Gorilla Health Bar Pty Ltd
Summary:
As quoted by Font & Cochrane (2005) that in recent years, public awareness of environmental issues and the consequences of unsustainable exploitation of natural resources has increased dramatically, leading to a global shift in attitudes about the environment and resource use. The following report is made to analyze the problems faced Gorilla Health Bar Pty Ltd, in practicing its operational procedures and how to modify the same according to the corporate sustainable standards. It was viewed that GHB since its establishment had not made any changes in its strategies and organizational structure. The production cost is too high due to unmanageable expenses. After investigating the causes of the issues, recommendation will be presented in this report on how GHB can implement corporate sustainable measures within its operational procedures.
Introduction:
In contrast of the conventional mode of operations, due to much awareness of environmental pollution and declining natural resources, organizations are now modifying their operations towards more sustainable and environmental friendly. Moreover, as the business organizations are operating within the society and avails full benefit of the opportunities being offered by the society, must contribute their share for the betterment of its external environment. Organizations implementing corporate social responsible measures in accordance with their operations, distinct themselves among the highly competitive market, whereas it also motivates innovations within the organization, gaining more loyalty of employees and consumers. It has been found that socially responsible companies make more profit than companies that do not bother about social responsibility (Chitale, Mohanty, & Dubey, 2013, p.569).
Gorilla Health Bars Pty Ltd, is established with purpose to produce health food product for the health conscious people. Taking dried fruits, nuts and cereals as main ingredients, GHB is producing health snack bars. It is a newly established company and had been in operation since last four years. The market in which GHB is operating is highly competitive and demanding, as there are many international brands and well established companies offering similar products while the consumers are exceptionally health conscious. An organization operating in an industry with few competitors will face a far more certain environment compared to one operating in an industry with many competitors (Jex & Britt, 2008, p.426).
Currently as GHB is somewhat able to set its foothold among the vastly challenging market, it is countered with many issues within its operational procedures. The company is based far away in an rural area, company’s premises is very old, high cost of transportation and expensive resources, all such issues are effecting the cost management making the product comparatively costly than the others in competition and at the same time company’s progress in the long run.
In this report problems faced by GHB in its operations will be analyzed and recommendations will be presented on what modifications are required and how the company could be made more sustainable.
Business Sustainability:
Sustainability can be referred as the organizational management procedures performed in accordance with the social, environmental and economical demands. As noted by Jacobsen (2011) that environmental sustainability in business refers to longevity, but in terms of which natural resources the production process might draw upon, how resources are used and replenished, the overall impact of the final product on the environment. It is the strategy that an organization implements for the minimum use of natural resources and making the environment less affected due to organizational operations. Company’s performing its operations based on the principles of sustainability are not only performing for the benefit of their own individual organization but at the same time contributing to save the resources and making the environment pollution free. Business organizations operating on the principles of sustainability, reflects a differ image among the competitors, and as the general consumers are also well aware of the environmental issues, considering their responsibility to put in their share mostly prefer products of companies that are produced on the basis of sustainability. Companies that develop a reputation for environmental excellence and that produce and deliver products and services with concern for their sustainability can attract environmentally aware customers (Lawrence & Weber, 2008, p. 269).
Global authorities concerned with the management of global organizations operational procedures as eco friendly has formulated and issued international standards to be industries to embed the same, within the their individual company’s policies. The most commonly acquired certificate by the industries implementing eco friendly procedures is ISO 14001:2004. This International Standard specifies requirements for an environmental management system to enable an organization to develop and implement a policy and objectives which take into account legal requirements and other requirements to which the organization subscribes, and information about significant environmental aspects (Dorn, 2006, p.30).
Considering the other side, besides the benefits of sustainability in business operations, implementations of such measures may also adversely affect the organization’s reputation or products. Many organizations hesitate in implementing sustainable measures, claiming that it will create hindrance in the normal flow of the organizational processes. As quoted by Landrum & Edwards (2009) that sustainability is a company-wide change in mindset, philosophy, views and practices related to how the business operates. Modifying the existing organizational policies into sustainable policies, will require lots of modification to be done within the organizational structure that is a good amount of the capital will be consumed. Whereas, the cost of same change will be covered by increasing the product price or reducing the number of employees.
GHB a Traditional Organization:
As the global economy and information technology enable and push for faster, more flexible organizations, the ability to manage change continuously will become a key source of competitive advantage in all types of organization (Cummings & Worley, 2015, p.743). The new technological advancement and changes in global economies had been a compelling factor for many organizations to modify their organizational policies and management strategies. The reasons for this shift are many and varied: growing uncertainty, high societal expectations, increased accountability and tougher competition all play their part (Brown, 2005, p.443). Upon critical analysis of GHB operations it is evaluated that it is the victim of its traditional values, to attain a competitive position among the existing well established market, it has to implement corporate sustainable measures. Developing the capabilities to implement sustainable development will be a key source of competitive advantage (Brown, 2005, p.444).
Issues at GHB:
It is observed that there are hidden leaks in GHB expenses, shifting to sustainable measures the same leaks will be clogged making the production unit more economized. For any organization involved in manufacturing process, it is the location and structure of the production facility that should be easily accessible and must not affect the production cost. Whereas, the GHB factory premises is located in a rural area, thus the transportation cost of raw material and finished goods will influence the production cost. The production unit of GHB is based in an old building made of corrugated iron, that is the cost of electricity consumed by the heaters and air conditioners is another factor influencing the production cost. Also the main ingredients for snack bars are sourced from far away a location, which is from Darwin and South Australia, creating more burdens on transportation cost.
Conclusion:
GHB had been operating following traditional methods, with no sustainable measures. Due to its old constructed premises and uncontrolled expenses the production cost was too high. Thus, making the final product expensive for the competitive market. By modifying the factory premises and implementing sustainable procedures GHB would be able to manage its production cost, making the final product cost effective for the well established market. Moreover, by practicing sustainable measures the product will attract more customers
Recommendations:
GHB by focusing more on corporate sustainable practices will be able reduce its production cost, further enhance the quality of its product, acquire more market share and promote its product effectively. On the basis of common sustainability procedures we recommend GHB as follows;
- The factory premises should be modified according to the international standards. Hollow blocks are ideal for insulation purposes, and are effectively being used in the modern construction. The same should be used for wall panels, whereas the roofs have to be coated with insulation chemicals or thermal sheets. In this regard services of professional insulation experts can be acquired.
- By installing solar panels, there will be significant decrease in electricity cost. Thus a valuable resource will be conserved.
- Water well should be dug and installing a small water purification plant can make this water suitable to be consumed in the manufacturing process. In other case if the water plant is not installed, the well water Ground water should be accessed by drilling a well, also by installing a water treatment plant the same water can be made suitable for consumption in production.
- In case the water treatment plant is not feasible , than the commercial water will only be used for making the product, while the well water will be used for other purposes, like cleaning or washing.
- For packing purpose re-cycle material will be used.
- The main ingredients dried tropical fruits and cereals used can easily be resourced from nearby locations like along the river Murray in Victoria and New South Wales.
References:
Chitale, K. A., Mohanty, P. R., Dubey, R. N. (2013) ORGANIZATIONAL BEHAVIOUR. Delhi: PHI Learning.
Jex, M. S., Britt, W. T. (2008) Organizational Psychology. New Jersey: John Wiley.
Lawrence, T. A., Weber, J. (2008) Business and Society. New Delhi: Tata McGraw-Hill.
Jacobsen, J. (2011) Sustainable Business and Industry. USA: ASQ press.
Dorn, D. (2006) Umweltmanagement-systeme. Beuth Verlag: Berlin.
Landrum, E. N., Edwards, S. (2009) Sustainable Business. New York: Business Expert Press.
Cummings, G. T., Worley, G. C. (2015) Organization Development and Change. USA: Cengage Learning.
Brown, S. C. (2005) The Sustainable Enterprise. UK: Kogan Page.
Font, X., Cochrane, J. (2005) Integrating Sustainability Into Business. USA: UNEP.
