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Students Zone - Answers to Case Study Questions
CASE STUDY 11.2: A DIVERSE APPROACH TO CURBING GREENHOUSE GASES
1. Will business change its view about pollution without the Kyoto Agreement?
The case study notes that even before the Kyoto Agreement was in place businesses began to adapt to a post Kyoto world. Often companies that are located in countries that have signed up to the Kyoto Agreement, will wish to deal with other “green” businesses. Even if this is not their own strategic view their shareholders may demand it of them. Moreover, knowing that some form of environmental agreement is likely to be in place in the future requires a longer term strategy to prepare companies for that date. They are unlikely to wait until an agreement is in place before addressing their green image.
As the case study notes getting ready to do something because of environmental legislation is different from actually doing something. However, it is institutional investors and shareholders that may force companies to behave ethically even before environmental agreements come into operation.
2. Why might businesses in countries that have signed up to the Kyoto Agreement consider that they are at a competitive disadvantage?
Changing production processes because of environmental legislation can be costly and this can put those organisations that trade within a country that has signed up to the Kyoto Agreement at a competitive disadvantage. The case study notes that Japan considers it will face considerably more abatement costs than its US and European counterparts, and this will be much higher than other countries who may do very little in terms of environmental control. However, this might be a short-sighted view in that companies who do change their environmental production processes earlier can sell their expertise to other companies. Furthermore EU companies know that many countries with which they trade have signed up to the Kyoto Agreement and they have built their operating strategies around this. US companies on the other hand do not know when, or if, the US will sign up to the Kyoto Agreement and this means that may be at a disadvantage strategically.
Other chapter answers >>
- Case Study 1.2 Karstadt Undertakes Investment for Survival
- Case study 1.3 Europe's International Trading Future
- Case Study 2.1 Porter's Diamond
- Case Study 2.2 The Coffee Market
- Case Study 3.1 Sugar Industry
- Case Study 3.2 FSC Dispute
- Case Study 3.3 Beef Hormones
- Case Study 4.1 SEM Effects of Business
- Case Study 4.2 Africa's Economic Integration
- Case study 5.1 The Effect of Exchange Rates on Businesses – The Us Dollar
- Case Study 5 2 Real Exchange Rates in the Euro-Zone
- Case Study 6.1 SEC to Rethink Post-Enron Rules
- Case Study 6.2 A Controversial New European Directive
- Case Study 8.1 Cross-Border Banking Bids in Italy
- Case Study 8.2 The Future of the London Stock Exchange (LSE)
- Case Study 9.1 Back to Bread and Butter for Europe
- Case Study 9.2 Poductivity in European and International Labour Markets
- Case Study 11.1 Poorer EU Areas Lose Funding
- Case Study 12.1 European and US Entrepreneurship Activity
- Case Study 12.2 EU Enlargement and the SME Sect
