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.
In the same context where BP business ethics and social responsibility was being questioned, Chris MacDonald, Ph.D., is an educator, speaker, and consultant in the realm of business ethics, tries to explain the concept of just how “socially responsible ” a business can be can be. As suggested in his article, BP and Corporate Social Responsibility, he explains that “BP is in the business of finding oil, refining it, and selling the gas (and ) interacts with a huge range of individuals and organizations, and those interactions bring with them ethical obligations. Basic ethical obligations in such a business would include things like:
a) providing customers with the product they’re expecting (rather than one adulterated with water, for example),
b) dealing honestly with suppliers,
c) ensuring reasonable levels of workplace health and safety,
d) making an honest effort to build long-term share value,
e) complying with environmental laws and industry best practices, and so on.
(Chris MacDonald, 2010)
In the article, the author tries to explain that most of the obligations mentioned above are identifiable to individuals such as customers, employees, shareholders and so on, and that there is nothing really “social” about these obligations. Here, the author then goes ahead to elaborate exactly what makes the oil spill a matter of social responsibility, and explains that the fact that the risks of the companys’ deep-water drilling operations are they responsibility of the society at large. He explains that the negative effects of the spill on the people not economically involved with the company are involved here as they bear the risks taken by the companys’ operations there.
And due to the fact that all production processes involve externalities as suggested by the author, the question of corporate social responsibility has something to do with the extent to which a company is responsible for those effects, and their obligation not just to avoid social harms or risks, but to contribute socially beyond making a product people value.
As the author states, “From a CSR point of view, then, the question with regard to BP is whether the risks taken were reasonable. Most of us would say “no.” But then most of us still want plentiful cheap gas. Thus the BP oil spill provides an excellent way to illustrate the way we should understand the scope of the term “corporate social responsibility,” and how to keep that term narrow enough for it to retain some real meaning.” (Chris MacDonald, 2010)
This point makes a lot of sense whereby the customers want to buy the products at the lowest possible cost, but complain then the company refrains from some aspects of their operations so as to cut costs, provide the cheapest price which is their main source of revenue, as well as make a profit which is BPs’ sole responsibility as a business. Therefore the author is basically urging the customers and community at large to try and look at the issue from a business point of view, and then maybe they will understand how the business works towards achieving its various goals.
Recommendation:
So, I relation to the incidents that have occurred to BP, and the manner that the company has dealt with them, certain recommendations can be made based on some theories.
Descriptive Ethical Theory:
This is a theory that aims to describe how ethical decisions are actually made in a business and what influences the process and outcomes of those decisions. This means that BP should be more descriptive and transparent about their values in regard to ethics, and elaborate why they practice such values and from what point of view they are looking at it from. This enables critics and the general public to understand how BPs’ ethics were developed thus maybe they will not be too critical in the future.
It can be suggested that in their elaboration of values and other ethical issues that the company may want to address, BP should mention and try to make its readers understand that they are a business and that their main aim is to make profits. Once the interested parties are aware of this fact, then the company can show that in that respect, they are willing to go an extra mile and chip in to keep the community safe and as clean as possible though every product has a byproduct which needs to be deposited somewhere. If BP can show a good channel through which it can handle a crisis and/or technical hazard, then it should not be criticized as much as they have. All this criticism came along because the company was hiding facts from the public and once these facts got out; they were in trouble and tried to do some serious damage control.
Cognitive Moral Development:
This is another recommendation that BP could use in its damage control and in the development of its ethnical decision making process. CMD can be referred to as the different levels of reasoning that an individual can apply to ethnical issues and problems. This is a very vital element in their damage control programs as it recognizes that everyone is different thus the opposes group show be identified and damage control done on them accordingly. If they are dealing with professional, they damage control board should be free to use business terms and regulations, but when dealing with third parties whose concern is their environment and have little to no business literacy, simple but effective explanations can be used to bring them to understand the approach that the business is taking.
Conclusion:
Therefore, as can be seen through this research, companies do come to a point where their reputation and values are questioned and criticized, and they should be ready to deal with them in the utmost efficiency and effectiveness.
BP is an organization that is involved in extracting products that are of use by their customers worldwide and handles vast operations in many different locations all over the globe. Therefore they should structure their values and ethnical practices according to these regions and not try to come up with a universal code of conduct.
Also, it can noted that, since businesses have to sole purpose of making a profit, and this fact has been supported by several theories such as Milton’s and a few others mentioned above, they tend to carry out certain actions due to the circumstances that they are facing. As can be seen with BP which is involved in a non-price competitive industry, they try to minimize costs so as to maximize profits in ways that are not understood by ordinary people and therefore they should take steps in order to clarify this with the professions as well as the ordinary people that are affected by any occurrence that threatens to damage the environment around them.
Last but not least, BP needs to include the recommended theories in their damage control as well as response to a crisis so as to be able to save their reputation and keep their image which is vital in a non-price competitive industry, so as to maintain their customer threshold and so on.
REFERENCE:
BP Company Profile, By Oilcareers ltd, 2010
Website: http://www.oilcareers.com/content/coprofile/BP.asp
(Viewed on 3rd November 2010)
The BP Brand, by BP p.l.c, 1999
Website: http://www.bp.com/sectiongenericarticle.do?categoryId=9028275&contentId=7051490
(Viewed on 3rd November 2010)
BP: Putting Profits Before Safety?; Bp: maen or green?, 2006
Website: http://www.icmrindia.org/casestudies/catalogue/Business%20Ethics/BECG071.htm
(Viewed on 3rd November 2010)
Corporate Social Responsibility: Was Milton Friedman Right?, By Brandon Miller, 2009
Website: http://www.associatedcontent.com/article/2445056/corporate_social_responsibility_was.html?cat=3
(Viewed on 3rd November 2010)
The Social Responsibility of Business is to Increase its Profits by Milton Friedman, 1970
Website: http://www.ethicsinbusiness.net/case-studies/the-social-responsibility-of-business-is-to-increase-its-profits/
(Viewed on 3rd November 2010)
Now we know why BP hasn’t apologized, By Lauren Bloom, 2010
Website: http://www.thebusinessethicsblog.com/now-we-know-why-bp-hasnt-apologized
(Viewed on 3rd November 2010)
