Business Purchasing And How It Effects The Environment - Assignment Example

Topic:   I. Business purchasing and how it effects the Environment  A. Thesis  The decisions made by all organizations have an effect on its stakeholders which includes the employees, consumers, government as well as the environment as a whole. The extent of the effect depends on the strength of the relationship between the business and the stakeholder, in question. Therefore, it is now a known fact that business decisions do have an external impact on its environment. Most of the consumers are unaware of the effects of their purchasing decisions on the environment. Businesses, however, have realized their even the most minor decisions made by them could have a larger impact on the environment including the people around them. B. Social responsibility  1. What is social responsibility? The main objective that most of the companies work towards is to make huge profits. However, the companies become so engrossed in it that they become indifferent to the effects of their activities on the environment. In other word, the companies fail to fulfill their social responsibilities. Social responsibilities are the responsibilities that businesses have towards one of their stakeholders which is the society as a whole. In order to be socially responsible, businesses need to critically study and analyze all the effects of their decisions on the environment as a whole. All external benefits should be maximized with all the external costs being minimized. Globalization has resulted in a number of advancements and now, social responsibility is considered as a way to measure the efficiency of the overall performance of the corporations. The social responsibility that corporations have towards their society is often termed as corporate social responsibility and the 21st century has witnessed a remarkable increase in the fulfillment of these responsibilities on part of the corporations. Corporations should make sure that there is a balance between its fulfillment of objectives and avoidance of any kind of external costs on the environment. There are a number of laws and regulations regarding the conduct of corporations and the impacts that their decisions can have on the environment. Corporate social responsibility is related to the concept of sustainable development which links the social, environmental and financial aspects of a corporation. This is known as the triple bottom approach and involves efficient use of resources today to save more for the future generations. Many companies are really involved in the objective of profit maximization that they tend to waste the resources in order to make as much profit as possible. Through CSR, corporations take an active part in the development of their communities and countries. Through investing in CSR activities, corporations can remain competitive by coming up with innovative products and this attracts investors as well as talented employees and consumers. Corporations need to realize that in order to succeed in the long run; it should behave in a socially responsible way along with focusing on maximizing short term profits.   2. How can companies do their part? The benefits of corporate social responsibility are not only enjoyed by the society but also by the company itself. In order to fulfill its part, corporations need to incorporate its plans for social responsibility in its broad company objectives. Corporations need to fulfill its core business activities in a socially responsible way. One of the ways is to invest in certain communities and provide employment opportunities for people living in that area. Perry Goldschein provided seven best practices, at sustainable brands 2010, which companies need to follow in order to fulfill its responsibilities towards its employees and consumers. The first of these is to set goals regarding its CSR policies. These goals should include small changes in the activities of the company for example, policies regarding the minimization of waste, the recruitment of efficient employees etc. These policies should be measurable and should support the overall strategies and objectives of the company. Another step should be to involve the stakeholders in the decision making as well as the implementation process. This would give a sense of responsibility to the stakeholders as well and they would be aware of the activities that the company is doing in order to fulfill its social responsibility. Another practice is the use of interactive maps to focus more on the key issues and make efficient use of the company`s resources. Corporations should analyze its decisions and try to minimize all external hazards on the environment. The company policies should also be in line with the governmental laws and regulations regarding the environment and society. Companies can report its csr activities and plans through its official websites or other sources of information. By doing this companies can accept the feedbacks by employees, consumers and other stakeholders as well. (Cecilia Lu, n.d.) 3. When properly implemented what is the out come After carefully planning out the policies of CSR, the corporation should make sure that these policies are implemented with the utmost efficiency. Without effective implementation, the entire planning process would go to waste and would further result in a waste of resources. Therefore, implementation is extremely important and should be handled by top level executives. If properly implemented, the company as well as the environment and the society as a whole would reap the benefits. In terms of the society and the environment, there would be lesser pollution as the company would be involved in cleaner technologies. Other benefits for the environment would include more opportunities in terms of employment and products and services as well as greater involvement in the decision making processes of the company. As far as the corporation, itself, is concerned, the benefits include innovation as well as cost savings. Innovation is really important for a corporation as this is what directs a company towards success. Sustainability is carrying out the normal activities of the business while reducing the consumption of energy and other natural resources. The environmental damage and atmospheric pollution should also be reduced as much as possible. In order to remain sustainable, the company needs to come up with new products which use cleaner technologies and reduces environmental damage. This results in new and innovative products of the company. Investing in new and cleaner technologies, for the sake of sustainability, results in huge cost benefits for companies. For example, in 2011, General Mills had a cost savings of around $600,000 as a result of investing in energy monitoring equipments. In all aspects, it is better to focus on long term benefits and plans rather than short term activities. Similarly, corporations should focus on long term profits by indulging itself in sustainable projects and by fulfilling its social responsibilities. This is because this would improve the reputation of the business which is essential for its long term success. Sustainable development requires focusing on triple financial bottom line including social and environmental aspects. Other benefits for corporations are that, nowadays, companies buy products from socially responsible companies and even talented and efficient employees are attracted to companies focusing on sustainable projects and activities. Therefore, companies should get involved in this strategic philanthropic activity and make social responsibility a part of its core mission. This would result in a win-win situation which would benefit the company as well as the society and the environment as a whole.   C. Labor laws and human factors of purchasing  1. Why the work forces do matter? Labor is an important factor used for business purchases and other essential activities of the company. Without labor, a company would not be able to carry out its normal operations as well as implement its overall strategies and plans. Therefore, organizations need to analyze its recruitment strategies and employ talented as well as efficient labor who are dedicated to their work and fulfill their responsibilities. Labor skills are extremely important, especially, for knowledge based companies. Effective use of labor results in increased labor productivity and lower labor costs which also reduce the overall costs of the company. therefore, labor management is critical to an organization`s success. Internal rules and regulations regarding labor should be followed by all members of the organization. Companies need to know the basic rights of employees and fulfill their responsibilities towards employees. If any company fails to fulfill its responsibility, then this might have a negative effect on the reputation of the business and will even result in reduced productivity and de-motivation of other employees. Therefore, it is highly essential for a corporation to treat its labor appropriately and introduce such measures in the workplace which make the employees motivated and more involved in their tasks and responsibilities. Managers should make sure that all members are complying with the internal as well as the governmental laws and regulations regarding employees.   2. How do overseas labor laws play a part in the environment? Every country has a number of laws and regulations regarding appropriate treatment of employees and these laws provide the basic guidelines about how employers should treat their employees. Labor laws are regulations which deal with the employer-employee relationships and specify the rights of both parties involved. All corporations should comply with both local as well as international labor laws as its success and reputation is directly related to it. Globalization has resulted in increased communication between all countries as well as between different corporations. It has also resulted in increased importance of international labor laws as well. The main objective of international labor laws is to educate people as well as organizations that labor is not a tool or a commodity which can be used for fulfillment of company goals and objectives. Through it, companies are made aware of their responsibilities towards its employees. These laws also communicate the consequences to be faced by those companies who do not comply with these standards. Companies with offices in other countries should make sure that they are aware of the laws of that respective country as different countries have different labor laws. There are different laws regarding the treatment of employees as well as the environment in which the company is operating. For example, US companies with operation in foreign countries are required to abide by the American environmental laws in order to protect the environment of other countries as well. Therefore, it is highly essential for an organization to follow all the laws of its own country as well as the foreign country in which it is operating as it is directly related to the environment of these respective countries. 3. Federal labor laws  The large number of labor laws indicates the significance of labor for an organization. There are a number of federal labor laws including collective bargaining, which is process which involves both the employers as well as employees. In this process, both parties negotiate with the aim of reaching at appropriate agreements regarding working conditions and other issues. However, there were a number of disputes, initially, regarding, the unequal bargaining power between both parties which were later resolved through additional federal labor laws. A large number of businesses are getting themselves registered as being federally regulated. This would also help in attracting more employees as most of the labor is now aware of their entitled rights. Employees, nowadays, study the extent of protection that companies are offering and base their decisions on it. Therefore, following federal laws also helps a company remain competitive in its industry and market. a. What has been done to prevent violations  The major focus of organizations, today, is profit maximization and therefore, companies tend to violate some of the local as well as federal labor laws. To ensure effective implementation of laws, federal and local organizations have constructed a set up to punish the violators of these laws and regulations. The departments involved, firstly, check the records of companies and if any discrepancies are found, then the companies are given a time limit to rectify their mistakes and make corrective action. The duration of the time limit depends on the extent of the discrepancy found. However, if a company violates the laws, intentionally, meaning that they were aware of the labor laws but still violated them then the department of labor charges a fine of upto $10,000. If child labor laws are violated then companies can be fined up to $10,000 per child. Companies which repeatedly violate the labor laws are subject to harsher penalties and may even be sentenced to prison along with different amounts of fines. Violations of health and safety standards can result in greater penalties depending on the extent of violation. b. The long arm of the law even overseas  Even in foreign countries, corporations violating these laws and regulations are penalized for not fulfilling their responsibilities towards their employees as well as the environment. Corporations cannot run from the long arm of the law in their respective countries as well as overseas. If in violation of the laws, the company would have to face the repercussions and pay in terms of money or other forms of penalties. Therefore, it is better for companies to make sure that it operates in compliance with the labor laws of their own country as well as the foreign country in which it is operating. Some countries have really harsh labor laws and it is better for organizations to study the labor laws thoroughly and follow them as much as possible. Getting involved in penalties will have a negative impact on the reputation of the business and might even reduce sales and profits. D. Environmental factors and the economy  Environmental factors directly affect the economy and all other factors related to the economy. These factors can either be a part of the internal or the external environment of a business. The internal environment of a company involves all those factors of a company which exist within the company including the organizational culture which the company follows as well as the internal business practices followed by the company. The external environment, on the other hand, includes all the external elements of the organization including the competitors, resources, technology as well as other economic conditions which have the potential to affect the organization. The general external environment includes international, technological, economic and socio-cultural factors whereas the external task environment includes the customers, suppliers, competitors as well as the labor market. As stated earlier, the decisions taken by companies also affect the environment around it including the society and its people. Therefore, the company needs to critically analyze its decisions and minimize its effect on the external environment as much as possible. 1. Pollution reduces money Pollution, whether air, land or water, has negative effects on human health and on the environment as a whole. In order to protect human beings and other creatures of the world, pollution should be prevented as much as possible and this could be done through pollution prevention strategies which aim to eliminate the source of pollution. Pollution prevention strategies could include an efficient use of all kinds of resources, investment in cleaner technologies as well as implementing changes in normal operations of the business to reduce the negative effects on the environment. Through these strategies, the hazardous effects resulting from production could be reduced. These would help to protect human health and will help in the protection of the environment as a whole. Prevention of pollution also helps to strengthen the well being of the society in terms of economic as well as social factors. There a number of laws and regulations regarding the amount of permitted pollution that companies can have. Exceeding the pollution limit can result in serious consequences for the company. Different countries have different laws regarding the limits on pollution. Companies which continuously exceed these limits have to pay huge amounts of fine in order to minimize further negative impacts on the society. The huge amount of money paid for the fine could have been used by the company for other purposes and negatively affects the operations of the business as well. Therefore, it is logical for the business to save this amount of money by assuring its compliance with the laws and regulations regarding environment. Corporations can do so by investing in waste reduction strategies and reviewing its normal operations and practices.   E. Going green ECO Friendly and the future  Going green essentially means to invest in those practices which are environmentally friendly and which helps protect the environment and its inhabitants. These practices are a result of responsible decisions being made by companies in order to make effective use of natural resources and sustain it for current as well as future generations. This is related to the concept of ecological sustainability which includes the redesign of organizational activities and practices to contribute to the economic development of countries. It also involves the protection of the atmosphere and the environment as a whole. In today`s world of rapid globalization, corporations are employing green business practices and using these environmentally friendly strategies to fulfill its social responsibilities as well as using it for marketing purposes. Going green does not always involve investing in huge systems and installing expensive machineries, it requires minor changes in the strategies of firms. Corporations can start by recycling minor items including paper, cartridges, can and other recyclable items. Another way is to save on electricity, power and energy consumptions which will result in huge cost advantages for the corporation itself. The concept of going green and investing in eco friendly practices is gaining momentum. Even employees are considering working for those companies which are environmentally friendly and which invest in such activities. Consumers have started buying products which are organic and non-hazardous to the environment. Recently, Wal-Mart started a campaign to make its consumers more aware of their purchasing decisions by informing them about the environmental effects of the products being bought. All of these advancements indicate that going green has a vast future and companies investing in such practices will benefit not only in the short term but in the long term as well. 1. Recycling, reducing clean energy  In order to be eco friendly, corporations need to recycle which reduces the carbonic emissions as well as the water and energy usage. There are a number of companies which are involved in recycling and other sustainable practices. Investing in cleaner technologies results in reduced emissions of greenhouse gases and therefore, reduces the resulting wastage. 2. Benefits of going green Organizations involved in going green practices and activities also face a number of benefits as a result of this. A major advantage of going green is the cost savings that result from a reduction in the consumption of electricity, water and other resources. This results in reduced spendings on electricity bills etc. purchasing recycled materials also result in lower costs of production for the company and reduces waste disposals. Other benefits include a cleaner environment and improved health conditions for human beings. By investing in cleaner practices, common air pollutants associated with health problems are reduced. Even the effects on global warming are reduced due to these practices and technologies. These activities also result in less exposure of employees to hazardous materials and chemicals. This can be done by creating working conditions which are safe for all the members of the organization. Other benefits of investing in going green technologies and practices include increased investor and employee confidence in the company which results in positive effects for the organization as a whole. It also results in increased compliance of the company and avoidance of all kinds of penalty fees. By investing in eco friendly practices, corporations focus on long term plans and also reap benefits in the long term as well. Through pollution prevention, companies can conserve the natural resources and reduce the impact on environmental degradation. F. Effects of pollution on the environment  1. Effect on wild life In the past 439 million years, 5 major extinctions have reshaped the earth in catastrophic ways. Each extinction leads to the wasting of about 50-95% of the dominant fauna of that time. The last extinction was that of the non-avian dinosaurs. Right now, we are living in the sixth greatest extinction. Called the Holocene extinction. However, the extinction triggered initially by Stone Age darts, blades and harpoons has escalated because of the Industrial Revolution and the chemical wastage, which spills from human life into territories of animal and plant life. Human presence in, or near, animal habitats can modify the behavior, survival, reproduction and distribution of individual animals thereby affecting the animal communities in localization. Tropic cascades of this sort occur because changes in habitat may admit parasites and competitors into an area or execute the indigenous genus. For example; businesses that provide recreational facilities undertake forest-clearing projects which help the brown headed cowbird populations which forage in open areas. However, the brown-headed cowbird is a nesting parasite that lays eggs in other bird’s nest. Numerous studies have shown that as the populaces of the cowbirds increase it leads to a subsequent decrease in the population of other native birds. According to recent re-estimations endangered species may become extinct 100 times faster than was previously calculated. Findings by ecologists suggest that the western gorilla, the Sumatran tiger and the Malayan sun bear may become extinct much sooner than was assessed. This poses a serious threat to the biodiversity of plains, savannahs, mountains and forests and will escalate into further loss of variety in the animal kingdom as co-dependent species are subsequently threatened. Humans play a tremendous role in wildlife extinction. Apart from poaching and hunting species into extinction and wiping out the habitat of faunas the accidental introduction of animals alien to an ecosystem can also trigger a destructive rotation. Many such species are introduced because of their significance as pest’s control or food items. The problem with these non-native species is that they do not have competitors that would in turn control their own populations.  2. The atmosphere In 2010 a UN study on a large scale-called the ‘Stern for nature’ has tried to put a price on the global environmental damage by large companies. The report, written by the economist Pavan Sukhdev, attempts to convince governments to stop providing subsidies to the agricultural, energy and transport industries Because of their heavy and unaccounted for contribution to environmental degradation. Furthermore, the UN-backed Principles for Responsible Investment initiative and the UN Environment Programme joined together to investigate into the activities of the 3000 biggest public companies in the world. The study was undertaken by Truscost revealed that the environmental damage by these companies was worth US $ 2.2 Trillion which is worth the national economic value of all the worlds countries (except 7 countries economies). The single biggest contributor to the effects of pollution was emissions of green house gases leading to climate change. Thus, air pollution is the most vigorous of all the other aspects of nature that are contaminated. Air is essential to all living things, from vegetation to animals to humans. Studies have shown that air pollution has perilous effects on the health and survival of all of Earth’s inhabitants. Air pollution causes cancer, neurobehavioral disorders, cardiovascular disorders, premature death, reduced energy levels, asthma exacerbations, dizziness, reduced lung functioning, respiratory diseases and disruption of endocrine, reproductive and immune systems. High air pollution levels have also been linked to increased child mortality rates. Air pollution can also taint the water systems through acid rain and enter the food chain. Acid rain has a cyclical effect on the food chain. It destroys corals and foliage and infects fish life, which is consumed by humans and other animals. Acid rain is also absorbed by the soil and can contaminate ground water supplies and make certain areas unavailable for plantation. Air pollution affects the atmosphere by eroding the ozone layer and allowing increased ultraviolent radiation to hit the Earths surface. This increased radiation can hamper the process of photosynthesis and pose deathly for plant, animal and human life by increasing risks for developing skin cancer. Also, above-natural heating of the Earths surface and change the currents in the Arctic Ocean and lead to rising sea levels. Many air pollutants are simple carcinogens. According to the US Environmental Protection Agency birth defects can also be caused by air pollution. However, humans are not the only ones affected by toxic air pollution. A study in 1995 found that some substances like mercury mend into plants and water resources and are then consumed by animals. Once this enters the food chain the effects are magnanimously damaging.   3. Effects on water  The water we drink is an essential ingredient for basic survival. The World Health Organization affirmed that one sixth of the world`s population-which amounts to 1.1 billion people do not have access to clean drinking water. Polluted water can be categorized as industrial discharge, sewage water, and rainwater pollution. Assessments indicate that more than fifty countries in the world with an area of twenty million hectares are treated with polluted or partially polluted water. In effect, the consequences of water pollution are said to be the leading causes of death across the globe. Less developing countries with severe water pollution are suffering from the following irreparable damages borne from water pollution: crop failure, desertification, sanitation problems, contamination of river and ground water supplies, and loss of biodiversity as polluted water kills of vegetation essential for the survival of local species. G. Conclusion It is extremely important for corporations to be socially responsible and fulfill its responsibilities towards its stakeholders. Most organizations tend to fulfill its responsibilities towards one of its stakeholders, the investors by highly focusing on profit maximization. However, corporations should instead focus on its responsibilities towards its environment and society as whole. Focusing on environment instead on profit maximization involves focusing more on long term benefits of the company. Corporate social responsibility not only results in benefits for the environment but it benefits the company itself. There are a number of laws and regulations regarding the behavior of corporations towards its environment. The most important factor of production, human capital should be efficiently used by a company and there a number of laws regarding that as well. Corporations should make sure that its normal operations are in compliance with such laws and regulations to avoid any penalties and fines. Corporations should invest in cleaner technologies and practices to reduce the effects of its decisions on the environment as a whole. It should invest in more eco friendly activities as well as recycle its products for the benefit of the environment. The effects of pollution on atmosphere as well as water and wild life should be minimized as much as possible. Works Cited: American attitudes: Americans & the World. (n.d.). American attitudes: Americans & the World. Retrieved March 4, 2013, from http://www.americans-world.org/digest/global_issues/globalization/envlaw.cfm Pollution Prevention Management | Pollution Prevention and Green Purchasing | Tribal Compliance Assistance Center | US EPA. (n.d.). US Environmental Protection Agency. Retrieved March 4, 2013, from http://www.epa.gov/tribalcompliance/prevandpurch/pppreventiondrill.html Real Index. 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Retrieved March 4, 2013, from http://books.google.com.pk/books?hl=en&lr=&id=BRbBAvLwQlAC&oi=fnd&pg=PA183&dq=effects+on+wildlife+from+business&ots=tLyTRWDzCC&sig=oeJ6GApVkURdOipLl6e_F2jTDZQ#v=onepage&q=effects%20on%20wildlife%20from%20business&f=false Matter? t. e. (n.d.). Animal Extinction - the greatest threat to mankind - Environment - The Independent. The Independent | News. Retrieved March 4, 2013, from http://www.independent.co.uk/environment/animal-extinction--the-greatest-threat-to-mankind-397939.html Read More