Sustainable Practice and Operations Management for Fonterra

Running head: SUSTAINABLE PRACTICE AND OPERATIONS MANAGEMENT
Sustainable Practice and Operations Management
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1SUSTAINABLE PRACTICE AND OPERATIONS MANAGEMENT
Table of Contents
Introduction......................................................................................................................................2
Task 1...............................................................................................................................................2
(a) Overview of Fonterra.................................................................................................................2
Justification for choosing Fonterra..................................................................................................3
(b) Analysing the complexity of sustainability challenge being faced by Fonterra........................4
Task 2...............................................................................................................................................6
(a) Trends in the external environment including political, technological, ethical and legal trends
.........................................................................................................................................................6
(b) Strengths and weaknesses in responding to the opportunities and threats that stem from the
trends................................................................................................................................................8
Task 3.............................................................................................................................................11
(a) Identifying one indigenous population impacted by the business operations of Fonterra and
justifying this indigenous population using sustainability criteria................................................11
(b) Describing the relationship between Fonterra and Maori using text and a visual aid.............12
Conclusion.....................................................................................................................................13
Reference List................................................................................................................................14
Appendix........................................................................................................................................17

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Introduction
Sustainable organisations organise those actions that can help the business to implement
sustainable strategies to gain cultural and economic benefits through environmental
responsibility. As suggested by Hopkins et al., (2009), of late, the natural environment becomes
a key strategic problem for both academic communities and business. The organisations are
using sustainable strategies to integrate long-term profitability to protect the environment and
eco-system. In this study, Fonterra, a famous dairy organisation has been chosen in order to
highlight sustainable practices and operation management. In the following part of the study, one
sustainability challenge has been chosen with recommending the vision of Fonterra for future
growth. In addition, the external and internal environment of the organisation has been discussed.
In the final section of the study, indigenous population Maori has been chosen that has been
impacted by the business operations.
Task 1
(a) Overview of Fonterra
Fonterra Group Limited is a cooperative organisation and this firm is owned by around
10,500 farmers. Fonterra is one of the largest organisations in New Zealand and it is in the dairy
industry. This firm is also associated with manufacturing, food services and retail industry.
Fonterra is responsible for almost 30% of the world's dairy exports. Fonterra was established in
the year 2001 and it has it headquarter in Auckland. Fonterra mainly produces milk, cheese,
butter, ice-cream and other dairy-based products. The current revenue of the organisation has
touched NZ$17.3 billion (Fonterra.com, 2017). The profit of Fonterra was NZ$834 million in

3SUSTAINABLE PRACTICE AND OPERATIONS MANAGEMENT
2016. However, this firm was established by merging two dairy cooperatives, Kiwi Cooperative
Dairies and New Zealand Dairy Groups. Fonterra has several subsidiaries, mainland Cheese,
Anlene, Ammum and Anchor.
Justification for choosing Fonterra
During the time of the 1980s, the term sustainability was related to the international
discussion about environmental challenges that can impact the overall global economy.
However, sustainability has entered in the arena of small organisations also where their
managerial operations should be sustainable. The growth of an organisation and economies
development on innovations are associated with the environment that should not harm the future
generation. In New Zealand, Fonterra farmers are dominant in each part and customers love the
Fonterra products. This organisation likes to do the business in transparent as they share their
environment, social and financial information to all. According to Drake & Spinler (2013),
increasingly, consumers like to know about health and nutrition when they purchase the food
products, similarly, consumers like to know about the firm’s ethical, agricultural and social
issues. Fonterra likes to produce the highest quality milk as it is the core of Fonterra’s business.
In order to ensure the milk quality and reduce the dairying’s environmental footprint, the
management developed the initiative Supply Fonterra. This is a programme that supports the
cooperatives and farmers to deliver the sustainable milk products. The management is striving to
produce sustainable milk supply to ensure the demands of local communities and international
customers (Nidumolu, Prahalad & Rangaswami, 2009). The Supply Fonterra initiative supports
the safety requirements and save-environment requirements and to provide assistance to the
farmers in meeting the regulatory framework. Collaborating sustainability to all the stakeholders
of the firm makes the organisation a step ahead in sustainability and in helping the stakeholders;