SU55: Sustainable Development & Competitive Advantage
Faculty Kai Hockerts, Guest Professor from INSEAD at Department of Intercultural Communication and Management, Copenhagen Business School, Denmark Course Coordinator Mogens Bjerre Prerequisite Basic knowledge of business policy and strategic management are advantageous. Aim of the course This elective helps participants to identify the competitive opportunities of sustainable development and corporate social responsibility (CSR) as well as to manage its downsides. Over the past decade public concern about social and environmental issues has profoundly transformed the competitive field. Yet, rather than uniformly changing the market conditions for all participants, sustainable development impacts companies differently. This translates into both opportunities and risks for individual firms. Sustainability strategies are thus used by a growing number of businesses to differentiate themselves from their competitors and to obtain firm-specific advantages. Managers adopt environmental and CSR strategies to reduce operational risks or to obtain cost advantages over their competitors. At the same time they leverage product innovation to obtain premium prices in their home markets and to expand into entirely new segments. In the face of increasingly innovative legislation and consistent pressure from NGOs, sustainability is today becoming a core management issues. Unchecked social and environmental costs can quickly eat into profit margins and constantly changing stakeholder demands make sustainability a key challenge for corporate change management. Course content The class helps participants understand, evaluate, and systematically manage sustainability issues.
It will start by outlining the principal mechanisms through which environmental and social issues transform the competitive field of businesses, as well as the basic strategic options managers have to manage these changes (Session 1-2). The class will then discuss four ways through which firms can achieve competitive advantages (Sessions 3-6): by reducing operating costs; by managing social risks, by obtaining premium prices for innovative products; any by entering new markets through social innovation. The next part (Session 7-9) of the course analyses three selected drivers for the social transformation of competitive landscapes. It will highlight drivers of sustainability such as regulation, public pressure groups, as well as investor concern.
The final block of the course (Sessions 10-15) is dedicated to a set of social management tools and systems. Tthe class will cover stakeholder management, design for environment, and social entrepreneurship.
Teaching methods The class is based on active class participation. Teaching will draw on case studies that will have to be prepared in advance of each class. Supplementary readings will be available to illustrate theory. Short oral and written assignments will be given in order to prepare some of the cases. Examination
Active class participation through case discussions and project presentations (20%). Mini-project (20 pages) in groups of 3-5 students (40%). Individual 20 Min oral examination based on mini-project (40%).
Course literature
Porter, Michael E. and Claas van der Linde. 1995. Green and competitive: Ending the stalemate. In Harvard Business Review, 73(5): p120-134. O'Neill Packard, Kimberly and Forest L. Reinhardt. 2000. What Every Executive Needs to Know About Global Warming. In Harvard Business Review, 78(4): 129-135. Spar, Debora L. and Lane T. La Mure. The Power of Activism: Assessing the Impact of NGOs on Global Business. In California Management Review, 45(3): 78-102. Knoepfel, Ivo. 2001. Dow Jones Sustainability Group Index: A Global Benchmark for Corporate Sustainability. In Corporate Environmental Strategy, 8(1): 6-15. Cerin, Pontus and Peter Dobers. 2001. Who is Rating the Raters? In Corporate Environmental Strategy, 8(2): 95-97. Woods, Maef and Robert H. Colson. 2003. The Global Reporting Initiative. In CPA Journal, 73(6): 60-66. Rugman, Alan M. and Alain Verbeke. 1998. Corporate Strategy and International Environmental Policy. In Journal of International Business Studies, 29(4): 819-834. Walley, N. and B. Whitehead. 1994. Its not easy being green. In Harvard Business Review, 72(3): 46-52.
Suggested readings
www.wbcd.org www.eabis.org