The road to green business

Pavel Kren

Student thesis: Master thesis

Abstract

The role of companies in the society has changed as a result of increasing ecological concerns among people. Apart from the economic, firms are now expected to contribute to the satisfaction of our social and environmental needs as well. Particularly, the latter represents a real challenge for the top executives in profit-oriented organizations. This paper takes an active approach and proposes to turn business green. Potential benefits of such an action are provided as arguments to support the decision. Three factors were identified as crucial for achieving a so-called green sustainable competitive advantage: entrepreneurship, commitment to the environment, and corporate social responsibility. As the competitive arena is constantly being shifted by institutions towards ecology through new regulation, utilization of those resources enables firms to better respond to the changes and gain a favorable position in the market. Green business also provides an opportunity to expand through substituting products or by entering new geographical areas. It is argued in the paper that people are naturally green buyers. To some extent they are willing to compromise on performance or price providing that they are confident about the green value of the purchase. Five attributes were found to have influence on the ecological buying behavior: values, knowledge, concerns, attitudes, and behavior. Their stimulation through effective communication can further increase demand at the expense of grey competitors. Going green, however, requires a fundamental change of the mindset of the company. The eight step model is presented that assists managers to develop and implement a green vision throughout the company. It starts with a creation of the sense of urgency among stakeholders, goes through the vision creation, implementation, early wins celebration, towards the ultimate goal – to incorporate environmental responsibility into the corporate culture. Some executives may find it beneficial to form a partnership with other organizations to share expertise, diversify risk, or to strengthen the green image of the company. Such collaboration may take various forms and duration. The negative sides of the alliances may include fundamental incompatibility in objectives of engaged parties, lack of commitment, or even a clash of organizational cultures.

EducationsMSc in International Marketing and Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2008
Number of pages79