1. MB061: Environment Management
Table of Contents
TASK 2: ASSESSMENT............................................................Error! Bookmark not defined.
INTRODUCTION ............................................................................................................... 2
Objective......................................................................................................................... 2
OT2025 - Securing Our Future / Cost reduction.................................................................. 3
Strategies and Capabilities................................................................................................ 3
Need Seekers................................................................................................................... 3
Market Readers............................................................................................................... 3
Technology Drivers .......................................................................................................... 4
What do we do at Ok Tedi................................................................................................ 4
Using Open Innovation to Identify the Best Ideas (OTML)................................................... 4
Travel.......................................................................................................................... 4
Commercial Unit
Processing, Department
PO Box 1, TABUBIL, Western Province,
Papua New Guinea
Telephone (675) 649 3474

2. Accommodations ......................................................................................................... 4
Restructuring departments........................................................................................... 5
Messing....................................................................................................................... 5
PESTEL Analysis................................................................................................................ 5
Overview of the Five Forces Model................................................................................... 7
Threat of newentrants to an industry............................................................................... 7
Bargaining power of suppliers....................................................................................... 8
Bargaining power of customers..................................................................................... 8
Strength weakness Opportunity Thread(SWOT) analysis.................................................... 8
opportunities....................................................................Error! Bookmark not defined.
threats .............................................................................Error! Bookmark not defined.
SWOT analysis......................................................................Error! Bookmark not defined.
Weaknesses................................................................................................................. 8
Strength Weakness Opportunities Threads(SWOT) analysis....Error! Bookmark not defined.
Strengths:.........................................................................Error! Bookmark not defined.
Weaknesses:.....................................................................Error! Bookmark not defined.
Opportunities:...................................................................Error! Bookmark not defined.
Threats:............................................................................Error! Bookmark not defined.
Recommendation ............................................................................................................ 9
Summary......................................................................................................................... 9
References .....................................................................................................................10
INTRODUCTION
Ok Tedi MiningLimited(OTML) an organizationasone of the worldclassgoldand coppermines,
operationsproducerapproximately70,000 to 80,000 tons perday almost80% and alsoemployerof
choice inPapua NewGuinea.Ithasbeenoperatinginthe Star Mountainof the WesternProvince for
well over30 yearsand alsopridesitself initstrainingandemploymentof PapuaNew Guineansandits
overall contributiontohumanresource developmentforthe countrytopromote andupholdthe Ok
Tedi Charteras part of a team,to shape appropriate culture across the sectionandto implementthe
strategies,goalsandobjectivesof the Company,organizationandthe country.
Objective
The mainpurpose of thisreportisto findout where the organizationlikewise OkTedi MiningLimited
can identifyactionplansandstrategiesonhow toimprovingProductivityand costreduction,Improving
Operationsby adoptingtothe changes.

3. Between 2010 and 2013, Ok Tedi, mining company saw costs rise and productivity fall as it
raced to meet surging commodity demand.
The global commodity boom is fading now, undermining growth strategies based on the
assumption of ever-higher prices. Falling prices will squeeze profits at firms with boom-era
costs. But Ok Tedi that adopt a Fit forGrowth
SM
approach—adjusting its cost reduction structure to
support key differentiating capabilities, such as improved market awareness or operations—will
boost margins, increase production, and create more value even as the market slows. The
techniques outlined in this report, using Australian mining companies as an example, show how
resource and commodity producers around the world can cut costs while growing stronger.
OT2025 - Securing Our Future / Cost reduction
OTML isundergoingaworkforce transformationasitpreparesforMine Life Extension(MLE) from2014.
Includedinthisprojectare reviewsof ourrosters,accommodation,flightschedulesandourcontractors,
as well asthe developmentof aworkforce blueprintthatwill ensurewe have the rightpeople,withthe
rightskillsinthe rightjobsto meetourfuture businessneeds.
‘OkTedi 2025: SecuringourFuture’isthe name giventothisproject.Itscompletionwill give OTMLa
brightfuture forthe nextdecade andmore,ensuringwe remainaviable andcompetitiveMine through
MLE.
Our goal thisyear isto examine the capabilitiesneededtomaximizethe impactof a company’s
innovationeffortsingoodtimesandbad,andto highlightthe benefitsbothof focusingonthe shortlist
of capabilitiesthatgenerate differential advantage,andof clearlylinkingthe specificdecisionswithin
innovationtothe company’soverall capabilitiessystemandstrategy.
Strategies and Capabilities
Three yearsago, in2010, Ok Tedi focusedourannual innovationstudyonhow companiesuse distinct
innovationstrategiestocreate theirproductsandtake themto market.Nearlyeverycompany,we
found,followedone of three fundamental innovationstrategies:
Need Seekers
Actively anddirectlyengagecurrentandpotential customerstoshape new productsandservicesbased
on superiorend-userunderstanding,andstrive tobe the firsttomarket withthose new offerings.
Market Readers
Watch theircustomersandcompetitorscarefully, focusinglargelyoncreatingvalue throughincremental
change and by capitalizingonprovenmarkettrends.

4. Technology Drivers
Follow the directionsuggestedbytheirtechnological capabilities,leveragingtheirinvestmentin
researchand developmentto drive bothbreakthroughinnovationandincremental change,often
seekingtosolve the unarticulatedneedsof theircustomersvianew technology.
What do we do at Ok Tedi
It isimportantto note that we foundthatnone of these three strategieswere anybetterthanthe
othersat producingsustainedsuperiorfinancial results,althoughof course individual companies
outperformotherswithineachstrategicgroup.The success of each of the strategiesdependsonhow
closely OkTedi,inpursuinginnovation,alignit’sinnovationstrategywithOT’s businessstrategyand
howmuch efforttheydevote todirectlyunderstandingthe needsof end-users.
Thisyear,we setout to answertwonew questions: “Whichsetsof capabilitiesare the mostcritical
for the successof each of the three strategies”?
And docompaniesthatfocuson those critical capabilitiessee improvedoverall financial results?Our
hypothesis:Companies,thatcancraft a tightlyfocusedsetof innovationcapabilitiesinline withtheir
particularinnovationstrategy — andthenalignthemwithotherenterprise-widecapabilitiesandtheir
overall businessstrategy — will getabetterreturnonthe resourcestheyinvestininnovation.
Peninnovationisasimple concept—companiestapintothe ideasof outside expertstodevelopnew
productsand services.Butinpractice itrequiresthree differentstrategies,eachwithitsownsetof
complex challengesandopportunities.The keytosuccess,says(HBSProfessorKarimR. Lakhani),is
careful considerationof whattoopen,how to openit,and how to manage the resultingproblems
Using Open Innovation to Identify the Best Ideas (OTML)
(By AndrewKing and Karim R. Lakhani)
Travel
Because mostemployeeswere travellingall the headquartersiscostlyandcompanyspendingalotof
money.Therefore,nowreduce these destinationsandall employeeswiththeirrecogniseddependswill
travel theirpointof hire hubonly.Thentheywill getoncommercial airlinesandgoto theirrespective
destinations
Accommodations
All shiftworkerswillbe movingintonewdongasandanolddongaswill be removingthemandselling
companiesandindividuals.Houseswill be soldtolocalsandstate,meaningprincipallandownerscan
buythemoff and thenrentto private companiesororganisations.Few companyemployeeswill be
residinginfewdesignatedhousesandcompanywill be responsible forit.

5. Restof national employeespaygrade PG03 – PG07 will be goingtosingle dongasandomittingcurrent
housestheyare residing.Theyare startgettinghome ownerscheme HOSmoneynow andsendingtheir
familiestotheirrespectivelocalsandothersbuyingstate ownedlandsanywhere.
Introducingpowerandwaterbills,commencingshortlyinthisyearandstartedinstallingmeasuring
parametersinplace.Livinginaccommodatedisveryexpensiveexerciseforthe company
Restructuringdepartments
The company hadrestructuredan organisationbyredunctantingsome positionsalsoreporting
structures.The executivemanagerpositionwithteamleaderandseniorpositionstrade personor
operatorisout. There were eightlayersof butnow five layersof reportingstructure.Meansthat
managingdirector,general manager,manager,superintendent,supervisorandworkforces.
The area managerwill be directlycommunicatingwithworkforce,noclose doormanaginganditwill be
walkaboutmanagementstyle.Employee will be onfield,actuallytouchingandobservingthe extreme
performance of equipmentandpeople.
Mergingsome internal departments,where Humanresourceswithcommunityrelationsand
environmentandall engineeringinone fromindividual departments.Minordepartmentswere
redunctantedandgoodperformerswere transferringcrosssections,basedontheirmeritsandskills.
Messing
The cookingstaff will prepare lunchanddelivertoworkplaces,have lunchinthe cribroomsat
workplaces.The cookswill make Cripsanddeliverthemtosite designatedcriprooms.Individual will
have lunchwithlesstime,schedule 30.
OT strategy plan
Thisstrategyis basedthe OkTedi is currentdoingbasingonmetal price declininganddownsizingits
businessoperations.The companywill make some ambiguousinnovationchangeschallengesforthe
organisationtostayon business.There twothingsoccurringsame time,governmenttakingover
ownershipandextension of mine life.However,thisstrategyplanningisbasedonendmine life and
metal price declined.
PESTEL Analysis
Political Economic Social Technology Environment legal
Environmental
regulations and
protection
Home Economic
situation
Income distribution Government research
spending
Ecological urrent legislation
home market
Future Legislation Home economic
trends
Demographics,
population growth
rates
eplacement
technologyand
solutions
Environmental
issues
International,
Future legislation

6. (Kelly and Bowles,2006).SWOT Analysis).
Porter'sFive ForcesModel:analysingindustrystructure
National
&Local
Government policies Taxationspecific to
product or services
Age distribution Industry focus on
technologicaleffort
Environmental
regulations
European/internation
al legislation
Government terms
andchanges
Interest rates &
monetarypolicies
Labour / social
mobility
New inventories and
development
Customer
values
Regulatory bodies
and processes
Tradingpolicies Market & Trade
cycles
Lifestyle changes Rate of technology
transfer
Market values Environmental
regulations
Environmental
regulations and
protection
Specific industry
factors
Work / career and
leisure attitudes
Life cycle andspeed
of technological
obsolescence
Stakeholder/
investor
values
Employment law
Future Legislation Market routines &
Distribution trends
Entrepreneurial spirit Energy use andcosts Staff attitudes Consumer protection
Government policies Customer/ Enduser
drivers
Education (Changes in)
Information
Technology
Management
style
Industry-specific
regulations
MiningAct Interest & exchange
rates
Fashion, hypes (Changes in) Internet organizational
culture
competitive
regulations
Safety act International trade
&Monetary Issues
Health consciousness
& welfare, feelings on
safety
(Changes in)
Mobility Technology
Staff morale mining regulation
Funding, Grants &
initiatives
Market Price Living conditions Manufacturing
maturityand
capacity
Staff
engagement
urrent legislation
home market
International
Pressure Group
Worldmarket price LifestyleTrends Intellectual property
issues
Global factors Future legislation
Local Pressure
Group
Seasonality/ weather
issues
Media Views Technology
legislation
EU based
factors
European/internation
al legislation
Wars & Conflicts Government spending Consumerattitudes +
opinions
Information&
Communications
Environmental
regulations
Regulatory bodies
and processes
Home market
Lobbey
Unemployment
policy
Brand, Company,
TechnologyImages
Innovative and
Potential
Customer
values
Environmental
regulations
Tax policies Taxation Customer buying
pattern
Technology,
Licencing, patents
Market values Employment law
International trade
regulations &
restrictions
Inflation rates Fashion & role models Global
Communication
Stakeholder/
investor
values
Consumer protection
Contract
enforcement law
Stage of the business
cycle
Ethical issues Mechanism and
Technology
Staff attitudes Industry-specific
regulations
Consumer Protection Consumer confidence Ethic / religious factors Competing
technology
development
Management
style
competitive
regulations
Employment laws home economy
situation
Major events and
influences
Research funding organizational
culture
mining regulation
Government
organization/
home economy
trends
Advertising&
Publicity
Staff morale urrent legislation
home market

7. Author: Jim Riley Last updated: Sunday 23 September, 2012
Overview of the Five Forces Model
Porter identified five factors that act together to determine the nature of competition within an industry.
These arethe:
Threatof newentrantstoa market,bargainingpowerof suppliersand bargainingpowerof customers
(“buyers”)
.
we identified that high or low industry profits (e.g. soft drinks v airlines) are associated with the
following characteristics:
Let’s look at each one of the five forces in a little more detail to explain how they work.
Threat of new entrants to an industry
If newentrantsmove intoan industrytheywill gainmarketshare &rivalrywill intensify,if PNG
parliamentarymove amotiononvote onconfidence andconduct 12 months’time,canaffectOk Tedi
mininglimitedoperations.
The positionof existingfirmsisstrongerif there are barriersto enteringthe market
Our barriers to entry are lowthenthe threatof new entrantswill be high,andvice versa Barriersto
entryare,therefore,veryimportantindeterminingthe threatof new entrants.Anindustrycanhave
one or more barriers.The followingare commonexamplesof successful barriers.

8. Bargaining power of suppliers
Ok Tedi’s suppliers have bargaining power they will:
Exercise thatpower,sellingourproductsata higherprice & squeeze industryprofits
OT have signed contract with our buyers and suppliers for certain periods of time, therefore
supplier won’t forces up the price paid for inputs, profits will be reduce
Suppliers find themselves in a powerful position when:
There are onlya fewlarge suppliers
The resource theysupplyisscarce
Just how much power the supplier has is determined by factors such as:
Bargaining power of customers
Powerful customers are able to exert pressure to drive down prices, or increase the required
quality for the same price, and therefore reduce profits in an industry.
Ok Tedi, have downgraded ore delivery from mine therefore we produce more tonnes in order to
stay on business and maintain the terms and conditions with customer.
Strength weakness Opportunity Thread (SWOT) analysis
Subjectof SWOT analysis:the creationof owndistributorcompanytoaccessnew end-usersectorsnot
currentlybeingdeveloped.
Strengths
End-usersalescontrol anddirection.
 Rightproducts,quality andreliability.
 Superiorproductperformance vscompetitors.
 Betterproductlife anddurability.
 Spare manufacturingcapacity.
 Some staff have experience of end-usersector.
 Have customerlists.
 Directdeliverycapability.
Productinnovationsongoing.
Weaknesses
 Customerlistsnottested.
 Some gaps inrange for certainsectors.
We wouldbe a small player.
No directmarketingexperience.
 We cannotsupplyend-usersabroad.
 Needmore salespeople.
 Limitedbudget.
 No pilotortrial done yet.
 Don't have a detailedplanyet.
 Delivery-staff needtraining.

9.  Can serve fromexistingsites.
 Productshave requiredaccreditations.
 ProcessesandIT shouldcope.
 Managementiscommittedandconfident.
 Customerservice staff needstraining.
 Processesandsystems,etc
 Managementcoverinsufficient.
Opportunities
Coulddevelopnew products.
Local competitorshave poorproducts.
Profitmarginswill be good.
End-usersrespondtonewideas.
Couldextendtooverseas.
Newspecialistapplications.
Can surprise competitors.
Supportcore businesseconomies.
Couldseekbettersupplierdeals.
Threats
Legislationcouldimpact.
Environmental effectswouldfavourlarger
competitors.
Existingcore businessdistributionrisk.
Market demandveryseasonal.
Retentionof keystaff critical.
Coulddistractfromcore business.
Possible negativepublicity.
Vulnerabletoreactive attackbymajor competitors.
Recommendation
Governmentshouldn’tintervene muchonoperationsof the companyanddistributionsof fund.
Ok Tedi shouldretain local ownedcontractorsandstartremovingoverseacompanycontractors.Then
trainthe localsthroughthe contractor,whichmeansin termsof cost itwill be lowerthanOkTedi hire
an employee.OkTedi ManagementandGovernmentshouldnegotiateproperly withthe people of
westernProvince. Especiallyaffectedonesdwellingalongthe FlyRiverforcompensate packages,
because lotmoneyiswastedonthissubject.
Summary
There is widespread recognition that the typical corporate cost-cutting initiativeswill not suffice in
the current business environment. To navigate the global downturn and even prosper in the
process, corporate leaders are taking a step back and consider how best to implement long-lasting
and effective initiativesaimed at fundamentally improving the way Ok Tedi will operate. Ok Tedi &
Government’s approach focuses on three strategic questions: What do we do? How do we do it,
and where? How well do we do it?

10. This Perspective explores the commonly observed issues and detailers surrounding company’s’ business
models in light of important questions they currently face:
References
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“Exploringstrategy”Ninthedition.PearsonEducationLimited: