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Riordan Manufacturing Corporate Plan

Essay by   •  January 27, 2012  •  Case Study  •  2,637 Words (11 Pages)  •  1,860 Views

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Riordan Manufacturing Corporate Plan

Dr. Riordan has obtained several patents relative to processing polymers into high tensile strength plastic substrates and then started Riordan Plastics, Inc. in the year 1991. Riordan Plastics mostly focused on research and the licensing of its existing patents. Dr. Riordan obtained venture capital to start up Riordan Manufacturing, Inc. what had started in Pontiac, Michigan, for custom plastic parts. Then the company expanded to Albany, Georgia, where it has plastic beverage containers. Recently, they expanded into China, taking over the production of the fan manufacturing operation from MI, and turning MI into custom plastic parts only (Virtual Organization: Riordan Manufacturing, 2004).

Riordan Manufacturing realized that they needed a corporate compliance plan since they are a global plastic producer involved with significant legal and ethical responsibility, responsibility not just to the customers but to the companies which are agencies of Riordan associates as well as Riordan's employees. Therefore, a corporate compliance guide was developed for all employees, the legal team, and each stockholder that affiliated with Riordan Manufacturing, Inc. and enforced by the Corporate Compliance Officer (CCO). He/she makes sure that Riordan Manufacturing is in a compliance with relevant federal and state legislative, regulatory and generally accepted business standards. A Corporate Compliance Officer (CCO) was assigned by Riordan Manufacturing to review the agency's policies and procedures.

Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution (ADR) will be used when handling any disputes brought on by the company or its employees. The ADR will offer parties alternative means of resolving their differences outside actual courtroom litigation (Jennings, 2006).

All employees must follow employee handbook's standards and code of ethics. Any employee at Riordan who has a dispute may discuss it with their manager or the human resources department. Riordan has an open-door policy which allows employees to help solve any dispute resolution. If they cannot be resolved within 48 hours, then the company will start ADR. Parties who are involved will be notified of the current problem or dispute. An internal mediator will be assigned to aid in reconciling both parties. The mediator will be someone who is impartial and a respected third party, who will listen and ask questions to help clarify issues within the dispute. The mediator will try to help negotiate an agreement and come up with the most optimal solution between the parties involved. If an agreement cannot come to a suitable resolution, then the parties will proceed to an arbitration process. The company will call the American Arbitration Association to have someone act as mediator. They will make the final decision through binding arbitration; all parties cannot appeal the decision since it cannot be changed or modified.

Any customer disputes that arise will be handled by the manager. Management will work with the customer to resolve any disputes in a professional and timely manner.

Enterprise Liability and Product Liability

Riordan Plastics owns Riordan Manufacturing, so the corporate compliance plan must address the enterprise liability existing between the two companies that could be a criminal law concern. Riordan Plastics needs to make sure that Riordan Manufacturing does not create any corporate criminal liability for itself. A team of directors, developed by the corporate compliance officer, will oversee Riordan Manufacturing, Inc. in its day-to-day operations.

The legal definition for product liability is "the responsibility of a manufacturer or vendor of goods to compensate for injury caused by defective merchandise that it has provided for sale (The Free Dictionary, 2010)." The company will record all its designs, processes, warranties, manufactured defects and product safety features. It will make sure that all state and federal guidelines are followed by insuring its products are free from manufacturing defects. Also, products will have the necessary warranties and consumer protections noted by law.

International Business Practices and Laws

Riordan, dealing globally, may encounter standards of conduct in business affairs that are different from those in the United States. Riordan will expect their employees to conduct business by complying with the local code and laws of the individual countries. "All employees are required to observe the restrictions and bans on domestic and international trade in listed goods, technologies and services (Bayer Corporate Compliance Plan, 2009)." The provisions of all national and international foreign trade laws must be observed. The international laws that would apply are the Geneva-based General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA) (Jennings 2006). It would also benefit the company to familiarize itself with decisions made by the World Trade Organization (WTO) and The European Union (EU) (Jennings 2006).

Before visiting another country, all employees who travel to that country will be given information on the intranet about its culture and laws.

Corruption will not be tolerated in Riordan. Riordan employees are not allowed, under any cumstances, to demand or accept personal gifts. They may not offer or grant gifts of cash, or gifts equivalent to cash, to any public official. In case of doubt, they should contact their legal department.

Enterprise Risk Management-COSO

"The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a voluntary private-sector organization, established in the United States dedicated to providing guidance to executive management and governance entities on critical aspects of organizational governance, business ethics, internal control, enterprise risk management, fraud, and financial reporting. COSO has established a common internal control model against which companies and organizations may assess their control systems (Wikipedia, 2010)."

"According to COSO (the Committee of Sponsoring Organizations of the Treadway Commission), three primary objectives of an internal control system are to ensure (1) efficient and effective operations, (2) accurate financial reporting, and (3) compliance with laws and regulations (Applegate, 1999)." Management needs to consider these when addressing the following eight components: internal environment, objective setting, event identification, risk assessment, risk response,

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