Part 3: Sustainability Flashcards
What’s a balanced scorecard
A performance measurement and management system
Balancing financial and non-financial, short- and long-term measures
Three main motivations for architecture & design of a sustainability BSC (Hansen & Schaltegger, 2016)
Instrumental theories
Social & Political theories
Normative theories
The sustainability balanced scorecard (Hansen & Schaltegger, 2016) consists of:
- Sustainability strategy
- Defensive (add on)
- Accommodative (partly or fully integrated)
- Proactive (extended) - Value system
- Profit driven (strictly hierarchical)
- Care driven (semi-hierarchical)
- Systematic driven (non-hierarchical, network)
Difference between CSR and CSV
CSR is doing good separate from profit maximisation
CSV brings economic and social value together
(CSR could be argued to take a more neoclassical perspective)
Problems with sustainability balanced scorecard
- Things can be believed to be true even though they are not
- Not statistically testable
- Make sense but lack empirical evidence
- Illustrates a difficult reality
What’s a Sustainable Business case
The perspective managers take on a commercial activity related to sustainability
Ethical motivations (Schaltegger & Burrit, 2018)
- Reactionary
- Self-seeking behaviour defending the conventional business approach - Reputational
- Narcissism, seeking grandiosity - Responsible
- Striving for business performance excellence - Collaborative
- Developing business with stakeholder participation and collaboration
Shared value
- Social- and economic value are generated through organisational activities without any trade-off
- The concept recognises that markets are defined by both social and economic needs.
(Where the disregardment of economic needs is bad for the firm for obvious reasons, and neglecting social needs is argued to generate frequent internal costs such as wasted energy and raw materials)
Creating shared value
Rethinking products and markets
Redefining productivity in the value chain
Enabling cluster development
Business model according to Bocken et al (2014)
A conceptual tool to understand how a firm does business
- Value proposition
- Product/ Service - Value creation & delivery
- Key activities, resources, channels, partners, technology - Value capture
- Cost structure and revenue streams
(analysis, comparison, performance assessment, management, communication, and innovation)
Business model innovation for sustainability (Bocken et al., 2014)
Create significant positive or significantly reduce negative impacts
Through changes in:
- value proposition
- value creation & delivery
- value capture
Strategies in business model innovation (Bocken et al., 2014)
Defensive (adjustment)
Incremental adjustments to protect current business models, often driven by need of compliance
Accommodative (improvement, integration)
Modification of internal processes in some consideration of environmental or social objectives
Proactive (full integration)
Redesign core business logic for sustainable development
What are the groupings in sustainable business models (Bocken et al., 2014)
Technological
Social
Organisational
Parida et al. (2019) two stage process model and outcomes
Ecosystem readiness assessment
Ecosystem orchestration mechanisms
Outcomes
Business models are important for sustainability because
- Eco-design and eco-efficiency improvements have assisted in reducing energy, resource intensity, and emissions and waste per unit production
- Can serve as a vehicle to coordinate technological and social innovations with system-level sustainability
What’s a sustainable balance scorecard?
Modifications to the original BSC which explicitly consider environmental, social or ethical issues
What are instrumental theories referred to in a sustainable balanced scorecard?
Sustainability performance as a contribution to the achievement of conventional corporate objective, such as market share
What are social & Political theories referred to in a sustainable balanced scorecard?
Implemented for organisations to adapt to external expectations and not to improve efficiency
(institutional & legitimisation theory)
What are normative theories referred to in a sustainable balanced scorecard?
SBSCs are implemented because it is considered a moral duty from a philosophical perspective
What are rethinking products and design referred to in creating shared value?
Identifying: 1. social needs 2. benefits 3. harms associated with products
What are redefining productivity in the value chain referred to in creating shared value
- Energy use & logistics
- Resource use
- Procurement
- Distribution
- Employee productivity
- Location
What is enabling cluster development referred to in creating shared value?
Benefit from and bring benefit to the institutional and business environment the organisation operates within
What are the technological archetypes in sustainable business models (Bocken et al., 2014)
Maximise material and energy efficiency
Create value from waste
Substitute with renewables and natural processes
What are the social archetypes in sustainable business models (Bocken et al., 2014)
Deliver functionality rather than ownership
Adopt a stewardship role
Encourage sufficiency
What are the organisational archetypes in sustainable business models (Bocken et al., 2014)
Repurpose for society/environment
Develop scale up solutions
Parida et al. (2019) Ecosystem readiness assessment stage
External environment assessment
Business model assessment
Ecosystem partner assessment
Parida et al. (2019) Ecosystem orchestration mechanisms stage
Standardisation mechanisms
Nurturing mechanism
Negotiation mechanism
Parida et al. (2019) Outcomes
Financial benefits
Environmental benefits
Social benefits
What are the Standardisation mechanisms in Parida et al. (2019) Ecosystem orchestration mechanisms stage
- Promoting establishment of industrial standards
- Pursuing technical standard co-development
- Seeking formal certification through broader adaption
What are the Nurturing mechanism in Parida et al. (2019) Ecosystem orchestration mechanisms stage
- Bearing early investment to reduce uncertainty
- Supporting ecosystem competences development
- Sharing core knowledge an intellectual property within the industry
What are the Negotiation mechanism in Parida et al. (2019) Ecosystem orchestration mechanisms stage
- Establishing give-and-take rules for ecosystem
- Reducing likelihood of conflicts through relational interdependencies
- Controlling inclusion of new partners based on risk and benefit analysis
What is Externalities?
When firms create social costs they do not have to bear
The aim with Bocken et al’s archetypes
Representative of underlying mechanisms of transformation in business model innovation, clear and intuitive, mutually exclusive and explanatory, but not overly prescriptive (real sustainability certainly demands combination of archetypes)
Circular economy (Parida et al, 2019)
The logic of take-make-use-return
The concept of business ecosystems (Parida et al, 2019)
Ecosystems are orchestrated by ecosystem leaders to create value in collaboration with a community of stakeholders.
A leader needs to be resourceful, in being able to create a healthy ecosystem by providing a stable set of common assets, simplifying connection between stakeholders, and encouraging innovation
What is orchestration referred to? (Parida et al, 2019)
A set of deliberate, purposeful actions by a firm.
Includes enforcing rules and ensure other partners adhere to the rules
Parida et al (2019) External trend assessment in the ecosystem readiness stage
Analysis of markets and technological trends
Analysis of government regulation and policy changes
Parida et al (2019) Business model assessment in the ecosystem readiness stage
Shift to service dominant business models
Identify mutually beneficial relationships
Parida et al (2019) Ecosystem partner assessment in the ecosystem readiness stage
Openness to new partnerships and cooperation
Understanding of trade-offs with new ecosystem creation
