Strategic Management for Competitive Advantage

Categories: Energy Efficiency


Usually CSR and sustainability are used to signify the same thing but conceptually there are slight difference as CSR focus on triple bottom lines i.e. economic, social and environmental responsibility while sustainability emphasis to societal and environmental development. The purpose of establishing CSR into core business strategies is to bring stability for in long run and meeting the need of the society at minimal impact on environment. CSR is a vital component of sustainability or sustainable development that comprises corporate economic responsibility, corporate environmental responsibility and corporate social responsibility.

This means organizations is responsible for impact of their activities on environment, society and various stakeholders such as shareholders, employees, communities and customers (Guarneri & Kao 2008).”
For the most part, CSR and maintainability are utilized to mean something very similar however theoretically there is a slight contrast as CSR center around triple primary concerns, for example, financial, social and natural duty while maintainability accentuation cultural and ecological improvement. The motivation behind setting up CSR into center business systems is to bring strength for over the long haul and addressing the need of the general public at insignificant effect on the earth.

CSR is a fundamental part of manageability or reasonable advancement that includes corporate monetary duty, corporate ecological obligation, and corporate social obligation. This implies associations are liable for the effect of their exercises on condition, society and different partners, for example, investors, workers, networks, and clients (Guarneri & Kao 2008).”

Corporate Social Responsibility (CSR) & Sustainable Development

Triple Bottom Line

Sustainability is comprised of three core elements -, economic development, social responsibility and environmental quality – essentially profit people and planet (Elkington & Robins, 1994).

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This ‘triple bottom line’ becomes more important when it is considered how modern companies are now held accountable. Stakeholders will introduce measures of environmental and social success which can affect competitive positioning, reputation and profitability.
Economic Responsibility\nEconomic Responsibility focuses on practices that facilitate the long-term growth of the business, while also meeting the standards set. By balancing economic decisions with their overall effects on society, business can improve their operations while also engaging in sustainable practices. Concrete example of economic responsibility is when a company modifies its manufacturing processes to include recycled products, which could benefit the company by potentially lowering the cost of materials and also benefit society by consuming fewer resources (Husted & Allen, 2007). .\n
Social Responsibility\nSecond pillar of CSR is social responsibility. Ultimately, an organisation that actively pursues a socially responsible strategy can enhance their corporate reputation. This, in turn, can both build and sustain a competitive advantage (Crane, McWilliams, Matten, Moon & Siegel, 2008).Corporate Social Responsibility may also be referred to as \"corporate citizenship\" and can involve spending finances that do not directly benefit the company but rather advocate positive social and environmental change. Aligning social and economic responsibilities. Maintaining a good reputation means good business which creates sustainable profit base rather than profit at any cost. It is a commitment by organisations to behave ethically and contribute to economic development while improving the quality of life of the workforce, the local community and society at large (Johnson, Whittington, Scholes, Angwin & Regnér, 2014). Social responsibility, unquestionably, contains more viewpoint than simply worried about the ecological impacts of associations.

Environmental Responsibility

Environmental Responsibility recognises that organisation’s need to take account of the social and ethical impact of business decisions on the environment in which they compete (Henry, 2011). As the awareness of environmental issues grows, business that takes steps to reduce air, land and water pollution can increase standing as good corporate citizens while also benefiting as a whole. Studies have highlighted common conceptual threads surrounding corporate sustainability and sustainable development: The central idea of sustainability is that the current generation must leave the next generation a stock of capital that is no less than that which exists now (Nemetz, 2013). To be environmentally responsible, corporations induce suppliers and retailer to develop eco-friendly inputs and outputs of entire value chains and reduce waste.

Sustainability and CSR of GE

The General Electric Company (GE from henceforth) is an American Multinational Conglomerate founded in 1892 by the merger of American Inventor Thomas Alva Edison’s Edison General Electric Company and Thomson-Houston Electric Company .GE currently operates simultaneously in five diverse business sectors namely: Energy (e.g. oil and gas), Media (as NBC Universal in areas such as cable and film), Technology Infrastructure (e.g. Aviation and Healthcare), Home and Business Solutions(Appliances and Intelligent platforms) and Finance ( as GE Capital involved in both commercial and consumer finance). GE currently has businesses in about 160 countries and about 300,000 employees around the globe. The company’s headquarters is located at Connecticut, USA.
As a global conglomerate GE has had a controversial history with regards to air and water pollution dating back to the late 1940s and had always been a target of criticism from public officials and environmentalists in the US. However, things took a turn for the better when on the 9th of May, 2005 GE’s CEO Jeffery Immelt announced the company’s new environmental initiative called ‘Ecomagination’. In Mr Immelt’s words, the aim of the initiative is to “focus our unique energy, technology, manufacturing, and infrastructure capabilities to develop tomorrow’s solutions such as solar energy, hybrid locomotives, fuel cells, lower-emission aircraft engines, lighter and stronger materials, efficient lighting, and water purification technology”.


In order to achieve its goals of becoming a more sustainable company and to increase their overall sustainability performance, GE through Ecomagination has committed to taking the following concrete steps:
Reduce water use and improve water reuse: As of 2006 GE’s freshwater was totalling about 15.3 billion gallons and so the company announced its goal of cutting consumption by 20% by 2012. By 2009, GE’s water usage was down 30% to about10.7 billion gallons which further prompted the company to set a modified goal of aiming for a 25% reduction by 2015. Double investments in clean Research and Development: At the launch of Ecomagination, GE committed to increase its R&D spending on clean technologies from about $700 million in 2004 to $1.5 billion by 2010; by the end of 2009 a total of about $5 billion had been spent on R&D for clean technologies which according to GE reports generated about $70 billion in revenue thanks to the new technologies and products from the Ecomagination initiative. In light of this, in 2010 GE announced a commitment to invest an additional $10 billion in Ecomagination by 2015. Reduce Greenhouse Emissions and improve Energy efficiency of its current operations: At the launch of Ecomagination, setting 2004 as a baseline GE made a commitment to cut 1% of its greenhouse gas (GHG) emissions by 2012 and reduce the intensity of its GHG emissions 30% by 2008. As of 2011, GE has been successful in cutting GHG emission by 22% and also reduced the intensity of its GHG emissions by 39%. According to GE reports, overall energy intensity has improved by 34% and the company hopes to improve by up to 50% for all its operations by 2015. Increase revenues from Ecomagination products: In 2009, revenues from Ecomagination grew by 6% to about $18 billion despite the financial crisis. GE projects Ecomagination revenues to continue to grow at double the rate of total GE revenues in the next five years and eventually account for a larger proportion of total sales.


Currently GE invests about $1 billion annually on training and education programmes for GE employees. Now, it could be argued that given GE’s long-standing commitment to Human sustainability,


CLIMATE CHANGE: Taking into account the large size and global reach of GE as a company, climate change can be highlighted as a key issue that poses a challenge for GE moving forward. In light of this fact, as part of the Ecomagination initiative GE has been able to successfully cut its GHG emissions by 22% and also reduced its GHG intensity by 39%, using 2004 as a baseline. As observed 85% of their emissions are made up of CO2 while 13% are consist of HFCs which are usually emitted during foam-blowing operations at its refrigerator manufacturing plants, in total they accounted for approximately 98% of GE’s emissions in that year.
WATER: As was highlighted earlier on, from 2006 to 2009 GE successfully cut its freshwater consumption by 30% and is on pace for an additional 25% reduction by 2015


WAGES AND BENEFITS: With GE currently operating in more than 100 countries around the globe, the company is very active in terms of job creation and employee development. Taking into account its total global workforce of about 300,000 people in 2009, about 154,000 people were non-US showing its interest in hiring and developing local people. In addition, GE provides benefits to it employees beyond their normal salaries that is aimed at ensuring heir financial security. According to GE data, it currently has an assortment of pension plans that provide cover for close to 635,000 employees and retirees around the globe
GOVERNMENT TAXES AND FEES: In addition, GE also paid out close to $1 billion in income taxes to the government.
USE OF LOCAL SUPPLIERS AND SUPPORT FOR LOCAL BUSINESSES: In an effort to enhance its supply chain management, GE launched a ‘Supplier Diversity Programme’ in 1974. The aim of the programme is to engage diverse groups of suppliers in order to enhance economic opportunity.


According to GE’s 2009 Ecomagination report, revenues grew by about 6% to $18 billion courtesy of products launched under the initiative. As a global conglomerate, GE is involved in the provision of a diverse set of products and services from appliances and aviation to healthcare and financial services.\nSource: GE Metrics\nFinancial Performance and Future Impact of the Expectations
The following table shows the GE’s main financial information from 2005 to 2018, and this table also shows the GE’s financial change accounted for GE’s Ecomagination. (table 1).

Chart 1: GE’s detailed financial data.

Chart 1:1 GE’s detailed financial data (increasing pattern)2005-2010
The following data show the pattern on GEs gross margin performance after the Ecomagination was launched in 2005.\n \nChart 2: GE’s gross margin from 2005 to 2010\n
Chart 3: GE’s share price from 01/01/2005 to 01/01/2010
According to the data table, after the launch of Ecomagination in 2005, GE’s performance had a steady growth in the first two years until reaching its peak in first Quarter of year 2007. However, on the second quarter of the year, there’s a steady decline on share price of GE before finally climbing again in 2009.


To sum up, businesses must integrate CSR concepts into the organization’s core business strategies by aligning CSR concepts with strategy and process innovations and treat them as new frontier for innovation to be sustainable innovative (Zadek, 2004). All three pillars of CSR, economic, environmental and social need to be considered as business norms by corporations in order to persuade the expectations of all stakeholders.


  • Guarnieri, Robin, and Tina Kao. \"Leadership and CSR–a perfect match: how top companies for leaders utilize CSR as a competitive advantage.\" People & Strategy, Sept. 2008, p. 34+. Gale Academic OneFile, Accessed 7 Jan. 2020.
  • Elkington, J. & Robins, N. (1994). Company environment reporting (1st ed.). Paris, France: United Nations Environment Programme, Industry and Environment.
  • Husted, B. & Allen, D. (2007). Strategic Corporate Social Responsibility and Value Creation among Large Firms. Long Range Planning, 40(6), 594-610.
  • Crane, A., McWilliams, A., Matten, D., Moon, J., Siegel, D.S. (2008). The Oxford Handbook of Corporate Social Responsibility, Oxford: Oxford University Press.
  • Johnson, G., Whittington, R., Scholes, K., Angwin, D., Regnér, P. (2014). Exploring Strategy: Texts and Cases, 10th Edition, Harlow: Pearson Education Ltd.
  • Henry, A.E. (2011). Understanding Strategic Management, 2nd Edition, Oxford: Oxford University Press.
  • Nemetz, P.N. (2013). Business and the Sustainability Challenge: An Integrated Perspective, Abingdon: Routledge.
  • As Ecomagination is GE’s main sustainability programme, the documents retrieved from the company and used for the purpose of this workbook are in the form of “Annual Sustainability Reports” which are publicly available at the Ecomagination website ( The reports are currently available for the years 2005 to 2009 in PDF format and can be downloaded and viewed by the public.

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Strategic Management for Competitive Advantage. (2021, Oct 31). Retrieved from

Strategic Management for Competitive Advantage
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