Renault’s circular economy, the elusive work-life balance and why whistles remain un-blown

Profit from performance

A little while ago, Renault sat down with its supplier of cutting fluids – the lubricants used in metalworking and machining. The French car manufacturer had a proposal.

Rather than a sales-based contract, which persuaded the supplier to sell as much product as possible, Renault was keen to move to a performance-based arrangement. The new approach has seen Renault’s total cost of ownership for cutting fluids fall by about one-fifth. For its part, the supplier is now positioned higher up the value chain. As for the environment, 90% less waste cutting fluid is now discharged.

The case is an illustrative example of what system theorists now refer to as the “circular economy”. In today’s era of scarcer, more expensive natural resources, companies need to consider non-linear, “regenerative” systems: step forward circular thinking. The end goal is to eradicate waste: use biodegradable, non-toxic materials in consumable products, and recycle (or “upcycle”) materials in durable products.

The benefits for the environment of lower resource use are self-evident. And the economic case appears strong too. Net savings from materials could reach $1tn a year globally, the researchers calculate. In the EU alone, the automotive sector could see costs of $200bn removed from its production chain.

Breaking out of a linear way of doing things is not without its challenges, however. Companies’ supply and manufacturing footprints are huge, for one. Fiendishly complex (and non-transparent) product formulations and “ingrained habits” tying us to business-as-usual thinking present further barriers.

Fear not, though: this paper is full of ideas on how to turn things on their head. Take “reverse-network activities”. Managers should take the final products as their starting point and work back via components to raw materials, not vice versa, the authors recommend. Improving skills in “reverse-logistics” is another idea. Think remanufacturing, refurbishment and the like. Whatever the case, collaboration is key. Only by acting together will we “trigger [the] self-reinforcing virtuous cycle” that is the circular economy.

Nguyen H, Stuchtey M and Zils M (February 2014), “Remaking the industrial economy”, McKinsey Quarterly: 46-63.  

Work-life balance

Drawing on five years of research and almost 4,000 interviews with business executives, this fascinating article asks how to achieve the elusive goal of work-life balance.

First off, define for yourself what a successful balance looks like. Women, for example, are apparently more likely to value individual achievement and having passion for their work. Men, in contrast, typically prioritise remuneration. Each choice has implications for how many hours you’re prepared to put in at the office.

Then there are the common bugbears to consider. Do you log on at home? Interviewees were broadly split between those who thought of modern communication technologies as “invaders” of family space (about one-third) and those who see them as facilitators of work-life balance (about one-quarter) – the rest are neutral or have mixed feelings. Then there’s the question of how much to travel or whether to relocate.

Depressingly, career women appear to pay the highest price when it comes to work-life balance. Three in five men have partners who stay at home, keeping the domestic show on the road; only one in 10 women have a similar arrangement with their partners. Women are also more likely to forego children for work: female executives have 1.67 offspring on average, compared with 2.22 among men.

Groysberg B and Abrahams R (March 2014), “Manage Your Work, Manage Your Life”, Harvard Business Review, 92 (3): 58-66.

Silent Samaritans

Prompted by shifts in regulation, companies have seriously upped their game of late when it comes to whistleblowing provisions. The only problem is, too few employees are using them. The phenomenon of “fallacious silence”, as academic ethicists term the act of keeping quiet about misdemeanours, is not a new puzzle. The argument that employees lacked the opportunity to blow the whistle no longer holds true in many cases, however. The prospect of retaliation for “grassing up” a colleague still dissuades many from speaking up, but, again, changing corporate attitudes mean whistleblowers are better protected these days.

This leads the authors of this paper to consider a third factor: rationalisation. How do individuals persuade themselves that failing to report illegal or unethical behaviour is morally acceptable? Based on findings from a sample group of accounting students, personal morals (moral sensitivity, moral judgment and moral motivation) appear to play a critical role. Questions companies should be asking are: do employees have the moral awareness to actually identify a wrongdoing? Are they subject to social norms that legitimise that wrongdoing? Do they have the “moral development” to act on what they recognise as their moral duties?

Too many continue to answer “no” to the above. This prompts the authors to call for a greater emphasis on “character” and “moral competence” in professional education, not simply technical and cognitive development.

MacGregor J and Stuebs M (March 2014), “The Silent Samaritan Syndrome”, Journal of Business Ethics 120:149–164.  

Campus news  

The University of Bath is offering a free online course on sustainability management via the FutureLearn platform. The course is called Making an impact: Sustainability for Professionals.

The Annual Sustainability, Ethics and Entrepreneurship Conference is due to take place on May 22 and 23 in Denver, US.

Academic news  Business School Bulletin  Renault 

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