British Petroleum Company - Essay Example

Assessing the ethical dilemma of Gulf Spill of British Petroleum Personal Identification (SID) Word count: 2965 words Table of Contents Introduction 3 Theoretical Approaches and Analysis 4 Mill’s Utilitarian theory 4 Kant’s deontology theory 6 Discussion on Utilitarianism and Deontology with respect to the given situation 8 Conclusion and recommendations 9 Reference list 11 Bibliography 13 Introduction Business sector, over the years, has become one of the most powerful institutions in the globe with numerous innovative sectors evolving on regular basis. The demand of business ethics has grew considerably in recent times as a result of significant number of corporate scandals. These scandals are largely associated with violations of moral considerations in business and thereby, generation of business malpractices such as environmental pollution, financial outrages, exploitation of human rights and so on and so forth (Crane and Matten, 2010). Initially, business ethics was defined as oxymoron by Collins (1994). Apparently, the author argued that business and ethics are two contradictory notions that have been brought together. Nonetheless, growing corporate malpractices has highlighted demand of corporate or business ethics significantly. Crane and Matten (2010) defined business ethics as assessment of a particular business situation or activity or decision that involve moral dilemma related to right and wrong. In business ethics, moral correctness is stress upon instead of commercially, strategically and financially correctness. Although there are several instances of violation of business ethics, one of the greatest scandals from gas and oil industry has been selected for evaluation with respect to two ethical theories. The paper will evaluate incident of Gulf Oil Spill by British Petroleum (BP) in the lights of Utilitarianism theory and Kant’s Ethics of duties or deontology theory. The oil and gas industry has been considered for evaluation of ethical crisis in business because this industry is one of the essential sectors from the perspective of economic development and environmental impact. The United States alone consist of 24.7 percent of global oil share while accommodating other subsectors such as exploration and production of oil and gas. Significant oil and gas reserved in the nation has attracted several global players such as British Petroleum (Marketline, 2012a; Marketline, 2014). Oil spill is often considered as an unavoidable situation in the process of drilling and extraction but the situation can cause havoc if goes uncontrolled. Two such critical examples are spill by Exxon Valdez in the gulf coast of Alaska and BP spill at the Gulf of Mexico. Prior to discussing the spill and its ethical consequences, brief introduction regarding BP Plc has been provided in the following section (Hanson, 2014). BP Plc was founded in 1901 and currently, it is considered as one of the largest oil and gas corporations in the world that has operation in the area of exploration and production of crude oil and natural gas. Alongside, the company is involved in trading and marketing of liquidated natural gas, power and natural gas. The company primarily operates in the Asia Pacific region, Europe, Africa, the US and South America. The operations of the company can be largely categorised as upstream, downstream and other business areas. The upstream segment is focussed on exploration of oil and gas, development of field and production and transportation and storage while downstream segments is relatively secondary area of operation focussed on lubricants, petrochemicals and fuel marketing, supplying and trading. In third segment, the company is associated with alternate energy business development (Marketline, 2015). Studies suggest the BP Plc has a history of repeating violation of safety requirements and business code of conduct. Instances such as accident of 2005, where around 170 employees were injured and 15 died and that of 2010 when 4.9 million barrels of crude oil was released in Gulf of Mexico as a result of failed operations in nearby oil rig. These issues have been condemned globally and have affected market reputation of BP in the long run (Mauer and Tinsley, 2010; Marketline, 2012b). These ethical dilemmas of BP will be evaluated in the following section with respect to ethical theories while critically analysing features and drawbacks of each theories in an elaborate manner. Theoretical Approaches and Analysis Mill’s Utilitarian theory Mill’s work on Utilitarianism discusses the concept as a moral theory and critically responds to various misconceptions associated therein. The theory of utility was originally introduced by Jeremy Bentham while Mill made effort to improve the concept by removing surrounding misconceptions such as happiness of minority should be sacrificed for the sake of majority’s happiness. Mill defined happiness as pleasure that is gained by the absence of pain. The author argued that happiness can vary in terms of quantity and quality and that it is bedded in one’s higher cognitive powers which should be weighed more strongly compared to basic pleasures. Furthermore, the author argued that achievements of individuals, for instance virtuous living, need to be counted as an impression of one’s happiness (Sandel, 2011). The ethical theory of Utilitarianism argues that minimisation of unhappiness and creation of happiness should be considered as a benchmark by means of which an entity’s actions should be judged as right and wrong and by means of which conventions associated with morality, public policies, law and social institutions should be critically evaluated. According to the utilitarian theory, the correctness or incorrectness of an action is not judged by underlying truth or lies because the institution of truth and lie determination in itself has certain flaws. Lying is considered wrong in general terms because it bears certain consequences. However, lying can be considered ethical under the purview of moral rules if it culminate in a good cause, such as saving someone’s life (Mill, 2010). Mill’s utilitarianism theory emphasises on the greater happiness principle that is referred to bringing maximum utility to maximum number of individuals. The author describe an activity as being moral, if it is the most appropriate for maximisation of happiness of greater number of individuals even if that cost sacrifice of one’s happiness. The theory aims at judging consequences of an action for determining its moral relevance. Utilitarianism emphasises on consequences that follows utility and which one needs to sacrifice for the greater benefit. Mill further argued that positive and negative intentions do not take the front place while judging moral relevance of an action. Instead, moral relevance should be associated with disperse of greater degree of happiness to maximum people. Nonetheless, the theory has been questioned from the viewpoint of justice that sacrificing someone’s happiness for greater good is unacceptable (Riley, 2010). Utilitarianism theory has been criticised for being relatively mechanistic and biased. The theory has been criticised from the perspective of justice and right theory as well; since, killing one healthy individual for saving lives of five individuals cannot be considered morally correct. Furthermore, it is impossible to measure the quantity or quality of happiness which according to the theory can be sacrifice for the greater good. Utilitarianism does not justify the incorrectness underlying an act either, as it only emphasises on consequences. Most critics argue that morality should not be determined on the basis of ultimate outcome only. The following section discusses the Gulf of Mexico Spill in the lights of utilitarianism (JJ, Quinton and Williams, 1973). The spill of 4.9 million barrels of crude oil in the Gulf of Mexico is completely immoral from the perspective of utilitarian theory. Mill’s theory emphasise on generating maximum utility and happiness for maximum number of individuals, none of which occurred during and after the spill. The spill affected several living and non-living entities in large and thereby minimised underlying utility. The spill had devastating impact on the coastal regions, beaches, marine lives and businesses that depended on these such as fishery and tourism. The disaster affected health of individuals, polluted environmental balance and caused significant level of financial loss in terms of lost revenue, increased cost, wastage of resources and falling marketing value of shares of investors. Studies suggest only 17% of the oil spread was recovered by the company and the rest affected water and marine lives and the impact is expected to last for longer than mere few years (Hanson, 2014; Marktline, 2012b). The spill is considered morally wrong because as per the ethical theory of utilitarianism it caused more harm than doing well. Arguably, negligible of pleasure or utility was derived from the spilled situation of BP Plc as it bore negative consequences such as death of large scale marine lives and death of 11 employees due to rig explosion. Since the explosion, BP Plc has taken initiatives for minimising the consequences and recreating its market reputation by adopting cleaning measures and other CSR initiatives throughout the Gulf area (Mauer and Tinsley, 2010). Nonetheless, Mill’s utilitarian theory mainly emphasises on impact of consequences for evaluating morality associated with an event instead of the intention associated with it. Since positive intention is largely unrelated with the features of this ethical theory, BP’s practice will also be held unethical. The firm’s intentions associated with oil exploration and leak will be largely irrelevant as the ultimate consequences were unhealthy. The theory condemns this practice of BP Plc for it affected the majority such as individuals, environment and finances (Mill, 2010). Kant’s deontology theory Immanuel Kant proposed the theory of duty or deontology which is strikingly different from Mill’s utilitarian theory. The terminology, deontology, was derived from Greek word Deon which implies duty. The deontology theory states that entities are morally bounded by certain principles to perform in an appropriate manner regardless of the associated consequences and outcomes (Schwartz, 2005). Similar to utilitarianism, deontology theories are in existence for centuries but its most recent moral form was present by Kant in 1788. The theory of deontology is different from the utilitarian theory on several levels. Among these differences, the most noted difference is that utilitarianism emphasise on consequences while deontology is focussed on nature of the act for establishing morality (Schwartz, 2005). Kant has produced so far the most prominent and effective form of duty based ethics. The theory is based on the author’s notion regarding individuals having a unique capability related to rationality. The capability to distinguish situations based on rationality is only available to human being and no other animals. As a result, individuals are obliged to act as per certain moral law and duty. The duty ethics emphasises on acting responsibly for the sake of one’s duty. Furthermore, the author believed that moral action associated with an act should not be influenced by its future consequences and emotions. Another divergence has been highlighted between utilitarianism and deontology based on the structure of the theories. Utilitarian theory is actively concerned about maximising greater good while theory of duty ethics is negatively focussed on avoiding things that are morally impermissible (Alexander, 2000). Kant discussed two imperatives. The first imperative is conditional which suggests that if an individual needs to achieve something (X) then they will have to do something (Y) and this notion can be implemented on any action and situation. The second imperative is categorical and it implies that if an individual wants to do something then they should do it. The categorical imperative seeks unconditional performance of an action. It is also referred as universal law as the author argued that using the above discussed reasoning, the rationality of a maxim (intention) can be determined. The theory invariably judges an entity’s actions and intentions towards a particular duty irrespective of its consequences. It strictly defies the notions associated with consequentialism. The author argued that if moral intentions are to be associated with an action or events then the action are correct regardless of the aftermath (McNaughton and Rawling, 2007). As per the theory, intentions or maxims are morally and ethically relevant while consequences and outcomes of the action are ethically irrelevant. Furthermore, the theory has nothing to do with end of an action; instead, it is largely about underlying duty associated with the action. Nevertheless, the Kantian deontology is not free from criticism. The greatest drawback of this theory is that it neglects an action’s consequence as an important factor for determining its moral validity. Deontology ethics is largely associated with things that are not to be pursed based on the correctness of the act. For instances, it forbids one from lying even if the lie is spoken for the greater good and otherwise (Alexander, 2000). In context of the Gulf spill of BP Plc, the situation has been assessed with respect to deontology ethical theory. According to the theory of deontology, the company’s intentions were moral irrespective of the spill or no spill. As a result, BP Plc cannot be executed on the ground of morality. Deontology in essence focuses on intention and duty associated with an act for determining morality underlying the act and as a result, the event of oil spill is completely ethical as per Kant. Arguably, the spill and clean up efforts undertaken by BP can be classified as two activities for determining morality of the act. The spill occurred when the firm was drilling the rig for oil extraction so that revenue is generated and investors are paid off accordingly. The oil spill occurred as an accident and was not a conceived intention by the corporation. Since the intentions of the company were moral, the overall act will also be considered as moral. Furthermore, the clean up action was undertaken by the company with the intention to minimise the impact of the accident as well as improve market reputation of the company. Again, the intentions are moral; consequently, the overall act is considered as ethical. The deontology theory establishes the act of Gulf Oil Spill as moral regardless of the environmental and natural life destruction, because the primary intention of undertaking the act was ethical (Schwartz, 2005). Discussion on Utilitarianism and Deontology with respect to the given situation The assessment of the oil spill situation with respect to both the ethical theories was performed to evaluate ethical relevance of BP Plc. The dilemma of the situation can only be resolved by means of deontology theory, as deontology lays emphasis on maxim associated with an act and its moral relevance. By means of deontology, the situation can be justified in favour of BP Plc as the firm has no negative intention while it undertook the project of oil exploration and extraction in the region. The firm did not intend to create the mayhem at the Gulf purposefully. As a result, the most possible and rational way to discuss the issue of rig burst and oil spill is to consider it as an unanticipated accident. The aftermath was extremely unethical as per Mill’s utilitarianism but Kant’s duty ethics does not take into account consequences of an act and as a result, the accident is irrelevant to deontology. The overall situation suggests that the accident was unethical but the intention of the company was ethical and the company cannot be condemned for anything that it has no control over. Furthermore, the clean up attempts of BP Plc as an act of philanthropy should be again considered as moral as the intentions were to promote the greater good. Duty of ethics considers this philanthropic act as ethical because it is aimed at undoing the damages and improving the market reputation of the company. However, if the act of philanthropy was undertaken by the corporation for only improving its market reputation then it would have been categorised as conditional imperative resulting to considering the act as immoral. The underlying reason for this is that the CSR efforts (X) were done for achieving a specific end, that is, to improve market image (Y). However, the positive intention of cleaning up the Gulf was categorically imperative and therefore, is moral by all means. Conclusion and recommendations The paper assesses two century old theories of business and moral ethics, namely, deontology and utilitarianism from the perspective of BP Plc oil spill that occurred at Gulf of Mexico. The situation discussed in this assessment is worth creating ethical dilemma as the act of the company was aimed at generating maximum revenue but the aftermath caused severe damage on several levels. It was established by means of the overall assessment that the paper chose appropriate subject for successful demonstration of difference between deontology ethics and utilitarianism ethics. Deontology invariably supported the accident occurred at BP Plc as well as its activities that were undertaken after oil spill because duty ethics are by default related to a specific act instead of its outcome. On the other hand, utilitarianism argues that the accident and role of BP Plc therein are largely unethical as utilitarianism ethics are mainly about consequences. The two ethical theories present interesting yet contrasting viewpoints related to ethical approach to the situation. The analysis very clearly depicts that these two theories belong to two extreme ends and apply any one of them to a situation which may generate mechanistic outcome. In both situations, it was determined that humanity has been paid negligible attention in terms of taking responsibility. The research paper essentially meets the primary objectives of the analytics as the theories have been theoretically contrasted as well as both aspects of a practical example have been presented in an elaborate manner. It was also established that the approaches will consistently contradict each other’s formulation regardless of the given situation. Act and consequences are two aspects of an event that lie poles apart and as a result, it is impossible to generate same outcome by applying these two theories. For recommendation purpose, it is suggested that an event should be evaluated from the perspective of both the theories so as to reach an appropriate solution. A situation needs to be moral from the perspective of the intention associated with the act as well as the impact of the consequence towards greater good. No event can be considered completely moral if one of the aspects remains amiss. Consequently, it is proposed that the intention of an event should be evaluated using utilitarianism theory while its outcomes are to be assessed using deontology so that complete moral relevance is established (Freeman, 1994; Ladkin, 2006). Reference list Alexander, L., 2000. Deontology at the Threshold. San Diego Law Review, 37, pp. 893-912. Collins, J. W., 1994. Is business ethics an oxymoron? Business Horizons, 37(5), pp.1-8. Crane, A. and Matten, D., 2010. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford, London: Oxford University Press. Freeman, S., 1994. Utilitarianism, deontology, and the priority of right. Philosophy & public affairs, 23(4), pp. 313-349. Hanson, K., 2014. Safety, Corporate Responsibility, and the Oil Spill. [online] Available at: [accessed 29 March 2015]. JJ, C., Quinton, A. and Williams, B., 1973. Utilitarianism; for and against. MA: Cambridge University Press. Ladkin, D., 2006. 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