operations management and the impacts on the natural environment

operations management

• both production management and service operations

  • directing and controlling processes

  • convert an organization’s resources (input) into finished goods and services (outputs)

key dimensions

• quality of the products and services being created

• dependability of delivering products and services

• speed/flexibility of creating products and services

• cost of creating products and services

tragedy of the commons

• interaction between people and environment

• population grows, but space is the same

• seemingly unlimited resources

• everyone is economically trying to maximize

commons

• resources are owned by everyone but by no one

externalities

• cost or benefit that affects a party who didn’t choose to incur that cost or benefit

• leads to market failures

• positive

  • job opportunities

  • vaccines

• negative

  • pollution

  • climate change

negative impacts on business

• climate change is changing the landscape of business

  • businesses that depend on water

  • tourism

  • commodity-based businesses

business as part of the solution

• technological innovations

  • clean energy

  • meat replacements

protecting the environment

• regulations

• laws

• market-driven approaches

• environmental NGOs

• multi-stakeholder initiatives and standards

• corporate programs and policies

regulation-driven approaches

• strengths

  • power for oversight and sanctions in cases of non-compliance

  • externally controlled so more stakeholder interests considered

• weaknesses

  • susceptible to lobbying and corporate influence

  • can be viewed by industry as inefficient since government may not have the necessary knowledge of an industry

  • cannot regulate outside jurisdiction

law-driven approaches

• strength

  • have the power to enforce compliance and can sanction non-compliance

  • potentially less susceptible to influence than regulations

• weaknesses

  • fines are often not a deterrent for large corporations

  • several instance where corporate executives have avoided criminal accountability

market-driven approaches

• market incentive for protecting the environment

  • carbon tax

  • emissions trading

  • emission reduction credit (offsets)

  • carbon capture and storage (CCS)

• strengths

  • incentives for companies

  • potentially efficient since it’s incorporated into the market

• weaknesses

  • allows corporations to continue to be environmentally destructive without addressing internal issues

environmental NGOs

• strengths

  • can effectively pressure corporations into changing policies

  • externally controlled instead of internally controlled

• weaknesses

  • don’t posses the same amount of power as regulations or laws

  • potential for co-optation

multi-stakeholder approaches

• strengths

  • input from multiple stakeholders

  • often transnational in focus

  • encourage collaboration and cooperation

• weaknesses

  • voluntary

  • slow progress

  • watered-down to satisfy all parties

corporate-driven approaches

• strengths

  • internally controlled so more likelihood for efficiencies and integration

  • company buy-in

• weaknesses

  • no external oversight or enforcement

  • company has complete discretion