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A Natural-Resource-Based View of the Firm
By Stuart L. Hart, Academy of Management Review (1995).
Stuart's earliest and most frequently cited academic article which proposes how the challenges of the environment and poverty can be leveraged to produce a sustainable form of competitive advantage.
"Historically, management theory has ignored the constraints imposed by the biophysical (natural) environment. Building upon resource-based theory, this article attempts to fill this void by proposing a natural-resource-based view of the firm - a theory of competitive advantage based upon the firm's relationship to the natural environment. It is composed of three interconnected strategies: pollution prevention, product stewardship, and sustainable development. Propositions are advanced for each of these strategies regarding key resource requirements and their contributions to sustained competitive advantage..."
For the PDF of the complete article, please click here.
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Does it Pay to be Green?
By Stuart L. Hart and Gautam Ahuja, Business Strategy and the Environment (1996)
Among the first published pieces of empirical research on pollution prevention, this article demonstrates that corporate initiatives to reduce emissions produce cost savings within 1-2 years of initiation.
"Evidence can be marshaled 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 firms using data drawn from the Investor Responsibility Research Center's Corporate Environmental Profile and Compustat. The results indicate that efforts to prevent pollution and reduce emissions drop to the 'bottom line' within on to two years of initiation and that those firms with the highest emission levels stand the most to gain..."
For the PDF of the complete article, please click here.
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Beyond Greening: Strategies for a Sustainable World
By Stuart L. Hart, Harvard Business Review (1997)
The first article to appear on sustainable business in Harvard Business Review, this classic piece won the McKinsey Award for best article in HBR for 1997. Providing the first articulation of the "sustainable value portfolio," it helped to launch the movement for corporate sustainability.
For the PDF of the article, please click here.
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Global Sustainability and the Creative Destruction of Industries
By Stuart L. Hart and Mark Milstein, Sloan Management Review (1999)
This paper contrasts strategies for "greening" (which involve continuous improvement and incremental improvement with those of "beyond greening" (which emphasize the "creative destruction" of current core technologies and incumbent businesses).
For the PDF of the article, please click here.
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Do Corporate Global Environmental Standards Create or Destroy Market Value?
By Glen Dowell, Stuart L. Hart, and Bernie Yeung, Management Science (2000)
In this empirical analysis, we find that corporations adopting a single, stringent environmental standard (versus defaulting to less stringent host country standards) have significantly higher market values. This paper won the 2001 Moskowitz Prize for best research article on social investing.
"Arguments can be made on both sides of the question of whether a stringent global corporate environmental standard represents a competitive asset or liability for multinational enterprises (MNEs) investing in emerging and developing markets. Analyzing the global environmental standards of a sample of U.S.-based MNEs in relation to their stock market performance, we find that firms adopting a single stringent global environmental standard have much higher market values, as measured by Tobin's q, than firms defaulting to less stringent, or poorly enforced host country standards. Thus, developing countries that use lax environmental regulations to attract foreign direct investment amay end up attracting poorer quality, and perhaps less competitive, firms. Our results also suggest that externalities are incorporated to a significant extent in firm valuation. We discuss plausible reasons for this observation..."
For the PDF of the article, please click here.
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The Fortune at the Bottom of the Pyramid
By C.K. Prahalad and Stuart L. Hart, Strategy+Business (2002)
This pathbreaking article provided the first articulation of how business could profitably serve the needs of the four billion poor in the developing world.
For the PDF of the article, please click here.
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The Great Leap: Driving Innovation from the Base of the Pyramid
By Stuart L. Hart and Clayton Christensen, Sloan Management Review (2002)
This article shows how the four billion poor at the "base of the pyramid" provide the ideal laboratory for incubating disruptive new clean technologies, enabling them ultimately to "trickle up."
For the PDF of the article, please click here.
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Creating Sustainable Value
By Stuart L. Hart and Mark Milstein, Academy of Management Executive (2004)
This article develops the "sustainable value framework" (first introduced in the 1997 HBR article) in depth, and shows how sustainability connects to the creation of shareholder value.
For the PDF of the article, please click here.
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Engaging Fringe Stakeholders for Competitive Advantage
By Stuart L. Hart and Sanjay Sharma, Academy of Management Executive (2004)
Rather than involving only known stakeholders important to existing businesses, this article makes the original case for engaging those on the periphery or "fringe" - the poor, the weak, the isolated, even the voices of other species with which we share the planet. Through "radical transactivenss" (RT), companies can build the competitive imagination necessary for future business success and the pursuit of a truly sustainable form of global development.
For the PDF of the article, please click here.
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Reinventing Strategies for Emerging Markets: Beyond the Transnational Model
By Ted London and Stuart L. Hart, Journal of International Business Studies (2004)
This article points to the importance of developing a new corporate capability in "social embeddedness" to succeed at the "base of the pyramid." Based upon extensive interviews and case analysis, three strategies emerge as being especially important: working with non-traditional partners, co-inventing custom solutions, and building local capacity.
With established markets becoming saturated, multinational corporations (MNCs) have turned increasingly to emerging markets (EMs) in the developing world. Such EM strategies have been targeted almost exclusively at the wealthy elite at the top of the economic pyramid. Recently, however, a number of MNCs have launched new initiatives that explore the untapped market potential at the base of the economic pyramid, the largest and fastest-growing segment of the world? s population. Reaching the four billion people in these markets poses both tremendous opportunities and unique challenges to MNCs, as conventional wisdom about MNC global capabilities and subsidiary strategy in EMs may not be appropriate. How MNCs can successfully enter these low-income markets has not been effectively addressed in the literatures on global and EM strategies. An exploratory analysis, involving interviews with MNC managers, original case studies, and archival material, indicates that the transnational model of national responsiveness, global efficiency and worldwide learning may not be sufficient. Results suggest that the success of initiatives targeting low-income markets is enhanced by recognizing that Western-style patterns of economic development may not occur in these business environments. Business strategies that rely on leveraging the strengths of the existing market environment outperform those that focus on overcoming weaknesses. These strategies include developing relationships with non-traditional partners, co-inventing custom solutions, and building local capacity. Together, these successful strategies suggest the importance of MNCs developing a global capability in social embeddedness.
For the PDF of the article, please click here.
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