Dechant, K., & Altman, B. Environmental leadership: From compliance to competitive advantage. Academy of Management Executive, 8 (3): 7-27.

Porter, M.E. 1991. America's green strategy. Scientific American, 264 (4): 168.

Porter, M.E., & van der Linde, C. 1995. Green and competitive. Harvard Business Review, 73 (5): 120-134.

Walley, N., & Whitehead, B. 1994. It's not easy being green. Harvard Business Review, 72 (3): 46-51.

The connection, or lack thereof, of a link between environmental and economic performance has been debated for decades. Often environmental performance has been "lumped in" with other types of Corporate Social Responsibility (CSR) without specific regard to the more logical and significant linkages between environmental performance and business efficiency. This session will discuss the findings of three studies which investigate empirical links between environmental measures of performance and economic/financial measures of performance. Discussion will include methodologies, results, and implications.

Required Reading

Hart, S.L., & Ahuja, G. 1996. Does it pay to be green? An empirical examination of the relationship between emission reduction and firm performance. Business Strategy and the Environment, 5: 30-37.

Johnson, S.D., & Laverty K.J.(1997). Environmental Performance and Economic Performance. Manuscript.

Russo, M.V., & Fouts, P.A. 1997. A resource-based perspective on corporate environmental performance and profitability. Academy of Management Journal, 3: 534-539.

Background Reading

Friedman, M. 1962. Capitalism and freedom. Chicago: The University of Chicago Press: 133-136.

Written Assignment

You have been asked by the editor of the Harvard Business Review to prepare a review of the three empirical papers. The editor suggests that you analyze the papers' methodology, results, and findings/implications, but indicates that you are free to address any other issues which you believe to be relevant to HBR's managerial audience.

This paper should be no longer than three typed pages double spaced with reasonable margins Supporting exhibits do not count toward the three page limit.

We have seen the need for strong links between business strategy and environmental management. This session adds explicit attention to technology management. In addition, we address these issues at a different level of analysis: can an appropriate treatment of environmental issues, technology strategy, and business strategy lead to improved international competitiveness for the firms in a particular nation?

Required Reading

Cowan, R., & Hultén, S. 1996. Escaping lock-in: The case of the electric vehicle. Technological Forecasting and Social Change, 53: 61-79.

Moore, C., & Miller, A. 1994. Green gold: Japan, Germany, and the race for environmental technology, by Boston: Beacon Press, 1994, pp. 1-58.

Rich, L. 1993. How environmental pressures are affecting the R&D function. Research·Technology Management, 36 (5): 16-23.

Rushton, B.M. 1993. How protecting the environment impacts R&D in the United States. Research·Technology Management, 36 (3): 13-21.

Background Reading

Porter, M.E. 1990. The competitive advantage of nation. Harvard Business Review, 68 (2): 73-93.

Discussion Questions

1. What are the inherent connections between technology strategy and environmental management?
2. What are the barriers to achieving profitability through sustainable technologies?
3. What are the essential elements of Porter's model of national advantage?
4. Is environmental technology a sector for which Porter's model is apropos?
5. What are the analogies between environmental management and total quality management?

This session will use the Designtex case to illustrate the ethical challenges and complexities of trying to be environmentally conscientious. Specifically, it stresses the strategic importance of "knowing what you stand for" rather than moving forward with vague ideas of "doing good."

Required Reading

Designtex, Incorporated (A). Case UVA-E-0099. Darden School, University of Virginia.

Discussion Questions

1. What is business ethics and how is it related to environmental management?

2. What is at stake for the firm in the dilemma posed by the DesignTex case? What priorities should drive managerial decision-making?

3. What ethical responsibilities do firms have to protect the environment? How far do these responsibilities extend?

4. What do you think of McDonough's ideas for product development (i.e. his speech in the appendix)? How applicable and practical are they for firms and for markets?

The World Bank: Mission Uncertain

Steer, A. 1996. Ten principles of the new environmentalism. Finance & Development, 33 (4): 4-7.

Background on the World Bank from Grolier Electronic Publishing.

Discussion Questions

1. It has been said that a characteristic of effective strategies is that they "are directed towards unambiguous long term goals." Does this describe the World Bank?

2. What are the discrepancies between "growth" and "development"? What are the essential positions of the economists and ecologists?

3. Is this a new dilemma for the World Bank? Where is there general agreement about where the Bank is headed? What has changed since 1944?

4. Do Steer's principles map a way out of this dilemma?

In this case the leaders of a recycling group of a major German automobile manufacturer must analyze two separate but related questions: How, if at all, should BMW modify the vehicle take-back infrastructure? What should the company do with recovered materials? Consideration of both questions is critical because of draft German legislation.

Required Reading

Bayerische Motoren Werke AG case, published by the Management Institute for Environment and Business, 1992.

Thierry, M., Salomon, M., Van Nunun, J., & Van Wassenhove, L. 1995. Strategic Issues in Product Recovery Management. California Management Review, 37 (2) 114-135.

Discussion Questions

1. What are the contextual factors driving BMW's actions?

2. Who are the key constituents in the debate and what are their goals for the program?

3. What factors must be considered when using secondary materials?

4. What should BMW's take-back and secondary materials policies be? Why?

5. Can a company gain a competitive advantage through a proactive recycling strategy? How?

Take-back requirements for automobiles require the automotive companies to think about how they will need to interact with the world outside the firm: vehicle dismantlers and shredders, metals and materials recycling companies, regulators and consumers. The BMW case focuses on understanding these elements of environmental product design decisions and their impacts on the firm. Requirements stemming from product take-back, however, also have significant implications for product design. Implementing corporate policy decisions on materials choice and recycling at the engineering design level is not as straightforward as it may seem. There are still many tradeoffs among key decision criteria that are important to final material choice.

Objective

The decisions faced by the Galaxy team in this assignment demonstrate the complexity of a multiattribute problem in moving environmental policies and decisions from the corporate level to the specifics of product design. Your analysis of the new Hubble2000 vehicle hood design will require you to understand and balance the tradeoffs among cost, performance and environmental criteria. You will be required to analyze the tradeoffs among these criteria and others you think are relevant, and prepare a written recommendation for your management.

Required Reading

Life Cycle Analysis in Product Design (the Galaxy Case)

Graedel, T.E., Allenby, B.R., and Comrie, P.R. "Matrix Approaches to Abridged Life-Cycle Assessment".

"The Product Ecology Project", Federation of Swedish Industries, The Information Group, June 1993.

Background Reading

You may also want to review the article from last quarter on "The Recycling of Automobiles: Conflicting Environmental Objectives in a Competitive Marketplace" by F. Field III.

Written Assignment

Using the materials given in this case, you need to

1. provide a recommendation for material choice for the hood assembly, justifying your recommendation;

2. explain how you used the EPS system (provided in the computerized spreadsheet along with the text of this assignment) in your decision making;

3. compare the EPS system (its strengths and weaknesses) used for your primary analysis to that of an alternative life-cycle analysis system used by AT&T (see article by Graedel, Allenby and Comrie). Discuss in what ways you think the two methods are better or worse for use in product design; and finally

4. provide a recommendation on utilizing life-cycle analysis tools in the product design process.

Your written assignment should be prepared in the context of your role at Galaxy as a member of the design team, writing to your supervisor. As such, your comments should be clear and concise, with the text portion of the report to be not more than three pages in length (double-spaced). Supporting tables with key results of your analysis are encouraged (but remember, you are preparing this material for a supervisor at a private firm).

Notes on the Spreadsheet!!

The spreadsheet is provided to allow you to calculate environmental impacts using the EPS system part costs. Don't let the spreadsheet make you nervous!!! There is very little of it you will need to change to do your analysis. The only numbers you need to enter are the following:

Kg/finished hood, as provided in the assignment sheet. The scrap and total raw material kgs will be calculated from this number.
Percentages of the material to be recycled in scrap disposal and end-of-life [keep in mind that for steel and aluminum, these values will always be 100%-- and make sure you enter them in terms of percentages rather than kg!].

You will simply need to determine ELU #s and costs per part with and without various recycling options as a part of your overall analysis. The reason these costs are important is that they can reduce your cost per part. Also, the choices you make relative to recycling will affect your environmental units. The caretaking costs (reflected under disposal costs) are not end of life costs, and will not change. But they are an element to be considered in your overall analysis.

Do not change any other numbers!!! They are provided for those of you interested in understanding more of the detail behind the valuation numbers in the EPS system and analysis. It is possible to adjust valuation numbers within the EPS system, but any changes you make must be specifically noted in your writeup. You need to beware of changing any numbers that are built in formulas. My recommendation for this assignment would be to use the EPS numbers as is.

Note that the data on technical performance is not quantitative--you will have to figure out what the most important performance parameters are and utilize the qualitative parameters in evaluating options among materials choices.

This complex case offers the opportunity to address several key issues. In the context of the interplay between environmental issues and corporate strategy, we also see how selecting appropriate partners can build credibility. In addition, we will discuss how to frame decision-making in situations of limited information and conflicting perspectives

Required Reading

McDonald's cases published by the Corporate Environmental Management Center, University of Michigan:

Case A: McDonald's Environmental Strategy
Case B1: The Clamshell Controversy
McDonald's/EDF Case Study: Note on the Trash Crisis
Note on Life Cycle Analysis

Suggested Reading

Böhm, E., & Walz, R, 1996. Life cycle analysis: A methodology to analyze ecological consequences within a technology assessment study? International Journal of Technology Management, 11 (5-6): 554-565.

Discussion Questions

1. Does the Joint Task Force serve as a model for future partnerships?
2. Should McDonald's continue its recycling efforts or drop the Clamshell container?
3. Evaluate how well LCA was applied in this decision.
4. Is there one best environmental solution? Will it change over time?

Required Reading

TBA