Week 3

Question 1

What 3 things should sustainability goals have?

Answer 1

Specific
Measurable
Time-bound

Question 2

2 types of goals

Answer 2

Absolute goals: which take only the KPI into account
Relative goals: which compare the KPI to a unit of output
Absolute goals best express the expected impact on society but do not take company growth into account. Relative goals measure performance per unit of output more accurately but the impact the goal will have is unsure.

Question 3

Outside in vs inside out

Answer 3

Looking at the environment surrounding the business and see what is needed instead of looking what the business can achieve

Question 4

Different sustainability strategies

Answer 4

• Introverted (Risk Mitigation)
• Extroverted (Legitimization) - Conventional vs. Transformative
• Conservative (Efficiency)
• Visionary (Holistic) - Conventional vs. Systemic

Question 5

Introverted strategy

Answer 5

risk mitigation strategy: focus on legal and other external standards concerning environmental and social aspects in order to avoid risks for the company

Question 6

Extroverted strategy

Answer 6

legitimating strategy: focus on external relationships, license to operate
Extroverted strategy can be transformative: interacts with the market and tries to change market conditions actively.

Question 7

Conservitive strategy

Answer 7

efficiency strategy: focus on eco-efficiency and cleaner production

Question 8

Visionary strategy

Answer 8

holistic sustainability strategy: focus on sustainability issues within all business activities; competitive advantages are derived from differentiation and innovation, offering customers and stakeholders’ unique advantages.

Question 9

2 types of visionary strategies

Answer 9

• Conventional: based in market opportunities in an opportunistic manner (outside in perspective)
• Systemic: the market based view is supplemented with a resource based view and sustainable development is deep seated in the normative level of the company (inside-out perspective)

Question 10

Maturity levels

Answer 10

1. Stands for a rudimentary level, maybe beginning consideration of the sustainability aspect in the company, which means that – if existing – only mandatory rules and laws are respected.
2. Marks that an elementary integration of this aspect is focused on compliance with sustainability-related laws but going slightly further (e.g. due to environmental technology, reduction and consideration of impacts of their business activities).
3. Represents a satisfying consideration and maturity of the specific sustainability aspect (often above the industry average).
4. Sophisticated maturity, which implicates an outstanding effort towards sustainability

Question 11

SBSC

Answer 11

Sustainability scorecard

Question 12

4 perspectives in SBSC

Answer 12

• financial
• customer
• internal process
• learning and growth

Question 13

Financial perspective

Answer 13

whether the transformation of a strategy lead to improved economic success
- Revenue
- expenses
- ROI
- Net income

Question 14

Customer perspective

Answer 14

defines the customer/market segments in which the business competes
- Customer satisfaction
- Customer retention

Question 15

Internal process perspective

Answer 15

identifies those internal business processes that enable the firm to meet the expectations of customers in the target markets
- inventory
- quality control
- product lead time

Question 16

Learning and growth perspective

Answer 16

infrastructure necessary for the achievement of the objective from the other perspectives
- employee skills
- employee training
- employee retention
- satisfaction

Question 17

Advantages by implementing sustainability

Answer 17

• Firms that are sustainable will in times of crisis not throw away sustainable actions just because they are more expensive
• Connecting social and ecological with economic can help gain an competitive advantage compared to their competitors
• It is most favorable for businesses to implement strategies across all 3 dimensions

Question 18

3 ways to integrate environmental and social aspects in SBSC

Answer 18

1. Environmental and social aspects can be integrated in the existing four standard perspectives (subsumption)
2. An additional perspective can be added to take environmental and social aspects into account (addition)
3. A specific environmental and/or social scorecard can be formulated

Question 19

3 stages of strategic relevance

Answer 19

• Strategic core issues with lagging indicators
• Performance drivers as represented by leading indicators
• Hygienic factors, reflected by diagnostic indicators (necessary changes but do not represent a competitive advantage)

Question 20

Corporate strategy 6 components

Answer 20

Mission
Strategic issues
Markets
Customer needs
Resourcers
Competitive advantage

Question 21

What is a vision?

Answer 21

the desired end-goal

Question 22

What is a mission?

Answer 22

what the firm is trying to achieve

Question 23

Sufficiency

Answer 23

individuals and companies living on needs rather than wants

Question 24

Ways how sufficiency driven businesses curb demand (5)

Answer 24

• education and consumer engagement
• making products that last longer and avoiding built -in obsolescence
• focusing on satisfying ‘needs’ rather than promoting ‘wants’ and fast – fashion
• conscious sales and marketing techniques
• new revenue models or innovative technology solutions

Question 25

2 criteria for strategy

Answer 25

Cost of sustainability strategy
Benefits of sustainability strategy

Question 26

Gaining a competitive strategy

Answer 26

• Lower price
• Differentiation
• Though focus

Question 27

4 outcomes when looking at the fit of a strategy

Answer 27

• Force
• Pressure
• Option
• Forbidden

Question 28

Characteristics of a good target (5)

Answer 28

• Meaningful
• Material
• Complete
• Consistent
• Ambitious

Question 29

Characteristics of good KPI (4)

Answer 29

• Accessible
• Relevant
• Responsive
• Comparable

Question 30

What time scale?

Answer 30

Bold end goal far in the future is seen as implausible.
Annual target fails to provide long-term direction and ambition.
–> Set some longer-term stretch goals that contain interim targets.