How to Become a Sustainable Company Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Corporate sustainability has caught the interest of much of the planet during the previous few years. Trends suggest the public is no longer filled with corporations that focus solely on short-term profit maximization. A recent study that compares firms that adopted environmental and social policies with firms that did not, authored by two of the authors of this article and another colleague, provides empirical support for this perspective. "High sustainability" companies considerably outperformed their counterparts over 18-year span in terms of both stock market and accounting standards, such as return on assets and return on equity. In addition they demonstrated lower performance volatility. For most companies, becoming sustainable involves a continuing and conscious attempt to establish long term value for investors by contributing to a sustainable society. The writers examined the organizational models of companies that they refer to as "sustainable" by comparing them with firms that they call "traditional."

They focused on two primary questions: (1) How do sustainable businesses create the conditions that embed sustainability in the business strategy and operations, and (2) What are the specific components of sustainable firms' cultures that differentiate them from those of conventional companies? The writers have developed an identity and cultural model for how to produce a sustainable company. The very first period includes reframing the identity of the company through external involvement and leadership dedication. The 2nd phase involves codifying the newest identity through mechanics and worker participation of performance. Both are processes that are ongoing. The two stages strengthen each other once the second stage starts. Worker participation enables even more advanced external participation, since a broader selection of workers will likely be able to effectively engage with outside stakeholders. Mechanics of execution bind direction dedication, since these organizational-level attributes continue from one generation of leaders to the following. Similarly, direction dedication provides a strong motivating force for worker engagement, since workers understand that their leaders care about what they're doing. The company's mechanisms of execution strengthen, since stakeholder pressure challenges the business to constantly enhance its quality. The article draws on examples at firms including Dow Chemical, PepsiCo, Natura and Toyota.

PUBLICATION DATE: July 01, 2012 PRODUCT #: SMR425-PDF-ENG

This is just an excerpt. This case is about INNOVATION & ENTREPRENEURSHIP