Developing sustainable corporations in Australia

In the wake of the environmental degradation, social inequality and injustice, and the incidents of corporate frauds and mismanagement reported in Australia, domestic business organisations have been asked increasingly by Australian governments and people to pursue sustainable business practices. As prime movers of creating wealth and employment, business organisations have an important and legitimate role to play in sustainable development, which is defined as a notion that meets the needs of present without compromising the ability of future generations. Corporate sustainability, which is a subset of the concept of sustainable development, involves integrating financial, social, and environmental values into business policy, planning, and decision-making requiring changes in organisational values, perspectives, culture, structure, and performance measures. Many Australian businesses are wary of meeting financial, social, and environmental objectives simultaneously claiming the agenda as contradictory and almost unattainable, but the demand for achieving corporate sustainability seems inescapable. Since Australian businesses are facing a fierce competition in domestic market as a result of reducing trade barriers, globalisation, and market deregulation, demanding them to contribute more to sustainable development may appear to be unreasonable. Furthermore, business managers are often wary of any organisational changes, as several of them have failed in creating organisational value. As a consequence, business managers are cautious of engaging in sustainable business practices. In an attempt to unravel the above dilemma, this study mainly examined how to enhance organisational value by sustainable business practices. It examined the two dominant strategic management theories, i.e. Barriers to Entry theory and the Resource-Based View (RBV) theory. It collected the data from 102 Australian business organisations using a survey method. Based on its findings, this study makes a number of contributions to the theory and practice of strategic management. Notable among them are, first, it shows that socially crafted business practices such as knowledge management, customer relationship management, and stakeholder management can have substantial leverage to building business competitiveness. Second, it demonstrates that environment-oriented business practices can provide a number of effective opportunities for increasing the height of entry barriers to new competition. Third, this study concludes that social-oriented business activities are almost ineffective as entry barriers to new competition. Fourth, it substantiates why environment protection measures such as Environmental Management System (EMS) are least contributing to business competitiveness. Finally, this study substantiates its main claim that a business organisation can enhance its competitive advantage by pursuing corporate sustainability principles. This study upholds the view that business organisations have enlightened self-interest in following corporate sustainability.