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Role Of Cost Benefit In Business

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Environment

To maximize profitability, economics can drive business practices and at the same time enhancing environmental protection. It is the role of business to ensure that it protects the environment in which it is running as well as making profits. It becomes imperative to ensure that as the company continues its production in its primary objective of making profit, it should also conserve the environment. Business organizations have social responsibility to take precaution of all sorts of environmental pollution and also to ensure that it protects the environmental resources. In most cases, the organizations should modify the process of production, substituting the materials of poor quality, redesign of equipment or other approaches which are innovative. It will substantially eliminate or even reduce the pollution levels entirely. Also, the business organizations should ensure energy efficiency, clean energy use, preventing the soil water pollution, and should also take part in recycling. The firms should also ensure that they comply with the enacted laws and regulations by the government which emphasize on the conservation of the environment. It should ensure that commitment to the protection of the environment is shared throughout the firm by all the employees in the enterprise and all divisions. My research paper will address how the business firms and the environment interact, by defining the cost/benefits analysis and discussing its components.

The cost/benefits analysis is imperative since it involves the remedial process through which the decisions of the business are analyzed. It entitles summing up the advantages of a particular given business-related action or situation and the subtracting the costs associated when we take that action. The cost/benefits analysis has two primary purposes. The first is the determination of whether or not the decision or investment is sound (Andrews, R. et al., 2003). The second one is that it provides a basis for comparing projects. By taking the concept of cost/benefits analysis in the right manner, it will ensure that the business firm is not greatly affected by the environment economic conditions which tend to vary from time to time. For example, during the recessionary conditions or the boom conditions.

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The cost/benefits analysis involves some components that contribute towards it being successful and giving us the right overview of the business enterprise. It gives the project general description which explains the kind of environment under which each of the analysis was done. It entitles looking at the decision life, objectives, and the assumptions. It does the listing of the alternative scenarios that considers the costs side by side with the benefits for each of the options made (Anderson, L. et al., 2000). It identifies the costs and benefits which give the exact costs and benefits that are met in each alternative scenarios. It schedules the benefits and costs which are involved in the identification of the value of each cost and benefit for each year. It begins at year 0 that acts as the start of life of the decision. It also, do the comparison of alternatives where it compares the solutions which are alternative of one another. Then, it ensures selection of the best alternative solutions that has more benefits with fewer costs associated. It finally tests the sensitivity analysis that examines the reliability and sensitivity of the obtained results in the analysis of cost/benefits.

I will discuss the business strategies that utilize techniques that save money and natural resources of the New Leaf Paper Company. The New Leaf Paper Company was founded in the year 1998 when there was a demonstration by the paper industry of their high resistance to change. The Company is aimed to be the one leading to the national source for being responsible for the environment and in the production of economically sound paper (Andrews, R. et al., 2003). It tends to supply paper taking the primary goal of environmental protection and also fulfilling its business needs of profit maximization without forgetting its role of customer satisfaction.

New Leaf Paper is a company that is very sensitive to the environment through taking some actions which have positive impacts on the environment. It does all this without sacrificing quality of the paper products hence maximizing its profits margin. Despite the company being involved in over a 1/3 harvest of worldwide timber and 40% of the United States landfill waste, it has some way of neutralizing it (Andrews, R. et al. 2003). The Company is involved in programs of planting other trees by replacing the one being harvested. The Company is involved in controlling the water pollution by first enclosing the waste water in a pond before releasing it to join the rivers and streams. The enclosed water is first treated to become harmless, and some are reused while other released to allow entry of fresh water. Also, their paper is manufactured with the environmental specifications of market-leading. The paper has the highest percentage of possible recycled and harvested fibers that are sustainable. The processing is also done without making use of the toxic chemicals. Its paper are confirmed by the Environmental of Paper Network that gives definition of environmentally superior paper.

New Leaf Paper Company conserves the energy it uses during manufacturing. It does this by producing paper which are recycled and hence limiting the whole process of production. By omitting some steps used during production, recycling tends to be simpler and involves less process which saves the energy used (Cordano, M. et al., 2000). The Company also greatly protect the environment by cumbering air pollution. These are whereby the Company does not use toxic chemicals in its process of manufacturing the papers. Also, it reduces the land pollution by replacing the timber that it harvests by coming up with programs of planting new trees hence fight away deforestation.

By protecting the environment in the ways mentioned above, the Company tends to make a healthier planet and increased profits for the firm. From 1998 to 2009, New Leaf Paper have saved 557,321,032 gallons of water, 1,040,964 million BTU of energy, 1,908,058 fully grown trees, 91,287,698 pounds of solid waste, and 164,490,636 pounds of greenhouse gases (newleafpaper.com). Through that savings, the company is sure about being the leading manufacturer of paper in the future since there is no threat that is posed towards its extinction. It ensures that the world is health. Due to its production of quality paper that are selling in the world, the company experiences increase in profits and hence maximizing its profits margin.

New Leaf Paper have a bright future due to it’s adopting the environmentally friendly processes. It is because they are the environmental leaders playing the role of innovators and educators. The Company usually teaches the importance of environmentally responsible choices of paper. They educate its marketplace about the importance of changing our today’s behavior so that we can manifest a paper industry that is sustainable in the future (Delmas, M. et al., 2004). The Company leads by example about its product innovation. The Companies foundation underlies in the commitment to sustain the environment through quality paper production to be the leading Company in the paper industry.

In conclusion, we have seen how the business firms and the environment interact, by defining the cost/benefits analysis and discussing its components. Business firms should ensure that they interact with the environment in a friendly manner so that it can avoid pollution. The companies should be involved in this through avoiding energy, air pollution, land pollution, and water pollution. Being the primary objective of every business to maximize its profit, it should not forget to protect the environment in which it is operating on. It tends to give the firm a clear future of it’s running smoothly. Also, the companies should learn how they can give quality products to its customers. By providing quality products, it will be able to establish an extensive customer base which will translate into increased profits by the business. All this is evident from my Company of focus which is New Leaf Paper. This company is involved in the intensive process of cutting down of trees. But we have found that it usually replaces the harvested trees. Also, through the process of manufacturing paper the company does not use toxic chemicals. It produces paper which have a high percentage of recycling with the motive of saving energy. All those are done in the primary role of protecting its environment. New Leaf Paper make quality papers that are demanded worldwide hence establishing broad customer base. It ensures the company makes more profit.

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