...Enterprise Risk Management William Briggs, D. Scott Forman, Benecia Richardson LAW/531 July 16, 2012 Sonja Dickens, Esquire Enterprise Risk Management Enterprise risk management may be defined as “people, systems, and processes working together across the organisation to systematically think about managing a wide range of risks that could impede achieving organisational objectives/opportunity” (Harb. 2008, slide 4). The student writers were asked to watch a video in which product liability was an issue. In the video, Non-Linear Pro sold an underperforming editing system to Quick Takes Video. The students were asked to identify potential tort risks in the video, to use the seven key elements of successful enterprise risk management to help mitigate associated risks, and to determine the criteria of involving legal counsel in product liability disputes. Potential Tort Risks Business-to-business sales are an important aspect of a supply and demand economy. In the video case study Product Liability the transaction demonstrated highlights some of the tort scenarios a business manager may encounter during the course of business. The torts risks in the video are classified in three categories. Although not all the tort risks are appropriate for follow up action, one tort risk is a clear violation. Through a process of analysis, the determination of the business manager may be to involve legal counsel to recover damages for the tort...
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...Kudler Fine Foods, owner Kathy Kudler has recently expanded her business to include a catering service, but she needs to be aware of basic food regulations, product liabilities, and good workplace practices to meet all requirements set by food and safety regulations. In today’s society many consumers such as very young children, the elderly and pregnant women with very sensitive immune systems that is more at risk for food borne illnesses. “According to the Center for Disease Control and Prevention (CDC) there are five factors that contribute to the unsafe food preparation techniques in food establishments that is considered food borne illnesses by the FDA” (U.S. Department of Health and Human Services, 2006, P.3). Warning and safe labeling on food is to help keep consumers abreast of food borne illness and how to prepare food the proper way. These warning labels help many consumers change the way they handle food preparation at home to prevent making themselves ill. Five food borne illnesses are: • Unsafe food sources • Insufficient cooking times • Inaccurate temperatures for holding food. • Unclean equipment • Staffs personal cleanliness Kathy Kudler and her operations management team will need to decide on a food management safety system that will help them manage their food related risk. One-way Kudler can began to implement a safe food managing plan is to take a general assessment of food regulations set by the Hazard Analysis and Critical Control Point (HACCP)...
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...Enterprise Risk Management Everyday someone commits a tort. A tort is act of wrong doing. Torts can be committed by people and by businesses. Torts are any of the following: assault, battery, false imprisonment, invasion of privacy, intentional misrepresentation, defamation of character, negligence, and strict liability. Sometimes torts are intentional and sometimes torts are not intentional. For example, an intentional tort is a fight at a baseball game where there are rival teams playing and a fan from one team punches a fan from the other team in the face all because they do not like the same team. An example of unintentional tort would be a toy manufacturer in China, the company did not realize that the toys were associated with lead paint, which caused bodily harm for some children who bought the product across the United States. Whether intentional or not, there are laws in place that provide a remedy to the party injured by a tort that has been committed. In the products liability case of Non Linear Pro, there were several torts committed. Since the case has to do with a product, strict liability comes into play. When a retailer sells a defective product, they become liable. A retailer, distributor, or manufacturer can be brought into a suit when a defective product is sold. Non Linear Pro also misrepresented the product, which is fraud. It was advised that the product should work in a day and a half, however, after two weeks the product still was not working. The purchaser...
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...the World provides insight on who the stakeholders of an organization are and who takes on the overall responsibilities of the organization. The importance of the decisions made by mid-level management are discussed and answered. The ability to make changes to support a more ethical work environment. The ability to improve operations and turn a profit are explained by discussing management’s requirements to abide by regulations governed by the Occupational Safety and Health Administration, Federal Drug Administration, Environmental Protection Agency, Equal Employment Opportunity , Comprehensive Environmental Response Compensation and Liability Act and other regulatory policies. The stakeholders within PharmaCARE are all the individuals and groups that are affected by the company’s decisions. The employees that may suffer from the lack of environmental safety or abuse of the production location allowing the organization to payless to workers for their hard work. The consumers of the organization’s products that may purchase bad goods that cause a negative reaction. The investors and stockholders who will lose any monetary investment due to the company’s loss of profits which would be an effect of inappropriate management of the organization. Due to the inappropriate management employees may lose their jobs which effects them as the stakeholders of the organization. At first glance PharamaCARE seems to have no ethics at all but with further review we would like...
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...Introduction It has been brought to our attention that a product defect in the Ever Last Ovenware line has led to the injury of a Mrs. Farzam. This report has been created with the intent of explaining what went wrong, and possible outcomes which may now occur as a result. After being redesigned to be more profitable, products in the Ever Last product line developed a defect as a result of the new manufacturing process. A small number of products would explode if exposed to a cold surface after cooking. Failure to correct this defect, or warn anyone about it has to a customer, Mrs. Farzam, being seriously injured as a result. It is possible that Mrs. Farzam will bring forth a lawsuit against Rock Cookware, so we have prepared this report to inform you of what may happen. The report contains a financial report showing what would have happened if the engineers redesign plan worked as intended. After preparing an income statement we discovered that the target number of 25% return on sales would have been exceeded and the redesign would have been a success. We then prepared an income statement based on the idea of recycling all of the defective cookware, returning to the old manufacturing process, cutting the price by 10%, and then adjusting for lost sales and customers. This showed that by choosing that option the 25% return on sales threshold would not be met by a very large margin. This report also contains information on the possibility of Mrs. Farzam being awarded punitive...
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...Legal Focus Kudler Fine Foods is a specialty food store created by Kathy Kudler (Apollo Group Inc., 2013). After reviewing Kudler Fine Foods’ information, it has been determined that their legal procedures are severely lacking in preparation for legal action. The thought process behind the current legal plan is to be reactive which only helps after an issue has occurred. The information systems team is formulating a plan to update policies and procedures as well as best practices to be both proactive and reactive when it comes to possible litigation against Kudler Fine Foods. Current Legal Plan As it stands, Kathy Kudler is the only person who is to talk to Kudler Fine Foods’ legal counsel, Anne Shousha. Shousha’s view on going to court is that it is like throwing dice, therefore she recommends settlements instead (Apollo Group Inc., 2013). There is a chain of events to follow within the stores for regular incidents that occur such as slips and falls. This chain begins with employees notifying store managers of the incident. At that point, the store manager determines whether or not Kathy Kudler should be notified of the event. Following Kathy’s notification, she determines whether or not the store’s legal counsel should be notified (Apollo Group Inc., 2013). Based on the current system, the legal counsel would then recommend to Kathy that she settles with the customer rather than go to court. This approach is a very poor way of protecting a business. The goal for Kudler...
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...of the costs of product recalls consists of two methods. The first is the accrual of “small campaigns” that are subject to a threshold of $100,000 (total campaign costs per product). Small campaigns are estimated and recorded together with the warranty reserve at the time of sale, since all payments related to such campaigns are expected to fall within the warranty period. The second is the accrual of “major campaigns” when announcement of the recall campaign is made. A major campaign involves consideration of numerous variables (for example, the number of defect occurrences, public safety issues, public relations concerns, evaluation of potential litigation, and so forth) and requires management approval prior to being announced. As part of a review of its accounting policies, Frequent Fixer began an internal evaluation of its product recall costs and its ability to reliably estimate and record product recall costs at the time of sale. The following summarizes the costs of announced product recall campaigns by Frequent Fixer in recent years: 1995 $ 8,000,000 1996 $ 11,500,000 1997 $ 15,500,000 1998 $ 20,000,000 1999 $ 32,000,000 2000 $ 50,000,000 From the data above, Frequent Fixer identified that the frequency and size of product recall campaigns, either voluntarily or mandated by industry regulators, have increased significantly in recent years. Frequent Fixer believes that the increased frequency and costs of product recall campaigns...
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... 2 When it comes to successfully starting and running a fireworks business, one of the most often asked question is “What tools are required to run a successful business”. Fireworks themselves are serious business and to start and successfully run a fireworks business is not as inherently easy as it seems. This paper will attempt to explain potential personal liability for injuries sustained by consumers when using this product incorrectly. It will also analyze the formation of a contract between Acme fireworks and several large retailers inquiring about Acme Firework’s Company’s ability to fill large orders on a regular basis. Along with that, it will also analyze the different employment types and finally recommend a new business entity based on the facts provided. Being personally liable for injuries to consumers who use Acme’s products can be best summarized as in the event a consumer is injured while utilizing Acme’s products, should they win the case in court , the judgment or settlement can be satisfied out of the personal assets of the owner of Acme Firework’s Company. “Strict liability, called liability without fault, means that manufacturers, distributors, wholesalers, retailers and others in the chain of distribution can be held liable for damages caused by a defect-regardless of whether or not they are at fault” (Buckley, S. , Monaco, F. , 2009). Fireworks have long been an American tradition. From New Year’s Eve to the 4th of July, fireworks continue to captivate...
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... Describe the company and the major initiatives they have planned for the next 5 years. The Samsung Group (Samsung) is a South Korean international conglomerate that makes all types of electronic products under the Samsung brand. Samsung is said to make exports that consist of fifth of all exports made by Korean companies, and its revenues alone would make Samsung the world’s 35th largest economy. Americans know Samsung for producing products like television, washer and dryer, smart phone, camcorder, printer, and DVD among many Samsung products. Samsung like other major companies has what is called Green Initiatives. Samsung aims to become one of the most eco-friendly companies in the world by year 2013. To reach such lofty goal, Samsung wants to “reduce greenhouse emissions, offer more eco-friendly products, build eco-management partnerships around the world, and invest in eco-friendly R&D design facilities.” (“Samsung in $4.2 bln ‘green’ initiative”, 2009) More specifically, Samsung says it will spend $4.3 billion to go green by cutting air pollutant emissions by 50% by 2013 from 2008 levels and promised to develop energy-efficient products that use less operating and standby power to operate. In addition, Samsung wants to boost making its products using recyclable and eco-friendly materials. (Samsung to go Green, 2011) By taking such drastic measures to improve its image as eco-friendly, Samsung is following the footsteps of many other well known companies...
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...this would be a great opportunity to present the potential defective products, that’s being sold to the customers and potential customers. Not only to the directors but to the executives as well As this is a very serious issue that cannot be over looked, that could cause a plague throughout the organization... this defective product could pose a risk For both the customers and the company. And cause millions of dollars in lawsuits, the businesses reputation, unsatisfied customers, and ultimately putting the company at risk of going out of business. Since the new executive may not be aware of the potentially defective product; nor of the company’s ethical guidelines; due to the lack of effective communication. However, as leaders of the organization all are accountable and responsible for the actions by the organization... as leaders are the pillars of the organization; i.e. directors, managers, internal auditors, and external auditors. Leaders must be an example of honesty, and accountability. “To be effective, all four must operate separately or it will cause a substantial amount of damage. (As cited in clarity begins at Home, 2002). Body Therefore the purpose of this assignment to discuss and prove the internal action of a defective product and how to ethically, notify the customers of the defective product which they are buying, Since the company is aware that there is a potential defective product that has been sold and are now in the hands of consumers; they need to...
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...Legal, Ethics, and Corporate Governance Jekilan Hill-Barrett Professor Weekley November 23, 2014 Ethics and Corporate Responsibility The stakeholders within PharmaCARE are all the individuals and groups that are affected by the company’s decisions. The employees that may suffer from the lack of environmental safety or abuse of the production location allowing the organization to payless to workers for their hard work. The consumers of the organization’s products that may purchase bad goods that cause a negative reaction. The investors and stockholders who will lose any monetary investment due to the company’s loss of profits which would be an effect of inappropriate management of the organization. Due to the inappropriate management employees may lose their jobs which effects them as the stakeholders of the organization. PharmaCARE is one of the world’s most successful pharmaceutical companies, enjoying a reputation as a caring, ethical and well-run company that produces high-quality products that has saved millions of lives and enhanced the quality of life of others. This company also offers discounted and free drugs to low income consumers. PharmaCARE’s ethics can be truly questioned due to its many wrong doings that have gone against to they’re established ethical values. To start off, this company maintains a large manufacturing facility in Colberia, Africa. Here the company has found several healers eager to freely share information about indigenous cures...
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...Product Liability Legal Issues LaTanya Powers LAW 531 September 17, 2012 Mike Kelley Introduction Have you been injured due to a defective product? Has the product that you just purchased failed to have the proper warning label? Better yet, has the design or the manufactured parts of the product somehow become defective? These questions are just some of the legal issues that will be presented within this paper. In addition, the legal principles that apply to each of the issues will be discussed. Product Liability is the type of law that holds manufacturers, distributors, suppliers, retailers, and others involved with the product reponsible “for any damage caused by that product (Products Liability Law). This paper will contain important factors about the Product Liability video. For example, Potential tort risks that were addressed within the video will be identified. In addition, a tort violation from the video will be identified. This, in turn, will provide the 7-step process to be applied to the risk management process to mitigate the business risk associated with that violation. Lastly, the criterion in determining if it is an appropriate situation to involve legal counsel in regards to the breach of warranty occurrence will be evaluated. Potential Tort Risks First of all, there are several potential tort risks that are addressed within the Product Liability video. Tort law basically protects individuals...
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... September 16, 2014 INTRODUCTION This weeks assignment will center on the two major product and service issues are quality and safety. We will also be covering three ethical theories apply to the issue of quality: contractual theory, due care theory, and the social costs view. Product safety is also an important legal and ethical issue. The Consumer Product Safety Commission and the FDA both have jurisdiction over these issues (Carroll & Buchholtz, 2012). The above individual work will include answers to discussion questions 1, 2, 3, and 4 on page 420 and on page 445-446 responses to discussion questions 1, 2, 3, 4, 5 and 6. Question 1 In addition to the basic consumer rights expressed by consumer’s Magna Carta, what other expectation do you think consumer stakeholder has of business? In addition to the right to safety, the right to be informed, the right to choose and the right to be heard as the “basic consumer rights expressed by the Consumer’s Magna Carta consumers today definitely for example - want “fair value” for money spent, a product that will meet “reasonable” expectations, a product or service with full disclosure of its specifications and a product or that has been truthfully advertised (Carroll & Buchholtz 2012). Question 2 What is your opinion of the consumerism movement? Is it”alive andwell” or is it dead” Provide evidence for your observations...
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...CITY OF GLASGOW COLLEGE HND SUPPLY CHAIN MANAGEMENT LEGAL ASPECTS OF COMMERCIAL TRANSACTIONS OUTCOME 2 THE IMPACT OF RELEVANT/APPROPRIATE STATUTES ON THE RELATIONSHIP BETWEEN SUPPLIER, SELLER AND BUYER FRANK RICHARDS OUTCOME 2 THE IMPACT OF RELEVANT/APPROPRIATE STATUTES ON THE RELATIONSHIP BETWEEN SUPPLIER, SELLER AND BUYER FRANK RICHARDS OUTCOME 2 THE IMPACT OF RELEVANT/APPROPRIATE STATUTES ON THE RELATIONSHIP BETWEEN SUPPLIER, SELLER AND BUYER CASE STUDY City Mall Plc is a large entertainment and shopping complex. The company has recently encountered problems in their stores. You as their legal advisor, have been consulted on a range of issues. Draft a report to the board of directors explaining the law in each of the following situations and advise accordingly. Your Report should make reference to legal authority. -------------------------------------------------------------------------------------------------------- Discuss the following: Chuck bought a new heater from City Mall Plc to heat his son’s bedroom. The heater was manufactured by Careless Plc. The heater wiring was defective and the defect caused a fire at chuck’s home, in the course of which, Chuck’s son was injured. Advise City Mall of their potential liability as well as that of Careless Plc. -------------------------------------------------------------------------------------------------------- Kris, a salesman from City Mall, called on Dolly. She invited him into her house to enquire...
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...plastics manufacturer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion. Its product include plastic beverage containers produced at its plant in Albany, Georgia, custom plastic parts produced at its plant in Pontiac, Michigan, and plastic fan parts produced at its facilities in Hangzhou, China. The company’s research and development is done at the corporate headquarters in San Jose. Riordan’s major customers are automotive parts manufactures, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufactures. (University of Phoenix 2011) Corporate Compliance Overview Riordan Manufacturing has created a Corporate Compliance Plan customized to the organization’s specialized field of plastic designs. Riordan is committed to managing and operating the organization programs with the utmost degree of business, ethical and moral principals. Employee expectations are maintain an innovative and team oriented working environment by assuring that the employees are well informed and properly supported, the company will provide a climate focused on the long-term viability of the company. Management contributes to achieve these standards by demonstrating leadership; integrity and being a role model to employees to promote an environment which compliance and ethical business practices are expected. The company...
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