Editorial: Relationship Is a Significant Construct of a Sustainable Business
M Daud Ahmed
Editor, July 2014
Sustainability is about maintaining inter-generational equity in terms of social, environmental and economic capitals, commonly referred to as sustainability dimensions or triple bottom lines, focusing on either keeping the status quo or improving these capitals from the present to the future. An intrinsic aspect of sustainability is defining the continuity of relationships from the current time to future generations. In order to achieve this deep and vertical relationship between present and future, sustainability needs to define broader and horizontal relationships among people, planet, and prosperity. These can be generated or impacted from a business, a community, a city, a country, a region or the world as a whole.
Sustainable business management or sustainable development is a roadmap to achieve sustainability, requiring a holistic approach to managing relationships among the sustainability dimensions. While it is logical to consider all the sustainability dimensions as equally important in a sustainable business model, different stakeholder groups may have widely varied emphasis and weighting depending on their area of interest.
A business cannot operate in isolation. The essential building blocks of business, besides its core competencies, are its internal and external relationships. The numbers and types of stakeholders are increasing, as the commercial and government sectors become more complex. Such stakeholders include, but are not limited to, providers of capital (both equity and loans), providers of labour (both employees and contractors), providers of goods and services (both from upstream suppliers and downstream consumers in the supply chain), providers of knowledge (in the knowledge web) and those such as government agencies that legislate and regulate businesses, provide support services (in some cases) and always demand their pound of flesh1. In addition, various social and environmental groups, and sustainability bodies have also been considered as stakeholders of a responsible organisation. Therefore, the stakeholders’ relationship is one of the significant ingredients of a sustainable business for strategic management, governance, transparency, development and growth, and reporting and communication.
This issue of The New Zealand Journal of Applied Business Research (NZJABR) Volume 12, Number 1 explores some of these relationships and growth aspects of sustainable businesses in its four articles. The first three address issues related to relationship management in New Zealand businesses with respect to different stakeholders, equity funders, and clients (market research clients and medical patients, respectively). The fourth paper is related to performance in the manufacturing sector of a regional Bangladesh economy.
The first article, entitled “Alternative Venture Capital Fund Structures: Analysis of Interviews with Fund Managers, Investors and Intermediaries” by Sujit Kalidas, Andrew Kelly, and Alistair Marsden, explores whether there is any new or different venture capital (VC) fund structures that would improve the viability of VC funds. There is a dearth of such funds in New Zealand, certainly, post the 2007 Global Financial Crisis. In particular, there is a shortage of venture funding for early stage companies in the two to the ten-million-dollar range. The issues around raising smaller funds, using co-investment, deal-by-deal or pledged-capital VC fund structures are explored.
The second article on “Client Contribution to Professional Service Delivery: Implications for Relationship Quality Delivery” by Milind Mandlik, Mark Glynn and Ken Hyde, examines the relationship between clients (patients) and their medical practitioners. The authors propose a conceptual model in which client empowerment, in addition to trust, commitment and satisfaction become an integral component of the meta-construct relationship quality in which client contribution to service provision has favourable outcomes not only for the clients but for the service providers as well.
The third article entitled “Ethical Issues in Business Relationships between New Zealand Marketing Research Practitioners and Clients” by Anca Yallop and Simon Mowatt, examines the complex relationships and ethical issues linking the general public, respondents, clients, and researchers. The ethical issues between clients and researchers have been under-researched generally in New Zealand. The paper shows that although most of the issues are similar to those encountered overseas. There are some peculiarities in the New Zealand market that include client confidentiality and publishing results, mainly due to the small size of the New Zealand business environment.
The fourth and final article, “A Nonparametric Estimation of Total Factor Productivity Growth of Manufacturing Firms” by Shakil Ahmed, M Daud Ahmed, and Ziaul Haider, considers how the growth of manufacturing firms depends on factors associated with both internal and external environments. Relationships, particularly in a developing economy, vary depending on the labour market, competition, technology adoption, investment opportunity and capability, industry sector, natural environment, local and regional influences, the strength of supply chain, and ethical and social aspects of business practices. The paper presents the top five factors that impede the growth of the manufacturing firms namely, lack of technological improvement, interruption in energy supply, lack of social security, uneven market competition, and uncertain natural disasters.