Hi folks! I came across the following article on Nestle's recent water wars in the April 14th issue of Businessweek. The article complements our last class discussion fairly well. Enjoy.
http://www.businessweek.com/magazine/content/08_15/b4079042498703.htm
Tuesday, April 8, 2008
Green Initiatives at Marriott
The below is an excerpt from the blog of Bill Marriott, Chairman and CEO of Marriott International:
"It's Environmental Awareness Month at Marriott, so I want to pick up our discussion on the environment. Judging from some of the comments you've sent, there's a lot of interest in global warming. Many of you challenged me on whether our company's efforts were strong enough and that's really great. That's why I started my blog --because I want to hear from you.
What you had to say mirrors consumer trends, especially in travel. People want to do business with companies that do the right thing. I think conserving natural resources and reducing Marriott's environmental footprint is the right thing to do. I told you about how we're going to reduce greenhouse gas emissions by six percent by 2010. Actually, that's on top of the 11 percent reduction we've already made.
But our environmental efforts don't end at our front door. My dad felt strongly about creating a caring corporate culture. It revolves around service for our guests and our communities. We call it our Spirit to Serve. This month it will take center stage as our associates around the world volunteer their time and partner with Clean Up the World.
We'll be cleaning up shorelines - like the Thames in London and the Potomac River here in Washington, DC, and beaches like Taba Heights in Egypt. In Jordan, the desert is consuming what's left of its forests, which are only one percent of Jordan's land. Near the capital, Amman, our associates are planting trees. The government is even calling it the Marriott Forest.
We've set a goal of planting 3,000 trees around the world this month. Experts say each one of these trees will remove one ton of carbon emissions from the atmosphere over their lifetime. The Dayton, Ohio Marriott is planting trees and building a bird sanctuary. And the Frankfurt Marriott in Germany will begin converting its wet waste into a new energy source called marsh gas.
We have a video about some of these projects. And, of course, we want to see what you're doing to save the environment that could result in an eco-vacation to Costa Rica. Just go to You Tube to learn more.
There's so much we're doing around the world and much more we will do. April will be designated Environmental Awareness Month at Marriott, but it's a 24/7 effort. I'm Bill Marriott and thanks for helping me keep Marriott on the move. "
I think Marriott deserves credit for increasing transparency of their CSR via this blog and soliciting feedback from their customers. This is an illustration of how CSR initiatives can increase customer loyalty by involving customers and other stakeholders in the initiatives, which can result in both higher profits (via lower customer turnover and acquisition costs) and a positive environmental impact. I think this is a great way that "shared value" can be created.
The link to the blog is: http://www.blogs.marriott.com/default.asp?item=555490 and an overview of their green initiatives is at: http://www.blogs.marriott.com/environment/.
"It's Environmental Awareness Month at Marriott, so I want to pick up our discussion on the environment. Judging from some of the comments you've sent, there's a lot of interest in global warming. Many of you challenged me on whether our company's efforts were strong enough and that's really great. That's why I started my blog --because I want to hear from you.
What you had to say mirrors consumer trends, especially in travel. People want to do business with companies that do the right thing. I think conserving natural resources and reducing Marriott's environmental footprint is the right thing to do. I told you about how we're going to reduce greenhouse gas emissions by six percent by 2010. Actually, that's on top of the 11 percent reduction we've already made.
But our environmental efforts don't end at our front door. My dad felt strongly about creating a caring corporate culture. It revolves around service for our guests and our communities. We call it our Spirit to Serve. This month it will take center stage as our associates around the world volunteer their time and partner with Clean Up the World.
We'll be cleaning up shorelines - like the Thames in London and the Potomac River here in Washington, DC, and beaches like Taba Heights in Egypt. In Jordan, the desert is consuming what's left of its forests, which are only one percent of Jordan's land. Near the capital, Amman, our associates are planting trees. The government is even calling it the Marriott Forest.
We've set a goal of planting 3,000 trees around the world this month. Experts say each one of these trees will remove one ton of carbon emissions from the atmosphere over their lifetime. The Dayton, Ohio Marriott is planting trees and building a bird sanctuary. And the Frankfurt Marriott in Germany will begin converting its wet waste into a new energy source called marsh gas.
We have a video about some of these projects. And, of course, we want to see what you're doing to save the environment that could result in an eco-vacation to Costa Rica. Just go to You Tube to learn more.
There's so much we're doing around the world and much more we will do. April will be designated Environmental Awareness Month at Marriott, but it's a 24/7 effort. I'm Bill Marriott and thanks for helping me keep Marriott on the move. "
I think Marriott deserves credit for increasing transparency of their CSR via this blog and soliciting feedback from their customers. This is an illustration of how CSR initiatives can increase customer loyalty by involving customers and other stakeholders in the initiatives, which can result in both higher profits (via lower customer turnover and acquisition costs) and a positive environmental impact. I think this is a great way that "shared value" can be created.
The link to the blog is: http://www.blogs.marriott.com/default.asp?item=555490 and an overview of their green initiatives is at: http://www.blogs.marriott.com/environment/.
Monday, April 7, 2008
Walmart
As a follow-up to the conversation we had tonight on Walmart's move into low-priced pharmaceuticals, what do people think about Walmart's "greening" efforts?
While a portion of these sustainability efforts may be attributed to "greenwashing," there is certainly a good business case to be made for the cost/energy savings Walmart is experiencing. As a global company, it also makes sense for Walmart to manage risks associated with climate change, resource shortages, potential policy changes, etc.
Given the scale of Walmart's operations, as well as the power it wields over its suppliers, Walmart's environmental improvements could have enormous impact (regardless of intention)...
Are there dangers in giving Walmart too much credit - or not enough?
While a portion of these sustainability efforts may be attributed to "greenwashing," there is certainly a good business case to be made for the cost/energy savings Walmart is experiencing. As a global company, it also makes sense for Walmart to manage risks associated with climate change, resource shortages, potential policy changes, etc.
Given the scale of Walmart's operations, as well as the power it wields over its suppliers, Walmart's environmental improvements could have enormous impact (regardless of intention)...
Are there dangers in giving Walmart too much credit - or not enough?
Study Questions: Session Three
Below are the study questions for session 3. If you are planning on missing class next Monday, please email me that you will not be attending. Study Questions are due before 7pm (start of session 3 class). If I do not receive your study questions, you will not get credit.
Additional reminder
Please email me your group name and members. I noticed a lot of you have not signed up as of yet.
Nice class discussion this evening.
Cheers
Michelle
Study Questions
Additional reminder
Please email me your group name and members. I noticed a lot of you have not signed up as of yet.
Nice class discussion this evening.
Cheers
Michelle
Study Questions
Christensen, Baumann, Ruggles, and Sadtler article:
2. The articles authors’ assert that the Minute Clinics are an example of catalytic innovation. What arguments do the authors use to substantiate this claim? Do you agree or disagree?
4. What are the dangers of pursuing this strategy? How can non-profit organizations overcome these issues?
5. Do you believe
Milton, Measuring Environmental Externalities & The Role of Regulation in the U.S.
(I apologize in advance for the lengthy nature of my post)
I read Milton's article and my knee-jerk reaction, was that we were assigned the article to get a fired up about an underlying statement that managers of firms should not deviate from maximizing profitability even if it means that sacrificing profits is for something socially or environmentally positive. I'll admit I felt that Milton came off as insensitive to social plight, however I don't think his theory is wrong. In fact not only do I agree with his theory, I believe that his theory actually strongly supports an argument for social entrepreneurship if one accounts for environmental and social externalities appropriately the equation of profit maximization.
Milton summarizes his argument that "there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."
He does not imply that companies should act in socially irresponsible ways. I think the two most important points in this statement are the "efficient use of resources" and "staying within the rules of the game". If companies followed this statement there would be opportunity to influence the profit maximizing behavior of firms by putting economic dollar value on "social benefits and costs".
This is already occurring in the example of Green House Gas (GHG) emissions. The Global Reporting Initiative (GRI) (www.celb.org/xp/CELB/downloads/GRI_2002.pdf) is an initiative to essentially create an international metric system by which companies can report their GHG emission. This would pave the way for things like treating GHG emission as a commodity and thus dollarizing air pollution to be factored into project NPVs. The end result is the opportunity for firms to make more educated decisions about the efficent use of their resources.
Playing within the rules of the game is how Milton factors in government regulation as the force that stipulates the boundary conditions on all the variables that go into profit maximization. This also supports the other opportunity for those who want a company to function in socially responsible ways in the Milton economic world. While Milton argues that companies and CEO are not people; In a republic or democracy, governments are a representation of the populous. Thus, it is in my opinion the responsibility of those who argue for social responsible corporations, to use the government as a tool to set laws that require companies to have a minimal level of social responsibility. As our ability to measure these environmental externalities increases, the expectations of our companies should increase as well.
This brings me to my question for the class.
How should regulation of social externalities be implemented in the U.S.?
To get this started, the thought that has rolled around in my head since I started learning more about social responsibility is that this question seems very analogous to issues that the U.S. has had with capitalism and financial transparency. Lack of financial reporting standards and transparency caused the stock market crash in 1929 which resulted in the formation of the Securities and Exchange Commission (SEC). The SEC influenced policy through what is now independently known as the Financial Accounting Standards Board (FASB) and their Generally Accepted Accounting Principles (GAAP). This made it mandatory for all public U.S. companies to report a minimal level of financial information and suffer penalties if they did not comply with certain financial standards. I believe in order for the U.S. to make an impact in social responsibility a similar mandatory reporting structure must be created. The GRI guideline seems like the most comprehensive document out there in terms of reporting and many Fortune 100 firms are beginning to use it as the "gold standard" of CSR reporting, but it is still only voluntary, and unfortunately when we ask everyone to play nice and use the honor system we end up with Enrons and Drexel Burnham Lamberts.
I read Milton's article and my knee-jerk reaction, was that we were assigned the article to get a fired up about an underlying statement that managers of firms should not deviate from maximizing profitability even if it means that sacrificing profits is for something socially or environmentally positive. I'll admit I felt that Milton came off as insensitive to social plight, however I don't think his theory is wrong. In fact not only do I agree with his theory, I believe that his theory actually strongly supports an argument for social entrepreneurship if one accounts for environmental and social externalities appropriately the equation of profit maximization.
Milton summarizes his argument that "there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."
He does not imply that companies should act in socially irresponsible ways. I think the two most important points in this statement are the "efficient use of resources" and "staying within the rules of the game". If companies followed this statement there would be opportunity to influence the profit maximizing behavior of firms by putting economic dollar value on "social benefits and costs".
This is already occurring in the example of Green House Gas (GHG) emissions. The Global Reporting Initiative (GRI) (www.celb.org/xp/CELB/downloads/GRI_2002.pdf) is an initiative to essentially create an international metric system by which companies can report their GHG emission. This would pave the way for things like treating GHG emission as a commodity and thus dollarizing air pollution to be factored into project NPVs. The end result is the opportunity for firms to make more educated decisions about the efficent use of their resources.
Playing within the rules of the game is how Milton factors in government regulation as the force that stipulates the boundary conditions on all the variables that go into profit maximization. This also supports the other opportunity for those who want a company to function in socially responsible ways in the Milton economic world. While Milton argues that companies and CEO are not people; In a republic or democracy, governments are a representation of the populous. Thus, it is in my opinion the responsibility of those who argue for social responsible corporations, to use the government as a tool to set laws that require companies to have a minimal level of social responsibility. As our ability to measure these environmental externalities increases, the expectations of our companies should increase as well.
This brings me to my question for the class.
How should regulation of social externalities be implemented in the U.S.?
To get this started, the thought that has rolled around in my head since I started learning more about social responsibility is that this question seems very analogous to issues that the U.S. has had with capitalism and financial transparency. Lack of financial reporting standards and transparency caused the stock market crash in 1929 which resulted in the formation of the Securities and Exchange Commission (SEC). The SEC influenced policy through what is now independently known as the Financial Accounting Standards Board (FASB) and their Generally Accepted Accounting Principles (GAAP). This made it mandatory for all public U.S. companies to report a minimal level of financial information and suffer penalties if they did not comply with certain financial standards. I believe in order for the U.S. to make an impact in social responsibility a similar mandatory reporting structure must be created. The GRI guideline seems like the most comprehensive document out there in terms of reporting and many Fortune 100 firms are beginning to use it as the "gold standard" of CSR reporting, but it is still only voluntary, and unfortunately when we ask everyone to play nice and use the honor system we end up with Enrons and Drexel Burnham Lamberts.
Tuesday, April 1, 2008
Update: Blog Posting
I have received some emails about students being unable to create new blog posts. I have investigated the issue and it seems that I will need to invite each one of you separately to my "blog" team. You will receive an email invitation. Please accept the invitation. If you do not have a google account you will be asked to create one.
I am in the middle of pulling together your email addresses and I will send the invitation as soon as possible. In the meantime, please go ahead and use the comment area to post new blogs for the time being.
I am in the middle of pulling together your email addresses and I will send the invitation as soon as possible. In the meantime, please go ahead and use the comment area to post new blogs for the time being.
Study Questions for Session 2
Hi everyone
Below are the study questions for session 2. As mentioned in class, students who will not be attending next week's class, should hand in these questions at the start of session 3 on Monday. I recommend that everyone take a look at the questions and be prepared to discuss them in class
Below are the study questions for session 2. As mentioned in class, students who will not be attending next week's class, should hand in these questions at the start of session 3 on Monday. I recommend that everyone take a look at the questions and be prepared to discuss them in class
How does Milton Friedman define social responsibility? What arguments does he use to rationalize his argument? What problems or issues arise given this definition?
According to Porter and Kramer, how should companies determine what corporate social initiatives to start? What processes should a company use to identify these core initiatives?
Compare and contrast Porter and Kramer’s definition of social responsibility with that provided by Klaus Schwab? Are their similarities? What are the key differences?
Subscribe to:
Posts (Atom)