Question 1: (25 marks) Part A: Origin Energy is involved in gas and oil exploration and production, power generation and energy retailing. The company operates four power stations and has interests in seven major Australian electricity generation plants, supplying more than 3 million customers across Australia (Origin Energy, 2007). The following extracts are taken from Origin Energy's sustainability objectives and strategies: PERSPECTIVE/Objectives FINANCIAL To provide sustainable returns to Origin's key economic stakeholders CUSTOMER To reduce the greenhouse gas intensity of customers energy consumption To maintain community support and goodwill for the company's activities BUSINESS PROCESSES To take all feasible steps to eliminate or minimise any adverse impact that activities have on the environment To reduce the greenhouse gas intensity of energy production and distribution and non-producing assets To eliminate or manage hazards and practices in business that could cause injury or illness to people, damage to property or unacceptable impacts on the environment LEARNING and GROWTH To provide and maintain a satisfying and rewarding work environment for all employees Required: Strategies . Provide shareholder returns in the top third of comparable companies · Be recognised as the leading provider of green energy products · Increase sales of low carbon intensity products to 10% of total supply chain greenhouse gas emissions by 2012 · Proactively resolve customer complaints. Reduce ombudsman complaints by 30% Actively consult with the community at all locations where Origin has a material impact · Identify opportunities for the reduction and reuse of waste . Reduce the greenhouse gas emissions intensity of electricity supply chain to 10% less than the National Electricity Market by 2020 · Reduce the greenhouse gas emissions of gas production by 15% by 2012 · Embed environmental leadership in all training and decision-making processes* · Achieve a TRIFR (Total Recordable Incident Frequency Rate) of 4 · Eliminate barriers to employment, development and workplace opportunities so that workforce attracts and represents diversity from the communities in which operate 1. For each strategy, state whether there is a cause and effect link between the objective and strategy chosen by the company. Explain why you think so. 2. Given the above strategies, is there any need to add a fifth dimension to the balanced scorecard? If so, which particular strategies could be included in this fifth dimension? (8 + 4 = 12 marks) Page 1 of 15
Part B: Kerry Pratt and Sons Foundry operates two plants, one in Sydney and the other in Perth. There has been a reduction in demand for their products and it is not viable to operate both plants. Management needs to decide which of the two plants will continue to operate in the coming year. A preliminary investigation shows that the Sydney plant is able to process material at a faster rate than the Perth plant. However, this is because of an inefficient heating process. Transport costs are cheaper in Sydney as it is located closer to the major suppliers. The following information relates to the two plants for the past