Isabel Dathe’s research while affiliated with Technische Universität Berlin and other places

The selection of the optimal strategic option is essential for long-term business success. Such strategic choice is a comprehensive process that involves narrowing down the strategic options after thorough consideration of the possible impacts of the most influential internal and external factors. This chapter begins with the introduction of Mintzberg’s strategy definition in terms of his 5Ps model that includes the core elements of plan, ploy, pattern, position and perspective, followed by the key selection criteria for strategic choices. Subsequently, some effective strategic management instruments can facilitate the strategy selection process in business practice, such as Porter’s generic strategies, Ansoff matrix, BCG matrix, McKinsey 7-S model and Blue Ocean vs. Red Ocean Strategy.

To develop a successful ESG policy, it is crucial to understand the needs and concerns of all relevant stakeholders. This chapter depicts the role of stakeholders in modern business processes. The decisions and actions taken by the company can have far-reaching consequences that are not confined to financial impacts, affecting various stakeholders and the broader society. By acknowledging and addressing the interests of the key stakeholder groups, companies can create value, contribute to society and achieve in turn long-term economic success. The chapter begins with an introduction of the concept of stakeholder, followed by the evolution of stakeholder theory, and sheds light on the role of stakeholders in the sustainable success of business undertakings. Furthermore, it presents a practical framework for stakeholder relationship management as an integral component of ESG management, including identifying, prioritizing, mapping and engaging major stakeholder groups, as well as possibilities for monitoring ESG stakeholder relationships. The visualization of stakeholders with the Stakeholder Circle approach further facilitates the understanding of stakeholder characteristics and the planning of stakeholder engagement in practice.

To develop optimal environmental, social and governance (ESG) solutions, companies should set clear strategic goals based on a holistic approach and deploy robust monitoring and reporting systems. In real-world practice, the notions of sustainability, corporate social responsibility (CSR) and Sustainable Development Goals (SDGs) have proven to be effective instruments to enhance shared values and prioritize stakeholder engagements. The following sections will provide an overview of the above key concepts that are closely related to the ESG principles and shed light on how they can be implemented in a holistic ESG strategy framework.

This chapter outlines the role of corporate strategy in shaping the overall decisions such as business purposes, directions for business development endeavours and the importance of alignment of all strategic choices with the overall corporate strategy. It introduces the process of the strategic management cycle with the elements of strategy analysis, strategy choice and strategy implementation that aim to answer the important questions in terms of corporate strategy and market positioning such as “Who are we?”, “Where are we?”, “Where do we want to go?” and “How do we achieve this?”. It also provides a detailed description of some common instruments for strategy development such as PESTEL analysis, Porter’s Five Forces, SWOT analysis and core competencies analysis.

In business practice, developing and implementing effective ESG policy is not without challenges. This chapter briefly outlines some of the major challenges and provides a detailed description of a framework recommended by McKinsey that entails the processes for conception and development, as well as for the implementation of a comprehensive ESG policy. A successful ESG policy requires a comprehensive understanding of the strategic purpose of ESG initiatives and the level of performance targets. The effective development and implementation of ESG policy involves the processes of mapping the business model with ESG dimensions, defining ESG targets and monitoring tools for the organization, embedding ESG in the overall business strategy as well as a well-designed communication strategy for stakeholder communication to maintain social license to operate.

The world has witnessed significant transformations in various aspects of society and the economy, including social movements advocating for environmental and societal causes, the global integration of economies through globalization, the rapid adoption of digital technologies in industrial processes and the pervasive impact of social media, which have all contributed to a dynamic and interconnected world.

Consumers and employees hold a special place among a company’s stakeholders in maintaining the brand image. This chapter is dedicated to their roles in shaping corporate ESG strategy to best meet their needs and requirements. It begins with depicting the emerging power of consumers in influencing corporate decision-making, especially by enhancing sustainable consumption worldwide, followed by an introduction of legal and ethical norms for consumer protection to ensure product safety and fair, honest treatment of consumers. Subsequently, we dive into various aspects of modern talent management, addressing both the main processes of talent management and some major instruments for the promotion of optimal employee experience.

This chapter delves into the emergence of the concept of environmental, social and governance (ESG) principles that have become a fundamental component of corporate strategy in terms of responsible business practices worldwide. It traces the historical development of ESG that began with a joint task force initiated by the United Nations (UN) to address growing social and ethical concerns about business practice. In addition, it explores the diverse stakeholders involved in initiating the ESG movement such as analysts, the private sector, business consultants and independent financial advisors, financial institutions, pension funds and pension trusts, investors, non-profit organizations (NGOs), regulators and stock exchanges. Subsequently, it highlights the significance of the Conferences of the Parties (COPs) in shaping the ESG policies and frameworks.

Sustainable supply chain management encompasses a range of topics and considerations aimed at minimizing environmental impacts, promoting ethical practices and ensuring economic viability throughout the supply chain. Today’s companies operate in a highly interconnected global marketplace. Globalization has led to complex supply chains that cover multiple countries and continents. As a result, the actions and practices of suppliers in different parts of the world can have far-reaching consequences. While governments around the world are enacting stricter regulations related to environmental protection, human rights and labour practices, companies are now required to ensure that their entire supply chains, including direct and indirect suppliers, comply with these regulations. This chapter introduces the fundamental concepts in supply chain management, as well as the significant challenges in implementing ESG in global supply chains.