Business Simulation - Alumina, Inc.
Businesses in a global environment run risks and one of the strongest areas of government regulation of business is the Environmental regulation. Businesses have to conform and comply with regulations mandated by the government and if failed to do so can face penalties that can cost the company immensely and sometimes closure. These regulations are set forth for companies to avoid major disasters that can affect the environment (to include animals and humans).
Alumina, Incorporated, a $4 billion aluminum maker operates in the United States with subsidiaries in manufacturing automotive components and manufacture of packaging materials, bauxite ...view middle of the document...
Bates believes that there is a correlation between her daughters Leukemia and the first environmental violation of Alumina. Businesses must not ignore their environmental and social responsibility. Alumina must follow legal, social, and environmental regulations in order to be a successful company. Alumina has a responsibility to its communities and the government in which it operates. The damaging accusations from Bates were reported to Erehwon newspaper, which caused major concern to their executive management team; mainly because of the possibility of affecting Alumina’s public image and its responsibility in complying with environmental regulations and issues. This was a legal issue that had the elements of a large-scale scandal and bad publicity, however, its management staffs had to approach the problem and act immediately and work closely with their legal counsel to downplay the accusations and do more research to ensure their PAH levels were in compliance before moving forward .
In the first part of the simulation, Legal Counsel and Public Relations Head discuss behind closed doors the editorial that claims of Alumina not possessing a good effective system. Roger Lloyd, Chair, believes that the accusation is baseless and although he agrees with Legal Counsel to proceed with immediate press release, in addition, needs to conduct an independent site evaluation to check for new violations and to disclose results to EPA. Results of independent study found that Alumina was under Federal guidelines for PAH in the ground. One negative feedback in generating an independent study can be that all information generated by the study would have to be made available in any future litigation issues between Alumina and the plaintiffs.
The next key factor in this simulation is the report by a leading American scientific society in its quarterly journal reporting that because of increased traffic in the heavily industrialized state of Erhwon the waters of Lake Dira are poisoned with polycyclic aromatic hydrocarbons (PAHs). Its concentrations have been found to be 100 times greater than pre-urban conditions and pose a danger to animal, aquatic, and human life (Legal Environment of Business, UOPX, 2011). Arthur Todd, Legal Counsel believes that Alumina has rendered Bates claim tenuous and that link between Alumina’s violation and her child’s leukemia has not been established therefore company has a chance to win in court. Though, Todd may have a point in regard to the possibility of winning in a trial, but needs to keep in mind the length of time and costs that can be incurred in a litigation process.
Another key fact is that EPA has notified Alumina of the consideration of disclosing information under the Freedom of Information Act (FOIA). This act allows any person a process in which to access any information or records held by government bodies. In reference to Alumina, Bates can request information from the Environmental Protection...