Krannert Graduate School of Management Purdue University

SUSTAINABILITY STRATEGIES

COURSE SYLLABUS WMBA-FALL 2012

RAWLS 4054 Oct 13, 20, and 27:9am-12:30pm, Nov 8, 15, 29 and Dec 6 Thur 6-9 pm online Dr. Henry R. Feeser (Hank) e-mail: hank@feeser.net Class Web Site: http://wmba12.wix.com/home Office hours: Oct 13,20 & 27 before/after class, thereafter by appointment remotely

COURSE DESCRIPTION: Introduction: The concept of sustainability dates back to Rachel Carson's book, Silent Spring which touched off an environmental awareness that grows stronger every day. While "sustainability" dates back to the late sixties in the US1, the most cited and used definition has its roots in the 1987 2Bruntland Commission report. The commission was created to address growing concerns "about the accelerating deterioration of the human environment and natural resources and the consequences of that deterioration for economic and social development." The report deals with sustainable development and the change of politics needed for achieving that. The definition of this term in the report is quite well known and often cited as follows: "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs." From a business perspective, the concept of sustainability has been operationalized by focusing on the "triple bottom line3," or the need to balance the three E's in the global economy; that is: 1. 2. 3. Economic prosperity Environmental quality Social equity

We will use Profit, Planet and People as surrogates for these constructs. Accenture (consulting company) for instance, currently defines "sustainability as the way a company or organization creates value for its shareholders and society by maximizing the positive and minimizing the negative effects on social, environmental and economic issues and stakeholders." By comparison, Shell 5states "Shell is a global group of energy and petrochemical companies. Our aim is to meet the energy needs of society, in ways that are economically, socially and environmentally viable, now and in the future." And lastly, "Sun Chemicals sustainability policy6 is based on the concept of eco-efficiency as defined by the World Business Council for Sustainable Development (WBCSD).

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Eco-efficiency is achieved by the delivery of economically competitive goods and services that satisfy our customers needs and brings quality of life, while progressively reducing ecological impact and resource intensity throughout the life-cycle." But in actually moving beyond the rhetoric about sustainability, companies have found that in fact actionable sustainability strategies have somewhat surprisingly resulted in improved financial results and competitive advantage across industry spectrums. This course is about gaining competitive advantage from sustainability strategies. Course Overview & Objectives: The course will provide students with access and in-depth exposure to firms that are actively grappling with sustainability-related issues through cases, readings and open class discussion. The course seeks to address these questions by providing students with: 1. 2. 3. In-depth knowledge of the various sustainability issues faced today; A set of analytical tools and frameworks that will help you understand/analyze as well as impact these issues; and Experience analyzing firms and/or organizations currently developing new business models (or reforming existing ones) in line with sustainable development.

The concept of Sustainability is evolving, adjusting, and morphing in front of our eyes. New corporate structures to cope with increasing social (think Occupy Wall Street) and environmental pressures (think an increasingly proactive EPA) are coming to the forefront. Understanding this new world is what this course is all about; having fun while doing so is also a central tenant of the course. COURSE REQUIREMENTS Grading: (1) Starting week two, submit via email attachment the assigned case question by start of class for that week. There are six such assignments, each weighted ten points each for a total of 60 points (2) Final Exam weighted 30 points. See http://wmba12.wix.com/home for details concerning the final exam. (3) Class Participation weighted 10 points. Since we meet for seven sessions, it is extremely important that you are there for every class, on time, ready to go with all assignments completed. Final grades will be assigned in accordance with Krannerts WMBA Guidelines. Total points: 100. Conduct of the course: For the first three sessions we will meet on Saturdays in Rawls 4054 from 9am-12:30pm with a break from 10:30-11:00am. The remaining four sessions we will meet in an online video conferencing format on Thursday evenings from 6-9 pm. To support these four sessions, you will need access to a computer, a fairly robust internet connection, and a webcam/mic. It is suggested that you use a separate mic/headphone to cut down on extraneous noise; I intend to do so. Most outof-the-box Macs support such a setup. Should circumstances preclude your video participation, you will be able to access the classroom via phone connection also. At this time (6/16/12) either www.anymeeting.com or Purdues Adobe Connect are under consideration for course support. Class Web Site: All assignments, readings, and video links will be maintained on the course web site, http://www.wmba12.wix.com/home. This site will be kept current and used for all class assignments. Should conflicts arise between this syllabus and the web site, the web site takes

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precedence and is to be followed. The site is programmed in HTML5 and should be rendered correctly on all Smartphones, tablets, and PCs, regardless of their brand and/or operating system(s). Keep in mind that some of the landing links are NOT HTML5 so less than optimal viewing may result for portable device users; all sites and links should display correctly on PCs. Also note that a minimal number of videos use flash codecs and WILL NOT display correctly on Apple devices which DO NOT support Adobes Flash. COURSE SCHEDULE Week 1: Oct 13 What is Sustainability? - Introduction Session1 Read (1) Sustainability

2012, 4, 1118-1134; doi:10.3390/su4061118

Read: Fashion or Strategy? Why Firms Are Jumping on the

Sustainability Bandwagon
Review Prezi: Introduction to Sustainability by Hank (well go through in class) Key Learning Objectives: o Understanding extant Sustainability constructs o Understanding why Sustainability is a lucrative strategy for firms o Understanding past, present and future of Sustainability constructs Session2 Study: Novo Nordisk sustainability web site here: Watch: Novo #1 in world sustainability ranking Case: Novo Nordisk: A Commitment to Sustainability Study Questions: (1) How does Novos strategy map to our People Planet Profit model? (2) Using an appropriate metric (defend-Sales/employee e.g.) and appropriate statistical tool(s) (defend), compare Novos performance with its competitors. (3) Has Novo accrued competitive advantage as a result of sustainability initiatives? Turn in: Study Question None for first class Key Learning Objectives: o Introduction to concept of integrated reporting o Role of reporting in helping a company to create a sustainable strategy Week Two: Oct 20 The Planet Aspect of Sustainability Session 1 Read: How FritoLay does it -> their web site Read: Apple and its environmental footprint Read+links: Apples 2011 Sustainability Report Browse: Wal-Mart+Sustainability Watch: Video on sustainability Key Learning Objectives: o How the Planet aspect is being implemented o The contrarian side of Planet for contrast Session 2 Read: Sustainability Ops @ REI Watch: Video REI Case: Environmental Sustainability at REI Study Questions: (1) What assumptions are fundamental to REI's business strategy

(2)

Identify and defend the conclusions that follow from those assumptions Turn in: Study Question (2)

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Key Learning Objectives: o Social and financial objectives should not be viewed as tradeoffs o Understanding the environmental stewardship program at REI, its objectives, and philosophy of implementation.

Week Three: Oct 27 The Profit Aspect of Sustainability Session 1 Read: Sustainability Profits Companies Read: Sustainable companies are more profitable Key Learning Objectives: o Direct connection sustainability & profitability? o Examples of companies who purport connection Session 2 Read: Case: KKR: Leveraging Sustainability Study Questions: (1) What is KKR doing right and wrong? (2) What other sustainability initiatives should KKR have considered at Dollar General? Turn in: Study Question (2) Key Learning Objectives: o Integration of assessment of sustainability savings in the LBO industry o Better understanding LBO operations vis--vis sustainability o How sustainability initiatives often lead to cost savings and increased profitability but can go beyond to new sources of revenue Week Four: Nov 8 The People Aspect of Sustainability Session 1 Read: Brambles Concept of People Browse: Sustainable Business Forum Browse: Unilevers People Browse: CSR International Browse: Occupy Wall Street web site Key Learning Objectives: o What constitutes People vis--vis Sustainability o What are the trends in People aspects of Sustainability o Consider trends Occupy Wall Street etc. Session 2 Read: Case: Allied Electronics Corporation Ltd: Linking Compensation to Sustainability Metrics Study Questions: (1) What are the merits of Allieds compensation Strategy? (2) How does compensation policy contribute to sustainable value creation by/for People? Turn in: Study Question (2) Key Learning Objectives: o Incorporating Sustainability into participative strategy & decision making o How Allied embedded Sustainability into their Strategy Week Five: Nov 15 Putting It All Together Session 1

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Read: Sustainability & Consumption Read: Life Cycle Assessment -> click through to article + review journal Read: Market-focused Sustainability Play With: Bob Willards Sustainability Advantage Dashboard Key Learning Objectives: o Intro to trends and tools in the Sustainability Realm o Importance of marketing vis--vis Sustainability Session 2 Read: Intro to Ray Andersons book at this link + browse web page View: Video Ray Anderson Tribute Case: Interface RAISE: Sustainability Consulting Study Questions: (1) Put a face on the market for Sustainability Consulting Services (independent research required) Turn in: Study Question (1) Key Learning Objectives: o How Interface levered its sustainability efforts into a lucrative revenue stream o Being proactive vice meeting letter of the law in sustainability Week Six: Nov 29 Next Act Session 1 Read: The Future of Sustainability Browse References: Web link Embedded Sustainability Browse: Sustainability Trends for the Coming Years Key Learning Objectives: o Where the concept of Sustainability is headed o Concepts you may be able to use in your own business/company Session 2 Read: 4 Mega-Trends that are Shifting Dows Sustainability Strategy View: The Dow Sustainability Journey video Case: Dow Chemical : Innovating for Sustainability Study Questions: (1) How does Dow balance creating value for shareholders with sustainability initiatives? (2) You have been hired as a graduate MBA consultant to Hawkins. Respond to his musing in the cases last paragraph: What approach would deliver best for Dow & our stakeholders? Turn in: Study Question (2) Key Learning Objectives: o Appreciation for how Dow embedded Sustainability into its DNA o How a company has evolved its sustainability strategy over time Week Seven: Dec 6 Coming On Fast: B-Corps Session 1 Read/Study/Ingest: Benefit Corporations A Sustainable Form of Organization? Read: Profits Take a Back Seat Read: Patagonia First Calif Study: bcorporation.net Review: Twitter chatter B-Corps Key Learning Objectives: o Become aware of different corporate structures as a result of o Understand what is going on in the B-Corp world and impact on sustainability

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Session 2 View: Video Unfriend Coal: Case: Greenpeaces Unfriend Coal Campaign and Facebook Study Questions: (1) How could/should Facebook have avoided this nightmare PR situation? (2) What are lessons for you and your company going forward? (3) How much power do firms like Apple, Google and Facebook consume in their server farms and what obligation do they have to society for this consumption? Turn in: Study Question (3)

Regarding Academic Integrity: see http://www.purdue.edu/odos/osrr/academicintegritybrochure.php

ABOUT YOUR INSTRUCTOR -> SEE WWW.FEESER.NET OR WWW.FEESER.NET/MOBILE FOOTNOTES:
1

The word 'sustainability' was originally used in forestry where Saxony's economic backbone, silver mining, was endangered due to an acute scarcity of wood which had been devoured for ore mining and production of charcoal. 2 http://www.worldinbalance.net/intagreements/1987-brundtland.php accessed 12/5/09 3 http://getsustainable.net/triple-bottom-line.html accessed 12/5/09 4 https://microsite.accenture.com/sustainability/Pages/landing_corporate.aspx?c=ad_gp09usconpsgs_ 1208&n=g_S ustainabilityGreen/a_0_k/green_supply_chain&s_kwcid=TC|7232|green%20supply%20chain||S|b|4078675363 accessed 12/5/09 5 http://sustainabilityreport.shell.com/2008/servicepages/welcome.html accessed 12/7/09 6 http://www.sunchemical.com/company/sustainability accessed 12/10/09