Allied-Signal: Managing the Hazardous Waste Liability Risk

Case Solution

Richard H.K. Vietor, Edward Prewitt
Harvard Business School ()

AlliedSignal, Inc., one of the oldest chemical companies in the world and now a diversified conglomerate, is responsible for the remediation costs of former hazardous waste sites. These costs are substantial: Reserves increased to nearly $ 500 million in 1991. To prevent further closures and anticipate liability laws based on the American model in Europe, environmental managers are reviewing the company’s three-part environmental control policy. . With extensive programs for landfill inspection, compliance audits, and hazardous waste reduction, managers seek to optimize costs and liability through a balance between waste disposal and waste reduction. The case speaks of the formation of the control policy in response to laws such as the RCTA, Superfund and the Inventory of Toxic Emissions. It examines in detail the implementation of the three hazardous waste programs and analyzes the experiences of two plants. Exhibits include internal control documents.

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