Multinational corporation and sustainability
VOOR HET TT OOK DE REFRENCES
Lecture 1: Introduction to the course: What is sustainability?
Articles
- Bansal, P. & Song, H-C. (2017). Similar but not the same: differentiating corporate sustainability from corporate
responsibility. Academy of Management Annals. 11(1), p. 105-149.
- Ripple, W. J., Wolf, C., Newsome, T. M., Galetti, M., Alamgir, M., Crist, E., ... Laurance, W. F. (2017). World
scientists’ warning to humanity: A second notice. BioScience, 67(12), 1026–1028.
Why study sustainability in business Schools?
Extractive and exploitative practices part of the problem
Technological innovations as solutions
Climate risk for companies
Climate more and more important
1992 climate conference: where are we going on this earth 20 years later +++
Sustainable development goals
- First millennium development goals for development countries
BASF
- Vegetable seeds/ Brewing crops + new varieties+ producing and selling seeds
‘’to make healthy eating enjoyable and sustainable’’
Introduce new varieties with different and better characteristics
- Color, taste, shape, production yield and disease resistance
Sustainability vs responsibility (Bansal and Song, 2017)
Sustainability Responsibility
Systems science Ethics
Facts; e.g. causes for productivity Morality, e.g. meanings to productivity
Corporation and the natural environment Corporation and society
What are connection and interdependencies What is the moral responsibility of
of economics, society and the environment? managers and firms to society and
environment?
Sustainable development
Sustainable development
‘’... development sustainable [...] meets the needs of the present without compromising the
ability of future generations to meet their own needs.’’
Lecture 2: Value creation for sustainability
,Articles
- Porter, M. E. & and Kramer. M. R. (2011). Creating Shared Value. Harvard Business Review, 89, nos. 1-2, 62–77.
- Laasch, O. (2018). Beyond the Purely Commercial Business Model: Organizational Value Logics and the
Heterogeneity of Sustainability Business Models. Long Range Planning, 51(1), 158-183.
Institutional logics = Principles or guidelines on how to interpret and function in social
situations (Greenwood et al., 2018)
- Contradictory, incompatible, competing
- University: logic of science (open science) vs logic of commerce (commercial
exploitation of research results)
Logics shaping business models (Laasch, 2018)
- Business models as value logics
What are examples of logics
- Welfare/ Market/ Responsibility - logic
What type of logics characterize sustainable business models?
- Heterogeneous/ Homogeneous/ Commercial - logics
The logics that constitute sustainable business models are
- Commercial market logics and sustainable development
- Government logics and family logics
- Institutional logics and market logics
What is a typical response to plural logics?
combining elements from the logics
Pursuing multiple, parallel business models
Value creation (Laasch, 2018)
Commercial logic
- Proposition: product or service on the market
- Creation: processes, structures and capabilities
- Exchange happens on market, customers are the focal point
- Capture on creation
Sustainability value creation
- Proposition: blending social, environmental and economic
- Creation: not allowing unsustainable activities, processes or structures
- Exchange is multi-relational and systemic
- Capture value not only for the organization but also for stakeholders and larger
environment
Shared value creation
“... policies and operating practices that enhance the competitiveness of a company
while simultaneously advancing the economic and social conditions in the
communities in which it operates.” (p. 66)
Creation through
- Reconceiving products and markets
- Redefining productivity in the value chain
- Enabling local cluster development
Evolution of capitalism
Eco-efficient business models (Halme et al., 2007)
, - Material service company (MASCO)
- Energy service company (ESCO)
- Material efficiency as additional service
- Material flow management service
- Material consultancy service
Summary
Companies operate with conflicting logics - Market logic and sustainability logic
To reconcile, companies combine these
- Shared value creation
- New kinds of business models
Lecture 3: sustainability strategies
Articles
- Halme, M., Laurila, J. Philanthropy, Integration or Innovation? (2009). Exploring the Financial and Societal
Outcomes of Different Types of Corporate Responsibility. Journal of Business Ethics, 84, 325–339.
- Burritt, R. L., Christ, K. L., Gulzar Rammal, H. & Schaltegger, S. (2021). Multinational Enterprise Strategies for
Addressing Sustainability: the Need for Consolidation. Journal of Business Ethics, Journal of Business Ethics
(2020) 164:389–410
- Hengst et al., 2021. Towards a process theory of making sustainability strategies legitimate in action. Academy of
Management Journal, 63(1), 246-271.
What is strategy
- Long-term, Direction, Objectives, Evaluation,
Different levels (e.g. corporate vs business)
Strategic choices for sustainability
1. Level of ambition
a. Ambitious/superficial practices (Burrit
et al, 2020)
i. Broad vs narrow definitions of sustainability
ii. Legitimacy
b. Goals to follow (Hengst et al., 2000)
i. Monthly or annual KPIs
2. Global vs local
a. Global approach
i. Following one unified centralized and common standard
ii. May be imposed by HQ
iii. Efficient transmission of sustainability practices to subsidiaries
b. Local approach
Following a local, decentralized and fragmented strategy
i. Local ownership and legitimacy
ii. Considering specific local and social and environmental issues
iii. Generating local knowledge
c. Regional strategies
3. Allocation of resources
a. Competing with other activities of a company
i. Trade- offs for different outcomes
b. Home and host country
4. Action types (Halme and Laurila, 2009)
VOOR HET TT OOK DE REFRENCES
Lecture 1: Introduction to the course: What is sustainability?
Articles
- Bansal, P. & Song, H-C. (2017). Similar but not the same: differentiating corporate sustainability from corporate
responsibility. Academy of Management Annals. 11(1), p. 105-149.
- Ripple, W. J., Wolf, C., Newsome, T. M., Galetti, M., Alamgir, M., Crist, E., ... Laurance, W. F. (2017). World
scientists’ warning to humanity: A second notice. BioScience, 67(12), 1026–1028.
Why study sustainability in business Schools?
Extractive and exploitative practices part of the problem
Technological innovations as solutions
Climate risk for companies
Climate more and more important
1992 climate conference: where are we going on this earth 20 years later +++
Sustainable development goals
- First millennium development goals for development countries
BASF
- Vegetable seeds/ Brewing crops + new varieties+ producing and selling seeds
‘’to make healthy eating enjoyable and sustainable’’
Introduce new varieties with different and better characteristics
- Color, taste, shape, production yield and disease resistance
Sustainability vs responsibility (Bansal and Song, 2017)
Sustainability Responsibility
Systems science Ethics
Facts; e.g. causes for productivity Morality, e.g. meanings to productivity
Corporation and the natural environment Corporation and society
What are connection and interdependencies What is the moral responsibility of
of economics, society and the environment? managers and firms to society and
environment?
Sustainable development
Sustainable development
‘’... development sustainable [...] meets the needs of the present without compromising the
ability of future generations to meet their own needs.’’
Lecture 2: Value creation for sustainability
,Articles
- Porter, M. E. & and Kramer. M. R. (2011). Creating Shared Value. Harvard Business Review, 89, nos. 1-2, 62–77.
- Laasch, O. (2018). Beyond the Purely Commercial Business Model: Organizational Value Logics and the
Heterogeneity of Sustainability Business Models. Long Range Planning, 51(1), 158-183.
Institutional logics = Principles or guidelines on how to interpret and function in social
situations (Greenwood et al., 2018)
- Contradictory, incompatible, competing
- University: logic of science (open science) vs logic of commerce (commercial
exploitation of research results)
Logics shaping business models (Laasch, 2018)
- Business models as value logics
What are examples of logics
- Welfare/ Market/ Responsibility - logic
What type of logics characterize sustainable business models?
- Heterogeneous/ Homogeneous/ Commercial - logics
The logics that constitute sustainable business models are
- Commercial market logics and sustainable development
- Government logics and family logics
- Institutional logics and market logics
What is a typical response to plural logics?
combining elements from the logics
Pursuing multiple, parallel business models
Value creation (Laasch, 2018)
Commercial logic
- Proposition: product or service on the market
- Creation: processes, structures and capabilities
- Exchange happens on market, customers are the focal point
- Capture on creation
Sustainability value creation
- Proposition: blending social, environmental and economic
- Creation: not allowing unsustainable activities, processes or structures
- Exchange is multi-relational and systemic
- Capture value not only for the organization but also for stakeholders and larger
environment
Shared value creation
“... policies and operating practices that enhance the competitiveness of a company
while simultaneously advancing the economic and social conditions in the
communities in which it operates.” (p. 66)
Creation through
- Reconceiving products and markets
- Redefining productivity in the value chain
- Enabling local cluster development
Evolution of capitalism
Eco-efficient business models (Halme et al., 2007)
, - Material service company (MASCO)
- Energy service company (ESCO)
- Material efficiency as additional service
- Material flow management service
- Material consultancy service
Summary
Companies operate with conflicting logics - Market logic and sustainability logic
To reconcile, companies combine these
- Shared value creation
- New kinds of business models
Lecture 3: sustainability strategies
Articles
- Halme, M., Laurila, J. Philanthropy, Integration or Innovation? (2009). Exploring the Financial and Societal
Outcomes of Different Types of Corporate Responsibility. Journal of Business Ethics, 84, 325–339.
- Burritt, R. L., Christ, K. L., Gulzar Rammal, H. & Schaltegger, S. (2021). Multinational Enterprise Strategies for
Addressing Sustainability: the Need for Consolidation. Journal of Business Ethics, Journal of Business Ethics
(2020) 164:389–410
- Hengst et al., 2021. Towards a process theory of making sustainability strategies legitimate in action. Academy of
Management Journal, 63(1), 246-271.
What is strategy
- Long-term, Direction, Objectives, Evaluation,
Different levels (e.g. corporate vs business)
Strategic choices for sustainability
1. Level of ambition
a. Ambitious/superficial practices (Burrit
et al, 2020)
i. Broad vs narrow definitions of sustainability
ii. Legitimacy
b. Goals to follow (Hengst et al., 2000)
i. Monthly or annual KPIs
2. Global vs local
a. Global approach
i. Following one unified centralized and common standard
ii. May be imposed by HQ
iii. Efficient transmission of sustainability practices to subsidiaries
b. Local approach
Following a local, decentralized and fragmented strategy
i. Local ownership and legitimacy
ii. Considering specific local and social and environmental issues
iii. Generating local knowledge
c. Regional strategies
3. Allocation of resources
a. Competing with other activities of a company
i. Trade- offs for different outcomes
b. Home and host country
4. Action types (Halme and Laurila, 2009)
