Presented by: Ruchi Ajmera Vivek Khanchandani

Previously
Foundations of SSM Formulation of SSM
Environmental Analysis of SSM Sustainable Strategic Management Analysis

SSM Strategies

Hierarchy of SSM

Functional Level SSM

Establish and exploit core competencies LCA vital, provides cradle-to-grave appraisal of the ecological impacts of a firms product or service across the firms value chain (type II) Strategic Environment Management strategies like DFE, TQEM, Environmental audit and reporting SEM + social performance -> SSM (Type III closed loop value chain)
DFE -> DFS, TQEM -> TQSM, etc. Sustainable Marketing, SMIS, SHRS, Full cost accounting

Competitive Level SSM strategies

Focus on how to compete in an industry or product/market segment SEM strategies are classified according to the nature of competitive advantage provided:
Cost Leadership Pollution Prevention strategies Market Differentiation Product Stewardship

Cost Leadership strategies

Pollution Prevention Strategies Cost advantages through improved eco-efficiency Core competencies in operations and logistics basis for competitive advantages exploited Pioneer: 3M
Pollution Prevention Pays (3P) program 3500 projects => saving $ 550mn

Big benefits for companies

Recruit and retain best talent Impress stakeholders

Market Differentiation Strategies

Product Stewardship Competitive advantage through superior products and services Expansion in focus from materials, energy and process efficiency to a focus on complete life-cycle impacts of products and processes Core competencies must in marketing and product/service development Effective environmental differentiation through competitive product positioning Continuous Innovation to create first-mover advantage and sustain it (avoid imitation) e.g. Electrolux Green Range line of appliances

SEM -> SSM

SEM = Economic + Environmental performance SSM = SEM + Socio-efficiency Strategic Managers e.g. SC Johnson -> Sustainable Racine
Core value: Every place should be a better place because we are there

Firms reputation good corporate citizen

Perceived differentiation in products and services Social labeling

Corporate level SSM

Corporate level SSM strategies SSM Corporate Portfolio Emerging markets BOP
eg HUL, Grameen Bank

Strategic Decision-Making
Strategic decision-making process:
Data gathering phase Matching external opportunities and threats with strengths and weaknesses: TOWS matrix Strategic choice

Implementing and Evaluating SSM

Formulation Implementation

Evaluation

SSM

Implementation
Organizational Objectives
Action plans Policies Procedures

Reward systems, performance tracking systems and controls

Sustainable R&D System

Focus on traits like dematerialization, resource intensity, recycled content, non-toxic content, durability, social impacts. Nature as a model for R&D system closed loop Tools: Life Cycle Analysis (LCA) Design for Sustainability (DFS) Information Substitution for Energy and Materials

Sustainable Procurement Systems

Socially and environmentally sensitive products need socially and environmentally sensitive inputs. SPS Provide usable tangible and intangible sustainable inputs to the organization
Sustainable Purchasing
Sustainability-based supplier relationships

Sustainable Consumption
Educating employees about sustainability

Purchasing Services rather than things

SPS supports both low cost and differentiation strategies

Sustainable Operations System

Necessary core competence for Low-Cost SSM strategies Vital to improve eco-efficiency in organizations Approaches:
Pollution Prevention Energy Efficiency Reverse Distribution Industrial Ecology

Supports both low-cost as well as differentiation SSM strategies

Sustainable Infrastructure Systems

Avoid Sick building syndrome Design buildings to mimic natural processes
Eg Ford Motor Companys Rouge plant (renovated) Benefits: Energy and water cost savings, lower waste disposal costs, improved heating and cooling systems, and improved employee health and productivity

Timely Replacement of Energy Inefficient Equipment Optimal location of plant and office sites Reduction of toxic, hazardous waste and adequate waste management practices

Sustainable Marketing Systems

Necessary core competency for SSM competitive strategies focusing on social and environmental differentiation Requirements to achieve this differentiation:
Top management commitment to sustainability Designing ecologically and socially products and packaging Sustainable pricing strategies using full cost accounting Promotional strategies Marketing channels are sustainable

Evaluating SSM
Begins with generative evaluation of fundamental assumptions Measure sustainability performance Perform Gap Analysis with sustainable based goals Occurs organisation wide, regardless of level 3 Value chain support activities
Sustainable Accounting and Finance Sustainable Management Information Systems Sustainable Strategic Management Reporting

Sustainable Accounting and Finance

Traditional financial systems fail when applied to SSM as lot of issues cannot be accounted for Full-cost accounting Cost of externalities LCA, ecobalances, ecological footprints

Sustainable Management Information Systems

MIS designed to identify, collect, process and transmit environmental and social information from throughout the organization Key for effective SMIS:
Prioritization of data gathering, processing and analysis

SSM Reporting
Sustainability reports comprehensive, ensuring continuity and comparability of data over time, presenting overview of firms SSM policies GRI, SustanAbility Sustainable sustainability reports Seventh Generation Inc.

Towards SSM
Bill Ford

Bill Ford and Ford Motor Company

Participation in SUV market Ethical implications Five corporate level SSM priorities
Strong commitment to human rights Focus on sustainable mobility Develop a comprehensive climate change strategy Establish business principles to provide an underlying value system Seek new solution through technology and partnership

 Products
Vehicles that use alternative fuels like hydrogen fuel cells, hybrid electric power, natural gas, ethanol Development of Model U concept car

Manufacturing
Renovation of Rouge plant in Dearborn, Michigan

Thank You