Part 3: Sustainability

Question 1

What’s a balanced scorecard

Answer 1

A performance measurement and management system

Balancing financial and non-financial, short- and long-term measures

Question 2

Three main motivations for architecture & design of a sustainability BSC (Hansen & Schaltegger, 2016)

Answer 2

Instrumental theories
Social & Political theories
Normative theories

Question 3

The sustainability balanced scorecard (Hansen & Schaltegger, 2016) consists of:

Answer 3

1. Sustainability strategy
   - Defensive (add on)
   - Accommodative (partly or fully integrated)
   - Proactive (extended)
2. Value system
   - Profit driven (strictly hierarchical)
   - Care driven (semi-hierarchical)
   - Systematic driven (non-hierarchical, network)

Question 4

Difference between CSR and CSV

Answer 4

CSR is doing good separate from profit maximisation

CSV brings economic and social value together

(CSR could be argued to take a more neoclassical perspective)

Question 5

Problems with sustainability balanced scorecard

Answer 5

1. Things can be believed to be true even though they are not
2. Not statistically testable
3. Make sense but lack empirical evidence
4. Illustrates a difficult reality

Question 6

What’s a Sustainable Business case

Answer 6

The perspective managers take on a commercial activity related to sustainability

Question 7

Ethical motivations (Schaltegger & Burrit, 2018)

Answer 7

1. Reactionary
   - Self-seeking behaviour defending the conventional business approach
2. Reputational
   - Narcissism, seeking grandiosity
3. Responsible
   - Striving for business performance excellence
4. Collaborative
   - Developing business with stakeholder participation and collaboration

Question 8

Shared value

Answer 8

• Social- and economic value are generated through organisational activities without any trade-off
• The concept recognises that markets are defined by both social and economic needs.

(Where the disregardment of economic needs is bad for the firm for obvious reasons, and neglecting social needs is argued to generate frequent internal costs such as wasted energy and raw materials)

Question 9

Creating shared value

Answer 9

Rethinking products and markets
Redefining productivity in the value chain
Enabling cluster development

Question 10

Business model according to Bocken et al (2014)

Answer 10

A conceptual tool to understand how a firm does business

1. Value proposition
   - Product/ Service
2. Value creation & delivery
   - Key activities, resources, channels, partners, technology
3. Value capture
   - Cost structure and revenue streams

(analysis, comparison, performance assessment, management, communication, and innovation)

Question 11

Business model innovation for sustainability (Bocken et al., 2014)

Answer 11

Create significant positive or significantly reduce negative impacts

Through changes in:

1. value proposition
2. value creation & delivery
3. value capture

Question 12

Strategies in business model innovation (Bocken et al., 2014)

Answer 12

Defensive (adjustment)
Incremental adjustments to protect current business models, often driven by need of compliance

Accommodative (improvement, integration)
Modification of internal processes in some consideration of environmental or social objectives

Proactive (full integration)
Redesign core business logic for sustainable development

Question 13

What are the groupings in sustainable business models (Bocken et al., 2014)

Answer 13

Technological
Social
Organisational

Question 14

Parida et al. (2019) two stage process model and outcomes

Answer 14

Ecosystem readiness assessment
Ecosystem orchestration mechanisms
Outcomes

Question 15

Business models are important for sustainability because

Answer 15

• Eco-design and eco-efficiency improvements have assisted in reducing energy, resource intensity, and emissions and waste per unit production
• Can serve as a vehicle to coordinate technological and social innovations with system-level sustainability

Question 16

What’s a sustainable balance scorecard?

Answer 16

Modifications to the original BSC which explicitly consider environmental, social or ethical issues

Question 17

What are instrumental theories referred to in a sustainable balanced scorecard?

Answer 17

Sustainability performance as a contribution to the achievement of conventional corporate objective, such as market share

Question 18

What are social & Political theories referred to in a sustainable balanced scorecard?

Answer 18

Implemented for organisations to adapt to external expectations and not to improve efficiency
(institutional & legitimisation theory)

Question 19

What are normative theories referred to in a sustainable balanced scorecard?

Answer 19

SBSCs are implemented because it is considered a moral duty from a philosophical perspective

Question 20

What are rethinking products and design referred to in creating shared value?

Answer 20

Identifying:
1. social needs
2. benefits
3. harms 
associated with products

Question 21

What are redefining productivity in the value chain referred to in creating shared value

Answer 21

1. Energy use & logistics
2. Resource use
3. Procurement
4. Distribution
5. Employee productivity
6. Location

Question 22

What is enabling cluster development referred to in creating shared value?

Answer 22

Benefit from and bring benefit to the institutional and business environment the organisation operates within

Question 23

What are the technological archetypes in sustainable business models (Bocken et al., 2014)

Answer 23

Maximise material and energy efficiency
Create value from waste
Substitute with renewables and natural processes

Question 24

What are the social archetypes in sustainable business models (Bocken et al., 2014)

Answer 24

Deliver functionality rather than ownership
Adopt a stewardship role
Encourage sufficiency

Question 25

What are the organisational archetypes in sustainable business models (Bocken et al., 2014)

Answer 25

Repurpose for society/environment | Develop scale up solutions

Question 26

Parida et al. (2019) Ecosystem readiness assessment stage

Answer 26

External environment assessment Business model assessment Ecosystem partner assessment

Question 27

Parida et al. (2019) Ecosystem orchestration mechanisms stage

Answer 27

Standardisation mechanisms Nurturing mechanism Negotiation mechanism

Question 28

Parida et al. (2019) Outcomes

Answer 28

Financial benefits Environmental benefits Social benefits

Question 29

What are the Standardisation mechanisms in Parida et al. (2019) Ecosystem orchestration mechanisms stage

Answer 29

- Promoting establishment of industrial standards - Pursuing technical standard co-development - Seeking formal certification through broader adaption

Question 30

What are the Nurturing mechanism in Parida et al. (2019) Ecosystem orchestration mechanisms stage

Answer 30

- Bearing early investment to reduce uncertainty - Supporting ecosystem competences development - Sharing core knowledge an intellectual property within the industry

Question 31

What are the Negotiation mechanism in Parida et al. (2019) Ecosystem orchestration mechanisms stage

Answer 31

- Establishing give-and-take rules for ecosystem - Reducing likelihood of conflicts through relational interdependencies - Controlling inclusion of new partners based on risk and benefit analysis

Question 32

What is Externalities?

Answer 32

When firms create social costs they do not have to bear

Question 33

The aim with Bocken et al’s archetypes

Answer 33

Representative of underlying mechanisms of transformation in business model innovation, clear and intuitive, mutually exclusive and explanatory, but not overly prescriptive (real sustainability certainly demands combination of archetypes)

Question 34

Circular economy (Parida et al, 2019)

Answer 34

The logic of take-make-use-return

Question 35

The concept of business ecosystems (Parida et al, 2019)

Answer 35

Ecosystems are orchestrated by ecosystem leaders to create value in collaboration with a community of stakeholders. A leader needs to be resourceful, in being able to create a healthy ecosystem by providing a stable set of common assets, simplifying connection between stakeholders, and encouraging innovation

Question 36

What is orchestration referred to? (Parida et al, 2019)

Answer 36

A set of deliberate, purposeful actions by a firm. Includes enforcing rules and ensure other partners adhere to the rules

Question 37

Parida et al (2019) External trend assessment in the ecosystem readiness stage

Answer 37

Analysis of markets and technological trends | Analysis of government regulation and policy changes

Question 38

Parida et al (2019) Business model assessment in the ecosystem readiness stage

Answer 38

Shift to service dominant business models | Identify mutually beneficial relationships

Question 39

Parida et al (2019) Ecosystem partner assessment in the ecosystem readiness stage

Answer 39

Openness to new partnerships and cooperation | Understanding of trade-offs with new ecosystem creation