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Week 3 Problem Solution: BCC LTD
University of Phoenix
MBA 560 ? Enterprise Risk
Aug 29, 2006
Abstract
Using situations from three University of Phoenix simulations, a fictitious company BCC endeavors to identify common ground in minimizing legal risk for its many unrelated subsidiary companies. Simulations deal with environmental regulation and toxic torts, contractual obligations and mutual understanding of obligations and contractual terms, employment law and termination decisions. BCC explores alternative solutions and implements a holistic approach to minimizing legal risk.
Week 3 Problem Solution: BCC LTD
Problem Statement
In today's litigious business environment, it is imperative that upper management and boards of directors make ethical decisions geared toward mitigating legal risk. Decisions in the running of a business enterprise, should meet three tests. The decision should be profitable or make business sense, it should be legal and it should be ethical. For-profit enterprises are un business to earn profits; as such, decisions in the day-to-day running of the business should have a primary focus of ensuring the continued profitability of the organization. A decision to implement a new CRM (Customer Relationship Management) should be based on the net present value, and not whether it will cause a friend to be laid off or hired as a consultant. Business decisions must also be legal. Business leaders should have enough understanding of the law to make decisions that are legal or they should hire competent counsel. Legal business decisions become more challenging when dealing with regulatory and administrative law, therefore it is imperativ ...