The other day in my Econ101 class, the professor suggested looking up a video by David Suzuki on externalities.

Although I disagree with his criticisms on economics as a social science, I do believe that sustainability should be a more prevalent concern for companies and society as a whole. This also ties into Week 3’s discussion on ethics in regards to how potential negative impacts may be disregarded in favor of generating more profit.

An article in The Guardian outlines a how companies deemed as “highly sustainable” differ in certain aspects from traditional businesses. It emphasizes that the current definition is too intent on concrete reductions, and that working to make the world better will in turn create value and influence how healthy the business will be tomorrow. Companies with sustainable cultures are managed with a broader set of standards, with a greater focus on the long-term and more open disclosures.

                                                   (Image Source)

I find that the perspective that this article presents is different from my previous ideas of “sustainability.” After reading, however, I can say that it has altered my stance on the subject, and I agree; instead of focusing on tight resource management and cutting down numbers, companies should see sustainability as a catalyst for innovation and positivity.

People have become increasingly reliant on modern technology, and businesses are constantly evolving to accommodate new trends and changes. Gracia’s blog post on Facebook offering $3 billion for Snapchat exemplifies this pattern.

Snapchat, a photo-sharing mobile app developed by CEO Evan Spiegel, has skyrocketed in popularity in the past year and gained the attention of Facebook Inc. A $3 billion buyout offer from Facebook was subsequently rejected. People briefed on the matter say that is is unlikely Mr. Spiegel will be considering an acsquisition or investment until at least early next year.

                                                     (Image Source)

I agree with Gracia’s point that Snapchat is not a sustainable company; much like Twitter, it has no tangible business plan and lacks strong revenue streams. I also agree that Snapchat’s popularity will not continue, and in the long-run its profitability is volatile. It’s hard to see how a platform based around disappearing pictures could be expanded, so once the appeal dies out there are no conspicuous options to pursue. With Snapchat rejecting such a substantial offer, it needs to take advantage of its large user base and find ways to generate profit.

Source: http://www.csmonitor.com/Innovation/Horizons/2013/1116/Why-did-Snapchat-s-23-year-old-CEO-reject-a-3-billion-buyout-offer-video

Fracking, or the fracturing of rocks by pressurized liquids, is a technique used that allows access to previously untapped oil and gas reserves. As a result of utilizing this technology, gas output has risen by one-third since 2005, and oil production has risen by 30% since a recent low in 2008. North Dakota, which is situated above the Bakken oil and gas field, has the lowest unemployment rate among all the states at just 3%. By 2020, IHS economists estimate that total manufacturing production will increase 3.5 percent thanks to lowered energy costs.

(Image Source)

These benefits, however, come with a multitude of environmental concerns and criticism.  The process involves pumping excessive amounts of pressurized, chemically treated water into shale formations, which may result in the contamination of drinking water. The gaps left in the rocks leave methane gas free to escape from underground, contributing to the issue of  global warming. Many people condemn the process as a pursuit for economic profit with a complete disregard of the environmental and social repercussions. Studies have shown that for businesses, there is a strong correlation between having a strong code of ethics, and being an admired company. If a company wants to be viewed in a positive light, ethical behavior can drastically skew the consumer’s opinion.

Sources:

http://www.energyandcapital.com/articles/bringing-fracking-to-the-uk/4011

http://www.bnd.com/2013/11/16/2907405/will-fracking-bring-jobs-or-environmental.html

http://www.theguardian.com/business/2003/apr/20/globalisation.corporateaccountability

McDonald’s is currently taking steps in order to improve their customer service, starting with the addition of a new drive-thru window.  This year’s average drive-thru time was nine seconds slower than the industry average, and was an all-time company low. In an attempt to facilitate the process speed, the chain is testing a “Fast Forward Drive-Thru” which allows customers to drive to a third stop if their orders are not ready.

Instead of introducing new items to the menu, US McDonald’s president Jeff Stratton wants to focus on “restructuring the production process.”  I feel that this is a very strategically viable move on McDonald’s part. A large part of their brand image puts an emphasis on speed and efficiency. Responding directly to recent customer concerns and acknowledging previous mistakes will likely improve people’s impressions of the business.   By catering to the customer’s needs, it will in turn strengthen their value proposition and improve customer relations.

(Image Source)

Source: http://www.huffingtonpost.com/2013/11/15/mcdonalds-drive-thru_n_4280859.html?utm_hp_ref=business

A recent Gallup poll found that over two-thirds of employees feel disengaged, unmotivated and fatigued at work. Another study in The New England Journal of Medicine found that interns who work 24 hour shifts made 36% more errors than those working 16-hour shifts, and were 61% more likely to accidentally injure themselves during procedures.  Arduous working hours make it exceedingly difficult for employees to find a work-life balance within their lives.

There is an obvious correlation between job satisfaction and overall motivation which can be explained by organizational behavior. I feel that when looking for a job, the work environment and whether or not I genuinely enjoy the tasks given play a significant role in choosing. Companies need to pay more attention to the needs of its employees; a positive organizational culture is essential to any successful business.

Google employees enjoy a variety of benefits, such as free haircuts
(Getty Images)

Another survey of technology firms found that more accepting business cultures saw an average annual sales growth of over 140 percent, as opposed to 10 percent for cultures deemed less accommodating. Despite spending more time and money on the employees, it is ultimately more profitable as intrinsically motivated employees are more inclined to be productive.

Source: http://dealbook.nytimes.com/2013/11/10/powering-employees-with-more-than-a-paycheck/?_r=1

After completing an in-class activity about Lululemon, I was surprised to find a blog post by Ty McMahan denouncing founder Chip Wilson for a recent bout of offensive comments. Following reports of quality issues regarding pilling in newly-purchased yoga pants, the CEO responded by claiming Lululemon was not responsible.

“Quite frankly, some women’s bodies actually just don’t work for [the pants]. They don’t work for some women’s bodies,” said Wilson.

From a marketing perspective, these comments have been extremely detrimental to the brand image and its implications. Lululemon’s strategy is to not only sell their products, but to sell a “way of life”. By blaming women’s bodies and claiming that not everyone suits their clothing, Chip Wilson has effectively estranged himself from a large portion of his consumer base.

Competitors have also taken advantage of Lululemon’s declining market share; Macy’s is planning to double its activewear square footage in early November, with both Nordstrom and Kohl’s following suit. With a lack of distinct points of difference, I predict that Lululemon will be susceptible to competition from brands that offer a similar value proposition.

Sources:

http://www.huffingtonpost.com/ty-mcmahan/where-founder-fails-to-be_b_4268917.html?utm_hp_ref=busines

http://investorplace.com/2013/10/lululemon-stock-lulu-nke-ua/#.UodLMOIUJKk