Discuss about the Corporate Responsibility and Management.
In the present business environment, maintenance of ethics has emerged as one of the most significant factors. Utilization of proper corporate social responsibility and ethics can actually help organizations to develop strong reputation that eventually will create positive impact on the on the businesses. British Petroleum (BP) is regarded as one of the largest integrated energy organizations. The organization includes activities like exploring, refining, producing, distributing and marketing oil and gas products in the world market. BP also has focuses on the renewable energy sources like solar and wind power. BP produced almost 4 million natural oil and crude oil every day. The company has it presence in more than 100 countries (www.bp.com, 2016).
In the essay, the focus will be on the issues of oil spill in the Gulf of Mexico that has created huge amount of impact on the maintenance of ethics in the operational process of the British Petroleum. In 2010, BP has experienced an explosion in the drilling platform in the Gulf Mexico area. This has caused the biggest oil spill catastrophe in the history of the oil and gas industry. The essay will focus on all the major ethical factors that the incident has induced BP to consider for the effective operational process.
As per the article by Brennan (2013) BP oil spill explosion has caused death of the 11 working employee and 17 employee has suffered serious injury. Furthermore, around 150 thousand barrels of crude oil are wasted in the sea on a daily basis for the period of 5 months. As a result, the wasted oil has covered around 68 thousand square miles. Investigation has identified many problems in the explosion rig that has made major contribution to the accident. It has been identified that BP has continued the installation process of the drilling rig with utilization of cheaper design that has increased the amount of risk in the operational process (Michel et al., 2013). Thus, it raises questions over the appropriateness of the operational process of the British Petroleum.
In the present business context, environmental protection has come up as one of the prime factors for maintaining ethics in the businesses. However, the disaster has created major impact on the environment of Mexico. Particularly, tourism and seafood industry has been affected heavily by this disaster. The oil spill scandal of BP has killed fish. Therefore, it increases the prices of seafood in the Mexican market (Ritchie et al., 2013). The oil spill scandal has also increases the job insecurity of the workers. As a result, oil spill in the Gulf of Mexico has raised questions over the ethical behavior of the organization.
It has been identified that BP’s cost saving strategy has made huge amount of contribution in the oil spill catastrophe in the Gulf Mexico. However, the incident has created ethical dilemma for the BP between meeting criteria of the safety in terms of providing huge number of facilities at the platform rig and the saving costs by taking unnecessary risks in the operational process (Kleinnijenhuis et al., 2013). Since, utilization of cost effective strategy can actually enhance the profit level of the organization. On the other hand, it increases the health safety issues for the workers, environmental issue and legal issues that BP has to face in order to utilize its operational process in an appropriate manner. Thus, corporate social responsibility and ethical behavior of the organization will have to be utilized in such a way so that it can able to cover both the factors in an effective manner. However, catastrophe in the oil spill in the Gulf of Mexico has highlighted that BP has unable to include all the factors in their CSR responsibility effectively (Bond, 2013). As a result, BP has able to get the opportunity of implementing risky technique for performing the operational process.
As per the Utilitarian theory, organizational actions should be based on the moral rules. It defines whether an action is morally relevant or not. Thus, it highlighted the fact that BP has to put more focus on the environmental and health safety factor (Issacharoff & Rave, 2013). Thus, it actually affected the CSR maintenance of the organization. The Utilitarian theory also mentioned that organizations have to sacrifice some of their profit in order to gain larger future benefits. However, oil spill in the Gulf of Mexico highlighted that BP is not focusing too much on their ethical behavior of providing proper working atmosphere for the employees. On the other hand, individualistic business theory highlighted the fact that every organization only has to focus on making profit. In fact, the theory highlighted that organizations have to do whatever it takes in order to enhance the profit level as long as it is in the legal boundaries. In this oil spill case, it has been identified that mechanical failure at the rig has caused the accident. Therefore, it highlighted that BP has not done any illegal for the utilization of the operational process (Barrage, Chyn & Hastings, 2014). For that reason, individualistic business theory induces BP to maintain its present cost effective operational procedure. As per the Kantian theory, organizations have to respect people, make rational decision and make decision based on the goodwill. The above disaster highlighted the fact that BP has to focus on these factors in order to operate properly. Therefore, it does create question mark on the ethical maintenance procedure of the organization.
Thus, it is important for BP to include moral aspect in the business processes so that it can able to maintain its CSR responsibility in appropriate way. For instance, BP has to focus on the emission reduction program so that it can create positive impact on the environment as well. The demand for natural oil product is increasing every day (Horowitz, 2014). As a result, it is polluting the environment in a huge way. Thus, BP’s CSR maintenance will have to focus on the emission of greenhouse gases so that its oil exploration process cannot able to impact too much on the environmental condition. CSR responsibility of BP can initiate support policies that will focus on the efficiency of the production process so that it requires less energy. BP also has to participate on the international debates, which focuses on the climate change. This will help the organization to improve the knowledge about different factors so that the organization can able to maintain ethics in a proper way. BP also has to understand the fact that stakeholders are becoming more concern about the toxic emissions (Boopathy, Shields & Nunna, 2012). Therefore, BP’s ethical behavior has to ensure that all the rigs have the required amount of capability so that it can able to deal with the mechanical failure in a much more effective way. BP also has to invest more on the health and safety process of the workers in order to reduce the possibility of life risk at the workplace. For instance, BP has to focus on the construction standards of the drilling rigs. Since, a well-prepared structure will reduce the probability of such kind of oil spill catastrophe.
The above discussion highlighted that ethics play crucial role in the operational process of the organizations. The oil spill disaster in the Gulf of Mexico has also induces BP to make several changes on the operational processes so that it can reduce the possibility of such kind of disaster and also maintain the moral aspects of the business. BP has to focus on the maintenance of meeting all the criteria, as it will help the organization to develop a strong image in the world market.
Barrage, L., Chyn, E., & Hastings, J. (2014). Advertising, reputation, and environmental stewardship: Evidence from the bp oil spill (No. w19838). National Bureau of Economic Research.
Bond, D. (2013). Governing disaster: the political life of the environment during the BP oil spill. Cultural anthropology, 28(4), 694-715.
Boopathy, R., Shields, S., & Nunna, S. (2012). Biodegradation of crude oil from the BP oil spill in the marsh sediments of southeast Louisiana, USA.Applied biochemistry and biotechnology, 167(6), 1560-1568.
Brennan, L. C. (2013). Gulf Oil Spill. ABDO Publishing Company.
Horowitz, A. (2014). The BP oil spill and the end of empire, Louisiana.Southern Cultures, 20(3), 6-23.
Issacharoff, S., & Rave, D. T. (2013). The BP Oil Spill Settlement and the Paradox of Public Litigation.
Kleinnijenhuis, J., Schultz, F., Utz, S., & Oegema, D. (2013). The mediating role of the news in the BP oil spill crisis 2010: How US news is influenced by public relations and in turn influences public awareness, foreign news, and the share price. Communication Research, 0093650213510940.
Michel, J., Owens, E. H., Zengel, S., Graham, A., Nixon, Z., Allard, T., ... & Rutherford, N. (2013). Extent and degree of shoreline oiling: Deepwater Horizon oil spill, Gulf of Mexico, USA. PloS one, 8(6), e65087.
Ritchie, B. W., Crotts, J. C., Zehrer, A., & Volsky, G. T. (2013). Understanding the effects of a tourism crisis: the impact of the BP oil spill on regional lodging demand. Journal of Travel Research, 0047287513482775.
www.bp.com (2016). Retrieved 16 August 2016, from https://www.bp.com/en_us/bp-us/commitment-to...gulf.../deepwater-horizon-accident.html
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