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By March 2020, Philip Morris International (PMI) had defined its purpose, "[to] create a smoke-free future and ultimately replace cigarettes with smoke-free products" and had validated PMI's materiality matrix. PMI's statement of purpose (SoP) was first published in the form of a letter from the board of directors to the company's shareholders and was published in its proxy statement of March 2020. PMI's sustainability leadership team (Huub Savelkouls, Chief Sustainability Officer and Jennifer Motles Svigilsky, Director of Social Impact & Sustainability) were working on the company's first ever integrated report (IR) due for publication by June 2020. Connecting a sound sustainability materiality assessment, a concrete SoP and a detailed IR would, they thought, bring together actions and words, and convey exactly how the company's strategy would create value for society and shareholders. They had the difficult task of setting realistic but ambitious targets, with a timeline to achieve them. They knew that targets - or a timeline - that were too ambitious and that the company could not deliver on could cause blowback for the team. At the same time, targets that were too conservative could lead to disengagement and exacerbate stakeholders' mistrust and undo all their hard work since 2015. The case is about a company in one of the so-called sin industries that has committed to phase out cigarettes in favor of a smoke-free future based on reduced-risk products.

Hijo Resources Corporation (Hijo) was a conglomerate based in Tagum, Davao del Norte, Philippines. Hijo began as an abaca plantation in the 1940s and ventured into the cultivation and exportation of Cavendish bananas in 1968. Alongside its agribusiness operations, Hijo had diversified into a conglomerate with business interests spanning a broad range of sectors. However, Hijo was no longer able to operate its business as usual due to changing economic, environmental, and societal challenges. The company's current initiatives were fragmented and existed in silos within each strategic business unit (SBU). In April 2018, Hijo's president and chief executive officer needed to determine how to holistically integrate sustainability practices into the company's value chain, cutting across different issues and encouraging collaboration across Hijo's different SBUs.

The chief information officer and head of human resources at Hero MotoCorp Limited, India's largest two-wheeler company, was responsible for overseeing the company's corporate social responsibility (CSR) programs. Under his leadership, the company's CSR team had started an ambitious project to provide livelihood and skills training to girls and women from marginalized socio-economic backgrounds. By March 2019, the program had helped many women become financially independent by providing training and opportunities to earn a living. These women otherwise lacked the resources and family support to gain employment or start their own business. However, the head of CSR wondered whether or not the company had done enough for women to reach their goals and become independent. Although the various CSR programs at Hero MotoCorp Limited had been successful, how could the company scale up its CSR programs for greater impact to help more girls and women?

In 2013, Nokia sold its Device and Services business to Microsoft for €5.4 billion. For decades Nokia had led the telecommunications (telecom) industry in handsets and networking. By the late 2000s, however, Nokia's position as market leader in mobile devices was threatened by competition from new lower-cost Asian manufacturers. Apple's 2007 release of its iPhone established an entire new category-the smartphone-immediately popular with users. What were Nokia's missteps over the years? What should Nokia have done differently?

The case is the fourth is a case series documenting the genesis, deal engineering, early implementation and then mounting operational challenges faced by Robin Budowski as he acquired and tried to turn around Château d'Agel, a vineyard located in the Minervois region of Languedoc, going from ideation to execution, stagnation and deep crisis. The key protagonist has to decide which plan he will present to the upcoming critical shareholders' meeting. Chateau d'Agel was acquired in 2003, for €0.8 million. After years of below par performances, sales dropped drastically in 2017 while capital expenditures exploded, generating critical financial issues. The vineyard manager was replaced and Robin took full operational control to manage the turnaround, cutting costs and investments.

Case (A) describes the situation facing John Davison after joining the company in December 2014 as the new CEO. A failing ERP implementation had led to serious operational issues in Singapore (its home base) and the Philippines (its biggest and most profitable market). Affected hospitals and doctors had complained directly to the Zuellig family, who owns the company. The board fired the two Co-CEOs who had been running the company and brought John in to turn it around. The company had lost ground with the ratio of operating profit to Gross Operating Revenue (GOR) dropping from 30% in 2009 to 14% in 2014. Increased competition leading to falling margins had contributed to this, as had a lack of focus on improving productivity. The company's most important clients, such as GSK, were threatening to take their business elsewhere if Zuellig Pharma did not fix its operational problems. The organization was fragmented, with a very small head office, disparate processes across the country operations, and no central leadership of key functions such as operations and quality assurance. The board had lost confidence in the leadership team which, in turn, felt that the board was interfering too much and not giving them the freedom to address the problems at hand. The company had invested in a number of businesses it saw as complementing its main distribution core, but these were sub-scale and (with one exception) loss-making. The leadership team needed to urgently develop a turnaround plan.

Case (B) is set in January 2020 when CEO John Davison decided to step down as CEO by end of June 2020. It describes the specific actions of Zuellig Pharma's transformation and how they resulted in more than doubling the company's net profit between 2015 and 2019 These actions included: (1) driving operational excellence by successfully completing the ERP implementation and taking other steps to fix operational problems; (2) fostering the leadership team through selective changes and aligning it around an integrated regional strategy; (3) increasing head office control while ensuring that country operations had the autonomy needed to operate effectively; (4) resetting the relationship between the management and the board to create more alignment and trust; (5) strengthening relationships with key distribution clients; and (6) growing the solutions businesses which accounted by 2019 for over 20% of GOR and net profit. The case also describes the situation facing Zuellig Pharma as the Covid-19 pandemic began to unfold, and John Davison's initial thoughts on related key issues facing the company.

Case (C) is set in July 2020 when John Graham took over as Zuellig Pharma's new CEO and he needed to decide how to take the company forward. Prior to that, John Graham had effectively led the company's Commercial Solutions business. However, as the new CEO he needed to manage the entire portfolio of new solutions businesses and investments in digital startups. Zuellig Pharma had successfully navigated the first six months of the COVID-19 pandemic. It had benefited from its earlier efforts to increase the robustness of its supply chain as well as the resilience and dedication of its employees. The COVID-19 crisis had accelerated the roll-out of its new e-commerce platform, which allowed for online ordering and cash collection. At the same time, the company had suffered financially because some costs had significantly increased. Zuellig Pharma faced an even more difficult environment with new stakeholders (like patient groups and Ministries of Health) playing a more important role. Given these challenges, its leadership needed to decide how to take the company forward and ensure that it continues to thrive in the future.

Cumplo S.A. is a Chilean fin-tech company based on sharing economy principles that aims to provide fair credit access and interest rates to small and medium enterprises. By 2016, Cumplo had successfully closed over 3,000 credit operations for a total of around USD 75 million, financed by over 3,500 investors. The case underlines the major issues confronted by the firm's owners concerning involving the limited transparency of personal financial data, low levels of trust in society, competitoin from traditional incumbents in banking, and the institutional voids commonly encountered by sharing economy businesses. It also also highlights debates concering B-Corporations and the the advantages and challenges of doing business with a social or environmental agenda.

Electrolux AB is the world's fifth-largest maker of consumer appliances. In November 2018, Electrolux launched the trial of a subscription-based business model in Sweden for the Pure i9 - a high-end robotic vacuum cleaner. Within nine months, Daniel Wentz, VP Software Products, who had spearheaded the initiative, started seeing traction in the market. Daniel was convinced that there was a much bigger opportunity for Electrolux to create value with the new hardware-as-a-service concept for small appliances. But key questions remained: How to shift the organization from a hardware-first product-push comfort zone to software-first service-pull model? How could Electrolux create more value with the hardware-as-a-service model? How to scale up the subscription-based business model? What options might be considered? What kind of investment and leadership commitment would it take to succeed?

Handout for Case IM1083

The case is about a company in one of the so-called sin industries that has committed to phase out cigarettes - the origin of its sins - in favor of a smoke-free future based on reduced-risk products. In early 2020, Huub Savelkouls, Chief Sustainability Officer at Philip Morris International (PMI) and Jennifer Motles Svigilsky, PMI's Director of Social Impact & Sustainability, were working on the company's first ever integrated report due for publication in June 2020. Motles, perceived skepticism and mistrust about PMI's strategy and, specifically, serious doubts about the health effects of IQOS. In 2017, the UN Environment Programme Finance Initiative, in conjunction with Tobacco Free Portfolios, had called for a Tobacco-Free Finance Pledge. By 2020, the pledge had 141 signatories and 41 supporters. Some environmental, social and governance (ESG) investors still seemed interested in PMI's strategy, but not many were ready to engage publicly. In January 2020, they met with Professor Robert G. Eccles (PMI's advisor on matters regarding sustainability, social impact and investor engagement since May 2019). They were ready to build and validate PMI's materiality matrix and try to align stakeholders' demands with PMI's priorities. They needed to look at PMI's value proposition in more depth in light of the feedback received from stakeholders and the significance of PMI's impact on society and the environment. And they needed to do this in the context of a blanket exclusion of the tobacco industry by ESG investors, mistrust from stakeholders and reputational liabilities. Motles stressed the importance of validating the sustainability materiality matrix because she thought that materiality was a foundational concept in integrated reporting. The case ends with Motles feeling the challenge (a make-or-break moment for her career) and how much was at stake; the sustainability team could not let their stakeholders down and destroy the rapport they were trying to build.

Ukrainian founder Aleksandr Stepura wants to grow his civilian drone-manufacturing startup Skyeton. Thanks to a local pool of aeronautical expertise inherited from the Soviet period, Stepura rapidly reached product excellence, technically on par with global powerhouses such as Boeing and other manufacturers coming from the military Unmanned Aerial Vehicle (UAV) space. Coming from a market approach focused solely on addressing the needs of governmental entities (police, border patrol, coast guards...), Stepura wants to expand the activities to regular B2B sales, for which the sales cycle is much shorter and less dependent on political connections. But moving from B2G to B2B was no easy feat operationally. The startup also had to make other decisions: selling products (drones, as flying platforms or complete systems) or services? Where to re-locate the company? What business model to pursue? How much financing was required? What needs to change in the management team to go from startup to scaleup effectively?

By 2020, Bridge International Academies and its "school in a box" model had achieved great scale. By leveraging digital technology and public-private partnerships, they had reached one million children across Africa and India through hundreds of schools. However, the organization encountered controversy as well as unexpected challenges resulting from COVID-19.

In 2019, Netflix had 167 million subscribers globally and offered thousands of television shows and movies on its streaming application, a growing proportion of which it produced itself. Media giants, who for years had valued the relationship with Netflix because it provided an additional outlet, began to re-evaluate their own (make) versus contract (buy) distribution decision. Leveraging acquisitions, technology investments, and vast content libraries, they entered the streaming wars by going direct to consumers. Was Netflix vulnerable in head-to-head competition in an increasingly fragmented market? How should it respond to entry by its former partners?

Founded in 1947 as an affordable women's retailer, J. Crew launched a highly successful catalogue in 1983. J. Crew's brick and mortar operations and catalogue sales experienced healthy growth through the 1990s. Seeking a cash injection to further growth, and to compete with larger catalogue retailers, the company's founders sold a majority stake in 1997 to Texas Pacific Group. A controversial second private equity buyout in 2011 put the company in the hands of a subsidiary of Chinos Holdings, Inc.-a deal made at a time when there were signs that J. Crew was failing to adapt to changing customer trends. A series of debt restructurings dug an even deeper financial hole for the company-leading to J. Crew becoming the first retailer to file for bankruptcy during the COVID-19 pandemic of 2020. In Case A students will learn of the retail trends and private equity-guided deals that led to J. Crew's distress.

The B case takes a closer look at the impact of the COVID-19 pandemic and the revenue losses that ensued for the company.

The case documents the evolution of Dress Your Home (DYH) into a profitable line of business for Colcerámica. This was a great achievement since, outside of micro-finance businesses, there were very few large companies that had created successful initiatives with the base of the socio-economic pyramid. DYH initially sought to generate positive social effects through a variety of ways. A decade later, the social effects were focused on two proposals: one, on a small scale, to generate labor inclusion for low-income citizens as sales promoters; the other, on a larger scale, to improve the living conditions of thousands of households through their home improvement products. This is the second pedagogical case about the DYH experience. The first one focused on lessons about the logistics needed to reach the "last mile" (case SKS-116 in the HBP case collection).

In 2001 Iberdrola, which had resulted from a merger between two Spanish utilities nearly 10 years before, held assets that were primarily sustainable but included some power­generation plants fired by oil and coal. Its footprint was limited to Spain and a bit of Latin America. Looking for a CEO who was willing to challenge traditional industry models and build a better future, the company tapped Galan. His values gave him the grounding to design and lead Iberdrola's green mission, and he describes the past two decades as some of the most rewarding of his career. He and his team focused an ambitious strategy on their core business of generating and distributing sustainable and renewable energy through plants, networks, and storage facilities, doubling down on a low-carbon future. Competitors thought they were crazy, and regulators raised a skeptical brow. Some senior executives retired or left. But since then Iberdrola has expanded into dozens of countries on four continents, grown to serve 100 million people with power, created one of the largest wind energy companies in the world, and closed all its oil and coal plants. Its net profit of 3.4 billion euros in 2019 represents a fivefold increase since 2001.

Ernesto Blanco, a leading Venezuelan businessman in the financial sector, was proposing to create a foundation with the aim of promoting the development of the stock market in his country. He wanted this initiative to be aligned with the strategic vision of his business group, as much as possible. However, he did not rule out sponsoring something not directly linked to the line of interest of his organization, if it had an impact on the status quo of the national stock market. Given the wide spectrum of issues that would fit into such an initiative, he decided to focus his efforts by developing a strategic planning exercise run by his old friend Ramón Piñango from the Business Academic Training Center (CAAE). For a day, a group of important opinion-makers from the academic and business worlds helped to think about the challenges of this proposal. These discussions resulted in the design of "four strategic topics" on which the project should focus: ≈ Development of the population's technical and financial capacities ≈ Ability of Venezuelan companies to operate in stock markets ≈ Capacity of the regulatory environment to boost competition ≈ Stimulation of the demand for securities Although Ernesto Blanco was convinced that the strategic planning exercise, run by Piñango, had been a success, he still felt that he had not resolved his greatest concern: where to position his foundation in the thematic area that would have the greatest impact on society, while aligning it with the long-term development interests of his corporate group.