To mix it up a bit after talking about sustainable approaches of different businesses, I would like to analyze an article that I had recently found in Business Week called, "Investors Don't Care about Sustainability." The article demonstrates a study that Business Week has completed in the past, but are now going back to, to reveal the changing of times. The study that they had been conducting included talking to 50 CEO's around the world in order to extensively interview them on their thoughts of the "new era" of sustainability. Along with the 50 interviews, they were able to receive 766 online questionnaires from other CEO's and company bosses.
After reading further into the article, I began to think to myself if sustainability efforts would be thrown away by companies who were not receiving support from their primary investors. In the article, it states that only 22% of the "company leaders" believe that investors will have an effect on their future sustainability efforts, but to me, 22% is a lot of businesses that may be effected in the future. I guess what I am trying to get at is, if businesses allow their investors to cause a detriment to their sustainable efforts, will the rest of the businesses not see it as important anymore? What do you think? Since investors are a key stakeholder in any type of company, do you believe that the company might simply ignore all efforts towards sustainability if their investors don't care about it?
To add from the study, 93% of those interviewed believed that sustainability efforts will be important to the future success of their company. Having said this, I still believe that the influences that investors have on companies may cause them to stray away from sustainable efforts if they are not supported in the act. Basically, top company bosses are seeing the lack of investor interest as a barrier for further investment by the investors. This could ultimately cause a great deal of stress and misdirection for companies as to what they are to do for future success.
From our text, we can assume that the leaders of these companies will have to motivate these investors if they are concerned with their leadership outcomes. Of these outcomes, they will have to effectively solve this problem of non-interested investors, and ultimately sustain their performance while doing so. For this, I am basing the leaders of these companies off of the skills model of leadership, and thus, will have to put their skills to the test if they want to overcome this discrepancy. To add, the investor's attitudes would be relating to the career experiences that will effect the leaders ability to reach their specific outcomes, and possibly alter the way the lead in years to come.
If the different CEO's are suppose to persuade these investors that sustainability efforts will benefit the company, they will have to use their ability to exercise their different powers. According to our text, there are five bases of power. One could assume that a CEO of a company would obtain all five of these powers in order to be the leader that he or she has become today. For this situation, the leaders will have to express their powers to the investors in order to help motivate them. For example, the CEO should demonstrate their power for rewards meaning that they should share the ability to reward the investors for their support in the sustainable acts. Ultimately, the various CEO's, if not supported by their investors, will have to use their powers effectively in order to lead the change towards sustainability.
Should they pick up new investors, reach a common ground, or simply push sustainability efforts aside? To conclude, it is obvious that every company is a bit different and so are investors, but soon enough, companies will have to decide what to do and lead a change in order to capitalize on this disappointment. What do you think might happen in the next few years if a great deal of investors are against sustainable efforts?
To view the full article from Business Week, written by Peter Lacy, visit:
http://www.businessweek.com/managing/content/nov2010/ca2010118_925615.htm
-Jeff Parrish
Motivation, one of the four individual attributes of the skills model, is very much applicable to this situation.
ReplyDeleteTo better enforce its correlation, I think we have to delve into the three aspects of motivation.
1.) These company leaders must exhibit a willingness to tackle the problem of getting investors interested in their initiatives.
2.) They have to take on dominance if they want to effectively motivate investors. If they were to half-heartedly support their own initiative. If they want investors to desire to be part of this initiative, they have to express dominance.
This relates to one of the characteristics of John Kotter's characteristics of an effective vision. The vision must be desirable and appeal to the long-term interests of stakeholders.
3.) Company leaders must be committed to the social good of the initiative.
Obviously, they are not lacking this aspect. However, it is a willingness and dominance that will enable them to convince their investors to see a benefit in their sustainability initiatives.
-Michael Condupa
I absolutely agree with what you are saying. I think that the leaders will have to use motivation to the "t" in order to be able to persuade the investors of the positive impacts that sustainable initiatives can have on their company now, and in the future. Thank you for the input.
ReplyDeleteJeffrey Parrish
Dr. Sheep's feedback for your team:
ReplyDeleteIn general, you are off to a reasonably good start on your blog. However, there are some important improvements that are needed.
First, a more careful and accurate/precise application of course concepts and models is needed. For example, one of your posts states, “For this, I am basing the leaders of these companies off of the skills model of leadership, and thus, will have to put their skills to the test if they want to overcome this discrepancy.”
This is an example of mentioning a concept or approach without applying it—they are not the same thing. Mentioning something is not applying it in a well-defined way to analyze anything specific. In another post, Katz’s model is briefly mentioned, but I am still curious why this model is being used when I very clearly recommended in class that you use Mumford’s model instead.
While your three posts all attempt in one way or another to apply leadership approaches, they do so in a somewhat non-specific way. Thus, defining your terms more clearly in how they apply to specifics of your article will improve the credibility of your conclusions in your post.
One of your most urgent problems, it would appear, is that one of your team members did not post anything at all to the blog. Keep in mind that everyone was supposed to have posted their first post by Feb. 9, as stated in class and in the assignment. Please re-read the grading criteria in the assignment file, and note that this is a fairly significant consequence to the team grade (and the individual grades, as well, for those who do not post).
In terms of overall suggestions for improvement, you would do well to increase the level of specificity and accuracy of your course concept and theory applications, although those of you who did post are further down this road than some. Thus, my general advice to your team would be to keep up the good work, make sure that everyone on the team posts well before the deadline, and increase your overall effort in terms of frequency and specificity.