Business Regulations

Business Regulation

Andre' T. Thompson

University of Phoenix

MBA/560

March 15, 2007

Professor Tracy Bomar-Howze

Alumina Inc. is an aluminum maker that operates in eight countries worldwide.

accounts in the United States make up 70% of the companies $4 billion worth. Located

on Lake Dira in the state of Erehwon, Alumina has business interests in automotive

components, the manufacturer of packaging materials, bauxite mining, aluminum

refining, and aluminum smelting. The company falls under the jurisdiction of region 6 of

the EPA.

Five years ago, Alumina was in violation of environmental discharge norms in a

routine EPA compliance evaluation. PAH concentration in test samples was above the

prescribed limit. A clean up was ordered, with which Alumina promptly complied. A

follow up audit reported the violation as corrected. Other than this single isolated

incident, Alumina has a good record of compliance before and after.

Kelly Bates, a 38 year old single mother, accused Alumina of repeatedly

contaminating the waters of Lake Dira with carcinogenic effluents, and has alleged that

consumption of the contaminated water is the proximate cause of her 10 year old

daughter's leukemia. Bates also alleges that her daughters condition may be as old as

Alumina's first instance of environmental law violation.

As a corporation, Alumina's first interest must be being profitable, as that is

what keeps them in business. To that end, they are responsible to their shareholders.

Alumina also has a responiblity to the communities that it operates to be a good neighbor.

That means to respect not only the surrounding environment and the people and animals

that inhabit that environment.

The stakeholders in this situation are as follows: Roger Lloyd, the company

chairman, Chris Blake, the company Chief Operating Officer, Diane Richards, the Head

of Public Relations, Arthur Todd, the company legal counsel, The Erehwon Reporter, the

newspaper that initially broke the story, Kelly Bates, the mother who actually filed the

claim, the shareholders, who actually run the company. The company officials could

actually be listed together under the company, which must report to the shareholders, the

actual owners of the company. Another group of stakeholders would be the lower level

employees of the company, who have a great deal of concern over the outcome of the

matter, as their jobs, and ultimately their livelihood is at stake. The newspapers stake in

the matter is to remain credible. Kelly Bates stake in this issue is the care of her daughter.

The ethical dilemma that lie in this situation are numerous. One of the options

presented in the simulation was to investigate Kelly Bates. This option raises issues of

invasion of an individual's privacy. Almost all of the options in the simulation bring a

significant financial cost to the company. The company wants to protect its image and

come up the best possible solution, but it must always keep the stakeholders interest at

the top of the list. This means finding the most cost efficient solution.

The legal counsel at my organization was not available for an interview, so I used the template provided.

Q: Did the organization actually violate or break any laws, rules, or regulations as alleged?

A: In almost all situations when dealing with a large organization and complex operations, the

answer to this type of question is hard to determine at the outset. When faced with public

allegations that contain the risk of significant litigation, the first and most necessary step is to do a

comprehensive investigation in order to obtain all the facts. The organization must proceed

systematically to gather all of the relevant information, including all internal and public records,

data, and reports that it reasonably can obtain. Evaluating this material establishes how the

organization will make further decisions; how it will respond to the allegations; and how it will

defend itself, if necessary. Importantly, however, the organization must understand that the

information gathered and the results may, in fact, be obtained later by its adversary in the process

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