Hoof Nuclear (HN) is a nuclear power station in Ayland, a large European country.
The HN plant is operated by
Hoof Power Company (HPC), which in turn is wholly owned by the government of
Ayland. Initially opened in the late 1950s, the power station grew in subsequent
decades by the addition of several other facilities on the same site.
HN now has the ability to generate 5% of Ayland’s entire electricity demand and is
one of the largest nuclear stations in Europe. At each stage of its development from
the 1950s to the present day, development on the site was welcomed by the relevant
local government authorities, by the businesses that have supported it, by the trade
union that represents the majority of employees (called Forward Together or FT for
short) and also by the national Ayland government. A nuclear reprocessing facility
was added in the 1980s. This is a valuable source of overseas income as nuclear
power producers in many other parts of the world send material by sea to HN to be
reprocessed. This includes nuclear producers in several developing countries that rely
on the cheaper reprocessed fuel (compared to ‘virgin’ fuel) that HN produces.
HPC is loss-making and receives a substantial subsidy each year from the government
of Ayland. HPC has proven itself uneconomic but is deemed politically and
environmentally necessary as far as the government is concerned.
The government of Ayland has reluctantly accepted that large subsidies to HPC will
be necessary for many years but considers nuclear power to be a vital component of
its energy portfolio (along with other energy sources such as oil, gas, coal, renewables
and hydroelectric) and also as a key part of its ‘clean’ energy strategy. Unlike energy
from fossil fuels (such as coal, gas and oil), nuclear power generates a negligible
amount of polluting greenhouse gas. HN also provides much needed employment in
an otherwise deprived part of the country. The HN power station underpins and
dominates the economy of its local area and local government authorities say that the
HN plant is vital to the regional economy.
Since it opened, however, the HN power station has been controversial. Whilst being
welcomed by those who benefit from it in terms of jobs, trade, reprocessing capacity
and energy, a coalition has gradually built up against it comprising those skeptical
about the safety and environmental impact of nuclear power. Some neighbouring
countries believe themselves to be vulnerable to radioactive contamination from the
HN plant. In particular, two countries, both of whom say their concerns about HN
arise because of their geographical positions, are vocal opponents. They say that their
geographical proximity forced them to be concerned as they are affected by the
location of the HN plant which was not of their choosing.
The government of Beeland, whose capital city is 70 km across the sea from HN
(which is situated on the coast), has consistently opposed HN and has frequently
asked the government of Ayland to close HN down. The Beeland government claims
that not only does ‘low-level’ emission from the site already contaminate the waters
separating the two countries but it also claims that any future major nuclear ‘incident’
would have serious implications for the citizens of Beeland. There is some scientific
support for this view although opinion is divided over whether Beeland is being
irrational in its general opposition to HN.
The government of Ceeland is also a vocal opponent of HN. Ceeland is located to the
north of Beeland and approximately 500 km away from Ayland. Some nuclear
scientists have said that with such a large stretch of water between the HN plant and
Ceeland, even a much-feared incident would be unlikely to seriously impact on
Ceeland. Some commentators have gone further and said that Ceeland’s concerns are
unfounded and ‘borne of ignorance’. FT, the trade union for HN employees, issued a
statement saying that Ceeland had no reason to fear HN and that its fears were
HN’s other vocal and persistent opponent is No Nuclear Now (NNN), a wellorganised
and well-funded campaigning group. Describing itself on its website as
‘passionate about the environment’, it describes HN’s social and environmental
footprint as ‘very negative’. NNN has often pointed to an environmentally important
colony of rare seals living near the HN plant. It says that the seals are dependent on a
local natural ecosystem around the plant and are unable to move, arguing that the
animals are at significant risk from low-level contamination and would have ‘no
chance’ of survival if a more serious radioactive leak ever occurred. NNN points to
such a leak that occurred in the 1970s, saying that such a leak proves that HN has a
poor safety record and that a leak could easily recur.
Each time an objection to the HN power station is raised, FT, the trade union, robustly
defends the HN site in the media, and argues for further investment, based on the need
to protect the jobs at the site. Furthermore, the radiation leak in the 1970s led to FT
uniting with the HPC board to argue against those stakeholders that wanted to use the
leak as a reason to close the HN site. The combination of union and HPC management
was able to counter the arguments of those asking for closure.
HN places a great deal of emphasis on its risk management and often publicises the
fact that it conducts continual risk assessments and is in full compliance with all
relevant regulatory frameworks. Similarly, FT recently pointed out that HN has had
an ‘impeccable’ safety record since the incident in the 1970s and says on its website
that it is ‘proud’ that its members are involved in ensuring that the company is
continually in full compliance with all of the regulatory requirements placed upon it.
The board of HPC, led by Chairman Paul Gog, is under continual pressure from the
government of Ayland to minimize the amount of government subsidy. Each year, the
government places challenging targets on the HPC board requiring stringent cost
controls at the HN power station. In seeking to reduce maintenance costs on the
expiry of a prior maintenance contract last year, the board awarded the new contract
to an overseas company that brought its own workers in from abroad rather than
employing local people. The previous contract company was outraged to have lost the
contract and the move also triggered an angry response from the local workforce and
from FT, the representative trade union.
FT said that it was deplorable that HPC had awarded the contract to an overseas
company when a domestic company in Ayland could have been awarded the work.
The union convenor, Kate Allujah, said that especially in the nuclear industry where
safety was so important, domestic workers were ‘more reliable’ than foreign workers
who were brought in purely on the basis of cost and in whose countries safety
standards in similar industries might not be so stringent.
HPC said that it had done nothing illegal as the foreign workers were allowed to work
in Ayland under international legal treaties. Furthermore, it argued that pressure by
FT to raise wages over recent years had created, with the government’s subsidy
targets, the cost pressure to re-tender the maintenance contract.
On HN’s 50th anniversary last year, NNN published what it called a ‘risk assessment’
for the HN power station. It said it had calculated the probabilities (P) and impacts (I)
of three prominent risks.
Risk of major radioactive leak over the next 10 years: P = 10%, I = 20
Risk of nuclear explosion over the next 50 years: P = 20%, I = 100
Risk of major terrorist attack over next 10 years: P = 10%, I = 80
Impacts were on an arbitrary scale of 1–100 where 100 was defined by NNN as ‘total
nuclear annihilation of the area and thousands of deaths’.
The governments of Beeland and Ceeland seized upon the report, saying that it proved
that HN is a genuine threat to their security and should be immediately closed and
decommissioned. HN’s risk manager, Keith Wan, vigorously disagreed with this
assessment saying that the probabilities and the impacts were ‘ridiculous’, massively
overstated and intended to unnecessarily alarm people. HN’s public relations office
was also angry about it and said it would issue a rebuttal statement.
Imagine you are the consultant of Hoof Nuclear (HN) and you are to write a
Management Report to Paul Gog, chairman of the
Your report should:
• Have a table of contents, introduction, main body, & conclusion. (No executive
summary is needed).
• Please include a bibliography if you use any references.
• Your case study should cover the following:
1. Distinguish between voluntary and involuntary stakeholders, identifying
both types of stakeholders in Hoof Nuclear. Assess the claims of THREE
of the involuntary ‘affected’ stakeholders identified.
2. The trade union, Forward Together, has had a long relationship with HN and
represents not only the main workforce but also the employees of the
maintenance company replaced by the foreign workers. Explain the roles of
employee representatives such as trade unions in corporate governance
and critically evaluate, from the perspective of HPC’s board, the
contribution of Forward Together in the governance of HPC.
3. Explain what an agency relationship is and examine the board of HPC’s
current agency relationship and objectives. Briefly explain how these
would differ if HPC was a company with private shareholders.
4. As a part of HPC’s public relations effort, it has been proposed that a response
statement should be prepared for the company’s website to help address the
major challenge to their reputation. Draft this statement to explain what a
social and environmental ‘footprint’ is and construct the argument that
HN’s overall social and environmental footprint is positive.
• Assessment of your assignment will take into account:
- Relevance of your report to the case.
- Clarity of expression.
- Logical planning and sequence.
- Comprehensive coverage.
• Also, marks will be allocated for presenting your report professionally including:
- The use of logical headings and sub headings that are numbered and also
referenced through a table of contents.
- The overall presentation, including correct grammar, spelling and
Total 1750words , You are required to consult and fully reference a MINIMUM of 5 references from 3 different sources. Use the APA Referencing system to acknowledge your sources of information.