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Submitted by nurselagos on March 7, 2007
Category: Business
Words: 1981 | Pages: 8
Views: 582
Popularity Rank: 13,552
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Business Regulation and
Corporate Decision Making:
The Legal Strategy of Alumina, Inc.
Our team was tasked with advising Alumina, Inc., the aluminum maker in the simulation that had one Environmental Protection Agency (EPA) compliance violation in five years and is being threatened in a million-dollar personal injury lawsuit. The team is to recommend a strategy in the lawsuit defense and advise whether to settle the dispute or defend the company’s position in court as if we were acting as the CEO of the company. We will also discuss the pitfalls of other areas of corporate government regulation in addition to environmental controls.
The team recommends that the key decision-maker in this scenario take a multi-level approach at the onset of this problem. The first thing Alumina, Inc. should do is conduct an independent site study to check current compliance with the applicable EPA regulations. If the study results showed additional violations, the company should voluntarily disclose them to the EPA, and then take action to promptly correct them. By doing this, Alumina would be taking advantage of the EPA Audit Policy’s incentive for self-policing (EPA’s Audit Policy, 2000). By voluntarily discovering violations, companies can reduce their EPA penalties by 75%. If this type of self-policing were done by Alumina on a systematic basis, they would receive no penalty for the reported and corrected violation. Even though the independent site study is costly, due to the nature of the aluminum business, Alumina’s potential for EPA penalties is very high. Systematic independent site studies would ensure no potential penalty liability and the public relations department could capitalize on the concept that Alumina was a highly responsible company that valued the environment of Lake Dira and the health and well-being of the citizens of Erehwon.
If the study results showed compliance with EPA regulations, this fact could be...
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