Awc Case Analysis

AWC Incorporation is a Southwestern Ontario aluminum fabrication plant company specializing in the production of commercial aluminum windows, doors, storefronts and curtain wall products. The company was founded by Jim MacDonald in 1950 and it was well known for the quality and design of its products and the competitive prices. Currently the company was taken over by Alex MacDonald who is the son of Jim. However, there were few issues that frustrated and confused Alex; in the sense of CSR, the local government decided to implement the new regulations in order to regulate businesses to preserve the environment. The government wants industrial companies not to vent harmful fumes inside or outside the plant, because the fumes would cost harms both to the environment and to the labors’ health. Thus, the new Ontario Environmental Emissions and Health and Safety regulation required the AWC to implement a new emission control system in order to meet the regulation standard. There are two choices of purchasing emission control system and the price ranges from $240,000 to $400,000 million. Both of the systems are costly, and would jeopardize the profit of AMC.

Besides the problem of the emission, the company also faces some other possible problems. For example, when caught by the government, AWC needs to pay $400,000 fine per day on releasing harmful particles into the internal work environment or outside the plant. If AWC acquired the emission control system, as the profit and cash flow are affected, AWC would face a decision of cutting down the labor force size. Furthermore, AWC has a chance of being prosecuted or charged by the government. Other than financial problems, AWC’s employees are currently working in a dangerous environment which could cause employees’ health problems as they inhale the fumes into their body during work. Even though there has not been an individual experienced health problem from working in AWC’s plant, AWC should eliminate the chance of it happening. Moreover, during the period of late 80s and early 90s, the whole aluminum fabrication industry was facing a recession which leads a fierce competition of bidding contracts. Although the AWC was able to receive contracts from the bidding process, the profit decreased from about five percent to around two percent.

Taking all the considerations of above, the most critical issue that AWC has been faced is according to the fume emission problems whether to comply or not to the Ontario Environment Emissions and Health and Safety regulation. AWC needs to make a decision between making an expense on equipment and running their business with risk of being caught. It is difficult to make a decision of this issue since implementing the new emission control equipment is too costly, the cheapest one would cost approximately $240,000 and the most expensive one would cost $1.25 million. With the purchase of the emission control system, AWC would be