Ethical Dilemma Facing Bp Commerce Essay

In general, moralss is a construct of covering with values concerned to people ‘s behaviour when it comes to the rightness and inappropriateness of their action, and the effects come after the actions. ( Florida International University, 2011 ) Wiley ( 1995, cited in Nicholas, Samuel & A ; Anthony 1999, p.22 ) states that moralss is related with moral responsibility, duty and societal justness where it reflects both the character of the person and the concern house. It is to make with a codification of behavior which clarifies one ‘s duty towards others, even in front of what is required by jurisprudence. ( Harris 1995, cited in Nicholas, Samuel & A ; Anthony 1999, p.22 )

While concern moral principle is a set of moral rules whereby one ‘s actions are judged for do a determination within the values of the organisation. ( Charles Holme, 2008 )

Bing ethical in concern is of import as it can profit organisation in term of efficiency in day-to-day operation, employee committedness, investor willingness to intrust financess, client trust and satisfaction, and fiscal public presentation as good. ( Ferrell, Fraedrich, Ferrell, 2011 )

1.1: Background of Company

The British Petroleum Company plc ( BP ) is the largest corporation in United Kingdom which ranked top five largest oil companies and is the innovator of the Middle Eastern oil industry. BP foremost discovered oil in Iran before World War I and today become involved in all facet from geographic expedition to selling in oil industry. ( Britannic House, n.d )

BP operates in more than 80 states and has about 21800 service Stationss worldwide. Its beginning can be traced back to 1909 when the subordinate of Burmah Oil Company, named as Anglo-Persian Oil Company was established to work oil finds in Iran. In 1935, it changed its name became the Anglo-Iranian Oil Company and changed once more to became British Petroleum in 1954. The company started to spread out its concern in 1935 beyond the Middle East to Alaska and became the first company to strike oil in the North Sea in 1965. In 1978, BP acquired the bulk control of Standard Oil of Ohio and merged with Amoco in 1998. Two old ages subsequently, it acquired ARCO and Burmah Castrol. ( BP, 2012 )

Over the old ages, BP has been required to responsible on several major environmental and safety incidents such as the Texas City refinery detonation in 2005 and Deepwater Horizon oil spill in 2010 which was said as the universe ‘s largest inadvertent escape of oil into Marine Waterss.

2.0: Ethical Dilemma Facing BP

In March 2005, Texas City Refinery ( BPTCR ) owned by BP was exploded doing 15 contractors were killed and another 180 workers were injured. Furthermore, 43,000 people in the nearby country were advised to remain indoors after the incidents. ( CSB, 2007 ) Harmonizing to the U.S. Chemical Safety and Hazard Investigation Board ( CBS ) ( 2007 ) , the incident was caused by the escape of chemical gases which result from the fanatic cost-cutting on safety, inordinate production force per unit areas, old equipment and exhausted employees

CBS reported that the organisational and safety lacks at all phases of the corporations were the chief factor that caused the catastrophe to go on. The detonation happened due to the broken gage and escaping of volatile bluess caused by overruning of flammable hydrocarbons from an octane processing tower, led to the detonation ignited by the blowback of a nearby truck.

The unethical patterns of BP when covering with safety direction in Texas City Refinery can be identified through the three elements in stakeholder analysis that is stockholders, employees and authorities.

2.1- Stockholders

Since 1999, Texas City refinery had been runing under tighten budget after BP took over from Amoco. ( Abrahm Lustgarten, 2010 ) The study issued by CBS ( 2007 ) has mentioned that the corporate ignored the safety of their employees and contractors as warning marks were present for several old ages before the detonation by the workers including the works ‘s director.

Besides, the harm of a piece of equipment called “ blow-down membranophone ” which use to catch overruning fuel had make BP to see to replacing them out in 2002 but the action could non able to transport out because of the $ 150,000 cost. The direction of BP said that the capital outgo is really tight and decided to bank the cost in nest eggs instead than to replace the equipment. ( Abrahm Lustgarten, 2010 )

Due to the carelessness of BP toward the safety direction, the corporate has confronting a immense fiscal loss after the detonation in Texas City Refinery which estimated cost about $ 1.5 million. ( CBS, 2007 ) Furthermore, the incident besides caused harm on the repute and image of the company in the industry.

2.2: Employees

Several old ages before the detonation, the employees of BP had clearly warned the direction that they were deficiency of equipment and resources to forestall a fatal detonation. ( Abrahm Lustgarten, 2010 ) Furthermore, claimed from a rig worker that BP knew that equipment was misfunctioning hebdomads before the runaway. ( Mount Royal University, 2010 )

However, BP tends to disregard the warning marks that could hold stopped the calamity from happening. BP ‘s action put their employees in the critical phase and eventually caused the catastrophe happened where 15 contractors were killed and another 180 workers were injured in the incident. In add-on, Steven Greenhouse ( 2009 ) states that BP was working employees whereby some had worked 12 hours per twenty-four hours for the 29 consecutive yearss.

2.3- Communities

Explosion in Texas City caused the decease and hurt on BP ‘s employees every bit good as other persons. Criticisms critic BP for puts the net incomes before safety. They criticized BP for passing 1000000s of dollars to “ green rinsing ” their image to public. ( Fernando & A ; Purkayastha, 2007 ) Yet, they were unable to guarantee the basic operational safety issues. Besides, the incident makes the life of occupants environing the refinery suffering and inconvenient due to the flight of chemical gas from the refinery. BP has polluted the air quality and caused people to expose to harmful gases which will impact their wellness.

Furthermore, the decease of the 15 workers and hurt of another 180 people in the incident had caused the unhappiness and concerns to victim ‘s households. BP is considered as the “ slayer ” and has to take all the duty.

3.0: Wayss to Dealt With Dilemmas

3.1- Stockholders

Explosion in Texas City has severely ruined the image of BP. Therefore, it is a must for BP to reconstruct it repute. The first measure been taken by BP is when its CEO, Lord Robert Browne ( Browne ) announced that he would vacate earlier by terminal of July 2007, alternatively of planned retirement in 2008. ( Petroleum News, 2007 )

Following, BP has invested more than $ 1 billion in order to upgrade its production and better its safety. Consequence from the incident, BP had implemented a plan called Future programme in twelvemonth 2006 which included upgrading, overhauling and installation of its safety direction system. Besides, a programme of major accident hazard ( MAR ) appraisals have been carried out to reexamine on its safety direction in order to cut down accidents by retracing the refinery and re-engineering the equipments. ( BP sustainability Report, 2006 )

3.2: Employees

.Result from the detonation, BP has appointed a new site director in May 2005 and has replaced the blow-down tonss. Besides, BP has removed all occupied dawdlers and put ining modern procedure control systems on major units which working to supervise the operation in the sites. Furthermore, BP enhanced its preparation programme toward employees and presenting reform care direction system. ( BP Sustainability Report, 2006 )

In add-on, BP started to affect contractors and brotherhood forces in safety direction where they can lend their concerns or sentiment through a contractor safety council and a contractor company leaders ‘ meeting. At the same clip, alternatively of sharing offices, many contractors have been allocated to the new Texas City office edifice and a new procedure has been implemented to supervise the activities undertaken in the refinery which aimed to measure contractors ‘ competences and the sum of preparation. ( BP Sustainability Report, 2006 )

3.3: Communities

Six month after the incident, BP have an understanding with the Occupational Safety and Health Administration ( OSHA ) to pay a $ 21.3 million mulct. In the understanding, BP promised to rectify the possible jeopardies in the refinery. ( Steven Greenhouse, 2009 ) However, BP was failed to make so over the four twelvemonth period and therefore OSHA issued a punishments cost $ 56.7 million to the corporate. In add-on, extra mulcts $ 30.7 million was issued to BP for the new indentified misdemeanors of safety control at the refinery. ( OSHA, 2012 )

On the other manus, The New York Times ( 2009 ) reported that BP has been charged for misdemeanor on Clean Air Act and been issued condemnable all right $ 50 million. Besides, BP paid more than $ 1.6 billion to settle more than 4000 civil claims in order to counterbalance victims. ( BP, 2012 )

3.4- Theory

The theory of Utilitarianism provides a clear position to BP ‘s practises. Crane and Matten ( 2007 ) defined the theory is morally right if it creates the greatest sum of felicity to the most. Therefore, BP could be argued that is non doing any inappropriateness when it adopt high hazard schemes that would convey bigger net incomes ; salvage safety outgo ; and work little minorities as it could profit most to the clients and stockholders. Consequence, they could bask increasing in investing and higher grosss. Therefore, BP can put more to bettering alternate energy beginnings to heighten its sustainability. In this state of affairs, all other quandaries such as development and accidents of employees, issue on environment and local communities, even calculated human deaths can be said as non a job. That is why Utilitarianism is besides known as a cost-benefit analysis to determination devising.

Arguably, some minor agony is acceptable if the intended purpose of a company is to make a sustainable environment. However, in most people point of position, it is unethical to destruct the environment and cause human deceases. This ‘Rule Utilitarianism ‘ against the rights of the employees. Therefore, to understand the aims of short-run operational determinations, ‘Act Utilitarianism ‘ position is more appropriate. In the position from this position, ‘calculated human deaths ‘ do non supply the greatest felicity where it shows that BP is unethical and ruthless to derive net incomes. BP is unethical as some of its determination cause agony and negative impacts to the employees, environment and local communities.

By using this theory, BP should non move egotistically to maximize net incomes by cut down the safety and see the employees or environment as factors of production. This is unethically and irresponsibly as they fail to see all stakeholders. Yet, they deliberately exploit many in order to increase efficiency and save budgets on safety.

4.0: Organizational Best Practices and Valuess

BP biggest job is its carelessness on worker ‘s on the job status. It does non hold proper safety direction and consistent monitoring on their refinery and employees status. In term of employee ‘s safety, Coca-Cola Company act good in protecting their employees ‘ wellness and safety where it monitors employees ‘ wellness and safety public presentation invariably to guarantee uninterrupted betterment. They work on identify safety issues in the workplace continually to cut down the possibility of accident happen. Coca-cola Company has wellness and safety employee representatives in all its operation sites which assisting to supervise and rede on occupational wellness and safety programmes. ( Coca-Cola, 2012 )

Besides that, Coco Cola Company do non work its employees like BP. It cares about employees by provide a benefits included health care, dental attention, child care and extra vacation and insurance. In order to assist employees accomplish a goof work-life balance, Coca-Cola Great gives inaugural to employees for taking a longer weekend during summer where they can work a four and a half twenty-four hours per hebdomad during the three summer months of the twelvemonth. Besides, employees were given the right to bespeak for flexible working times, reduced on the job hours and extended leave policies. ( Coca-Cola, 2012 )

4.1- Theory

From the above patterns implemented by Coco Cola Company toward its employees, it can be said that it is running its operation by using feminist moralss. Crane and Matten ( 2007 ) demonstrates feminist moral principle is an attack that emphasized empathy, harmonious and healthy societal relationship where it care about others and turning away to against above abstract rules. And evidently, BP is non adopted this ethic wholly. In the refinery, BP has their codification of behavior for operating in the operation. BP can non said to disregard their employees ‘ safety at all. However, the chief job of BP is it did non systematically bettering its safety direction harmonizing to the alterations in the refinery. Besides, BP did non often look intoing and upgrading the equipments in the refinery to guarantee them working good. It did non take this as an of import measure to forestall any accident happen in the refinery.

On the other manus, BP did non see about the effect of its determination toward the local communities. Alternatively, they merely think of their benefits to non put ining new equipment in the refinery. BP as a company which produced oil and gases should say to understand good the harmful of the chemical or gases to the public if there is any escape happens. Unfortunately, BP did non truly take serious on what would go on to the nearer occupants and communities if accident happens.

A portion of that, BP did non emphasized much on caring their employees since there is a study mentioned that it was working its employees. Unlikely to Coco Cola Company which wishes their workers to accomplish good work life balance, BP seem to be cruel to it workers when it required workers to work overtime continually for one month clip.

All patterns of BP on safety direction toward its employees is against the feminist ethic as it do non truly creates harmonious working topographic point and caring it employee. Alternatively, BP put it employees in high hazard and do them enduring in both mentally and physically.

5.0: Decision

Today, competitory environment in planetary phase makes directors must fight in doing determination, sing the rightness and inappropriateness in cultural and legal context. ( ( Akhter, 2004 ; Dyer and Chu, 2000 ; Myers, 1999 ) . Ethical motives is of import in concern as it is engage with many parties and could impact on each and other. Charles Holme ( 2008 ) demonstrated that concern moralss about person ‘s personal behavior and criterions, and is of import to back up the concern scheme. Different single can do different determination on same instances. It is depend on the person ‘s moral position and consideration. It is hard to judge on person ‘s behavior in concern industry. In personal side, it is consider right if determination brand could convey net incomes to the concern. But in moral side, it might right or might wrong, depend on the moral context and thought of others.

In some state of affairs, there would necessitate some scarification to do determination in order to catch the greatest benefits. In BP instance, it is non incorrect at all when it refuse to replace the old equipment due to the high budget as it need to see for its ain involvement and their stockholders as good. Rather than put in the upgrading of equipment which would convey back net income after a long clip, why non they invest in someplace else that would convey them net income is shorter clip and bigger benefits? Of class, it is unethical patterns since it risks the safety of workers. However, it is nil incorrect with their behavior as they make determination based on their concluding end – maximise their net income.

Therefore, one ‘s is unable to judge either is ethical or unethical by utilizing Torahs or moral contexts as it is a subjective sentiment.