Class notes
Multinational Corporation and Sustainability lecture notes
- Course
- Institution
Lecture notes of MCS
[Show more]
Seller
Follow
femkerooijmans
Content preview
Multinational corporation and sustainability – Lecture notesLecture 1: What is sustainability?
- Dyllick, T., & Muff, K. (2016). Clarifying the meaning of sustainable business: Introducing a typology from business-as-usual to
true business sustainability. Organization & Environment, 29(2), 156-174.
- United Nations Global Compact (2016). The UN Global Compact Ten Principles and the Sustainable Development Goals:
Connecting, Crucially (available at https://unglobalcompact.org/library/4281).
What are MNCs?
- It has to have operations and sub office in different countries around the world
- Important for an MNC’s divided around different locations
What is sustainability?
- What do you associate with sustainability in an MNC context? What companies come to mind when you think about the
concept? shell, non sustainable, doesn’t respect stakeholder
- Really sustainable MNC; Patagonia
‘’Meeting the needs of the present without compromising the ability of future generations to meet their own needs’’ vague,
have to look more closely what sustainability means.
Related concepts:
- CSR
- Corporate citizenship
- Business ethics
- Sustainable development
Sustainability in an MNC context
ENVIRONMENTAL issues SOCIAL issues GOVERNNCE/OTHERS issues
- Emmisions - Respect human rights - ‘Good’ governance: transparent
- Waste: fashion companies, stapels - Fair labor conditions (sweat shop) with their shareholders
kleding worden verbrand - Fair wages - Transparent reporting: consumers,
- Deforestation: aggreculture sector, - Health & safety investment, development of the
produce cosmetics - Diversity & inclusion company, public information.
- Packaging - Combatting corruption ( = minimize
- Energy use: any multinational the consequences of corrupt
especially IT companies offenses)
! This is not an exclusive list! Relevant issues are always dependent on the type of MNC and the sector it operates in.
(Sweat shop: These factories were named "sweatshops" because the employees, mainly women and children, worked long hours
for low pay in terrible conditions that caused them to "sweat" as they worked).
Sustainability in an MNC Context: What challenges are they facing?
HM GOOGLE
Social issues: - Environmental issue: Energy
- Working conditions - Social issues: transparent reporting
- Consumers become more aware of production of clothes - Governance issue: Privacy
shifting mindset underlying problem: fair fashion,
how is fashion actually produced, sweat shop?
- Respecting human rights in their supply chain really
big issue
- Supply chains are complex not always control what is
going on
Environmental issues
- Transport, sending clothes back, overproduction of
clothes, fast fashion company, emissions
- Basic product: water, the chemical process of the colour
of clothes
Interplay between the different challenges ESG?
,Why would MNCs act sustainable? (Rasche, Morsing & Moon, 2017)
1) The ‘business’ case: sustainability as a way to make profit
2) The ‘moral’ case: because ‘it’s the right thing to do’ sustainability report
3) Institutional pressures: imitating competitors’ behavior
4) Reputational reasons: avoiding or responding to pressure from other actors such as NGO’s, media
Dyllick & Muff (2016)
- Business sustainability 1.0: three dimensional concerns
- Business sustainability 2.0: actively the triple bottom line the three different goals are getting in balance.
- Business sustainability 3.0: Starts with a sustainability challenge, outside-in
SDGs MNCs play a huge part in the development in these goals
UN global compact: 10 principles of the UN global compact
- Help companies to be more sustainable
Lecture 2: Value creation for sustainability
- Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the value of “creating shared value”. California
Management Review, 56(2), 130-153.
- Levänen, J., Hossain, M., & Wierenga, M. (2022). Frugal innovation in the midst of societal and operational pressures.
Journal of Cleaner Production, 347, 131308.
- Porter, M. E. & Kramer. M. R. (2011). Creating Shared Value. Harvard Business Review, 89, 62–77.
Value creation for sustainability =
The process by which companies produce goods, services, or other outputs that are valuable to customers, stakeholders, and the
organization itself. This encompasses activities that enhance the worth of products or services, thereby contributing to the
company’s success” (Miller, 2002).
Creating shared value
“Shared value involves creating economic value in a way that also creates value for society by addressing its needs and
challenges” (Porter & Kramer, 2011, p. 4)
“The sweet spots where companies can create value for themselves and for society” (Vallentin & Spence, 2017, p. 69)
- While making profit, voldoen aan social needs / society creating shared value
How to create value Key question
1. Re-conceive products and markets Is the product good for our consumers?
2. Redefine productivity in the value chain How can externalities be addressed to create social value and
avoid economic costs?
3. Enable local cluster development How can addressing gaps in a cluster’s framework conditions
improve productivity
How to create shared value
1. Re-conceive products and markets
- Bottom of the period, not the purchasing power
- Shared valued to be created finding new ways to develop products, and making profit of them and doing it in a way to
create shared value for society
2. Redefine productivity in the value chain
- Fair trade help them protect sustainability tracks
- Block chain to trace products through the supply chain reduce logistical issues, want to have less problems
- Value chains become transparent customers can make decisions about the product they buy creating societal value
- How to reorganize value chain with societal concerns
3. Enable local cluster development
- Companies realizing operating in a broader community improving housing conditions,
- Google created an investment fund for the areas they operate in for better housing.
- Companies are organizing clean up events rivers, environment, community becomes more green
- Company realizing
- Community becomes more attractiveness employees have a reason to stay here, giving something back to the community
- creating shared value
,CSR vs CSV
- CSV is more profound way of doing business
Criticism to the CSV concept
According to Crane et al. (2014), CSV is,.
- CSV is unoriginal
- It ignores the tensions between social and economic goals: shared value
- It is naïve about the challenges of business compliance ( = pretending any company replies to regulation, is not the case a
lot of companies actively avoid taxes, less stricted regulated, producing in countries (Bangladesh) where the governmental
regulations are not present, enforcement of law is not there, they cant appl)
- It is based on a shallow conception of a company’s role in society (= win-win opportunity for companies, there is not a good
idea behind new product)
Punt 4 in more detail:
, TABEL LECTURE:
Three grades of sustainability behaviour: Business sustainability 3.0: Outside-in If we look at the defisniion of sus: BOP
products might be helpful now addressing long term perspective, we consider it critical zeep voorbeeld, goed dat ze met
zeep kunnen wassen, alleen ze hebben nog steeds geen water. QUICK FIXES.
- Considering the typology of sustainability behavior discussed in the first lecture, and the definition of sustainability, can we
consider it an act of “true” sustainability if MNCs design products specifically for the BOP market? Why, why not?
- “Meeting the needs of the present without compromising the ability of future generations to meet their own needs” (UN
Brundtland Commission)
Levanen et al. (2022)
- What pressures are relevant?
Frugal innovations
- “A novel offering that is radically more resource-efficient than current alternatives and still accessible and user-friendly
especially to low-income customers” (Hossain, 2018; von Janda et al., 2020).
- Can we compare this to the ways of creating shard value as defined by Porter & Kramer (2011)? If so, which one?
An analytical model
Which sustainability challenges give rise - What promise for the customers? What operational pressures does the
to the innovation? E.g. poverty, hunger, - How is it organized, i.e. what company face in the process in the
education, etc. activities? innovation process?
- How does the company generate
revenue from these activities?
Methods and data
Cases of frugal innovation:
1. Mitticool (clay fridge)
2. Jayashree (low cost napkins)
3. Ksheera (low cost milking machines)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller femkerooijmans. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.78. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75057 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now