Meeting the Challenge of Sustainable Business

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The Challenge of Sustainable Business
15.04.2019
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Summary

This paper provides in-depth information on the significance of conserving economic resources and creating a sustainable business for future survival. The report draws a scenario using Taboialak Oil Company operating in a resource constraint economy in France in 2060. The report has been divided into three main sections. The first section is the introduction which provides the background information on the issue under discussion and the overall aim and objective of the report. The second section is the main body which describes the scenario that has been used to explain the survival of a sustainable business operating in a resource constraint economy. The setting of the scenario is in the future in the year 2060. This is followed with justification for the scenario which highlights the way the economic status experienced that year developed and how businesses and governments responded. The report concludes that understanding the business scenario in terms of limited resources is the key to appropriate planning. It recommends that the business should be more focused on research to understand the best ways of remaining sustainable in a resource-constrained economy in France.

1. Introduction

In the year 2060, the world’s economy will be in a state of ruin. The reason for this has been attributed to insufficient availability of resources. According to Gupta, Li, and Yu (2015), resources are significant as they are the main driving force for economic growth and development. Their unsatisfactory availability has made it close to impossible for economic activities to continue successfully. An example of a country that has been severely impacted by this outcome is France while the most affected economic units are businesses. The latter is no longer sustainable to face the difficult economic hardship experienced around the world. For this reason, there is a need to provide an insight into resource constraints that have an impact on future economic wellbeing, preventing businesses from thriving and affecting their sustainability in the future. A scenario of Taboialak has been used in this report to explain what future businesses are heading into in case nothing is changed for the better today. The operation of the business, namely Taboialak Oil Company, in a resource-constrained economy of France in 2060 will not be easy, but innovative strategies will be the key to its success.

2. Main Section

2.1 Scenario Set

Taboialak is a French oil company operating in the oil and gas industry in 2060. This period has proven to be very difficult for businesses in the entire world. The reason for this difficulty is that there has been a great deal of resource constraint in the economy. The resource constraint can be attributed to a number of difficult environmental and social challenges that have been experienced over the years (Weterings et al. 2013). One resource constraint can be illustrated by the insufficient availability of labor. This is problematic since a large part of the population is hardly labour diversified and lacks skills that can meet the needs of existing businesses. Availability of labour is considered a key factor for economic growth (Lee et al. 2012). For this reason, the economy will be slowed down in its absence or inadequate availability. Further, natural resources at this time have almost all been depleted. Cole (2007) asserts that the reason for this issue is the high increase in population. Other reasons for the extreme depletion of natural resources are severe climate change and the unfortunately high rate of pollution that has been taking place over the years (Dietz & O’Neill 2013). Amidst the limited resources, the company is offering a plausible and innovative solution to the fuel shortage at this time using lasers and data analytics before drilling any given oil well. This is to ensure that the latter are not overexploited through aggressive drilling procedures. This is coupled with fracking techniques to get more out of oil wells exploited before to ensure it gets maximum of ra materials to serve the high demand for oil. It works with the understanding that as much as the world advances, the demand for oil will remain at its highest. Therefore, the company is able to go back to the explored oil wells using advanced fracking techniques to get more out of them and serve the demand instead of resorting to seeking for new wells at the wake of each day as many other companies are doing in this resource-constraint economy.

2.2 Justification of the Scenario

In 2060, the economy experiences a lot of constraints in the availability of resources; and that factor has made life very difficult for many business owners. Businesses have been the most affected as they find it difficult to put together resources needed to drive their operations. Consequently, many of them fail while others have already shut down altogether. A number of changes have resulted in the poor economic state of the business. These changes have been taking place gradually which explains the reason their impact has gone unnoticed and disregarded when attempting to rise to the surface. This has been going on for a long time. In the end, their impact has come to be felt all over the world as it has brought the world’s economy to its knees. The truth of what has really happened is human has failed in his responsibility of conserving his resources. This can be illustrated by the careless activities human beings have been engaging resulting in the destruction, mismanagement, and ultimately depletion of resources (Heck, Rogers & Carroll 2014).

A number of environmental limitations can be attributed to the existence of the current situation. Most of them have been brought about due to climate change which has been greatly influenced by man and his activities (Sena 2008). The example of a distinct limitation is the fresh water shortage. The sources of fresh water have slowly diminished over time.

Another relevant environmental limitation is increased in waste. Zhang (2012) asserts that human beings are very busy producing much waste and disposing of it incorrectly. This is also one of the reasons there is a reduced amount of fresh water and high rate of pollution. Weterings et al. (2013) count the factories, which have developed the habit of using very inadequate ways to dispose of their waste. Greedy factory owners have been busy depositing harmful waste into water basins and land making them unsafe for drinking or farming. The most hazardous waste is a chemical one. In this concept, it is obvious that one more resource that island has been compromised and thus constrained as a resource for economic advancement. The final blow of environmental limitation that has resulted in resource-constrained is the loss of biodiversity. Man has been on the frontline of destroying the ecosystem by artificially interfering with it through unnecessary scientific escapades or hunting animals due to greed and pleasure factors that have led to many useful species of plants and animals became extinct (Sena 2008). Accordingly, these limitations have affected the oil industry causing high costs of production. Different companies do not know how to handle the costs effectively. The society is also affected in the sense that it cannot access oil products at affordable prices due to the increasing costs of production for most companies in the industry. Finally, global markets are impacted concerning supply and demand. The demand is too high, but the supply is too low due to limited resources for companies.

The losses of the oil and gas industry have resulted in depletion of many sources of oil. Use of fossil fuels based energy has further accelerated the use of natural resources which has also affected the climate and ecosystem (Kimura 2007). Most companies have been using methods of extracting oil that is near the surface without considering future trends. As it stands currently, due to environmental limitations mentioned above, the oil on the surface has become depleted forcing businesses to shut down or come up with new and better ways of reaching the oil deep in the surface. The industry has responded by trying to find the best way of becoming more innovative in order to remain competitive and to extract oil in a less traditional manner. This will allow businesses to tap into oil basins that they were not initially able to. In essence, the specifics of the home country, namely France, interact with these limitations and impacts by offering supportive technologies that would ensure efficiency and effectiveness of the industry. The specifics are tuned in the sense that they accommodate the shortage of resources and the need to offer technologies to maximize their usage while avoiding further depletion.

Governments’ response is the formulation and implementation of policies and laws to improve the current economic situation though that move has come too late. Many of the laws and policies focus on the way the remaining little resources can be conserved and how they can be expanded to revert back to the initial volume (Moore, O’Connell & O’Donnell 2013). Some of laws and policies include regulating pollution, preventing hunting, best ways of conserving sources of water, and general ways of protecting the environment as it is the strongest chance for the planet in overcoming resource constraint. The impacts have been prioritized due to their immediate influence on the creation of the current economic situation.

2.3 Strategy for Taboialak Sustainable Innovation

In light of the current situation, it is imperative that Taboialak finds a way of developing a strategy for sustainable innovation that could provide it with value creation and competitive advantage. The latter could help the company to successfully operate at the time of economic hardship. It will also enable it to effectively respond and adapt to the major economic challenges. Thus, the most suitable and efficient strategy for Taboialak’s sustainable innovation is as below.

The strategy developed by Taboialak involves the reduction of production costs as the main way of surviving the harsh economic conditions. This is carried out through innovations in electrification, automation, and digitalization of the entire production chain (Blowfield 2013). Becoming innovative has proven to be the only solution for Taboialak as its future competitive advantage depends on it. Taboialak has utilized these innovations to develop new ways of extracting oil from sources considered unconventional which other companies may shy away from trying. It is imperative to note that this new way of extracting oil requires the company to possess a lot of ingenuity and sophistication as affirmed by Hess (2013).

The unconventional sources of oil the company seeks to tap into include oil and gas deposits that are found deep underground, offshore, or locked in oil sands. The way to extract the oil is to inject water or carbon IV oxide into the sources increasing pressure that boosts the oil to the surface. The company is also working towards the development of automated oil fields at the bottom of the sea. This will require work to be done more by machinery than people. Kleijn and van der Voet (2010) confirm that this move will increase productivity and reduce the risk associated with the process of oil extraction. Further, the use of automated machinery will contribute to the acquisition of smart data which will be used to optimize the oil extraction process. The company is also striving to ensure that the new methods of oil extraction are more environmental friendly by reducing the intensity of energy.

The reason for approaching the business development strategy in this manner is the need for the strategy to be highly ingenious in order to be successful in its purpose, and this is the best way of achieving the aim. Another reason for using this approach is the strategy to achieve a fundamental shift in the company’s business model, values, and behavior. This can be succeeding through the use of this approach. The aforementioned facts are the reason for this approach to be suitable for Taboialak’s current situation.

There are a number of opportunities available to facilitate the process of salvaging the situation and making Taboialak a sustainable business that can successfully operate within a resource-constrained economy. Research and development is a way of enabling businesses to gather data that can be useful in turning their situation around (Friedman 2010). Further, it can facilitate finding more innovative alternatives to apply in order to make the oil company more sustainable and successful.

The business model may need to change due to the equally changing situation of the economy and resources. The company should be able to anticipate that in some instances, the situation worsens due to pressure placed on a given constraint, and this pressure moves from one resource to another. It is, therefore, necessary to change the business model in order to respond effectively.

3. Reflection

I suppose this task has been very eye-opening to the kind of future that the world and the general economy may find itself if it continues mismanaging its resources. It is obvious that business sustainability is important for the survival of the economy. Business owners should focus more on people and the environment rather than on profits alone. Thus, when a business is sustainable, it has a fighting chance for survival in the event that issues get tough in the future.

In my opinion, the businesses should carry out more research and use scenarios to gain an insight into how best they can conserve economic resources and thus prevent the economy from being destroyed due to constraint in resources. Therefore, they will be able to formulate strategies that can be used to save the situation and prevent the predictable doomed economic future. Businesses will also be inspired to become more creative and innovative further promoting success in the future.

In conclusion, carrying out a business environment scanning will serve to assist business leaders and global corporations in how best to apply emerging and future trends to gain information on the future vision and plans that can be used to overcome economic hardships. Further, scenario planning will demonstrate an understanding of the complex issues, risks and opportunities the businesses face and apply the appropriate knowledge, as well as creative and entrepreneurial thinking to reach convincing solutions for a sustainable global business. It is imperative to note that industry standards and governmental laws and regulations will impact the business decisions concerning sustainability at global and local levels.

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