Facing the Future: Sustaining Business Competitiveness at Peanut Butter & Co - Case Study Example

?Running head: MANAGING FOR THE FUTURE Managing for the Future Insert Insert Insert July 13, Managing for the Future Case study: Facing the Future Introduction The global as well as the local economies in different parts of the world have exhibited changing trends in the past years. There have been periods of global and local economic recessions. There have also been periods of economic growth. For instance, the beginning of the 21st century was characterized by a promising global economic growth. However, before the end of the decade, an economic crisis began to be experienced globally. Several factors can be considered to be behind the changing trends that have been witnessed and that are yet to be witnessed at the local and global scenes. One of the factors that led to the changing growth pattern of the economy at the beginning of the millennium was the introduction of the emerging market into the world market. The increased industrialization in various countries like India and China led to increased demand for various products in those markets. Business organizations took the advantage of the available opportunities to invest in the given regions. These regions were attractive as there were still cheap labour and availability of the raw materials for the production companies. The increased employment rates in those regions initiated the economic growth. There was a rise in the in the living standards with more demand on products like energy and food in the region. This demand surpassed the supply of the products thereby forcing the prices of the products to rise. This could be the reason that led to economic recession towards the end of the last decade. Another factor that affects the economic growth is the competition that is witnessed among different organizations in the global markets. With the increased globalization, various organizations struggle to maintain their market position and have advantage over their competitors. One of the strategies that could be used to attract more consumers or to retain the customers of the organization is to lower the prices of their products. The cycle that will be formed eventually affects the economic growth in the regions. Another important factor relates to the ever-increasing world population. This leads to increasing demand for essential products that are necessary for human consumption. In effect, much of the population, especially in the developing nations, cannot obtain the basic human needs like food and shelter. The low rates of expenditure of such families have negative impacts on the regional economy. The economic changes that are witnessed in a business environment will have a direct impact on the operations of a given business organization. The achievements of the goals and objectives of a business organization will depend greatly on the response that the management of the organization gives to the changes in the business environment. A business organization that is to survive in the competitive global market has to be sensitive to the dynamics of the business environment and take the necessary steps before a competitor takes the advantage. In response to the changes in the business environment, a business organization can take several initiatives. These include reviewing the organizational structure, adopting modern technology in the operations of the organization, analysis of the environmental effects of the operations, putting much emphasis to meet the needs of the customers, and involving all the key stakeholders in the decision-making activities in the organization among many others. Peanut Butter & Co is a food company that was founded in 1998 by Lee Zalben. The company is situated in New York City and is known international for its peanut butter products that are now available in different flavors. This paper provides a look at three initiatives that an organization can take in order to survive in the future market namely corporate social responsibility, technological changes, and environmental impact analysis. It provides a case study on how these initiatives have been adopted by Peanut Butter & Co as a strategy to survive in the future business environment. Corporate social responsibility There are different individuals and organizations that are related to a given business organization, of course with a varying degree of relations. Some of the parties affect largely the operations of the organization whereas others have little influence. Similarly, the operations of an organization will have varied impacts on the lives of different individuals and the operations of other organization. The individuals and organizations that are affected by, or can influence, the operations of an organization are referred to as the stakeholders of the organization (Werther & Chandler, 2010, p.3). The shareholders, the employees, the clients, the top management, the society, and the public are all stakeholders of the organization (Mallin, 2009, p.1). The traditional approach in the management of business organization was focused on meeting the company objectives, which centered on maximization of the returns of the organization within the legal framework. The stakeholders like the consumers were considered in terms of their value to the organization. This traditional approach is less likely to survive the challenges that are posed by the changes in the business environment. Much attention focuses on how the business organizations interact with the society. There is a need to redefine the business responsibilities and improve on the organization’s relationship with the stakeholders. A modern approach that can survive in the contemporary market is to consider the needs of the employees and consumers of a given organization. Organizations are also expected to go beyond the legal and regulatory requirements and serve the society (Leonard, 2008, p.2). Corporate Social Responsibility (CSR) refers to how an organization considers and improves on the social, economic, and environmental effects that its operations have on the society (Brine et al, n.d, p.48). It provides a remedy to the challenge through considering the needs of all the stakeholders in planning and executing the operations of the organization. It is a concept that emphasizes the need of businesses to focus on not only maximizing their profits but also providing other benefits to the members of the society (Werther & Chandler, 2010, 6; McWilliams et al, 2005, p.3). It refers to the commitment of firms to promote different kinds of development in the society by improving the quality of life of all the stakeholders of the organization. The adoption of CSR as a strategy in business will require that the structure of the organization be redesigned to allow the free flow of information among the employees of the organization. The traditional hierarchical structure with complex reporting system does not usually allow easily flow of information from the clients low-level employees to the top management and vice versa. The decision-making process thus excludes these individuals. CSR will call for sharing of information across all departments and to all levels in the organization. The responsibilities that an organization has can be put into various categories as has been provided by Archie Carroll, an academician at the University of Georgia. These include economic, ethical, legal, and discretional (philanthropic) responsibilities (Carroll, 1991, p.4). It is important to note that even though all these responsibilities have been existence for a long time, the economic and legal responsibilities of the business organization have always been considered by business organizations in the past. What calls for CSR is the ethical and philanthropic responsibilities of the organization, which have been illuminated in the recent years (Carroll, 1991, p.4) The economic responsibility of a business organization is to provide returns that are proportional to the stockholder’s investment (Werther & Chandler, 2010, p.7). This is the responsibility that was assumed in the past. In an attempt to increase the returns, the organization has to comply with the legal provisions in the region or country. This is legal responsibility (Werther & Chandler, 2010, p.7). Similarly, the organization has a responsibility to ensure that its operations do not have harmful effects to the stakeholders. The organization needs to focus on the safety of the consumer products that are sold to the clients. The employees should not be subjected to harmful working conditions such as the use of faulty machines. The organization should avoid discrimination, for instance, in the recruitment of employees. These are ethical responsibilities as they touch what societies consider as moral values (Carroll, 1991, p.6). The discretionary or philanthropic responsibilities refer to the activities that a business organization performs beyond seeking profit in order to benefit the society. It is one of the numerous social initiatives that an organization can start in a given society (Glowik & Smyczek, 2011, p.31). The organization can initiate activities in the society like providing health services to the community or providing financial assistance to the vulnerable groups of people. The organization has no legal obligation to carry out such activities. However, such initiatives improve on the organization’s relation with the society eventually improving its operations. An organization that is to grow and survive in the future has to increase its responsibilities to the community. Studies have shown that there is a positive relationship between financial performance of organizations and the practice CSR and many organizations are striving to adopt the practice (Tsoutsoura, 2004, p.3). An organization that practices effective CSR will have a good image among its stakeholders (Maignan & Ralston, n.d, p.2). As such, it will be easy for the organization to retain its clients and maintain the market position. Such an organization will also win easily consumers from other competitors who have no such practice. The involvement of every stakeholder in the decision-making process is motivating especially to the employees. This will improve on the production of the organization. Besides, the restructuring of the organization can reduce, to some extent, the production costs. Even though the measurements of such effects might be involving, it can be concluded that CSR positively affects the financial performance in an organization (Kotler & Lee, 2005, p.19). CSR is a practice that is continuous and will have to be maintained as long as the organization still carries out the business. Basu (2011), an eHow Contributor, gives the stages involved in the adoption and implementation of CSR as was given by Mirvis and Googins. These include Elementary stage, Engagement stage, Innovation stage, Integration stage, and Transformation stage (Basu, 2011). The practice advances with the development stage of a given organization at the specific time. The practice of Corporate Social Responsibility has been evident at Peanut Butter & Co. In the statement of the mission, the organization appears to focus more on meeting the needs of the customers and providing service to the society (Peanut Butter & Co. Inc., 2011a). It strives to produce products that can be used by a wide range of individuals. The management of organization had noted that even though the peanut butter products in the supermarkets have been manufactured with the kids in mind, much of the ultimate consumers are actually adults (Peanut Butter & Co. Inc., 2011a). Thus, the company is out to develop products that could serve both the kids ad adults. It has also concentrated on producing different flavours of the peanut butter products to suit the diverse tastes of different people. Apart from producing a variety of flavours to suit different consumers, the company is also concerned with the safety of their products to the consumers. Peanuts are among the crops with high risk of aflatoxin contamination (Environmental Health & Safety Online, 2011). The company’s products contain little or no components of harmful substances like hydrogenated oils, cholesterol, gluten, or fructose corn syrup (Peanut Butter & Co. Inc., 2011a). The presence of such substances in reasonable proportions in the food products is likely to pose health challenges. The products are certified by the standards bureau (Peanut Butter & Co. Inc., 2011a) indicating the organization’s compliance with the legal provisions. The company continues to improve on the quality of the products with the consumers’ interests in mind. The company also has initiatives that are aimed at giving back to the society to boost the economic development in the region. The organization provides financial support to programs aimed conserving the rain forest in the New York City (Inc. 2011). Technological advances Business organizations apply the modern technology in various operations in order to provide better services to the clients. These modern technology applications are faster, more efficient, and more reliable than the traditional manual operations. Organizations use the modern information systems to keep large pieces of information like the database of employees such that the information is secured and can be accessed easily. Applications are also available that can perform various non-mathematical manipulations relating to these stored pieces of information (Brynjolfsson & Hitt, 2001, p.23). This improves the quality of services that the organization offers to its customers. The reliability of the systems adds onto the trust that the clients have with the organization. The communication and information technology is applied in the passage of information across the organization (Rosoman, 2011). Information about the organization including its products can be availed to a wide range of individuals in through the modern technology. Organization carries out advertisement and product promotion through different media. Online purchasing of products is increasing as a competitive strategy among business organizations. The technology world experience changes that are registered regularly and forms the basis for competition among different business organization. An organization that is to survive in the future market needs to sensitive and quick to respond the changes registered each time. This is necessary since the needs of the customers change with the changing technology and an organization that is current in its operations or in its products will survive. The consumers often want to obtain more services faster and at a relatively cheaper price. They often wish that several functions be incorporated into a single gadget or that they obtain a product without having to work to the retail store. In this respect, organizations dealing in the electronic products like mobile handsets, computers, television, or video camera have to respond to the continuous customer needs by incorporating various functions as per the current technology. Similarly, other organizations have to be aware of the trend in the technology that is most current and efficient in operations. The marketing departments have to identify the strategy that can be used to expose the products of the organization to the consumers. Peanut Butter & Co applies modern technology in advertisement and selling its products. It has an online retail shop where consumers can order for the products (Peanut Butter & Co Inc, 2011b) The natural environment Environmental consideration was not common in the past due to the abundance of the resources (Wilson & Sasseville, 1998, p.3). Most production companies were not concerned much with the environmental impacts of their operations and neither did they have effective environmental conservation measures. The effects that the operations of a given organization have on the environment are another key determinant of the survival of the organization in future. Currently, the consumers will be attracted to the products and companies that are sensitive to the environment. The organization that considers the natural environment will focus on sustainable use of the existing resources through proper conservation measures. Besides, in as much as it is not possible to mitigate natural calamities that affect the operations of an organization, being sensitive to environmental impacts can reduce the effects of such calamities. There has been increased globalization with various multinational enterprises operating in different parts of the world. However, the consideration of the increasing need for globalization has associated adverse effects that it can have on the environment. Organizations operating in certain commodities across different may be forced, in the future, to limit their operations within a given region in response to the environmental needs. Consider a typical organization that operates across different countries and deals in bulky products. The equipments that are used in transportation consume fuel and emit carbon and other greenhouse gases. As the transportation distance increases, the carbon footprint of the organization also increases posing environmental challenges. If this were considered alongside the high cost of transportation and the diminishing fossil fuel reserves, it would be economical if the organization localizes its operations. Similarly, companies that import raw materials from far regions may suffer the same consequences and be forced to use the local raw materials. The management at Peanut Butter & Co has settled on using the raw materials that are locally obtained. The company fully uses peanuts that are from within the US (Peanut Butter & Co Inc, 2011a). This reduces the environmental effects and the cost of production in the organization. The available natural resources are scarce and cannot meet the demands of the increasing world population. The rate by which renewable resources regenerate is lower than the consumption of such resources. It is thus necessary that the organizations conserve the available resources for sustainable production. Business organizations need to collaborate with other organizations in the community to protect the environment (North, 1997, p.153: Ryding, 1994, p.31). The management at Peanut Butter & Co has been concerned with the conservation of natural resources like rainforest by funding the tree planting programs in parts of New York (Inc., 2011). Trees absorb carbon dioxide thereby reducing the greenhouse effects that would lead to global warming (Thompson, 2007). By promoting the growth of trees in Katrina, the company helps in preventing global warming that would lead to adverse weather conditions in the future. Natural disasters such as drought, floods, earthquakes, livestock diseases, or crop pests affect the economy of a given region and thus affect the operations of business organizations. While some of the natural disasters like drought and floods may be foretold by meteorologists, others like earthquakes may not be predicted precisely. This makes management of the disasters quite difficult. However, conservation measures may be adopted to counter the effects of drought or floods. On a similar scale, the regions that are prone to earthquakes and the associated volcanic eruptions can be marked by organization to determine the location of their business premises. The effective management of the company has seen it expend its operations within US and across the borders. The company currently operates in different countries including Canada, Japan, UK, and Hong Kong (Peanut Butter & Co Inc, 2011a). The organization has to consider the location of its stores in relation to the associated risks of natural catastrophes. Reference List Basu, C. 2011. Stages of Corporate Citizenship. eHow money. (Online). Available from http://www.ehow.com/info_8194920_stages-corporate-citizenship.html [Accessed July 13, 2011]. Brine, M. et al. N.d. Corporate social responsibility and financial performance in the Australian context. (Online). Available from http://www.treasury.gov.au/documents/1268/PDF/04_CSR.pdf [Accessed July 13, 2011]. Brynjolfsson, E. and Hitt, L., 2001. Beyond Computation: Information Technology, Organizational Transformation and Business Performance. Journal of Economic Perspectives, 14(4); 23–48. Carroll, A., 1991. 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