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Chapter 11 L&W
- Lafayette, Indiana produces around 800 Subaru cars a day (factory owned by Fuji Industries of Japan)
- Slashed its waste per vehicle almost in half - no waste to landfills, returns packaging materials
- EU adopted an innovative policy - system of tradable permits for carbon dioxide emissions. Those who don't exceed their quota can sell their permits
- FedEx and Eaton to design an environmentally friendly delivery truck (hybrid)
Environmental Protection Agency (EPA)
- created in 1970 to coordinate most of the government's efforts to protect the environment.
- US's main pollution control agency
- occurs when more pollutants are emitted into the atmosphere that can be safely absorbed and diluted by natural processes
- Six criteria: asbestos, bensene, chloroform, dioxin, vinyl chloride, and radioactive materials (potential hazards to human health)
- acid rain: is formed when emissions of sulfur dioxide and nitrogen oxides, by products of burning fossil fuels by utilities, manufacturers, and motor vehicles, combine with natural water vapor in the air and fall to Earth as rain or snow that is more acidic than normal.
- when more wastes are dumped into waterways than can be naturally diluted and carried away
- polluted by..organic wastes, chemical by products of industrial processes, and disposal of nonbiodegradable products.
- Water Pollution Act (Clean Water Act) aims to restore or maintain the integrity of all surface water in the US
- Walkerton Ontario, a small farming community was infected by E.coli bacteria in the municipal water supply. Water company failed to disinfect the water as required by law. Manger was convicted and sent to prison
- contamination by both solid and hazardous waste
- Germany has made probably the greatest progress in reducing its solid waste stream. Manufacturers and retailers were required to take back almost all packaging waste---Recycle and reuse. Germans had to pay for trash pick up but not for recycling
- Toxic Substance Control Act of 1976
- All hazardous waste must be treated before disposal in landfills
the effort to prevent inequitable exposure to risk, such as from hazardous waste
- a promising regulatory approach to waste management (Pollution Prevention Act of 1990) aims to reduce pollution at the source, rather than treat and dispose of waste at the end of the pipe.
- saves money, protects worker health, and requires less abatement and siposal technology
CERCLA Comprehensive Environmental Response, Compensation, and Liability Act (Superfund)
- major US law governing the cleanup of existing hazardous waste sites
- established a fund, supported primarily by a tax on petroleum and chemical companies that were presumed to have created a disproportionate share of toxic wastes
- original polluters if identified they would be required to pay for the cleanup, if not identified, Superfund would pay
- Right to Know Law- reporting of companies
Environmental Standards (command and control regulation)
- traditional method
- allowable levels of various pollutants are established by legislation or regulatory action and applied by administrative agencies and courts
- environmental quality standard: a geographical areas is permitted to have no more than a certain amount or proportion of a pollutant
- emission standard: maintain the air's standard air quality...set by state and local regulators who are familiar with local industry and special problems caused by local geography and weather conditions.
- best available technology: particular process that the agency determines is the best economically achievable way to reduce negative impacts on the environment.
Market Based Mechanism
- the market is a better control than extensive standards that specify precisely what companies must do
- cap-and-trade: business to buy and sell the right to pollute (tradable permit EU)
- emission charges or fees: charged for the undesirable waste that it emits, with the fee varying according to the amount of waste released. (pollution is not illegal but it is expensive)
- green taxes or eco-texes: levy a fee on various kinds of environmentally destructive behavior.
- regulation by publicity/embarrassment: government encourages companies to pollute less by publishing information about the amount of pollutants individual companies emit each year.
- TRI (Toxic Release Inventory)- manufacturing firms to report, for about 300 toxic chemicals, the amount on site, the number of pounds released and how (if at all) these chemicals were treated or disposed
Civil and Criminal Enforcement
- Companies that violate environmental laws are subject to stiff civil penalties and fines and their managers can face prison if they knowingly or negligently endanger people or the environment.
- Massey Energy paid $20 million to settle charges it had violated the Clean Water Act
Costs and Benefits of environmental regulation
- the costs-lost jobs, reduced capital to significant gains in the quality of life and to the economic payoff of a cleaner environment
- overall emissions of nearly all major air pollutants in the US have dropped as week has the water quality has improved.
- environmental regulation s can stimulate the economy by compelling businesses to become more efficient by conserving energy, and less money is spent on treating health problems caused by pollution.
greening of management
process of moving toward more proactive environmental management
Stages of Corporate Responsibility
- 1. pollution prevention: focuses on "minimizing or eliminating waste before it is created"
- 2. Product Stewardship: managers focus on "all environmental impacts associated with the full life cycle of a product." from the design of a product to its eventual use and disposal
- 3. clean technology: businesses develop innovative new technologies that support sustainability
3 main motivations for "going green"
- 1. chance to gain competitive advantage
- 2. desire to gain legitimacy (approval of the public and regulators)
- 3. moral commitment to ecological responsibility
ecologically sustainable organization (ESO)
(ideal type) is a business that operates in a way that is consistent with the principle of sustainable development. Continues its activities indefinitely, without altering the carrying capacity of the Earth's ecosystem
- many businesses that are seeking to become more sustainable have formed voluntary, collaborative partnerships with environmental organizations and regulators to achieve specific objectives
- Aglo_Dutch (largest buyer of seafood) partnership with the World Wildlife Fund = formed Marine Stewardship council to set standards
Environmental Management in Practice
- Top management with a commitment to sustainability -
- sustainability officer: direct reporting relationship with the CEO. Supervise extensive staffs of specialists and coordinate the work of managers in many areas, including research and development, marketing, and operations, whose work is related to a firm's sustainability mission
- Line manager involvement: carry out the company's daily operations, involved directly in the process of change.
- Codes of environmental conduct: companies put their commitment in writing, often in the form of a code of conduct or charter that spells out the firm's environmental goals.
- Cross-functional teams: use of ad hoc, cross-functional teams to solve environmental problems, including individuals from different departments
- rewards and incentives: organization acknowledge and reward good behavior
Sustainability report: integration of social and environmental reporting into a single audit
Environmental Management as a Competitive Advantage
- Cost Savings: reduce pollution, reuse or recycle materials, and operate with greater energy efficiency can reap significant cost savings
- Product Differentiation: Companies that develop a reputation for environmental excellence and that produce and deliver products and services with concern for the sustainability can attract environmentally aware customers
- Technological Innovation: leaders that seek new methods for reducing pollution and increasing efficiency, which wins new customers
- Strategic Planning: companies that cultivate a vision of sustainability must adopt sophisticated strategic planning techniques to allow their top managers to assess the full range of their firm's effects on the envitonment
creating "green" products and services
when they mislead consumers regarding the environmental benefits of a product or service
Global Human Resource Management
Chapter 16 Opening Case
- IBM sold its entire PC operations to Lenovo (Chinese enterprise with little global exposure)
- Less than 24 hours IBM HR released a memo that clearly stated that employees could accept employment or leave, with no separation of pay
- The 30 member top management team was split down to half Chinese and half American
- Goal was to transfer Levono into a truly global corporation (headquarters moved to NY and American CEO Ward has skills and capabilities required for working in a global enterprise)
Human Resource Management
- to the activities an organization carries out to use its human resources effectively
- determining the firm's human resource strategy, staffing, performance evaluation, management development, compensation, and labor relations
- strategic role is to make sure that the very best people are hired for job openings, irrespective of their national origin.
- modified to national context
- 1. compensation practices may vary from country to country
- 2. labor laws may prohibit union organization in one country and mandate it in another
- 3. equal employment legislation may be strongly pursued in one country and not in another
a citizen of one country appointed to a management position in another country
Strategic role of International HRM
- strong fit between human resource practices and strategy is required for high profitability
- for a firm to outperform its rivals in the global marketplace, it must have the tight people in the right postings
- HRM function, through its staffing, training , compensation and performance appraisal activities, has a critical impact upon the people, culture, incentive, and control system.
- superior HRM a sustained source of high productivity and competitive advantage (usually the weakest capabilities in most firms)
- if pursuing a transnational strategy , need to build strong corporate culture and an informal management network exchange info within the organization
- concerned with the selection of employees for particular jobs
- 1. selecting individuals
- 2. tool for developing and promoting the desired corporate culture of the firm
- corporate culture: the organization's norms and value systems
- if employees are predisposed toward the organization's norms and value system by their personality type, the firm will be able to attain higher performance.
ethnocentric staffing policy (international strategy)
- one in which all key management positions are filled by parent-country nationals
- 1. the firm may believe the host country lacks qualified individuals to fill senior management positions (less developed countries)
- 2. best way to maintain a unified corporate culture
- 3. transfer parent-country nationals who have knowledge of that competency to foreign operation is the best way to transfer core competencies to a foreign operation
- 1. limits advancement opportunities for host country nationals (leads to resentment, lower productivity, and increased turnover)
- 2. cultural myopia, the failure to understand host country culture differences that require difference approaches to marketing and management
Polycentric staffing policy (localization strategy)
result can be a "federation" of largely independent national units with only nominal links to corp headquarters
- requires host country nationals to be recruited to mange subsidiaries, while parent country nationals occupy key positions at corporate headquarters
- less likely to suffer from cultural myopia
- may be less expensive to implement
- effective for firms pursuing a localization strategy
- host country nationals have limited opportunities to gain experience outside their own country and thus cannot progress beyond senior positions in their own subsidiary (resentment)
- gap that can form between host country managers and parent country managers
geocentric staffing policy (global standardization and transnational strategies)
- seeks the best people for key jobs throughout the organization regardless of nationality
- 1. enables the firm to make the best use of its human resources
- 2. enables the firm to build a cadre of international executives who feel at home working in a number of cultures
- better able to create an experience curve and location economies
- limit the firm's ability to pursue a geocentric policy
- many countries want foreign subsidiaries to employ their citizens--> immigration laws
- expensive and need a compensation structure with a standard international base pay level, higher than national levels