Category: Environmental Issues

Introduction

The Port of Hastings has always played a significant role in the Australian shipping industry. According to experts, the country’s shipping industry will grow significantly in the coming years. This situation explains why the Victorian Government plans to expand the Port of Hastings. This paper analyses the issues surrounding the expansion of the Port of Hastings. The discussion identifies some of the key players in this issue. The paper analyses the environmental issues associated with the project. The report presents my views and recommendations for this project.

What does the Hastings Port Expansion project involve and who is the project proponent?

The Port of Hastings will remain a key area in the Australian shipping sector. The port will also serve different regions such as Victoria and Melbourne. The approach will be ‘critical towards supporting the proposed expansion in container operations’ (Port of Hastings: Port Expansion: About the Project 2014, par. 3). After identifying the potential benefits of the project, the Victorian Government has committed over $110 million towards the port’s expansion. The government also expects the proponent of the project to obtain all appropriate environmental and planning documentations (Port of Hastings: Port Expansion: About the Project 2014). Such efforts are critical to the success of the project. The Government of Victoria established the Port of Hastings Development Authority (PHDA) to oversee every activity aimed at expanding the harbour. The government-appointed the PDHA to act as the proponent of the project. The PDHA is presently undertaking the relevant environmental assessments and surveys before starting the project. The minister also expects the proponent to create the best business case.

Who are the key players in this issue, and what are their positions on the proposed development?

Every project must have specific key players. Such players determine the effectiveness and implications of the project. The first key player in the issue is the Westernport and Peninsula Protection Council Incorporation. This council is opposed to the proposed project because it will degrade the environment. According to the organisation, the decision will pose a major threat due to marine pests. The project will also cause oil spills. The other player is the Government of Victoria. According to the Government of Victoria, this port is one of the best areas to expand (Wathern 2013). The government expects the new port to promote trade and economic development.

The Victorian National Parks Association is another key stakeholder. This association is planning to educate more citizens about the impacts of the project. The association believes that the project will have negative impacts on Westernport Bay. The agency has conducted various studies to establish potential impacts of the proposed project (Wathern 2013). Blue Wedges is another agency trying to protect the environment from this project. According to the agency, the plan will contaminate the area and increase toxic wastes. The project has the potential to produce disastrous weather events. A local group called Preserve Western Port is working hard to preserve and protect the environment. The group is working with local communities in order to protect the region from degradation and pollution.

What are the potential environmental impacts of the Port of Hastings development?

The above checklist explains why this proposed project might produce numerous impacts. The expansion of Port Hastings will produce a wide range of socio-economic impacts. The project will result in new job opportunities and business activities. The port ‘might support the region’s economy’ (Platt 2014, p. 1). However, the project will have disastrous effects at the local level. People will lose their recreational facilities and beaches. The locals will have to deal with increased noise levels and traffic (Carey & Gordon 2014). The people will be restricted from using the port. However, a proper plan and proposal will ensure the expansion creates new recreational facilities. The government will use financial resources to support the project. According to Wathern (2013, p. 54), ‘the completed port might transform the country’s tourism industry’.

The expansion of Hastings Port is a good example of such projects. Some of the ‘projected environmental impacts include loss of habitats and increased sea levels’ (Raff 2014, p. 3). The project will also ‘affect different species due to increased disturbance and pollution’ (Platt 2014, p. 1). The project will significantly result in environmental deterioration. The people will have to cope with increased oil spills and loss of their fishing zones. Global warming might become a reality due to extreme weather changes. Flooding and erosion in the coastal region will also become major problems.

What is another technique that could be used to predict and assess the potential environmental impacts of this development?

Engineers and researchers use quality tools to analyse the potential environmental impacts of different projects. Some ‘of the best assessment techniques include networks, overlays, checklists, and matrices’ (Wathern 2013, p. 27). The proponents and stakeholders of the project can use matrices to evaluate the implications of this project. Matrices are ‘effective because they make it easier for researchers to analyse the interaction between different environmental components and project activities’ (Wathern 2013, p. 32). These two-dimensional charts facilitate the assessment of different stages and activities. The tool makes it possible for researchers to predict the impacts of different practices or activities. This technique ‘is used in Environmental Impact Assessment (EIA) because it establishes how various activities affect different environmental components’ (Wathern 2013, p. 39). Engineers can use the tool to make appropriate decisions. This EIA tool has unique advantages. The tool describes the relationship between two or more factors. Researchers can ‘expand the tool in order to meet their targeted needs’ (Eccleston 2011, p. 65). This tool identifies the impacts of specific phases and stages of a project. Engineers can ‘use the tool to separate site-specific implications from those affecting the targeted region’ (Platt 2014, p. 1). The method has several weaknesses. The researcher might not get every required detail or information. The method is also labour-intensive. Engineers must gather their data from different players and stakeholders. Accuracy and dedication are critical whenever using this assessment tool.

What is the significance of the project’s environmental impact?

The checklist presented in question 4 identifies several impacts arising from the proposed project. The most critical issue is the project’s environmental impact. The word ‘significance refers to the importance or quality of deserving necessary attention’ (Wathern 2013, p. 73). I have chosen ‘the environmental impact within the context of this definition because it determines the future of different organisms and people’ (Wathern 2013, p. 78). The environment has always supported life. It ‘also guarantees posterity’ (Kirkman 2014, p. 6). The targeted port supports different animals, insects, and plants. The decision to expand the port will affect many natural habitats. The project will also affect every food chain. The project will also disturb the natural environment. The proposed project will also disturb many animal species. These animals will migrate thus destroying the beauty of the port. The increased levels of pollution will ‘affect the surrounding environment and make inappropriate for human survival’ (Kirkman 2014, p. 6). The completed project will attract more container ships.

The economic activities at the port will increase oil spills, thus killing different aquatic animals and plants. People will lose their fishing areas or zones. According to Carey and Gordon (2014), the project will ‘also destroy the environment, increase sea levels, and eventually promote global warming’ (par. 4). This development will produce new weather changes. Floods and soil erosions will become common in the region. The world is working hard to reduce the impacts of climate change. The Government of Victoria should analyse the impacts of this project. The government should examine the environmental issues associated with this expansion before making its final decision. The approach will safeguard many lives and natural habitats.

What are the key planning stages for this development? What surveys are currently being undertaken?

The proposed Port of Hastings development is characterised by key planning stages. Planning is what determines the success of any project. The first stage is analysing the benefits of the proposed project. The next one is identifying the areas covered by the project. The other critical stage is conducting various surveys in order to establish the appropriateness of the project. Project Assessment Process (PAP) is also a critical stage for this expansion. The next stage is to create the best engineering design using the collected information. The next approach is to identify the resources and efforts required to complete the project. Topographic surveys are critical towards mapping the physical attributes of the targeted port. Marine geotechnical surveys will make it easier for every planner to have the best plan for the proposed expansion (Port of Hastings: Port Expansion: About the Project 2014). The Port of Hastings Development Authority (PHDA) is currently conducting new surveys to examine the environmental implications of the project. The important thing is to ensure such surveys are in accordance with the required laws.

Although this development is still taking shape and details are yet to be finalised, what is your view at this stage?

The Port of Hastings project is still taking shape. The project’s details are yet to be finalised. My view is that the Government of Victoria is dedicated to the project’s success. The proponents of the project have undertaken various surveys and studies in order to establish its impacts. The current stage explains why more studies are required in order to address the above impacts (Platt, 2014). This project will present two issues to the people. The first one is supporting people’s economic positions due to increased activities. The second issue arises from the projected degradation of the environment.

In conclusion, it is agreeable that the government might not abandon this project despite the efforts availed by different associations and corporations. The port will also affect the surrounding environment and destroy various habitats (Raff, 2014). People will lose their recreational facilities and beaches. I will not support this project because it has the potential to affect the natural environment. The Victorian Government should, therefore, address these impacts before undertaking the project.

List of References

Carey, A & Gordon, J 2014, ‘Hastings port expansion to over-burden Melbourne’s roads and rail lines, report finds’, The Age Victoria. Web.

Eccleston, C 2011, Environmental Impact Assessment: A Guide to Best Professional Practice, CRC Press, Sydney.

Kirkman, H 2014, Impact of proposed Port of Hastings expansion on sea-grass, mangroves and salt marsh. Web.

Platt, K 2014, Government Pressured Over Port Plans. Web.

Port of Hastings: Port Expansion: About the Project 2014. Web.

Raff, A 2014, Future Plans for the Port of Hastings: The Good, The Bad and The Ugly. Web.

Wathern, P 2013, Environmental Impact Assessment: Theory and Practice, Routledge, New York.

Introduction

Hospitality industry, like any other industry, is greatly dependent on the outside environment this is why its concern with certain environmental issues is natural. Lately, the constituents of the hospitality industry demonstrated a clear understanding “that environment sustainability is a matter of necessity” (Parida and Mishra 2004, p.34) and that environment has a profound effect on the functioning of this industry. Hospitality industry is the one which uses such resources as energy and water to the biggest extent (Lockyer 2007). This makes saving of energy and water resources the first environmental issue which has influence on the hospitality industry. Another issue is water and air pollution. Since some sectors of hospitality industry are closely connected with recreation and health improvement (Fasulo and Walker 2007), quality of water and air are vital for it. They are directly connected with meeting the demands of the customers and obtaining the expected profit. These environmental issues affect lives of people worldwide because they have not only economical, but social and cultural implications as well. Saving energy and water resources is necessary for the hospitality industry, because these are the resources which it utilizes the most. Fighting with water and air pollution, as well as observing the standards of drinking water supply are vital for proper functioning of this industry and health of the consumers. These environmental issues have numerous social and cultural implications which increase their importance.

Discussion

To begin with, saving of energy and water resources is one of the most vital issues in the hospitality industry. The matter is that saving of resources influences directly the welfare of the hospitality industry. This especially concerns energy resources. Hospitality industry consumes a great amount of energy, “because it is a diverse industry, a large proportion of which is devoted to servicing the needs of other industries such as the welfare and industrial sectors” (Webster 2000, p.61) Hospitality industry may be characterized by an incessant operation, which means that its sectors function all the year round. This is why saving energy each day will influence greatly the overall results of saving of energy resources during the year. This task is rather challenging for the hospitality industry management, because it involves a number of activities which they will have to be in charge of. The management should take into account a wide range of factors which the amount of energy consumed by any sector of the industry depends on. The most significant factors are “the size and location of the building, the specifications to which it has been built, the heating and lighting systems that it employs, and the activities that take place inside it” (Webster 2000, p.62). When evaluating energy efficiency, it is important to determine which energy costs each sector of an operation requires and then reduce the costs of these sectors depending on the necessity of energy consumption. When planning energy-saving strategies, the managers of the hospitality industry should consider “what the current energy requirements of the building are, in order to calculate … the most cost effective measures to implement in the short term” (Webster 2000, p.64). Location of the building belonging to hospitality industry is one of the key factors responsible for the consumption of energy by this building. For instance, if the building is situated in the exposed area (for instance, on the seafront) and its frontage is rather broad, “more heat will be lost than if a building is located in a sheltered spot, for example in a town centre or in a warmer climate” (Webster 2000, p.64). These characteristics should be taken into account by hospitality industry management who should find ways to reduce energy consumption by such buildings or to compensate for it (this can be done through reducing energy consumption by the buildings which do not need much heating).

Saving water resources is especially important for certain sectors of hospitality industry. This concerns lodging industry in the first place, because numerous hotels, camping sites, and boarding houses use water for cleaning, drinking, bathing, fire safety systems, and sanitary purposes; moreover, “food and beverage operations use water for food preparation, cooking, and a variety of cleaning purposes; laundry operations are also substantial consumers of water; grounds and landscaping can consume significant amount of water as well” (Pizam 2005, p.648). This means that any activity which takes place in this sector of the hospitality industry involves using water resources at least to some extent. Thus, hospitality facilities “require relatively large amounts of water and create large amounts of wastewater” (Pizam 2005, p.648). The consumption of water depends on the size of the building and such amenities as swimming pools. Each day hotels use large amounts of water:

The hotel water usage ranges from 101 gallons per available room per day in a hotel with less than 75 rooms, to 208 gallons per room per day in a hotel with 500 or more rooms. This amount averages out to 154 gallons per available room per day, or 56.210 gallons of water per room per year. (Chandra 2004, p.295)

This makes tourism (which constitutes 30% of guests in any country) responsible for utilizing 16.843 gallons of water per every room annually. As far as the entire lodging industry is concerned, it “has been estimated to use 154 billion gallons per year, with tourism therefore accounting for about 46.2 billion gallons per year” (Chandra 2004, p.295). These numbers show that hospitality industry, especially its sectors responsible for lodging, are in a great need of saving water resources. This would add some work for the management of the hospitality industry, which will have to find out ways to reduce the amount of the water utilized by every sector. Management of the hospitality industry should organize campaigns for saving water resources aimed to making people who use their services more environmentally conscious (Jones and Martin 2004). If each sector of this industry will be able to reduce the amount of the consumed water at least to 5-7 percent, the overall numbers will not be so striking. Thus, saving water and energy resources is extremely important for the hospitality industry, because it has a great impact on its functioning and development.

Furthermore, air and water pollution is another environmental issue which the hospitality industry has to deal with. Clean air is commonly associated with any recreation area; the place where people have rest and entertain themselves should, first of all, be useful for their health. This being the reason, air pollution is one of the biggest problems which hospitality industry management encounters. This inevitably influences the state of this industry and the work of its management. Their most important task in frames of this issue is to ensure the best indoor air quality (IAQ) for people who use their services, especially when it comes to the countries where air pollution is the greatest. Ensuring good air quality involves certain expenses which the hospitality industry management should take into consideration. Failure to do this may lead to serious consequences and even bigger expenses; thus, “the cost of poor IAQ in the hospitality industry alone exceeds $19 billion. This estimate includes absenteeism and sick leave, health-related costs, turnover, and productivity improvement” (Burroughs and Hansen 2004, p.5). Smoking is one of the causes of such pollution. Taking into account that “over 20% of the adult population still smoke, the control of the problem contaminant remains a concern to the building owner or manager of facilities that contain smoking designated places” (Burroughs and Hansen 2004, p.135). Introducing smoking bans seem to be one of the solutions to the problem of poor indoor air quality. Nevertheless, it is not easy to enforce these bans because it can significantly lower the revenues of such sectors of hospitality industry as bars and restaurants. The managers of these sectors keep to an idea that “ventilation or air cleaning, often in conjunction with designated smoking areas, provides acceptable alternatives to smoking bans” (Henningfield, Santora, and Bickel 2004, p.190). This is also unlikely to involve greater expenses than those which bars and restaurants will have to bear in case they prohibit smoking in the buildings. Apart from smoking, “indoor air quality issues involve the exposure of a building’s occupants to various air pollutants: particles, gases, and biological organisms, for example mold, and a formulation of standards regarding ventilation and health protection” (Pizam and Holcomb 2007, p.153). It is the responsibilities of hospitality industry management to follow these standards and to ensure that the buildings correspond to them. Their task in terms of this issue is to organize events and activities aimed at “determining required levels of ventilation to sustain acceptable (IAQ) across a variety of facility designs and assessing the effectiveness of IAQ control technologies in controlling human exposure to indoor pollutants” (Pizam and Holcomb 2007, p.145).

As it has been already mentioned above, hospitality industry is one of the biggest water consumers this is why water pollution is a no less vital issue for it. Tackling the problem of water pollution for this industry should start with careful discharging of its own wastes, “particularly toxic wastes such as pesticides or cleaning chemicals from laundry areas” (Barth and Hayes 2005, p.124). Management of hospitality industry sectors bears large responsibility for discharging waste and should be aware of numerous laws and standards this procedure entails. In addition, they should take care about the quality of the drinking water, because this aspect is directly connected with the health of those who use their services. They need to make sure that the following precautions are observed:

Water from a public water system must meet National Primary Drinking Water Regulations and state drinking water quality standards. Water from a nonpublic water system also must meet state drinking water quality standards. Water from a nonpublic water system needs to be sampled and tested at least annually and as required by state water quality regulations. (Arduser and Brown 2005, p.296)

Hospitality industry management is also responsible for the bottle water they supply their customers with. Of course, the primary responsibility lies on the bottle water manufacturers, but it is the management’s obligation to obtain goods only from the approved sources (Arduser and Brown 2005). Drinking water pollution cannot be dealt with, but the management should take all possible measures to avoid bacterial infections which spread through drinking water, because it directly influences the reputation of hotels, resorts, and the related sectors of the hospitality industry (Yu 2002). The preventive measures are likely to involve certain expenses, but they will hardly be higher than those which the lawsuits from the consumers who suffered from the polluted water are going to entail. Therefore, management of the hospitality industry should always remember about the air and water pollution and take correspondent measures to protect the consumers from their harmful influence.

Finally, such environmental issues as saving of energy and water resources, as well as fighting with air and water pollution have certain social and cultural implications. Socially, all these issues can help to make people more environmentally conscious. This concerns hospitality industry in the first place, though the influence on other industries will be no less considerable. Among social implications which saving of energy resources may involve, “greater awareness of social responsibility” (Strong and Hemphill 2006, p.118) is one of the most significant. Desire to save energy resources and to find substitutes for them (such as renewable energy systems) will considerably change social structures and patterns of living:

The influence of modern science and technology will insure that there are considerable improvements to older methods, and subsequently standards of living can be expected to rise, especially in the rural sector. It is impossible to predict the long term effect of such changes in energy supply, but the sustainable nature of renewable energy should produce greater stability than has been the case with fossil fuels (Twidell and Weir 2006, p.24).

This shows that searching for renewable energy systems and utilizing them will involve significant social consequences. Saving of water resources will also entail numerous social changes, such as working out of water supply projects. They will tangibly increase financial and social costs, but will help to fight with water scarcity for food production, which is vital for the hospitality industry. For this, management of this and other industries will need to do the following:

1. Invest in infrastructure to increase the supply of water for irrigation, domestic, and industrial purposes;
2. Conserve water and improve the efficiency of water use in existing systems through reforms in water management and policy, and
3. Improve crop productivity per unit of water and land through integrated water management and agricultural research and policy efforts, including crop breeding and water management for rainfed agriculture. (Resegrant, Cai, and Cline 2002, p.22).

This scenario can be regarded as one of the social implications of saving water resources, because it involves a number of social activities and social costs. One more social implication of water shortages is the increasing price for this resource (Economy and Council of Foreign Relations 2005). Prices for what is rare are always high and water is not an exception; its shortage and increasing of prices for it may serve as a motivation for people to save as much of it as possible. As far as water and air pollution is concerned, the main social implications here are health implication for people who have to consume contaminated water and breathe polluted air. Both polluted and air water may lead to serious health problems (Johnstone, Hascic, and Jones 2008, p.41) in children and adults, this is why fighting with pollution will turn attention of all the people. Another social implication rising from this one is sparing out money for purifiers from the governmental and local budgets, which will affect the welfare of citizens.

Cultural implications of the environmental issues in question are no less serious. What is even more important is that the first issue, shortage of water and energy resources, has both positive and negative cultural implications. Culturally, such environmental issues as saving of water and energy resources and dealing with water and air pollution touch upon every nation and unite them in a common goal. On the other hand, those countries which have more resources at their disposal provoke international conflicts which lead to the enforced limited consumption of these resources (Chall 2000, p.2711). A vivid example of this is the functioning of monopolies in Russia which is “attempting to establish strategic control over its energy resources against the preferences of the EU” (Aalto 2008, p.56). Monopolies of energy resources may make different nations unequal in possessing of the resources which primarily belong to the nature; this shapes biased opinions regarding definite nations and hinders the development of intercultural. The main cultural implication of water and air pollution is changing of cultural attitudes about the quality of the water and its usage, as well as about the air contamination. For instance, countries which are known for their resorts may become not so popular among tourists because of air and water contamination; this will significantly change the attitude of other people to such countries and their culture. Moreover, this will entail the loss of value of cultural heritage of the nations living in these countries.

Conclusion

In sum, saving of water and energy resources and dealing with water and air pollution are the most important environmental issues which the hospitality industry is currently preoccupied with. Since this industry is one of the biggest consumers of water and energy, the management should take measures to reduce this consumption and to make those who use the services of hospitality industry more environmentally conscious. All the sectors of this industry should observe drinking water standards and take care about proper waste discharging, because they are responsible for health and welfare of people who they supply with their services. Taking measures on preventing the air and drinking water contamination will entail financial expenses, but they will be much less than those which the ruined health of the consumers may involve. These environmental issues have certain social and cultural implications. For instance, energy and water shortages lead to increased prices for these resources, which results in an increased awareness about the necessity of saving these resources by means of implementing different projects and strategies for energy and water supply..Major social implications of air and water pollution include health problems of people who live in contaminated areas, as well as certain costs from local budgets for purifiers, which also affects the welfare of these people. Culturally, shortage of resources leads to cultural conflicts between the nations which possess more of these resources and those which do not have them. Water and air pollution results in losing the value of cultural heritage in those countries whose resorts became contaminated.

References

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Introduction

Mercury International Limited is a global company that engages in the design and marketing of sports and fitness products with its history dating back to 1974. The products include apparel, footwear and accessories. Mercury is the established brand name for the company which serves the product lines of Boost, Sweatless Apparel and Trailstep.

Mercury also engages in the licensing of its trademark and its intellectual property to third parties for use on apparel, sporting goods, equipment, accessories, health clubs and other fitness products and services for the reinforcement and capitalization of the brand’s reputation. The company has major competitors although it has established a substantive market share.

The issues of concern for the company include mainly its products and services due to the need for innovation, the value discipline based on the recommendable organizational structure, concern for the drop in the quarterly earnings, financial risks, competition in the industry, the expected trends in the industry and the process of realignment.

Analysis of key issues in footwear and apparel industries

The identification of the key issues facing Mercury Limited involves the macro environmental and micro environmental issues, the state and changes in the economy as well as their influence on spending, lifestyles, manufacturing and income levels.

Description of the Key Issues facing Mercury International Limited

Products and Services

Mercury Ltd holds the fourth position in market share in the worldwide apparel and footwear industries. The design and performance of the products form part of the competition base. The products and services also represent the brand strength. The analysis shows that following the rising of the quotas and tariffs, the prices are likely to rise and the apparel inventory reduce at the retail store.

This calls for increased new product development and brand strengthening through maintaining and improving the value and quality of the already existing products and services. The new product development will require substantial increase in research and development through assessment of the market, customer needs and use of updated technologies to improve production and marketing.

Further, as reports show, the industry is faced with the issues of quotas and thus there is need for product cycle reduction to reduce the durations of product delivery to the market. This is to meet the needs of the customers within stipulated time and maintain their loyalty (Schramm, 2006).

The redevelopment of proprietary exchangeable sole technology in 2009 needs reconsideration due to the fact that the insoles and apparel businesses have fallen short of the expectations of management. Further, the redevelopment of Boost in the current year is recommendable. As analysis shows, the manufacturers in low end cost countries such as China are likely to benefit from economies of scale and being able to increase product and service distribution (Shane, 2008).

The Value Discipline

Mercury Company has manufacturing plants in other countries and manufactures products for the market in the specific country thus saving on shipping costs. The organizational structure is the standard one whereby leadership and management are based on geographical location, product line and market.

Accordingly, the structure of the organization needs to be based on the strategy used (Wiersema & Treacy, 1997). Mercury utilizes the corporate strategy hence the product leadership strategy is recommendable. This will require increased innovation and improvement of the value and quality of the products and services offered.

It is based on the proposition that “We Have the Best Product.” This strategy will require a focus on encouraging employee creativity and innovation, use of modern technology to boost quality and maintenance of the quality (Wiersema & Treacy, 1997). This is an alternative of establishing a competitive advantage considering that the greatest competitor and market leader in the footwear and apparel industry, Nike, uses the strategy.

The implementation is faced with challenges of high technological costs, personnel costs for top notch work and the bottlenecks of maintenance of the standards throughout the countries since manufacturing is suited for local products with the standards differing from one country of manufacturing to another.

Global Expansion

It is worth noting that the footwear and apparel industries are global with the emphasis on style and performance. Mercury is likely to benefit through increasing its global market due to market changes whereby it can gain from one market when the other is declining and still remain competitive especially with the reported improvements in the European market and the reduction in the Asian market. The strategy requires global marketing and brand strengthening and recognition.

However, it is faced with the challenges of brand recognition due to the fact that it has established manufacturing plants in the global market which supply goods to the local market hence compromises on homogeneity (Foster, 2009). Additionally, global marketing and advertising require high costs but likely to generate greater benefits. This is also to be made possible by the increased spending and allocations on research and development mostly at the global scene.

The Drop in Quarterly Earnings

The financial statements show a decline in the quarterly earnings reported. This is an issue of concern due to the competitive nature of the industry and the need to increase returns for the improvement of the market share. The decline is caused by the decline in the Asian revenues while the European market has increased due to the sales of the Snowstep shoes but the American market has remained steady (Schramm, 2006).

There is need to consider research and development in the Asian market to produce products that suit the market and increase brand recognition. The Asian market is expected to change following the quotas and tariff changes which are likely to increase the profitability of companies manufacturing in places such as China thus increasing the economies of scale for Mercury.

Further, the costs of production need to be lowered in the market to maximize on returns while not compromising on quality through market research. The product innovations for the European market is necessary to enable it remain steady even during the warmer seasons of the year. The strategy improvements through new products innovation are recommendable though quality has to be top notch for effective differentiation (Foster, 2009).

The price earnings ratio is expected to move to the industry norm of 15 with the stock prices higher. This is also likely to improve due to the quotas and tariffs changes causing the reduction in retail stocks and to the advantage of countries manufacturing in such countries.

Financial Risks

Mercury Limited is faced with several risks such as geographical risks due to the fact that it relies on manufacturing in countries that are politically unstable such as Indonesia and Czech Republic. While this enables it to lower its production costs in the short term, the brand name and overall running faces the risks of failures in the long run (Wiersema & Treacy, 1997).

The Indonesian tax holiday poses a risk for Mercury since the profits are reported with the benefits of a tax holiday whose expiry period is the current year yet the management’s plans for the next action on this are not stipulated.

Further, the exchange rates are a risk since Mercury does not carry out hedging as is required in the global industry which could lead to material losses (Schramm, 2006). Mercury needs to consider its risks, prepare to deal with them and look for ways of risk evasion or minimization to maintain competitive advantage.

Competition

Although Mercury ranks in the fourth position in terms of market share in the footwear and apparel industries, competition is very intense. The challenge in maintaining a competitive advantage lies in establishing the brand name through improved quality of products and the introduction of new products. It is recommendable to focus on research and development of the products and services with flexibility for adjustments to market changes and inherent risk minimization (Wiersema & Treacy, 1997).

Industry Trends

The trends in the footwear and apparel industries are recommended to form the core foundation of new products as well as production decisions and changes to be made (Shane, 2008). The analysis of the industry shows the trend of shorter product cycles due to the fact that customers are ordering on close end.

This is an advantage to Mercury since it manufactures locally hence has the capacity to meet short orders. Further, this trend requires more research and development for the identification of the customers’ needs and flexible production strategies to meet this (Wiersema & Treacy, 1997).

The increased technological innovation is a trend that is likely to improve the quality of products. This is also in the marketing of products with increased collaboration between companies and retail outlets which minimizes bottlenecks but is quite expensive (Shane, 2008). Price deflation is a trend due to the increased importation, discount offers and retail promotions. This is likely to influence the performance of Mercury but it can benefit from established economies of scale especially in the America and China market.

Off-shore outsourcing seems to be the trend for the industry with the companies shifting their production to lower end countries. Mercury stands to benefit due to its involvement in such lower end countries through lower costs of production. The analysis shows that diversification is likely to reduce the risks of market failure in the product line.

Mercury is in line with this trend through its involvement in the footwear and apparel industries and multiple product lines. The aspect of buying into new markets seems to be catching up in the industry with the increased consolidations (Schramm, 2006). This poses a challenge for Mercury which requires it to build up its competitive advantage so as to remain relevant.

Licensing which Mercury Limited is also involved in seems to be catching up in other competitors and is a great way of building the brand strength. While the trends call for adjustments, Mercury needs strategies to counter the increased competition from these trends (Foster, 2009).

Conclusion

This summary represents the issues identified as crucial for Mercury Limited. The issues are based on its environmental factors, state of the economy, financial reports, industry trends and expectations as well as other influences on the company.

The issues have been identified as the need for innovation, the value discipline based on the recommendable organizational structure, concern about the drop in the quarterly earnings, financial risks facing it, competition in the industry, the issue of the expected trends in the industry, and the process of realignment.

Reference List

Foster, T. (2009). Managing Quality. New York: Prentice Hall.

Schramm, C. (2006). The entrepreneurial imperative: How America’s economy miracle will reshape the world (and change your life). Upper Saddle River: Harper Business.

Shane, S. (2008). Technology strategy for managers and entrepreneurs. New York: Prentice Hall.

Wiersema, F., & Treacy, M. (1997). The discipline of market leaders: Choose your customers, narrow your focus, and dominate your market. Washington: Basic Books.

In today’s corporate environment the issue of images and perceptions are becoming more and more important. The top most executives have to perform their organization leadership tacks with a high degree of integrity.

Over the past few years we have seen the public and investor confidence fall due to poor leadership styles that don’t take the issue of ethics seriously. Some of the corporate debacles include Enron, Adelphia, WorldCom and Tyco just to mention a few. According Hackmam & Johnson (2000 , 450) “it is the work of organizational members including executives to make sure that organizational goal and objectives are achieved in such a way that serves their own interests and the interests of the society at large.”

Many cases of unethical leadership arise as a source of conflict arise when there lacks an equilibrium between shareholder interest which is profitability, self interests, employee interests which often include perks and stock, options and the interest of the society. Ethics in business is a wide topic that may cover greed, neglect of duties, breach of confidentiality ,favoritism, by standing and failure to intervene when fouls are committed ,unfairness, unkindness, and harassment just to mention a few.

Earlier in the 1990’s the topic of ethics and corporate social responsibility was not a very hot topic, but in todays post Enron environment it has become mandatory that top executives who are leaders of their various corporate companies to engage themselves more in ethical styles of leadership.

The dangers that are related to cases that amount to lack of integrity are not taken lightly because they result to breach of trust of the public and dented investor confidence. Brown (2005 96) insists that leadership in ethics is all rounded and must cover the civic, environmental, organizational, interpersonal and cultural. According to Brown integrity is not integrity unless is consistent, purposeful, rational and all inclusive.

In today’s business environment businesses strive to exhibit top class ethical behavior; this is mainly because of pressure from the government, shareholders and stakeholders. With the emergence of indices such as the FTSE4GOOD companies are merging the goals of their social responsibility charters together with all other organizational goals.

Top executives are setting strategies that advocate for corporate citizenship amongst their employees communicating goals of these programs, motivating employees to stick to them. As situations in the environment changes leaders should also change with them according to the situation and the context.

The pressure to perform financially has lead to cooking of books and using of unorthodox accounting techniques that have lead to recent corporate debacles. By taking a look at the Rigas family owners of Adelphia which comprised of a father and two sons who were top executives in one of the largest cable companies in the world can paint a clear picture of what is considered ethical or not.

The Ethisphere Institute published on 25/04/2010 its fourth annual list of what are considered the top most ethical organizations in the world today, this survey took a look at corporate citizenship, corporate governance, innovation towards public well being, integrity track record and reputation, and internal systems of ethics/ethics compliance programmes. On the other hand Xerox has exhibited exemplary leadership in ethics under their Anne M. Mulcahy who was their C.E.O 2001-2009.

The Rigas family is well known to be amongst the biggest violators of ethics in corporate America, these executives are a symbol of poor ethical leadership and gross incompetence. It seems that the Rigas were unable to distinguish between what family was owned and what was publicly owned. Sashkin & Sashkin (2003, 124) Ethics provide a foundation which enables an organization/corporate entity broaden their priorities far beyond the classical aims of profit maximization and shareholder enrichment.

Therefore ethical matters have a big influence on other public sector organization and stakeholders for whom the issue of quality, cost management, honesty and accountability is vital. There may be no absolute rules, standards and controls that govern ethical leadership but Rigas went clearly overboard.

John Rigas founder for Adelphia was jailed for 15 years together with his sons were taken to court and found guilty of wire and securities fraud, tax evasion and concealing financial statements. It is estimated that $ 3.1 billion was unaccounted for and that $2.3 billion in liabilities was concealed.

The family further went ahead during their reign at Adelphia to purchase personal land, golf courses, and artwork and executive jets beside huge personal expenditure using funds from Adelphia. It seems they were unable to distinguish what belonged to the shareholders and what belonged to them as a family.

According to Rest and Colleague’s model Yunus & Webber (2007 56) in order to be ethical leaders must first of all be able to take look and analyze their actions by simulating the consequences of their behavior to come to a conclusion whether there is likely to be a negative or positive outcome to the relevant parties.

This quality is known as moral sensitivity and is the first element in Rests & Colleague’s model, the second element is moral judgment which allows a leader the ability to choose between right and wrong, After leaders make a choice the next element is moral motivation which in turn tries to explain what inspires the action and finally the implementation of the action through ethical means takes place (Hackman & Johnson, 2000, p.337).

Diagram 1. Rest’s Model of Ethical Interpersonal Communication

According to the model which is linear, a leader should go through each step at a time and when an issue arises then he/she should perform more analysis and consult his/her peers. According to the model it is therefore correct to conclude that John Rigas had a low moral sensitivity that lead to his despicable unethical actions.

His actions did not only lead to financial downfall of Adelphia and loses to shareholders but also to unemployment of many workers, regulatory organizations such as the securities exchange commission were blamed together with other public oversight companies for failing to detect this problem early. Furthermore the trust of the public and investor confidence was weakened within America. (Show, 2004 89)

On the other hand Xerox through its C.E.O Anne M. Mulcahy who was the company’s chief executive between 2001-2009.Is a company which has shown exemplary standards as far as the issue of leadership in ethics is concerned.

The Ethisphere Institute named Xerox as the most ethical company in its second annual companies list in June 2008.Anne Mulcahy is the type of leader who inspires and transforms the organization by creating strategy that tries to strike a middle ground between financial goals and social goals of an organization.

Upon her entry as C.E.O Anne Mulcahy was preceded by many instances of unethical behavior in Xerox but as a determined leader she used her unique traits to turn the organization around. Using her charismatic and referent power she went ahead to marshal organizational support to insist upon good ethics from all employees by creating an ethics and compliance program that has brought Xerox to where it is today just as suggested by Ciulla (2004 148-175).

The ethics and compliance program laid a code of conduct for business, for finance employees, board and directors and all other employees. It is therefore as a result of the good leadership style, traits that assigns tasks, and identifies individual needs and incorporates them into overall strategy that has assisted in outstanding ethics within the organization. (Carmichael, 2007 36)

Inter-departmental systems of communication that consisted of memos, emails and the web were introduced to handle complaints, suggestions and communicate the leadership’s intent towards ethics. Furthermore mandatory employee training of all employees, senior management and officers was made part of company policy thus bringing an ethical culture to Xerox.

Introduction of systems that have resulted to ‘greening the supply chain’ and reverse logistics which insist on recycling and use of sustainable resources as well as calling back and replacing equipment that are considered unsuitable to the environment are some of the good ethics in Xerox.

There exist many challenges in the field of ethics, some of which business executives hiding behind the law instead of knowing that ethics and the law are not the same thing Ciulla, (2004 30).

There are plenty of business practices that are legal but at the same time unethical for example greed ,therefore organizations should implement leadership that will come up with various means of drawing a clear line of separating the two. The difference amongst personalities and different cultural diversities within the organization creates a challenge towards achieving ethical goals. Individuals vary from each other and therefore what is unethical to one person may be considered ethical to another individual.

Therefore in summary ethics can only be a success if it is in the heart of leadership, without executives setting a clear path and leading from the front as far as ethics is concerned then, chances of failure increase.

References

Brown, MT, 2005, Corporate Integrity: rethinking organizational ethics and leadership, Cambridge University Press, New York.

Carmichael, S, 2007, Business ethics: the new bottom line, Demos, London.

Ciulla, JB, (2004), Ethics the heart of leadership, Praeger Publishers, 88 west road Westport.

Hackman, M, Z, & Johnson,C,E (2000), 3^rd edn, Leadership: A communication perspective,Waveland Press Inc,Illinois.

Sashkin M, & Sashkin GM, 2003, Leadership that matters: the critical factors for making a difference in peoples’ lives, Marshall Berrett Koehler Publishers Inc, San Francisco.

Show, WH, (2004) Business Ethics, 5th edn, Thompson/Wadswort, London.

Yunus, M, & Webber, (2007), Creating a world without poverty: social business and the future of capitalism, PublicAffairs, New York.

Introduction

Business regulation refers to the measures that the government imposes on businesses in order to control the activities that they undertake. The government regulates businesses by controlling their production processes, regulating their amount of imports and exports and monitoring the services that organizations offer to their clients. The government also implements social and environmental regulations which allow it to direct companies on appropriate ways in which they can dispose their waste products. Moreover, the government sets up legal measures that businesses should abide by before they start operating (Thorne 2003, 4). Therefore, the goal of this paper is to discuss the pros and cons of government regulations regarding the practices that businesses undertake daily.

Discussion

The regulations that the government imposes on businesses have benefits and limitations.

Benefits

Regulation of environmental pollution

It is the goal of every government to ensure that the environment is safe to use by the citizens of a nation. In this case, most governments make sure that companies comply with environmental protection laws in order to ensure that the business environment remains sustainable. In this case, the government advises companies to devise proper waste disposal mechanisms so that people can adopt healthy living standards.

Companies that lack sufficient resources encounter difficulties while looking for ways to dispose their waste products. In this case, the government denies such companies permission to undertake activities that would bring negative impacts to the environment. Moreover, the government advises companies to disclose information that is related to hazardous materials that they produce. In this case, employees are able to make informed decisions whether to work for a certain organization or not (Ingram 2013). Therefore, it is true that the regulations that the government imposes on companies are have the effect of sustaining the environment thus allowing people adopt healthy living standards.

Price control

The business environment is characterised by business people whose main objective is to maximise profits. In this case, the government imposes measures that protect consumers from the high prices that organisations charge. For example, monopolies charge high prices since no competitors force them to reduce their prices. In this case, the government adopts price control mechanisms in order to ensure that consumers pay fair prices for the goods and services that they obtain from the organizations. When the government sets price control, only the strong firms are left to operate in the market. Most firms leave the market when they realize that the profits that they are making do not cover for their costs of operation (Ingram 2013).

Monitoring illegal practices

There are certain businesses that engage in unethical business practices. In this case, companies engage in activities that draw the performance of an economy backwards. In order to keep track of the performance of an economy, it is important for the government to put restrictions on business practices that draw back the performance of a country. Though some illegal business practices improve the performance of an economy, it is vital for the government of a state to embark on ethical business practices in order to encourage other nations to transact business with it professionally. A nation that supports illegal business practices does not build lasting relationships with other nations thus making the performance of the economy to deteriorate (James 2010). Therefore, once the government imposes restrictions on illegal business practices, a country manages to sustain its relationships with other nations thus improving the performance of an economy.

Limitations

The regulations that the government imposes hinder the competitiveness of businesses thereby making the performance of an economy to slow down. Moreover, research indicates that some governments impose weak regulations thus preventing businesses with good reputation from operating in an efficient manner.

Minimum wage

The issue of minimum wage affects the profitability of businesses negatively. In this case, the government directs companies to pay their employees high wages. As a result, the costs of operation of businesses go up significantly. In this case, organizations fire their employees in order to keep the prices of their goods and services down. On the other hand, companies raise the prices of their products to allow them to pay their employees reasonable wages. However, there are certain firms that are incapable of coping with such situations and they therefore go out of the market (James 2010).

Wastage of time

Every business enterprise pays significant attention to time factor in order for it to maximize its revenue. However, when the government imposes laws and regulations, businesses waste a lot of time while attempting to follow up with the imposed regulations. In this case, the profitability of such businesses and the productivity of their employees go down significantly (Ingram 2013). As a result, companies find it difficult to cope with the changing economic conditions.

Conclusion

From the analysis therefore, it is true that government regulations influence the sustainability of a business positively and negatively. Therefore, it is vital for the government to set up regulations which would help developing economies to compete effectively with other international organizations and safeguard them from being driven out of the market.

Bibliography

Ingram, David. 2013. Government Regulation Factors in Business. Web.

James, Geoffrey. 2010. Government Regulation is good for Business. Web.

Thorne, Francis. 2003. Business and Society: A strategic approach to Corporate Citizenship. New York: Ferrell and Ferrell.

Research Model

The model on which research is based assumes that there are drivers of sustainable supply chain management that influence organizations to pay attention to environmental issues. Information sharing, trust, commitment, and some external factors indicate to which extent the company engages in sustainable supply change management practices (see Figure 1). Environmental performance has been chosen as a dependent variable, and information sharing, trust, commitment, and specific external factors, including the type of an organization, number of employees at an organization, and total annual revenue, have been considered as independent variables.

The given study helps provide a conceptual framework for better understanding of how business ethics, coupled with external factors, drives firms to engage in sustainable supply chain management practices and whether these practices improve organization’s environmental performance.

The Profile of the Respondents

The study sample included 123 respondents working for UAE-based organizations. 46% of respondents worked at a hotel, and 54% of respondents worked at a hospital (see Table 1). 62.6% of the respondents served as a part of middle management, 32.5% of the respondents served as a part of top management, and the remaining 4.9% held other roles. 19% of respondents worked for an organization where the number of employees was less than 500. 10% of respondents worked for an organization where the number of employees was between 500 and 1000. The remaining 72% worked for an organization with more than 1000 employees. All the respondents were given a questionnaire with Likert scale questions to rate their organization in terms of information sharing, trust, uncertainties, and environmental performance.

Table 1. Profile of the Respondents.

Reliability, Regression, and Correlation

The reliability of separate variables and the internal consistency of the whole test were estimated using Cronbach’s alphas. Cronbach’s alpha values for all the variables are greater than 0.60, which indicates that all the questions in the questionnaire have reliably measured the variables (see Table 2). In particular, the lowest Cronbach’s alpha values of 0.64 and 0.68 are for information sharing and commitment correspondingly. Both external factors and environmental performance have the highest Cronbach’s alpha values of 0.79. Research has good internal consistency as the overall Cronbach’s alpha value is equal to 0.84.

Table 2. Cronbach’s Alpha Values.

To ensure that there is no multicollinearity and run a regression model, the correlation matrix has been created. As shown in Table 3, there is no strong correlation between independent variables. The highest correlation can be observed between information sharing and external factors (0.44) and trust and commitment (0.429). All the independent variables showed meaningful correlation with the environmental performance, though the highest correlation of 0.38 was with external factors, and the lowest correlation of 0.297 was with trust.

Table 3. Correlation Matrix.

Multiple regression was run to predict environmental performance based on information sharing, trust, commitment, and external factors. The independent variables have been tested for statistical significance using t-statistic. It can be seen that information sharing and trust do not have a significant impact on the environmental performance of an organization (see Table 4). In turn, commitment and external factors have a statistically significant impact on environmental performance.

All regression coefficients are positive, which means that there is a positive correlation between independent variables and the dependent variable. If all the independent variables are equal to zero, the environmental performance of a company is likely to be rated at 1.97 out of 5. Given a one-unit shift in information sharing, the environmental performance increases by 0.09. Given a one-unit shift in trust, environmental performance increases by 0.109. Given a one-unit shift in commitment, environmental performance increases by 0.172. Given a one-unit shift in external factors, environmental performance increases by 0.188.

Since the multiple regression coefficient is equal to 0.46, it can be stated that the calculated regression model with all independent variables predicts the dependent variable only in 46% of cases. The adjusted R-squared is equal to 0.18, which means that the improved regression model with two variables being excluded has not improved the prediction significantly (see Table 5). The coefficient of determination is equal to 0.21, so independent variables explain only 21% of the variability of environmental performance variable.

Table 4. Regression Coefficients.

Table 5. Regression Statistics.

Conclusion

Six hypotheses have been tested to assess sustainability measures in UAE-based organizations and their relation to environmental performance. Four independent variables, which are features of an organization’s business ethics and external factors, have been evaluated in terms of statistical significance. Information sharing and trust do not have a significant impact on the environmental performance of an organization (both p-values are greater than 0.05). Commitment and external factors have shown a statistically significant influence on the environmental performance of a company.

The results indicate that the environmental performance of an organization depends on the commitment and external factors, such as the type of an organization, the number of employees, and total revenue. Importantly to notice, both variables have almost the same positive influence on environmental performance. The test showed good internal consistency as each variable have been reliably measured. However, the multiple regression model that has been run predicts less than half of the values of environmental performance, which may be explained by correlations between independent variables or some important variables that have not been considered. Findings of research significantly add to the knowledge of how to enhance sustainability management and which factors drive the environmental performance of a company.