Corporate Environmental Management

OM 6000

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

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.

Breakdown of grade 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.

Corporate Environmental Management

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?

What are some example implications for business? For these problems?

Changes in the Environment: The Master Equation

EI = Population x xGDP EI

Person unit of per capita GDPEI = Environmental Impact

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

What is man’s role with nature?– Take Dominion over it? Dualistic?

What is meant by that?

– Nature exists to serve humans anthropomorphic view is environment in “profit” equation? In calculation of “national” accounts?

– Linear “Design” of production. What is it and why might it no longer be applicable?

Stages of Environmental Concern

Conservation Use resources wisely - nature’s utility is in its service to

humans

Preservation Leave certain areas alone - nature has intrinsic value

Protection pollution control - protect humans

Sustainability global perspective, “sustainable growth” (pg. 17), and equity. What is the basic theory behind equity and sustainability?

Ecology Analysis and evaluation can be carried out

at many levels 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

Anthropocentric Theories– Ethics and stuff.– Economic– Corporate Social Responsibility

Stakeholder Normative Social Contract

Green Management Theories– Ecocentricism– Adjusted Stakeholder– Sustainablity– Resource Based Theory

Environmental Ethics and Business

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

The corporate social responsibility of a business is to increase profit. - M. Friedman

Those things that cannot be traded on the market have no value.

Where does the environment fit in these definitions for environmental ethics?

Corporate Social Responsibility

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

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?) 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

Four Readings related to Business Strategy and the Environment– Porter and van der Linde– Walley and Whitehead– Respondents to Walley and Whitehead– Stuart Hart

What is meant by Win-Win?

Green and Competitive: Ending the Stalemate

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?

Innovation’s role with Environment and Competitiveness – Two innovation types

End-of-pipe Prevention Examples?

Does Regulation drive innovation?

Green and Competitive: Ending the Stalemate

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

Environmental Innovation Friendly Regulations

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

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

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?– What should be maintained?

It’s Not Easy Being Green Two era’s of environmental management

(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 What is the “trade-off” zone? What is the value based approach?

What framework do they recommend?– What is “The Triage Framework?”– Does it make sense?– Does it help to more efficiently and effectively

guide environmental spending?

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 categoriesPPProduct StewardshipSustainable development

Should not only be theory..but actual normative practice.

In 1995– What did consumers think of businesses and

environmentalism? Were they doing better? Were they doing enough?

– What do you think consumers feel?

Corporate Behavior and Reputation

A Couple Questions:– Is Corporate Environmentalism a Fad?– Is Corporate Environmentalism a Conspiracy?