Introduction and Environmental Analysis
The Upper Big Branch Mine disaster happened on April 5, 2010, in Raleigh County, West Virginia at Massey Energy’s Upper Big Branch coal mine, owing to the explosion, which occurred 1000 feet underground and led to substantial life losses (29 miners were killed and 2 were injured). The accident was caused by methane ignition while cutting sandstone with a shearer. Although the pocket of gas was small, the flame reached a larger accumulation of methane. The ignition created a wave of powerful explosions, aggravated by coal dust. Since the disaster was one of the most severe accidents since 1970, an independent investigation was funded by the state to find out if safety violations tool place. The MSHA concluded that these violations were numerous and the CEO of the company, Donald Blankership, was aware of them, which made him guilty of a willful violation of safety standards.
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|Stakeholder||Interests||Sources of Power|
|Donald Blankership, the CEO of the company||His interest was to increase the company’s revenue and coal reserve at minimal costs.||His source of power was that he gave a lot of jobs to the region, suffering from poverty and unemployment. Furthermore, Messey’s activities were beneficial to the nation since it provided fuel, which lessened the reliance on imported oil and thereby saved costs.|
|All the miners working on the site||Their interest was to keep their positions (since there was a threat of losing jobs if they reported safety concerns) and work in safe conditions at the same time. Their salary interests are not well articulated in the case since the company provided jobs that were rather well-paid as compared to other occupations in the region.||Their major source of power was that their interests were protected by the government. However, for many years, they could not appeal to it since it was fraught with being fired.|
|Mine Safety and Health Administration||The interest of the commission was to find out what caused the explosion and whether there were some serious safety violations, which were purposefully ignored by the CEO.||The power of the MSHA is that it is a state agency, which implies that it has the power to enforce compliance with safety and health rules established by the state.|
Bituminous Coal and Lignite Surface Mining
Since the time of the Massey disaster, the industry conditions have changed dramatically. When the accident occurred, coal mining was at the peak of its popularity, providing the country with half of the electricity generated nationwide. However, according to the report, coal production decreased by more than 10% in 2015, reaching its lowest level since 1986. This was accompanied by a sharp reduction in the number of mines (by 13%). The Appalachian region (where the mine was located) also experienced a considerable fall in production. Furthermore, the number of employers has also dropped (by 12%) since 2014. This is the lowest point ever reached since 1978. This implies that industry (due to its hard-working conditions and safety issues) ceased to be attractive for both the customer and the employee and is currently suffering from a considerable lack of demand. The consumption of coal has reached its lowest level since 1987 making its prices fall by 8.6%. Even the industry leaders lose their revenues and employees: The total employment continues to decline every year since 2010.
As far as the customer environment is concerned, it seems that Massey Energy Corporation was rather successful in monitoring it. This is supported by the fact that, according to the case, the company sold its product to more than a hundred industrial, metallurgical, and utility customers for rather a long period. The majority of its clients were long-term contracts. Moreover, it exported coal to 13 countries, which allows stating the customer satisfaction was high. Although it is not indicated how the corporation identified customer needs, values, wants, and behaviors, it still managed to meet the demand.
There is no information about the competitor monitoring found in the case. This may be accounted for by the fact that Massey Energy Corporation was at that time among the leaders of coal production in the country and, being one of the biggest players, had a considerable competitive advantage. Besides, each coal mine likely was the only one for its region, which brought competition to a possible minimum.
As for the economic environment, the success of the company allows stating that the CEO monitored it very closely. This is supported by the fact, that he maintained a laser focus on productivity no matter what was happening in the mines. Running coal was initially made the priority of the organization (safety replaced it only later).
The technological environment was purposefully neglected by the corporation to avoid innovation expenses. The results of the revision demonstrated that the push-pull ventilation system implemented in the mines had a design defect since it did not allow to direct air in any other way but horizontally. Therefore, ventilation was poor due to technology. Moreover, water sprays did not function properly.
The case demonstrates that the company was not detached from the social environment. It made donations to scholarship programs, provided emergency support to the region during natural disasters, supported local educational institutions, and gave the population rather well-paid jobs. However, at the same time, it had some safety concerns, undermining the lives, and well-being of its employees.
The political environment seems to have been taken into consideration, too. The CEO of the organization could not be unaware of the fact that the mining industry regulations were historically strengthened mostly after some accidents. As for MSHA, the authority of the agency was limited. This lack of governmental intervention allowed him to abuse the position.
The same can be applied to the monitoring of the legal environment. Besides not following safety regulations, the corporation violated the Labor Code by intimidating its employees when they reported problems. Also, it kept two sets of books, recording hazards in the one that was not official. Finally, managers were warned about visits to the inspector, which violated the law. All these factors imply that the company was surely aware of the regulations but ignored them purposefully.
The geophysical environment was also largely neglected. It is a common practice for mountaintop removal mining to apply explosives for eliminating the top layers; this causes several environmental problems (dumping of the valleys, contaminating rivers, killing wildlife, etc.). Even though the company paid a fine for violating the Clean Water Act, it continued this practice. This allows concluding that it was not successful in monitoring the geophysical aspect of its activities.
Limits of the Market and Limits of the Law
The arguments provided by Christopher Stone about the limits of the market and the lawfully apply to the described case. As far as the market is concerned, one cannot help agreeing that it is not a universal remedy for all problems of society. Although its invisible hand may influence industries and firms, it still cannot keep them within socially favorable bounds. Stone states that to be able to impact market players, the customer who is going to withdraw patronage must know that he/she is being “injured”. In the case with miners, very few people ever consider what threats mines can pose to those who run coal. Even if they do, they rarely connect it to the electricity that they use daily and are not ready to sacrifice. The second factor is knowing where to apply pressure on the producer. Third, one should be in the position to apply pressure, which is even a rarer case. Massey Energy Corporation is one of the industry giants and is quite difficult to counteract. Finally, even if the pressure is applied, one must make sure that it is translated into changes. In the case of Massey Energy Corporation, no considerable changes were implemented.
As far as the law is concerned, Stoner is right claiming that corporations are guided by profit until tougher laws are introduced to keep them within limits. He is also speculating upon the time-lag problem, consisting in the fact that until it comes into force, a lot of harm can be done. The given case demonstrates this as even tougher regulations did not manage to improve safety in the workplace. Lawmaking is often unsatisfactory due to the lack of facts against the company (non-applicable to the case) and the lack of consensus on the values. This is applicable since the region must extract coal to have electricity and this need is placed higher than the danger.