Alcoa’s Core Values in Practice – Professional homework help online

Alcoa began under the name of the Pittsburgh Reduction Company in 1888, changing its name to the Aluminum Company of America (Alcoa) in 1907. The company was originally founded on a $20,000 investment to capitalize on Charles Martin Hall’s invention to smelt bauxite ore into the metal known as aluminum. Within a few years, Alcoa had developed into a model of large-scale vertical integration with control over all the inputs to aluminum production. Now, over 125 years later, Alcoa is a global leader in lightweight metals technology, engineering, and manufacturing, with over 60,000 employees and operations in 30 countries. Since its inception, Alcoa has had a very strong values-based culture. Employees learn early in their career that every decision they make and everything they do must be aligned with the company’s values: Integrity; Environment, Health and Safety; Innovation; Respect; and Excellence. Since the 1990s Alcoa’s leadership has communicated their commitment to the importance of health and safety—one of the company’s core values. Alcoa has a stand-alone environmental health and safety (EHS) organization and a dedicated global ethics and compliance (E&C) organization. The Alcoa E&C program incorporates all of the elements specified in the U.S. Federal Sentencing Guidelines and Sarbanes–Oxley Act. The chief ethics and compliance officer makes regular reports to Alcoa’s Audit Committee and to the company’s Compliance Advisory Council, which includes the CEO, CFO, and chief legal officer. E&C is responsible for global training, the code of conduct, the global anticorruption and trade compliance programs, internal investigations, and the company’s global helpline reporting system. The importance of safety, integrity, and “doing the right thing” is regularly reinforced by management and through E&C communications. In addition to continuous safety training and education programs, the norm at Alcoa is to start all business meetings with a safety message to identify exits, the evacuation plans in the event of an emergency, and other safety procedures. All locations are required to meet the same overall goal: zero work-related injuries and illnesses. Alcoa’s management team has made the commitment that no employee should be forced to work in an environment where their safety and the safety of other employees might be jeopardized. Simply stated, no employee should leave work in a worse condition than when they arrived. Through persistent attention over the years, safety at work has become deeply embedded in Alcoa’s culture and “the way we do things around here.” In the late 1990s, activists raised allegations at an Alcoa annual shareholders meeting claiming that health and safety conditions at one of Alcoa’s Mexican facilities had deteriorated. The individual who spoke at the meeting concluded by saying that the company’s behavior in Mexico was “inconsistent with its widely publicized values.” The company promptly launched an investigation, and Alcoa’s then CEO personally visited the plant. Although the company learned that many of the issues raised at the annual meeting were unfounded, it also discovered that a few injury incidents and the subsequent actions taken by local managers were not reported to corporate headquarters, as required by company policy. Meetings held with local government officials over safety incidents at the facility were also not reported, even though the results of these meetings indicated Alcoa was in compliance with all appropriate laws and regulations. Following the review, the company concluded that although the business unit management’s response to the safety incidents uncovered in the investigation was adequate, there was “a breach of the letter and spirit of our communication practices with respect to major incidents” as well as “a serious lack of understanding when it came to incident classification, reporting, and recordkeeping of occupational illnesses.” The lack of reporting these safety incidents to others in the company was viewed as unacceptable—it meant others in the company were denied the opportunity to learn and possibly prevent similar occurrences at other Alcoa facilities. A change is leadership was made at the facility, despite the manager’s stellar record of increased sales and profitability and high marks for quality and customer satisfaction. In an open letter to the entire company, Alcoa’s then CEO re-emphasized that full compliance with both the letter—and spirit—of Alcoa’s policies was imperative, and anything less unacceptable. Over time, Alcoa’s focus on safety has paid off. In 2013, Alcoa employees and contractors worldwide worked an entire calendar year fatality-free for the first time in over five decades. The 2014 year-end Alcoa lost workday (LWD) incident rate was 0.10. (This number represents the number of injuries and illnesses resulting in one or more days away from work per 100 full-time workers.) That same year: ∙ 42.7% of Alcoa’s locations worldwide had zero recordable injuries ∙ 80.5% of Alcoa’s locations worldwide had zero lost workdays These numbers reflect the commitment of not only Alcoa leaders but also the employees, who are empowered to take personal responsibility for ensuring their safety and that of their coworkers—even if that means stopping work when they feel unsafe or unsure. In 2013, in order to further embed and enhance a values-based culture of integrity and compliance, Alcoa formed a global “Integrity Champion Network.” This group of highpotential employees was appointed to work within their businesses to raise awareness, promote a “Speak-Up” culture, and provide advice on various ethics and compliance matters. In 2014, Alcoa released a new Code of Conduct, providing a road map for “Advancing with Integrity.” Every employee worldwide received the Code, reinforcing Alcoa’s values and the shared responsibility for conducting business in accordance with Alcoa’s highest ethical standards and the law. At the same time, Alcoa’s 24/7 hotline was rebranded as the “Integrity Line.” Alcoa’s ethics and compliance program continues to focus on anticorruption, trade compliance, and adherence with all relevant U.S. and national laws and regulations. 2. What role did top management commitment play in developing the ethical work climate and organizational performance seen at Alcoa? What other ethical safeguards are mentioned in the case to support the company’s efforts at developing a strong ethical culture? Don't use plagiarized sources. Get Your Custom Essay on Alcoa’s Core Values in Practice Just from $13/Page Order Essay 4. Can the focus on safety seen at Alcoa be duplicated into other ethics and compliance areas and how would this be accomplished? Briefly integrate the core values of excellence, community, respect, and integrity.