The use of business ethics to assess business conduct in BP
In the recent years, there has been an expectation on companies to adhere to ethical standards. Every company desires to make profits and its known this is a goal that can compromise on ethics (Acheru, 2009). Employers are expected to take care of their employee safety, the environment and the public. When the ethical factors are not considered the results are catastrophic and company suffers many expenses (Flaxx, 2002). This was shown by the BP Texas city explosion. 15 workers were killed in the Texas plant explosion while 170 others were injured. There were trailers located to close to the plant yet it handled hazardous materials showing disregard of public safety. The “blowdrum” drum in the company was old and did not have a flare to prevent the flammable liquid that was burning from leaking into the environment.
As per the results of the various US Chemical Safety and Hazard Investigation Board (CSB) there was a blatant disregard for ethical and moral standards for companies. The internal auditors in several audits highlighted the processes and mechanical failures and risks to workers and the community yet the focus was on profits. The company engaged in budgetary cuts that were extreme and compromising in safety. When this happens in a company, morals and ethics are disregarded. (Welles, 2000). Capital spending was cut by over 50% while maintenance spending by 41%. This included safety committee meetings and plant maintenance.
The company continued with ageing equipment and aging designs. A plant manager negotiated the level of budgetary cuts but the top management attitude was highly discouraging. There was no money for a much-needed emergency response system. There was lack of supervisory controls and training ion employee safety. Additionally the workers were working long hours increasing operational risk. The attitude of the management further increased operational risk as the workers lost morale.
Furthermore, the BP Texas managers and workers were scared and believed a disaster would occur due to compromise on safety standards. The CSB noted that the company had not complied with all the safety rules yet the Occupational Safety and Health Administration (OSHA) did not enforce compliance to these rules. The Baker report in arguing that the management did not intentionally compromise on safety is faulty. The management of any company should have a culture of upholding ethical standards. The top management placed no safety standards, expectations and responsibilities on plant managers. This was ineffective leadership. There were many warnings from different sources but they ignored them.
The culture of the company became money-oriented and people’s lives were not highly regarded. In any company one warning should be enough to drive change towards ensuring safety. The court system ensured the victims and the diseased beneficiaries were highly compensated. At the end of the day the cash the company was trying to save was lost. In fact, more money was lost through compensation, legal fees and investigation reports. The company also had an adverse negative image as result of the same. Managers lost their jobs. As the saying, prevention is better than cure.
The company should have upheld ethical standards. It is important to find a balance between ethics and profit-making. Making profits is not unethical since this is why the company exists (Voss, 2009). However, Programs on employee and public safety deserve same attention as programs on financial controls. There is no alternative to the use of ethical standards in judging business conduct. It is a must the standards be used. Complimentary standards that can be used are labour and employment standards that look at the working conditions of the workers. These standards work hand in hand with ethical standards.
Acheru, P. (2009). Business Ethics and Profit. Retrieved from http://ezinearticles.com/?Business-Ethics-and-Profit&id=2018845
Flaxx, K. (2002). Are business ethics or profits more important? Retrieved from http://www.helium.com/debates/132677-are-business-ethics-or-profits-more-important/side_by_side?page=6
Welles, M (2000). Ethics vs. making a living. Chicago: Routledge
Voss, P. (2009). The ethics of profit, the profit of ethics. Atlanta Business Chronicle. Retrieved from http://www.bizjournals.com/atlanta/stories/2009/05/25/editorial2.html