Sustainability Issues in Multinational Manufacturing Companies

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