Embedding Sustainability At Novo Nordisk: The Compassion Vs Competitiveness Dilemma

Case Abstract

This case is about Novo Nordisk, one of the leading global healthcare companies. Novo Nordisk started to focus on sustainability when its predecessor Novo faced criticism regarding its business practices in the late 1960s. A pioneer in sustainability reporting, the company introduced several sustainability related initiatives like the Novo Nordisk Way of Management and the Triple Bottom Line philosophy. A new sustainability strategy was developed for Novo Nordisk in the year 2000 which put global health at the center of its sustainability initiatives. These initiatives led to the integration of sustainable development with the company’s business strategy. Novo Nordisk also put a lot of focus on reducing the impact of its business operations on the environment. It initiated a new innovative partnership model to reduce its CO2 emissions and this was followed by many other companies in the world.

Novo Nordisk started selling some of its insulin products at a subsidized price in some of the poorest countries in the world. But the senior management of the company was often faced with the compassion vs competitiveness dilemma. In the year 2010, it temporarily stopped the sale of its drugs in Greece when the government asked for a 25 percent reduction in the prices of all the medicines sold. The withdrawal affected nearly 50,000 people who were using its products there. Patients, the Greece government, and NGOs accused Novo Nordisk of putting profits before its responsibility toward society. The challenge before the senior management at Novo Nordisk was to strike the right balance between business and global health.

This case has been written to facilitate classroom discussions for MBA/MS-level students as part of the Corporate Social Responsibility/Business Ethics curriculum. The case primarily focuses on sustainable development — the challenges faced by companies in their growth and how they strive to overcome those challenges. It covers the different issues related to corporate social responsibility, linking sustainable development to business strategy, areas to be focused on in achieving sustainable development, etc. This case will help students to: 1) Understand the main issues related to corporate social responsibility and sustainability and the various challenges faced by organizations regarding the impact of their operations on the society and environment; 2) Appreciate the importance of integrating sustainable development practices of a firm with its business strategy; 3) Understand a key contemporary issue facing healthcare companies – the compassion vs competitiveness dilemma; 4) Explore ways in which Novo Nordisk can strike the right balance between its business and global health.

Authors: Debapratim Purkayastha, Adapa Srinivasa Rao
Institution: IBS Hyderabad, India
Competition Year2013
TrackCorporate Sustainability
Key WordsSustainability; Sustainable Development; Embedding Sustainability; Governance Mechanisms; Novo Nordisk Way of Management; Triple Bottom Line Philosophy; Corporate Social Responsibility; Sustainable Pricing; Stakeholder Tension, Sustainability Reporting; Balance Scorecard; Global Health; Healthcare; Greek Healthcare Dilemma.
Target AudienceMBA
Permission RightsThis case is available for purchase from the Case Centre
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posted June 30, 2013

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