Twin Lake Mining Company Board of Directors June 28, Environmental Cleanup Costs Develop objectives The primary objective of the negotiation is to lower costs of complying with environmental regulations and cleanup costs by obtaining the financial support of the government of Tamarack. Determine the facts of the situation Twin Lake Mining Company faces mandatory environmental costs of $37 million. The company wants to continue operating, but the firm needs the help and cooperation of the government of Tamarack to cover a portion of the environmental costs. Some of the mandatory improvements include a $20 million water filtration plant that will benefit both the company and the community.
Determine the issues The company needs to obtain the commitment of the government of Tamarack to ensure their financial support for environmental costs. If the company is forced to pay all the costs by itself the company faces the risk of shutdown. Analyze the strengths and weaknesses for both parties One of the strengths of Twin Lake Mining Company is the fact that the company is instrumental to the local economy. The firm provides jobs to 60% of the population.
If the Twin Lake Mining Company closed operations it would devastate the local economy. This gives the firm a lot of power in the negotiation. A weakness of the organization is the fact that the environmental regulators hold the company liable for the cleanup. In regards to the government of Tamarack one of its strength in this negotiation is that they are not legally responsible for the mandatory environmental cleanup. A weakness Tamarack government is their dependency on the tax income generated by the activities of Twin Lake Mining Company Set the buyers and sellers position on each issue The position of the seller (Twin Lake Mining Company) and the position of the buyer (government of Tamarack) are different.
The company seeks to reduce its costs in order to maintain a high level of profitability that satisfies the needs of its shareholders. The new environmental regulations were unpredictable and they placed the company in a tough financial position. The company understands that sharing the costs will place a burden on the community, but not doing so could result in more catastrophic consequences such as the complete shutdown of the operation.
Prepare counter arguments; zone of overlap, and gap The counterargument of the government of claiming they don’t have the resources to invest in the project can be easily refuted by asking the government to raise the money through the issuance of municipal bonds. The municipal bond marketplace is extremely liquid which would allow the government of Tamarack to raise the money in relatively short amount of time. A criterion that overlaps between both parties is the interest of all involved to keep the operations of Twin Lake Mining Company open. Plan the strategy The firm has to create a plan of attack that determines how the plan is going to be financed and the effect it will have on the longevity of the company.
The financial commitment that the firm must secure from the government of Tamarack must be signed through a formal written contract. The firm will hire an external firm to perform environmental audits to ensure the company is in full compliance with state and federal regulations.
Compliance with environmental laws helps prevent air pollution and it protects the natural resources of a community (Scotland). References Scottland. gov. Benefits of improving your environmental performance. Retrieved June 28, 2012 from http: //www. business. scotland. gov. uk/bdotg/action/detail? itemId=1079416877&site=202&type=RESOURCES