Frequently leaders of organizations are challenged with making difficult decisions. It appears that British Petroleum’s (BP) decision making was focused on cost cutting, and not the employee’s safety, gulf residents, or the environment. The Deepwater Horizon catastrophe is a result of the systematic failure within a major corporation to be ethically and socially responsible to all stakeholders involved.
The priority was corporate profits. A series of cost cutting measures ultimately unveiled a corporate giant that chose to neglect its ethical and social responsibility. The BP case gave light to what many companies are challenged with. It is the ability to balance financial and ethical commitments. BP’s commitment at that time was clearly to their financial stakeholders. BP’s culture and behavior showed that there were no other stakeholders to be considered. The fact that the cost cutting measures was their only concern, begs the question, what was their thought as it pertains to its ethical responsibility to society? Realistically, can companies be ethically responsible when profits are what turn the lights on and off? If achieving ever-increasing profit is the basic purpose and principle of business and economic profitability is the primary and overriding factor in strategic business decisions, ethical behavior and business behavior eventually must conflict. (Duska, 2002)
Ultimately BP is accountable for the series of negligence, and unethical behavior that resulted in an environmental nightmare. One environmentalist wondered how BP can call itself a “green company” when its environmental record is so poor. (Jennings, 2012, p. 416) According to all accounts, it wasn't just BP, but contractors Transocean, and Hall...
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It's difficult not to be cynical about how “big business” treats the subject of ethics in today's world. In many corporations, where the only important value is the bottom line, most executives merely give lip service to living and operating their corporations ethically.
In the Macondo blowout case, (Deepwater Horizon Oil Spill), leaders within Transocean and British Petroleum (BP) processed a “by any means necessary” mentality as well. The company cultures promoted doing whatever was possible to enhance profits. This oil leak and explosion, resulted in the loss of 11 lives, destroyed beaches and wetlands, and killed multiple wildlife species. The most telling piece of information throughout this case is that the oil spill and explosion could ...
One major business incident happened in April 2010 shocked the world and caused an “earthquake” of British Petroleum (BP)’s brand image. The Deepwater Horizon oil rig owned by BP in the Golf of Mexico exploded, leading to a disastrous oil spill in this marine area. The maritime disaster caused by the explosion became the largest one in the history of the U.S. and brought huge financial and reputations losses to BP. What is worse, sealing the oil well took over five months. From the explosion of the completion of the sealing (announced by BP), over 780 million gallons of crude oil spilled into the sea, causing irreversible pollution and damage to the bio-system in this area and the world (Lofgren 2013). BP’s response, however, is considered as a crisis communication failure (Heller 2012) by some people and others believe BP’s response was effective (Mejri & de Wolf 2013).
The Deepwater Horizon was a dynamically positioned drilling rig which owned by Transocean and it was chartered to BP from 2008. On April 20, 2010, the offshore oil rig exploded, the explosion was the largest accidental marine oil spill in the history of the petroleum industry as the oil leaked 205.8 million gallons of crude oil into Mexico Gulf Coast and BP spent 86 days to cap the well, stopping the oil flow into Mexico Gulf for the first time. This report covered some facts about the BP oil spill scandal and its influence to stakeholders. The article also includes the analysis of oil spill from accounting, legal, ethical and corporate governance aspects. Furthermore, a comparison between The BP oil spill and Enron scandal is for analyze the similarities and differences of these two cases, and explore any improvement and change on legislation, accounting standards, code of conduct etc. The purpose of this report is reveal to directors what did BP do wrong in the past and what aspect the firm could do better in the future.
Weeks, Jennifer. "BP's Financial Pain From Spill Is Just Beginning." CQ Researcher 21.29 (2011): 688. MAS Ultra - School Edition. Web. 17 Feb. 2014.
Shell’s decision to pump for oil, although legal and in development for decades, had major negative repercussions on the local environment. Some, such as Norma Bowie, argue that because they were operating legally, Shell’s obligation to protect the environment isn’t very strong. Others, such as Arnold and Bustos, assert consumers/ stakeholders cannot be held responsible for policing the operating companies if the government doesn’t give them that sort of power, and therefore Shell had an obligation to protect the stakeholders (Arnold et al, 2012). The arguments must be weighed by any company that has the potential to augment the environment in which they will be operating. In another industry, chemical companies are regulated well in the U.S. to keep them from contaminating the local water supply, but in countries without these regulations is it ethically responsible of the company not to damage the ecosystems surrounding them, although they are not legally bound to do so. Another major learning point is what the involvement of major companies in politics can do to an economy and its people. Had Shell utilized their power in the region to perhaps mediate between the activists and Nigerian government perhaps the outcome of the trial could have been different. Given the unstable situation, politically and socially in Nigeria, Shell’s decision to work quietly with international leaders “behind the scenes” and offer on their local manager, Brian Anderson, to issue a public statement on the necessity for a “fair trial, medical treatment, and lawyers of their own choosing” (Paine and Moldoveanu, 2009), may have been the best option available at that time and can serve as a point of learning for other companies operating in such volatile, unstable, and complex international situations. This is also a tough concept to argue
On March 24 1989, the tanker Exxon Valdez runs aground in Prince Williams sound, Alaska. This was a tragic accident that the company deeply regrets. It all began when the Valdez was traveling towards California when it hit a coral reef. As a result, of this accident, significant quantities of oil began to seep into the waters. According to most, the action to contain the spill was slow. As a result, the media blamed Exxon for not responding fast enough to the crises. Many of the wildlife including birds, fish and other mammals were kill...
This is not the first time that BP is at fault. They have had criminal convictions in places such as Endicott Bay in Alaska, Texas City and Prudhoe Bay. Jeanne Pascal was a part of the Environmental Protection Agency (EPA) and was assigned to watch over BP. Pascal was watching over companies such as BP that were facing debarment. Under her watch, BP was charged with four federal crimes. Over the past twelve years, Pascal’s seen BP patterns as misconducts. She attempted to warn the government about BP’s safety and environmental issues that would most likely lead to another disaster. While she was watching over BP, the company misinformed and misled her about things that resulted to the felonies that they have committed. Sensing that some things were not right about the company, she presented a case of their unsafe working environments.
On April 20, 2010, BP’S deep water horizon drill exploded in Gulf of Mexico and this oil spill killed 11 innocent workers and caused severe damage to the environment. “It was the worst environmental disaster in US history and BP lost his reputation worldwide”. The oil spill created negative attention from media and public. BP’s “Gulf of Mexico Restoration” website uses these three strategies to try to repair its reputation: pictures of its new employees to show its dedication to creating more jobs and ensuring the safety in the company, images of emergency services and clean-up programs to show its quick responses and efforts to prevent more damages, and clear language about its legal proceedings and investigations to show its commitment to the affected people and environment.
BP was founded in 1908 under the name Anglo-Persian Oil Company. They changed their name to British Petroleum in 1954 and merged with Amoco in 1998. (BP Public Website, 2010) “The Texas City Refinery is BP’s largest and most complex oil refinery... It was owned and operated by Amoco prior to the merger of BP and Amoco.” (Michael P. Broadribb, 2006) Throughout their history, there have been a number of accidents that have been caused by negligence and disregard of safety precautions. Unfortunately many lives have been cut short or seriously injured as a result. My research will focus on the 2005 Texas City Oil Refinery Explosion. I will attempt to look into the ethical implications that surrounded this disaster before and after the event and suggest what BP could have done to prevent the incident then and in the future.
Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the
On April 20, 2010, the Deepwater Horizon oil rig, located in the Gulf of Mexico exploded killing 11 workers and injuring 17. The oil rig sank a day-and-a-half later. The spill was referred to as the Deepwater Horizon oil spill, BP oil spill, Gulf of Mexico oil spill, and BP oil disaster. It was first said that little oil had actually leaked into the ocean but a little over a month later the estimate was 12,000-19,000 barrels of crude oil being leaked per day. Many attempts were made to stop the leak but all failed until they capped the leak on July 15, 2010, and on September 19 the federal government declared the well “effectively dead.” In the three months that it took to finally put a stop the leak, 4.9 million barrels of oil were released into the ocean. The spill caused considerable damage to marine and wildlife habitats and the Gulf’s fishing and tourism industries. The White House energy advisor, Carol Browner, goes as far to say that the Deepwater oil spill is the “worst environmental disaster the US has faced.”
Winston A, 2010, Five Lessons from the BP Oil Spill, Harvard Business Review, accessed 1 April 2014,
On a Monday afternoon, A couple of friends and I drove about forty-five minutes to El Dorado to see a movie. A movie in which we didn’t know anything about. None of us had even seen the trailer. I sent my friend a link to the movies that were showing at the cinema in El Dorado, and she had chosen Deepwater Horizon solely on the fact she liked the actors that had been cast for the movie. A few of these actors included Mark Wahlberg and Kate Hudson. Deepwater Horizon, as I came to find out on the car ride there, is about the most devastating oil spill in United States history. Since this event occurred only roughly six years ago, I recognized it after my friend called it the BP oil spill. Growing up in south Arkansas, I know many people that work on oil rigs so the spill was something that came close to home. The movie portrays the events leading up to the rig explosion and the aftermath concerning the people aboard the rig.
The term “ethical business” is seen, by many people, as an oxymoron. This is because a business’s main objective is to make as much money as possible. Making the most money possible, however, can often lead to unethical actions. Companies like Enron, WorldCom, and Satyam have been the posterchildren for how corporations’ greed lead to unethical practices. In recent times however, companies have been accused of being unethical based on, not how they manage their finances, but on how they treat the society that they operate in. People have started to realize that the damage companies have been doing to the world around them is more impactful and far worse than any financial fraud that these companies might be engaging in. Events like the BP oil