Green Business, Green Values, and Sustainability

Christos Pitelis, Jack Keenan, Vicky Pryce

• Publisher: Routledge
• Year: 2011
• ISBN:
  9781136805981
• Edition: 1
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

Today greenness is goodness; non-greenness is not an option. It is therefore critical to advance thinking on why and how business, consumers and policy makers can contribute to the goal of sustainable global wealth creation. This volume analyzes the strategic sustainability issues confronting contemporary business, and explores the transformation in values, strategies, and practices needed by modern businesses to attain sustainable business. It is is developed from a Global Business Symposium organized by the Centre for International Business and Management (CIBAM) at Cambridge University in February 2009, which brought together leading academics, scientists and engineers, government leaders, and business executives to consider the transformation in business values and strategies implicit in sustainability. Green Business, Green Values and Sustainability offers a concise and definitive book on the green transformation of business in major sectors including government, finance, energy, and retail. Different solutions to sustainability are explored including ethical approaches, alternative environmental strategies, corporate responsibility, and carbon reductions.

1	CIBAM and the Symposium on “Green Business and Green Values” Christos N. Pitelis

INTRODUCTION

The aim of this chapter is to introduce the reader to the nature and philosophy of the Center for International Business & Management (CIBAM) and zero in on one of its major functions, the Symposium, in particular the one in February 2009 on “Green Business and Green Values.” In addition, we summarize the main points made at the introductory talk by the Director of CIBAM (the present author).A short summary of all the proceedings, to include some of the discussion, appears after the introduction—signed by a group of Cambridge MBAs who attended the Symposium and co-authored the report. Here, I will only refer to the topics covered, the authors and rationale, as well as to the articles included in this book.

CIBAM AND THE CIBAM GLOBAL BUSINESS SYMPOSIA

CIBAM’s Identity and History

CIBAM is a research center established in 1995 within the Judge Business School, at the University of Cambridge. It is the oldest such center. It was co-founded by Professor John Child and the present author, with John Child serving as the first Founding Director, from 1995 to 1997. The present author, who was then Associate Director, took over as a Director of CIBAM in 1997. Noreena Hertz was appointed Associate Director. An inaugural meeting-mini conference took place to mark this in July 1997 at St. John’s College, Cambridge, attended by friends—academics and business leaders, the last mentioned invited to join as advisory board members. Founding Board Members included Sir Martin Sorrell, CEO WPP; Mr. Jack Keenan, then CEO of the United Distillers and Vintners; Mr. Manfred Tuerks, Managing Director, AT Kearney, Automotives; and Marc Verstringhe, then CEO of Catering and Allied.

Following presentations by some academics on issues they felt might interest the business people present, the discussion zeroed in on what should be the nature, philosophy and function of CIBAM, to include the interactions and divisions of tasks between the academics and business people.

The role of research centers within business schools is not as easy to determine as in some other schools, for example mathematics or engineering. The aim of the theoretical mathematician, for example, is to come up with fundamental research output that may or may not be of commercial relevance. In an engineering or physics department, on the other hand, research to output is normally expected to have clear, discernible commercial applications. Business schools stand somewhere in between. The research output of a business school is normally expected to be simultaneously rigorous and with clear implications to managerial practice, albeit without necessary commercial applications. It is, so to speak, high-brow potential prescription. Clearly the above description does not apply to all business schools, or the other types of schools mentioned, but this is a usual expectation.

When originally conceived by John Child as a Center for International Management, the intention was to focus on research issues pertaining to the management of international business, particularly multinational enterprises (MNEs), what we call in academic circles International Management (IM). John Child, who moved to Birmingham University in 1997, is a global leader in this field.IM deals with issues pertaining to the “insides” of MNEs, for example their internal organizational structure; the link between structure, strategy and performance, the way through which MNEs can leverage the skills of their subsidiaries, the role of autonomy versus control of subsidiaries; how MNEs can deal with issues of organizational coordination and communication, whether and how to adapt to local taste in “host” countries, or to aim for cost reductions through integration. Issues of culture and inter-cultural management are critical in this context, as they are the particularities of IM in emerging markets, such as China, East Asia, Russia, India, Brazil and now Africa. Some of the founding academic members of CIBAM, notably Noreena Hertz, Malcolm Warner and Charles Hampden-Turner, had unique knowledge and competence on these issues, rendering these a natural original focus of CIBAM’s research.

Another aspect of International Business (IB) scholarship, as for example practiced by associations such as the Academy of International Business (AIB), and its European, regional and national counterparts, for example the European International Business Association (EIBA), focus also on the issues pertaining to the nature, objectives, growth, boundaries and strategies of MNEs and the impact of the above on MNE performance. Focal issues here include the choice of modality by MNEs (e.g., foreign direct investment versus licencing/franchising, and inter-firm cooperation, such as joint ventures and strategic alliances); how being an MNE can help firms capture value from their advantages (whether through efficiency, market power or a combination); the interactions between MNEs, regions and nations; the competitiveness of firms, regions and nations; government policies toward MNEs, to include trade, foreign direct investment (FDI), and cluster and other microeconomic and macroeconomic policies that can have an impact on MNE decisions. These aspects of IB are based more on business economics and international political economy (IPE) foundations. They are closely linked to IM concerns (e.g., a badly implemented entry through FDI will lead to failure, even if FDI was the best entry modality theoretically), and they also involve their special considerations. These aspects of IB were the research focus of the present author, who moreover was working at that time on the supply-side (industrial) and catching-up strategies of East Asian countries, such as Japan and the Four Tigers (Hong Kong, Singapore, Korea, Taiwan)—including their attributes and policies towards FDI and MNEs—and compared them to Western policies, and those of the emerging Central and Eastern European “transition” economies. Noreena Hertz, too, was working on international competitiveness issues, in general and particularly in Russia, where she had done work with Michael Porter. Peter Nolan, a founding academic member, was carrying out research on the “global business revolution” in general, and with particular reference to China, on which he is one of the leading Western experts.

The complementarities, both conceptual and regional, were far too obvious for John Child to miss, and following a discussion with the present author the two agreed to create a center with a BA between the CI and the M—leading to CIBAM. The research focus of the center, as a natural result would be:

• The nature, growth, boundaries and strategies of MNEs, to include entry modalities, such as FDI, franchising and joint ventures;
• The competitiveness of firms, regions and nations and government policies toward FDI and MNEs;
• The management of MNEs to include inter-cultural management issues;
• The particularities and comparative analysis of emerging economies, notably China, East Asia, Russia, Central and Eastern Europe vis-à- vis mainly IM, but also IB-related concerns.

Identifying the focus, joint interests and complementarities, and aiming to undertake collaborative research, and research-related activities by building critical mass, is by itself an important enough reason to set up and maintain a research center within a business school—provided the quality of the people and their research interests and focus are sufficiently rigorous and business relevant. But CIBAM was faced with a more specific challenge. At the inaugural meeting in St John’s and after having attended my presentation, Sir Martin simply asked, “and what is in it for me?” This led to the appreciation that thinking one is doing business-relevant research is not enough; research needs to also be perceived as relevant by business. One way to do this is by developing tools (such as Michael Porter’s five-forces model) which distill the essence of academic research but target it specifically to business policy makers. This involves elements of both research and consulting. However, it does remain at arm’s length, so to speak. The academic does the work, and he or she teaches it to, or consults, the business.

While there is nothing wrong with the above, and members of CIBAM certainly do this too, there was and still is debate in business school circles of the need for deeper interaction between business and academia, with each party contributing where they possess comparative advantage and each getting what they need from this collaboration. Starting from the objectives, both business and academics (as well as firms and indeed regions and nations) share one objective in common:to capture value out of their perceived to be value creating and appropriable advantages. What differs is not so much the generic objective, but the metrics—what is being measured. Businesses focus on the bottom line (profit), hopefully subject to this being sustainable for them and the wider community, and they have subsidiary interests on philosophical-academic issues and research, usually to the extent it helps them leverage it for commercial purposes. Academics in business schools aim for maximum impact through rigorous and relevant top-quality research, published in scholarly journals, subject to making a good living out of this activity, in terms of salary and consulting. Wider, societal concerns are often (albeit not always, or perhaps as much as they should) part and parcel of business school research:for example current debates on Corporate Social Responsibility (CSR) and Business Ethics.

One way through which the mutual interests of both parties can be satisfied is by convening high-level events (call them colloquia, symposia, conferences) where the two parties physically meet and exchange ideas on a theme of business relevance. This is not consulting per se; it is not businessfunded research either. Instead, it is a genuine two-way street in which both parties give and take. Academics give state-of-the-art knowledge and rigor. Business provides topicality, immediacy, and foresight. As regards business-relevant research, for example, it is difficult for an academic to be aware of current and emerging (especially immediate) concerns of business. In this context, business academics can get inside knowledge and insight on what are also likely business concerns of the present and near future. For example, at a time when for the present author, declining (but still at around 7%) unemployment seemed to be an economic concern, Sir Martin Sorrell suggested that “talent wars” (the attempt by business to acquire talent) was the critical issue for his business. That led to the fourth (July 2001) symposium, “Talent Wars... Why and How to Compete.”

In addition to possessing more time for research, academics also possess conceptual frameworks that can serve as a lens through which one can analyze, propose solutions and even attempt to predict longer-term trends. Now business academics and economists are notoriously bad of predicting anything in particular with much success, but there are various cases where a decent conceptual framework afforded impressive predictions. An example is the father figure of IB, Stephen Hymer, who, back in the early 1970s, predicted the far more recent trend toward outsourcing (see Cohen et al., 1979), by analyzing the respective disadvantages of integration versus outsourcing and proposing that firms would gradually aim to keep the advantages of both, by removing the disadvantages of outsourcing (the lack of control) by developing brands and maintaining the control of “intangibles” and some tangibles (e.g., the Coca-Cola secret recipe). There are more such examples suggesting that business academics too can be of further value to business.

Ideas such as the above led to the adoption of the Forum; initially named Colloquium, it was subsequently renamed as Symposium (from Plato’s homonymous book) to reflect the fact that the meetings involved not just the interactions of ideas but also the consumption of food and drink, which is far closer to the etymology of the “Symposium” (literally drinking together, from syn = “together” and pinein = “drinking”!). Indeed, there has been lots of drinking and eating since.

Based on the idea that businesses know better what they need to know (an almost tautological statement, yet not necessarily always true, especially on longer-term sustainability-related issues), the decision was for the global advisory board to determine at a board meeting the topics of the Symposia. The result was a resounding success and also rather surprising. It was surprising because some of the issues selected (e.g., ”Ageing” or “Religion”) did not quite strike, originally at least, as being too business-related— rather they looked quite academic, not at least to this author.A resounding success, not least because almost invariably the topics were selected well before (often up to two years) the Symposium, the topics became headline news at just about Symposium time. The Global Financial Crisis Symposium in February 2008 could not be a better example. When the topic was proposed by CIBAM board member Jonathan Garner (managing director, Morgan Stanley), the only interest anyone had on financial markets was how to make more money out of the relentless and apparently endless rally of stocks and house prices. Jonathan instead was seeing clouds—a bear, I thought, albeit he did not appear like one. Two years later, the crisis almost coincided with the Symposium; it was hard to find speakers as some were losing, or moving, jobs; and there was some excitement, concern and, dare I say, panic. Now, economists should be able to predict this (the conceptual lens is definitely there), but few dared—perhaps it is the fear of reputational loss. Jonathan did. This almost spooky predictive capability of the board became a major reason for the success of the events. Others include the venue, the format, the participants—in short the “business model and the “value proposition.”

Much of the above is an evolutionary, learning, trial-and-error process. The first few meetings were one-day events, but soon we moved to a twoday event involving one night stay in Cambridge, starting Friday afternoon and ending Saturday evening with the board meeting. From 2005 we decided to move it to start Thursday evening and finish Friday evening—all in 24 hours, from 5:00 p.m.on Thursday to 5:00 p.m.on Friday, followed by the board meeting.

Concerning the format, early events involved few (four or five) standup talks, mainly by academics followed by some questions—admittedly a rather tedious experience for people traveling from abroad for the purpose. Through a continuous process of learning and (mostly) improvement, the final product involves as many as 15 to 20 speakers, panelists, chairs and discussants, over the 24 hours. There are now panels, as well as stand-up lectures. Speakers are allowed to talk for around half of their allocated time (40 minutes fo...

Table of contents

• Front Cover
• Routledge studies in corporate governance
• Title Page
• Copyright
• Contents
• Illustrations
• 1 CIBAM and the Symposium on “Green Business and Green Values”
• 2 Humans Then, Now, and Looking Ahead
• 3 The End of Gucci Capitalism
• 4 The Energy Challenge
• 5 Economizing,Innovating,and Sustainable Economic Performance A Business School Perspective
• 6 Green Values in Communities How and Why to Engage Individuals with Decarbonization Targets
• 7 Green Business and Green Values A Perspective from Government
• 8 Sustainability of Corporate Profit
• 9 Doing Good Is Good Business
• 10 Demonstrating Goodness
• 11 Sustainable Special Economic Zones
• 12 Considering Green Business and Green Values
• Contributors
• Index