Business Regulation Simulation: Alumina, Inc.

Running head: BUSINESS REGULATION SIMULATION: ALUMINA, INC.

Business Regulation Simulation: Alumina, Inc.

Alumina is a US-based aluminum maker that operates in eight countries. 70% of its sales are accounted for in the United States. Five Years ago, Alumina was found to have been in violation of an EPA compliance inspection. The EPA or Environmental Protection Agency is responsible for the enforcement of the pollution of air and water, solid waste and toxic substance disposal, pesticide regulation and radiation laws. The evaluation inspection found that the PAH concentration was above the allowable limit. Alumina quickly responded to the violation and returned quickly within compliance of the PAH limits. Despite this, Alumina has a good record with environmental regulation compliance. An accusation of illness due to the increased PAH concentration is what the Company does not want, but that is exactly what Kelly Bates is telling the reporters.

Kelly Bates is a local resident of Lake Dira, Erehwon where Alumina has business interests in mining, refining and smelting aluminum products. Mrs. Bates is a single mother who accused Alumina of contaminating that water resulting in her daughter’s leukemia. This accusation appeared in the Erehwon Reporter which also alleges that the onset of the disease might be as old as the first instance of the PAH concentration being too high. Alumina has the challenge of how to respond. When responding to the accusation, Alumina has to take in consideration the values of its shareholders. “Ethical corporate behavior depends on managers who recognize and take into account the various stakeholders whose interests the corporation impacts (Reed, Shedd, Morehead, Corley, 2005).”

The man shareholders directly involved in this scenario are the officers, the community and environment and the state and federal agencies. The governmental agencies are charged with the regulations to keep the environment safe. They do this through audits and inspections to test and measure specific levels of pollutants in the environment. The government’s ethical dilemma is that they need places of employment to survive but they also need them to stay in compliance with the regulations. The company and its officers want to make money through their products and company. They are hindered by the regulations but know they must keep in compliances with them. Shortcuts often look promising and could benefit them in large short term profits. Alumina must remember that “profits and business ethics are not contradictory. Some of the most profitable businesses have historically been the most ethical (Reed, Shedd, Morehead, Corley, 2005).” The community wants and has the right to the property they have individually and as a group. They want to have a safe place to live and play. If a company that is in their area does not follow the regulations given them, they need to have recourse to that issue especially if it injures their property or person. The problem is that it is easy to blame an organization with deep pockets of illnesses that arise. It would be simple to make accusations prior to finding out what the cause of the illness or injury is.

The legal process of Alumina stipulates that when dealing with accusations of this type that the company performs a comprehensive investigation to obtain all the facts. Prior to any other action, Alumina needs to obtain all the facts by doing an internal investigation. A systematical approach must be taken to obtain any and all information related to the violation and the ability for the high PAH concentration to cause leukemia. As the organization gathers the information, it is important that it remembers that the information it is collecting can be obtained in the discovery process in a court’s proceedings. Because of this, Alumina must be prepared to handle the information ethically in accordance to the results.

Once the investigation has been completed, Alumina needs to take into consideration what method it will take to resolve the dispute. Some of the alternatives include privately discussing the concern with Kelly Bates, go through trial proceedings, or try alternative methods of negotiations like mediation or arbitration. The legal process outlines three factors that must be considered when facing this type of challenge. The three items are financial cost, time and publicity and confidentiality. Obviously trying to negotiate privately with Mrs. Bates could be the most inexpensive but could result in further action later on if she decides she is not happy with the outcome. This would also be the quickest and most discreet way of handling the situation. Unfortunately, the risks are high and likely