Business class Principles of management
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83 WINDHAM STREET ! WILLIMANTIC, CONNECTICUT 06226 ! 860-‐465-‐5000
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BUS 201 (04) – FALL 2014 PRINCIPLES OF MANAGEMENT
INSTRUCTOR: KAMESH V. CHIVUKULA
ASSIGNMENT# 1 – WASTE MANAGEMENT General rules:
1. Assignment due by beginning of class on September 19, 2014. Email with attached Word or PDF best though instructor will accept hard copies as well.
2. Responses must be typed on 2 to 3 pages. Please use reasonable font, line spacing and margins! 3. Use your learning from all Chapters covered so for from the textbook (MGMT7, Chuck Williams) 4. This assignment will count for 12 points. 5. Please address the following 3 questions. You are welcome to touch on additional issues if you wish.
A. [2 points] What are the main issues described in the case? B. [5 points] List and describe the main Principles of Management involved in the case. C. [5 points] If you were in charge of Waste Management, what would you do?
Americans generate a quarter billion tons of trash a year, or 4.5 pounds of trash per person per day. Thanks to nearly 9,000 curbside recycling programs, a third of that is recycled. But, that still leaves 3 pounds of trash per person per day to be disposed. In the past, trash was incinerated, often in local neighborhoods. John Waffenschmidt, vice president for Covanta Energy Corp., remembers that when he delivered newspapers in the 1960s, “I'd go out in the morning and there would be little flakes coming down because there were 4,000 or 5,000 apartment-‐building incinerators.” The rest was incinerated in large power plants, like the one on the east side of the Hudson River that burns 1,900 tons of New York City garbage each day. With 20 million customers; 273 municipal landfills; 91 recycling facilities; and yes, 17 waste-‐to-‐energy facilities— that’s what large power-‐generating incinerator plants are called today— Waste Management, Inc., is the largest waste-‐handling company in the world. It generates 75 percent of its profits from 273 landfills, which can hold 4.8 billion tons of trash. And because it only collects 110 million tons a year, it has plenty of landfill capacity for years to come. You joined the company a decade ago, and, after 3.5 short years as deputy general counsel and then chief financial officer, became CEO. That quick promotion prompted you to joke, “I needed to go to a bookstore to see whether I could find a book called CEO-‐ing for Dummies.” Instead, Waste Management sent you to Harvard for an executive program for CEOs, where the most important lesson you learned was to listen, because, as you tell your executive team, “This company and this industry aren’t very good at that.” And with all of the changes taking place in your industry, Waste Management won’t succeed unless it listens. However, corporations, cities, and households are greatly reducing the amount of waste they generate, and thus the amount of trash that they pay Waste Management to haul away to its landfills. Subaru of America, for instance, has a zero-‐landfill plant in West Lafayette, Indiana, that hasn’t sent any waste to a landfill since 2004. None! And Subaru isn’t exceptional in seeking to be a zero-‐landfill company. Walmart, the largest retailer in the world, has also embraced this goal, stating, “Our vision is to reach a day where there are no dumpsters behind our stores and clubs, and no landfills containing our throwaways.” Like those at Subaru and Walmart, corporate
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leaders worldwide are committed to reducing the waste produced by their companies. Because that represents a direct threat to Waste Management’s landfill business, what steps could it take to take advantage of the trend toward zero waste that might allow it to continue growing company revenues? Another significant change for Waste Management is that not only are its customers reducing the waste they send to its landfills, they’re also wanting what is sent to landfills to be sorted for recycling and reuse. For instance, food waste, yard clippings, and wood—all organic materials—account for roughly one-‐third of the material sent to landfills. Likewise, there’s growing demand for waste companies to manage and recycle discarded TVs, computer monitors, and other electronic waste that leaks lead, mercury, and hazardous materials when improperly disposed. However, the high cost of collecting and sorting recyclable materials means that Waste Management loses money when it recycles them. What can the company do to meet increased customer expectations, on one hand, while still finding a way to earn a profit on high-‐cost recycled materials? Finally, advocacy groups, such as the Sierra Club, regularly protest Waste Management’s landfill practices, deeming them irresponsible and harmful to the environment. Should Waste Management take on its critics and fight back, or should it focus on its business and let the results speak for themselves? Should it view environmental advocates as a threat or an opportunity for the company? Sources: “2010 Sustainability Report,” Waste Management, www.wm.com/sustainability/pdfs/2010_Sustainability_Report.pdf, [accessed 6 February 2011]; “Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Facts and Figures for 2008,” U.S. Environmental Protection Agency, http://www.epa.gov/epawaste/nonhaz/municipal/pubs/msw2008rpt.pdf, [accessed 14 February 2011]; “Zero Waste,” Wal-‐Mart*Corporate, http://walmartstores.com/Sustainability/7762.aspx [accessed 15 February 2011]; J. Ball, “Currents -‐-‐ Power Shift: Climate Change: Garbage Gets Fresh Look as Source of Energy,” Wall Street Journal, 15 May 2009, A9; J. Fahey, “Waste Not,” Forbes Asia, July 2010, 46; M. Gunther, “Waste Management’s New Direction,” Fortune 6 December 2010, 103-‐108; A. Robinson & D. Schroeder, “Greener and Cheaper: The conventional wisdom is that a company's costs rise as its environmental impact falls; Think again.” The Wall Street Journal, 23 March 2009, R4.
