Sustainability vs Profitability
CHAPTER: 1 - Introduction
1.1Background of the study: 6
1.2Objectives of the study: 8
1.3Research Questions. 8
1.4Problem Statement: 9
1.5Rationale of the study: 9
1.Structure of the study: 10
CHAPTER : 2 - Literature Review
2.1 Concept of Sustainability. 12
2.2 Benefits of Sustainable Business Practice. 12
2.3 Steps to Sustainable Business Practice. 14
2.3.1 Step 1: Get Ready. 14
2.3.2 Step 2: Get Started. 15
2.3.3 Step 3: Set Goals. 15
2.3.4 Step 4: Go Green. 16
2.3.5 Step 5: Ensure Continual Development. 16
2.4 Corporate Social Performance vs. Corporate Financial Performance. 16
2.5 Importance of Employee Engagement in Sustainable Business Practice. 18
2.6 Major Challenges Encountered during Implementation of Sustainable Business Practice. 19
2.6.1 Estimation of Sustainability. 19
2.6.2 Inconsistent Importance of Sustainability to the Consumers. 19
2.6.3 Employee Engagement. 20
2.6.4 Sustainability and Business Structure. 20
2.6.5 Differentiation between Most Important Opportunity and Threat. 20
2.6.6 Ineffective Communication. 21
2.6.7 Engagement of the key stakeholders. 21
2.6.8 Leadership issues. 21
2.7 Strategy for Overcoming Challenges of Sustainable Business Practice. 22
2.8 Sustainable Practices in Restaurants. 24
CHAPTER: 3 - Research Methodology
3.2Outline of the method: 27
3.3Research Onion. 30
3.3.1Research Philosophy. 31
3.3.2Research Approach. 33
3.3.3Research Design. 34
3.3.4Data collection process. 34
3.3.5 Sampling method. 35
3.3.6 Sample size. 36
3.3.7 Research method. 36
3.3.8 Ethical consideration. 37
3.3.9 Limitations of the study. 38
Chapter 4: Data Analysis
4.1 Results and Findings of Customer Survey. 39
4.1.1 Section A: Sustainability. 39
4.1.2 Section B: Attitude towards the sustainability and the hub. 42
4.1.3 Section C: Advantages and Barriers. 49
4.1.4 Section D: Financial Background and Sales. 56
4.5 Section E: Demographic profile of the respondents. 62
4.2 Comparison between Salt and Pepper Restaurant and Growhampton Project. 65
Comparison between product, service and operation. 65
Comparison of financials. 66
CHAPTER : 5
CHAPTER: 6. 74
CHAPTER: 1 - Introduction
According to World commission on Environment and Development (1987) there has been increase in conflicts between the environment and the development initiatives of the organizations. This has resulted in increase in need for sustainable development. Sustainable development is the progress that has been made in the utilization of resources so as to meet the needs of the present without compromising on the ability of the future generations to fulfill their needs (aue.ac.uk/, 2014); (Un.org, 2014). Sustainability has also been used to define the philanthropic efforts made by the organization to protect the environment (un-documents.net, 2014; p-1-10).
Sustainable development is built on three pillars. They are growth of the economy, ecological balance and social progress. These three factors are the major agenda for sustainable development. But social pillar has received less attention. Businesses are paying greater emphasis on social progress. For a long period of time organizations have been responding to social changes and pressure (Werbach, 2009; p-9-15) ;( worldbank.org/, 2004 ; p-1-15) . Emphasis is put more on social pillar of sustainable development. Companies are focusing on carrying their everyday operations to become eco efficient. The main aim of the organizations is reduction of the environmental impact which will enhance the value of the organization. Organizations must demonstrate that sustainable development is a good business. Organizations that are practicing sustainability have been able to survive through the upheavals in the market because the customers remain attached with the companies as they comply with the values of the company (An introduction to sustainable development, 2014; p-1-15). Sustainable business organizations has the following benefits –
- They are able to provide products that are innovative.
- They fulfill the need of the customers.
- They reward the shareholders and the communities.
- They promote accountability.
- They lead to reduction of dependence on natural resources and reduce pollution to a larger extent.
- They contribute largely to the production of enhanced energy and provide food security worldwide.
- They are able to address the needs of developing nations.
- They help people in living a healthier and creative life (Fordham.edu, 2014).
Economic efficiency will promote continued economic growth (Oecdobserver.org, 2014). According to Bloomberg more than one third companies in UK are generating profit from sustainable efforts and there has been 23 percent increase than the previous year. The business models of the companies have changed over a period of one year and they measure to track the performance of their company in maintaining their sustainability goals and performance. Companies are changing their business plan and commitment by investing in sustainable projects. Waste management and management of resource scarcity is the major issues addressed by business firms (Fellow, 2013).
Businesses practicing sustainability are dissatisfied with the status quo of the traditional companies. They operate in a socially responsible manner. Their key focus is to protect the environment. They value the good health of the employees, society, culture and ensure that well being of the future generation is protected (Tencati and Perrini, 2011;p-140-155). Although these businesses do not generate short term cash flow, they operate on a long term basis. These business organizations imbibe their values within their employees. Their model of business serves as an inspiration to other business and industry sector. This broader vision of the companies can be successful only the companies formulate new business strategies. Since there is increase in awareness of the staff members on sustainable practices, suggestions can be taken from them for improvements in the organization (Iisd.org, 2014). The main view of the traditional companies is to maximize their risk adjusted return. This is achieved by them by proper allocation of resources. Major corporate activities are aimed towards maximizing the profit. They consider the return from only one form of capital i.e. economic capital. They ignore the other forms of capital like environmental capital and social capital. But from the point of view of sustainability this is detrimental and not sufficient. But there is well establishment of the conventional approach or traditional approach in the corporate world. There are many organizations that are integrating sustainability in their business operations. Instead of traditional profit they think of making sustainable profit. This is a new concept known as sustainable corporate profitability. According to this concept economic activity depends on utilization of different forms of economic, natural and social capital. It is concept which is oriented with value. Managerial thinking finds compatibility with this concept. It reconceptualizes the term profitability and incorporates all forms of capital (Sustainable Profit Reconciling Sustainability and Corporate Profitability, 2014).
Sustainable development has been the prime focus of Growhampton coffee shop. Sustainability initiative has been taken by Growhampton and the prima facie focus of the company is on food growing. The organization practices sustainability in order to have a positive impact on the environment. The key values of the organization has been maintenance of ethics and values, recycling, up cycling, maintenance of a healthy lifestyle, promotion of biodiversity, volunteerism and educating the customers and the staff members on sustainable development. They plan to create a hub for sustainability on the campus of University of Roehampton (Growhampton.com, 2014).
1.1 Background of the study:
Sustainability needs to be backed by core business strategy. The business strategy has to prepare with actual business metrics which measures the overall return on investment of the company. There are three main strategies that can be implemented to make sustainability profitable. These are as follows –
- The initial investment has to be more and expensive so that it generates long term yield.
- Small changes have to be introduced in the organization that will save a lot of money. The savings can be utilized in investing in bigger projects.
- Sustainability efforts and initiatives taken by an organization have to be shared with the customers and suppliers so that ideas can be taken from them in creating unique business models (Business Insider, 2014) ;( org/, 2014 ; p-1-15).
Social responsibility and sustainability are the core goals of Growhampton (aue.ac.uk/, 2014). Growhampton has made a good practice of making a mass engagement of students of Roehampton University on their sustainability project. Growhampton has to think of new ways in order to amplify its impact across the borders of the campus. Growhampton can gain strategies so that closer bonds can be created between the students and the community existing outside the University. This will generate positive stories about the organization by creating positive word of mouth and increase the reputation of the organization (NUS Students’ Green Fund: working with the community, 2014).
Growhampton has an ongoing projection which includes the creation of a hub. It will be an ethical café and food co-op. It will be a social hub for environmental initiatives. They will create an outlet for which will grow food on campus. It will provide students and staff members with ethically sourced food. The fund for the project at Growhampton is for two years. The aim of the organization is to make the project profitable to ensure continuation of the Growhampton hub after expiry of the funding. The café will run as a social enterprise. Progress of the society and reduction of environmental impact is the key mission of the project. The profits earned from the project will be reinvested back in Growhampton fund.
The Hub will attract people who are interested in sustainability. But Growhampton hopes that the hub will also attract those who are not interested in environmental initiatives. This can be achieved by providing the customers with coffee of high quality which is presented in artisan style and high quality tea. Growhampton plans to serve simple breakfast and lunch. The breakfast menu of the Hub will comprise of museli which is homemade and fruit. It will also have smoothies in breakfast. The menu for lunch will be soup for winter season and salad will be offered in summer season. The requirements for making soup and salad will be grown in the site of Growhampton.
Growhampton will enter into partnership with a local charity which is based on the Roehampton estate. The charity will provide young people who have working skills. They will be employed by Growhampton. The charity will start a social enterprise which will make sandwiches for local businesses. Growhampton will provide them with salad leaves and sandwiches prepared by them will be sold in the Hub of Growhampton. Growhampton will also sell stir fry kits which are prepared from the fresh produce grown in the site. Students can work in the Hub. A food cooperative element will be started by the Hub. The students of the University will run the cooperative society (Roehamptonstudent.com, 2014) ; (Growhampton.com, 2014).
1.2 Objectives of the study:
The objectives have been set in order to analyze the financial viability of the project by Growhampton. The research analyzes that whether the company will be able to maintain its competitive advantage by practicing sustainability. The target of the researcher is as follows:
- To analyze the factors that determines that Growhampton has been successful in practicing sustainability.
- To identify the factors that determines that the project initiative by Growhampton is successful in maintaining a balance between the sustainable practices and profitability.
- To analyze the factors that enable the company to maintain competitive advantage over other cafes by practicing green and sustainability concepts.
- To identify the factors that will ensure financial viability of the Hub without sacrificing the sustainable initiative.
- To find out the factors that will provide a linkage between sustainability and profitability at Growhampton.
- To identify the awareness of the customers on the sustainability initiative.
1.3 Research Questions
- Is the project initiative by Growhampton sustainable in financial and environmental sense?
- How Growhampton and in particular the “Hub” will be able to interact in a positive manner with other business practicing sustainability?
- How can the “Hub” café ensure its future financial viability without sacrificing its sustainable initiative?
1.4 Problem Statement:
In the present study the researcher has identified the key issues that the organization is facing in practicing sustainability. The prices of the food served in the café are higher than the other cafes. There has been increase in competition from the other companies. Though sustainability practice has raised the reputation of the organization but profitability can be a major concern for the organization due to increasing competition from other cafes. There must be increase in awareness of the customers on the sustainability initiative by Growhampton. In order to ensure sustainability practice in the Hub on a long term basis, Growhampton needs to focus on increasing its sale. Growhampton has to find out ways to increase its profitability. In order to attract more customers Growhampton has to make its products cost effective. Growhampton should not deviate from its mission of establishing Hub for sustainability. The company must adhere to its principle of practicing sustainability so that positive impact on the environment can be ensured. The research aims at finding solutions to the problem statement so that Growhampton can maintain its profitability without affecting sustainability (Businessweek.com, 2014); (Green Is Good: Sustainability, Profitability, and a New Paradigm for Corporate Governance, 2009; p- 987-990).
1.5 Rationale of the study:
Maximizing profit is the major concern and aim of every organization. There has been limited market pressure on the companies to be sustainable but many businesses wish to see themselves as sustainable organizations. According to these companies businesses cannot operate for a long term in a polluted environment (Norton, 2012; p-110-120) ; (Bcg.com, 2014). Though eco efficiency saves money and the legal hazards are decreased but the organizations practicing sustainability has to increase the cost of their products in order increase their revenue and continue practicing sustainability.
Growhampton has taken initiatives to practice sustainability. The major initiatives of Growhampton have been creation of a Hub for practicing sustainability on campus. They want to create an edible campus. But there has been increasing competition from other organizations. So the major concern of Growhampton is to enhance its financial viability which is the main focus of the study.
1.6 Structure of the study:
The present research has been divided into six chapters arranged consecutively. They analyze the research in order to reach to a desired conclusion. A standard strategy and structure has been followed by the researcher in order maintain the transparency of the research and make the research reliable to the readers. The analysis has been presented in a simple manner so that it can be interpreted in an easy way. The summary of the chapters are as follows –
The first chapter provides a brief introduction of the topic. It is based on a set of objectives which are determined by the researcher. The researcher has presented the research questions in the introduction. The research questions support the objectives of the research. The rationale of the study has also been provided in the introduction.
The second chapter discusses the theories that have been already implemented related to this topic. The researcher has tried to implement the principle in the literature review chapter. The theories support the topic of study. If there is any gap between the theoretical evidence and its implementation in real life situation it has also been presented.
The third chapter is the research methodology chapter. It contains the research onion which includes the different methodologies followed in the research. The layers are research philosophy, design of the research, approach of the research and process of data collection. The researcher also provides justification to all the selected methods. The methods have been selected to answer the questions of the research.
The fourth chapter deals with analysis of the data. It focuses on the results. The results have been obtained from interview and survey. The frequency of the answers in case of quantitative analysis has been shown in data analysis chapters by tables and charts. The qualitative results are also presented in this chapter.
The fifth chapter is the discussion chapter. It explains the findings that have been shown in the fourth chapter. The analysis of the results from the fourth chapter has been done in the fifth chapter. This has been done to draw suitable conclusion of the research. Analysis of the factors in details has put emphasis on the maintenance of financial viability of Growhampton by practicing sustainability. This chapter has helped the researcher in providing a suitable and valuable recommendation for the company so that financial viability of the company can be ensured in long term by incorporating sustainability in its business practices.
In the sixth chapter the author has drawn conclusion from the research study and analysis of the results. Here the researcher has provided justification to show that the objectives of the research comply with the conclusions of the research. Based on the conclusion certain steps have been devised so that Grohampton can perform in a better way.
CHAPTER : 2 - Literature Review
2.1 Concept of Sustainability
Initially, sustainability was defined as fulfillment of present requirements without compromising the capability of the future generation for meeting their needs (www.un-documents.net, 1987). A sustainable business firm must contribute by delivering social, environmental and economic advantages. In order to triangulate with the nation and the society business organizations are focusing on development of new policies, strategies which will assist in making suitable arrangements for redefining the roles as well as activities (Marrewijk, 2003). According to Dyllick and Hockerts (2002) sustainable business practice helps an organization to achieve a triple bottom line through delivery of socio-economic as well as environmental advantages. From the last decade, it has been observed that the idea of sustainability is receiving more attention across the globe. Growing number of organizations in the global level has been considering to integrate sustainability into their business practices. Management of sustainable business practice implies that the organizations seek to maintain equilibrium between the short term and long term considerations of business and interest of the stakeholders (Raynard and Forstater, 2002). It has been found that two components significantly influence the promotion of sustainable business practice: market pull and organizational push. The present market analysis can give an insight about the present practices and trends. The market analysis has reflected that the market is focusing on sustainability while considering investment opportunities. Some organizations have found to push their sustainability potential to their major stakeholders (The Institute of Chartered Accountants in Australia, 2011).
2.2 Benefits of Sustainable Business Practice
The major benefits of business sustainable business practices have been identified by several researchers. According to the previous research studies sustainable business practices assist the organizations to achieve its business goals smoothly. On the other hand, few business organizations feel that sustainable business practice requires extra cost for aligning the business activities with the sustainable framework which leads to creation of value for the society and the environment (Maas and Reniers, 2014). However, when an organization incorporates sustainable business practice in operations and management, it gets exposed to a lot of opportunities. According to a report published by Environmental Protection Agency (EPA) of United States sustainable business practice contributes in the growth of the organization by effective risk management and enhancing return on capital (U.S. Environmental Protection Agency, 2010). The most important benefits obtained by incorporation of sustainable business practice are briefly discussed below:
- Sustainable business practice focuses on reducing waste and recycling through improved efficiency in operational activities. Thus, money can be saved from sustainable business practices.
- Sustainable business practice helps in enhancing the financial performance of the organization.
- Integration of sustainability leads to improve the employee morale which contributes in enhancing the overall performance of the firm (www.ey.com, 2013).
- Sustainable business practices help to attract the responsible consumers or the green consumers.
- Sustainable business practices ensure the health and safety of the employees. Hence, the organizations do not need to worry about these issues.
- Sustainable business practice contributes in enhancing the reputation of the company and brand image (Fombrun, Gardberg and Barnett, 2000). According to a research study conducted in 2009, business performance of the reputed market leaders is 22% better than the average of Standard & Poor. Additionally, the study has shown that the share price of these reputed leaders is 88% more than the S&P average (Prophet, 2009).
- Sustainable business practice assists in enhancing the public relation with the key stakeholders.
- Sustainable business practice helps in identification of potential risk and effectively manages the risk (U.S. Environmental Protection Agency, 2010).
- It has been observed that due to lower risk, improved reputation and enhanced brand image, sustainable organizations have better access towards capital.
- A social responsible business firm can differentiate it from other market rivals by integrating sustainability. It will help the organization to gain competitive advantage (Vorhies and Morgan, 2005).
Increasing number of organizations is focusing on integration of the expectation of the society. Business firms are discovering the prospects of sustainable business practice and aiming to gain competitive advantage. Umpteen number of business organizations are putting serious effort to incorporate strategic business practice by analyzing, monitoring as well as enhancing the environmental impact of the firm’s activities. However, the management of several business firms is encountering serious issues in implementing sustainable practice and policies.
2.3 Steps to Sustainable Business Practice
United States Environmental Protection Agency has discussed five steps for sustainable business practice. The objective of the report is to guide the small business in adoption of green practices. The five steps of sustainable business identified by United States Environmental Protection Agency are discussed below:
2.3.1 Step 1: Get Ready
The first step focused on laying the foundation of the sustainable business practice in an organization. At first, the organization must be able to identify the relevant regulatory framework and how it can be addressed. Hence, assessment of the compliance issues is the first big step (Anton, Deltas and Khanna, 2014). In this phase, the organization must be able to gain active participation of the employees for successfully implement the sustainable practice. Employees will be playing major role in incorporation of sustainable business practices. Sometimes it has been observed that implementation of sustainable practice requires a change in the organizational culture (Munasinghe, 2009). It would not be possible without the support of the employees. Hence, the organization must take an initiative to share the green vision with its employees. Moreover, the employees can be encouraged to provide feedback or suggestion regarding implementation of sustainable organizational practice (Carless et al., 2011). It is very important to gain the support of the employees through active participation of the employees (Bolboli and Reiche, 2013).
An organization can seek support from other sustainable business organizations for providing information regarding green practice. It can ask for partnership and develop a sustainable network for producing and delivering sustainable products and services (Clark and Lund, 2007). Environmental committees, regulatory bodies, non-profit organizations, trade associations can provide support in implementation of sustainable practice in an organization (Aten, Tilleman and Irwin, 2012).
In this phase, knowledge about sustainable business practice must be developed so that the impact of the business activities can be understood by the organization. In depth knowledge about sustainable business practice and existing business practice will help in designing a successful strategy for sustainable business practice (Svensson and Wagner, 2012). A primary planning of the sustainable activities and allocation of resources must be done in this phase. The objective of the plan is to ensure success by implementation of the sustainable initiatives (Lim et al., 2012).
2.3.2 Step 2: Get Started
In this phase, an organization needs to clearly define the sustainable vision. It will help in setting realistic goal, motivating the employees as well as gaining support from the customer base (Ayuso et al., 2011). Each organization needs to choose its approach towards sustainable business practice. The suitability of approach must be assessed (Clark and Lund, 2007). It has been found that the large organizations tend to adopt the formal approaches. On the other hand, small organizations focus on making major improvements in the informal policies (Raynard and Forstater, 2002). Therefore, the impact of the business activities on environment and society must be assessed. It will help in identifying the activities beneficial for the society and environment (Cambra-Fierro and Ruiz-Ben'itez, 2011).
2.3.3 Step 3: Set Goals
In the third step, the organization must be able to identify the SMART goals. It is very important to ensure that the goal set by the organization is specific, measurable, attainable, relevant and time-bound. The organization must have specific goal and the goal must be quantified. Otherwise it will be difficult compare the progress of operations with the goals. The goals must be relevant to align with the business objectives and vision of the organization. A timeframe must be set to outline the deadline of each activity. All the goals must be realistic so that the organization can achieve those within the given timeframe. Therefore, each goal must be assessed in order to prioritize. It will helps in achieving the sustainable objectives of the organization. Implementation plan must be outlined in this phase.
2.3.4 Step 4: Go Green
Fourth step focuses upon implementation of the sustainability plan. In this phase, the strategy must be turned into actions. It has been found that effective communication and leadership are two essential components for successful implementation of sustainable strategies (Azapagic, Perdan and Clift, 2004). The success of implementation depends on the skill of the management. The strategy must be effectively communicated to the employees. The employees must be motivated so that the team work can make the sustainability strategy successful (Avery and Bergsteiner, 2011).
2.3.5 Step 5: Ensure Continual Development
In the last phase, the progress of the procedure must be assessed. It needs to be examined whether the progress fulfills the goals or not. Therefore, the goals must be reevaluated after a certain time period. Revision of the goal and strategies will lead to move forward in the right direction (Batty, 2001).
2.4 Corporate Social Performance vs. Corporate Financial Performance
In the past few decades, researchers are focusing on building a relationship between the corporate social performance (CSP) and the corporate financial performance. The idea of corporate social responsibility has presented the idea of sustainable business strategies. Previously, it was assumed that corporate social performance has a negative association with the corporate financial performance. As per Friedman (1970), the activities associated with corporate social responsibility cost higher and consequently it leads to decrease the financial performance of the organization. On the other hand, Freeman (1984) negated his perspective and contended that there is a positive relationship between the corporate social and financial performance of a company. Jones (1995) had supported the stakeholder perspective proposed by Freeman and added that the increased social spending aids in enhancing the relationship with the stakeholders which prompts to diminish the transaction expense of the company (Basu and Palazzo, 2008). Additionally, the sustainble business practice gives better opportunities to the company and pricing premiums which helps in enhancing the overall financial performance (Fombrun, Gardberg and Barnett, 2000). As indicated by Barnett and Saloman (2012), the advantages obtained from the sustainable business practices rely upon the capability of the firm in capitalizing their efforts connected with corporate social responsibility. Additionally, they contended that the relation between corporate social financial performances varies in different organizations. From the study of Barnett and Saloman (2012) it was found that for a few organizations the relationship between CSP and CFP is negative and in a few cases it appears to be positive.
According to the research study of Barnett (2007), when a business firm incorporates sustainable business practices in the business strategy, it will accrue the influence capacity of its key stakeholders. Hence, in order to optimize the advantages or profits from the sustainable investments the support of the stakeholders is essential. The organizations aim to exploit the influencing capacity of the stakeholders. It can be put in other words that if organization do not succeed in obtaining adequate stakeholder influence capacity, it will consequently fail in generating the desired returns on investments form the business activities (Clarkson, 1995).
Research studies have shown that a ‘U’ shaped relationship exist between the social and financial performance of a business firm (Barnett and Saloman, 2006). The findings of the research demonstrate that return on mutual funds which have invested in the sustainable businesses varies with the severity of the criteria for social screening. Again, the research studies conducted by Brammer and Millington (2008), has considered the relationship between corporate social performance and financial performance of an organization at the organizational level. The findings suggest that the highest and the lowest level of the social performance of an organization is associated with the highest level of the financial performance of the firm (Brammer and Millington, 2008). In this study, social performance of an organization has been estimated by only one dimension, the corporate charitable activities.
Again, Barnett and Saloman (2012) had conducted a research study for evaluating the relationship between the social and financial performance of the organization. The major objective of the research is to find the relationship between KLD and the financial performance of the firm in terms of return on assets. In this study, KLD provides the overall estimation of the social responsibility and the influential capacity of the stakeholders. Additionally this study provides an insight about the relationship between KLD and net income of the firm. The findings of the research imply that a business firm can enjoy all the benefits of sustainable or socially responsible business practices only after attaining a certain point. A ‘U’ shaped quadratic curve was developed for representing the relationship between social and financial performance of the business organization. The results were supported by the previous studies. It was also stated that this result will vary as the factors influencing social and financial performance will be distinct for different organizations.
2.5 Importance of Employee Engagement in Sustainable Business Practice
As indicated by Rickenbach (2011), making the employees strongly engaged with the organization is a vital component of sustainable business strategy. Large number of organizations has been considering to adopt the sustainable practices which emphasizes on the recycling. So as to focus on the "benefit" component of the sustainability, business firms required to put significant efforts which will assist in significant monetary savings, enhanced public relation and it can be reflected in the growing market share of the firm. The enhanced or socially and environmentally responsible business practices will be a support in generating excess revenue for the organization (Madhavan et al., 2013). In order to implement sustainable business strategies in an organization, the active participation and engagement of the employees is essential. An organization will fail to achieve long term sustainability without gaining significant contribution from the employees (Albdour and Altarawneh, 2014).
It is very important for the organization to align the employees with the organizational goals for ensuring active participation of the employees. Each employee has his personal orientation which leads to set goals and values of that employee. If the organization can align its mission, goals and values with the employees, the primary requirement of employee engagement can be fulfilled (Abu Bakar, Cooke and Muenjohn, 2012). Hence, every organization must ensure that it shares a mutual goal with its employees. Moreover, successful implementation of the sustainable business strategies need skilled and experienced employees. Hence, after aligning the employees with the organizational goals and mission, required training must be provided to the employees for proper execution of the strategic plan for sustainability practices. Training will help the employees to obtain relevant knowledge and develop skills for successful implementation of sustainable practice (Chasey, 2013). Therefore, it can be concluded that the sustainable development program plays a significant role in engaging the employees in practicing sustainability. Moreover, employee engagement can be achieved by celebrating the success of the institution. This will act as a motivational force for the employees to achieve the mutual goal. Both formal and informal celebration such as financial rewards, recognition, appreciation etc can stimulate the creativity of the employees to make them actively participated in the organizational activities (Anitha, 2014).
2.6 Major Challenges Encountered during Implementation of Sustainable Business Practice
This section will focus on the research and findings of the previous studies that will assist in identification of the major challenges encountered by the organizations during the implementation of the sustainable business strategies. Few scholars have focused on identification of the significant difficulties that is faced by various organizations. The major challenges of sustainable business practices are briefly discussed below:
2.6.1 Estimation of Sustainability
Organization face challenges when it takes an attempt to measure the sustainable business activities as the sustainable business practices have an impact on the society and environment at the macro level. Moreover, the social and environmental implications are not always obvious as it is extensively dependent on the implementation. Presently, various metrics exist for measuring the sustainability of an organization (Sikdar, 2003). Originations face difficulty to choose the appropriate measurement system. It is very important for an organization to understand which method is the most suitable. According to the research study conducted by Laugland and Bansal (2011), different measurement systems are responsible for serving different purpose. Some metrics are found to cater the need of the particular department and some focuses on specific issues. In some metrics, benchmark is set for assessing sustainability and indicates the areas which need to be improved ( Hong, Roh and Rawski, 2012 ; Dos Santos, Svensson and Padin, 2013).
2.6.2 Inconsistent Importance of Sustainability to the Consumers
Consumers are majorly responsible for making the purchasing decision. Hence, it is significant to analyze the purchasing behavior of the customers in context of sustainability. Organizations need to find out the importance given to sustainability by the customers. On the basis of this analysis, business firms must focus on innovation in order to fulfill the expectations of the consumers (Stout, 2000). Moreover, the business organization has a role to play in educating the consumers on the relevant issues and features so that the consumers can make a rational purchase decision with the aid of the relevant information (Hanss and Bohm, 2012). This also holds in case of investors. Sometimes the investors may search for the businesses which focus on sustainable practice. Therefore, it can be concluded that purchasing and investing decision has significant impact on the adoption of sustainable business practice by an organization (Laugland and Bansal, 2011).
2.6.3 Employee Engagement
Research study has found that the employees prefer to work for sustainable business organizations. Moreover, some of them are ready sacrifice the higher income jobs (Montgomery and Ramus, 2007). Hence, organization must utilize this knowledge for attracting as well as retaining the best employees in the industry. However, many firms fail to motivate its employees for executing the sustainability initiatives of the organization. Hence, organizations must focus on adopting best practices for engaging its employees.
2.6.4 Sustainability and Business Structure
In many cases it has been found that the sustainability managers are beyond asking whether the sustainable practice adopted by the organization pays to be great. But, they are frequently asked to provide an explanation of the sustainable activities. Presently, the financial decision making does not completely consider the value of the sustainable investments (Eberhardt-Toth and Wasieleski, 2013). It has been found that these decisions judge the long term as well as the intangible rewards. On the other hand, several investments are made on the basis of the short term implication on the bottom line (Aigner, Hopkins and Johansson, 2003; Maser, 2012). The challenges for the sustainable managers are to estimate the returns of sustainable investment short term as well as log term assessment and justification of these investments and how the sustainability value can be demonstrated in the decision making framework of the finance departments (Laughland and Bansal, 2011).
2.6.5 Differentiation between Most Important Opportunity and Threat
Organizations face difficulty in prioritizing several risk factors that are looming. Financial crisis, local issues, climate change etc have significant impact on sustainable business practices. Organization encounter challenges in assessing the materiality of the risk factors or the opportunities. If the materiality can be assessed, the sustainability managers can prioritize these issues and incorporate those factors in the internal strategies (Azapagic, 2003).
2.6.6 Ineffective Communication
Though the business firms claim about their sustainability and credibility, all are not trusted by the inventors and other stakeholders. Organizations must share their vision regarding sustainability clearly (Johnston, 2011). Hence, the integrity of the organization will not be questioned. Research studies have found that NGOs and academics are more trustworthy than the government and other companies. The major challenges of the organizations are to identify the activities that can be undertaken for fostering public credibility ((Nielsen and Thomsen, 2011 ; Aras and Crowther, 2012).
2.6.7 Engagement of the key stakeholders
Many organizations have built healthy relationship with its key stakeholders which have provided an added value to the business. Engagement of the major stakeholders in the business generates advantages for both the parties. Every organization needs to understand the perspective of its stakeholders and implication of sustainable development. The traditional concept of sustainability encourages the organizations to adopt a business practice which has positive impact on society, environment and economy (Bao, Aramaki and Hanaki, 2013). Presently, the sustainability concept has been extended and cultural and spiritual dimensions have been incorporated into it. As the relationship between organization and key stakeholder leads develop mutual respect and positive engagement, organizations must focus on analyzing the perspectives of the stakeholders (Network for Business Sustainability, 2013).
2.6.8 Leadership issues
In every field leadership acts as a key factor for success. The leading organizations can easily attract new customers as well as develop loyalty with stakeholders and employees. But, there is a risk of leading. It has been found that the leading organizations have invested excessively in innovation for achieving sustainable development. However, those investments failed to generate the expected yield.
2.7 Strategy for Overcoming Challenges of Sustainable Business Practice
In the previous section, the major challenges encountered by the organization in implementing sustainable business practices have been identified. An effective methodology for successful integration of sustainable business practice has been outlined by KPMG in a report “20 issues on Building Sustainable Business Practice” in association with Institute of Chartered Accountants in Australia. Four major steps have been discussed in this report. In this section, the framework for successful implementation of sustainable business practice is briefly discussed. The framework is consisted of four steps and each step is described below:
Sustainable Strategy Development
First task for the organization is to analyze the external factors in order to get an insight about the shareholders’ expectation. In the opinion of Rodriguez-Melo and Mansouri (2011), engagement of the key stakeholders is an important aspect for responding to the externalities. The organization needs to scrutinize whether the implementation of the proposed strategy will be potent to fulfill the expectation of the stakeholders (Poudyal, Siry and Bowker, 2012). The next step is associated with the mapping of risk, threats and opportunities of the organizational; activities. In this phase, the external factors of the relevant industry such as growth constraint must be recognized (Dewhurst and Thomas, 2003). A suitable methodology is required for examining the changes and analyzing the implication of various external and internal issues on the operational strategy. According to Shireman (1999) the organization must emphasize upon leveraging the external changes for achieving competitive advantages (Tojeiro, 2011) On the other hand, the practice adopted by the competitors also needs to be assessed in context of sustainability. Hence, the organizations can develop the positioning strategy so that it can differentiate its product with the aid of competitive advantage (Fahmi, 2012). According to Eyto et al. (2008) effective strategy for sustainable business practice will assist in reduction of the long term operating cost of the firm.
Effective Implementation of Strategy
From the previous studies, it can be implied that the leaders of a business firm play a crucial role in effective implementation of the sustainable strategy for the business practice (Svensson, Wood and Callaghan, 2010; Avery and Bergsteiner, 2011). The effective communication about the vision of sustainable business practice must be facilitated by the leaders and the senior management executives (Bielak, Bonini and Oppenheim, 2007). According to Fowler and Hope (2007), the major driving factors for sustainable practice and expected outcome of the implementation of the strategy need to be clearly described to its employee and other major stakeholders (Strohhecker and Grossler, 2012). In addition to this, the role of the employees in implementation of sustainable strategies must be communicated in a lucid manner. In this process, journals, e-mails, newsletters, magazines etc can be used to improve the communication among the employees regarding sustainability (Gomes et al., 2013). These initiatives will assist in making the employees aware about the practice and hence they will be able to perform their respective roles to achieve the mutual goal. Sometimes, organizations need to incorporate organizational change for successful implementation of the sustainable business practice (Matos and Clegg, 2013). It will helps in aligning the organization with the designed sustainable strategy (Sitnikov, 2012). Additionally, originations need to evaluate its performance to arrive the results in terms of Key Performance Indicator (KPI) so that the sustainability can be measured (Xu, Chan and Qian, 2012).
Embed Sustainability into Core Business Practice
According to Meehan and Bryde (2011) sustainability practice must be embedded into the core of the business so that the all the activities of the organization follows this practice. Especially, it must be incorporated in the risk management framework of the organization. Business firms must estimate the impact of risk on the brand image and reputation. Organization must ensure that that it has undertaken enough research works in order to analyze the preset and the future trend (Muyingo, 2011). Based on the findings of the research study, innovation must be planned. Organizations must promote sustainable souring and management of supply chain sustainably (Howarth and Fredericks, 2012; Fittig, 2010). During the decision making procedure, the risk factors must be taken into consideration. Moreover, the organizations must focus on improving the sustainability metrics on regular basis (Boudreau, Chen and Huber, 2008; Hodgman, 2006). Constant supervision and monitoring of the external factors is an essential element to embed sustainability into the core business process of an organization (Stocchetti, 2012).
Value Creation through Reporting
One of the most important elements of sustainable business practice is adoption of appropriate reporting principles that can address the major issues. The report presented by the organization must be able to properly explain the business strategies and how this strategy helps in meeting the needs of the shareholders (Cruz, Pedrozo and Estivalete, 2006). An integrated mechanism is required for reporting and every organization must ensure that the internal audit framework has the capability to address the sustainability issues (Hezri, 2004; KPMG, 2012; Dos Santos, Svensson and Padin, 2013).
2.8 Sustainable Practices in Restaurants
According to Ben Smallman sustainable practice is a significant aspect of food service industry when interviewed by National Geographic. Ben Samllman is a tourant of “Danny meyer’s the Modern Restaurant” and an experienced person form the food service industry. Smallman admitted that everybody working in the food industry must focus on playing his role responsibly and hence, the future of the food industry will be protected from the negative impact of irresponsible activities of producers as well as consumers (Connor, 2013). As Ben Smallman is a seafood expert, he conveyed the environmental implications of serving fish. He emphasized on the fact that both the consumers and the restaurant owners must consider sustainable activities so that the next generation can also have access to these ingredients. Several organization in the food service industry has been suffering from various issues regarding integration of sustainable business practice (Gilmore, Fuller and Jo, 2014). It has been observed that many restaurants are striving to adopt sustainable practice through sustainable procurement. Huge number of restaurants is dependent upon the local suppliers and producers for the ingredients. These organizations ensure that the ingredients have been harvested with the aid of sustainable procedures (Blay-Palmer, 2010). But, the restaurants have to sustain in the competitive environment through catering the needs of the customers. Sometimes, in order to fulfill the growing demand for superior quality food, restaurants are souring few ingredients form a distant place. In these cases, sustainability practice gets disturbed as the local suppliers and producers cannot provide the ingredients specified by the changing needs of the customers. Hence, in few cases, restaurants have to compromise with the sustainable sourcing in order to deliver superior quality product to its consumers.
The research study conducted by Pandey and Rai (2013) provides a insight about the sustainable development practices and its influence on the customer behavior in the restaurants. The findings of the research demonstrate that customer prefers visiting the restaurants which have adopted sustainable practices (Bader, 2005). In this study, sustainable corporate practice has been estimated on the basis of few factors such as impact of business activities on the environment, organizational concern about the employees, quality of the product etc. It has been found that the revisit of customers increase in case of the restaurants that has adopted sustainable business practice.
According to Hartford (2014), 93% of the consumers are found to prefer sustainable products. But, the survey conducted by Hartman Group has found that only 5% consumers has admitted that they have been able to identify with a sustainable organization and 12% of the consumers have been able to identify with the sustainable product. The food service industry is presently suffering from the sustainability crisis. The growth of this industry has been challenged by the requirement of the consumers who wants to have sustainable and healthy products (Baldwin, 2009). The major reasons behind the sustainability crisis encountered by the restaurant industry are listed below:
Growing competition and market rivalry:
According to the survey report presented by Nielsen (2013), in United States 47,000 new restaurants were started in the preceding year. Increasing number of companies has leaded to extensive market rivalry. Hence, the restaurants are trying to fulfill the customer need by compromising with the sustainable practices. This is major issue that has leaded to sustainability crisis in the food service industry.
Stagnant revenue and price competition:
Due to increasing competition the restaurants have been experiencing stagnant revenue. Moreover, it has been observed that the companies operating in the food service industry is increasingly focusing on pricing strategy for obtaining higher market share. Aggressive price promotion has been found to be a threat to the sustainable practices for the restaurants (Roth, 2013).
Various economic, environmental as well as social factors have influenced the increase in the price of ingredients. Hence, the cost of production is becoming higher for the food service industry (Jargon, 2012). In case of sustainable sourcing and environment friendly practices, the cost of production is much higher. Hence, the restaurant owners are intending to compromise with the sustainable practices.
Change in consumer behavior
Consumers have become more aware about healthy eating habits and health. The increasing health concern has been diminishing the revenue of many restaurants. It has been observed that the purchase of high calories food has been decreased significantly (FleishmanHillard, 2012). It can be considered as a threat to the sustainable business practice (Roth, 2013).
CHAPTER: 3 - Research Methodology
Research is a process of intellectual discovery. The aim of research is to search data systematically to gather information. It is a discovery of new thing which is useful for the readers. Research provides solutions to problems in a systematic way. The source of information of research can be numerous. New contribution to an existing field of study is made through research. The outcome of the research results in fine refinement of knowledge and enhances the quality of human life. Methodological assumptions with real examples are the basis of research. Evidence of a research is proved from the theory that supports the research and empirical evidence. Research methodology is the description, explanation and justification of the methods that has been used for the research. The primary aim of a research is to discover and interpret new knowledge that is understandable to the readers (Introducing Research Methodology: A Beginner's Guide to Doing a Research Project, 2014; p-1-10).
The selection of appropriate methods for research is based on the aims and objectives of the research. Conclusion of the research is derived from the objective of the research. The primary task is to address the validity of the research. Readers should be able to interpret the results and find a link of the results with the objectives. The components of the research are of equal importance. The topics are addressed in an efficient manner. Sustainable development at Growhampton is the prime focus of the research. The research aims to find a link between profitability and sustainability so that Growhampton can have competitive advantage over other coffee shops.
3.2 Outline of the method:
According to Ellis and Levy (2009) outline of the method provides a framework to the entire research. It formulates a basic structure to the research. Research outline provides right direction to the research in a systematic manner. The main aim of Growhampton is to embed sustainability in the lives of the students and others on campus and beyond. The primary aim of the research is to find the linkage between profitability and sustainability in Growhampton. It also aims to find that whether Growhampton is successful in incorporating sustainability in their business practices. The study also finds out whether financial viability of the company is maintained by practicing sustainability. Growhampton has taken the initiative for sustainable development. Their main focuses are growing their business and maintain a fine tuning of sustainability and profitability (Growhampton.com, 2014). Biodiversity can make a huge difference to the environment. Health benefits and psychological benefits are obvious from sustainable development (Sustainabilityexchange.ac.uk, 2014). Sustainable development aims at using more green products. It has created a major new market. By practicing sustainable development companies can gain competitive advantage over others (Iisd.org, 2014). The main issue of the research is analyzing whether Growhampton has been successful in incorporating sustainable development plans in their café. There is increasing number of organizations across the world that is incorporating sustainability in their business practices. Though few firms considers application of sustainability as increasing the cost for the organization but the long term benefits of sustainability cannot be ignored. Growhampton have transformed itself into a socially responsible business. It has introduced a number of measures to promote sustainable development. There is increase in competition of Growhampton from other organization following the same business plan. The research will portray the effectiveness of the sustainable practices by Growhampton and the awareness of the customers about sustainability. Therefore, complying with the research topic the researcher has chosen philosophy of positivism. Positivists claim the existence of single objective of a research which has unbiased existence. Positivists find success in their research by in depth analysis and finding close relation between the objectives and the conclusions (RESEARCH PHILOSOPHY AND QUALITATIVE INTERVIEWS, 2014; p-15-20). The approach used in the research is deductive. Deductive approach aims at testing the hypothesis with relevant data. The design of the research is descriptive. Descriptive research finds compliance between the objective of the research and the findings. Data collection method is of two types. They are primary data collection and secondary data collection. The present research is based on primary data collection. Primary data collection process has been used. The analysis of the data has been done both qualitatively and quantitatively. Quantitative analysis has been done by conducting a survey based on questionnaire. The respondents are the customers visiting the coffee shops. Qualitative research has been conducted by interviewing customers visiting the café. There are two methods of sampling. One is probability sampling and the other one is non probability sampling. Non probability sampling method has been used by the researcher in data collection process.
3.3 Research Onion
Research onion provides systematic structure to a research. There are different significant steps in a research. It is the critical investigation of the subject that has been chosen as the research topic. The researcher describes the steps used for the research by explaining the elements in the research onion. The structure of the research onion is devised in such a way to identify the appropriate methodology for the dissertation research. The research onion consists of the following layers –
- Philosophy of the research
- Approach of the research
- Methodology of the research
- Method of data collection
In the first step the research philosophy is defined. The research philosophy will lead to the research approach. In the third step research strategy is investigated. The steps are designed in a particular series (Johnson et al. 2007). The author can arrive at a definite conclusion by going through each layer from outside to inside. The research onion frames the strategies of the research. The objectives are met in a systematic way by using research onion. The study aims to understand sustainability in an in depth manner. The personal view of the researcher is depicted in the philosophy of research. The research philosophy is developed on the knowledge of the researcher of the subject of research. There are four types of philosophies of research. They are positivism, realism, interpretivism and pragmatism. Positivist approach is a scientific technique. The proposed theories are tested based on analysis of the data. The data is analyzed in a structured way. Realism philosophy is based on reality and independent of the individual perception of the researcher. Interpretivism philosophy relates the subject of research with the natural environment. The practical results from a research are concluded from pragmatism philosophy. For better analysis positivist philosophy has been obtained by the researcher. From the literature review it can be said that deeper understanding of the topic is required to arrive at definite conclusion. According to Saunders et al (2000), the complexity of the problem leads to analysis of the problem in details. The research approach enables to take more informed decisions on the design of the research. It also supports the researcher in arriving at definite conclusion. The present research uses deductive approach. In deductive approach the research is carried on based on the already existing theory (Research Methodology, 2005; p-105-115).
3.3.1 Research Philosophy
Saunders et al. (2000) defined research philosophy as the way the researcher proceeds with the research topic. The first layer of research onion is research philosophy. This suggests that all the other layers of the research are based on research philosophy. Research philosophy is found to be a belief about the way in which data related to the research can be gathered. There are various research philosophies. Western tradition of science has identified two major research philosophies. They are positivist theory and interpretivist philosophy. Choosing the right philosophy of research is essential to proceed in the right direction. According to Levin (2009), positivists belief in stability of reality and they describe a phenomena from objective point of view. Positivism approach to research is a highly structured method which can be evaluated by using statistical methods. Positivism follows a rich tradition historically. In the researcher has taken the initiative to provide an insight analysis of the topic (Chapter Three: Research Methodology, 2014; p-3-1 – 3-5) ;( Maximizing Corporate Reputation through Effective Governance, 2014; p-35-45).
The researcher aims to do an in depth analysis of sustainable development at Growhampton and make a study on the affect of sustainable development on financial viability of the café. Insight analysis is required so that the research can be conducted in a better way. The author wants to find out the factors that affect profitability at Growhampton by practicing sustainability and whether Growhampton has been successful in implementing sustainability in their business practices and how it has affected their financial viability. To arrive at a definite conclusion, positivism is the best way. Positivism philosophy will provide a detail structure to the entire research. The theory is confirmed by the method of data analysis.
3.3.2 Research Approach
The second layer of research onion is the research approach. The two basic research approaches are inductive and deductive. According to Brannen (2009) inductive approach is derived from observation of the data, collection of data, and analysis of the data by using analytical tools and potential theories are developed relevant to the topic of research. On the other hand deductive approach proceeds by selection of theory, testing of hypothesis, analysis of data and theory implementation after analysis of data and confirmation of the theoretical evidences. The research approach is usually derived from the philosophy of the research. Inductive approach derives the theory from observation. Researchers using inductive approach work with data which is qualitative and apply various methods to gather information to establish the view point (Bell, 2001) ; ((Maximizing Corporate Reputation Through Effective Governance, 2014 ; p-38-40).
The theories related to the research topic have been described in the literature review chapter. The next chapter analyses the data to provide proof to the theoretical evidences. The current research is based on the confirmation of the theories selected to point out and evaluate the success of sustainable development practices at Growhampton.
3.3.3 Research Design
Research design forms the third layer of research onion. Here the researcher interprets the results of the data analysis based on the objectives and purpose of the study (Cameron, 2009; p-140-152). There are three basic types of designs of research. They are exploratory, explanatory and descriptive. The background information of the problem statement is identified from the exploratory study. However according to Crouch and Pearce (2012 ; p-68), explanatory design aims in finding out the causes behind the problem statement. On the hand, descriptive design finds a relation between the objectives of the study and the findings obtained from data analysis.
In the current research, the researcher has taken the initiative to find a relation between the findings and conclusion with the objectives of the research. Thus the researcher has used descriptive design. The researcher has kept a fine tuning between the objectives of the research and the findings which shows the attentiveness of the researcher and his dedication towards the topic (Lancaster, 2012). The objectives of the research are to find that whether Growhampton is successful in incorporating sustainability in their business practices. The study also finds out whether financial viability of the company is maintained by practicing sustainability. The data analysis is based on the objectives of the research. A survey has been conducted. 60 customers visiting Growhampton has been interviewed. 80% of the customers responded to the survey i.e. data gathered from 48 customers were analyzed.
3.3.4 Data collection process
There are two types of data collection process. They are primary data collection and secondary data collection. In the current research the researcher has emphasized on primary data collection.
The research topic is based on sustainable business practices at Growhampton. The primary research has been done by conducting a survey. The survey consists of questionnaires which are answered by the customers visiting Growhampton. The customers can best describe that whether the developments at Growhampton aiming to practice sustainability has been able to satisfy their need. The customer’s awareness about sustainability can also be known from the survey. This is why collecting primary data is crucial for analysis of the research. Primary data collection validates the research and readers find the research to be more reliable. The primary data is obtained by a survey which is conducted to explore –
- The awareness of the customers on sustainability.
- Awareness of the customers on the dependence of the financial viability of the business with sustainability.
- The awareness of the customers on the effective management of resources so that the so that social, economical and aesthetic needs can be fulfilled by Growhampton.
- Awareness of the customers on the vision of the Growhampton.
- Knowledge of the customers on the environmental impact by sustainability practices.
- Knowledge of the increase in prices of food at Growhampton by introduction of sustainability concepts and the increasing competition from other companies
3.3.5 Sampling method
Sampling is a crucial method for collection of primary data. The respondents selected for the survey is done by sampling method. The appropriate candidate is selected via sampling method and relevant data can be collected through data collection method. There are two basic types of sampling. One is probability sampling and the other one is non probability sampling. In case of probability sampling, the sample from which the data is collected is known to the researcher. Every item chosen by the researcher is included in the research. But there is one disadvantage of probability sampling. The entire sampling framework is required by the researcher i.e. a list of the participants in the research. On the other hand in case of non probability sampling, the sample is not known to the researcher. The researcher deliberately selects items for sampling. It is also known as purposive sampling. It is difficult prepare a definite framework of the sample as it is not always available. Probability sampling is of the following types. They are simple random sampling, systematic random sampling, stratified sampling and multistage cluster sampling. Non probability sampling is of the following types. They are convenience sampling, snowball sampling, quota sampling and theoretical sampling (grmgrlaranya.com, 2014;p-1-5).
In the present research the researcher has undertaken non probability sampling. Random sampling method has been used in the present research. Random sampling method is unbiased and thus the deviation of the results can be minimized.
3.3.6 Sample size
For conducting the present research the researcher investigates 131 customers visiting Growhampton café. The sample size is chosen by non probability sampling. Convenient sampling method has been used for data collection. The data collection method is via survey which is done by preparing questionnaire. Primary data collection can be done in a systematic way. Out of the 131 customers who were surveyed, the customers responded to the survey varied according to the questions. This will help to arrive at definite conclusion. Only quantitative analysis has been done in the research by conducting a survey via questionnaires.
3.3.7 Research method
The method used for the research can be divided into two segments. They are qualitative method and quantitative method. Qualitative analysis is based on collection of non numerical data and follows the characteristics of research paradigm. Quantitative analysis is based on numerical data. Quantitative analysis is focused on testing the hypothesis and testing the theory. The hypothesis is tested with empirical data. Qualitative research describes phenomena that are observed locally. Sometimes new hypothesis are derived from observation. It understands the experiences of the people and their understanding of the research topic. It uses a wide and deep angle lens to arrive at a definite conclusion (uk.sagepub.com/, 2014; p-30-40). Quantitative research has been conducted on huge number of respondents. This has been done by conducting a survey. A questionnaire has been prepared and the survey is based on the questions in the questionnaire. In the present research only quantitative analysis has been done by conducting surveys and organizing interviews.
3.3.8 Ethical consideration
Ethical issues must be considered in order to proceed with the research in a systematic manner. It enhances the reliability of the research. Ethical issues like collection of genuine data from the respondents have to be considered while conducting a research. Misrepresentation of research data to promote truth and justify the research topic is unethical way of conducting a research. Since research involves the collaborative work of large number of people including the researcher and the respondents, coordination and cooperation of the people involved in the research to maintain the ethical standards of the research such as trust and mutual respect must be ensured. Ethical norms by federal policies on misconduct exist to ensure fair practice by the researcher. Moral and social values are promoted by a research such as social responsibility, promotion of good health and compliance with law. There are several codes followed by various universities and government organizations to ensure the ethical practice by a researcher. The codes are based on honesty, objectivity, integrity, respect for intellectual property, maintenance of confidentiality of data and social responsibility. All these codes of research are not applicable for every research. The data collected for the study is used for commercial purpose. The questionnaire does not contain personal question which may bother the respondents. Such kind of botheration might deviate the responses from the desired results. Confidentiality of information is maintained. Referencing style has been used appropriately. This increases the validity of the research (Niehs.nih.gov, 2014).
3.3.9 Limitations of the study
There are some limitations that the researcher has to face while conducting the survey. Those are as follows:
- The entire research is based on primary data. This is a limitation because information collected in primary data collection process might not be authentic. Thus the results from such data can be deviating.
- Time constraint is a major limiting factor in the research. The research could be conducted with a bigger sample size if more time was allocated for the research.
- The awareness of the customers on sustainability practices at Growhampton varies and their perception on sustainability is different from one another. So it is difficult to arrive at a definite conclusion.
- Many customers have little knowledge and understanding of the linkage between profitability and sustainability in business operations. Thus it was difficult to arrive at definite conclusion.
Chapter 4: Data Analysis
4.1 Results and Findings of Customer Survey
Customers were surveyed to understand their perception towards sustainability and its impact on the success of the Growhampton project. Thirteen questions were asked to 131 volunteer respondents to collect relevant data. The survey was divided into five sections. In this section, the responses of the survey are analyzed to meet the research objectives.
4.1.1 Section A: Sustainability
Four questions were designed to address the perception of sustainability among respondents. Question 1:
First question was asked to know whether the customer is aware of the concept of sustainability. From the survey it was found that 130 respondents answered the question and one has skipped the answer. 111 respondents told that they are aware of the term “sustainability” and the rest 19 respondents admitted that they were not aware of the concept. Hence, 85.38% respondents were aware of sustainability.
The second question aims to analyze how much importance is given to sustainability. The level of importance given to sustainability by the customers has significant importance on the sustainable business practice and its success. Among 131 respondents 130 people have given answer and 1 has skipped. It was found that 6 people do not care about sustainability. 25 respondents told that some importance is given to sustainability. 46 respondents care about sustainability at moderate level. Again 46 respondents told that they mostly care about being sustainable. 7 people told that they don’t know about how much they care about sustainability.
Not at all
I don’t Know
The third question focuses on analyzing the customer behavior towards sustainability. Among 131 respondents 130 answered and 1 skipped. The findings have demonstrated that only 15 respondents i.e. 11.54% people always buy sustainable products. 62 respondents have told that sometimes sustainable products are bought by them. Hence 47.69% of the respondents sometimes buy sustainable products. 30 respondents i.e. 23.08% of the total respondents have thought about sustainability however did not consider while purchasing products. 21 respondents or 16.15% people have told that they did not think about sustainability and buys whatever fulfills their requirements. 2 people have chosen the option “couldn’t care less about whether it is sustainable”. This implies only few people buy sustainable products always. According to a lot of respondents sustainable purchasing behavior is observed sometimes. Hence, it can be expected that these people will consider sustainability frequently in case of future purchase. However, significant number of respondents has told that although they are aware about sustainability, it is not reflected in their purchasing behavior.
The fourth question also aims to understand the purchase behavior of the customers by identifying preferred locations for shopping. 130 respondents answered this question while one has skipped. It is found that 83 respondents have chosen supermarkets as preferred location for shopping. It means 63.85% or majority of the people prefers supermarkets than local shops, markets and co-operative stores. 42 respondents i.e. 32.31% of the sample have chosen local shops and markets for shopping. Only 5 respondents prefer co-operative stores as a shopping destination. Shopping from local markets is a sustainable purchasing behavior as it supports the local markets and shops. Hence, sustainable purchasing behavior is low in terms of choosing shopping destination.
Hence, it is found that most of the customers are aware of the concept of sustainability. On the other hand, while buying products most of the customers do not buy sustainable products. Only few people always buy sustainable products. However, there are potential numbers of customers who buy sustainable products sometimes.
4.1.2 Section B: Attitude towards the sustainability and the hub
The questions from this section focus on evaluating the attitude of the customers towards sustainability.
In order to understand the attitude of the customers towards sustainability and the Growhampton hub, for statements were presented to the customers and therefore, they were asked to respond through five options strongly disagree, disagree, neither disagrees nor agrees, agree and strongly agree. 72 respondents answered these questions and 59 had skipped it. First statement told that the viability of a business is dependent on the quality of the natural build or the cultural environment. 8 respondents (i.e. 11.11%) strongly disagreed with the statement. 3 people (i.e. 4.17%) disagreed with the statement. 17 respondents were neutral about this topic. 30 respondents (i.e. 41.67%) agreed with this fact while 14 respondent have strongly agreed with this. Hence, it can be stated that most of the respondents feel that the viability of a business project is dependent upon the cultural environment of the business.
The second statement told that the facilities and services must be designed and developed to fulfill the requirements of the customers. 4 respondents strongly disagreed with this statement and 2 respondents disagree with this fact. 3 respondents have taken a neutral position. 33 respondents (i.e. 45.83%) agreed with the fact that the hubs must develop facilities and services for meeting the customers’ demand. It was found that 30 respondents (i.e. 41.67%) have strongly agreed with it. Hence, it can be concluded that the hubs must consider the need and demand of the customers for developing the facilities and services.
The respondents whether they agree with the fact that in this project, the resources must be managed in a certain way where the three needs economic, social and aesthetic can be met. 69 respondents answered to this question. It was found that 3 respondents strongly disagreed with this statement. 2 respondents disagree and 7 respondents remained neutral. On the other hand, 35 respondents (i.e. 50.72%) agreed and 22 people (31.88%) strongly agreed with this fact. Hence, the findings of this study suggest that the hive café must focus in managing the resources in such a way so that the economic, social as well as aesthetic needs can be met.
The fourth question focused on understanding the customer perspective regarding the future prospect of the hive café. They were asked whether they are clear about the future prospect of the hive café. 71 respondents answered to these questions while rest skipped. It has been found that 6 respondents (i.e. 8.45%) strongly disagree and it means they are not clear about the future of the Growhampton project. 7 respondents (i.e. 9.86%) have chosen disagree option to express they are not clear about the future of hive café. On the other hand 22 respondents (i.e. 30.99%) have been neutral in this case. 25 respondents (i.e. 35.21%) have agreed with the statement and 11 respondents have strongly agreed with it. These findings suggest that about 50 % respondents have clear idea about the future prospect of the hive and rest has no clear vision regarding this issue.
It is very important to understand how frequently the customers visit to the coffee shop. This question was asked to the respondents and 106 were answered while 25 respondents had skipped. It was found that 17 respondents visit the coffee shop every day. It means 16.04% of the respondents are daily visitors of the coffee shop. 5 respondents (i.e. 4.72%) visit the coffee shop 6 days, 8 respondents (i.e. 7.55%) visit 5 days and 4 days are visited by 13 (i.e. 12.26%) respondents. Again 13(i.e. 12.26%) respondents visit 2 days and 19 respondents (17.92%) told that once. 19 respondents have told that they have not visited. This finding implies that 52.84% customer visit the coffee shop for 3 days or more.
The customers were asked about the food choices in the hive café to know whether they found it satisfactory or not. 105 respondents answered to this question and 26 had skipped. It was found that 77 respondents told that they were satisfied with the food choices of hive café which is located in the university. However 28 respondents have found to be unsatisfied with the food choices of the Growhampton project. The findings of this study show that 73.33% customers are satisfied with the food choices at the hive café. Hence, it must emphasize on designing its menu for fulfilling the needs of various customers for achieving 100% customer satisfaction.
The unsatisfied customers were asked to provide suggestion for improving the food choice at hive café. Few respondents have helped to identify the major causes which leaded to dissatisfaction. Respondent 2 and 4 have identified more or less the same thing. They have complained about the lack of healthy foods served at the hive café of Growhampton. Additionally, it was told that there is nothing new or unique, it serves the same food and drinks like other cafes. According to Respondent 34, the hive café of Growhampton must offer more variety of soups, salads along with main courses. Respondent no told that he has been satisfied with the food options however he would like to have some more choices in food as well as beverages. Similarly respondent 12 wanted to have more variations in drinks. Respondent no 46 has told that the hive café must offer variety foods in the take away option so that those could be taken to the class. Respondent 22 has identified an issue regarding packaging of food. The respondent has questioned about the sustainability of the new packaging of the sandwiches offered at the hive café of Growhampton sustainability project. Respondent no 33 had mentioned that he is not satisfied as halal food is not served at Growhampton’s hive café. Tehse are the major reasons behind the dissatisfaction of the customers at hive café of the university. The finding has majorly emphasized on the lack of variety and healthy food at the cafe. Moreover, it has identified another major issue such as halal food which is preferred by a specific religion.
4.1.3 Section C: Advantages and Barriers
The questions of these sections have been designed to understand the advantages as well disadvantages of sustainability practices in hive café.
Four questions are asked to address this issue. Statements are given and the respondents have expressed their view by choosing options ranging from strongly disagree to strongly agree.
First question states that adoption of sustainable business practice assists in increasing the reputation of the coffee shop. 5 respondents (i.e. 5.10%) have strongly disagreed and 3 respondents (i.e. 3.06%) have disagreed with this statement. It implies that 8.16% people do not believe that sustainable business practice helps in enhancing the reputation of a coffee shop. 18 respondents were neutral about the statement. On the other hand, 48 (i.e. 48.98%) respondents agreed with the fact that the sustainability helps in enhancing the reputation of the coffee shop. Again, 24 respondents (i.e. 24.49%) have strongly agreed with this statement. Hence, it can be implied that the sustainability practice assists in increasing the reputation of a coffee shop.
The second question asked the respondents about their view regarding impact of sustainability in reducing waste. 98 respondents have given answer to this question and rest had skipped. It was found that 4 respondents (i.e. 4.08%) strongly disagreed with the statement and same number of respondents was disagreed with the fact that adoption of sustainable business practice aids in diminishing waste. 17 respondents remained neutral in this position. In contrast, 41 respondents (i.e. 41.84%) were agreed and 32 respondents (i.e. 32.65%) strongly agreed with the fact. Hence, it can be concluded from this finding that sustainable business practices help to reduce waste.
The customer perception was analyzed regarding the sustainable business practice by asking whether they feel that green practice encompasses several health and safety issues. Only 2 respondents (i.e. 2.04%) strongly disagree and 6 respondents (i.e. 6.12%) disagree with the fact that green business initiatives do not take care of the health and safety issues. However, 46 respondents (i.e. 46.94%) and 29 respondents (i.e. 29.59%) think that the sustainable business practice considers various health and safety issues and take care of those.
It is important to understand the impact of sustainability in terms of relationship of the business organization with the suppliers, customers and other stakeholders. The respondents were asked to answer whether they agree with the fact that sustainable business practice helps to improve the relationship with the customers, suppliers and other stakeholders. 4 respondents (i.e. 4.12%) have strongly disagreed and 4 respondents have disagreed with the positive impact of sustainable practice in improving the relationship with the customers, suppliers along with other stakeholders. 18 people could not take a position n this case. 45 respondents (i.e. 46.39%) have agreed with the positive impact of sustainable practice on relationship with key stakeholders. 26 respondents (i.e. 26.80%) have strongly agreed with this fact. Hence, it can be concluded that adoption of sustainable business practice aids in improving the relationship with the key stakeholders such as customers, suppliers etc.
It is also consisted of three statements and the respondents were asked to respond through the given parameters ranging from strongly disagree to strongly agree.
It was stated that the sales of the small companies get affected by the high level of competition from other large or mass food producing companies. 98 respondents have provided their response showing agreement or disagreement. 9 people (i.e. 9.18%) disagreed and 2 respondents (i.e. 2.04%) strongly disagreed with this fact. 10 respondents could not reach conclusion and remained neutral. However, 48 respondents (i.e. 48.98%) have agreed and 29 respondents (i.e. 29.59%) have strongly agreed with the given statement. It can be concluded that the small scale companies’ sales get affected by the competition from the huge food producing companies. Hence it can be implied that Growhampton’s hive café also encounter challenges due to the extensive competition from mass food producing organizations.
One of the most important factors is price of the products that has large impact on the sales of the products. The customers were asked whether they think that the foods and drinks offered at sustainable coffee shops will be higher than other shops as they has adopted green business practices. 7 respondents (i.e.7.14%) disagreed and 5 respondents strongly disagreed with the fact that the food products will be expensive in the sustainable coffee shops compared to the other cafes. Significant number of respondents (26 respondents i.e. 26.53%) neither agreed nor disagreed with the fact. On the other hand, 42 respondents (i.e. 42.86%) agreed and 18 respondents (i.e. 18.37%) strongly agreed with the fact that the food prices in the coffee shops which have adopted sustainable business practice will be higher compared to others. Hence, it can be concluded that most of the customers think that adoption of sustainable business practice leads to increase the price of the foods and beverages at the coffee shops. Consumer perception reflects that the sustainable coffee shops are expensive.
The respondents were asked to respond to the question which states that most of the green and sustainable organizations adopt complicated practices which is difficult to estimate with the aid of the traditional financial methods. Total 97 respondents have given their responses. 14 respondents (i.e. 14.43%) disagreed and 4 respondents (i.e. 4.12%) strongly disagreed with the statement. It implies that these respondents feel that the practices of the sustainable organizations can be easily estimated with the help of normal financial method. 28 respondents (i.e. 28.87%) had taken a neutral position which indicates that significant number of people is not clear about the business process and implication of sustainable practices. 36 respondents (i.e. 37.11%) agreed while 15 respondents (i.e. 15.46%) strongly agreed with the fact that it is very difficult for most of the sustainable or green companies to measure the sustainable practices with the aid of traditional financial methods due to its complexity. This finding implies that the business practices adopted by most of the sustainable organizations are complicated and hard to measure these using traditional financial approaches. It is one of the major disadvantages of sustainable business practices.
From question 9 and 10 the advantages as well disadvantages of sustainable business practices have been identified. These advantages as well as limitations hold in case of the hive café. The major advantages for sustainable business practice in hive café will be:
- Enhanced reputation.
- Reduction in waste.
- Takes care of various health as well as safety issues.
- Improved relationship with key stakeholders.
The disadvantages identified by this study are summarized below:
- High level of competition from large food producing organizations.
- Expensive food and beverages.
- Complicated business practices.
- Difficulty in measuring complicated business processes.
4.1.4 Section D: Financial Background and Sales
Five statements were provided and the respondents were asked to rate it on a scale of 1 to 10. Highest rating implies maximum level of agree and lowest rating indicates maximum level of disagree.
First question states that high standard of the management, behavior of the employees and their superior service is responsible for creating positive impact on the customers which lead to enhanced customer loyalty. Significant number of respondents agreed to the fact by providing more number of higher ratings. Hence, it can be implied that in order to achieve customer loyalty through creating positive impact on the customers, the hive café of Growhampton project need to emphasize on improving customer service, behavior of the employees and standard of the management activities and system.
The second statement directly establishes a positive relationship between sustainability and sales. It states that adoption of sustainability helps in attracting more number of customers. The findings indicate that most of the respondents agreed with this fact. It can be concluded that adoption of sustainable business practices in the hive café will attract greater number of customers which will ultimately reflected in the profitability of eth hub.
Third statement is associated with the impact of quality of the product, environment friendliness on the sales or profitability of the organization. Majority of the respondents have felt that the quality of the product and green practices will have positive impact on the sales of the organization. Hence, it can be implied that hive café’s sales will enhance due to its green initiatives and quality of the product. The business practice of hive café is environmentally sustainable and it aims to provide better quality products. It can be expected that the sales will be increased due these factors.
Fourth point states that the environmental friendly background the interior is responsible for attracting more number of customers. The finding of the study indicates that most of the respondents agreed with the statement that the environment friendly background and the unique as well as sustainable interior attract them to the café. The hive café as well as the adjacent courtyard is decorated with funky and up cycled materials. The woods used for interior decoration of the hive are collected from the off cuts of trees in the Growhampton university campus. Hence, the unique combination of beautiful and environment friendly interior as well as background help to attract the customers.
The fifth statement indicates that the various and fresh range of foods and drinks in the coffee shop leads to achieve maximum level of customer satisfaction. Again this statement has been strongly supported by the respondents. The hive café aims to provide fresh food and beverages sourced from local and organic suppliers at a reasonable price.
Hence, it can be concluded that the sustainable practice, superior management, high standard of service and employee behavior, quality of the product, eco-friendly background and interior are the major factor for ensuring success of the growhampton project.
Customer purchasing behavior play most significant role in the success or failure of an organization. Question 10 has found that most of the respondents have a perception that the price of foods and beverages will be higher in sustainable coffee shops due to the green practices. It is very important to understand the willingness of the customers to pay more for the sustainable products. It was asked to the customers whether they are ready to pay for the foods and beverages produced by adopting sustainable and green practices. 93 respondents answered these question and rest 38 respondents skipped this question. It was found that 71 respondents (i.e. 76.33%) have expressed willingness to pay extra for purchasing sustainable food. It has a positive implication for the Growhampton hive café.
As a huge positive response is obtained from the respondents regarding the willingness to pay extra for the sustainable food products, it is important to assess to what extent they are willing to spend more. The respondents were asked how much they can afford to pay in excess compared to the similar product or service produced without adoption of sustainable practice. Total 80 respondents provided the answer. It was found that 23 respondents are willing to pay less than 5% in excess for the sustainable products. 36 respondents (i.e. 45%) were willing to pay upto 10% extra for the sustainable foods and services. 18 respondents showed interest to pay 10% -15% for sustainable products while only 3 respondents have expressed their willingness to pay more than 15% extra for sustainable foods and services. Hence, it can be implied that most of the customers are ready to pay maximum 10% extra for sustainable food products. The hive café of Growhampton project must consider this finding while determining their price strategy for attracting more number of customers.
4.5 Section E: Demographic profile of the respondents
The demographic profile of the respondents needs to be analyzed for understanding the target market perception of people from different background, age, profession etc.
Customer perception and purchasing behavior change with the gender. It was found that 93 respondents disclosed their gender. 37 respondents (i.e. 39.78%) were female while 56 respondents (i.e. 60.22%) were male.
The age group of the respondents needs to be determined and 93 respondents have answered to these questions. It was found that 42 respondents (i.e. 45.16%) belong to the age group of 18 to 24 and 40 respondents (i.e. 43.01%) belong to the age group of 25 to 34. 6 respondents were between the age of 35 to 44. Only 1 respondent belongs to the age group of 45 to 54. From 55 to 64 there are only 3 respondents and 1 person is older than 75 years. Hence it can be implied that the survey result reflects the perception and attitude of the age group 18 to 34.
The nationality of the respondents was asked and 90 respondents provided the answer. It was found that 4 respondents belong to United Kingdom and rest 86 respondents are belong to various countries and will be tagged as international respondents.
It is also very important to learn about the occupation of the respondents. 93 respondents have provided their answers. It was found that 63 respondents (i.e. 67.74%) were students. 7 respondents (i.e. 7.53%) were academic staffs. Rest 23 respondents (i.e. 24.73%) have other professions.
4.2 Comparison between Salt and Pepper Restaurant and Growhampton Project
This paper emphasizes on the environmental as well as financial sustainability of the Growhampton project. In order to conduct this analysis, Growhampton project can be compared with other similar restaurants. Salt & Pepper is a sustainable restaurant that aims to provide healthy foods sources locally and sustainably. The homemade fresh products are prepared with the aid of organic procedure. A comparative study has been conducted between Growhampton project and Salt and Pepper restaurant. There are two aspects: foods and services and financials for comparing these two sustainable food and beverage hubs.
Comparison between product, service and operation
Salt and Pepper offers wide range of foods and beverages. Their ever changing menu consists of fresh, homemade and organic foods. According to the season, the menu at Salt and Pepper also changes. In summer, the restaurant use orchard for serving lemonades, milkshakes and fruity drinks. The menu also includes fresh and healthy hot foods such as salads, soups and sandwiches. Growhampton’s hive café has been started recently and it has not been able to offer the wide range of menu like Salt and Pepper. The ingredients used in sandwiches are harvested at the university campus. From the customer survey it was identified that the customers want to have variation in the menu including the take away menu. They wanted to have more healthy foods such as salads and soups.
Salt and Pepper is well connected with the local manufacturers for having access to the sustainable harvested fresh seasonal agricultural products which are used as ingredients. Growhampton is aiming to harvest ingredients in the university campus and supply the locally grown organic foods. However, the Growhampton needs to focus on improving its supply chain.
The hive café of Growhampton project offers loyalty card to its customers like Salt and pepper. Salt and Pepper considers it as discounted cost, but the hive café has not done it. Hence, the hive café finds difficulty in providing the clear stock details. Salt and Pepper has been using the loyalty cards for collecting the feedback of the customers. The customers can write down their feedback and the restaurant gathers it for future development. Grwwohampton has not taken any initiative to collect the feedback directly from the customers.
Comparison of financials
The financials of June and July for the Hive Café of Growhampton project is available. Same is available for Salt and Pepper. Salt and Pepper has maintained their account in a more systematic way. In case of Salt and Pepper, budgeted and actual expenditure and income has been presented. It provides a clear insight about the performance and deviation from the objective or goals.
If the sales are considered for the two organizations for June and July, it can be observed that the net sale of Growhampton’s Hive café is much lower than Salt and Pepper for both June and July. The major reason behind the low sales volume of Hive Café is it has been started recently. Moreover, all the equipments of the Hive Café has been hired and every month it has to pay huge amount for the equipments. However it has been identified that the net sales has been increased by 37% for Growhampton’s Hive Café in July while it has decreased by 36.8% for Salt Pepper. Hence, it can be implied that the sales of Hive Café is increasing.
Growhampton's Hive Café
Salt and Pepper
Now, the net profit or loss of the Hive Café and the Salt Pepper needs to be compared. The net profit of Growhampton’s Hive café is negative for June and July. It implies that the café has generated loss. It is majorly due to the huge start up cost. On the other hand, Salt and Pepper has earned huge amount of profit. However, it can be observed that the loss of Grwhampton’s Hive café has been declined by has been declined by 47.6% in July which is a positive indication for the Hive Café. The profit of Salt and Pepper has declined by 46.1%. It is too early to determine the financial sustainability of the Growhampton Project. According to the project manager of Growhampton project, Teresa, within 3 to 5 years the project is expected to transform into a profitable social enterprise. It will take time as well as cost to setup the project. The major aim of the café will be to attract and retain the customers by offering healthy foods with the aid of sustainable practice.
Growhampton's Hive Café
Salt and Pepper
CHAPTER : 5
This chapter discusses the findings from the survey conducted. It finds a relation with the objective of the research. A separate chapter has been created for discussion of the data analysis. A broader approach has been taken in the study. The chapter makes an in depth discussion of the analysis. The research objectives are presented in this chapter. They are discussed separately to provide an explanation to the objectives. The data is critically analyzed in this chapter.
Linking with the objectives
To evaluate the perception of the customers on sustainability
In this objective it is crucial to identify the perception of the customers on sustainability. Growhampton has taken sustainability initiative in their Hive café. To make it successful the perception of the customers on this concept is important. From the analysis it can be found that the customers give significant importance to the concept of sustainability. The perception of the customers on sustainability has not been seen in their buying behavior. Though they understand the importance of sustainability but from the analysis it can be inferred that the importance of sustainability practice has not been initiated in their daily life. This is evident from the buying behavior of the customers. The awareness of the customers on the customers on sustainability practices has not been reflected in their purchasing behavior. In terms of choosing shopping destination there is lack of practice of sustainability. It has been seen that customers prefer supermarkets over local markets in purchasing the products. Therefore the local markets face severe competition from the supermarkets. The supermarkets keep high quality products which are imported from foreign countries. They have to pay high import duty to purchase those products. This is increasing the competition for the local products. Thus it can be said that customers are aware of the concept of sustainability. But there is lack of practicality in the concept. They do not apply it in their daily life which is reflected in their purchasing behavior and choosing of shopping destinations. However it can be also said that there are potential number of customers who buy sustainable products sometimes. The concept of sustainability has been discussed in the literature review chapter. It is important to understand the perception of the customers on sustainability so that it can be implemented successfully in the business practices.
To evaluate the attitude of the customers towards sustainability and the hub
In the second objective the aim is to analyze the attitude of the customer’s towards the concept of sustainability and its importance in business practices. It has been already discussed in the literature review chapter that it is important to incorporate sustainability in the business practices of an organization. The risk management framework of an organization should consist of sustainability practice initiatives. Sustainability can be incorporated to promote sourcing and it can also be done for the management of supply chain. Regular monitoring should be done by organizations to improve and enhance their sustainability practices. The viability of a business organization is dependent on the quality of the natural build and the cultural environment. In a restaurant the ambience is one of the key factors that should be considered. If the ambience of a restaurant is alluring then it would attract customers. Thus it is important to understand the need of the customers. The hub should be facilities and services fulfilling the demand of the customers. An organization will be successful if it is able to meet the social, economic and aesthetic needs of the society. Similarly the hive should also manage its resources in such a manner so that the social, economic and aesthetic needs are met. The future prospect of the hive café will depend on its ability to meet the need of the customers. Most of the customers visit the coffee shop on a regular basis which shows that the attitude of the customers towards the hub is positive. The new project will be successful. The food choices in the hive café are satisfactory. But the coffee shop should put emphasis on customizing its menu to bring 100% customer satisfaction. This can be done by understanding the food choices of the customers by taking suggestions from the customers. From the analysis it can be found that there is lack of variety in the coffee shop. Even the food that is served in the hive café is not of superior quality and not healthy. Sustainability regarding the packaging of the sandwiches offered at the hive café has also been questioned. Thus the survey has been successful in determining the key drawbacks of the hive café. The coffee shop should ensure that there are changes implemented in the service. It should comply with the need of the customers. It is important for Growhampton to meet the need of the customers to maintain its competitive edge.
To analyze the advantages and disadvantages of practicing sustainability in Hive café of Growhampton.
The third objective has tried to analyze the advantages and disadvantages of practicing sustainability in the Hive café of Growhampton. It has been already discussed in the literature review chapter that it is important to implement sustainability practices in business activity in order to increase the customer base. The major advantage of practicing sustainability in the hive café is that it will provide competitive advantage to the coffee shop over others. Sustainability practice will increase the reputation of the hive café. This has also been agreed by the respondents of the survey. Sustainable business practice will lead to waste management. There would be reduction in the waste. Sustainable business practices address the various health and safety issues. It takes care of the major issues that affect human health. Sustainable business practice also helps in supply chain management and improves the relationship with the stakeholders and the customers. Growhampton is a small company. It faces severe competition from the mass food producing companies. Growhampton face challenges from other companies who produce food on a mass scale. One of the disadvantages of practicing sustainability in business organization is that it increases the prices of food. It makes the food products expensive. This is because the raw material used in making the food products is costly and this increases the price of the food products. Maintaining a sustainable environment in the cafe is a costly affair which increases the prices of the food products. Another major disadvantage of practicing sustainability is that the business practices of the organization tend to be complicated. The traditional financial approach cannot measure the financial condition of such organization.
To evaluate the factors that is responsible for sales of Growhampton.
The fourth objective tries to evaluate the major factors that are responsible for sales of Growhampton. There are several factors that contribute to the sales and profitability of Growhampton. Customer loyalty has been maintained by Growhampton by creating a positive impact on the customers. This has enhanced the loyalty of the customers. As a result of which the customer base in Growhampton has increased. Customer service is a key factor in retention of the customers. Growhampton need to address this factor. The suggestion provided by the customers regarding the food quality need to be addressed. It has been seen that there is a positive relationship between sustainability and profitability of the organization. Sustainability initiative at hive café will increase the reputation of the hive café. This will attract customers to the organization which will increase the profitability of the hub. Profitability of the hive café will also be increased if it serves quality product to its customers. The ambience of the hub and environment friendliness is one of the key factors in increasing the profitability of hive café. The green initiative will enhance the sales of the hive café. The business practice of the hive café is sustainable environmentally and it will try its best to provide quality products. This will increase the profitability of the firm. The ambience of the hive café is another important factor for attracting customers. A sustainable practice in the interior of the hive café will attract more customers. The courtyard of the hive café is decorated with up cycled materials. The interior of the hive café has been decorated with trees cut off from the University campus. This unique and beautiful environment will play a major role in attracting customers towards the café. Maximum level of customer satisfaction is derived from the food and drinks offered at the hive café. The aim of the hive café is to increase its profitability by ensuring customer satisfaction. This will be achieved by the hive café by providing fresh food to its customers. The increase in price of sustainable food products can be controlled by purchasing the raw materials from local and organic suppliers at reasonable price. From the survey it can be said that customers are willing to pay extra money to purchase sustainable food product. Thus the major factors contributing to the profitability of the Growhampton project are superior management, high standard of service, high quality of product, eco- friendly background and ambience. Pricing strategy can also be determined by Growhampton for its hive café project from the responses of the customers from the survey. The customers can pay extra 10 % for sustainable food products.
To evaluate the financial sustainability of the Growhampton project.
Evaluation of the financial sustainability of the Growhampton project is the fifth objective of the project. This has been determined by comparing Growhampton with another restaurant in the same line. The financials of Growhampton has been compared with Salt and Pepper. Certain initiative has been taken by Salt and Pepper which needs to be considered by Growhampton in its hive café project. Growhampton needs to improve its supply chain management like Salt and Pepper. There is lack of variation of food in the hive café. On the other hand Salt and Pepper offers wide range of menu. Growhampton has not yet taken the initiative to collect feedback directly from the customers. This should be implemented. The sales of Hive café is increasing gradually. It is visible from the financial report of June and July. Growhampton has suffered from loss. Though it is too early to determine the financial sustainability of the Growhampton project in comparison to Salt and Pepper since it is new in its business. Within 3 to 5 years hive café can transform itself into a profitable organization by implementing the major changes.
The following recommendation can be cited for the hive café project of Growhampton –
- In order to maintain its competitive advantage Growhampton should take initiatives to introduce variation in their food products.
- Growhampton should maintain the quality of the food product without much increase in the price of the food products.
- Growhampton should ensure that the sustainability initiative is being practiced at every level of the café starting from the ambience, food products.
- Regular feedback directly from the customers should be taken by Growhampton so that it can make necessary changes which will increase the satisfaction of the customers.
- Growhampton should make an effective pricing strategy so that the price of the food products are not increased even undertaking the sustainable initiative.
- Growhampton should take effective strategy for supply chain management.
The major limitation of the research is that the survey is based on direct response of the customers. Collection of primary data has been a major problem. Large number of respondents has been selected for the survey.
Time is another major constraint of the research. All the components related to the sustainability initiative for the hive café project by Growhampton could not be addressed. Thus the research requires more time for in depth analysis so that all the factors are addressed with more clarity.
The research is mostly based on primary data. Secondary data has been used by the researcher to support the primary data. Secondary data analysis has been ignored. Secondary data could be used to analyze the past performance and authenticity of the primary data. Secondary data provides systematic information.
Future scope of the research
Uncovered portions can be addressed in the future scope of the research. This will improve the level of research and provide an in depth analysis of the subject. The measures by which the awareness of the customers could be increased on sustainability have not been addressed in the research. The marketing strategy which will increase the profitability of hive café without affecting the sustainability initiative has not been addressed in the research.
Therefore there is wide range of scope which is open so that the research can be further conducted. This would highlight the topics that are not covered in the study. Further research on the uncovered topics require more time. A detailed analysis of the factors can be done with more time. This will improve the strategy of the organization which will have positive impact on the profitability of the organization. This will fulfill the mission of the organization. Growhampton will be able to ensure its sustainable practice on a long term basis.
From the data analysis and discussion chapter it can be said that the factors that has been mentioned in the literature review chapter is important to understand the concept of sustainability and its importance in organization. The sustainability concept has been studied on Growhampton new project, hive café. From the survey conducted it can be said that the customers are aware of the concept of sustainability. Most of the customers understood the importance of the sustainability concept in organizations. There was lack of practicality amongst the customers in implementing sustainable practices in their daily life. From the survey it has been found that the customers were not keen in purchasing sustainable products. But it is expected that customers will buy sustainable products in future. It has been seen from the survey that although the customers are aware about sustainability, it is not reflected in their purchasing behavior. Lack of sustainable purchasing behavior has been noticed in the customer in choosing their shopping destinations. The customers prefer super markets instead of local markets in making their purchase decisions. This is hampering the profitability of the local business. The super markets have to pay heavy import duty to buy foreign products. Inclination of the customers in purchasing from local shops can reduce the import cost and increase the practice of sustainability. However from the survey it can be said that there are potential customers who often purchase sustainable products. The viability of the business depends largely on the cultural environment of the business. The environment in an organization should be designed in such a way so that it can fulfill the requirements of the customers. In order to ensure the viability of the business project of Growhampton it should consider the need and demand of the customers so that the services can meet the requirement of the customers. The hive café should also ensure that the economic, social and aesthetic needs of the customers are catered. The customers were optimistic regarding the future prospect of the hive café. If it can cater to the changing need of the customers then hive café has good prospect financially. Growhampton coffee shop has regular customers who visit the café. Growhampton has been able to maintain a strong customer base via its sustainability initiative. But the customers shared some of their grievances regarding the food quality of Growhampton project. According to most of the customers there was lack of variation in the food products offered by Growhampton. There should be variation in soup, salads and main course offered at Growhampton. A new packaging system has been initiated for packing sandwiches. The sustainability of the new packaging has been questioned by the customers.
Sustainability initiative helps to increase the reputation of the organization. The sustainability initiative by Growhampton has enhanced the reputation of Growhampton which has resulted in increasing the customer base of the organization. Sustainable business initiatives helps to reduce the pollution caused to the environment. This is mostly done by reduction in waste. Sustainable business practices helps to reduce the health and safety issues. Organizations practicing sustainability ensure that there is reduction in environmental impact from the release of the waste product. Since sustainability is focused on reducing the harmful impact on the environment, it helps to improve the relationship with the customers, stakeholders and suppliers.
The profitability of small scale companies are largely affected by the competition from mass food producing organizations. Growhampton face competition from Salt and Pepper who is in the same line of business and practice sustainability. The major threat that Grow Hampton receives from Salt and Pepper is that there is wide variation of food product offered at Salt and Pepper. The management of supply chain is done efficiently by Salt and Pepper. Growhampton should manage its supply chain efficiently. Although it is too early to comment on the profitability of hive café but it is envisioned that hive café will perform well in the future based on the its initiatives and vision. The major concern of every organization is to maximize its profit. The sustainability initiative by Growhampton has to be strategized in a well-organized manner so that the profitability of the business is not affected. Growhampton should take regular feedback from the customers to improve its service. Sustainable business practice helps an organization to achieve its triple bottom line through the delivery of socio economic as well as environmental advantage. Growing number of organizations are integrating sustainability in their business practices.
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