Progressive Business Models

Palgrave Studies in Sustainable Business In Association with Future Earth Series editors Paul Shrivastava Pennsylvania State University University Park, PA, USA László Zsolnai Corvinus University Budapest Budapest, Hungary Sustainability in Business is increasingly becoming the forefront issue for researchers, practitioners and companies the world over. Engaging with this immense challenge, Future Earth is a major international research platform from a range of disciplines, with a common goal to support and achieve global sustainability. This series will define a clear space for the work of Future Earth Finance and Economics Knowledge-Action Network. Publishing key research with a holistic and trans-disciplinary approach, it intends to help reinvent business and economic models for the Anthropocene, geared towards engendering sustainability and creating ecologically conscious organizations. More information about this series at http://www.springer.com/series/15667 Eleanor O’Higgins · László Zsolnai Editors Progressive Business Models Creating Sustainable and Pro-social Enterprise Editors Eleanor O’Higgins University College Dublin Dublin, Ireland László Zsolnai Corvinus University of Budapest Budapest, Hungary Palgrave Studies in Sustainable Business In Association with Future Earth ISBN 978-3-319-58803-2 ISBN 978-3-319-58804-9 (eBook) DOI 10.1007/978-3-319-58804-9 Library of Congress Control Number: 2017948271 © The Editor(s) (if applicable) and The Author(s) 2018 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: Melinda Podor/Getty Images Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Preface The idea of the book was born in the Business Ethics Faculty meeting of CEMS—Global Alliance for Management Education that we organized in 2014 at Bocconi University in Milan. After many years of decrying, the unethical and unsustainable practices of mainstream business we realized that the time has come to study the best of what business can offer to the world. We decided that, along with colleagues from selected CEMS member universities and other friends, we would start to explore the most promising progressive businesses in Europe and beyond. By “progressive business” we presaged enterprises that seek to serve society, nature, and future generations, while maintaining their robustness and financial profitability. We did not want to develop a conventional case book. Instead, we decided to focus on the business models of progressive businesses. In our understanding, its business model is the way the company creates (and destroys) values in the broad socio-ecological context. The whole picture view of the mechanism of value creation and destruction is crucial to study the role enterprises play in the society and nature at large. v vi   Preface In 2015, we became involved in Future Earth, a major international research platform of academics from a range of disciplines, with a common goal to support and achieve global sustainability. Our project has been included as one of the projects of the Future Earth Finance and Economics Knowledge-Action Network. We are especially pleased that the resulting book of our project is published as the first volume in the newly created Palgrave Studies in Sustainable Business—in association with Future Earth. One of us (Eleanor) just recently visited Antarctica. She learnt there what it means to be a “visitor” in nature. In a deep sense, we are only temporary visitors on the Earth. For this reason, all of us should learn the governing rules of our host, respect its values, and organize our businesses accordingly. It is our hope and ambition that our book on Progressive Business Models can contribute to reinventing business, geared towards engendering sustainability and creating ecologically conscious and ethically minded business organizations. Dublin, Ireland Budapest, Hungary Eleanor O’Higgins László Zsolnai Contents Part I Introduction What is Progressive Business? Eleanor O’Higgins and László Zsolnai Part II 3 Progressive Business Cases Banking on Values: Triodos Bank Nel Hofstra and Luit Kloosterman 29 The Power of Tradition: Béres Pharmaceuticals András Ócsai and Zsolt Boda 51 Caffee Making as Art: illycaffè Antonio Tencati 73 Staff Inclusion: DKV Integralia Marc Vilanova and Silvia Agulló 95 vii viii   Contents Economy for the Common Good: Sonnentor Michael Muller-Camen and Jutta Camen 123 An Inclusive and Circular Value Chain: Armor Benedicte Faivre-Tavignot 143 Clean Energy: Lumituuli Mikko Jalas and Jukka Mäkinen 173 The Ethos of Partnership: The John Lewis Partnership Eleanor O’Higgins 193 The Danish Model of Corporate Citizenship: The Novo Group Jacob Dahl Rendtorff 221 Responsible Hospitality: Carlson Rezidor Knut J. Ims and Kjell Grønhaug 241 Sustainable Living: Unilever Patrick E. Murphy and Caitlin E. Murphy 263 Part III Conclusions Future of Business Eleanor O’Higgins and László Zsolnai 289 Index 305 Editors and Contributors About the Editors Eleanor O’Higgins, BA, M.Sc., MBA, Ph.D. is on the faculty of the School of Business at University College Dublin and is an Associate at the London School of Economics and Political Science. She specializes in teaching, research and publications about business ethics, corporate governance, corporate social responsibility and strategic and public management. She is the author of numerous papers in academic and professional journals, newspaper articles, book chapters, and case studies. She has received a number of international awards for peerreviewed articles on business ethics and governance, and her case study writing. Eleanor serves on the editorial boards of several international management, ethics, and corporate governance journals and carries out a range of national and international teaching and speaking assignments. She is a member of the Business Ethics and the Public Management and Governance interfaculty groups of the Community of European Management Schools (CEMS). She has held a range of leadership positions in the US Academy of Management, including chairing the Ethics Committee and the International Theme Committee. ix x   Editors and Contributors László Zsolnai is Professor and Director of the Business Ethics Center at the Corvinus University of Budapest. He is Cochair of the Future Earth Finance and Economics Knowledge-Action Network in Montreal, as well as President of the European SPES Institute in Leuven, Belgium, and a Fellow of the Royal Society of the Arts in London, UK. He has been a guest professor/visiting scholar at the University of Cambridge, the University of Oxford, the University of California at Berkeley, Georgetown University, the University of Richmond, Concordia University Montreal, the University of St. Gallen, Bocconi University Milan, and the Netherlands Institute for Advanced Study. László Zsolnai’s most recent books include The Collaborative Enterprise: Creating Values for a Sustainable World (2010. Oxford, UK: Peter Lang Academic Publishers); The Palgrave Handbook of Spirituality and Business (2011. Houndmills, UK, New York, NY: Palgrave Macmillan); Beyond Self: Ethical and Spiritual Dimensions of Economics (2014. Peter Lang Academic Publishers, Oxford); and The Spiritual Dimension of Business Ethics and Sustainability Management (2015, Springer). His website: http://laszlo-zsolnai.net. Contributors Silvia Agulló is Director of Responsible Business and Reputation at the DKV Seguros Group in Barcelona. She has previously worked at Pfizer, Unilever, and Pepsico. She has also been a consultant in collaborative projects with Creative Intelligence, Esade Creápolis. Silvia graduated in Business Administration and Management from the Universidad Ramón Llull, Barcelona, where she also obtained a doctoral degree in Responsibility and Ethical Management. In 2002, she published a book in Spanish (“Étikos”) on the theory and practice of business ethics. Silvia is a member of the Beta Gamma Sigma Association, Dirse and Dircom in Spain. Since 2012, she has served as a member of the editorial board of Tres Sesenta, a magazine that has a focus on the latest trends in sustainability. Zsolt Boda holds an MA in economics and a Ph.D. in political science. He is Director of the Institute of Political Science, Hungarian Academy of Sciences, and Associate Professor at the Business Ethics Center, Corvinus University of Budapest. He has coedited and written books in Editors and Contributors   xi Hungarian on corporate ethics, political theory, and environmental politics and policy, and has published numerous papers in academic journals and books on international ethics on the topics of fair trade, trade and environmental issues, and the politics of global environmentalism. Jutta Camen is a student at the Vienna University of Economics and Business (WU). For several years she has been interested in quantum physics, sustainable management, and spirituality and has presented papers about this topic at academic conferences. She is currently working on integrating these interests with case studies of progressive businesses. Benedicte Faivre-Tavignot is Affiliate Professor of Strategy at HEC Paris. She is also Executive Director of the Society & Organizations Center, which is designed to develop a new way of thinking at HEC about the role of business in society through teaching and research. She is also Executive Director of the HEC Chair in Social Business/ Enterprise and Poverty and the HEC Paris Master of Science in Sustainable Development. Her research focuses on the processes through which social businesses and “Base of the Pyramid” business models can leverage innovation and strategic renewal. Kjell Grønhaug is Professor Emeritus at the NHH-Norwegian School of Economics, Bergen, Norway. He holds an MBA and a Ph.D. in marketing from this institution, an MS in sociology from the University of Bergen, and completed postgraduate studies with an emphasis on quantitative methods at the University of Washington. He has been Visiting Professor at the Universities of Pittsburgh, Illinois at UrbanaChampaign, California, Irvine, Kiel, and Innsbruck and several other European institutions. He is an honorary doctor at the Turku School of Economics and Business Administration, the Stockholm School of Economics, and the University of Gothenburg. Grønhaug’s publications include 18 authored or coauthored books and numerous articles in leading American and European journals. His research interests relate to the creation and use of knowledge, the cognitive aspects of strategy, marketing strategies in novel high-tech markets, and methodological issues. xii   Editors and Contributors Nel Hofstra has been a lecturer at the Faculty of Economic Sciences of the Erasmus University Rotterdam in the Netherlands since 1986. She teaches Entrepreneurial Marketing, Sustainable Entrepreneurship, and Business and Society. She is a member of the Business Ethics Faculty Group of CEMS—Global Alliance in Management Education. Her research interests include eco-innovation and entrepreneurship, with a focus on the role of nature. Knut J. Ims is Professor of Business Ethics at the Department of Strategy and Management at NHH-Norwegian School of Economics in Bergen. He is a member of the business ethics faculty group of CEMS—Global Alliance in Management Education, and a Fellow of the European SPES Institute. He has been a visiting scholar at the Corvinus University of Budapest, Universidad Catholica Argentina (UCA), and the Weatherhead School of Management, Cleveland, USA. His recent publications include (with Zsolnai, L. 2015) Social Innovation and Social Development in Latin America, Egypt, and India in G. Enderle and P. E. Murphy (Eds.) Ethical Innovation in Business and Economy, Edward Elgar, Cheltenham, UK, Northampton, MA, and (with Pedersen, L. 2015), Personal responsibility for the greater good in K. Ims and L. Pedersen (Eds.) Business and the Greater Good. Rethinking Business Ethics in an Age of Crisis. Studies in Transatlantic Business Ethics, Edward Elgar, Cheltenham, UK, Northampton, MA. Mikko Jalas is a Professor of Sustainable Consumption at the Aalto University School of Arts, Design and Architecture. He holds a Ph.D. in Organization and Management from Aalto University. His work focuses on consumer engagement with renewable energy, and on the related broader transitions in the energy system. He has worked with citizen initiatives on creating alternative energy solutions for several decades. His work also covers business innovation in areas such as energy efficiency services and forest product certification. In addition to research activity and practical engagement with change initiatives, he is responsible for the interdisciplinary Master’s program “Creative Sustainability” at Aalto University. Editors and Contributors   xiii Luit Kloosterman until 2016, Luit Kloosterman was serving as Assistant Professor of marketing at the Erasmus University Rotterdam in The Netherlands. During an academic career spanning more than 30 years, he was involved in teaching international marketing and consumer behavior and organized research projects in which Erasmus students undertook research into Dutch companies located abroad. Kloosterman has also coauthored several marketing textbooks in Dutch. Based on his experience, he struggles with the neoclassical perspective that dominates marketing and other economic fields, and has become interested in how spirituality and sustainability can contribute to transforming economics. Jukka Mäkinen is Docent of Business Ethics and Corporate Social Responsibility at the Aalto University School of Business, Department of Management Studies. He teaches Business Ethics, Corporate Social Responsibility, and Philosophy of Social Sciences. Mäkinen approaches the political and socioeconomic roles of businesses in society from the perspective of the contemporary theories of social justice and political theory. His research has appeared in journals such as Business Ethics Quarterly, the Journal of Business Ethics, the Journal of Global Ethics, the Journal of Sustainable Tourism, Management and Organization Review, and Utilitas. Mäkinen has coedited books and written several chapters for books about globalization, business ethics, corporate social responsibility, social justice, and political theory. Michael Muller-Camen is Professor of Human Resource Management at the Vienna University of Economics and Business (WU). Michael has developed a reputation as one of the leading academics in the newly emerging area of Sustainable HRM, and in particular, Age Management, Green HRM, and Human Rights. He is currently exploring the HRM implications of new organizational concepts such as Conscious Capitalism, Economy of the Common Good, and Holacracy. He is editor of the German Journal of Human Resource Management (GHRM) and has published articles in journals such as the British Journal of Management, the Journal of Human Resource Management, Human Relations, and Organization Studies. xiv   Editors and Contributors Caitlin Murphy is a senior finance major and sustainability minor at the University of Notre Dame and the undergraduate representative for the Mendoza College of Business council, as well as a student intern at the University of Notre Dame’s Investment Office. She is also a site coordinator, helping to bring a national organization called Food Rescue US to campus in an effort to redistribute food waste from oncampus eateries to shelters in the surrounding community. After graduation, she plans to work as a marketing analyst for GCM Grosvenor in Chicago. Patrick E. Murphy is Professor of Marketing in the Mendoza College of Business at the University of Notre Dame. He is a former chair of the Department of Marketing and was a Fulbright Scholar at University College Cork in Ireland and the Lille 2 University in France. He specializes in business and marketing ethics. His work has appeared in leading ethics and marketing journals and his articles have won awards from three academic journals. In 2011, he received the Lifetime Achievement Award from the Marketing and Society Special Interest Group of the American Marketing Association. In 2016, Murphy received two awards from Notre Dame for his research and service contributions to the university. His latest book (with G. Laczniak and F. Harris), Ethics in Marketing: International Cases and Perspectives, was published by Routledge in 2017. Professor Murphy holds a BBA from Notre Dame, an MBA from Bradley University, and a Ph.D. from the University of Houston. Andras Ocsai worked for a number of private companies and also in the public sector after graduating from the Corvinus University of Budapest in 2002. After finding his way back to his alma mater, he started a Ph.D. in 2012 with the title of “Value-oriented Business and Ecological Transformation.” Jacob Dahl Rendtorff is Senior Associate Professor at Roskilde University, Denmark. He has a research background in ethics, business ethics, bioethics, political theory, and philosophy of law. He has also undertaken research into phenomenology and hermeneutics, as well as continental French and German philosophy. Since 1994, Rendtorff Editors and Contributors   xv has been visiting professor at Bentley College, Boston, the Markkula Center for Applied Ethics, Santa Clara University, Stanford University, Bard College, New York, the University of Paris-Ouest-La defense, and Copenhagen Business School. He has written many books and articles, including Responsibility, Ethics and Legitimacy of Corporations (Copenhagen Business School Press, Copenhagen 2009). Antonio Tencati is Full Professor of Management at the Department of Economics and Management, Università degli Studi di Brescia, Italy. He earned his Ph.D. in Corporate Social Responsibility from De Montfort University, Leicester, UK. He also serves at the Department of Management and Technology, Università Bocconi, Milan, Italy, and collaborates with the Technology and Operations Management Unit at the SDA Bocconi School of Management. Tencati is a member of the Business Ethics Faculty Group of CEMS—The Global Alliance in Management Education. His research areas include business and society, the management of sustainability and corporate social responsibility, environmental management, and innovation and operations management. His work has been published in leading international journals and academic books. Marc Vilanova is a lecturer in the Department of Social Sciences and a researcher at the Institute for Social Innovation at the ESADE Business School, Barcelona. He also serves as the Academic Director of the Master of Science in International Management at ESADE. Marc has a B.Sc. in Economics from Shepherd University, USA, and a Ph.D. in Management Sciences from ESADE. His work focuses on managing responsible competitiveness through culture, identity, and innovation. Marc is also a sustainability, CSR, stakeholder engagement and social innovation consultant. He began his career as a consultant in Tokyo, working on projects in developing countries. He then moved on to work in consultancy services at PwC. Following this, he became a managing partner of a consultancy firm in Barcelona, and a freelance consultant for various strategic consulting companies, with a special focus on sustainability. In 2001, Marc began his collaboration with ESADE. List of Figures Banking on Values: Triodos Bank Fig. 1 Value creation by Triodos Bank 39 Staff Inclusion: DKV Integralia Fig. 1 Organizational culture as the foundation of the business model 104 Economy for the Common Good: Sonnentor Fig. 1 The Common Good Matrix 126 The Ethos of Partnership: The John Lewis Partnership Fig. 1 The governing structure of JLP Fig. 2 JLP democracy in action 203 204 The Danish Model of Corporate Citizenship: The Novo Group Fig. 1 Novo Nordisk’s stakeholder network 229 xvii xviii   List of Figures Responsible Hospitality: Carlson Rezidor Fig. 1 The Carlson company 245 Sustainable Living: Unilever Fig. 1 Leaders in sustainability Fig. 2 USLP 2015 Revision Fig. 3 Progress toward the three sustainability goals Fig. 4 Greenhouse gas footprint 272 274 275 280 List of Tables Banking on Values: Triodos Bank Table 1 Key financial data of Triodos Bank 37 An Inclusive and Circular Value Chain: Armor Table 1 Thermal transfer business: Market share by volume and competitors (2014)  Table 2 Absenteeism and Resignations since 2004 Table 3 Financial data of Armor Table 4 Staff in Morocco 155 157 158 161 Clean Energy: Lumituuli Table 1 Basic combinations of business and politics in society 182 xix