Sample Management Essays on Ethics and Corporate Social Responsibility

Ethics and Corporate Social Responsibility

Part A

Question One

. This dual characteristic is mostly because at the core of business ethical standards, there is a universal set of business ethics that mould the formation of individual moral codes. At the same time, using only the universal code of ethics as the moral code for a business is likely to present problems for corporations because of the variety of business and environmental characteristics of the areas within which the businesses operate (Graafland & Smid, 2019). Therefore, it is deductible that while all the elements of the universal code of ethics are necessary for all the business ethical codes, they are insufficient for addressing all the needs of all corporations across the world. Attempting to force the universal ethics to be the only business ethics could be driven by the concept of ethical absolutism (Donaldson, 1996). This concept is not only impractical in the face of cultural diversity, but also in diversity of business characteristics. Therefore, it is justifiable to argue that organizations should take into consideration the universal set of business ethics. These form the foundation of all the other ethical standards as they provide the most basic forms of expected ethical human behavior that are acceptable worldwide. Modifications and additions to the universal code of ethics should cover for distinct business characteristics such as the size of the business, industry of operation, market characteristics, and most importantly, the cultural background of the operating environment. In recent years, the cultural background has become a particularly important aspect of business operation, resulting in the development of various forms of cultural competency models, based on which business owners ought to train their employees to practice cultural competence for better market performance (Shepherd et al., 2019). These same cultural models can form the basis for defining the business ethical standards that deviate from the universal code of ethics.

Question Two

The relationship between businesses and the societies within which they operate is determined by the ethics guiding the business operations. As such, businesses attempt to develop strategic relationships between themselves and their communities. The impacts of businesses on communities are such that they determine the directions of moral conduct and even the outcomes of ethical practice. The impacts of business ethics on the community are evidenced by companies such as The Coca Cola Company, whose operations had previously been depleting natural water resources within the areas of operations, resulting in unacceptability of its operations (Lawrence & Weber, 2016). The same company, upon the decision to initiate the water neutrality test, was accepted by the community due to its positive impacts on the community. Similarly, Chiquita Brands, through the decision to pay insurgents to protect their employees, created a dangerous environment for other Mexican residents (Lawrence & Weber, 2016). In each of these cases, the firms in question influenced community reactions through their ethics.

From these observations, it is clear that businesses can impact social ethics. However, the impact can be either negative or positive depending on the societal ethics. Consequently, allowing businesses to direct societal ethics can be effective, since evidence already indicates that where business ethics are not aligned to the ethical values of the society, the society is likely to reject them inadvertently. Consequently, any permission accorded to a firm to influence social ethics would only be advantageous due to the checks and balances that are in place in the form of the societal ethics.

B.P. Oil Spillage

Section 1: Introduction

The extractives industry is recognized as one of the major threats to environmental conservation due to the impacts that it has on the environment. Particularly, the oil and gas industry poses a lot of environmental risk across the world. Big players in the sector, such as BP, have greater responsibility to the environment than the smaller ones, and understanding the ethical and corporate social responsibilities around their operations is mandatory if they have to work effectively and sustainably. Many operational factors could cause significant concern both from an ethical perspective and from a CSR perspective. An example of such issues is the probability of oil spillage, such as what happened with B.P in September 2010, in which an oil rig in Gulf of Mexico exploded, resulting in serious environmental destruction not only due to the flaring gases but also due to the prolonged effects of oil spillage on the sea water and other outcomes (Adams & Gabbatt, 2010). The impacts of the explosion were extensive and continue to be felt to-date.

The explosion is recognized as both a CSR and an ethical issue due to its impacts on surrounding communities and the obligations of the company. Considering the environmental impacts, it is deductible that the oil spillage affected not only humans but also animals and plants, posing a significant environmental and health risk (Saadoun, 2015). BP was responsible for ensuring that all its operations were safe for the employees and for the communities within which it operates. The explosion of the oil rig, therefore, was a breach of the company’s obligation to ensure safety in its operations. The major stakeholders in the incident included the company’s management, the government, employees, and the communities within which it operates. The company’s management is liable for its failure to operate safely thus responsible for making as much recompense as possible for the harm caused. The government already has policies in place to guide the operations of the oil and gas industry, and every player has to adhere to those regulations. For an issue such as the oil spill in question, government regulations would be responsible for pushing the responsible parties to mitigate the impacts of their activity.

Section 2: Rationale

While the oil spillage was accidental, its ethical implications can be evaluated and ethical reasoning methods used to evaluate the ethics of the issue. Conceptually, it can be concluded that the spillage was an ethical violation. The utility perspective to moral reasoning posits that an act is only ethical when it provides the greatest utility to the largest number of people or to the society as a whole (Siedel, Mayer, & Warner, 2012). The spillage, though accidental, posed harm to more groups of people and benefited non. There has been significant concern about environmental implications of common industrial applications, and the increasing awareness of the impacts of various activities on the world.

The fact that environmental degradation activities, such as that which occurred as a result of the spillage, are not centralized to where they occur, raises the awareness that even the spillage did not affect only people in the Gulf of Mexico. Moreover, the whole world was affected as a result of the destabilization of the atmosphere (Saadoun, 2015). Prolonged effects of the ozone destruction as a result of the strong carbon emission during the explosion are expected to spread throughout the world. The impacts of the oil spillage on sea life and, subsequently, on food consumption extend beyond the life forms at sea (Seddiki, 2018). As such, the spillage can be treated as an ethical violation on the basis that it does not provide any benefit for anyone, not even the affected organization. Furthermore, it causes harm to everyone. Besides the environmental and potential health risks associated with the oil spillage into the environment, there is also the probability of financial loss, particularly to BP, as the company lost their equipment in the explosion and has to replace the equipment besides having to work on compensating the neighboring communities and their affected staff.

The harm resulted from a safety failure, which should have been checked and measures put in place to handle any risks. The Company, BP, was responsible for ensuring that all safety and security checks were in place at all times and there probably was someone on site tasked with doing that. Based on the utilitarian conclusion that the event was unethical, the safety failure could also be blamed on the company, meaning that the company itself behaved unethically and put its staff and their products at risk.

An evaluation of the issue at hand from a justice perspective leads to the re-consideration of the ethical standards around the incident. The justice perspective is founded on the principle of distributive justice, based on which every individual or group should be treated equally. Any situation that results in the good for some but has negative outcomes for others is considered unethical. The BP oil spillage situation posed negative impacts for all the stakeholders. The company gained nothing from the spillage and was faced by the same challenges faced by the rest of the world. Consequently, there was fair distribution of justice. The justice perspective presents a different outlook from of the utility one, in that it implicitly considers that the incident was not intentional and that the rig owner was hurt by it just as much as the world. Therefore, the incidence cannot be classified as an ethical violation, but rather an accident.

The rights perspective defines ethics based on different considerations. Khalid, Eldakak and Loke (2017) describe the perspective as founded on the respect for human dignity. Human dignity is provided for in the international bill of rights through specific rights, such as the right to life and good food among others. When considering the oil spillage case from this perspective, it can be said that to some extent, the incident degraded human dignity by exposing humans to danger through environmental degradation. This perspective slightly digresses from the perspectives shared in the other two ethical reasoning methodologies. Among the three perspectives, it is clear that the utility perspective is the most relevant to this case scenario because it presents the ethical concerns surrounding the issue at hand without blames or focusing on the balance of power or benefits, but by looking only into the impacts of the event to people.

Section 3: Impacts

The most profound impact that this particular social issue would have on my family is pegged on its impacts on the environment as a whole. A study by Saadoun (2015) indicated that the demand for fossil fuels has driven the operations of fossil fuel-based extraction companies such as BP. However, even with a controlled environment, such as that which characterizes normal extraction, such corporations pose a significant challenge to the environment through increasing carbon footprints, greenhouse gas emissions, and subsequent global warming. Accordingly, the impacts of the incident on the environment are bound to result in future health risks for the population, of which my family is part. For instance, increased global warming increases the risk of skin cancer, which is a major financial drain and cause of death. The probable health impacts of fossil fuel exposure may be escalated by the impacts of the oil spillage on sea life. The spillage will affect food productivity and thus cause hunger not only for my family but all over the world.

Section 4: Community Impacts

The community impacts of the explosion and the oil spill extend beyond the environmental implications and the more general health impacts. The community under consideration is that which lives within the environment in which the incident occurred and which was directly affected by it. According to Gray (2019), an oil spill as large as that caused by the BP oil rig explosion results in psychosocial impacts on the society. The most common effect is the social disruption that occurs soon after the incident. The community experiences a lot of community fissures in the sense that strangers come in and disrupt normal life activities. While most of those who come in do so with the objective of investigating and helping in environmental cleaning, having so many people around can be psychologically disruptive. Additionally, there are often a lot of movements, especially caused by follow up on the litigation and compensation processes. Gray (2019) reports that while some of the community members may feel engaged and may be even willing to participate more actively in the litigation process, most just have a feeling of despair and the desire for all to be over.

Inevitably, the combination of social disruptions, environmental damage, and increased health risks results in augmented  stress levels among the affected communities. The perception that the community is always at risk and the feeling of dependency can result in a lot of stress for the affected individuals. Moreover, such an incident results in disrupted economic activity, which can result in low income levels and subsequently raise the levels of finance related stress (Gray, 2019). The documentation process can further escalate the stress levels as people are forced to recount their painful experiences over and over again. At the same time, such stress levels can result in the identification of emergency response gaps and the intention to cover them.

Section 5: Country Impacts

The impacts of the oil spill at the country level fall within the scope of conventional effect reported by previous studies. According to Chang, Stone, Demes, and Piscitelli (2012), incidences, such as the BP oil spill, have significant impacts on the social fabric of the society, as well as on the economic and policy aspects of national governances. While most of the social effects that have been explored have been those on the community, Chang et al. add that the most potentially impactful social effect is unequal distribution of employment. This problem comes in the form of increased employment opportunities in clean-up businesses within the affected areas and lack of similar opportunities in other areas. As a result of this unequal labor distribution, social systems are bound to be shaken and foreigners move into the affected areas to seek employment.

Besides the social impacts, the economic impacts of the issue are profound at the national level. Chang et al. (2012) posit that an oil spillage greatly impacts the economy and national policy, through impacts on economic activities. Particularly, spillages affect the tourism industry as a result of their effects on the aesthetic value of beaches and other natural resources. Additionally, they affect the recreational use of the environment, which limits environmental appeal and subsequent tourism attraction. Besides tourism, the spillage also may result in significant economic losses arising from its inhibition effects on industries, such as sea-based transport and port business, which use waterfronts and sea water as an input. It is, therefore, important for the country to review the incidences leading up to the BP oil spillage, and come up with strategic disaster management measures that would limit losses.

 

References

Adams, R., & Gabbatt, A. (2010, September 8). BP oil spill report – As it happened. The Guardian. Retrieved from www.theguardian.com/environment/blog/2010/sep/08/bp-oil-spill-report-live

Capsim (2018, May 7). Five ways to shape ethical decisions: Rights Approach. Capsim Blog. Retrieved from www.capsim.com/blog/five-ways-shape-ethical-decisions-rights-approach/

Chang, S.E., Stone, J., Demes, K., & Piscitelli, M. (2014). Consequences of oil spills: A review and framework for informing planning. Ecology & Society, 19(2), 26. Retrieved from www.ecologyandsociety.org/vol19/iss2/art26/

Donaldson, T. (1996). When is different just different, and when is different wrong? Harvard Business Review.

Graafland, J., & Smid, H. (2019). Decoupling among CSR policies, programs, and impacts: An empirical study. Business & Society, 58(2), 231-267. Retrieved from journals.sagepub.com/doi/10.1177/0007650316647951

Gray, A. (2019, March 19). People and pollution: The social impacts oil spins have at a community level. Office of Response and Restoration. Retrieved from blog.response.restoration.noaa.gov/people-and-pollution-social-impacts-oil-spills-have-community-level

Khalid, K., Eldakak, S.E., & Loke, S.P. (2017). A structural approach to ethical reasoning: The integration of moral philosophy. Academy of Strategic Management Journal, 16(1). Retrieved from www.abacademies.org/articles/a-structural-approach-to-ethical-reasoning-the-integration-of-moral-philosophy-6525.html

Lawrence, A., & Weber, J. (2016). Business and society: Stakeholders, ethics, public policy, 15th Ed. McGraw Hill Education.

Saadoun, I.M.K. (2015). Impact of oil spills on marine life. In Larramendy, M.C. & Soloneski, S. (Eds.). Emerging pollutants in the environment. Intech Open. Retrieved from www.intechopen.com/books/emerging-pollutants-in-the-environment-current-and-further-implications/impact-of-oil-spills-on-marine-life

Seddiki, S. (2018). The environmental impacts of off-shore drilling: The case of BP oil spill 212. Conference Paper. Retrieved from www.researchgate.net/publication/326319524_The_Environmental_impacts_of_offshore_oil_drilling_the_case_of_BP_oil_spill_212

Shepherd, S.M., Willis-Esqueda, C., Newton, D., Sivasubramaniam, D., & Paradies, Y. (2019). The challenge of cultural competence in the workplace: Perspectives of healthcare providers. BMC Health Services Research, 19(135). Retrieved from bmchealthservres.biomedcentral.com/articles/10.1186/s12913-019-3959-7

Siedel, G., Mayer, J.K.L.D., & Warner, D. (2012). Introduction to the law of property, estate planning and insurance. Retrieved from saylordotorg.github.io/text_introduction-to-the-law-of-property-estate-planning-and-insurance/s05-02-major-ethical-perspectives.html