Fiji Water and Bringing the Environment Down to Earth - Article Example

Article Analysis of the of the No. Fiji Water Introduction This article sheds light on the business of U.S.based bottled water company, Fiji Water. It is claimed by companies, like, Fiji Water, in the industry that use of bottled water is healthier for the consumers. However, in reality, scientists and researchers often suspect the apparent purity of such water. An Australian researcher, Jeff Angle, had claimed that bottled water is harmful to human health as it contains high carbon footprint and its transportation as well as extraction involves a lot of energy loss around the world. The concerned article deals with a case, where the company of Fiji Water is facing problem in convincing its stakeholders regarding purity of their bottled water (Simpson &Taylor, 2013). Relevant Stakeholders The relevant stakeholders, who were affected, are: Consumers: Many of the consumers across different markets claimed that they had faced severe health hazards, after drinking bottled, yet contaminated, water. Business Support Groups: The environmentalist groups heavily criticized the brand name and product of the company. They started to promote the term, “water insanity”, against the product of the company. Government: The Fiji government intensely scrutinized the product’s purity in context of the company. It accused the company of having manipulated its product price in external markets; hence, export of products of the company were banned for long and later, the export tax rate was increased (Shapiro, 2002). Employees: In order to force the government in Fiji to reduce its exporting tax, the company started to cut down jobs of the employees. Key Ethical and Other Issues The key ethical issues related with the business of the company are: Fundamental Ethics: The company has constantly augmented its product price for all customers by claiming to deliver the best quality bottled water. Its business in U.S. and Australia was at its zenith with this strategy. Nonetheless, consumers of U.K. realized that it was irrational to consume such expensive imported bottled water, when the available tap water in the country was equally good. Diversity Ethics: When the government increased its product export tax, the company decided to reduce employment opportunities in domestic market. This was an unethical initiative of the organization, given that it is the duty of a company to ensure that employees get equal opportunity, security and diversity across the workplace. Decision Making Ethics: The company increased its product price, simply because tax incidence was being increased. This was also an unethical decision of the organization as it had transferred the burden of its own taxation on potential customers. Compliance and Government Ethics: The environmentalists and the government of U.K. introduced the “London on Tap” project, where they claimed that production, transport, storage and disposal activities of the company was highly unsustainable to the environment due to emission of heavy carbon pollutants (Schwartz, 2011). Apart from the abovementioned ethical issues, there were two other issues that the company was facing: Higher Market Competition: The company had observed that the market for bottled water was becoming more competitive, over time. The same products, manufactured by its competitors, like, Coca Cola and PepsiCo, were sold at lower prices. It became difficult of the company to lower the price as its cost of exports in the foreign market was high. Shift in the Market Demand Pattern: Since 2000, the environment protectionists started to promote campaigns like, ‘think outside the bottle’, that severely went against the bottled water industry. Consumers began to consume tap water, instead of bottled water. Figure 1: Fall in Market Growth Rates in Bottled Water Industry U.S. (Source: Alzahrani, 2011). Conflicting Causes Increase in excise and export duty: Since 2008, the Fiji government has increased the tax on export and production of Fiji water to a level of 20% per litre. This has significantly raised costs for the company. If the company reduced production due to increased cost, then it had to lower its employments; this was the first unethical issue. Rather, if employments were not reduced, the company could further increase its product price; but, this was again unethical for consumers. Thus, interests of the government, consumers and employees are working against each other for the company (Paley, 2002). Recommendations The company should try to invest in new water purifying technologies through which it can establish new manufacturing plants in potential markets, like, U.S. and Australia. This would help the firm in reducing the cost of product transportation (Mumford, 2011). The company should conduct more awareness campaigns to state that the blame of ‘green washing’ is not relevant for its product. More eco-friendly technologies should be invented by virtue of which the company can easily reduce carbon and greenhouse emissions from the production process. With essence of the above changes, the firm can enhance its brand value in the market as well as increase sales. By improving the sales, Fiji Water can lower its costs and enjoy economies of scale in production, thereby withstanding other high operating costs in business. References Alzahrani, B. (2011). Fiji water and corporate social responsibility. Richard Ivy Business School Publications, 9(21), 1-21. Mumford, M. (2011). Handbook of Organizational Creativity. Waltham: Academic Press. Paley, N. (2002). Marketing for the Nonmarketing Executive: An Integrated Resource Management Guide for the 21st Century. Florida: CRC Press. Schwartz, M. (2011). Corporate social responsibility: An ethical approach. Moorebank: NewSouth Books. Shapiro, S. M. (2002). 24/7 innovation: A blueprint for surviving and thriving in an age of change. New York: McGraw Hill. Simpson, J. & Taylor, J. (2013). Corporate governance, ethics and CSR. London: Kogan Page Limited. Bringing the Environment Down to Earth Article Synopsis The article stresses on importance and value of environmental investments in business. The author firstly suggests that business firms, in the contemporary world, should treat general commercial investments and environmental investments as equally important. This is because; most stakeholders in modern corporations are gaining better awareness about protection and preservation of environment. High investments in environment protection by a company can successfully augment its brand value in the market, thereby enhancing business performance (Lawfer, 2004). The context of the article also claimed that if a company’s operations are sustainable to the environment and environmental regulations, then, it reduces management costs in business more effectively, compared to the competitors. This helps to move ahead in the competitive industry. The author in the article has introduced five special approaches through which a company can substantially increase environmental protection practices in its business. The author stated that all such approaches would help organizations to reduce business risks, boycotts and lawsuits (Love & Bullen, 2009). These five approaches are: Environmental Product Differentiation Approach related to competitor management Cost Saving approach Market Redefining approach Risk minimizing approach Apart from these five approaches, the article also refers to environmental problems as primary social responsibilities in business. Review of environmental issues in business should be done with an optimistic approach. It also regards environmental management process as a zero sum game. Even so, in general, government and environmentalists are opponents of a business concern. Along with the above theoretical explanations, the article also tries to focus on empirical cases, which reflect different types of environment related business initiatives adopted by companies in the real world. Important Facts, Features and Highlights As stated in the above context, the article tries to advocate that eco-friendly initiatives of firms are highly correlated with success in trade and commercial matters in business. The context states that firms must assure environmental sustainability in business via virtue of five approaches. Environmental Product Differentiation This approach claims that a company should always try to produce those products or adopt only those business processes, which helps in assuring greater environmental sustainability in business as well as reduces social costs of other competitors in the same industry. For instance, in textile industry, the company of Ciba Specialty Chemicals has introduced dyes that easily fix in apparels with minimal usage of salt (Reinhardt, 1999). Approach related to competitor management Environmental product differentiation often does not turn out to be cost feasible for a company. Environmental measures might significantly heighten cost price of operations for such firms. These companies can promote similar rise in costs of the competitors by merging business with them and convince the government to make policy changes in their favour (Hage, 1999). For example, after Bhopal gas tragedy in India, the chemical industry forced the government to act in a less hostile manner towards them. Cost Saving approach This process entails principals via which a company can adopt eco-friendly approaches in business production and sales, in order to reduce its internal cost, but not that of its competitors, like, in product differentiation approach. For instance, hotel companies try to reduce cost by lowering water and energy usage (Reinhardt, 1999). Market Redefining approach There are some companies, which simply adopt a mixture of all approaches, by encouraging competitive forces in the market (Ruggie, 2011). Risk minimizing approach This approach is adopted by companies to reduce the overall risk in business, like, lawsuits and customer boycotts, occurring due to environmental issues. For example, Alberta-Pacific Forest Industries has discovered that organisations can gain competitive advantages through voluntary supply of eco-friendly goods (Reinhardt, 1999). Self Reflection From context of the article, I have realized that maintaining eco-friendly business activities has turned out to be an indispensable task for modern corporate firms. I reckon that, in the present scenario, firms cannot succeed in business without adequate investment in matters relating to environmental protection and preservation. Similar to economic investments, environmental investments also yield economic as well as non-economic returns to companies. This enables companies to manage risks, provides higher competitive advantage, augments firms’ overall brand value and lowers the cost. With essence of such sound modifications in business, I suppose a firm can ultimately satisfy all the business stakeholders in the long run. Thus, I believe that business firms should treat our ailing environment by striving to enhance the condition through supply of eco-friendly products and services (Hesse-Biber, 2011). References Hage, J. (1999). Organizational innovation and organizational change. Annual Review of Sociology, 25, pp. 597-622. Hesse-Biber, S. N. (2011). Emergent Technologies in Social Research. Oxford: Oxford University Press. Lawfer, M. R. (2004). Why Customers Come Back: How to Create Lasting Customer Loyalty. California: Career Press. Love, P. & Bullen, A. (2009). Toward the sustainable adaptation of existing facilities. Facilities, 27 (9/10), pp. 357-67. Reinhardt, F. L. (1999). Bringing the Environment Down to Earth. Harvard Business Review, pp. 1-10. Ruggie, T. G. (2011). Business and Human Rights: The Evolving International Agenda. The American Journal of International Law, 101 (4), 819-840. Read More