Business and the Environment - Harvard Business School MBA Program

Business and the Environment

Course Number 1140

Associate Professor Michael Toffel
Fall; Q1; Q2; 3 credits
20 Sessions

Career Focus

General managers, management consulting, entrepreneurs, non-profit managers

Educational Objectives

Companies in many industries are facing growing environmental challenges, which can also provide significant opportunities to gain competitive advantage by differentiating products and reducing costs and risks in operations and supply chains. Managers also have to make long term investments, and entrepreneurs require start-up capital, while facing substantial uncertainties regarding regulations especially in the realm of global climate change. Meanwhile, managers are also facing growing demands for increased transparency and accountability from consumers, B2B buyers, investors, and activists. This course explores these issues through leading-edge examples of how the best firms in the world are rising to these challenges.

This course provides emerging leaders with frameworks and skills to anticipate and address these managerial challenges, both to recognize business opportunities and to mitigate business risks, and to execute on these strategies. This course also helps prepare managers to better understand how to engage these issues with stakeholders including investors, regulators, and activists -- as well as customers and suppliers.

Course Content and Organization

Using recent cases on companies in a wide array of industries focusing on operations in various countries around the world (including North America, South America, Europe, Africa, and Asia), this course is organized into four modules:

Non-Market Strategy: Profiting from Environmental Policy
he course begins by introducing key environmental economic and regulatory concepts including public goods and externalities, and enables students to forecast which companies will gain or lose from various forms of potential environmental regulations, and to identify potential collaborators to influence regulation.

Environmentally Sustainable Operations and Supply Chains
This module critically examines several leading-edge corporate initiatives that purport to reduce the environmental impacts of operations and supply chains. How do companies prioritize issues, set targets, measure performance, and evaluate environmental programs? How do organizations decide whether and when to collaborate with competitors, suppliers, and/or activists to capture value or manage risks associated with environmental concerns?

New Products and Business Models
Perhaps the most important role businesses can play in solving environmental problems is developing new products and new business models. How do environmental concerns affect customers' willingness to pay for products and the firm's own costs and risks? In which contexts are firms likely to succeed in differentiating their products as being environmentally friendly?

Strategic Approaches to Global Climate Change
What challenges and market opportunities are arising from greenhouse gas emissions regulations? How can companies profit by selling into these markets and trading within these markets? How are companies managing long term investments in light of significant uncertainty surrounding greenhouse gas regulations?

Students form teams of two to four to write a paper based on a combination of public sources and interviews. Topics might include evaluating an established company's new initiative that has significant environmental implications, or analyzing a new venture. Paper topics must be selected by the teams and approved by the instructor within the first few weeks of the course. Each team meets periodically with the instructor to develop their idea, and presents final conclusions to the entire class. Many teams have enjoyed presenting their findings to the senior management team of their focal company, but this is not required. The course concludes with students presenting their main findings of their group projects, and a broad discussion of the opportunities and challenges environmental concern create for emerging senior managers.