Framework of Legality of the EPA - Essay Example

Legal Framework of Phoenix Connie Johnson 3/28 In the business world of the 21st century business laws have become an important variable that has led to the success of thousands of corporations worldwide. The business simulation Contract Creation and Management showed how Alumina Corporation faced a variety of situations in which knowledge and application of business law allowed the company to make the optimal solution. The use of business law can be used to protect the best interest of the company and its stakeholders. The purpose of this paper is to establish a hypothetical plan for company A that provides guidance to deal with regulatory risks through preventive, detective, and corrective measures. The use of contract laws starts at the point of sale of a product. The products in its packaging should include disclosure of a warranty agreement which stipulates the types of potential liabilities the manufacturer is liable for and under which types of circumstances. Customers expect to receive quality merchandise that will last for a reasonable amount of time when they buy goods. The end state customer should be the target of the legal department of an enterprise. A potential preventive measure company A could use to receive direct input from the customer is the creation of a customer service internet website. The free input the site collects could be used towards improving the quality standards of the company, therefore reducing the risk of being suit over a defect on a product. When companies hire new employees they should incorporate adequate training time for the employee to break the learning curve enough to be efficient at his job duties. The elapsed time used in the training represents a preventive measure to lower the changes of mistakes occurring due to human error. There were several lessons to be learned from the simulation which can be used in the legal framework of company A. The simulation showed the importance of complying with the laws and regulation of regulatory bodies such as the Environmental Protection Agency (EPA). The mission of the EPA is to protect human life and the natural resources of our environment. The managers of company A must educate themselves on the statutes of EPA. Five regulations mandated by EPA are the Clean Water Act, Clean Air Act, Toxic Substances Control Act, Resource Conservation Recovery Act, and the Energy Policy Act (Epa, 2010). In the simulation game the company past violations of PAH water levels made them suspect to wrongdoing which caused a customer to file a million dollar lawsuits. Lawsuits are a potential risk for company doing business in the United States and abroad. Companies can include within the content of the packaging a notice of the maximum liability they would pay in case of defects in the product. This could be a preventive measure to limit the cost of liability in case of defects. The company needs to establish an algorithm to follow in case a customer files or threatens to file a lawsuit. When this unforeseen and unfortunate legal matters surge the best strategy is to take a hands on approach to the problem. Failure to recognize the legal problem can make the problem escalate into a more serious matter. The first step is to open the lines of communication up between the company and the customer and his legal representation. If there was any wrongdoing the company can negotiate an out of court settlement. Sometimes it is better to settle even if the event was not necessary the company’s fault because the bad press that comes from lawsuit can lead to depletion in the brand value of the enterprise. When a company is worth billions of dollars in yearly sales every fraction of a percentage makes a difference. The framework has to predict different outcomes because the behavior of plaintiffs is hard to predict. Going to court should always be the last resort for a corporation. I like the alternative proposed in the simulation game of utilizing the services of the American Arbitration Association (AAA). Arbitration is a hearing or a process in which the parties involved in the dispute resolve their dispute by submitting their case to impartial third party (Answers, 2010). I would recommend that company A include the AAA as its preferred arbitration alternative. If the arbitration process cannot be negotiated and the plaintiff decides to go to court and follow through with a lawsuit company A must be prepared for this type of action. If the company cannot afford to hire its own legal department, then it must have identified a lawyer firm that would represent them in this type of cases. If the company hires the same lawyer for all its cases it should be able to negotiate a better price. Sometimes lawyers are willing to enter into lump-sum yearly payment arrangement with companies in which they provide all the representation needed for yearly fixed price. Failure to have identified a law firm prior to a lawsuit manifesting itself would be a serious flaw in the company’s corrective actions. The public press relations of company A must be carefully managed. The Freedom of Information Act (FOIA) gives the press the ability to investigate companies and create articles based on public released information. A way for the company to protect sensitive information is through a clause in the FOIA that provide confidentiality of business information. Establishing good working relations with the local press and the community can serve a preventive measure to minimize the risk of being bombarded by the press for any minimal mistake. Showing the community that that the company cares about the environment can help create brand value and improve customer retention. The environmental laws mandated by agencies such as the EPA exist because the corporate world for too has been acting irresponsibly. American companies should not resort to unethical practices such as establishing operations in developing countries only to avoid EPA standards. The air, water, soil, and natural resources of our planet must be protected now more than ever because the environmental destruction we created during the 20th century cannot be repeated in this century. References Answers.com (2010). Arbitration. Retrieved March 28, 2010 from http://www.answers.com/topic/arbitration Epa.gov (2010). Laws that we Administer. Retrieved March 28, 2010 from http://www.epa.gov/lawsregs/laws/index.html Read More