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Askews Food V Wal-Mart

Essay by   •  November 20, 2018  •  Course Note  •  1,315 Words (6 Pages)  •  138 Views

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a) Under these circumstances, is the decision by Askew's to proceed with building a new Uptown shopping center and store a prudent one?

b) If the Board stays the course on the building should they go with David’s vision of building a leading edge sustainable community focused outlet or a less expensive conventional design?

1.a) Yes, I believe it is a sensible decision to invest in a new Uptown shopping Centre and a store.

We cannot be sure of the impediments that the new Walmart Smart Centre will bring on Askew’s Downtown Store. David’s study suggests the general decline to be about 10-40% and the competitiveness concerning the other stories is not noteworthy, another store at the same area would give a risk aversion option in case Walmart governs the grocery segment of Salmon Arms downtown.

b) The board should harbour an interest in David’s vision and be on-board with green construction focused outlet.

As stated in the case study, the benefits of sustainability are beneficiary in the long term including grant programs, less operating costs etc. Moreover, there are other business benefits when business sustainability development is consciously integrated.

  1. Improve brand image and competitive advantage – NMI’s studies show that 58% of consumers support “green marketing” companies.
  2. Benefits from Increased, profitability, productivity and reduced costs
  1. energy-intensive infrastructure will keep operating costs low in the future as and when the energy prices rose. (As per BC Hydro assessment, the design would save 400,000 kilowatts of electricity per year).
  2. Sustainable commercial buildings had lower vacancy rates, higher rental incomes, increased property values and productive employees.
  3. No extra heating expenses – heat used for operating the store would be a derivative from the refrigeration system.
  4. Recover and store stormwater to fulfill property’s irrigation needs.
  5. Through market environmentalism – emissions trading (Cap-and-Trade) and Tax Credits.
    According to a study made by McKinsey – “
    an investment of $1 at the beginning of 1993 in a value-weighted portfolio of high-sustainability companies would have grown to $22.60 by the end of 2010, compared to $15.40 for the portfolio of low-sustainability companies.” (Reference: McKinsey on Sustainability and Resource Productivity).
  1. Environmental Benefits and Moral Imperatives: Since businesses are multifarious with its tangible and intangible benefits, it becomes a moral obligation for them to the environmentally good for the society.

How much responsibility does a corporation (Askew’s) have for the environment, should market conditions dictate, i.e. if financial institutions do not lend for energy-saving measures, does that let the corporation off the hook for the environmental impact of their decisions?

Environmental responsibility is now accepted as a norm for sustainable organizations wherein precautions and policies organizations adopt to reduce and prevent hazards to the environment along with stakeholder participation to induce transparency. If businesses act ethically and legally, they need not concern themselves with broader social goals.

Since the leadership of Llyod Askew, the company’s core values talk about sustainable development, encouraging local business and giving back to society. Environmental Ethic is a utilitarianism act as it encourages the controlled use of Commons – to preserve for future generations but also brings about long-term profitability.

- Even if a business is not about profit-making, profit is required for survival. However, that does not dictate that the corporation can go off the hook for the impacts caused by them.

Nature has intrinsic values, and un-controlled use should never be encouraged. The problem lies in the traditional accounting system which does not document the “negative externalities.” Full cost accounting or specifically full-cost environmental accounting should be implemented to capture a business’s true cost by measuring the resources it uses, the waste and pollution it generates, and other social and environmental impacts.

Moreover, if an organization complies with ethical policies, many regulatory bodies like ENGOs may come forward with funding.

Nevertheless, a corporation (Askew in this context) is a part of the community and can only strive if the people continue to support the business which has Substantial Social Impact and is Financially Sustainable.

To what extent should governments intervene in the marketplace to facilitate energy saving and environmentally investment? Are the energy incentives sufficient or what more could and should governments do in this regard?

Energy should fundamentally be treated as another form of goods or services, and hence the government should take steps to ensure that the users internalize the costs and benefits of their decisions. The role of the government is to foresee the well-being of its citizens. To achieve this, the government need to regulate negative externalities by facilitating green investments. The government can intervene in the marketplace through regulations and laws. However, since abiding by regulations can cost high on the business, it may pass on the consumers especially if the goods sold are inelastic. Moreover, if there are too many regulations, the producers may shift to other regions with more relaxed rules. This may create issues such as unemployment.



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