Sustainable business strategy
MODULE 4: CHANGING THE SYSTEM AT THE INDUSTRY SCALE
WHY PURPOSE MATTERS
SELF-REGULATION & THE COMMONS
❏ Play the Prisoner’s Dilemma via this online simulation ( Lessons from the Prisoner’s Dilemma: An Interactive Tutorial: 1 (economicsnetwork.ac.uk) )
❏ Read HBS Note: Industry Self-Regulation: Sustaining the Commons in the 21st Century?
❏ Read Reimagining Capitalism, Chapter 6 (pp. 163-200).
❏ Answer Module Comprehension Questions
- 2.The royal DSM case explores the tension inherent in creating “share value” in practice. Using royal DSM as an example, what kinds of tradeoffs should a firm think about making when simultaneously serving unmet human needs and creating a profitable business model?
- 3. In Sustainable palm oil case, Unilever committed to purchasing 100% sustainable palm oil in 2008. At that time it was the only major company to have such a commitment. But by 2014, nearly all of the major buyers, traders, and producers (i.e., 60% of globally traded palm oil) had made such commitments. What happened and why?
- 4. Industry self-regulation, in general, has a lousy track record. The HBS Note: Industry self-Regulation introduces the Prisoner’s Dilemma as a metaphor for industry self-regulation on ESG and sustainability metrics. Play the Prisoner’s Dilemma via this online simulation and answer the following questions:
- If the rational choice is always to defect, then why do rational people ever cooperate with each other?
- How does the nature of the game change if your goal is to beat your opponent(s) by the largest margin?
- How does the game change if your goal is to maximize total gains for you and your opponent(s)?
- Give one example from your own life where a group you have been part of (e.g. your family, a sport team, a team of co-workers) has been able to solve a common problem by persuading everyone to work together? Briefly describe the situation and then reflect on why it was successful?
- Finally, what are the parallel lessons for industry-level-regulation?
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