CHAPTER 8

THE POLITICAL AND SOCIAL CONTEXT: A SIXTH

FORCE ON BUSINESS?
In Chapter 6 we showed that there are many drivers for change for business to embrace
sustainability; there are many winwin options for most business. Chapter 6 also showed
how Porters 5 Forces Model provides a framework within which to understand how
sustainability strategies could help business. Shaun Mays, in his report Corporate
Sustainability: An Investor Perspective,
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points out that in assessing the external
environment, approaches such as Porters five forces are used. However, most
companies and analysts also look at the political and social environment when looking
at the future of the industry in which they operate. Sustainability provides a framework
in which to assess this sixth force;
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the political and social forces that are also driving
a companys external environment. (See Figure 8.1 for key sustainability principles and
characteristics of less and more sustainable companies.) By way of example, Mays refers
to the Canadian based CIRANO research centres industry level study looking into
environmental regulation and productivity.
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Regulatory change is one of these additional
political and social drivers that are additional key reasons for business to change. We
consider some of these in detail now, starting with changing consumer demands.
Consumer demand change: knowing your market
There is strong evidence to indicate that consumer demand is changing. The 1997
Cone/Roper Cause-Related Marketing Trends Report found that 76 per cent of
consumers polled said they would most likely switch to a brand or retail store associated
with a good cause. A further 58 per cent said they had a more favourable opinion of
companies that helped good causes, with 29 per cent saying they were more likely to buy
the companys brand. This is reflected by the views of the companies themselves. A 1998
survey by Saatchi & Saatchi, Cause Connection of Marketing Directors, at 170 leading UK
companies, found that 34 per cent believed that cause-related marketing could enhance
their brands. The environment also provides firms with a credible way to target the youth
market. Professor Peter Senge, MIT, author of the highly respected book The Fifth Discipline
stated, Many youth today have grown up acutely aware of the imbalances in the world,
especially those living in poverty or in countries with obvious social divisions. Theyre
beginning to network with each other internationally to initiate changes in our social and
environmental conditions. For example, groups such as the International Young