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Hello and welcome to this series of
introductory talks on business strategy.
My name is Robert Grant,
I'm a professor of strategic management
at Bacconi University in Milan, Italy.
I'm also the author of
Contemporary Strategy Analysis,
a leading strategic management textbook used
in business programmes throughout the world.
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Achieving compatibility
between the pursuit of profit
and the pursuit of social-environmental
goals is not automatic.
The relationship between profit and
social and environmental responsibility
needs to be understood and
it needs to be managed.
Realising this convergence can be
assisted through two concepts.
The first is the idea of
evolutionary fitness.
Firms need to nurture and sustain their
ecosystems and co-evolve with them.
Consider the case
of climate change.
For automobile producers
and oil companies,
the solution is neither to fight it
nor abandon what they are doing.
The challenge is to recognise the
changes that are afoot and adapt to them
so that they can become part of the
solution rather than part of the problem.
Second, firms need to focus on
those issues and activities
where there is the
potential for convergence
between commercial interests
and social interests.
Thus, through pursuing social and
environmental responsibility,
firms can gain
reputational benefits.
Conversely, if firms do not operate
according to the expectations of society,
they may well lose their
license to operate.
There are plenty of
examples of both.
In terms of building a reputation through
social and environmental responsibility,
Patagonia, Lego, Starbucks
are examples of this.
Conversely, environmental and ethical irresponsibility
is punished by consumers and investors,
consider the case of BP and
the Deepwater Horizon crisis.
Consider Harvey Weinstein's
firm, Weinstein Studios,
or News International and
the phone-hacking scandal.
These companies were
brought to the brink.
In the case of Weinstein,
over the brink of failure as a
result of management's actions.
If we view long-run profit as
the primary goal of the firm,
