDS, and discrimination against
women and girls.

u The creativity, knowhow, technology and financial resources from all of society is
necessary to achieve the SDGs in every context.
17 Goals of SDG

u NO POVERTY
u ZERO HUNGER
u GOOD HEALTH AND WELL-BEING
u QUALITY EDUCATION
u GENDER EQUALITY
u CLEAN WATER AND SANITATION
u AFFORDABLE AND CLEAN ENERGY
u DECENT WORK AND ECONOMIC GROWTH
17 Goals

u INDUSTRY, INNOVATION AND INFRASTRUCTURE

u REDUCED INEQUALITIES
u SUSTAINABLE CITIES AND COMMUNITIES
u RESPONSIBLE CONSUMPTION AND PRODUCTION
u CLIMATE ACTION
u LIFE BELOW WATER
u LIFE ON LAND
u PEACE, JUSTICE AND STRONG INSTITUTIONS
u PARTNERSHIPS FOR THE GOALS
Model Five Elements of Sustainable
Development
SD

u Pembangunan Berkelanjutan adalah suatu proses pembangunan

yang mengoptimalkan manfaat dari sumber daya alam serta
sumber daya manusia, dengan menyerasikan sumber alam dengan
manusia dalam pembangunan.
Mengapa Penting?

u DIKSI keberlanjutan biasa dipakai dalam bahasa Indonesia sebagai

serapan dari istilah sustainability. Keberlanjutan (dalam
pembangunan) menjadi sangat penting dikarenakan dalam
pencapaian tingkat kesejahteraan tertentu dibutuhkan usaha yang
terus-menerus (kontinu) dengan skala yang berimbang dan
proporsional.
Sustainable Bisnis

u Mengacu pada dua kata tersebut, secara harfiah sustainable

business bisa diartikan sebagai bisnis yang berkelanjutan, baik
dalam menghasilkan manfaat jangka pendek maupun jangka
panjang. Manfaat yang dimaksud disini tidak hanya berhenti pada
keuntungan materi atau profit.
S and CSR

u ABSTRAK Program CSR adalah sebuah investasi dari perusahaan

perusahaan untuk pertumbuhan dan keberlanjutan (sustainability)
perusahaan dan tidak hanya dilihat sebagai sarana mencari
keuntungan/biaya (cost centre) melainkan sebagai sarana
mencapai keuntungan (profit centre).
 Strategi Berkelanjutan

u Strategi Keberlanjutan.
u Kepatuhan Perubahan Iklim.
u Pengoperasian Berkelanjutan.
u Pelaporan Keberlanjutan.
u Pengoptimalan Air dan Limbah.
u Energi Terbarukan dan Teknologi Bersih.
Perusahaan Didesak Segera Adopsi
Sustainability, Ini Alasannya
u Artikel ini telah tayang di Bisnis.com dengan judul "Perusahaan
Didesak Segera Adopsi Sustainability, Ini Alasannya", Klik
selengkapnya di sini:
https://ekonomi.bisnis.com/read/20210409/9/1379069/perusahaan-
didesak-segera-adopsi-sustainability-ini-alasannya.
Author: Feni Freycinetia Fitriani
Editor : Feni Freycinetia Fitriani

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 Model of SSM

Source: Adapted from Stead and Stead (2000 and 2004).

SSM value chain Source: Reproduced from Stead and Stead (2004).
Open living system economy

Source: Reproduced from Stead and

Stead (1992, 1996, 2004).
Buku
 Artikel Acuan

u https://www.researchgate.net/publication/228336772_Sustainable_s
trategic_management_An_evolutionary_perspective
u https://www.mdpi.com/journal/sustainability
u https://www.ijournalse.org/index.php/ESJ/article/view/777
u https://www.ijournalse.org/index.php/ESJ/article/view/1067
u https://editorial.upce.cz/1804-8048/28/3/1092