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Chapter 1

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Department
Management
Course
MGM102H5
Professor
Dave Swanston
Semester
Winter

Description
Chapter 1 - sustainability • The industrial revolution marked the beginning of a societal shift toward technology and scientific methodologies as mechanisms for economic development. It also marked the change in societal behaviour from self-sustenance to a consumption-inspried marketplace. • This increase in the demand for products and services resulted in the need for greater production, more efficient operations, and a growth in specialization. • Technological innovations like assembly line, replaceable parts, and factory based, labour driven business systems all evolved in response to the growing demand being experienced • The new shift was the dramatic intensification of destructive pressures on our environment. • We pump toxic materials in our air, water and land. Absent of regulations for governing business behvaiour, prosperity was measured by activity and monetary gain, not by long term legacy and environmental stewardship. • Environmental stewardship is the integration of sustainability values into the managing of environmental resources. • These regulations, for example those associated with pollution and waste, were designed to prodive some elemen of acconutability and control with respect to environmental management within the business and public sectors. • Organizatins began to see the true value in implementing eco-management intiatives and in incorporating environmental policies into their business operations. • The benefit of this risk exposure recognition is that the marketplace began to come to terms with the impact of the unabated consumption practices to date, and the consequences of such activities to our environment. This led organizations to begin to develop environmental policies and environmental management systems in order to reduce, measure and monitor their risk. • Degradation is the deterioration of the environment through the depletion of resources and the destruction of ecosystems. • We are integrating environmental responsibilities into our business strategies. • The goal is to design and redesign business processes in a way that, while allowing for increased wealth and enhanced competitive advantage, incorporates the principles of human mankind and resource protection and sustainability for the future. • This requires organizations to integrate sustainable development and resource management into their core mission, vision, values, codes of conduct and business systems. • Its core fundamental is the integration of the relationship of society, environmenta and economic benefit into every facet of the organization's decision making process. • We have five critical sustainability challenges: climate change, pollution and health the energy crunch, resource depletion, and the capital squeeze. Climate Change • Did ya noe dat ah 1 degree rise in avg temp can have devastate'n effects on crop yields? Omg no waaaaay....O.o...waaaaaayyy. • Therefore rise in global temperatures will reduce corn crop yields. Which sucks because corn is used for pretty much errthang. • Time is running out on our ability to respond to the climate change • Ladies and gentzz, we needa cut carbon based emissionssss during this period by at least 50%. Our climate change revolution will need to reverse these trends in 20 percent of the time - a time when our global population is expected to increase by more than 36%. • We are trying to look for alternate solutions in order to reduce carbon. Like wind, solar, geothermal, biomass, hydro and nuclear. • Transportaion is another key area where a significant improvement can be achieved. Rapid growth in vehicles and their carbon-based emissions can have climate degradation implications. Critical to this action is ensuring that governments and manufacturers set fuel economy as a top priority and that worldwide bidning fuel economy targets are set. • We also need to protect our "green carpet", which refers to our forests, trees, and plant life. Farming, logging and energy consumption have resulted in a serious erosion of our green carpet. • Deforestation...there is a huge loss of plant and animal species resulting from this. The process also robs the earth of its ability to deal with natural carbon dioxide emission absorption. • Burning of fossil fuels is also really bad. • Our ability to respond to climate change challenge can be via stronger use of incentives such as carbon tax, or cap-and-trade system; stronger adoption of compliance methodologies like the Kyoto protocol. And the use of stronger use of tax or investment incentives for transitioning businesses to renewable strategies and making the investments in research and development to spur new technologies. • Kyoto Protocol: is the 1997 internation agreement that binds participating nations into stabilizing and reducing greenhouse gas emissions. • It is we as managers and individuals who need to take the climate change responsibility into the business operation to ensure the behaviours exhibited reflect a true integration of environmental sustainability practices into our organizational and corporate strategies. Pollution and Health • Pollution is a major killer of humans. • The cause of death is the air we breathe and the water we drink. Because of the organic and chemical pollutants. • Water pollution, lack of water sanitation. And air pollution • BLACKSMITH INSTITUTE is leading an effort to create an international program for addressing the problem of global toxic waste. The energy Crunch • Since commercial production began, our consumption pattern has continued to grow to the point where we have consumed approximately one-half of this amount and have reached a peak demand of an estimated 30 billion barrels per year. • Anticipated rebound of energy demand will be driven largely from developing countries. • Global energy demand between now and 2020 will come from developing countries like china and india. • Growth in energy demand will occur despite the implementation of sustainability initiatives, with sectors such as air transportation, long-haul transportation, infrastructure development, and manufacturing leading the way. • Energy supply requirements of these economies aren't expected to change over the next couple of decades, with traditional fuel sources being required to support a significant proportion of this new energy need. Like despite the entry of electric cars into the marketplace, it is anticipated that the ability of this new product class to significantly impact traditional fossil fuel requirements for transportation will not occur much before 2025. • The response to this question is that it depends on two core ingredients: (1) resource availability and (2) improvements in energy productivity from the sources we have available. Resource Availability • There is a possibility of supply shock. This conclusion is not based primarily on the peak model theories, which suggest that the finite supply of these non-renewable sources is coming to an end, but more on the key factors that determine our ability to draw on existing resource availability at this time. • Supply is affected by seven key factors: o Current supply development contraints: refers to how quickly we can develop the production of existing known resource supplies. This related to how quickly capital investment in existing sources of energy (Alberta oil sands) can result in energy sources being moved from a state of known but not developed, to "into the pipeline". It would also include transportation capacity constraints and refining constraints that could bottleneck or impact the delivery of final products to users. o Political impact factors: political, legislative, or environmental action that constrains the ability of companies and organizations to proceed with supply development. There are positive and negative influences on supply by political impact factors. Like grants and investment programs (positive), like Feed in tariffs (are gov't payment subsidy arrangements whereby participants are paid a guaranteed premium for energy developed through the adoption of alternate energy sources). And Political disagreements (negative). o Rate of new discoveries: refers to the identification of new sources of fossil fuels. o Declines in current production: refers to the reduction in current supply volume due to energy sources drying up or being taken offline. The closing of a well due to the exhaustion of the oil supply associated with that well is an example of supply contraction contributor. o Immediate access to additional capacity: refers to the ability of current suppliers to tap into excess capacity to meet the demand needs of the marketplace. o Geopolitical instability: refers to instability in the countries or regions that supply our global energy needs o Development speed of alternate energy sources: refers to the speed at which alternate energy sources can be brought online and achieve the necessary scale and cost structure to be viewed as viable options for energy consumers to consider when looking to meet their current and future energy needs. Improvements in energy productivity • Energy productivity is all about improving the efficiency of energy production currently taking place, as well as reducing the overall demand for such energy in a manner that doesn't compromise economic growth. • Energy productivity is a measurement of the productivity achieved from each input of energy consumed. • Capital invesetment in new technologies will generate greater output per energy unput requirement, and lead to energy savings through reduced consumption. • Getting consumers to switch from incandescent lights to fluorescent lights in their homes is an example of behvaioural change. Resource Depletion • Resource management refers to our ability to actively manage existing supplies of materials and regenerate new supplies in a way that minimizes resource depletion. • The creation of goods and services designed are to improve our standard of living. • This concern is further compounded by the acceleration of non-renewable resource consumption, which in some areas has grown to the point where resources are well past their peak supply points. • FOREXAMPLE: fishing. Because fish stocks are depleting..so then gov't of canada imposed a moratorium on the northern cod fishery along the east coast. This moratorium ended more than 500 years of cod fishing and resulted in an estimated 30 000 jobs being eliminated. • Another example is fresh water. Groundwater is essential to agriculture (irrigation), industry (hydroelectricity), and domestic use (residential needs). Excessive pumping of groundwater results in the drying up of wells, the lowering of water in lakes, rivrs and streams, the deterioration of water quality, and increased costs of gov'ts, organizations, and businesses strive to gain greater access to this valuable resource. The Capital Squeeze • Fully developed economies, eager to stimulate their own growth, tap into their own reserves to finance their own economic expansion. This means that a significant number of nations within the global economy have leveraged their growth via these developing economies' reserves. Add to this the very low rate of savings many of these fully developed economies have experienced among their citizens, and the end result is an overwhelming dependency on emerging economies to meet their capital needs. • READ ON PAGE 21 CAUSE I DON'T REALLY UNDERSTAND. • The consequence of this massive capital infusion requirement and the projected capital shortfall are: o Access to capital, particularly by fully developed economies will become more difficult. This will be due to low savings rate of their citizens, resulting in little investment capital being generated internally, and the increasing need of developing economies to use their capital reserves for internal, domestive investment, thereby reducing the supply they are able to lend elsewhere. o A reduction in saving will most likely occur among citizens. Because in order to enhance their quality of life, the citizens will save less and spend more obtaining the goods and services that will make their lives easier. As econo
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