Corporate Governance and Ethics Issues Free-Sample for Students

Question: Identify the different Stakeholders who will be Affected by the Decision to be made, the Different Decisions Possible Regardless of the Ethical Stance and then Outline the Decision that you Consider the Most appropriate and why. Answer: Introduction Almost seven years after the dreadful and the worst environmental disaster of oil spill in Gulf of Mexico, the individuals and the world are still trying to recover from its damage. The outburst of the drilling rig, Deepwater Horizon resulted in nonstop oil pouring for around 86 days into the Gulf. This disastrous calamity took place on April, 20th, 2010. There well leaked by almost all its fillings, approximately 4 million barrels of oil was splashed in Gulf, ranging from the cost of Florida to Mexico (RT, USA, 2013). Regrettably, the oil spill destroyed the wildlife and the environment at every place it hit and it is also mysterious that for how long the negative impacts of this event will last. In the entire consequence, there were came in lime light the ethical issues which were prevailing in the British Petroleum, before, during and after the occurrence of such terrible environmental disaster (De Wolf and Mejri, 2013). Ethical issues in British petroleum oil spill in the Gulf of Mexico (Source: Singh, 2013) There were certain ethical issues which were there in the British petroleum oil spill in the Gulf of Mexico. The primary ethical issue was the conflict of interests. The higher authorities and the administration were more concerned with the increase in the production profits rather than the improvement in the protection safety (Griggs, 2011). There was identified that the company violated seven federal regulations in its operations and this became the primary reason for the occurrence of the oil spill. The another ethical issue was that the management was extremely negligent towards the various significant aspects that requires high consideration such as there was lack of compliance related to the accepted industrial practices and safety standards. Because of absence of appropriate safety standards, there was no considerable strategy or plan for handling such a disastrous event. After the incident, in several analysis and reports it was found that the company had highly ignorance tow ards execiuting the negative tests or the mock drills. This resulted in insufficient training for the employees to control and mange such contingencies (Freudenburg and Gramling, 2011). There were certain red signals which were given to BP before enough from the date of incident. It was mentioned by the analysts that there are problems in the Deep-water Horizon but considering the profits and putting revenues over and above the safety of the employees, the management took no actions for the proactive maintenance. It result in deaths of 11 workers and around workers were affected by the both in the accident and in the cleaning process (White, et al., 2012). Another ethical issue which took place after the incidence of oil spill was that there were thousands of people who lost their habitat that includes the fishermen at the top as fishing was their one and the only source of earning and because of the impact of such dreadful event, there were caused death of around 6,800 animals. The great impact was posed upon the tourism industry, as because of such negative environmental impacts, the rate of tourists visiting Gulf of Mexico was rapidly declines and this resulted i n loss of wages as well as the jobs of number of individuals. And this became a big ethical dilemma for the organisation as it seizes the livelihood and source of earning of hundreds of people (J.M., 2012). The ignorant management decisions impacted all the stakeholders of the organisation which includes the local communities, industry, government, shareholders, employees, investors, environment and the customers. All these stakeholders were negatively impacted by the consequences of the event took place such as environment as the stakeholder wedged as the level of PAHs i.e. Polycyclic Aromatic Hydrocarbons was increased to 40 times than it was before which decreased the oxygen levels and resulted formation of more of dead zones. The heart and other organs were also damage that results in life-shortening and in increase number of animals there was found oil. The other environment related ethical issues includes extended number of dead fishes, dead turtles, dead birds and dead dolphins, death of the coral community of Gulf region, presence of oil in the food chain for several number of years. The employees as the stakeholders were also impacted in a greater context as it cause death of e leven employees because if the ignorance of the management and there were also number of injuries which also affected the smooth livelihood of number of employees (Ramseur, 2010). The local communities as the stakeholders are the one which had impacted negatively in a much deeper sense. There were found negative physical health symptoms in the children who have their habitat in the regions of 10 miles distance from the coastline. The recreational fishing and the commercial fishing was also closed in the affected federal water which were impacted because of toxic substances, it results in snatching the source of earning and livelihoods of number of local fishermen (Paul, et al., 2013). The fisherman also found more number of dead crabs, fishes and other animals; therefore, the squat number of fishes was not sufficient for all the people involved in the fishing occupation. The Government as a stakeholder got affected as because of the aftereffects of the incident, the beach was remained closed as well as due to the presence of toxic and deadly substances in the food materials, the number of tourists that visits Mexico suddenly decreased and this affected the tou rism of the country. Tourism was a significant source of revenue generation for the company, but because of all such non-happening events, there was no or very little revenue generation from the tourism sector (Padgett, Cheng and Parekh, 2013). The shareholders were had to face a lot of monetary losses because of the company had to pay a huge amount of claims to the employees and the local communities, high amounts as the grants to the Gulf States, sales dropped down by 10 to 40 percent and the tock price of BP was also fall down by 52 percent in just next fifty days of the incident took place. The investors also had an impression of strain as their holdings were decreased to $27.02, which shows a loss of around 54 percent in the total value. The oil industry was also get threatened by the consequences took placed of the incident as the government had imposed strict regulations upon the gas and oil drilling so that such explosions can be prevented from taking place in coming future (Partlett and Weaver, 2011). The organisations were essentially required to implement strict safety standards and regulation otherwise the entire operations were about to ceased, thus it made difficult for the oil companies work by following all the rules, standards and regulations (Theguardian, 2011). The customers also have to pay almost doubled charges for the purchase of oil as there was a loss of 4 million barrels of oil which was spilled into the Gulf. This led to increase in the prices of oil across the world. There were also possibilities of several other decisions which can be taken by the higher management and there can likelihoods of preventing this incident taking place. If the administration had given appropriate consideration over the red flags of danger and have taken actions for the proactive maintenance of the Deep-water Horizon or have prepared plans for contingencies, the country could be saved from such a big loss (Bond, 2013). The best decision which could be taken by the administration could be giving more importance to the protection and safety rather than production and profits. Just after getting the first insight of issue, there should be executed proper examination of the operations, so that there can be set safety standards. As well as must work with a utilitarianism approach which makes the organisations works over the principle of, The greatest good for the greatest number. If BP had worked with this theory, then there would be the least harm and the most good to the society and the environment. Instead of having profit motive functioning, there could be a mixed approach of having profits with equal positive impact over the society and the environment (Beauchamp, Bowie and Arnold, 2004). Conclusion From this essay, it can be concluded that the British petroleum oil spill in the Gulf of Mexico was the most terrible and awful environmental disaster in the history of Mexico. But rather than a calamity, it was more of an outcome of the ignorant organisational management. There were several ethical issues which were associated with this incident that ruined and deteriorate the brand image of BP for the entire lifespan. If the management have given equal significance to the profits of the organisation and the safety regulation, then there can be saved lives of thousands of species, birds and animals. Thus, it is concluded that, an organisation is required to remain ethically sound for having a successful and sustainable future ahead. References Beauchamp, T. L., Bowie, N. E., Arnold, D. G. (Eds.). (2004). Ethical theory and business. Bond, D. (2013). Governing disaster: the political life of the environment during the BP oil spill.Cultural Anthropology,28(4), 694-715. De Wolf, D., Mejri, M. (2013). Crisis communication failures: The BP case study.International Journal of Advances in Management and Economics,2(2), 48-56. Freudenburg, W. R., Gramling, R. 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