Sustainability Audit:
Bell Fire Equipment
Executive Summary
Bell Fire Equipment needs to enhance its sustainability policies by adopting changes. The two areas of priority are improving collaboration between the R&D and marketing departments and the other is improving its processes of selecting and building relations with suppliers. The change strategy to develop collaboration is through team-building activities such as challenge simulations and meetings. The measure of change is by integrating financial measures, key performance indicators and benchmarking. The sustainability measure considers costs and benefits. The change strategy for improving supplier relations is taking feedback from the different departments to determine factors for consideration and top managers in charge of negotiating with suppliers developing the standards. The measure of change is key performance indicators and the measure of sustainability is corporate sustainability model.
Table of Contents
Executive Summary
Table of Contents
Introduction
Company Background
Purpose of the Report
Scope of the Report
Sustainability Audit
Overview of Priority Areas
Priority Area 1
Priority Area 2
Recommendations in Improving Sustainability
Conclusion
Reference List
Appendices
Introduction Company Background
Bell Fire Equipment is a fire protection company established in Western Australia. As a small business, it employs 30 people handling the sale, installation and maintenance of fire protection equipment and provision of fire protection services. ( 2008) While the company experienced growth, there are issues or risk areas requiring prioritisation for change.
Purpose of the ReportThe report is a sustainability audit for Bell Fire Equipment that lists down the areas for change in business, the prioritisation of these areas, and the change strategy and measures for the top priorities.
Scope of the ReportThe report focused on the priority areas in the company and specific discussion of change strategy and measures in the context of Bell Fire Equipment and supported by relevant theories
Sustainability AuditThe process of sustainability audit offers key benefits to business firms seeking improvements in operations and long-term goal achievement. One benefit is the ability of the firm to focus on all evidence entrenched in the organisation to understand its sustainability as a company. Another is the consideration of internal and external perspectives of the organisation to support future oriented planning. Last is assessment of progress in sustainability by the company by using measures such as comparing the objectives with actual incremental outcomes. ( 2005)
Overview of Priority AreasThe list of stakeholders of Bell Fire Equipment [See Summary in Table 1 in the Appendix] shows the stakeholders of the company, their influence on the business, sustainability issues, and the prioritisation of the issues. The stakeholders are all the parties that affect the success or failure of the company in its strategic actions but since various stakeholders represent various interests, issues or problems are abound to arise ( 2007). These issues require consideration to determine the priority areas and identify change strategies and measures.
The stakeholders of the company include Bell Fire Equipment as the owner that provides leadership, authority, direction, and oversight of the company. Employees implement decisions or policies and provide feedback to the leaders. Customers determine the needs and objectives of the company. Investors provide capitalisation and share in risks. Customers determine the needs and objectives of the company. Regulatory and safety authorities impose standards for aspects of the firm’s operations. Suppliers provide the resource needs and affect the supply chain of the company. Government agencies offer mutually beneficial large-scale and long-term collaboration with the company. Private companies provide large-scale and long-term collaboration with the company. [j1]
The company face a number of sustainability issues relative to the different stakeholders. These issues include: 1) collaboration between the R&D and marketing teams for efficient resource utilization and customer needs fulfilment; 2) careful selection of investor relations on mutual terms; 3) dissemination of information to the company of new regulations; 4) consistency in the quality of raw materials and components from suppliers; and 5) possible involvement of the company in political affairs by engaging in government agencies as its main client pool through bidding contracts. [j2] The priority issues are collaboration between R&D and marketing and consistency in the quality of raw materials and components from suppliers[j3] .
By applying the triple bottom line model ( 2007), the sustainability issues emerging from the operations of Bell Fire Equipment fall under environmental, economic or social concerns considered relative to resource, internal and external impact [See Summary in Table 2.in the Appendix]. Based on the TBL, most of the issues fall under the economic and social components. This means that the concerns faced by the company pertain more to the financial and resources aspects as well as building social relations with various stakeholders. Adhering to economic and social components justifies the prioritisation of collaboration between R&D and marketing. Nevertheless, the company also face an environmental issue in relation to its sourcing of raw materials. Consideration of environmental aspect justifies the prioritisation of consistency in the raw materials and components from suppliers. [j4] According to (1991), these various issues correspond to the corporate social responsibility of the company. Corporate social responsibility finds representation in a pyramid [See Figure 1 in Appendix] with economic factors at the bottom and philanthropic activities at the top. The progress of the company determines the depth of its corporate social responsibility and sustainability. By focusing on these issues, Bell Fire Equipment considers the three aspects of corporate social responsibility, albeit in varying extents.
Risk assessment support and manage change by facilitating prioritisation ( 2007). The application of risk assessment, which assesses sustainability issues according to the degree of risk, posed for Bell Fire Company shows that two sustainability issues receiving high prioritisation [See Summary in Table 3 in the Appendix]. One is organisational decay from failure of the R&D and marketing departments to collaborate and the other is failure to maintain quality of products and services because of inconsistencies or decline in the quality of raw materials and components. The priority areas pose immediate risk with wider and longer impact deserve attention and the change management plan organised. [j5] Business firms have limited resources and response to issues requires timely action so prioritisation according to risk is a necessity.
Priority Area 1The first area of priority for Bell Fire Equipment is preventing organisational decay by building collaboration between the R&D and marketing departments. The solution to this is building better working relations between the two departments by changing processes, systems and structures.
Change Strategy
The driver for change is management dilemma [j6] or the means of improving management to support collaborative practice. The type of change required is continuous transformation [j7] ( 2006) because relations develop over time and requires nurturing to continue. The organisational development [j8] strategy is normative re-educative [j9] ( 2000) because the activities for change create symbolic environments in starting collaborative relationships. Team building activities such as simulation challenges and formal meetings support collaboration. As such, the management approach would necessarily be collaborative[j10] ( 1999) also with the heads of the departments facilitating the communication exchanges or information sharing between the two departments. The leadership style is coaching[j11] ( 1994) because the managers lead collaboration by example and point out flaws and best practices in collaborative practice in the course of task completion. This also supports change through the voluntary action of individuals with managers stimulating action.
There are also changes in the organisational structure to a more organic [j12] one to create cross-functional teams ( 2006) that support open communications and easy information sharing between the R&D and marketing departments as horizontal units. This also lowers the wall of formality between the two groups to build a friendly atmosphere. This involves the change process of horizontal communication
There would be resistance during the change process [j13] because change is transitional so that individuals affected by the change go through the stages of security, anxiety, discovery and integration ( 1996). Resistance of Bell Fire Equipment to the change process largely occurs during the anxiety phase since it is in this phase that the employees in the two departments experience stress in re-establishing their place relative to the change. Easing resistance is through information sharing, coaching and collaborative management.
Measures
To determine the extent of success, the integrated measures of change include the combination of financial measures, key performance indicators, and benchmarking[j14] . The integrative approach is necessary since different measures focus on various areas and combining measures ensures that more coverage. Financial measures by looking at changes in market share, profitability, cash blow and budget targets. Key performance indicators are factors for success that have been pre-identified prior to the change and serve as comparison of outcomes. Benchmarking is the measurement of change outcomes based on best practices developed by the company and/or based on industry best practices. This considers what ought to be done relative to what was done. ( 2006) Since the change addresses sustainability issues, measures of sustainability also require consideration. The cost and benefit analysis [j15] that considers economic, social, legal and environmental costs work best by focusing on impacts in multidimensional areas ( 2008).
Priority Area 2The second area of priority for the company is ensuring consistency in the quality of raw materials and resources by selecting and enhancing relations with supply partners. The solution to this is identifying and selecting from firms that align with the quality standard of the company.
Change Strategy
The change driver for this priority area is consumerism[j16] , particularly the growing concern of the market for fire protection on quality that encompasses not only the functional quality but also environmental quality. Since the change process involves the shift in external boundaries or the manner of building supplier relations, the change strategy is empirical-rational strategy [j17] ( 2000), which operates based on the assumption that change occurs through information that point out areas for change. In particular, Bell Fire Equipment needs to gather information on various suppliers of raw materials and components, compare performance, identify which companies align with its quality values, and establish the link. It may also be necessary for the company to cut relations with low quality suppliers and establish new ones.
The style of change management for the second priority area is consultative[j18] ( 1999) since the development of the process of selection and relationship building would form from consultations with the different departments particularly the R&D departments that directly handle raw materials and components. The leadership style that best fit this change is captain profile[j19] ( 1994). Although the change management style is consultative, there is need for a central authority directing the consultative tasks. In addition, the objective is to ensure consistency in the outcome and a directive leader becomes necessary. The type of change is punctuated equilibrium [j20] ( 2007) because the establishment of a new supplier selection system comes after a long period of stability. However, after determining and establishing a new system, this would apply for a longer period of equilibrium. This fits the change since the intention is to build long-term relations corresponding with the long period of equilibrium. The nature of change is also mechanistic ( 2006) because even if there the process involves collaboration, the leadership style fits the captain profile and the decision rests on top management in charge of negotiating with suppliers. This requires high specialisation, authority, and formal processes.
Measures
The measures for the change process include key performance indicators [j21] ( 2006), especially on quality. However, as a sustainability issue, the quality indicators should include social, economic, legal and environmental components. Indicators for success should be identified prior to the change process based on expectations of successful supplier partnerships and then the outcomes would be compared with the expectations. The extent of different and the justifications would determine the success of the change process. Applicable sustainability measure for the second priority is the corporate sustainability model [j22] of considering the relationship of input to process to output and then outcome ( 2006). This coincides with the supply chain process.
Recommendations in Improving Sustainability
Bell Fire Equipment can improve its sustainability by furthering the adoption of more encompassing sustainability policies. So far, the company has considered its economic and social sustainability. However, these only focused on internal impact. The company has not really made any strong connections with the community it serves through corporate social responsibility practices ( 2003) of sponsoring fire protection programs in the community as a philanthropic activity instead of just offering these services to its paying customers.
ConclusionSustainability is building the value of the company to various stakeholders to ensure viability in the long-term. The sustainability audit allowed the determination of the areas for change for Bell Fire Equipment to support sustainability.
Appendices
Table 1: Summary of Stakeholders, Issues & Prioritization
Influence on Business
Sustainability Issues
Priority Level (High/Low)
Owner (Bell Fire Equipment)
Bell Fire Equipment provides leadership, authority, direction, and oversight of the company.
Inefficient management, weak leadership
Low
Employees
Employees implement decisions or policies and provide feedback to the leaders.
Poor collaboration between key departments (R&D and marketing)
High
Customers
Customers determine the needs and objectives of the company.
dissatisfaction and loose loyalty
Low
R&D Investors
Investors provide capitalisation and share in risks.
Poor or non-mutual investor relations
Low
Quality and Safety Regulatory
Authorities
Regulatory and safety authorities impose standards for aspects of the firm’s operations.
Untimely dissemination of new regulations
Low
Raw Materials and Prefabricated Materials Suppliers
Suppliers provide the resource needs and affect the supply chain of the company.
Consistency in quality of raw materials and components
High
Government Agencies in Western Australia
Government agencies offer mutually beneficial large-scale and long-term collaboration with the company.
Breakdown of collaborative relations
Low
Private
Companies
Private companies provide large-scale and long-term collaboration with the company.
Breakdown of collaborative relations
Low
Table 2: Summary of Triple Bottom Line Analysis
Sustainability Issues
Triple Bottom Line Component
Resources & Respect
Internal Impact
External Impact
collaboration between the R&D and marketing teams
Economic
Social
Efficiency in human resource functions
Respect for employees, customers, and community
Improve performance and productivity
Effective human resource management
Meet needs of customers
Improved customer and community relations
careful selection of investor relations
Economic
Social
Efficient management of capital investments
Respect for investors and the community
Maximised investment returns
Accountability
Economic benefits to the community
Continuity of employment and income generation for the community
dissemination of new regulations to the company
Social
Respect for people’s right to information
Adherence to new regulations
Benefits of compliance to the community
consistency in the quality of raw materials and components from suppliers
Economic
Environmental
Efficient sourcing
Respect for the environment by incorporating earth friendly features of raw materials and components as part of quality
Adhere, maintain or enhance quality standards
Assumption of environmental responsibility
Provision of quality products and services
Helping to alleviate pollution and release of greenhouse gases
Table 3: Summary of Risk Assessment
Risk
Impact (High/Low)
Parties Affected
Controls
Further Action
Organisational decay
High
Employees, Customers and Community
Performance measures, HRM policies
Information sharing
Negative investor relations
Low
Investors and community
Mutuality-based assessment of investors, building long-term relations
Improved selection methods and expansion of investor relations to support R&D
Non-compliance with new regulations because of lack of information
Low
Customers and community
Failure to sustain product and service quality Inconsistent or Low Quality of Raw Materials
High
Customers and Community
Figure 1: Corporate Social Responsibility Pyramid
[j1]List of stakeholders and description
[j2]List of sustainability issues
[j3]Priority issues
[j4]Justification for the priority areas using TBL
[j5]Justification for priority areas using risk assessment
[j6]Lecture 5
[j7]Lecture 5
[j8]Lecture 6
[j9]Lecture 5
[j10]Lecture 5
[j11]Lecture 6
[j12]Lecture 6
[j13]Lecture 7
[j14]Lecture 12
[j15]Lecture 12
[j16]Lecture 5
[j17]Lecture 5
[j18]Lecture 5
[j19]Lecture 6
[j20]Lecture 5
[j21]Lecture 12
[j22]Lecture 12
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