Contents

Sr. No. Topics

1
Introduction

Page
1

Executive Summary

Company Background

Examination of the Challenge

Sources of the Challenge

Impact of the Challenge

Analyzing the Options for Meeting the Challenge

Ethical Approach

Conclusion

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Recommendations

11

References

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Introduction
The purpose of this report is to identify and analysis of an organizational challenge for
Meridian Energy. The report examine the source of the challenge and its impact on the
company and its stakeholders. The report also highlights various options for meeting the
challenge and roles of management in tackling the challenges keeping in focus the
ethical approach to the decision-making.
Based on the analysis of the challenge, the report provides recommendations that could
be undertaken to meet those challenges.

Executive Summary
This report discusses the challenges faced by Meridian Energy keeping in view the
internal and external environment analysis of the company. In previous assignment,
business environment impact an organization were studied. The tools used in that
report were SWOT Analysis, Porters Five Force Model and PESTEL Analysis. Based
on them, a challenge was identified for Meridian Energy.
This report deals with that challenge in detail. The report focuses on source of the
challenge and the impact it has on the company as well as stakeholders. It focuses on
the core competencies of Meridian Energy and how they can help the company in
meeting the challenge. The role ethics in decision-making is also highlighted. Lastly, the
report provides some recommendations which could be undertaken by Meridian Energy
to face the challenges and overcome them.
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Meridian Energy

Company Background
Meridian Energy is the leading generator and retailer of renewable electricity in
New Zealand and Australia. The company deals in power generation through hydro and
wind energy with 7 hydro stations and 10 wind farms across New Zealand and Australia.
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The company was formed in 1999 when three companies were formed from
the breakup of the Electricity Corporation of New Zealand (ECNZ). Initially, the company
was wholly owned by New Zealand government but in 2013, the government divested
49% of the stake and now it holds a 51.02% stake in the company.
The company has its headquarters in Wellington, New Zealand. It also has its
operational offices in Sydney and San Francisco. The company employs approximately
800 employees and it has annual revenue of NZ$2,904 million. Meridian energy
generates highest amount of electricity in New Zealand with hydro stations powering
about 1.4 million homes and wind farms supplying electricity to around 152,000 homes
each year. It also holds a contract to supply electricity to Tiwai Point Aluminum Smelter
which is considered as the nations largest electricity consumer.
Meridian Energy aims at producing only green energy and it is the most
significant contributor to the 90% renewable power generation target of New Zealand
government by 2025. The most important aspect of the companys policy is sustainable
development and creating better energy future.
Retail

Hydro

Wind

New Zealand
276,446
Connections

Total Installed
Capacity
2,388 MW

Total Installed
Capacity
617 MW

Australia
48,208
Connections

Total Generation
11,911 GWH

Total Generation
1,940 GWH

Examination of the Challenge

Sources of the Challenge
Meridian Energy is the largest power generation and supplier in New Zealand. It is a
government owned company so in a larger prospect concerning political issues, the
company enjoys the luxury of stability. The company supplies electricity to 60% of the
New Zealand population and it is one of the major contributor to the New Zealand
governments target to generate 90% of the power from renewable resources by 2025.
In order to meet the target, Meridian Energy is under the process of making huge
investments in the power generation sector. Most of the thermal power plant in New
Zealand are about to shut down because of renewed policies of the government. So,
Meridian Energy has an additional challenge to increase its generation capacity to cater
to the increasing demand in context of dwindling other sources.
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Meridian Energy has set a target of 2 new hydro power plants and 5 wind power plants
in New Zealand by year 2025 and increasing the capacity of existing plants. So, for all
this to achieve, massive investment is required along with the efficient use of resources.
The company is backed by major investors in New Zealand and Australia and it has the
technical expertise to accomplish them. So the major challenge which the management
has to look into is sustainable development.
It is not easy to develop a hydro or a wind power plant. A lot of planning and research is
required for the inception of the project. Also, these projects usually covers large parts
of land which is very troublesome. The main focus of New Zealand government is the
environment safety. Although, Meridian Energy is focusing on environmental friendly
energy, but the projects have to deal with a lot of environmental issues. Acres and Acres
of land is submerged into water. The people living in the vicinity of the project have to be
relocated and farmlands and villages get destroyed. So these projects face a lot of
criticism from environmentalists around the world. Hence, as a responsible company, it
becomes the utmost necessary for the executives of Meridian Energy to focus on the
environmental concerns and tackle the issues of dam-affected people.

Impact of the Challenge

Impact on Company
Meridian Energy faces a challenge from environmental factor which also affects the
technological and economical aspects of the company.
Environmental Challenge
The most visible and immediate impact of large-scale hydropower is from the reservoir
behind the dam. The size of the reservoir created by a hydroelectric project can vary
widely, depending largely on the size of the hydroelectric generators and the topography
of the land. It causes drowning of vast areas of land which destroys wildlife habitat,
agricultural land, biodiversity and scenic beauty.
Technological Challenge
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The engineering team of Meridian Energy have to constantly engage into developing
technology which is both efficient as well as sustainable. Because the last thing a
company wants is to face legal issues concerning use of unfair technology.
Economical Challenge
The projects that Meridian Energy deals are on a scale of millions of dollars. Hence, it is
very important for the managers to ponder upon the economic aspects very astutely.
There are some fixed costs associated with the project but in a lot of cases, variable
costs poses extreme challenges. The cost of damage caused to environment can never
be calculated. The cost of relocation, handling with environmental agencies, and
destruction of wildlife are some of the major concerns for the management team.
Impact on Stakeholders
Shareholders
The capital required for the projects comes mainly from the shareholders. They are
mainly concerned with the return on investment. Since, the challenges faced by
Meridian Energy present a lot of risks, shareholders find it difficult to invest their money
with the organization.
Customers
The people of New Zealand are also very concerned about the environmental issues.
They will never support a company which does not inculcate sustainable development.
If it is found that Meridian Energy is avoiding these issues then they will very easily go
with other companies or can force the company to be on right track.
Employees
The employees of Meridian Energy have to work under the umbrella of core values of
Meridian Energy. The motto of Meridian Energy is Better Energy Future. Hence, every
employee right from the top management to the line workers support the company to
stick to its values.

Analysis of Options for Meeting the Challenge

In order to overcome the challenge, Meridian Energy has to devise a coherent and
effective corporate strategy. The organization has to look for various alternatives
available in order to provide the most efficient output. Some of the options to overcome
the challenges are:
Effective Leadership
There needs to be a strong leadership at the top level management. The executives of
the company should be well aware of the vision and goals of the organization and these
values should be trickled down to lower management is such a way that whole company
work in coherence. The employees should look upon their seniors as role model and
remove all the obstacles to overcome the challenge that crop up.
Strategic Alliance
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Meridian Energy should make strategic alliances with various environmental agencies
around the globe so that they incorporate sustainable measures in their approach. The
management team should look for opportunities by making collaborations with similar
organizations around the world and make the best use of their technology and employ
measures for the sustainable use of resources.
Communication
The projects of Meridian Energy are spread across different geographical locations. So
the executives should maintain an open communication channel especially with remote
offices. They should regularly talk to the field engineers and discuss the most pressing
issues. Effective communication increases the productivity of the organization.
Focus
It is important to identify the end goal, create a plan to make it happen, and then remain
focused on that plan moving forward.
Innovation and Open-Mindedness
The management should always look for innovative solutions. They should be openminded to different approaches and new perspectives. The company should not stick to
the one-all policy rather it should incorporate innovative ways keeping in mind the
economic aspects.
Social Approach
The company officials must take the general public into confidence. They should make
them understand the long term benefits that the nation would get on the completion of
the projects.
Relocation Planning
As the project requires a relocation of villages which comes in the vicinity of the project,
Meridian Energy should make proficient measures with the help of government to help
them get relocated. The first focus should be the betterment of human populations
which is affected by the project. The company should take every step which is most
beneficial for the betterment of the society.

Ethical Approach
Ethical decision-making is central to the business strategy of Meridian Energy. The
management believes that acting sustainably is the right thing to do for environment,
society and to support Meridians long-term economic success. Ethical approach
requires that the decisions incorporate economic, social and environment objectives.
Meridian focuses on the areas which it believes can make the biggest difference to the
people, customers, stakeholders and the environment. This starts with their commitment
to renewable energy generation, the need to provide shareholders with a financial return
that meets their expectations given the risks associated with the business and continue
through the priority they place on having sustainable practices embedded across the
business.
The top level management should follow the managerial ethics and implement the same
in the organization. Meridian Energy follows a strict code of conduct. The code of
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conduct defines the behavior expected from the employees of the company. Meridian
Energy supports the employees by providing training and information on the Code and
has strict policies in case of retaliation of the code.

Conclusion
Based on the report, it can be concluded that Meridian Energy has to face some very
aggressive environmental challenges. The company has maintained a high growth rate
and it is expected the same in the future. Meridian Energy has massive investment
plans for next 15 years. It has to work in collaboration with the government to achieve
90% energy from renewable sources. But the road ahead is not smooth. There is a high
increase in the demand for electricity and the company has to build effective measures
to cope with it. Also there is a continuous pressure from the environmental agencies and
human right departments for ethical standards and sustainable development. Meeting
the expectations of the stakeholders catering to the protection of the environment is the
biggest challenge for the company.

The challenge faced by Meridian Energy has some serious impacts both on the
company and the stakeholders. Meridian Energys economic and technological factors
are effected by the challenges and also the customers, general masses and employees
are impacted by the challenge. There is a collaborative effort from each side to meet the
challenge.
Meridian Energy has to devise very coherent strategic policies to tackle the challenges.
Effective use of the management roles is a key here. Leadership, innovation and openmindedness are major factors that need to be taken into account. Also the ethical
approach play a major role. Devising a plan which emphasis on providing the
sustainable progress along with the financial profit should be the only way which makes
everyone (the company and the stakeholders) happy.

Recommendations
The very first step for Meridian Energy should be making strategic alliances with the
environmental agencies around the world. Scandinavian nations have got the most
state of the art technology in sustainable development. The government of New
Zealand should import technologies from them and incorporate them here.
Next, Meridian energy should be open to innovation. Exploring different ventures can
never harm a company. There are many other ways of electricity generation. Meridian
Energy should venture into solar and geothermal energy. New Zealand has abundant
resources available in this regard. So Meridian Energy should also focus on thede
technologies.
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Lastly, it should see that development should not be done compromising human values
and environmental degradation. Every new project should first have a strong policy
devised for their protection and then should go into the business aspects.

References
https://www.meridianenergy.co.nz/about-us/about-meridian/
https://en.wikipedia.org/wiki/Meridian_Energy
http://www.mbie.govt.nz/info-services/sectors-industries/energy/energy-strategies/documentsimage-library/nz-energy-strategy-lr.pdf
https://www.nzte.govt.nz/media/344115/the_new_zealand_energy_sector_report_final.pdf
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www.edisoninvestmentresearch.com/?ACT=18&ID=10489
http://www.swotanalysis24.com/swot-m/70203-swot-analysis-meridian-energy-limited.html
https://en.wikipedia.org/wiki/New_Zealand_electricity_market
http://www.stuff.co.nz/the-press/christchurch-life/9752311/New-Zealands-biggest-issues-yourviews
https://www.climatechange.govt.nz/reducing-our-emissions/government-policies.html
https://www.eeca.govt.nz/about-eeca/our-goals-and-progress/
http://www.stuff.co.nz/business/industries/70763839/Tiwai-Smelter-deal-signed-betweenMeridian-Energy-and-NZAS
http://www.stuff.co.nz/environment/3552176/Dam-approval-threat-to-all-rivers
http://www.climatechangelaw.co.nz/renewable-energy-law-in-new-zealand/
http://www.ucsusa.org/clean_energy/our-energy-choices/renewableenergy/environmental-impacts-hydroelectric-power.html#.VlapzvkrK00
http://www.mbie.govt.nz/law-policy/law-and-policy-index?
topic=Energy+and+resources&type=All
http://www.theguardian.com/environment/2010/aug/09/hydroelectric-damstribal-people
http://www.wikiwealth.com/five-forces:renewable-energy
https://www.meridianenergy.co.nz/assets/Investors/Governance/Policies/Code
-of-Conduct-APPROVED-December-2014.pdf

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