Transcript No Slide Title

Corporate
Environmental
Management
OM 6000
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Class Today
– Introductions
– Syllabus
– Corporate Environmental Management
Background
– Keith Coulter?
– Video on Industrial Ecology
Me
-Joe Sarkis
- Professor of Operations and
Environmental Management
- 6-7 years here
- Many interests (OM, Env, IS,
Marketing, Accounting,
Finance….etc.).
You
Your School Background
 Your Work Background
 Environmental Issues that you have
faced at work or anywhere else
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Syllabus
We will look at how companies deal
with environmental issues.
 Today will be readings and brief
introduction into some issues.
 Next few classes will focus on
environmental issues in a number of
functional areas for organizations.
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Breakdown of grade
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1 Team Case Write-up
- 30%
1 Team Industry Evaluation
- 30%
Case Executive Summaries
- 20%
Class Preparation and Participation
- 20%
Schedule
Each Week a new case. Case
questions on web-site.
 One change to schedule – In Two
Weeks – Polaroid Case.
 Let us take a look at website syllabus.
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Corporate
Environmental
Management
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Basic Philosophical Elements and
Issues of the Environment
The Litany
 Global
Problems
– Global Warming - Warmest Years on Record
– Ozone Depletion - Big Hole in Atmosphere
– Species Decimation
 Regional
Problems
– Deforestation
– Acid Rain
– Water Pollution - Rivers, Lakes
 Local
Problems
– Pesticides - Hazardous Materials
– Waste Disposal
Basic Philosophical Elements and
Issues of the Environment
Are these concerns realistic?
 Are some more realistic than others?
 How serious are they?
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What are some example implications
for business? For these problems?
Changes in the Environment:
The Master Equation
GDP
EI = Population x
Person
EI = Environmental Impact
x
EI
unit of per capita GDP
GDP = Gross Domestic Product
Population = Population Concerns
GDP/PERSON = Affluence Concerns
EI/Unit of Per Capita GDP = Technological Concerns
What Alternatives Exist to Manage EI Here?
What areas Does Commoner think we should focus upon?
Paul Ehrlich?
Environmental
Consciousness
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What is man’s role with nature?
– Take Dominion over it? Dualistic?
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What is meant by that?
– Nature exists to serve humans
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anthropomorphic view
is environment in “profit” equation?
In calculation of “national” accounts?
– Linear “Design” of production.
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What is it and why might it no longer be applicable?
Stages of
Environmental Concern
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Conservation
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Preservation
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Leave certain areas alone - nature has intrinsic value
Protection
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Use resources wisely - nature’s utility is in its service to
humans
pollution control - protect humans
Sustainability
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global perspective, “sustainable growth” (pg. 17), and equity.
What is the basic theory behind equity and sustainability?
Ecology
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Analysis and evaluation can be carried out
at many levels
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Individual Organism
Population (individuals of same species)
Community
Ecosystem - non-biological (abiotic) integration.
Biomes - grouping of ecosystems
Analogy to organizations and business?
Management Theory and the
Environment
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Anthropocentric Theories
– Ethics and stuff.
– Economic
– Corporate Social Responsibility
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Stakeholder
Normative
Social Contract
Green Management Theories
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Ecocentricism
Adjusted Stakeholder
Sustainablity
Resource Based Theory
Environmental Ethics and
Business
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Western Society - Objectifies Nature
– Locke - “Something in a state of nature
has no economic value and is of no utility
to the human race”
Ethics - a concern with actions and
practices directed to improving the welfare
of people.
What are the environmental implications of
this statement?
Economic
Fundamentalism and
Ethics
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The corporate social responsibility of a
business is to increase profit. - M. Friedman
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Those things that cannot be traded on the
market have no value.
Where does the environment fit in these
definitions for environmental ethics?
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Corporate Social
Responsibility
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What is it?
By doing socially responsible things,
businesses better human life.
Supposedly ..good ethics is good business.
Is this true?
Is enlightened self interest a good way to
push this?
Incorporating Environment into
Management Theory
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Environmental Ethics is a starting point.
– Expanding ethics to include nature.
– What is the difficulty in doing this?
– What does the Biocentric ethic say
(Goodpaster?)
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Biocentrism
– Natural objects have intrinsic value and morally
considerable in their own right.
– Deep Ecology nature has an ethical status at
least equal to humans.
Environmental Strategy
Concepts and Development
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Four Readings related to Business Strategy
and the Environment
– Porter and van der Linde
– Walley and Whitehead
– Respondents to Walley and Whitehead
– Stuart Hart
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What is meant by Win-Win?
Green and Competitive: Ending
the Stalemate
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What stalemate?
Regulation and the Environment a good thing for
organizations? Traditional vs. New thought?
Pollution = Inefficiency
– Resource Productivity? Why is this important?
– How does this argument relate to quality initiatives?
– How might TQM work with Environmental programs?
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Innovation’s role with Environment and
Competitiveness
– Two innovation types
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End-of-pipe
Prevention
Examples?
Does Regulation drive innovation?
Green and Competitive: Ending
the Stalemate
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Why is Regulation needed for Innovation?
– A market drive may be needed to aid innovation.
– What is meant by the “rarely see $10 bills on the
ground?”
– Inexperience causes a barrier to environmental
innovation.
– Organizational inertia is a barrier
– What to do?
Green and Competitive: Ending
the Stalemate
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Environmental Innovation Friendly
Regulations
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Create pressure that motivates companies to innovate.
Make sure regulations improve environmental quality
Alert and educate companies about ineffeciencies and
areas for technological improvement
improve likelihood that innovations are environmentally
friendly
create demand for environmental improvement
level the playing field making sure every one makes
environmental investments
Green and Competitive: Ending
the Stalemate
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What needs to be done Overall?
– Remove “Static” thinking (organizations)
– Make Regulations less adversarial more cooperative
– Less specific regs….address “whats” let organizations worry
about “hows”
– Managers need to realize that environmental improvement is
a competitive opportunity. (org)
– Make environmental decisions internal….not just delegated
to adversarial external parties (org)
– resource-productivity rather than pollution control model
must govern decision making (org)
Green and Competitive: Ending
the Stalemate
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What do they recommend to
managers?
– Measure direct and indirect environmental
impacts (can’t manage what you don’t measure).
– Learn to recognize the opportunity cost of
underutilized resources
– create bias in favor of innovation based,
productivity enhancing solutions
– develop proactive relationships with
regulators/environmentalists.
It’s Not Easy Being
Green
Should win-win be at the core of an
organization’s environmental strategy?
 Yes? Why?
 No? Why not?
 Do they say let’s go back to the old
ways?
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– What should be maintained?
It’s Not Easy Being
Green
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Two era’s of environmental management
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(Fisher and Schot)
resistant adaptation
embracing environmental issues with no innovation
win-win derived from second era.
Tradeoffs -Where are the tradeoffs?
What is meant by low-hanging fruit?
Where to make innovations? Is rabbit-out-of-the-hat
a way to solve problems?
It’s Not Easy Being
Green
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What is the “trade-off” zone?
What is the value based approach?
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What framework do they recommend?
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– What is “The Triage Framework?”
– Does it make sense?
– Does it help to more efficiently and effectively
guide environmental spending?
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Which
way?
Not all win-win opportunities are insignificant (Clarke)
more efficiency in regulatory system still needed
(Clarke)
more strategic vision, not operational as win-win
assumes. (Clarke)
Are regulations good/bad for competitiveness?
(somewhere in between).(Stavins)
What about the rest of the world? (Greeno)
Are they short-sighted? (Bavaria)
Regulations inefficient and political (Cairncross)
Porter’s arguments were for both sides,
regulators/industry (Esty) etc.
Anything interesting of note that you found?
Green Management Theories
Resource based view of firm (Hart)
making the environment a strategic and competitive part of
the firm.
Three categories
PP
Product Stewardship
Sustainable development
Should not only be theory..but actual normative practice.
Corporate Behavior and Reputation
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In 1995
– What did consumers think of businesses and
environmentalism? Were they doing better? Were
they doing enough?
– What do you think consumers feel?
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A Couple Questions:
– Is Corporate Environmentalism a Fad?
– Is Corporate Environmentalism a Conspiracy?