Apollo XIII (PowerPoint)

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					Business and the Natural
      Environment
        ENV 188A

      Magali Delmas

                           2
    Class 1 Introduction
 Introductions
 Paper’s discussion (Reinhardt)
 Subjects that will be covered in the
  class
 Administrative matters
 Rules of the fishbanks game


                                         3
                 PORTER 1995
Fixed trade-off: Ecology versus the economy?

   Industry’s private costs for prevention and cleanup
     – costs that lead to higher prices and reduced
       competitiveness
   This is a static view of environmental regulation
    were everything except regulation is held constant
     – i.e. technology, products, processes and
       customer needs are fixed


                                                    4
A world of dynamic competition
   Companies operate in a world of dynamic
    competition not in the static world of much
    economic theory
   Firms constantly find innovative solutions to
    pressures of all sorts from competitors, regulators
    and customers
   Environmental management offers opportunities to
    innovate, differentiate products, reduce costs, or
    otherwise enhance the profitability of operations
                                                    5
       Environmental innovation
               can pay
 General  Electric - Ecomagination
    Program
    – Replaced existing lighting with high-efficiency
      lighting - Reduce its indirect GHG emissions by
      18,000 metric tons per year, providing expected
      savings of $2 million annually
 3M    Company - Brookings Environmental
    Performance Commitment
    – Implemented product changes to eliminate the
     use of 3.5 million of gallons of water
   See http://www.greenbizleaders.com/           6
    Is regulation necessary?
 Create pressure that motivates
  companies
 Improve environmental quality
 Alert and educate companies
 Create demand for environmental
  improvement
 Level the playing field

                                    7
Reinhardt: the environment as
 a business problem (1997)
    It is important to recognize the
     conditions under which it pays to be
     green.




                                            8
 Conditions to reconcile provision of
public good and expected value of the
               firm (1)
   Possibility for strategic interaction with
    competitors
    – Rent seeking (German car manufacturers)
    – Collusion (Responsible Care)
   Opportunities to differentiate products
    – Bundle public good with private
      consumption benefit (Patagonia)

                                                 9
 Conditions to reconcile provision of
public good and expected value of the
               firm (2)
   Discovery of unexploited cost savings
    – (Interfaces, Xerox product take back)
   Managing environmental risks
    – insurance policy sour community relations
      related costs shocks (Exxon)
   Increase productivity
    – Recruit and retain high level employees
      with personal environmental convictions

                                                  10
    Topics that will be studied in
           the course (1)
   I. The context for environmental management:
    tragedy of the common and environmental
    regulation
   II. Environmental performance and financial
    performance
   II. Basic Environmental strategies and
    competitive advantage:
     – environmental differentiation, cost reduction,
       and risk reduction
                                                 11
Topics that will be studied in
       the course (2)
 IV. Managing stakeholders
   – new types of relationships between
     firms, regulatory agencies, NGOs
     and communities and suppliers
 V. International issues in
  environmental management

                                      12
      Teaching method
 Case discussion (Patagonia, McDonalds/
  Environmental Defense …)
 Lecture discussion
 Speakers (outside of class)
 Group project/Survey




                                       13
             Grading
 Group     Presentation    20%     (group
  presentation on case or other material)
 Class Participation 20%
 Individual Write-Up 25% (one individual
  write-up on a session of your choice)
 Group     Project 35% (report and
  presentation)
 Be on time and No cell phones please!

                                        14
     Group presentation
 GROUP assignment: Most weeks 5 slide
  powerpoint presentation due (analyzis
  of case, response to questions etc…)
 GROUP presentation: Each week 1
  group presents to the class their
  recommendations
 The other groups challenge the group
  with questions

                                      15
         Case studies
 Cases about actual companies to
  practice strategic analysis and gain
  experience in crafting strategy
  (Patagonia, Hayward Lumber…)
 Diagnose and size up the situation
  described in the case and then
  recommend appropriate actions steps
  as if you were a manager
                                         16
         Advantage of cases
   Get valuable practice in identifying strategic
    issues
   Enhance your sense of business judgment as
    opposed to uncritically accept the
    authoritative explanation of the teacher
   Gain exposure to different industries and
    companies and increase your understanding
    of the real situation that managers face


                                                     17
        The discussion
 Don’t be obsessed with “the answer of
  the case”
 More important is the group discussion
  of the case and the development of
  good arguments
 Participation and discussion is key



                                           18
       How to organize a case
   What is the problem?
    – Present what you see as the strategic
      problems facing the firm or industry. Assess
      strengths, weaknesses, opportunities and
      threats.
   What are the different possible strategies?
    – Evaluate available alternatives
   What is the solution that you would
    propose and why?
    – Make strategic recommendations                 19
    How to prepare a case as a
              group
   Read the “reading” assigned for the class and read
    the case once
   Read the case a second time studying exhibits and
    decide what strategic issues are
   Use whichever tools and techniques of business
    environmental analysis that are called for. Look for
    opportunities to apply the concepts and analytical
    tools in the reader.
   Discuss conflicting opinions in your group and
    support your diagnosis and opinion with evidence
   Develop and appropriate action plan and set of
    recommendations                                 20
          Good Slides
 Use PowerPoint
 Use BIG FONT (i.e. Book Antiqua 32)
 Draw graphs
 Assignment: 5 slides max




                                        21
     Individual Write-Up
 1 write-up for the entire quarter
 Analyze case briefly.
 Write the report as a recommendation
  for the CEO for the company
 Max 2 pages




                                         22
     Group project: Strategy of an NGO or
Corporation related to coffee eco-certification.

    Select company or organization of your choice
    Analyze firm its strategy related to eco-certification
     using the concepts learned in class
    Suggest improvement: be creative!
    Information sources: organization and consumer
     survey
    Example of potential organizations are Starbucks,
     Rainforest Alliance, Smithonian Institute, Coffee Bean
     etc….



                                                          23
          The Survey
 Survey about awareness and
  understanding of coffee eco-label
 Survey Monkey survey
 Each of you sends out the survey to
  100 people by email
 Each group analyzes the data
  independently

                                        24
                      Timing

   By January24: 1 page summary of project
    including:
    – the name of the organization you will be
      researching, your group members and
      description of your objectives
    – UCLA Survey training online
   Deadline of written final report March 10
   Presentation of the report on March 13 (last
    class)
               Groups
   By the end of the session, please
    provide the name of the people in your
    group (5 people per group)




                                             26
    Next session Fishbanks
 Read the Fishbanks rules carefully and
  prepare your strategy for the game
 Fishbanks game




                                           27

				
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posted:5/19/2012
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