Managing Sustainable Business: An Executive Education Case and Textbook

Foreword by Doug Baillie
Foreword by Daniel Janssen
Contents
Managing Sustainable Business in a Global Context
Part I Risk Management: Managing the Accountabilities of the Business
Part II Issues Management: Managing the “Responsibilities” of the Business
Part III Stakeholder Management: Managing Competitiveness and Trust
Part IV Strategic Differentiation: Creating Comparative Advantage
The Value of “Creating Shared Value” Contested
Part V Business Model Innovation and Transformation
Part VI Managing Change: Developing Dynamic Capabilities and HR Talent
References and Further Readings
Part I Risk Management
Part II Issues Management
Part III Stakeholder Management
Part IV Strategic Differentiation
Part V Business Model Transformation
Part VI Dynamic capability and Talent
Introduction, Justification and Outline
Gilbert G. Lenssen
Justification and Objectives of This Book
Managing Sustainable Business: An Introduction
Sustainable Business: An Outline
A Managerial Framework for Sustainable Business
Closing Reflection
Further Reading on the Themes Touched on in This Introduction
Part I: Introduction: Risk Management – Managing the Accountabilities of the Firm
1: The Scenario Approach to Possible Futures for Oil and Natural Gas
Introduction
Scenarios in Shell
Scenarios and Executive Decision-Making
The Energy Outlook and the Zone of Uncertainty
New Lenses
The Paradox Lenses
Two Archetypal Pathway Lenses
New Lens Scenarios for the Twenty-First Century
Reflections
Concluding Remarks
Royal Dutch Shell plc, Disclaimer
References
2: Beyond BP: The Gulf of Mexico Deepwater Horizon Disaster 2010
Introduction
Context
Initial Reaction
“The Well from Hell”
BP’S “Near-Death” Experience
Capping the Well and the Immediate Crisis
The Aftermath
Conclusion
Appendices
Appendix 1: Tony Hayward Speaking at Stanford Graduate School of Management May 12th 2009
Appendix 2: Bly Report Summary
Appendix 3: New York Times
Appendix 4: BP Share Price Movement
Appendix 5
3: Wal-Mart’s Sustainable Product Index
Background
The Greening of Wal-Mart
Wal-Mart’s Sustainability Initiatives
The Sustainability Index
4: Tetra Pak: Sustainable Initiatives in China
Introduction
Background
Chinese Dairy Industry Overview
Major Dairy Producers in China
Yili
Mengniu
Bright
Sanyuan
More Milk Safety Incidents
Tetra Pak Global
Mission, Strategy and Sustainability
Tetra Pak China and Competition
Tetra Pak’s Competitors in China
GA Pack (ga-pack.com)
Evergreen
SIG Combibloc
Other Competitors
Environmental Challenge of TP’s Packaging
Service-Based Sustainability Strategy at Tetra Pak
KAM-the Way of Working with Customers
Working with Stakeholders
FSC Certification
Pasture Land Management
Creating a Recycling System
Appendices
5: INEOS ChlorVinyls: A Positive Vision for PVC (A)
Introduction
How It All Started
PVC Coordination Group
The Framework for Strategic Sustainable Development
July 2000, Consensus-Building Report
Vinyl 2010
Hydro Works with The Natural Step
The PVC Resin Market in 2005
Engaging Suppliers and Customers
The INEOS Takeover
Part II: Introduction: Issues Management – Managing the “Responsibilities” of the Business
6: Expect the Unexpected: Building Business Value in a Changing World
Introduction
Global Sustainability Megaforces Will Affect the Future of Every Business
The Systems Approach to Sustainability: Planning for Change
The Nexus Approach
The Footprint Nexus
The Erosion Nexus
The Innovation Nexus
Global Sustainability Megaforces: A Sectoral View
Costs of Environmental Impacts Are Doubling Every 14 years
Value at Stake: Sectors Could See Profits Lost
Exposure Reduced But Driven Mostly by Rise in Earnings
Environmental Intensity: A Clearer Picture
Perceptions of Sectoral Risks and Readiness to Deal with Them
Call to Action: Business Strategies & Policy Formation
Recommendations: The Essentials of Business Action
Recommendations: The Essentials of Government Action towards Sustainability
Business and Government Working Together: Public- Private Partnerships as a Tool for Green Growth
Imperatives for Achieving Sustainable Growth
Contacts
7: Pathways to Corporate Responsibility - Revisited
2020 Vision – In Retrospect
Pathways to Corporate Responsibility
Critical Analysis of Pathways Framework
The Civil Corporation
Enhancing the Pathways Framework
References
8: GSK: Profits, Patents and Patients: Access to Medicines
Introduction
Background Events from 2000
GSK in the Early Years and the HIV/AIDS Pandemic
The South African Court Case
Post-merger: Facing the Challenge
Access to Medicines and Implementation of the Access Policy
Research in GSK
Vaccines at GSK
Scandals at GSK
Access to Medicines in 2014
GSK and the Novartis Deal
9: Revenue Flow and Human Rights: The Paradoxes of Shell in Nigeria
Shell and Nigeria
Human Rights in the Niger Delta
Sustainability and Human Rights at Shell
The Extractive Industries Transparency Initiative (EITI)
Changing the Legacy: Shell’s Next Steps
Analysis: Shell’s Learning
Company Learning
Strategy Development
Cohesive Focus
Stay or Go?
The SWOT of Shell’s Position in Nigeria
Strengths and Opportunities
Shell’s Experience
Extractive Industries Transparency Initiative
Corporate Influence: “He Who Pays the Piper….”
Weaknesses and Threats
Relationship with Government
Threats to Reputation
Ongoing Conflict
Economic Situation
Cultural Divide
Multinational Corporation Role
Recruitment/Retention of Qualified Personnel/Management
Political Situation
Sustainability of Oil
Axes of Action Available to Shell
Shell’s Position on Human Rights
Maintain Leadership Position in Transparency
Act Local
Use Other Stakeholders to Support Action
Engage in Stakeholder Dialogue
Epilogue: Ten Years Later……
Shell’s Role and Direction in the Niger Delta in 2015
Nigeria and the NNPC in 2015
The Extractive Industries Transparency Initiative in 2015
10: Ziqitza Health Care Limited: Responding to Corruption
Introduction
Background
ZHL
Growing Pains and Gains
Major Player, Minor Players
The Decision
Part III: Introduction: Stakeholder Management – Managing Competitiveness and Trust
11: How GAP Engaged with Its Stakeholders
Why Stakeholder Engagement?
The Gap Story
The Limits of Policing: Cambodia, 2000
Implementing Strategic Stakeholder Engagement
Step 1. Draw a Stakeholder Map
Step 2. Identify the Material Issues
Step 3. Define Objectives
Step 4. Resolve Issues Collaboratively
Step 5. Embed Engagement
Beyond Crisis Management: India, 2007
Gap and Lesotho
12: Barrick Gold: A Perfect Storm at Pascua Lama
Introduction
Background
Barrick Gold Corporation
Pascua Lama
Stakeholder Outreach Efforts
Environmental Concerns
Industry-Wide Woes
13: Walmart: Love, Earth (A)
Background
The Critics
Walmart Responds
Earthworks and the NGOs
The Vancouver Dialogue
Working Together
Love, Earth
14: Shell Nigeria: Changing the Community Engagement Model
Introduction
Shell in Nigeria: A Brief History
A Huge Footprint in Nigeria
SPDC and the Nigerian Government
How the Partnership Works
SPDC as Operator of Joint Venture Partnership
SPDC and Its Host Communities in the Niger Delta
Community Assistance
A New Approach to Community Engagement
Implementation of the GMoU Model
Pilot Phase Gbaran-Ubie Project
Results of Pilot Phase Implementation
Implementing the GMoU Beyond the Pilot Phase
Nembe: An Exemplar Case
Has GMoU Model Been Successful?
References
15: Economy of Mutuality: Equipping the Executive Mindset for Sustainable Business
Introduction
Economy of Mutuality
Reconsidering the End State of Business
Business Archetypes
End-Point Examination of Business Archetypes
For-Profits
Hybrid Enterprises
Social Enterprise
Shared Value
Nonprofits
Architecture of Economy of Mutuality
Solidarity
Cultural Capital
Homo Reciprocans
Common Good
Virtue
The Place for Profitability
Self-Interest in Proper Proportion
Conclusion
Part IV: Introduction: Strategic Differentiation – Creating Competitive Advantage
16: Creating Shared Value
Moving Beyond Trade-Offs
The Roots of Shared Value
What Is “Shared Value”?
How Shared Value Is Created
Reconceiving Products and Markets
Blurring the Profit/Nonprofit Boundary
Redefining Productivity in the Value Chain
The Role of Social Entrepreneurs
Enabling Local Cluster Development
Creating Shared Value in Practice
The Next Evolution in Capitalism
17: Response to Porter: Responsibility for Realising the Promise of Shared Value
CSV for the Legitimacy of Capitalism
Why Status Quo Business Has Failed Society
The Virtue of CSV in A-Cases
CSV Beyond the A-Case
Supplementing CSV with a Responsibility Framework
Conclusion
References
18: The Roots of Corporate Sustainability: the Art of Managing Innovation and Relationships by illycaffè
Introduction
The Coffee Industry
Coffee and Fair Trade
The illycaffè Group
A History of Innovation
‘Excellence and Ethics’
illycaffè Brazil Quality Espresso Coffee Award
The illycaffè University of Coffee
Voices from the Supply Chain
Other Approaches to CS in the Coffee Supply Chain
Luigi Lavazza S.p.a.: ¡Tierra! (Source: Lavazza Web Site 2007)
Nestlé: Nespresso AAA Sustainable Quality™ (Source: Nespresso Web Site 2007)
Starbucks: C.A.F.E Practices (Source: Starbucks Web Site 2007, and Starbucks ‘Beyond the Cup. Highlights of Starbucks Corporate Social Responsibility,’ 2006)
The Business Dilemma
illycaffè Social Value Improvements (2007–2014)
19: Microfinance as a Shakespearean Tragedy: The Creation of Shared Value, While Acting Responsibly
Introduction
The Case of Microfinance
The Origin and Growth of Microfinance
Microfinance Investors
ACTIAM Impact Investing
The Trend Towards Responsible Investments
Launching Two Microfinance Funds
A Different Business Model
Investments
Performance of the Funds
Creating Shared Value
Bad Moon Rising
Assisting the Poor?
Consequences for Institutional Investors
Creating Shared Value as a Normative Challenge?
Creating Value Versus Redeeming Legitimacy
A Clear Challenge
Good Business Sense
Shakespeare’s Tragedy
20: ‘Ecomagination’ at Work: GE’s Sustainability Initiative
Towards a Cleaner Environment
Background
Past Controversies
Remedial Attempts
From Imagination to Ecomagination
Targets and Expected Benefits
Promotions
The Results
Outlook
References
21: Sustainability as Opportunity: Unilever’s Sustainable Living Plan
The Challenge
Unilever
At a Glance: Unilever at 31 December 2014
Seeking a New Strategy for the Twenty-First Century
The Unilever Sustainable Living Plan
Embedding the Unilever Sustainable Living Plan
Employees Help Lead the Way
Small Actions Make a Big Difference
Sharing “Proud Practice” Projects Globally
Unilever’s Sustainable Living Plan: Too Risky, Too Ambitious?
Appendices
Appendix 1: Unilever’s Business Model: A Virtuous Circle of Growth
Appendix 2: Unilever’s Governance of Sustainability and Corporate Responsibility
Appendix 3: The Unilever Sustainable Living Plan: From Seven (2010) to Nine Commitments (2013)
Appendix 4: Unilever Sustainable Living Plan and the ESG Value Driver Framework
Appendix 5: Consolidated Income Statement and Key Indicators Since USLP Launch
Appendix 6: Share Price Versus Market Index
Part V: Introduction: Business Model Innovation and Transformation
22: Business Model Innovations for Sustainability
Introduction
What Do We Mean by “Business Model”?
Why Business Model Innovation Matters
Research Approach
Caveats
Purity
Hybrid Models
Intent to Produce Sustainable Outcomes
Business Model Innovations for Sustainability
Environmental Impact
Social Impact
Financial Innovation
Social Innovation Focused on the Base of the Pyramid
Diverse Impact
Patterns: Industry, Geography, Size and Type of Innovation
How Large Companies Are Finding New Models
Final Remarks
Appendix
23: From Incrementalism to Transformation: Reflections on Corporate Sustainability from the UN Global Compact-Accenture CEO Study
From Philanthropy to ESG: The First Wave
The Financial Crisis and the Rise of ‘Sustainability’
‘Frustrated Ambition’: Reaching the Plateau
Consumers Are Conflicted in Their Signals: And May Not Provide the Answer
Investors Are Showing Greater Interest: But Remain Ambivalent and Are Unlikely to Drive Change
The Transformational Leaders: Steps to Success
Impact and Value: A New Approach
Signposts to the Future: Towards Transformation
24: A Case of Radical Reinvention: Umicore
Introduction
Case Method
Introduction to Umicore and the Case
Introduction
The Case
Economic Restructuring: The Industrial Plan
Conceptualization and Learning: The First Formulation of a Strategic Approach to Responsibility
Implementation and Roll-Out of Strategy
Diffusion and Institutionalization
Discussion
Conclusions
References
25: IBM and Sustainability: Creating a Smarter Planet
Smart Projects
Pillar for Growth
Core Strengths for Succeeding in an Integrated World
Addressing Challenges
26: Waste Concern: Fixing Market Failures
Bangladesh
Dhaka and Waste Management
Early Trajectory of Waste Concern
Waste Concern (1995)
Waste Concern Consultants (2000)
WWR Bio Fertilizer Bangladesh, Ltd and Matuail Power Ltd (2005)
Waste Concern CDM Projects
CDM Plans
CDM Challenges
CDM Strategic Reactions
New Ventures of Waste Concern
Recycling Training Centre (2005)
Waste Concern Baraka Agro Products (2006)
Waste 2 Resource (2009)
Going Forward
References
27: Uber and the Ethics of Sharing: Exploring the Societal Promises and Responsibilities of the Sharing Economy
An Economy Built on Technology and Trust
Sharing as Big Business
Uber
Regulating Disruption or Disrupting Regulation?
Armies of Lobbyists
Business Tactics Questioned
Seeking New Rules in a Regulatory Hodgepodge
Environmental Promise?
Safety Questions
Labour Issues
Conclusion
Part VI: Introduction: Managing Change: Developing Dynamic Capabilities and Managerial Talents
28: Taking the Future Seriously: Preparing for the Global Gigatrends
Introduction
The Global Gigatrends
Interactions
The Gigatrends and Executive Education
Discussion Questions
References
29: Unilever’s Super Stretch Goal for 2020
Polman: Aiming to Buck the Mega-trends
“Full Steam Ahead!”
At the Helm of a New Strategy: The Unilever Compass
The Unilever Sustainable Living Plan (USLP)
A Navigation Challenge for the Chief Sustainability Officer
Overhauling the Engines: The HR Mega-challenge
Case Analysis: What Shifts Culture in Corporate Organizations?
New Expectations from Senior Human Resources Officers
Getting the Requisite Managerial Profiles on Board
Globally Relevant Opportunities for Change
30: The Ongoing Dynamics of Integrating Sustainability into Business Practice: The Case of Novo Nordisk A/S
Prologue
Introduction
Introduction to Novo Nordisk A/S
Sustainability as Part of Novo Nordisk’s Business Strategy
History of Sustainability
How Did Novo Nordisk Meet Its Objectives of Being Sustainable?
Facilitators
Sustainability Reporting
Balanced Scorecard
The Use of the Balanced Scorecard at Diabetes Finished Products
Conclusion
Epilogue 2015
Appendices
Appendix 1: Novo Nordisk A/S Organisational Structure 2005
Appendix 2: Selected Financial Information
Appendix 3: Novo Nordisk’s Vision, Values, Commitments and Fundamentals
Appendix 4: Example of a Facilitation
Appendix 5: Indicators of Triple Bottom Line Performance
Appendix 6: Diabetes Finished Products – Organisational Chart
Appendix 7: Cascading of Balanced Scorecard 2005 – Ensure Environmental, Social and Ethical Performance
Appendix 8: Cascading of Balanced Scorecard 2005 – Support Diversity
Appendix 9: Cascading of Balanced Scorecard 2005 – Ensure Talent Development
Appendix 10: Diabetes Finished Products – 2005 Balanced Scorecard
Appendix 11: Performance Index 2005 – for Eric Drapé
31: The Changing Role of Business Leaders, and Implications for Talent Management and Executive Education
Putting Creating Value for People at the Heart of Strategic Goals
Fundamental Shifts
A More Collaborative Leadership Role at the Heart of Society
What’s Required to Be Able to Play This New Role Well?
What Does It Mean for Talent Management and Executive Education?
Selecting and Developing Today’s and Tomorrow’s Senior Executives