Course Name:

Sustainability
Management
Lecture-4
Sustainable
Development
 Theories of Development
Development Theory by itself has little value unless it is applied, unless
it translates into results, and unless it improves people’s lives. We will
discuss about two theories of development:
1. Modernization Theory
2. Globalization theory
 Modernization Theory
Modernization Theory has been defined as a theory that uses a
systematic process to move underdeveloped countries to a more
sophisticated level of development. It is a US and European-centric
normative model of development. The focus of Modernization Theory is
cultural change directed at institutional structures in non-industrialized
countries. Modernization Theory explains inequality within or between
states by identifying different values, systems and ideas held by
different nation.
• Modernization theory casts development as a uniform evolutionary
route that all societies follow, from agricultural, rural, and traditional
societies to postindustrial, urban, and modern forms.
 Rostow’s 5-Stage Model of modernization
Stage I
• At this inaugural stage, traditional societies are dependent upon rural
economies characterized by subsistence agriculture and barter. These
economies have limited access to technology and modern industry.
Stage II
• This is a transitional stage characterized by specialization, production
surpluses and the construction of infrastructure. Herein, skill
development and a greater appreciation for education could be salient.
This often occurs thanks to Western aid packages.
 Rostow’s 5-Stage Model of modernization
Stage III
• This is the take-off stage wherein the economy experiences growth as
industrialization, increased investments and political change transform
society.
Stage IV
• This is the age of mass consumption wherein production and economic
growth would be comparable to the levels of Western societies.
Stage V
• Herein is a drive to maturity characterized by innovation, investment in
education, less reliance on imports, and diversification.
 Globalization Theory
Globalization is a theory of development that uses a global
mechanism of greater integration with particular emphasis on the
sphere of economic transactions.
• It is a US- and Europe-centric positive model of development whose
feature is the spread of capitalism around the globe.
• The focus of Globalization Theory is communications and international
ties, directed at cultural and economic factors in communication
systems
• Globalization Theory explains inequality by identifying cultural and
economic factors in global connection.
 Globalization Theory
Reyes claimed there are two major meanings of the word
“Globalization”.
• One deals with the word as an event when a sense of interdependence
occurs throughout different countries of the world in different aspects
of communication, trade, and finance.
• The other meaning that has been applied to the concept of
Globalization considers it as a theory of economic development with
the supposition of widespread unification among different countries.
This integration is believed to have an effective influence on the
development of economies and on the improvement in social
indicators.
 Why sustainability is good for business?
Let’s take a look at five reasons sustainability is good for business.
1. Attracting And Retaining Employees
• These past two and a half years of the Covid-19 era have been marked with what
has been called the “Great Resignation,” a time marked by historical numbers of
employees choosing to leave their employer for a variety of reasons, including
companies not having a CSR agenda. In fact, both Gen-Z and millennial
employees have asserted that a company having a sustainability agenda has
influenced them to stay.
2. Value Creation, Cost Reductions And Innovation
• Successful companies look at sustainability from a point of considering how they
can leverage it to have better returns on capital both operationally and
commercially.
 Why sustainability is good for business?
Let’s take a look at five reasons sustainability is good for business.
3. Brand Reputation And Consumer Demand
• These types of initiatives can have a positive impact on the expansion of
the consumer base, a brand’s reputation in the marketplace and customer
loyalty.
4. New Opportunities And Emerging Markets
• Entering new markets is a two-pronged approach, first in providing
products and secondly by providing services at a lower margin in
markets that provide share or entering markets that have not been
touched but show demand.
 Why sustainability is good for business?
Let’s take a look at five reasons sustainability is good for business.
5. Competitive Advantage
• When conducting a traditional SWOT analysis, a company’s view
toward sustainability should be classified as a strength and ideally a
differentiator among its competitors. In some instances, when consumers
are evaluating their options, it may, in fact, prove the deciding factor for
the final choice they make.
 The power of leadership in driving climate
change action and sustainability
In a world grappling with the pressing challenges of climate change and
environmental degradation, the role of leaders has never been more
critical. Whether at the helm of a multinational corporation or of a small
business, leaders possess the power to shape the future by taking proactive
steps towards climate change action and sustainability. Let’s examine a
few examples that have successfully combined the realms of leadership
and climate action.
Taking Responsibility
• Leadership entails a profound sense of responsibility towards
stakeholders, including employees, customers, and the communities they
operate in.
 The power of leadership in driving climate
change action and sustainability
Managing Risk
• Climate change brings forth a range of risks, both immediate and long-
term, that can significantly impact business operations. Effective
sustainability reporting enables leaders to assess and manage these risks
strategically.
Gaining a Competitive Edge
• In an increasingly conscious marketplace, businesses that embrace
climate change action and sustainability gain a competitive advantage by
demonstrating leadership in addressing environmental concerns.
 The power of leadership in driving climate
change action and sustainability
Building Investor Confidence
• Investors are becoming acutely aware of the risks and opportunities
associated with climate change. They seek companies that integrate
sustainability into their operations and demonstrate long-term viability.
Compliance and Regulation
• Governments and regulatory bodies worldwide are tightening
environmental regulations and disclosure requirements. Leaders who
embrace sustainability reporting ensure compliance with existing
regulations and position their organizations to adapt to future changes.
 The power of leadership in driving climate
change action and sustainability
Securing a Sustainable Future
Ultimately, leaders who prioritize climate change action and sustainability
reporting contribute to a broader vision of a sustainable future. By demonstrating
a commitment to responsible practices, they inspire their employees, customers,
and other stakeholders to join the journey towards a greener and more equitable
world.
As the urgency to address climate change increases, leaders who champion
sustainability become catalysts for change. They set a powerful example for
others to follow, fostering a culture of sustainability within their organizations
and influencing industry norms. By taking bold steps towards a sustainable
future, these leaders help shape a world where economic growth, social well-
being, and environmental stewardship are harmoniously balanced.
Thank you