11197 Industry Project Essay.

ExxonMobil formerly known as Exxon is an American multinational oil and gas corporation headquartered in Texas. It stands at number ninth in the list of world’s largest company by revenue and it is the fifth largest publicly traded company by market capitalization. In 2016 it was ranked at ninth position in the list of fortune global 2000 and it is considered as the largest oil producers in oil and gas industry. Their brand portfolios consist of four brands Esso, Exxon, Mobil and ExxonMobil (ExxonMobil, 2017). Presently it is headed by Darren W. Woods who was elected as a chairman on January 1, 2017.

In the year 2015, Insideclimate news and Los Angeles times initiated an investigation claiming that ExxonMobil knew about the climatic change due to global warming caused by releasing of greenhouse  gases such as CO2 in the environment about 50 years ago before it came into the knowledge of NASA scientist alerted everyone about the global warming impacts. In the year 1977, Exxon scientist James F. Black warned the authorities that carbon dioxide released from burning fossil fuels will affect increase the earth’s temperature by 2-4% and will have a significant impact on the rainfall and agricultural activities of some regions (Barrett, & Philips, 2016). Exxon backed up the funding of many research organizations that were involved in climate change denials and continue to mislead the public about the impact of the activities of Exxon on the climate change was not significant (Banerjee, Song, & Hasemyer, 2015).

Exxon claims to be an environmental friendly company but in the year 2007 they ran misleading advertising campaigns fooling the public by showing their fake concern on global warming and they are taking necessary steps in reducing their carbon footprints in the existing problem of global warming. The tagline for the campaign stated that CO2 is not a pollutant but it is their life.

In 2011, Exxon bought XTO energy that were regular in donating to AIDS organization but after the bought out the funding from Exxon has stopped coming. In the year 2013, Human rights campaign gave Exxon a negative score of 25 out of 100 due to their discriminating nature towards LGBT employees (Juhasz, 2013). They also showed deceitful campaigns during the Olympics which clearly made to cover up the crisis and issues faced by the company (Henn, 2106).

Unethical behavior does not only impact the business performance of an organization but also impact each and every groups and individual who have a direct interest in the organization’s business. There are three pillars of ethics. First one is individualism. Individualism in business sense refers to earn profits and maximize shareholders value but with long list of controversies including the infamous climate change denials, shareholders and investors are asking for a full report stating clearly about the impact of its business on environment (The guardian, 2016). The shareholders have also filed a lawsuit of misleading them from the facts of the climate change; due to this they have purchased the share prices at inflated prices (Haseymyer, 2016). The second pillar is utilitarianism which seeks to maximize the happiness of the organization in terms of achieving goals and objectives (Module 1). In order to achieve short term growth an objectives, they have done a lot of environmental damage and run misleading advertisements. They could have searched for a safe alternative that could have prevented environmental damage. The third pillar being Kantianism, it refers to the concept that impact of one’s action does not depend on the consequences but on the fulfillment of duty. But here Exxon has fulfilled their duty but in an unethical manner, leaving a deep impact on shareholder, stakeholders and environment.

When any unethical behavior comes into the limelight of the public, each and every individual working in the organization is held accountable for behaving unethically. Ethical behavior can only be encouraged and practiced in an organization when each and every individual is aware about their moral duties and have a clear idea that they are not answerable to the management or the organization but to the shareholder, investors and society who have direct interest in the organization. Exxon mobile already had their share of controversy of being an unethical organization who was involved in concealing relevant facts about climate change.

1. Rewards: There can be many reasons in behaving unethically in an organization. The reason behind indulging in unethical practices is to achieve personal growth and objectives because there is a competitive work culture existing in an organization, everyone wants to succeed. Behaving unethically is often seen as a shortcut to earn success but it does not last long. Reward and recognition can be seen as the most common workplace motivation to increase productivity of the employees but it can also been used to encourage ethical behavior in employees. If an individual gets punished to for doing something wrong, they should also be rewarded for behaving ethically (Mitchell, Schaeffer, & Mitchell). They should be rewarded by providing attractive financial incentives, bonuses and performance appraisals (Pavlo, 2014). Another effective way to build an ethical work culture is to create a profit sharing system in which every employee will be eligible to get a share based on their contributions (Module 3). As a result employees will not steal and work collectively and productively to earn profits. Reward and recognition schemes works well to increase the morale and productivity of the employees. It will not only satisfy the personal need of earning monetary incentives but also help an organization to achieve its objectives.
2. Authority: Authority in an organization is generally exercised either by the top level authority or a person in power. Managers and leaders are held responsible for managing the workplace behavior and productivity of the employee in order to achieve the desired goals and objectives of the organization (Randall, 2012). Managers and leaders are accountable for employee’s actions and decisions. It is their duty to create an ethical work climate either by cooperation or use the position of the power. Generally they exercise informal authority and seek cooperation from every employee to behave ethically but if they still don’t contribute in maintaining an ethical work environment, a leader has to use the authority. In times of crisis when individuals are reluctant in following principles it is very important that a leader or a manager should use the power of the position and compel each and every individual in the organization to follow ethical business practices. Generally this should be avoided and it should be the last choice for the managers because it will lower down the morale of employees and they will lose their trust in the managers and leaders (Trevino, & Brown, 2004).
3. Bureaucracy: Bureaucracy is a system in which authorities implement strongly follow rules and regulations. It is of two types. The first one being public sector bureaucracy who generally includes government organizations like environmental protection agencies. The intentional non-disclosure on the part of ExxonMobil was supported by research agencies who were involved in climate change denial so as to mislead public and to maintain a positive image of the business operations. In order to control such practices the interference of the government is very important. They should continuously review the activities of the business and analyze the implications of these activities on environment and public. An individual who is at the top of the authority should make strict rules and regulations to maintain ethical business environment in an organization. For example, hiring and recruiting people who are ethically aware about their responsibilities. Conducting timely audits to check the ethical culture in the organization.

Maintain an ethical culture within the organization will not only help to achieve business growth and objectives but also help the employees to be productive. It will also help to increase the profitability of the business and maximizes the shareholders’ value.

Creating an ethical business is very important. As it can been seen in the case of ExxonMobil, non-compliance of ethical standards will put the organization under the risk and directly question business organization’s work culture. Creating a strong ethical culture means encouraging ethical conduct in organization (Sandford, 2015).

1. Defining the culture- The definition of culture is broad and it is often viewed as different in the minds of the managers and employees. In order to implement a strong ethical culture it is very important that management listen to the point of view of the employees and stakeholders.
2. Establishing culture and value at all levels of the organization- A manager or a leader prepare an ethical code of conduct to be followed it may or may not be communicated well in large organization like ExxonMobil. It should be communicated well to each and every individual of the organization.
3. Defining the acceptable and non-acceptable behaviors- A manager or a leader should clearly convey what is ethically acceptable and what is not. By clearing the ethically accepted behavior, each and every individual will be able to analyze their actions based on the expectation of the company and act accordingly.
4. Handling employer resistance- In order to implement a strong ethical climate in an organization, it is very important that reason for the resistance on the part of employees should be identified and counseled and given a chance to accept the ethical norms.
5. Effective communication- The ethical policies should not be repeated again and again nor should be documented and given to the employees for reading but rather it should be communicated in an interactive manner such as showing videos or telling stories about the implications of following unethical business practices.
6. Leadership: In order to ensure effective implementation of ethical policies and continuously monitor ethical behavior of employees, a strong individual with great leadership qualities is very important. A strong leader can collectively ensure the implementation of ethical climate in the organization.
7. Workforce participation: In order to engage the workforce in ethical business practices, it is very important that they should be held accountable for their actions and also their suggestions should be included in creating a strong ethical culture.