Sustainability Audit: Bell Fire Equipment

 

 

 

 

 

 

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. 2

Table of Contents. 3

Introduction. 4

Company Background. 4

Purpose of the Report 4

Scope of the Report 4

Sustainability Audit 5

Overview of Priority Areas. 5

Priority Area 1. 7

Priority Area 2. 9

Recommendations in Improving Sustainability. 10

Conclusion. 11

Reference List 13

Appendices. 14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Report

            The 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 Report

            The 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 Audit

            The 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 Areas

            By considering the stakeholder analysis of Bell Fire Equipment [See Summary in Table 1 in the Appendix], a number of issues emerged with bearing on the sustainability of the company. The stakeholder analysis considers 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.

Based on the stakeholder analysis framework, the sustainability issues relate to the significant stakeholders and less preferred stakeholders determined according to the extent of influence on the company. The relationship of Bell Fire Equipment with its preferred stakeholders led to the emergence of issues including collaboration between the R&D and marketing teams for efficient resource utilization and customer needs fulfilment and the careful selection of investor relations on mutual terms. Issues emerging with the company’s relationship with less preferred stakeholders include dissemination of information to the company of new regulations, consistency in the quality of raw materials and components from suppliers, and possible involvement of the company in political affairs by engaging in government agencies as its main client pool through bidding contracts. Those issues linked to the preferred stakeholders appear to be the priority issues.

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. Nevertheless, the company also face an environmental issue in relation to its sourcing of raw materials. 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. Bell Fire Equipment has considered in economic and legal responsibilities but it has to engage more deeply into its ethical responsibilities encompassing the social and environmental sustainability factors to support its decision over philanthropy, which is the highest form of corporate social responsibility.

While these issues deserve consideration, there is need to prioritise since those posing immediate risk with wider and longer impact deserve attention and the change management plan organised. Business firms have limited resources and response to issues requires timely action so prioritisation is a necessity. Risk assessment to support and manage change ( 2007) for Bell Fire Company [See Summary in Table 3 in the Appendix] shows that two sustainability issues received high prioritisation. 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.

Priority Area 1

            The 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 or the means of improving management to support collaborative practice. The type of change required is continuous transformation ( 2006) because relations develop over time and requires nurturing to continue. The change strategy is normative re-educative ( 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 ( 1999) also with the heads of the departments facilitating the communication exchanges or information sharing between the two departments. The leadership style is coaching ( 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 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 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. 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 that considers economic, social, legal and environmental costs work best by focusing on impacts in multidimensional areas ( 2008).

Priority Area 2

            The 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, 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 ( 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 ( 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 (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 ( 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 ( 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 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.

Conclusion

            Sustainability 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 Stakeholder Analysis

Shareholders	Effect on Business	Impact  high/low	Potential
Resource Base
Employees	Value creation, innovation, collaboration, product quality	High	Inventions and innovations
Customers	Demand, loyalty, long-term relationship	High	Expansion through networks
R&D Investors	Capitalisation, risk sharing	Low	Larger volume to support expansion
Industry Structure
Quality and Safety Regulatory Authorities	Standards, incentives influencing actions of various parties and aspects of business	Low	More effective incentives to support greater positive impact on business operations
Raw Materials and Prefabricated Materials Suppliers	Efficiency, cost minimisation	Low	Outsourcing, mergers, partnerships
Socio-Political Arena
Government Agencies in Western Australia	Large-scale and long-term collaboration	High	Sponsorship of researches and wider collaboration
Private      Companies	Large-scale and long-term collaboration	High	Partnerships, internationalisation

 

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

 

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Comments

[PPE]

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