The View From Taft

“Greed, for lack of a better word, is good.”

— Gordon Gekko,
from the movie Wall Street

Traditional or mainstream businesses and managers prioritize self-interest and maximize profits with little regard for their stakeholders and the environment. In creating products, they externalize some of the costs and impact of production to the detriment of other stakeholders.
For example, manufacturers of technology-driven items such as smartphones and tablets employ a “planned obsolescence” strategy, de-optimizing the performance of older-generation phones so that customers become dissatisfied and look for the next big thing. Even with start-ups, founders and capitalists eager to make big bucks and inflate valuations have encouraged fast growth with little regard for stakeholders and business constraints.
Meanwhile, mainstream consumers are encouraging these unwanted business behaviors by always searching for the lowest prices even if these negatively impact business suppliers. Furthermore, the consumers’ constant pursuit of the shiny and new, of the new toy that signals prestige, rewards planned obsolescence.
On his blog, renowned marketer and author Seth Godin laments how consumers know what they need, but demand what they want.
For example, we crave tasty fried chicken over slowly prepared healthy viands. Such is the curse of greed combined with instant gratification! And businesses and consumers are equally responsible.
In this context, we can see how greed drives traditional management and consumption. Although Gordon Gekko exclaimed in the movie that greed is good, pursuing true sustainability means that greed cannot shape business and customer decisions.
What, then, is the alternative?
Bocken and Short, in a 2016 article entitled “Towards a sufficiency-driven business model” published in the journal Environmental Innovation and Societal Transitions, advocate that sufficiency should drive how firms design their business models as well as how customers consume products. Sufficiency pertains to creating (on the firm’s side) and consuming (on the customer’s side) adequate amounts, or only what is enough for one’s needs.
What do sufficiency-driven business models and consumption look like?
Some examples we are familiar with are those that take advantage of the sharing economy, such as Airbnb, Grab, and Uber.
With these services, consumers do not have to own property or cars, but instead “share” with other consumers and rent them as needed. Another example is items that have long lives. Instead of buying cheap fluorescent bulbs that last about 10,000 hours, consumers can buy LED lights that they can use up to 100,000 hours. Some engineers are also looking at modular smartphones that will allow consumers to replace only the parts they want/need to replace instead of disposing of the whole item.
However, shifting towards a sufficiency-driven business model requires innovating business models (such as those done by Airbnb, Grab, and Uber) and educating consumers to not look at price at face value (buying cheap items multiple times versus investing in high-quality items). Consumption patterns must change, but it will take effort from both companies and customers to realize the promises of sufficiency.
If we really want true sustainability, we — consumers, businesses, and other stakeholders — should create an ecosystem of sufficiency by supporting and taking care of each other’s needs as they arise. In essence, the principle of sufficiency invites us to go back to the time before greed powered our behavior. As Mahatma Gandhi said:
“Earth provides enough to satisfy every man’s need, but not every man’s greed.”
Patrick Adriel H. Aure is an Assistant Professor at the Management and Organization Department, Ramon V. Del Rosario College of Business, and head of the Social Enterprise Research Network of the Center for Business Research and Development at De La Salle University.