Case Study

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.