Managing in Our Natural Environment

I picked the topic of managing in our natural environment because environmental issues are becoming increasingly prevalent in our society. Many organizations are beginning to capitalize upon this trend, and in order to be successful in the long run it is necessary to include environmental preservation in the core values of a business. Individuals, organizations, and public figures are frequently asked about their environmentally conscious strategies (or lack thereof). Today it is increasingly important to consumers to inspect a business's impact on nature.

I will be leading you through the ideas that have formed throughout my research. I will discuss the different aspects of the environmental movement's involvement in business. It is important to be able to interpret the laws and regulations of the movement, providing information on what companies are expected to do to protect the earth's condition. One must also dissect what managers can do to be environmentally conscious and understand their role in educating employees on the benefits of being "green." I hope to enlighten readers with the importance of reaching and maintaining society's standards of a "nature friendly" organization. The contents of this paper will provide you with information and evidence of the positive effects of environmental awareness.

The criticisms of environmentalism in business will also briefly be mentioned; presenting both sides of the issue in an effort to ensure the reader is well informed on this subject. U.S. environmental laws are not just beneficial for the environment, but for the organizations that comply with the laws as well. My purpose is to prove to organizations that maintaining an environmentally conscious institution can improve their chances for long-term viability.

In the 1990's, a new philosophy about the state of our environment and its importance emerged. This idea, titled "new environmentalism," at first did not blend with business values, and organizations found themselves avoiding the newly created regulations in an effort to preserve their own economic profits. As time has passed, however, the economic costs of being environmentally aware have been outweighed by the long-term benefits. Over the last two decades, Congress has passed more than three hundred major environmental laws and regulations with thousands more at the state and local levels; more are added every year. Our economy has been shaped around the importance of being "green." In recent years the nation's obsession with environmental activism has halted its image of detriment to business profit, and has become an increasing trend producing profits of its own.

Business and organization leaders against the influence of environmental regulations believe that the preservation of nature is a separate issue from their economic goals. How can this be, when the issues involved are so similar? Economics is about the allocation of scarce resources to individual wants. This is what environmental organizations do every day. In order for businesses to comply with environmental regulations, the costs and benefits must be balanced. With scarcity being the biggest problem for economists, one would think that anything preserving nature's resources would not be at odds with business values. The theory of conservation is concerned with preserving resources and promoting their efficient use. If organizations can combine the issue of conservation with environmentalism, perhaps the critic of the movement would more readily accept its benefits.

In the future, the most successful and efficient businesses will be environmentally compliant. Even today, the United States and Great Britain lag behind Germany and Japan in mandated emissions standards. In Western Europe the large market for environmentally "friendly" products is growing steadily as organizations recognize the changing standards in consumer's wants. The problem with worldwide environmental laws is that separate countries feel they are entitled to separate regulations. Developing countries prefer to spend their money on developing themselves first, then on helping to preserve the earth. Countries that have been previously developed economically used the resources available to them without regulation, meaning the pollution of the environment.

This causes a divide in the efforts of different nations to clean up nature and preserve its resources. However, aspects of the economic world will soon be required to increase their environmentally safe procedures in order to stay on top of the market. For small businesses, these actions will be necessary to even stay involved with the market. An example of the ever-changing need for "green" organizations is the real-estate market. Property managers are getting involved in this process, as it is growing more evident that satisfying consumer wants means working to preserve nature. If an apartment building can decrease operating costs, increase occupant productivity, and decrease health complaints, as well as be environmentally responsible, you have a "green" building. If environmentally compliant means happier tenants and healthier occupancy rates, more building owners would want to incorporate these programs to gain a powerful market advantage.

Organizations in the United States need to be prepared to adapt to the changes in other nations. For instance, in Germany manufacturers are legally required to take products back from customers after use to recycle. Hewlett-Packard has changed its office-machine packaging worldwide to meet these demands and plan for future environmental guidelines. In order to manage successfully in the future, organizations need to follow suit and realize that environmentalism is now a part of big business. Companies such as HSBC have stepped up environmental programs -- its Hong Kong offices recycle 65 percent of its paper waste and the company recently spent $900,000 to install energy-efficient lighting. Wal-Mart has begun an extensive program to monitor and clean up its environmental practices, including its supply-chain policies. More businesses are buying environmentally friendly technology as companies worldwide begin to measure not only how they are doing financially, but reporting their impact on environment and society as well.

These companies are thinking long-term; consumers want to do business with the environment in mind. Companies that ignore this fact will be left behind in growth and development. According to Janet Ranganathan from the World Resources Institute, "if companies understand the true cost of environmental factors to their bottom line, they are more likely to do something about it on their own." The most successful companies of the world's nations are no longer being forced to comply with the environmental regulations; they are taking it upon themselves to improve and research ways to preserve the earth's condition. Ranganathan's statement supports the idea that complying with environmental regulations is no longer a nuisance to a business's profits, but a benefit to the long-term viability and success rate of an organization.

There are many rules and regulations that companies have to abide by to run a successful business. Included in these are the environmental laws. The Environmental Laws investigate, restrict, and prohibit certain business processes to ensure that our environment is protected. Companies must notice and follow these laws because they help keep the environment we are in less polluted. There are many reasons that businesses are turning their full attention to environmental issues. Some of them include legal compliance, cost effectiveness, competitive advantage, public opinion, and long term thinking strategies. Some of the most important environmental laws include: Community Response and Right-to-Know Act, Federal Hazardous Substances Act, Hazardous Materials Transportation Act, Surface Mining Control and Reclamation Act, Superfund, Clean Water Act, Clear Air Act, Toxic Substances Control Act, and the Resource Conservation and Recovery Act.

The Community Response and Right-to-Know Act mandates that all facilities producing, transporting, storing, using or releasing hazardous substances provide full information to local and state authorities and maintain emergency-action plans. The Federal Hazardous Substances Act regulates hazards to health and safety associated with consumer products. The Hazardous Materials Transportation Act regulates the packaging, marketing, and labeling of shipments of flammable, toxic, and radioactive materials. The Surface Mining Control and Reclamation Act establishes environmental standards for all surface-mining operations.

The Superfund, also known as the Comprehensive Environmental Response, Compensation, and Liability Act, establishes potential liability for any person or organization responsible for creating an environmental health hazard. The Toxic Substances Control Act addresses the manufacture, processing, distribution, use and disposal of dangerous chemical substances and mixtures. The Resource Conservation and Recovery Act extends to small-quantity generators the laws regulating generation, treatment, and disposal of solid and hazardous wastes.

Government regulations and liability for damages provide strong economic incentives to follow the government guidelines. Prison sentences to executives whose companies violate hazardous-waste requirements have been given by the United States Justice Department. Environmentally conscious strategies can be cost-effective. Companies can increase tradable permits, pollution charges, and deposit refund systems. They also can provide positive financial incentives for good environmental performance to help with cost effectiveness. By repackaging, recycling, and other approaches, companies are realizing that they can save on costs in the short run. For example, Union Carbide avoided $8.5 million in costs and generated $3.5 million in income by recycling, reclaiming, or selling its wastes. Costs savings include fines, cleanups, and litigation; lower raw material costs; reduced energy use; less expensive waste handling and disposal; lower insurance rates; and possible higher interest rates.

By producing higher-quality products that meet consumer demand and by channeling their environmental concerns into entrepreneurial opportunities, corporations gain a competitive advantage. Business opportunities thrive in pollution protection equipment and processes, waste cleanup, low-water-se plumbing, new light bulb technology, and marketing of environmentally safe products like biodegradable plastics. Companies who do not use these strategies are at a competitive disadvantage. Environmental protection is a universal need as well as a major export industry. If the United States does not produce innovative, competitive new technologies, it will abandon a growth industry and see most of its domestic spending for environmental protection go to imports. By maintaining market share with old customers, and by creating new products for new market opportunities, competitive advantage can be gained. Long-term thinking about resources helps business leaders understand the nature of their responsibilities with regard to environmental concerns.

Companies can also choose to abide by the CERES Principles. This is a body of law, which is a system of complex and interlocking statues, common law, treaties, conventions, regulations and policies which seeks to protect the natural environment which may be affected, impacted, or endangered by human activities. The CERES Principles are a ten-point code of corporate environmental conduct to be publicly endorsed by companies as an environmental mission statement or ethic.

By endorsing the CERES Principles, companies not only formalize their dedication to environmental awareness and accountability, but also actively commit to an ongoing process for continuous improvement, dialogue and comprehensive, systematic public reporting. Endorsing CERES companies have access to the diverse array of experts in our network, form investors to policy analysts, energy experts, scientist, and other. The CERES Principles are: Protection of the biosphere, sustainable use of natural resources, reduction and disposal of waste, wise use of energy risk reduction, marketing of safe products and services, damage compensation, disclosure of environmental incident, environmental directors and assessment of annual audit.

Some companies have already made an effort to enhance the environment. Toyota has established an "ecotechnologies" division both for regulatory compliance and to shape corporate direction, including the development of hybrid electric-combustion automobiles. Shanghai circulates liquid through a standard pumping loop like those used in most industries. By using fatter pipes and short, straight pipes instead of long and crooked pipes, it has cut the power requirements by 92 percent. Xerox used "zero-waste-to-landfill" engineering to develop a new remanufacturable copier. By setting the copier to double-sided mode instead of single sided mode AT&T cut paper costs by 15%. Anheuser-Busch saved 21million pounds of metal a year by reducing its beer-rims by 1/8 of an inch without reducing its contents. Electrolux uses more environmentally friendly water-based and powder paints instead of solvent-based paints, and introduced the first refrigerators and freezers free of chlorofluorocarbons.

Providing consumers with an image of trustworthiness and environmental concern is extremely important for today's organizations. In the past twenty years, the environment's influence has increased in almost every marketable aspect of our economy. This will only continue, and smart companies soon will realize that profits can be made from growing and developing in this direction. Environmental safety starts in the home, and ends with worldwide acceptance. Managers, business owners, and entrepreneurs must learn the importance of protecting our ecosystem's natural resources in order to ensure their long-term success and viability.