Recognizing and Minimizing Tort and Regulatory Risk

Recognizing and Minimizing Tort and Regulatory Risk

Transforming an idea into a business opportunity instantaneously involves risk management, a reality of any business that management must address. Running a business inherently involves a broad spectrum of risk. On one end of the spectrum companies encounter the risk of violating regulatory requirements, and on the other they risk causing injury to individuals. Because of these inherent risks in operating a business, it is crucial to establish a plan that identifies, mitigates or prevents, and effectively manages these exposures.

After conducting the business regulation simulation (University of Phoenix, 2010), it clearly demonstrated Alumina's lack of foresight and required proactive posturing to handle the multiple situations as posed. As a global industry leader in the production of aluminum, Alumina failed to understand the rippling ramifications of its Environmental Protection Agency (EPA) discharge violation in to Lake Dira. Although Alumina worked diligently to correct the deficiency, they did not account for the haunting effects the violation would have beyond the regulatory boundaries and in to the private citizen sector of the state of Erehwon. So when Kelly Bates surfaced, teaming up with the local Erehwon paper publicly alleging Alumina as the culprit behind the cause of her daughter's leukemia, the company was caught off guard for such a fight and the only recourse Alumina had was to mediate a settlement. However, not before Alumina considered conducting a private investigation of Bates in an effort to place her in a false light, an intentional tort (Cheeseman, 2010).

Because the EPA provides strict guidelines and standards of governance, outlining the codes of conduct for a successful coexistence of nature and industry, there is no good reason for Alumina's violation other than poor operating procedures and lack of vigilance.