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International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 4
1 Instructor’s Manual – Module 4 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
Module 4: Sustainability and Natural Resources
Use this Instructor Guide to incorporate the unique content of this product and facilitate your
Face-to-Face, Online, and Hybrid classes. This guide has been designed to be interactive and links
have been created within each title in the Table of Contents to guide you to each section. You
can also link back to the main page by clicking at the button at the bottom of each page.
Here is the Table of Contents highlighting what you’ll be able to find to support you in teaching
this module:
YOUR CONTENT
Summary
Learning Objectives
Key Terms & Key Terms with Definitions
Content Outline
ENGAGEMENT & APPLICATION (FACE TO FACE & ONLINE & HYBRID)
BOXED TEXT DISCUSSION QUESTIONS WITH SUGGESTED ANSWERS
IB IN PRACTICE
GLOBAL DEBATE
GET THAT JOB! FROM BACKPACK TO BRIEFCASE
Team Exercises
Supplemental Lecture
Tools & Tricks
Controversial Issues
Teaching Suggestions
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 4
2 Instructor’s Manual – Module 4 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
Time-Saving Hints:
Connect Content Matrix
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 4
3 Instructor’s Manual – Module 4 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
YOUR CONTENT
SUMMARY
This chapter reviews sustainability and how it affects the conduct of business. We look at frameworks
the critical aspects of natural capital that we review.
LEARNING OBJECTIVES
LO 4-1 Describe environmental sustainability and its potential influence on business.
LO 4-2 Describe frameworks for sustainability.
LO 4-3 Summarize ways to measure sustainability achievements.
KEY TERMS AND DEFINITIONS
biomass (p. 112)
A category of fuels whose energy source is photosynthesis,
through which plants transform the sun’s energy into chemical
energy
Carbon Disclosure Project (CDP)
(p. 94)
Organization that provides reporting frameworks for greenhouse
gas emissions and water use
carbon footprint (p. 94)
A measure of the volume of greenhouse gas emissions caused by
a product’s manufacture and use
climate (p. 106)
Meteorological conditions, including temperature, precipitation,
and wind, that prevail in a region
concentrating solar thermal
power (CSP) (p. 114)
A system using mirrors or lenses to collect sunlight for heating
water that powers an electrical generator
cradle-to-cradle design 93
A closed-loop design that recycles and reuses products
environmental sustainability
(p. 91)
State in which the demands placed upon the environmentby
people and commerce can be met without reducing thecapacity
of the environment to provide for future generations
geothermal power (p. 114)
Power from heat stored in the earth
Global Reporting Initiative (GRI)
Sustainability reporting framework developed among
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 4
4 Instructor’s Manual – Module 4 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This
(p. 94)
stakeholders
heavy oil (p. 109)
Oil that does not flow easily, presently sourced from oil sands and
oil-bearing shale
inland waterway (p. 104)
Waterway that provides access to interior regions
life cycle assessment (LCA)
(p. 92)
An evaluation of the environmental aspects of a product or
service throughout its life cycle
natural capital (p. 100)
Natural resources such as air, land, and water, that provide us
with the goods and services on which our survival depends
natural resources (p. 106)
Anything supplied by nature on which people depend
nonrenewable energy (p. 107)
Energy that comes from sources that cannot be replenished, such
as the fossil fuels—petroleum, coal, and natural gas—and nuclear
power
rare earths (p. 115)
17 elements used in defense and technology applications
renewable energy (p. 107)
Energy that comes from sources that are naturally replenished,
such as sunlight, wind and water flow
shale (p. 109)
A fissile rock (capable of being split) composed of laminated layers
of claylike, fine-grained sediment
solar photovoltaic power (PV)
(p. 114)
Power based on the voltage created when certain materials are
exposed to light
stakeholder theory (p. 99)
An understanding of how business operates that takes into
account all identifiable interest holders
topography (p. 102)
The surface features of a region
triple-bottom-line accounting
(3BL) (p. 100)
An approach to accounting that measures the firm’s social and
environmental performance in addition to its economic
performance
United Nations Global Compact
(p. 94)
A voluntary reporting scheme for businesses that covers critical
areas affecting the conduct of international business—human
rights, labor, the environment, and anticorruption efforts
water footprint (p. 95)
A measure of the amount of water used in a product’s
manufacture and use
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International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 4
CONTENT OUTLINE
The following section provides the flow of information using the LEARNING OBJECTIVES as a guide, KEY
TERMS learners will need to take away from the course and a notation of when to use POWERPOINT
SLIDES with LECTURE NOTES to drive home teaching points.
LO 4-
1
Describe environmental sustainability and its potential
influence on business.
• Definition
• Sustainability in the business context
• Systems concept
• Need to think about present and future
• Early efforts
Key Terms:
• Environmental
sustainability
Lecture Outline and Notes:
I. Definition of environmental sustainability
A. Maintaining something
B. Brundtland Commission drafted a widely accepted definition of sustainable development:
it “meets the needs of the present without compromising the ability of future generations
to meet their needs.”
C. Requires us to change the way we manage everything.
II. Sustainability in the business context
A. Systems concept. Local and global at the same time.
1. Need to think about present and future, simultaneously
2. Need to think about ecological, economic and social systems
B. Early efforts involved business operations
1. Resulted in conservation and savings
2. Then businesses moved to the value chain, and then to the larger picture with the
supply chain.
LO 4-2
Describe frameworks/systems for achieving sustainability
Key Terms:
B. Such “product stewardship” leads organizations to be concerned about the entire life of
their product.
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 4
6 Instructor’s Manual – Module 4 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
LCA.
D. Involves the cumulative impact of product, can lead to reductions and savings.
1. of environmental footprint,
2. cost structure,
3. potential carcinogens in inputs, processes and wastes.
4. Patagonia example: 1 tee-shirt required 700 liters of water with industrially-produced
cotton. Company switched to organic cotton, which requires less water.
II. Cradle-to-cradle design
A. Design should close production loop
1. Resources use din production are recycled and reused as part of the design
2. System cycles all materials and generates no toxic wastes. (Waste = Food)
B. Identifies two components
1. Technical nutrients, inorganic and synthetic, so reusable.
2. Biological nutrients, organic and decompose.
3. Example: Petroleum-based carpet manufactures (Interface, etc.) reprocess technical
nutrients (old carpets) to produce new product.
III. Accounting and Finance
A. Accounting controls rest of assumptions about people’s basic nature.
1. Tight controls suggest lack of trust.
2. Loose controls suggest people will act honestly when not closely monitored.
B. Example of U.S. expatriate paying taxes —in NY and Italy.
IV. Preferred leadership styles
C. Vary by culture
A. Paternalistic? Heroic? Focused on group or individual?
LO 4-3
Summarize ways to measure sustainability achievement.
• Carbon Disclosure Project (CDP)
• Footprinting
o Carbon
o Water
Key Terms:
Initiative (GRI)
• Carbon Disclosure
Project
• carbon footprint
• water footprint
I. Criteria for measurement and comparison of the effects of our actions
A. Measurement tools must measure across different sectors (comparability test). See
D. Carbon Disclosure Project: nonprofit that provides reporting frameworks for sustainable
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 4
water use and reduction of greenhouse gas emissions, including carbon emissions
reporting.
1. Over 85% Fortune Global 500 report to CDP.
2. Becoming standard framework for supply chain reporting
E. Footprinting
1. Carbon footprint: volume of greenhouse gas emissions associated with product,
throughout life cycle. Complicated calculation.
2. Water footprint: amount of water used in a product’s manufacture and use.
Complicated because we use water locally but discharge it globally
LO 4-4
Identify the characteristics of environmentally sustainable
business
• Limits to resources
• Interdependence of systems in which businesses
operate
• Equity in supply chains
Key Terms:
• life cycle assessment
• cradle-to-cradle design
I. Limits
A. Environmental resources (water, soil, air) are exhaustible.
B. Examples in extractive industries: FreeportMcMoran in Papua New Guinea
C. Recognizes ecological and social issues with local tribes. Negative example: Shell Oil in
Niger Delta.
II. Interdependence
A. Sustainable practices create complex interdependence among ecological, economic and
social systems.
B. These inter-relationships are often difficult to predict.
1. Fracking has caused social problems in rural parts of U.S.
2. Outsourcing decisions often have unanticipated social effects—childrens’ education,
subcontractor issues with pollution, safety.
III. Equity in distribution
A. For interdependence to work, there cannot be vast differences in the distributions of gains.
B. Interdependence requires business model that allocates value added over a wide array of
stakeholders.
C. Vast inequities lead to social disruption and violence.
D. One approach is to pursue backward integration to gain control over supply chain.
E. Palmisano of IMB: we need to abandon the corporate colonial model for one that is
globally integrated, where high levels of trust operate among all stakeholders.
LO 4-
4
Identify the characteristics of environmentally
sustainable business
• Limits to resources
Key Terms:
• life cycle assessment
• cradle-to-cradle design
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 4
• Interdependence of systems in which businesses
operate
• Equity in supply chains
I. Stakeholder model
A. Contrasts with traditional input-process-output model and exclusively profitability-focused
economic approach.
B. Theory developed by R. Edward Freeman calls for managers to consider the network of
tensions caused by competing internal and external demands that surrounds the business.
II. Stakeholder approach forces managers to examine the underlying values and principles of the
business and to articulate them.
A. All stakeholders have a voice in this network of relationships.
B. Examples of businesses that pursue an approach consistent with stakeholder theory
include Johnson & Johnson, eBay, Google, Lincoln Electric.
III. Triple-Bottom-Line accounting a way to share business data with stakeholders.
A. Measures economic (traditionally measured), social and environmental data.
B. Does not allow for comparisons across companies because measurements, especially social
and environmental areas are not standardized.
LO 4-5
Describe how the stakeholder model can help businesses
achieve sustainability
• Stakeholder model
• Stakeholder theory in practice
• Triple-bottom-line accounting as part of stakeholder
model
Key Terms:
• stakeholder theory
• triple-bottom-line
accounting (3BL)
LO 4-6
Describe how geographic features of a country or region
contribute to natural capital.
• Geography—our natural capital
• Location—political and trade relationships
• Topography
• Climate
Key Terms:
• natural capital
• topography
• inland waterway
• climate
• Nonrenewable energy sources
• Petroleum
• Nuclear Power
• Coal
• shale
• heavy oil
• biomass
• solar photovoltaic
power (PV)
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 4
9 Instructor’s Manual – Module 4 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
• Natural gas
• Renewable energy sources
• Wind
• Biomass
• Solar photovoltaic power
• Concentrating solar thermal power (CSP)
• Geothermal power
• Ocean energy
• Hydropower
• Nonfuel minerals rare earths)
thermal power
• rare earths
I. Natural resources: anything supplied by nature on which people depend.
II. Nonrenewable energy sources can not be replenished
A. Petroleum—crude oil
1. Cheap
2. Many industrial applications, including plastics, fertilizers
3. Estimates of world oil reserves are uncertain. Peak oil discovery thought to be in
B. Nuclear Power
1. Clean (no contribution to climate change) but not safe
2. Despite safety issues, growth area.
C. Coal
1. Pollutes heavily, but global consumption growing
2. U.S. has world’s largest recoverable coal reserves.
D. Natural gas—low pollution, growing fuel source
III. Renewable energy sources: growth in sector has outpaced growth in fossil fuels in U.S. and EU
A. Wind power now a mainstream electricity source
B. Biomass
1. Relies on photosynthesis
2. Ethanol reduces food crop acreage
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 4
10 Instructor’s Manual – Module 4 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This
document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
E. Geothermal power
1. Source is heat stored in the earth
2. Growing in Turkey, Iceland, Philippines. Some in U.S.
F. Ocean Energy
1. Sun’s heat on water and mechanical energy of tides and waves
2. Least mature of alternative energy sources
3. Established in France, UK. Growing in China, India, U.S.
G. Hydropower
1. Moving water to generate power
2. Largest alternative power source
3. Both large and small scale applications (China, Ethiopia, rural Africa)
IV. Nonfuel minerals—rare earths—China controls 95%
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