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- 24 Sep 2014
- Op-Ed
Tackling Climate Change Will Cost Less Than We Think
Yes, addressing climate change will be expensive, but not nearly as much as the costs of delaying action, argues Rebecca Henderson. Closed for comment; 0 Comments.
- 24 Sep 2014
- Op-Ed
The Climate Needs Aggressive CEO Leadership
History will judge CEOs not just on their stewardship of firm growth, but also on whether they effectively used their clout to address one of the greatest societal challenges of our time, say Michael Toffel and Auden Schendler. Closed for comment; 0 Comments.
- 24 Sep 2014
- Op-Ed
Take a Trim Tab Approach to Climate Change
Often depicted as greedy and shortsighted, business leaders face a crucial opportunity on the issue of climate change to change that perception, says Amy Edmondson. Closed for comment; 0 Comments.
- 24 Sep 2014
- Op-Ed
We Need a Miracle. New Nuclear Might Provide it.
New nuclear power technology could be the miracle we need to combat dangerous carbon emissions, says Joe Lassiter. Closed for comment; 0 Comments.
- 11 Sep 2014
- Working Paper Summaries
Chief Sustainability Officers: Who Are They and What Do They Do?
A number of studies document how organizations go through numerous stages as they increase their commitment to sustainability over time. However, we still know little about the role of the Chief Sustainability Officer (CSO) in this process. Using survey and interview data, the authors of this paper analyze how CSOs' authority and responsibilities differ across organizations that are in different stages of sustainability commitment. The study documents the increased authority that CSOs have in companies that are in more advanced stages of sustainability. But while CSOs assume more responsibilities initially as the organization's commitment to sustainability increases, CSOs decentralize decision rights and allocate responsibilities to the different functions and business units. Furthermore, the authors document that a firm's sustainability strategy becomes significantly more idiosyncratic in the later stages of sustainability, a factor that influences significantly where in the organization responsibility for sustainability issues is located. The study also reflects on the best avenues for future research about CSOs and transformation at the institutional, organizational, and individual levels. This article is a chapter of the forthcoming book Leading Sustainable Change (Oxford University Press). Key concepts include: As a CSO gains more authority, she becomes less central in in the organization by allocating decision rights and responsibilities to the functions and business units. While most companies have fairly generic sustainability strategies in the initial stages, it is in the latter Innovation stage that different organizations more closely customize their sustainability strategy to the needs of the organization. The sustainability strategy is driven by the demands of the markets where an organization has a presence or plans to expand in the future. Closed for comment; 0 Comments.
- 21 May 2014
- Working Paper Summaries
The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research
Neoclassical economics and several management theories assert that the corporation's sole objective is maximizing shareholder wealth. Despite these theoretical approaches, however, actual corporate conduct in some cases is inconsistent with shareholder value maximization as the sole objective of the corporation. In fact, corporations are now engaging in environmental and social causes with multiple stakeholders in mind and this is especially true for the world's largest corporations. Overall, the author presents an alternative view of the role of the corporation in society where the objective of the corporation is a function of its size. Specifically, the largest corporations are forced to balance different stakeholders' interests instead of simply maximizing shareholder wealth. The author attributes this change in the role of the corporation to the increasing concentration of economic activity and power in a few corporations which has resulted in 1) a few companies having a very large impact on society, 2) corporations and influential actors which are easier to locate, and 3) increasing separation of ownership and control. These events have led to what scholars Berle and Means (1932) predicted more than 80 years ago: both owners and "the control" accepting public interest as the objective of the corporation. Further research on the topics outlined in this paper may increase our understanding of corporate behavior and the role of these corporations in society. Key concepts include: The role of the corporation in society can be a function of the broader economic, social, and political context and as a result evolves over time. Corporations are not a homogeneous group as it is assumed by profit maximization theories. Not all corporations have the same role in society. Increasing corporate engagement on environmental and social goals has redefined the relation between business and society. It remains to be seen whether this trend will continue. Closed for comment; 0 Comments.
- 08 May 2014
- Working Paper Summaries
Corporate and Integrated Reporting: A Functional Perspective
Corporate reporting plays two functions. The first is an "information function" that enables counterparties, such as investors, employees, customers, and regulators, to enter into an exchange of goods and services under specific terms. Companies also benefit from the information function by comparing their performance against peers, thereby informing internal resource allocation decisions. The second is a "transformation function," the result of a company engaging with stakeholders to get their input on the company's resource allocation decisions. The authors argue that integrated reporting is more likely to perform effectively these two functions than separate financial and sustainability reporting. Moreover, as the authors argue, these two functions vary in terms of how important the role of regulation is. Regulation and standard setting is likely to improve the information function but could well impede the transformation function. If regulation is too prescriptive and "rules-based," the risk is that integrated reporting becomes more of a compliance exercise. Key concepts include: Investors need a better understanding of how companies are managing the relationships between financial and nonfinancial performance. Separate financial and sustainability reports are no longer adequate for performing either the information function or the transformation function. Companies need integrated reporting in order to make sure that their corporate reporting process effectively performs the information and transformation functions. Closed for comment; 0 Comments.
- 15 Apr 2014
- Research & Ideas
Calderón: Economic Arguments Needed to Fight Climate Change
Former President of Mexico Felipe Calderón says the United States Congress and Chinese coal plants are the biggest obstacles to fixing climate change. Open for comment; 0 Comments.
- 01 Apr 2014
- Research & Ideas
When Do Alliances Make Sense?
Analyzing drilling leases in the Gulf of Mexico, John Beshears explores a question as old as business itself: When does it pay to make an alliance? Open for comment; 0 Comments.
- 24 Mar 2014
- Research & Ideas
The Surprising Link Between Language and Corporate Responsibility
Research by Christopher Marquis shows that a company's degree of social responsibility is affected by a surprising factor—the language it uses to communicate. Closed for comment; 0 Comments.
- 21 Mar 2014
- Working Paper Summaries
Speaking of Corporate Social Responsibility
While many scholars have observed that corporate social responsibility (CSR) is a deeply cultural process, there are inconsistent findings on the specific cultural mechanisms by which culture affects CSR. This paper suggests that the way in which corporations use language is a strong predictor of their CSR and sustainability practices. It addresses two questions: 1) Why do CSR practices vary significantly across countries? And 2) How does the future-time orientation of companies' working languages affect their adoption of, compliance to, and engagement in corporate social responsibility programs? Building on the future-time criterion of scholars Dahl (2000) and Chen (2013), which separates languages into two broad categories-those languages that require future events to be grammatically marked when making predictions, and those that do not-the authors examine thousands of global companies across 59 countries from 1999 to 2011. The empirical results support the hypothesis that languages that grammatically separate the current tense from the future tense can significantly affect how corporations perceive future-oriented strategies, and so make corporate behavior less future-oriented. Overall, the authors introduce a new way to think about underlying variation in global CSR practices. As they show in this paper, it is crucial to examine language as an important underlying feature that shapes cultural values and the norms in a society. The study also builds on research into the ways in which perceptual category systems focus the attention, and subsequently, the behaviors, of corporate leaders. Key concepts include: Research in linguistics and economics has shown that one of the most important factors that shapes culture and creates variation across countries is spoken language. This study contributes to understanding international variation of CSR. Differences in cross-national commitment to CSR arise from characteristics of the languages spoken across the globe. Closed for comment; 0 Comments.
- 03 Mar 2014
- HBS Case
Decommoditizing the Canned Tomato
Most commodity producers look to cut costs aggressively. So why is Mutti S.p.a, an Italian producer of tomato products, paying farmers more than competitors? Mary Shelman discusses her case study. Closed for comment; 0 Comments.
- 26 Feb 2014
- Research & Ideas
How Grocery Bags Manipulate Your Mind
People who bring personal shopping bags to the grocery store to help the environment are more likely to buy organic items—but also to treat themselves to ice cream and cookies, according to new research by Uma R. Karmarkar and Bryan Bollinger. What's the Quinoa-Häagen-Dazs connection? Closed for comment; 0 Comments.
- 12 Feb 2014
- Research & Ideas
Private Sector, Public Good
What role, if any, does business have in creating social good? A new seminar series at Harvard Business School tackles this complex question. Closed for comment; 0 Comments.
- 05 Dec 2013
- Op-Ed
Encourage Breakthrough Health Care by Competing on Products Rather Than Patents
For too long, the science behind breakthrough therapeutics has been locked behind patents held by universities. Richard Hamermesh proposes the market compete on solutions rather than intellectual property rights. Closed for comment; 0 Comments.
- 04 Dec 2013
- Research & Ideas
The Fantastic Horizon: How to Invest in a New City
Rapid urbanization and resource scarcity pose problems—and opportunities—for businesses and governments all over the world. Senior Lecturer John Macomber writes about his recent investigative visits to nascent privately-funded municipalities in Saudi Arabia and Vietnam. Closed for comment; 0 Comments.
- 16 Oct 2013
- Op-Ed
Response to Readers: Combating Climate Change with Nuclear Power and Fracking
Following a contentious online debate, Professor Joe Lassiter expands his argument that nuclear power and fracking are the lesser evils when stacked up against coal power, and presents a way forward. Closed for comment; 0 Comments.
- 07 Oct 2013
- Research & Ideas
The Case for Combating Climate Change with Nuclear Power and Fracking
Joseph B. Lassiter explains why he believes that nuclear power and shale gas are on the right side of the fight against climate change, and why markets have a better shot at winning the fight than governments do. Closed for comment; 0 Comments.
- 20 Sep 2013
- Working Paper Summaries
Historical Origins of Environmental Sustainability in the German Chemical Industry, 1950s-1980s
This paper examines the emergence of environmental strategies in the chemical industry between the 1950s and the 1980s. German chemical firms have been hailed as "eco-pioneers" in this regard, but this study demonstrates that initially the leading chemical companies of both Germany and the United States followed a similar approach to societal concerns about environmental pollution. Both German and American firms suggested that pollution incidents and complaints were a matter for local responses, tailored to specific settings, and should be considered primarily as nuisances rather than as environmental or health hazards. By the 1970s, however, the evolution of environmental strategies in the German chemical industry diverged greatly from that of the United States. This working paper explores how and why by examining the strategies of two prominent German chemical companies, Bayer and Henkel. The German firms diverged from their American counterparts in using public relations strategies not only to contain fallout from criticism of their pollution impact, but also to create opportunities for changes in corporate culture to encourage sustainability. While the US chemical industry remained defensive and focused on legal compliance, there was a greater proactivity among the German firms. The study stresses the importance of the regional embeddedness of Bayer and Henkel in the state of North Rhine-Westphalia, which made their reputations especially vulnerable to criticism. A new generation of corporate leaders also perceived that more reactive strategies were needed to fulfill societal expectations. They were savvy enough to understand that investing in environmental sustainability could provide an opportunity to create value for the firm, and that self-identifying as eco-pioneers had commercial as well as reputational benefits, provided that the image reflected genuine policies and processes. Key concepts include: Leading German chemical companies have been regarded and self-identified as "eco-pioneers," but before the 1970s their environmental strategies were broadly similar to their U.S. counterparts. Subsequently the German firms became more proactive in their environmental strategies. The regional embeddedness of Bayer and Henkel in the state of North Rhine-Westphalia emerges as an important determinant of their emergent green strategies. The firms had deep reputational stakes invested in their region and were highly exposed to criticism of their environmental impact. Corporate leaders of Henkel and Bayer were early movers in understanding that investing in environmental sustainability could provide an opportunity to create value for their firms. Closed for comment; 0 Comments.
Stop Thinking of Climate Change as a Religious or Political Issue
Private and public innovation around cleaning up our environment will be motivated only if prices reflect the true state of the world, says Forest Reinhardt. Closed for comment; 0 Comments.