Corrective actions are commitments to fix problems, either voluntarily or by regulatory agencies. Examples include environmental remediation, product recalls, and correcting financial records. Companies can promote their commitment to resolving problems, but corrective actions can be expensive and should be taken seriously.
A corrective action is a commitment to correct a problem or problem. Such actions may be conducted as part of a voluntary compliance program, with a person or company making changes to fix a problem without being specifically asked to do so. In other cases, people are ordered to fix a problem, usually by regulatory agencies, and are required to complete a corrective action within a set time frame in addition to facing penalties such as fines.
An example of a corrective action is environmental remediation. When the environment is polluted as a result of commercial activities or other events, it needs to be cleaned up for safety and well-being. If the culprit can be identified, he’ll be instructed to take corrective action or request financial assistance if he can’t pay for the cleanup. In other cases, government agencies step in to manage the cleanup.
Other corrective actions may include recalling defective products for repair or replacement, correcting inaccurate financial records, and changing company policies that are considered violations of law. The action is corrective in nature and is intended to resolve a problem that has been identified, either internally or externally. Sometimes, corrective actions are intended to prevent legal penalties, such as fines for not keeping accurate records.
When companies are active about a corrective action and engage in this activity to protect health and safety before regulators intervene, they can promote their business, using it to demonstrate that they care about customers and are committed to resolving problems. Public relations departments will try to put a positive spin on an event like a recall to avoid problems like customer dissatisfaction or eroding consumer confidence. When companies are late in addressing an issue and are ordered to do so by government regulators, they tend to downplay the event as they don’t want the general public to think ill of them.
Corrective actions can be triggered by problems identified by company personnel, consumer complaints, or problems identified by inspectors and regulators. They can be very expensive, and companies take steps to avoid them as much as possible, ranging from very stringent testing and quality control to prevent problems to strong liability action defenses to avoid being forced into costly product recalls. Individuals who purchase products subject to corrective action should be aware that the company has a responsibility to correct the problem and replace the product or provide compensation.
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