Sustainable Global Enterprise

Author: Hart, Stuart L.
Year: 2005

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Abstract:

Environmental and social issues have been treated historically as peripheral concerns to business.  “Social responsibility” and “environmental management” have been framed as added costs driven primarily by guilt or regulation.  At best, companies have felt compelled to “give back” to society in the form of philanthropy or other good deeds directed at the natural environment or the community.

Increasingly, however, the institutions of global capitalism find themselves under siege.  Following the fall of communism in the late 1980s, a decade of economic globalization, privatization, and free trade has produced mixed results at best:  While developed countries have grown richer, the vast majority of nations and people in the world have not benefited from these momentous changes.  Furthermore, the underlying natural systems supporting human economies—forests, fisheries, soils, ecosystems, and climate—have all experienced continuing decline.  A rising tide of “anti-globalization” has emerged which combines concerns about environmental degradation, inequity, human rights abuses, and loss of local autonomy. 

As we enter the 21st century, therefore, the historical separation between competitive strategy and social contribution is breaking down.  Rather than treating social and environmental issues as expensive luxuries, many companies are now fusing social mission with competitive strategy.  Indeed, a form of “new capitalism” is emerging where environmental and social performance is embedded in the competitive strategy of the firm.  

Unlike their predecessors, “sustainable enterprises” use business as an instrument of social development and environmental improvement.  Environmental thinking and social responsiveness are integrated proactively into core business processes, systems, and strategies.  For a growing number of companies, competitive advantage is rooted in such new capabilities eco-efficiency, stakeholder dialogue, clean technology, and poverty alleviation.  

This course explores the connections between “global sustainability” and business strategy--the unlimited business opportunities in solving the world's most difficult problems.  Through a combination of cases, readings, lectures, videos, and simulations, class sessions will engage students in discussions aimed at developing strategy models and applying new strategy tools that incorporate principles of environmental management and social performance.

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