Business Analysis: Business & Marketing Essay

BUSINESS ANALYSIS
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Business Analysis
Part A
Question One
The events in the Rio Tinto case are significantly connected to sustainability for several reasons. First, as revealed by Butler et al. (2020) in The Guardian, Rio Tinto executives decided to blow up the rock shelters despite knowing that these shelters had a significant cultural value to the indigenous people around that area. By doing so, the company destroyed their relationship with the indigenous people, yet they are an important part of the community in which Rio Tinto operates in. This goes against the corporate social responsibility (CSR) concept which is focused on ensuring that businesses are making decisions that have a positive impact on society (Chang et al. 2017, p.50). The company’s action did nothing but destroy some of the things that hold cultural value among the indigenous community. Rebuilding the relationship with the Aboriginal people will be a long and probably costly process for the company, yet its success depends on it. As indicated by Butler et al. (2020), the indigenous investors raised concern over the issues, which is why it was reviewed by the board. Thus, not only did their action affect the community that owns land around the area but also the investors.
Second, when the indigenous groups and investors raised concerns about the actions of the company, the issue became more serious. Investors and other interest groups are as important to companies as employees and customers. These are all essential stakeholders and according to the stakeholders’ theory, companies need to build strong and lasting relationships with all these stakeholders (Chang et al. 2017, p.50). Stakeholders include any person or group affected by the actions of the company or who influence the company’s success. Since the actions of the company affected the investors as well as the indigenous groups and raised concerns, it also endangered the survival of the company. Such actions in the future can cause existing and potential investors to pull out, which will affect the company negatively. Also, such actions that cause public outcry threaten the company’s reputation and shareholder value.
Third, blowing up rock shelters relates to the sustainability of the company because it affects the environmental aspect of sustainability. Mining has always been associated with a negative environmental impact. As part of promoting sustainable mining and ensuring that the social and environmental impacts of mining are mitigated, mining companies are increasingly consulting with local communities (United Nations Development Programme(UNDP) 2018, p.15). Some countries have laws requiring mining companies to consult with the affected communities. When such consultation is absent, the social and environmental impacts of mining are amplified. This is what the actions of RioTinto executives did. They amplified the issue because the indigenous community was not consulted. If anything, the company aggravated the local community, thus threatening any future cooperation.
In summary, the actions of Rio Tinto relates to sustainability because they threatened the core dimensions of corporate sustaina...