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Upper Big Branch Mine Disater

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1a. Upper Big Branch Mine disaster was one of the worse mining disasters in the United States. Managers at Massey Corporation demonstrated poor ethical and decision making enforced by the CEO. Key issues are company productivity and profitability regardless of problems, unethical practice toward stakeholders, negligence toward regulations, safety precautions, environmental hazards and pollution created by the company. The safety for employees was not top priority for the company due to rise in safety violations over the years and lack of procedures followed to prevent disasters. The company would warn workers of inspections to prevent violations and if a violation was issued it would be delayed by ligation. Massey was charged with illegal dumping and polluting which resulted in fines for its unethical disposal. The stakeholders in this case are employees, customers, the community around the mine, shareholders, federal government, state government, families of employees, and the environment.


Stakeholder Interests Sources of Power

One non-market stakeholder is Employees. Livelihood and personal growth of the employee depended on the company’s success. Their source of power is economic and legal.

Another non-market stakeholder is Federal and State Governments. The government manages company compliance with legislation and regulations. Their source of power is political.

The Community also is a non-market stakeholder. The community worries about employment opportunities and corporate citizenship. Their source of power is economic and legal.

One market stakeholder is the Customers. Customers are concerned about availability of products and pricing. Their source of power is economic.

Another market stakeholder is the Shareholders. Shareholders need the company to have profitability and grow. Their source of power is voting.

2a. The NAICS code 212111 is for the primary industry Bituminous Coal and Lignite Surface Mining.

2b. Since the Upper Big Branch Mine disaster of 2010, industry conditions have changed due to the continuing decline for the demand of coal. The federal government adding more regulations and a weaker export market. In 2015, surface mines started to outproduce underground mines. Surface mining can extract the coal two different ways, strip and auger, that are less expensive and more productive than underground mining. Surface mining produces more coal that can be extracted with fewer employee effort. Also, in 2015 natural gas became the top source of electric generation in the United States. Since the demand for coal is decreasing, many coal companies have started to file for bankruptcy and lay off workers due to the slump in sales from lagging demand.

3. Massey Energy Corporation’s customers were over 100 utilities, metallurgical, and industrial companies in the United States and 13 other countries. They did not monitor the customers very well due to the large number of customers but also, they were only offering one product high grade metallurgical coal. Massey Energy would not know who the end user of their product was due to selling it on a commercial basis that was then converted to energy and resold to the public. Massey only succeeded in the customer environment with the buying preferences of its customers by continuing to supply them with coal.

Massey Energy Corporation’s competitors were more concerned with Massey Energy than Massey was with them. They owned one-third of the known coal reserves and one of the leading coal producers in the US. Massey did not succeed in competitor environment because they felt they were bringing too many benefits to the nation and Appalachian region that nothing could stop them. They even had the worst fatality rate of any coal company in the US but were able to continue production.

Massey’s economic environment was monitored well due to the company supplying coal nationally and exports to 13 different countries. The price of coal, a commodity, is mainly affected by supply and demand.

The technological environment for Massey was not monitored well. The technology that was used, was acquired by the company from Peabody Coal in 1993, was outdated and beyond repair. Such as the rock duster that was 30 years old did not work most of the time, the water sprays on the shearer were not functioning properly, the ventilation was not working properly, and the shearer bits were worn flat.

Massey’s social environment was very successful by giving back to the community but not successful in the treatment of employees. The company provided thousands of people in West Virginia area with jobs, gave money for scholarships, partnered with local schools and even provided support during natural disasters as in the flooding in 2009. The company felt that the company depended on the community in order for it to continue to grow and be successful. Massey’s employees were not assets for the company but seen as expendable. The employees were only supposed to aid in production and not hinder the process, even for legitimate reasons as in equipment failure or safety hazards. Massey’s main goal was to keep production running no matter the circumstances as revealed in a memo to superintendents.

Massey Energy Corporation’s political environment was monitored well. In fact, they looked for ways around laws and regulations to avoid any negative impact due to their unethical practices. The company received numerous violations from government regulators, but that did not impact the company. The vice president for Massey was an attorney that succeeded in litigating violations so the company could continue business without interruption.

The legal environment for Massey was not monitored because the company did not invest in updating or upgrading acquired equipment. The process of extraction was never updated because the soul focus of the company was on production as stated in a memo from the CEO.




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