Case Study Essay: Agrium Inc.

 
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In the modern world, business has evolved to embrace a holistic approach towards the analysis of business success. The criteria have moved from a simple concept of high profitability and size growth to an inclusive view of environmental and social prosperity. Thus, agribusinesses are increasingly subject to pressure to maintain a balance between economic viability, environmental contribution, and social responsibility. Agrium Inc. is a massive retail supplier of agricultural products, in particular agrochemical inputs and services in America and Australia (Ranker, 2017). Therefore, Agrium Inc. is a world-class sustainable organization by all standards that can be substantiated by its competent efforts in upholding economic, environmental and social credibility.

Economic Viability

The economic aspect of sustainability demands that an organization should appropriately use the socio-economic resources to their best advantage in ensuring profitability (higher revenue than expenditure) without raising social and environmental concerns. (FrontStream, 2013). Agrium Inc. is a large public company that majors in retail and wholesale of the main agricultural nutrients and fertilizers with its headquarters in Calgary, Alberta, Canada (Ranker, 2017). It has officially operated as an agribusiness since 1995 with no scandals pertaining finance such as bankruptcy or selling out (Ranker, 2017). The ability of the corporation to manage its socio-economic resources in remaining profitable over several years since 1995 is the first evidence of its economic viability.

According to the financial records, it is possible to prove whether Agrium as a business is indeed economically viable (FrontStream, 2013). Agrium is estimated to have 1,500 retail agricultural centers in Canada and its wholesale segment is focused on the production of nitrogen, phosphate, potash and sulfur-based fertilizers. The contribution of each retail and wholesale branch should result in generation of substantial revenue for the venture to be considered profitable and sustainable. The average total revenue of Agrium ranges from 10-20 billion dollars with total equity of about 6-7 billion dollars (Ranker, 2017). Hence, since the revenue is significantly higher than the expenditure in various branches of the firm, without a doubt the company may be regarded economically feasible.

Returns are crucial in determining the economic feasibility of a firm, but it is not a sole determinant (FrontStream, 2013). Therefore, other issues that prove Agrium to be economically workable include the satisfactory maintenance of staff and their business branches. Agrium has 15,000 employees and has rarely faced failure in financial compensation to workers (“Agrium”, 2017). Thus, despite such a large workforce, the company has the capability to sustain and maintain the needs of their personnel. Consequently, the welfare of employees along with sufficient minimum wage that ensures balance between productivity and contribution in Agrium demonstrate that it is economically viable.

Additionally, the fact that Agrium has branches worldwide shows that the firm has several subsidiaries and acquisitions, which will be used as the evidence of sustainability of this establishment. The sturdy developing corporation has been efficacious in acquiring as well as maintaining businesses, since in 1994 it took control over such firms sch as Agroservicios Pampeanos S.A. while the most up-to-date possession was Viterra’s Canadian retail assets in 2010 (“Agrium”, 2017). No cases of shutdown of these new ventures have been traced over the years proving that they are efficient in production all together. Nevertheless, the ability of Agrium to manage socio-economic resources and sustain their subsidiaries is an overall impressive sign of economic health and feasibility.

Environmental Impact

Environmental sustainability is a concept that refers to the effects of processes, systems and activities of a company on its surroundings (FrontStream, 2013). Major organizations dealing with agribusiness have faced challenges with regard to maintenance of the environment, and Agrium is no exception. Firstly, one has to acknowledge the efforts and measures implemented by Agrium Inc., which are aimed at the conservation, protection and sustenance of its environment. Later its failures are to be regarded in order to reach the right judgment on this sensitive issue. Concerning the environmental viability, the key considerations are water, air, soil and land, which will be elaborated in details.

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Being one of the greatest parameters in the determination of environmental welfare, water can be used to assess environmental practicality of the firm (FrontStream, 2013). On its website, Agrium indicates that gallons of water are utilized in the production of fertilizers, and the water discharged after production can pollute the environment with toxic nutrients. However, the corporation has introduced the system to control this issue (“Agrium”, 2017). The company tries to mitigate water pollution through recycling in a closed-loop system. The latter ensures that instead of discharging water, it should be recycled multiple times over the cause of production. Successful recycling of water has proven the intentions of Agrium to achieve environmental sustainability in order to make a positive impact on its surroundings.

Air pollution of huge organizations cannot be avoided but the ability to control production of gases and fumes can serve as an indication of environmental sustainability (FrontStream, 2013). Nevertheless, Agrium Inc. has adopted measures, programs and policies to overcome air pollution such as the use of Best Management Practices (BMPs) especially regarding the emission of greenhouse gases (GHG). However, the fact that it faced charges and fines in 2005 and 2006 for negligence, non-compliance, and air pollution cannot be ignored (Ranker, 2017). The penalties because of environmental laws violation have majorly originated from the complaints of air emissions. For the last five years, Agrium has not encountered problems with environmental sustenance, which is a progressive sign that the company applies successful measures to reduce the negative influence on the environment.

The impact of industrial activities of a firm on land and soil can provide evidence of its environmental feasibility (FrontStream, 2013). Since the aspects of the environment affected by Agrium include soil health along with land, habitats, and wildlife, they can be used as an assessment of sustainability. The venture works in collaboration with farmers, industry associations, the government and researchers to secure that nutrients released in the soil are applied in the amounts that positively replenish soils (“Agrium”, 2017). Agrium takes responsibility for the effects its activities exert on the environment and substantially contributes to the development of innovations in order to aid in resolving environmental issues related to soil as well as land. Besides, the corporation has succeeded in the attainment of this objective. Thus, soil and land protection by Agrium adamantly advocates for its consideration as an environmentally sustainable business.

Social Responsibility

Social responsibility in sustainability is a strong aspect that has a profound impact on both the public image, goodwill and overall prosperity of the society (FrontStream, 2013). It is a pillar that provides for balancing the needs of the firm with that of the surrounding community (FrontStream, 2013). Social responsibility is about the harmonious existence of the company and the public for the mutual benefit along with the contribution of the business towards the welfare of the society (FrontStream, 2013).

The effect of products on consumers in any level can be used in determining the social responsibility an organization has towards its customers (FrontStream, 2013). Thus, with respect to products, Agrium has organized a Product Stewardship Team that is in charge of ensuring the quality and safety of consumer products for the good of customers in the society (“Agrium”, 2017). Additionally, the corporation collaborates with community leaders and residents to get insight into the working conditions and activities in production that are favorable to both parties. The success of Agrium in providing quality, acceptable and beneficial goods and services to its clients proves that it is socially viable.

Community development along with protection of human rights are parts of social sustainability that should be highly considered by any establishment, in particular Agrium (FrontStream, 2013). Agrium focuses on community development in four areas including the welfare of the environment, health and wellbeing, education and culture (“Agrium”, 2017). Furthermore, education provision is a social responsibility undertaken by Agrium, in particular the programs that support adolescents. In regards to advocating for human rights, the firm is adamantly striving to respect, protect and recognize human rights through the National Global Compact (“Agrium”, 2017). Some of the rights that the company fights for incorporate consumer and employee rights as well as the rights of the public in general. Contributions of the company with respect to human rights and community development show the social accountability of Agrium.

Another proof of social responsibility by Agrium is the purposeful pursuit of social security as a priority (FrontStream, 2013). For Agrium, safety is an organizational initiative practiced both within the establishment and externally in relation to the community. An example of a safety program in which Agrium is involved is the ResponsibleAg, a collaborative venture between the Agriculture Retailers Association and the Fertilizer Institute since 2014 (“Agrium”, 2017). The efforts devoted towards attainment of safety as a holistic approach by Agrium are described on the company’s website in detail explaining its applicability to both external and internal consumers of the corporation. Therefore, provision of security is a direct evidence that Agrium indeed is socially viable.

Conclusion

In conclusion, one may deduce that Agrium Inc. is a defensible establishment based on all three stakes of sustainability. The presented environmental law concerns prove that due to the environment sustainability evident in the recent past, the corporation indeed can be regarded economically viable. Based on the provided information, the view and approach to sustainability are revolutionized, as the perception changes from a simple concept to the holistic one. Therefore, such firms as Agrium set the pace for other organizations to devote more efforts to maintaining a necessary balance in all aspects of sustainability.