MB061: Environment Management

Table of ContentsTASK 2: ASSESSMENT...............................................................................................................1

INTRODUCTION........................................................................................................................1

Objective..................................................................................................................................2

OT2025 - Securing Our Future / Cost reduction.......................................................................2

Strategies and Capabilities.......................................................................................................3

Need Seekers...........................................................................................................................3

Market Readers........................................................................................................................3

Technology Drivers...................................................................................................................3

What do we do at Ok Tedi........................................................................................................3

Using Open Innovation to Identify the Best Ideas (OTML).......................................................4

Travel...................................................................................................................................4

Commercial Unit

Processing, Department

PO Box 1, TABUBIL, Western Province,

Accommodations.................................................................................................................4

Restructuring departments..................................................................................................4

Messing................................................................................................................................5

PESTEL Analysis........................................................................................................................5

Overview of the Five Forces Model..........................................................................................7

Threat of new entrants to an industry.....................................................................................8

Bargaining power of suppliers..............................................................................................8

Bargaining power of customers............................................................................................9

Strength weakness Opportunity Thread (SWOT) analysis........................................................9

opportunities.......................................................................................................................9

threats.................................................................................................................................9

SWOT analysis........................................................................................................................10

Weaknesses.......................................................................................................................10

Strength Weakness Opportunities Threads (SWOT) analysis.................................................11

Strengths:...........................................................................................................................11

Weaknesses:......................................................................................................................12

Opportunities:....................................................................................................................12

Threats:..............................................................................................................................12

Recommendation...................................................................................................................13

Summary................................................................................................................................13

References.............................................................................................................................14

INTRODUCTION

Ok Tedi Mining Limited (OTML) an organization as one of the world class gold and copper mines,

operations producer approximately 70,000 to 80,000 tons per day almost 80% and also employer of

choice in Papua New Guinea. It has been operating in the Star Mountain of the Western Province for

well over 30 years and also prides itself in its training and employment of Papua New Guineans and its

overall contribution to human resource development for the country to promote and uphold the Ok

Tedi Charter as part of a team, to shape appropriate culture across the section and to implement the

strategies, goals and objectives of the Company, organization and the country.

Objective The main purpose of this report is to find out where the organization likewise Ok Tedi Mining Limited

can identify action plans and strategies on how to improving Productivity and cost reduction, Improving

Operations by adopting to the changes.

Between 2010 and 2013, Ok Tedi, mining company saw costs rise and productivity fall as it

raced to meet surging commodity demand.

The global commodity boom is fading now, undermining growth strategies based on the

assumption of ever-higher prices. Falling prices will squeeze profits at firms with boom-era

costs. But Ok Tedi that adopt a Fit for GrowthSM approach—adjusting its cost reduction structure to

support key differentiating capabilities, such as improved market awareness or operations—will

boost margins, increase production, and create more value even as the market slows. The

techniques outlined in this report, using Australian mining companies as an example, show how

resource and commodity producers around the world can cut costs while growing stronger.

OT2025 - Securing Our Future / Cost reduction OTML is undergoing a workforce transformation as it prepares for Mine Life Extension (MLE) from 2014.

Included in this project are reviews of our rosters, accommodation, flight schedules and our contractors,

as well as the development of a workforce blueprint that will ensure we have the right people, with the

right skills in the right jobs to meet our future business needs.

‘Ok Tedi 2025: Securing our Future’ is the name given to this project. Its completion will give OTML a

bright future for the next decade and more, ensuring we remain a viable and competitive Mine through

MLE.

Our goal this year is to examine the capabilities needed to maximize the impact of a company’s

innovation efforts in good times and bad, and to highlight the benefits both of focusing on the short list

of capabilities that generate differential advantage, and of clearly linking the specific decisions within

innovation to the company’s overall capabilities system and strategy.

Strategies and CapabilitiesThree years ago, in 2010, Ok Tedi focused our annual innovation study on how companies use distinct

innovation strategies to create their products and take them to market. Nearly every company, we

found, followed one of three fundamental innovation strategies:

Need Seekers Actively and directly engage current and potential customers to shape new products and services based

on superior end-user understanding, and strive to be the first to market with those new offerings.

Market Readers Watch their customers and competitors carefully, focusing largely on creating value through incremental

change and by capitalizing on proven market trends.

Technology Drivers Follow the direction suggested by their technological capabilities, leveraging their investment in

research and development to drive both breakthrough innovation and incremental change, often

seeking to solve the unarticulated needs of their customers via new technology.

What do we do at Ok TediIt is important to note that we found that none of these three strategies were any better than the others

at producing sustained superior financial results, although of course individual companies outperform

others within each strategic group. The success of each of the strategies depends on how closely Ok

Tedi, in pursuing innovation, align it’s innovation strategy with OT’s business strategy and how much

effort they devote to directly understanding the needs of end-users.

This year, we set out to answer two new questions: “Which sets of capabilities are the most critical

for the success of each of the three strategies”?

And do companies that focus on those critical capabilities see improved overall financial results? Our

hypothesis: Companies, that can craft a tightly focused set of innovation capabilities in line with their

particular innovation strategy — and then align them with other enterprise-wide capabilities and their

overall business strategy — will get a better return on the resources they invest in innovation.

Pen innovation is a simple concept—companies tap into the ideas of outside experts to develop new

products and services. But in practice it requires three different strategies, each with its own set of

complex challenges and opportunities. The key to success, says (HBS Professor Karim R. Lakhani), is

careful consideration of what to open, how to open it, and how to manage the resulting problems

Using Open Innovation to Identify the Best Ideas (OTML)(By Andrew King and Karim R. Lakhani)

TravelBecause most employees were travelling all the headquarters is costly and company spending a lot of

money. Therefore, now reduce these destinations and all employees with their recognised depends will

travel their point of hire hub only. Then they will get on commercial airlines and go to their respective

destinations

Accommodations All shift workers will be moving into new dongas and an old dongas will be removing them and selling

companies and individuals. Houses will be sold to locals and state, meaning principal land owners can

buy them off and then rent to private companies or organisations. Few company employees will be

residing in few designated houses and company will be responsible for it.

Rest of national employees pay grade PG03 – PG07 will be going to single dongas and omitting current

houses they are residing. They are start getting home owner scheme HOS money now and sending their

families to their respective locals and others buying state owned lands anywhere.

Introducing power and water bills, commencing shortly in this year and started installing measuring

parameters in place.Living in accommodated is very expensive exercise for the company

Restructuring departments The company had restructured an organisation by redunctanting some positions also reporting

structures. The executive manager position with team leader and senior positions trade person or

operator is out. There were eight layers of but now five layers of reporting structure. Means that

managing director, general manager, manager, superintendent, supervisor and workforces.

The area manager will be directly communicating with workforce, no close door managing and it will be

walkabout management style. Employee will be on field, actually touching and observing the extreme

performance of equipment and people.

Merging some internal departments, where Human resources with community relations and

environment and all engineering in one from individual departments. Minor departments were

redunctanted and good performers were transferring cross sections, based on their merits and skills.

Messing The cooking staff will prepare lunch and deliver to workplaces, have lunch in the crib rooms at

workplaces. The cooks will make Crips and deliver them to site designated crip rooms. Individual will

have lunch with less time, schedule 30.

OT strategy planThis strategy is based the Ok Tedi is current doing basing on metal price declining and downsizing its

business operations. The company will make some ambiguous innovation changes challenges for the

organisation to stay on business. There two things occurring same time, government taking over

ownership and extension of mine life. However, this strategy planning is based on end mine life and

metal price declined.

PESTEL Analysis Political Economic Social Technology Environment legal

Environmental

regulations and

protection

Home Economic situation

Income distribution Government research

spending

Ecological urrent legislation

home market

Future Legislation Home economic trends

Demographics, population growth rates

eplacement

technology and

solutions

Environment

al issues

International

, National

Future legislation

&Local

Government policies Taxation specific to product or services

Age distribution Industry focus on

technological effort

Environment

al

regulations

European/

international

legislation

Government terms

and changes

Interest rates &

monetary policies

Labour / social mobility

New inventories and

development

Customer

values

Regulatory bodies

and processes

Trading policies Market & Trade

cycles

Lifestyle changes Rate of technology

transfer

Market

values

Environmental

regulations

Environmental

regulations and

protection

Specific industry

factors

Work / career and leisure attitudes

Life cycle and speed

of technological

obsolescence

Stakeholder/

investor

values

Employment law

Future Legislation Market routines &

Distribution trends

Entrepreneurial spirit Energy use and costs Staff

attitudes

Consumer

protection

Government policies Customer/ End user

drivers

Education (Changes in)

Information

Technology

Managemen

t style

Industry-specific

regulations

Mining Act Interest & exchange

rates

Fashion, hypes (Changes in) Internet organization

al culture

competitive

regulations

Safety act International trade

&Monetary Issues

Health consciousness & welfare, feelings on safety

(Changes in)

Mobility Technology

Staff morale mining regulation

Funding, Grants &

initiatives

Market Price Living conditions Manufacturing

maturity and

capacity

Staff

engagement

urrent legislation

home market

International

Pressure Group

World market price Lifestyle Trends Intellectual property

issues

Global

factors

Future legislation

Local Pressure

Group

Seasonality/ weather

issues

Media Views Technology

legislation

EU based

factors

European/

international

legislation

Wars & Conflicts Government spending Consumer attitudes +

opinions

Information &

Communications

Environment

al

regulations

Regulatory bodies

and processes

Home market

Lobbey

Unemployment

policy

Brand, Company, Technology Images

Innovative and

Potential

Customer

values

Environmental

regulations

Tax policies Taxation Customer buying pattern

Technology,

Licencing, patents

Market

values

Employment law

International trade

regulations &

restrictions

Inflation rates Fashion & role models Global

Communication

Stakeholder/

investor

values

Consumer

protection

Contract

enforcement law

Stage of the business

cycle

Ethical issues Mechanism and

Technology

Staff

attitudes

Industry-specific

regulations

Consumer Protection Consumer confidence Ethic / religious factors Competing

technology

development

Managemen

t style

competitive

regulations

Employment laws home economy

situation

Major events and

influences

Research funding organization

al culture

mining regulation

Government organization /

home economy

trends

Advertising &

Publicity

Staff morale urrent legislation

home market

(Kelly and Bowles, 2006).SWOT Analysis).

Porter's Five Forces Model: analysing industry structure

Author: Jim Riley Last updated: Sunday 23 September, 2012

Overview of the Five Forces Model

Porter identified five factors that act together to determine the nature of competition within an industry.

These are the:

Threat of new entrants to a market, bargaining power of suppliers and bargaining power of customers

(“buyers”)

.

we identified that high or low industry profits (e.g. soft drinks v airlines) are associated with the following characteristics:

Let’s look at each one of the five forces in a little more detail to explain how they work.

Threat of new entrants to an industry

If new entrants move into an industry they will gain market share & rivalry will intensify, if PNG

parliamentary move a motion on vote on confidence and conduct 12 months’ time, can affect Ok Tedi

mining limited operations.

The position of existing firms is stronger if there are barriers to entering the market

Our barriers to entry are low then the threat of new entrants will be high, and vice versa Barriers to

entry are, therefore, very important in determining the threat of new entrants. An industry can have

one or more barriers. The following are common examples of successful barriers.

Bargaining power of suppliers

Ok Tedi’s suppliers have bargaining power they will:

Exercise that power, selling our products at a higher price & squeeze industry profits

OT have signed contract with our buyers and suppliers for certain periods of time, therefore

supplier won’t forces up the price paid for inputs, profits will be reduce

Suppliers find themselves in a powerful position when:

There are only a few large suppliers

The resource they supply is scarce

Just how much power the supplier has is determined by factors such as:

Bargaining power of customers

Powerful customers are able to exert pressure to drive down prices, or increase the required quality for the same price, and therefore reduce profits in an industry.

Ok Tedi, have downgraded ore delivery from mine therefore we produce more tonnes in order to stay on business and maintain the terms and conditions with customer.

Strength weakness Opportunity Thread (SWOT) analysis

Subject of SWOT analysis: the creation of own distributor company to access new end-user sectors not currently being developed.

Strengths

End-user sales control and direction.

Right products, quality and reliability.

Superior product performance vs competitors.

Better product life and durability.

Spare manufacturing capacity.

Some staff have experience of end-user

Weaknesses

Customer lists not tested.

Some gaps in range for certain sectors.

We would be a small player.

No direct marketing experience.

We cannot supply end-users abroad.

Need more sales people.

sector.

Have customer lists.

Direct delivery capability.

Product innovations ongoing.

Can serve from existing sites.

Products have required accreditations.

Processes and IT should cope.

Management is committed and confident.

Limited budget.

No pilot or trial done yet.

Don't have a detailed plan yet.

Delivery-staff need training.

Customer service staff needs training.

Processes and systems, etc

Management cover insufficient.

Opportunities

Could develop new products.

Local competitors have poor products.

Profit margins will be good.

End-users respond to new ideas.

Could extend to overseas.

New specialist applications.

Can surprise competitors.

Support core business economies.

Could seek better supplier deals.

Threats

Legislation could impact.

Environmental effects would favour larger competitors.

Existing core business distribution risk.

Market demand very seasonal.

Retention of key staff critical.

Could distract from core business.

Possible negative publicity.

Vulnerable to reactive attack by major competitors.

RecommendationGovernment shouldn’t intervene much on operations of the company and distributions of fund.

Ok Tedi should retain local owned contractors and start removing oversea company contractors. Then

train the locals through the contractor, which means in terms of cost it will be lower than Ok Tedi hire

an employee. Ok Tedi Management and Government should negotiate properly with the people of

western Province. Especially affected ones dwelling along the Fly River for compensate packages,

because lot money is wasted on this subject.

Summary There is widespread recognition that the typical corporate cost-cutting initiatives will not suffice in

the current business environment. To navigate the global downturn and even prosper in the

process, corporate leaders are taking a step back and consider how best to implement long-lasting

and effective initiatives aimed at fundamentally improving the way Ok Tedi will operate. Ok Tedi &

Government’s approach focuses on three strategic questions: What do we do? How do we do it,

and where? How well do we do it?

This Perspective explores the commonly observed issues and detailers surrounding

company’s’ business models in light of important questions they currently face:

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York, NY.

[2] Asheghian, H.P. and P., Ebrahimi, 1990. ‘‘International Business’’. Harper

Collins, New York, NY.

[3] Auster, C. and C.W., Choo, 1993. ‘‘Environmental Scanning by CEOs in two

Canadian Industries’’. Journal of the American Society for Information

Science and Technology, 44(4), 194-203.

[4] Beal, R.M. 2000. ‘‘Competing effectively: environmental scanning,

Competitive strategy, and organizational performance in small manufacturing

firms’’. Journal of Small Business Management, 38(1), 27-47.

[5] Bourgeois, L.J. 1980. ‘‘Strategy and environment: a conceptual integration’’.

Academy of Management Review, 5(1), 25-39.

[6] Daft, R.L., L., Sarmunen, and D., Parks, 1988. ‘‘Chief executive scanning,

Environmental characteristics and company performance: an empirical

study’ ’Strategic Management Journal, 9(2), 123- 139. 313-327.

[9] Kris, Cole. 1968. “Management: theory and practice”.3rd ed TAFE

[10] Gerry, Johnson. Richard, Whittington. Keavan, Scholes.2011.

“Exploring strategy” Ninth edition. Pearson Education Limited: