California drought
Abstract
This proposal will touch on the subject of the California drought, how long is has been in effect, how long scientists believe it will remain in effect, and the impact that it has had on our company. With landscaping businesses struggling, water restrictions implemented, and fines for overuse of water, we will look at where our company stands in the current environment and how we can evolve as a company to push through these issues. The recommended changes we must make to our company such as diversifying, hiring new workers, and changing the company logo and slogan will be discussed, along with the suggested timeline for when these changes should be implemented and finished. Following these changes, the forecasted problems associated with each change such as overextension, reduced innovation, training, taxes, and rebranding expenses will be discussed in length. The consequences the company may experience for not accepting this proposal includes several components such as a company shutdown, loss of investors, and major fines will be touched upon. Finally, any ethical issues involving future actions and decisions concerning water use and reduction, hiring and firing workers, whether or not the chosen direction of the company is in our best interest, and the possibility of continuing the company or shutting down will be discussed.
Introduction
California Governor Jerry Brown is pushing to pass permanent water conservation measures in response to the five-year long drought that has plagued the state. With recent winter rains replenishing reservoirs and easing dry conditions in parts of Northern California, state officials are calling for an end to water restrictions. Although Californians have reduced their water use by 23.9 percent, 90 percent of the state remains in drought despite the increase in rains and mandated water conservation. Scientists are unable to come to a conclusion as to how long this drought will last. An article appeared on NationalGeographic.com titled “Could California’s Drought Last 200 Years?” detailing the history of California’s climate and how this drought is currently impacting the state. In his article, author Thomas M. Kostigen quotes B. Lynn Ingram, a paleoclimatologist at the University of California at Berkeley; “…this [five-year drought we have been experiencing] may be just the beginning, thinks that California needs to brace itself for a megadrought—one that could last for 200 years or more.” Meanwhile in an article published on cnbc.com titled “Engineer: California drought will end, but it’s not the last” author Robert Ferris writes a similar article about the history of California’s climate. Don't use plagiarised sources.Get your custom essay just from $11/page
Problem
While we may not know how long this drought will last, one thing is for certain; the five-year drought has placed a heavy burden on landscape companies that sell turf products, such as ourselves. With low availability of water, water restrictions have been put into effect, fining any property that exceeds the allowed amount. In an effort to conserve water and reduce costs, homeowners and commercial properties are replacing their turf with water friendly landscapes, and turf related product sales have decreased as a result. The government has currently established a turf buy-back program that offers monetary incentives for businesses and homeowners to replace their turf with these more drought resistant landscapes. Due to this program, our company has begun to experience a loss in revenue and customer base. If Governor Brown’s proposal to make the water restrictions permanent passes, we will continue to watch revenue drop until we are no longer profitable and may eventually experience a full company shut down.
Problem for Green Scene
Looking over our previous two quarterly reports, our sales have been lower than projected. These two quarters show that our profits are steadily decreasing and this trend is projected to continue until we eventually become unprofitable. This water restriction mandate will accelerate the trend of declining sales and revenue we have been experiencing, as more and more homeowners and commercial properties are moving away from turf products and services.
Water restrictions are what have had the greatest negative impact upon our company. Reducing water usage by 30 percent and expecting there to be no repercussions is impossible. Our sod fields, no longer getting the water they once had, are beginning to stress, wither, and die. With the ongoing effort to conserve water, sales have diminished and we are unable to move our inventory. If we reinstate our previous watering schedules, our turf will remain in top condition; however, we will be charged a premium fee per gallon used and will receive extensive fines every month for not controlling our water usage.
Proposal
Upon thorough discussion of Green Scene’s advancement options with the senior manager, business analysts, and investors of the company, the following recommendations for the future can be offered based on the current environmental conditions affecting the state:
A complete overhaul of the company will be the most practical and lucrative plan in order to continue building the revenue and credibility of Green Scene. This process would ultimately result in a shift in focus from turf-based products to a more diverse landscape company that offers landscape installation and maintenance in addition to water conservation products. Diversifying the products and services of Green Scene will result in our ability to satisfy a larger demographic of customers which will enable us to maximize our assets. In regard to the current drought situation, Green Scene, operating as an environmentally friendly corporation, will definitely strive to assist in minimizing the damaging effects of the dry environment. To satisfy the needs of consumers who wish to cut back on their water usage, Green Scene can offer consumers the option to keep their turf, but move to more water friendly distribution systems in order to conserve water. Alternatively, consumers could keep the turf in place but replace current plants with more drought resistant species. Another highly recommended approach for Green Scene is to collaborate with other companies that are eco-friendly and water-smart to actively participate in the water conservation movement.
Overhauling the company will prove to be the most successful plan in moving towards a more lucrative business. This change will not be swift or simple. The company must pay attention to the current work force and products in order to maintain credibility with long-term customers. That being said, Green Scene will continue to retain current larger turf contracts with soccer and baseball fields, parks, and other recreational areas as supplemental income for the initial loss of commercial and homeowner contracts. The risk of essentially starting a new company may come at a price, but the carefully calculated predictions and changes will prove to yield a more successful and prosperous Green Scene.
Timeline
It will take time and energy for us to reestablish ourselves in thisvd become a well-known brand name once again. While our preferred transitional time is one year, with unknown costs and problems we may face, the forecasted time will be approximately two years. Below is a two-year plan that implements what changes should be made on a per year basis. Focusing on these specific goals will allow us to transition the company efficiently.
Changes to Green Scene-First Year
With the first year, there will be five substantial changes occurring throughout the company. These changes are what we should consider to be the backbone of our future landscaping business and without them, the possibility of this company failing is immense.
Diversifying Green Scene
To combat the effects the California drought has had upon our business, we will need to diversify Green Scene’s products and services. In an article titled “Dry Gardening”, written by Franklin Hoke in the journal Environment, various gardening techniques are discussed, such as xeriscaping, that are being used in the dry western states. According to Hoke, xeriscaping involves; “choosing drought-resistant plants, including alternative ground covers to thirsty turf grasses; using more efficient watering systems like drip irrigation; grouping plants with similar needs; preparing soil with lots of organic material to hold moisture; and mulching at least four inches deep to reduce water loss through evaporation (21).” The incorporation of xeriscaping will be the main focus of Green Scene’s diversification.
Reduction of Turf Fields
With the state mandate for water reduction impacting businesses and homeowners statewide, we anticipate the need for turf to decrease over the next two years. Our proposal is recommending the reduction of our turf fields by 25 percent within the next six months, with the eventual reduction increased to 40 percent over two years. We will continue to maintain a sufficient amount of acreage to meet the needs of our contract clients. As turf is still our main source of income, it would be in our best interest to not reduce too much turf too quickly.
Modification of Vehicles
The vehicles we currently have are specific to the delivery of sod. They can be modified for the movement of plant material such as palm trees, trees or canned plants. Along with modifications, we may also need to purchase or lease vehicles that are specific to the landscape construction industry such as irrigation trucks, forklifts, and dump trucks.
Hiring New Workers
In the early stages of Green Scene’s diversification, priority must be given to the company’s current and future employees. Along with the company’s expansion of more services and products comes more positions and opportunities for employment. Current employees must be evaluated for suitability in each department, and eligible new hires must be sought to ensure the success of the new Green Scene company.
Water Footprint
To help prevent exceeding water restrictions, we will need to establish a water footprint for our current and projected future water needs. A water footprint is a calculation of the total volume of freshwater that is used to produce the goods and services produced by the business. According to Waterfootprint.org, “In response to growing concerns about water scarcity and unchecked water consumption, corporate water foot printing has emerged as a useful tool for assessing water use and pollution…in addition to determining a company’s basic water use, it can provide a standard for comparing and benchmarking water use with industry peers.”
Changes to Company-Second Year
After the first year we are forecasting to have successfully established ourselves in the new market. Making the above five changes first allow the company to build off of the newly created backbone and work on other issues that were not in our one-year action plan.
Changing the Company Slogan
The company logo will be familiar, yet with a slight change to encompass the direction the company is moving towards. The roll of sod will remain but we will incorporate the new aspects of our company such as a plant, shovel, and drops of water. Our slogan, once focused towards turf will no longer read “Grass so green, from space it will be seen,” but instead, “Doing our part, to keep your landscape water smart.” This slogan alerts people that we have expanded our company and services to help people meet the needs of the state water reduction mandates.
Installation of Nursery and Greenhouse
We do not need to buy land to start our plant nursery due to the reductions of our turf fields; we can take portions of those lands and designate them as new growing areas for our plant inventory. For the future we may start growing our own plant material from seedlings, which would necessitate the need for a greenhouse.
Problem with Changes
As with any change to an existing business, there are always some anticipated and unexpected challenges we will face. The problems we will be faced with these new changes are as follows:
Diversifying Green Scene
Overextension
As we diversify Green Scene, there is a possibility of overextending our current and available resources. In order to run the company stringently, each new division will be allocated enough resources to maintain its infrastructure and operations. If we expand in too many directions at once, there is a possibility both the old and new divisions of the company will receive insufficient attention and resources to expand.
Lack of Expertise
Along with the possibility of insufficient attention and resources, there is the employing of inexperienced managers overseeing workers. A foreman or manager who has experience in one field (turf production) may be placed into a position where they do not understand the fundamentals of the task at hand. Some aspects of landscaping may require entirely different skills and knowledge. Moving an experienced turf-growing foreman to oversee a nursery requires a new set of skills.
Reduced Innovation
Green Scene is one of the top ranked turf producing companies in the state because we focus solely on turf. If we diversify the company too widely, there is a chance the company’s core value of top grade products and services could falter, and our ability to forecast and respond quickly to trends will suffer. Moving to other aspects of landscape may cause our contract customers to question whether or not we will be able to continue providing them with top grade turf. We will need to ensure them that while we are diversifying our company, our products will continue to be top grade.
Reduction of Turf Fields
By allowing sections of our turf fields to go fallow, there is a possibility of causing dust pollution. There will no longer be water to keep the grass alive, thereby reducing the turf to dust. One of the problems associated with letting turf go fallow, is staying in compliance with dust control regulations set forth by South Coast Air Quality Management District or AQMD. According to aqmd.gov, “SCAQMD was created by the state legislature to facilitate compliance with the federal Clean Air Act and to implement the state air quality program… develop[ing] regulations designed to achieve these public health standards by reducing emissions from business and industry.” If businesses surpass the limits of pollution standards as dictated by SCAQMD, they will be heavily fined. We will need to have at least three of our employees certified in dust control management to prevent our company from breaking these strict regulations. As we proceed with this company change, we have introduced more regulations to follow along with the water mandate.
Hiring New Workers
Training
In his book “Training in Organisations: A Cost-Benefit Analysis”, John Talbot states; “When considering any training activity, attention must be paid to certain factors if a decision is to be made that will result in the most profitable outcome. [Two of] these factors are: the priorities for training, and the choice of training method (137).” If we are disorganized in addressing training take precedence, our labor force will be inefficient, problems can arise, leading to our new brand image having negative associations. If our brand image has a bad reputation, the possibility of brand loyalty, similar to that of the old company, will be nonexistent.
Taxes and Benefits
The process of hiring an employee will involve the employer’s portion of Social Security contributions and withholding federal, state and local taxes. This will add costs to our business, especially when hiring large numbers of people. According to quickbooks.intuit.com, “These provisions [created by the Affordable Care Act] require businesses with more than 50 employees to offer health coverage to all workers or be forced to make an ESR payment. ESR payments will be required for any month that insurance is not provided. The ESR payment amount is $2,000 per uninsured employee, not counting the first 30 full-time employees.” Along with this requirement, we will also need to offer benefits, such as paid time off, and access to a retirement plan.
Changing the Company Logo
Brand Recognition
Green Scene has spent the last ten years building a positive image under the existing logo. Changing the logo may cause problems with our current customers who recognize our business by the logo. As we begin to establish ourselves into this new market, we will need to provide our on-going clients the comfort and familiarity they have counted on all the while moving forward. A new logo provides the means of introducing ourselves into the landscape construction market, but may take time depending on our marketing strategy.
Design and Planning
In addition to retaining and establishing brand recognition, there are costs associated with design of the new logo. We will need to conduct marketing research strategies such as focus groups to discover which logos and slogans will appeal to the commercial consumer, the homeowners, and our contract clients. This may include research and survey costs, as well as costs paid to designers for creating several design costs for the studies.
Re-Branding Expenses
After establishing the new logo, we will need to re-brand all promotional and business materials. Our website and social media pages will need to be updated along with business cards, invoices, and business signs. Vehicles will need to be repainted, new uniforms will need to be ordered with colors matching the new logo. Advertisements we currently have in print and on television will need to be updated as well as any promotional items such as posters, pens, bags, and apparel.
Installation of Nursery and Greenhouse
Temperature Management
The installation of a greenhouse for growing plant material comes with its own set of challenges. Greenhouses are designed to hold in warmth during cold seasons, however, during warm weather a greenhouse can become a heat trap. If temperatures exceed healthy levels, plants can be cooked to death. Similarly, during cold seasons if temperatures drop too low, plants can freeze to death. This delicate balance of temperature management requires heating and ventilating systems, which will be the most expensive operating costs of a greenhouse.
Pests and Diseases
Turf species and plant species differ widely in both their susceptibility to diseases and the symptoms they show; some showing no symptoms and other species becoming completely unmarketable. For example, molds impact turf differently from plants. Molds are a water-born problem and can cause devastating damage to turf. After watering, if mold is present, it can attach to and be spread by equipment such as mowers over large areas. With plants, molds tend to impact individual plants and the soil that these plants are in. While plant molds are easily controlled they can be hard to spot.
Modification of Vehicles
For the modification of our vehicles, we will need to retrofit frames that will allow us to transport plants safely and effectively. New or used vehicles may need to be purchased for moving irrigation parts and personnel. We will need to decide which of our existing vehicles will be sold off or scrapped in order to meet the demands of the new business. The company will still need to maintain a sufficient turf fleet, albeit reduced, to continue meeting the needs of our turf contracts.
Budget
Although it appears our incurred costs will be higher than our revenue, we anticipate this will not be the case. While we will have a loss with homeowners not buying turf, we will still retain contract clients along with a savings from our lower water bills. These costs and savings will balance each other out resulting in a break-even. The budget allocation will be centered more towards hiring employees and installing a nursery. We forecast that both of these will take up to 65 percent of the total budget. The water footprint, modification of vehicles, and changing the company logo and slogan are forecast to take up the rest of the budget. We expect to incur some cost changes as we diversify the company, be it from hiring new workers, adding new inventory, or unexpected problems but transitioning from one type landscape company to another should not cause significant losses of revenue.
Consequences of Not Accepting Proposal
The investors of Green Scene have remained informed throughout the decision making process and have agreed that a redesign of the company is the most effective plan of action. Avoidance of the redesign would be highly impractical on Green Scene’s part. Investors will identify a lack of development in response to the current environmental status and potentially opt out of future investments with Green Scene. If Green Scene does not evolve as a company, profits will continue to plummet at a disastrous rate, foreshadowing the inevitable shutdown of the corporation.
Ethics
The California drought is a serious issue that affects businesses and homeowners alike. The drought problems we currently face in California will continue with the probability of getting worse over time. As a family based company, Green Scene must do its part in providing for its employees, the families it serves, future generations and our investors. Water is not an abundant or limitless resource. While people and businesses have a right to water, it does not mean it should be recklessly wasted. As a landscape company trying to survive through this drought, we have few choices open to us regarding the direction our company needs to go. Can we cut costs by firing our workers instead of reducing our water? Yes, but is it ethically and morally wrong? Unquestionably. As a company we have an obligation to provide work for our employees for as long as we can. The costs saved from firing workers would surely offset the costs associated with our water usage, but how long would it last? California politicians could move to pass stricter water regulations in the years to come, which would lead to more cutbacks. As we look to the future, the possibility of continuing as a company in this way is possible, but would there even be a workforce after additional cutbacks? If word were to get out that instead of doing the right thing and cutting our water usage down, we were firing employees, the company’s reputation could be tarnished.
After analyzing possible trends, and paths we can take this company, following the recommendation to diversify as stated in the proposal is in this company’s best interest. As stated previously, diversifying will take time and money, both of which we currently have. If we do not act soon, the company will stay afloat for a while longer, but will inevitably sink. Following this recommendation to diversify will allow the company to do its part and still make money when it comes to reducing its water usage. This drought is not going to disappear overnight, it will continue, and eventually get worse. The world is changing, whether it is through politics or the environment, and businesses that cannot adapt to these changing conditions will ultimately fail.
Works Cited
Ferris, Robert. “California Drought Will End—but It’s Not the Last.” CNBC. Getty Images, 29 Sept. 2015. Web. 01 Sept. 2016.
Hoke, Franklin. “Dry Gardening.” Environment, vol. 33, no. 6, July 1991, pp. 21. EBSCOhost.
Kostigen, Thomas M. “Could California’s Drought Last 200 Years?” National Geographic. National Geographic Society, 13 Feb. 2014. Web. 20 Aug. 2016.
“Regulations.” South Coast Air Quality Management District. N.p., 2014. Web. 24 Aug. 2016.
Talbot, J. Training in Organisations: A Cost-benefit Analysis. Farnham [England] ; Burlington, Vt.: Gower, 2011.
“Water Footprint,” Water Footprint Network, “Water Footprint, 2008.”
Weiss, Lori. “Am I Required to Provide Health Insurance to My Employees?” QuickBooks. Intuit, 17 July 2014. Web. 20 Aug. 2016.