Chapter- Four

Managing the Environment

Business Environment
 Define Business Environment
• Business Environment has been defined
by Bayard O. Wheeler as “the total of all
things external to firms and industries
which affect their organization and
operation”.
• According to Arthur M. Weimer, business
environment encompasses the „climate‟ or
set of conditions, economic, social,
political or institutional in which business
operations are conducted.
Concept of Business Environment

• A business firm is an open system

• It gets resources from the environment
and supplies its goods and services to the
environment. There are different levels of
environmental forces. Some are close and
internal forces whereas others are external
forces
 Cont‟d
• This system approach can be classified into
three environmental groups:
a) uncontrollable,
b) semi-controllable, and
c) controllable
• A manager must follow a change in his or
her structure, strategy and policies in
response to the changing environmental
forces
 Cont‟d
• A business firm exists in two level of
business environment
1) internal and
2) external.
• Internal business environment comprises
internal structure, system, culture, staff, and
resources of the organization.
 Cont‟d
• This is sometimes identified into the internal
functional areas such as marketing-distribution,
finance, accounting, human resources,
production-operation, and research development.
• All these business environment components are
controllable
 Cont‟d
• External business environment comprises
two layers that are:
 task business environment
closed , semi - uncontrollable
 general business environment
Broader, indirect in nature
 Cont‟d
The business environment or the external
forces acting on the business consists of a
large number of forces. These are:
Demographic
 Economic
 Geographical
 Ecological
 Social and Cultural
 Political & Legal
 Technological
Environmental Management
Systems
 The Concept
An Environmental Management
System (EMS) is a set of
processes and practices that
enable an organization to reduce
its environmental impacts and
increase its operating efficiency
 Cont‟d
• “The part of the overall management
system that includes organizational
structure, planning activities,
responsibilities, practices,
procedures, processes and
resources for developing,
implementing achieving and
reviewing the environmental policy.”
ISO14001 11
 Cont‟d
An environmental management
system brings together the people,
policies, plans, review
mechanisms, and procedures used
to manage environmental issues at
a facility or in an organization.

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So, what exactly are they?
 Developing an EMS
• Create an environmental policy
• Set objectives and targets
• Implement a program to achieve
objectives
• Monitor and measure its effectiveness
• Correct problems
• Review the system to improve it and
overall environmental performance
 Standard
A documented agreement containing
technical specifications or other precise
criteria to be used consistently as a rule,
guideline or definition of characteristics to
ensure that materials, processes products
and services are fit for their purpose
 Benefits of an EMS

• Helps maintain compliance

• Reduce operating costs
• Integrate environmental programs
into mission
• Increase employee involvement
• Reduce environmental impacts

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 Basic Elements of an EMS
• Reviewing the company's environmental
goals
• Analyzing its environmental impacts and
legal requirements
• Setting environmental objectives and
targets to reduce environmental impacts
and comply with legal requirements
 Cont‟d
• Establishing programs to meet these
objectives and targets
• Monitoring and measuring progress in
achieving the objectives
• Ensuring employees' environmental
awareness and competence
• Reviewing progress of the EMS and
making improvements
Costs and Benefits of an EMS

Potential Costs Potential Benefits

• Internal • Improved environmental
• Staff (manager) time performance
• Other employee time • Enhanced compliance
• (Note: Internal labor costs • Pollution prevention
represent the bulk of the EMS • Resource conservation
resources expended by most • New customers/markets
organizations) • Increased efficiency/reduced
• External costs
• Potential consulting assistance • Enhanced employee morale
• Outside training of personnel • Enhanced image with public,
regulators, lenders, investors
• Employee awareness of
environmental issues and
 EMAS: Eco-Management and
Audit Scheme
• currently voluntary but could become mandatory
• site-based and originally confined to industrial
activities but has been extended to any
organization that has an impact on the
environment
• makes adherence to a formal EMS and auditing
mandatory and requires that organizations make
independently verifiable public statements about
their environmental performance
 EMAS – Specific Objectives
• promote continuous improvements in
environmental performance by
establishing policies, programs and
management systems;
• perform systematic, objective, and periodic
evaluation of these elements;
• provide relevant information about these
activities to the public
 EMAS Requirements

• Adopt an environmental policy

• Conduct an environmental review
• Set environmental objectives
• Introduce an environmental program
and EMS
• Set-up an environmental auditing
program
• Prepare an environmental statement
 Management Environmental
Review Policy

Checking/ Continuous Planning

Corrective Actions Improvement
• Environmental Aspects
• Measurement and Monitoring
• EMS Nonconformance and • Compliance
Corrective Actions • Objectives and Targets
• Records • Environmental Mgmt.
• EMS Audits
Implementation Programs
• Roles and Responsibilities
• Training and Communication
• EMS Document Control
• Emergency Preparedness
and Response

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 Evaluation & Management Product Support
Auditing Tools System Standards Tools
Life Cycle
Auditing Guidelines EMS Assessment
ISO 14010 Specification ISO 14040
ISO 14011 ISO 14001 ISO 14041
ISO 14012 ISO 14042 *
Environmental Environmental
Performance EMS Guide Labelling
Evaluation ISO 14004 ISO 14020 *
Guidelines ISO 14021
ISO 14031 ISO 14024 *
Terms and Definitions
ISO 14050
Environmental aspects of product
To be used by other
standards
standards writers
Guide 64
 Commitment &
Environmental
policy

Management Planning
review

Continual
Improvement

Checking and Implementation

corrective and
action operation
 Environmental Policy
• Statement of intentions and principles in
relation to overall environmental
performance
• Provides a framework for setting and
reviewing environmental goals and
objectives
 Planning
• Identify environmental aspects of
activities, products and services
• Determine which are associated with
significant environmental impacts
• Identify and track legal and other
applicable requirements
• Establish objectives and targets
• Establish an EMS
Implementation and Operation
• Define roles and responsibilities
• Provide EMS training
• Establish internal and external
communication mechanisms
• Establish document control system
• Establish operational controls
• Integrate with or establish emergency
preparedness procedures
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Checking and Corrective Action

• Conduct periodic monitoring of

environmental performance
• Identify root causes of findings and
conduct corrective and preventive
actions
• Maintain environmental records
• Conduct periodic EMS audit
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 Management Review
• Conduct periodic senior management
review of EMS
• Revise policies as needed

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 EMS
Must:
– designate responsibility for achieving
objectives and targets at each relevant
function and level
– provide the means for fulfilling objectives and
targets
– designate a time frame within which they will
be achieved
 ISO 14001
Benefits Concerns
• international standards help • increased costs
level the playing field • create trade barriers
• reduce duplicity, conflicting • does not ensure better
requirements of different environmental performance
markets • registration issues –
• satisfy stakeholder interests inconsistent interpretation of
• lower insurance rates-due standards
diligence
• internal benefits - reduce costs
• pollution prevention, not end-
of-pipe