Alumina Inc and Business Regulations
Do you think it is easy to run a $4 billion corporation? Before you answer, first consider that the company we are referring to is located in eight countries around the world, and 70% of their business is here, in the United States. That is the situation Alumina Inc. deals with on a daily basis. Although companies strive to be in that position, there are also a lot of problems that come with being a global company. In order to be competitive, your company has to maintain a positive public image, and be able to manage a crisis instantly.
Lawsuits are common for a big corporation because they are thought to have deep pockets, which means they have money to pay out. Alumina Inc. is faced with a crisis that involves a possible lawsuit from a woman named Kelly Bates, who alleges Alumina Inc violated environmental statutes, which led to the leukemia of her daughter. If found guilty Alumina could face high priced fines, and could pay millions to Kelly Bates in damages, along with bad publicity that could upset shareholders. How do you prevent extensive losses- environmental and commercial?
That is what our team will try to do as we act as the business manager of the Alumina Corporation. Based on the collective research conducted by our team, we have concluded that our strategy in dealing with the accusations by Kelly Bates, and our report to the key decision maker, Roger Lloyd will be as follows. After learning of the possible lawsuit by Kelly Bates accusing Alumina Inc of contributing to her daughters Leukemia because of the high content of Poly Aromatic Hydrocarbons (PAH) released into Lake Dira; we would first conduct an independent study to check the validity of the accusation.
We would also try to find any information we could on Kelly Bates. We know she is a single mother, and we know her daughter died from leukemia. We would try to find some information about her personal life, past lawsuits, drug use, alcohol abuse, or anything that can show a motive for suing our company. We know that under the Freedom of Information Act (FOIA), which was passed in 1966 by congress to provide citizens with a statutory right of access to government and business information (Davis, 2000); Kelly Bates will go after our records.
We are not worried about what Kelly Bates may find because our company has had only one violation five years ago, and the situation has been corrected to the satisfaction of the EPA. Also, the results of our independent study shows our PAH levels are well below the legal limits. The FOIA also has some exemptions to the information that is mandatory to be released in order to protect the agency (Davis, 2000). This will be up to our legal team, which is lead by Arthur Todd, to decide what has to be released. Mr.
Todd handles all litigation and regulatory proceedings, and he is there to prevent extensive losses and make sure that Alumina Inc abides by the environmental statutes. After reporting to Mr. Lloyd about the positive findings of our independent study, we would then recommend a press release about our findings. This is important to preserve Alumina’s public image, and to show our current and past measures taken to preserve the environment, concentrating mostly on Lake Dira. The head of the public relations department Diane Richards will conduct this.
Ms. Richards would speak about the clean history of Alumina Inc, and would concentrate efforts on reassuring the public about Alumina’s adherence to the Clean Water Act. The Federal Water Pollution Control Act Amendments of 1972, commonly known as the Clean Water Act, created a comprehensive program to clean up the nation’s waters. Additionally, the Act expressly mandated that state water quality standards provide for the protection and propagation of fish, shellfish, and wildlife (Shosteck, 2001).
This is important for the public to hear because the information tells how the water is safe for not only the people, but for the animal and aquatic life as well. We as a group recommend Ms. Richards mention nothing about Kelly Bates or the possible lawsuit; only mention the clean record of the company, the strides we are taking to protect our environment, and the number of jobs Alumina Inc. has generated in the surrounding area. Our next advice we would recommend to Mr. Lloyd would be how to handle the legal issue’s being brought on by Kelly Bates.
We would strongly advise Mr. Lloyd to use the American Arbitration Association (AAA) to negotiate with Kelly Bates. Ultimately it is up to Mr. Lloyd in which direction Alumina will go from here. We as his counsel can only recommend the course of action. The question was asked if Roger Lloyd, Chief Executive Officer of Alumina Inc. would we have accepted a mediated settlement with Ms. Kelly Bates, a local resident. The overall team consensus is yes; we feel that a mediated settlement is the best course of action to take in this situation.
Five years ago, Alumina Inc. did have an issue and was promptly handled with the guidance of the Environmental Protection Agency approving the steps we did in order to solve the problem of the incident. In today’s business environment, many corporations are utilizing the less time consuming and less costly methods to dissolve the disputes they may have with other parties. Corporations have attempted to distance themselves from the time consuming, costly approach of settling disputes through lengthy trials utilizing third-party law firms.
According to Coulson (1993), alternate dispute resolution (ADR) employs traditional negotiation techniques, but also includes additional methods of mediation and arbitration. This strategy has proven successful for many corporations in helping to reach prompt, rational and mutually agreed-upon settlements as Coulson (1993) explains further. Corporations have emerged as one of the cornerstones of modern global societies, and with this power come the social accountability demanded by society.