C.K.Prahalad,"The Innovation Sandbox”

This is the paper to promote business in developing countries through innovation to make it possible for poor to access. It describes some successful organization in India, and extracts principles of innovation.

For innovation, key of action is followings:
1. Specialization(=focus on niche)
2. Pricing(=low)
3. Capital Intensity(=Scale merit)
4. Talent Leverage(=specialization of HR)
5. Workflow(=management)
6. Customer Acquisition(=customer driven)
7. Value and Organziation(=Culture)

It is resembles industry structure analysis such as Porter’s five forces. Ultimately, the principle of success of business is same in any situation.

Sum up the lecture

Sum up the lecture

Today was the last lecture of Sustainable Management. At the first part, teacher said she was disappointed about our poor participation in the course. That was true, but it was difficult to discuss about sustainability, especially in her class, I thought…

Any way, she summarized the structure of the lecture. It was interesting for me. The lecture consisted;

1. Concept:
Concept of Sustainability

2. Business:
CSR, conduct
sustainable market and enterprize
supply chain, customers sustainability
sustainable leadership
financial market and cooperate responsibility

3. Standerize:
social entrepreneur
reporting
social standard

4. Poverty reduction:
poverty reduction


From the all over the course, I learned three things about sustainability.

First is complexity of network. To consider sustainability, we have to look supply chain, from raw material to customer, even to recycle. Network becomes more complex and more long-term, and communication become more and more important.

Second is standardization. To make communication efficient, a system of certification is needed. It should be international one. And in terms of financial market, sustainability should be evaluated. This generates some report of CSR, and indexes.

Last one is poverty reduction. Ultimately, sustainability relates poverty and developing countries because the concept of sustainability is global, and one of the biggest polluters in the future world will be developing countries.

At the same time, I leaned that there are not solid method or theory in sustainability. I do not know why, but I think “sustainability” should not be an independent subject, should be one theme of some business administration because there is some trade-off in real and theory, and sustainability is only theory and ideals.

C.K.Prahalad and Stuart L. Hart, ”The Future at the Bottom of the Pyramid”

This is a proposal for MNCs to enter the Bottom of the Pyramid; Tier 4, the market where people’s annual per capita income is less than $1,500, but the population is 4,000 millions.

Authors pointed that some unreasonable assumption, such as poor market is for government and NGO, has prevented MNCs from Tier 4. But actually, Tier 4 is also area for MNCs and can improve MNCs activity.

As Tier 4 is important for MNC, MNC is important Tier 4, because only MNCs has Resources, Leverages, Bridges, and Transfers. To make use of these advantages, MNCs should build a local base of support, conduct R&D focused on the poor, Form new alliances, increase employment intensity, and reinvest cost structures.

Finally, Tier 4 ‘s market is made by local firm, MNCs, and global partnership.

Sustainable Finance

Today's lecture was hold by a PhD. student. But actually, she was better than the teacher, I thought because of English wise and knowledge of student's attitudes.

It was kind of a presentation in Business English class. Someone complained that she told only knowleage in the paper for the lecture, but for me, it was interesting.

The way to evaluate social investment:
*avoidance screening(negative screening)
*positive screening(choose best in industry, or bench mark)
(these are done by questionaires and talks)

The influence of shareholders:
*amplify external pressure on corporations
*legitimize CSR in the corporation
*take part in shaping norms about CSR overtime

I thought, CSR is a product for social investment.



And from the paper that the teacher presented us, I learned "system view"
That is the way to think sustaibability, social value in long term.

1. To understand the source of change
2. To predict the effect of the source to each external factor
3. To integrate each factor and imagine interaction between them

Sustainability is most difficult problem we have ever seen, I felt. But it means it is most interesting object at the same time.

Tutoring

Today we had a tutorial for term paper of Sustainable Management. It was quite better than I had expected.

Before discussion, I was so anxious about what to ask and first of all, what was our main point, because our plan was so broad and abstract. What was worse, I could not express fully about that.

In the tutoring, we decided to focus on adaptation of household level energy generation in EU. First, one member represented we would focus on renewable resources, and this conversation lead the question “what is needed for adaptation of clean energy”. Next, one member stated household solar energy, and it lead private energy generation. And after that, teacher suggested us to focus on EU.

It was too good to be true because before the tutoring, Ian said he did not have any idea. I guess he planed to find some way in tutoring because if teacher agreed, it was easy to persuade other members. I leaned a lot about team management in this class.

sustainability and leadership

Today’s class was the worst class in my study in SSE. One of the reason was I did not read required article, but mainly it is caused by teacher’s skill.

The topic was so abstract, and contents had nothing new.

But I leaned something from the lecture:

1, concept of exampler: association needs leader, manager, and exampler.
2, students who are active has good preparation: I seated next a girl who gave opinion in every lecture. She read quite well and underlined a lot. It was great surprise for me, but it was natural for students.
3, likes attracts likes: I think the quality of guest was quite low. This caused by the teacher because in last term’s lecture, all guest were good and teacher was also great.

From next time, I will read and prepare for discussion!

Figure, Reason, Point, Before view

Today’s lecture should have been team presentations, but actually was not. This was twice that I misunderstood the obligation of presentation. But it was not bad, because I got an opportunity to improve my presentation.

Today’s lecture style was orthodox: first was summary of the case, and discussion about that. But what I could not understand was she divided class into three, not into group that prepared some presentation, and gave each group each role such as product manager, and started to discuss about the case. I thought this way was inefficient because we can not necessarily express the opinion which was made by group, and ultimately this group preparing and non-group lecture made the quality of discussion lower.

But, of course, there was some positive aspects about that. One was it made clear characters and opinions of individual students. What was more, the discussion confused in two positions; promote organic cotton, and not care about organic. The discussion was interesting because it told me how to express my opinion, and what is good speech.

From this lecture, I learned four things:

Figure: In discussion, or business communication, figure is important and only information we can rely on. For example, figure about distribution, money, time, are most important figures.

Reason: It is also important for discussion. Opinion itself is no value, and reason is true value because there is no room to inspect opinion without reason.

Point: To grasp key factor is important in the premise of figure and reason. For example, what is competitive advantage for a firm.

Before view: This is overlook of discussion. There are some question and requirement for discussion, but before that, to see broadly is more important. For example, in the case of H&M, organic cotton is used by only 1%, it means it might be waste of time to discuss organic cotton.

Globalization opposes Sustainability

Today’s sustainable management was first “lecture”. The theme of the lecture was Sustainable Supply Chain, and teacher explained this from company’s view and customer’s view.

From company:
Most impressive was the fact that globalization opposes sustainability. Globalization necessarily increases transportation, and distance between customer and production of goods. It means more consumption of fuels, concealment of negative information such as child labor or environmental destruction. And ultimately, the goal of the sustainable supply chain is to reduce resources; opposite to marketing.

From customer:
Sustainable Supply Chain means changes of lifestyle for customer. But it also opposition of economy; large consumptions and large productions for growth.


About presentation:
From her presentation, I leaned followings;
Common knowledge is waste of time
Slide should be formatted for efficient information
Credibility is important for attention
Sustainability is naturally boring area for students, because we do not know contradiction to environment in business situation; the core of this area.

Remko I. van Hoek(1999),”From reversed logistics to green supply chains”

This is a study to aiming at making framework of green supply chain to meet ecological foot print’s requirement. This paper demonstrates key points and challenges of research of green supply chain management, and possibility for them in real world.(reverse means recycle)

In this paper, author organizes concepts of reverse logistics, green supply chain, and the change from former to latter. The biggest difference between two is range of players. Logistics means only firms activity, but supply chain contains streams of product, raw supplier to customers, nearly whole society. What is more, globalization make supply chain more broad and complex. To overcome this, this paper suggests firms should not only reverse but also act value-seeking approach, to add some value for products, for resource reduction; ultimate goal.

Esben Rahbek Pedersen and Peter Neergaard(2006)"Caveat Emptor-Let the Buyer Beware! Environmental Labelling and the Limitations of “Green” Consumerism

This is a study for inspecting Green labeling. In 1990s, a great many number of environmental rebelling products were released, and some of them received a great deal of attention while others remain in obscurity. To understand the difference, this paper discusses factors that determine market impact. The conclusion of the paper is that, the differences are caused by over-simplified concept of “green” consumer, and this leads firms fail to capture the actual complexity of consumer value, attitudes of behavior.

Rolf Wustenhagen and Jasper Boehnke(2006),"Business models for sustainable energy”

“sustainable energy technologies” can be defined as providing energy services with lowe environmental impact than today, while maintaining economic efficiency and being socially acceptable. This paper is a chapter of a book and it focuses on the sustainable production perspective of this broader picture, by looking at business models for sustainable energy. It starts to describe energy industry, and next overlooks history of researches of business model, and presents appropriate model for sustainable energy technology.

According to the paper, sustainable energy technology is characterized by three factors: environmental externality, capital intensity and long lead times, and the power of incumbents. On the other hand, core concepts of business model are value production(=what is value), configuration of value creation(=how to deliver the value), and revenue model(=how to make money). These factors correspond with each other.

Author says, about value production is customer value. About configuration of value creation, outsourcing is important. And after sales service is contribute to revenue model.

Rolf Wustenhagen(2004)”Sustainability and Competitiveness in the Renewable Energy Sector”

This is a case study of a Danish wind turbine manufacturing company, Vestas. Between 1994 and 2001, Vesta’s sales have increased more than tenfold. This paper examines the key success factor of Vestas, and describes its challenges for future.

The key success factors of Vestas are five.

1.A clear vision for Vestas and the industry; focus on renewable energy
2.Managing internal growth; use government, stock option, school
3.International expansion
4.The politics of wind energy; because energy is regulated industry
5.Social responsibility and environmental management; ISO14001, some certification

However, Vestas faces some challenges for example, U.S. overcapacity of energy, high utilities’ credit rate which prevent to develop projects, change of exchange rate, doubt of core-competence of vertical integration. Theoretically, wind energy is most efficient in other renewable energies and its needs will become increase to meet Kyoto protocol by 2012, but it is not clear how to solve these questions.

John Wiley and Sons, 2006,”Current Issues in the Greening of Industry”

This is a guide for business schools to study environmental case. Today, environmental problem is always discussed in everywhere in the world. But only business school, the heat is low.

For the reason of business school’s neglect of environmental energy issue, this paper presents two reasons. First is business school missed the trends because of big change of one industry different from their traditional way of study of routine whole industry. Second is its interdisciplinarity, which means complexity.

However, actually, the issue of greening industry is appropriate topic for business schools. In the future, it will be more study from the schools.

World Energy Outlook 2008, International Energy Agency

This is a report of IEA about global energy supply and demand in future. It was presented in the face of financial crisis and incremental price of energy in 2007-2008.

The report says, the current energy system is at a crossroads. The risk is lack of investment rather than resources. Urgent action is necessary but key is governmental action to make financial incentive for efficient and low carbon energy and reduction of subsidy of energy consumption.

About future demand and supply, demand will increase 45% from 2006 to 2030. in the supply, fossil fuels account for 80% of energy mix but the share will decrease compared with increase of coal and renewable resource. In the consumption, China and India account just over half of the increase in world primary energy demand.

About investment, over half of investment is for maintaining current level of supply because most of infrastructure is needed to replace by 2030. Most incremental oil will come from OPEC but appropriate investment is necessary.

Surprisingly, oil reserve is enough for 40 years, but the resources are concentrated in small region. And gas is Russia, Iran and Middle East is 56% of the world.

However, decline in oil production is accelerating field-by-field. To combat the decline and offset falling production, large investment must be done. In this process, partnerships between MNCs and national companies are important.

On the other hand, Oil-rich countries have a lot of poverty. If they spend 0.4% of oil and gas revenue for minimal energy service, they can access enough energy.


Most difficult problem is to deal with climate change. In the reference scenario, world average temperature increase to 6c in the end of the century. Three-quarters of projected increase in energy related CO2 emissions in reference scenario arises in China, India and Middle East. Only Europe and Japan are emissions in 2030 lower than today.

To overcome this situation, any strong action must be done.

Emma Sjostrom(2008)”H&M and Organic Cotton”

This is a Case about H&M, Hennes and Mauritz, one of the most famous Swedish companies. In this case, author focuses the challenge of introducing organic cotton products of H&M, such as lead time, marketing, and purchaicing.

H&M’s business concept is “to offer fashions and quality at the best price”. It originated from women’s clothes shop “Hennes”(means “hers”)in 1947, and acquired “Mauritz Widforss” in 1968. It expanded 29 countries through overcoming scandals.

About organic cotton, it started in the 1990s, but it failed because it did not live up to its fashion standard. But in 2004, it was ready to new try with new designer, Stella McCartney. And this attempt succeeded.

To achieve this, H&M had to change many things. For example, manager’s motivation for organic production, certified system, efficient logistics, and so on. It was done by commitments of each department because H&M adapts like SBU system.

For future, CEO thinking three things: long-term line of organic, promotion of organic purchase, and minimizing transportation.

long-term line of organic:
partnership of other organization for changing production sustainably
promotion of organic purchase:
use sustainable activity for advertisement
minimizing transportation:
make or use network other organic production organization

Microfinance and study

Today's lecture was guest lecture, Lin Lerpold, Assistant Professor of SSE. She has many experiences both in business and academic. However, I felt her lecture was less interesting than I thought.

The lecture was well organized because we did many things, understanding a basic mechanism of Microfinance, describing challenges of Hand in Hand, and group work and presentation. In the introduction, she talked about five points of microfinance:

1. Peer Selection; lending to group
2. Peer Monitoring; monitor through the group
3. Dynamic incentive; start small lend, and it becomes bigger if repayment is satisfied.
4. Regular Repayment Schedule; repayment is done regularly immediately after lending
5. Collateral Substitute; there is no collateral, but have immediate fund that is 0.5% of loan as the substitute of collateral.

Next, we discussed about a case of Hand in Hand. There were too many activities that Hand in Hand was taking. Her explanation was this was typical type of NGOs because if they want to expand Microfinance, social infrastructure is needed such as school, citizen center, environment, and health and medical care. It was quite interesting point, and for me, it was also interesting to discuss more about confliction of vision and efficiency.

After that, we divided into five groups and did role play taking a role in a group. It was so excited because one of students were from India and had experience to work in a NGO. He said collecting donation is easy and hiring people also easy. But finding right people is difficult and sometimes there are scandals for NGO, such as farmer’s suicides.

About presentation of each group, there was nothing special. Of course, every presentation was clever and each has good information, but it is not real, meaningless to discuss a lot. I think this was the reason why the Indian student seemed to feel boring in the lecture. By the way, English fluentness was much important I felt…

Jonathan Morduch(1999)”The Microfinance Promise”

This is a verification of Microfinance. Microfinance is booming but there is not empirical study about its efficiency, there is only a promise. And some Microfinance institutions reject subsidies because government failed the same work as Microfinance.

In the paper, author concludes the effect of Microfinance is limited, and their operations are cost-sensitive because they have to lend small money for large number of people. To improve the cost structure, they have to change management structure or get subsidies. Subsidies are totally beneficial for Microfinance institutions even if it has bad effect. If the cost problem is cleared, they can focus more poor people because they now lend money less poor group of people than they want.

However, “making a real dent in poverty rates will require increasing overall levels of economic growth and employment generation”. Microfinance may be help some part of poverty reduction, but it is only introduction. In future, organizations of Microfinance have to challenge for innovation of new model.

Teacher is evaluator

Today's lecture was presentation!
We had a presentation, and listened others'.


Now, I am so interested in methods of presentation because I will have one in Business English class.

From today's class, I learned following:

1.voice
most important thing is voice. Clearer and Stronger is better.
fluents are also important.

2.hand
Second is hand actions. It make explanation clearer.




Most impressive thing was confidence.
They did not need any help from teacher, they demonstrated "We want to <>, and we will do by <>". For me, teacher is person who gives answers and help. But for them, teacher is audience to evaluate them. To get high grade, they appeal their skill and talent even if actually not so. It is completely different for me.


The contents itself were not so advanced, I thought. But presentation and English were really good.


What the teacher pointed was "Narrower is better". She wanted us to focus business analysis for sustainability. Everyone felt that in class, because she will evaluate us.

Sustainable, CSR reports

Today's lecture was about accounting CSR and sustaibability. The topic was so interesting because measurement of CSR is big problem for sustaibability.

Today, a guest came from an accounting firm. She was good at speaking English and talking. She was a kind of activist, but she knew about business or economics through her job and experience of study in a unversity. It was surprising for me, and big difference between most activists in Japan, I think. Howver, I could not comprehend fully what she spoke because of my lack of ability to hear.

The structure of the lecture was simple.

1.fact(problem/solution)
-global index(macro)
-example(micro)

2.CSR
-defenition
-position in society

3.CSR report
-why report is necessary
-law(government)
-report(private)
-index


What I was supprised at was Sweden has compursoly law for reporting CSR.
It is difficult in Japan.


And I leanrd two new things:

350(ppm): That is the level to which Hansen believes we need to reduce the concentration of carbon dioxide (and by implication, other greenhouse gases) in the atmosphere if we want to avoid a series of catastrophic climate tipping points.

ANIARA:The poem of a famous Swedish writer , Harry Martinson, who was a Nobel prize writer in 1972. This is about space travel and its human struggle. the story is really interesting.

I will read someday, and also read CSR report in this week!

Thirds eye!

Today's lecture was the first guest lecture in Sustainable Management class.
The lecturer was a human right lawer, and so energetic woman.

Her speech was very practical matters, such as "Annual report is always wrong". And I remembered my experience about studying economics of developing countries.

What I felt were

・Is it enough to think agriculture in Japan?
・how can/should Japanese agriculture contribute "sustainabiliuty"?
・What does it mean to promote Japanese agriculture in the world now?



It was so critical question, but I will find answers by when return Japan.

Anyway, I will work not only study.