Sustainability Issues in Multinational Manufacturing Companies

This essay discusses sustainability issues in multinational manufacturing companies, focusing on economic, social, and environmental perspectives. It analyzes the impact of unethical practices, healthcare costs, environmental regulations, and social and economic causes on long-term sustainability. Examples from various industries such as automotive, mining, food, and clothing are provided to illustrate the importance of sustainability in business operations.

SUSTAINABILITY

Identify and analyse particular sustainability issues in the context of a multinational
manufacturing company. Consider economic, social, and environmental sustainability
perspectives, and use appropriate examples to illustrate your answer.
Introduction
Due to increasing number of manufacturing companies and the cutthroat competition has
forced them to engage every possible action to make profits and stand apart from the
competitors. Therefore, when organisation operate with maximum potential in order to
achieve organisation goal and become competitive blindly. Knowingly or unknowingly, it
engage itself some of the activities that are not ethical. Moreover, in this process it affects the
consumers in a negative way. In order to rectify these problems, the concept of sustainability
emerged that aims to focus on long-term existence. These days, the organisations have
understood the importance of environmental and financial benefits that can be derived from
sustainable business actions (EPA, 2018). The concept of sustainability emerged as the
creation of manufactured products, which are economically sound, and it ultimately
minimises the negative effects while conserving the natural resources and preventing the
environmental energies. Corporate social responsibility and sustainability perspective has to
be considered by organisations because through mandatory and strict rules regarding CSR
company strives to improve the society by donating money, environmental-friendly policies,
and health safety measures. Sustainability encourages the organisations to regulate the
business operations that are ethical and account for economic, social, or environmental
influence by considering the environmental and human rights (ICAEW, 2018). The essay
brings out the discussion on several sustainability issues especially in various multinational
manufacturing organisations. The essay carries a critical analysis on sustainability issues
based on social, environmental, or economic perspectives with illustrations. Many companies

could not succeed because of unethical methods or sustainability issues. Although, these
organisations are known to be in the name of blue chip shares but they could not comply with
environmental friendly policies (Kozlowski, Searcy, and Bardecki, 2015).
Sustainability issues in manufacturing companies
Sustainability has become an important factor in relation to manufacturing companies.
Business sustainability is defined while managing the triple bottom line through which
companies handle the financial, environment, and social risks, opportunities, and obligations.
By focusing on manufacturing sustainability, recent generation has valued CSR and have
made environment protection priority. This generation focuses to care for environment, a
sentiment that they incorporate in the buying habits. Ten out of nine focuses to pay more
attention on the products from the brands, which are committed to have a positive
environment or social impact. Sustainable manufacturing not only makes the products more
marketable but ignoring the sustainability can harm the sales. For example- replacing the
electric bulbs with the energy-efficient fluorescent lamps that could even last three times
more than electric and also consumes nearly 25 percent less energy. Several practises are to
be considered to foster the business sustainability and ultimately help the organisation to
move on the path from stragglers to leaders. The practises are stakeholder`s engagement,
reporting and disclosure, life cycle analysis, and environment management systems.
Organisations which are sustainable have proved themselves attract and retain the employees
easily because of less reputation and financial risk. The healthcare costs of the manufacturing
companies has been increasing due to considerable strain on delicate manufacturing cost
structures. Manufacturers face problems while providing healthcare services. The company
has to be aware of rising cost and manage it to ensure that healthcare services do not push the
price of products. Concerning actions for the environment can be beneficial for local
environment. Sustainability regulations remain expensive for the manufacturing

organisations. For example- In 2015, Volkswagen will not exist among the investor-focused
CSR (corporate social responsibility) ranking. The automobile manufacturers preferred
business priorities that have commenced to integrate resources scarcity, social equity,
digitization, climate risks to the corporate responsibility (Hepler, 2015). The environmental
Protection Agency reports that software-cheating emissions lead to the testing of eleven
million owned by consumers. This further resulted to unknown Air pollution that have
contributed to respiratory ailments and deaths that linked to contamination of breathing air.
Whereas, in coming few years the company has raised environmental targets such as the
group started prioritising the environmental strategies and targets. Currently, the company is
seeking the leading role in sustainability in automobile industry. It is the aim of the company
to make decisive contribution in order to mitigate the risk associated with the climate change
and improve the quality of the air. Another similar case of Mitsubishi Motors leads to
emission scandal. Although several companies have not been able to become successful to
accomplish its sustainability activities and the essay discusses some cases. Cadbury struggles
to integrate the supply chain. The case describes that situation where the company involved
child labour as their slaves. Although the company has paid close attention for the welfare of
the labourers. Moreover, what actions should company to sustain the same level of
sustainability to ensure that the supply chain is ethically operated? Other than environmental
issues, choosing the wrong leader can affect the long-term sustainability. For instance-
Exxonmobil which is renowned as world`s largest oil and gas corporate in terms of its market
share but it does not represent the same level of leadership which is represented by other
smaller peers. The biggest flop of Ford named “The Edsel” has launched the new vehicle
under the wraps, which was the experimental car. The company had lost around $250 million
in 1959 due to failure of marketing plan. It is more important for the companies to leave a
positive legacy and maintain throughout the time till it operates in the corporate world. If the

company consider its one-time benefit as more important such as ruining and spoiling the
environment until and unless they are caught red handed and finally are punished and even if
they are caught, government penalise them for their deeds which ultimately affects the long
term sustainability. Even after being penalised, some organisations think as our organisation
has already paid the penalty fees, which is much more less than their profit making. So,
paying penalties is more cheaper than causing harm to the environment which not only
affects the organisation`s long term sustainability but also encourages the younger generation
to do the same without caring about the environment. Although, the companies may earn
benefits in the short run or till the time they are not caught red handed by the authorities but
in the long run it encourages the next generation to spoil the environment and loss of
consumer base (Maas, Schaltegger, and Crutzen, 2016). In 2013, many protesters in UK has
reported that mining companies has breached the environmental and human rights. Expansion
of mining and automobile companies have threatened the water supply chain of nomadic
people and area`s ecology. For example- Rio Tinto Group is an world`s largest mining
corporations but it breached the human and environmental rights. It is important to consider
that water is a both lifer and death resource. The company has been diverting water without
taking care of local community living around it. Although, the company has succeeded to
make profits but ultimately it has released the importance of water from the deep level
aquifers to provide nomadic people pure water and a seasonal river will be diverted near the
mine. Apart from environmental issues for the sustainability, companies lose their brand
image due to social and economic causes too (Neate, 2013). For example- Tyco international
is a Manufacturing company that deals in production of electronic components, which further
undoubtedly creates risk on the part of fire safety, health care, and security. Social issues such
as fraud employees within the organisation such as Tyco international`s executives such as
CFO and CEO were found guilty of stealing a sum of money of approximately $600 million

from the organisation which ultimately left a very bad impression that even responsible
executives are not loyal. As shareholder`s investment is in the hands of top level management
because their decision making will affect shareholder’s returns but here in Tyco international
CFO and CEO turned fraud that reflects a very bad image in a long run. Another corporate
example is Enron, which is known for its wealth, power and smart. Nevertheless, this
company faced spectacular bankruptcy because of painstaking planned accounting fraud
passed by accounting organisation (Wolf, 2014). Although, the company faced a drop in
share price due to disaster in financial terms where employees and investors experienced their
savings vanishing. Social issues such as sexual harassment, health risk during the process,
and disloyal employees lead to affect the sustainability in the end. Electronic, infrastructure,
and mining companies face risk associated with employee’s health increases in these types of
operations. So in order to overcome these issues, companies have to undertake some crucial
measures to protect the employees’ health and enhance the health services in the company
(Kaspereit, and Lopatta, 2016). Apart from this, it is reported that nearly 71 percent
millennial want food industry to serve healthy food and products to them (Daneshkhu, 2018).
Moreover, even they are ready to pay more money to minimise the overloading expenses of
healthcare services. Young generation has changed the food trends over the recent years; they
have forced the company to undertake the activities that can win the trust of the food
manufacturers (Bradford, Earp, Showalter, and Williams, 2016). MNCs and large
manufacturers started to listen to the consumer`s demand and preferences for transparency
regarding production methods and its ingredients. Millennial prefer healthy food, which
forced the food industry to engage low-fat and high fibre. As per the statistical reports,
millennial look at the label stickers to see whether the content is natural, organic and
sustainable or not (Industry News, 2017). Although, companies earlier provided a brief
description of what they are providing in their product but now companies have become more

aware of what actually they are serving to their customers as Millennial are more interested in
in what way food can be sourced and grown and how it ultimately affect the carbon footprint.
Long-term sustainability is a priority for the company especially while serving the customers
as when buying food at stores. Several environmental issues has created awareness among
Millennial that has influenced the food industry to employ environmental friendly practises
(Siew, 2015). Apart from mining, electronic and food industry, it is seen that large clothing
industry such as Zara, H&M, and topShop has been focusing to discontinue the production of
those apparels that followed the allegation of animal cruelty. Ethical and CSR concerns has
enforced the engagement of natural and expensive raw material that could not affect the
animal`s survival that will help the company to image itself as operating the company to
achieve the sustainability (Pedersen, Gwozdz, and Hvass, 2018). Zara and H&M have
criticised the organisations who uses angora wool especially after the unethical practises for
the Chinese suppliers (Jason, 2018). These companies has ceased the production of angora
products just after the plucking of several Chinese factories. In short run, although, these
companies incurred a huge cost to find the substitute of angora product, which will help the
company to maintain its sustainability (Pedersen, Gwozdz, and Hvass, 2018). This has
reflected a shifting of consciousness among the customers who are ready to pay more for the
ethical sourced clothing. The time when the confidence of people was hit by horsemeat
scandals and things concerned with obesity and diabetes. In order to achieve the sustainability
and corporate social responsibility, Big MNCs have decided to build the public policies and
commitments regarding the supply chain that has focused on improving the capitalist system
(Sunday Telegraph, 2013). It is important to know that while sourcing the commodities such
as cocoa, potatoes, soy, sugar, coffee, and corn, many farmers face injustice and inequality.
Apart from this, many CSR and sustainability reports are criticised to focus only on specific
projects such as usage of water, by paying adequate wages to the workers, fair price to small

farmers, figuring out the root cause of hunger and poverty due to which companies lack
adequate policies that can guide the supply chain (Kozlowski, Searcy, and Bardecki, 2015).
Oxfam has ranked the companies such as Unilever, Coca-Cola, and Nestle as per the
standards and how it ensures to apply the worker`s rights and farmers that also can includes a
transparency in the operations of supply chains, managing the usage of water and land,
protect the human rights, and actions to reduce the negative effect of climate change
(Confino, 2012). Brexit has severe impact on the economic as well as social environment of
the organisation. It is reported that UK consumer shares appear cheap valuation metrics that
brings out price to adjusted earnings that fail to take into consideration the level of debt and
maintain a poor cash flow exhibiting a level of investment that are exposed to cyclical
pressures that has affected rising cost and corporate profit margins (Marketviews, 2018).
Conclusion
From the above discussion in the essay, it can be concluded that considering the sustainable
and CSR activities have become necessary for regulating business in recent corporate world.
These days, the competition is not only limited on what company contribute as profits to its
shareholders but also its long-run reputation. Several benefits discussed above in the essay
after executing sustainability actions can be it gives a brand recognition, saves cost on
operations, organisational growth, increase the consumers base and ultimately it is able to
employ greater talent and retain the efficient staff. The essay also illustrated some relevant
examples such as how Zara and H&M questioned the sustainability of other clothing outlets
just because of not using the natural resources that should not harm the animal’s existence.
While analysing the reports of sustainability issues, according to emission trading system,
11000 power stations and flights associated with European countries accounts for 45 percent
gas emission. Other than benefits, fulfilling sustainability contexts also lead to higher costs

such as changing the process of supply chain and using elements that are more nutritious in
the food industry.

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