How the Organizations Have Come in Terms with the Effects of Climate Change - Research Paper Example

Introduction To understand better about how the organizations in different sectors have come in terms with the effects of climate change, interviews were conducted with different industries and their respective clients with a common set of questions related to environmental change. The results of the interviews that were conducted with the engineering contractors and their client Network Rail are analyzed here. It is done to provide a better understanding of the awareness level that the organizations have on the competitive advantage provided by implementing environmental strategies. The results are analyzed in relation with the discussions that were explained in literature review section. Based on the discussions made on global warming and its effects, both the organizations agreed to the fact that global warming is a significant problem and believe that it is important for them to act on it with immediate effect. As a service provider for Network Rail, Atkins limited believes that public is the major contributor for global warming. They suggest that with proper usage of rail networks, the usage of cars and trucks to travel can be avoided to a great extent and thereby, reducing the emission of greenhouse gases. The organizational heads believe that, because of recession in current economy, the issues related to environmental changes have lost their limelight and have taken a back step. With the climatic change meet scheduled to happen at Copenhagen in November, clients and service providers believe that the global warming issues will again be under the scanner. They expect the meeting to design long term plans to achieve the goal of reducing global emissions by 80% from the current level in 2050. On organizational perspective, as an example of companies practicing new strategies with the primary focus both on environment and customer, the rail network organization has come up with an A2B strategy for their business. By this strategy, they have kept the mitigation of climate change effects as one of the top requirements, on par with cost and maintenance activities. Based on the argument produced by Arvin Lazar regarding climate change becoming one of the top most agenda for organizations, the two organizations have different opinions on this issue. Being a part of the government of UK, Network rail has taken into consideration the environmental impact by green house gases, in their funding strategy. They have organized an environmental committee to promote them to a state where they have a clearer idea about the environmental impact caused by them. Whereas on the other hand, the contractors are concerned more about the quality of the product they deliver rather than climate change. They prioritize issues based on the client needs and believe that climate change would be considered as a top priority in the near future. On an introductory note, we can summarize the issues that the contractors and the client are challenged by implementing the environmental change strategies in their respective system. For the client, implementing the environmental strategies is in the pipeline but the only drawback they are facing is a failure of an estimation of the cost required to do the same. The contractors, due to recession are in a state of implementing environmental strategy only on compulsion from the client and hence it is yet to become their prime motive. Since there are no set of standards on implementing the strategies, both the clients and contractors believe that the implementation is not a onetime process. Government The government has introduced a program called Climate Change Program (CCP) to reduce Carbon content emission levels. But then, as (David 2008) suggests, the above program will not affect greatly on reducing the percentage of emissions. The contractors agree with this thought as their main goal is quality of work rather than leverage of taxes. The client side analysis shows that they believe the rules are only just to comply and suggest that legislations in Scotland have to certain extent, embodied the necessities of the requirement for the current scenario. As mentioned in Tang 1997, the clients too agree with the pressure on them as they face the necessity to follow the carbon emission disclosure strategy and Chancellor Gordon Brown's perspective of UK objectives; employment , growth and care for environment. On the suggestion by (Hoffman, 2007), regarding change for greener environment promoting a bigger market shift, the contractors believe that they are in a premature state regarding this issue. They are confident of the steps that are taken, intending to proceed in a positive note and are awaiting a behavioral change within the organization to integrate these proceedings. Based on the government strategies for capping the emission of gases, the organizations are afraid to take up the risk to implement the strategy. The recession has added to their woes. There environmental policies are still in the reviewing stage and the clients are yet to care about competitive advantage aspect of such strategies. Environmental Management When the environmental strategies followed by the client were reviewed, the Network rail organization is currently under planning process. They are planning for short term and long term goals. There only cause of concern for not implementing a green strategy till now is the cost of expenditure. Their key goal is to devise and implement all strategies within 2020 as their funds would be worked out by that time. Once implemented, they expect innumerable opportunities to provide to people of different fields. This shows that many of the organizations are yet to implement a green strategy as suggested by Bushan and MacKenzie, 1994. When further analysed, their primary concern seems to be an aversion to risks. People of different organizations are so petrified to take risks only for the purpose of climatic change. The causal analysis shows that the negative impact of these risks could prove costly to the organization and hence there is such an aversion to taking opportunities. The client organizations accept that the thought process of green strategy still remains to be an afterthought process rather than an anticipatory process. This is directly related to Azzone(1998) division of strategies based on the reaction of the organizations. While Environment Management Systems (EMS) is predicted as a proactive strategic tool to gain competitive advantage, the client is yet to initiate such a system. They are still in the design of the framework and ensuring to apply best practices to turn them into a better business management system. They are in the process of merging environmental design to an engineering framework. Also, environmental specialists are assigned to do such quality works with the management, providing a job opportunity to people with some accreditation in this field. The contractors believe that the EMS is the current best tool for gaining competitive advantage through environment strategy. They also believe that ISO 14000 falls under such strategy. Their worrying point is not achieving the same but sustaining it as it would have severe impacts on the management, if failed. While the client side is yet to agree with the process, the service providers who support the clients are ready to embrace the strategy as it is indicating the best way forward for gaining competitive advantage. The strength of the contractors lies in accepting these new strategies to service the client in order to gain the competitive advantage. While there are innumerable opportunities available on applying, the client has to wait for the payback for long years. As suggested by Azzone(1998), the changing requirements of investors regarding the green environment strategy is posing a concern to the clients as they are not able to follow a particular standard of actions. Risks The clients and the contractors were aware of the four risks namely physical, regulatory, competitive and technical risks. The Network Rail counterparts were aware of the physical risks that could damage the rail networks and the risks they carry due to lack of implementation of a green strategy. They could face legal troubles if they do not cap the emissions of carbon content. They are also in risk of losing their competitive edge if the environmental strategies are not implemented. Similarly, most of their risks are based on their operational service and hence any neglect to update the technical aspects would lead to catastrophe. On the other hand, the contractors are more concerned about the financial risks and give more importance to the cost expenditures involved in risk benefit analysis. The cost implications that come along with the strategies implemented for capping carbon emissions depends solely on the clients instructions as the contractors are concerned only about the quality of work. They are in a state of accepting the effects of the risk they are ready to take as larger importance is not given to it. On the climate change risks playing a bigger role in future, the contractors believe that climate risk strategies are in a similar position to what safety was in the 70's and believe it to be the future trend. Hence, it can be summarized as they are aware of the competitive advantage they could provide to the clients with implementing environmental strategies. Procurement Strategies Both the client and contractors are in synonymous view with Coulter's words that competitive edge is the basic necessity for every organization to sustain and excel (2005). When questions about promoting purchase of 'green' goods and work were asked, the clients are ready to push the contractors to apply strategies that would satisfy the environmental legislations of the government. They believe that most of the contractors are aware of this fact. The client on its own has implemented many strategies like WARP and A2B strategies that signify the importance of climate change and move the organization in the direction of minimizing it. But having said that, the cost and benefit strategy is still the most preferred by the client in gaining the edge for the organization. They still believe they are not completely into accepting environmental strategy as they are not aware of the complete benefits they could obtain from the contractors, if applied. The contractors are of the view that safety cost and quality are still the main requirements of the client but they feel that they are to raise the standards to gain the edge as the clients are on the verge of pushing them for including environmental changes too. On the opportunities provided by clients, the contractors are expecting a lot of job opportunities as the clients in the past two years are concentrating more on buying carbon less products. Since this is a new strategy, the number of people who have cognizance about this aspect are very less and hence the job opportunities are bound to raise. Both the counterparts are in the middle of the prospector strategy and reactor strategy as proposed by Miles and Snow. As per (Tang, 2007) suggestion, the clients and the contractors are in stage of analyzing their own strengths in order to develop carbon emission strategies. Their main motive is to understand their own culture and behavior in order to differ from that of the competitors. Businesses On the business perspective, the clients are yet to follow business models like emissions trading scheme. Their reasoning suggests that the issue is due to the expenditure of money as it involves lot of years to renew the money they invested. But, Michael and Brent suggest that businesses have taken this as an opportunity to gain the strategic edge against the competitors. This contradicts the views of the contractors. But as per the international energy agency's suggestion, the contractors have to provide plans on reducing the carbon emissions of the clients in order to reduce cost and gain the competitive edge. The clients on the other hand believe that the framework that has been implemented for the railways were consolidated on the basis of avoiding railways from failure. Hence it is still in defender strategy and is in the position of consolidating itself. The application of environmental strategy involves lot of training and documentation and they are expecting such things from their contractors. Competitive Strategies On the analysis based on the argument that businesses with climate change strategies implemented have competitive edge over others, the clients were of the view that most of the products that have been delivered have been environment centric and stress that rail network would have gone into dust if they haven't produced such products. They also believe that replacing diesel trains with electrified trains are the best strategy they are working on to maintain the competitive edge. They believe to have implemented this strategy only due to pressures from external side and are working with the focus on 'green strategies'. Both the client and the contractors are ready to follow up with other industries strategies which have been successful like, Unilever, Investa and Wal-Mart. Marketing The clients are aware of the marketing challenges they have to face on introduction of 'greener' products. They believe on (William, 2007) view that marketing such a 'greener' strategy would increase their customers database and would make people travel more frequently. They are also aware of Peter's suggestion(2007), that marketing their products should be done on ground level rather than exaggerating it. Though the client is yet to strategize marketing externally with the public regarding climate change, it is having plans to explore the opportunities to educate their workers about the challenges they have to face. Their expectations regarding job opportunities with respect to environment protection is on a high and they believe on the contractors to deliver for it. Based on the interview analysis, it could be concluded that clients and contractors are aware of environmental strategies and the day to day changes that occur with it. Based on Daniel and Andrew's view that environment plays a significant role in a business environment, both the clients and contractors have taken steps to integrate it within their system to gain the competitive edge over other organizations. Read More