Cases June 27, 2016

Alibaba.com between Economic Success and Corporate Responsibility

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The Alibaba Group was one of the biggest and fastest growing businesses in China for about ten years. Among many other companies under the holding’s umbrella, Alibaba.com had become the world’s most frequented market place in the Business to Business segment. The company provided an internet platform for especially small and medium sized companies, where western demands meet Asian supply.

Although the platform opened the door for many firms to the international markets, there was room for improvement. Due to the increasing access to information through the World Wide Web, customers had become more and more sensitive to what is known as corporate responsibility. Sustainable business models and fair working conditions were more than ever of huge importance for the customer. In order to respond to this trend, companies on the demand side had to make sure that their suppliers fulfill not only European standards.

This trend of corporate responsibility recently caused many complaints about the listing and transparency of the Alibaba platform. On the supply side, suppliers missed a tool for signaling their working and quality standards to their customers. There was hardly a way to differentiate from competitors on the webpage. On the demand side companies suffered the same problem vice versa. There was barely a way for small western companies to control and check quality and labor issues for their supply chain without long lasting selection and arrangement processes.

But not only direct users of Alibaba.com drew the attention to the Alibaba system. Years ago many NGOs (Non-Governmental Organizations) claimed for more transparency and social standards on the Alibaba.com homepage.

Jack Ma, the CEO of Alibaba, knew about these problems. However, he also knew that many firms that once started with poor standards were nowadays great companies with well-known products all over the world. With a higher entry barrier, these corporations would not have had the chance to enter the market at all. Developing from a small company with low standards to a firm with high standards was often a long and time-consuming process.

Triggered by the recent complaints Ma was challenged by several self-imposed questions. Ma knew that the listing and policy on his platform were deeply connected with those questions and that there would be no easy solution. Whatever he decided should be the best answer for all parties: The Company, the customers and society.

AuthorsKannika Leelapanyalert, David Beschorner, Kim Nadine Reckmann and Marie Aslanian
InstitutionCollege of Management, Mahidol University, Thailand
Competition Year2016
PlaceRunner up
TrackCorporate Sustainability
Key WordsAlibaba, corporate sustainability, supplier, NGO, B2B
CoursesInternational marketing
Target AudienceMBAs
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@oikos-international.org.
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posted June 27, 2016

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Cases

The Rise of a New Industry: Business Model Innovation at the Intersection of Energy and Mobility

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Cofely, a large international technical services provider, is observing important changes at the fringes of its industry. Two industries that have experienced pressure towards being more environmentally responsive in the past, the automotive industry and the energy industry, are converging due to the emergence of electric cars. The Dutch subsidiary of Cofely is therefore searching for new business models at the intersection of energy and e-mobility. In the Netherlands, a front runner of sustainable mobility, firms and other stakeholders are increasingly identifying the essential role electric vehicles can have for a balanced and sustainable energy system in the future. This new industry at the intersection of energy and e-mobility is developing at a fast rate, with innovative start-ups as well as existing firms establishing themselves across a new, not yet clearly defined, value chain. This value chain is highly integrated via ICT and stretches from energy production on the one end of the spectrum to mobility services on the other. Cofely wants to become pioneer in this new industry and particularly see how it can position itself with a new business model building on its core competences.

AuthorsRené Bohnsack and Pico van Heemstra
InstitutionCatólica Lisbon School of Business and Economics, Portugal, and Amsterdam University of Applied Sciences, Netherlands
Competition Year2016
PlaceSecond Prize
TrackCorporate Sustainability
Key WordsSustainable business models, e-mobility, utilities, smart grid
CoursesStrategic management, innovation management
Target AudienceMBAs, MSc students
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posted June 27, 2016

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Theses June 18, 2016

Cocoa Sourcing – Sustainability Challenges and Emerging Corporate Response

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The chocolate industry is confronted with serious sustainability challenges in cocoa production that may put long term cocoa supply at risk. Although sustainability challenges have been a concern for the industry for some years, the challenges have become more complex and increasingly urgent. Hence, it is analysed how chocolate manufacturers started to address the challenges. Additionally, the influence of these emerging corporate responses on global cocoa sourcing and on the sustainability challenges is assessed. The comprehensive review of the emerging corporate responses of six Switzerland-based companies shows that the responses represent similar approaches towards sustainable cocoa sourcing. The assessment of the influence on global cocoa sourcing reveals major effects on the cocoa procurement market. About the effect of the emerging corporate responses on the sustainability challenges in cocoa production no conclusive statement can be made because of the incomplete data basis. Overall, the chocolate companies see themselves as being in transition to sustainable cocoa sourcing.

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posted June 18, 2016

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Events April 22, 2016

oikos-Accenture Strategy Workshop

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As one of three winners of the oikos-Accenture Strategy workshop, join oikos Jena to learn more on sustainability strategy. Find more information here on how to participate.

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posted April 22, 2016

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Theses March 22, 2016

CSR and Human Rights Under the Light of a Game Theory Approach

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The thesis will demonstrate Bilancini and Boncinelli (2014)’s model of two players with a signal-sending player making an offer of two types, namely high quality and low quality, and sending either high or low signal on the offer; and the signal-receiving player who perceives and processes the signal in either of two elaboration levels, namely high elaboration or low elaboration with the emergence of coarse thinking. Different strategic and psychological behaviors result in expected utilities that define equilibrium states. The game proves to be a suitable model to explain Giuliani (2014)’s definition of low-road, window-dressing and rights-oriented clusters as per CSR adoption and human rights practice. The concept of window-dressing cluster/firm will be analyzed under the model with regard to the reverse-signaling phenomenon where a low quality player sends high signal and vice versa which is compatible with the silent CSR cluster/firm concept.

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posted March 22, 2016

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Cases June 24, 2015

The German ‘Energiewende’: RWE’s Strategic Choice

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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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Cases

Hopworks Urban Brewery: A Case of Sustainable Beer

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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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Cases June 26, 2014

Mannat Foundation: Building Social Enterprise for the ‘Bottom of the Pyramid’

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In April 2013, Dr. Yogendra Saxena, Managing Trustee of Mannat Foundation, was to work out the renewal of the contract between Mannat Foundation and Tata Business Support Services (TBSS). The objective of the contract was to state the constitution of the structure and modus operandi of Mannat Foundation. Mannat Foundation was established in 2009 as a product of the joint venture between Tata Power Company (TPC) and TBSS with the objective of setting up of the social enterprise for the ‘bottom of the pyramid’. It had initiated rural Business Process Outsourcing (BPO) to provide the employment opportunities to the unemployed and semi-skilled rural population. The renewal of the contract was going to impact on the very basic goal of the Mannat and the possibility of replicability of the Mannat Foundation’s business model. There were quite a few issues related to this decision which were going to impact replicability and sustainability of the model. The case is anchored on the business dilemma of creating the win-win strategy for both business entities (i.e. TPC and TBSS) that have got their own independent profit function. It poses the question in terms of identifying the areas which would lead to sustainability by targeting at the ‘bottom of the pyramid’.

Authors: Trupti Karkhanis and Ritu Sinha
Institution: Indian Education Society – Management College and Research Centre
Competition Year2014
PlaceRunner up
TrackSocial Entreprenuership
Key WordsRural BPO, Bottom of the Piramid
CoursesStrategic management, Business Environment
Target AudienceMBA
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posted June 26, 2014

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Cases June 30, 2013

Embedding Sustainability At Novo Nordisk: The Compassion Vs Competitiveness Dilemma

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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
PlaceFinalist
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
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posted June 30, 2013

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Cases June 30, 2012

TerraCycle

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In 2001 Tom Szaky, a Princeton freshman, founded TerraCycle in the hope of starting an eco-capitalist company built on waste – worm waste to be exact. Tom and his small team had little experience in building a business, but all possessed entrepreneurial spirit. Eventually, Tom dropped out of Princeton to pursue his dream of eliminating waste. Surviving on the goodwill of family, friends – both old and new – and a tremendous amount of dedication, the team had to constantly keep developing new ideas to keep the business from bankruptcy.

The company eventually moved into partnering with companies who would sponsor the collection of waste associated with their brands, and TerraCycle would transform that waste into affordable, high quality products. In 2006 Inc. Magazine named TerraCycle “The coolest little start-up in America” and Tom “The no. 1 CEO under thirty.”

By 2011 Tom had successfully built TerraCycle into an icon for environmental sustainability that was projecting US$16 million in annual revenues. However, sustained profits continued to elude the company, and though Tom was committed to eliminating waste, he was beginning to question whether TerraCycle had the right business model to achieve the triple bottom line.

Authors: Jan Lepoutre, Stuart Read, Philippe Margery
Institution: Vlerick Leuven Gent Management School, Belgium; IMD, Switzerland
Competition Year2012
Place1st place
Track Social Entrepreneurship
Key WordsEntrepreneurship, Effectuation, Strategy, Sustainability
Permission RightsAn inspection copy of this case is available here. This case can be purchased from ecch: Part A (IMD-3-2262), Part B (IMD-3-2263), Part C (IMD-3-2264), Part D (IMD-3-2275), Part K (IMD-3-2286) and Part "Outsmarting Waste" (IMD-3-2311).
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posted June 30, 2012

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