This simulation offers insights into the management of global corporations using sustainable business practices, including the “Sustainable Value Framework” developed by Stuart Hart, Johnson School of Management, Cornell University.
You take over a large, global automobile manufacturer where your objective is to build sales, improve profitability and to maximize shareholder value. At the same time you need to control total carbon emissions from your business operations, in a tightening regulatory environment. Failure to limit “fleet” CO2 emissions will result in large financial penalties being applied to your company ́s profits, leading to a reduction in company value.
You also need to develop Sustainable Value for your business by implementing certain balanced, strategic investments which have various beneficial impacts. These include reducing total carbon emissions in your operations, reducing operating costs or improving consumer demand for your products.
A number of KPIs (Key Performance Indicators) allow you to track improvements in CO2 Efficiency, Energy Efficiency and Corporate Reputation, in addition to the more usual business indicators linked to profitability or cash flow. Your business success is also measured by the Market Value (Market Capitalization) of your company, which is directly connected to the profitability of your business, and operating decisions that you take. The higher your profits, the higher the market value of your company by the end of the simulation run. The regulatory environment in the auto manufacturing sector will impose increasing constraints on decision-making over time, so you will need to manage your business to conform to these new regulations and yet still make a profit.
This simulation and case study does not directly address issues of global warming, or the politics of such issues. It deals with the realities of operating a business where managers are obliged to understand and adapt to government regulations covering carbon emissions and other environmental concerns.
Also see: the Virbela/UCSD/Rady School of Management project - this simulation has been adapted for use in 3D worlds.
This simulation helps you, your students or manager-learners understand how business operates in the real world. Some of the issues you will cover are: