You are speaking for the executive board of a small oil company, Future Fuel, in
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Question
You are speaking for the executive board of a small oil company, Future Fuel, in Colorado. The CEO and founder, Alica Hardy, is very avid supporter of sustainability and innovation. He insists that money invested now will pay off in big dividends down the road. Everyone involved has a legitimate concern for the environment and share and support Hardy in her personal and business philosophy. Everyone is also very aware of the momentum of the growing “green” movement. The R&D (research and development) budget for seeking new renewable and viable alternative sources of energy has traditionally been between 22-24% of your operations revenue. The board has decided to increase that budget line item to 35% for the next fiscal year on the strong recommendation of Hardy.Additionally, it has been decided to equip the headquarters and other 8 sites in the west with active solar energy systems and wind power generators. This is a publically held company and the stock has been less than stellar in its last 3 quarters’ performance. The third quarter just ended, and the quarterly shareholders’ meeting is about to be held. The earnings after operating costs are modest. You, as the board representative, are announcing your numbers and the plans to increase the R&D budget and installation of renewable energy systems.
Discuss the above scenario as the executive board of Future Fuel and in 5-pages answer these questions. This is not a speech, nor a narrative, nor personal opinion. You are presenting the board’s position to the shareholders.
What are you actually aiming to achieve? Why? What is your organization’s policy/position on corporate social responsibility and ethics - your corporate philosophy? What does the company owe to its shareholders? Why? What return on investment does your activity/enterprise require? Is this a strategic driver in itself, or simply the means by which you maintain your activities in support of your organization’s goal(s) from question 1? How do you balance the needs of the shareholders and the need to innovate?
You are speaking for the executive board of a small oil company, Future Fuel, in Colorado. The CEO and founder, Alica Hardy, is very avid supporter of sustainability and innovation. He insists that money invested now will pay off in big dividends down the road. Everyone involved has a legitimate concern for the environment and share and support Hardy in her personal and business philosophy. Everyone is also very aware of the momentum of the growing “green” movement. The R&D (research and development) budget for seeking new renewable and viable alternative sources of energy has traditionally been between 22-24% of your operations revenue. The board has decided to increase that budget line item to 35% for the next fiscal year on the strong recommendation of Hardy.
Additionally, it has been decided to equip the headquarters and other 8 sites in the west with active solar energy systems and wind power generators. This is a publically held company and the stock has been less than stellar in its last 3 quarters’ performance. The third quarter just ended, and the quarterly shareholders’ meeting is about to be held. The earnings after operating costs are modest. You, as the board representative, are announcing your numbers and the plans to increase the R&D budget and installation of renewable energy systems.
Discuss the above scenario as the executive board of Future Fuel and in 5-pages answer these questions. This is not a speech, nor a narrative, nor personal opinion. You are presenting the board’s position to the shareholders.
What are you actually aiming to achieve? Why? What is your organization’s policy/position on corporate social responsibility and ethics - your corporate philosophy? What does the company owe to its shareholders? Why? What return on investment does your activity/enterprise require? Is this a strategic driver in itself, or simply the means by which you maintain your activities in support of your organization’s goal(s) from question 1? How do you balance the needs of the shareholders and the need to innovate?
You are speaking for the executive board of a small oil company, Future Fuel, in Colorado. The CEO and founder, Alica Hardy, is very avid supporter of sustainability and innovation. He insists that money invested now will pay off in big dividends down the road. Everyone involved has a legitimate concern for the environment and share and support Hardy in her personal and business philosophy. Everyone is also very aware of the momentum of the growing “green” movement. The R&D (research and development) budget for seeking new renewable and viable alternative sources of energy has traditionally been between 22-24% of your operations revenue. The board has decided to increase that budget line item to 35% for the next fiscal year on the strong recommendation of Hardy.
Additionally, it has been decided to equip the headquarters and other 8 sites in the west with active solar energy systems and wind power generators. This is a publically held company and the stock has been less than stellar in its last 3 quarters’ performance. The third quarter just ended, and the quarterly shareholders’ meeting is about to be held. The earnings after operating costs are modest. You, as the board representative, are announcing your numbers and the plans to increase the R&D budget and installation of renewable energy systems.
Discuss the above scenario as the executive board of Future Fuel and in 5-pages answer these questions. This is not a speech, nor a narrative, nor personal opinion. You are presenting the board’s position to the shareholders.
What are you actually aiming to achieve? Why? What is your organization’s policy/position on corporate social responsibility and ethics - your corporate philosophy? What does the company owe to its shareholders? Why? What return on investment does your activity/enterprise require? Is this a strategic driver in itself, or simply the means by which you maintain your activities in support of your organization’s goal(s) from question 1? How do you balance the needs of the shareholders and the need to innovate?
Explanation / Answer
What are you actually aiming to achieve? Why?
We are aiming to achieve sustainable profits based on current investments but just with longer payback period. Though the payback period is longer, the returns will be huge due to influence of green movement in coming years
What is your organization’s policy/position on corporate social responsibility and ethics - your corporate philosophy?
Our organization is highly committed to CSR and maitaining good ethics for sustainability of the organization. Development of green initiatives will add on to investing in CSR activities as well as improve corporate image of the company.
What does the company owe to its shareholders? Why?
Company owes current stauts of growth and support provided by shareholders for sustaining in highly competitive market
What return on investment does your activity/enterprise require? Is this a strategic driver in itself, or simply the means by which you maintain your activities in support of your organization’s goal(s) from question 1?
The return on investment during prototyping phase can be less, but once comemrcialization is achieved, it will give better ROI based on studies carried out. Once commercialization is achieved in a strategic way, it will generate returns in such a way that it can fully or partially finance futher R&D and development.
How do you balance the needs of the shareholders and the need to innovate?
The need to innovate will be based on exhaustive study of future prospects and investment required for earning returns. It the need to inovate will help to outwiegh benefits achieved from this versus investment from shareholders leading to high returns in furture based on short / long term return study, we can proceed with investment for innovation needs. The budget increase of around 11-13% is required (35% instead of 22-24%) till commercialization or as per future requirement. Feasibilty study regarding ROI can be carried out for establishing long term returns from this investment
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