Stuart L. Hart

Does it Pay to be Green? An Empirical Examination of the Relationship Between Emission Reduction and Firm Performance

Evidence can be marshalled to support either the view that pollution abatement is a cost burden on firms and is detrimental to competitiveness, or that reducing emissions increases efficiency and saves money, giving firms a cost advantage. In an effort to resolve this seeming paradox, the relationship between emissions reduction and firm performance is examined empirically for a sample of S&P 500 firms using data drawn from the Investor Responsibility Research Centers Corporate Environmental Profile and Compustat. The results indicate that efforts to prevent pollution and reduce emissions drop to the ‘bottom line’ within one to two years of initiation and that those firms with the highest emission levels stand the most to gain.

From Chimneys to Cross-Functional Teams: Developing and Validating a Diagnostic Model

This article develops a framework for studying cross-functional teams in organizations that focuses on three domains: organizational context, internal process, and outcome measures. The framework was developed from qualitative data from over 200 individual and group interviews, written descriptions, and team observations. We then operationally defined this model through a set of questionnaire items and validated it through quantitative analysis of data from 565 members of cross-functional teams. The resulting framework provides a base for the future study of cross-functional teams.

STRATEGIC REFERENCE POINT THEORY

How can executives achieve a match between expected external environmental conditions and internal organizational capabilities that facilitates improved performance? This paper argues that a firms choice of ‘reference points’ can help achieve strategic alignment capable of yielding improved performance and potentially even a sustainable competitive advantage. Building upon prospect theory and other relevant theoretical perspectives, the strategic reference point (SRP) matrix is developed. A firms SRP consists of three dimensions: internal capability, external conditions, and time. A theory is developed which posits an optimal SRP structure, and propositions are offered which articulate the expected relationships between the SRP, strategic choice behavior, and firm performance. The paper closes with some suggestions for using strategic reference points in both research and practice.

A Natural-Resource-Based View of the Firm: Fifteen Years After

The authors revisit Hart’s natural-resource-based view (NRBV) of the firm and summarize progress that has been made in testing elements of that theory and reevaluate the NRBV in light of a number of important developments that have emerged in recent years in both the resource-based view literature and in research on sustainable enterprise. First, the authors consider how the NRBV can both benefit from recent work in dynamic capabilities and can itself inform such work. Second, they review recent research in the areas of clean technology and business at the base of the pyramid and suggest how the NRBV can help inform research on the resources and capabilities needed to enter and succeed in these domains.The authors revisit Hart’s natural-resource-based view (NRBV) of the firm and summarize progress that has been made in testing elements of that theory and reevaluate the NRBV in light of a number of important developments that have emerged in recent years in both the resourcebased view literature and in research on sustainable enterprise. First, the authors consider how the NRBV can both benefit from recent work in dynamic capabilities and can itself inform such work. Second, they review recent research in the areas of clean technology and business at the base of the pyramid and suggest how the NRBV can help inform research on the resources and capabilities needed to enter and succeed in these domains.

Invited Editorial: A Natural-Resource-Based View of the Firm Fifteen Years After

The authors revisit Hart’s natural-resource-based view (NRBV) of the firm and summarize progress that has been made in testing elements of that theory and reevaluate the NRBV in light of a number of important developments that have emerged in recent years in both the resource-based view literature and in research on sustainable enterprise. First, the authors consider how the NRBV can both benefit from recent work in dynamic capabilities and can itself inform such work. Second, they review recent research in the areas of clean technology and business at the base of the pyramid and suggest how the NRBV can help inform research on the resources and capabilities needed to enter and succeed in these domains.The authors revisit Hart’s natural-resource-based view (NRBV) of the firm and summarize progress that has been made in testing elements of that theory and reevaluate the NRBV in light of a number of important developments that have emerged in recent years in both the resourcebased view literature and in research on sustainable enterprise. First, the authors consider how the NRBV can both benefit from recent work in dynamic capabilities and can itself inform such work. Second, they review recent research in the areas of clean technology and business at the base of the pyramid and suggest how the NRBV can help inform research on the resources and capabilities needed to enter and succeed in these domains.

Innovation, Creative Destruction and Sustainability

OVERVIEW: Nearly 4½ billion people, all over the world, earn less than three dollars a day. These are largely rural, largely uneducated—but not stupid—individuals whom we do not understand and on whom corporations have never seriously tried to focus. The assumption has always been that this is a market for governments or the not-for-profit sector to worry about, sort of like an international division of labor. However, this base of the pyramid is where the biggest business opportunities lie. As technologists, it is the early market that we should be looking at.

The Base of the Pyramid Protocol: Beyond “Basic Needs” Business Strategies

Looking back over the half-dozen years since the publication of “The Fortune at the Bottom of the Pyramid,” we are reminded of the adage, “your greatest strength is your greatest weakness.” Arguably the greatest strength of that seminal paper was the simplicity with which the authors communicated an altogether complex and audacious vision: Corporations, by thinking of and engaging the world’s four billion poor as they would any other market segment, could address the material deprivation of the poor while generating significant profits for the firm. The paper rendered the complex, even intimidating, language and discourse of poverty and development into one to which managers could relate and, more importantly, one on which managers could act. Doing development was a question of doing business with a different customer. The result has been nothing short of catalytic: the number of conferences, initiatives, and papers on the subject matter has exploded, corporations across the globe have launched BOP, or Bottom of the Pyramid, ventures, and Peace Corps graduates are seeking out top MBA programs as a means to channel the passion that brought them to the Peace Corps in the first place. “BOP” has emerged as one of the most powerful management buzzwords of this decade. Simplicity and clarity, however, have come at a price. Reducing the complex meaning of “poverty alleviation” and “development” to the managerially accepted language of “customer needs” and “product development” gave managers a way to get their arms around the challenge, but it also led them to adopt a strongly “economistic” notion of poverty. This mental image has been further reinforced and validated by corporations’ traditional skill sets and capabilities. The lackluster development impacts of initial BOP ventures have led the nonprofit and public sectors, which initially extended cautious support for the concept, to voice increasing dissatisfaction. Some almost seem to feel they were duped, and that the BOP is little

Greening organizations 2000

Environmentalism will be one of the most potent forces of economic, social, and political change in this decade. By the year 2000, organizations and organizational theory will need to transform themselves dramatically to accommodate environmental concerns. Despite the rise of environmentalism over the last two decades, organizations and organizational theories have failed to adequately address environmental concerns. This paper examines this failure and proposes new concepts and a framework for greening organizations.

Expanding Possibilities at the Base of the Pyramid

ty alleviation. Driven in large part by the emergence of empowerment-based forms of development practice—most notably, Participatory Rural Appraisal—and the success of the Grameen Bank and the microfinance movement it catalyzed, it is now well accepted that sustainable poverty alleviation must recognize the poor as central agents in that process. Indeed, in place of the image of the poor as helpless dependants waiting on Western largesse to extricate them from their predicament, the poor are increasingly recognized as highly resourceful entrepreneurs who possess valuable knowledge, resources and capabilities. In turn, business development and enterprise creation driven by the poor has emerged as a powerful philosophy and tool for addressing poverty and marginality. Significantly, this shift has simultaneously altered the role of the development practitioner—from that of a “development doctor,” who diagnoses the poor’s problem and prescribes the solution, to that of “enterprise facilitator”, who assists the poor in acting on their self-defined aspirations. KickStart and its founders demonstrate the power of this enterprise-driven approach to poverty alleviation, as their MoneyMakerTM pump has empowered over 30,000 income-poor people to start or expand their own income-generating businesses on their own terms. Much as microfinance loans make possible a wide variety of businesses, so, too, do KickStart technologies. By simply making KickStart technologies accessible to the poor through local market outlets, KickStart provides an enabling tool that expands the poor’s opportunity set and, Erik Simanis and Stuart Hart

Toward quality criteria for collective judgments

Abstract While most organizational and social decision making is done in a group or collective mode, there are few guides or evaluative criteria for judging when a high-quality outcome has been reached. Most past studies of group decision making have been conducted in laboratories using student subjects and factual problems with correct answers as means for judging outcome quality. Such proxies are rough approximations at best of real-world conditions where value differences can be intense and problems have no correct or best answer. Drawing upon the existing literature, evaluative criteria are proposed including process, content, and outcome concerns. An instrument based upon these criteria is then applied retrospectively to six cases of ad hoc collective decision making. Using dimensional analyses, a set of more detailed evaluative factors is derived from actual participant responses. The results provide some insights into the nature of high-quality collective judgments as well as the most effective procedures for their achievement.