Introduction
These days, the heads of multinational corporations must make choices in a range of ambiguous situations that aren’t clearly defined by existing rules and regulations. Most of the moral and ethical “gray zones” that have arisen as a result of globalization concern norms of behavior. These ethical quandaries pose a new challenge for today’s leaders as they make decisions and develop strategies to make their firms more competitive in the global market. Historically, leaders have faced ethical challenges that have only grown more complex as the world has become more interconnected and interdependent. While it is important for leaders to delegate authority and decision-making to managers by outlining their tasks and providing them with the tools they need to succeed, ultimately, the onus of accountability rests with the leader (Johnson, 2015). Strategic leaders, for an organization to be sustainable, must deal with the complexities that develop during the decision-making process. SWOT analysis, risk management, supply chain analysis, and the operational scorecard are all useful tools for doing so.
Task 1: Critical evaluation of the vision of the founders of Climeworks
Christoph Gebald and Jan Wurzbacher, two researchers at ETH Zurich, formed the company Climeworks in 2009 to commercialize their technique for absorbing carbon dioxide from the atmosphere and therefore mitigating climate change (Nguyen, 2017). Climeworks’ groundbreaking rooftop plant is the first commercial direct-air-capture enterprise to target ton-by-ton sales of carbon dioxide. When Christoph Gebald and Jan Wurzbacher initially revealed their plans to form a corporation many years ago, they were met with widespread skepticism. Now more than ever, those who have argued that Climeworks’ economic model is unsustainable have a valid point. It costs the company between $500 and $600 to remove one metric ton of CO2 from the air, and that is mostly because it cost between $3 million and $4 million to produce and install the 18 units in Hinwil, which were hand-assembled in a second-floor workshop in Zurich (Nguyen, 2017). About $50 million in private investments and grants have been drawn to the firm, but it still must overcome the same formidable challenge that faced Carl Bosch a century ago. How much money will it save? How quickly can it expand?
However, the ultimate purpose of air capture isn’t to convert it into a product, at least not in the conventional sense. In reality, what Gebald and Wurzbacher intend to do is remove huge quantities of CO2 from the air and permanently bury it far below, then charge people for the privilege. In addition to injecting collected CO2 deep into rock formations underneath Iceland, Climeworks plans to extend operations by deploying 50 units in Reykjavik by the end of the year (Nguyen, 2017). At that point, however, the organization will be venturing into new economic terrain, providing a service that appears to be urgently required to help mitigate climate change but which currently serves no substitute function in either the domestic or global economies. A further complication is that neither people nor governments have demonstrated any interest in purchasing a ton of buried CO2. Thus, businesses like Climeworks confront a conundrum: how to offer an unproven product in an unproven market for a price that may never be affordable?
Those who are most optimistic about direct air capture nevertheless refrain from calling it a miracle. Scrubbers to remove carbon dioxide have been employed in submarines since at least the 1950s, but this age-old concept is being substantially updated for usage in a wide range of cutting-edge fields. In fact, it might be argued that direct air capture would be perceived as a solution that is both too expensive and too ineffective when it comes to lowering our carbon emissions. In a nutshell, turning on millions of air capture units would not be the first step toward a decarbonized planet. The first step is to cease releasing CO2 into the air.
However, since atmospheric CO2 concentrations have continued to climb, the future of carbon reduction is on a countdown timer. As things stand, it will be difficult for the world’s governments to achieve the goals of the 2016 Paris Agreement, which aimed to keep global warming below 2 degrees Celsius (or, preferably, 1.5 degrees) (Gutknecht et al., 2018). And it would bring to widespread suffering and economic collapse. According to a study published by the Intergovernmental Panel on Climate Change in October, temperatures have increased by more than 1 degree Celsius in several locations. Droughts, heat waves, floods, and biodiversity losses have all increased in tandem with these temperature rises, making the pandemonium of another 2 or 3 degrees of warming appear incomprehensible. Another issue is that if current emissions trends are allowed to continue for too long, they may cause permanent harm to Earth’s ecosystems that will be impossible to reverse via technological advancement alone.
Sustainability and CSR are important for the bottom line for many different reasons. The extent to which corporations are socially responsible may be influenced by factors such as their social standing, how the public sees them, their financial success, and the pressure to comply (Engert et al., 2018). Additional aspects that emphasize the relevance of these sectors include values, which give reasons meaning, and stakeholders, who provide support for a CSR program.
Discuss the concepts and tools of strategic business management that may be relevant to problems of sustainability.
The strategic management tools include operational scorecard, SWOT Analysis, risk management, and value chain analysis. A SWOT analysis is a method used by companies to assess their strengths and weaknesses, both internally and externally. Strengths, Weaknesses, Opportunities, and Threats is abbreviated as SWOT. In-Operational Scorecard. In business, a management tool known as an operational scorecard, or balanced scorecard (BSC), keeps tabs on how well a group is doing and how far along they are in reaching a goal. An operational scorecard system allows a management or stakeholder to monitor and control several projects or initiatives at simultaneously, checking to see if they are meeting the necessary metrics or strategic objectives for optimal strategic performance. Value Chain Analysis. The term “value chain” is used to describe the comprehensive set of operations and procedures that go into making a product or providing a service. In Porter’s value chain, the first five actions are what bring in raw materials and finished goods, while the last four are what move those goods to the customer (Fuertes et al., 2020). Risk management. Business risk management entails the process of identifying and mitigating potential threats to an organization, such as those posed by the market, workplace hazards, information technology, and legal liabilities.
Task 2: The economic, social responsibility, and ethical dilemmas that strategic leaders face in the process of reconciling long and short-term goals
Increasing organization’s social standing is one goal of the Corporate Social Responsibility initiatives undertaken by several companies. Consumers are more likely to support companies with high moral standards, and the “green movement” is a widely known social and environmental concern. By engaging in CSR, businesses may grow their social capital and attract customers that care about environmental issues (Engert et al., 2018). By adopting these environmentally friendly practices, they raise their social standing in the community and make their business more competitive.
Furthermore, public opinion has a role. Many consumers have a favorable impression of companies that make environmental responsibility a priority. Businesses may boost their public image by demonstrating social responsibility. Business success depends increasingly on how the public sees your company as the generations grow. Besides moral and ethical considerations, CSR is also motivated by a desire to increase financial stability. Many environmental policies stress the four-pronged approach of reducing, recycling, reusing, and repurposing to cut down on material costs (Engert et al., 2018). Patagonia is a great example since they reuse and recycle their old clothes to make new ones. Recycling materials helps the economy, saves money, and protects the environment. Conformity is the last motivator. With competition heating up in the business sector and the green movement gaining momentum, it is more important than ever for companies to differentiate themselves from the competition.
Ethical and social responsibility dilemma
Motivations for Seeking Financial Gain
Retail and hospitality establishments lose significantly more money due to staff theft than to shoplifting. Therefore, some businesses have made investments to reduce employee dishonesty, such as upgrading to checkout technology that prevents cash theft.
Authoritarianism
People in positions of authority abusing or harassing others less powerful have been a common theme in recent news stories. One example is the allegation that the previous head of a film studio exploited his position to solicit sexual favors from women in return for roles in his films. Sometimes the victims of strong people feel imprisoned by them, or they just don’t have the resources to respond.
Seeking a Sense of Duty
The objectives and goals of various establishments vary. Leaders must translate the value-driven vision into concrete, attainable goals, the paper argues, so that workers can buy into it. The ethical difficulty here is that gaining insight into one’s own values sometimes necessitates perseverance and introspection in the midst of a barrage of competing stimuli.
The risk of Mission failure
Organizations have a moral problem when their missions are not fulfilled because of the serious repercussions that might result from failing to do so (e.g., employees or shareholders). To maintain their popularity, many leaders avoid making tough choices, even if they are the right ones, because of the potential for public backlash against them.
Reducing Unwanted Side Effects
The word “collateral harm avoidance” very much speaks for itself. Leaders have an ethical responsibility to keep an eye on how their actions could affect the organization’s overall goals. As a result, fewer people, both workers and customers, will be put in danger.
Economic Dilemma
The economic dilemmas that affect strategic; leaders include;
Wages
The benefit of paying comparatively lower rates for labor has been cited as a driving force behind globalization, according to recent academic literature. Here, developing nations are at a disadvantage since boosting local development requires them to accept investments from massive global corporations. Although the rise of suppliers and labor providers may make it difficult for managers to keep tabs on their conduct, this can no longer be used as an excuse if it causes the public to view the firm in a negative light (Fragouli, 2020). While some argue that it is unethical for a leader not to maximize profits, others argue that doing so by taking advantage of these cheaper labor costs, provided that their legality can be demonstrated, is entirely acceptable.
Bribery Large-scale bribery, made to government authorities to influence policies that may benefit the corporation, and traditional, small-scale bribery, in which modest quantities of money or favors are paid, typically to foreign officials.
Financial dependency
There is a wide range of national and company strengths and weaknesses in international financial transactions. Companies headquartered in nations with higher power are able to negotiate more favorable terms and conditions, giving them an advantage over their local competitors (Fragouli, 2020). Companies with wealthy CEOs or those headquartered in stable economies typically get what they ask for.
Inventions and Technologies
Products and technologies raise ethical questions when they are used despite being unfit for human consumption, such as when they are legal in the host nation despite being prohibited in the originating country. This is a conundrum that confronts most CEOs of multinational corporations: it may be lawful to utilize such items in the host country, and doing so may offer the company a competitive edge (Fragouli, 2020).
Conclusion
Sustainability is key in realizing the goals of an organization and this calls for strategic leaders being vigilant to beat dilemmas in key decision making. To achieve these key decisions managers and strategic leaders have to use the different strategic management tools. SWOT analysis is one of the best tools that leaders can use to have both analysis of capability of organization. SWOT looks into both the internal and the external factors. Decision dilemmas have impacted Climeworks as criticism and decision pitfalls befall the company. Some of the main challenges are economic, like profitability of the company. The company is not able to sustain its operation without the donations and international climate mitigation agencies support.
References
Bourzac, K., 2017. We have the technology. Nature, 550(7675), pp. S66-S69.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate sustainability into strategic management: A literature review. Journal of cleaner production, 112, pp.2833-2850.
Fragouli, E., 2020. A critical examination of influential factors on leadership values when addressing ethical dilemmas. Journal of Business Management and Marketing, 1(1), pp.001-006.
Fuertes, G., Alfaro, M., Vargas, M., Gutierrez, S., Ternero, R. and Sabattin, J., 2020. Conceptual framework for the strategic management: a literature review—descriptive. Journal of Engineering, 2020.
Gutknecht, V., Snæbjörnsdóttir, S.Ó., Sigfússon, B., Aradóttir, E.S. and Charles, L., 2018. Creating a carbon dioxide removal solution by combining rapid mineralization of CO2 with direct air capture. Energy Procedia, 146, pp.129-134.
Johnson, W. 2015. “What Issues Are Raised by Globalization for Business Ethics?”
Nguyen, T., 2017. Climeworks joins project to trap CO2. Chemical & Engineering News, 95(41), pp.15-15.
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