Sustainability and Financial Performance

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Sustainability and financial performance
1. What is the difference between local and corporate decision-making, and what is the significance of the difference for sustainability?
The top management in firms is normally keened on the need for corporate sustainability, but they have difficulties executing it to success. The difficulty they face is on how to execute sustainability in operations and decision making regarding capital investments and seeing it to success especially for large and profit maximizing firms. Impacts from sustainability are often regarded as local and so, decisions concerning this are hardly made by the executives. Mainly middle level management is involved with such kind of decision making, and by so doing, there arises a tradeoff between impacts of finance and those of sustainability. In essence, the heads of sustainability in firms demand better sustainability performance from top managers while the top managers request for good financial performance.
Models have been developed to enhance the sustainability processes, which managers can use in their day-to-day firm operations. One such model was developed by Epstein who stipulates that for this to be workable managers should focus on certain drivers included in different inputs and processes.

2. Study the Corporate Sustainability Model in Figure 1. Based on this study, do you think sustainability should be managed by means of a cost center, profit center, the balanced scorecard, or some other method, and why?
Informal systems such as leadership, organization and people lead a firm in the path of sustainability.
Large companies are, however, committed to ensuring sustainability aside from being keen on impacts to shareholders. Formal systems, on the other hand, have more of an indirect role if the successful implementation of sustainability. Firms can…...

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