Apple and Conflict Minerals: Ethical Sourcing for Sustainability

Abstract

The success of Apple Inc.’s products like the iPhone and the iPad made the company rely on manufacturers in Asia to produce its products at a lower cost. Since these manufacturers were not too particular about checking the origins of the minerals they used, Apple had to face accusations by activists that it was using conflict minerals in its products. These conflict minerals led to the abuse of human rights in the strife torn parts of the world. Extraction and sale of conflict minerals like tin, tungsten, and tantalum extracted from illegal mines in the Democratic Republic of Congo (Congo) and surrounding countries funded armed militia who fought against the government and violated the human rights of people living in the conflict prone areas.

Apple had taken various initiatives to tackle the challenge of conflict minerals since it started facing the heat from some activist groups in 2010. Despite all the efforts made by Apple, the company faced an uphill task. The problem for Apple was compounded by the fact that the supply chain for such minerals was opaque and it was not so easy to determine which refiners and smelters around the world were financially fueling violence in the war-torn regions. There was also the possibility that such minerals could slip into its supply chain through indirect routes.

Going forward, the question before Apple was what more could the company do to ensure that all its products were free from conflict minerals. How could it ensure that the procurement of minerals through its supply chain did not profit armed groups in producer countries? How could it assure stakeholders that their products did not contain any primary commodities that were linked to the funding of conflicts? How could it ensure all these, while also seeing to it that the action taken by the company does not have an adverse effect on the livelihoods of people who work in and around artisanal mines and their communities?

AuthorsDebapratim Purkayastha and Adapa Srinivasa Rao
InstitutionIBS Hyderabad, IFHE University, India
Competition Year2015
PlaceSecond Prize
TrackCorporate Sustainability
Key WordsConflict minerals, Human rights, Consumer electronics industry, Sustainability, Sustainable supply chain, Ethical Supply chain, Ethical sourcing, Supply chain transparency, Supply chain risk mitigation, Supply chain mapping, Supply chain audit and reporting, Stakeholder management, Stakeholder tension, Systems approach
CoursesCorporate Sustainability, Business Ethics, Corporate Social Responsibility, Supply Chain Management
Target AudienceMBA
Purchase InformationYou can purchase the case at the Case Centre.
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posted June 24, 2015

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The German ‘Energiewende’: RWE’s Strategic Choice

Abstract

In July 2012 Peter Terium was named the new CEO of RWE, the biggest electricity provider in Germany. RWE has performed financially well over the previous 40 years with annual sales greater than €50bn since 2010. However, in 2014 the company had to disclose €2.8bn of net losses for the first time in its history.[i] This prompted an urgent need to change RWE’s corporate strategy. Peter Terium now faces a number of challenges in order to guarantee the profitable future of RWE.

First, RWE has to deal with the consequences of a variety of regulations, namely: (a) The German electricity market liberalization, (b) the renewable energy law in Germany, (c) the European Emissions Trading System and (d) the German nuclear phase out. These regulations contribute to a major shift in the electricity market, often referred to as the German Energiewende. The cornerstones of this Energiewende are decentralized and renewable power generation. RWE’s business model is built on centralized electricity generation based on coal and nuclear power and, thus, is contradictory to the German Energiewende.

Second, RWE is endangered by market developments: (a) RWE’s bottom-line is suffering from decreasing electricity market prices as a result of an oversupply of electricity due to the growing amount of renewable sources. (b) Many small competitors, sometimes even RWE’s former customers, have entered the electricity market thereby decreasing RWE’s market share. (c) In 2014 one of RWE´s main competitors E.ON started to respond to the altering market conditions and announced a substantial change in its business strategy and to focus entirely on renewables.

Third, the company faces specific expectations from external stakeholders: (a) As a consequence of the developments above, 10,400 jobs are up for redundancy.[ii] Local governments – of which some are RWE`s shareholders – are worried about these figures. (b) RWE also carries reputational risks because some well-known NGOs like the WWF criticize its lack of a low-carbon strategy.

Finally, the organization also faces an internal challenge. The internal structures have developed over decades and are based on the dominant logics of centralized coal and nuclear power production. As is typical for change processes in large organizations, these dominant logics may lead to structural inertia.

This case has been written to facilitate classroom discussion and engage debates for MBA/MS-level students in the form of a stakeholder role-play. The case focuses on the challenge of RWE to determine its future corporate strategy. It enables students to understand how legislative developments, market transformations and new technologies can fundamentally impact incumbents in a traditional industry.

[i] RWE, Annual Reports 2010 – 2013

[ii] “RWE streicht jede zehnte Stelle“, Zeit Online, http://www.zeit.de/wirtschaft/unternehmen/2013-11/energiekonzern-rwe-stellenabbau, accessed on September 30, 2014

Authors: Timo Busch and Marcel Richert
Institution: University of Hamburg, Germany
Competition Year2015
PlaceThird Prize
TrackCorporate Sustainability
Key WordsEnergy transition, renewable energy, electric utilities, low carbon strategy
CoursesStrategic management, CSR, business ethics, finance
Target AudienceMaster level, MBAs
Permission RightsThis case is part of the oikos free case collection. Download a free online copy below. If you are a faculty member and you are interested in teaching this case, you can request a free teaching note by sending us an email to freecase@oikosinternational.org.
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posted June 24, 2015

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Hopworks Urban Brewery: A Case of Sustainable Beer

Abstract

Founded in 2007 in Portland, Oregon, Hopworks Urban Brewery is a sustainability-focused brewpub that produces certified organic beer. The State of Oregon is the second largest producer of hops, a main ingredient in beer, in the United States, and also has more craft breweries per capita than any other state. The metro area of Portland, home to over 2 million people, has over 84 craft breweries within its borders.

The craft brewing industry has grown rapidly in the United States over the last decade, with an annualized growth rate of 9.6% from 2009–2014 and a $14.3 billion market in 2013. Craft brewers are small enterprises, producing fewer than six million barrels of beer per year, employing both traditional and innovative brewing methods, and focusing on quality products and connecting with their local community. To date, Hopworks has thrived in this competitive environment, producing over 12,000 barrels of beer per year while staying carbon neutral and diverting 98.6% of their total waste from landfills. Hopworks’ top quality beers have won prestigious national awards. Additionally, Oregon’s Governor has honored the brewery for its achievements as a sustainable business.

However, to expand, Hopworks is faced with a number of key decisions that affect its sustainability both economically and ecologically. Christian Ettinger, founder and brewmaster of Hopworks, must make strategic decisions about capital investments, labor allocations, and even the future of their organic certification as he executes a growth plan in line with their sustainable values. In this case, students will be challenged with analyzing all aspects of a sustainability-focused business and considering the many choices a craft brewer, or any small business owner, faces.

AuthorsMadeleine Pullman, Jacen Greene, Devin Liebmann, Nga Ho and Xan Pedisich
InstitutionPortland State University, United States
Competition Year2015
PlaceFirst Prize
TrackCorporate Sustainability
Key WordsCraft Brewery, Beer, Break-even, Sustainability Manager
CoursesMarketing, Operations & Supply Chain Management, Human Resources
Target AudienceMBAs and Advanced Undergrads
Permission RightsThis case is part of the oikos free case collection. Download a free online copy below. If you are a faculty member and you are interested in teaching this case, you can request a free teaching note by sending us an email to freecase@oikosinternational.org.
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posted June 24, 2015

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Succession at Berrett-Koehler Publishers: Institutionalizing the “BK Way” and Protecting BK Values for Future Success

Abstract

Many for-profit enterprises with a strong social or environmental mission, as well as businesses with a strong commitment to corporate social responsibility, struggle with the issue of keeping their social or environmental mission alive as the companies grow larger, bring in new investors, deal with mergers and acquisitions, and change leadership. There have been many failures chronicled as various founders dealt with this issue. Unfortunately, there is a gap in the case materials that speaks to this issue. This case helps to address that gap.

The Berrett-Koehler (BK) case highlights the efforts of a competitively successful, mission-driven, socially responsible publishing company to preserve its values, culture and practices while ensuring continued future success.  BK’s stated mission is “Creating a World that Works for All.” In pursuit of this mission, BK published 35-40 titles per year, each of which focused on fundamental transformation at the individual, organizational or societal level. The wide array of efforts pursued in protecting its mission include innovative approaches, such as consideration of Benefit Corporation status and adoption of a constitution.  The case provides an opportunity to cover corporate governance topics such as:  ownership structures, shareholder relations, CEO and organizational succession planning, and board roles and responsibilities.

This case takes place just prior to and immediately following Berrett-Koehler’s July 2012 Annual Shareholder Meeting and 20th Anniversary celebration.  The case highlights BK CEO, Steve Piersanti, and the Board of Directors in their efforts to institutionalize the “BK Way” through a variety of legal and operational methods.  BK is a socially responsible and mission-driven business working to protect the values, practices and culture it considers to be a critical component of its fundamental success.  BK has outperformed rivals from a financial standpoint in the intensely competitive publishing industry, and is well-known for its integrity and unique procedures.  Specifically, CEO Steve Piersanti and the BK board consider several specific and different options for embedding the BK values in the organization’s operating and ownership structures.

AuthorsMurray Silverman and Sally Baack
InstitutionSan Francisco State University, United States
Competition Year2015
PlaceRunner up
TrackCorporate Sustainability
Key WordsProtecting the social mission, stakeholder management, corporate governance, benefit corporation
CoursesStrategic management, Business, Government & Society, Sustainable Business
Target AudienceMBA's and Undergrads
Permission RightsThis case is part of the oikos free case collection. Download a free online copy below. If you are a faculty member and you are interested in teaching this case, you can request a free teaching note by sending us an email to freecase@oikosinternational.org.
DownloadFree Online Copy
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posted June 24, 2015

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Barrick Gold: A Perfect Storm at Pascua Lama

Abstract

This case study is about a gold mining company that sought to practice “responsible mining” by reaching out to stakeholders and addressing environmental concerns, but which nevertheless attracted a host of protestors and opponents. Punctuated by testimony from its 85-year-old founder, it offers unique insights into Barrick Gold Corporation in the age-old pursuit of the precious metal, facing the problems of a new era. The world leader had spent $4.8 billion and more than a decade working to build the Pascua Lama gold mine amid the glaciers of the Andes mountain range in South America. But its promises to bring economic growth to impoverished communities were challenged by environmentalists and local groups seeking to preserve the pristine landscape and indigenous culture. The case provides a platform from which to pose the question ‘How much CSR is enough?’, enabling students to grapple with the dilemmas facing resource-intensive industries in a new age of environmentalism.

Barrick’s founder Peter Munk lays out the dilemma facing not just his company but the entire gold mining industry. Gold is getting harder to find and more expensive to mine, while the demands of environmentalists and governments seeking to protect their nations’ resources are steadily mounting. At the start of the story, Barrick had already invested millions dollars in community benefits and spent more than 200,000 man-hours on documenting an environmental review to launch its mega mine on the border between Chile and Argentina. Lured to the region by governments eager for economic development, it then had to obtain all the environmental and governmental approvals to get the go-ahead for the project. This meant making modifications to the project that it claims will avoid damage to glaciers in the region. It has gained many supporters in the community and has received more than 145,000 applications for the jobs it plans to create. Yet mid-way through construction, Pascua Lama is held up by environmental regulators and legal challenges from an indigenous people who inhabit the mountain region.

The project is extremely important to Barrick, which has already poured billions more dollars into developing the mine than it ever expected, and is only mid-way through construction. Not only can the company ill afford to lose its huge investment, it is depending on the mine (and others planned in the same region) to replace many of its older mines which are nearing the end of their productive lives. When a drop in the price of gold compounds the cost overruns and legal problems facing Pascua Lama, the company’s share price takes a nosedive. As Munk tells shareholders, the company must consider whether to suspend the Pascua Lama mine development altogether. Not only is the future of Barrick at stake, but of the gold mining industry.

As students consider what the company should do next, the case offers the opportunity to discuss the Social License to Operate (SLO), a concept which applies across natural resource-based industries, particularly extractive industries such as mining that operate in developing countries. While there is no universally accepted definition of SLO, it can be broadly thought of as “a community’s perceptions of the acceptability of a company and its local operation.” The dilemma presented in the case puts students in the position of deciding on the boundaries of the SLO. Can companies move forward with projects even if not everyone agrees? Implicit in this is the notion that perhaps the only way to responsibly mine gold is not to develop new mines at all.

Authors: Craig Smith and Erin McCormick
Institution: INSEAD
Competition Year2014
PlaceRunner-Up
TrackCorporate Sustainability
Key WordsSustainability; Social Enterprise; Sharing Economy; Carsharing; Triple Bottom Line; Environmental Impact; Consumer Pricing
CoursesSustainable Strategy, Social Entrepreneurship
Target AudienceMBAs, advanced undergrads
Purchase InformationPlease contact case.studies@insead.edu
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posted June 26, 2014

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Faculty from Concordia University, Mc Gill University and Carinthia University of Applied Sciences Win oikos Case Writing Competition 2014

11th edition of the annual oikos Case Writing Competition awards leading teaching cases on sustainability in management and entrepreneurship

St. Gallen, 26th May 2014 – oikos, the international student-driven organization for sustainable management and economics, announced the winners of its annual oikos Case Writing Competition. The first prize in the corporate sustainability track is awarded to Professor Dietmar Sternad from Carinthia University of Applied Sciences (Austria) for his case “Organic Growth at Sonnentor“. In the Social Entrepreneurship track, the first prize goes to Raymond Paquin from Concordia University (Canada), as well as Dror Etzion, James Povitz and Benjamin Gruber at McGill University (Canada) for their case entitled “Communauto: A Big Idea for a Big Market“.

The annual oikos Case Writing Competition promotes the development of new high quality case studies on sustainability in management, entrepreneurship and finance. An international panel of more than 30 leading faculty evaluates the cases in a double-blind review process and gives written feedback to all authors. For each of the three tracks on corporate sustainability, social entrepreneurship and sustainable finance the judging committee selects the winners and runners-up. The first prize amounts to CHF 5000, the second prize is CHF 2000 and the third prize CHF 1000. The jury may decide, as was the case for this 2014 edition in the newly launched third track on “Sustainable Finance” not to award a prize, if none of the submitted cases meet the high requirements in terms of educational excellence, sustainability focus and innovativeness defined by the competition.

Partners of the program include Ashoka, a global organization that identifies and invests in leading social entrepreneurs; caseplace.org, a dedicated and curated library of teaching resources provided by the Aspen Institute to support the integration of sustainability in business education; The Case Centre, the biggest collection of management case studies worldwide; the University of St. Gallen, a front-runner in higher education business courses;  and WWF, one of the world’s largest and most respected independent conservation organizations.

In its eleventh edition of the competition – since its launch in 2003 – more than 40 cases written by scholars of 15 different countries were submitted. The complete list of winning cases is shown below:

Corporate Sustainability Track
1st Prize "Organic Growth at Sonnentor" by Dietmar Sternad (Carinthia University of Applied Sciences, Austria),
2nd Prize "IKEA and the Better Cotton Initiative'" by Stefano Pogutz (Università Bocconi, Italy)
3rd Prize "Accenture Development Partnerships (A) (B)" by Michelle Rogan and Christiane Bode (INSEAD, France)
Runner up"Barrick Gold: A Perfect Storm at Pascua Lama" by Craig Smith and Erin McCormick (INSEAD, France)
Runner up"Terra Nova (A)" by Gilles van Wijk and Alireza Ahmadsimab (Essec Business School, France)
Social Entrepreneurship Track
1st Prize "Communauto: A Big Idea for a Big Market" by Raymond Paquin (Concordia University, Canada), Dror Etzion, James Povitz and Benjamin Gruber (McGill University, Canada)
2nd Prize "Clean Water Grow: 'Go or No Go?'" by Simon Ngawhika and Scott Marshall (Portland State University, USA)
3rd Prize "Wellcome – Growth of a Social Enterprise" by Karin Kreutzer and Magdalena Kloibhofer (European Business School, Germany)
Runner up"MokshaYug Access (MYA) in India: Enriching India’s Dairy Farmers" by Rajan Shah (Amity Research Centers, India)
Runner up"Mannat Foundation: Building Social Enterprise for the ‘Bottom of the Pyramid’" by Trupti Karkhanis, Ritu Sinha and Anurag Pratap (Indian Education Society – Management College and Research Centre, India)

Further information including inspection copies for each case is available at:
https://oikos-international.org/cases

About oikos

oikos is an international student-driven organization promoting the integration of sustainability issues in research and teaching at faculties for management and economics. The organization comprises a global community of 40 student chapters at universities around the world as well as faculty, alumni, advisors and partners. Its program consists of conferences, seminars, fellowships, and other events as well as a variety of action-based learning platforms that support the integration of long-term economic, environmental and social trends in research and teaching. More: http://www.oikos-international.org/.

Contact oikos Cases Project Leader Jordi Vives Gabriel for any questions you may have.

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oikos International

posted May 26, 2014

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Asia Meet

oikos Asia Meet 2014 will be hosted by oikos Pune at the main campus of Symbiosis International University, Pune. The theme of the Meet is ‘Innovation in sustainability‘. Registration is open!

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posted April 7, 2014

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TATA Power: Corporate Social Responsibility and Sustainability

Case Abstract

The case describes the strategic dilemma involved while taking the decision on the ‘modus operate’ of CSR department for one of the leading Indian MNCs (‘Tata Power Company’ from Tata Group of Companies). TPC had undertaken the CSR activities for decades reflecting the company’s commitment towards sustainable energy generation without undue compromise to human and environmental development. These activities were undertaken as the voluntary initiative by the employees of TPC and there was no separate entity as ‘CSR department’ as of now. However with the large scale expansion, the need to have CSR as a separate entity was felt.

The dilemma for the decision manager (Col. Prakash Tewari) was whether to go for separate CSR department or continue with the existing set up. There are other issues related to it which needs to be addressed strategically as well as tactically to maintain a balance between shareholders’ interest and other stakeholders.  The case has been developed for the academicians as well as practitioners to have better insight into the issue from the perspective of business strategy and business environment. The case will help to analyse the issue of corporate sustainability from the business angle.

Authors: Rama Deshmukh, Atanu Adhikari
Institution: IES Management College and Research Centre, India; IBS Hyderabad, India
Competition Year2009
Place2nd place
TrackCorporate Sustainability
Key WordsTATA Power, Sustainability, Opportunity Recognition, Corporate Social Responsibility, Stakeholders, Strategy
CoursesBusiness Strategy, Business Environment, International Business, Corporate Governance, Corporate Sustainability
Target AudienceMBA, Business Executives, Undergraduate Students
Permission RightsThis case is available for purchase from Ivey Publishing (9B10M013)
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posted June 30, 2009

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