Bhopal Union Carbide - Case Study Example

Sur Bhopal Union Carbide Case Study Introduction: With an incidental accident occurring in the year 1984, in Union Carbide Chemical Factory, in Bhopal in India, a lethal chemical gas was released in the air killing and injuring thousands of people who were living in the region. While several individuals were killed, thousands of others suffered from severe health illnesses even till death. The company was held responsible for the incident considering their lack of sincerity and effectiveness in maintenance of the equipments and units that caused the leakage on one hand and on the other hand could not prevent the spread of the chemical as well. Although the US Union Carbide Company had its holdings in the Indian Company; yet it was the Indian company and its members who were accountable for the incident (Bhopal-Union Carbide Case Study). The present study focuses on studying and analyzing the case and discuss on the ethical issues associated with the incident, and also issues such as liability of the members, the effect on the workforce, the effect on the management, and ways to reduce negativity. Analysis of the Case: As could be obtained from this particular case, the Indian Union Carbide Company can be said to have neglected severe issues in relation to the maintenance of its units and equipments which was significantly necessary as the factory was dealing with harmful chemicals. The management of the company should have been careful to understand that the slightest of the leakages or malfunctioning of the units or equipments could lead to such massacre. Particularly, when individuals were working within the factory, and also there were people living in the surroundings, the company should not have neglected even any minor issue in regard to handling of the chemicals and their leakages. It could be obtained from the case study that the company had been performing well initially and opportunities of jobs were also increased for the Indians at a time when the welfare of India could not be considered as healthy. However, gradually negligence occurred in the activities of the company and few years before the incident even the US inspectors detected faults and warned them of areas that needed repairing and monitoring. But, the Indian company did not take such warnings seriously and the result was the accident. It is clear from the case that if the company had been careful in its handling of chemicals, and in maintaining their units and equipments, then the incident would not have occurred in the first place. Even if it occurred, the company could have prevented the spread of the chemical in the air, but no equipments worked at that time. Hence the Indian company was to be blamed and was blamed, an incident that has left several lives into suffering till the present day. Ethical Issues Raised by the Case: The most essential ethical issue that could be observed from the case study is in regard to the responsibility of the company to provide for protection of the human lives. The company effectively failed to protect the lives of its employees. Not only that, the company also proved to be inefficient in protecting its environment as the incident killed hundreds and injured thousands of people residing in the surroundings, affecting the entire area. Ethical issue arises as such an incident clearly reflects that the company had not been sincere in following and maintaining the safety procedures that it needed to. The focus of the company was only on increased production of pesticides and hence gained profits. Thus profits were given more value by the company than the protection and safety of human lives. The company did not care to ensure the fundamental standards of safety in the factory. Moreover, although the company was under the holding of its American company, yet the standards set by the American firm were not followed by the Indian company. Ethical issues can also be raised to be in the way the factory was built in a surrounding where so many people resided. The chemicals stored in the factory were hazardous and the company knew the negative effects of such chemicals. In spite of that there were no safety precautions for either the employees or for the company’s surrounding environments. The methyl isocyanate gas that caused the havoc is a deadly chemical and when it had started boiling owing to entry of water in the tank, it did give some hints resulting in burning sensation in the eyes of the employees. Moreover, the poisonous properties of the chemicals were also known properly by the employees. This also reflects that the basic training and knowledge were not provided to the employees such that any accident could be prevented, and hence the slightest warnings were always neglected without them even realizing that it could lead to a disaster. The company thus represented itself to be highly unethical in the way it performed its manufacturing and dealing of chemicals. Liability of the Shareholders of the Company: As could be obtained from the case, the shareholders of the company were not liable for any deaths or injuries that occurred in the factory or which affected the surroundings. Thus the legal doctrine of “Limited Liability” could not be applied to the shareholders of the company. However they had to encounter personal losses when owing to the incident, the stocks of the company and fell and the company went into losses. Moreover, the company was decided to be shut down in the year 1985 causing losses to all its shareholders. Thus the case for the company was such that neither the shareholders were accountable for the damages that occurred in and outside the factory, nor they could be saved from losses when the company went into losses. Compliance of the Indian Operations with Legal or Moral or Ethical Standards: The case clearly presents that the operations of the Union Carbide Company in Bhopal in India did not comply with any legal, moral, or ethical standards. The basic standards of safety were not followed or maintained by the company. Safety was neither regulated nor enforced unlike the situation in the United States. Very few laws needed to be followed and they were not difficult to follow but the company did not follow any law of safety for the company and its employees. The Indian company should have complied with the standards set by the American company but they did not do so. Rather, even after the American counterparts came and warned them of their faulty equipments and units, the Indian company still ignored and neglected the significance of maintaining the standards of safety. Thus the company failed to present itself as both moral and ethical. The lives of humans were not given any value in the company in India, nor was there any concern on the part of the company for the surroundings and the environment. The incident of 1984 left the entire area shattered. If the company had followed and implemented the necessary safety standards the costs of the company would have been lesser than what it had to pay owing to the incident. The incident led to loss of stock values and unpleasant media hype of the company forcing the company to shut down. Before the occurrence of the incident, as the case reports, the company had been performing poorly. As an initiative to manage its losses, several programs were initiated by the company in order to cut the costs for the company. The workforce had also been reduced. Seeing the condition of the company, many of the best workers and operators of the company had left that in turn reduced the morale of the company. Gradually there were individuals working in the factory who did not have the suitable qualifications as well. Even after the survey of the company was done by the engineers from the U.S. company, the company had replied them stating that the improvements and rectifications in the processes had been done which was actually not the case. Thus, from all these facts, it is clear that the Indian operations of the company did not comply with the ethical, moral, or legal standards. The U.S. Union Carbide Company Bothering About the Indian Incident: The Union Carbide Company in Danbury in Connecticut had 50.9 percent holding in the Indian operations of the company. The U.S. management had the power to exert financial and technical control over the Indian operations. The regular operations were the responsibility of the Indian company, but the U.S. company dealt with the budgets, major policies for the business, and also decide on directives for technicalities of operations of the business targeted towards operation and maintenance of the plant. Thus the U.S. company’s role in the Indian operations were significant and hence they needed to bother and take involvement when the incident occurred, although the accountability of the incident laid with the Indian counterparts. When the Indian company had implemented the cost cutting programs to overcome its losses, although the U.S. company had no involvement in taking up those measures; yet they supported those programs stating them as justified. However, when the company had sent three engineers for survey of the Indian operations they had suggested the Indian company to bring remedies to certain major flaws that they could detect in the processes but the Indian company seemed not to bother and gave them false reply stating changes have been brought. This was later proved when the incident occurred and thus the accountability of the incident might not be forced on the U.S. company but their holdings and roles presents a connection for which they can take decisions for the Indian operations. Effect on the Workforce: The first effect that has been severely felt reflects the death of hundreds of employees who were present in the factory and in the surroundings at the time of the incident. For the existing employees, the effects could be imagined to have occurred from two aspects. Firstly, the losses that the company encountered led the company, even from before the incident and with the incident as well, to cut down on its workforce. Thus many individuals lost their jobs while others would be in fear of either losing their jobs at any point of time, which in turn would have affected their morale and encouragement to work. The morale of the employees had also been affected owing to several efficient employees leaving the company resulting from the deteriorating condition of the company. Another factor that would affect the employees was the fear of harm. It could be obtained from the case that the company was not sincere about the protection of its employees. Such a realization would affect the mindset and encouragement of people working in the company and factory. Effect on the Management: The management of the company in India would be badly affected as they can be considered to be the most responsible for the incident. The management involved in the Indian operations of the company did not take into consideration the sincerity of maintaining the safety and protection standards of the employees or the operations of the company and hence the existing management could not be trusted any more for the purpose of business. As obtained from the case, the company had started encountering losses even before the incident owing to which shut down of the company was being considered. With the incident being occurred, the operations of the company could be realized to have halted with stocks of the company losing their values drastically in the market. The management of the company being one of the major stakeholders of the company would be affected as a result and they might also need to leave their positions owing to their negligence causing such havoc disaster. Ways to Reduce Negative Publicity: Owing to the incident that occurred in 1984, the Indian Union Carbide Company encountered adverse publicity that could only be reduced with the company responding quickly and honestly to the situation. If the company realized their mistakes, then it would be better for them to stand up and apologize. The press, the media and the general public would have several queries in relation to the incident that should not be ignored or kept unanswered, as not commenting on the situation would lead to the press digging more into the issue and the public considering it as a more negative aspect of the company, thereby affecting the reputation of the company. In order to restore the reputation of the company and its business, the only way would be to face the situation, admit the mistakes, compensate for the losses as much as possible, and rectify. Conclusion: It can be concluded from the Bhopal Union Carbide Case Study that the incident had been one of the biggest tragedies that could have taken place in any company, in any factory. The lives of many people can never be compensated and the issue had been more severe as the incident could not be called a mere accident but it occurred owing to the negligence of the management dealing with the Indian operations of the company. Thus the losses could be prevented had the standards of safety and protection been followed and maintained by the organization. Instead, the company neglected their responsibilities and failed to show any concern for their employees and the surrounding environment, resulting in massive disaster for human lives and the company. References Bhopal-Union Carbide Case Study Read More