Introduction
Pacific Gas and Electric Company (PG&E) supplies both electricity and gas utilities to its clientele, mainly based in California.
The company has expressed its long-standing commitment to manage its corporate responsibility, through addressing the safety issues of its workforce and public, achieving diversity and widespread inclusion, constantly addressing issues related to environmental performance, as well as integrating customer energy programs within its system, and ensuring economic vitality is attained by the external communities served (PG&E 2013, para 1).
PG&E equally follows an environmental policy that underscores the company’s dedication to addressing and managing the environment effectively. The company has offered to comply entirely with the stipulated laws and regulations on the environment (PG&E, 2013, para 3).
The company intends to explore areas that will enable it meet the standards that are set to avoid pollution. The company would also ensure conservation of rare species.
The company’s other policies on environment entails improving the existent management programs, as well as the environmental excellence standards and innovation, to ensure a reduction of its impacts on the environment (PG&E, 2013, para 4).
Other significant areas that the company has shown strong commitment in addressing related issues include crisis and catastrophe management.
This essay particularly intends to carry out an elaborate analysis of the firm’s style along with the approach of management and conduct an assessment on its capability to sustain its management in these areas.
Historic Analysis of the Company’s Performance
Corporate Social Responsibility
In 2003, PG&E Corporation produced its first report on corporate social responsibility where seven critical performance values were highlighted.
Firstly, the company put the health as well as the safety of its employees at the forefront, where no job that is ascertained as unsafe would be conducted or pursued by the company.
Secondly, the company offered to treat its “customers, the neighbours, workers, shareholders, business partners, and each other the way we would want to be treated, that is, honestly, respectfully, ethically, and fairly” (PG&E Corporation, 2003, p. 3).
It was the resolve of the company to keep registering good returns to ensure that investors would be drawn to the company.
In terms of the environment, the report highlights PG&E’s intentions of maintaining a perfect environment, and disclosing to the investors and general public about the important corporate governance efforts being undertaken (PG&E Corporation, 2003, p. 3).
To the community, PG&E recognised the need of appreciating diversity and nurturing it within its expanded workforce and other business associates, including suppliers.
The company’s management also decided to work together with the communities as a way of appreciating their contribution to the success of the company.
In the fourth annual CSR report of the company published in 2006, PG&E had succeeded to establish a specific environment and culture that enhanced the employees’ full potential to produce the anticipated results (PG&E Corporation, 2006, p. 5).
Among the achievements made during the year included developing a new program, the ‘Zero-In on’ programme about safety, which offered new equipment, instructions, and initiatives (PG&E Corporation, 2006, p. 5).
These innovative apparatus and methods were designed purposely to reduce or eliminate injuries altogether. The company also welcomed up to seven MBA hires during the same year, and enrolled them into the internal corporate MBA Leadership Programme.
This programme worked by recruiting MBA programme graduates at the leading business schools, which enjoyed distinct academic performance and were renowned for their great diversity in terms of their student composition (PG&E Corporation, 2006, p. 5).
During the same year, PG&E provided about $1.2 million to be used as stipend for students who would be on-the-job training.
These efforts were particularly emphasised on as a way of developing the future leaders for the company in these critical subject areas, and priority was mainly given to the populations in California with disadvantaged educational backgrounds (PG&E Corporation, 2006, p. 5).
Another significant CSR achievement during the year, which was targeted at the employees, involved expanding the actual number of employees required to take part in at least one of the apprenticeship programmes.
There was an increase of up to 800 employees who engaged in “apprenticeship programmes”. The programmes were formulated in conjunction with “ESC/IFTPE and IBEW” (PG&E Corporation, 2006, p. 5).
To the community, PG&E succeeded to install solar arrays in up to 30 schools and helped in training over 600 teachers in curricular relate to solar sciences (PG&E Corporation, 2006, p. 6).
Another partnership with the San Francisco city has seen PG&E develop energy sources as an alternative to reducing greenhouse gas emissions. The year 2006 was historic for PG&E because the highest diversity spending of $491.9 million was achieved for the first time.
This achievement fulfilled the objective set by the Public Utilities Commission in California (PG&E Corporation, 2006, p. 6).
Environmental Issues
PG&E established a stewardship council in 2003 to enhance the corporation’s commitment on developing and executing land conservation efforts.
The Pacific Forest Watershed Lands Stewardship Council was planned to receive $10 million in funding every year for a full decade (PG&E, 2013, para 5).
It was estimated that about 10 years would require a budget of roughly ten million. About 70% of the budget went into financing the “Land Conservation Plan”. The remaining 30% went into the “Youth Investment Program.”
The Corporation introduced yet another environmental plan that focuses on the conservation of different bird species (PG&E, 2013, para 3). In 2002, the Avian Protection Plan retrofitted its over 28,000 electricity poles to protect and avert bird injuries and deaths (PG&E, 2013, para 3).
Part of the conservation plan involves training the employees to enhance compliance with both the federal, as well as state laws on bird protection (SMUD, 2009, p. 1).
The public is educated, through various partnerships, to understand and facilitate the migration and habitat conservation of the birds (PG&E, 2013, para 3). Among the programme partners include non-profit corporations in addition to the state and federal agencies.
The company went ahead to ensure that it laid down plans to conserve watershed lands completely. This initiative was achieved in 2007. The conservation efforts targeted more than 16,187.425 hectares of the land that the company conserved.
The initiative involved the “Pacific Forest and Watershed Lands Stewardship Council”. The conservation plans earmarked 2008 for the unveiling of a multiyear free title donation process that would also see public agencies and other conservation organisations receive grants (PG&E Corporation, 2007, para 7).
The company committed itself to conserve the habitat for a species of a beetle known as the “Valley Elderberry Longhorn” beetle in a piece of land amounting to 700 acres (PG&E Corporation, 2007, para. 11).
The plan entailed forming partnerships with agencies both at the state and federal levels to enhance its success. There are prospects that the beetle will become extinct because its livelihood is pegged on the elderberry bushes.
The conservation plan considered adding a further 35 acres of land as part of the Sacramento River Wildlife Refuge (PG&E Corporation, 2007, para 11).
Crisis and Catastrophe Management
Over the past decade, PG&E has focused on preparation plans aimed at educating customers and the community on their preparedness in the event of an earthquake occurring (PG&E, 2013, para 4).
The company advises the community to conduct drills with their families, to determine the opportune time to switch electricity and gas when disaster strikes, and having emergency supplies in readiness, including flashlights and portable radios.
The disaster management plan is particularly critical for the operations of PG&E because California is considered among the earthquake-prone areas in the USA.
The company equally has established a gas emergency awareness and response programme that supports coordination, training, as well as communication activities (PG&E, 2013, para 4).
The emergency programme enrols volunteers, locals, and state officials for training on general safety that revolves around the gas utility.
In conducting its activities, the gas emergency awareness programme measures performance and ensures it adheres to the regulatory compliance (PG&E, 2013, para 4).
Over the last decade, PG&E has established a standalone department that focuses on gas emergency preparedness, which trains employees on specific ways of handling gas-related emergencies.
The department harmonizes the After Action Reviews relating to the unplanned gas releases and participates in industry benchmarking in as far as the Emergency Management solutions are involved (PG&E, 2013, para 5).
A 911 Notification Process was established at PG&E, where operators in the company’s control room need to dial 911 and make notifications as soon as possible, basing on the stipulated SCADA alarm conditions (PG&E, 2013, para 5).
Some of the SCADA conditions include activating Lo-Lo pressure alarm to indicate a possible rupture on the pipeline.
Immediately after triggering the stipulated alarm conditions, PG&E undertakes a highly detailed mechanism that demands the notification of the 911 Emergency Response Units by the Gas Control department (PG&E, 2013, para 5).
Assessment of the Management’s Performance in these Areas
Corporate Social Responsibility
PG&E has succeeded in excellently addressing the workers’ safety and health. No unsafe job is approved within the firm, which means that staffs are not subjected to any dangerous jobs or environments.
The management has attained a greater level of honesty in fulfilling the CSR programmes and plans to the community, shareholders, and employees at the firm.
As a result of honesty in handling employees and effectively ensuring safe working environment, the company has improved on the employee turnover rates gradually. For instance, the percentage turnover rates for male workers stood at 23% while female workers’ turnover rate was 19%.
In 2011, the rates reduced to 22% for male workers, before dropping to 16% in 2012 (Freeman, 2010, p. 6). In the case of women workers, the turnover rates shot up to 20% in 2011 before reducing significantly to 15% only in 2012 (Crutcher, 2002, p. 15).
Significant number of employees has undergone training programmes in recent years, reflecting on the management’s good performance in the area. In 2010, 2,144 employees were trained on leadership, while 448 were enrolled for senior management training programmes.
The advanced project management programmes benefitted 768 employees, making a total of 3,360 employees who undertook training and development programmes.
In 2011, 1,600 workers were enrolled for the leadership training programme, while 448 and 304 undertook the senior management and advanced project management programmes respectively.
In total, 2011 witnessed a total of 2,352 employees benefit from the training and development programmes.
In 2012, up to 1,072 employees benefitted from the leadership programmes, with another 800 of them undergoing senior management training programmes and 336 benefitting from the advanced project management training programme.
A total of 2,208 gained from the training and development programmes in the organisation.
These figures are huge and imply that a majority of the employees at the firm gain from the training and development courses, which in turn enhances their employee satisfaction levels (Pacific Gas and Electric Company, 2010, p. 159).
In terms of attaining workforce diversity, PG&E’s workforce composition has continued to reflect the world’s population to a greater degree. About 12,000 employees are involved in more than 2,000 projects that are spread across the 50 states in America.
Globally, the corporation has a presence in 25 countries, where employees of the firm are also stationed as they undertake their roles and duties (DiversityInc Recognizes PG&E’s Diversity, 2012, para 3). Overly, PG&E’s talented professionals use a total of 82 languages in their communication.
The management is still expanding the workforce diversity, targeting to maintain the different perspectives as well as experiences that need to meet customers’ toughest challenges (DiversityInc Recognizes PG&E’s Diversity, 2012, para 4).
Environmental Issues
PG&E’s management performed excellently well in establishing an environmental management system that required all of the company’s suppliers to adhere to the set-out stipulations (Nation’s Utilities Join With PG&E, 2008, p. 12).
The environmental standards entailed a requirement that the suppliers voluntarily act in determining their reduction goals, and reporting their actual performance with reference to the performance goals determined each year.
PG&E has been strict in enforcing the metrics on supplier environmental management, thus ensuring that its suppliers play a role in enabling the attainment of the corporate environmental goals and objectives.
To highlight the importance that the company places on environmental management, PG&E has introduced numerous awards to recognise the efforts of the suppliers (Kligman, 2013, para 1).
On an annual basis, supplier performance details are tracked before the best performers are rewarded for their efforts at the close of each year.
This incentive programmes by the management implore on the suppliers to consider performing at their best to reach the environmental standards set by PG&E (Kligman, 2013, para 5).
The stewardship council has produced positive results in its efforts of effectively conserving land. The decision by PG&E’s management to formulate the stewardship council created a perfect opportunity for the corporation to address all the issues that pertain to land conservation.
The management had effective plans to fund the programme fully, where $10 million were diverted towards boosting the project each year. It highlights the management’s level of preparedness in sustaining the programme through adequate funding.
Empowering the youth in society through the Youth Investment Program (PG&E, 2013, para 5), equally showcases the management’s willingness and preparedness to ensure that the environmental plans emerge to be as successful as anticipated.
Involving the youth in the society to address environmental matters assures of continuity even after PG&E’s support declines. Thus, the management of the firm understands the need of making this project permanent and therefore introduces and empowers the youth in preparation.
PG&E’s management also performs very well in terms of incorporating many stakeholders into its environmental management programmes.
For instance, the Avian Protection Plan that centred on protecting birds from injuries and deaths saw a public education programme initiated to enhance the performance.
The corporation’s management realises the need for inclusivity in making the plan a success and therefore partners with other crucial stakeholders to make it a success.
Integrating non-profit organisations helps the PG&E management to bring in real experts in the area to help in administration as they face their primary roles.
However, the idea by PG&E management to introduce many environmental programmes all at once was not a good idea. The enterprise is an energy manufacturing and distribution entity, which means that its core business area does not entail environmental management.
Initiating many environmental management programmes all at once, including the avian protection, land conservation, and the habitat protection programmes, minimises the ability to obtain the needed results.
Even though the management has incorporated other external interest groups to help in steering the programmes, there lurks the danger of divided attention affecting the outcome.
It would have been more important for the firm to consider only two of the environmental management programmes but endeavour to address all the problems involved exhaustively, without having to face the issue of gross divided attention (Walker, Pitt & Urmila, 2007, p. 49).
Crisis and Catastrophe Management
The management’s performance with regards to preparing the customers and general community on how to deal with calamities and catastrophes has been less effective.
Most of the safety awareness programmes have only been involving the idea of encouraging the society to conduct safety drills. There are limited instances where PG&E appears to be following up on the awareness programme as it seeks to ascertain the level of its incorporation.
Although it is highly challenging for the company to reach out to the entire society and offer safety awareness education, it is more critical that the management tries it out rather than just urging the community theoretically (Murphy, 2007, p. 31).
However, the enrolment of volunteers and other individuals for safety awareness training is a noble idea on the part of the management. It enhances the company’s ability to see to it that more of its consumers and other members of the larger society remain safe and free from potential hazards.
Empowering the community has a more realistic potential of attaining the objective easily and in a less expensively way than wholesomely relying on the company to achieve the goals.
Establishing a standalone department in charge of crisis and catastrophe management enhances performance on the part of the company’s management. The control room is manned all through by individuals who have attained specialised training in the area.
By initiating such a plan, the management takes the initial responsibility of ensuring safety upon itself, before it attempts to involve other external emergency organizations (Murphy, 2007, p. 31).
It also enhances the degree of coordination and response on the part of the management when it comes to addressing emergency situations.
In other words, the management has taken the initiative to empower the internal response units effectively, to increase the efficiency with which the company deals with urgent situations.
Scenario Development
Corporate Social Responsibility
Purpose of CSR
Corporate social responsibility is a critical business aspect that organisations are increasingly adopting to enable them achieve their numerous objectives.
CSR activity helps in convincing the general community, which is a significant stakeholder in any business situation that the firm does not only focus on profits but rather on the general good for all.
The extent of CSR activity by any given organisation helps it to attract buyers or customers, which in turn builds its revenue base.
There have been growing opposition over continued expenditure by organizations to fund CSR activities, which often are not part of the organisation’s core business objective (Trends in Utility CSR Reporting, 2008, p. 6).
However, it is important that the organisation participates in empowering the community because, without the community, there is no chance of business taking place.
Time Horizon
CSR programmes and activities should last for a significant period, to continuously benefit the communities.
Because business relies on the community, mainly for market, particular CSR activities can be sustained for between 7 and 10 years by the company (Trends in Utility CSR Reporting, 2008, p. 6).
Such objectives as training the workforce require continuity over a long period for the company to be able to manage and determine the actual skill development needs required effectively.
Participation
Both the internal and external customers of the company must be ratified as stakeholders in the CSR programmes. The internal customers comprise of the employees at PG&E, who directly involve themselves in service delivery.
The external customers comprise of the actual buyers of the services issued by the firm. Other important participants that should be involved include non-profit organisations and the authorities at both the federal and local levels (Trends in Utility CSR Reporting, 2008, p. 6).
Pre-workshop Analysis
Most organisations initiate projects that target to empower both the local communities and the employees in various ways (Trends in Utility CSR Reporting, 2008, p. 6).
This may include building such social amenities as schools and hospitals, which in turn enrich the community with various opportunities for service delivery and acquisition.
Often, once the organisation avails the CSR programme, it is left out to the community and other stakeholders to run it, unless specific skills are needed or required.
In terms of the employees, the organisation initiates programmes and practices that target the empowering the workers, such as training them to add their skill capabilities.
Environmental Management
Purpose
Activities by organisations often result in the degradation of the environment. As the number of factories and processing firms increase, more effluent is discharged into the environment, which results in its degradation.
With a degraded environment, people’s quality of lives and health are affected negatively, thereby causing illnesses (Esther, Carmen & Francisco, 2007, p. 403).
Thus, organisations such as PG&E may not have a healthy population from where to pick its workforce in case the environmental degradation is not put to check.
Equally, an unhealthy community may not prioritise buying such services as electricity and gas because they will spend much of their resources seeking health services in hospitals (Esther, Carmen & Francisco, 2007, p. 403).
Time Horizon
Environmental degradation occurs on a daily basis, as long as human activities continue unabated. Thus, to ensure that the environment remains clean even with the continued operation of factories and other processing activities, environmental management should be a long term activity.
Specific projects or programmes can last for between 5 and 10 years before being revised or renewed.
Participation
Environmental management requires the involvement of experts in the specific areas to enhance the achievement of results.
While the organisation may train its own workers on environmental management matters, it is critical that skilled personnel from the environment field, such as the non-profit organisations, be involved in running the projects (Esther, Carmen & Francisco, 2007, p. 404).
The government is also a key stakeholder because it is the custodian of the numerous environmental laws that apply within a given jurisdiction.
Pre-workshop Analysis
Environmental management projects often entail reclaiming or conserving particular aspects of the environment that face the danger of extinction. Every organisation realises the direct effect that the environment suffers as a result of its activities or operations.
This usually forms the priority area as the firm resorts to manage the environment (Esther, Carmen & Francisco, 2007, p. 410).
However, other environmental aspects that may not necessarily be affected by the organisation’s activities and operations may also be given priority by the organisation, as an extension of the other environmental management practices (Esther, Carmen & Francisco, 2007, p. 415).
Crisis and Catastrophe Management
Defining the Purpose
Calamities and disasters are a part of the day-to-day life that human beings lead. The catastrophes are further heightened by the presence of man’s activities and conduct (Lalonde, 2007, p. 17).
For PG&E, the availability of the firm’s amenities, such as power lines, pose more danger because they may fall as a result of heavy storms or earthquake and cause injuries or even death.
Therefore, it is critical that crisis and catastrophe management is sustained in organisations to help in curtailing the extent of danger that may befall people.
Time Horizon
Specific crisis and catastrophe management plans or programmes can last for an average period of 5 years, before being reviewed.
Advancement in other sectors, mainly in the information technology, is resulting in improved techniques and knowledge, which the organisation may need to integrate into its disaster management plans after a short period of about five years (Lalonde, 2007, p. 17).
Participation
Disaster management should involve the stakeholders involved in the business (Lalonde, 2007, p. 19).
It is important for the entire community to understand about how to protect themselves from dangers that may occur as a result of their proximity to such amenities as power lines in case of calamities.
Both individual members of the community and organisations should be involved in managing disasters and catastrophes that put all of them at risk (Lalonde, 2007, p. 20).
Pre-workshop analysis
Because communities are often not better placed to initiate disaster and catastrophe management plans on their own, the organisations are usually expected to take the lead in this area.
In particular, the organisation should begin by reaching out to the community to educate them about ways that they can use to remain protected from any dangers (Lalonde, 2007, p. 22).
Organisations also train their workers on how to handle emergency situations, to make it easy for them to address such situations when they arise.
Management Requirements in Tackling these Scenarios
Corporate Social Responsibility
PG&E’s management requires planning and organising for the continued training and skill development of their workers.
The employees can only appreciate the CSR efforts of their employer, and thus turn it into active performance for the benefit of the company if they benefit directly from the management’s actions.
The management should determine the career growth needs of the employees in advance and plan to ensure that the necessary programmes are availed.
In terms of achieving workforce diversity, the management requires to work towards raising the feeling of inclusivity in the organisation (Nicolopoulou, 2011, p. 524). Recruitment exercises should include all qualified individuals from the various communities for consideration.
During decision-making processes aimed at determining the individuals who merit for promotion and leadership positions, the management should practise openness and strictly base their decisions on actual performance.
Environmental Management
PG&E’s management must improve on its public relations efforts to enhance its environmental management performance and results. Environmental management is a technical area that requires technical expertise and skills to a greater level.
It is difficult to build such needed skills or expertise from within the organisation, because PG&E is not an environmental organisation in the first instance.
The good public relations practise required of the management will be critical in enabling the firm to partner with other external expert organisations in charge of environment and management (Lu & Schuett, 2012, p. 334).
A good public relations skill on the part of the management is equally important in enabling the firm to convince the community. Environmental management programmes and plans, even if they are initiated by a corporation, require the direct input of the local community.
Unless the community is convinced to an extent of buying the idea, chances of it achieving its intended targets are minimal.
Therefore, through good public relations skills, the management will succeed to convince and eventually win over the support of the local community (Lu & Schuett, 2012, p. 334).
Crisis and Catastrophe Management
The management at PG&E needs to enhance the effectiveness in performance of this area by widening the inclusion of all the participants targeted.
With companies being expected to take charge in their disaster management plans, it is upon PG&E’s management to sell the idea to the entire community to take part in it (Burnes, Cooper & West, 2003, p. 452).
This can be more realistic if the managers involve themselves directly in meeting with the communities and demonstrating to them the benefits of practising good disaster management skills.
Comparison between the Needed and Existing Company Requirements
Effective Planning and Organisation
PG&E requires effective planning and organisation skills to fulfil the training and development needs of its workforce.
In actual practise, the management of the firm has constantly enrolled the employees into numerous training and development programmes to enhance their knowledge and skills. This has seen the turnover rates fall considerably over the past years.
However, the management requires extensive planning and organisation skills to improve in the area significantly.
As the future business trends require that organisations maintain continuity in their various programmes and plans, enabling the employees to undergo career growth effectively and development opportunities will enhance PG&E’s performance in the area.
The company has succeeded in curtailing employee dissatisfaction over the present past, which is particularly highlighted by the improved turnover rates. It is critical to mention that PG&E’s performance trend in terms of addressing critical employee needs has been positive.
With the future trend depicting rising need for employee needs to be fulfilled effectively, PG&E has an adequate capacity in this area to handle the situation even in future.
Public Relations
PG&E has already succeeded to involve many stakeholders in the numerous programmes that it has initiated. These important stakeholders in the environmental management programmes, for instance, include non-profit organisations and government authorities.
Additionally, PG&E has been working towards empowering the communities by training individuals on various issues and programmes. This highlights the extent at which the company has been working towards building public relations.
In essence, it can be pointed out that PG&E has the needed potential to achieve the requisite public relations capacity going forward. The continued community empowerment programmes, mainly through training, is likely to prolong the goodwill between the organisation and the general public.
Equally, the already existing partnerships between the firm and other expert or non-expert organisations have afforded it the right capability to build its public relations even further in the future.
Culture and Diversity
PG&E’s workforce comprises of individuals from mixed diversities and backgrounds. The company has been working towards enhancing its cultural diversity as a way of enabling it to achieve its intended objectives.
The recruitments, training, and other important employee-related decisions have continuously been made on the basis of merit and actual ability. As the future scenario demands that the company upholds and maintain diversity, PG&E is in a good position to achieve this requirement.
As employee satisfaction levels improve following the numerous efforts employed by the management, it is worth noting that the company has achieved greater results in the area of employee culture and diversity.
The PG&E workforce is a mixture of people from varied backgrounds, and the fact that there has been witnessed notable improvement in employee satisfaction underscores the great performance of the organisation in terms of upholding diversity.
Conclusion
The Pacific Gas and Electricity Corporation (PG&E) has initiated significant programmes in the areas of corporate social responsibility, environmental management, and crisis and catastrophe management.
Although these areas do not directly relate to the company’s core business obligation, they are critical for the management to pursue because they directly influence the performance of the organisation in the long run.
Corporate social responsibility programmes initiated by the company include ensuring the health and safety of its workers, introducing regular training and career development programmes, as well as pursuing initiatives that would in turn improve the investor confidence.
In terms of environmental management, PG&E has initiated land conservation programmes along with efforts aimed at improving the habitat situation of species facing the danger of extinction.
Birds likely to suffer injuries or death from coming into contact with the company’s electricity poles have equally been considered in the environmental management programme through newly devised safety techniques.
The crisis and catastrophe management plan, on the other hand, entails the company training its employees to create awareness on the lurking dangers in their normal day-to-day lives.
There is a growing demand for organisations to continue participating in CSR activities as a way of appreciating the community that they serve.
Rising environmental degradation concerns as a result of human activities are equally putting pressure on organisations to address environmental management.
PG&E management should improve on its public relations skills to convince expert firms to buy its idea of environmental management, and convince local communities into buying the idea.
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