BUSINESS STRATEGIES FOR SUSTAINABILITY

The Tuck School of Business

Dartmouth College

Hanover, New Hampshire

BUSINESS STRATEGIES FOR SUSTAINABILITY

Andrew King

114 Buchanan Hall

603-646-8985

Andrew.A.King@dartmouth.edu

Rosenwald Classroom

Companies now face challenges and opportunities created by concerns about their environmental and social impact. General Managers need to understand the factors that drive business value when dealing with these concerns. This course will evaluate how firms are responding to these challenges. It will also explore how firms are strategically shaping the regulatory and competitive context in which they operate. The course will consider examples related to climate, natural resources (renewable and non renewable), and human health.

This class will use a combination of analytical tools: simulation, case examples, empirical evidence, and historical study. It will draw on cases in numerous settings. Course requirements include homework assignments, a midterm exam, and a final project. This course should be of value to students interested in corporate strategy, economics, business & society, environmental issues, and public policy.

COURSE MATERIALS

All cases and other readings are accessible through the course Web page. Generally, each class should require roughly three hours of outside preparation. If you are consistently spending more (or less) time, see me for help.

Cases: Cases will be discussed in class. You are expected to read the case carefully before coming to class.

Readings: The readings provide insight and background for the cases. They include material that will be discussed in class, but we will not spend classroom time reviewing the readings; rather, we will focus on their elaboration and applying the concepts in them. Additional readings or other material may be handed out during the term.

GRADING

There are three graded components of the course:

Class Participation 45%

Assignments 10%

Final Project 45%

Class participation:

In this course, you are part of a community of learners who educate each other. Your questions and insights help your fellow students learn more than they would without your participation. Consequently, 45% of your grade depends on the degree to which you educated the rest of the community during the term, in the professor’s judgment.

Class participation will also include participation in the “class wiki”. You will be invited to participate in a course wiki where I will post the class slides, course notes, and additional materials.

Assignments:

There will be three 1 page homework assignments and the Fishing Game.

Final Project:

In groups of 1, 2 or 3, you will write a case on a company of interest, propose a new business venture, or solve a business problem. I would like each project to have a corporate sponsor. I will explain this during class #1.

COURSE ADMINISTRATION

Office hours for Professor King:

My office hours are Fridays 9:00-12:00 in Buchanan 114. On a few Fridays, I will be teaching the core strategy course or attending faculty recruiting seminars. On those days, I will have office hours from 1-4.

Outside of these times, the best way to ensure that you have uninterrupted time is to e-mail me to set up an appointment. You are welcome to drop by without an appointment. If I am free, I will be pleased to talk with you about the course.

Attendance:

Since the material in this class builds session by session, attendance at each session is vital. Please notify me before class by any means available if you are unable to attend a session due to illness, family emergency, or an unavoidableconflict. No compensatory work will be given for an unexcused absence. Three unexcused absences will cause an automatic failure of the course.

Class Handouts:

Class slides will be distributed the day of each class. After class, the material can be downloaded from the class folder.

Laptop Policy:

This course relies on the contributions of all of the students. As a result, laptop use will only be allowed when explicitly allowed by the professor (e.g. for the games). Students with unique need to take notes on their laptop (writing difficulties, etc.) should send me an email requesting permission for the duration of the course.

COURSE SCHEDULE INTRODUCTION

CLASS 1: JAN. 6 INTRODUCTION TO THE COURSE Reading:

1. Market Failures, HBS (9-700-127)

2. Julian Simon’s Wager with Paul Ehrlich (Wikipedia) Optional Reading:

Julian Simon and the “Limits to Growth” Neo-Malthusianism (Wikipedia)

I. ECONOMICS AND NON-MARKET STRATEGY

CLASS 2: JAN. 7 ECONOMICS FOR ENVIRONMENTALISTS

Reading: “Microeconomics” by Pindyck and Rubinfeld (Chapter 18).

(Not included electronically via Web page; used in Managerial Economics course.)

HOMEWORK #1DUE

CLASS 3: JAN. 12 WORLD TRENDS AND NON-MARKET STRATEGY

Case: Du Pont Freon Products Division (A), HBS (9-389-111)

Reading:

1. “A Blue Print for Legislative Action”, Consensus Recommendations for U.S. Climate Protection Legislation, USCAP, January 2009.

2. “Green-Up to a Point”, Bloomberg Businessweek, Feb. 20, 2010.

3. Reactions to Climate Group Departures, Lorinc, John, The New York Times, “Green Blog”, Feb. 19, 2010.

CLASS 4: JAN. 13 RENEWABLE RESOURCES

Case: Clearwater Seafood, HBS (9-707-012)

Reading:

Fishing Game Instructions for Students (see the class wiki)

II. FINDING NEW OPPORTUNITIES

CLASS 5: JAN. 20 ASSESSING PROJECTS

Case: Genzyme Center (A), HBS (9-610-008)

Reading:

1. “A Cost Curve for Greenhouse Gas Reduction”, Per-Anders Enkvist, Tomas Nauclér, and Jerker Rosander, McKinsey Quarterly, Feb. 2007.

2. “Green and Competitive: Ending the Stalemate”, Porter, M. and van der Linde Claas, HBR # 95507

CLASS 6: JAN. 21 MOTIVATING CHANGE

Case: OPOWER: Increasing Energy Efficiency through Normative Influence HBS (9-110-16)

Visitor: Itamar Goldminz

Sr. Manager, Product Management Operations, OPOWER, INC. HOMEWORK #2DUE

CLASS 7: JAN. 26 NEW ENERGY SOURCES

Case: Mascoma Corporation. Tuck Case (see class wiki)

Visitor:M. West Owens

CLASS 8: JAN. 27 CARBON MARKETS

Case: South Pole Carbon Asset Management—Going for Gold? HBS (9-709-030)

Visitor: Katherine Birnie,Ecosystem Investment Partners. CLASS 9: FEB. 2 CHANGE AT THE BASE OF THE PYRAMID

Reading:

1. “ The Great Leap: Driving Innovation From the Base of the Pyramid”, Hart & Christensen, MIT Sloan Management Review, Fall 2002.

2. “Beware of Bad Microcredit”, Beck, Steve & Ogden Tim, HBR#F0709C 3. “Doing Bad by Doing Good?” Duggan, Catherine, HBS Strategy Research

Conference, 11/7/09

Visitor:Catherine Duggan, Harvard Business School

Case: The AES Corporation (1992), World Resources Institute.

CLASS 11: FEB.9 Lecture: No Pain No Gain Readings:

1. No Pain, No Gain: A Critical Review of the Literature on Signaling Unobservable Product Quality”, Kirmani, A. and Rao, A., Journal of Marketing, (2000), Vol.64, pp. 66-79.

2. Why Do We Smoke, Drink, and Use Dangerous Drugs? Diamond, J., from

The Third Chimpanzee: The Evolution and Future of the Human Animal; (1993), New York: Harper Perennial, pp. 192-204.

HOMEWORK #3DUE

IV. PRIVATE ORDERING

CLASS 12: FEB. 10 HEALTH CARE

Reading: Changing Physician Behavior, HBS (9-699-124)

Case: Tufts Health Plan, HBS (9-699-160)

CLASS 13: FEB. 16 ASYMMETRIC INFORMATION IN FOOD SUPPLY CHAINS

Case: Friona Industries: Delivering Better Beef, HBS (9-906-405)

Case: PolyFace. The Farm of Many Faces, HBS (N9-611-001)

Readings: “Power Steer,” Polan. M., The New York Times Magazine, March 31, 2002,Section 6.

CLASS 14: FEB. 17 ASYMMETRIC INFORMATION IN FLOWERS AND COFFEE Discussion: Certification of Flowers and Coffee

Readings:

1. “Strategic Responses to the Reputation Commons Problem”, King, Lenox, and Barnett, in Hoffman, A. and Ventresca, M. “Organizations, Policy and the Natural Environment” Stanford University Press, 2002.

2. “Is There Consumer Demand for Improved Labor Standards?”, Hiscox, M., and Smyth, N., Working Paper, Harvard University, Department of

Government.

Class Visitors: Rick Peyser, Green Mountain Coffee Growers; Andrea Prado ABD, Stern School of Business, New York University

CLASS 15: FEB. 23 PRIVATE GOVERNANCE

Case: Celebration and the New Urbanism

1. New Urbanism (http://en.wikipedia.org/wiki/New_Urbanism)

2. “The Zeus Box”, and “Bowling Together”, from Douglas Frantz, Catherine Collins, Celebration, U.S.A.: living in Disney's Brave New Town, Henry Holt and Company, 2000.

Begin reading “The Zeuss Box” with the paragraph beginning on page 152 with "The willingness..."

CLASS 16: FEB. 24 PRIVATE GOVERNANCE

Case: The Chad-Cameroon Petroleum Development and Pipeline Project, HBS (# 9-202-010)

Readings:

1. North, D. “Institutions” Journal of Economic Perspectives, (1991), Vol. 5, No. 1, pp. 97-112.

2. Lazarus, S. “The Equator Principles: A Milestone or Just Good PR?” Global Agenda, (2004), pp. 106-7.

CLASS 17: MARCH 2 FISHING GAME CONCLUSION Reading:

1. Geertz, C. “Very Bad News” The New York Review of Books, (2005), Vol.52,

No. 5, pp. 1-9.

2. Lomborg B. (1998) The Skeptical Environmentalist: Measuring the Real State

of the World, Cambridge University Press

Visitors: DG Webster Dartmouth College and others.

CLASS 18: MARCH 3 STUDENT PRESENTATIONS