Dissecting Maggie (A Girl Of The Streets) Essays -

Dissecting Maggie (A Girl Of The Streets) Dissecting Maggie ?Maggie, A Girl of the Streets? focuses on a young woman turning to the streets of New York in the late nineteenth century. Stephen Crane uses this novella to raise America's consciousness of the desolate conditions present in urbanized cities. The Industrial Revolution had made production more bearable, but was making life increasingly unlivable for those in certain metropolises. The Industrial Revolution brought change and growth to areas such as New York City. Mechanization in Th work place led to harsher working conditions. Open factories gave way to cramped and unsafe institutions. Many of the new machines were crude versions of what we are aquatinted with today. These machines were often improperly developed and dangerous to use if the operator was not well trained. This resulted in many deaths and disfigurements of those on the clock. Also, this sudden availability of production created greed in the minds of the entrepreneurs. This fervor for creations led to longer and more difficult hours for those employed. The buildings were also poorly ventilated and many workers became ill from inhalation of the charcoal fumes. These close quarters also caused horrible accidents, such as the Triangle Shirtwaist Factory fire of 1911. One of the most notorious of these institutions was the sweatshop, given this name for their close and ?sweaty? quarters. This labor-intensive strategy could be employed only with a large number of workers. Many persons in these sweatshops were lower-class women with few, if any, other options. They were forced to accept these torturous jobs out of desperation and the proprietors took full advantage of this weakness. They were able to raise hours and lower wages. Sweatshop conditions were detestable. Men operated in small basement rooms, poorly lighted and ventilated. The room may or may not have had a floor, and many were forced to work on bare earth. In another room about twelve by fifteen feet in dimension resides the ladies work area. The rooms were filled to overflowing with sewing machines and pressers, making to near impossible to move around. This area was adjacent to tenement bedrooms, separated by a frail partition. In some situations these shops were equipped with a heating and cooling system, lighted with electric lights. Others were not so lucky and worked in uncomfortable rooms aided only with the light of a poor gasoline lamp. The organizers of these factories also did all they could to avoid rent and made sure that the shop was only ?strong enough to sustain the jar of the machines.? (Annals of America 1884-1894, 379.) Maggie was like many of these unlucky women, forced to work at a collar and cuff manufactory in order to maintain her parents' alcohol addiction and to help keep food on the table. Crane placed Maggie in such an environment to elicit a feeling of sympathy within us and possibly reveal to America the situations they were being faced with. At the turn of the century, New York City was the most prosperous American city. The waves of European immigrants coming to New York, the consolidation of New York suburbs into one metropolis, the development of the city's infrastructure, and the incredible construction boom all led to the city's prominence. However, this growth also created a lack of proper housing in the city and residents turned to tenement living as an alternative. These houses were established to accommodate the maximum number of residents possible. It sacrificed floor area to allow light and air to penetrate. It stretched to a height of about four of five stories and was built on a lot by lot approach. The result of development was a donut-shaped block- ?perimeter massing with open space in the block interior.? (Internet source #1.) The establishments lacked indoor plumbing and were crowded and unsanitary. The buildings were entered into off the streets and this created a haven for crime and violence. Even when America, when it became belief that a family needed privacy and isolation to survive, tenement living continued to thrive. The social upheaval of the Industrial Revolution heightened this threat to the family and cultural identity, not only by changing how people lived and worked, but also by bringing in a flood of immigrants

Carnival Case Issues Essays

Carnival Case Issues Essays Carnival Case Issues Essay Carnival Case Issues Essay SPRING 2013 – GLOBAL STRATEGY AND POLICY MAN4720009_2013S_11202: , Schwartz: Tuesday and Thursday 9:30 to 10:50 AM – LA 331 GLOBAL STRATEGY AND POLICY MAN4720009_2013S_11202 Spring, 2013 Prepared for Professor Harry Schwartz, March 14, 2013 by the following students: Robert OndercikZ8384Finance Ron AbrahamZ4458Accounting Jenna FranzoneZ3483Business Management Tabitha Palmisano Z0857Marketing Jeffrey VonZ7035Accounting Aaron SchneiderZ0653Business Management Sabine BorgesZ7510Accounting 1. Current Situation: CRITICAL CASE ISSUES Human Relations (CI #1) Employee and Labor Lawsuits Employees of Carnival are claiming unfair working conditions with poor compensation. (CI #2) Succession Mr. Arison stepping down in the future, who will run company, third generation Arison or someone else. Operation/Logistics (CI #3) The Costa Concordia Cruise Ship lawsuit Cruise ship laying on side, environmental risk, and lawsuits from crash. (CI #4) The Carnival Triumph dead at Gulf of Mexico Pending lawsuits from this event, leading to more negative publicity (CI #5) US Corporate Tax Congress continues to try to charge Corporate taxes on Carnival, but has failed recently. This could change soon. Marketing CI #6) Serving on 20 % of Americans It becomes expensive for customers to get to ports to cruise, discouraging some customers from cruising. Carnival Corporation plc is currently the largest cruise company in the world and is among the most profitable and financially strong leisure travel companies in the world. Carnival Corporation PLC’s portfolio of cruise brands in North America, Europe, Australia and Asia are comprised of Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, Ibero Cruises, PO Cruises (Australia) and PO Cruises (UK). Collected, these brands operate 100 ships totaling 203,000 lower berths with nine new ships scheduled to be delivered between March 2013 and March 2016. Carnival Corporation PLC is the only group in the world to be included in both the SP 500 and the FTSE 100 indices. A. CURRENT PERFORMANCE Carnival reported net income for the year 2012 decreased to $1. 3 billion compared to $1. 9 billion for the prior year due primarily to a combination of lower revenues and higher fuel prices. Revenues declined $410 million primarily as a result of the Costa Concordia incident. Net revenue yields declined 2. 5 percent due primarily to lower cruise ticket prices and occupancies for the Costa brand. Excluding Costa, Carnival was able to maintain year 2012 net revenue yields in line with the prior year. Even with the many challenges faced in 2012, Carnival generated $3 billion of cash from operations, more than enough to fund our net capital investments of $1. 8 billion. All of the subsequent free cash flow was then returned to shareholders. Carnivals regular quarterly dividend of $0. 25 per share, combined with a special year-end dividend of $0. 50 per share, resulted in $1. 2 billion of distributions to their shareholders. Carnival also purchased 2. 6 million of the company’s shares in the open market at a cost of $90 million during 2012. B. STRATEGIC POSTURE * Carnival remains dedicated to profitably growing our cruise business and driving returns on capital higher. Carnival will continue to increase their fleet through a measured pace of two to three new ship introductions each year. Some of these vessels are expected to replace existing capacity from the possible sales of older, less-efficient ships * Currently, Carnival has nine cruise ships scheduled for delivery through March 2016. * In addition, Carnival is focused on the growth of developing cruise regions. During the previous five years, Carnival has doubled their guest sourcing fro m up-and-coming markets, a trend Carnival expects will continue in the future. CI #6) * Carnival and its Operating Lines place the uppermost importance on guest health, safety and security. Carnivals objective is to maintain an exceptional health, safety and security record. As well as constantly strive to better our health, safety and security standards and procedures. (CI #3 and 4) 1. Mission â€Å"Carnival Corporation plc mission is to take the world on vacation and deliver exceptional experiences that appeal to a large variety of consumers, all at an outstanding value. † 2. Objectives To our stakeholders, this mean: Consumers | Take the world on vacation and deliver exceptional experiences that appeal to a large variety of consumers, all at an outstanding value| Employees | Recruiting and Retaining Qualified Employees. Carnival considers their employee and union relations generally to be good| Business Partners | Carnival shall communicate with our business partners frequently to ensure that we receive high-quality products and services and that our ships receive the goods and services that they need to operate sustainably. Shareholders| The strength of their people, values, culture and mission has driven superior returns for their shareholders. A dollar invested in Carnival stock 25 years ago would be worth 19 times that today, representing a total return almost twice that of the SP 500 over the same period. | Communities | Carnival strives each and every year to make a difference in their homeports and various regions around the world in need. During the past year Carnival Corporation plc gave nearly $10 million to charitable organizations, including a $2 million donation to support Hurricane Sandy relief efforts. | 3. Strategies * Carnival now has its ships in ports that are within reasonable driving range for a good portion of the country. Galveston, San Diego, Mobile, New Orleans, Charleston, Baltimore and New York all have Carnival ships sailing from their ports, making it cheaper and easier for more Americans to cruise. CI #6) * Identify those managers responsible for implementing health, environmental, safety and security performance and ensure that there are clear lines of accountability. (CI #3 and 4) * Promptly report and properly investigate all incident and take appropriate action to prevent recurrence (CI #3 and 4) * Establish and act upon goals and objectives to continually improve our performance * Continue to publicly report to and maintain open dialogue and cooperation with key stakeholders (CI #3 and 4) * Carnival operates Under Section 883 of the Internal Revenue Code; certain non-U. S. corporations (such as our North American cruise ship businesses) are not subject to U. S. federal income tax or branch profits tax on U. S. source income derived from, or incidental to, the international operation of a ship or ships. (CI #5) * Since defueling on Costa Concordia began until 7 a. m. Feb. 17, a total of 251,492 gallons of fuel have been pumped out of 4 tanks located on the ship. (CI #3) * According to Costa Cruise, a total of 377,237 gallons of fuel is still onboard in 13 tanks. Following the schedule drawn up by the Neri/Smit Salvage experts, if sea and weather conditions remain favorable, all of the fuel still on board the vessel should be removed within three weeks. (CI #3) * Carnival has several defined contribution plans available to most of their employees. Carnival also has single-employer defined benefit pension plans, which cover some of their shipboard and shore side employees. (CI #1) 4. Policies Protecting the health, safety and security of Carnivals passengers, guests, employees and all others working on behalf of the Company * Protecting the environment, including the marine environment in which Carnivals vessels sail and the communities in which we operate * Continue to follow Carnivals Corporate Standards which go considerably beyond the requirements of current environmental law and regulations. * Carnival is primarily a foreign corporations engaged in the business of operating cruise ships in international transportation. (CI #5) Key Executi ves: Mickey Arison: Chairman and CEO of Carnival Corporations David Bernstein: CFO and senior Vice President of Carnival Corporations Howard S. Frank: Vice Chairman and Chief operating officer Alan B. Buckelew: CEO and President of Princess cruises Gerald R. Cahill: CEO and President of Carnival Cruise lines Larry Freedman: Chief Accounting Officer and Vice President-Controller Michael Thamm: CEO of Costa Crociere, S. p. A. Arnaldo Perez: Senior Vice President, General Counsel and Secretary Stein Kruse: President and CEO of Holland America Line David Dingle: CEO of Carnival UK Michael Ungerer: President of AIDA Cruises Board Members: Mickey Arison: (Internal) President since 1979 and CEO since 1990 Howard Frank: (Internal) Vice Chairman of the board of directors of Carnival Corporations since 1993, and Chief Operating Officer since 2003. Pier Foschi: (Internal) on the board of directors for Carnival Corporation since 2003. Chairman and CEO of costa crociene SpA. A vice chairman of confitama, the federation of Italian ship owners. Robert Dickinson: (Internal) Director of Carnival Corporation since 1987 and of carnival plc. since 2003. He served as president from 1993-2007 and CEO of Carnival cruise lines from 2003-2007. Jonathon Band: (External) Director of Carnival Corporation and Carnival plc. Since 2010. Stuart Subotnick: (External) Director of Carnival Corporation since 1987 and of carnival plc. Since 2003. Richard Glasier: (External) Director at carnival corporation and carnival plc. since 2004. From 1995-2002 he was executive vice president and CFO of royal Caribbean cruises. Arnold Donald: (External) Director of carnival corporation since 2001 and a director of carnival plc. ince 2003. Modesto Maidique Ph. D: (External) Director of Carnival Corporation since 1994 and of carnival plc. since 2003. He also served as FIUs president from 1986-2009. John Parker: (External) Director of Carnival Corporation since 2003 and of Carnival plc. since 2000. He served as Deputy Chairman of Carnival plc. from 2002-2003 Laura Weil: (External) Director of Carnival Corporation and carnival plc. since 2007 Peter Ratcliffe: (Ext ernal) Director of Carnival Corporation since 2003 and director of Carnival plc. since 2000. 003 to 2007 he served as the CEO of PO Princess cruises. Randall Weisenburger: (External) Director of Carnival Corporation and Carnival plc. since 2007 Debra Kelly- Ennis: (External) Elected to the committee of the carnival Corporation and carnival plc. in January 2012. Conflicts of Interest: Richard Glasier was once the CEO of Argosy gaming and although no longer the CEO he still is a chairman and major shareholder of the company. Argosy gaming mostly deals with casinos but also operates riverboat gambling cruises. There is a definite conflict of interest because he is not only concerned with the success of Carnival Corporation but also Argosy gaming success as well. Even though he is not the CEO anymore he still converses with the top management of Argosy and is up to date about what’s going on within the company as well as knowing about what’s going on in Carnival too. This means he might have information on the companies such as release dates for new ships or new specials that he cannot share with the board members of the other company and if he did it would be ethically wrong. Therein lies the conflict of interest, if he was not on both board then there would be no conflict. Being on both boards is a conflict of interest because he is not only concerned with the success of Carnival but also Argosy gaming as well. Since 2010, Start Subotnick has been the president and CEO of Metromedia. Metromedia is a holding company that has many subsidiaries that operate in various activities such as restaurants, internet, software technology, and more. The main conflict of interest for Subotnick is that Metromedia develops software for the hospitality industry. Since Carnival uses hospitality software to perform most tasks such as when you get checked at the port to the server on the cruise ship placing your dinner order, it would be in Subotnicks best interest to try to get Carnival to use Metromedia’s software. This is a conflict of interest because it might not be what’s best for the Carnival but it what’s best for Metromedia. Mickey Arison: Mickey Arison, CEO and chairman of Carnival Corporation is #64 on Forbes billionaire list in the United States. His father ted Arison founded carnival cruises in 1972. Mickey started working for the company in sales. He quickly moved up the ranks not just because of who his father was but because he was hard working and had great ideas. In 1979 he became president and finally in 1990 he became the CEO and he currently still holds that position. He turned carnival into what it is today, which is the world’s largest and most successful cruise ship company. Mickey said the best lessoned he learned from his father was to â€Å"hire good people to run your businesses, give them the support they need to be successful, and let them do the job you hired them to do. He is known for his â€Å"hands-on† or â€Å"open door management style. He lets his employees’ do their own thing because he knows that they will do it right and he doesn’t have to be watching over them in order for things to get done because he hired the right people. Micky Arison goes above and beyond what a manager does. He is to say the least a competent manager. His company has been the most successful and r ecognizable cruise line in the world for over two decades. Arison learned the basics of the company from the bottom so he could really understand the company and make better decision for the company as a whole down the road. He directed his company to make many acquisitions, including their most important, the acquisition of the PO princess cruises. Royal Caribbean also wanted to acquire the line so it was not an easy fight. Luckily for Arison they got it and with the acquisition it made them a clear industry leader. David Bernstein: David Bernstein Started with carnival in 2003 as vice president and treasurer. He was then promoted in 2007 to senior vice president and CFO. AS CFO and VP of carnival he overlooks all finance, treasury, insurance, accounting, tax, and investor relations. Howard Frank: Howard frank has been Vice Chairman of the board of directors of Carnival Corporations since 1993, and Chief Operating Officer since 2003. He is responsible for the corporate-wide business strategies. He works closely with all carnival corporation management, especially with Mickey Arison. He provides oversight to Mr. Arison of the companies many worldwide ventures. He also serves as a chairman of the executive committee of the cruise line international association. (CLIA) Partnership Management: Based on the information gathered the Carnival Corporation shows a partnership management model. They have many characteristics of this model. There is a high degree of involvement by top management and an equally high degree of involvement from its board members especially since their CEO is also their chairman and they also have a few other top guys on the board. * This enables the top management and board members’ to work more closely with each other to develop strategies and to co nverse on a daily basis about the many things going on in the company. * Howard frank who is the vice chairman of the board is known for working closely with all management of Carnival Corporation plc, As well as with Micky Arison himself, the CEO and chairman of carnival. When disaster strikes the company’s senior management team and board members take on the responsibility for what’s going on and work together to come up with the best strategy to fix the problem. * Also the board creates committees by matching certain members’ functions to their expertise. For instance, David Bernstein was promoted to senior vice president and Chief financial officer in 2007 because of his expertise in finances. He was the CFO of Cunard line and Seabourn cruise line for five years and before that he held various financial positions at royal Caribbean for seven years. Carnivals board consists of 15 members. 3-A. External Environment: Opportunities and Threats A. Natural Physical Environment: Sustainability Issues 1A. Opportunities a. The climate could be a benefactor since nice weather usually attracts tourism and cruising. 1B. Threats a. When the weather is not pleasant on the coasts of the United States, there may be a negative impact on the num ber of cruise ships sailing since the shipping ports are located in these areas. For example, during the hurricane season, cruises along the Atlantic and Gulf coast do not set sail due to danger the storm may bring. . The weather in places like Europe, is not as threatening when it comes down to storms compared to the United States. This lessens the degree of one threat in the European market for Carnival cruise lines. B. SOCIAL ENVIRONMENT 1. Opportunities Economic: * | Potentially expand their luxury liners which can cause an increase in revenue. (CI#2)| * | Increase their capacity of their cruises by 30-40%. (CI#2) | * | Offer more travel destinations that they currently do not offer, such as China, India, and various countries in South America (CI#2) | Technological: | Improvement of the technology on the cruise. | * | Working on their home web page since millions of people visit this site daily. They can improve their format so that it would be better understood and easier to n avigate by people in foreign countries. | * | Using more technological machines for the cleaning staff; for example, to check off each room that was cleaned or is in need for something, such as towels, toiletries, blankets, etc. (C#1)| Political-legal: * | Avoiding paying some of the taxes that other companies in the same industry pay for. CI#5)Ship waste disposal is highly unregulated; waste is dumped off shore without any consequences from a legal point of view. (CI#5)| Sociocultural: * | The diversity of customers that are traveling with Carnival Cruise Lines for their vacation get-away is very large. (#CI2)| * | Brand name is well known among the society. | * | Reached an agreement with Italys Fincantieri shipyard to build a 2,660-passenger vessel for Holland America and a 4,000-passenger vessel for Carnival. Ships should be delivered by 2015. This will generate more revenue in the future. CI#2)Some people take a cruise with carnival just to gamble in the casino because some sta tes do not have any casinos at all. | 2. Threats Economic: * | Prices of fuel constantly increase. (CI#6)| * | One of the biggest weaknesses that the company and the industry itself are facing is hurricanes and bad weather during specific seasons. Revenues go down, refunds go up. | Technological: * | Technological problems on-board which can be a big threat for Carnival. For example, the latest incidence was last month. Carnival ship was stuck at sea for almost a week because of technological mishaps. This caused many lawsuits, refunds, and a bad reputation for the brand. (CI#1)| | | Political-legal: * | Progressive accumulation in water waste caused the cruise line to pay millions in fines. | * | More regulators are trying to force Carnival and other cruise line companies to pay more taxes. (CI#5)Major law-suits of the sinking Costa Concordia. (CI#3)| | | Sociocultural: * | Seasick; some people can’t take a cruise because they get seasick after a while. People that suffer from this generally do not board lengthy cruises. | * | Most people do not eat at the higher class restaurants because the dining room is complementary. Most passengers are generally not looking to spend more money on a cruise that was already paid for and clearly states that it is â€Å"all inclusive†. (CI#6)| * | For some people cruises can be very pricy. (CI#6)| | | 2. Some of these opportunities and threats are different in other parts of the world because of different climate, economical issues, and different regulations. III. Internal Environment: Strengths and Weaknesses A. Corporate structure 1. Carnival Corporation and Carnival plc operate under a dual listed corporation structure with primary stock listings in the United States and the United Kingdom. Carnival corporate structure is based on the concept of â€Å"profit center. † a. The decision making authority is decentralized. b. The corporation is a fleet organization worldwide. For the most part, most of Carnival business runs in North America and Europe. 2. Carnival keeps telling its employees this phrase: â€Å"do one thing and do it better than anyone else†. Well that could sound very promising, but from a personal experience I enjoyed royal Caribbean a lot more than I did with carnival. Whatever the CEO preaches to the employees does not really justify the truth. To clarify, Micky Arison the CEO of the company quotes: Carnival doesn’t view a cruise the way Procter Gamble would view toothpaste or Dial would view soap. Each of Carnival’s lines has its own personality and corporate focus. (CI#2) 3. The current structure of the company is pretty much consistent with all of its objectives, strategies, policies and programs, as shown and seen in their financial report their profit keeps increasing. (CI#2) 4. The structure of Carnival cruise is very similar to the other cruise companies that strive to succeed and make money. B. Corporate culture 1. Carnival Corporation maintains a friendly, family-like atmosphere on all of its ships. I agree to this based on my previous experience on their ships. ( CI#1) 2. In my opinion, the corporate culture is consistent with current situations of objectives, strategies, policies and programs. They have an â€Å"open door† policy where each and every employee can communicate with upper division managers and let their voice to be heard, and the reason for that is to benefit the employee and potentially even benefit the company. CI#1) 3. â€Å"Unique to the cruising industry is its promotion to protect the environment. The core values include preserving the marine environment and, in particular, the pristine condition of the waters upon which our vessels sail. † This statement is posted on the Carnival website and is the biggest flaw that I have noticed with the company. They are constantly polluting the water, dumping trash into the water, and they contri bute a great deal to air pollution. Therefore the statement above is not accurate. (CI#4) 4. Carnival employs a variety of different kinds of people from various different cultural backgrounds. Many employees that work for Carnival have different ethnic backgrounds but are all being treated equally(CI#1) 5. The company does take into consideration the value of cultures of each nation the company operates in. This is shown in the diversity of Carnival employees and their cultural backgrounds from all around the world. (CI#1) 3-B. Corporate Resources Finance IV. All numbers in millions except for ratios | 2012| | 2011| | 2010| | | Carnival| RC| Carnival| RC| Carnival| RC| Revenues| 15,382| 7,688| 15,793| 7,537| 14,469| 6,753| Operating Income| 1,642| 403| 2,255| 932| 2,347| 803| Net Income| 1,298| 18| 1,912| 607| 1,978| 515| Net Profit Margin| 8. 4%| 0. 2%| 12. 1%| 8. 1%| 13. 7%| 7. 6%| EPS| 1. 67| 0. 08| 2. 42| 2. 80| 2. 47 | 2. 4| OperatingCash Flows| 2,999| 1,382| 3,766| 1,456| 3,818| 1,663| Debt to AssetRatio| 39%| 58%| 38%| 58%| 39%| 60%| V. Financial Analysis The chart above displays a list of relevant figures and ratios for the Carnival Corporation. It is important to highlight that some of these numbers show increasingly negative results each year. If this negative trend continues it would represent a significant problem for the company, as it would become unprofitable. But how does Carnival compare to others in the industry? Two key players dominate the cruise industry. According to a report by Cruise Market Watch, Carnival Corporation controls 48% of the market share, Royal Caribbean controls 23%, while the rest is controlled in small portions by over 30 other companies (Cruise Market Watch). By generating double the revenues of Royal Caribbean, Carnival is clearly the leader in this industry. For the purpose of this section of the paper, we analyzed the financial statements of Carnival Corporation to measure the health of the company. We will also use financial ratios which best allow us to compare Carnival side by side to its smaller but closest competitor, Royal Caribbean. A notable decline can be seen in the operating income. This figure is considered by analysts to be one of the most important on financial statements because it reflects to a great extend the strength of the company and success of its core business operations (Kennon). Operating income is arrived at by subtracting operating costs and expenses from gross revenues. It is the profit that is left to invest, expand, pay debt, distribute to shareholders, and achieve other objectives that a company may have (Kennon). For Carnival Corporation, Operating income declined 27% from 2011 to 2012. Let’s see why. Carnival mainly generates its revenue from the sale of cruise tickets and onboard items and services (Carnival). Although revenue has remained stable in the past years, operating income has been declining which indicates that the company is making less and less profit of the revenue it generates. This could be due to several reasons, but in the case of Carnival Corporation, there are two major factors. One is the rising price of fuel. Cruise companies are heavily dependent on fuel and any change in its price has a significant impact on the company’s financials (Carnival). From 2011 to 2012, the carnival’s fuel expense increased 7% or $188 million. Another factor that has affected profits for the company is accidents. In its annual report for fiscal year ending 2011, Carnival Corporation included a note to its shareholders regarding the tragic event of the Costa Ship (Carnival). It states that the company takes careful measures to prevent accidents such as the Costa cruise incident (Carnival). In the 2012 Income Statement, Carnival Corporation reported $28 million for â€Å"ship incident-related expenses that were not covered by insurance, including a $10 million insurance deductible related to third party personal injury liabilities (Carnival) CI#3. It is safe to expect that in the 2013 financial statements, Carnival Corporation will again report incident expenses not covered by insurance and possibly higher ones due to the â€Å"Triumph† ship incident CI#4. Although Carnival’s decline in operating income is significant, Royal Caribbean’s 56% decline truly is worrying. Even though Royal Caribbean had nothing to do with the Costa ship incident, there were indirect consequences that affected the company. Royal Caribbean had to report a $413. 9 million impairment loss because â€Å"booking volumes and pricing are down substantially in Spain due to the impact of additional austerity measures there, the lingering impact of the Costa Concordia tragedy and other factors†(Royal Caribbean). Now let’s compare the two companies in terms of efficiency generating profit. The profit margin ratio shows how much after-tax profits are generated by each dollar of sales (Kennon). It is a good indicator of how efficiently a company manages its resources and how well it keeps costs under control. Carnival Corporation has an 8% profit margin. In other words, of every dollar that the company receives from sales, only eight cents represent profit. With expenses increasing more than revenues each year, a low profit margin represents another sign of potential unprofitability. However, taking into consideration Royal Caribbean’s 0. 2% profit margin, which means that they keep much less than a penny for every dollar they sell, Carnival Corporation is performing much better than Royal Caribbean. Off course, there are additional expenses that are not calculated in operating income like interest and tax expenses. It is worth mentioning that carnival corporation currently does not pay any U. S. federal income taxes because it qualifies for the benefits of section 883 of the Internal Revenue Code (Carnival). Section 883 basically states that some non-U. S. corporations that generate income from the operation of ships are not subject to federal income tax in the United States (Carnival). However, the closing of this tax loophole could become a potential threat for Carnival, as it would significantly affect their net income in subsequent years CI #5. Senator Jay Rockefeller of West Virginia confronted representatives of the cruise industry in a hearing last year (Walker). Senator Rockefeller questioned why Carnival, a company that sells to many American and extensively benefits from the resources of forty U. S. ederal agencies, gets to pay no federal income taxes (Walker). Let’s analyze the Debt to Asset ratio, measured with total assets and total liabilities. Carnival Corporation has a 38% Debt to Asset ratio which by itself represents an okay picture. More specifically this means that debt was used to finance 38% of the assets. On the other hand, Royal Caribbean has a 58% debt to asset ratio which indicates that the company m ay run into problems borrowing more money in the future. For its debt, Carnival paid $336 million in interest in 2012, a healthy amount compared to the $2. 3 billion operating income (Kennon). Operating income divided by interest expense gives us interest coverage ratio, which indicates problems when it is below 1. 5 (Kennon). But carnival has a 4. 8 interest coverage ratio which means that there is still room for earnings to decrease before the company would default on bonds and loans for not being able to keep up with interest (Kennon). But will Carnival be able to meet short-term liabilities? The current ratio is short-term indicator of the company’s ability to pay its short-term liabilities from short-term assets; how much of current assets are available to cover current liabilities (Kennon). A healthy current ratio is greater than 2, but for Carnival Corporation’s is only 0. 25 which indicates that meeting current obligation could be a problem for the company (Kennon). But again we see that Royal Caribbean may have a bigger of a problem since their current ratio is only 0. 08. Another important factor to point out from the financial statements is that operating cash flows show a declining trend. From 2011 to 2012, cooperating cash flows declined 20%. What this means is that unless the current trends change, the company may start running out of cash and become unable to fulfill its obligations, which could lead the company into filing for bankruptcy. Interestingly, Royal Caribbean’s cash flows also declined 20%. However, it is worth mentioning that cruise companies have the advantage of receiving money for unearned revenues because cruise tickets are generally paid in advance. It’s like getting loans at 0% interest. Another important figure to analyze is Earnings per Share (EPS), which is especially important to stockholders. Carnival’s $1. 67 EPS means that if net income was divided amongst all outstanding shares, investors would receive $1. 67 per each share owned. Although a good EPS does not necessarily represent company strength or weakness, its changes affect the price of a company’s stock and therefore it is one of the most looked at figures by investors (Kennon). Based on EPS only, Royal Caribbean may not be an attractive choice of stock since their EPS is only $0. 08. Corporate Resources Marketing Product (Service) Carnival sells cruise tickets for vacations around the globe. Although Carnival markets the experience on the cruises as the vacation destination, their ships go to hundreds of destinations worldwide. Carnival sells numerous products and services onboard either directly or through independent concessionaries from which a commission is collected. Some of the onboard products and services offered that are not included in the ticket price include â€Å"liquor and some non-alcoholic beverage sales, shore excursions, casino gaming, gift shop sales, photo sales, full service spas, communication services, art sales, a wide variety of dining options and laundry services† (Carnival). Moreover, Carnival offers shore excursions and activities, and depending on the destinations, it owns or has stake in hotels where customers are offered a stay in a vacation package. In addition, carnival owns or leases private islands where it operates â€Å"among other things, beach bars and restaurants, water sports, sky lifts, cabana rentals and a surf rider attraction† (Carnival). Promotion: Carnival’s annual report states that each of its brands has â€Å"comprehensive† advertising programs designed to attract the local market. The principal mediums used for marketing and advertising are television, magazine, radio, outdoor billboards, direct mail, e-mail, online websites, online advertising and social media† (carnival). Social media’s utilized are facebook, Twitter, YouTube and Pinterest. In 2012, Carnival’s facebook pages reached over five million â€Å"likes†. In addition, Carnival has â€Å"past guest recognition programsâ₠¬  designed to give past guest’s incentives such as reduced prices and gifts in order to create customer loyalty. Price: Through its many brands, ships, and packages, Carnival claims to provide an option for every generation, taste, lifestyle, and off course, budget. The company categorizes their â€Å"cruise experiences† as contemporary, premium, and luxury. A contemporary experience is the cheapest and most casual alternative, lasting a week or less. A premium experience is designed for experienced consumers with an emphasis on quality, comfort and style and lasts from a week to two weeks. The most expensive alternative is the luxurious, which provides high standards of accommodation and service in a smaller cruise. All cruise tickets include dining and entertainment but other options are available at additional prices. Carnival’s brands all offer special promotions, early booking or past guest recognition programs that reduce the regular price of a vacation. But regardless of the type of experience and discounts taken, cruise ticket prices can vary due to many factors including demand and season. To have little bit of an idea of prices we went through the steps of booking a vacation on carnivals website. The first thing we noticed on the carnival-U. S. website was a sale of â€Å"up to $200 off + free upgrades for 3-5 day sailings† or â€Å"up to $400 off + free upgrades for 6+ day sailings. Using this sale, for travel in July and departing from Miami on a cruise to Bahamas, the cheapest alternative per person came out to be $330. On the other hand, high-end vacations can cost thousands of dollars. Place: Consumers can always book their cruise vacation directly on the company’s website. But according to Carnival Corporation, their cruise vacations are sold â€Å"mainly through travel agents, including wholesalers, general sales agents and tour operators that serve our guests in their local markets† (Carnival). Accordingly, the company puts a lot of emphasis on their relationship with travel agents. Carnival provides additional commission incentives to travel agents in order to motivate them to sell more of carnival’s vacations. Carnival also provides agents with educational tools such as training seminars, online courses, and videos for them to better understand and sell Carnival’s products and services (Carnival). . TASK ENVIRONMENT Threat of New Entrants: medium * Economies of scale: expansion of current companies is the greatest weapon against new entrants. The few leading companies, Carnival, Royal Caribbean, ; Disney, purchase or build larger ships or renovate older ships. Carnival, the leading giant of the industry, â€Å"As of January 20 11, the company operated 98 cruise ships with a passenger capacity of 191,464 berths. The company operates through four segments: North America cruise brands; Europe, Australia and Asia (EAA) cruise brands; cruise support; and tour and other. (â€Å"Global hotels†, 2012) * Government regulations: as a global industry, it is very difficult for government of any particular countries to impose regulations. Therefore lack of enforcement or adherence to regulations regarding employment, safety, and health requirements make it less bureaucratic for a new entrant. * Capital requirements: large capital is required to own and maintain a ship. * Product differentiation: many companies offer a variety of theme cruises to attract or cater to different needs or preferences. It is an opportunity for a new comer although quite difficult to grasp. Access to ports cannot be so easily obtained. There are very few ports embarkations in populated cities. Giant companies sometimes share ownership of ports when they financially contribute with state government to build them. Rivalry: medium high * Capacity growth: the cruise industry is driven by capacity maximization; every square inch of space must be utilized to accommodate and maximize the experience of the passenger. * Service characteristics: cruises and ships are designed to cater to the various ‘wants’ and preferences of different demographic around the world. Many cruise lines difference themselves by the amenities or destinations they provide or offer. This uniqueness in the service adds an edge to the competitive field. Creativity is key in designing cruise themes that respond to or attract unexploited market niches. * Rate of industry growth: based on various reports the industry is growing at a much slower pace in North America than Europe and Australia. The slow growth may be because of the economic downturn that we are facing or it may be the result of how difficult it is for the cruise industry to reach the wallets of more Americans. Number of competitors: the industry is somewhat fragmented and few competitors have a hand in multiple niches. Competition is very high in the industry because they are fighting for a bite of a pie that is already small. The companies try to maximize their revenues by offering attractive prices and exotic destinations to customers. (Lester, Thyne, ; Weeden, 2011) * Switching cost: can be high or low ba sed on the type of cruise that is analyzed. Threat of Substitute Products or Services: medium high * Existence of substitutes: land-based vacations are the biggest threat to the industry. The cost is half or one third less expensive, the vacationer has more control in land than over sea, greater sense of security towards land than sea. Although land transportation does not provide the sea experience that a cruise does, it is by far preferred to sea transportation. Also, a cruise is considered a luxury item and can be compared to the purchase or acquisition of luxurious items such as jewelry, high-class automobiles or whatever else discretionary money is used for. A cruise is not a necessity; it is a choice, a reward or a gift to oneself or loved ones. The rating of medium high is mostly due because of the fact that choosing a cruise over a road trip, a flight, a hotel is determined by preference and affordability. * Switching cost: the only cost is the loss of the experience of the cruise. Power of Buyers: medium low * As a luxury item, the cost of a cruise is not negotiable. The expectation of a high cost is lightly brushed with the hope that a cruise will not drain a savings account. The buyer does not have a significant influence on the price. Prices are more inelastic than elastic. Backward integration is quite impossible, the capital necessary to lease or purchase a ship is over tens of thousands dollars. Average passengers cannot afford it. * Alternative suppliers do exist but high product differentiation does not allow the buyer to compare oranges with oranges, more likely the buyer has a choice between grapes or oranges. Moreover, the same company under different names may offer different theme or budget cruise. Cruise com panies own more than one cruise lines, therefore choosing one cruise line over another may not represent a competitor’s advantage. Carnival and Royal Caribbean cater to different income brackets, Windstar offers exotic destinations for adventurers, Disney Cruise Lines are more family oriented. (Deep sea, 2012). * Due to the hefty price of a cruise, the buyer has a high expectation about the service. The demands and expectations of buyers greatly influence the marketing techniques and expansion projects that cruise companies undertake. Brand recognition is a magnet to create and retain customers and helps increase demands. Power of Suppliers: medium high * Supplier dominance: only a few companies build ships, provide staff and services to cruise companies. Forward integration for suppliers is less likely but backward integration for the cruise line industry is highly possible. Carnival uses backward integration to reduce costs and retain control of how its ships are built. * Product and services that the suppliers provide to cruise lines is very unique and specific to that industry; switching cost is high. What t hese suppliers make or produce can only be sold to the cruise industry. * Economies of scale: purchasing industry is very important to the supplier. All the major cruise companies own at least 5 to 10 cruise lines; which strengthen their purchasing power. However, there are not that many suppliers to choose from. Having limited purchasing options, increases the power of the suppliers. Relative Power of Other Stakeholders: very high * Special interest groups: environmental activists voice their concerns to the industry and directing their attention to fuel emissions, waste water dumping and few others. Thousands gallons of sewage and water bathroom water are discharged untreated in the ocean daily. Onboard observers are placed on ships that use ports in Alaska to ensure that wastewater is sanitized before being dumped in the ocean (Klein, 2011). In his article, Klein also indicated in his article that the daily fuel emission of one cruse ship could be equivalent of that of thousands of cars. * Loyal customers: their perception regarding the safety of the industry affects their decision about whether to use discretionary money on a cruise or elsewhere. It also taints their views of the brand recognition. They are less likely to refer that cruise line or to become repeat customers. * Travel agencies: most cruises are sold and advertised by travel agencies. Travel agencies are described by Cruise Lines International Association (CLIA, 2011) as ‘the distribution channel offering the best service† to the cruise industry. * Government regulations: even though some of the big companies have headquarters in the USA, they are incorporated in Antillean territories such as Panama, Bahamas, and Virgin Islands. Doting a ship with a flag registered in countries like Liberia and Panama, becomes a convenient avoidance tool that shields the cruise companies from adhering to labor and environmental laws, health and safety regulations, and most importantly avoid paying corporate taxes. Airlines industry: they provide means of transportation to different ports (from one state or one country to another), when airfares are high, it adds to the cost of transportation to a port. To overcome this dependence more ports are being built in areas that can be driven to. * Local communities: when a cruise ship arrives at a destination, the community of that foreign location receives the passengers. How passengers and the cruise line are received affect how the cruise experience is perceived. * Global workforce: many describe the work environment as ‘sweat ship’ and it does not project positively on the companies. In the cruise industry, employees are in contact with passengers 24 hours a day and for several days; an unhappy or miserable employee is contagious. It does affect indirectly the bottom line of the company. Lack of respect, living quarters, rigorous demands of the job, being underpaid, language and culture differences separate the cruise workforce from the visibles and the invisibles. The cruise industry is part of the service sector; an unhappy, mistreated, undervalued workforce does not contribute to a pleasant experience for the passenger (Agaard, Larsen, ; Marnburg, 2012). SWOT ANALYSIS Strengths:1- wide variety of theme cruises Case issue #6 2- largest ship capacity Case issue #63- backward integration4- heavily invest in marketing Case issue #65- experienced managenent Case issue #1, #3 ; #4| Weaknesses:1- Corporate culture regarding ship workforce Case issue #12- PR handling of current sea tragedies Case issue #3 ; #43- HR: employee training and recruitment Case issue #1| Opportunities:1- partnership with travel agencies Case issue #62- leader in environment protection ; safety Case issue #3 ; #43- Adopt a global standard of ethics ; conduct Case issue #14- develop a positive rapport with ship workers Case issue #15- treat labor force as valuable contributors Case issue #1| Threats:1- Extra costs (taxes, cleaner waste water) Case issue #52- slow growth of North American market3- workforce motivation Case issue #14- land-based transportation and hotel resorts Case issue #65- brand recognition mudded by sea tragedies Case issue #3 ; #4| MODIFIED TOWS SO Cross referencing * The capability of backward integration puts Carnival in a better position to build ships that are safer friendlier to the environment while controlling costs. S3, O2 Case issue #3 ; #4 * Experienced management can develop standards that could help improve the workforce environment on board. S5, O3, O4, O5 Case issue #1 * Sharing marketing techniques with travel agents may improve and strengthen their relationship. O4, S1. W2, O2, Case issue #3 ; #4 * Treating employees as valuable contributors helps HR in their recruitment strategy. W3, O5 Case issue #1| ST Cross referencing * Experienced management can use their expertise to create a working environment that empowers and values the ship employees. S5, T3 Case issue #1 * Marketing techniques is the best weapon to weaken the threat of substitutes and ‘clean’ the brand. S4, T2, T4. T5 | WT Cross referencing * When morale is low, ‘the ship may sink’. Employees are the foundation of companies, the weaker the base, the less solid is the company. W1, W3, T3 Case issue #1 * A PR is the voice of the company. After a tragedy, responsibility, reassurance, and compensation is key in re-building confidence. The opposite drills the hole deeper. W2, T4, T5 Case issue #3 ; #4| 5. EVALUATE STRATEGIC ALTERNATIVES Alternative #1 Pause/Proceed with Caution Strategy: Proceed with caution until they are able to evaluate how the new tax and fuel regulations will affect the company and how to go about decreasing lawsuits due to employee exploitation and onboard guest safety. (CI #1, 3, 4, 5) Pros: * Customers will continue to do business with Carnival if they feel that they are working to improve the ship’s safety. * Employees put forth more effort if they do not feel as though the company is taking advantage of them and increased motivation from the staff can increase the company’s bottom line. Cons: * Only making small changes gives the competition a chance to catch up. * Nothing can be done to stop new regulations, so the company is bound to lose profits if there is an increase to fuel prices and taxes. Alternative #2 No-Change Strategy: Since Carnival Corporation ; PLC has the largest ship and passenger capacity in the cruise industry with many diverse brands they can continue to do what they have been doing and hope they remain ahead of the competition even with the replacement of Mr. Arison in the future (CI #2). Pros: * Carnival is already one of the most profitable cruising companies with a 47% market share in the UK, 68% in Italy, 51% in Germany and 45% in France, so they are dominating the global market competing mainly with Royal Caribbean. * Doing nothing new gives the company time to fix some of the current issues. Cons: * Competition could pass and take control of market if Carnival sits idly by especially with growing customer concerns about safety of the ships. Profits are already decreasing from previous years so doing nothing new could keep the company from enjoying profits that could be acquired with innovative ideas. Alternative #3 Horizontal Growth Concentration Strategy: Carniva l can increase operations in the current European market as well as reaching out to new regions (CI #6). Pros: * Carnival derives a majority of its revenue (nearly 52%) from US customers which is currently on the decline, so it would be beneficial to tap into other markets around the world. * Carnival already has market presence in Europe, so it would not be as difficult to increase capacity in that region as opposed to starting fresh somewhere else. Cons: The value of the dollar against Euro appreciated from 1. 60 in January 2010 to 1. 53 by April 2010 against the Pound. If the dollar strengthens it would record lower revenue than is actually earned. * The European economy is also faltered, so profits are not guaranteed and an increase in operations could instead cause a company lose. RECOMMENDATION I would recommend that Carnival begin with the pause and proceed with caution strategy for at least 1 to 2 years. This would give them time to get the company back in line with the aspi ration of earlier business days when the safety and satisfaction of customers and employees came before the profits of the corporation (CI #1,3). Once they are back on track I would then recommend for Carnival to go forward with the horizontal growth. It is in their best interest to reach out to untapped markets particularly since there is a decline in the current US regions and they are looking for ways to increase revenues since Carnival is only currently reaching 20% of the total US market (CI #6). Growing horizontally in any market has significant financial implications for a cruise company. Considering that the newest Carnival Dream-class ships cost $740 million each (Shipcruise. org), it is a very expensive strategy to implement. In addition, the company would have to engage in research, planning, training, and marketing activities which can be very costly. Because Carnival’s balance sheet shows $465 million in cash, it will most likely be necessary for the company to borrow money to finance their growth. But borrowing money would not cause any problems for Carnival Corporation because as we analyzed earlier, the company has a healthy interest coverage ratio which measures the ability to pay interest on outstanding debt (Kennon). Although it is costly and risky, investing the money to expand into new and existing markets now, Carnival would have the potential to increase its revenues in the future years to offset the increasing costs. Carnival is already in the process of building two new ships to be entered to service in 2013 and 2014 and estimates that these two new ships will increase their passenger capacity by 19% (Carnival). Also, a continuous growth by the largest company in the industry could drive some of its competitors out of business and capture a larger market segment. 6-A. Implementation After an extensive in-depth review of the Carnival Corporation ; PLC, it is apparent, as with any large corporation it has many strengths and weaknesses. Carnival and its subsidiaries have a dominating; nearly 50% market share and strong support base among its customers. With plenty of loyal customers, and many recognizable and respected brands it would  appear to have few  problems. However, despite all the good attributes, several recent negative events have arisen concerning both  safety and corporate concerns, which have shaken the company and its shareholders. 6-B. What must be done?  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   1. Shareholder Confidence  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   2. Safety Concerns  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   3. Improvements and New Ship Building Action Steps| Responsibility| Start-End  | Financial impacts| Questions? | Concern:| WHO? | WHEN? | HOW MUCH? | What Must be done? |   |   |   |   | | 1. Shareholder Confidence| Micky Arison (CEO), Upper Management| 4/1/13-Ongoing| Determine Future Earnings|   | 2. Safety Concerns| Upper Management,Howard S. Frank (COO)| 4/1/13- 12/31/13| Cost of Training and current safety assessment|   | 3. Improvements and New Ship Building| Upper Management, Design Team,David Bernstein (CFO)| 4/1/13- 4/1/16| Set budget for cost of research| Shareholder Confidence Over the last 5 years Carnivals stock price has  collapsed. Granted, the worldwide economy has endured one of the worst periods in history, but In 2008 the stock was trading roughly 15% higher than what it is today, and between that time it fell as much as 70% to the 2009 lows. I believe Micky Arison (CEO) should be focusing on how to re-energize and grow the company in the face of some very difficult times. I believe this could be achieved by continuing to expand to new entrant markets in Asia, Europe and Australia. The United States has been saturated for some time, with little growth and shrinking profit margins due to fierce competition. In addition the company must provide a great experience for clientele in order to ensure repeat business, which is essential to Carnivals success. Safety Concerns Over the last couple years Carnival has experienced several bad events and even worse publicity. This has caused many to suspect wrong doings and create concerns over safety. Incidents like the MS Costa Concordia in 2012, which was one of the worst  disasters in modern cruising history, in which 34 people were killed and the ship was a total loss costing nearly 600 million dollars are a nightmare for a cruise line. In a more recent case, the Carnival Triumph endured an engine fire disabling the ship and causing the boat to be stranded at sea for several days. Although no one was hurt, it  caused a severe inconvenience to the passengers and crew. Tales of rotten food and overflowing toilets ran for several days on international media. Safety should always be of utmost concern with any industry. The last thing people want or need is to have a feeling of insecurity  on a vacation. Cruises overall have been very safe for many years but still in the back of many people’s minds the thought of the Titanic lingers. Carnival needs to make sure people know that safety is  the top priority of the Carnival Corporation. Although it shouldn’t be pushed to the point where people get scared, it definitely needs to be continuously addressed. Carnival needs to constantly implement the most modern safety techniques and they must educate the crew how to keep passengers as safe as possible. Improvements and New Ship Building Because of the fierce competition in the cruise industry it is vital to constantly upgrade older ships and build larger and more desirable new ships with more features and amenities. A new trend in the industry over the last couple decades is to build bigger and bigger ships. Cruise lines such as Royal Caribbean have been very successful over the last decade by initially building  100,000 Gross Tons ships. Since then the Oasis Class that is well over 200,000 Gross Tons has been put in service. Carnival and its subsidiaries aren’t necessarily building the biggest ships but they are uilding larger ones as well. I believe this is very important because more and more people are going on cruises for the entertainment rather than the ports. Many cruise goers are like the typical individual who want th e newest and the best and this is the reason it is pivotal for Carnival to keep up with the new trends of constant upgrades and services. 6-C. How should it be put into action? Action Steps| Responsibility| Start-End  | Financial impacts| Questions? | Concern:| WHO? | WHEN? | HOW MUCH? | How should it be put in action? |   | Micky Arison (CEO), Howard S. Frank (COO), Upper Management| 4/1/13| Determine budget in conjunction with finance dept. | Concerning safety, it must be a top priority to follow the standard government mandated procedures, which are given to the entire Cruise Industry. Carnival can go above and beyond this by simple measures such as drills and employee training. They can go beyond the recommend amount of life jacket and lifeboat requirements. I believe the biggest concern is to hold top officials such as the Captain responsible for such disasters as the MS Costa Concordia. Carnival is doing a great job in terms of shipbuilding and upgrades. They have kept up with the competition so in my personal opinion I believe the company needs to make security a given so that passengers focus on the amenities of the cruise ship. The company should also take guest recommendations seriously and look at what competitors such as Royal Caribbean are doing in newer ships and follow as well. As for the Shareholders it is important for Carnival to insure that it is strong and well managed, generating consistent profits and growth. This is very important to any shareholder and I believe this can be achieved by expanding to new markets in  Asia, Europe and Australia. Logistics is also important to have available ships to move to these new ports to expand. 6-D. Who should do it and when should it take place? Action Steps| Responsibility| Start-End  | Financial impacts| Questions? | Concern:| WHO? | WHEN? | HOW MUCH? | Who Should Do it and when should it take place? |   | Micky Arison (CEO) Howard S. Frank (COO), Upper Management,  | 4/1/13| Determine budget in conjunction with finance dept. | Carnival and its subsidiaries future expansion and safety goals need to be implemented and enforced at senior management levels in order for the employees to know that it truly is important to the companys success. It takes a strong leader to do what’s necessary for future growth and fend off new fierce competition within the industry. It is important to start as soon as possible because the competitors within the industry will try to take advantage of Carnivals recent problems. I believe safety is a big concern with two major issues within a year of each other. This has brought bad press and will most likely follow up with loss of customers in the future. 6-E How much will it cost? Action Steps| Responsibility| Start-End  | Financial impacts| Questions? | Concern:| WHO? | WHEN? | HOW MUCH? | How much will it Cost? |   | Upper Management,Micky Arison (CEO),David Bernstein (CFO)| 4/1/13| Set budget for cost of research| Modern cruise ships  cost no less then 250 million dollars, with the most expensive costing well over 1 billion dollars. Carnival as well as the rest of the industry has absorbed these costs by constantly upgrading ships every year or two rather then building many ships at once. They also have sold older ships to other cruise lines, or even created new cruise lines with their older ships to cut costs and continue making more money with new locations around the world. As far as safety is a concerned it shouldn’t cost much considering a large amount of the cost of new cruise ships is equipping them with the most modern safety equipment available. It is very important for the employees be able to use and know this safety equipment because it is worthless if the staff doesn’t know how to use such equipment. Work Cited Carnival PLC. (2012, March 03). Carnival corporatoion ; plc 2012 annual report. Retrieved from http://phx. corporate-ir. et/phoenix. zhtml? c=140690;p=irol-reportsother2 Carnival PLC. (2010, March 03). Carnival corporatoion ; plc 2010 sustainability report fiscal year 2010. Retrieved from http://phx. corporate-ir. net/phoenix. zhtml? c=140690;p=irol-sustainability_env Carnival Corporation ; PLC. 2012 Annual Report. Washington, DC. Mar ch 7, 2013. http://phx. corporate-ir. net/phoenix. zhtml? c=140690;p=irol-reportsother4 Carnival Corporation. 2006 ;Retrieved from http://phx. corporate-ir. net/phoenix. zhtml? c=200767;p=irol-history; Morningstar 2013 ;Retrieved from http://insiders. morningstar. com/trading/board-of-directors. action? =CCL;region=USA;culture=en-us; The Financial Times Ltd. 2013 ;Retrieved from: http://markets. ft. com/research/Markets/Tearsheets/Directors-and-dealings? s=CCL:NYQ; How Much Does a Cruise Ship Cost to Build. Ship Cruises. N. p. , n. d. Web. 13 Mar. 2013. shipcruise. org/cruise-articles/489-cruise-ship-cost Kennon, Joshua. Investing Lesson 4: Income Statement Analysis. About. com Investing for Beginners. N. p. ,n. d. Web13Mar. 2013. http://beginnersinvest. about. com/od/incomestatementanalysis/a/income-statement-analysis. htm Market Share | Cruise Market Watch. Cruise Market Watch RSS. N. p. , n. d. Web. 12 Mar. 2013.

Project Time Management Research Paper Example | Topics and Well Written Essays - 1750 words

Project Time Management - Research Paper Example or organizations are undertaking project management, they are feeling the pressure from the governments, policymakers, and public to finalize the project as soon as possible. In case of private organizations, there are both internal and external pressures, which force the project managers to meet deadlines and utilize the resource of time effectiveness (Sen, 2008). Many projects regarding new product development have to use time effectively so that the competitors do not come up with similar innovations before them. Therefore, the bottom line here is that time management has emerged as important determinant of project success in the 21st century. This explains why over the past few decades, great deal of literature has surfaced about project time management and its different processes stressing its importance and need (Lock, 2007; Lewis, 2007). Importance and Development As mentioned earlier that in today’s competitive business world, efficiency is the key a large proportion o f this efficiency depends upon time management. Effective time management reduces not only the costs but it may also reduce potential conflicts as well. For example, if the workers are billing you as a project manager at an hour rate, effective management may reduce the costs (Kerzner, 2009). In the same way, if the project manager takes more time than usual and then bills you as the client for greater number of hours then that may create tension and poor word of mouth advertising. The fact is that when it comes to other resources, such as building, cash, human resource, IT, and others, corporations and companies have found a way to store them and utilize them on their terms but the same is not true in case of time. Therefore, project managers have to utilize time without any delay since it... For example, Gantt charts may suit small projects but for large projects with more than 30 activities, it may become troublesome to handle. Furthermore, Gantt chart also does not communicate anything about the magnitude of different activities. Gantt charts have also received criticism for their inability to follow the 100 percent rule which the activities divided usually fail to account for 100 percent performance of the actual project either adding more elements or leaving out the existing ones (Meredith & Mantel, 2005).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   In simple words, critical path method is a time management technique in project management, which allows project managers to understand the shortest and longest time required for the completion of each project. The first step entails specifying all the individual activities concerned with the completion of the project. The second stage has to with determining the sequence of those activities (Sen, 2008). Third, in light of the sequence, at this stage, one would draw a network diagram showing the flow of activities. Fourth, at the same time, taking into account all the overlapping, at this stage, the manager would calculate the total time required for completing each activity. Fifth, the most important step is about identifying the critical path or the longest path (Portny, et al., 2007; Leach, 2005). The same is done by evaluating the four elements about each activity, which are earliest start time, earliest finish time, latest finish time , and latest start time.

Pollution of environment during, petroleum and gas synthesis Essay

Pollution of environment during, petroleum and gas synthesis - Essay Example According to Obadina (2007), oil production in Canada rose from 1.8 million barrels to 3.1 million barrels per day between 1984 and 2003. Appreciating the widespread global use of petroleum and gas products, this paper seeks to outline the environmental pollution resulting from the synthesis of petroleum and gas, giving recommendations on prevention approaches. Environmental pollution would be appreciated as the process of man introducing energy or substances into the environment that could cause hazards to the health of human beings, harm ecological systems and living resources and interfere with or damage the legitimate use of the environment (Walker et al. 2006). The petroleum industry encompasses various activities in exploration, production and transportation of about 3.5 billion tons and 2.5 giga m3 of crude oil and natural gas respectively and other derivatives around the world each year (Walker et al. 2006). After the exploration process identifies a commercially viable reser ve, the extraction of oil and gas would be carried out through drilling by use of special technologies (Vidal 2012). The extracted hydrocarbon product would then be separated into gas and liquids and dehydrated to get rid of excess water. This would then be split into various petroleum and gas products. ... The synthesis process involves exploration and production of the products of natural gas and crude oil. It encompasses the exploration and preparation of well sites, drilling, production of crude oil and gas and on-site processing. The synthesis of petroleum and natural gas products as observed by Kaiser and Pulsipher (2007) starts with the bringing to above the ground crude oil and natural gas which would in turn be processed to various products for distribution to consumers. In the process, the industry contributes to air, water and soil pollution with the components of the resources being processed and the subsequent by-products and products, the latter being the key pollutants. Natural gas would mainly contain methane with water and carbon dioxide as impurities. Crude oils vary widely in viscosity and colour but studies by Kaiser and Pulsipher (2007) indicate 79.5% to 87.3%, 10.4% to 14.8%, 0 to 8%, 0 to 2%, 0 to 0.1% and 0 to 0.005% carbon, hydrogen , sulphur, oxygen, nitrogen a nd metals composition respectively. The main constituents are hydrocarbons of varied types and molecular masses with between 1 and 60 carbon atoms. The synthesis of gas involves processing natural gas by dewatering and removing its acid components such as hydrogen sulphide followed by eventual removal of carbon dioxide. Despite taking appropriate precautions against environmental pollution, Obadina (2007) appreciates that accidents occur periodically in the course of producing petroleum and gas. Air pollution in the process of petroleum and gas synthesis occurs through combustion emissions, fugitive emissions, process emissions, secondary emissions and from handling and storage of petroleum liquids

Fundamentals of Decision Support -linear programming (LP), integer Assignment

Fundamentals of Decision Support -linear programming (LP), integer linear programming (ILP), or transportation problem and problem - Assignment Example on, the manager is seeking an option that has the least amount of costs, as he banks on this cost efficiency of the option selected in maximizing the returns on investment. Each of the three shirts produced by the company requires a given set of material n specified quantities or amounts. For instance, an athletic shirt requires one yard of fabric comprising of sixty percent cotton, while the rest is rayon. The manger also has to consider the available number of contracts per shirt within a given period, say weekly, and then compare this with the market price of the finished product. As such, the manager should come up with the right quantities of each shirt that would bring the company the most profits without increasing its costs of production (Lussier 2010, p.382). The criteria for the manger to use in making this decision depend on the cost of raw materials, the available resources within the reach of the company, as well as, the demand and price of the finished product. Rayon goes at  £7 and only 3000 yards of it is available to the company on a weekly basis. On the other hand, cotton goes for  £5 and the company can only lay hands on 4000 yards of the material. The available market demand of each finished product, together with the number of possible contracts on a weekly basis for each product, assists the manager in drawing up the right objective to pursue in making decisions. This is because there is a budget limit that the manger has to adhere to while making such decisions. As such, a manager can only make a right decision if it is within the budgetary provisions of the company, as well as, assure the company of maximum proceeds at the closure of business (Pinheiro-Bohl 2007, p.75). The appropriate model to undertake in making such an important decision is the resource allocation model. This model enables the manager to make a decision on the right amount of resources to allocate to a given line of product or process of production. For instance, in

Environmental Management Case Study of AkzoNobel

Environmental Management Case Study of AkzoNobel Abstract In modern business, sustainability has become of great importance when determining a companys strategy.   AkzoNobel, a company that produces chemicals, paint, paper and pulp, is well aware of this evolution and has built its business model around it. This case study aimed to analyze and review AkzoNobels environmental- and sustainability performance by exploring the companys webpage as well as other critical resources. The management of the company was analyzed, along with the tools, methods and metrics that are used to reach set objectives. Furthermore, the environmental- and sustainability policy was related to the ISO14001 requirements. It was determined that, although AkzoNobel puts in significant effort to include environmental aspects in its long term goals, it is clear that their sustainability agenda is a tool for boosting their reputation to outcompete their competitors. Table of Content Abstract 2 Table of Content 3 Introduction 4 Environmental Management 4 Executive body 5 Driving forces 5 Objectives/Comparison with Sweden 5 Environmental Policy 7 Sustainable systems 7 Tools, methods metrics 8 Eco-premium products 8 Environmental Assessment Tools 9 Safety 9 Product stewardship 9 Managing scarce resources 9 ISO14001 and AkzoNobel 9 Suppliers sustainability 11 Supplier visit 11 Vendor compliance letter 12 Key supplier management program 12 Sustainability focus areas 12 Climate change AKZO Nobel 12 Position 12 Achievements 13 The Future 13 Discussion 14 Conclusion 15 References 16 Introduction AkzoNobel is the largest global paint and coating manufacturer in the world and a leading producer of specialty chemicals, pulp and paper. It is a company of about 57,000 employees that are situated in more than 80 countries. The companys slogan is Tomorrows answer today. In other words, their strategy is to produce products that are far more advanced compared to their competition. With todays concern about environmental issues, this competitive edge comes with producing products that are deemed sustainable. Therefore, the forefront of AkzoNobels agenda, it can be said that sustainability is the key word in AkzoNobels business. The aim of this report is to review the environmental and sustainability management performance of AkzoNobel. The objectives of this report are to: Give a short description of AkzoNobels activities and to investigate their executive body; Analyze the driving forces behind the environmental management performance of the company; Define the most significant environmental aspects of AkzoNobel and relate them to Swedens Environmental Objectives; Critically analyze the environmental/sustainability policy; Identify and analyze the different environmental and sustainability management tools, methods and metrics; Provide AkzoNobels position on global warming; Describe AkzoNobels supplier and vendor policy; Examine their business strategy in relation to business opportunity; Judge their actual sustainability performance; and Comment on outside criticism of the company. Environmental Management When a company sets its goals towards sustainability, it is often necessary to completely rework the way in which the company is managed. In order to successfully improve negative social and environmental impacts, it is essential for the company to integrate these factors into every day decision making (Epstein, 2008). AkzoNobels management team has claimed to have done this by the appointing a management team that has sustainability at its utmost priority. Executive body AkzoNobel has established an executive committee (ExCo) which is composed of five members of the board of management and four leaders with functional expertise. This arrangement allows business and function to be taken equally into account while managing the company. The functions that are now representing the ExCo are: HR Organizational Development, Research, Development Innovation, Legal  and Supply Chain/Sourcing. The ExCO shares powers and responsibility for managing the company under the chairmanship of the CEO, Hans Wijer. (AkzoNobel, 2011c) AkzoNobel also has a special Sustainable Development Group. This team is composed of 13 individuals with background studies ranging from chemistry to economics and from environmental sciences to policy and management. (AkzoNobel, 2011g) Driving forces In 2008, AkzoNobel put in place a strategy with a sustainable agenda. Their specific sustainability objectives were to: Remain in the top three in the Dow Jones Sustainability Indexes; Reduce the total reportable rate of injuries to 2.0 per million working hours by 2015; and Deliver a step change in people development, in part through substantially improving the diversity in the company. (AkzoNobel, 2011e) The first point connects the companys business side and its environmental objectives together. Investors are increasingly focusing on investing in companies that set industry-wide best practices with regard to sustainability. Sustainability has become attractive to investors because it aims to increase long-term shareholder value. Sustainability leaders are increasingly expected to show superior performance and favorable risk/return profile (Dow Jones Sustainability Indexes, 2011). Consequently, a company with a sustainable agenda is considered a good investment. AkzoNobel is well aware of this as can be seen in their business principles when they state: We need to make sustainable profits if our business is to thrive (AkzoNobel, Business Principles, 2011a). The companys sustainable agenda also mentioned that they aim to reduce the reportable rate of injuries. AkzoNobel is a company that works with substances and chemicals that have high environmental and health risks. Companies fear having a reputation for a high number of injured employees or for causing environmental damage. Because AkzoNobel handles these types of substances it is consequently under the microscope. In order to avoid pressure from environmental advocacy groups such as Greenpeace or to avoid bad media, it is of strong interest to account for environmental aspects as well as the safety and health of its employees. Objectives/Comparison with Sweden According to the companys website, AkzoNobel set its targets on the following objectives towards sustainability: Improving safety performance; Increasing turnover from eco-premium products  which are both eco-efficient and attract a premium; Developing sustainable water management   at all sites; Reducing carbon emissions from cradle to gate; Adherence to and training in the companies Code of Conduct ; Strengthening the diversity of the companys workforce; and Implementing leading people development programs (AkzoNobel, 2011b). From these targets it is clear that AkzoNobel considers a well trained and ambitious workforce an important step towards sustainability. It can also be seen that there is an emphasis on the responsibility of the workforce. It is important for the company that its personnel are aware of the sustainable targets and that the employees take part in reaching them. In comparison, Swedens Environmental Objectives are the following: Reduced Climate Impact Clean Air Natural Acidification Only A Non-Toxic Environment A Protective Ozone Layer A Safe Radiation Environment Zero Eutrophication Flourishing Lakes and Streams Good-Quality Groundwater A Balanced Marine Environment, Flourishing Coastal Areas and Archipelagos Thriving Wetlands Sustainable Forests A Varied Agricultural Landscape A Magnificent Mountain Landscape A Good Built Environment A Rich Diversity of Plant and Animal Life (Government offices of Sweden, 2011) The management of AkzoNobel is in line with most of Swedens environmental objectives. They are aware of the need to reduce carbon emissions and employ sustainable water management. Furthermore, the production of eco-efficient products is a step towards a non-toxic environment. Eka Chemical is AkzoNobels daughter company that specializes in specialty chemicals, pulp and paper. Their goal is to have pulp and paper products that are made from sustainably sourced fibers (i.e. sustainable forestry), while using energy from renewable sources and discharge only of water that is cleaned after production (AkzoNobel, 2011d). Taking into concern its environmental aspects, AkzoNobel has a clear aim towards one of Swedens Environmental Objectives, which is A Good Built Environment. Environmental Policy Within a company, the principles of environmental policy are the foundation for implementing a sustainable system. Usually full support at the top management level is needed to make such a system work and to gain the attention of all employees inside the organization (ISO 14001,2010). The term Environmental Policy can be defined as: any [à ¢Ã¢â€š ¬Ã‚ ¦] action deliberately taken [à ¢Ã¢â€š ¬Ã‚ ¦] to manage human activities with a view to prevent, reduce, or mitigate harmful effects on nature and natural resources, and ensuring that man-made changes to the environment do not have harmful effects on humans. (Fairbridge Technologies, 2009). As mentioned previously, AkzoNobel really takes care of its reputation for being a sustainable company. This, again, is mentioned in their Vendor Policy. The slogan Tomorrows Answer today shows that this topic is omnipresent and AkzoNobel not only explains that à ¢Ã¢â€š ¬Ã‚ ¦sustainability is at the heart of everything we do but also that they have integrated sustainability into every area of their business. (AkzoNobel, 2011a) Sustainable systems Sustainable systems are considered ones that take into account not only environmental aspects but also social and economic ones. The main goal of an Environmental Management System is to improve all three aspects simultaneously without losing performance in one. AkzoNobel uses a sustainability framework which is part of the managing our values ideal. Former key points such as integrity, governance and compliance are now being replaced with new topics such as value creation through process excellence, innovation and talent development. More specifically, AkzoNobels sustainability framework focuses on three concepts: Improve: continue to comply with environmental and social regulations to ensure a license to operate. This point is considered to be the core element of how AkzoNobel, as a company, operates. Manage: include sustainability in all aspects of the value chain. Invent: integrate sustainable value propositions to develop a long-term strategic value. (AkzoNobel, 2009) Tools, methods metrics The global strategy of AkzoNobel is to integrate sustainability in all aspects of the value chain, to decrease their carbon footprint and to make profits from these standardized systems. It starts in the early stage of market research across sales and ends in cooperation with stakeholders. Furthermore, AkzoNobel highlights the essential aspect of long-term opportunities for their business which should be reached by these tools, methods and metrics. In the following theres a detailed list of the sustainability actions in the company. Eco-premium products AkzoNobel analyzes all of their products by quantitative or qualitative measurements every time they bring a new product on the market. In order to be deemed an eco-premium product, the product must score significantly better than a currently available product in at least one of the following categories: Toxicity Energy Efficiency Use of Natural Resources and Raw Materials Emissions Waste Land use and risk (AkzoNobel, 2009) Environmental Assessment Tools As mentioned previously, AkzoNobel quantitatively and qualitatively measures the sustainability of all products before they are considered suitable for sales. In order to conduct these assessments, the company implements the use environmental assessment tools such as life cycle analysis, environmental impacts analysis, carbon footprint analysis, eco footprint analysis and eco efficiency assessment. Environmental tools, such as the ones mentioned, are essential for turning data into environmental business strategies. Data for each of the tools is gathered from in house personnel, measurements, authorities, etc. and the conclusions from each report are used for negotiations, reducing costs, meeting permit requirements, improving efficiency, meeting customer demand and setting sustainability targets. (AkzoNobel, 2010b) Safety The establishment of a behavior-based safety program and a new Safety Leadership Program for head management is an efficient method of improving the injury rate for employees and contractors. This figure is also influenced by the integration of standards for process safety and occupational health and the, so called, Health, Safety, Environment and Security (HSES) audit process. The aim is to share good practice all over the company with corporate HSES audits to analyze progress. (AkzoNobel, 2009) Product stewardship To guarantee that AkzoNobel fulfills all legal and ethical requirements for their products (according to REACH, GHS etc.), a Global Product Stewardship and Regulatory Affairs Council has been established. Their tasks are to integrate good practice from the company into a product stewardship framework and to ensure that supplies, training and audits are optimized step by step. (AkzoNobel, 2009) Managing scarce resources AkzoNobel puts in a significant amount of effort in reducing the carbon footprint of their products and creating more value for the customer at the same time. Sourcing managers have been installed to identify focus areas for improvement and develop a carbon management plan in a dialogue with suppliers. In the future, AkzoNobel wants to learn more about customer applications to become more efficient in their environmental management. (AkzoNobel, 2009) ISO14001 and AkzoNobel The ISO 14000 family of environmental management standards can be used to implement a successful environmental management system. Specifically, ISO 14001 can be considered the most important framework for organizations around the world to reach their environmental goals and keep an effective environmental system running. The cyclical process of plan, do, act and check are similar to the ISO 9000 family (Quality Management) but focused on environmental issues. Nevertheless, it is possible to combine the two because it is voluntary for companies to implement these systems. Therefore, every organization regardless of size or sector has the ability to implement ISO 14001. Two different companies can run two completely different environmental management systems but both according to the framework in ISO 14001. The basic principle which distinguishes ISO 14001 from all other strategies is the Concept of Continual Improvement Process (CIP). This concept ensures that products are continually being monitored and improved to adhere to environmental and safety regulations. (Envirocip, 2011; Environmental Management System, 2011; ISO, 2009) ISO 14001 consists of four basic points (figure 1). They are similar to traditional generalized strategic planning and are following: Plan Do Check Act (ISO, 2009) Figure 1: ISO 14001(Jonsson, L. 2011) An explanation of each step and its connection with AkzoNobels business policy is as follows. Plan: Environmental management system implementation In the first step of the PDCA-cycle, environmental goals are defined and strategic processes are created to reach them. Ideally those targets are measurable so it also gives a framework for a control system. AkzoNobel installed sourcing managers to take care of their carbon management plan and to find new focus areas for improvement and development together with suppliers. (AkzoNobel 2009; ISO, 2009; U.S. Environmental Protection Agency, 2008) Do: Conduct life cycle assessment and manage environmental aspects During this step, the company begins the life cycle assessment process and determines how to manage environmental aspects. This step requires that documentation be taken throughout the entire assessment, control systems are run, employees are educated and emergency plans are established. One example of how AkzoNobel deals with this step in the ISO 14001 process is the implementation of the EUs REACH-Project in 2007. This program involved changing the requirements and rules for suppliers which how AkzoNobel educated their contractors to manage environmental aspects differently. (AkzoNobel ,2007a) Check: Conduct audits and evaluate environmental performance The check step in the ISO 14001 involves screening, measuring and controlling all processes and products controlled by internal audits etc. AkzoNobel is very proud of its Eco-Premium Products. They give this label to new products after positive analyses of their carbon footprint. (AkzoNobel 2009; ISO, 2009; U.S. Environmental Protection Agency, 2008). Act: Communicate and use environmental declarations and claims During this stage, companies determine whether their goals and targets within their Environmental Management System were fulfilled. In AkzoNobel, a Product Stewardship System controls and improves all activities from cradle until gate. An effective way to follow this step of the ISO-framework is to check the current situation, and go back and find a better solution in a continuous process. (AkzoNobel 2009; ISO, 2009; U.S. Environmental Protection Agency, 2008) Suppliers sustainability As mentioned previously, AkzoNobel claims to have implemented sustainability into every area of their business. As per this initiative, part of their long-term strategic goal is to build relationships and work with partners that help the company increase its sustainability. Currently, AkzoNobel requires suppliers of raw materials to adhere to certain restrictions with regards to social and environmental standards. This is laid out by the AkzoNobel Vendor Policy- a document that formulates the conditions that suppliers are legally bound to. The conditions that vendors must comply to have been broken down into four categories: supplier visits, vendor compliance letter, key management program, and sustainability focus areas. (AkzoNobel, 2011h) Supplier visit AkzoNobel regularly conducts support visits with their vendors. The purposes of these visits are to not only ensure that AkzoNobels restrictions are being met but also to provide sustainability counseling. AkzoNobels personnel give suggestions and act as environmental consultants to their suppliers. Continual regular visits ensure that the suppliers have implemented the sustainability measures and have maintained their new strategies. This process is laid out in the Vendor Relationship Management Framework. (AkzoNobel, 2011h; AkzoNobel, 2011j) Vendor compliance letter As part of the legal obligation for vendors to adhere to AkzoNobels business principles, vendors are required to sign the Vendor Compliance Letter. This document contains AkzoNobels core values as well as a framework for labor, environmental, safety, and business relations guidelines. (AkzoNobel, 2011i) Key supplier management program This program aims to work with suppliers to increase and improve Eco-premium solutions for their customers. Regular meetings are conducted where suppliers and AkzoNobel agree upon new products that will continue success not only in economic terms, but also environmental sustainability terms. (AkzoNobel, 2011h) Sustainability focus areas AkzoNobel has developed sustainability focus areas (SFA) in order to source products and services that give the company the opportunity to significantly reduce their ecological footprint. These areas include: Logistics Travel Waste Management Packaging Carbon Management Renewable Raw Materials IT Lease Cars (AkzoNobel, 2011h) Climate change AKZO Nobel Position AkzoNobels position on climate change is laid out in the document AkzoNobels Position Statement. This document states that AkzoNobel recognizes climate change as a man-made global issue of great importance and, therefore, it is necessary to mitigate CO2 emissions. In an effort to reduce their carbon footprint, AkzoNobel monitors, measures and studies all CO2 emissions related to industrial or production activities. Yearly, this data is compiled into reports that are in accordance with the Greenhouse Gas Protocol and provide an analysis of direct, indirect, and total CO2 emissions. From these reports, reduction goals and mitigation objectives are developed that the company aims to achieve by the following year. The 2015 target is to reduce carbon emissions by 10% (based on 2009 emissions) per ton of product and the 2020 target is to reduce carbon emissions by 20-25% (based on 2009 emissions). (AkzoNobel, 2008) Achievements AkzoNobel has been recognized as the global leader in sustainability in the chemicals industry. From 2006 to 2007 AkzoNobel has managed to decrease their carbon dioxide emissions from 5.2 (Million T c) to 3.3 (Million T c). From 2007 to 2008, AkzoNobel decreased their carbon dioxide emissions 1 percent per ton of production. Because AkzoNobel aims to significantly reduce their ecological footprint, they have set up a strategy to help reduce carbon-intensive processes and improve energy efficiency. Thus far, they have achieved the following: 73% of worldwide power consumption is based on zero and low carbon sources 37% of electricity in the production process is based on hydropower Considered in the top ten percent for energy efficiency in manufacturing salt-chlorine-PVC loop- on our their most energy intensive processes Use low carbon energy sources to produce their other two most energy intensive chemicals- sodium chlorate and hydrogen peroxide Trying to replace fossil fuels with renewable resources such as wood chips Assessed the eco-efficiency/carbon footprint of key products Developed several carbon efficient solutions for our customers Include energy efficiency and carbon footprint criteria in their investment decisions (AkzoNobel, 2008) Additionally, Scandinavias pulp and paper industry and Hollands base chemical production are AkzoNobels most energy intensive production plants. These two industries combined are responsible for 82% of AkzoNobels total energy use and 73% of their CO2 emissions. Recently, the pulp and paper chemicals production plant shifted 58% of its energy to hydropower. Also, the base chemicals plants were retrofitted with highly energy efficient, gas fired cogeneration units that produce steam and power. (AkzoNobel, 2007b) The Future AkzoNobel has made plans to invest in creating a system that produces steam from waste and biofuels. AkzoNobel also supports implementing a cap and trade system that encourages plants to become sustainable while punishing the unsustainable ones. Their position states that they support the development and implementation of the most energy efficient technologies worldwide. For the future, AkzoNobel is revising their 2008 Carbon Strategy to build new sustainability goals. This strategy will include plans to reduce carbon emissions in the area of manufacturing. (AkzoNobel, 2007b) Discussion After reviewing AkzoNobels business strategy, it is clear that AkzoNobel looks at high environmental/sustainability performance as a business opportunity. The company specifically aims to produce products that are economically as well as environmentally rewarding. Currently, sustainability and climate change issues are at the forefront of the global agenda. If AkzoNobel chose to disregard these issues and continued with business as usual their reputation would lack the high integrity which has been a key element to their success. Because this company has managed to significantly reduce their ecological footprint, they have received several awards, media attention, and PR. This attention does not go unrecognized as consumers are attracted to companies that hold such a high esteem. Additionally, it is well known amongst the general population that chemical production as well as pulp and paper production are two notoriously environmentally harmful industries. As the general population b ecomes increasingly involved and aware of environmental issues, AkzoNobels business and purchasing decisions begin to reflect it. It is, thus, in AkzoNobels best interest to address the companys sustainability and remain at the forefront of the global sustainability arena. If AkzoNobel chose to disregard sustainability issues it would, in the long-term, cause AkzoNobel to not be able to compete with its competitors in the market. This is in line with AkzoNobels philosophy of environmental stewardship and their understanding of customer demand as can be seen by the following AkzoNobel quotation: [Sustainable innovation process] SIP is driven by the need for better product performance but its always connected to sustainability and environmental performance. We cant bring a product to market that is less environmentally friendly than its predecessor and expect it to succeed. Equally, a new eco-product will only do well if it also offers real competitive advantage. (AkzoNobel, 2010a) Regardless of the companys attempt to address environmental/sustainability issues, AkzoNobel is nonetheless environmentally harmful. Producing chemicals, paint, paper, and pulp products is never done without an ecological price. However, AkzoNobel has made a significant effort to increase the companys environmental sustainability as much as possible. This has been done by developing strategies, goals, and plans through rigorous sustainability planning and the success of the activities have been monitored via environmental testing. Because reductions in VOCs, CO2, SO2, and NOx emissions have been proven, the business activities of the company are in correlation to the environmental planning. As mentioned, companies in modern business are aware of the importance of being green. Unfortunately some of them fail to act green even though they present themselves as such. Greenpeace has set up a campaign to stop this so called Greenwashing and ask companies to: Clean up your act, NOT your image (Greenpeace, 2011). While surfing AkzoNobels webpage, it was clear that AkzoNobel was extremely proud of all its positive achievements but hardly mentioned when it didnt succeed or have a bad performance. However did SOMO (Centre for Research on Multinational Corporations) make a report in 2009 about AkzoNobel to provide additional information that AkzoNobel itself might not have reported, focusing on the 2008 annual report. In this report it was stated that in 2008 the Political Economy Research Institute (PERI) of the University of Massachusetts had ranked AkzoNobel in the 85th place on the Toxic 100 Index. This index indicates the top 100 air polluters in the U.S. on the basis of tota l human health hazards resulting from air toxics emissions at their facilities. (Knottnerus, 2009). It was also noted that in 2008, AkzoNobel had not fulfilled requirements about the usage and purchase of renewable energy. Knuttnerus mentioned more cases that were not environmentally friendly, though many were old, some even stationed back in the 1980s. Sustainability first became a fundamental principle in AkzoNobels business in 2004. The company had a quick success and already in 2008 it was in 2nd place on the Dow Jones Sustainability Indexes. (Knottnerus, 2009). The company has succeeded a lot in a short time and its understandable that some things cant happen over a night. From our point of view AkzoNobel could think about taking part in the Chemical Leasing program coordinated by UNIDO to mitigate their environmental pollution. The idea of ChL is to establish a service-oriented business model and to guide customers away from buying and using too much chemicals for the purpose of the environment. The producer mainly sells the functions performed by the chemical and functional units are the main basis for payment. (UNIDO, 2010) Conclusion After analysis of AkzoNobels environmental/sustainability management performance, it is clear that the company has a strong sustainable agenda that is supported by all levels of management- an essential aspect for successful implementation of business strategies. To execute this plan, AkzoNobel established an Executive Committee and a special Sustainable Development group that focuses on these matters. The main driving force for the development of this strategy is to increase long-term share holder value. The company monitors and develops both their internal production as well suppliers through the use of several sustainability tools. It was determined that AkzoNobel uses this sustainability strategy as a business opportunity as well as a means of boosting their public image. Since it was difficult to find figures or statistics that showed negative environmental performance, it is unclear whether the company adheres to Greenpeaces campaign slogan Clean up your act, NOT your image. Ei ther way, it is important that modern day companies are transparent and do not forget to report their bad performance. Transparency and honesty in business is the best way to be trusted and to avoid being classified as a Greenwashing company.