March 3, 2016
Owen Graduate School of Management
VANDERBILT UNIVERSITY
Management 423
Module 4, Spring 2008
Mon/Wed. 9:40-11:10 AM Room 220
Office Hours by appt.
Professor Mark Cohen
301 Management Hall
Phone: (615) 322-6814
email: mark.cohen(at)owen.vanderbilt.edu
Corporate Strategies for Environmental & Social Responsibility
“Environmental management” and “corporate social responsibility” have traditionally been
viewed as necessary evils that add to the cost structure of business. In this old model, government
regulations, threats of consumer boycotts, and other forms of coercive activities are the driving
force behind compliance and socially responsible behavior. Sometimes firms would go beyond
what was legally required, but that would generally be due to either guilt or a genuine desire to
do good deeds through philanthropy. Regardless, these activities were simply viewed as a cost of
doing business – not a business opportunity.
More recently, some firms have begun to shed this old view of environmental and social issues
and to embrace socially responsible behavior as a competitive strategy. Rather than treating the
environment and social issues as an added cost, they view them as added opportunities to
differentiate themselves in a competitive marketplace. For these companies, environmental and
social responsibilities are integrated into the core business functions and strategies of the
company, and these concepts help them obtain and maintain a competitive advantage.
This course will explore this growing trend and its implications for business in today’s world and
beyond. We will explore what leading companies are doing in areas such as fair wages, privacy
concerns, affirmative action, sexual harassment, employee rights, worker safety, consumer safety,
animal testing, human rights and environmental considerations. Particular attention will be paid
to understanding whether or not these activities provide firms with a competitive advantage in
the marketplace.
The course will be primarily case-based and will involve a significant amount of student
interaction and group work. Students are expected to come to class and to be prepared by
reading material in advance of class. Class participation is a significant part of the grade
for this course and students will be cold called. Be prepared.
Grading weights:
Class participation & peer evaluation
Case write-ups (4 x 10%)
Group project
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30%
40%
30%
Group Case Write-Ups
There are 5 cases being covered throughout the course. Students are expected to read all cases.
However, each group will only hand in 4 cases (There are 2 cases on Wednesday, April 9 – you
choose which one to write-up). Case write-ups should generally be 2-3 pages, plus any figures or
charts you want to add. You should directly answer the questions in the syllabus. They are due at
the beginning of the class when they are being discussed.
Group Project
Students should form groups of 3 or 4. While you are free to form your own group, each group
must contain at least one non-native English speaking student. I reserve the right to move
students around to ensure that all class members have a group to work with.
You have been hired as a consultant to the newly appointed CEO of a large publicly traded
company. She has heard a lot about Corporate Social Responsibility over the past few years but
doesn’t know much about her company’s CSR strategy (if any!). She has asked you to prepare a
presentation and a paper that analyzes the company’s CSR strategy and compares it to two of
their competitors. Like any consultant, you should conclude with recommendations.
The basic idea for this project is to analyze the CSR strategy of one company and to determine
how this strategy compares to two of its competitors. The paper should take an objective look at
the CSR reporting of the company as well as how it integrates CSR into its core business
strategy.
Obviously, your primary source of data is likely to be the company website – most companies
now have some section on CSR on their websites. Other sources: Look at the GRI website for
companies that indicate they are using the GRI Guidelines (www.globalreporting.org). Another
site that maintains a database of reports is maintained at: http://www.csrwire.com/csr/home.mpl.
Finally, a great site is at the Roberts Environmental Center at Claremont McKenna College
(http://www.roberts.mckenna.edu/) which rates companies from the perspective of how extensive
their reporting is. This might also be a good resource for comparing companies – although I am
not just interested in “how much they report,” but want you to go beyond that and compare their
approaches to CSR. There is also nothing wrong with contacting the company directly and
interviewing someone on their CSR or environmental staff.
While you should feel free to conduct your own analysis, let me offer a few ideas on how you
might go about this project. One of the things you might look at is the narrative statement from
top management – are they focusing on compliance or are they forward looking and strategic?
Does their portrayal of CSR look like window dressing or does it appear to be a serious effort to
engage stakeholders and to integrate the company’s business strategy with its CSR strategy?
What do they do to engage stakeholders? Does the company have partnerships with NGOs? Does
the CSR report and/or website include both good and bad? Is the information accessible? In
addition to looking at two competitors, you should see what the company’s stakeholders are
saying about it. Look for “anti-company” websites, external ratings of companies, press releases,
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etc. Do you find the company to be engaging directly with stakeholder groups or are they kept at
arms length? This analysis should then be done for two of the company’s competitors.
The final paper should be in the form of a consultant’s report to the company’s top management.
Tell them how they are doing on CSR issues and how they compare with their competitors. What
recommendations would you have for the company? The paper should be no more than 15
written pages double-spaced (plus any accompanying charts or attachments).
Course Honor Code Policy
Students are bound by the Honor Code and the following specific guidelines for all work
completed in this course.

Group work: All assignments in this course will be completed in “designated groups.” As
such, all steps of the assignment are to be carried out solely by members of the designated
group. That means group members should not discuss the assignment with students
outside their group – including generating ideas, general discussions about the
assignment, sharing of research, drafting the final work product, etc.
If you are in doubt as to the type or amount of collaboration allowed on an
assignment, it is always your responsibility to consult with the faculty member who
made the assignment.




Data Sources and Tools
(a)
Cases: When writing up a case assignment, you should not conduct any research
outside the case or the materials otherwise assigned or provided to you in class.
Thus, you should not attempt to follow-up on the case to see what happened or go
beyond any of the facts in the case. Each student is responsible for following
assignment instructions
(b)
Group Project: Obviously, this requires outside research and you are free to use
any source available with the following exceptions: (i) You may not consult with
current or former students outside your group, (ii) You may not consult with any
other paper written by a student or professional that is designed to assist students
in writing term papers or otherwise to help them on such school project.
Plagiarism, which includes the unauthorized use of previous years’ materials (e.g.,
examinations, case analyses, homework assignments, etc.), is a violation of the Honor
Code.
Written deliverables must use appropriate citations to signify when arguments
or analyses rely on the ideas or insights of others, including any of the readings in the
classpack or external sources (including websites). If you are uncertain about whether
or not something should be placed in quotation marks and/or cited, it probably
should be!
Any use of analyses or any other material in any format from other sections of this course
or a similar course taught at any time in the past, at Vanderbilt, other universities, or the
Internet, is a violation of the Honor Code.
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

Laptop Use: Laptop use in class is disruptive to your fellow students and to me.
Laptops are to be turned OFF and CLOSED during class. I do not like to embarrass
people in class, but I will call you out for using your laptop. After the first warning,
I will begin to take this into account in your “class participation” grade. In rare
circumstances, upon request, I may allow individuals to use their laptops for note taking
or following class overheads. However, taking advantage of this privilege to use the
laptop for other reasons will result in even harsher penalties!
Above all, maintain your personal integrity.
Please ask your professor (and not other students) if you have any questions regarding how
the Honor Code applies to this course.
COURSE OUTLINE AND SYLLABUS
Class 1. (Monday, March 10) - Introduction to CSR
FILM “Corporate Social Responsibility: From Principles to Profit”
Class 2. (Wed, March 12) - Strategic CSR
“The Link Between Competitive Advantage and Corporate Social Responsibility,”
Michael E. Porter and Mark R. Kramer, Harvard Business Review, December 2006, pp.
1-14. (Blackboard)
“Rethinking the Social Responsibility of Business,” A debate between Milton Friedman,
John Mackey (Whole Foods), and T.J. Rodgers (Cypress Semiconductor), October 2005,
available at: http://www.reason.com/0510/fe.mf.rethinking.shtml.
Be prepared to discuss the following questions:
(1) What is the Social Responsibility of Business? Do you agree with Mackey or
Friedman?
(2) Can social responsibility be a sustainable competitive advantage?
(3) What do Porter and Kramer believe is wrong with the way most companies view
corporate social responsibility?
(4) What are the three types of social issues Porter and Kramer identify? Do you think
this is a useful characterization and which one should a company focus on?
(5) What are the risks associated with “measuring social impact” instead of “measuring
stakeholder satisfaction” as they propose?
Class 3. (Mon, March 17) Doing Well by Being Good?
“Beyond the Green Corporation…” by Pete Engardio, Business Week (cover story),
January 29, 2007.
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“The 100 Best Corporate Citizens,” Business Ethics (available at: http://www.businessethics.com/BE100_all.
“Use of Extra-Financial Information by Research Analysts and Investment Managers,”
European Centre for Corporate Engagement, March 2007. Can be downloaded directly
from: http://www.corporate-engagement.com/ [Read Executive Summary and skim
remainder of report...]
Be prepared to discuss the following questions:
(1) How does the social performance of a company affect consumer demand for its
product? Does this apply to intermediate products as well?
(2) Do you think firms can do well financially by doing good? Does this apply to all
firms?
(3) Do you think some firms spend “too much” on CSR activities to the detriment of
shareholder value? If so, how would you explain?
Class 4 (Wed, March 19) Codes of Conduct, International Standards, Transparency
(1) CERES
http://www.ceres.org/coalitionandcompanies/principles.php
[ You can also browse through the list of member companies, etc. at:
http://www.ceres.org/ceres/
`
(2) Global Compact
http://www.globalcompact.org/AboutTheGC/TheTenPrinciples/index.html
http://www.globalcompact.org/AboutTheGC/faq.html
(3) Global Reporting Initiative
See:
http://www.globalreporting.org/ReportingFramework/AboutG3/
and
http://www.globalreporting.org/NR/rdonlyres/DDB9A2EA-7715-4E1A-9047FD2FA8032762/0/G3_QuickReferenceSheet.pdf
Another good source of information is the 2005 KPMG Survey of Corporate
Sustainability Reports:
http://www.kpmg.com/nr/rdonlyres/66422f7f-35ad-4256-9bf8f36facca9164/0/kpmgintlcrsurvey2005.pdf
Discussion Questions (not to be handed in):
(1) If you are the head of a major multinational conglomerate, would you have any
qualms about signing the CERES Principles? If so, what exact provisions or wording
would you be concerned about? What about the Global Compact?
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(2) Why do you think that only a handful of companies have signed on to the CERES
Principles? What about the Global Compact?
(3) What difficulties do you see in implementing the GRI or other similar reporting
standards? What type of companies do you think would support such efforts? Why?
(4) Do you think the SEC should require firms to issue annual corporate “sustainability”
reports similar to the annual financial reports they currently require?
Class 5 (Mon, March 24) - “Green” Consumers: Who are they? What do they want? Will
they pay?
Jacquelyn A. Ottman, Green Marketing: Opportunities for Innovation, Chapters 1, 2 and 3.
Available at: http://www.greenmarketing.com/Green_Marketing_Book/contents.html
Jill Meredith Ginsberg and Paul N. Bloom, “Choosing the Right Green Marketing
Strategy,” Sloan Management Review, Fall 2004, pg. 79-84. [Blackboard]
Discussion Questions (not to be handed in):
(1) How do you know whether or not a product is “green”? Who should decide what a
green product is? Is greener better?
(2) What is the profile of the typical “green” consumer?
(3) Do you think you can sell “green” products to “basic browns” or to “grousers”? Why or
why not & what type of products?
(4) What do you think Roper would find if they did similar surveys in Poland? Norway?
Nigeria?
(5) How would you determine whether a green marketing claim is “greenwashing?”
Class 6 (Wednesday, March 26) - The Path to Corporate Responsibility: From
Confrontation to Collaboration
“The Path to Corporate Responsibility,” Simon Zadek, Harvard Business Review,
December 2004. (Blackboard)
Anatomy of a Corporate Campaign: Rainforest Action Network and Citigroup (A),
(B) [IND #1]
Homework Case #1 Questions (and be prepared to discuss in class):
(1) Was Citigroup a good or bad target for RAN? Why not focus on the project
contractors? What about focusing on the governments that host these projects?
(2) What harm can RAN realistically hope to impose on Citigroup? How would you
assess Citigroup’s risk?
(3) Was Citigroup’s approach (keep talking, but not negotiating; keep away RAN away
from top management) a wise one? Should it begin serious negotiations now?
(4) Which of Zadek’s five ‘stages’ of organizational learning would you attribute to
Citigroup? Why?
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Class 7 (Monday, March 31)
“Starbucks and Conservation International” (HBS #9-303-055)
Homework Case #2 Questions (and be prepared to discuss in class):
(1) What do you think of Starbuck’s approach to collaboration with Conservation
International (CI)? Is this a risky strategy? Would you do things differently?
(2) What about their approach to dealing with the TransFair?
(3) Since shade-grown and fair-trade coffee is such a small part of their business, do you
think they should publicize the fact that they even sell it? If so, how should it be
publicized? Could it be a public relations nightmare and backfire on them?
Class 8 (Wednesday, April 2). Bottom of the Pyramid
Prahalad and Hart, “The Fortune at the Bottom of the Pyramid,” Strategy + Business, 2002.
(BLACKBOARD)
World Business Council for Sustainable Development (WBCSD), “Business Solutions in
Support of the Millennium Development Goals,” September 2005
http://www.wbcsd.org/web/publications/biz4dev.pdf. Read Chapter 1 (p. 1-18).
Millennium Goals are in Appendix, pp. 82-3. Interesting case studies are reported on
throughout.
Discussion Questions (not to be handed in):
(1) Prahalad and Hart have several recommendations from companies that are interested
in pursuing the “Tier 4” economies. What are they and do you agree with them?
How would you sell these ideas to top management of a for-profit company? What
pitfalls do you see?
(2) Prahalad and Hart note that most of the success to date has been led by NGO’s (e.g.,
WRI and others) and local firms (e.g. Grameen Bank). They list a few pioneer
multinationals such as Starbucks, Dow, HP, Unilever etc. that have been exceptions.
What if anything do these companies have in common? Why do you think they have
been pioneers? What will it take for other companies to jump in?
Class 9 (Monday, April 7) - Green Buildings
Guest Speaker – Kim Shinn
Charles Lockwood, “Building the Green Way,” Harvard Business Review, June 2006, pp.
129-37
William McDonough and Michael Braungart, “From Principles to Practices: Creating a
Sustaining Architecture for the 21st Century,”
www.mcdonough.com/writings/from_principles.htm
William McDonough and Michael Braungart, “The Cradle-to-Cradle Alternative,”
www.mcdonough.com/writings/cradle_to_cradle-alt.htm.
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Class 10 (Wednesday, April 9) – Corporate Philanthropy & Social Entrepreneurship
Michael E. Porter and Mark R. Kramer, “The Competitive Advantage of Corporate
Philanthropy,” Harvard Business Review, Dec. 2002. pp. 57-68. [Blackboard]
Playgrounds and Performance: Results Management at KaBOOM ! (A), (B) - HBS
9-306-031, 9-306-055 [Homework Case #3a]
Homework – Case #3a Questions (and be prepared to discuss in class):
(1) Why is Home Depot partnering with KaBOOM! ? Is it for public relations reasons,
corporate social responsibility, or corporate profits?
(2) Do you think Porter and Kramer would approve of Home Depot’s partnering with
KaBOOM?
(3) What are the specific criteria and metrics that you would use to evaluate the success
of this association for Home Depot? For KaBOOM!?
(4) What are the specific metrics that you would use to evaluate the success of
KaBOOM!? Why?
IBM on Demand Community, HB Case #9-504-103 [Homework Case #3b]
Homework – Case #3b Questions (and be prepared to discuss in class):
(1) Why is IBM launching the ODC initiative?
(2) Do you think Porter and Kramer would approve of IBM’s new initiative?
(3) Will IBM employees in the US and overseas do more volunteer work as a result of
ODC?
(4) How should Litow and Palmisano measure the success of the ODC initiative? Why?
Class 11. (Monday, April 14) Supply Chain, Human Rights, Labor Issues, etc. –
Sustainability at Walmart - Case #4
Homework – Case #4:
Choose one of the three networks discussed in the case (electronics, seafood, textiles).
Propose one new “game changer” or “innovation project” not described in the case. To
support your proposal, outline the environmental benefits, the profit opportunity for WalMart, the greatest challenges in implementation, and how Wal-Mart could overcome
them. Your group should hand in a write-up of this proposal with justification, no more
than 3-pages text plus any figures. Be prepared to present in class with a brief 5 minute
overview of your idea. You should bring one or two overheads or Power Point to class.
Discussion Questions (not to be handed in):
(1) After reading the case, do you think that Wal-Mart’s sustainability strategy is a
serious effort to transform the company, or is it largely about ‘green-washing’ and a
defensive ploy to try to regain Wal-Mart’s public image?
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(2) How is Wal-Mart hoping to derive business value from their sustainability strategy?
Do you think this is a good approach? Why? If not, what might you do differently?
Which has been most successful/ Seafood, Electronics, Textiles? Why?
(3) Wal-Mart is taking the lead on various public policy issues and pushing for
legislation. Why are they doing this? Is this a good idea?
(4) How has the new sustainability strategy changed the relationship between Wal-Mart
and its suppliers? Do you think this is a good idea?
Class 12 (Wednesday, April 16) - Supply Chain Issues (continued)
Guest Speaker – Jeff Gowdy
Class 13 (Monday, April 21) The Pharmaceutical Industry and AIDS in the Developing
World
Life, Death and Property Rights: The Pharmaceutical Industry Faces Aids in Africa (HBS
Case #9-702-049)
Discussion Questions (be prepared to discuss in class):
(1) How should pharmaceutical companies respond to the plague of AIDS in Africa?
(2) What public role, if any, should companies like Merck and Pfizer play in debates over
the pricing and availability of AIDS drugs?
(3) What strategy should they follow to protect their intellectual property rights? What
are the costs and benefits of this strategy?
(4) How should they price AIDS drugs?
Class 14 (Wednesday, April 23) - Group Presentations
Brief Discussion of “The Future of CSR”
http://www.ethicalcorp.com/content.asp?ContentID=5630
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Class Schedule – Corporate Strategies for Environmental & Social Responsibility
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3.
4.
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6.
7.
8.
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10.
11.
12.
13.
14.
Date
Notes
Readings/Cases
Mon.
March 10
Wed.
March 12
Mon.
March 17
Intro to CSR
Film shown in class…
Strategic CSR
Wed.
March 19
Mon.
March 24
Wed.
March 26
Mon.
March 31
Wed.
April 2
Mon.
April 7
Wed.
April 9
Mon
April 14
Codes
of
Conduct,
International Standards
Green Consumers
Porter & Kramer; Friedman & Mackey
debate
“Beyond the Green Corporation”
“100 Best Corporate Citizens”
(skim) Reading on “financial information”
CERES, Global Compact, GRI
Corporate Philanthropy,
Social Entrepreneurship
Supply Chain: Human
Rights/Labor
Guest Speaker: Kim Shinn
Green Building Readings
KaBoom! (CASE #3a); IBM on Demand
Community (CASE #3b)
Wal-Mart’s Sustainability Strategy
(CASE #4)
Wed.
April 16
Mon.
April 21
Wed.
April 23
Supply Chain (continue)
Guest Speaker – Jeff Gowdy
Intellectual Property &
the Third World
AIDS Drugs
Doing Well by Being
Good?
From Confrontation…
…to Collaboration
Bottom of the Pyramid
Green Buildings
Class Presentations
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Ottman, Chapt. 1-3;
Ginsberg & Gloom (SMR)
Rainforest Action Network & Citibank
(CASE #1)
Starbucks Case
(CASE #2)
Prahalad & Hart