Regulatory Risk
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Regulatory Risk
Heather Varner
University of Phoenix
MBA/560 - Enterprise Risk
Carol M. Parker
January 10, 2009
Introduction
The respective environment in which a company exists can often dictate strategy, rate of growth, and level of risk of which a company is willing to engage. Industries are also required to operate within government constraints, regulations, in order to maintain accountability and social responsibility in an effort to protect the well-being of the population. Companies that operate within the environmental industry are required to adhere to strenuous government regulations administered by various entities. Within the simulation, Business Regulation, Alumina, Inc. (AI) is embedded in controversy involving regulatory issues and social responsibility because of hazardous waste.
Situational Analysis
Alumina, Inc. is an aluminum company based in the United States (US) with global operations in eight countries. Though AI maintains a global presence, its primary source of revenue is derived from the US. Per the simulation, “70% of sales are US driven” (University of Phoenix simulation, 2008). AI’s business markets include “automotive components and manufacture of packaging materials, bauxite mining, alumina refining, and aluminum smelting” (University of Phoenix simulation, 2008). The respective regulatory agencies and acts involved in the simulation include The Environmental Protection Agency (EPA), The Occupational Safety and Health Administration (OSHA), and The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Per the Oil Pollution Act of 1990:
EPA is required to direct the response in cases where the spill "is of such a size or character as to pose a substantial threat to the public health or welfare." EPA may also take the lead in managing the response if requested to do so by state or local response officials, or if EPA determines that the responsible...
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