BUS446 Sustainable Business Models

Autumn 2023

Spring 2024

Topics

Companies are increasingly expected to respond to social and environmental sustainability concerns related to their strategies and operations. That is, they are expected to be both sustainable and profitable. This requires designing and innovating sustainable business models. This course centers around this challenge.

The course consists of two main modules. The first module "recognize and rethink" addresses the challenge of understanding the company’s current business model and its strengths and weaknesses, both from a business performance perspective and with regard to societal and environmental externalities.

The second module "reinvent and reorganize" addresses the challenge of innovating and redesigning the business model in a manner that aligns sustainability performance and business performance, and reorganizing in a manner that promotes such performance.

Module 1:

This part of the course introduces the business model framework, the three components of business models, and the manifold ways in which they can be innovated. This part of the course emphasizes the practical nature of the business model concept, in the sense that it relates to the concrete questions managers need to address in the design and innovation of a business model. This is related to the offering to customers (value proposition), the configuration of resources, activities and partners needed to deliver the offering (value delivery), and the choices related to revenue streams, payment models and cost structures that allow the company to make a profit (value capture). This part of the course also emphasizes new business models and innovative approaches to create, deliver and capture value.

This part of the course also introduces the concept of sustainability, with regard to both the social and the environmental externalities of business models. Different perspectives on sustainability and the measurement thereof are introduced, and emphasis is placed on analyzing how different business models have different footprints with regard to sustainability. Furthermore, this part of the course introduces the concept and perspectives of the circular economy, as a contrast to traditional, linear models of business.

Implications for product and service design as well as for business model design and innovation are discussed.

Module 2:

In the second module of the course, the emphasis is placed on how to innovate existing business models in a way that makes them more sustainable, or design new business models that represent an improvement on the status quo with regard to sustainability. Furthermore, the big question that is addressed is how to make such improvements in a way that is compatible with profitability, and that might even lead to competitive advantages. In this part of the course, issues related to strategy formulation, leadership,organizational design and management control for sustainability performance are also addressed. Moreover, this part of the course includes case workshops in close collaboration with Norwegian companies in the process of innovating their business models for sustainability.
Learning outcome
Upon successful completion of the course the student:

Knowledge
- will have developed an understanding of central concepts and theories on business model innovation and sustainability.
- will have knowledge of the various research methods used in studies on aligning sustainability performance and financial performance.
- can demonstrate knowledge of the most recent research in the field of sustainable business model innovation.
Skills
- have advanced skills in business modelling.
- can explain concepts such as business models, innovation, sustainability and circular economy.
- can identify and analyze relevant sustainability issues for a company, and distinguish between more and less material sustainability concerns.
- can apply theories of sustainable business model innovation on concrete company cases.
General competence
- can communicate with specialists in both academia and practice about complex issues in business modeling and innovation for sustainability in business.
Teaching

Lectures are given as a combination of lectures and prerecorded video lectures.

Course requirements:

- Blog posts and comments on the course's Facebook page

- Project paper in groups of 4 (+/- 1) students
Compulsory Activity

Written group project papers, ca. 10 pages; groups of 4 (+/- 1) students.

Two blog posts on the course's Facebook page (individual basis).

Eight blog post comments (individual basis).
Assessment

6 hours written school exam.
Grading Scale

A-F
Literature
Text book:
- Jørgensen, S. og Pedersen, L.J.T. (2018). RESTART Sustainable Business Model Innovation. London: Palgrave.
Collection of scientific articles and other readings provided on Leganto
- Bashir, H., Jørgensen, S., Pedersen, L. J. T., & Skard, S. (2020). Experimenting with sustainable business models in fast moving consumer goods. Journal of Cleaner Production, 270, 122302.
- Bocken, N. M., de Pauw, I., Bakker, C., and van der Grinten, B. (2016). Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 33(5), 308-320.
- Bocken, N. M. P., Short, S. W., Rana, P., and Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42-56.
- Bocken, N., Boons, F., & Baldassarre, B. (2019). Sustainable business model experimentation by understanding ecologies of business models. Journal of Cleaner Production, 208, 1498-1512.
- Bocken, N. M., & Short, S. W. (2021). Unsustainable business models-Recognising and resolving institutionalised social and environmental harm. Journal of Cleaner Production, 312, 127828.
- Davenport, T. H. (2009). How to design smart business experiments. Strategic Direction, 25(8).
- Eccles, R.G., I. Ioannou, and Serafeim G. (2014). The Impact of Corporate Sustainability on Organizational Processes and Performance, Management Science, 60, 11, 2835-2857.
- Forstater, M., Zadek, S., Evans, D., Knight, A., Sillanpaa, M., Tuppen, C. and Warris, A. (2006), The Materiality Report: Aligning Strategy, Performance and Reporting, AccountAbility, London.
- Johnson, M.W., Christensen, C.M. and Kagermann, H. (2008). Reinventing Your Business Model, Harvard Business Review, 86, 1-11.
- Jørgensen, S., Mjøs, A., & Pedersen, L.J.T. (2021). Sustainability reporting and approaches to materiality: Tensions and potential resolutions. Sustainability Accounting, Management and Policy Journal [Available OnlineFirst].
- Jørgensen, S., Pedersen, L. J. T., & Skard, S. (2021) How going green builds trusting beliefs. Business Strategy and the Environment [Available OnlineFirst].
- Lüdeke‐Freund, F., Gold, S., & Bocken, N. M. (2019). A review and typology of circular economy business model patterns. Journal of Industrial Ecology, 23(1), 36-61.
- Lüdeke-Freund, F., Carroux, S., Joyce, A., Massa, L., & Breuer, H. (2018). The sustainable business model pattern taxonomy—45 patterns to support sustainability-oriented business model innovation. Sustainable Production and Consumption, 15, 145-162.
- Porter, M.E. and Kramer, M.R. (2011). Creating Shared Value: How to reinvent capitalism - and unleash a wave of innovation and growth, Harvard Business Review, 89, 1/2, 62-77.
- Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2016). Business models for sustainability: A co-evolutionary analysis of sustainable entrepreneurship, innovation, and transformation. Organization & Environment, 29(3), 264-289.
- Schwab, K. (2015). The Fourth Industrial Revolution [*excerpt of chapters 1-2]. Davos: World Economic Forum.
- Skard, S., Jørgensen, S., & Pedersen, L. J. T. (2020). When is sustainability a liability, and when is it an asset? Quality inferences for core and peripheral attributes. Journal of Business Ethics, 1-24.
- Unruh, G. (2016). Sustainability Reporting: One Size Fits Nobody. MIT Sloan Management Review, Dec. 12, 2016
This is an ENGAGE-course

This is an Engage-course