Business Regulation Simulation: Alumina Inc - Case Study Example

Running Head Business Regulation Simulation Business Regulation Simulation Company Overview Alumina Inc. is a US-based company specializing aluminum railing and special aluminum fabrication. Alumina belongs to one of the profitable industries in the world proposing global consumers a wide range of aluminum products. Quality and new technology are the primary driving factors for the company and its growth. Alumina tries to deliver customer satisfaction at a lower cost, smaller size, and higher speed. Alumina follows differentiation strategy which helps the company to attract and keep a customer. "Alumina offers standard picket, glass systems, column, stairs privacy panels and custom design" (). The simulation will be based on the Legal Environment of Business Simulation UOP. the aim of the paper is to identify and analyze the main facts, regulations, and legal issues which influence the company and its stakeholders. Also, the paper will cover risk analysis and ethical questions, and provide possible solutions to the problem exist. The Key Facts, Regulations and Legal Issues The aim of EPA rules is to promote better self-regulation of business. EPA rules and regulations have a great impact on decision-making process determining direction and strategies of future growth and development. EPA found that five years ago, Alumina violated environmental regulations and rules. According to commission results, PAH concentration was above the norm. Thus, Alumina asked for another test and received a good record of compliance. Except this case, the company strictly follows environmental rules and regulations. This adversarial mode of business-government relationships in the regulatory arena can be adapted to a more cooperative, less confrontational mode through positive interaction between compliance officials from the public and the private sectors. The central theme of interactive corporate compliance is the encouragement of effective compliance systems within each business so as to ensure that the purposes of public policy are reflected in the internal operations of American businesses--not only through the threats of enforcement efforts for noncompliance, but also through the positive effects of recognition of the obligations to make corporate practices square with the requirements of public policy. Voluntary compliance can be made palatable, and even profitable, in an effective scheme of interactive compliance (Hildreth 2007; US. EPA 2006). The Freedom of Information Act (FOIA) is another important issue in simulation. Among most FOIA officers, the individuals who process the requests and authorize the disclosures, there is, in fact, a genuine respect for the FOIA. This act was signed by Even Lyndon Johnson in 1966. Following this Act, Alumina asked the Environmental Protection Agency (EPA) to disclose the information concerning their spill five years ago. No one, in or out of government, can deny the oppressive delays in agency response to FOIA requests, but this varies from agency to agency and is often due to the refusal of the executive branch to provide adequate funding and staffing for its FOIA sections. Indeed, there is considerable evidence that the career professionals overseeing the implementation of the FOIA in federal agencies have, for the most part, accepted the principle of the public's right to know (Richter, 2002). Another important factor covered by the study is the U.S Environmental Protection Agency Compliance Incentives and Auditing policy. The aim of this strategy is to identify all aspects of its production, storage, and transportation operations, analyzing its management systems, and other systems designed to avoid, prevent, or mitigate spills. More and more, individual citizens throughout the country are deciding to reward what they see as "good" businesses with patronage, support, and good will and to tell the dishonest or unethical corporations to shape up or lose their business. This is becoming particularly evident in the areas of the environment and public health. Kelly Bates was one of those citizens who accused companies contaminating the waters. She states that Alumina contaminated Lake Dira with carcinogenic effluents which led to leukemia diagnosed for her daughter. In order to prove that Alumina has not violated any laws and regulations, its Chairman, Roger Lloyd, has started an independent investigation. It was found that the company did not violate laws following norms and standards stipulated by EPA (Legal Environment of Business Simulation 2006). Alumina's Values and Stakeholders The case study and key issues show that Alumina pays a special attention to all stakeholders and work in compliance with current laws and regulations. The main stakeholders are the Board of Directors headed by Roger Lloyd, the company chairman, the community, represented by Kelly Bates, EPA agency and Alumina's employees. The main conflicts among stakeholders are based on different ethical perspectives and goals persuaded by these groups. The Board of Directors and Roger Lloyd prove that they did not violate environmental laws and followed EPA regulations. On the other hand, Kelly Bates saw Alumina and its production as the main threat to environment and health of citizens. The dilemma can be explained by the fact that any production and manufacturing cause damage to the environment, and any steel or chemical company pollute the surrounding. The problem is that any company pursues business goals making profit neglecting rights and problems of the people and animals inhabited these areas. This position and ethical issues have drawbacks that bring into question their actual worth. Their language is so abstract and ambiguous that their meaning and application can be easily manipulated to mean almost anything. Codes of ethics have not noticeably elevated the ethical behavior of the groups using them. Members of groups need to recognize that their loyalties go beyond their groups to encompass all humankind. Social values are another powerful source of guidelines for ethical decision making. These deeply embedded cultural values and traditions are not always positive. Although values are sometimes nebulous, they can be articulated with a considerable degree of accuracy and meaning (Hildreth 2007). A Risk Analysis Matrix A Risk Analysis Matrix shows that litigation is possible but it will cost the company both time and money, can bring negative publicity and disclosure of private information. In the communication context, leaking of information can be explained by the inappropriate releasing of information outside an understood boundary (Richter, 2002). Until evidence accumulates that interactive compliance can improve compliance without compromise to the public interest, it will be difficult to persuade administrators to launch additional experiments (Goldberg 2003) Even so, many enforcement officials are beginning to see the compliance benefits of corporate self-regulation, and there are many signs that corporations that have reliable self-regulation systems can expect recognition and reward. Few courts have weighed the legal impact of corporate policy statements intended to discourage employee defalcations. By investing in compliance programs, executives reasonably expect that this effort will afford the corporate entity a measure of protection from civil or criminal liability. To their surprise, prevailing legal norms offer little to bolster these expectations. Despite resolution with the help of a third party will help Alumina to avoid negative publicity and save its corporate image. These systems are created to provide a structured approach to identify, discuss, and resolve workplace conflicts that have been transformed into disputes. The disputes that are managed by such systems include a broad range of issues from interpersonal conflicts such as some forms of sexual harassment to the discontent of union members with some feature of their contract. n the present era the type of management mechanisms employed reflect the stage on the dispute continuum to which a dispute has progressed and whether it is based primarily on interests, rights, or power. These factors determine whether a preventive or remedial approach can be used for a given dispute. While fairness of treatment of the parties to a dispute is an important value supported by stakeholders, there is a tension between acting in a fair manner and in pursuing one's own self-interest. In a negotiation the parties want to do as well as possible, but fairness is important in maintaining ongoing relationships, managing disputes, and influencing the outcomes of a dispute (Goldberg 2003) Complacence of the Proposed Strategy with Ethical Dilemma and Values Dispute resolution is the best approach for alumina but it is important to note that it will violate ethical and values of the company. The economic and behavioral decision theory perspectives on fairness suggest that the ambiguity and subjective factors confront efforts to define fairness. In spite of the fact that people are constrained by fairness, they will maximize their own outcomes when they can justify doing so (Goldberg 2003). Justifications and impression management are used to resolve the tension between self-interest and fairness. People manage the impression of being fair so they are perceived as being fair to gain social approval in the negotiation process. In this case, the characteristics of the relationship between the parties are the central determinants of the process and outcome of the dispute. The interpersonal nature of a relationship determines the choice of relying primarily on power, negotiation, or conflict resolution to handle disputes, as well as the process to be used to implement each option and the effectiveness of the implementation. Power is the ability to gain compliance with an outcome that benefits the person using power. They distinguish between negotiation, or getting commitment to a particular course of action to settle a dispute, and conflict resolution techniques used in a persuasive process to reframe the dispute as a mutual problem to be worked out jointly (Hildreth 2007). In sum, Alumina's choice to use dispute resolution will help the company to void unnecessary spending and protect its brand image. To some extent, dispute resolution will help to increase trust ad openness of the relationship, empathy, acceptance, and respect. Dispute resolution may encourage the company not only to do or to avoid doing certain things, but also to be living examples of highly ethical people, contributing positively to the organization and to the general public. References 1. Hildreth, R. (2007). Theory of Morals: An Inquiry Concerning the Law of Moral Distinctions and the Variations and Contradictions of Ethical Codes. Kessinger Publishing. 2. Legal Environment of Business Simulation UOP: Business Regulation. Retrieved February 3, 2007 from University of Phoenix Student Web site. 26 December, 2007 https://mycampus.phoenix.edu/secure/resource/vendors/tata/sims/legal/legal_simulation1.html 3. Richter, J. (2002). Holding Corporations Accountable: Corporate Conduct, International Codes, and Citizen Action. Zed Books. 4. Goldberg, S. B. et al. (2003) Dispute Resolution: Negotiation, Mediation, and Other Processes Aspen Law & Business. 5. U.S. EPA (2006). Compliance Incentives and Auditing -Compliance and Enforcement. Retrieved 26 December, 2007 from the World Wide Web: http://www.epa.gov/compliance/incentives/auditing/auditpolicy.html Week Three Risk Analysis Matrix Risk Analysis Matrix Alternative Solution Risks and Probability Consequence and Severity Mitigation Techniques and Strategies Litigation high cost time (up to several years) privacy concerns (private information disclosure) High - time and high cost Middle - if the company win the process, it will save money and improve its reputation Offer settlement for Bates problems Contingency- conduct an independent study and prove Alumina's liability at trial Dispute Resolution poor suited subjectivity of the third party the decision would not protected by laws and the state High - Bates can refuse to use this method trying to receive huge sum of money after the trial Middle - Bates will make alternations all the time she disagrees with the company, High - Alumina will lost both money and time on Dispute Resolution, and then start litigation process Preventive - communication with Bates and attention to all her requests and propositions Contingency - communication only through a third party Read More