What Would You Do? Case Assignment Waste Management Houston,Texas
Americans generate a quarter billion tons of trash a year, or4.5 pounds of trash per person per day. Thanks to nearly 9,000curbside recycling programs, a third of that is recycled. But, thatstill 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, âIâd goout in the morning and there would be little flakes coming downbecause there were 4,000 or 5,000 apartment-building incinerators.âThe rest was incinerated in large power plants, like the one on theeast side of the Hudson River that burns 1,900 tons of New YorkCity garbage each day. With 20 million customers; 273 municipallandfills; 91 recycling facilities; and yes, 17 waste-to-energyfacilitiesâthatâs what large power-generating incinerator plantsare called todayâWaste Management, Inc., is the largestwaste-handling company in the world. It generates 75 percent of itsprofits from 273 landfills, which can hold 4.8 billion tons oftrash. And because it only collects 110 million tons a year, it hasplenty of landfill capacity for years to come. You joined thecompany a decade ago, and, after 3.5 short years as deputy generalcounsel and then chief financial officer, became CEO. That quickpromotion prompted you to joke, âI needed to go to a bookstore tosee whether I could find a book called CEO-ing for Dummies.âInstead, Waste Management sent you to Harvard for an executiveprogram for CEOs, where the most important lesson you learned wasto listen, because, as you tell your executive team, âThis companyand this industry arenât very good at that.â And with all of thechanges taking place in your industry, Waste Management wonâtsucceed unless it listens. However, corporations, cities, andhouseholds are greatly reducing the amount of waste they generate,and thus the amount of trash that they pay Waste Management to haulaway to its landfills. Subaru of America, for instance, has azero-landfill plant in West Lafayette, Indiana, that hasnât sentany waste to a landfill since 2004. None! And Subaru isnâtexceptional in seeking to be a zero-landfill company. Walmart, thelargest retailer in the world, has also embraced this goal,stating, âOur vision is to reach a day where there are no dumpstersbehind our stores and clubs, and no landfills containing ourthrowaways.â Like those at Subaru and Walmart, corporate leadersworldwide are committed to reducing the waste produced by theircompanies. Because that represents a direct threat to WasteManagementâs landfill business, what steps could it take to takeadvantage of the trend toward zero waste that might allow it tocontinue growing company revenues? Another significant change forWaste Management is that not only are its customers reducing thewaste they send to its landfills, theyâre also wanting what is sentto landfills to be sorted for recycling and reuse. For instance,food waste, yard clippings, and woodâall organic materialsâaccountfor roughly one-third of the material sent to landfills. Likewise,thereâs growing demand for waste companies to manage and recyclediscarded TVs, computer monitors, and other electronic waste thatleaks lead, mercury, and hazardous materials when improperlydisposed. However, the high cost of collecting and sortingrecyclable materials means that Waste Management loses money whenit recycles them. What can the company do to meet increasedcustomer expectations, on one hand, while still finding a way toearn a profit on high-cost recycled materials? Finally, advocacygroups, such as the Sierra Club, regularly protest WasteManagementâs landfill practices, deeming them irresponsible andharmful to the environment. Should Waste Management take on itscritics and fight back, or should it focus on its business and letthe results speak for themselves? Should it view environmentaladvocates as a threat or an opportunity for the company?
Question: Like at Subaru andWal-Mart, corporate leaders worldwide are committed to reducing thewaste produced by their companies. Since that represents a directthreat to Waste Managementâs landfill business, what steps could itemploy to take advantage of the trend toward zero waste that mightallow it to continue growing company revenues?
What Would You Do? Case Assignment Waste Management Houston,Texas
Americans generate a quarter billion tons of trash a year, or4.5 pounds of trash per person per day. Thanks to nearly 9,000curbside recycling programs, a third of that is recycled. But, thatstill 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, âIâd goout in the morning and there would be little flakes coming downbecause there were 4,000 or 5,000 apartment-building incinerators.âThe rest was incinerated in large power plants, like the one on theeast side of the Hudson River that burns 1,900 tons of New YorkCity garbage each day. With 20 million customers; 273 municipallandfills; 91 recycling facilities; and yes, 17 waste-to-energyfacilitiesâthatâs what large power-generating incinerator plantsare called todayâWaste Management, Inc., is the largestwaste-handling company in the world. It generates 75 percent of itsprofits from 273 landfills, which can hold 4.8 billion tons oftrash. And because it only collects 110 million tons a year, it hasplenty of landfill capacity for years to come. You joined thecompany a decade ago, and, after 3.5 short years as deputy generalcounsel and then chief financial officer, became CEO. That quickpromotion prompted you to joke, âI needed to go to a bookstore tosee whether I could find a book called CEO-ing for Dummies.âInstead, Waste Management sent you to Harvard for an executiveprogram for CEOs, where the most important lesson you learned wasto listen, because, as you tell your executive team, âThis companyand this industry arenât very good at that.â And with all of thechanges taking place in your industry, Waste Management wonâtsucceed unless it listens. However, corporations, cities, andhouseholds are greatly reducing the amount of waste they generate,and thus the amount of trash that they pay Waste Management to haulaway to its landfills. Subaru of America, for instance, has azero-landfill plant in West Lafayette, Indiana, that hasnât sentany waste to a landfill since 2004. None! And Subaru isnâtexceptional in seeking to be a zero-landfill company. Walmart, thelargest retailer in the world, has also embraced this goal,stating, âOur vision is to reach a day where there are no dumpstersbehind our stores and clubs, and no landfills containing ourthrowaways.â Like those at Subaru and Walmart, corporate leadersworldwide are committed to reducing the waste produced by theircompanies. Because that represents a direct threat to WasteManagementâs landfill business, what steps could it take to takeadvantage of the trend toward zero waste that might allow it tocontinue growing company revenues? Another significant change forWaste Management is that not only are its customers reducing thewaste they send to its landfills, theyâre also wanting what is sentto landfills to be sorted for recycling and reuse. For instance,food waste, yard clippings, and woodâall organic materialsâaccountfor roughly one-third of the material sent to landfills. Likewise,thereâs growing demand for waste companies to manage and recyclediscarded TVs, computer monitors, and other electronic waste thatleaks lead, mercury, and hazardous materials when improperlydisposed. However, the high cost of collecting and sortingrecyclable materials means that Waste Management loses money whenit recycles them. What can the company do to meet increasedcustomer expectations, on one hand, while still finding a way toearn a profit on high-cost recycled materials? Finally, advocacygroups, such as the Sierra Club, regularly protest WasteManagementâs landfill practices, deeming them irresponsible andharmful to the environment. Should Waste Management take on itscritics and fight back, or should it focus on its business and letthe results speak for themselves? Should it view environmentaladvocates as a threat or an opportunity for the company?
Question: Like at Subaru andWal-Mart, corporate leaders worldwide are committed to reducing thewaste produced by their companies. Since that represents a directthreat to Waste Managementâs landfill business, what steps could itemploy to take advantage of the trend toward zero waste that mightallow it to continue growing company revenues?
