Written Assignment Unit 7
MBA Business Administration
University of the People
BUS 5116-Operations Management
Dr. Catrin Hechl
December 29, 2021
Case Study
The case study deals with the dilemma of balancing between profit and long-term sustainability.
Every business has its objectives, mission, and values that set the foundation and long-term
goals. Based on these objectives, mission, and values the company develops its strategy and
plans. Traditionally, private firms focus only on profitability, and the strategies are geared
toward minimizing cost and maximizing profit. However, environmental and social awareness
has become more significant and the need to consider these factors is increasing.
Based on the case study there is a change in decision-making power from a single person to
shareholders. This brings new ideas, perspectives, and value systems into the decision-making
process. The shareholders have accepted the company's mission and vision, however; they want
to focus on the profitability aspect of the business. Consequently, when making benefit-cost
analysis factors like environmental issues may not be given the same weight.
Problem Analysis
The dilemma described above has various complicating factors. For instance, profitability is
easily measurable and traceable, however; social and environmental factors are hard to measure
and track. Additionally, it's difficult to find the tradeoff point between these various objectives,
or optimizing the problem becomes infeasible (Jensen, 2000). Furthermore, environmental or
social objectives are vast, and trying to deal with all of them may critically affect the company's
profitability, especially as the company grows in size.
As laid out in the case study, the actions taken by the company to fulfill environmental
responsibilities increase the cost which in turn decreases the profit margin. The decrease in profit
margin will not be taken positively by the shareholders and will decrease the company's capacity
MBA Business Administration
University of the People
BUS 5116-Operations Management
Dr. Catrin Hechl
December 29, 2021
Case Study
The case study deals with the dilemma of balancing between profit and long-term sustainability.
Every business has its objectives, mission, and values that set the foundation and long-term
goals. Based on these objectives, mission, and values the company develops its strategy and
plans. Traditionally, private firms focus only on profitability, and the strategies are geared
toward minimizing cost and maximizing profit. However, environmental and social awareness
has become more significant and the need to consider these factors is increasing.
Based on the case study there is a change in decision-making power from a single person to
shareholders. This brings new ideas, perspectives, and value systems into the decision-making
process. The shareholders have accepted the company's mission and vision, however; they want
to focus on the profitability aspect of the business. Consequently, when making benefit-cost
analysis factors like environmental issues may not be given the same weight.
Problem Analysis
The dilemma described above has various complicating factors. For instance, profitability is
easily measurable and traceable, however; social and environmental factors are hard to measure
and track. Additionally, it's difficult to find the tradeoff point between these various objectives,
or optimizing the problem becomes infeasible (Jensen, 2000). Furthermore, environmental or
social objectives are vast, and trying to deal with all of them may critically affect the company's
profitability, especially as the company grows in size.
As laid out in the case study, the actions taken by the company to fulfill environmental
responsibilities increase the cost which in turn decreases the profit margin. The decrease in profit
margin will not be taken positively by the shareholders and will decrease the company's capacity
