New Horizons in International Business series
Edited by Subhash C. Jain and Ben L. Kedia
Chapter 9: How Can Sustainable Environmental Stewardship Enhance Global Competitiveness?
Irene Henriques ‘A system must be managed. It will not manage itself. Left to themselves in the Western world, components become selfish, competitive. We cannot afford the destructive effect of competition.’ William Edwards Deming (2000) in The New Economics for Industry, Government, Education According to Hill (2006), globalization refers to the moving away from an economic system in which national markets are distinct entities, isolated by trade barriers and barriers of distance, time and culture, and toward a system in which national markets are merging into one global market. This process has been facilitated by declining barriers to trade and investment and advances in transportation and telecommunications technologies which have decreased the perceived distances and cultural barriers. More firms, both large and small, are becoming international businesses with the help of the internet. Despite the trend toward globalization, countries differ in their cultures, political systems, economic systems, legal systems and level of economic development. International scholars argue that businesses that understand these differences are best able to gain a competitive advantage over their competitors (Dhanarj and Beamish, 2009; Delios and Henisz, 2003). But where does the natural environment fit into this picture? From a purely economic perspective, the natural environment is the source of our natural resources which are inputs into the production process. This simplistic view, however, has been shown again and again to reduce a country’s competitiveness when renewable and non-renewable resources such as oil and gas, fisheries, clean air and tropical forests are depleted (See Yale University’s...
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