Rising levels of industrialization in Australia has led to increased demand for energy by both the domestic and commercial sectors of the economy. This is due to the fact that energy providing companies are parent firms to numerous firms especially in the manufacturing, processing and motor industries. As a result, it has been stated that energy is the vehicle for driving the economy to heights of economic growth and development. Without energy, rates of economic growth and development would stagnate or even drop in severe circumstances. However, in recent times, there have been intensified calls for energy companies to produce clean and safe ‘green’ energy. By ‘green’, environmentalists and other stakeholders argue that in spite of the several benefits derived from the production, distribution and sale of energy, due diligence should be taken to ensure that the harmful spill-over or external effects on the environment are mitigated.
Discussions about the adverse effects of global warming and climate change have dominated the debate in international platforms in recent years. During such forums, leaders and representatives of the developing countries have continuously put the blame on this situation to the industrialized and newly-emerging developing countries (Mewburn, Macintosh & Weldon 2011). They argue that the uncontrolled production activities in the developed and industrialized nations have alarmingly led to the deterioration of the general environment. Monitoring and managing the global environment has thus become a priority for all leaders of the world. As a result, industry players such as the Australian-based company, Better Power are expected to provide energy to businesses and households in an environmentally cautious manner.
Overview of the External Environment
The general environment analysis comprises of the broad socio-cultural, economic, technological, politico-legal and global perceptions of the society in which Better Power conducts its operations. Differences in any aspect of the general environment will ultimately affect all players in the industry, normally by affecting their specific environments (Robbins 2014). As the aspects of the general environment portray major trends in the society, the ability of a particular energy company to influence them directly is very limited. The energy sector is a very critical in the growth of the entire world economy. Major economic powerhouses of the world such as the United States, China, Japan and Germany hold a key interest in the energy sector. This is revealed in the huge amount of investment that they put in the energy sector. Such investment has stemmed from the realization that economic progress can significantly be achieved through intensified industrialization activities. However, this sector is also highly sensitive. As a result, the supply of energy is very variable and susceptive to fluctuating prices.
Most energy companies operating in the world market are solely motivated by the profit-making objective. Such companies use the high demand for energy across the globe to make exorbitantly high profits at the expense of the welfare of their consumers. Most energy sources comprises of chemical substances that when released into the environment in the form of gas emissions, spill-over or leakages into the environment lead to detrimental effects on the external environment. For instance, BP Oil Company in the U.S. experienced a scandal over the spilling of oil into the Gulf of Mexico (Black 2014). This had the impact of destroying aquatic life and also serious damages on this water source. Serious law suits for damages were filed against the company which also tainted its reputation in the eyes of the public.
As a new entrant into the energy sector, Better Power has taken a stance that is currently trending in the society; environmentally-friendly, ‘green’ energy. In the contemporary world, successful companies are those which integrate the concerns of the society into their operations and service delivery. Recent discussions about the quality of energy have been highly focused on their effect on the natural environment. Using its heavy financial backing, the company needs to ensure that it adopts the use of technology that is highly receptive and accommodative of the concerns raised by various segments of the society. To start with, it is important for the company to obtain all the necessary regulatory and legislative requirements needed to conduct business in Australia. This will ensure the legitimacy and of operations and compliance with the set laws and regulations. This will be an indication of willingness to operate business within the confines of the law. Law compliant companies enjoy favor both in the eyes of the government or regulatory authorities and their customers. Nurturing the culture of compliance leads to attaining of goodwill for the company. This may imply continuity in business in the foreseeable future.
Another factor that Better Power needs to consider is the value that the society will attach to green energy. In the modern world, most people and business are concerned about environmental protection and natural resource conservation (Finley 2014). Many individuals have made this their personal responsibility while companies have decided to incorporate this in their corporate social responsibility initiatives. Therefore, providing green power will be an added advantage to how households and businesses view the activities of the company. Providing green power is a strong indication to the safety of its users whether individual households or businesses which in turn produce goods for consumption by members of the society.
People are often very concerned about the sustenance of their natural habitat. Power generation companies have a history of going about their activities without taking into account their impact on the natural endowments. Oil spill over into water outlets, harmful gas emissions and radioactivity are examples of externalities that are detrimental to the natural environment. Most power companies often tend to ignore the fact that members of the society also derive satisfaction from the natural environment. Therefore, when producing and distributing power, it is important for power companies to take account of activities that deteriorate natural resources (Winnick 2011). Consequently, Better Power should ensure that the generation of power is done in a way that acknowledges the importance of conserving the natural environment. After all, human satisfaction is a function of both economically-produced and naturally-provided goods.
Conclusion and Recommendation
In summation, Better Power is a company whose time has come of age. In a world where households and consumers are presently concerned about mitigating environmental degradation, providing green energy will be a welcome idea. This is because it will ensure compliance with the existing regulatory framework in Australia, address societal concerns about environmental conservation and look into making the power affordable enough to compete with existing sources of power in the market. Apart from committing funding for the establishment of the company, the investors will need to conduct further feasibility studies to ensure that all factors of concern are effectively addressed.
Black, R. 2014. Gulf oil leak: Biggest ever, but how bad?. [online] Available at: http://www.bbc.co.uk/news/science-environment-10851837 [Accessed: 13 Apr 2014].
Finley, A. 2014. Allysia Finley: Fifty Shades of Green in San Francisco. [online] Available at: http://online.wsj.com/news/articles/SB10001424052702303281504579222403494358682 [Accessed: 14 Apr 2014].
Mewburn, K., Macintosh, C. and Weldon, M. 2011. Green power. South Melbourne, Vic.: Oxford University Press Australia & New Zealand.
Robbins, S. 2014. Bookshelf :. [online] Available at: http://online.vitalsource.com/#/books/9781486007271/pages/58734099 [Accessed: 13 Apr 2014].
Winnick, N. 2011. Green power. New York: AV² by Weigl.