Cook Composites and Polymers Co Case Solution

2. Problem Definition

Cook Composites and Polymers Co, (CCP) is the manufacturer of gel coats. These Gel Coats are customized as per the demand of customer with quite tight specifications. CCP strongly believes on the maintenance of a high quality. To accomplish and retain a high quality, CCP has strong control system, where even a single gel is checked and improved numerous times until it achieves perfection. As a result of such strong inspection and maintenance of their quality standards, quality assurance serves as their competitive advantage for CCP.

Within the production of the gel coats, styrene is used to rinse mixing vessel between the production batches. However, Styrene has been nominated as a hazardous waste; if a higher level of styrene is used the quality of gel increases; if the low level of styrene is used, it compromises quality. This compromise can have grave consequences on the brand image. CCP has to come up with a solution to not only reduce or dispose of the styrene but, also maintain the quality. In order to handle this situation CCP came up with various options.

CCP has the option of carrying out the business as they are doing, and sending the rinse styrene to the cement kiln. The second option is to sell the styrene to the waste exchange and third option is to develop a new product. Since, during the Kansas City Regional BPS initiative, CCP realized that it might be able to find a business partner that can use the product having foundation of styrene This idea though, quite attractive, also has many oppositions within the organization. If CCP pursue this option, there is a general sense that the organization is deviating from its competitive advantage of making high value products. Addition to this, this option will also cause them huge initial investments in term of product development and R&D.  However, these options should be analyzed after setting a decisive decision making criteria. This decision making criterion sets the reason for the option. As, decision making criteria is set on bases of business vision, mission, goals and philosophy.

3. Decision Criteria

Maintenance of quality is engrained within the company’s value and such quality standards also serve as a competitive advantage for the organization. As a result, company cannot give up on quality. Styrene is an essential product in maintaining quality. Addition to this, there is no other choice for the organization, but to use styrene. So, company will have to figure out an option to handle styrene.

These businesses around the world have an objective of making profits. The businesses usually exist because they make profits, serve its employees and add value to the society. These profits and value addition can be achieved through different means; for instance, by providing the superior products as in the case of CCP. Further, organizations try to maximize profits by achieving superior supply chain or technology to produce products at lower costs, like Wal-Mart; while, other organizations achieve profits through development of new products and create new categories, in this way they can charge high premiums. In other words, the businesses achieve different means to maximize their profits. As a result of this one can say that no matter what business does, the primary objective is to maximize profits. Consequently, in the evaluation of the alternatives, one would consider profit making as primary criteria.

Despite all these facts, the organizations today are quite aware of the environmental laws and regulations. Organizations have shifted from a product focused approach to consumer focused approach. Ethics and reputation of those organizations depend on their effort and seriousness about the corporate social responsibility (CSR). In order to become socially responsible organizations, not only they have to abide by the environmental laws; but, they also take many initiatives to prove themselves a corporation considering their social responsibility.

These CSR steps are then marketed to make consumer aware of those efforts to translate a positive image in the minds of the consumers. As part of CSR and following strict regulations, these organizations are committed to develop products that are not hazardous for the users and environment. One of the primary concerns for CCP is also an environmental concern. They proved themselves to be an ethical organization as they took part in the disposal of waste. Moreover, even if they are not taking part in the CSR activities, the NGOs and laws will not allow an increase in usage of styrene, which has been nominated as environmental hazardous. As per the importance of these environmental factors, one would be considering it to be one of the most important factors in decision making criteria.

In the case of CCP, they have strict quality control systems and strong belief on providing products that are environmental friendly. However, they have to use styrene to maintain their quality, and find a way to use styrene, a hazardous waste. This decision to handle Styrene is also related with organization’s strong belief on social responsibility. No matter what decision CCP takes, they have to consider factors like profit making, brand image, and successful disposal of styrene.

4. Analysis of Alternatives

Businesses exist to make profits, but these profits should not be at the cost of injuries to consumers and environment. One of the major problems faced by CCP is handling of styrene. In doing so, CCP came up with three different options to handle this situation.

i. First Option

The first option for CCP is to carry on the business as they are doing i.e. to send styrene to the cement Kiln. This is an attractive option for the CCP; as, they are already doing it and it is helping business to run smooth. However, the problem with this option is the rise in the emission of Carbon dioxide. On the basis of above criteria, if CCP continue these practices, they will lose the opportunity of making some money, which they can do by selling their waste and earning profit. It is just like they are being stagnant with and not capitalizing upon the window of opportunity.

One of the most interesting options they are forgoing is that they can make a new product out of styrene, concrete coating. This will cause them to have a new product category, causing them to be a category leader. As a result of that, they can charge premium for their products. In this way, they will have the opportunity of making profit for the organization. As part of CSR, CCP took the responsibility to dump the old styrene drums, though they were not responsible, but at the end of the project, EPA demanded $, 500,000 for its overhead, administrative and investigation cost. CCP is quite concerned about the environment, if the styrene is used in the cement kiln; they are causing an accelerated increase in the carbon dioxide emission. This can cause them to be forced to use lower level of styrene or choose another option to dispose of it.