DHL is a universally known company that specializes in urgent international shipping of letters, parcels, and documents. As such, its environmental impact has the potential to be very damaging due to the organizational difficulties associated with long-distance high-speed transportation. Therefore, environmental audit of the DHL is one of the most important areas for the company’s internal strategic analysis. But is it a useful management tool when conducted in isolation, outside of the complex analysis? This paper aims to answer this question with the aid of the PESTEL Porter’s Five Forces and the VRIO tools.
The environmental audit from DHL’s 2019 Sustainability report is used as a reference for this essay. The audit comments on the carbon emission as the company’s main concern, since it is tied directly to the transportation (Deutsche Post DHL Group 2019 Sustainability Report). DHL’s management states its commitment to the increase of the Carbon Efficiency Index and report on tracking the carbon emissions from delivery trough the internal information management channels. Other sustainability measures implemented by the company include the green energy sources for the operations and a special investment policy that demands new acquisitions to surpass the existing ones in CEI (Rahman, 2021). Such strategies are up to the current standard of the sustainable environmental policies for large-scale businesses (Aslam, Rehman & Asad, 2021). It should be noted that the recent research suspects companies’ sustainability reports might not be indicative of their real sustainability performance (Papoutsi & Sodhi, 2020). For what its worth, DHL’s environmental audit appears to be efficient, yet at this stage it is unclear whether it is capable to impact the company as an isolated sector of the general audit.
PESTLE’s Five Forces is a framework that analyses the impact of the several groups of the external factors on the company: political, economic, social, technological, environmental, and legal. The second “E” is but a singular factor in a PESTEL analysis, regularly conducted by the management team of the businesses. Environmental side of the PESTEL analysis is concerned with such factors as the impact of the climate change, environmental laws, sustainability, and pollution levels on the affairs of the company. However, the factors associated with different parts of the analysis might overlap and do so frequently. For example, environmental laws and regulations are relevant for both Environmental and Legal parts of the analysis (Kreutzer, 2019). It therefore might be used as evidence against the efficiency of a singular environmental audit. An audit committee is only effective when assessing the state of the affairs of a company in general, considering not only the individual areas but the relationships between those (Inaam & Khamoussi, 2016). The PESTEL framework is a good illustration of this principle, since it allows the managers to fully profile the firm’s multi-layered dynamics with the existing environment.
The VRIO framework deals with such aspects of the company analysis as the Value, Rarity, Imitability and Organization of its competitive advantage. This framework is comparatively less linked to the environmental policies and sustainability performance than the PESTEL analysis (Montinero, 2021). However, one might argue that DHL’s carbon remission orientation severely affects the Organization of its services (Ariyani & Daryanto, 2018; Lopes, Farinha, Ferreira, & Silveira, 2018). The VRIO framework also emphasizes the importance of the multi-layered performance assessment, since maintaining the advantage requires all the four components to be up to due standard. As an international large-scale company, DHL inherently struggles with sustainability policies, as those are organizationally easier to implement for the small business (Barbosa & Ayarasa, 2020). The company should not therefore engage in self-sabotage by overfocusing on one particular aspect, since its troublesome nature might be helped through the advancements in other areas.
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