317 Discussion Responses

Discussion Post 2

Jacob Spear

Decision matrices are essential to the decision-making process because they help to compare each potential option to each other. It facilitates the analysis of multiple options to ensuring that all aspects are taken into account, and the best decision is made (White, 2015, para. 1). It helps you analyze your choices, assign weighted values to them, and evaluate them so that you ensure you achieve the most out of the decision (Decision Education Foundation, 2019, p. 1 para. 1). Then, if what the tables tell you still feels wrong, it allows you to go back and gather more information about your alternatives to see if you made a miscalculation based off of limited knowledge (Decision Education Foundation, 2019, p. 1 para. 1).

A score of two is given for every alternative because they do meet the customer's goals to some extent, but none of them are focused on the customer directly. The case study describes how they will find other suppliers if PPO is unable to deal with CAPO. Consequentially, if the alternative deals with CAPO, the customer's needs are satisfied to some extent. Creating a policy and fundraising both receive a one in environmental impact because they both hint at becoming more environmentally sustainable but do not do anything to work towards it.

Creating a policy and fundraising is excellent and can help move PPO towards becoming sustainable, but nothing in those decisions specifically targets becoming more sustainable. Selling the oldest plantation receives a two because the plantations themselves are the main reason palm oil farming is terrible for the environment (Rainforest Rescue, n.d., para. 5-6). Selling that plantation back does not reverse the damage caused by its creation, but does allow other organizations to use the land for the benefit of the environment. Finally, actively investing in sustainable plantations receives a three because that is the only option that is targeted towards improving the environment. With that option, PPO is taking active steps towards ensuring the sustainability of their plantations and improving the situation.

Creating a policy receives a two because the policy does directly address the concerns of CAPO, but does little to ensure that real change will occur. Greenwashing is the act of companies pledging to become more environmentally friendly while not taking steps to become environmentally friendly (Moritz-Rabson, 2019). CAPO could interpret the pledge like that, and it may harm that goal, which is why creating a policy is not rated a three. The other three options, selling the plantation, working with CAPO, and actively investing in sustainable plantations, all receive a three because they align with CAPO’s mission. In the case study, it is mentioned that CAPO exists to bring awareness to the harmfulness of palm oil farming and encourages consumers to boycott palm oil or make sustainable choices. Those options show to CAPO that PPO is taking the steps required to become sustainable and reduce its environmental impact.

Finally, creating a policy receives a zero because it has no impact on PPO’s finances. The act of creating a policy does not cost money, nor will it correlate with increased cash flow. It is merely a cheap, quick fix to buy PPO time to orchestrate another solution. Actively investing in more sustainable plantations only receives a one because it does not guarantee future profits. It will be a financial drain on PPO at first. Then even sustainable plantations that have been certified have been shown to still have significant deforestation issues (Mosas, 2013, para. 2). Then the sustainability of the plantations may raise overhead costs and regulation costs, which would also cut into PPO’s profit margins. Lastly, selling the plantation and fundraising receive a two because they have the potential to meet the short term financial needs of PPO but do not guarantee long term commercial success. Selling the plantation can result in some immediate cash that PPO can reinvest into sustainability or certification. Still, that option does not guarantee that PPO will be able to maintain future profit margins since they would be losing out of 9,750 tons of palm oil production. PPO would need to find a replacement for that cash flow before long to ensure they remain profitable. Also, conducting fundraisers will increase short term income, but that income will need to be actively invested in creating a sustainable plantation. If PPO takes the fundraising money as profit, they can severely damage their reputation and cause customers to leave. So the fundraising will only provide a dedicated revenue stream to support sustainability investments, which can reduce losses to the profit, but will not directly increase profits.

Matrix 2: Weighted:

Finances are weighted the heaviest because a business needs to make money to survive. PPO is about to enter a long period where they will have only one plantation at their peak production time. One plantation is about to need replanting and another was just planted and will not break even for several more years. Plus, PPO also saw a 9.2% reduction in profits from the previous year. All of those factors combined indicate that PPO needs to be especially cognizant of the financial repercussions of their decisions.

CAPO was given the next highest weight because they are the chief concern at the moment. The active protesting has alienated some of PPO’s largest customers and may cause them to source palm oil from a competitor. Since CAPO is the primary reason for this decision in the first place, as indicated by the decision statement, a significant goal needs to be how PPO plans to deal with CAPO. Otherwise, PPO will only be treating the symptoms without dealing with the root problem.

Customers and environmental impact were both weighted the same because they both have value but are not among the chief concerns at the moment. Environmental sustainability is a hot topic in the modern business landscape, and working towards a sustainable product would help PPO in the long run, focusing on environmental sustainability does little to stop the current problems quickly. Similarly, customers drive business profits, and their concerns must always be accounted for to ensure their product sells, but customers can be replaced. It would be a considerable blow to PPO to lose its largest customers, but in time they would still have the ability to find other customers to refill those gaps.

Final Decision

Selling the land, fundraising with CAPO, and investing in sustainable plantations all scored near each other in both the unweighted and weighted tables. This shows that all three of these decisions can help bring PPO towards their end goals. However, selling the land scored the highest because it is more likely to satisfy the financial goals of PPO.

Based on this information, it is recommended that PPO sell its oldest plantation as it becomes unprofitable. This answers PPO’s decision statement of ‘in responding to CAPO’s attacks, how will PPO keep their customers and continue to make money?’ Selling the plantation shows to CAPO that PPO intends to become more sustainable and is making significant changes to ensure the restoration of the environment and the protection of its habitats. The earned money will also serve as funding to jumpstart PPO’s transformation into a sustainable company. This helps secure profits to help cushion the anticipated rough years and satisfies the concerns of their customers.