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Amanco Discussion

Amanco Discussion

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Published by Mahendra Prabhu

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Published by: Mahendra Prabhu on Jan 15, 2011
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01/20/2015

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Amanco: Sustainable Balanced Scorecard Harvard Case

Evolution of an internal strategic management tool
Professor Doug Cerf Donald Bren Graduate School of Environmental Science and Management Environmental Accounting &Financial Management (ESM 284) Spring 2007

learning and growth perspectives ± Investments in sustainability were not critical to create shareholder value ‡ Stage #3 Sustainable balanced scorecard (mid 2000) ± Evolves over time within a firm as we observe in the Amanco case Printed on recycled paper-actually better. internal processing. not printed at all .Evolution of an internal strategic management tool ‡ Stage #1 Metrics tied to strategy ± Metrics financial ± Investments in long-term capabilities and customer relationships were not critical for success ‡ Stage #2 Balanced Scorecard (the early 90¶s) ± Financial. customer.

not printed at all . ± An additional perspective added to take environmental and social aspects into account ± A separate scorecard should only be used to augment the previous two options Printed on recycled paper-actually better.Sustainable Balanced Scorecard ‡ Possible methods to integrate sustainability into Balanced scorecard ± Sustainability aspects integrated in the existing four standard perspectives.

Sustainability Scorecard System ‡ ³Our strategy is the best for sustainable creation of value´ » Amanco¶s founder ‡ Simultaneously maintain a sustainable strategy and an increase in profitability ± Earnings increased from $520 to $700 million from 2001 to 2006 Printed on recycled paper-actually better. not printed at all .

‡ Amanco executive started the World Business Council for Sustainable Development ± Coined the term eco-efficiency ‡ Adding greater value to goods and services while using fewer resources and generating less waste and pollution ± Developed GHG accounting and reporting standard with the World Resource Institute Printed on recycled paper-actually better. not printed at all .

‡ Evolution of Amanco¶s sustainable scorecard follows«. not printed at all . Printed on recycled paper-actually better.

not printed at all .Amanco¶s first Sustainability scorecard (2001) ‡ ‡ ‡ ‡ Class discussion of Exhibit 7 Identify perspectives Explain the level of integration of sustainability Objectives in each block ± Translated into action plans ± Details responsibility ± Determine necessary resources need for each objective ‡ Action plans revised quarterly ‡ Action plans thoroughly discussed with middle management Printed on recycled paper-actually better.

not printed at all .Amanco¶s Triple Bottom Line Sustainability Strategy Map (2002) ‡ Previous version did not present the triple bottom line concept as an element for competitive advantage. development and value creation ‡ Class discussion of Exhibit 8 ‡ Strategy management committee met quarterly to learn from the scorecard ‡ Link of sustainability scorecard to compensation to improve accountability Printed on recycled paper-actually better.

6 million per year beginning in 2005 ‡ Local sustainability scorecards developed in countries and divisions ± Local scorecards aligned with corporate scorecard Printed on recycled paper-actually better. not printed at all .Revised Sustainability Strategy Map (2005) ‡ Class discussion of Exhibit 9 ‡ Connect sustainability scorecard to value creation ‡ Economic value added ± profits after subtracting the expected return to shareholders ‡ Goal to increase EVA $4.

not printed at all .Linking Sustainability to Compensation ‡ Managers must be motivated to act upon new information ‡ Financial. environmental and social metrics have significant influence on employee awards ‡ Employees that do not reach the target do not receive the reward for that dimension ‡ Compensation link sporadically implemented because labor laws varied by country Printed on recycled paper-actually better.

not printed at all . methodology. source. responsible party.Selected Indicators (Exhibit 10) ‡ For each indicator the unit. frequency and classification are determined ‡ Indicators ± Economic ‡ Change in economic value added ± Social ‡ External ranking of the 150 best places to work ± Environmental ‡ Savings as a result of environmental efficiency Printed on recycled paper-actually better.

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