Case Study

Topics: Stock market, Stock, Water Pages: 6 (1630 words) Published: April 3, 2013
Managerial Communication

Final Assignment

Date: 24th December, 2011

Submitted by Group E

American Electrical, Inc.
Interdepartmental Correspondence

Date: 24/12/2011
To: Mr. Walter Martinson, President
From: Director of Corporate Communication
Subject: Communication Strategy Memo

The purpose of this memo is to present a comprehensive communication strategy in order to send an effective message to the company’s customers, the shareholders, the community, the city government, the press and the company employees. The memo would outline recommendations about effective communication strategy so as to inform the audiences about the situation the company is in due to GDEP’s findings.

Prior to AEI’s acquisition of Multi Phase Equipment, WireGrass Disposal, Inc. was their contractor for disposing the PCBs in a federally licensed toxic waste facility. Before purchasing the Multi Phase Equipment plant, AEI had hired Independent Laboratories Inc. to conduct a survey of air, water and soil quality of the plant. Multi Phase Equipment’s acquisition was based on their report of good environmental health of the plant.

Recently, complaints about contaminated water supply emerged and the Cobb County Water & Sewer Authority contacted GDEP to assist them in investigating the cause. An anonymous tip from a former Multi Phase Equipment employee alleged that the company had improperly stored PCBs on the company property, suggesting that it may be causing the contamination of water. GDEP then excavated several parcels of land on the plant site, finding out that improper packaging and storage of PCB’s has actually been carried out. There were several PCB drums buried on a small area of land near the river which should have been properly disposed.

Even though the GDEP officials have figured out that this may not be causing the water contamination, it has highlighted a significant violation of PCB disposal practices and requires several actions from AEI - including clean up. GDEP plans to issue a public statement on Monday.

The first and the foremost implication of GDEP’s public statement would be the impact on the company’s stock prices in NASDAQ. The news when released to public would have a negative impact on the image of the company and would demonstrate the company’s irresponsibility in the matter of disposing toxic waste. It will create a false image that we have been causing contamination and environmental health risks, thereby affecting our share price in the stock market.

The news will also cause a concern among the plant employees who will be concerned about health risks caused by PCB leakage, thereby posing a danger to employees working nearby. The employees would be greatly concerned about the dangers that the PCB leakage can cause by polluting drinking water and air.

The customers of the company would also be concerned about the issue and the rumors being spread about the potential irresponsibility of AEI in this matter. This will de motivate our customers and it may be a possibility that we lose our major customers if we don’t clarify the matter to them.

The rumors of drinking water being polluted because of us will create a negative image of our company in the local community and would pose us as a company which is not taking environmental safety seriously.

Actions Taken
* Independent labs are currently being contacted and are being notified of this incident.

* Wiregrass disposal have filed for protection under federal bankruptcy and we have little hope of recovering the damage done on the Multi Phase site however we are planning on going to litigation to recover what we can.

* A list of reliable licensed contractors is being obtained from GDEP for barrel disposal. We shall select one shortly after performing a background check on them.

I recommend the following actions, listed by order of importance and...
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