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MANAGEMENT FOUNDATIONS OF IN HOSPITALITY INDUSTRY
Chapter 5: Managing for Sustainability
± The ability of a company or organization to meet the needs of the present without exhausting natural resources or damaging the environment.
± Any organization that participates in environmentally-friendly activities while maintaining a profit.
Green Business Practices
± Generic term for environmentally-friendly business practices, such as conservation of water and energy. ± Play a large role in sustainability initiatives. ± Companies that employ them are often said to be going green, being green, or greening their business
and leather may all be renewable if harvesting is performed in a sustainable manner. paper. winds and hydroelectricity. Perpetual Resources ± Inexhaustible resources such as solar radiation. ± Wood. . tides.Renewable Resources Renewable Resources ± Natural resources that are replaced by natural processes at a rate comparable to or faster than their rate of consumption.
The Dissenting View ± Spending money on environmental problems does not provide full payback to the firm. and wealth creation. new market opportunities. . ± The belief that everyone will come out a winner is naïve.Business and the Environment: Conflicting Views The Win-Win Mentality ± Being green" is a catalyst for innovation. ± Actions can be taken that benefit both business and the environment.
Complying with Environmental Regulations The financial costs of complying with environmental regulations are steep. petroleum refiners $37 billion. ± GM spent $1. more than the book value of the entire industry. 20% of manufacturing costs were for the environment about the same amount as for labor. ± The Clean Air Act was expected to cost U. ± Environmental regulations were once considered a threat to the survival of the chemicals and petroleum industries.3 billion to comply with California emissions requirements.S. . ± At Bayer. ± California's laws have caused manufacturers to move to Arkansas or Nevada.
A More Balanced View Businesses must weigh the environmental benefits of an action against value destruction. emissions. ± This creates opportunity if well managed for both business and the environment. ± Shareholder value. ± Such an approach is environmentally sound and sustainable over the long term. rather than compliance. but pick environmental initiatives carefully. ± Don't obstruct progress. Businesses have the resources and the competence to bring about constructive change. . or costs should be the focus of objective cost-benefit analyses.
and public disclosure. air.S. environmental laws govern water.Why Manage with the Environment in Mind? Legal Compliance ± U. . ± Government regulations and liability for damages provide strong economic incentives to comply with environmental guidelines. hazardous materials.
plans and actions.Why Manage with the Environment in Mind? ISO 14000 Standards ± A family of voluntary standards developed by the International Organization for Standardization (ISO). ± Provide a framework for a strategic approach to an organization s environmental policies. .
and other approaches. ± Long-run: Companies may avoid paying damages or upgrading technologies and practices when laws change down the road.Why Manage with the Environment in Mind? Cost Effectiveness ± Short-run: Companies are realizing cost savings from repackaging. . recycling.
Cost Effectiveness Other Cost Savings ± Fines. cleanups and Litigation ± lower raw materials costs ± reduced energy use ± less expensive waste handling and disposal ± lower insurance rates .
Why Manage with the Environment in Mind? Competitive Advantage ± Corporations can channel their environmental concerns into new opportunities and producing higher-quality products that meet consumer demand. ± Companies that fail to innovate in this area will be missing a competitive disadvantage. . ± Environmental protection is a major export industry.
.Why Manage with the Environment in Mind? Public Opinion ± The majority of the U. consumers consider environmentalism in making purchases.S. population believes businesses must clean up. ± Companies recover public opinion very slowly following an environmental disaster. but few people think businesses are doing it well. ± Adverse public opinion may affect sales and the firm's ability to attract and retain talented employees. ± More than 80 percent of U.S.
Why Manage with the Environment in Mind? Long-Term Thinking ± Economic arguments It is the responsibility of management to maximize returns for shareholders. Attention to environmental issues enhances the organization's long-term viability because the goal is the long-term creation of wealth for serious investors in the company. implying the preeminence of the short-term profit goal. .
air. . ± Carrying capacity The limited ability of a finite resource to sustain a population without being destroyed.Why Manage with the Environment in Mind? Long-Term Thinking ± The Tragedy of the Commons Environmental destruction that results as individuals and businesses consume finite resources (the commons ) to serve their short-term interests without regard for the long-term consequences. and land. Examples of finite resources include clean water.
Inevitably. we are witnessing this tragedy of the commons. . conflict arises and solutions are urgently needed. ± In many ways.Why Manage with the Environment in Mind? Long-Term Thinking ± The Tragedy of the Commons The solution is to make choices according to longversus short-term consequences. Carrying capacities are shrinking as precious resources become scarcer.
the Czech Republic. Germany and Denmark are among the most environmentally conscious industrialized nations. Holland. . Hungary. ± Companies selling products in certain parts of the world must take growing consumer consciousness about environmental protection into account. and former East Germany are the most polluted industrialized nations.Why Manage with the Environment in Mind? International Perspectives ± Environmental problems are seen differently in various countries and regions of the world. Poland. ± There is a large growth market in Western Europe for environmentally "friendly" products.
increasing production costs. Higher energy costs are causing firms to switch to more fuel-efficient sources. and outputs. Environmental pressures are causing prices of some raw materials to rise.What Managers Can Do Systems thinking ± Environmental considerations relate to the organization's inputs. ± Inputs Include raw materials and energy. processes. .
Firms are incorporating technologies that control these by-products of business processes. noise and waste. making serious accidents less likely.What Managers Can Do Systems thinking ± Processes Firms are considering new processes or methods of production that will reduce air and water pollution. Many companies keep minimal stocks of hazardous materials. .
What Managers Can Do Systems thinking ± Outputs Include the products themselves and the waste or byproducts of processes. Both have environmental impact. . Refurbishing and reselling products. Recycling or reusing waste from manufacturing processes. ± Strategies for reducing environmental impact.
± First step: create the proper mindset.What Managers Can Do Strategic Integration ± Environmental issues should be addressed in a comprehensive. This sets the stage for Strategic Actions . The firm must come to see environmental concerns as a potential source of competitive advantage and an important part of a strategy for long-term survival and effectiveness. integrative fashion.
5. 7.What Managers Can Do Strategic Actions 1. Involve employees at all levels. Develop a mission statement and strong values supporting environmental advocacy. 6. Establish a framework for managing environmental initiatives. Engage in "green" process and product design. 2. 4. Provide internal and external education. 3. Gain support of top management. Establish environmentally focused stakeholder relationships. .
Have environmental professionals within the company report directly to the president or CEO. Make employees accountable for any of their actions that have environmental impact. Allocate sufficient resources to support the environmental effort. Build bridges between the organization and other companies. . governments. environmentalists.What Managers Can Do Implementation ± Preparations Begin with a commitment by top management Commission an environmental audit Communicate the policy and make it highly visible throughout the organization. and local communities.
2. 3. 6. Compensate for environmentally risky projects. Make every new product environmentally better than the last. Develop and expand environmental cleanup services. Invest in green businesses. Cut back on environmentally unsafe businesses Carry out R&D on environmentally safe activities. . 7.Implementation Implementation Strategies 1. Make your company accountable to others. 5. 4.
Attempt to gain environmental legitimacy and credibility.Implementation Public Affairs 1. Collaborate with environmentalists. Try to avoid losses caused by insensitivity to environmental issues. . 2. 3.
Take advantage of innovative compliance programs.Implementation Legal Issues 1. Try to avoid confrontation with state or federal pollution control agencies. 3. Comply early. Don't deal with fly-by-night subcontractors for waste disposal. 2. 4. .
.Implementation Operations 1. 8. Assemble products with the environment in mind. Find alternative uses for wastes. Insist that your suppliers have strong environmental performance. 2. Practice reverse logistics. 7. Develop new product formulations. 6. Encourage technological advances that reduce pollution from products and manufacturing processes. Promote new manufacturing technologies. Eliminate manufacturing wastes. 5. 4. 3.
Take advantage of the Net. 2. Avoid attacks by environmentalists for unsubstantiated or inappropriate claims.Implementation Marketing 1. Differentiate your product via environmental services. 4. 3. Cast products in an environment-friendly light. .
Demonstrate that antipollution programs pay off! 4. 6. 2. Show the overall impact of the pollution reduction program. Use an advanced waste accounting system. Adopt full-cost accounting. 3. . Collect useful data. Make polluters pay.Implementation Accounting 1. 5.
Implementation Finance: 1. Fund and then assist green companies. Recognize true liability. 3. . Gain the respect of the socially responsible investment community. Recognize financial opportunities. 4. 2.
Opportunities for Making Your Business Sustainable Air Quality ± Indoor and outdoor air quality is affected by the type of energy we use to power our businesses and the equipment and products we rely on in the workplace. . Building Construction and Renovations ± Building renovations are an opportunity to improve environmental performance while potentially realizing cost savings.
. and improve your company s bottom line.Opportunities for Making Your Business Sustainable Energy ± Energy use is one of the largest contributors to the environmental impacts of any facility. Paper ± By reducing paper use and purchasing paper products made with recycled fiber you will help to reduce the use and pollution of freshwater. ± Reducing energy consumption will reduce your company s environmental impacts and energy costs. reduce greenhouse gas emissions.
± Encourage the widespread adoption of environmentally responsible purchasing practices. . ± Consider the effects of the products you purchase and give preference to ecologically preferable options.Opportunities for Making Your Business Sustainable Purchasing ± The purchasing decisions your company makes have an impact on the environment.
carbon monoxide.Opportunities for Making Your Business Sustainable Transportation + Accommodation ± Transportation is a source of pollution. ± By reducing the need for automobile transportation and promoting environmentally preferable forms of transportation and accommodation your organization can reduce its contributions to these harmful effects. smog. . and harmful particles that can cause health problems.
. your company can keep products out of landfills and reduce the harmful environmental impacts associated with the extraction of natural resources.Opportunities for Making Your Business Sustainable Waste Management ± By recycling. ± Choosing products manufactured from recycled content also helps reduce pollution from virgin resource extraction and processing.
± Water conservation strategies can help ensure that future generations have access to the water they need. while saving your company money. and by using more grass and gravel on your property to absorb and filter pollution. pesticides and fertilizers.Opportunities for Making Your Business Sustainable Water Quality and Use ± Your company can reduce detrimental impacts on water quality by limiting the use of toxic chemicals. .
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