Today’s business managers are faced with many more issues beyond the bottom line. Managers must be aware of and comply with federal and state laws that affect the business as well as any ethical issues that arise during potentially damaging lawsuits. Throughout this paper, Learning Team B will discuss additional strategies that could be used to solve the challenges in the simulation, debate the issues of mediation versus litigation, and discuss other areas of business regulations that affect private businesses. Business Regulations Today’s business managers are faced with many more issues beyond the bottom line criteria.
Managers must be aware of and comply with federal and state laws that affect the business as well as any issues that lead to potentially damaging lawsuits. Business leaders must act ethically while working to resolve legal dilemmas in ways that are beneficial to the organization’s finances and public image. Learning Team B will discuss strategies to solve the challenges in the business regulation simulation, debate the issue of mediation versus litigation, and discuss other areas of business regulations that affect private businesses.
The key decision maker in the simulation had to make decisions that adhered to EPA regulations, federal laws, state laws, and at the same time keep in mind the business needs of Alumina Inc. and keep good relations with the public. The first problem encountered was when Kelly Bates claimed that repeated contamination in Lake Dira caused by Alumina was responsible for her 10 year-old daughter’s leukemia. Alumina Inc. was convinced that Alumina were well within the regulations for contamination. As a result, the best reaction to this was to conduct an independent site study that would check for any new violations.
The PAH levels were as expected. This extra effort to conduct the study kept the company’s integrity intact while also showing the community that Alumina cares about the environment and their neighbors. Keeping good relations with the public is vital. Corporate responsibility not only has morality[WE2] obligations, but can have an impact on the end product as well. If people have a negative image of a company, then consumers are less likely to do business with the company. Good community relations have both good business and social outcomes (Goddard, 2005).
Next, Kelly Bates and the Erehwon Reporter requested documentation of Alumnia’s violation five years ago of the Clean Water Act. Under the Freedom of Information Act (FOIA), a person is given the right to obtain certain Federal agency records. But also under the FOIA (exemption 4), Alumina could withhold confidential business information (Platts, 2005). The outcome determined that Alumina would allow a partial release of the report[WE3]. This decision keeps both the business and community in mind. The report does not jeopardize Alumina’s competitive position which is good for business.
At the same time, the result keeps community reactions mild because the company is not trying to hide anything. Following this, Bates then wants to sue Alumina for one million dollars. Alumina’s best interest is to seek the American Arbitration Association’s (AAA) intervention in order to save time and money. Another advantage is that the arbitration lawyer can be chosen by those involved. Furthermore, it is private and information does not need to be released (Guillet, 2005). Alumina avoids the court fees, avoids negative publication, and manages to satisfy Kelly Bates.
A mediated settlement with Bates is affordable and saves the company’s reputation. A confidential settlement means the Bates received financial incentives to aid in recovery and is also expensive. Alumina Inc. felt that obtaining third party mediation is an immediate way of a solution. “Environmental liabilities are notoriously difficult to estimate given the high degree of uncertainty and contingent nature of environmental exposure such as cleanup costs and related liabilities” (Sullivan, 2005, p. 1).
If an organization or individuals do not address the regulatory or the complaints, the issue can evolve to a huge problem for the company. “These methods, called sanctions, may be used against a person who had failed to comply with the law. The sanctions are in effect a form of punishment for violating the law. Sanctions also have preventive function. The threat of sanctions usually results in compliance with the requirements of law” (Reed, Sheed, Moreheed, & Corley, 2005,p. 16). Therefore, resolving the disputes in a manner that follows the law is the best interest of all parties involved.
A decision to practice the mediation settlement with Bates is an accepted type of alternative dispute resolution (ADR) that allows the company to establish their own settlement terms. According to Reed et al, “Mediation is the process by which a third party person, called a mediator, attempts to assist disputing parties in resolving their differences” (2005, p. 120). Litigation and laws can be expensive and time-consuming for an organization. There are specialized litigation laws such as Toxic Tort Litigation laws which are addressing occupational hazards and risk management.
According to Landing, “the mass tort litigation stemming from occupational risk is changing focus as a result of the asbestos debacle, which is morphing into other occupational risk” (2005, p. 1). The legal system is evolving and addresses the environmental problems by developing regulations and mandating compliances by organizations. These laws are established to protect both businesses and citizens. Some other areas of business regulations that hold similar dangers for private businesses are The Occupational Safety and Health Administration (OSHA) regulations.
“OSHA’s mission is to assure the safety and health of America’s workers by setting and enforcing standards; providing training, outreach, and education; establishing partnerships; and encouraging continual improvement in workplace safety and health” (OSHA, 2005, pg. 1). Employees can feel peace of mind that OSHA looks out for the best interest for the environment and safety standards. For example, businesses that employee employ youth young people have to consider his or her their safety. OSHA has an active role in protecting the youth’s health[WE4], safety, and development in work environments.
“In 1999, a 16-year-old restaurant cashier died when she was shot in the head during an armed robbery attempt. At 1:15 p. m. , a man approached the cashier and her mother, a co-owner of the restaurant, at the cash register. He pointed a gun at the cashier, demanded money from the register, and fired the gun, striking her in the face. She was transported to the hospital and pronounced dead” [WE5](West, Castro, ; Fitzgerald, 2005, p. 1). Adolescents are huge contributors to the workforce because they are usually eager, affordable to pay, and have energy.
However, possible injury and death could arise therefore getting employers and employers involved in safety and precautions comply with the OSHA standards and business regulations. Every effort to establish the OSHA mission is in the best interest of the business and the consumers. Of course there are many aspect of meeting the regulations. [WE6]The Fair Labor Standards Act (FLSA) enacted in 1938 governs the number of hours children and adolescents can work and places restrictions on adolescents working in specified hazardous jobs.
The FLSA applies only to businesses that are engaged in interstate commerce and have annual gross income in excess of $500,000. Labor regulations differ markedly for children and adolescents who work in agricultural jobs; however young people who work on family farms are exempt from federal law enforcement. When both federal and state laws are applicable, the FLSA requires that the more stringent law be followed (West et al, 2005). So, if the private business meets the requirements then the FLSA standard has to be enforced. OSHA and FLSA are laws that govern regulation on business, individuals, and the government.