RiskAssessment of Ford: A Focus on the Effectiveness of theEnvironmental Hazards Policy Information System and Framework
Inthe current world, companies are operating in an environment filledwith a myriad of challenges. Some of these issues include increasedglobalization that has resulted in competition, the growth ofregulations that have increased the cost of operation, and the growthof market uncertainties that have compelled organizations to developinformed strategies. On the overall, these challenges call uponcompanies to adopt informed risk management methodologies to survivethe market and realize profits.
Organizationsare presented with different forms of risks to consider. Theenvironmental issue is perhaps one of the common areas of riskmanagement focus. Indeed, at the backdrop of the quest forsustainable development, the society is increasingly acknowledgingthe environmental management as the pillar of sustainabledevelopment. In a bid to conserve the environment, the society hasplaced many expectations on the companies to lead the way inpreserving the environment through ethics and social responsibilitypractices (Frondel,Horbach, & Rennings, 2014).Businesses that do not comply face penalties, which can include heavyfining or license revocation. Therefore, it is virtually mandatoryfor all enterprises to accede to environmental conservationrequirements. Several guidelines have been developed to guidecompanies in the maintenance process. The NIST Special Publication800-30 on Identifying and Evaluating Environmental Aspects is perhapsone of the most comprehensive frameworks for guiding companies tomanage environmental risks (EnvironmentalProtection Agency, 2016). It is intriguing how firms are faring withthe conservation process.
Deemedas the second largest automaker in America, Ford Motor Company (Ford)is a giant in the vehicle-manufacturing sector. Its head offices arein Dearborn, Michigan. The founder, Henry Ford, started the companyin 1903 as a factory for the assembling of motor vehicles. At thetime, gasoline automobiles were very expensive. To make them moreaffordable, the production stage had to be refined. The organizationwas among the first companies to initiate the assembly line conceptin production. They were able to begin mass production of vehicles.Ford quickly grew from assembling car parts to the actual productionof the motor mobiles in the same facility. Their production ofgasoline vehicles gained an edging competitive that they were able tobranch out globally. The century that Ford has been operating, theymanaged to own significant shares in several vehicle-manufacturingcompanies. Currently, it holds a high rank in both the American andEuropean markets. They have over 90 plants with more than 200, 000employees (Ford Motor Company, 2015). This paper examines the Ford’senvironmental risk management system regarding the requirements ofNIST Special Publication 800-30.
Thescope of this risk analysis is the entirety of the products that Fordmanufactures. The company is evaluated based on all of its processesto the primary units that may be hazardous for its future growth. Thedimensions of the hazard review cover Ford’s production of luxurycars, commercial vehicles and even cars used in motor racing. Theprimary emphasis is on the impact that the machines they make have onthe environment. The research information for this project isobtained from the internet. The crucial websites used in the reportinclude annual reports from the company, websites of variousenvironmental agencies, as well as peer, reviewed articles, andjournals.
UnderstandingStandards on Identifying and Evaluating Environmental Practices
Inevaluating Ford’s environmental risks management framework, it isfirst important to examine the NIST framework. The rules demand firmskeep records, establish, and implement procedures for its operations.Companies should check and ensure that their activities, services,and products are within the established scope environmentalmanagement guidelines — the aspects that firms can control andinfluence while considering new or planned developments. Secondly,companies should scrutinize and evaluate different aspects todetermine those that might have significant implications on theenvironment. Besides, businesses are required to keep and updatetheir information regarding environmental aspects of their productsand services. Additionally, institutions are required to determineand take measures against various specified environmental issues toensure they are controlled. Nevertheless, companies are required toupdate all identified elements and evaluate the related significanceand define their priorities and objectives. Certainly, companies willneed to make tough choices at each step. For instance, whendetermining various environmental aspects, companies must choose thelevel of details to include in their database, followed by selectingissues that are more important. Companies are presented with optionsto choose elements that suit to be embedded in their systems (SCCM,2017).
Practically,companies may decide to declare environmental aspects that areprotected by the laws as the top priority. However, due to theexistence of legal requirements covering different areas, chances ofincreased number of significant environmental aspects are high,making it difficult to get some processes correct. A clear focustoward this program can be achieved only if the potential and actualenvironmental issues primarily determine the importance of theselected environmental aspects (Simchi-Levi,Schmidt, Wei, Zhang, Combs, Ge, & Zhang, 2015).Once all environmental issues that are termed crucial have beenidentified, targets and objectives can be formulated. Firms can nowbe able to set their priorities based on the environmental impacts.Nevertheless, if the existing laws and regulations are considered inevaluating the practices, the management system can be developed toaddress all relevant environmental aspects based on the businesses’legal requirements (SCCM,2017).
Basedon the outcomes, it is evident that some differences can occur basedon the embraced management systems. Ideally, the environmentalaspects that have minor effects on the environment (less significant)should have lower priority in firms’ management systems (Hawkins,Singh, Majeau‐Bettez& Strømman, 2013).However, this does not imply that low-priority aspects should becompletely ignored or overlooked. For instance, waste paper fromoffices of institutions that deal with the production of chemicalscan be categorized as an environmental aspect. Besides, for achemical company, the impacts related to the use of paper andseparating various waste streams can be considered less significant(SCCM,2017Nakamura,Takahashi & Vertinsky, 2014).
Theprocess of identifying environmental aspects involves making aninventory of different environmental elements.Thebusinesses accomplish this stage by laying down various environmentalthemes that are covered under their environmental management system.This process is done at regular intervals (for example, after everysix months, annually or after every two years). However, thebusinesses need to establish whether the priorities and inventoriesare still up to date.
EnvironmentalAspects and Environmental Impacts
Accordingto SCCM(2017),environmental aspects of companies determine the environmentalimplications. Environmental impacts include the greenhouse effectsand the acidification of soil and water, which are the consequencesof various environmental aspects of the public (people), animals, andplants. It is also worth noting that firms face different challengesin accurately evaluating and determining their environmental impacts.Therefore, the role of the environmental management system is tocurtail and control various aspects of the environment to preventdifferent environmental impacts.
Levelof Detail of the Environmental Aspects Inventory
Businessesmust determine different aspects of their operations services andproducts within their environmental management systems (SCCM,2017).Only those elements that they can control or influence are recordedin the inventory. The typical process includes development anddesign, production processes, transportation and packaging,environmental procedures and performance of suppliers andcontractors, waste processing, distribution and extraction of naturalresources and raw materials and distribution lifespan and use ofproducts.
Someof the valuable information that should be considered by businesseswhen formulating their inventories is environmental details that theycan influence on top of those elements they control when purchasingservices or products, set requirements about various environmentalimplications that occur with third party transactions, and providerelevant information to consumers of their products. Secondly, firmsshould identify environmental aspects associated with both previousand current activities, services, and products and improveprocedures. Lastly, the businesses must pay attention touncertainties and normal business conditions, especially during startup and shut down and emergencies such as fire outbreaks, poisonousleakages, and loss of electricity.
IdentifyingLegislation and Regulations and Identifying Environmental Details
Oneof the core assumptions of the standard is the compliance to laws andregulations by companies. The framework outlines that firms(companies) need to have relevant inventories of environmental lawand legislations that are in line with its environmental aspects andthe appropriate legal needs and requirements. The list is related tothe evaluation and identification of different environmental details(SCCM,2017).According to Frondel,Horbach, and Rennings (2014), allmatters outlined in the environmental regulations and legislationswill automatically consider. However, discrepancies can exist betweenwhat the governments and the companies term to be environmentallyrelevant.
Itis important to note that legal requirements are applied as anofficial checklist to ensure companies identify all the environmentalaspects. Nevertheless, it is a legal mandate to relate environmentaldetails with applicable legislation requirements (CSRwire, 2017).It is of great importance for firms to evaluate the needs inregulations and legislations and the consequences for variousenvironmental aspects (both non-significant and significant) to havean estimate of the provisions and concrete standards involved. Inaddition, companies must be able to come up with an accessibleoverview of different applicable regulations and legislations becausefirms rely on this summary to determine their compliance with thedesired standards (SCCM,2017).
QuestioningWhether Ford’s Environmental Hazards Policy Information SystemSatisfies the NIST Standards
Havingexamined the NISTframework, it would be interesting to evaluate ways that Ford alignswith this context. The NIST framework creates the allowance to singleout various questions to analyze Ford. These are as follows.
TheProcesses of Identifying Environmental Issues
FordCompany has been vibrant in ensuring its operations conform to theNIST standards. The company has been proactive is relatinginventories of different environmental aspects to identifyenvironmental issues that should be observed. The company establishedseveral environmental risks that have been incorporated in itsenvironment management system. The company has created a tradition ofmaintaining up-to-date records of all aspects of the operation.Environmental issues related to the enterprise such as sulfur dioxideemissions from heating and transport, discharge of polluted water,leakages from pipes and use of non-renewable energy can lead toenvironmental impacts such as acidification of the soil and water,pollution of water ecosystems, and depletion of natural resourceshave all been documented (CSRwire, 2017 Nakamura,Takahashi & Vertinsky, 2014).
TheScope and Level of Detail of the Environmental Aspects Inventory
Asset out in the NIST framework, companies must identify allenvironmental items of their operations, services, and products intheir scope of environmental management systems. Companies arerequired to determine aspects concerning the environment, which theycan influence or control by observing processes such as design anddevelopment, production processes, transportation and packaging,performance and environmental procedures of suppliers andcontractors, waste processing, distribution and extraction of rawmaterials and the lifespan and use of its products by consumers. Fordhas been keen to align all processes and operations such as safewaste processing, checking the environmental performance record ofits suppliers and contractors and safe transportation of itsproducts, among other methods (CSRwire, 2017).
TheRelationship Between Identifying Environmental Aspects andLegislations
Observingregulations and legislations is one of the core focuses of the NISTstandards. Some of the underlying environmental items that arerelated to the operations of Ford Company include the use of naturalenergy that might run out, pollution from its cars, and discharge ofpolluted water to clean water sources. The company has been alert inembracing and implementing a measure that is geared towardspreventing water pollution, air and soil pollution, move that hasenabled it to avoid sanctions by the NIST. The company has integratedidentification of regulations and legislations in its identificationand inventory of different environmental items CSRwire (2017).
TheSignificance of Environmental Aspects on Ford Process
Fordhas stipulated several environmental elements that have an impact onits activities. Some of the items that the company has placedemphasis on include discharges of polluted water, use of water,lighting, non-renewable energy, pipe leakages, sulfur dioxideemissions from transport, heating, carbon dioxide and sulfur dioxideemissions from its cars and heating processes. Due to the immediateimpacts of these items to the soil, air and people, Ford hasconsidered them as critical aspects in its efforts to reduce thenegative impact on the environment and ensure full cooperation withthe NIST standards (CSRwire, 2017).
Theframework allows the company to conduct Follow-up. Ford has beendoing follow-ups that are intended to reduce the impact of pollutionon air and water sources. The company has been aligning its designspecifications to ensure that the cars emit minimal amounts ofamounts of carbon dioxide and Sulfur dioxide that cannot harm peopleand other living creatures (Chasek, Downie & Brown, 2016). Theproducts are passed thorough tests and evaluations to determine theirrates of emissions. Products that do not conform to the NISTstandards are taken back for further checkups and rectification.Besides, the company has been ensuring maximum utilization ofresources through recycling of some of the waste product to avoiddepletion of natural resources (SCCM,2017:CSRwire, 2017).
UpdatingEnvironmental Management Systems
Thesystem reflects regular system upgrades. The company has beenensuring timely and consistent update of the environmental aspects inits inventory. The NIST directsthat all businesses must keep their records updated. Ford has beenkeen on assessing environmental aspects, incorporating any changes,and implementing relevant measures using its effective managementsystem. According to CSRwire (2017),Ford was one of the first companies in the United States to makenecessary implementations of all demands of the guidelines andlegislations of the NIST. However, with the emergence and enactmentof other legislations by international organizations due to therampant effects of global warming that is majorly attributed to theemissions from manufacturing companies, the company has not yetconformed to all new stipulations and guidelines (SCCM,2017Nakamura,Takahashi & Vertinsky, 2014).
Inconclusion, the aim of this paper was to examine Ford’senvironmental risk management system regarding the requirements ofthe standards for identifying and evaluating environmental aspects.Currently, companies are operating in an environment filled with amyriad of challenges. Some of the problems include increasedglobalization that has resulted in the growth of regulations thathave increased the cost of operation and the growth of marketuncertainties that have called upon organizations to develop informedstrategies. Ford has adopted informed risk management methodologiesto realize profits and assure sustainability. In a bid to conservethe environment, Ford has placed a lot of emphasis on the issue ofenvironmental conservation as a form of promoting ethics andcorporate social responsibility. Moreover, the company has beencooperative with various legislations and regulation, enabling it toavoid sanctions and expenses related to lawsuits while realizing highprofit margins and sustainability. Its environmental managementframework is objective.
Certainly,Ford risks management approaches concerning the environment issue areobjective, although there are certain areas of weaknesses that thecompany will need to address. The company established severalenvironmental risks that have been incorporated in its environmentmanagement system. The company has created a tradition of maintainingup-to-date records of all aspects of the operation. Environmentalissues related to the enterprise such as sulfur dioxide emissionsfrom heating and transport, discharge of polluted water, leakagesfrom pipes and use of non-renewable energy can lead to environmentalimpacts such as acidification of the soil and water, pollution ofwater ecosystems, and depletion of natural resources have all beendocumented. Considering the diverse nature of the risks, the companywill need to develop an integrated management approach (Ford MotorCompany, 2015). The Ford’s success over other rivals is hinged indifferent strategies that the company adopts. For instance, theresource management strategy is the optimization to sustain operationrequirements. Success in realizing the goals underlying itsactivities is guided by an array of factors, ranging from theexternal and internal factors, which are treated as interrelated andmust all be reflected in the operation management process. Inessence, the resource management technique largely conforms to theprinciples of one systems approach, which lays emphasis on treatingelements as a system of interrelated items, as opposed to distinctparts.
Lately,the department’s IT system has been experiencing the lack ofintegrated approach to environment risks management. In the light ofthe above safety concerns, the primary goals of the IT section shouldbe to assure the privacy of the database, keep the system free andsafe from malwares, ensuring faster and efficient functioning of thescheme. To accomplish these goals, the objectives are to improvetotal security of the central database, devise a round-clockmonitoring of the system behavior and report in time, address thesystem of loopholes of risk and decentralize and merge related minordepartments to avoid total breakdown of all operations
Theimplementation of an effective policy for department can be executedbased on three possible phases under the grade to grave methodology:initial rollout, displacement, and ongoing security maintenance. Asdocumented by Gordonand Loeb, (2012),Rolloutinvolves the deployment of operating systems and applications of ITsolutions, reprovisioning systems by using one PC to do differenttasks. Displacement, on the other hand, entails wiping of all data onthe hard drive so that privacy is highly kept. Lastly, the ongoingsecurity maintenance focuses on maintenance of machines usingreliable security patches regularly.
Whilethe other processes are critical, the ongoing maintenance process isparticularly essential to the security management to address thementioned issues in the department, considering the primary cause ofthe breaches was complacency and failure to update systems.Therefore, ongoing maintenance is recommended, even for the cases inwhich a system is perceived to be stable. Such a step will go a longway in helping the department overcome the problem of complacency.
Itwill also be important for the department to adopt centralizedmanagement approach. Indeed, the ability to centralize management ofpatches has been welcome by many IT specialists and systems due toits high efficiency and self-update ability (Kraft, 2015). Moreover,the current employees should make the environmental security of thefirm a personal responsibility help turn around the poor organizationculture responsible for safety challenges. For example, employeesshould be encouraged to update of their computers according to thecompany’s security protocol.
Lastly,the process of ongoing maintenance should entail fitting the ITsystem with latest standards that is much stable, purchased fromcredible suppliers with desirable reputation. The system should alsobe serviced frequently to carry out necessary repair and maintenance.Large sections should be divided into subsections that can workindependently to avoid total system breakdown. Alarms for malwareshould also be installed to notify the control center to act withspeed before any severe damages happen. The concerned departmentshould be alert and willing to embrace newest security developmentsto benefit the department.
Inline with this point, the company acknowledges that effectivemanagement of the human and non-human resources are all crucial tosupport the company to realize its short-term and long-term goals.Nevertheless, it further recognizes the paradigm shift towardshumanistic approaches, which requires companies to treat theworkforce as the most special resource to be able to leveragecompetitive advantage. To achieve this, Ford should endeavor toengage engaging its employees through ways such as motivation,training, and development to support them in improving capacity towork effectively. Ford should extend this practice to risksmanagement methodology.
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