Background Information
Compass Minerals International Company produces and sells minerals which may include salt, fertilizers and magnesium chloride. The company has its base in Kansas City and offers its products and services to customers in Canada, North America, and the UK. Also, the company also offers records management services to business in the United Kingdom. The business operates two segments namely salt and plant nutrition. The Salt segment focuses on mining and producing salt related products such as Magnesium Chloride and Sodium Chloride. On the other hand, the plant nutrition segment focuses on coming up with products such as sulfate of potash which is a fertilizer (Compass Minerals International Inc. 2014 Sustainability Report 9). This paper focuses on conducting an analysis of the company’s remote environmental factors. Some of the factors discussed in the paper include economic, political, environmental, political, competition and sociocultural factors affecting the operation of the business.
Environmental Factors
Taking care of the environment is one way to which an organization can enhance its social responsibility to the immediate community. Compass Mineral International Inc. is committed to ensuring clean environment everywhere it operates its business. The company deals with mineral chemicals that have a lot of harm to the environment. For instance, the production of its salt products leads to the emission of Nitrogen, Sulphur and carbon oxides which are detrimental to the environment since they cause pollution.
The company has good ways of handling waste produced in the company thus ensuring safe and clean environment. For instance, transportation of the company’s products and wastes is one area through which the company may cause a lot of pollution to the environment. However, the company ensures that the transported waste materials are packed in plastic steel drums which cannot leak any substance thus promoting efficiency in environmental conservation. Besides, the company uses low NOx emitting boilers to reduce the emission of nitrogen oxides which have negative effects on the environment (Compass Minerals International Inc. 2014 Sustainability Report 35). Its commitment to ensuring clean environment has seen the company clinch awards from regulatory bodies. For instance, it was awarded a pollution prevention award in 2006 by Health and Environmental Department of Kansas.
Despite the efforts that the company has taken to ensure a pollution free environment, it is also subject to various minimal environmental pollution issues. For example, (Hawley n.p) reveals that two of its shafts were shut down by Federal officials at Lousiana. The officials expressed concern about the safety of the company’s employees after it recognized excess debris along the edges of the shafts. This came after the company was subjected to numerous health and safety violations there before that incident (Madslien n.p). However, the company has come up with several measures as discussed above to ensure a conducive working environment for its employees. As a result, the company is among the best in enhancing environmental safety and cleanliness.
Political and Legal environment
Compass Minerals International Company operates business both in North American and in the UK. These areas can be said to be politically stable and highly regulated. Both United States and UK are politically stable environments in that they have low levels of corruption with minimal political influences from political officials. Both nations are committed to ensuring transparency in all their operations. Besides, the company enjoys working in an environment with minimal civil wars and terrorist attacks. This is to mean that political instability is not a serious threat for the company in the areas it operates (Marsh 98).
On the other hand, the company operates in a highly regulated climate which influences its performance. In both regions, a company is required to adhere to all business regulations to survive in the market. The company’s business nature requires the business to adhere strictly to the environmental provisions that require the company to offer products and services without polluting the environment. Thus, the company has taken various initiatives on its environment which has played a great role in assisting it to adhere to the set environmental provisions. Any non-compliance of these laws has seen the company suffer fines and penalties as well as closure of some of its operations (Brandy n.p). An outstanding example is the closure of its shafts in Louisiana which were a security threat to the workers of the company. Governments from where the company operates have also enacted different regulations that the company must comply. A good example is the recent regulation by the Canadian government controlling the use of rock salt.
The legal provisions in the regions where the company operates also require it to take care of the community needs. For instance, the legal provisions require the company to provide the community with minerals that do not have harm to their health. All through the company is ever dedicated to ensuring it complies with the legal provisions. The company encourages all its employees to comply with the code of business conduct and ethics that dictate what they need to do and what they need to avoid in fostering success. The company believes that since every employee receives an attractive salary from the company; he or she must attend the company’s annual training on anti-bribery and anti-corruption. Besides, all its employees who are involved in direct marketing of the company’s products need to receive training on antitrust regulations that prohibit unethical competitive behavior in the marketplace.
Economic environment
The economic conditions of the where the company operates have much influence on the company’s success. The company has business across the borders thus subject to various economic indicators that have great influence in their operations. For instance, the company produces and markets its products in USA, U.K. Canada. This implies that the business of the company is subject to economic risks taking place in these regions. Currency exchange rates in this nations are never stable thus affecting the operations of the businesses negatively. This implies that sometimes the company receives higher returns when the rates are favorable and low returns when the rates are unfavorable (Caplinger n.p).
Pitchford (n.p) reveals that U.K has various barriers to trade for companies that originate nations that are not in the European Union. This is to mean that there are some tariffs and trade protection which require companies to meet exporting licensing requirements especially on chemicals. These are some of the challenges that the company faces in the market place. Besides, the regions through which the company operates are prone to high taxation rates that lower the company’s profitability.
On the other hand, the high-interest rates during harsh economic conditions have led to increased indebtedness of the company. Increased indebtedness is a negative impact to the operations of the business since it implies that the business may lack the capacity to borrow large amounts of money for supporting its operations as in U.K (Kaletsky n.p). Additionally, this may also affect the future investment plans for the company thus affecting its performance negatively. Finally, the harsh economic conditions leading to increased inflation rates in the regions where the company operates are very risky to the company. This is because they lower the company’s customer’s ability to purchase the products thus lowering the company’s revenues (Caplinger n.p).
Technology Environment
Technology advancement is cutting edge on how the companies compete in the market. Companies which adopt the new technologies very fast benefit in the production and marketing promote their competitiveness in the market. Compass Mineral International Inc. is committed to using the new technologies in its production. The company relies computer on systems and the information technology in performing its business squarely. It applies such systems in its inventory and cash management, ordering, communication and record keeping just to mention but a few. The move to apply these systems in its operations has played a great role in promoting efficiency.
Furthermore, the company uses advanced technology in its production. It applies mechanical evaporation by utilizing natural gas and electricity as the sources of energy to obtain brine from the underground deposits. On the other hand, it uses solar evaporation technologies in pumping the brine. This makes the company take into account modern technologies in producing its products. However, the use of technologies by the competitors is a clear threat to the business. The adoption of new methods for salt and plant nutrition by the new companies in the market may increase competition in the industry thus reducing the company’s customer base.
Competition
Compass Minerals International Company is subject to stiff competition in the industry. Although it is one of the world’s largest salt producing companies, it faces competition from other world salt producers such as Cargill and United SaltBay Town Companies. The use of modern technology in production is one way through which the companies cut edge in the marketplace. Besides, the company has the largest rock salt mine in the world situated in Ontario thus giving the company a boost in production. This is because it allows the company to enhance efficiency in production by reducing the cost of production which is a major challenge to many of its competitors (Collins n.p).
However, the future of the company’s competitive edge in the company is subject to its adoption to new technologies and compliance with business regulations provided by the governments of which the company has a business. New companies are entering the industry and apply new technologies in the production. On the other hand, its competitors are also using modern technologies in their production. Such a move is giving the company a big threat when it comes to the advancement of its competition in the market in the future. Also, the governments are still coming up with various regulations to make the industry efficient in providing products and services which have seen the company lose some its shafts. Such a move is threatening the future competitive strategies of the company.
Socio-cultural environment
Compass Mineral International Company is dedicated to exercises good businesses practices that are acceptable in the society. In ensuring this takes place, the company has put in place a code of ethics to regulate the behavior of its members when performing their duties. The company is aware the cultural practices of its consumers in various markets where it operates. For instance, the company is committed to ensuring that its customers receive quality products and services that do not have any health effects. Also, the company focuses on ensuring that its products and production does not pollute the environment hence breaking its relationship with the members of the societies where it operates (Dividend Watcher n.p).
Besides, the company is also committed to enhancing cultural diversity in the workplace. The companies have employees from different cultures and thus it always work hard in ensuring that each employee feels comfortable in the workplace. For instance, the company encourages teamwork in the workplace as one way of encouraging employees from different cultures to unite and work towards a common goal. Furthermore, the company provides its employees with protective clothing when performing their duties to prevent them from harmful chemicals that are involved in its production.
Furthermore, its sustainability provisions dictate that the company is focused on providing services that will enhance their relationship with the community in which it operates. Such a move is very good in ensuring that the company works hard to comply with moral practices of various communities. Also, the provisions regulating the operation of its business reveal that the company is ever dedicated to ensuring that it operates in a good way that will help in protecting the health and safety of its workforce together with that of its community.
Conclusion
Remote environmental factors for a company play a great role in helping one understand the efficiency of company’s operations. It is the same tool where the company can come up with its SWOT analysis. It is clear that Compass Mineral International Company is among the few committed companies in promoting the social responsibility. The company strives very much in ensuring that its operations foster social responsibility in the communities it has a business. Environmental conservation is one of the leading strategies that the company utilizes in ensuring that the community and its workforce leave a satisfactory life free from health and safety issues (Shaw n.p).
Besides, the company is dedicated to ensuring that it conforms to the governments’ provisions which dictate how the company should conduct business in their nations to survive. It does that through compelling its employees to comply with its code of business conduct and ethics. Regarding competitiveness, the company has placed various strategies including the use of technology to ensure that it competes with other companies in the same industry without any issue. Finally, the company is dedicated to ensuring that it adopts the changes in economic conditions something that helps it to survive in the market.
Recommendation
It is recommendable that the company should focus on improving its competitiveness in the future by considering the use of the modern technologies both in its production and in marketing. New technology offers the company an opportunity to design unique products that would compete in the market. Digital marketing is another opportunity that business needs to consider as a way of promoting its customer base.
Additionally, the company needs to adhere to the changing business regulations so as to avoid penalties that may ruin its profitability. This is to mean that the company needs to invest much in controlling environmental pollution as well as providing a conducive working environment for its employees to enhance comfort. Such a move is very vital for the company in enhancing its social responsibility in the communities it operates.
Works Cited
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Caplinger, Dan. “Compass Minerals Suffers Falling Sales, Earnings as Winter Approaches.” The Motley Fool. 1 Nov. 2013. Web. http://www.fool.com/investing/general/2015/11/01/compass-minerals-suffers-falling- sales-earnings-as.aspx
Compass Minerals International Inc. 2014 Sustainability Report. Taking care of the essentials environmental & social responsibility. Compass Minerals. (2014): 1-97. Web. http://www.compassminerals.com/wp-content/uploads/2015/09/2014-Compass-Minerals- Sustainability-Report1.pdf
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Kaletsky, Anatole. “Why Britain’s days as a haven of political, economic stability are numbered.” Reuters. 21 Nov. 2014. Web. http://blogs.reuters.com/anatole- kaletsky/2014/11/21/britain-may-turn-into-europes-most-politically-unpredictable-country/
Pitchford, Karen. “Poisons and chemicals: changes to the law in the UK.” Pharmaceutical Journal. 28 Jul. 2015. Web. http://www.pharmaceutical-journal.com/learning/learning- article/poisons-and-chemicals-changes-to-the-law-in-the-uk/20068947.article
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