...BP's Ethical Culture and the 2010 Oil SPil The explosion of 2010 that occurred at the “Macondo” oil reservoir is to date the largest oil spill in history of the United States of America which resulted in 2.5 million gallons of crude oil to pour into the Gulf of Mexico daily. The death of thousands of marine animals, the damage done to the habitats, the lives of the 11 oil rig workers and many other consequences have been laid at the feet of BP. Such a crisis has raised further questions regarding BP’s ethical practices and has urged enquires into what aspects of BP’s ethical culture would have contributed to this disaster. BP (formerly known as British Petroleum) has had a long history of questionable ethical conduct. The Oil Spill in the Gulf of Mexico is not the first incident that BP has been involved in but it is certainly the largest. After some previous incidents, BP issued a code of conduct to all of its employees around the globe entitled “Our commitment to integrity”. While this was a valiant attempt by BP to change course and to instill a clear code of conduct within its employees, it did not take effect which is apparent in the Gulf of Mexico incident. Research into this most recent dilemma has shown that BP did not place safety and security as a priority in their drilling activities. There is evidence that BP have conducted this operation with the intent to save costs and expenditures. BP included numerous safety systems in the oil rig and have complied with...
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...BP OIL SPILL Under the Deepwater Horizon, an offshore drilling ring of British Petroleum (BP) caused an oil spill in the Gulf of Mexico. The incident occurred on April 20th 2010, where equipment failed and caused the explosion sinking the ring, and causing the death of 11 workers and more than 17 workers injured. The British based energy company also faced other problems at the site of the oil spill. More than 40 million gallons (estimated data) of oil spewed into the Gulf of Mexico. Oil spill in the Gulf of Mexico is a very serious threat for the wildlife as it causes water pollution. The oil spill effected many coastal areas in the US, like the Louisiana, Alabama, Mississippi and Florida. The oil spill disaster strongly damaged wildlife cycle in the Gulf of Mexico, and many species were thrown into extinction. Similarly, thousands of businesses were thrown into extinction. Many people has questioned the ethical decisions and core value system that BP used to cut corners with the accident; namely, the race to maximize profits at all costs. We are all aware that one of the main causes that let to the disaster were the result of bad decisions, in which a less expensive option (whether to run a test or use a particular kind casing pipe, for example) would save lives. There has been “zero dollars spent on research concerning how to handle oil spills for off-shore drilling by BP despite the company's NET profits - above and beyond all salaries, bonuses, or overhead costs- of...
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...released the 2005 results of their ethical study that covered ethics within some of the top oil companies in the world. The S&E ethical study was titled, “Ethics in the Oil Industry 2005” and upon it was BP at number three on the list. The only two oil companies ahead of BP were Royal Dutch Shell at number one and Exxon Mobil at number two. (Manage & Excellence, 2005) BP has displayed that they take ethics very seriously, at least enough to be recognized in the study. This will be our apex to the slippery slope in which the reputations of BP will start its decent. Also, in 2005, BP faced its worst disaster to date when one of BP’s refineries located in Texas City, Texas, exploded killing 15 people and injuring another 180 individuals and forced thousands of nearby residents to take up shelter within their homes. (Mauer & Tinsley, 2010) An Investigation lead by the U.S. Chemical Safety and Hazard Investigation Board found, “organizational and safety deficiencies at all levels of the BP corporation.” British Petroleum pleaded guilty to felony acts that violated the Clean Air Act and was fined $50 million while only receiving a three year probation sentence. The Occupational Health and Safety Administration (OSHA) issued the largest fine in OSHA history, $87 million, to BP after conducting their investigation. (Mauer & Tinsley, 2010) OSHA discovered over 270 violations that had been previously cited but not fixed and 439 new violations. Ethical problems can be seen with the 270 violations...
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...Ethical Issues Affecting Bp Operations Management Essay For a company to become a good corporate citizen it must follow the rules put in place by the government to where the company's operations activities are taking place, this also include protecting the environment and local people in the community from any harm from noise or water or air pollution. This report will explore more about the responsibilities BP have for making moral judgement and how their employees are involved and empowered. Also will have information on ethical issues affecting their operational activities and how do they ensure good relationship of employer and employee. Ending part there will be a summary about ethical code for oil industry. INTRODUCTION Considering ethics, a corporations' responsibility for taking actions that are morally sound needs to change. Reviewing the role of the individual, corporations are being subjected to the role of moral agent. The question is, can a corporation, composed of people, be held responsible for its own action as a moral agent? The answer is complexed from an individual's viewpoint with that of the corporation. Werhane (1989:821) viewed that corporation by law is identified as a person that is frequently held responsible for business practises. However, Werhane continues, if firms are not moral agents, they do not become morally liable and thus the onus is passed onto the individual person. [1] This becomes complicated because how can individuals become solely...
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...Kant’s Deontology theory states that ethical behavior is based on the moral intention of the action rather than its moral consequence. Kant’s theory is based on, having respect for others, being fair, and idealistic (universal principles). The fact that BP knew about the potential harm that might affect the population and yet didn’t do anything about it shows an unfair and disrespectful behavior toward the local population. According to Kant, BP should have fixed the problem that it was aware of before continuing on with the project, even if this would not make the company profitable. Therefore, it’s an unethical decision for BP to avoid responsibility because it has a “duty” to fix the problem. Mill’s Utilitarianism theory states that a behavior is considered ethical and moral as long as it is the best chosen alternative that’s likely to produce maximum happiness for the greatest number of people even if a single person has to sacrifice. BP probably used this approach when it did the cost-benefit analysis and came up with the decision that it would be more profitable if they take the risk of the problem occurring and deal with the results after rather than spend money fixing the problem. However, this approach suggests that it’s an unethical decision because the oil spill caused more harm than good for the stakeholders such as the shareholders, local population, tourism, and the wildlife throughout the gulf. Aristotle’s Virtue ethics states that people should look into their...
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...Ethics Case Analysis BP BP Struggles to Resolve Sustainability Disaster Case Summary: The BP oil spill in the Gulf of Mexico in April 2010 is the worst oil spill in US history. Initial claims on the scope of the spill, as released by BP, was that 5,000 barrels per day were being released into the water, although they stated they had no way of precisely measuring the spill. Outside analysts have stated that between 54,000 and 84,000 barrels per day were leaking into the area. This estimate has been largely supported and accepted. The spill lasted for 87 days before workers finally sealed the leak, but by that time, more than 4 million barrels of oil had been released into the gulf. The BP oilrig, owned by Transocean, Deepwater Horizon had been in operation in the Gulf of Mexico since February 2001. The rig was valued at more than $560 million dollars and worked on many different wells in the gulf. The last well it operated on was the Macondo well. It was this well that the oil spill came from and was brought about by several preventable errors on the part of BP and Transocean management and employees. The Deepwater Horizon vessel was an exploratory rig assigned the duty of finding oil, reporting it, and capping the well for another extracting type rig to come in and harvest the oil. While drilling the well, the rig encountered pockets of natural gas buildups where it was drilling. A week prior to the fatal explosion, Horizon encountered one of these pockets and the natural...
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...the ultimate sinking of the Deepwater Horizon. Although this disaster was accidental there were many warning signs that BP neglected which could have prevented it. To begin with, the construction of the underwater drilling pipelines were shoddy and a vital valve was installed backwards. Consequently the pipelines became brittle, full of cracks, and flooded. In addition, equipment readings, internal documents from BP engineers, and other red flags warned that the rig wasn’t operating correctly and that there was potential for a dangerous explosion. However, all these signs were ignored and not addressed as threats by managers. In an effort to avoid incurring costs and to maximize profit, BP cut corners and underestimated the importance of safety. After initial investigations it became clear that BP not only missed significant signs but staff did not have proper training, maintenance of the rig was inferior, and overall BP lacked formalized emergency responses and a safety culture. As a result BP has undergone strict investigations by the U.S Justice Department and a variety of environmental organizations. The company has faced and is still facing both civil and criminal charges and was initially set to pay over $20 billion in damage claims. Due to the oil spill and explosion BP’s stock fell 52% in 50 days in the New York Stock Exchange. Before the disaster BP was valued at $182 billion...
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...society. Such entrepreneurial problems takes the form of irresponsibility and lack of accountability of the firms in regard to the negative externalities they create to the society, deteriorating integrity and manipulation of ethical codes of conduct. In the recent past the oil firms have been in the international focus for their major role in the pollution of the environment as they produce and distribute their product and even as the products are consume. One of the major casualties for this problem is BP Oil Company that has been in wrong books with the international community for its growing unethical standards that emerged in the twenty-first century. To save its tainted reputation and restore its public image, BP management has been working on various strategic plans to improve the firm’s code of conduct. This came into light with the 2005 publication on code of conduct that was entitled “our commitment to integrity.” Due to the multinational status of the BP Company it has geographically dispersed operational regions across the world and this meant that they were to circulate this message to all its employees across the globe. The debate over the position of BP on the issue of risks stands out as a much asked question by many people. It is understood that the oil production from the sea is a contractual co-operation between BP and Transocean as the driller. However, the risk need to be absorbed by both of the as the primary stakeholders. BP is the major shareholder in the...
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...A Costly Mistake Bus 311 Beth Garcia April 23 2012 Introduction- Thesis statement In April 2010 British Petroleum (BP) had its worst nightmare come true; the Deepwater Horizon drilling rig exploded. Gushing million and millions of barrels of oil into the ocean becoming the largest oil spill in history. Effecting animal life and small business for years to come; someone had to be responsible, someone had to pay. Throughout this paper we will explore BP’s legal options, the administrative agencies involved, the ethical dilemma they face in the coming future, and the issues between their business and the environment Topic Sentence: BP has a huge problem on their hands and its only getting bigger. Initially the underwater explosion and oil spill was thought to be a small problem, but once the continually had failure after failure to stop the leak BP knew there were in for a catrostophic event. I. What Laws did BP break if any? A. Was it more of an ethical issue? B. Tort Law 1. Negligent torts Topic Sentence: Administrative agencies “affect nearly every individual, business, firm, and organization in the country”, and BP is no exception. II. Administrative Law/agencies A. Functions of administrative agencies B. Administrative agencies roll in BP’s incident Topic Sentence: Business and the Environment, sometimes they can work in harmony but most of the times that’s not the case. IV. Business and the Environment? A. Major federal legislation...
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...BP Oil Spill | Case Study Analysis | | Disclaimer: To start things off, I would like to mention that the BP Oil Spill is an extremely complicated case and its impact could be felt in every corner of the world. Therefore, my case study is only the tip of the iceberg and should not be used to judge the entire controversy. In addition, all statistics and information have been obtained from other sources. Enjoy! | | By: Haikang Zhu | For: Professor Bill WoofClass: Mgmt 1040 DDate: December 9th, 2010 | | BP (British Petroleum) is a global oil and gas company based in London, England. To date, it is the third largest energy company and the fourth largest company in the world in terms of revenues. Bp has operations in over 80 countries, produces around 3.8 million barrels of oil per day and has approximately 22,400 service stations worldwide. One major controversy that has been following every single oil and gas companies is the sustainability of offshore drillings and their impacts on the environment and the potential problems that might occur. Unfortunately for BP, On April 20th 2010, the dreaded problem occurred. The drilling rig known as the Deepwater Horizon Rig exploded, immediately killing 11 men and injuring 17 others. The incident took place in the Gulf of Mexico and is the worst environment disaster in the history after the Exxon Valdez accident in Alaska. The oil spill stemmed from a sea-floor sea gusher and was the result of the explosion of the drilling...
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...Final Paper Management 5000 – OGF1 2010 Management Statement of the Problem From the perspective of strategic planning and leadership, how could British Petroleum Company (BP) have minimized the risk of the deepwater oil drilling incident of April 20, 2010, and done a better job of crisis management after the fact? This environmental emergency was the result of the Deepwater Horizon drilling rig explosion which killed 11 workers, injured 17 others, and resulted in a sea-floor oil gusher leaking 185 million gallons of crude oil into the Gulf of Mexico. The media is filled with stories criticizing BP for not taking proper precautions to prevent the accident, and for their public response immediately following it. The following are representative of the headlines covering media outlets across the country and internationally: “BP touts itself as ‘green’, but faces PR disaster with BP oil spill” (Farhi, 2010), “Another Torrent BP Works to Stem: Its C.E.O.” (Krauss, 2010) “BP contingency plans for dealing with oil spill was riddled with errors” (Clark, 2010), “BP’s failures made worse by PR mistakes” (Weber, 2010), “BP oil spill: Leadership and IT failure (Krigsman, 2010). Statement of major relevant principles to be applied The major relevant principles to be applied to this analysis are strategic planning and leadership as they relate to crisis management. Strategic Planning Strategic planning is the process by which organizations define their strategy and make decisions...
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...as the environment. Business ethics has come under scrutiny over the past several years thanks to such companies as Enron, and more recently BP. As a society we are faced with ethical dilemmas daily and our culture is shaped by how we handle these situations. A Code of Ethics policy is used in most businesses today to establish acceptable behaviors and actions expected among the employees and executive officers. The Code of Ethics is fundamental in building a stable business foundation with all members being expected to comply. It is here that the problems start because even though the Code of Ethics should guide the members toward appropriate moral activity, it is not always successful. When moral and ethical behaviors go bad it affects us all. The top three ethical issues within today’s business environment that affect my community and my organization are corporate social responsibility, leadership issues, and financial issues. The first ethical issue to affect us is corporate social responsibility (CSR). CSR is defined by how companies integrate social and environmental issues and concerns within their business operations. CSR goes beyond corporate donations and compliance of corporate laws to the management of an environmental impact. A good example of how a company’s CSR is inadequate would be British Petroleum (BP). BP is a large oil company in...
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...Ethical and Moral Issues in Business Teresa Wright Mgmt 216 Kenna Fowler 25 September 2010 Business is complicated by Moral and ethical issues which are hard to resolve but easy to see, the reason is everyone has their own set of morals and ethics, what maybe morally wrong for one could be just the cost of doing business to another, after all it is a dog eat dog world. Therefore, decisions made by personnel can cause complications for business’, Code of ethics and company mission statements provide guidance to employees and employers on expectations. Merriam - Webster Dictionary defines Moral of or relating to principles of right and wrong in behavior, expressing or teaching a concept of right behavior, conforming to a standard of right behavior, sanctioned by or operative on one’s conscience or ethical judgment, capable of right and wrong action. I would define Moral as values placed on behavior and decision whether right or wrong. Ethics refers to well founded standards of right and wrong, reasonable obligations to refrain from committing crimes either minor or larger, which include honesty, compassion, and loyalty, also can be referred to as standards relating to rights. 2 Personal ethics is the moral foundation a person builds there life, ethics may assist with decision making, guide us to participate in actions that meet our personal internal moral standards. Ethics are the core value system for each and used to solve problems, determine what is right versus...
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...Ethical Responsibility with Oil Companies Lisa Dauwen National American University Abstract There are processes that oil companies need to go through to make sure that they are operating ethically. They include protecting the environment, researching alternative sustainable energies, and making sure that they are allowing for economic growth. This paper will look at 3 oil companies that are familiar to the United States. The paper will also look at the recent Gulf of Mexico oil spill and look at any ethical concerns. It will discuss how an oil company can follow corporate social responsibility (CSR) tools to lessen their environmental footprint. Ethical Responsibility with Oil Companies All companies in the world have the responsibility to operate in a manner that follows the laws of the government. All of these companies also have a social responsibility to follow ethical laws. Along with all the other types of companies, oil companies have the social responsibilities to protect the environment, to research sustainable energies, to safely explore and produce in new areas, and they also have responsibility of fostering economic growth. It is important for oil companies, perhaps more important than other companies, to hold up to these social responsibilities because if they don’t find new ways to produce energy, future generations could run out. There has been much talk in the last few months regarding oil companies and if they are being ethical when making decisions...
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...towards ethical issues in BP’s company. Just like to set up a communication consistent standard for all the employees of BP for different location, culture and language. Originally, this is a good way to guide the company staff to maintain company standard and reputation. But the code did not effectively address specific high-risk activities for the scope of daily operations. It was quite reasonable because at the very beginning stage of drafting the related guidelines, not every experience or assumed circumstancs were fully considered in the daily operations. Unfortunately, after the spill happened, several reports have pointed out that BP's internal problems were the main causes of the disaster. In 2009, the Occupational Safety and Health Administration had put a record largest fine of $87 million upon BP’s company. In the investigation, the OSHA has issued as many as 271 notifications to BP’s company. The notifications were mainly dealing with a series of misconducts which BP’s company performed in the 2005 Texas refinery explosion hazard. Moreover, BP’s company improper management and lack of adequate safety precautions were once again been found in the Deepwater Horizon oil spill at Mexico in 2010. Millions of gallons of oil were discharged into the Gulf of Mexico in this incident. The nearby environment was highly deteriorated and many precious lives had lost. On 5 January 2011, a report has been issued by the White House oil spill commission, it pointed out that BP, Halliburton...
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