Ethics, Consumerism and Social Responsibility - Essay Example

? Running head: Ethics, Consumerism and Social Responsibility (insert (insert Executive Summary British Petroleum Company is a multinational company that is involved in drilling and refining of oil. It is also involved in the manufacture of various chemicals and oil products. The company is sometimes involved in some unethical business practices such as environmental pollution. Due to the unethical business activities, the ethical theories in business are normally infringed. These ethical theories include utilitarian approach, justice approach, rights ethical approach, common good approach and virtue approach. The British petroleum company is expected to be socially responsible for the social welfare hence should come up with various recommendations for its social obligation to the public. Contents Executive Summary 2 Introduction 4 Ethical business practice 4 Ethical theories 5 Social responsibility of British Petroleum Company to the society 8 Recommendations on how the company could position itself on social responsibility 11 Conclusion 12 Reference List 13 BRITISH PETROLEUM COMPANY ETHICAL ISSUES Introduction British petroleum is the largest oil company in the world on the basis of market capitalization and proven reserves. It was established in 1908 with oil found in the rugged Persian Gulf after a long and difficult such. Since then, it has transformed from a local oil company to a global energy group, which focuses on various forms of energy. Their businesses include exploration of oil, production, refinery and marketing chemicals. It is the largest energy producing companies in the world that provide fuel for transportation and manufacturing. It extends its services to marketing of petroleum chemicals with a growing presence in gas and solar energy. Due to the nature of its major product, oil, the company is mostly linked to ethical issues such as environmental challenges on a global scale. However, in recent years, the British petroleum company has embarked on reviewing its ethical issues both to its employees and the public. This move is aimed at improving public confidence and profit maximization for the company. Ethical business practice This is the use of business policies properly in regard to controversial related issues like corporate governance, corporate social responsibility (CSR), bribery, insider training and discrimination (Terry 2011). It applies to all aspects of business conduct and is relevant to the conduct of a particular individual and the entire organization. The work of business ethics is to implicitly regulate areas and details of behavior that lie beyond government control. Therefore, business ethics ensures good moral business practices in the society hence creating conducive environment for competitors, consumers, suppliers, the government and all other stakeholders in the business. Ethical theories Business ethical theories and principles are the foundations of ethical analysis of the business because they are the viewpoints of the society to the business. Through this analysis, the guidance on the ethical performance of the business can be found. These theories include utilitarian approach, rights ethical approach, justice approach, the common good approach and the virtue approach (Leonard, 2011). Utilitarian approach This is the oldest business ethics theory propagated by philosophers like Jeremy, Bentham, James Mill and Mill’s son John Stuart Mill (John 2002). This approach focuses on using ethical actions that would promote values among the societies while limiting the amount of harm as possible. It therefore incorporates the maximum number of stakeholders for it to succeed. In the recent past, the British petroleum company has not been able to limit the amount of harm caused by the company’s operations. Accidents due to human error and mechanical failures have been blamed on various occasions. For example, explosions in Texas in 2005 that killed workers; also oil spill in Alaska in 2006, which over 250000 gallons of oil spilled through, corroded sections of the British petroleum pipeline across the North Slope. Such unethical practices of this company have led to environmental pollution and loss of revenue to the government (Davis 1996). This unethical practice of the British petroleum company indicates lack of commitment of the company to the utilitarian approach of the ethical theories. Rights ethical approach This business ethical approach base its support on individuals who have a right to life, respect and self-respect (Becker 2001). The approach considers morals highly since they are related to human behavior in pursuit of achievement of set goals. The theories therefore make use of this approach by ensuring that there is no mistreatment, respecting the people’s decisions hence not imposing their products, missions and systems to the market (Jamrog 1996). The consumer is hence given a chance to choose what they want and what they detest. In the process of sales promotion, the British petroleum company sometimes wrongly advertises its products. The advertisements may sometimes carry misleading information or an over-exaggerated account of the product (Cohen 2006). This practice of relaying misleading adverts to the public is an unethical business activity hence contrary to the rights ethical approach in the business ethics theories. Justice approach This is known as the fairness approach in business ethical theories (Duvall 1999). It involves treating human beings equally in the society, regardless of ranks, position, class, creed or race. For example, for an employee receiving a higher compensation than others, a justifiable reason must exist such as technical skills and exclusiveness of a job position (Gates’ Foundation 2011). In a research carried out on British petroleum company employees, there was a large disparity in the amount of salaries awarded to employees (Martin 2007). In addition, in some instances employees of the same qualifications and doing the same job were found to be paid differently. This mode of unequal remuneration of workers showed lack of equality and fairness hence creating an aspect of unethical business practice (Chris 2001). This mode of payment does not conform to the justice approach in the business ethics theories. The common good approach This approach is based on the moral principles of the society. It endeavors to support values and principles in a given culture. Business owners and managers normally implement this theory in order to ensure that the company’s mission is in line with the society as a whole. In the consideration of this approach, care must be taken on the type of society one is dealing with because there is a difference in moral principles in different countries. For example, moral principles between China and the US differ. The British petroleum company has not been keen on the social implications of its business activities but rather it has focused on the profit maximization agenda. Being a multi-national company, it has the obligation to understand the society in its area of operation and how the oil drilling activities affects the society as a whole. Therefore, the failure to uphold the common good approach in business ethics theory is an unethical way of operation by the British petroleum company. Virtue approach Virtue approach has always been the most difficult theory to implement since it emphasizes the evidence of the ethical principles in a given society (Ferrell 2001). It works by restoring values that promote human development in place of the failing ones. Though it has many challenges when implementing, the company can consider pushing it through for the benefit of the society. In most instances, the management of British petroleum company, exploration and drilling blocks are done by foreigners. This can be evident in the Middle East and in some oil producing African countries. Such foreigners have no prior knowledge of the society’s cultural requirements and ethics. They therefore impose their foreign policies, which are not in line with what the society wants. This is an unethical business practice because the virtue approach requires that the business should follow ethical principles that are evident in the society. Social responsibility of British Petroleum Company to the society Social responsibility is an ethical entity that every individual or organization should act to the benefit of the society. Every business operating in the society should therefore be socially responsible to the society. The business should focus on the needs and requirements of the society as opposed to focusing on profits as the main agenda (Sinclair 2003). The following are ways in which British Petroleum Company is socially responsible for the various stakeholders in the society. Consumers Steady fuel prices in the market In the modern world, the inflation rates are rising each and every day. Due to such inflation, the prices of basic commodities rise hence the consumers have to pay for more. The oil industry plays a crucial role is curbing inflation because most economies are driven by oil as a source of energy. The British petroleum company therefore ensures that oil and gas prices are stable in the market. This is done by drilling and refining enough oil hence there would be no shortage of oil in the market. By ensuring a surplus of oil in the market, the fuel prices remain stable hence consumers are able to pay less for basic commodities. Providing a variety of products The British petroleum company focuses on different forms of energy apart from the traditional fossil fuels. It is involved in the manufacture of chemicals and recently has invested in solar energy for photovoltaic modular systems. With the diversified market in the world, they are able to cater for one’s specific needs hence fulfilling its social responsibility to consumers. Suppliers Non discrimination when awarding tenders Each year, the company has its expansion strategies as it moves into new markets (Dan 1997:17). Therefore, construction tenders, machinery and equipment tenders etc are advertised to the public. The British Petroleum company has a responsibility of fare awarding of the tenders to the society irrespective of the race, ethnic background, creed etc. to ensure fare treatment when awarding of tenders, a large group of board members have been assigned the job of scrutinizing the tender applications hence a fare chance to every interested party. Reasonable and fair payments to suppliers The amount of remunerations given to the suppliers for their goods and services should match the quantity of commodities supplied. The British petroleum company should ensure that they award fair payments to the suppliers because it is their social responsibility to ensure that the stakeholders are not undermined. To ensure proper payment, the company has set aside a different body to deal with procurement of raw materials, machines and the building of new structures ( Bradley 1995). Government Abiding by the government standards Different governments have different bodies which control the quality of products in the market. Such bodies are vested with the authority of assessing the type of product as per the standards set by the legislation of the specific country or state (Benson 1996:4). The British petroleum company is therefore socially responsible to the government by abiding by the set rules. They achieve this by understanding the quality requirements of the state or country hence producing commodities that are in line with the set standards. Payment of taxes It is a requirement that business remit part of their profits to the government so that the government can function properly in maintaining law and order and also other development projects. The British petroleum company being a profit making multi-national, is therefore socially responsible to paying taxes to the government. Through such ethical means, the government is able to fund many development projects (James 1997:16). Environment Green energy The current trend in the world is to limit air pollution caused by burning of fossil fuels (Richard 1992). Over time, air pollution has proved to cause many health hazards to human beings hence the need to advocate for green forms of energy such as solar energy. The British Petroleum Company being a major processor of the fossil fuels has embarked on the production of solar energy as its plan of going green. Limit environmental pollution Oil spillage has been a cause of environmental hazards because it pollutes the environment. Spilling of oil in the environment has led to reduced agricultural land fertility, death of aquatic animals such as fish, occurrence of fire etc. The British petroleum company has put strategies to combat this type of environmental hazards. The company has ensured that most of the production zones have a rapid response to fire outbreak. In addition, the pipes transporting the oils are computerized to detect any leakage. Therefore, in case of a leakage, the oil spill is able to be controlled in time hence protecting the environment from pollution. Recommendations on how the company could position itself on social responsibility Voluntarily eliminating practices that would harm the public or environment The company should look for ways of eliminating pollution in the environment. The British petroleum company should service their industrial machines so that they can emit low contents of carbon in the environment. The company should also ensure that more hazard control centers are located near the drilling zone so that the environment is guided from pollution due to spillage (Richard 1992). Good working conditions for workers It is the social responsibility of the company to provide a good environment for the employees. The employees should be allowed to have unions, which represent the workers in the board meetings (David 1994). In addition, there should be facilities such as hospitals and schools provided to the employees and their families. By doing this, the workers will be more motivated since the company would ensure a good working condition for them. Community development The company can participate in social corporate responsibility by developing the community where they are in operational. They can develop the community by building schools, hospitals, infrastructure etc. Such developments help to create a good public image about the company in the society. The company can also donate money to charity, which would help in the building of orphanages and helping the old in the society (Valiace 1995). In most parts of the world, oil occurs in the remote parts of a country. In such areas, agricultural water is scarce hence, poverty is widespread in the society. Therefore, the company should provide ways of getting clean water for agricultural purposes. Hence, the company can fund the building of dams and provision of clean-piped water to the people. Conclusion In conclusion, business ethics are the proper moral behaviors in the business that gives priority to the needs of the society as opposed to profit making. In the analysis of business ethics, various theories and approaches are deduced. Such theories include utilitarian approach, justice approach, rights ethical approach, common good approach and virtue approach. These approaches lay down the principles of business ethics in the society. The British petroleum company is therefore expected to be socially responsible to various stakeholders such as consumers, suppliers, the government and the environment. In order for the company to maintain a good social responsibility in the society, it is recommended that it should come up with methods that would help to reduce pollution, participate in community development projects and cater for the employees’ welfare. Even though the British Petroleum company has tried to maintain good business ethics, more has to be done so that the world can be free from pollution and other unethical practices of this company. Reference List Benson, D 1996, Business with conscience, American nurseryman, September 1, vol. 184 issue 5, p4. Becker, L 2001, Encyclopedia of ethics, Taylor & Francis, Oxford. Bradley, F 1995, Looking for the right answer, people management, April 4, vol. 1.issue 9, p27. Cohen, M 2006, Essentials and ethics , Taylor & Francis, Oxford. Chris, M 2001, Guide to business ethics, SAGE Publication, New York. David, F 1994, Ethics in shrinking world, Business credit Feb. 1994, vol. 96 issue 2, p48. 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