Case Study: Lute Construction

Lute Construction is a regional constructions company that focuses on single-family housing units as well as small to medium apartment complexes. The firm has a large market share and a reputation for constructing products on time and within budget. As customers are increasingly concerned with environmental issues, demand for sustainable housing has become the strongest growth area in Lute's industry.

Though Lute has never been associated with unethical practices or culture, its name is also not synonymous with corporate social responsibility. Management has set an objective of reducing its carbon emissions by 20% over the next 5 years. While Lute has identified a range of materials and processes to focus on while implementing this reduction, it is difficult to achieve for buildings like apartments that use carbon-intensive construction materials such as concrete.

A recent conflict in international trade may raise the price of several construction materials that Lute relies on, making it even more difficult to implement their sustainability objective without passing significant costs on to the customer. Some members of Lute's management team are suggesting that rather than focus on materials that are difficult to decarbonize, they should focus on building designs that reduce energy costs over the structure's lifespan. They would like Lute to establish a relationship with an architecture firm in order to work on ways of constructing homes that would reduce the need for heating, air conditioning, and lighting.

At the moment, Lute has little expertise in this field, and shareholders are increasingly concerned about the possibility of rival firms gaining an advantage if Lute does not lay out a clear and timely path to address its lack of environmental credentials.

Question Marks 1. Describe one internal factor that may prompt Lute Construction to 2 change its objectives. 2. Describe one strength and one weakness of Lute Construction. 4 4 3. Describe one opportunity and one threat for Lute Construction. 4 4. Explain one advantage and one disadvantage of Lute Construction setting ethical objectives regarding environmental sustainability. 5. Recommend a course of action for Lute Construction regarding a focus 10 on sustainable materials vs. establishing a relationship with a firm focussed on housing design