Strategic management of natural resources - Universitatea Alma ...

Sibiu Alma Mater University Journals. Series A. Economic Sciences – Volume 3, no. 1, March / 2010

Strategic management of natural resources Nicolaie GEORGESCU and Cristina ANTTILA Sibiu Alma Mater University, 57 Somesului, 550003 Sibiu, Romania Tel./ Fax: +40 269 250008, e-mail: [email protected]

Abstract Strategic management is one of the forms of modern management that has officially entered in the world of management specialists in 1973. Strategic management is a process through which managers formulate and implement from the strategic point of view strategies for optimizing the fulfilment of an objective, in some given internal an external conditions. The pressure upon the environment has registered a fast growth, thus creating a deficiency of natural resources not only for us, but also for future generations. Society has to make efforts to reduce the negative impact exerted by economic growth on the environment, efforts concretized in environment investments. Keywords: strategic management, renewable, non-renewable, eco-technologies, environment protection, ecological labelling system. Rezumat Managementul strategic este una dintre formele de management modern care a pătruns oficial în lumea specialiştilor în management în 1973. Managementul strategic este un proces prin care managerii formulează şi implementează din punct de vedere strategic strategii pentru optimizarea îndeplinirii unui obiectiv, în anumite condiţii interne sau externe date. Presiunea exercitată asupra mediului înconjurător a înregistrat o creştere rapidă, creând astfel o deficienţă de resurse naturale nu numai pentru noi, cât şi pentru generaţiile viitoare. Societatea trebuie să facă eforturi să reducă impactul negativ exercitat de creşterea economică asupra mediului înconjurător, eforturi concretizate în investiţii în mediul înconjurător. Cuvinte cheie: management strategic, regenerabil, neregenerabil, eco-tehnologii, protecţia mediului înconjurător, sistem de etichetare ecologică.

The difference between having a strategy and really practicing strategic management is as great as that between failure and success.

1. Introduction Strategic management is one of the forms of modern management, focused on the changes and modification that need to be done in the organization and in its interactions with the environment where it functions, in order to avoid generating some situations when goods and services provided by the organization, their fabrication and sale, the whole activity to become overrated, in chronic disparity as compared to the changes produced.

Strategic management may be defined as: – The process through which leaders determine the long-term direction and organization’s performances, ensuring the creation of a cautious formulation, of a correct implementation and of a continuous strategy evaluation – The art and science of formulating, implementing and evaluating correlated functional decisions that allow the organization to fulfil its objectives.

By strategic management, organization’s leadership determines long-term evolution and its performances, ensuring rigorous formulation, corresponding application and continuous evaluation of the set strategy.

Most organizations attempt to elaborate and to implement strategies for fulfilling long-term objectives. Presenting the strategy of the 30

Nicolaie GEORGESCU and Cristina ANTTILA – Strategic management of natural resources

Renewable resources are in general the ones that can be reproduced, such as water. In this category of permanent resources specialists include solar, wind and tide-propelling energies. Non-renewable resources (non-permanent) are those that are in stocks, more or less generous regarding the ensuring of future consumption (fossil energetic resources, all categories of ores).

organization, besides its mission and objectives is a strategic plan of the organization. In order to elaborate and to apply this strategy, an important role is held by a certain aspect of the prevision function called strategic management. Strategic management is a process through which managers formulate and implement from the strategic point of view strategies for optimizing the fulfilment of an objective, in some given internal and external conditions.

3. Natural resources and European economic growth

2. Strategies and natural resources

In spite of the technological advancements, the pressure upon the environment has registered a faster growth than the Europe’s population, thus creating a deficiency of natural resources not only for us, but also for future generations.

Strategies are complex decisional processes that unfold at organization’s level and that are oriented towards the fulfilment of fundamental objectives that organization has set.

With the exception of Finland, Latvia and Sweden, all European Union’s countries are confronted with a deficiency/scarceness of natural resources.

Strategic objectives have to be: – Very clearly and realistically formulated – Accepted by all the organization’s employees – Action-oriented – Accompanied by evaluation systems

Even if these countries dispose of important reserves as compared with the other member states of EU, this does not mean that they administrate/manage them right. For example, in Finland, the pressure on the environmental protection has increased with 70% starting with 1975, one of the greatest growth rates of EU.

Natural resources are those material elements that exist in the environment and that may be used by a biological system. They are: geochemical, energetic, genetic and food. The notion of natural resource includes chemical elements, the energy existent on Earth, as well as a part of the stored information as genetic programs on using the first two types of resources. Geochemical resources are renewable, the mass and the composition of the planet being constant, the main resource of energy, the solar one is non-exhausted at the scale of the biosphere’s existence. The man uses natural resources in a specific way, not only for satisfying biological need, but also for creating ways of transforming the environment, of satisfying the requirements created by his social development.

Moreover, Germany together with Bulgaria and Latvia have managed to reduced the ecological footprint (an indicator that measures the demand of natural resources in the basis of the consumption of a single person) in the last three decades. The accomplishment of these countries is all the more notable as, at the same time, they have managed to increase the indicator of human development as well. However, Germany’s ecological footprint is still 2,5 times bigger than the natural resources it has. The difference between the ecological footprint and bio-capacity (the bio-productive capacity of natural systems) is practically that between the man’s demand and the nature’s capacity to offer.

Natural resources are defined in Robert Dictionary as “an ensemble of natural resources of which a community disposes or may dispose”. They are air, water – in all forms, solar radiation, vegetal and animal biomass, soil, mineral substances of the soil and subsoil, natural rocks, fossil fuels, ferrous and non-ferrous ores. Giraud (1979) and F. Ramade (1984) complete this definition, showing that the term resource designates “the entity on the energy and materials necessary to man plan to ensure its psychological functions and to feed the totality of its productive activities”.

In time, this indicator has varied: until 1970, the bio-capacity has been larger than the ecological footprint; between 1970 and 1994, the report has inversed itself. Evaluations made between 1994 and 2003 show that the bio-capacity has been greater than the ecological footprint, except for two years. In Romania, the ecological footprint is 2,4 and is the lowest in EU, but the country stays an ecological debtor.

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– Development of some structures/financial patterns that reflect the costs with emphasis on the projection/engineering/fabrication.

4. Strategic management of natural resources in Romania

The issues of waste management are usually included in general rules of economic activity, the main role being held by the initiative of public and private economic agents in view of obtaining some profits corresponding to the effort made for recycling and capitalization.

A durable Romania from the managerial point of view imposes: – Closing the production cycles by using and recycling waste; – Reducing the use of fossil fuels; – Improving the quality of materials in order to prolong the economic life of products manufactured of these materials; – Lowering the intensity of transports. – Technologies, respectively: – Rational technologies – technologies with reduced consumption of materials and energy; – Clean technologies – they imply ecologization of existing technologies; – Eco-technologies – new technologies, adapted to ecological requirements.

A well-determined place in the category of waste is held by textile waste, importance sustained by the fact that in operational costs raw material has a high percentage. Recycling textile waste is a main direction of strategic management, doubled by efficiency in: – The design activity; – Implementation of practices and procedures; – Choosing machineries and technologies. The starting point in the field is legislation, from which the following tasks result: – Avoiding waste has to have priority as compared to legal and non-toxic capitalization, respectively to their elimination; – Unavoidable waste will be collected on assortments and subdued to an energetic or material capitalization, mainly in the economic circuit, if this is possible from the technical or economic point of view.

In this context, waste represents a major issue in each European country, and the waste quantities are in general growing. Producing waste implies a loss of materials and energy and imposes high economic and environment costs to society for their collection, treatment and processing. Therefore, a strategic management program is imposed whose control elements are analysis, policy and action plan and that needs implication of all departments of an organization.

Law’s provisions referring to the waste circuit, as well as the tendency of growth of the deposition taxes act more and more intensely, which determines the existence of a proper strategy in the field based on selectivity, technological avantgarde, high competitiveness, profitability.

Ecologic management, environment protection respectively is done through: – Technology and clean materials/managerial programs; – Solutions for areas where errors occur; – Cleaning after ecological disaster.

Eco-balance sheets, eco-audit schemes, analysis of the product’s life cycle, eco-labeling system are more and more imposed, they ensure the harmonization of the technologies of processing textile waste, of the textile products containing fibers recuperated according to the EU requirements.

Inspiration and “ecological intelligence” are the foundation for the company’s objectives to ensure profit. Out of these there can be mentioned: – Elimination of the waste concept in creating the product by using materials, energy and resources that can be immediately recycled, reused and introduced in nature; – Elimination of all substances that seem noxious to man’s health or to the natural system; – Assuming responsibilities for all stages of the product’s life cycle;

Starting from the idea of the necessity, at national level, of a strategic, directional and operational management, it is imposed: – Knowing the quantity and quality of the produced waste, of the producers and of the processes from which they result, of the trajectory and of their final destination;

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Nicolaie GEORGESCU and Cristina ANTTILA – Strategic management of natural resources

Environment investments lead to sustainable development in the industrial and commercial field and are strongly connected with sustainable economic growth.

– Reducing the quantity of waste at the producer, by interventions in technology or by their capitalization through an intermediary link; – Setting some least harmful ways of eliminating or reintegrating in the natural environment the wastes whose coming out cannot be avoided or that cannot be recycled.

The European Union offers non-payable money for businessmen that can invest in: – Extension and modernization of water systems and used water; – Development of wastes integrated management systems; – Implementing adequate management systems for environment protection – Reduction of pollution and diminishing the effects of climate changes by restructuring and rehabilitating the urban heating systems to score the energetic efficiency targets in places most affected by pollution.

The strategy of developing sub sectors of the Romanian textile industry provisions meeting some superior physical and value production indicators in 2010 as compared to 2000, implicitly a quantitative growth of textile waste up to 26,5 thousand tons. In Romania, in the 16th of December 2009, the order no.2201 of the Ministry of Economy has been issued on launching the call for project proposals for investments in the modernization and making new capacities of producing electrical and thermal energy by capitalizing renewable energetic resources: of the biomass, of the hydro energetic, solar, wind, bio fuel, thermal resources and of other renewable resources.

Economic growth based on environment protection is presented as the main priority of the European Union. To attain this purpose, EU offers important funds destined for the ecological systems development. To mark nature-“friendly” products and services, economic operators of the community space may get “the European ecological flower”.

These projects are to be financed by the European Fund for Regional Development and by the state budget by the Sectorial Operational Program “The growth of economic competitiveness”.

EU’s ecological label (the European Flower) is a unique authentication scheme to help consumers distinguish the “green” products and services from those that affect the environment. Participation in this project is voluntary and the purpose of introducing the ecological label is to promote products that have a reduced impact on the environment, within their life cycle. The applicant shall pay the fee for soliciting the label and the costs for testing or verifying the products in their performance evaluation process in conformity with specific criteria of granting the ecological label. The ecological labeling system does not include food products, beverages, pharmaceutical products and medical equipment. Nevertheless, one may find these labels on detergents, light bulbs, personal computers, printing paper, furniture or in tourist accommodation services.

At present, green energies are ignored. Countries such as USA, Germany or China massively invest in producing alternative energy. Romania is barely moving even if it has potential. 20% of the budget for the national energetic system has to go to renewable resources. In this way, 10000 green houses may produce a third of the capacity of a nuclear reactor. This is the conclusion of the Employers Association of New Energy Sources (SunE). The targets assumed by Romania towards EU concerning the production of renewable energy should represents 24 percent of the total of national consumption until 2020. 5. Solutions offered by the European Union for environment protection

This ecological labelling system includes 80 types of products. Over 4000 products and services from over 710 label users of Germany and abroad are sold with this symbol.

At national level, Nature 2000 network has been created, an ecological network of natural areas, this being the solution found by the European Union to bring together the two vital human needs, the need to keep nature alive and the need of economic development.

6. Conclusions The ecological aspect has to be a permanent component of the economic decisional process and 33


the environment, efforts environment investments.

has to take into consideration the fact that any use of the natural resources to satisfy some non-vital needs or some vital needs on non-economic ways, represents a shorter future life span. Therefore, the manager has to have not only technical, juridical, financial knowledge, but also ecological knowledge that should be integrated in economic judgments. Development indicators are instrument in decisional processes meant to accomplish the consolidation of positive connections between development and environment and to break the negative connections between economic growth and environment degradation.

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References Naneş M. 2000. Managementul strategic al întreprinderii şi provocările tranziţiei (Strategic management of the enterprise and transition challenges), Editura All Beck, Bucureşti. Nicolescu O. (coord.), 2000. Sisteme, metode şi tehnici manageriale ale organizaţiei (Managerial systems, methods and techniques of the organization), Editura Economică, Bucureşti.

Economic development and prosperity will continue to exert a powerful pressure on the planet’s capacity to fulfill the requirements concerning resources and pollution absorption. Therefore, society has to make efforts to reduce the negative impact exerted by economic growth on

Nicolescu O. (coord.), 1996. Strategii manageriale de firmă (Managerial strategies of the company), Editura Economică, Bucureşti. Popa I. 2004. Management Strategic (Strategic management), Editura Economică, Bucureşti.

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