Running an Ethical Global Business - Dissertation Example

THE OPERATIONALISATION OF ETHICAL THEORY AND CORPORATE RESPONSIBILITY Table of Contents Business Ethics 3 Utilitarianism 4 Kantian Deontology 5 Rawls and Nozick on justice 6 Rights 8 Ethical relativism 11 (Source: BHP Billiton Sustainability Full Report, 2005) 13 Conclusion 13 References 15 Business Ethics Ethical theories deal with responsibilities in a virtuous way. It is derived from the Greek word ‘ethos’ which means ‘morals’. In fact, ethics is defined as the moral code of conduct. It’s the person’s conscience which judges whether the decisions taken or deed done are right or wrong. Ethics is of two types, one is descriptive, the other one is normative. Descriptive ethics is a field within the social sciences; it deals with a comparative study either of two societies, or past with the present. The normative ethics is a methodological reflection on moral and is used to judge human psychology. Thus, it can deduce that people’s main desire is to maximize pleasure. Based on types, utilitarianism is further sub-divided into topics under Act, Rule, Negative and Preference (Aerospace, 2010, p.1). BHP Billiton is a leading global oil resource company. Its main aim is to create long-term worth through development, discovery and conversion of natural resources, such that it remedies the market requirements by making innovative products. BHP Hilton actively manages and figures an elevated quality assets and services. It continues to drive for a superior performance where every individual accepts the responsibility and works for a better result. Making a commitment and fulfilling it, makes the company a trust-worthy name among the employees, customers, suppliers, communities and share-holders. The code that BHP has is a common reference point for defining how each of people working in office or site is expected to act while conducting a business with BHP Billiton. Working on-site or in an office, dealing with fellow employees, cooperation between business partners, community and government representatives or making decisions are routine based activities. Any high-risk activity in relation to the use of assets and any unexpected business behavior should be well understood whether it’s right or wrong and under any circumstances, it needs to be cautious about it. So our major subject of study is BHP’s moral study within the employees and socio-environment (Market Publishers, 2011, p.1). Utilitarianism Utilitarianism is a normative ethical theory and is a prevalent form of consequentialism. Consequentialism is one’s code of conduct for a range of moral theories that state the exactness and mistakes of an action that’s based only on the results produced by that action (Thompson, et al., 2000, p.4). BHP Billiton is a global leader in the natural resources sector formed by the merger of two complementary companies – BHP (Broken Hill Proprietary Company), an Australian company and Billiton, a British firm and it is head-quartered in Melbourne with various corporate branches at Johannesburg (South Africa), Houston (United States) and London (United Kingdom). The Company manufactures diverse range of products: base metals, aluminium, carbon, diamonds, energy coal and stainless steel-making raw materials and petroleum having more than 100,000 employees’ world-wide helping a smooth workflow of the organization. BHP Billiton aims to create a prolonged significance through the discovery, development and conversion of natural resources and the anticipation of pioneering customer and market-focused solutions. Thus, it utilises the natural resources very wisely while providing customer benefits. BHP Billiton maintains a sustainable development ensuring that its business remains feasible and contributes lasting benefits to the society through the consideration of social, environmental, ethical and economic aspects in everything that it does. BHP Billiton’s ‘Sustainable Development Policy’ emphasis’ the company’s aspiration of zero harm to people, to any host communities and the environment. Moreover, BHP Billiton does the utmost to accomplish leading industry practice, govern safety by sound principles, business conduct while environmental, social, and economic activities are the business’ fundamental way. The policy identifies a number of related aspects including socio-economic considerations. BHP Billiton does not compromise on safety values and always tries to find out ways for simulating and enlightening the physical condition and fitness of the workforce and community (BHP, 2011). Kantian Deontology A Deontological approaches is usually compared with teleological approaches. A teleological means that any phenomenon that occurs in nature is not only a mechanical force but also has certain goals of self-realization. It tries to overcome egoism and brings about self-unitarianism. Deontological theories are explained by its own features and not by the consequences of judgment (Umass, 2006, p.3). BHP commits to repeatedly improving the performance by implementing programs that sets and reviews health, environmental, safety and community objectives and targets a management system framework that abides with the provisional set-up. BHP functions to create, implement and conserve the management systems for safety, health as well as the betterment of the environment to match it with the internationally recognized standards. It identifies and takes care of the risk to the employees, environment as well as the communities. It tries it best to achieve the leading practices which are followed by the industry. BHP sets and gives its best shot to achieve targets that include reducing as well as preventing pollution. It believes in supporting the fundamental human rights of the different contractors, employees as well as the communities in their particular area of operation. BHP respects the traditional rights of aboriginal people and gives a lot of emphasis on the cultural heritage as well as on the environment. It recommends the responsible use of their products while also looking out for opportunities to share their achievements by working in close coordination with the communities. Thus, a significant contribution to social infrastructure is ensured through the increased use of appropriate skills and technologies. A partnership is developed that emphasizes on establishing a sustainable value for everybody. At the same time, communication on a regular basis is carried out with the employees, business partners, contractors, customers, visitors, suppliers, and communities. It believes in developing relationships while focussing on honesty, trust, sincerity as well as involvement. BHP takes the responsibility for fulfilling all requirements of the policy laid (Crossley, 2003, p.2). Rawls and Nozick on justice John Rawls’ theory of distributive justice is based on the idea that society is a cooperation system for mutual benefit between people. It distinguishes between conflicts arising due to difference of individual interests and an identity of common interests. Principles of justice define the appropriate distribution of the benefits and encumbrances of social co-operation. Firstly, each person should have an equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all. Secondly, social and economic inequalities are to be arranged so that they are both are either for the greatest benefit of the least advantaged or attached to offices and positions open to all under conditions of fair equality of opportunity (Lacewing, 2009, p.2). BHP follows certain standards set out as follows: The standards followed are: - Leadership and Accountability; Legal Requirements and Document Control; Risk and Change Management; Planning, Goals and Targets; Awareness, Competence and Behavior; Health and Hygiene; Communication, Consultation and Participation; Business Conduct, Human Rights and Indigenous Affairs; Design, construction and commissioning; Operations and Maintenance; Suppliers, Contractors and Partners; Product Stewardship; Incident Reporting and Investigation; Crisis and Emergency Management; Monitoring, Audit and Review (Lawrence, n.d., p.5). Its positive attitude and healthy relationship with everyone while abiding by the government laws has enabled it to have large number of stakeholders. Major ones are: - Employees and Contractors, Local and Indigenous Communities, Shareholders, Customers, Investment Community, Business Partners, Community Organizations, Unions, Non-Government Organizations, Suppliers, Governments (including regulators), Media and Industry Associations (Billiton, 2006, p.1). It comprehends, promotes and upholds fundamental human rights within its sphere of influence, respecting the traditional rights of ethnic peoples and valuing cultural inheritance. It encourages a diverse workforce and renders a work environment in which everyone is treated reasonably, with due esteem and can realize their full potential. BHP engages regularly, unambiguously and honestly with people affected by their operations. It can take their views and concerns into account for decision-making. It develops partnerships that nurture the sustainable development of their host communities, enhances fiscal benefits from the operations and contribute towards the eradication of poverty. The socio-economic stability aspect of BHP Billiton’s operation is associated with how the company manages its people and how it participates with the communities and economies where it operates. Thus, BHP Billiton’s always follows three stands and socio-economic withstanding approach: viz., employee relations, supply and economic contributions. Rights The need for ethics and human rights has few considerations in counter-trafficking. Few points need to be remembered about rights. There shouldn’t be any harm and it should try to be compassionate but neutral, prioritization on personal safety and security as well as identification and minimization of risks. Informed consent can be obtained, without any coercion. An assurance of greatest possible extent should be made to maintain anonymity and confidentiality. An adequate selection and preparation should be done to interpreters and field teams. Referral information needs to be prepared and it should be prepared for emergency intervention. Information should be put to good use without hesitation (UNIAP, 2008, p.23). Supervisors and managers of BHP take all reasonable steps to ensure that the employees remain aware and uphold the behaviors projected in the Code and perform it responsibly. This includes: - Consistently demonstrating exemplary behavior, undertaking activities to substitute a culture in which employees understand their responsibilities, feel comfortable raising concerns without fear of retaliation, are encouraged to work according to the values in the Charter and are rewarded for such behavior. It also looks into performance management processes, employment and supply contracts, and induction and industrial agreements. It responds promptly and seriously to employees’ legitimate concerns and seeks further assistance if required. It identifies the risk areas in relation to business conduct and ensures that actual or potential breaches are appropriately investigated and handled. The Global Ethics Panel (GEP) set up by the BHP assists the CEO in meeting his responsibilities by advising on matters affecting the values and culture of the group. Members of the GEP meet regularly and assist business and functional leaders in assessing acceptable outcomes in cases where judgment is required. BHP Billiton respects the authority of governments wherever a business is conducted and maintains an honest relationship with governments and their agencies, officials and personnel. Information that Billiton obtains either from employees or government organization, is ensured to be accurate and appropriate. Errors or omissions may damage BHP Billiton’s reputation and credibility. BHP builds relationships and works collaboratively and transparently with the host communities for its long-term success. The aim is to be the priority company, a valued one and respected by the communities in which they operate. Thus, BHP engages regularly, openly and honestly with people affected by the operations and takes their views and concerns into account for their decision-making. A value is given on local community knowledge and perspectives for a better understanding. Community-based activities are designed to improve the livelihoods of the people in the operating communities in a sustainable way. A proper due diligence is conducted before engaging any partner or agency to implement a program. Thus, once engaged the partner or agency fully understands the expectations and is monitored accordingly. BHP understands the norms, laws and customs of those countries and provides cross-cultural training. BHP ensures that gifts and hospitality are modest and it complies with applicable laws, regulations, and local customs. A good judgment must be done in deciding which the local value of what is modest, is relative and is a function of the average local income and standard of living. The recipient’s employer’s policy is taken into consideration in offering gifts or hospitality, especially to government officials. Articulation of BHP Billiton practices on the offering and accepting of gifts and hospitality at the beginning of new business relationships, especially where cultural norms may be different than those outlined in the Code. Personal payment of a gift or hospitality is to be done in order to avoid complying with BHP Billiton standards. BHP Billiton respects the authority of governments wherever the business is conducted. An honest relationship with governments and their agencies, officials and personnel is maintained (Kloppers, 2009, p.32). Ethical relativism The two main arguments for ethical relativity were presented by Stace. First of all, there are so many different moral standards around the world over the time that a universal standard has not been found, even by anthropologists who have studied people in all cultures and have observed much diversity and variety in moral customs. In fact, it is the belief of ethical relativists that worldwide variety explains why there is and can be no universal standard (Underwood, 2008, p.4). Corporate social responsibility BHP performs various environmental monitoring programs. These activities are regulatory requirements covered by waste discharge licenses and it undertakes the best practice to provide valuable information to its stakeholders, with the overriding objective to minimize the impact on the environment. It keeps a check on: ambient dust, mosquito, surface water, ground water, sewage monitoring. It seeks: Energy conservation Plan, Greenhouse Gas Management Plan, Land Management Plan, Waste Minimization Plan and Water Management Plan. These plans aids to minimize emissions, conserve our natural resources and maximize the success of our rehabilitation accomplishments. Land rehabilitation activities during the year focused primarily on improving the success of preceding rehabilitation which was internally classified as being unsuccessful. It includes routine groundwater monitoring, sub-surface fuel recovery, maintenance of the groundwater, separate phase hydrocarbon and dissolved phase hydrocarbon models, coral monitoring. BHP also conducts various social awareness programmes. One of the significant one is in relation to increase rapidity of HIV in South Africa. BHP recognized the early importance of responding to HIV through the rapid absenteeism, increasing operational costs due to growing workforce mortality, disruptions in the supply chain, reduced productivity and mounting healthcare requirements for sick employees. Thus, BHP took the initiative to stop the spread of this HIV epidemic among common people. So, BHP held a comprehensive HIV training, education and medical programs in order to create general awareness among the people. The result was four-fold in terms of benefits such as employee commitment, stable production, and productivity. The major ones are: - Health insurance and treatment, care and support, responding to social factors, support for therapeutic vaccine trials (Apbca, 2008, p.3). Figure 1: Environmental Management Strategy (Source: BHP Billiton Sustainability Full Report, 2005) Conclusion With an ethical attitude, BP emerged as a market leader. Since the major oil spill incident involving BP, BHP attempted to maintain a good code of ethics. Thus, BHP Billiton is is known as the second drilling company in U.S. after BP. At the same time, BP’s blowing off the coast of Louisiana which resulted in killing 11 rig workers and spewing more than 4 million barrels of crude oil into the sea, made BHP succeed in this matter. Meanwhile, the company also runs a MBA Program in order to properly groom the students so that they are able to receive a proper exposure. They can become competent managers by learning Ethics and Skills of BHP (Business School, 2011, p.1). BHP Billiton is obligated to its ethical and social responsibilities genuinely and it demonstrates this by investing significant time, money and resources in numerous sustainable development and socio-economic set of instructions. BHP Billiton’s commitment to responsible business practices and repeated efforts are consequently recognized which includes ‘Company of the Year Award of 2005’ for Excellence. It was a national award by Business in the Community (BITC) of United Kingdom (Afrbiz, 2006). The Company Charter forms the basis of the corporate culture and their principles of business conduct. It states that high standards of business conduct, honesty and integrity is needed in all their dealings. The Guide to Business Conduct provides a basis for achieving the expected standards. This is particularly valuable and relevant for the global supply staff, interacting with suppliers on a regular basis. BHP maintains a strong commitment at the highest levels of the company so that their business conduct principles are understood and practiced not only by our employees and contractors but also by our vendors. Thus, BHP still abides by every mission undertaken by them be it, educating, delivering key messages or networking. As their suppliers deal with the local site level, the forum provided an opportunity to present them with a profile of their entire organization and to highlight the benefits of having a global business view. Emphasis was placed on our growth plans and the requirements regarding ethics and business conduct. The environmental and social impact assessment and approval processes have commenced in order to assess the potential effects of the developments. The information will also be used in presentations and to seek government and community response on the acceptability of the proposals. In support of this, a community engagement program was established and has been implemented with the initiation of development activity. The program has been developed in line with the Companys policy of engaging with communities and building relationships based on sincerity, openness, mutual trust and engagement. The business growth supported the performance of the suppliers. It forms relationships with suppliers who demonstrate excellence in continuous value improvement and business conduct. The forum also enabled the crucial suppliers and the executives and supply leaders to interact, facilitating the building of relationships that can substitute continued business improvement. The phase on the value of ethics focused on the importance and value of good business conduct (BHP Sustainabilty Report, 2005, p.377). References Aerospace, S. 2010. Ethical Theories. [Pdf]. Available at: http://www.aerostudents.com/files/ethics/ethicalTheories.pdf. [Accessed on March 31, 2011]. Afrbiz. 2006. Running an Ethical Global Business. [Online]. Available at: http://www.afrbiz.com.au/library/416226/publish/Asset/420229_BHPOnline.pdf. 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