Think Green Organizational Behavior - Essay Example

?“Think Green” is the direction that the world is going towards and Waste Management, Inc. (WM) is leading the way. Waste Management is the largest comprehensive waste and environmental service in the North American. The company serves over 20 million customers, managing more than 7 million tons of recyclable commodities. The mission of the company is “To maximize resource value, while minimizing environment impact so that both our economy and or environment can thrive”. (waste management, inc.) Recycling has been around for thousands and thousands of years. There is evidence in the ancient city of Sagalassos (located in Turkey) of glass from the imperial Byzantine times were being recycled (http://www.all-recycling-facts.com/history-of-recycling.html) During the World War II (WWII) it was necessary for most homes to recycle their waste, metal, rubber and even certain food items were rationed as they were needed overseas. After the WWII, recycling was influenced by economic reasons and some countries continued to establish conservation programs, but recycling was not so popular within the United States. Landfills became a cheap way to dispose of trash and recycling efforts was not the main focus. It was not until the 1960’s that recycling and environmental awareness was public concern. By the 1970’s recycling was popular again and drop-off recycling centers were established (http://www.all-recycling-facts.com/history-of-recycling.html ) . The city of Woodbury, New Jersey was the first city to mandate recycling in the United States and soon after many towns and cities followed. “Recycling” trailers were towed behind waste management vehicles during trash collection routes. It was not till the late 1980’s and 1990’s that curbside collection was introduced. They say “one man’s trash is another man’s treasure”, this is true for Wayne Huizenga, Dean Buntrock, and Larry Beck because in 1968, they began purchasing garbage companies throughout the country. In 1971, Waste Management was established by Wayne Huizenga and by 1972 the company had acquired 133 waste management companies with $82 million in revenue. (Wikipedeia). ” It had 60,000 commercial and industrial accounts and 600,000 residential customers in 19 states and the Canada. In the 1980s, Waste Management acquired Service Corporation of America (SCA) to become the largest waste hauler in the country.” As of 2010, Waste Management employs 45,000 employees that are dedicated to improving the environment and reported $12.52 billion in revenue. The business of collecting trash and disposing of it has evolved to a billion dollar business and all the problems that come with it. In 1993, Los Angeles Times wrote a article “Landfill Pact is Appalling” (http://articles.latimes.com/keyword/waste-management-inc) informed the public of the proposed contract between Waste Management, Inc and Weldon Canyon landfill and once the press heard of such a develop, it announced the high profit Waste Management would gain for such a contact. “Ventura Regional Sanitation District are appalled at the proposal that Waste Management Inc. be permitted a report 35% profit or over $156 million over the life of the contract. Adding insult to injury, the landowner will receive another $5.63 per ton, or over $67 million for renting out his goat pasture. Combined, these figures represent nearly 50%--$224 million--going directly into the pockets of Waste Management Inc. and the landowner.” (Landfill Pact is appalling, 1993). The stock price for Waste Management, Inc raised steadily in 2004, in the article “3 reasons to avoid Waste Management”, the country needs garbage service that is not question. Is the stock strong enough to profit from it success? On the surface, the company’s future remains positive. “The current dividend yield is 4.3%. A competing investment alternative, the 10 year Treasury Bond, yields 2.06%.” Waste Management reported an increase in revenue from $3.24 billion in 2010 to $2.52 billion in 2011. ”Waste Management's stock buyback plan has reduced the outstanding share count from 570 million shares to 470 million shares. The buyback has been, for all intents and purposes put on hold due to the acquisitions. Debt levels remain at above 55% of the capital structure. Time will tell whether the stock buyback plan can be put back in full force. Oakleaf was intended to produce higher profit margins, which ideally would have provided additional net income per share to pay for the acquisition.” http://seekingalpha.com/article/306087-3-reasons-to-avoid-waste-management In 2011, the company reported zero gain on the revenue side, despite stock buybacks and acquisitions. “Waste Management is expanding fast over the year, and their acquisitions have served to be very profitable for them in the year 2011. Statistics show that Waste Management made $1.36 in cash dividends paid per share annually, which is a significant rise by $0.10 in 2010. The financial statements issued at the end of the second quarter of 2011 showed the Net income of Waste Management to be a total of $237 million or $0.50 per diluted share. The revenue increased by 6.0% due to recycling volumes, higher prices on commodities along with acquisitions and yield.” “Waste Management (WM) is a company dedicated to preserving the earth’s natural environment, and their chief goal is the reduction and management of waste, from collection to the point where it is disposed. They extract valuable resources from the waste, and convert it into clean and renewable sources of energy. The future for our world has great potential; CEO Steve Steiner anticipates the growth to be promising due to the increase of volume in recycling and the production of recycled energy at a steady pace. As the leader of a company that success depends on collecting trash, recycle raw materials that have the potential to generate clean energy, waste-to-energy and landfills gas plants, “waste is no longer something to get rid of-its resource”. Customer service can make or break any company and as the CEO of the company it is important to educate the customer with realistic goals. Waste Management “recognizes that environmental sustainability can help them cut cost and improve their operations.” http://thinkgreen.com/pdf/Sustainability%20Report_2010.pdf “Go Green” should be on everyone’s mind setting “zero waste” goals. By promoting holistic ways to recycle within the office, education and customer service go hand in hand. Evaluating every aspect of the companies operation and recommend overall strategies for operating more sustainably “from maximizing recycling to reducing waste to avoiding the generation of waste in the first place.” As the CEO leadership, mission and strategy, and organizational dynamics are important for human transformation to have a successful company. It just one bad complaint for a company to lose revenue, Measured Up reported several negative comments: billing, overpricing, and cancelling of service were the main complaint. Customer service rating was horrible, the wait on the phone was not acceptable by any standards, rude trash collectors and over all bad customer service. Which studies show “customer service can make or break a company.” Burke-Litwin model is advance thinking about planning change, how to create “first –order” and “second-order” of change. “Four research themes or issues common to all change efforts are discussed: (a) content issues, which largely focus on the substance of contemporary organizational changes; (b) contextual issues, which principally focus on forces or conditions existing in an organization’s external and internal environments; (c) process issues, which address actions undertaken during the enactment of an intended change, and (d) criterion issues, which deal with outcomes commonly assessed in organizational change efforts.” Waste Management has adopted this organizational pattern and this why the company is very successful. In the Sustainability Report 2010, Waste Management reported to increase waste-based energy production by creating enough energy through our waste-to energy operations to power almost 1.1 million homes “goal is to double that 2020.” As the company strides to be the largest residential recycler, it reports “to increase the volume of recyclable materials they process.” Investing on new cleaner technologies is Waste Management goal, “reducing emissions and increasing fleet efficiency by s for the 15 percent”. Converting waste into fuel and investing in plants that convert landfill gas to liquefied natural gas, plants to convert organic waste to high-octane transportation fuel, and plasma gasification joint ventures are plans for 2011. Wheelabrator Technologies Inc. is the nation’s leader in commercial waste to energy facilities. It is the “pioneer that uses municipal solid waste for fuel in the generation of electrical power in the Untied States.” (WM) It uses “mass burn” technology to convert solid waste into reusable electrical power. Working on green technologies and protecting the wildlife habitats. Waste Management is “10 years ahead of schedule”, 100 landfills are certified by the Wildlife Habitat Counsel. “The “Wildlife at Work” program preserves land as wildlife habitats by providing food, water, shelter, cover and space “suitable to animals needs.” A site must be actively maintained and monitored for a year before it qualifies for certification. The “Corporate Lands for Learning” promotes using “Wildlife at Work” certified land for hands-on environmental education by school and community groups.” (WM) In the report written by CEO David Steiner (2010), he stated the company will “continue to challenge ourselves to minimize our own operational footprint and improve the environment, even as we help our customers do the same.” What does this mean to the stockholders? Waste Management reported net income for the quarter of $182 million, or $0.37 per diluted share, compared with $155 million, or $0.31 per diluted share, for the first quarter of 2009. This is an increase in earnings per diluted share of over 19%. Revenues for the first quarter of 2010 were $2.93 billion compared with $2.81 billion for the same 2009 period, an increase of 4.4%. Revenue increased primarily because of improving commodity prices and year-over-year yield increases. The top five Institutional stockholders are Capital World Investors, Capital Research Global Investors, Wellington Management Company, Vanguard Group, Inc., Bill and Melinda Gates Foundation. The Gates Foundation reported they added around two million shares to Waste Management during the quarter ended September 30. Since the beginning of year the shares have risen 3%. “ The value of the Gates Foundation’s holdings rose nearly 24% to move than $14.60 billion over the quarter, up from roughly$11.9 billion in the previous quarter.” The Gates Foundation is greatly known for providing vaccines and charitable work on AIDS. As the world continues to recycle and less garbage is created, what does the CEO of the largest waste management company to do? CNN money reported (Gunther, 2010), our environment is using more reusable bag, concentrated laundry detergent, smaller packages and online media, all these forms of reducing waste are good, but is there a warning to Waste Management and other collecting business. “No wonder executives at Waste Management (WM, Fortune 500), America's biggest trash hauler, got nervous when Subaru's TV commercials boasted that its Indiana auto plant sent nothing to the landfill, or when Wal-Mart (WMT, Fortune 500) embraced the idea of zero waste. In a world where people throw less stuff away, the future of a traditional garbage company looks bleak.” (Gunther, 2010) David Steiner, CEO of Waste Management will need to redirect the company and ensure investors that the company will continue make money by finding a “ay to extract value-energy or materials from waste stream. Even if it means to cannibalized the core business of buying anything and everything in landfills” (Gunther,2010) The company will need to keep their investors interested by reporting in new ways to recycle. “Think Green” is still the company’s mission and will shift from landfills and toward recycling plants, For example, the company has already invested in companies that generate waste to energy, which can produce enough electrical power for 1.1 million homes. If consumers continue to recycle paper, cardboard, glass, plastic, and metal, the company must not only focus of stock investor, it needs to focus on company employees. Is the company ready for layoffs? In a recent report in the Houston Chronicle, the company “will lay off about 700 employees.” Most of the cut will be in management position throughout company’s in East, Midwest, Southern and Western regions, but none in Texas. The reasons for the cuts are, if the company wants to achieve operational expectations, the cut are needed. Even though, employee will be offered a severance package and some benefits, will the company continues to meet company’s satisfaction? The article reported “Wedbush has given Waste Management an "under-perform" rating for the past year, he said. Kaschalk expects more cost-cutting from the company, possibly by decreasing the number of facilities it operates.”(Houston Chron,2012) “While recycling makes sense when commodity prices are high, it's a losing proposition when raw materials are cheap, as they were during the recession. Some shareholders want Waste Management to use its free cash to pay dividends or buy back stock instead of investing in unproven new ventures -- they say any startup that figures out how to make money generating energy from waste will eventually have to do business with Waste Management to get access to its waste stream.” (CNN Money,2010) Will we see pales of trash on our curbsides? In the article “Something stinks at Waste Management” (2012), in Seattle the company struggle to communicate with Teamsters, due to a strike. Replacement drivers were brought in for the company’s commercial customer and not for residential services. “Further, Seattle regulators aren't taking kindly to the hold-ups, either. It threatened fines of $1.25 million per day if service disruptions continue, or even $3 million if several cities in nearby counties follow suit.” The company has a responsibility to keep the business functioning and the happiness of employee is also imperative. As the United States struggles with the economy and the company announcing of more possible layoff, is not a positive look for the company. (Motley Fool, 2012) ” Higher energy prices will pay off for Waste Management if the company and its partners devise new ways to generate electricity or transportation fuels from trash. Higher commodity prices will drive recycling because the value of materials extracted from the waste stream -- paper, plastic, aluminum, steel, and precious metals like gold and mercury -- will go up. Waste Management has estimated that about $8 billion to $10 billion worth of value lies in the waste it handles each year. http://thinkgreen.com/pdf/Sustainability%20Report_2010.pdf http://www.wikinvest.com/stock/Waste_Management_(WM) http://www.advfn.com/nyse/StockNews.asp?stocknews=ECL&article=45250076 http://money.cnn.com/2010/12/03/news/companies/waste_management_trash.fortune/index.htm http://www.wm.com/about/community/pdfs/Waste_to_Energy.pdf\ http://www.chron.com/business/article/Waste-Management-will-trim-some-management-3738904.php http://www.fool.com/investing/general/2012/07/30/something-stinks-at-waste-management.aspx http://www.wikinvest.com/stock/Waste_Management_(WM) http://waste-management-reviews.measuredup.com/2605/Reviews/Consumer-Complaint-1 http://seekingalpha.com/article/830531-trash-to-sugars-could-be-valuable-for-waste-management?source=yahoo http://money.cnn.com/2010/12/03/news/companies/waste_management_trash.fortune/index.htm http://www.advfn.com/nyse/StockNews.asp?stocknews=ECL&article=45250076 http://www.glassdoor.com/Reviews/Waste-Management-Reviews-E2094.htm http://www.brighthubpm.com/change-management/86867-explaining-the-burke-litwin-change-model/ http://en.wikipedia.org/wiki/Waste_Management,_Inc#Corporate_structure_and_leadership http://www.wm.com/about/community/educational-resources.jsp http://www.all-recycling-facts.com/history-of-recycling.html Read More