Assignment - Balancing Act - Case
Managing and leading effective organisation
You are speaking for the executive board of a small oil company, Future Fuel, in Colorado. The CEO and founder, Alica Hardy, is very avid supporter of sustainability and innovation. He insists that money invested now will pay off in big dividends down the road. Everyone involved has a legitimate concern for the environment and share and support Hardy in her personal and business philosophy. Everyone is also very aware of the momentum of the growing "green" movement. The R&D budget for seeking new renewable and viable alternative sources of energy has traditionally been between 22-24 % of your operations revenue. The board has decided to increase that budget line item to 35 % for the next fiscal year on the strong recommendation of Hardy.
Additionally, it has been decide to equip the headquarters and other 8 sites in the west with active solar energy system and wind power generators. This is a publically held company and the stock has been less than stellar in its last 3 quarter's performance. The third quarter just ended, and the quarterly shareholders meeting is about to be held.
The earnings after operating costs are modest. You, as the board representative, are announcing your numbers and the plans to increase the R&D budget and installation of renewable energy systems.
Discuss the above scenario as the executive board of Future Fuel and in 5-pages answer these questions. This is not a speech, nor a narrative, nor personal opinion. You are presenting the board's position to the shareholders.
1. What are you actually aiming to achieve? Why?
2. What is your organization's policy/position on corporate social responsibility and ethics-your corporate philosophy?
3. What does the company owe to its shareholders? Why?
4. What return on investment does your activity/enterprise require? Is this a strategic driver in itself, or simply the means by which you maintain your activities in support of your organization's goal(s) from question 1?
5. How do you balance the needs of the shareholders and the need to innovate?
Expectations: Use a minimum of 5 references