Ethics in general can basically be described as knowing the difference between right and wrong and choosing to do what is right. Therefore, in the business world, the term business ethics can be used to describe the actions of individuals within an organization, as well as the organization as a whole. In any organization, the culture sets standards for determining the difference between good and bad decision making and behavior amongst the subordinates.
However, business ethics is also affiliated with the general culture of the community in which the people running the business are raised from. However, there is a difference between business and individual ethics, and the therefore business ethics in a nutshell can be defined as a list of written and unwritten codes of principles and values that preside over decisions and actions within a company. This research aims at looking into this aspect of business ethics with reference to a particular company, so as to evaluate how that particular organization conducts it ethical issues.
In addition, theories will be used to gauge the actions taken by this particular organization, with the aim of trying to understand how and why they chose to undertake this particular decision or choice. British Petroleum (BP) : Business process: The British Petroleum (BP), is a company that is involved in the exploration, production, refining, trading and distribution of energy, on a global scale. The company has a workforce of nearly 100,000 employees and operates with business activities and customers in more than 100 countries across six continents.
On a day-to-day transaction, the company is also said to serve millions of customers around the world. The company works towards meeting its customers’ needs for heat, light and mobility, and also strives to achieve these needs by producing energy that is affordable, secure and doesn’t damage the environment. However, challenges do occur and as will be seen in this research, the company has had a number of incidents t that has threatened its ethical as well as reputation in its industry and in various communities that it is operating in.
On the structural front, the BP brand appears on production platforms, refineries, ships and corporate offices the world over, as well as on solar products, wind farms, research facilities and at retail service stations. As stated, “Our brand is summed up by the phrase ‘beyond petroleum’. BP recognises that meeting the energy challenges of today and tomorrow requires both traditional hydrocarbons and a growing range of alternatives. We are at the forefront of delivering diverse, material and real solutions to meet the world’s needs for more and secure, cleaner and affordable energy.
Named after the Greek sun god, our logo – the Helios, symbolises all these characteristics. It represents diverse forms of energy. Perhaps most important to BP is human energy: the spirit, determination and pride our people bring to everything we do. If BP fuels the world, it is our people who fuel BP. ” (BP p. l. s, 1999) “Different people, common goals – that sums up our group. All over the world we look for people who share our ambition to be competitive, successful and a force for good. We are continually looking for talented and committed people to help us shape the face of energy for the future.
” (BP, oilcareers ltd, 2010) In terms of business ethics, the BP is said to be committed to equality and diversity, and welcomes applications from people who meet their selection criteria, regardless of sex, race or disability. In addition, it stated that “The idea of being ‘a force for good’ underlines all our activities worldwide. So the way we work is guided by values – integrity, honest dealing, treating everyone with respect and dignity, striving for mutual advantage, transparency and contributing to human progress.
And these values are more than just words: they are enshrined in practical policies and standards that govern areas of our activity, including health, safety, security, environment, ethical conduct and business relationships. ” (BP, oilcareers ltd, 2010) This goes to elaborate the ethical standards that BP values and aims to upkeep and maintain. “Different people, common goals – that sums up our group. All over the world we look for people who share our ambition to be competitive, successful and a force for good.
We are continually looking for talented and committed people to help us shape the face of energy for the future. ” (BP, oilcareers ltd, 2010) BP Ethical Issues: Like any other business that exists today, BP has had its own share of challenges and problems that have threatened its reputation and even its establishment in the several areas that it is operating in, around the world, and this has brought the company to practice its business ethical issues in order to uphold its value.
As can be seen through an article titled BP: Putting Profits Before Safety? , “… On March 23, 2005, an explosion at BP’s Texas City refinery resulted in one of the most serious workplace accidents in the US. An investigation by The US Chemical Safety and Hazard Investigation Board (CSB) uncovered many safety lapses at the Texas City refinery. BP was accused of endangering its workers by compromising on process safety due to its high emphasis on cost cutting. The Texas accident was not the only safety lapse at BP.
In March 2006, a large oil spill was discovered due to a corroded pipeline at BP’s Prudhoe Bay refinery in Alaska, USA. ” (BP: Putting Profits Before Safety? , 2006) As can be seen BP put profits before safety in this case and critics tended to view it in a negative way. This brings up a theory that argues on the issue of the social responsibilities of a business. As stated by Brandon Miller in this article titled Corporate Social Responsibility:
Was Milton Friedman Right? , that There is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud. ” ~Milton Friedman~ US economist (1912-2006) This theory opposes my critics and ideologies who claim that a business is supposed to serve the community and be “human” I respect to the environment as well as to it s employs too.
As can be seen here, Milton argues on several aspects of a business’s responsibility and suggests that a business sole responsibility is to makes profits. This argument is based on the fact that “The discussions of the “social responsibility ties of business” are notable for their analytical looseness and lack of rigor. What does it mean to say that “business” has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but “business” as a whole cannot be said to have responsibilities, even in this vague sense.
The first step toward clarity in examining the doctrine of the social responsibility of business is to ask precisely what it implies for whom. ” (Milton Friedman, 1970) Therefore in regard to Milton theory and the article which further states that BP was being criticized and questioned about its business ethics, this move made by BP was not a humanitarian one but one that was aimed to increase its reputation and popularity, which would in turn bring profits in the long-run.
Therefore this move was more of a business/profits endeavor than a social responsibility. BP was also being criticized for spending millions of dollars to project a ‘green’ and ‘environment-friendly’ image, while failing to take care of basic operational safety issues. Also in another event, an article tried to explain an incident that involved the British Petroleum company when an oil spill occurred near the shores in the United States. As stated by the author Lauren Bloom in her article titled, Now we know why BP hasn’t apologized, she states that “…….
I’ve wondered why British Petroleum’s CEO, Tony Hayward, has skipped the crucial words “we’re sorry” when discussing the oil leak that’s pouring into the Gulf of Mexico after one of his company’s offshore drilling platforms exploded. It seemed odd because Hayward had already said that BP would pay for claims associated with the disaster, essentially admitting that his company had at least some legal liability for cleanup costs. Once that admission had been made there seemed to be little reason for BP not to make a full apology.
Hayward’s a Brit, after all – apologies are far more common in English business culture than they are here, and British executives usually deliver them well. ” (Lauren Bloom, 2010) Here, the author tries to evaluate why BP Company apologized for the oil leak incident and offered to chip in to cheap the mess, yet they rejected taking full responsibility of the incident. During the hearing that took place in the US, the British Petroleum’s CEO, Tony Hayward admitted on behalf of the company of having some responsibility for the spill.
This partial agreement to being responsible for the mess was a business ethics strategical move to not taking full responsibility of the occurrence so as to reduce the amount of money that they were to spend in cleaning up the mess. As the author suggests, a full apology from BP would have given the United States law makers an opportunity to put the entire fault on the company thus making them fully responsible for this mess which meant they had to finance the whole clean-up process. This would greatly increase their costs and affected their profits which as Milton argures are the sole and main responsibility of a business.
So as can be seen in this incident, the partial agreement by BP to take partial fault for the incident, gave them an opportunity to limit the costs thus forcing the United States to split the costs between them and the other two companies; Transocean and Haliburton, thus making it cheaper for BP, and enabling the other companies to practice their business ethics are well. This ethical move by BP was also geared towards removing the spot light from them thus lessening their chances of having a bad reputation as the other companies involved are safe from such harm.