Reference no: EM131956357

MIDWEST FAMILY MUTUAL GOES GREEN

Midwest Family Mutual Insurance Co., an insurance company with nearly 100 million in written premiums in 2011, considers itself to be "operationally green." Through a variety of initiatives it has reduced its annual energy, natural gas, and paper consumption by 63%, 76%, and 65%, respectively.

Ron Boyd, the carrier's CEO, attributes most of the improvements in energy usage to creating a virtual work- from- home office environment. As a result of implementing a series of electronic processes and applications. These include imaging and workflow technology, networking technology, and a VoIP network. In 2006, the year these savings were reported, all but two of Midwest Family Mutual's 65 employees worked from home.

In addition to the energy savings that Midwest Family Mutual has directly experienced, Boyd estimates that the company's telecommuting policy has resulted in fuel savings of at least 25,000 gallons. Though green computing was a commendable goal in itself, Midwest Family Mutual's bottom line also has benefitted from the company's socially responsible approach. Over a five year period Midwest Family Mutual's was able to shave its expense ratio to 29.9% from 33%. Boyd states: "Being environmentally green can equate to financial green."

Green computing grew out of Midwest Family Mutual's IT successes, according to Boyd. AS the company started realizing saving from the electronic processes it implemented, it started thinking about telecommuting arrangements that allowed its employees to work from home. He adds, "It became obvious that many of our jobs could be done wherever a high-speed connection existed. . . VOIP completed the technology requirements for all [employees] to work from home." Boyd summarizes: "We became green as a side benefit of saving resources and cost."

The company continued its green policy with its decision to sell its 24,000-square-foot office building in Minnetonka, Minnesota. However, in order to provide more centralized regional service to agents in the new states in which it was recently licensed (i.e., Arizona, Nevada, Utah, Colorado, Idaho, Washington, and Oregon), the company built a new home domicile in Chariton, Iowa, in 2012.

Discussion Questions

1. Do you think that the economic benefits that Midwest Family Mutual realized as a result of green computing are unusual? Do you think most companies can see similar types of economic gains? Explain.

2. What are some possible disadvantages the employees of Midwest Family Mutual may be experiencing as a result of their new virtual "work from home" office environment?

3. Apply the normative theories of business ethics to this situation.