Cata Ratiu weblog*Sustainability in multinationals: do subsidiaries matter?As a matter of fact, they matter a lot.
Take the examples of two subsidiaries of Shell: Canada and South Africa.
In a recent book chapter with Rick Molz, we show how autonomy, decentralization and credibility of the subsidiaries played a key role in their respective abilities to generate valuable strategies.
In the early 1990s, the Canadian subsidiary was among the first organizations worldwide, to define and refine environmental reporting standards, which were adopted not only by other Shell subsidiaries, but also by the industry. This is not small feat. Environmental reporting is an opportunity for companies to showcase their achievements in the area of sustainability. Shell's role in defining standards practices for reporting is recognized as a major contribution.
On the other hand, the South African subsidiary was less invested with autonomy and decentralization, thus unprepared to deal with new trends in the local environment that affected its legitimacy. When hit by a crisis, local managers, although prepared and knowledgeable, were not autonomous enough to act and generate coherent and locally-sensitive strategy. As a result, problems escalated, and the social and environmental crisis that ensued had significant effects on the company globally.
Clearly, there is a lesson here about the need to engage with all areas of the organization, to generate valuable strategies, and not discount knowledge from less central units.
To learn more, read our chapter.
3 Major Trends on Sustainability and the WorkplaceSustainability has come a long way from the fringe of organizational life, to its center. More organizations understand the key opportunities of sustainability, and reformulate strategies to match them. But sustainability is not just boardroom jargon; it's a way of doing business that has been adopted throughout organizations, with most initiatives coming from the ground up, either within organizations or in 'born responsible' social enterprises. What, then, should you know about sustainability in the workplace? 1. Green collar jobs are increasing Policies and public demand continue to increase interest in greening human activity. From renewable energy, technology, and environmental management, to social entrepreneurship and innovative collaborative organizational forms, the number of jobs designed around sustainable principles are increasing. New hires have unprecedented opportunities to define their role within organizations seeking to innovate their business models. 2. Green literacy is imperative (not conditional) Environmental studies used to be a specialized and often isolated degree in universities. Not anymore. We have come to understand the effect of human activity on other life systems around us. As a result, sustainability as an integrative discipline is making its way to the center of our studies. It has become a lens through which all activity is being considered. Green literacy, then, is key to understanding the demands and opportunities of the twentyfirst century. 3. Green leaders are young The current generation of students are literate in sustainability, globalization and technology far beyond previous generations. This is not unlike the computer literacy that created a generation gap two decades ago. The 'green' generational gap, impacts the pedagogical process, management training in corporations, and organizational development. Can organizational leaders keep up? Will they recognize young minds for their potential to bring innovative thinking in the workplace, or will they attempt to fit them in an inert organizational culture. Furthermore, will today's new ventures started by these young green leaders take on the corporate giants within the next decade?
Making green choices that stickAccept and work with long-term horizons Catalin Ratiu, John Molson School of Business, Montreal, Financial Post National Post, May 18, 2010, Financial Post p.11 With high demands on businesses to green their act, many find it difficult to choose initiatives that have the most impact both on bottom line and carbon footprint. As a result, companies resort to tried-and-true, though often costly, marketing campaigns to influence customer perception about their sustainability efforts, but do not follow up with investments in substantive initiatives. Whether or not you are interested in climate change theories, it is increasingly difficult to disagree that making smart green choices can have a net positive impact on the bottom line. Why, then, do so many companies treat their environmental performance as a marketing and not a strategic issue? And why do so many invest in initiatives that turn out not to stick and end up scrapped- -sunk costs and all? The answer to this puzzle is likely inside your company, and in how it approaches the development of green initiatives. In the past year I have examined how public transit authorities develop sustainability initiatives in more than 50 urban and metro areas around Canada and the United States. I found that the most proactive organizations have a few things in common. This setting is particularly appealing, because transit authorities are not under the same pressures from environmental groups as business firms. In fact, they are viewed favourably as part of the solution to rampant pollution and traffic congestion. Hence, many have had the freedom to experiment with a wide range of green initiatives and their lessons might be useful to corporations. So how are green initiatives developed and what lessons can be passed to your organization? A first lesson is to start by working with a wide range of actors inside and outside the organization. Successful public transit authorities consult with scientists, policymakers, business leaders, and customers, all in an effort to anticipate what is called for in their activity sector. By engaging actively with a broad range of stakeholders, they can effectively develop services that address the most pressing concerns. Second, develop processes of anticipation and foresight. Most companies use financial forecasting tools and these are useful to understand the viability of investments. But they do not provide any input into the strategic viability of environmental initiatives. Keep in mind that sustainability sciences are evolving, and new issues are brought up constantly. Anticipating sustainability issues of relevance to your business involves learning about current concerns with an eye for opportunities. In the public transit sector, initiatives that stuck were usually born out of an anticipated need or issue outside the organization. A third important characteristic of successfully implemented initiatives is to accept and work with long- term horizons. This is more easily observed in public transit than other industries, because pressures for greening are typically lower. This allows them to take more time to develop high-impact initiatives. Meanwhile, this is a good reminder that changing the corporate environment to accommodate a broad, deeply embedded initiative takes time. But the returns on investment are promising. In addition to increased operational efficiencies from better use of energy and other technologies, successful organizations reported organization-wide benefits, such as the acquisition of new skills and knowledge. Moreover, front-runners of sustainable initiatives are trend setters, who distinguish themselves and contribute to the development of standards. In so doing, they develop new areas of expertise that help diversify into new and emerging industries. Finally, sustainable initiatives that stick are strategic not tactical. We all wish to positively impact the world around us, and the various choices we make daily while conducting business have great potential in doing just that. - Catalin Ratiu is a PhD candidate at the John Molson School of Business, Concordia University in Montreal.
Online at: http://www.financialpost.com/story.html?id=3040098#ixzz0oITQ4vBu Judith Walls (DOCSE fellow) featured in the pressNew JMSB prof sees big value in being greenJudith Walls brings experience and perspective in advancing sustainabilityBy Russ Cooper Judith Walls, JMSB professor of management specializing in corporate and social responsibility, is encouraged by the enthusiasm for sustainable thinking at Concordia, both among students and administrators, with its inclusion into the university’s priorities. “There’s a lot of support for sustainable initiatives here and it’s great,” she says. “Sustainability is not a fad. It’s something that needs to be studied and shared with students because they’re the ones going out in the world and managing the future.” Walls, who arrived here in July after a two-year post-doc at the Erb Institute for Sustainable Enterprise at the University of Michigan, is a key part of the David O’Brien Centre for Sustainable Enterprise. Her research focuses on the habits of many of the world’s ‘dirty’ corporations with the greatest negative environmental impact; those in mining, manufacturing and chemicals. Essentially, Walls looks closely at three aspects of a given company’s governance over its environmental efforts: pressures exerted by institutional investors; oversight of directors (such as board structure and the social connections of board members with other environmentally-minded companies); and the role of top management’s beliefs and values. In 2003, Walls, a native of the Netherlands, began examining what skills companies were building as disclosed in their annual environmental reports to the public. The research, part of her PhD in Strategic Management at the Rensselaer Polytechnic Institute (RPI) in Troy, N.Y. focused on corporations listed on the Standard and Poor’s 500 Index (3M, Anheuser Busch, Dow Chemical and Boeing among them). At that time, she found there was little incentive for companies to announce their environmental endeavours – only about 38% of companies were reporting their efforts. Now, thanks to a grant from the O’Brien Centre, she’s updating the results. With the help of PhD student Catalin Ratiu, she’s comparing the efforts of the same companies to see if there’s been any improvement in their environmental skills since 2003.
Read more: http://cjournal.concordia.ca/archives/20100401/new_jmsb_prof_sees_big_value_in_being_green.phpMEDIU ÎNCONJURĂTOR | Designul ecologic
Inauguration of the David O'Brien Centre for Sustainable Enterprise
On November 16, I attended the private reception celebrating the inauguration of the David 'Brien Centre for Sustainable Enterprise [http://sn.im/tc9ef]. The Center is affiliated with the John Molson School of Business and has been created as a result of a gift from David O'Brien -- now chairman of RBC and Encana, also known for his tenure at Canadian Pacific Ltd., and several companies in the oil and gas industry in Western Canada.
The Center cements JMSB's vision of becoming one of the principal resources of sustainable business knowledge in North America. Paul Shrivastava, the director of the Center, gave a heartfelt speech which outlined an agenda for how the next few years may change not only the Center but the business school as well. While the school has made significant steps towards becoming a sustainability research leader (building a LEED-certified ivory tower and hiring faculty members specializing on the topic, among other things), the Center promises to take it much further in this journey.
Evolutionary change of organizations (Accent Montreal)Article originally published in Accent Montreal nr. 32Summary: This article is based on a conversation I had with Eva Halus (Accent Montreal) on the evolutionary change of organizations. I presented a paper on the topic in Cyprus, in 2008 (see the Conferences section of this page).>>
Wednesday, October 14, 2009 at 2:18pmMEDIU ÎNCONJURĂTOR | Schimbarea evoluţionară a companiilor către o dezvoltare durabilă Conceptul de schimbare evoluţionară aplicat la nivelul unei organizaţii este unul nou. Vi-l prezentăm pe scurt în acest număr, având ca ghid lucrarea d-lui Cătălin Raţiu intitulată Evolutionary Change of Organizations in the Natural Environment (Schimbarea evoluţionară a organizaţiilor în acord cu mediul) care a fost susţinută în mai 2008 la Nicosia (Cipru). Lucrarea respectivă este o încercare de teoretizare pe marginea felului în care se operează schimbarea către o dezvoltare durabilă la nivelul organizaţional al unei companii. Conceptul de dezvoltare durabilă este folosit în accepţiunea sa consacrată, care se referă la o creştere economică ce ţine cont de aspectele ecologice şi culturale ale unei planete globalizate, cu economii interdependente. În trecut, o schimbare radicală se referea la strategia şi procesele necesare pentru ca o companie să pătrundă într-o nouă industrie. Acesta nu era însă un adevărat pas spre durabilitate, schimbările radicale creând de obicei perioade de instabilitate. Companiile erau deconectate de mediul înconjurător, înţeles şi reprezentat de persoanele fizice sau juridice implicate în acest proces, care urmăreau un avantaj. Schimbarea evoluţionară propune o metodă prin care o companie se dezvoltă în funcţie de mediul înconjurător. În acest caz, mentalitatea de a face lucrurile este diferită: companiile nu sunt imaginate ca nişte insule, ca nişte entităţi izolate, ci sunt interdependente şi sensibile la cerinţele economiei moderne şi ale pieţei, luând totodată măsuri pentru protecţia mediului înconjurător. De exemplu, Societatea de Transport Comun din Montreal, despre care am vorbit în numărul 29 al acestui ziar (disponibil la www.accentmontreal.com), care prin acţiunile întreprinse arată înţelegere faţă de ecosistem, schimbându-şi tacticile pentru a opera durabil. Putem spune că acesta nu este un caz singular, căci din ce în ce mai multe companii aderă sau au aderat deja la schimbarea evoluţionară către durabilitate. Standarde industriale În prezent nu există un tribunal al mediului care să condamne eventualele pagube făcute de diverse companii mediului înconjurător. Există însă aşa numitele standarde industriale, ca de exemplu seria ISO ( International Standards Organisation) care certifică faptul că o firmă recunoaşte sistemul managementul mediului înconjurător şi îl incorporează în mod explicit în activităţile ei. În domeniul construcţiilor există certificarea LEED (Leadership in Energy and Environmental Design) de bronz (certified), argint, aur şi platină. Exemple: Certificatul ISO 14001 al companiei Toyota pentru toate cele şapte locaţii ale sale în SUA şi Canada, care ajută la promovarea produselor companiei; Certificatul LEED de bronz al noii clădiri John Molson School of Business (Universitatea Concordia), a cărei construcţie dovedeşte o preocupare pentru durabilitate, reciclând energia, nefolosind mult curent electric, având un acoperiş verde şi debarasându-se de deşeuri într-un mod „prietenos” faţă de mediu (friendly ecologic). De menţionat că singura clădire canadiană cu certificare LEED de platină aparţine Universităţii din Calgary. Cele mai evoluate ţări în materie de durabilitate Montrealul încearcă să fie un pionier în domeniul ecologic, dar nu este cel mai dezvoltat oraş în sensul acesta. Pe primele locuri se situează localităţi din ţările Europei de Nord, precum Danemarca, Suedia, Norvegia, la care se adaugă şi Elveția. Pentru aceste ţări preocupările ecologice sunt la ordinea zilei de câteva decenii deja. De exemplu, în Danemarca există un sat care foloseşte pentru încălzire gazul metan provenit din deşeurile organice. Acest lucru este posibil datorită instalării unui sistem care separă deşeurile organice de restul deşeurilor, captând apoi gazele emanate de acestea pentru folosirea lor la încălzire şi alte treburi menajere. În ceea ce priveşte Montrealul, trebuie spus că şi aici abc-ul reciclajului şi al durabilităţii este învăţat încă din primii ani de şcoală. Locuitorii Montrealului se folosesc de bacuri de reciclaj, ordinatoarele sunt în multe cazuri şi ele reciclate şi, în ansamblu, numeroase companii optează pentru schimbarea evoluţionară către durabilitate. Faptul că populaţia tânără este foarte receptivă la măsurile ecologice este un pas înainte spre viitorul unui echilibru între activitatea umană şi mediu. Prin intermediul acestei rubrici dorim să vă facem cunoscute eforturile care se fac în acest sens şi să vă încurajăm în asumarea responsabilităţii faţă de mediul înconjurător. Cătălin Raţiu este profesor la Universitatea McGill şi doctorand la John Molson School of Business de la Universitatea Concordia. El deţine un MBA de la Western Kentucky University (Kentucky, USA) şi o bogată experienţă în consultanţă legală şi de management în Europa şi Nord America. S-a stabilit în Quebec în urma unei vizite efectuate cu scopul de a studia şi a scrie despre mediul de afaceri de aici. Cătălin Raţiu face parte din Montreal Local Global Research Group. www.localglobalresearch.org. EVA HALUS, Accent Montreal nr. 32, 9 octombrie 2009 www.accentmontreal.com John
Molson School of Business (de Maisonneuve colţ cu Guy, Montreal),
clădire nou construită şi dată în folosinţă (septembrie 2009) care a
obţinut certificarea LEED.
Local Global dynamics (Accent Montreal)Article originally published in Accent Montreal, nr.31 >>> MANAGEMENTUL MEDIULUI ÎNCONJURĂTOR Dinamica dintre economia locală şi cea globală - EVA HALUS,Acum, la primele accente de toamnă, continuăm seria de explorări legate de mediul înconjurător, trecând de la „gesturile verzi” ale diverselor organizaţii şi companii din Montreal la precizări despre dezvoltarea durabilă (sustainable development/ dévélopement durable). Scopul este de a vedea - prin prisma managementului mediului şi a resurselor - care sunt conceptele necesare pentru dezvoltarea oricărui tip de afacere în acord cu Planeta Albastră. Planificarea, echilibrul cu ecosistemul, impactul social, cultural, ecologic şi justiţia ecologică sunt câteva dintre temele pe care vi le propunem.Pentru început, am stat de vorbă cu dl. Cătălin Raţiu, specialist în domeniul dezvoltării durabile, al managementul strategic şi internaţional şi al politicilor publice, despre economiile emergente din ţările în curs de dezvoltare. Punctul de plecare l-a constituit cartea The Multinational Enterprise in Developing Countries, care va fi publicată în 2010 şi care este bazată pe cercetările grupului Montreal Local Global Research, din care dl. Raţiu face parte. Cartea respectivă este unică prin faptul că aprofundează, pentru prima oară, ideea de dinamică între local şi global din punct de vedere al interacţiunii dintre economiile locale ale ţărilor în curs de dezvoltare şi firmele multinaţionale, care au o logică economică globală. Această interacţiune este de multe ori acompaniată de tensiuni. Bref, economia locală are la bază mentalitatea tradiţională a locului, pe când cea globală are o unitate de măsură neo-clasică, denumită mentalitate economică. Exemplul comerţului cu cafea pune în lumină aceşti doi termeni: legea predominantă a producătorului (furnizorului) este logica (mentalitatea) locală, legată de tradiţiile locului; distribuitorii cafelei în diverse ţări au la origine mentalitatea econo-mică globală.Local vs. global: un exemplu din România România ocupă un loc special în dezvoltarea economiei globale, deţinând resurse tangibile importante (zăcăminte, materii prime, etc.) dar şi resurse intangibile, cum ar fi talentul. Există în România o piaţă de talent fantastică datorată unei educaţii bune şi ambiţiei de a fi cotat la o valoare înaltă. Talentul românesc este apreciat şi folosit de firme din toată lumea, ceea ce reprezintă un avantaj competitiv faţă de unele ţări din Africa şi America Latină. Chile, de exemplu, vinde resurse tangibile, precum vinuri, struguri şi mai nou zăcăminte de sare, şi are o intelectualitate bogată. România însă are situaţia privilegiată de a oferi o plajă mult mai variată de resurse şi capacităţi.Uneori, în dinamica de la local la global problema poate fi pusă şi invers. De exemplu, unele state europene cumpără lemn sau terenuri din România şi astfel pădurile româneşti sunt defrişate în număr din ce în ce mai mare. Ce se va întâmpla în aceste condiţii cu pădurile României depinde de cât de conştientă este populaţia de valoarea resurselor naturale ale ţării. Aici intervine problema durabilităţii. Într-o ţară cum este Canada există o conştiinţă la nivel naţional care condamnă exploatarea excesivă sau haotică a pădurilor. În România nu există încă o conştiinţă socială în acest sens, cel puţin nu acolo unde trebuie. În momentul în care forţele econo-mice ale altor state intervin în economia locală a României, aceasta trebuie să înţeleagă ce capital valoros de resurse naturale are, comparativ cu alte ţări dezvoltate din Vest care nu mai deţin acest tip de capital. Exemplul de mai sus arată tensiunile care se creează între o logică locală şi una globală, care vine şi schimbă tradiţia economică a unei ţări sau regiuni. Echilibrul între aceste două tipuri de mentalităţi economice este important, niciuna nu trebuie să domine, dar nu trebuie uitat, aşa cum preciza Cătălin Raţiu, că localul are legitimitate în faţa globalului, după cum reiese şi din exemplul pădurilor româneşti.Cătălin Raţiu este profesor la Universitatea McGill şi doctorand la John Molson School of Business de la Universitatea Concordia. Deţine un MBA de la Western Kentucky University (Kentucky, USA) şi o bogată experienţă în consultanţă legală şi de management în Europa şi Nord America. S-a stabilit în Quebec în urma unei vizite efectuate aici cu scopul de a studia şi a scrie despre mediul de afaceri din Quebec. Cătălin Raţiu face parte din Montreal Local Global Research Group. Mai multe despre studiile acestui grup la www.localglobalresearch.org. MLGRG conference 2009As coordinator for the first conference of the Montreal Local Global Research Group, I spoke with Karen Herland (Concordia Journal) about the event. Below is the article which originally appeared in the Concordia Journal on Sept 3, 2009
Local-global researchBy Karen Herland International development requires financial resources leading to great potential for culture clashes. Last month, the Montreal Local-Global Research Group (MLGRG) hosted its first conference. The goal was to bring researchers and corporate executives together to compare notes and consider the question from different perspectives. It was also the first major event to be held in the glossy new MB Building, which will be formally opened later this month. The MLGRG was founded five years ago by JMSB Management professors Rick Molz and Mehdi Farashahi, with Taieb Hafsi from HEC, to examine the challenges related to local/global dynamics. Claude Marcotte, of the JMSB management department, joined his colleagues soon after the group formed. The MLGRG has expanded to include researchers from more than seven universities and graduate students from all four universities in Montreal. “People often research developing countries without taking into account the tensions between local populations and corporations,” said PhD candidate Catalin Ratiu of the group he has participated in for some time now. Over 60 registrants gathered to hear two academics and four multinational executives on the theme Multinational Corporations in Developing and Emerging Economies: Local-global dynamics and organizational adaptation. “This event was the first of its kind to create an effective bridge between practitioners and researchers,” said Farashahi. “These kinds of events help researchers to direct their research activities toward the actual needs of multinational corporations in developing and emerging economies and obviously help executives to better understand and implement the most effective and available frameworks tested by researchers in their decision making processes.” Until now, the MLGRG has hosted special sessions or events within the context of larger international conferences such as the Academy of Management. Ratiu thinks the success of this inaugural event was in part due to the LGRG itself. “One of the strengths of the group is that it represents a good mix of developing and developed countries. We have researchers representing Egypt, Tunisia, Iran, Morocco, Russia, Brazil, China and Romania, among others.” The conference attracted academics, students, executives and EMBA alumni. Ratiu characterized the “blend of academics and decision-makers in emerging economies” as positive. The conference was discussion-focused “we planned for three hours of discussion time throughout the day” which allowed those on the ground to feed, and in some cases challenge, research theses. Farashahi sees this kind of interaction between researchers and practitioners as necessary in the context of business schools, The MLGRG is already thinking about future events. Deciding sustainably
An interesting new book which reaches to executives not necessarily familiar with all aspects of sustainability, and offers quick reference for decision making.From the press release:
Business Expert Press (BEP) is pleased to announce the release of “Sustainable Business: An Executive's Primer” authored by Nancy E. Landrum and Sandra Edwards. This book offers an overview of how sustainability is applied throughout the organization. Chapters are organized by familiar departments or functions of the business and cover the applications and terminology of sustainability throughout each area. Whether you are an executive, an entrepreneur, an employee, or a business student, this book will help you understand the big picture of what it means to be a sustainable business and will give you the information you need to begin your journey toward sustainability. You can read more about this new BEP release at [ http://www.businessexpertpress.com/books/sustainable-business-executives-primer ]http://www.businessexpertpress.com/books/sustainable-business-executives-primer. |
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