1. The accidents in the workplace of the organizations operating in the oil and gas industry can be fatal to the live of the business along with the lives of the employees. So, the organizations like BP, Chevron and Exxon are putting a lot of effort in making their workplaces safe from various accidents in order to establish a robust business model along with healthy and safe workplace for the employees. There are a number of common factors in the major accidents that have happened in the past, in the workplaces of organizations operating in the oil and gas industry. These factors include flaws in the safety culture implemented in the workplace, lack of focus on the safety of the workplace, non-compliance to the organizational guidelines, flawed communication and inadequate learning from past events. All of these reasons are responsible for causing an accident in the oil and gas industry along with causing some significantly adverse effects on the brand image of the organization. So, the management of these organizations are putting a lot of effort in maintaining the integrity and compliance to the organizational procedures and guidelines in the workplace (Raufflet, 2014).
The non-compliance to the organizational guidelines and policies is one of the major causes of the ethical risks of the organizations. The ethical risks in the workplace of the organizations operating in the oil and gas industry include various types of corporate and personal risks, which also include fraudulent transactions. These ethical risks create the probability of allowing unethical activities, which in turn affect the overall safety of the organization, which might lead to accidents in the workplace. So, the major reason for the management of ethical risks in the organizations operating in the oil and gas industry is to stop and avoid the unethical activities that can lead to accidents (Varfolomeev, 2014).
Other than the obvious effect, the ethical risk management also has a lot of other benefits as mentioned here. The management of the ethical risks improves the leadership in the organization along with its focus on the safety of the workplace, which in turn leads to the reduction of accidents. The management of the ethical risks leads to the enhancement of the organizational policies along with the removal of various organizational issues. This in turn leads to the reduction of accidents due to strict and effective business policies. The management of the ethical risks also allows the management of the organization to have better regulatory governance and compliance to the organizational policies in the workplace, which in turn keeps the employees conscious and aware of the possibilities of major accidents in the workplace of the organization. This in turn reduces the number of accidents in the workplace of the organization (Jordan, 2013).
2. There are a number of risks that BP, Exxon and the fracking industry continue to face in providing an adequate supply of energy. One of these risks is related to the environment of the workplace. The business activities of BP, Exxon and the fracking industry can have multiple negative impacts on the environment including water pollution, seismic shifts, global warming and negative effects on the ecosystems. These environmental impacts of the organizations lead to oppositions from various activists and environmental groups, which is a significant risk for the business processes of the organizations (Hystad, 2014). Environmental groups and activists with political influence can cause operational and financial risks to the organization as well. Along with the environmental groups and activists, the customers can also be affected by the environmental impacts of the organization. The buying behavior of the customers can change drastically if there are any major accidents related to the organizations.
Safety and health concerns of the employees in the workplace of the organization is another risk to the business operations of these organization. If there are any adverse effects to the health and safety of the employees even after implementing efficient business policies and guidelines, then the employees become demotivated to work in the organization. A small accident in the workplace can also cause big disruptions in the business activities of the organization due to the involvement of the labor union and legal authorities (Ferrell, 2015).
Another risk that these organizations face is the increasing pressure from the society to maintain a positive public image. The public image of the organizations allows the organizations to have a positive environment for the business activities. A weakened public image costs a lot to the business of these organizations (Keil, 2014).
Possibility of leaks is always there in the business processes of these organization. None of the business processes or policies can guarantee 100% safety and security in terms of leaks and accidents. This in turn is a continuous risk that these organizations face all the time. Political pressure is another risk that these organizations face continuously in order to maintain minimal environment impact along with complying to various regulations and legislations. The financial risks faced by these organizations include the increasing costs of operations and maintenance of compliance (Crane, 2016).
3. The presence of ethical leadership in the workplace has a number of effects and impacts on the overall business model of the organization. The effective leadership in the organization allows the organizational culture and policies to be transparent. This in turn allows all the employees to be clear about the safety and health policies in the workplace along with other organizational guidelines. This allows the employees to be aware and conscious about all the possible risks to the business processes of the organization, which in turn helps the management to effectively manage the risks (Yukl, 2013).
The ethical leadership in the organization also allows the business strategies and guidelines to focus a lot on the health and safety of the employees along with the business processes. This in turn allows the management of the organization to have effective strategies for the management of the risks (Berkowitz, 2016).
The ethical leadership also allows efficient complaint and grievance processes to be implemented in the workplace, which allows the employees to easily report any unusual or harmful activities in the workplace. This in turn helps in the management of the business risks.
The ethical leadership in the organization also ensures the implementation of effective and efficient ethical guidelines along with code of conduct. These in turn allow the employee to avoid unethical activities in the workplace, which generally lead to accidents. This allows the risks to be reduced in the workplace of the organizations operating in the oil and gas industry (Cotton, 2017).
The presence of ethical leadership also allows the employees of the organizations to be involved in the key business decision making processes. This in turn allows the employees to feel motivated and confident about their employment with the organizations. This in turn allows the employees to have high performance in their corresponding business activities, which in turn reduced the risks to the business processes of the organization (Avolio, 2016).
The information provided in the case study reveals the importance of ethical leadership, business ethics and organizational policies in the management of the business risks along with the risks faced by the business processes of the organizations operating in the oil and gas industry. As per the analysis of the case study, ethical leadership in the workplace of these organizations allows the employees to have a safe and healthy workplace. This in turn allows the business risks to very decreased. The ethical leadership in the workplace of these organizations also allows the employees to have high performance and quality of the corresponding business processes. All the risks faced by the business processes of the organizations in the oil and gas industry are tackled efficiently by efficient risk management along with ethical leadership. This in turn allows the organization to yield a lot more value from the business processes which in turn leads to the success of the organization. The case study provided an effective way of analyzing the role of these factors required for efficient risk management along with the business processes without any accident in the oil and gas industry (Brown, 2014).
Avolio, B.J., Keng-Highberger, F.T., Schaubroeck, J., Trevino, L.K. and Kozlowski, S.W., 2016, January. How Follower Attributes Affect Ratings of Ethical and Transformational Leadership. In Academy of Management Proceedings (Vol. 2016, No. 1, p. 16854). Academy of Management.
Berkowitz, H., Bucheli, M. and Dumez, H., 2016. Collectively designing CSR through meta-organizations: A case study of the oil and gas industry. Journal of Business Ethics, pp.1-17.
Brown, M.E. and Treviño, L.K., 2014. Do role models matter? An investigation of role modeling as an antecedent of perceived ethical leadership. Journal of Business Ethics, 122(4), pp.587-598.
Cotton, M., 2017. Fair fracking? Ethics and environmental justice in United Kingdom shale gas policy and planning. Local Environment, 22(2), pp.185-202.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.
Hystad, S.W., Bartone, P.T. and Eid, J., 2014. Positive organizational behavior and safety in the offshore oil industry: Exploring the determinants of positive safety climate. The journal of positive psychology, 9(1), pp.42-53.
Jordan, J., Brown, M.E., Treviño, L.K. and Finkelstein, S., 2013. Someone to look up to: Executive–follower ethical reasoning and perceptions of ethical leadership. Journal of Management, 39(3), pp.660-683.
Keil, K., 2014. The Arctic: A new region of conflict? The case of oil and gas. Cooperation and Conflict, 49(2), pp.162-190.
Raufflet, E., Cruz, L.B. and Bres, L., 2014. An assessment of corporate social responsibility practices in the mining and oil and gas industries. Journal of Cleaner production, 84, pp.256-270.
Varfolomeev, E., Marin, O., Bykov, D., Karasev, O., Velikanova, N., Vetchinkina, E., Edelkina, A. and Thurner, T., 2014. Connecting strategy, environmental and social indicators: a study of oil and gas producers.
Yukl, G., Mahsud, R., Hassan, S. and Prussia, G.E., 2013. An improved measure of ethical leadership. Journal of Leadership & Organizational Studies, 20(1), pp.38-48.
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