Business Administration 2

The three stakeholders model.

In the transition towards sustainability, each of the stakeholders have to play its own role:

- the consumers/citizens have to shift their expenditures towards a lower Eco-cost / Value Ratio, i.e they should buy 'green' products and services

- the companies have to create product-service combinations with a lower Eco-costs / Value Ratio, i.e. they should offer 'green' solutions to the market

- the governments have to create regulations and new systems for tax, subsidies and Tradable Emission Rights, i.e. they should create a business environment which gives 'green' solutions a fair chance in competition with the current products and services ("level the playing ground").

It is obvious that, when one of the stakeholders fails to play the right role, the transition towards sustainability will not happen. What triggers each of the stakeholders of the system to go in the right direction? Who triggers the transition process?

Designers tend to believe in 'technology push': when the green products are on the market, they will be bought in the long run, but the reality seems different.

The general business opinion is inclined to 'market pull': the consumers have to trigger off the demand. Why should they do so? In reality they tend to go for the best price/value proposition in the market instead of the proposition with the lowest environmental burden, since the latter is normally slightly more expensive. Advertising campaigns to make people buy the slightly more expensive 'green' option failed to succeed so far.

Apparently, the government should do something as well: level the playing ground in the market, i.e. create a system in which the 'green' solutions have a fair chance.

The key to the solution of the problem is to realise that the consumer is an individualist, reacting instantly and in the short term to offerings on the market. Sustainability, however, is a long term issue for the citizen. We have to realise that each...