Subject matter: Harvard Business Review Reflection
Article: Harvard Business Review| Scorched Earth
Author(s): Elizabeth Economy and Kenneth Lieberthal
Date of publication: June 2007
The article entitled “Scorched Earth ” written by Elizabeth Economy (senior fellow for Asia with the U.S. Council on Foreign Relations in New York) and Kenneth Lieberthal (William Davidson Professor of Corporate Strategy and International Business, the China director of Davidson Institute, and the Arthur Thurnau Professor of Political Science at the University of Michigan in Ann Arbor, senior director of Stonebridge International, a Washington, D.C.–based consulting firm, and the co-author, with Geoffrey Lieberthal, of “The Great Transition” (HBR October 2003)) was published in the Harvard Business Review of June 2007 on the pages 88 to 96. The article deals with the problem of environmental degradation in China which is of great concern for MNEs that are active in, or are going to be active in China concerning both future opportunities and risks. Summary
The authors of this article consider the threat posed by environmental degradation as the greatest risk of doing business in China. The problem is that this topic is barely discussed within corporations. This is a serious mistake. Multinationals may be busy with other problems, but the Chinese government, NGOs, and the Chinese press have been focused squarely on the country’s energy shortages, soil erosion, lack of water, and pollution problems. The authors believe that these problems are so severe they might constrain GDP growth. Moreover, it is from the MNEs expected to play a key role in the protection of the environment. If that does not happen, multinationals face clear risks to their operations, their workers’ health, and their reputations. In implementing environmental issues into their strategies, foreign firms need to be both defensive and proactive....
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