About The American Mining Company

American Mining Company
The U.S based coal company AMC, is a true giant in the world coal industry. Though AMC was successful, it was having difficulties regarding labour rules and cost in U.S. so, seeing some bright future in Colombia which is a beautiful country located in the resource rich South American continent and is famous for producing coal, oil and coffee. As expected, AMC was achieving its goals, when things were going perfect for AMC, the political conditions of Colombia and the war between the rebels and the paramilitaries was increasing difficulties for AMC and harming AMC in every possible way. The situation was turning so adverse that AMCs existence became a matter of doubt.
About the AMERICAN MINING COMPANY AMC was one of the most successful and largest coal mining companies in the history of the United States. It had a massive coal holding capacity of over 1.3 billion short tons and staggering revenue of US $ 1 billion. It had a worldwide reputation of providing premium quality coal with excellent service and trustworthy delivery methods. It even diversified and started expanding its operations in the real estate sector on both the US east and west coasts.
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About Colombia Colombia is a beautiful country located in the resource rich South American continent. The country is famous for producing coal, oil and coffee. It has the worlds third largest coal reserves. Colombia has the capability to produce Premium Quality of coal which is famous all over the world. The coal has a surprising heat value of 11,000 BTU per pound which is a characteristic of superior quality coal.
Problems faced by AMC Despite of the success of AMC it had to suffer through problems regarding the strict rules in the American mining sector and the taxing wage rate. They had to pay an average US mine worker a salary of over $ 3,000 per month with extra benefits which was higher compared to any other coal mining company of the world Besides there were restrictions like limited working hours, mandatory safety conditions etc.
Even though AMC promised its workers that it would never shift its operations in anywhere else, AMC was looking forward to operating its business in a more cost effective condition with higher efficiency and also where it can get superior quality coal, convenient transportation service at a lower labor cost.
Economic Conditions in Colombia The economic situation of Colombia was in a severe down turn in the mid 1990s. The unemployment level and inflation rates reached their peaks. As a result the Government had no other option but to privatize the national industries and attract foreign investments in order to alleviate the deteriorating economic situation. It was also to comply with IMF (International Monetary Fund) loan conditions as the economy had huge amounts of national debts. The government started offering numerous advantages just to attract foreign companies investing in the country.
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Benefits for the foreign companies in Colombia and possible reasons for AMC to shift in Colombia At this point of time, both Colombia and AMC found mutual benefits in developing an agreement between them where Colombia would get lucrative foreign investment and AMC would get high quality coal with cheaper labor costs.
Due to high unemployment rate of about 20% it was easy to find workers in reasonable price in Colombia .Besides workers there are willing to work for longer hours and in risky surrounding .The wage rate of Colombian mine workers ranged hardly from $500 to $1,000 per month whereas the US workers wage was $3,000 per month along with additional benefits. Other than that the labor rules in Colombia were much more flexible and easy to comply with. A possible shift in AMCs operation from USA to Colombia would significantly reduce labor costs, increase efficiency and productivity and generate higher profits.
Colombia, with its ongoing economic recession unemployment and inflation rates and IMF restrictions, was eager to offer its coal mines to any well established foreign company and AMC was certainly an attractive option for them.
Colombia offered so many attractive investment benefits to AMC which included tax free operations for the first 10 years, very cheap lands holding Colombias best coal reserves and subsidized infrastructure development. It would also construct a modern sea port on the Caribbean coast which would allow the shipping of coal exports to the United States within just two days .The seaport with a capacity to move 10 million tons of coal per year was for the exclusive use of AMC. Moreover a new 200 km rail link which would connect the mine to the coast was also supposed to be build in joint venture by the Colombian government and AMC. In addition, for the protection and security of AMCs operations and its workers, around 500 soldiers of the Colombian army would be continuously posted. Getting all these lucrative benefits from the Colombian government, AMC decided to shift its operation there and began construction on its Colombian mines in 1994.
The transfer of AMC operations Within the year 2000, AMC had shifted almost all of its operation from the southern United States to North East Colombia. Over a time span of five years AMC had shut down nine mines, which made at least 5000 US workers
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unemployed. Only two mines were left operational in the United States and even those two were planned to be closed by 2003.
Initially AMC started its operation successfully in Colombia. The initial production capacity was 3 million tons per year. AMC was in charge of everything there, even a portion of the rail link was owned by AMC. After processing the coal completely it was loaded on trains for transportation to the port, and the processing facility had a capacity to store over 200,000 tons of coal. It planned to expand its operations by the year 2004, which would help to increase AMCs production to over 10 million tons per year. The modern technologies of AMCs and efficient operational logistics provided reliable source of exports worldwide. It had sufficient amount of resources which helped and supported AMCs expansion plans significantly. The administration policy of the American president George W. Bushs was more focused on coal and as a result AMC had bright prospects in this sector. Since the Colombian units proved to be more profitable, AMC gradually closed down its US units and emphasized more on its plan Colombia.
Colombian Business Environment The Colombian business environment was apparently friendly to AMC, an American origin company which started its operations for the first time there. The Colombian president Andres Pastrana was in favor of US investment in his country. Moreover, very few restrictions were applied to foreign companies operating in Colombia, such as, both foreign and national investments had to follow the same legal and administrative policies. According to Colombian law 80% of a companys employees should be the local ones of Colombia. AMC complied with this rule and rotated its high and mid level executives between its US headquarters and its Colombian operations, however, all lower level workers were all Colombians. However, 100 percent foreign ownership was permitted except for a few situations. More and more organizations were being privatized in the country, reorganization in accounting and legal procedures were taking place, all these making the business transactions in the country more transparent.
Coal was the third largest export of Colombia followed by oil and coffee respectively. As AMC started its successful operations in Colombia, the countrys coal exports were expected to double by the year 2005. To make it US $2 billion by 2006, the government encouraged private investments within the coal industry. The major portion of the countrys coal deposits was within the Guajira
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Peninsula on the Caribbean coast. The largest state owned coal company, Carbocol, was to be fully privatized by 2006 and AMC wanted to acquire its 50% equity. Carbocol had a 50% stake in the Cerrejon Norte project which was Latin Americas largest pit mining operation and one of the largest in the world. Overall, AMCs future seemed bright and promising.
Colombian Political environment: Colombias political environment, unlike its business environment was going through a period of instability and unrest. In the years 1970 to 2000, Colombia suffered severe civil war between various rebel groups tremendously spread throughout the country. The Colombian president Andres Pastrana who was elected in 1998 with the expectation to control this situation, gave his best efforts to bring an end to the civil war but failed to do so. Despite the intense effort of the Pastrana administration to negotiate with the rebel groups, different crimes and terrorisms like kidnappings and assassinations were continuously taking place. Colombia had the highest kidnapping rates compared to any other country in the world. Both local workers and foreign executives were frequently kidnapped for money which was a big discouragement and drawback for foreign investors. Different rebel guerilla groups were engaged in Colombias drug trafficking and kidnapping activities. There were two major factions among these groups, commonly known as the FARC and the ELN. Over 40% of the countrys territory was under their control, mostly the remote areas which were near the Venezuelan and Brazilian borders. These rebel groups main activities were dealing with drugs and kidnapping foreign executives for high amount of ransom.
FARC- the Fuerzas Armadas Revolucionarias de Colombia This was Colombias most dangerous and largest rebel group. They had almost 15,000 well trained troops. FARC was mainly involved in the persuasion of its Marxist philosophy through violent actions. They were against the idea of foreign investments in Colombia and preached their doctrine regarding re-distribution of wealth, land reforms etc through aggressive measures. They used to make large profits from kidnapping and drug trafficking all over Colombia which motivated them even more, and as a result, they were able to keep highly trained well equipped and motivated soldiers who were more powerful than their government counterparts. A massive area measuring 42,000 sq km was allocated to this group by president Pastrana in order to initiate peace negotiations. The area was declared de-militarized zone with no government intervention and thus was literally a safe shelter for the FARC to carry out their illegal operations including cocaine cultivation, training of its soldiers etc. FARC even forced the local people
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to take part in the cocaine production and persecuted those who didnt comply with them. Cocaine production brought in more than $700 million annually and was mainly exported to USA. Many multinational companies operations were to be carried out in this FARC ruled area and AMC was one of them. AMCs main Colombian mine was within a territory that was contested by the FARC the ELN and the paramilitary.
ELN- The Ejerciti de Liberacion Nacional The Ejerciti de Liberacion Nacional (ELN) was Colombias second largest and influential rebel group. It had almost 5,000 armed and well-trained soldiers. ELN had a similar Marxist ideology to the FARC but its activities were more focused on kidnappings and attacking the countrys energy and petroleum infrastructures. They used their guerilla tactics to attack and demolish pipelines and power lines. They also used to blackmail multinationals by different activities. ELN was also provided with an area of 5,000 sq km by the government in order to initiate peace talks and bring a stable situation. The group was involved in severe terrorist activities time to time such as hijacking a domestic airliner in 1999, kidnapping 100 church going people, etc. ELN was in clash with FARC and the paramilitary group AUC.
AUC-Autodefensas Unidas de Colombia Unlike the two terrorist rebel groups, Autodefensas Unidas de Colombia (AUC) was Colombias renegade paramilitary faction. Its activities were highly controversial as it used violent and brutal techniques to combat the Marxist rebel groups and any of their suspected accomplices. They use to violate human rights to a large extent. Three quarters of the politically motivated killings in Colombia was carried out by this group. The group had members ranging from 5,000 to 11,000 in number. They were highly trained and disciplined and led by the vindictive leader Carlos Castano. The group had unofficial ties with the Colombian army and together they used to annihilate the Marxist rebels. Though AUC didnt directly harm AMCs operations, continous clashes between AUC and the rebel groups had negative impacts. AUC depended to a large extent on the tax imposed on the cocaine producers, which was used in their war against the rebels. US Plan Colombia In order to combat the rebel groups in Colombia and deal with problems like drug trafficking and kidnapping, the US congress allocated a$1.3 billion aid package to Colombia. The condition of US congress was that the Colombian Government
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has to control the cocaine production and help the US companies in Colombia directly with this aid. AMC played active role behind convincing the US government regarding this aid. AMC top officials heavily lobbied the US congress to increase military shipments, including helicopters and training. This course of action was also influenced by the Colombian president Pastrana, who convinced the US government that such aid would benefit USAs interest and promised to help the US companies operating in such hostile conditions of Colombia.
Because of this direct interference by USA, and AMC consciousness raising for it, FARC was severely discontented at them. They planned a series of attacks against US assets in Colombia and AMC, being an American company was their primary target. The hurdles faced by AMC AMCs success stories in Colombia started to be hampered within a few years. Its operations were frequently in the trouble between the battling Marxist rebels (FARC and ELN) and the paramilitaries (AUC). AMCs railroad structures were attacked by the FARC guerillas very frequently. One severe attack devastated an entire train and its shipment. The mine pits of AMC were not left alone. AMC had to suffer a lot regarding its establishments and operations and was forced to stop its night operations as they were too much risky.
Besides a 10% tax was imposed on AMC by FARC as its operating area was included in the FARC controlled territory. AMC denied paying any such taxes, which further aggravated the FARC authority. It resulted in increased number of attacks on AMC establishments. FARC even decided to make strategic plans for AMC as a penalty of supporting US and its aid against them known as Plan Colombia. ELN imposed similar taxes on AMC and other foreign companies and those who refused to pay were severely targeted. Kidnapping was another major problem faced by AMC besides the guerilla attacks. Despite of 400 Colombian Army soldiers being employed for its protection, and AMC having its own airport, incidents of kidnapping continued. In such situation AMCs demand of having more security was not fulfilled by Colombian Government due to lack of properly trained soldiers.
The activities of the AUC paramilitaries were another barrier for AMC. Although they did not attack AMC directly, their clashes with the rebel groups and their targeting of the companys Marxist employees did hurt them much. Within a 3 year period, 6 AMC union leaders were killed by AUC paramilitaries. They
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demanded their accommodation at the mines at night as most of the killings took place at night time while returning home but it was refused by AMC. In October 2001, AUC killed 2 more union leaders by stop a bus and dragging them out of it through which workers used to travel from home to work. It stopped AMC production due to a strike held by over 1200 workers, in order to protest and in demand for a safe working condition.
These incidents and AMCs refusal to house its workers created negative impact on the relation between AMC and the Union workers. Things were getting worse for AMC gradually. The United Mine Workers of America publicly condemned AMC for failing to give protection to its workers. It even advised them to withdraw completely from Colombia saying that human rights were violated by the killings caused by AMCs lack of safety measures.
The recent ongoing incidents in the neighboring country Venezuela were yet another threat to AMC. Venezuelas president Hugo Chavez, a vastly popular person among the poor, general people, announced a new legislation in his country. It stated that all the private oil industries of the country would be taken over or controlled by the government. He said that the foreign owned companies were making staggering profits without giving any single benefit to the general and poor people. Thus taxes and royalties were to be increased. Private industry officials protested against the new law stating that it would discourage foreign investments. But their protest did not work that much as the general people were in favor of the proposal. AMC had to deeply consider this situation in the neighboring country as the mottos of FARC and ELN were similar to that of Chavezs and it would be of no wonder that the Colombian people would support their Marxist doctrine of land redistribution and opposition of foreign settlements too.
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Throughout the journey of American Mining Company known as AMC, the company has gone through a number of obstacles and tough situations; however, it has wisely handled the difficulties and continued its path of success. Those trouble causing barriers for AMC are mentioned here. Initially, the high labor cost in U.S was cutting AMCs profit, which compelled AMC to downsize workers and later Throughout major reason for AMC to shift to Colombia. When things became onethe journey of American Mining Company known as AMC, the company has gone through a number of obstacles and tough situations; were going has wiselyAMC, the war between the Rebels its path of success. however, it right for handled the difficulties and continued like FARC and the Paramilitaries likebarriers for AMC are mentioned here. Initially, the high Those trouble causing AUC created barriers for AMC, because the union workers whomcutting AMCs profit, which compelled AMC to downsize labor cost in U.S was the AUC believed to be Marxist sympathizers or workers and later became one were included in the shift to Colombia. indirectly the FARC followersmajor reason for AMC totargeted list of When things were going right for time, this turned out to Rebels of FARC and attack for the AUC. With AMC, the war between the be one like the major the Paramilitaries like AUC were well armed and because the union workers problems as the parascreated barriers for AMC,used to kill the workers whom the AUC believed to be Marxist sympathizers or indirectly the FARC openly. Then the government of Colombia allocated huge areas of this followers were included in the targeted list of attack for the AUC. With time, land to out to be one of the major problemspeace paramilitaries were well armed turned the rebels in order to establish as the but it became safe haven for to kill the workers openly. Then the government of Colombia allocated and used them and the situation became extremely dangerous for huge areas of land to the rebels in order to establish peace but it became companies located in those areas and it was quite unfortunate for safe haven be one of those companies. The rebels dangerous for companies AMC to for them and the situation became extremely created various located in those obstacles was quite unfortunate for AMC to be one of those obligations and areas and itfor those companies, like imposing 10% tax companies. The rebels created various obligations and obstacles for those on those companies, attack the on those companies, attack the transports companies, like imposing 10% tax transports carrying coal, harm the workers, coal, harm the workers, kidnap the executives,the Government carrying kidnap the executives, etc. Next, comes etc. Next comes the provided improper security facilities due to lack of lack of trainedwell well Government provided improper security facilities due to trained and and equipped and motivated soldiers. Thus it difficult to preserve the minerals, equipped and motivated soldiers. Thus it was was difficult to preserve the provide safe working environment and transportation transportation minerals, provide safe working environment andsystem to the workers. The next problem workers. The next problem caused by this was the system to thecaused by this was the demand for accommodation overnight by the workers due to lack of safe transport which was denied by AMC, and the demand for accommodation overnight by the workers duethuslack of result was the crucial relation between AMC and union workers, to as a result safe transport which was denied by AMC, strike the result was the of continued attacks on workers, they started and and stopped AMC crucial relation days. The situation was already complicated as a result of productions for between AMC and union workers, thus when neighboring country Venezuelas President Hugo Chavez declared and stopped AMC continued attacks on workers, they started strike to keep strategic decision making authorities of industries like oil industry, nationalizes most private productions for days. The situation was already complicated when industries and imposed higher royalty. This became bigger threat when Chavezs neighboring country Venezuelas President Hugo Chavez declared to decision was supported by the general people. keep strategic decision making authorities of industries like oil industry, nationalize most private industries and imposed higher royalty. This became bigger threat when Chavezs decision was supported by the general people.
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Will American Mining Company be able to strategically counter the HR and security issues that they are facing while operating in Colombia, for their employees to operate efficiently and save their billion dollar project from getting to a halt and thus expand AMC to higher grounds for the purpose of future growth?
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SWOT analysis
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies.
Strengths: characteristics of the business or team that give it an advantage over others in the industry. Weaknesses: are characteristics that place the firm at a disadvantage relative to others. Opportunities: external chances to make greater sales or profits in the environment. Threats: external elements in the environment that could cause trouble for the business.
Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated. The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company's unique value chain. SWOT analysis groups key pieces of information into two main categories:

Internal factors The strengths and weaknesses internal to the organization. External factors The opportunities and threats presented by the external environment to the organization.
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The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. The factors may include all of the 4Ps; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix.
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STRENGTH:
Strategic planning to Expand would increase production by more than 10 million tons. American mining companys production would increases significantly by 2004 if they expanded according to their plan. With modern technology and more efficient operational logistic they could provide coal more efficiently to the world market. If a renowned company like American Mining Corporation would be able to provide such huge amount with modern equipment and efficiency they will be able to create new markets and catch a bigger market share and attain more growth.
American mining company was one of the largest privately owned
companies in United States. In the previous half century American Mining Corporation was one of the biggest company in America, with coal holding of over 1.3 billion short tons and revenues of almost US $1 billion, it was one of the top 300 largest private companies in the United States. American Mining Corporation had one of the biggest asset and investment capability out of all their competitions. Not only did they earn a huge profit they also had a huge amount of resource which allowed them to gain an advantage over others. They had only 6 mines previously in United States which later they closed down to cut cost and enter into the Columbian market.
They provided the highest quality coal with reliable delivery and extraordinary service which set them apart. Columbia has the finest natural coal with the best thermal output in the world. The average composite of Columbian coal had a heat value of eleven thousand eight hundred BTU per pound. Their coal provided the highest heat value; since their quality was the best amongst all the other mining companies in the world they could charge a higher price. And considering demand for coal is very high, their high price would earn
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them more revenue which would give them better advantage over other companies and further investment ability.
They owned their own private air strip near their main office. American mining corporation owned and maintained a private air strip near its inland mine and on the coast to maintain more security for the higher executives. As kidnapping was a major threat during that time because of different rebel groups. They were in a very volatile country with unstable political conditions and rebel groups threatening them in every step, their executives were constantly on the risk of being kidnapped by the rebel groups for ransom money hence their private plane provided them with security benefit for the company.
They over saw and directed every single process of the mining production. After the company started its production it reached 3 million tons per year by 1995 directing every step which was mining and then transporting by a truck to a storage facility few miles away where it was processed and crushed and transported by a train. Due to instability of the government and harsh condition of the country, Columbia was going through and economic down turn, they had very little regulations for the foreign investment in their country. So American Mining Corporation took the opportunity to seize the benefit and took complete control over all the process from mining to storing to transporting of the coals.
Owned a portion of rail link American mining corporation owned a portion of the whole rail way which was used for the purpose of transporting coals to the port from the storage facility which in turn increased the control of the American mining corporation on the shifting process. American Mining Corporation owned a part of the rail way that transported their coal. Owning their own rail link made sure they always had a passage to their storage facility. And as they always had passage to the rail way it allowed them
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to transport the coal through the sea port to the United States very quickly within two days.
Had a capacity to store over 200,000 tons of coal American mining company had an exuberant storage capacity of 200,000 tons of coal and the facility was capable of successfully loading 1700 tons of coal in every hour on to rail cars. And the rail cars had an impressive 50 ton capacity. American Mining Corporation had a very large storage facility which ensured them to have a stable supply of coal to the United States. This amazing facility was very efficient and elevated the transportation of the coal.
Weakness:
The union leaders were dissatisfied by the company management. American Mining Corporation despite being requested by their union leaders to let them reside in the mining facility during the evening as it was dangerous to return home after dark because rebels ran raids were refused even after some of them were killed. There was a very hostile situation going on and very risky to travel by night so the workers wanted to reside in the mine during evening after their shift for which they requested permission again and again. But American Mining Corporation denied them that permission for which many union leaders died when their bus was stopped and raided by the rebel group. The government did not have a structured compensation plan. Unlike United States Columbia did not have mandatory compensation law for the workers. Columbian mine workers were compensated on a fixed basis salary without any further benefits or bonus. To attract and retain the foreign investors Columbia did not have any structured compensation plan because of strict regulation or pressure on the foreign investors would discourage them to invest. But Columbia going through the
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middle of an economic depression was badly in need of foreign investment to fix its economy.
The workers were given very low motivation for their work. Taking the advantage of 20% unemployment in Columbia, American mining company only compensated the employee for their work rather than building a relationship or motivating them further. Unlike American workers, Columbian workers did not have a choice and American Mining Corporation took this opportunity and paid them with minimum wage rather than compensating them properly in order to motivate them to be a part of the organization. They did not even pay them proper overtime pay or compensation for their lack of security.
Destruction of the locomotive which hinders the shipment as well as the business When the locomotive of American mining company was damaged by the rebel attacks it slowed down the transportation of coal to the mainland significantly thus causing damage to the further production of coal supply.
Transportation was the heart of the mining company. When the locomotive of the company was destroyed and the transportation of the coal slowed down, American Mining Corporation could not get their coal 200 km away to the sea port for the purpose of exporting them to United States timely.
Opportunity:
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American Mining Corporation was diversifying into real estate business.
Rather than solely focusing on coal mining American mining company diversified in various sorts of business to reduce their business risk. For that purpose they invested in real estate. Due to availability of cheap and good quality coal mining facility in Columbia, American Mining Corporation stopped its production of coal mining in America and closed down the mines to diversify in to real estate business to reduce their business risk and increase profitability.
Columbian labors were willing to work longer hours in dangerous condition with the same pay. Due to adverse economic conditions in Columbia and high unemployment rate the workers were willing to do their jobs in harsh conditions for the same pay without any extra benefits or security. The economic condition of Columbia was very bad with a 20% unemployment rate which means there was a supply of workers but not so much demand for them hence they were being forced to work in the mining company underpaid with out over time pay and being worked for long hours. Easy availability of vast resource of Columbia. Columbia was going through a harsh economic downturn with bad political condition so with the given condition of IMF and the pressure from privatization they had very little to ask for and their vast resources ware easily available for the private corporations. American Mining Corporation took the opportunity to take full advantage of the massive resources of Columbia, which was the worlds third largest coal reservoir as well as oil and coffee. These huge resources were easily available due to lack of regulation of foreign investment by the Columbian government.
Got an opportunity to hold the business without TAX, develop the infrastructure because of its renowned reputation
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Being a massive corporation American mining company took advantage of 100% foreign ownership and tax rebate further more they did not have to pay tax for the first ten years and got the land at a very cheap price and received subsidy for the development of the infrastructure. To follow the terms given by IMF, Columbian government offered various lucrative offers to American Mining Corporation; including a ten year tax free pass and cheap land. It also agreed to subsidize infrastructural development for American Mining Corporation.
Having approximately 400 Colombian army soldiers to guard the operation to increase protection. For the purpose of security of the production of the company American mining company received 400 armed men from the Columbian army who were deputed around the facility to make sure the company employee were safe from the rebel. Columbian government agreed to provide 400 armed soldiers from its army to American Mining Corporation for their security. In order to protect the facility and the executives from the rebels who were wide spread and kidnapped executives for ransom money.
American Mining Corporation had to ensure 80% of the employees were Columbian citizens. Under Columbian law minimum 80% of any companies operating in Columbian land were required to be a citizen of Columbia. This could be a barrier for the other companies but to AMC it was an advantage over others. If this was any other company it would have been a barrier for them because maintaining 80 percent foreign employee will usually be tough but since AMC has the leverage by rotating its high executives it vitally use the local workforce, they had competitive advantage over other businesses.
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Threat:
Unfamiliar with the rebel group Even though American mining company had good liaison with Columbian government they did not have an understanding with the rebels. So when they implemented plan Columbia the plan back fired. There was four rebel forces present in Columbia, so the government was ineffective in providing security against all of them to the American mining company. And they were so in adequate at their work that they were becoming obsolete so this were being problematic for American mining company as the rebel force began to see them as their enemy.
Faced threats of kidnapping, assassination and other acts of terrorism Being a foreign company in Columbia, American mining company was not safe in Columbia. There was imminent threat to kidnap their executives and pay unofficial tax to the rebel groups. If the senior executives and employees were kidnapped or killed by the rebels, not only the running of the facility will stop but the workers will also be terrorized and the other foreign officials will also stop working for American mining company and return back home. And without the skilled and experienced executives from United States, AMC could not run profitably.
Increasing number of rivals in terrorism was a big trouble for the company American mining company had to face different groups of rebels, who had different core beliefs so even if they wanted to negotiate, it wouldnt have been possible and they would face the hostile behaviors from the rebel groups. It would not have been possible because siding with any party was not possible as it would upset the other groups. Because with different beliefs none of them
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will be happy of AMCs actions at the same time, and the innocent workers will have to pay the price.
More motivated and better equipped rebel group compare to the government soldiers The rebel groups were well funded from the drug business and they were better equipped and more motivated in regard to fighting in the jungle compared to the government army who did not even bother to fight the rebels sometimes. The rebel groups were better trained, better funded and better equipped. They had better ability to fight in the jungle and knew the territory better unlike the government soldiers. So the government could not help the American mining company in providing them with security for the business.
Using the territory of the rebel groups provided by government In a controversial decision, president pastrama of Columbia authorized safe haven for rebel groups by giving them a large piece of the jungle the size of Switzerland which in turn increased the growth of their terrorist activity. In order to make some sort of peace with the rebel groups the government had given them a large piece of land which was demilitarized so the rebel groups could do whatever they wanted in there. This land consisting of resources that American mining company used or needed was a big threat on the life of the workers who had to go to get them.
Frequent attack on the company supply chain if the company did not
abide by their demand. It was regular activity for the rebels to attack the mining or petroleum corporations; they would terrorize and demand tax from the corporations. They claimed large percentage of tax on the profit. The rebel groups demanded heavy demands upon the companies working on Columbian lands. If the companies refused to comply by the rebel groups wishes they raided their supply chains regularly to hamper their production and transportation. Regular extortion caused heavy problems for the American mining company.
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The union workers went on strike and pressurized the management of Colombia to withdraw from Columbia.
After the deaths of too many union leaders the Columbian workers of American mining company decided to go on a strike demanding the adequate security for the workers working in dangerous area or withdraw their operation from Columbia. With the union leaders being executed by the rebels, the workers refused to work without the assurance of their security by the American mineral company and permission to sleep in the mines after they have done their work in the evening. With this unsatisfied workers in strike there would be no production.
Venezuela making new nationalization policies might inspire Columbia to change its policies too in the same way. The new president of Chavez, took the decision to nationalize all the privately owned industries into public companies with the belief of land distribution to the poor and have high royalty payment and operational decision of the companies. Columbia being Venezuelas neighboring country might follow into their footstep soon considering both have similar type of economy and political condition. If this occurred than American mining company would have to pay a large number of money to the government in terms of royalty and lose its operating decision power which would further increase its operating costs.
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Human resource is like the heart of the organization. Human Resource is an essential part of an organization. An organization will feel helpless without a Human Resource Department. The main agenda of this department is to acquiring, hiring, training and compensating employees. It helps companies to deal with the fast changing business environment and help employers to deal with the situation. HR is also important for maintaining good quality for long period. It also explains how a company can retain and satisfy good employee by giving incentives, bonuses, reward, and great compensation to sustain its quality service. After going through the case we have found out that American Mining Company is a very successful company in their business. American Mining Companys coal has great quality and its market has for a number of years. It was a growing company in a rising market. AMC has an intention of retaining the larger portion of coal market by capturing more of Colombias vast resources. Expanding the business right now is very important for the purpose of keeping AMCs growth upwards.
Higher salary expected by the US mine workers caused AMC to shift abroad:
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By the year 2000 American Mining Company had ended al of its operation in United States and moved them to Colombia. They actually were forced to do this, due the legislation and labor laws in USA. In United States they had to pay minimum 3000 dollars to every worker, and then again compensate them further on several different benefits. But, even though they told the workers that American Mining Company would not shift operation but they did it to take advantage of cost cutting and their image in the US mine workers union was less now.
Uncertain about their job security of US workers: AMC closed down nine mines and fired almost 5,000 United Mine Workers over a five year period, without giving prior notifications- despite telling its workers that the company would not transfer its operations abroad. So, no matter how much they were providing the workers now in Colombia, the workers union knew that they can not believe anything that the HR department was telling them because American Mining Companys HR did not have a bright history dealing with workers. Compensation and benefits packages: AMC paid $500 to $1000 a month to Colombian workers, while US mine workers received over $3,000 monthly plus benefits. Thus the company deprived Colombian mine workers by giving lower wages. So, even though they were getting enough employees to work for them due to the downward economy in Colombia, but they were not building relationship with them and employees knew they were not being properly compensated and American Mining Company was taking advantage of them. Unstable political and economical conditions: In Colombia there is less labor restrictions and government encourage to do business in here. Moreover in Colombia there is abundant number of labor in
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cheap wages but no matter how good the conditions seemed the truth is completely different. Colombia had very unstable political and economic conditions that are the only reason why they would offer cheap labor and investment. Because, if anything goes wrong and the government loose total control over the nation, AMCs billion dollar investment will become a waste and they would be captive to the other rebel forces. Harsh work environment: In Colombia rebel groups, kidnapping, assassinations and other acts of terrorisms are very common. It maintained the highest kidnapping rates of any country in the world. Both foreign executives and local factory workers were frequently held for ransom, often up to years at time. Violent and disruptive acts on companies operations were common place and a significant discouragement to foreign investments. And, considering the strength of the government it is very likely that they wouldnt be able to help during the worst days. Aggression of rebel groups caused AMC to pay more: FARC, ELN, AUC were the different large rebel groups which dominated Colombias drug trafficking and kidnapping business. They were so powerful, well rained, and well equipped that even the government army will not dare to fight them sometimes. Thus AMC had to attract the employees by offering higher salary to work in their dangerous environment, because none will be willing to work in a hostile environment without extra compensation, but they couldnt assure safety work environment. Labor Union suffered greatly: AUC killed six union leaders within three years and for this reason union leaders held one of the most occupations in Colombia. Two leaders of AMCs mine union were taken off the bus and killed execution style. The assassinated leaders had previously requested that AMC should allow employees to spend the night at the mine, due to the dangerous traveling conditions after dark. And, due to this, the workers were dissatisfied, worried, and began to worry about their own lives.
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Labor went on strike for not providing accommodation facility: It was impossible for the employees to work after dark, because of the killing of workers by the rebel groups due to political reasons and their demands. So the workers demanded that they want to reside at the mine after dark for their own protection, but the company declined the proposal. Since AMC couldnt provide any accommodation facility to their workers, the companys employees went on strike for three days in protest and all production ceased, as a consequence. Moreover the United Mine Workers of America publicly condemned AMC for not taking the necessary precautions to protect its workers. It called for AMC to withdraw the company completely from Colombia, stressing that the company was putting its employees in danger by operating in such a volatile environment. They also mentioned that it violates the Colombias human rights
Social responsibility: Under the Colombian law, 80% of a companys employees were required to be Colombian nationals. AMC exceed this percentage and hired more Colombian citizens. But, the HR of American Mining Company took it as an advantage and in turn switched mid and higher level employees from USA and thus exceeded the given 80 percent limit of people required to be Colombian citizen.
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After analyzing the case and identifying the Human Resource issues effectively in the previous part, it is now time for recommendation to American Mining Company in order to solve the issues. To focus on some specific issues of great concern retain the facility and keeping it working in Colombia. To capture the growing market, and keeping the production stable in Colombia it is very important to decide carefully so that the hostile environment in Colombia do not become a threat to the growth of American Mining Company. We already knew from the case that AMC has already established itself as one of the worlds largest company in their business. It has a superior strategy of quality. But, they already started to have problem with the different rebel groups and the government of the country where they are operating, Colombia. Due to hostility of the rebel groups the worker leaders were assassinated and workers went on a strike in demand for safety, so this had to be taken care of. Otherwise production will be at halt, and the growth and the future of this company will be at risk.
By focusing on Human Resource related issues we have identified in the previous part, now we can recommend some solutions that will support the efforts of providing security and safety for the workers, keeping the company production stable, add value and make the proper dealings with the rebel groups and government. By adopting our suggested plans we believe that it can
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overcome from its security and workers strike problems and by taking the full advantage of its facilities to earn a higher profit to operate their business successfully in Colombia, and also to expand its production throughout the world. In the following section one by one, we will mention the specific problems we have identified, our recommendation to solve these current problems, and the justification of the successfulness of those solutions.
Problem 1: The clash between the Marxist sympathizers and the Paramilitaries put AMC in the middle of a war; also suspected Marxist sympathizers within the union were killed by the AUC. Solution: The Company should be more careful while recruiting employees who are politically inclined to the Marxist ideology, they can also make sure that employees are not actively taking part in political issues for the sake of their own safety, and some of the territories in which AMC is present, should be acquired. Justification: As the Paramilitaries have killed those employees who have been supporting the Marxist, it is better and safe to have employees who are free from those groups. The employees should have not been involved in those matters because the union leaders were killed before for that reason and having employees who are politically inactive are less likely to be a target.
Problem 2: Sufficient weaponry, training and controlling ability of the rebel groups were much more superior to the government army and guards, so the paramilitary created apprehension and fear among the workers. Solution:
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We urge that the government should not give them so much power in terms of land and such resources and AMC can influence this by pressuring them by US authority, because AMC had liaison with US government and President Pastrana would listen to US authority because they were getting help from the US government. Justification: The rebel and the paramilitary groups were very much powerful and in many aspects they exceeded the government army. It is not legal to allocate the terrorist any place for their training. Because, whatever they do is not legal and is harmful for the citizens. The government didnt fix any rigorous rules for the rebel and paramilitary group. And they also started using this power in their own ways which created a big problem. Government is taking tax from the company too. Then why shouldnt it care for its security. Problem 3: The rebel groups of Colombia started imposing tax on the company, even though American Mining Company was paying a large amount of tax to the Colombian government, the rebel groups were asking for a tax imposition. FARC asked American Mining Company to pay a 10% tax. Solution: We recommend that the American Mining Company initiate talks with the government so that it negotiates countering the illegal imposition of the tax by FARC. The government provided army, but that was obsolete. So, the AMC management should pressure the government to ensure their safety issues and gradually try to come to an understanding with the rebel groups as well. Justification: A new place is very critical in many ways to start a business. Government was unable to provide security, they were not well funded, and they were not well trained or well equipped, so the right choice for the business would be to pay rebel groups a lump sum amount, and come to an understanding.
Problem 4: A huge area of 42,000 square kilometers was provided to the FARC and another 5,000 square kilometers to the ELN which resulted in the places becoming safe shelters of the rebel groups. Solution:
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We think that the government should take measures to take back some portions of the lands from the rebels or at least declare regulations on what activities they can perform there. Justification: The lands were used by the rebel groups for illegal activities like cocaine cultivation, drug trafficking, training of the armed soldiers etc. Also they imposed an illegal 10% tax on companies operating in those areas and that included AMC. AMC already paying taxes to the government is not supposed to pay any taxes to any rebel group. So AMC should talk to the government and convince them in implementing the above solution.
Problem 5: AMC had lack of security in preserving and coals. American Mining Company had a huge storage facility, but their facility was not properly protected. In past few years AMCs facility has been attacked several times. Solution: Establishing CCTV cameras, more security guards, locking the systems could be the solution of this problem. AMC could always hire private security and negotiate with the rebels for the purpose of safety to their facility. They can also assign some Colombian armies to protect the companys assets from rebel attacks. Justification: To get rid of the threats they could have arranged some underground storerooms to preserve their minerals but those holes should be secret. The CC cameras should have been established everywhere inside the factory to look after what is going on.
Problem 6: Lack of security in the coal transportation systems is a major issue for American Mining Company. AMC faced almost 5 or 6 attacks on their train and railroads; one of their locomotives was also destroyed during a fatal attack. Solution:
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The Colombian armies should be assigned to keep the locomotives and other means of transportations of minerals safe. Otherwise it will be harmful for their business. The guards should be paid also to be sincere to their respective jobs because as we read, sometimes guards even dont react much knowing they are less equipped and less trained. Justification: The Colombian armies should be assigned to keep the locomotives and other means of transportations of minerals safe. Otherwise it will be harmful for their business. The security guards should have been trained because the minerals are the asset of the company; if it is not kept safe then it there is no mean to sustain the business. So to keep the environment free from risk, the company should hire employees who are free from any political biases.
Problem 7: American Mining Company did not provide accommodation to the workers to stay overnight, as a result the union leaders were getting killed by paramilitary rebels one by one and later the workers returning after dark was also a target by the rebel groups in Colombia. Solution: The workers hours should have been fixed in two shifts which would minimize the number of working hours at night and thus lessen the need of accommodation at night. And, if possible the HR should also try and mange to reside as much workers as possible to keep the workers safe. Justification: Half of the workers should work for 8 hours a day from 8.00 AM in the morning to 4.00 PM in the afternoon. Then the next group will start working from 4.00 PM to 12.00 AM in the night. The number of the second group would be less because the group was divided before. And also, it would take less accommodation as well. So it will be easier for the company to provide minimum accommodation.
Problem 8: Union mine workers (UMW) strikes to stop the business of AMC for not ensuring security. The production, transportation work was at halt, this was a threat for the company. Three days they didnt work at all asking for residence after dark hours.
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Solution: Providing good accommodation facilities to the night shift workers and also providing overall security to the employees could be a solution. American Mining Company has to ensure that their workers are given security and safety which includes residence at the mine both from the humanitarian point of view, and to keep their business running. Justification: As the company was not providing any place to the workers to stay overnight and the workers were killed by the groups, it was an emergency step which could have been taken at that time. Workers security is the main thing if you want to involve your workers in work. The strike could be eliminated if the company provided them accommodation. So we suggest the confirmation of it.
Problem 9: The salary of the employees in US was high because of the high demand of the workers and the legislation related to labor laws. Solution: We advocate that the company could minimize the salary by diminishing the pressure and restriction which could stand as a solution for the company to trim down the cost. Justification: They used to get $3000 monthly which is pretty high. The reason was the restriction among the workers. The workers couldnt work freely and the pressure was too high that the workers charged more which was bad for the company too.
Problem 10: Risk of the Colombian government adopting the concept of Hugo Chavez (the president of Venezuela) in nationalizing all the privatized companies and removing all the multinational companies was also a great concern for AMC. Solution: Participating in CSR (Corporate Social Responsibility) activities can be one solution for not converting it into nationalized company. AMC has to make a relationship with the people of the nation and its government.
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Justification: Participating in CSR (Corporate Social Responsibility) activities could convince the people and the government that it would be more beneficial for Colombians to have a multinational company such as AMC in their country.
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By focusing on Human Resource related issues we have identified in the previous part, now we can recommend some solutions that will support the efforts of providing security and safety for the workers, keeping the company production stable, add value and make the proper dealings with the rebel groups and government. By adopting our suggested plans we believe that it can overcome from its security and workers strike problems and by taking the full advantage of its facilities to earn a higher profit to operate their business successfully in Colombia, and also to expand its production throughout the world. In the following section one by one, we will mention the specific problems we have identified, our recommendation to solve these current problems, and the justification of the successfulness of those solutions.
Problem 1: The clash between the Marxist sympathizers and the Paramilitaries put AMC in the middle of a war; also suspected Marxist sympathizers within the union were killed by the AUC. Solution: The Company should be more careful while recruiting employees who are politically inclined to the Marxist ideology, they can also make sure that employees are not actively taking part in political issues for the sake of their own safety, and some of the territories in which AMC is present, should be acquired. How to implement this: Some territories in which AMCs principal Colombian mines are situated must be reacquired so that AMC does not fall in the middle of these clashes. So AMC should give the responsibilities to the HR department, so that they can reassure that the union leader is not related to any kind of Marxist ideology. As a result
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none of the rebel groups may declare with valid proof, that any employee is a Marxist sympathizer. Who will implement it? It will be implemented by: AMC headquarter to give the responsibilities to the HR department. The HR department is insuring that the workers or the person who will be union leader is not related to Marxist ideology. The accusation of land will be done by Colombian government in request of AMC.
When to implement? This should be done the next time recruitment is viable and the acquiring of lands should be done as quickly as possible. The acquiring of grounds must be done as soon as it can be sanctioned by the government.
Where to Implement? The recruitment process must be implemented within the company grounds where security measures are taken. The acquiring of grounds must be done as soon as it can be sanctioned.
AMC Headquarte r
HR derpartment
Request to Governmen t
Recruitin g process
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Land accusatio n
Problem 2: Sufficient weaponry, training and controlling ability of the rebel groups were much more superior to the government army and guards, so the rebels & paramilitary created apprehension and fear among the workers. Solution: We urge that the government should not give them so much power in terms of land and such resources and AMC can influence this by pressuring them by US authority, because AMC had liaison with US government and President Pastrana would listen to US authority because they were getting help from the US government. How to implement this? The government should try to fight these forces so that they may not get the upper hand and do not get the supply of arms and ammunition which they clearly must be getting from some neighboring country since the government has officially cut down all ties with these groups. They must keep guards at check posts at the border for any illegal arms or resource traded must be stopped if the rebel groups are to be countered. Who will implement this? This will be implemented by the government of Colombia to stop the arms supply of the rebel & paramilitary and seize the land which was given to them. When to implement? The government of Colombia should implement this as soon as possible, so that the rebels & the paramilitary cannot do any more harm to anyone.
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Where to Implement? This must be implemented at the borders of the FARC, ELN and the AUC territories as well as the borders of Colombian territories.
Problem 3: The rebel groups of Colombia started imposing tax on the company, the rebel groups were asking for a tax imposition. FARC asked American Mining Company to pay a 10% tax. Solution: We recommend that the American Mining Company initiate talks with the government so that it negotiates countering the illegal imposition of the tax by FARC. The government provided army, but that was obsolete. So, the AMC management should pressure the government to ensure their safety issues and gradually try to come to an understanding with the rebel groups as well.
How to implement this? AMC must try and convince the government to initiate a conference in which they may negotiate with the groups to stop the illegal imposition of tax, fighting, assassinations and unnecessary demands. AMC should also try to make their place more secure by hiring guards from outside of Colombia and make them better equipped with to protect the company. Who will implement this? This will be implemented by The AMC to convince the Colombian government to help them to negotiate with the rebels.
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The AMC should also give the responsibilities to the HR department to hire some of the trained guards from the outside with better arms & equipments.
When to implement? They must do this as quickly as possible so that no more people are killed and so that workers may work and travel safely without fear and apprehension. The productivity of the employees depends on how well the negotiations can be carried out. Where to implement? AMC should implement it in Colombia with the Colombian government to help them with the negotiation with the rebels. They should also hire well trained well equipped guard from the outside like from America.
AMC Headquarte r
HR departm ent
Convince Colombian Government
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Higher well trained guards from outside
Negotiate with the rebels
Problem 4: AMC had lack of security in preserving and coals. American Mining Company had a huge storage facility, but their facility was not properly protected. In past few years AMCs facility has been attacked several times. Solution: Establishing CCTV cameras, more security guards, locking the systems could be the solution of this problem. AMC could always hire private security and negotiate with the rebels for the purpose of safety to their facility. They can also assign some Colombian armies to protect the companys assets from rebel attacks. How to implement this? To protect themselves from being attacked by the rebel AMC should come up with better security system. For that AMC should put some security cameras, better & well trained security guards and also talk to Colombian Government and try to get as much help as they can. Who will implement this? These will be implemented by: AMC to convince the Colombian Govt. to get as much help as they can get. Give the responsibilities to the HR department to higher more trained and equipped security guards from outside.
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When will it be implemented? This should be implemented as soon as possible because day by day the situation is getting worse than expected.
Where will it be implemented? Most of this will be implicated in Colombia, where the factory is. But the recruitment of the outside guards can be in outside the country, and then send them to here.
Problem 5: American Mining Company did not provide accommodation to the workers to stay overnight, as a result the union leaders were getting killed by paramilitary rebels one by one and later the workers returning after dark was also a target by the rebel groups in Colombia. Solution: The workers hours should have been fixed in two shifts which would minimize the number of working hours at night and thus lessen the need of accommodation at night. And, if possible the HR should also try and mange to reside as much workers as possible to keep the workers safe.
Problem 6: Union mine workers (UMW) strikes to stop the business of AMC for not ensuring security. The production, transportation work was at halt, this was a threat for the company. Three days they didnt work at all asking for residence after dark hours. Solution: Providing good accommodation facilities to the night shift workers and also providing overall security to the employees could be a solution. American Mining
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Company has to ensure that their workers are given security and safety which includes residence at the mine both from the humanitarian point of view, and to keep their business running.
How to implement? The top management of AMC should hold a meeting weather they could put a house close to the mining site so that the worker can stay there and be safe. Also they should give the responsibilities to the HR department to make the worker clam down and ensure their safety. Who will implement? It will be implemented by: AMC top management to establish a house near the mining site. HR department to calm down the workers & ensure their safety.
When will it be implemented? It will be when the top management will have meeting about it as soon as possible. to ensure the safety of the workers and to stop the strike HR department should get to work as fast as possible. Where will it be implemented? It will be implemented at the factory in Colombia.
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AMC Top management
HR Department
Build a house near mine site
Ensure Worker s safety
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Problem 10: Risk of the Colombian government adopting the concept of Hugo Chavez (the president of Venezuela) in nationalizing all the privatized companies and removing all the multinational companies was also a great concern for AMC. Solution: Participating in CSR (Corporate Social Responsibility) activities can be one solution for not converting it into nationalized company.
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Problem 1: The clash between the Marxist sympathizers and the Paras put AMC in the middle of a war, also suspected Marxist sympathizers within the union were also killed by the AUC. Solution: The Company should be more careful while recruiting employees who are politically inclined to the Marxist ideology, some of the territories in which AMC is present, should be acquired. Justification: As the Paras have killed those employees who have been supporting the Marxist, it is better and safe to be free from those groups. The employees should have not been involved in those matters because the union leaders were killed before for that reason.
How to implement this: Some territories in which AMCs principal Colombian mines are situated must be reacquired so that AMC does not fall in the middle of these clashes. The company may be discreet while recruiting people so that no
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rebel groups may declare with valid proof, that any employee is a Marxist sympathizer.
The acquiring of land is possible by convincing the government to do so. Since AMC is getting battered in the middle of the fights and since it is making it difficult for AMC to operate under such conditions we must urge the government. Since if AMC leaves Colombia, it would not be able to cope with its national debts to the IMF (international Monetary Fund).
When to implement: This should be done the next time recruitment is viable and the acquiring of lands should be done as quickly as possible. The acquiring of grounds must be done as soon as it can be sanctioned by the government.
Where to Implement: The recruitment process must be implemented within the company grounds where security measures are taken. The acquiring of grounds must be done as soon as it can be sanctioned.
Problem 2: Sufficient weaponry and controlling capability of the rebel group and paramilitary created apprehension and fear among the workers. Solution: We urge that the government should not give them so much power in terms of land and such resources so that they may not have the upper hand. Justification: The rebel and the paramilitary groups were very much powerful and in many aspects they superseded the government army. It is not legal to allocate the terrorist any place for their training. Because, whatever they do is not legal and is harmful for the citizens. The government didnt fix any rigorous rules for the rebel and paramilitary group. And they also started using this power in their own ways which created a big problem. Government is taking tax from the company too. Then why shouldnt it care for its security.
The government is having tax from these groups but we are not suggesting stop taking tax from them because nobody wants loss. But as the government is having tax from AMC, it should have been careful for the company too. So they
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could promote this issue to general people, raise for help confidentially. Because it could charge them if discloses.
How to implement this : The government should try to fight these forces so that they may not get the upper hand and do not get the supply of arms and ammunition which they clearly must be getting from some neighboring country since the government has officially cut down all ties with these groups. They must keep guards at check posts at the border for any illegal arms or resource traded must be stopped if the rebel groups are to be countered.
When to implement: This should be implemented as soon as possible.
Where to Implement: This must be implemented at the borders of the FARC ELN and the AUC territories as well as the borders of Colombian territories.
Problem 3: The rebel groups of Colombia demanded to impose a 10% tax on the company. Solution: We recommend that the AMC initiate talks as soon as possible with the government so that it negotiates countering the illegal imposition of the tax. Justification: A new place is very critical in many ways to start a business. None of the business has started in the history without giving TAX to the gangsters. The company AMC had to too. The reason was the company used the territory of the rebel group. They could hire professionals from outside which could be supportive for the armed force.
How to implement this: AMC must try and convince the government to initiate a conference in which they may negotiate with the groups to stop the illegal imposition of tax, fighting, assassinations and unnecessary demands.
When to implement: They must do this as quickly as possible so that no more people are killed and so that workers may work and travel safely without fear and
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apprehension. The productivity of the employees depends on how well the negotiations can be carried out.
Problem 4: A huge area of 42,000 square kilometers was provided to the FARC and another 5,000 square kilometers to the ELN which resulted in the places becoming safe shelters of the rebel groups. Solution: We think that the government should take measures to take back some portions of the lands from the rebels or at least declare regulations on what activities they can perform there. Justification: The lands were used by the rebel groups for illegal activities like cocaine cultivation, drug trafficking, training of the armed soldiers etc. Also they imposed an illegal 10% tax on companies operating in those areas and that included AMC. AMC already paying taxes to the government is not supposed to pay any taxes to any rebel group. So AMC should talk to the government and convince them in implementing the above solution.
How to implement: This can be done by lobbying the Colombian government to get the US aid package to use it to reallocate the lands that are now under the control of the rebel groups.
Where to Implement: This should be done where ever there are AMC properties or where ever their shipments pass through
Problem 5: Lack of security in preserving minerals. Solution: Establishing CCTV cameras, more security guards, lock systems could be the solution of this problem. Justification: To get rid of the threats they could have arranged some underground storerooms to preserve their minerals but those holes should be secret. The CC cameras should have been established everywhere inside the factory to look after what is going on.
The security guards should have been trained because the minerals are the asset of the company; if it is not kept safe then it there is no mean to sustain the
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business. So to keep the environment free from risk, the company should hire employees who are free from any political biases.
How to implement this: To solve this problem AMC has to establish CCTV cameras everywhere inside and outside the corporation and there should be some stand by people who will look after what will happen around. They should hire some strict security guard who has proper weapon to save them. AMC can also outsource the guards. It can establish a card reader lock system by which only the card holder can enter to the company.
When to implement: AMC should do this as quickly as possible so that no more minerals are loose and so that company can achieve a huge success. The productivity the corporation then increases definitely.
Where to Implement: AMC can implement these steps to their factory to assure a safety work conditions.
Problem 6: Lack of security in the coal transportation systems. Solution: Assign some Colombian armies to protect the companys assets from rebel attacks. Justification: The Colombian armies should be assigned to keep the locomotives and other means of transportations of minerals safe. Otherwise it will be harmful for their business. The guards should be paid also to be sincere to their respective jobs.
How to implement this: AMC can solve this problem by hiring Colombian armies to protect the companys valuable assets from the rebel attacks when the company is ready for their coal shipment. When to implement: AMC should resolve this problem very eagerly as it is a very serious issue for AMC, as one of the leading mining companies.
Where to Implement: The Colombian armies should be assigned to keep the locomotives and other means of transportations of minerals safe.
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Problem 7: Not providing accommodation to the workers to stay overnight. Solution: The workers hours should have been fixed in two shifts which would minimize the number of working hours at night and thus lessen the need of accommodation at night. Justification: Half of the workers should work for 8 hours a day from 8.00 AM in the morning to 4.00 PM in the afternoon. Then the next group will start working from 4.00 PM to 12.00 AM in the night. The number of the second group would be less because the group was divided before. And also, it would take less accommodation as well. So it will be easier for the company to provide minimum accommodation.
How to implement this: AMC can take initiatives by providing accommodation facilities to the workers. If they are not able to provide adequate space to their employees, they can easily divide their employees by offering shifting duties. And they need to give accommodation facility only to the second shifted workers whose works start from evening. And also, it would take less accommodation as well. So it will be easier for the company to provide minimum accommodation.
When to implement: It has to execute its corrective measures as early as possible, so that workers can work safely. And for this reason employees work productivity will increase and they will be satisfied with the job conditions.
Problem 8: Union mine workers (UMW) strikes to stop the business of AMC for not ensuring security. Solution: Providing good accommodation facilities to the night shift workers and also providing overall security to the employees could be a solution. Justification: As the company was not providing any place to the workers to stay overnight and the workers were killed by the groups, it was an emergency step which could have been taken at that time. Workers security is the main thing if you want to involve your workers in work. The strike could be eliminated if the company provided them accommodation. So we suggest the confirmation of it.
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How to implement this: AMC can take preventive actions by providing their workers accommodation facility and giving their employees a safety and secure transport service, so that the workers can reach their home safe and sound. By doing these company can rebuilt its trust to Union Mine Workers and this will help the company run their business further.
When to implement: It has to implement its elucidation as quickly as possible, so that the consequences cant spread.
Problem 9: Downsizing the US workers without informing them was one of the problems. Solution: Minimizing the salary of the US workers without firing could be a solution on a temporary basis. Justification: Every action has a reason behind it. As the company AMC had closed nine mines and attempted to shift to Colombia, it had to reduce some of its employees to minimize the cost. But the workers had suffered a lot for this decision. It is a companys responsibility to inform the workers before firing them. Because the workers need to find another job for them and it will take much time too.
We suggest if the company wouldnt have downsized the workers and minimized the salary from all of them then that could be a better decision for both company and the workers as well. The boss could motivate the workers by making this rule of giving salary temporary. Later on he could increment the salary and gave bonus which would definitely work as an aid for the workers.
How to implement: Implementation of this plan needs arranged meetings with the US employees, listening to their grievances, explaining the companys situation to them and trying to come to a mutually satisfactory conclusion.
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When to implement: This thing is necessary to be implemented as soon as possible after the shifting to the Colombian mines so that the US workers do not get agitated and do something harmful for the company.
Where to implement: The implementation of these measures would take place in AMCs American coal mine units and offices.
Problem10: The salary of the employees in US was high because of the high work pressures and demand of the workers. Solution: We advocate that the company could curtail the salary by diminishing the work loads, pressure and restriction which could stand as a solution for the company to trim down the cost.
Justification: They used to get $3000 monthly which is pretty high. The reason was the strict restrictions among the workers. The workers had to work long hours of hard jobs and automatically the salary went up.
How to implement: Salaries can be cut down by reducing the workloads of the workers, imposing less firm restrictions and offering non-monitory benefits to them such as transportation, food etc.
When to implement: AMC started its operations in its Colombian mines in 1994. By the year 2000, almost all of its mines were shifted from USA. So many workers had been fired. This led to resentment in the minds of the American workers. It was an issue of AMCs goodwill too. So AMC should have taken the necessary steps between this period of time in order not to upset its local workers.
Where to implement: The implementation of these measures would take place in AMCs American coal mines.
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Problem 11: Risk of the Colombian government adopting the concept of Hugo Chavez (the president of Venezuela) in nationalizing all the privatized companies and removing all the multinational companies. Solution: Participating in CSR (Corporate Social Responsibility) activities can be one solution for not being converted into a nationalized company. Justification: Participating in CSR (Corporate Social Responsibility) activities could convince the people and the government that AMC does care about the local people and the society and it would be more beneficial for Colombians to have a multinational company such as AMC in their country.
How to implement: AMC taking part in social activities which would make the people and government believe that it is a welfare organization and would not do anything harmful for them. Such activities might include providing education to the employees children, ensuring safe vicinity in the mine areas, providing reliefs to general people in times of natural disasters, working with the government to combat terrorism etc.
When to implement: These measures should be implemented right after Chavezs declaration of the new legislation so as to create a positive perception in the minds of the people and government.
Where to implement: These actions need to be implemented not only in the Colombian mine fields and neighboring areas, but also in different parts of the country so that a message of wide presence and sense of responsibility can be conveyed to the people and government.
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About The American Mining Company

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About The American Mining Company

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American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American mining company was one of the largest privately owned

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

Convince Colombian Government

American Mining Company

American Mining Company

American Mining Company

American Mining Company

Build a house near mine site

Ensure Worker s safety

American Mining Company

American Mining Company

American Mining Company

American Mining Company

When to implement: This should be implemented as soon as possible.

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

American Mining Company

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