Creating Social And Environmental Value In China: Case Study Of Novo Nordisk

The importance of attaining sustainability in business operations

Identifying and critically evaluating the ways in which Novo Nordisk has created social and environmental value in China. 900

It is crucial for an organization in the modern era to focus on attaining sustainability in its business operations in order to not only enhance its organizational activities but have a positive impact on the society, environment and economic elements of the market (Thies and et. al., 2019). It allows an organization to improve its overall brand image in the market and ensure it is able to fulfil its responsibilities towards society, the environment as well as the economy through its various organizational operations. In context to the organization of Novo Nordisk, which is a pharmaceutical organization with a geographical presence consisting of production facilities in 8 countries, offices or affiliates in 5 countries and markets in over 180 countries. The organization specializes in diabetic care medications as well as devices. The organization has been able to develop value in China through its optimal structure and effective Triple bottom line which elaborates on how the organization conducts its business. Through this, the business has been able to create both social and environmental value in China (Liu and et. al., 2019).

The operations of the organization are based on establishing a healthy economy, environment along with society relative to long-term objectives and focus on taking these elements into consideration while taking its organizational decisions. Relative the operations of the organization in China are based on being financially responsible through effective management of financial resources of the business in order to attain as well as secure growth in a structured manner. The organization believes in providing quality results to its stakeholders and contributing to the socio-economic welfare of the region along with conducting ethical business practices which are transparent in nature which has helped the organization to create social value in China (Agrawal, Atasu and Van Wassenhove., 2019). In addition to this, the organization has been able to create social value in China by working towards defeating diabetes through their investment in enhanced methods of prevention, detection and treatment. Furthermore, the organization has created environmental value in China as well as the business is oriented toward reducing the overall consumption of natural resources along with manufacturing inputs across the established value chain. The organization is also devoted to minimizing outputs in the form of CO2 and water emissions (Mura and et. al., 2018).

The organization has also been able to develop social value in China by providing access to health care which helps in enhancing the lives of individuals. In addition to this, the organization has been able to improve the overall number of physicians that have attained training as well as the development of how to provide better support to society. Moreover, in order to create value in China relative to Social value, the organization has had a huge contribution in controlling the number of patients through optimal diagnoses and providing the necessary support that is required. This has also helped the business to increase the number of life-years saved which has helped improve the creation of value for the business in china in context to social aspects (Franciosi and et. al., 2018). In addition to this, the organization has provided its patients with effective education which has helped in developing positive engagement among the patients and the organization leading to the creation of optimal social value. Furthermore, the organization has focused on securing effective product supply in order to provide the products to the patients in the most efficient and cost-saving manner. Although the organization has aimed to develop social value in China it is also motived by the monetary aspects as the market is huge and has the potential to prove the organization with the necessary financial as well as brand recognition resources that it requires to attain growth in a most suitable manner (A?an,  Acar and Neureuther., 2018). This does not mean that the organization is solely focused on attaining money or providing benefits to society, but rather on finding a balance.

Novo Nordisk: A brief overview

The organization of Nova Nordisk have been able to create environmental value in China through tis value drives of energy as well as transportation. The organization has focused on reducing the overall energy that is consumed along with minimizing the input that is required in order to have a positive impact on the environment and its resources. This has helped the business to create effective value in China. In addition to this, the organization has focused on reducing the overall emission of CO2 through new processes as well as techniques in order to ensure that all its operations of developing products have minimal impact on the surrounding environment. This has been a major measure for the organization in creating environmental value in China (Kumar, Singh and Kumar., 2021). Moreover, the organization has focused on reducing the distance for production which will help in providing the products to the patients in a much more efficient manner. This will require minimal utilization of transportation along with fuel which will help in establishing a positive impact on the environment of the region. Although all the aspects and value drives of the business are oriented towards having a positive impact on the environment, it will also help the business to save huge costs relative to its operations such as cutting fuel and transportation expenses along with reduced use of energy will lead to saving of financial resources. In addition to this, the reduction in CO2 will help the business to enhance its brand image relative to the global market leading to improved sales as well as growth (Silva and Figueiredo., 2020).

Evaluating to what extent has Novo Nordisk’s approach to shared value created value for the company and strengthened the company’s position in the Chinese market? Justify your answer with supporting evidence. 540

The organization of Nova Nordisk has taken various approaches that have helped the business to create value in China and allowed the business to strengthen its position in the Chinese market. Given below are three approaches of Novo Nordisk in creating value in China:

Physician Training: The organization has been providing training farcicalities since the year 2013 in order to enhance aspects such as prevention, screening optimizing treatment and communication with patients. It was the first organization to establish an effective partnership with the Ministry of Health and The World Diabetes Foundation. The organization has taken up more than 220,000 physician training sessions in order to enhance the ability to prevent and provided essential support to the patients. The business also conducted a survey of physicians that were trained in diabetes management and on average each of the physicians treated around 230 patients in a year (Patil and et. al., 2021). According to the survey, the physicians rated training farcicalities by Nova Nordisk as an important contribution in attaining patient control which has helped the business to cheat value in the Chinese market as well as utilize its positive image relative to physicians its strength in the market as well.

Patient education: The organization of Nova Nordisk has been able to create optimal value in the Chinese market as well as to attain effective strength in the region by providing education to the society and businesses in the region. The organization since 1997 has focused on several educational programs in China in order to provide essential support to the patients in how their medicines need to be utilized in order to attain maximum benefit. In addition to this, in order to establish a positive relationship with its patients (Chu and Cheung., 2018). The organization also developed a NovoCare telephone hotline where patients can directly communicate with specialists and attain vital health support. Moreover, education of patients has allowed the business to create value on the bases of promoting awareness of diabetes which helps in social welfare. This has become the strength of the organization in the chines market as through educating the patients the organization has been able to increase its total sales per patient (discounted lifetime sales) by DKK 3,400.

Creating social and environmental value in China

Local Production: The organization has been able to create value in the Chinese market by enhancing its production efficiency along with attaining stability in its supply chain as well as relations. The organization identified that in order to secure its future supply chain and keep its quality high relative to insulin making it is important to have local production. The organization established stat of an art factory in China in order to attain efficiency in its production and have a deeper interaction with its customers through efficient response relative to the market demand (Sarkis and Zhu., 2018). This has become a strength for the organization as it is much closer to the market which helps in understanding customers. Although the production in China, when compared to others countries, is more CO2 intensive and will require urgent alteration in order to maintain the development of value as well as strengthen the Chinese market (Kumar, Meena and Difrancesco., 2021).

The issue is no longer about ‘good’ companies or ‘profitable’ companies but about companies doing the most good the most profitably’. Critically discuss this statement with reference to Novo Nordisk in China and any other companies. 

It is crucial for an organization to maintain a positive image in the market as well as generate profitability in order to compete. Although in the current market the organization that wants to attain success, as well as growth, has to focus on doing good in order to attain the most profits as they are linked to getting in the operations of the business (Gupta,  Kusi-Sarpong and Rezaei., 2020). In the context of the organization of Nova Nordisk, the business has introduced various approaches along with the development of value that is based on financial, economic, social as well as environmental value drivers which have helped in attaining an optimal position in the Chinese market (Rajesh., 2018). The organization is oriented towards doing the right thing and proving all benefits to the community which has provided it with enhanced sales and engagement with customers along with the development of an improved brand image in both local and international markets. The organization has also developed a blueprint for change that is ordered towards enhancing its business operations making them more effective as well as efficient in nature. This will help the business to develop a balance relative to doing the most good for most profitability. Another example can be Eli Lilly which is an American pharmaceutical company headquartered in Indianapolis. The organization has focused on reducing its environmental impact by reducing the wastage of resources such as energy, water and raw material in order to do its best and attain higher profitability (de Boer and Andersen., 2018). The organization has established new sustainability goals in order to reduce their emission and waste in order to ensure the safety of their employees as well as the community which will help the organization to not only be a ‘good’ company but an organization that is able to use sustainability elements in order to enhance the profitability of the business and gain significant market share relative to a specific region (Zhan and et. al., 2021). The overall statement is based on developing a balance that consists of improving organization operations through sustainability in order to ensure growth is attained.

References

Books & Journals:

A?an, Y., Acar, M.F. and Neureuther, B., 2018. The importance of supplier development for sustainability. In Sustainable freight transport (pp. 165-178). Springer, Cham.

Agrawal, V.V., Atasu, A. and Van Wassenhove, L.N., 2019. OM Forum—New opportunities for operations management research in sustainability. Manufacturing & Service Operations Management, 21(1). pp.1-12.

Chu, K.W.K. and Cheung, L.L.W., 2018. Incorporating sustainability in small health-care facilities: an integrated model. Leadership in Health Services, 31(4). pp.441-451.

de Boer, L. and Andersen, P.H., 2018. Operations Management and Sustainability.

Franciosi, C., Iung, B., Miranda, S. and Riemma, S., 2018. Maintenance for sustainability in the industry 4.0 context: A scoping literature review. IFAC-PapersOnLine, 51(11). pp.903-908.

Gupta, H., Kusi-Sarpong, S. and Rezaei, J., 2020. Barriers and overcoming strategies to supply chain sustainability innovation. Resources, Conservation and Recycling, 161. p.104819.

Kumar, G., Meena, P. and Difrancesco, R.M., 2021. How do collaborative culture and capability improve sustainability?. Journal of Cleaner Production, 291. p.125824.

Kumar, P., Singh, R.K. and Kumar, V., 2021. Managing supply chains for sustainable operations in the era of industry 4.0 and circular economy: Analysis of barriers. Resources, Conservation and Recycling, 164. p.105215.

Liu, X. ed., 2019. Environmental Sustainability in Asian Logistics and Supply Chains. Singapore: Springer.

Mura, M., Longo, M., Micheli, P. and Bolzani, D., 2018. The evolution of sustainability measurement research. International Journal of Management Reviews, 20(3). pp.661-695.

Patil, A., Shardeo, V., Dwivedi, A., Madaan, J. and Varma, N., 2021. Barriers to sustainability in humanitarian medical supply chains. Sustainable Production and Consumption, 27. pp.1794-1807.

Rajesh, R., 2018. On sustainability, resilience, and the sustainable–resilient supply networks. Sustainable Production and Consumption, 15. pp.74-88.

Sarkis, J. and Zhu, Q., 2018. Environmental sustainability and production: taking the road less travelled. International Journal of Production Research, 56(1-2). pp.743-759.

Silva, M.E. and Figueiredo, M.D., 2020. Practicing sustainability for responsible business in supply chains. Journal of Cleaner Production, 251. p.119621.

Thies, C., Kieckhäfer, K., Spengler, T.S. and Sodhi, M.S., 2019. Operations research for sustainability assessment of products: A review. European Journal of Operational Research, 274(1). pp.1-21.

Zhan, Y., Chung, L., Lim, M.K., Ye, F., Kumar, A. and Tan, K.H., 2021. The impact of sustainability on supplier selection: A behavioural study. International Journal of Production Economics, 236. p.108118.

Online:

Minimize Our Environmental Impact.,2021.[Online]Available through:< https://www.lilly.com/impact/minimizing-our-environmental-impact>

Changing diabetes in China.,2011.[Online]Available through:< https://www.novonordisk.com/content/dam/Denmark/HQ/sustainablebusiness/performance-on-tbl/more-about-how-we-work/Creating%20shared%20value/PDF/blueprint-changing-diabetes-in-china.pdf>

Video: Nova Nordisk: Changing Diabetes Care in China

https://www.youtube.com/watch?v=F2zOY0A_mgQ