Read the Waste Management Case Study.
After reviewing the case and studying Chapter 3, respond to the following four questions in an essay (introduction, body, and conclusion) format. Grading will be based on your ability to incorporate core ideas from the textbook and your ability to respond to each question in a detailed and structured manner.
Case Study Questions
Note: Minimum word count for each question is 350 to 400 words.
1. List and explain three key lessons you have learned based on the review of the Waste Management Case Study and
Chapter 3 of the textbook.
2. Conduct an external environmental analysis of this case. List and explain the general and specific factors found in the
case, and provide an example for each type.
3. An increasing interest in recycling on behalf of consumers and companies is an example of changing sociocultural and
political and legal views in relation to the general environment. Based on the details of the case, the high cost of
collecting and sorting recyclable materials means that Waste Management loses money when it recycles the items. What
can the company do to meet increased customer expectations on one hand, while still earning a profit on high cost
recycled materials?
4. To improve its public image, how should Waste Management deal with advocacy groups? If you were given the
opportunity, what two recommendations would you make to Waste Management’s management on this topic?
Waste Management
Introduction to the Case
Americans generate a quarter billion tons of trash a year, or 4.5 lb. of trash per person per day.
Thanks to nearly 9,000 curbside recycling programs, one third of that is recycled. However, that
still leaves 3 lb of trash per person, per day to be disposed. In the past, trash was incinerated,
often in local neighborhoods.
Waste Management, Inc., is the largest waste‐handling company in the world. It has 20 million
customers, 273 municipal landfills, 91 recycling facilities, and 17 waste‐to‐energy facilities.
Waste Management generates 75%of its profits from 273 landfills, which can hold 4.8 billion
tons of trash. But even as it dominates its industry, Waste Management faces serious changes in
its environment. Both corporations and consumers are reducing the amount of waste they
generate and increasing the amount of goods they recycle. Over the past few years, has been an
overall gradual change in the sociocultural, political, and legal thinking of society has occurred in
reference to waste management. These trends challenge Waste Management because the high
cost of collecting and sorting recyclable materials means that Waste Management loses money
when it recycles them. Discussed below are some of the key challenges faced by Waste
Management, Inc.
Changing External Environment
External environments are the forces and events outside a company that have the potential to
influence or affect its stability. As discussed in the textbook, organizations are influenced by two
kinds of external environments: the general environment, which consists of economic,
technological, sociocultural, political, and legal events and trends, and the specific environment,
which consists of customers, competitors, suppliers, industry regulators, and advocacy groups.
The sociocultural component of the general environment refers to the demographic
characteristics, general behavior, attitudes, and beliefs of people in a particular society.
Sociocultural changes and trends influence organizations in two important ways. First, changes
in demographic characteristics, such as the number of people with particular skills or the growth
or decline in particular population segments (marital status, age, gender, or ethnicity), affect
how companies staff their businesses. Second, sociocultural changes in behavior, attitudes, and
beliefs also affect the demand for a business’ products and services.
Subaru of America, for instance, has a zero‐landfill plant in West Lafayette, Indiana, that hasn’t
sent any waste to a landfill since 2004. None! Subaru isn’t in the only company to seek to be a
zero‐landfill company. Walmart, the largest retailer in the world, has also embraced this goal,stating, “Our vision is to reach a day where there are no dumpsters behind our stores and clubs,
and no landfills containing our throwaways.” Like leaders at Subaru and Walmart, corporate
leaders worldwide are committed to reducing the waste produced by their companies.
Recycling
Another significant change for Waste Management is that not only are customers reducing the
waste they send to its landfills, they’re also wanting what is sent to landfills to be sorted for
recycling and reuse. For instance, food waste, yard clippings, and wood—all organic materials—
account for roughly one‐third of the material sent to landfills. Likewise, demand is growing for
waste companies to manage and recycle discarded TVs, computer monitors, and other
electronic waste that leaks lead, mercury, and hazardous materials when improperly disposed
of. However, the high cost of collecting and sorting recyclable materials means that Waste
Management loses money when it recycles them.
Traditionally, recycling has been a breakeven or low profit business. The challenge for Waste
Management and CEO David Steiner is to focus on sustainability services and be highly
profitable. The question, of course, is how. The answer, he believes, is technology. Says
Steiner, “We don’t want to play just in the picking up and delivering. We want to own
conversion, too. We want to own the technology.” Consequently, Waste Management has
gone on an acquisition spree, purchasing companies with the technologies it believes can make
it highly profitable in recycling.
For instance, Waste Management purchased Garick, a Texas‐based company that can turn a ton
of food waste, which traditionally had no value, into $40 or $50 of compost and mulch. It also
invested in Harvest Power, a Massachusetts‐based firm that turns waste into high‐quality
compost which can then be burned to generate electricity at a payoff of $60 to $80 per ton.
Waste Management also bought Glacier Recycle, based in the state of Washington, which
recycles construction materials into recycled wood products and biomass fuel. Finally, Waste
Management has invested in Terrabon, another Texas‐based firm that makes so‐called “green
gasoline” from waste paper and chicken manure.
Perception, Image Issues, and Advocacy Groups
Advocacy groups are an example of a specific environment as discussed above. Advocacy groups
are groups of concerned citizens who band together to try to influence the business practices of
specific industries, businesses, and professions. For example, groups such as the Sierra Club
have been critical of Waste Management’s landfill practices.
The members of these groups generally share the same point of view on particular issues. For
example, environmental advocacy groups might try to get manufacturers to reduce smokestack
pollution emissions. Unlike the industry regulation component of the specific environment,
advocacy groups cannot force organizations to change their practices. Nevertheless, they canuse a number of techniques to try to influence companies, including public communications,
media advocacy, Web pages, blogs, and product boycotts.
For Waste Management as a company, the most common technique for responding to the
criticisms of advocacy groups is to assertively and quickly counter their claims with factual
evidence that demonstrates that the company is not acting unethically, as claimed by the
advocacy groups. Often, that just leads to more intense accusations. Waste Management,
however, has taken the unique strategy of working directly with advocacy groups to address
criticisms of how it does business. One of the largest criticisms of Waste Management is that its
273 landfills represent tens of thousands of acres of contaminated waste land.
To address that criticism, it began working with the Wildlife Habitat Council (WHC), a nonprofit
organization, which works with “with corporations and other landowners to create tailored
voluntary wildlife habitat enhancement and conservation education programs on corporate
facilities and in the communities where they operate.” The WHC works with corporations to
independently certify that their recovered lands are now suitable and sustainable for wildlife.
To achieve the WHC’s certification with waste‐filled landfills is no small task. But, in 2007, CEO
Steiner announced that Waste Management’s goal was to achieve the WHC’s certification at
100 sites amounting to over 25,000 acres by 2020. Debbie Figueras‐Cano, who runs the Wildlife
Habitat Council program at Waste Management, said, “I honestly thought at that point in time
that getting to 100 of them would be a challenge, just because it’s not a simple thing to do to
get WHC certified. There’s a lot of work that goes into getting these certifications.” The WHC
had only certified 19 sites in the previous 7 years. Furthermore, said Scott Kilkenny, chairman
of the WHC, “No single company has ever received 30 certifications in one year, and no other
company has more than 100 certified programs.”
Nonetheless, today, just 3 years after setting its goal, Waste Management has 100 WHC sites
protecting more than 25,000 acres. Of the 100 sites, 97 are former landfills. Waste
Management’s Kirby Canyon site, for example, has 600 acres for wildlife use that includes
grasslands where two threatened species, the bay checkerspot butterfly and the California red‐
legged frog, are now thriving.