Sustainable Business - DigiMob - Case Study Example

Table of Contents Executive summary 2 Introduction: 3 Drivers for Change 4 ADP key issues: 6 1. Project Management 6 2. Operational Issues 6 3. Energy Issues 7 4. Moral Issues 7 Recommendations 8 2.Saving Electricity 10 China: Outsourcing-Exploitativeness prevention 11 Inspiring Stakeholder Confidence: 12 Conclusion: 13 Munilla, M. P., Miles, L. S., and Darroch, J., (2008). ‘Sustainable corporate entrepreneurship’. International entrepreneurship and management journal. 5(1). pp65-76 14 Srivastava, S. K. (2007). Green Supply-Chain Management: A State-of-The-Art Literature Review. International Journal of Management Reviews, 9 (1), pp53-80.  15 APEC CaseBook, (2007). Corporate Social Responsibility in the Global Supply Chain. Retrieved November 14, 2010, < http://cedoc.sirio.regione.lazio.it/DOCUMENTI/30_IMPRESA.pdf> 15 Yang, Q. and J. Tang (1999), ‘The final safety net’, Social Sciences in China, XX (2): pp65-75 15 Sha, K.X. and Z.J. Jiang (2003), ‘Improving rural labourers' status in China's construction industry’, Building Research and Information, 31(6): pp464- 473. 15 Appendices: 15 SWOT Analysis 17 PEST Analysis 18 Social 18 Economic: 19 Technological 19 Executive summary The report will provide an insight into the issues of sustainability by way of the creation of an organization that is environmentally friendly and keenly aware of the responsibilities that it owes the society at large. The report will focus on the 3 specific problems that ails DigiMob, a mobile handset selling company, that is also in the business of creating car mobile phone solutions. The company also repairs broken handsets for which it imports batteries and other telephone equipment parts from China. The three issues related to sustainability that are currently facing DigiMob are inclusive of: 1. Use of conventional electricity models-harmful to the environment 2. Use of lead in batteries 3. Import of goods from China, a country characterised by extreme labour and worker exploitation. The report provides an overview of the issues which have already arisen, in particular those relating to Occupational, Health & Safety within the business and the fact that there is a need within the company to overhaul its basic model of functioning so that it confirms to an environmentally friendly status. Moreover, additional issues have been identified on the premise they are likely to eventuate if the status quo is not changed.   To address the issues identified, a number of recommendations have been made. These relate to:   The nature of the specific actions to be taken by company management to minimise the impact environmental harm Image overhaul methods   It should be noted, the recommendations presented within align with a Reformist approach for achieving sustainability on the premise it was felt this would be more acceptable to the related stakeholders. Introduction: DigiMob Australia was established in 2001. It is a mobile and wireless handset selling outlet that works on franchisee basis selling mobile phones from brands such as Nokia and Motorola (Appendices 1). It is based in Australian and is privately owned, professing to promote quality of work and reliability. In the context of this organization, the following discussion will argue the case of sustainability in corporations such as DigiMob, keeping in mind the concept of corporate sustainability. The concept of corporate sustainability could be understood in terms of the definition that it is a development that meets the need of the present without compromising the ability of the organization in the future to meet its demands (WCED, 1987, Online). The idea inherent in the definition is to emphasize the long term aspect of the concept of sustainability and introduces the ethical principles of achieving equity between the present and the future. In the context of the company like DigiMob the idea of sustainable development would comprise of types of economic and social development that protects and enhances natural environment and social equity. Drivers for Change The fact that there are problems in the environment with the usage of electricity is well documented. Also, the fact that lead has hazardous qualities is well known, as is the fact that that workers in China, are subject to moral and human degradation. “One of the primary ways an organization could promote corporate sustainability is through the adoption of green energy and environmentally friendly resources.” (Crittenden and White, 2010, p. 4503). Category Explanation Environmental One of the primary areas of problem where DigiMob is concerned arises with the usage of lead in products. Lead has been essentially made use of, for a while, and over 81 per cent of lead used globally is used in storage batteries. Environmental The problem with lead based equipment is that most of it after use, especially in cell phones, which in any case have shorter shelf lives comparing consumer products, ends up in landfill post disposal, where the lead is then leached out into the water supply, which in the long run results in poisoning and long term handicap Environmental “Research into the subject, however is demonstrative of the fact that lead-free soldering is in fact a segment of global trend toward lead-free environment which has been promoted by Japan is being followed the world over, at minimal cost” (Lee, 1999, p. . 29). Political The lure of cost advantages has meant also, that the company relies heavily on supply by the Chinese. The problem here arises with respect to the fact that there is an issue of human rights violations and worker’s abasement that characterizes labor in China. Political The country is characterized by central planning which seeks to essentially artificially keep the prices of labor artificially low (Appendices, 3). Social policy played a supportive role to strengthen the state’s ability to lower labour costs and maintain social control. A New York Times article recently portrayed with pictures the sad condition of labour in China-its states “But two workers interviewed outside Huanya’s huge complex in late December said that they were forced to work long hours to meet production quotas in harsh conditions” (NY Times, 2008, Online). Economic Use of electricity is harmful given that the consumption is harmful for the environment given that in large scales in Australia, there is little to no chances of it being created through hydroelectricity power and the largest source of the mode of power is burning of coal, which results in burning of fossil fuels-having a direct impact on global warming Economic Need for suitable model of electricity replacement Economic “Again, environmental exposure to high-frequency voltage transients (HFVT), also termed dirty electricity, has an important biological active component of standard electromagnetic pollution.” (Vocht, 2010, p. 405).  ADP key issues: 1. Project Management The interplay of the aforementioned environmental, political and economic and drivers, compounded by unprecedented growth in international competitiveness in 2010. The resulting tight timelines, however, fostered a less transparent and pressured environment for key stakeholders, ultimately giving rise to critical project issues. Waste Management integration into the standard mode of operation-innovative yet high on risk. Requires managerial training by way ok skill set and task adoption. 2. Operational Issues Growth at 10-15 per cent has been achieved while keeping costs at a minimal level. This will be challenged with the adoption of more environmentally sustainable strategies. Most workers in China consistently tend to express cynicism about the capacity of China’s laws and leadership to solve wage exploitation and other rights violations that they experience on a day to day basis (Sha and Jiang, 2003, p. 464). For DigiMob even to accept an anti-exploitative stance, there would be compromise needed by way of figuring out the agencies that are exploitative Replacement of electricity, is not really a singular choice-state and availability factors would play a role as well 3. Energy Issues DigiMob’s main energy use is electricity and Lead. There is no strategy of Green energy use or how to be environmentally more aware or friendly in the use of Lead. Coming up with a new strategy that is sustainable at the same time will be difficult. Also, the company makes use of Chinese manufacturers and suppliers to get its parts and components and is not sufficiently aware of the worker’s rights and how they might be treated by these manufacturers. 4. Moral Issues “One could associate the labor exploitation of Chinese migrants with clandestine recruitment methods.” (ILO Report, 2005, cited in Yang and Tang, 1999, p. 65). Where the exploitation of workers is concerned, one would need to understand the fact that while costs might be low, it is a reality that in any atmosphere where the workers are unhappy with the environment within which they are being made to work there is a high probability of there displeasure being manifested with the tasks that they are being made to perform. The idea is that while, costs might be lower if the supplier is one that exploits his laborers chances are that many more of the suppliers pieces would have defects vis-à-vis work that has been outsourced from a place where the workers are happy. Recommendations In light of the issues identified, the following recommendations have been made with the objective to: Suggest what specific action can be taken to minimise the impact from the pollution in terms of energy factors and material used along with ridding the company of the kind of stigma associated with using products made of labour characterised by exploitation Propose a way forwards that achieves the goal of supplementing the State’s current and future electricity supply requirements while adopting an approach which is more socially responsible and has reduced impact to the environment. 1. Usage of Lead: Research has demonstrated the fact through tests such as the TCLP aimed at the stimulation of disposal in a municipal landfill leaches measurable amounts of tin, silver, copper, antimony, indium, and bismuth finds that demonstrates that co-disposal of electronic wastes with municipal wastes is undesirable The merits of lead elimination from electronics could be validated by way of the fact that a lifecycle assessment (LCA) is often recommended to provide a holistic view. The recent passage of the European Union (EU) “Directive on the Restriction of the Use of Certain Hazardous Substances (RoHS) in Electrical and Electronic Equipment (EEE)” has made the drive towards worldwide adoption of lead-free soldering unstoppable for electronics packaging, board assembly, and manufacturing of electronics products. “Also, environmental compliance is becoming a global effort in the electronics industry.” (Shangguan, 2005, p. 28) Again while it is true that rework for lead-free solders is relatively more difficult, given the nature of the lead-free solder and the fact that alloys typically do not wet or wick as easily as the Sn-Pb solder due to their difference in wet-tability. In spite of these differences, successful rework methods (both manual and semi-automatic) have been developed with lead-free solders. 2. Saving Electricity Measure Benefit Logic Use of wind/solar energy- Easy to use and ecologically friendly. This will have initial hiccups as the company would have to employ additional equipment professionals Defining clear expectations of performance can support increased trade and investment, assure consumer protection and promote environmental stewardship Minimisation of wastage Maintenance and upgradation of current infrastructure to ensure that less water is lost through leaky pipes Budged allocated to initiative to repair and monitor current infrastructure that delivers electricity Shareholder Conflicts – inadequate discussion Monitoring and alterations in product could be brought about by entering into a strategic alliance with an NGO or an environment protection consultation agency-engaging experts(e.g. Greenpeace) Engaging stakeholders Due transparency Consultation In partnership for the environment, human activity and wellbeing Waste Management Maintenance of, and furthering the present waste management programme. Here the idea will be to test for effectiveness the present waste management programme: First waste should be pre-treated before discharge and there is a need for the firm, again to enter into strategic partnerships with industry to find alternative use of sludge to use as caustic soda - for the alumina industry, sodium cyanide- for the gold industry and sodium hypochlorite – as bleach as noted by CSIRO Minimisation of waste and waste related pollution China: Outsourcing-Exploitativeness prevention Measure Benefit Logic Support to Chinese NGOs and worker protection activists Easy to contact and help-funding a major mode of operative help-lobbying another easy method Defining clear expectations of performance can support increased trade and investment, assure consumer protection and promote environmental stewardship Rehabilitation of workers Gaining access to direct aid-helping Good for image, hand on approach-lots to talk about during media interaction. Proactive role in prevention of exploitation Setting up operations in China-operations by way of self-made supplying units Monitoring and alterations in product could be brought about by entering into a strategic alliance with an NGO or an environment protection consultation agency-engaging experts(e.g. ActionAid) Engaging stakeholders Due transparency Increase operational footprint at minimal price Better management of funds, elimination of added costs in the long run Consultation In partnership for the environment, human activity and wellbeing Sourcing out of other third world countries Similar benefits at similar costs without the added burden of exploitation tag on products Direct advantage in terms of image over rival-iPhones are manufactured in China Minimisation of image related problems at no cost at all Inspiring Stakeholder Confidence: Project Management: Waste Management to be handled in a professional manner, with the aid of experts that minimise chances of error Operations Management: The AIDA model should find application here. The model basically states that in order to get a customer interested one has to first gain attention, thereby arousing desire which would ultimately lead to action. This also means that the price that the customer will have to pay needs to be worth the service that he is being provided (Nickels and Wood, 1997, p222). Energy Management: Change in the energy consumption is needed as it is likely that there will be increased regulation for carbon dioxide emissions. Furthermore, as the cost of energy continues to rise, this will have a direct impact on the cost of desalinated water – an essential resource for society. Conclusion: There is a need in the face of increasing costs to pay more and more attention to issues of sustainability. “Research has found that those companies that take it upon themselves to embrace sustainability principles en up providing stimulus for corporate entrepreneurship resulting in innovation and the creation of growth opportunities, reputation, a burgeoning competitive advantage.” (Munilla, Miles and Darroch, 2008, p. 65) Where the adoption of green technology is concerned, one would need to be on board with the fact that where a company such as DigiMob is concerned, screening becomes vital if mot essential. “Beyond understanding the state of the art in energy technologies, for a utility technology screening means to have an overview of emergent technologies that might not play an important role in the sector right now, but may be the trigger for change of the whole industry in the future.” (Moore & Wüstenhagen, 2004, p. 235). References: Crittenden J. C., and White, H. S., (2010) ‘Harnessing Energy for a sustainable world’. Journal of American Chemical Society. 132 (13), pp 4503–4505 Munilla, M. P., Miles, L. S., and Darroch, J., (2008). ‘Sustainable corporate entrepreneurship’. International entrepreneurship and management journal. 5(1). pp65-76 Moore, B. and Wüstenhagen, R. (2004): Innovative and Sustainable Energy Technologies: The Role of Venture Capital, Business Strategy and the Environment, 13, 235-245. Lee, Ning-Cheng, “Lead-Free Soldering- Where the World is Going”. Advanced Microelectronics, September/October 1999, pp. 29-34 NY Times, (2008). In Chinese Factories, Lost Fingers and Low Pay. Retrieved November 13, 2010, < http://www.nytimes.com/2008/01/05/business/worldbusiness/05sweatshop.html> Nickels, W. G., & Wood, M. B. (1997). Marketing: Relationships, quality, value. Worth Publ., Irving Place, N.Y. Vocht, F., (2010). “Dirty electricity”: what, where, and should we care?’. Journal of Exposure Science and Environmental Epidemiology. Vol. 20. pp399–405. Srivastava, S. K. (2007). Green Supply-Chain Management: A State-of-The-Art Literature Review. International Journal of Management Reviews, 9 (1), pp53-80.  APEC CaseBook, (2007). Corporate Social Responsibility in the Global Supply Chain. Retrieved November 14, 2010, < http://cedoc.sirio.regione.lazio.it/DOCUMENTI/30_IMPRESA.pdf> Yang, Q. and J. Tang (1999), ‘The final safety net’, Social Sciences in China, XX (2): pp65-75 Sha, K.X. and Z.J. Jiang (2003), ‘Improving rural labourers' status in China's construction industry’, Building Research and Information, 31(6): pp464- 473. Shangguan, D., (2005). Lead-free solder interconnect reliability. ASM International. pp28-31 WCED: Our Common Future, WCED, 1987. retrieved November 14, 2010, < http://www.oecd.org/dataoecd/6/9/38509315.pdf> Appendices: Stakeholder Analysis Table (Johnson & Scoles, 2003, p.8) SWOT Analysis Strengths Low cost of change management and adoption Government support for environmentally friendly measures New concept, easy to adapt, easy to remove  Innovative, always finds acceptance and accolades Great for gaining praise and publicity Weaknesses High energy consumption Waste by products: dispersion & disposal Plant construction carbon intensive High cost: outlay & ongoing Tight project timelines: unrealistic Poor safety record Safety culture Management/leadership Opportunities Bolstering standard operating and safety procedures Community engagement Commercial opportunities and/or recycling of by products (e.g. sludge as compost) More renewable energy capabilities onsite (e.g. solar) Product stewardship via a green alliance (Srivastava, S.K.,2007, pp53) Governance overhaul Partner with industry to find alternative uses waste Ensure energy recovery is maximized with an ongoing commitment to R&D Investigate methods of replacing seagrasses. Threats Potential or unforeseen impact on the marine and land ecosystems (e.g. brine concentrations not dispersed, sea grass, contamination, operational noise, vibrations and compromised air quality) Disposal of waste by products Technical issues (e.g. corrosion due to high salt content) New idea not acceptable for the market Unknown/undiscovered  Structural  error will lose public’s confidence Increasing competition could be a problem if quality is compromised. PEST Analysis Political: Removing restrictions on the acquisition of new energy modes by foreign companies. Removing minimum expenditure requirements and increasing development time frames to encourage the development of innovation in enterprise Reducing restrictions on the sale of new product that is environmentally friendly Stable in the political environment Social A market that is increasingly more and more aware of need for environment protection and corporate responsibility The Australian population is currently growing at 1.84% per annum. (UK 0.4%; USA 0.9%).Natural population increase and immigration, without adequate supply-side response, increases demand for existing stock. Australia has quality of overseas migrants. (Those people are potential customers) Existing stock is passed down to children, which captures past property wealth for future generations to build upon. Disposable household income has been rising faster than wages, and there is a natural tendency to direct this excess income towards housing. Economic: Economic climate Large amount of Australians are now more open to medication, of an alternative nature and substance Government support to business development and extension Easy availability of raw material Well developed supply and logistics chain New industry establishment created large amount of job  Booming alternative market The falling Australian dollar has made Australian more affordable to foreign investors Inflation rate of 2.5% Technological Client Relations - Technology plays an important role in facilitating communication with plan sponsors and consultants. Investment Research - It is no longer acceptable to just gather data and perform micro-level diligence. Researcher's challenge is to transform today's torrent information in to strategies that enhance risk-adjusted returns. Enterprise Management - Employ technological innovation is a way to emphasize and enhance firm's strategic areas of competitive advantage Read More