Required Curriculum (1st Year) Cases

Environmental opportunities and challenges are embedded in most Required Curriculum courses so that all students understand the importance of the natural environment to their roles as managers and are equipped to make business decisions involving sustainability issues. Cases are set in a variety of industry contexts, including energy, agriculture, transportation, chemicals, and investment. Some of the environment-related cases recently taught in the required curriculum include:

Your First Year

Business, Government and the International Economy

Climate change: Paris, and the road ahead

Key concepts: climate change, industry regulation, business and government relations

This case starts by reporting various factors that may have contributed to the massive Macondo oil spill, noting that BP, its partners, and the government all made decisions that helped cause the accident. It then discusses the response to this spill by BP and the government. This helps provide some context for the decision by the Obama administration to request $20 billion for a fund from BP and for BP's willingness to go along with this request. The case also depicts BP's safety record before this spill, which may also have contributed to the creation of this fund. After this, the case describes the various ways in which the U.S. government is involved in offshore oil, including the leasing of tracts, the regulation of drilling, and the assessment of fines and damages.

Finance I

Acid Rain: The Southern Co. (A)

Key concepts: return on investment, financial management, financial planning, energy, strategic planning

The Southern Co., an electric utility, is planning its compliance with the 1990 amendments to the Clean Air Act. The Act established a system of tradeable permits for sulfur dioxide emissions. The company must decide whether to install pollution control equipment and generate excess permits for sale to other firms, or to emit larger quantities of sulfur dioxide, save capital costs, and purchase pollution permits. Can be used to teach discounted cash flow analysis of a make versus buy decision. Also raises issues of expected cost minimization, questions of economic and political uncertainty, and the value of flexibility.

International Carbon Finance and EcoSecurities

Key concepts: business and government relations, investment return, cash flow, valuation, risk management

EcoSecurities has to decide whether to undertake a new Clean Development Mechanism (CDM) project in China. The Ventilation Air Methane Project is an opportunity to break into a new sector with large potential, and the economics and risks of the project need to be assessed.

Financial Reporting and Control

Accounting for Nuclear Power Provisions at RWE

Key concepts: liabilities, provisions for long-term obligations, discounting, accounting, energy generation

In early 2016, RWE, a utility that operates nuclear power plants in Germany, came under scrutiny from regulators and the media over the adequacy of its provisions for costs of decommissioning and dismantling (D&D) its nuclear power plants. Accounting standards required utilities to record the present value of projected D&D costs as a liability. However, there were many uncertainties associated with these estimates given the actual cash outlays would be incurred decades into the future. In addition, German government bond rates used to discount projected future costs had fallen to record lows, and RWE, as well as its competitors were struggling with depressed electricity prices. Would RWE's provisions be adequate to cover the future costs?

Accounting for Political Risk at AES

Key concepts: political risk, asset impairment, risk factors, fair value, fair value accounting, financial reporting, financial statements, energy industry

As a global energy generating company, AES frequently faces challenges from political changes and instability. This is exacerbated by the fact that in many instances AES' primary customer is the government, which is also in charge of law-making. For example, AES' management team has encountered expropriation risks in Venezuela, collection problems in the Dominican Republic, and regulatory changes in the United States that have led to asset impairments. More recently, the Bulgarian energy regulator announced its intentions to seek a 30% price reduction on a power purchase agreement signed over ten years ago with AES. Accordingly, AES' management is evaluating whether the renegotiation will lead to any asset impairments and the overall effects on its financial statements.

Measuring True Value at Ambuja Cement

Key concepts: corporate social responsibility, valuation, manufacturing, sustainability

The case study takes place in 2016 and focuses on Ambuja Cement Limited, a subsidiary of the Lafarge Holcim Group that was India's third largest cement manufacturer. Along with impressive financial growth, the company had demonstrated a longstanding commitment to supporting social and environmental initiatives. The Ambuja Cement Foundation, the corporate social responsibility arm of Ambuja, was considered a CSR pioneer in India. Starting in 2012, Ambuja had begun quantifying its social and environmental impact in order to improve its understanding of resource use, climate protection and community engagement. Following the True Value methodology developed in partnership with KPMG, Ambuja identified the social and environmental impact of its activities, classified them as positive or negative, and applied a financial value to these externalities.

Leadership and Corporate Accountability

Bayer-Monsanto: The Challenges of a Mega Merger

Key concepts: mergers & acquisitions, valuation, business ethics, consolidations, stakeholders

In September 2016, German-based Bayer AG (Bayer) and U.S.-based Monsanto Company (Monsanto) agreed to merge entities to create a global leader in agriculture. The combined entity would benefit from Monsanto's expertise in seeds and traits, and from Bayer's wide range of crop protection products. Bayer would acquire Monsanto for $128 per share, a high 44 per cent premium in an all-cash transaction. There were issues with the deal, which included antitrust concerns, which could require subsequent divestments, and Monsanto's brand image, owing to its involvement in controversial business operations. Given these issues, would Bayer's diversification into agrochemicals by merging with Monsanto be able to create sufficient synergies and deliver economic benefits to shareholders, while meeting expectations from other stakeholders at different levels?

IKEA's Global Sourcing Challenge: Indian Rugs and Child Labor (A)

Key concepts: crisis management, international management, operations, business ethics, social enterprise, human resource management, social responsibility

Traces the history of IKEA's response to a TV report that its Indian carpet suppliers were using child labor. Describes IKEA's growth, including the importance of a sourcing strategy based on its close relationships with suppliers in developing countries. Details the development of IKEA's strong culture and values that include a commitment "to create a better everyday life for many people." Describes how, in response to regulatory and public pressure, IKEA developed a set of environmental policies that grew to encompass a relationship with Greenpeace and WWF on forest management and conservation. Then, in 1994, Marianne Barner, a newly appointed IKEA product manager, is surprised by a Swedish television documentary on the use of child labor by Indian carpet suppliers, including some that supply IKEA's rugs. She immediately implements a strict policy that provides for contract cancellation if any IKEA supplier uses child labor. Then Barner is confronted by a German TV producer who advises her that he is about to broadcast an investigative program documenting the use of child labor in one of the company's major suppliers. How should she react to the crisis? How should the company deal with the ongoing issue of child labor in the supply chain?

Marketing

S'well: The Mass Market Decision

Key concepts: branding, marketing, startups, entrepreneurship, strategy

This case tells the story of how Sarah Kauss, a young female entrepreneur, built a premium water bottle brand from scratch. After having built a high-end brand, the key decision in the case is whether to begin expanding the S'well product portfolio to the mass market.

Strategy

Tesla Motors: Facing the Model 3

Key concepts: market entry, economies of scale, technology and innovation, leadership, strategy, competitive advantage

2016 had been an eventful year for Tesla. Not only had the company unveiled its Model 3 and ramped up production on the Model X, but it had also opened its massive Gigafactory and merged with SolarCity. Eventful years were nothing new for the company. In its almost 15 years in existence, Tesla had redefined people’s view of electric cars, in the process making its Model S the best-selling electric car in the world, despite being much more expensive than other EVs. But by late-2017, the company faced its biggest challenge yet. Whereas Tesla had struggled with quality problems while ramping up production for the Model X to about 40,000 units per year, its plans for the Model 3 were much more ambitious: Tesla’s plans called for a production volume of 400,000 to 500,000 cars in 2 to 3 years’ time–almost the same global volume as the BMW 3. Moreover, to do so profitably, the company also had to ramp up its Gigafactory battery plant, drastically reduce the cost of its battery packs, and keep demand high. Could it really succeed on all these fronts? Or was this just a bridge too far? When, in September 2017, the company missed its first production targets for the Model 3, it blamed an outside supplier and moved up its production plans by a few months.

Technology and Operations Managment

Indigo Agriculture

Key concepts: product development, agribusiness, science-based business, operations

Indigo Agriculture had successfully developed and launched its first commercial product, microbe-enhanced cotton seeds, on an accelerated product development timeline. In late 2016, as the company was about to launch its second product, winter wheat, the management team proposed to again accelerate the development timeline and introduce six new products in four countries within the next 12 months. The CEO and Director of Business Development met to discuss the feasibility of accelerating the timeline, potential bottlenecks in the product development process, resource management, and the potential need for a more formalized development process.

Sustainability at IKEA Group

Key concepts: supply chain, customer value chain, growth and development strategy, consumer products

By 2014, IKEA Group was the largest home furnishing company, with EUR28.5 billion of sales, and planned to reach EUR50 billion by 2020, mainly from emerging markets. At the same time, IKEA Group had adopted in 2012 a new sustainability strategy that focused the company's efforts on its entire value chain from its raw materials sourcing to the lifestyle of its end consumers. The plan especially centered on wood, which represented 60% of IKEA Group's total procurement in volume and constituted a key lever for the company to increase its positive impact on sustainability. IKEA Group Management therefore had to decide how to manage its portfolio of wood sustainability initiatives, especially in the context of the company's aggressive growth plan.

RC CAPSTONE

The HBS Boardroom

The Boardroom is a hands-on, day-long exercise designed to simulate leadership challenges faced by executives. It will serve as the Capstone program for the Required Curriculum (RC) year for MBA candidates.

This year, 430+ alumni returned to campus to join 930+ students for the HBS Boardroom, the RC capstone experience that includes first-year student teams presenting case-based management decisions to alumni playing the role of board members. This year's case was X: The Foghorn Decision. Students and alumni grappled with the question of when to invest in a new technology to remove carbon from seawater, given the uncertainties and opportunities posed by climate change.

Elective Curriculum (2nd Year) Courses

In the Elective Curriculum, students may choose from a number of courses that explore the integration of environmental issues and management practices or that address broader issues of sustainable markets.

In their second year, students choose elective courses, many of which focus on or support the understanding of environmental issues as they relate to business. Here are the offerings for 2018-2019.

Your Second Year

Core Business & Environment Courses

Investing in the 21st Century: Return, Risk and Impact (Fall 2018)

Shawn Cole and Vikram Gandhi

This is an investing/finance course, designed to build on skills introduced in the RC finance course, but with an emphasis on how and whether investors should incorporate what have traditionally been considered “non-financial” criteria in their decisions: for example, climate risk, environmental sustainability, minority representation on boards, and even the potential to create social good. Covering both public and private markets, the course will present rigorous approaches to business model assessment, valuation, transaction structuring and exits, as well as equity selection and portfolio construction. The course also explores incentives, decision-making, and the crucial problems and opportunities within the industry itself. For the full listing, click here.

Reimagining Capitalism: Business and Big Problems (Spring 2019)

Rebecca Henderson and George Serafeim

Free market capitalism is one of the great achievements of mankind, bringing prosperity and economic freedom to billions of people and contributing to a flowering of individual freedom and possibility that would have been unimaginable to our ancestors. Today, however, it faces critical challenges on a wide variety of fronts. For the full listing, click here.

Sustainable Cities and Resilient Infrastructure (Spring 2019)

John Macomber

The world faces challenges including rapid urbanization, increasing pressure on the environment and on basic resources, and the growing difficulty governments face in managing the confluence of these trends. This class will appeal to students who would like to explore tools and examples that help investors, entrepreneurs, and policy makers understand and address these issues. Students interested in infrastructure, private equity, real estate, business and environment, and social enterprise also will find the course to be useful. For the full listing, click here.  

Key Industry Verticals

Food and Agribusiness (Spring 2019)

Forest Reinhardt

The course will provide a survey of the global food and agribusiness system. While studying the management problems of farmers, processors, branded consumer goods manufacturers and food retailers, we will consider consumer trends, technological advances, public policy issues, food safety, and risk management. The pervasiveness of food and agribusiness makes the course suitable for future consultants and investment bankers in addition to those who have a direct interest in the industry; it may also be of interest as a general management course due to its integrative, cross-functional approach and emphasis on strategy. The course may also appeal to students with interests in political economy and business-government relations, since the firm's ability to capture value is affected by regulatory institutions at the national and global levels. For the full listing, click here. 

Twenty-First Century Energy (Fall 2018)

Martha Crawford

This course offers students the opportunity to develop a business-focused understanding of energy in the 21st Century. Following the “value chain” of energy - from upstream production to downstream consumption - the course provides practical insight into how business models are being shaped by global market trends, regulatory contexts, and emerging technologies. Using cases as the basis for most class discussions, the course exposes students to the major economic, technological, and regulatory trends that are creating change within the energy value chain. In-class discussions will explore the implications of these change vectors for energy-related businesses in the 21st Century. Case analyses will teach students analytical frameworks and tools for assessing the business potential of various energy innovations, and how to separate hype from substance. For the full listing, click here. 

Other Related Courses

Business at the Base of the Pyramid (Spring 2019)

Michael Chu

The course provides an understanding of how business can play a significant role in improving the quality of life of low- income individuals and households especially in developing country environments, but also in some developed country situations. Low-income segments in most of the world constitute the majority of the market, in terms of population, but nevertheless remain significantly underserved. This opens the opportunity for innovative models to dramatically expand access while generating profits. The course focuses on the key factors behind the business success and failure of such enterprises and the key drivers of profitability. The course will explore the nature of the challenges and opportunities involved and what strategies enhance business value and societal value at the same time. And if there is a trade-off, under what circumstances is it appropriate. The course is especially relevant for those interested in general management, emerging markets, marketing to lower-income segments, and the interplay of business, government, and civil society. The course is offered in conjunction with Marketing. For a full listing, click here.

Field Course: Commercializing Science; Technology Strategy and Business Models for Science-Based Enterprises (Spring 2019)

Karim Lakhani, Peter Barrett, and Noubar Afeyan

Companies seeking to develop and commercialize breakthrough science are playing an increasingly important role in today’s economy. Commercializing Science is intended for students who want to start or lead such businesses. The course covers such issues as creating value from innovation, business model design, value capture strategies, portfolio strategy, intellectual property and organizational models of science-based ventures. For a full listing, click here.

Creating Shared Value: Competitive Advantage through Social Impact (Fall 2018)

Mark Kramer

Classical economics taught that the social and environmental impacts of business were externalities to be handled by government regulation, philanthropy or corporate social responsibility. Classical finance went further, arguing that any corporate focus on “social” factors was a misuse of shareholders’ resources. We have since learned, however, that societal problems actually create internal costs and new avenues for improving efficiency, while social needs offer new opportunities for differentiation and growth. Companies that integrate a social purpose into their competitive positions will find opportunities for innovation and profitability that competitors miss. For a full listing, click here.

Creating Value in Business and Government (HKS-HBS Joint Degree Seminar) (Fall 2018)

Herman "Dutch" Leonard

This seminar will bring together students in Year 3 of the Harvard Kennedy School of Government / Harvard Business School joint degree program. Meetings will be held on the HBS campus on ten Mondays in fall term, from 4:15-7:15 PM. This 3.0-credit course is open only to students in the HBS/HKS Joint Degree Program, and is a required course for all joint degree students in the fall semester of their third year. Its purpose is to integrate on the one hand, the perspectives and analytic tools provided by the HKS core curricula in the MPP or MPA/ID programs, and, on the other, the perspectives and analytic tools provided by the required HBS curriculum in the MBA program. For a full listing, click here.

Doing Business in Africa (Spring 2019)

John Macomber

This course introduces frameworks and models for smart and focused investing and operations across sectors, nations, industries, and time frames in Africa. Students will learn tools and skills to help navigate the business landscape of Africa in terms of selection of investments and markets, as well as in locally relevant (nation by nation and district by district) components of effective operating businesses. For the full listing, click here.

Entrepreneurial Finance (Fall 2018)

Ramana Nanda and Robert White

Entrepreneurial Finance is primarily designed for students who plan to get involved with a new venture at some point in their career -- as a founder, early employee, advisor or investor. However, the course is also appropriate for students interested in gaining a broader view of the financing landscape for young firms, going beyond the basics of venture capital and angel financing to look at venture debt, bank finance, corporate venture capital and receivables financing. For the full listing, click here.

Entrepreneurship and Global Capitalism (Fall 2018)

Geoffrey Jones

EGC discusses the history of the modern world through the entrepreneurs who shaped it. It emphasizes the challenging contexts these entrepreneurs faced in their times, the difficult decisions they made, and the legacies they left behind. The course is relevant to all future leaders operating in today’s global context, as it considers the roles of entrepreneurs, CEOs, investors, inventors, philanthropists, and politicians. For a full listing, click here.

Globalization and Emerging Markets (Fall 2018)

Sophus Reinert

This course is designed for students who will be investing, managing a business or nonprofit, or working for a government in an emerging or frontier market. The unit of analysis of the course ranges from countries to multinational and domestic companies in emerging markets. Students are asked to take the perspective of different decision-makers, such as politicians, investors, and managers. For instance, students may have to take the perspective of an analyst at an American company contemplating investment in Nigeria's power industry, a private equity investor in Brazilian tech, a large-cap mining firm in Mongolia, a domestic conglomerate in the Philippines, or a muckracking hedge fund in Russia. Many of the cases are set beyond the so-called BRICs of Brazil, Russia, India, and China, in today's "frontier" markets that are only beginning to attract the attention of mainstream investors. The course should appeal to anyone considering spending part of their career working or investing outside of the major developed markets. For a full listing, click here.

Retailing (Spring 2019)

Jose Alvarez

The EC Retailing course focuses on delivery mechanisms for consumer goods and services. The course will primarily concentrate on retail stores but we will also study web and catalog based businesses. "Delivery" encompasses all activities of the company that have direct dealings with the consumer including, but not limited to, buying, storing, merchandising, selling, store siting, expansion strategies and marketing. Since the course considers all aspects of the management of retail companies, it may be viewed as a general management course. The course aims to develop students' understanding of retail strategy, retail operations management, innovation in retail, and the key issues impacting growth in retail firms (including exposure to issues facing retailers in international settings). For a full listing, click here.