Possible methods

This section lists different popular methods, which could possibly assist to structure the research. All methods listed in Table 3.1 were considered and investigated. The MCDA, the balanced scorecard (BSC) and strategic planning methods were found to be most likely to contribute to the characteristics listed in section 3.2.1. The other methods that are used less frequently are scenario and contingency planning (Ringland, 2006), change management programmes (Cameron and Green, 2012), the value chain (Presutti and Mawhinney, 2013), Porter’s Five Forces (Hough et al., 2011), SWOT analysis (Hough et al., 2011), core competencies and capabilities (Tidd, 2006), strategic benchmarking (Watson, 2007), PESTLE analysis (Grant and Jordan, 2012) and cost-benefit analysis (De Rus, 2010). Table 3.1 gives the different methods and illustrates which requirements the three selected methods fulfilled. The numbers in the top row are linked to the requirements in section 3.2.1.

Table 3.1: Possible strategic methods

Method Requirement 1 Requirement 2 Requirement 3 Requirement 4

Multi-criteria decision analysis1 _{✔ ✔ ✔ ✔}

Balanced scorecard2 _{✔ ✖ ✔ ✖}

Strategic planning3 _{✔ ✔ ✖ ✖}

(1) Ishizaka and Nemery, 2013; (2) Westermann and Sehl, 2006; (3) King and Cleland, 1987

Each of the three selected methods is briefly introduced, a possible utilisation is described and a contribution according to these characteristics is discussed:

A strategic planning (SP) model is a tool for businesses to organise their current operations to realise the desired future. The model can be seen as a road map for the business to get from the current situation to future goals. It is of importance for businesses to create a plan, as it provides clarity on how to achieve the planned goals.

It can be seen as a manual on how to consider factors in the external and internal environment and how to generate the best possible outcome (King and Cleland, 1987). Every strategic planning model should entail seven elements, namely plan-to-plan (rarely used); mission; needs assessment; strategic objectives; outcome measures; strategies and performance feed-forward (De Beer, 2000).

The SP approach can be adapted and implemented according to the main research objective of this chapter. A mining corporation should express in its strategic mission statement the aim to diversify its electricity mix and should specifically set out its approach to adopting renewable sources (Cetindamar et al., 2013). The SP process would first identify the exact objectives are to be achieved. According to the objectives, the possible electricity-generating technologies would then be introduced, followed by the identification of the internal and external issues and requirements, which have to be fulfilled. Lastly, the SP approach could investigate which technology would be best suited, according to the internal and external influences identified.

A shortcoming of the SP approach is that it will not identify strengths and weaknesses, nor will it compare the selected technologies according to the specific demand requirements of mining corporations. Furthermore, it will be influenced strongly by the mining corporations’ strategic aims. Another shortcoming – relevant to this paper – is the more strategic nature of the SP to improve a company’s business coordination (Jakhotiya, 2013). The objective of this research is oriented towards a once-off decision.

The balanced scorecard (BSC) is a tool that converts the strategy and mission of an organisation into performance indicators that are of a qualitative and quantitative nature. The indicators provide the structure for an effective, dynamic and timely strategic management and measurement system to achieve the overall strategy (Westermann and Sehl, 2006). The scorecard approach identifies elements and requirements that have to be considered in order to follow the strategy with the best possible outcome. The original Balanced Scorecard of Robert Kaplan and David Norton (1992) entails four scoring elements, namely financial, customer, internal business processes, and learning and growth (Linard and Yoon, 2000).

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The BSC principle could have been used to fulfil the main research objective of this chapter, with some adaptation for mining corporations that have the goal of getting involved in renewable energy sources. The adaptation and application would contribute to providing information to mining corporations, as it would show all the criteria that a mining corporation has to fulfil to realise such a project. The adaptation would replace the original scoring elements with more energy-related ones, for instance, financial, environmental, strategic and operational. The corporation could measure its own standards against the ones from the renewable energy source and see where it has to improve or where issues could arise. After adapting and applying the scorecard to evaluate the selected technologies, comparisons could then have been made according to the requirements.

The BSC approach would contribute to informing mining corporations about renewable energy, by illustrating the main requirements that have to be fulfilled when realising on- site renewable energy projects. The mining corporation would then understand in which areas adjustments have to be made or, perhaps, that no realisation of objectives would be possible as requirements simply are not achievable.

The shortcoming here is that the requirements are not based on the specific needs of a mining corporation. Furthermore, the fact that the requirements are based on what the technology can supply, rather than on the demands of the mining corporation, makes comparisons difficult, as the requirements might differ.

Another problem is that the BSC approach requires the mining corporations to have the initial strategic goal to get involved in renewable energy (Person, 2013). As the market is still relatively new, mining corporations first have to be informed about the possibilities of renewable energy in catering for their specific needs (Chislett, 2014). Consequently, with adapting and applying the BSC, the criteria used are based on the technology’s specification and not from the mining corporations’ perspective, which limits the informative data. The approach should not illustrate the requirements to realise the technology, but rather how it would work based on the mining corporations’ needs.

The multi-criteria decision analysis (MCDA) is a method that is utilised in making complex decisions. When making complicated decisions, it is necessary for the

decision-makers to handle a large number of criteria, which influence the decision. The MCDA method supports the decision-makers in the selection of the best possible alternative (Ishizaka and Nemery, 2013). The MCDA process is generally divided into three main steps, namely the problem structuring, the model building, and the approval of the model (Stewart and Belton, 2002). The problem-structuring phase comprises, firstly, the investigation of possible alternatives; secondly, the identification of criteria that influence the decision; thirdly, the investigation of uncertainty in the process; and, lastly, the examination of influences from the external environment. The model-building phase represents the development of a method to evaluate the alternatives according to the criteria while the approval phase tests how accurately the model is working (Mateo, 2012).

It was found that the MCDA method could be adapted to the context of the main research objective of this chapter as it could illustrate to mining corporations which selection of electricity sources would be most suitable. The method would achieve this by utilising the mining corporations’ own evaluation criteria. Firstly, the research would identify the criteria that mining corporations use to evaluate possible electricity sources. Secondly, the type of electricity source and possible uncertainties in the internal and external environment would be identified. Thirdly, based on the identified criteria, an MCDA method would have to be developed to analyse different electricity-generating technologies. The most likely and attractive technologies could then be analysed and evaluated.

The MCDA method developed for the purpose of this research would provide information to mining corporations by indicating the possible fit of renewable energy. The corporations would be able to understand, according to their own evaluation criteria, what it entails to use renewable energy. However, the method would be developed according to a specific type of electricity source to ensure that the same criteria can be used – which would limit the applicability to technologies. Possible types of technologies are self-generating sources like diesel generators and trigeneration systems like combined heat and power (CHP).

The renewable energy company would gain more understanding of how mining corporations evaluate such projects. Consequently, it would ease the communication

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about a possible project realisation, as information packages about the technology can be customised from the beginning.

The method enables the mining corporation to identify the strengths and weaknesses of the selected technologies from their own point of view (Stewart and Belton, 2002). A clearer understanding of how the new technologies would perform compared to the present ones would be obtained. It would also be possible to compare, according to each criterion, how the different alternatives perform while paying close attention to external influences.