Ethics and sustainability

Economic growth

Innovation tends to be driven by economic growth which is strongly linked to technological change. In 1982, Dosi wrote a paper on technological paradigms and technological trajectories, where he argued economic progress gives rise to new technological breakthroughs of which some will contribute to the creation of new markets and wealth. Some companies, when assessing their competitiveness are currently looking to integrate the principles of ethics, responsibility and sustainability on the impact of economic growth and technological progress.

Corporate sustainability management

Discussion is currently focussed on needs and wants coupled with concerns regarding carbon economies, fossil fuels and looming destruction. Ethical issues also need to be addressed when discussing sustainability. What is agreed for the current population needs to be considered for future generations.

Business currently reflects corporate sustainability management within the following three tangible areas i.e. environmental management, corporate social responsibility, and corporate political activity. These areas are not exhaustive but they cover many of the strategies which companies undertake when discussing sustainability. A paper from Schuler et. al. showed business sustainability focussed on conservation whilst neglecting the ethical considerations of preservation, the rights of ecosystems and non-human animals.

A hybrid approach

Within the private sector large innovative firms generally pay well compared to smaller businesses. Smaller businesses can overcome this inequality by seeking a wider set of aims and logic. One such mechanism is to become a hybrid organization. A hybrid business model, in this context, seeks different markets with a social/environmental impact. This new direction may require the development and purchase of new technologies which ensure ‘sustainable’ compatibility e.g supply chains.

Over the centuries, firms have used hybrids to manage periods of difficult transition. The advantage of hybrids is that they are a half-step that can help their developers manage long and difficult transitions, such as the one between generations of technology. The challenge of hybrids is that they are only temporary half-steps, and so in retrospect they can look clumsy.

Business model innovation

A new type of hybrid business model has also started to find favour i.e. the hybrid product/platform business model. Whereas product-based business models create value by selling differentiated products to market niches, platform-based business models create value by facilitating transactions across large, generic markets (platforms create communities and markets with network effects that allow users to interact and transact).