Management in eco-friendly organizations (Benefits of Going Green) - Essay Example

? Topic: Lecturer: Presentation: Section Going Green Modern organizations are faced with a lot of challenges as various stakeholders, government, and watchdogs groups put pressure on them to “go green.” As a result most organizations have incorporated green strategies in their production and management activities. The companies that fail to put in place green strategies risk losing their businesses as customers insist on buying environmentally friendly products. The organizations also utilize ethical processes in their management and strive to socially responsible in order to attain competitive advantage (Banal & Roth, 2000). Management involves striving to achieve organizational objectives in an effective and efficient manner through others in a dynamic global environment. An organization therefore needs to utilize the scarce resources efficiently and achieve its objectives. Green techniques involve eliminating wastes hence efficient utilization of the natural resources thus reducing costs in the process. It involves implementation of environment friendly practices such as reduction of carbon emissions, greenhouse gases, energy and water saving. To ensure eco-friendly organizations, the management must be committed to implementing green strategies and ensuring ethical leadership. The organization structure determines the kind of relationship the management has with employees, customers, stockholders and the community as a whole. Besides maximizing profits for the shareholders, the management should ensure it is operating ethically and is socially responsible (Berman et al. 1999). By implementing green strategies costs are reduced, the company gains reputation, workers work in a healthy environment thus improving their productivity, the company can attract and retain highly qualified employees and engage in constant innovations hence remain competitive in the market (Crawford et al. 2008). The paper will discuss the benefits that various industries achieve by enacting green strategies in their operations. Benefits of Going Green Various industries achieve different benefits from utilizing environment friendly operations. Global warming is rampant due to greenhouse gas emissions especially from the manufacturing and vehicle industries. The manner in which business premises are constructed also contribute to gas emissions as a result of the materials used, the lighting, heating and cooling systems inside the building as well as transportation of building materials (Crawford et al. 2008). Most companies however, are trying to reduce the emissions by putting up environmental friendly buildings. Reduction of carbon emissions is also necessary if the environment has to be conserved. One of the companies in the vehicle manufacture industry has done a lot over the years to ensure sustainable environment. Honda Motor Company with its headquarters in Japan is one of the leading companies in implementing environmentally friendly policies. It specializes in motorcycles, automobiles and power products. It has 176, 815 consolidated employees and 26,121 unconsolidated employees. Its new global environmental slogan is “Blue skies for our children” (Honda.com, 2011). According to Pride et al (2010), Honda is committed to reduction of pollution, conservation of water and energy, recycling, reduced carbon emissions and production of fuel efficient vehicles. It has produced natural gas powered civic CIX and hydrogen full cell cars FCX which are environmental friendly. As a result, the company has earned a lot of reputation and good will from the community and stakeholders. It is considered as one of the leading automakers in the vehicle industry. It has an environmental committee which oversees green strategies formulation and implementation. One of the benefits of going green for a company is thus is gaining outstanding reputation. Another company in the financial sector which has managed to gain much reputation from applying environment friendly policies is the Goldman Sachs. The company based in New York enacted its environment policy in the year 2005. It is a global leader within investment banking, investment management and securities management (Goldman Sachs worldwide web, 2011). Its green strategies include; formation of community teamwork to volunteer in environmental programs, funding and giving advice to companies to put up environmentally responsible projects, offering market for environmental products, low carbon emissions, asset management, career development for staff and offering training courses on green strategies among others. It is thus one of the most respected companies in the world. Going green also enables organizations to be involved in continuous innovations hence gaining competitive advantage in the market (Robbins and Coulter, 2009). Companies are engaged in developing environment friendly products due to high demand by consumers and pressure from watchdog groups. The products developed are cost efficient thus cost saving for the organization. It also encourages workers creativity as they are involved in developing new products and they also advance their skills and career in the process. The organizations become learning organizations and this acts as a motivation to the workforce hence gaining their commitment, increased productivity and efficiency. Honda is engaged in development of environment friendly vehicles to reduce carbon emissions and greenhouse gases. It has developed various models which utilize natural gas and hydrogen. It recycles its products and always engages stakeholders in product development by getting their feedback. Its principle is to respect uniqueness and ability of every individual hence producing high quality products at a reasonable price (Honda.com). The workers of Goldman Sach are considered as the greatest asset to the organization hence are given highly competitive compensation and are encouraged to use their creativity and intellectual capacity to address any challenges. Sharma (2000) argues that going green also involves ensuring that the organizations act ethically and are socially responsible. This enables the organization to attract and retain the best employees as well as gain corporate image. Stakeholders expect the organization to fulfil their interests while at the same time ensuring compliance to laws. Shareholders should recognize that the organization activities also affect the community as a whole and hence make proper decisions. By being socially responsible, the organization is able to get commitment from all stakeholders especially suppliers, customers and employees hence increase its revenue for the stockholders (Berman et al. 1999). The company will also be able to gain brand name and get brand loyalty from customers’ thus competitive advantage. Honda has a vision of ‘joy of freedom of mobility’ and ‘sustainable society where people can enjoy life.’ It therefore collaborates with all stakeholders and strives to ensure that it gives back to the community by using green strategies. During a catastrophe it donated a civic Gx to the community and as a result it gained a lot of reputation (Pride et al. 2010). It also ensures production of high quality products at reasonable price to the consumers. It has prompt and efficient after-sale services hence ensuring customer satisfaction in return gaining their loyalty. Goldman Sachs is involved in charitable activities. For example, it offers business education courses to women and small business owners. It also gives workers a day off to engage in volunteer activities in surrounding communities. According to the 2010 environmental social and governance report, it is the second largest corporate giver and eighth world most admired company (Goldmansach.com). Companies that go green have the benefit of saving costs (Crawford et al. 2008). This is in form of being efficient in the scarce natural resources utilization which is the goal of going green. Cost savings are in terms of low energy bills by ensuring energy efficient gargets. For example, Goldman Sachs was able to reduce power consumption by up to 42% by use of LEED certified office space. This in turn increased its computing capacity by 60%. By utilizing green strategies, the overall health of the people is ensured thus reducing sick offs and increasing employee productivity. The cost of treatment is also reduced when workers don’t get sick due to poor working conditions. Honda on the other hand, reduces its costs by using transport efficient means. It strives to reduce packaging materials and use of returnable containers. It also applies reduce, reuse, recycle principle to minimise costs (Honda.com, 2011). Coca-cola Company also tries to reduce costs by use of plastic bottles which can be recycled. Sony is another computing company that drastically reduces its costs by use of green strategies; it utilizes renewable source of energy, more efficient transport, it decreases travel expenses by avoiding flights, use of better communication like video conferencing instead of travelling, and producing products which don’t consume a lot of power (Young, 2011). Conclusion Consumers all over the world are constantly demanding for more environmental friendly products. Various interest groups and watchdogs are also persistently pressuring organizations to put in place measures that are eco-friendly and save the environment. All business activities impact greatly on the environment and hence it is the duty of the management to make proper decisions on how to save the environment. Companies need to comply with the law concerning environmental issues. They should also heed to consumer demands and provide them with environmental friendly products. Organizations also need to be socially responsible and ensure ethical practices in the workplace. To ensure successful implementation of green strategies, the organization should engage the workers in formulating the strategies and ensure a healthy working place. Utilization of green strategies enables the organization to save costs, attract and retain highly qualified employees, gain company reputation and brand loyalty, ensure satisfaction of all stakeholders hence commitment and loyalty, continued innovations, increased productivity and revenue among others. Section 2: Ethical and Environmental Policies Organizations that want to remain relevant in the industry must be socially responsible. An organization has the responsibility to maximise profits but other stakeholders are also important for the success of the organization thus it should be socially responsible. Performing business practices in an ethical manner is crucial to its success. Ethics involves making a decision as to whether behaviour or an action is right or wrong (Griffin, 2008).Managers are thus faced with challenges while making decisions as what one person perceives to be right may be wrong according to another person. They should therefore think carefully before making ethical decisions and act as role models to other staff members. Most companies have an established code of ethics that guides behaviour of all stakeholders. An organization also needs to be environmental conscious in order to gain support from all the stakeholders and be environmentally sustainable. Robbins & Coulter (2009) argue that being socially responsible is the key to enabling an organization to build a better public image and discourage further government intervention since it goes beyond legal and economic obligations. A medium sized UK restaurant chain with 200 outlets worldwide and more than 500 employees dealing with Asian foods has been undergoing various ethical and environmental issues. Mr. Taylor, the ethics and environment manager has not realised the benefits of being ethical in all business practices and lacks commitment to the environment. The company therefore has a reputation of being socially irresponsible thus earning negative publicity. The manager needs to learn to formulate policies that are relevant in the corporate world and emulate best-practices from the leading restaurant chains and food retailers and leading hotels in the industry so as to gain its reputation and reduce negative publicity. It should be responsible to the community, shareholders, employees, suppliers, customers and all stakeholders. A responsible company should respect the rights of humans and animals. Human and animal rights crusaders play a vital role in ensuring that organizations avoid business practices that are harmful to animals or humans. Most restaurants have undertaken upon themselves to ensure that they respect human and animal rights. For example, the sarova hotels play a crucial role in maintaining the environment and wildlife habits (Sarova, 2011). Other food retailers like Sainsbury have recognized that animal welfare is vital to customers hence it is committed to ensuring good quality of life for animals. In 2009, Sainsbury was the first major retailer to stop selling eggs from caged hens and took the initiative to support the woodland environment where hens are reared in freedom (Sainsbury, 2011). Thistle also promotes human rights by refusing to purchase from suppliers who exploit child labour, pays unfair wages and violates workers rights (Thistle, 2011). Since consumers are usually concerned with the source of products, Mr. Taylor should emulate these initiatives and stop dealing with suppliers with poor human and animal rights records as this will only contribute to negative publicity for the restaurant. According to Robbins and Coulter (2009), an organization should be responsible to the community in which it operates. A restaurant requires a lot of products from the surrounding communities and therefore should give first priority in sourcing for products. This will lead to a good relationship between the restaurant and surrounding environment thus reducing negative publicity. Mr. Taylor should learn from Sainsbury which partners with suppliers and helps the local farmers so as to produce quality products. These farmers act as the source of supply for the food retailer and buys from foreign farmers only when necessary (Sainsbury, 2011). Besides buying local products, the retailer also creates jobs for the surrounding community, supports small and medium-sized enterprises as well as improving the quality of life of the inhabitants. By engaging in such activities, Sainsbury is able to retain its reputation and gain commitment from suppliers and the community as a whole. Morrison restaurant chains also believe that local products are the best as they shorten the supply chain, and produce standards trusted by people. It thus engages in its campaign of ‘Great taste, less waste’ by supporting British farmers (Morrison, 2011). Ethical business practices require that the managers make ethical decisions and treat all workers equally. The diversity of the workplace is recognized and all employees given equal treatment. The restaurant should also act fairly when setting wages and give fair rewards for fair work done without discrimination as to race, gender, religion, and political affiliation (Naylor, 2004). This is a requirement by the law but some companies tend to practice unethically and offer unfair wages to workers. This demotivates them thus losing morale and consequently low productivity. The restaurant also gets negative publicity as a poor employer and thus is unable to attract and retain qualified workers. Some organizations act unethically by giving more privileges to the executive staff. This discourages the junior staffs who feel alienated from the organization and spread bad word of mouth creating negative publicity (Mullins, 2004). As the ethical manager, Mr. Taylor should ensure that not large discrepancies exist in remuneration and start valuing its workers so as to boost morale of the junior staff and gain their commitment. The leading food retailers like Sainsbury have managed to attract and retain the best workers by implementing the principle of equality, diversity, fairness and regular communication with the staff. It offers fair rewards which are competitive in the market and shares its profits with them by giving them annual bonuses. Morrison on the other hand, carries out auditing of employment conditions by the Fair Working Conditions which has the responsibility to ensure best employment practice worldwide (Morrison, 2011). This ensures fair and ethical employment conditions are maintained at all times thus enabling the restaurant to be an employer of choice. Another unethical issue that Mr. Taylor needs to deal with is the service of customers with unhealthy products. A socially responsible organization especially restaurants which serve foods should act ethically by ensuring all its products are healthy for use and attaching labels to show the ingredients used to make the product. Robbins & Coulter (2009) argues that organizations should ensure the workers they hire have high ethical standards to ensure the products produced are safe and healthy. The leading restaurant chains and food retailers have taken various initiatives to ensure they provide customers with healthy products and thus retain their reputation and market share. Morrisons initiatives includes excluding genetically modified ingredients and derivatives from its products. It does not also entertain products from cloned animals and has a monitoring programme for products to ensure unhealthy ingredients are not used (Morrisons, 2011). Thistle on the other hand, makes it a requirement for suppliers to fill ethical and environmental questionnaires before they can be awarded a tender. This ensures that only suppliers of healthy products are chosen. It also exercises honesty and transparency when advertising its products so that customers have correct information regarding its products (Thistle, 2011). Sainsbury has gone further to educate consumers on healthy eating and ensures the nutrition information label is attached on a product before sale. To ensure health standards are maintained, Sainsbury has also taken initiative to reduce saturated fats on its food products and offering nutritional training to the workforce. Consumers are increasingly becoming more demanding to companies to provide environmentally friendly products. Consumer watchdogs and interest groups also constantly lobby for environmental friendly products for consumers. Organizations that are not complying with ethical and environmental standards are therefore at a risk of losing business due to negative publicity. Furthermore, going green has been considered beneficial for the organization as it leads to cost savings and increased revenue due to increased worker productivity (Pride et al. 2010). Mr. Taylor should therefore embrace green strategies in the restaurant chain so as to be at the same standard with other restaurants that have already gone green and reduce negative publicity. Some of the restaurants that have gone green include; Sainsbury, Nandos, Sarova hotels, Morrisons, and Thistle among others. Nandos has recently started using waste cooking oil to produce electricity. Though it is not clear how much electricity they can produce to run all outlets, it is a good step in ensuring a clean environment. Its transport vehicles are run by use of bio-fuel and this has helped to reduce carbon emissions by 90% (Nandos, 2011). In Sarova hotels, towels are recycled so as to reduce the amount of water used in washing them. Thistle has put various measures in place; it ensures low energy lighting and carries out regular boiler audits to ensure efficiency. It has installed water saving devices in toilets and bathrooms for proper utilization of the scarce resource. To make sure suppliers are also environmental conscious, Thistle only purchases products fro ethically sound sources and offers annual performance rewards to encourage green strategies. Mr. Taylor needs to ensure ethical and environmental policies in the restaurant encompass all the strategies that have been discussed in order to reduce negative publicity and be a reputable restaurant chain able to compete with all the leading chains and food retailers in the market. The strategies will also benefit the restaurant from frequent government interventions, attract and retain qualified staff, reduce operational costs, gain commitment from all stakeholders and most of all ensure a clean and healthy environment for people to live in. References Banal, P., Roth, K (2000)”Why Companies go Green: A Model of Ecological Responsiveness”. The Academy of Management Journal. Vol. 43:77-736. Berman, S., Wicks, A., Kotha, S., Jones, T. (1999). Does Stakeholder Orientation Matter? The Relationship between Stakeholder Management Models and Firm Financial Performance”. Academy of Management Journal. Vol. 42: 488-506. Crawford, J., Langdon, D., Morris, Peter. (2008) Benefits of Going Green: Quarterly Insights and Best Practices in Economic Development. US Department of Commerce. Griffin, R (2008). Fundamentals of Management. 5ed. Boston, MA: Houghton Miffin. Mullins, L (2004). Management and Organizational Behavior. 7ed. Prentice Hall. Naylor, J (2004). Management. 2ed. Prentice Hall. Pride., Hughes, R., Kapoor, J (2010). Business. 11ed. USA: Cengage. Robbins, S., Coulter, M. (2009). Management. 10ed. Prentice Hall. Sharma, S (2000). “Managerial Interpretation and Organizational Context as Predictors of Corporate Choice of Environmental Strategy”. Academy of Management Journal. Vol. 43: 68-697. Young, E (2011) “Sony Takes up Eco Challenge to Reduce Carbon Emission.” Ethical and Green. Aug 6, 2011. http://ethicalandgreen.com/category/companies-going-green www.goldmansachs.com www.honda.com www.morrisons.co.uk www.nandos.co.uk www.sarovahotels.com/environment www.sainsbury.co.uk www.thistle.com Read More