Rio Tinto Company and Its Experience during the 2011 Earthquake - Case Study Example

Video Business Case Report Name Course Tutor Date Table of Contents Table of Contents 2 Executive Summary This paper presents a case of Rio Tinto Company and the experience of the company during and after the March 11, 2011 earthquake which adversely hit Japan. The paper acknowledges the fact that the company was greatly affected by the earthquake just like most of Japanese companies. One of critical issue that arises in this particular case is the occurrence of an operations stand still. Another issue that arises is the difficulty to undertake international business activities based on the fact that the company’s value chain is internationally connected. Also the company also experienced the challenge of managing the human resources. The ethical issues arising from this particular case include violation of contracts and the dismissal of employees. The paper identifies the causes of this issue to be grounded on the lack an effective disaster management and preparedness plan. Also the employees also influenced the challenges that the business faces this is because if their attendance to work is not effective, then the subsequent organizational functions are bound to be negatively affected. The paper also identifies a decision criterion that is bound to lead to alternative that can assist in resolving the issues facing the business just after the disaster. The areas identified include; maintenance of customer satisfaction, timely service delivery , improving employee performance, retaining employee, ensuring the growth of sales and maintaining the supply of resources. Realistic solutions for the immediate effects of the earthquake were suggested as crucial. These include finding techniques of reconnecting the electricity supply in the company. Secondly the company offering alternative transport means such as bicycles to the employees in order to eliminate work intendance. Finally this particular paper recommends that the company should reevaluate or develop a business continuity plan that will enable the organization to identify the existing threats that affect the organization and how the threats can be tackled. Critical Business Issues Earthquakes are disasters that affect all aspects of life. When the March 11, 2011 earthquake hit Japan, the Rio Tinto Company was also greatly affected by this particular disaster. A critical business issues that is represented in this particular case is the occurrence of an operational stand still. Many operations within the organization were greatly affected. The earthquake knocked out the power system, these therefore implies that working was bound to be difficult. Also the operations stand still occurred based on the fact employees experienced difficulty in terms of going home and even coming to work after the earthquake was a challenge because the trains were not able to function effectively. Another issue that arises is that international business activities of the company were bound to be difficult as a result of the impact of the earthquake. The value chain operations of Rio Tinto Company usually involve business deals with oversee mining companies in countries such as South Africa and Madagascar. Nevertheless, the occurrence of the earthquake interrupted the international business operations of the company. The difficulty to meet needs of business clients is another arising issue just after the earthquake. The Rio Tinto company supplies energy resources to various power companies such as automobile industry who use titanium and the steel industry which uses coal and steel. Such activities will definitely not take place effectively due to logistic issues to various locations where the companies are situated. Another issue that arises therefore is whether the company will actually be able to maintain it’s usually sales. Another issue arising from the case is the difficulty in managing the human resource. The Rio Tinto company has a total of 27 employees. The employees have to be effectively managed. However, the earthquake resulted to a difficulty in managing the employees. This is because employees could begin coming late to work, other would have been impacted by the challenges of the earthquake such as ill health and thus leading to a high level of absenteeism. Ethical Issue There are various complex ethical issues that arise in this particular case. One of the ethical issues that arises entails human resource management. This may occur from dismissal of employees from work due to constant absenteeism and neglect of work. The employees of the organization are bound to come late to work due to the lack of transportation means and others may be frequently absent due to health complications or losses attributed to the effects of the earthquake. Violation of contracts is also another ethical issue that may arise from this particular case. Before the earthquake, the Rio Tinto company had made various business contracts with other stakeholders such as suppliers and international supplies that bring mineral resources to the company. The effect of the earthquake is that the company may default some of its contracts which may to some extent be unethical. Causes One of the causes to the issues that arise in this particular case is the lack of disaster management or preparedness. The Community Foundation Leadership Team (2010), highlights that during an emergency or a disaster, it is fundamental for an organization maintain normalcy in order to deal with the sensitive issues that may exist at that particular time. Consequently, it is essential for an organization to develop and effective disaster management plan to enable a quick return to normally. If challenges such as; operational standstill, difficulty to meet the requirements of the clients, difficulty to manage the workforce and the violation of contract terms occur this , indicates that the organization does not have an effective disaster management and recovery plan. Another cause of the issues arising is from the human resource. As argued by Armstrong (2008), employees are the most valuable resource to an organization. This is because it is the people that get things done within the organization. Consequently, if employee attendance to work is not effective, then the subsequent organizational functions are bound to be negatively affected. Decision Criteria A decision making criteria is significant based on the fact that it provides specific measures that will be adopted in order to select the best alternative facing an organization (Moriarity, 2008). Rio Tinto Company is currently facing various issues that need suitable decisions that can make the organization to get back on its fit. There are various decision criteria existing in this particular case, this include Maintenance of customer satisfaction and also upholding the image of the company both within the country and with other oversee companies that the business deals with Ensuring timely service delivery for the customers Improving employee performance and their ability to be committed to their work is another crucial decision Retaining employee within the organization that is preventing layoffs Ensuring that the sales of the business grow in despite of the crisis Maintaining the supply of resources which are used by the company Alternative cause of actions The alternative case of action can be measured against the main issues highlighted by the decision criteria. The following table highlights the alternative cause of actions Decision Criteria Alternative cause of actions Suitability of the Alternative Maintaining customer satisfaction Ascertaining that contracts made with customers are fulfilled High Ensuring timely service delivery for the customers Ensuring that resources are available and employees are available to handle the delivery High Retaining employee Correcting Employee mistakes wisely for instance incidences of absenteeism and lateness High Improving employee performance Ensuring that employee are provided with effective means of arriving early and constantly at their work station High Maintaining Employee commitment Motivating the employees to work High Growth in the sales Ascertaining that contracts made with customers are fulfilled High Maintaining constant supply of resources Ensuring that resources are available and employees are available to handle the delivery High Solutions One of the solutions that can be derived from the alternatives provided above is that foremost the organization should work out a way of tackling the problem of the operation stand still that was caused by the March 11, 2011 earthquake. In terms of issues arising form the human resource, the company should develop an effective way in which employees can get to work in order to avid absenteeism and lateness. This will thus facilitate the improvement of their performance. Implications In order to resolve the operational stand still, first the company can begin by finding techniques of reconnecting the electricity supply in the company. Secondly the company can reorganize the transport facilities in order to facilitate the effective working of the value chain. For the human resource a realistic solution for the employees to get to work on time and constantly is by offering alternative transport means such as bicycles. Conclusion and Recommendation One of the most essential recommendations is for the organization to come up with a business continuity plan. Business continuity planning is a process that involves identifying the threats that may be facing an organization and the impacts of these particular threats on the ordinary operations of the organizations. After the threats affecting the organization are identified a framework or structure is developed in order to deal with existing threats (Robert 2007).The main objective of the process is to create organizational reliance which is the ability to successfully respond to and safeguard the basic interests of the organizations stake holders, operations, its activities and its reputation, despite of the existing challenges or threats facing the organization.. References Armstrong, M, Strategic Human Resource Management: A Guide to Action, Kogan Page Publishers, 2008. Community Foundation Leadership Team, Disaster Preparedness and Recovery Plan, 2010. Robert, J, Business Continuity Planning: From Writing to Testing, University of Rochester. 2007. Moriarity, K, Making Decisions - Specifying Decision Criteria, 2008, Read More