Recently, the chief executive of Volkswagen Martin Winterkorn resigned to allow the company a ‘fresh start’. Volkswagen’s reputation lies in tatters and the stock price has plummeted by a third of its value. It is also staring at a fine of possibly up to 18 Billion USD. The crime? The automaker was accused of gaming vehicle emission rules.
This is not the first time that the auto industry has hit a speed bump on a safety or environmental issue. Come to think of it, it will probably not be the last time either!
Clearly times have changed. An environmental misdemeanor can get you ousted, even an indiscretion can cost the company heavy. Or an overly confident attitude as Monsanto demonstrated in the early stages of the GMO controversy can sink the fortunes of the company and get the CEO fired.
In India, Dow Chemicals is fighting the ghosts of an accident long past – the Bhopal gas leak. As the chairman of Dow said, “Why should I be held responsible?” Activists disagreed and the Indian government prevaricated. The result: Dow is caught in a quicksand of potential liabilities.
As Bob Dylan sang, “… for the times, they are a-changin!’
Sustainability concerns are changing the structure of industries, creating new market leaders, creating new paradigms for doing businesses and allowing new stars to emerge over the horizon. In every industry, new upstarts are on the horizon often rewriting the rule of conducting business.
The language, too, is turning around. “Green” is literally the colour of money, innovation is frugal, the most promising markets are at the base of the pyramid and economies are turning circular.
We are moving toward a new corporate order greatly supported by a new world order that places a great emphasis on sustainability as a core value.
How do we make sense of the changes around us? What implications do these changes have for the way business operates? How are the roles of business changing? What new social contracts are being written? Is there a sustainable advantage to being sustainable?
Join the ST250x team from IIM Bangalore and a plethora of thought leaders from across the globe in our MOOC to explore the exciting world of Strategy and the Sustainable Enterprise.
08 Jan 2019