Ethics in the Workplace
Business ethical standards vary according to the culture and corporate laws that regulate corporate management and operations in various countries. For example, receiving gifts maybe abhorred and termed as corruption in the United States of America though it is a widely practiced and accepted behavior in Japan (Donaldson, 1996). However, there is a need to consolidate and harmonize the varying extremes of the various cultures and regulations practiced worldwide to create a universally accepted set of ethical standards for businesses.
I believe that it is possible to follow ethical rules that are accepted internationally and applied by all companies globally. The universal code of ethics can be achieved by balancing the extreme ethical practices in use globally. Ethics should be clearly distinguished to differentiate between ethics which may be condoned due to cultural differences and ethics which are completely wrong and should be outlawed. According to Donaldson (1996), the universal set of ethics should be based on internationally-accepted principles, such as respect for fundamental human values, rights, and freedoms; respect and safeguarding of local traditions and cultures; and emphasis of specific context when deciding on whether a code of ethics is wrong or different.
Through the use of the above principles, I believe that a universal code of ethics can be created to regulate businesses globally. Besides, collective mechanisms and structures should be created to deal with any conflicts regarding ethics globally.
I believe that corporations have a responsibility to positively influence and shape ethics in the countries in which they operate. Engaging ethically and positively influencing ethics is part of a company’s corporate social responsibility (Lawrence & Weber, 2017). Corporations should not involve themselves in intolerable practices such as the use of child labor and the dumping of hazardous materials near residential places. Instead, they should promote the health and wellbeing of the communities.
Corporations have an inherent responsibility to safeguard and promote the best interests of the society in which they operate because most of its customers and employees hail from the regions and societies in which the businesses are located. Therefore, engaging in untoward ethical practices put not only the firms’ employees but also their customers at risk and this, in the long run, is calamitous to the companies’ success. Moreover, for companies to meet their objectives and goals, they have to build trust among the customers and establish brand loyalty (Lawrence & Weber, 2017). Engaging in unethical business practices and conduct such as bribery and violation of basic human rights is repugnant to establishing a loyal customer base that is fundamental to business success.
I will focus on the unethical practices carried out by British Petroleum (now B.P.) during their 2010 Macondo oil well project in the Gulf of Mexico. Due to British Petroleum’s flouting of numerous domestic and international codes of ethics that regulate offshore oil exploration the Macondo oil well blew out in flames killing several workers and spilling millions of barrels of oil into the Gulf of Mexico.
Section 1. Introduction
On April 20, 2010, a large British Petroleum-licensed oil drilling rig, Deepwater Horizon, blew up in the Gulf of Mexico. Out of the 126 workers onboard the rig, eleven died while the others sustained injuries. The rig, valued at $560 million, sank in the Gulf of Mexico after two days of a ferocious fire fueled by more than seven hundred thousand gallons of oil on board the rig at the time of the explosion. The Macondo oil well, which was being explored by the Deepwater Horizon oil rig, spilled more than fifty thousand barrels of oil per day into the gulf because it was not sealed before the accident. This resulted in over two hundred-five million gallons of oil being spilled into the Gulf of Mexico before the well was sealed on July 15, 2010 (Ingersoll, Locke, & Reavis, 2012). The environmental impact of the spillage was unprecedented with the oil almost obliterating the coasts of Louisiana and Florida. Moreover, aquatic life was killed and the marshy seabed of the Gulf of Mexico made the clean-up process almost impossible.
The Macondo disaster sparked national and international criticism and the company British Petroleum was blamed for the catastrophe. According to Cornwall (2015) British Petroleum played the victim card and pushed the blame to its external contractors: Transocean that leased the Deepwater Horizon rig to British Petroleum and was in charge of its maintenance; Anadarko Petroleum Corporation that owned a 25 percent share in the Macondo well; Halliburton Corporation, which was in charge of cement related decisions and cementing of the well; and Schlumberg Inc., which had been hired to perform a cement bond log on the well if needed. Numerous ethical issues of concern were found to be at the root of the Macondo well explosion. The findings by the requisite taskforces indicated that British Petroleum did not follow numerous international standards required during offshore oil exploration processes.
First, the company failed to comply with basic international and American standards and laws on safety practices that regulate oil exploration and production. In September 2009, British Petroleum conducted a safety audit on the Deepwater Horizon rig and realized that it was in urgent need of maintenance. The rig required more than three hundred and fifty repairs and had not been to dry-dock for wholesome maintenance for over nine years (Ingersoll et.al, 2012). Besides, the Drilling Chairs, the oversight computers that controlled the rig’s drilling technology, were faulty and would frequently freeze. On several occasions, the three computers controlling the Drilling Chairs would freeze rendering the drill completely out of control. This issue was raised numerous times by the engineers on board the rig but was never rectified. The Deepwater Horizon rig was eventually employed at the Macondo well by British Petroleum without maintenance. Furthermore, the blowout preventer that was responsible for triggering an alarm system in case of an anomaly in the rigging process was faulty and had therefore been turned off to prevent false alarms from disrupting the workers’ sleep (Ingersoll et.al, 2012). British Petroleum continued with the use of the rig in spite of its urgent need for repairs.
The decisions British Petroleum took to seal the Macondo oil well after the initial exploration was also not in line with the ethical standards required of any offshore oil exploration company. The enterprise made decisions based on their economic and urgency benefits than on their safety aspects. British Petroleum engineers had recommended liner casing of the Macondo oil well as it provided four barriers made of cement and numerous seals to cap the well. However, the management, through Brian Morel, an engineer in charge of offshore oil wells drilling at British Petroleum, decided to go with a long string casing option to cap the well stating that the long string casing option would save the firm a lot of time and money (Ingersoll et.al, 2012). In reality, through cheap and faster to put in place, the long string casing option was highly risky as it relied on only one barrier to seal the well.
Second, British Petroleum did not conduct a thorough clean-up process of the mess it had created in the Gulf of Mexico. The company engaged in a public relations exercise aimed at saving face in light of its stocks steadily declining in value in the aftermath of the spill. For example, the company invested heavily in several T.V. commercials that emphasized its dedication to the cleaning up process (Grayson, 2018). British Petroleum came up with a clean-up project that incorporated several volunteer groups. On June 6 the same year, the corporation announced that it had come up with a mechanism to collect more than ten thousand gallons of oil per day from the Gulf of Mexico. This statement was proved to be a lie aimed at misleading the public when President Obama’s administration declared that the well was still leaking about 40,000 gallons of oil into the Gulf of Mexico (Grayson, 2018). The company shored up its dividend payments by over ten billion dollars to retain its shareholders, who were keen on offloading the company’s stocks and shares. This further diverted the company’s resources from the clean-up process. In the aftermath of the disaster, British Petroleum had failed to comply with the requisite code of ethics required in containing the environmental disaster it had created.
The employees of British Petroleum and the community were affected by the disaster, which was largely caused by negligence, and were not properly compensated by the company. British Petroleum offered money to the claimants, who waived their rights to sue, to avoid a class lawsuit from those affected by the disaster. Nevertheless, the money was far less compared to what the class lawsuit sought for the victims. Additionally, numerous investors felt cheated when British Petroleum stated in their public statements that the oil leakages were at a maximum of five thousand barrels a day when the company’s internal estimates held that the figure was almost ten times higher (Davies, 2016). The investors sued the company and British Petroleum settled the claims for one hundred seventy-five million dollars.
Section 2: Rationalize
Ethical reasoning is based on three principles of utility, rights, and justice. Below are the ethics of the issues involved in the Macondo oil well disaster using the three principles.
Utility ethics is concerned with the complete good that can be derived from action or decisions made by an organization, and the corporation in question failed to satisfy the mentioned characteristic of the theory. Additionally, it is derived from the concept of utilitarianism and id also known as utilitarian reasoning. Utility ethics analyzes the cost of actions and decisions, the benefits to be accrued out of the actions and decisions when implemented, and then opts for the best option (Kolb, 2007). British Petroleum’s actions are bereft of utilitarian ethical decision-making. The company made decisions based on cost-cutting and urgency at the expense of safety, which is key in offshore oil rigging. British Petroleum, through its board of directors, CEO, and project managers overseeing the Macondo oil well rigging, overlooked the benefits that could accrue not only for the company but also the staff if it had opted for safety over cost and urgency (Cornwall, 2015). The enterprise disregarded governmental regulations and international standards on safety practices in their operation and management of the rigging of the Macondo oil well. As such, the firm went against the utility concept.
British Petroleum, in its decision making and actions, did not take into consideration the rights of not only its workers but also the environmental rights of the Gulf of Mexico and its surroundings. The rights approach is a moral decision-making process that is concerned with whether a group or a person is entitled to receive his or their share respectively (Kolb, 2007). Rights ethical decision-making also deals with whether an individual is entitled to be treated in a specific manner. Therefore, the concept of the right is concerned with an organization making rational decisions that protect and safeguard the rights of individuals and groups related to the company. British Petroleum did not consider rights in its decision-making process as evidenced in the manner in which it treated its investors who sought information on the extent of the oil leak at the Gulf of Mexico (Davies, 2016). The corporation provided these stakeholders with watered-down analysis reports aimed at covering the extent of the disaster thus misled them. Besides, British Petroleum short-changed the people who were affected by the Macondo oil well disaster by compensating them with meager amounts compared to what a class lawsuit would have awarded the claimants. Consequently, the organization did not act ethically in the perspective of this approach to ethics.
Justice in ethical decision-making is concerned with the extent to which a decision or action is fair and in the case of British Petroleum, the concept was not observed. Justice in ethical reasoning is concerned with whether profits and losses are distributed equally (Kolb, 2007). British Petroleum spent more than ten billion dollars on solidifying its stakeholder’s base after the Macondo explosion at the expense of cleaning up the environmental mess its actions had caused in the Gulf of Mexico (Grayson, 2018). The company was much focused on raking in profits while compromising the environment and the numerous people who relied on the Gulf of Mexico for livelihood. Indeed, its actions were immoral as they were selfish and unfair to the victims of the incident.
The utility ethical method of reasoning is the most helpful in evaluating the lack of observance of ethics by British Petroleum during the Deepwater Horizon explosion at the Gulf of Mexico. The method allows the analysis and understanding of the issues that influenced British Petroleum’s decision-making during the operation at the Macondo well and why the disaster happened in the first place.
Section 3. Impacts
The unethical decisions made by British Petroleum and the resultant disaster have an impact not only on my family but also on myself. The direct impact is that the Deepwater the implications of the horizon explosion led to my family embracing the use of green energy that is clean and renewable. My family decided to start using green energy as it is sustainable and its production does not pollute the environment. The aftermath of the disaster impacted me directly as I became involved in the agitation and activism for a complete shift from the use of fossil fuels to green energy in the world. I even joined several movements aimed at agitating for the use of sustainable energy in the world.
Section 4. Impacts
The unethical decisions by British Petroleum that instigated the largest oil spill in the Gulf of Mexico in history have had numerous impacts. On the site community, the spill caused unprecedented environmental pollution and degradation. Additionally, the oil spill inconvenienced those people who drew their livelihood from the Gulf of Mexico as both the aquatic animal and plant life were nearly obliterated (Levy &Gopalakrishnan, 2010). The oil spill also exposed the nearby communities to health risks, such as cancer. From the corporate perspective, the disaster led to the reviewing and tightening of both domestic (American) and international ethical standards of oil and gas exploration and production. Besides blowing up of the Deepwater Horizon oil rig led to the upwards revision of insurance fees of rigs and offshore equipment as an oil rig had never blown up before (Freudenberg& Gramling, 2011). Consequently, the cost of oil exploration and production, more so in offshore oil wells, increased. These measures were aimed at preventing or reducing the chances of similar incidents from occurring.
Section 5: Impacts
The ethical issues raised by British Petroleum’s actions and decisions in the Macondo oil well project have international ramifications. In Canada, where British Petroleum has a branch, the community has embraced the need for green energy that is clean, cheap, and renewable. Most of the Canadian society has reduced the consumption of or abandoned in entirety the use of fossil fuels that pose significant threats to the environment. According to Lee& Blanchard (2011), the Canadian corporate society has adopted a sustainable corporate management strategy that emphasizes safety and observance of ethics and corporate social responsibility
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Davies, R. (2016, June 3). BP to pay $175m to investors over the Deepwater Horizon spill. Retrieved from https://www.theguardian.com/business/2016/jun/03/bp-compensate-investors-deepwater-horizon-oil-spill
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