BUS/475 Week 4: Risk, Ethics, Legal Exposure and Measures of Success, sample paper

The Label Is a Promise: Risk, Legal Exposure, an Ethics Rule for the Certification Sticker and a Balanced Scorecard for a Kitchen Exhaust Cleaning Company

[Student Name]

University of Phoenix

BUS/475: Integrated Business Topics

Week 4 Assignment

[Instructor Name]

[Date]

The company, the metro area and all figures are a composite written for a model paper.

The business now has a mission, a market, a marketing and operations plan and three years of projections. This paper asks what could go wrong, what the law requires, where employees will be tempted to cut corners and how the owner will know whether the plan is working. In this business, one sticker on a hood tells a fire marshal, an insurer and a restaurant owner that a fire hazard has been removed; if the sticker is wrong, everyone who relies on it is misled.

Risk Assessment

Each risk is rated for likelihood and impact on a three-point scale, and the ratings are multiplied to rank them.

Fire in a recently cleaned kitchen, likelihood 2, impact 3, score 6. Kitchen fires start on the cooking line for many reasons, but a claim will point at the last company to clean the duct. Mitigation: photo documentation of every access point, labels that record any section not reached, written recommendations for access panels where ductwork cannot be cleaned, and general liability insurance that covers completed work.

Crew injury, likelihood 2, impact 3, score 6. Crews work on roofs at night, on ladders, with hot water under pressure and caustic degreasers. Mitigation: fall protection on every roof job, two-person crews without exception, chemical training and workers' compensation insurance.

Loss of the founder, likelihood 1, impact 3, score 3. In Year 1, the founder is the only person who can sell, schedule and lead a crew. Mitigation: disability insurance, a written operations manual and training the first technician as a crew lead by month six.

Customer concentration, likelihood 2, impact 2, score 4. At least 60 of the first 140 accounts come from one former vendor's list. Mitigation: a second source of customers through restaurant groups and suppression contractors from the first month.

Rig breakdown, likelihood 2, impact 2, score 4. With one rig, a breakdown stops all work. Mitigation: a standby rental agreement and a scheduled maintenance day each month.

Legal Exposure

Worker safety

The degreasers the crews use are hazardous chemicals, so the company must meet the federal hazard communication standard: keep safety data sheets for each product, label containers and train workers on the hazards and protective equipment before they handle the products (Occupational Safety and Health Administration, n.d.). Fall protection on roofs and ladders is also required, and the company's safety plan will be written before the first employee is hired.

Wastewater

Grease-laden wastewater cannot go into a floor drain or storm drain. Under the Clean Water Act's pretreatment program, local sewer authorities control fats, oils and grease from food service establishments, and the Environmental Protection Agency has reported that grease is the most common cause of reported sewer blockages (U.S. Environmental Protection Agency, 2012). The company will capture all wastewater in its recovery tank, dispose of it through a licensed hauler and keep disposal records for each job.

Employment

Technicians will be employees, not independent contractors, because the company sets their schedules, supplies their equipment and directs how the work is done. Misclassifying them would expose the company to back taxes, penalties and wage claims.

Contracts

Each service agreement will state the scope of work, the cleaning frequency the customer has chosen, the customer's duty to report cooking changes that raise the required frequency and the limits of the company's responsibility for sections of duct that cannot be reached without access panels the customer declines to install.

Ethics

The central ethical issue is the label. At two in the morning, after a long night, a crew may find a section of duct it cannot reach or a fan too corroded to open. The easy choice is to apply the label and move on. The rule is simple: a label is applied only to what was cleaned, and any section not cleaned is written on the label and in the report, with a photograph and a recommendation. No technician will be disciplined for a job that takes longer because of this rule, and the founder's morning photo review will catch labels that do not match the photographs.

Two other situations need rules. Access panels and hinge kits are add-on sales, and technicians could be tempted to recommend them where they are not needed. They will be recommended only where the photographs show they are necessary, and technicians will not earn commissions on them. And crews will sometimes see problems outside their scope, such as a damaged fire suppression nozzle. They will report these to the customer in writing, even though the company does not repair suppression systems.

These rules serve every stakeholder. Customers and their insurers receive accurate records, fire marshals can rely on the labels, employees are protected from pressure to falsify, and the company's reputation, which is its main competitive advantage, is protected.

Measures of Success: A Balanced Scorecard

Kaplan and Norton (2001) described the balanced scorecard as a way to put strategy into operation, linking objectives across four perspectives so that improvements in learning and processes lead to satisfied customers and then to financial results. The company's scorecard has two or three measures in each perspective, reviewed monthly.

Financial: revenue against plan, $200,000 in Year 1; income before taxes of at least 9% of revenue; cash reserve never below $30,000.

Customer: annual renewal of at least 85% of program customers; at least 98% of cleanings completed by their due date; complaint return visits for fewer than 3% of cleanings.

Internal process: photo reports sent by 9 a.m. after every job; at least 95% of in-person spot checks passed; rig downtime under two days a month.

Learning and growth: every technician certified within six months of hire; no lost-time injuries; technician turnover below 25% a year.

The measures are linked. Certified, stable crews produce complete cleanings and prompt reports; complete cleanings and prompt reports keep customers renewing; renewals produce the revenue and cash in the financial plan.

Conclusion

The company's most serious risks, a fire claim and a crew injury, are managed through documentation, insurance and strict safety practices. Its legal obligations cover worker safety, wastewater, employment and contracts. Its central ethical rule, never to label what was not cleaned, protects everyone who relies on the label and the company's own reputation. The balanced scorecard turns the plan into monthly measures, so the owner will know early whether the business is on course.

References

Kaplan, R. S., & Norton, D. P. (2001). Transforming the balanced scorecard from performance measurement to strategic management: Part I. Accounting Horizons, 15(1), 87-104. https://doi.org/10.2308/acch.2001.15.1.87

Occupational Safety and Health Administration. (n.d.). Hazard communication standard (29 CFR 1910.1200). U.S. Department of Labor. https://www.osha.gov/hazcom

U.S. Environmental Protection Agency. (2012). Controlling fats, oils, and grease discharges from food service establishments (EPA-833-F-12-003). Office of Water.