CASE STUDY

ENVIRONMENTAL AWARENESS PAYS OFF AT FARMERS INSURANCE

In this case External Environmental problem was the cause that triggered change in organizations of California. California was in the midst of increasing levels of air pollution in an alarming rate. Smog was clouded all around the surrondings of Los Angeles. Thus by 1989 California passed the Clean Air Act. Under this act a new concept called “RideShare plan” was introduced. Under this plan companies with 100 employees or more at one site were forced to adopt this plan. All organizations accept this new policy. It can be termed as Legal Posture of an organization. Legal posture means organizations can adopt a posture that they will obey any laws, rules, and regulations about the environment willingly and without legal challenge. Farmers Insurance Group, one of the company in California successfully implemented this act. Rideshare plan can be said as an Indirect-action element. Indirect action elements are elements of the external environment that affect the climate in which an organization’s activities take place, but do not affect the organization directly. The rideshare plans were to be centered on achieving an employee average vehicle ridership (AVR) of 1.5, or 3 employees to every 2 cars on site. Basically it means that a car has to be used by more than 1 persons thus reducing air pollution and traffic. But at starting it was a very difficult task because employees living at different places, with different social status and also with different work timings has to get adjusted with this. The stakeholders that are affected by ridesharing are Internal Stakeholders. Internal stakeholders are groups or individuals, such as employees, that are part of an organization’s environment but for whom an individual manager remains responsible. Environmental concerns greatly influenced the policies at farmers Insurance. By the end of the year the average vehicle ridership of Farmers Insurance group increased from 1.17 to 1.30 when every others AVR went down. All organizations where giving special incentives and other special offers to employees for doing rideshare plan but growth in AVR was only with Farmers insurance group. The reason behind this was that Debbie Dalla was only working at this organization not in any other organization. Debbie Dalla was the transportation coordinator and under his leadership this growth was achieved. She aggressively participated for the success of this program. She marketed the program, set up activities and events, published newsletters, put slogan and jingle contests once in every month. Dala’s efforts have paid off.

Ridesharing influenced the organizational environment a lot. Employees enjoys purchasing goods with the special points they got by rideshare. Employees made friends with their rideshare partners. It reduced some employees stress, which, in turn, could lead them to work more productively. Organization as a system will always have an attachment with the environment. So change in environment can always affect the organization. But if there is a person who can control all these changes like Dala, it can change it as a success.