MGMT 8615M Week 1 Discussion Post Example

Week 1 Discussion: What Would Keeping the Promise Cost?

Collecting a Container for Every One Sold by 2030: A Discussion Post Pricing a Beverage Maker's Packaging Pledge From Its Own Published Figures, Naming Who Would Pay and When, and Stating What the Writer's Position Would Cost

The Promise in Its Exact Words

Brightwater Beverages, a composite soft drink and bottled water company selling mainly in the United States, states on page 14 of its 2025 sustainability report: "By 2030, we will help collect a bottle or can for every one we sell." At current collection rates, the target cannot be met from Brightwater's own budget, and most of its cost will fall on others: state deposit programs, municipal recycling systems and the consumers who return containers.

Three Inputs, Each With a Document

The estimate uses three published inputs. Unit volume: Brightwater's annual report states that it sold about 9.0 billion containers in the United States in 2025. Collection gap: the sustainability report gives a 2025 collection rate of 61 percent, leaving 39 percent, about 3.5 billion containers, uncollected. Cost: the same report says Brightwater's funded collection partnerships cost it about $210 per ton of material collected. Containers average about 30 grams across Brightwater's mix of plastic, aluminum and glass, so 3.5 billion containers weigh about 105,000 tons. Closing the gap at Brightwater's own cost per ton would take about $22 million a year by 2030, rising as the remaining containers become harder to reach.

Who Pays, and From When

Brightwater's report shows it currently funds about $6 million a year of collection, less than a third of the gap's cost. The rest of the pledge rests on systems Brightwater does not pay for. Deposit programs in the ten states that have them are funded mainly by unredeemed deposits and handling fees, paid by consumers from the day they buy. Municipal curbside programs are paid by local taxpayers through existing budgets. New extended producer responsibility laws in several states will begin charging producers fees from 2027 and 2028, which would shift some cost back to Brightwater, but the pledge's language, "help collect," lets the company count those mandated fees toward a voluntary goal.

My Position and Its Bill

Jensen (2002) argued that a firm cannot pursue several objectives at once without leaving managers accountable for none, and that stakeholder concerns should be weighed through their effect on long-run value. On that view, Brightwater's pledge is a marketing claim unless it is costed and funded. My position is that Brightwater should either budget the full gap, about $22 million a year by 2030, or reword the pledge to state the share it will fund. Fully funding it would cost about 1.4 percent of Brightwater's 2025 operating income of roughly $1.6 billion. Friedman (2007) would call that spending shareholders' money on a social goal; I would answer that publishing the pledge already traded on the goal's goodwill, so the cost has in a sense been incurred. Hart and Zingales (2017) offer a further reply: shareholders who care about packaging waste may prefer that the company spend on it, since a company spending at scale may achieve more than they could separately.

Reply to Leon

You priced a coffee chain's reusable cup target at $4 million. Which input drives that figure, and does it come from the company or from a trade article?

Reply to Mariam

Your estimate for an airline's sustainable fuel pledge uses a premium of $3 a gallon. Is that the airline's own figure or an industry average, and from which year?

References

Friedman, M. (2007). The social responsibility of business is to increase its profits. In W. C. Zimmerli, M. Holzinger, & K. Richter (Eds.), Corporate ethics and corporate governance (pp. 173-178). Springer. https://doi.org/10.1007/978-3-540-70818-6_14

Hart, O., & Zingales, L. (2017). Companies should maximize shareholder welfare not market value. Journal of Law, Finance, and Accounting, 2(2), 247-275. https://doi.org/10.1561/108.00000022

Jensen, M. C. (2002). Value maximization, stakeholder theory, and the corporate objective function. Business Ethics Quarterly, 12(2), 235-256. https://doi.org/10.2307/3857812