Chapter 05 Natural Resources and Environmental Sustainability McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

5-2 Geography Elements of geography managers to consider: –Location –Topography –Climate –Natural Resources Elements of geography managers to consider: –Location –Topography –Climate –Natural Resources Physical elements of location are Uncontrollable LO1 The details are on pages 80 – 86 in the text.

5-3 Competitive Advantage: Porter’s Diamond LO1 The details are on pages 80 & 81 in the text.

5-4 Location: Builds Political and Trade Relationships Topography: Creates differences in economies cultures politics social structures LO1

5-5 Greater population density means lower marketing & distribution costs, better communication, and more employees. Greater population density means lower marketing & distribution costs, better communication, and more employees. Bodies of Water – attract people and facilitate transportation Inland waterways give access to interior regions LO1 The details are on pages 87 – 89 in the text.

5-6 Climate Meteorological conditions –including: Temperature Precipitation Wind Meteorological conditions –including: Temperature Precipitation Wind Climatic conditions explain differences in human and economic development “Underdevelopment in tropical nations is because of the tropical climate.” - The World Bank “Underdevelopment in tropical nations is because of the tropical climate.” - The World Bank LO1 The details are on pages 89 & 90 in the text.

5-7 Natural Resources Anything supplied by nature on which people depend Nonrenewable Energy: –Petroleum –Nuclear Power –Coal –Natural Gas Renewable Energy: –Hydroelectric –Solar –Wind –Geothermal –Waves –Tides –Biomass Nonrenewable Energy: –Petroleum –Nuclear Power –Coal –Natural Gas Renewable Energy: –Hydroelectric –Solar –Wind –Geothermal –Waves –Tides –Biomass LO2 The details are on pages 90 – 97 in the text.

5-8 Petroleum Estimates of petroleum reserves change for a number of reasons: New discoveries in proven fields with improved prospecting equipment Governments open their countries to exploration and production Improved techniques in steam and hot water injection enable producers to obtain greater output from operating wells and open new areas Automated equipment lowers offshore drilling costs. Company can profitably work smaller-sized discoveries Estimates of petroleum reserves change for a number of reasons: New discoveries in proven fields with improved prospecting equipment Governments open their countries to exploration and production Improved techniques in steam and hot water injection enable producers to obtain greater output from operating wells and open new areas Automated equipment lowers offshore drilling costs. Company can profitably work smaller-sized discoveries LO2

5-9 Nuclear Power Benefits: Low pollution Low carbon emission Growth in devel nations Problems: Radiation Spent fuel storage Coal 49% increase through 2030 Problems: Pollution Global warming Kyoto Protocol: UN Framework Convention on Climate Change calling on nations to reduce global warming by reducing emissions Kyoto Protocol: UN Framework Convention on Climate Change calling on nations to reduce global warming by reducing emissions LO2

5-10 Natural Gas Cleanest burning fossil fuel Low greenhouse gas emissions Burns efficiently –Lower contributions to acid rain, solid waste, and water pollution As oil price rises, gas consumption will rise –47% increase through 2030 Cleanest burning fossil fuel Low greenhouse gas emissions Burns efficiently –Lower contributions to acid rain, solid waste, and water pollution As oil price rises, gas consumption will rise –47% increase through 2030 LO2

5-11 Renewable Energy Sources: 1) Hydroelectric 2) Solar 3) Wind 4) Geothermal 5) Waves 6) Tides 7) Biomass (ethanol) 8) Ocean thermal energy conversion Photosynthesis is the Biomass energy source LO2

5-12 Environmental Sustainability A systems concept of maintaining something (environment, society, the economy, people) within the economy or the organization. Is both local and global. Stakeholder Model to Sustainability LO3 LO5 The details are on pages 98 & 99 in the text.

5-13 Characteristics of Environmentally Sustainable Business Limits –Environmental resources are exhaustible Interdependence –Actions in one ecological, social, and economic system affects the others Equity in Distribution –For interdependence to work, there cannot be vast differences in gains Limits –Environmental resources are exhaustible Interdependence –Actions in one ecological, social, and economic system affects the others Equity in Distribution –For interdependence to work, there cannot be vast differences in gains LO4

5-14 Stakeholder Theory Operations take into account all identifiable interest holders Addresses Underlying Values and Principles: –Type of relations with stakeholders –Tension between stakeholders can be balanced –Profits are a result not a driver of value creation Addresses Underlying Values and Principles: –Type of relations with stakeholders –Tension between stakeholders can be balanced –Profits are a result not a driver of value creation LO5

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