a strategical approach towards the sustainable

A STRATEGICAL APPROACH TOWARDS THE SUSTAINABLE COMPETETIVE
POWER: ENVIRONMENT COST MANAGEMENT
Orhan ELMACI
Department of Business Administration
Faculty of Economics and Administrative Sciences
Dumlupinar University- Kutahya/TURKEY
0-274-2652193 (2004)
[email protected]
Niyazi KURNAZ
Department of Business Administration
Faculty of Economics and Administrative Sciences
Dumlupinar University- Kutahya/TURKEY
0-274-2652193 (2066)
[email protected]
ABSTRACT
The economy-politics can not adopt the changing in producing the theories due to the
fact that the changing process in 21th century has been so fast and effective over the life
indicators of the firms. The firms as the laboratories or workshops generally lead to the
theoretical studies and the new models and experiments replace the previous practical works.
The theory-model and application process of the open market economy has constituted a stable
togetherness within a circular permutation.
Due to the fact that the production firms are aware of that they are future-oriented and
consuming the natural resources and polluting he environment. Within this development
process the accounting has overtaken the responsibilities in accordance with the main
accounting principles. Under the light of above all information, in this study, the “environment
accounting”, the determination, classification, analyzing and interpretation
of the cost of
environment protection has become the main concern. Beside that the main requisites,
theoretical approaches over the firms’ sustainable power of competitiveness, environment costs
have been evaluated
Key Words: Costs of protecting environment (future), Sustainable competition power,
Cost advantage, Environmental effects, Environment Cost Management,
I- INTRODUCTION
The economy-politics can not adopt the changing in producing the theories due to the
fact that the changing process in 21th century has been so fast and effective over the life
indicators of the firms. The firms as the laboratories or workshops generally lead to the
theoretical studies and the new models and experiments replace the previous practical works.
The theory-model and application process of the open market economy has constituted a stable
togetherness within a circular permutation.1
Orhan Elmacı, “Küresel Boyutlu Stratejik Planlama ve Rekabet Gücü Analizi”, Boğaziçi Üniversitesi Endüstri
Mühendisliği, İstanbul, 7-9 Temmuz 1993.
1
1
The open market economy has been positioned within the center of changing and
transformation of the world. This process indexed to the rapid changing has been effected the
both infra and supra-structure of the market economy. The competition, freedom, quality,
information, cooperation, integration, environment, health, and security has become the
prominent factors in reaching the new balance of the firms. In this context, it is inevitable to
develop new narratives, determine the priorities and design the original standpoints for firms.
Otherwise, this changing process would be at the stake of analysis, or it would result with the
gross loosest.2 In order to prevent the structural deformation of any organization, the firm
should grasp the main rules of the change and have the capability to establish correlation’s
among the relevant factors.3
Company’s sustainable competition power, provide with produce strategies related
general productivity and cost advantage basic component for change the market structure
and to get specific moment after a time period that as
changing again the market structure
The moment for change the market structure, can make with strategies that in this way.4
Due to the fact that the production firms are aware of that they are future-oriented and
consuming the natural resources and polluting he environment. Within this development
process the accounting has overtaken the responsibilities in accordance with the main
accounting principles.5 Under the light of above all information, in this study, the “environment
accounting”, the determination, classification, analyzing and interpretation
of the cost of
environment protection has become the main concern. Beside that the main requisites,
theoretical approaches over the firms’ sustainable power of competitiveness, environment costs
have been evaluated.
II- GENERAL MANIFESTOS AND THEORETICAL APPROACHES OF
ENTERPRISES IN GAINING SUSTAINABLE COMPETITIVE POWER
Enterprises’
keeping on their activities only for their survival, their generally
approaching to the events in accordance with adaptation models and focusing on these run
counter to new paradigm of enterprises. Because new enterprise paradigm depends on system
thought. System thought is a discipline to see “ the whole”. A frame work and of general
Orhan Elmacı, “Küreselleşen Pazarlarla Bütünleşmede Stratejik Rekabet Gücünün Verimlilik Eksenli Analizi”,
MPM, II. Verimlilik Kongresi, Ankara, 19-21 Ekim 1994.
3
Nurhan Papatya, Sürdürülebilir Rekabette Stratejik Yönetim ve Pazarlama Odağı Kaynak Tabanlılık
Görüşü Kavraması ve Kuramsal Yaklaşım, Nobel Dağıtım, Ankara, 2003, s. 108.
4
Hayri Ülgen, S. Kadri Mirze, İşletmelerde Stratejik Yönetim, Literatür Yayıncılık, İstanbul, 2004, s. 47.
5
Mehmet Özbirecikli, Çevre Mühendisliği, Natürel Kitap ve Yayıncılık, Ankara, Nisan 2002, s. 25, Lerzan
Akün (Kavut), “Çevre Muhasebesi: Genel Bir Bakış”, Muhasebe Bilim Dünyası Dergisi, MODAV, C. 1, S. 1,
Nisan 1999, s. 145.
2
2
principles are composed in order to see bilateral dynamic relations, that’s changing regulations
among the elements of the system.6
In this context it’s important for the enterprise to evaluate its internal processes, to
foresee the changes and apply the distribution strategies to suitable areas, and also hold the
competitive power for permanent leadering to changes. focusing on competition power is
reguired to sustain competition hegemony. This is only gained by strategies valued.
Recently stock prices of capital market determines institutional value in big enterprises.
These prices change according to the expectances of institutional profits in capital markets.
This circle shows the fact that institutions should increase their profitability in order to increase
market value. But today it’s very difficult for an institution to increase its profitability.
Because of imitating of the products (goods or services) in a very short time period
results in similar product markets and so competition increases. And basic tendencies that crate
and direct new developments ( globalization, increased ratio of invention, short time process of
these inventions in realization on trade, short lifetime of products, competitive lifetime of
investment, changes in relations between production and raw materials, input compositions and
changes in their costs, changes between production & employment / production & money /
production & trade, the main resource “time”, development in dominanced competition) makes
the enterprise dynamic.
Competitive power of the enterprise which is the non – competitor leader of the market
today may be treatened the following day. So, average profits may decrease naturally. Thus,
making more profits than other enterprises – that’s making more profit over the average of the
sector – is required in order to make the institution level up or keep its current level.
Over – profit of the sector can be obtained in enterprises having competitive hegemony
is possible by, deriving strategies that cannot be imitated and applied.7
Peter M. Senge, Beşinci Disiplin, Yapı Kredi Yayınları , 2. Baskı, İstanbul, Kasım 1993, s. 79.
Orhan Elmacı-Niyazi Kurnaz, “Sürdürülebilir Rekabet Gücüne Yönelik Vizyon Arayışlarında Faaliyet Tabanlı
Maliyetle (FTM) Yaklaşımı”, Selçuk Üniversitesi, ÜAS’04, IV. Ulusal Üretim Araştırmaları Sempozyumu,
Günay Ofset Matbaacılık ve Tic. Ltd. Şti., 8-10 Ekim 2004, Hilton-Konya, s. 481.
6
7
3
Basic approaches in determining new strategies for enterprises for providing sustainable
competition hegemony are as follows shown in Table:1 .8
Approach
Planning
application
and
Learning
Location
Sourced
approach
based
Definition
This approach reflects the location of companies asset , as a project utilize the
strategy to benefit from environmental opportunity. This strategy makes a
rational basic and accepted the origin of strategy discipline. An this view the
main source of companies success is external environment of organization and
also important for harmonious, successful of ability of organization in external
environment of company. Determination of this system is the application of large
military and other company which has got a hierarchic structure during the years
1960 and 1970 (esp. In America) . Also, systematic foresightedness, collecting of
information and planning are stressed in this approach
Learning approach is specifically discuss the complexity of companies
environment provide, applicability is nearly impossible but planned strategy in the
matter of researching variable market condition. This approach makes clear that
foreseeing the environmental condition is impossible and stress on strategic
success. In addition Learning meddled determinate the rationality and increase
logical frame. Also it is related to accidental environmental. Factors in formation
of planning process.
Innovator Nouns
Taylar (1911), Gilbreth (1912),
Fayol (1949), Barnard (1938),
Steiner (1969), Andrews (1987)
and Ansoff (1965.
This approach is accepted getting hold opportunity of companies by
creating differentiated conditions and successful strategy improve with the
comprehending market structure. The origin of this view is monopolistic
competition. Successful company restrict independent activity and response to the
structural power. Sa this respect directed power for success is position of
successful companies.
Chamberlin (1933), Robinson
(1969), Porter (1980-1985),
Kotler (1967), Levitt (1975),
Hofer and Schendel (1986) and
Ohmae (1983).
This approach is provide as a successful strategy “outward “strategy.
Company does not react to location school but it may be get strategic success by
locating, connecting and improving the scarce sources and capability in a certain
time space. İnspiration of this system is traditional micro economies. Sources
based system provide sustainable competitive advantage to company unless rival
firms do their best.
Penrose (1959), Wernerfelt and
Motgomery (1988), Amit and
Schoemaker (1993), Peteraf
(1993), Dierickx ve Cool (1989),
Rumelt (1996), Collis (1994),
Barney andGriffin (1992), Kay
(1993), Alvarez and Barney
(2000).
Senge (1990), Lindblom (1968,
Quinn (1980), Cyert and Marsh
(1963), Weick (1969), Simon
(1947) and Beer (1979).
Table 1: four approaches known as basics of literature of strategies.
Source: Henry Mitzberg, Joseph Lampel, “Reflecting on The Strategy Process”, Solan
Management Review, (Sping 1999), s. 21-30.
III-
COST
OF
PROTECTION
OF
ENVIRONMENT
(FUTURE)
OF
ENTERPRISE
Potential using of companies assets according to increase the level of cost advantage
and general productivity, determine the capability of company. To make this capability is basic
capability depends on the peculiarity which is worthy scarce unsusbstituted and inimitable. In
addition to make this capability is sustainable basic capability, it is require that the quality
which harmonize with changeable environment.9 In this context environmental cost are one of
the important criteria of success in protecting environment (future).10
8
Henry Mitzberg, Joseph Lampel, “Reflecting on The Strategy Process”, Solan Management Review, Spring,
1999, s. 21-30.
9
Jay B. Barney, “Information Technology and Sustained Competitive Advantage: A. Resevrce-Based Analysis”,
Mıs Quarterly, December, 1995, s. 487-504.
10
Mehmet Özbirecikli, “Çevre Muhasebesi Kavramı ve Yönetsel Kararlara Katkıları”, Muhasebe Finansman
Öğretim Üyeleri Derneği–MUFAD Dergisi, Temmuz 2000, S. 7, İstanbul, s. 5.
4
It’s possible to subtitle the cost of protecting environments in two:11
i.
private costs.
ii.
Societal costs. This classification can be seen below as in the figure 1.12
The Environmental Protection
Costs
Private Costs
-
-
-
Upfront Costs
Regulatory Costs
Voluntary Cost
Back-End Costs
Activity Costs
Gray Zone Costs
Hidden Costs
Exit Costs
Liability Costs
Environmental Obligations
Less Tangible Costs
Societal Costs
-
Insurance & Material Costs
Costs Caused By The Rejections
Of The Deficient Materials
Costs Spent For Compensating
The Consumer Complaints
Costs Spent For The Accurate
Use Of The Product And The Its
Advertisement
Costs Spent For The Education
Of The Employees About The
Liability Of The Product And
Efforts To Make Participate.
Figure 1- The Classification Of The Environmental Protection Costs Of The Enterprise
From the aspect of total quality management costs of protecting future is divided into
four.13
i.
Preventing Costs.
ii.
Evaluating Cost
iii.
Internal Mistake Costs
iv.
External Mistake Costs.
IV- GENERAL EVALUATION OF PROTECTING ENVIRONMENT COSTS OF
ENTERPRISES FOR PROVIDING SUSTAINABLE POWER TO COMPETITIVENESS
11
A.g.k., s. 50.
12
Özbirecikli, Çevre Muhasebesi, s. 50.
Esra Nemli, Çevreye Duyarlı İşletmecilik ve Türk Sanayinde Çevre Yönetim Sistemi Uygulamaları,
İstanbul Üniversitesi Siyasal Bilgiler Fakültesi, İstanbul, Kasım 2000, s. 177., Süleyman Yükçü, Kalite
Maliyetlerinin Muhasebeleştirilmesi , Anadolu Matbaacılık, İzmir, 1999, s. 93.
13
5
Enterprise has to group all its activities for reaching its aims as creating value or non
creating value activities. In other words it has to create value both for customers and
environment.
All the activities of enterprise whether they provide for more value add to products and
environments, should be taken into consideration before grouping. Because the value of
activities that enterprise adds to products and environment is expected to be much more than
cost of it.14
There is no value if vice versa. For obtaining hegemony in competition the value of all
activities that is added to products and environment must be more than the value that of
competitors’. Otherwise enterprise cannot get hegemony even if it creates a value.
In enterprises values that provide hegemony of competition are composed in two ways:15
i.
Decreasing costs of activities and providing increase in value that will get cost
hegemony.
ii.
Creating a difference in products that customers values and so providing increase in
value by applying a price over the market price.
In this context , activities of enterprise can be divided into two subtitles / groups as:
basic activities and support activities.16 Basic or support activities may contain activities of
protecting environment (future). So, environmental protecting costs effects cost of enterprise
either directly or indirectly. Private or internal costs are the ones that directly effect the results
of enterprise activities.17 The cost that effect enterprise costs indirectly are societal cost. All
these costs have the characteristics to effect competitive power and they should never be
ignored.
V. RESULT / CONCLUSION
Sustainable competitive power is an application of value creating strategy that achieve
to remain different in spite of the imitating struggles of its current and futures competitors.
Developing this value creating strategy including environment is important for both society and
national / international environmental legistations.
14
Gary Hamel, Leading the Revolution, Harvard Business, Business School Pres, December 2000, Boston, s.
100-120.
15
M.E.Porter, Competitive Advantage: Creating and Sustaining Superior Performance, Free Pres, 1985, s.
33-62.
16
A.g.k., s. 137.
17
Özbirecikli, Çevre Mühendisliği, s. 25-26.
6
Through this process, as being a part of current accounting system main principles of
“social obligation” and “priority of substance” are crucial paradigms not to be ignored with in
the framework of “life” and “advance” strategies of enterprises.
BIBLIOGRAPHY / SOURCES:
Esra Nemli, Çevreye Duyarlı İşletmecilik ve Türk Sanayinde Çevre Yönetim
Sistemi Uygulamaları, İstanbul Üniversitesi Siyasal Bilgiler Fakültesi, İstanbul, Kasım 2000.
Gary Hamel, Leading the Revolution, Harvard Business, Business School Pres,
Boston, December 2000.
Hayri Ülgen, S. Kadri Mirze, İşletmelerde Stratejik Yönetim, Literatür Yayıncılık,
İstanbul, 2004.
Henry Mitzberg, Joseph Lampel, “Reflecting on The Strategy Process”, Solan
Management Review, Spring, 1999.
Jay B. Barney, “Information Technology and Sustained Competitive Advantage: A.
Resevrce-Based Analysis”, Mıs Quarterly, December, 1995.
Lerzan Akün (Kavut), “Çevre Muhasebesi: Genel Bir Bakış”, Muhasebe Bilim
Dünyası Dergisi, MODAV, C. 1, S. 1, Nisan 1999.
M.E.Porter, Competitive Advantage: Creating and Sustaining Superior
Performance, Free Pres, 1985.
Mehmet Özbirecikli, “Çevre Muhasebesi Kavramı ve Yönetsel Kararlara
Katkıları”, Muhasebe Finansman Öğretim Üyeleri Derneği–MUFAD Dergisi, S. 7,İstanbul
Temmuz 2000.
Mehmet Özbirecikli, Çevre Mühendisliği, Natürel Kitap ve Yayıncılık, Ankara, Nisan
2002.
Nurhan Papatya, Sürdürülebilir Rekabette Stratejik Yönetim ve Pazarlama Odağı
Kaynak Tabanlılık Görüşü Kavraması ve Kuramsal Yaklaşım, Nobel Dağıtım, Ankara,
2003.
Orhan Elmacı, “Küresel Boyutlu Stratejik Planlama ve Rekabet Gücü Analizi”,
Boğaziçi Üniversitesi Endüstri Mühendisliği, İstanbul, 7-9 Temmuz 1993.
Orhan Elmacı, “Küreselleşen Pazarlarla Bütünleşmede Stratejik Rekabet Gücünün
Verimlilik Eksenli Analizi”, MPM, II. Verimlilik Kongresi, Ankara, 19-21 Ekim 1994.
Orhan Elmacı-Niyazi Kurnaz, “Sürdürülebilir Rekabet Gücüne Yönelik Vizyon
Arayışlarında Faaliyet Tabanlı Maliyetle (FTM) Yaklaşımı”, Selçuk Üniversitesi, ÜAS’04,
IV. Ulusal Üretim Araştırmaları Sempozyumu, Günay Ofset Matbaacılık ve Tic. Ltd. Şti.,
Hilton-Konya ,8-10 Ekim 2004.
Peter M. Senge, Beşinci Disiplin, Yapı Kredi Yayınları , 2. Baskı, İstanbul, Kasım
1993.
Süleyman Yükçü, Kalite Maliyetlerinin Muhasebeleştirilmesi , Anadolu
Matbaacılık, İzmir, 1999.
7