The General Environment surrounding the timber industry and Weyerhaeuser is highly reliant upon six different segments. These segments are: demographics, economics, political/legal, sociocultural, technological and global. The environment within which a company operates is directly influenced by what is going on in each segment. Weyerhaeuser must constantly analyze the surrounding environment through scanning, monitoring, forecasting and assessing, to determine the environments changes and its subsequent effect on the company.
Over the past decades the timber industry has had minimal demographic diversification. However, within the last decade they have recognized a demographic change within the U.S workforce and have mounted an aggressive campaign to recruit and develop job opportunities for women and minority groups. Weyerhaeuser, knowing that their current workforce is ageing has made it a priority to update their recruitment plans for new employees. Having seen class action lawsuits against other large companies for alleged gender and racial discrimination2, Weyerhaeuser is determined to change the internal culture of the company to incorporate women and minority groups into its workforce. Another issue for bringing in a diverse workforce for Weyerhaeuser has been its consumer market. In many states Weyerhaeuser’s markets are made up of a significant portion of an ethnic group. This has urged Weyerhaeuser to hiring a workforce that is supportive and reflects its consumer market.2
The economic segment of the timber industry has taken a huge hit within the last few years. The timber industry ships out $10 billion dollars of wood products annually and helps create other jobs within the economy, nevertheless, because of the time lag it takes to turn each tree into a house, the wood industry suffers later and is usually one of the last to recover. For the timber industry home sales and interest rates are great indicators for measuring future production. One of these indicators has shown a slumping real estate markets worldwide and has greatly impacted all wood production. Many economists predict a rebound in home sales by the end of 2009 and into 2010. Economists also predict that the younger generations who are becoming more economically conscious and those headed towards retirement, will be more interested in building smaller homes which will lessen the demand for wood production. Many companies within the timber industry are pulling out of the U.S into different countries where wood is abundant and expanses are smaller, this leaves the private forests owners in the U.S. to forgo on paying their property taxes, due to lack of income, which further effects the economy. Many states have different legislation in place to relive tax burdens on private forest owners, but without future contracts with timber companies, many of these owners are selling their lands to developers. Weyerhaeuser’s share of revenues in 2007 was 81.5% from the U.S. market. This over dependence on the U.S. has made is very vulnerable to economic fluctuations, such as the decline in home production.
Weyerhaeuser along with other companies must also comply with numerous environmental laws and regulations, to reduce air emissions and pollutants from facilities and control pollutants that contribute to smog and haze. These regulations have made it difficult for the timber companies to be profitable and continue to push their expansions globally. This is part of the political and legal segment of the timber industry. The timber industry is plagued with constantly changing regulations, antitrust laws, union negotiations, and trade barriers. Companies such as Weyerhaeuser are constantly running into national forest management policies. These policies are meant to protect biological diversity and the old growth forests and force timber companies to cut down small trees which make low value products. Acquisitions and mergers within the timber industry, often turn into antitrust suits. Within the last decade legal actions have been filed against Weyerhaeuser several times for monopolizing the alder market in the Pacific Northwest .
The sociocultural segment of the timber industry is mainly centered on environmental concerns. Environmental issues and global warming has been a hot subject over the past years, and the timber industry is right in the middle of it. Many timber companies have focused their goals and efforts on practicing sustainable forestry, reducing pollutions and conserving resources. Within this segment timber companies experience strong oppositions from conservative groups, which oppose clear cutting initiatives, logging of old growths, and raise awareness of the disruption of habitat for endangered species. Internationally the timber industry has also run into some sociocultural issues. Logging has greatly impacted the way of life for many natives living in the southern hemisphere. Their food resources are threatened by loggers and clean water sources are being contaminated as watersheds are destroyed. Logging also disrupts local economies, which depend a lot on products from trees, such as nuts, rattan and resin.
The technological segment within the timber industry has not only brought in new machinery to log efficiently, it has also developed hundreds of new products which result from wood. Engineered wood products, which are wood fibers injected with plastic is one of these developments. They can be used in different climates and are made to prevent warping and will not attract termites. Specialty chemicals, ethanol and vaccines are all possibilities that are being developed from wood product and byproducts.3 Due to the shrinking number of large premium logs, many companies turn to research and technology to assist with crop plantings and sustainability efforts. Companies such are Weyerhaeuser are turning to alternative sources of energy such as carbon neutral biomass and striving to reduce their emissions footprint be investing into new technologies.
Works Cited
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Jerry Franklin, N. J. (2004, Summer). Forests Face New Threat: Global Market Changes; an Overhaul of Forest Policy Is Needed to Deal with the Economic and Environmental Consequences of Globalized Production. Retrieved November 7, 2009, from The Questia Online Library: www.questia.com/reader
Jossi, F. (2004, December 1). Cultivating Diversity. Retrieved November 7, 2009, from Human Resource Executive Online: http://www.hrexecutive.com
Monitor, F. (n.d.). Social Impacts of Logging. Retrieved November 7, 2009, from Forests Monitor: www.forestsmonitor.org
Phelps, J. (2009). Timber and the recession: How will local industry survive downturn? The Daily Sifting Herald .
ProQuest. (2004, May). Weyerhaeuser Faces Potential $500 Million Bill in Antitrust Case. Retrieved November 7, 2009, from Proquest Information and Learning : www.findarticles.com
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Weyerhaeuser. (n.d.). Air Quality. Retrieved November 7, 2009, from Weyerhaeuser: www.weyerhaesuer.com