Ethics of Petroleum Nasional Berhad - Case Study Example

PETRONAS Student’s Name: Institutional Affiliation: PETRONAS Introduction PETRONAS is shortened form of Petroliam Nasional Berhad which is Malaysian oil Gas Company. The company was found on 17th August, 1974 by the Malaysian government. Al the gas and oil resources in the country are entrusted with the capability of developing as well as adding value to the resources. It is a blue chip company which has been featured in the Fortune Global 500’s corporations, which are the, largest in the world. In 2008, it was ranked position eighty, and in 2009 it was position 95 in the world. PETRONAS was ranked as the thirteenth most profitable company in the entire world indicating that it has an opportunity to transform the lives of the citizens of the Malaysian nation. It is the most profitable in Asia because it ha dockets that take care of the oil resources in the country (Pywong, 2009). Most of the employees are sourced from within the country hence lessening outsourcing of employees. It has cost cutting measures which enhance it to realize profits which sustain the profits of the company by far. Since the beginning of the company, it has integrated more than thirty countries, which pool their, resources in the same ideologies for the purpose of realizing profits (Luqman, 2011). The company has a variety of activities which are upstream exploration of oil and gas to the downstream activities such as refining of oil, marketing of the products, trading gas, distribution of oil products, processing, and gas transmission by use of pipeline. The company runs its affairs from its headquarters, which are in, Petronas Twin Towers. The headquarters were opened on 31st august, 1998 during the twenty fourth anniversary of the company (Petronas, 2012). Standards PETRONAS has integrity standards, which helps it, strive to achieve in the case of accountability. The conduct of the company ensures that the company has the measures to enhance accountability in the company. The company ensures that all its activities are conducted ina transparent and ethical processes which give a good reputation to the company and the nation at large. There is a policy which provides avenues for all PETRONAS employees to have a chance to disclose any misconduct in the company. This helps the workers to be stakeholders in the company rather than just workers who strive to achieve the targets in the company. The policies enhance the top level management to delegate the powers in running the company. Subdivision of roles helps the company to be very effective in the duties, in the company. There are many incidences, which ensure that, fraud is controlled in the company (Shaw, 2010). Whistle blower policy The scope of the whistle blower policy was to control and prevent fraud, bribery, power abuse, embezzlement, and non compliance with the procedure. It is not able go exhaust the list of the things that can be unethical in the company, but it is imperative to check the loop holes which create such misconducts in the company. By ensuring the policy was effected in the company is an ethical process towards realizing the ethical behaviors in the company. There is no racisms issue sin the company because the company needs have a teamwork approach towards realizing its goals. The policy also ensures there is no impersonation whereby most of the people disguise themselves to occupy official duties and commit theft. Most of employers are advised to disclose the identity of the people they report instead of stating anonymous people in the company. In that respect, the company will have measures as per the statutes of the office to offer protection for the suspect and conduct investigations (Petronas, 2012). By being truthful about the business operations in the company helps the customer relationship where there is the creation of value that exceeds the service provision cost in the company. In the recent wave, of globalization, the way businesses are carried out has changed. It is through communication that business transactions are carried. There are a lot of cyber crimes involved in transacting business deals. A lot of loopholes are being used by rogue operators who intend to swindle people their fortunes in the name of transacting business with the PETRONAS Company (Cragg, 2005). In that regard, there are counter measures put in place to ensure that there are no unethical process being carried out by the employees.sin the PETRONAS company website there are a lot of authentication passwords for identification. This helps the employees who are held responsible with the information to have the secrecy of operation. Oaths are taken before working where workers remain faithful to their offices ad all the duties within their jurisdiction so as to reduce theft cases (Shaw, 2010). In the upstream activities of sourcing for oil through exploration, the company has measure that ensures that there is no degradation of the environment. Compensation is highly recommended by the board of PETRONAS because eviction of people from the mining area is unethical. There are legal proceedings, which are followed, to ensure that people are not unlawfully evicted from their environment in pursuit of oil resources (Petronas, 2012). The company signed the Corporate Integrity pledge which was formulated in Malaysia for the purpose of upholding transparency in the country and elsewhere. Since the launching of the corporate integrity pledge on 31st March, 2011 which took place in Bursa Malaysia, there have been twenty four countries which signed the contract for the purpose of ensuring transparency. The pledge enhances that there is no violation of anti corruption principles which shield the government corporate from being mishandled by employees who are egocentric. PETRONAS Company ensures that the employees attend integrity workshops so that they are imparted with ethics in operating the transactions in the company. Because of a lot of money in the company one can be tempted to make away with some or bribe the auditors. This one is stopped by the personal conscience which has been affected by the use of ethics (Cragg, 2005). There have been quality assurance officers appointed by the civil service to ensure that the company is run accordingly without flouting the rules of the company. So many companies pay bribes to win contracts which are a crime according to David Lehmann who is the head of Deloitte Malaysia’s forensic practice. Facilitators who help the workers identify the consequences of unethical practices participate in the seminars which are beneficial to the governmental organizations in Malaysia (Luqman, 2011). PETRONAS is committed towards ensuring that the community which surrounds the company’s activities has water and air which is free from pollution. This enhances the ethical bit of PETRONAS to manifest itself. This is provided by the government which shows the aim of good well to the society. The lands, which are in, the exploration regions of oil are reclaimed by the company instead of destroying the land that was productive for people who lives in the community. Instead of the people who live in the neighborhood suffering because their source of livelihood is used the government relocates the people in other places away from the mining center. This is an indication that PETRONAS is concerned about the welfare of the people who work for it as well as consumers of the oil and gas products. Most of the people accept the ethical sense in the company. By giving back to the community shows that the top management of the company is not self centered or exploitative to the people who serve them. It is imperative to be positive minded concerning the people who are direct consumers of the company instead of destroying their source of livelihood and later evicting them to take of their uncertain lives (Luqman, 2011). The PETRONAS business industry has business laws, which take care, of the justice concerns of consumers who are also stake holders in the company. There is no impunity in the company because everyone has a right to expression. This helps in minimizing the collisions in the company because if misconduct is supreme in the company, there is no progress in the company. There is the necessity to have seminars in the top level management who can be corrupted by the politicians in accepting dubious means of soliciting money from international investors. PETRONAS ensures that there is transparency in everything that takes place from the floating of shares whereby the consumers get an opportunity to become stakeholders (Petronas, 2012). PETRONAS is a company that has employees who are patriotic because they work well for the country. The employees are ethical in the manner which they offer their services to the people because they authenticate the company in the country and the citizens too. The company creates a good public image by giving back to the community. This strengthens the bond between the company and its consumers. During the marketing strategies, the company helps in sponsoring many programs, which affect the, grassroots directly without mediation. In the field of sport, the company funds the organizations that are related to sports because they enhance integration in the community. PETRONAS was a key sponsor in formula one team by supplying lubricants and fuel to the esteemed team. This makes the community benefit because it sees the results of associating with such a blue chip company. It also gives the people intrinsic motivation for they feel that their money is being used wisely and more so in a manner that helps them. Apart from running oil and gas products, the company owns about forty percent of Sauber Petronas Engineering which builds chassis of engines such as Ferrari (Pywong, 2009). The company has a social responsibility program whereby it helps underprivileged children to enjoy. It pays for their tickets to watch the rallies for instance the formula one rallying. By helping underprivileged children to have fun shows how ethical the company is because it helps in rejuvenating joy in the children. PETRONAS sponsors other motor sport activities where the racing cars are fueled for free and servicing is offered by the company. This increase the customer relationship for the consumers feels that they are a part of the business rather than mere spectators. Apart from supporting motor sports and underprivileged children, PETRONAS supports education ministry. There are staff members who convert schools for both international and local students to study in local universities. PETRONAS has an educational unit called PETRONAS University of technology. The company proved to be ethical to the society because it rated the admission with merit, family background and co curricular activities. It is a unit that rewards talents and chooses on the less privileged people rather than the opportunistic students. The students, who are absorbed by PETRONAS at the tertiary studies level, have convertible loans that become full scholarships for their educations. For every one year, they get sponsored they are asked to work for two years for the company. This ensures that there are provisions of work for the educated people although they will need to add a little money on the salaries. By affecting the society in such a positive manner, the consumers always feel that they have the responsibility to have the company grow. It is with caution that people attach themselves to the company because they know that they will be treated well. Having that responsible perspective helps the company to have loyal customers who feel that, their relatives or even parents’ lives were transformed by the company. This enhances the company to build it some more through the social network channel. PETRONAS partners with the government in helping educate a person which is a noble idea for uplifting the current status of the people. It is ethical to be selfless rather than be selfish by treating people with compassion rather than contempt (Petronas, 2012). PETRONAS unethical practices Despite the fact that PETRONAS is the most profitable company in Asia, it has a lot of unethical practices, which take place, in the company. Apart from the patriotic nature if the worker, most of the just persevere because of the different approaches in the company. In terms of reporting they have edited news for the sake of publicity while the inner stories of the company are full of social rot. Racism among all other social evils takes place in the company. There have loss of chunks of money which money ha not been accounted for. It is evident that the workers are concerned with the loss of money in the company but they still want to deny the fact. This makes the company to suffer a lot of financial setbacks because they maximize on the opportunity of mediocrity of quality officer. Even if the quality assurance officers are strict, they are wooed to accept tips from the worker who wok in cahoots with the quality assurance officers to embezzle funds from the company. Most of the opportunities preserved for the underprivileged student are traded whereby the able students occupy the positions they have not merited for. This is an unethical incidence which needs to be corrected. The top level management controls the junior staffs in behaving in the manner they do not like became they blackmail them with a sack if thy do not behave according. Most of people do not want to risk a job loss more so in the current tough times when finding a job is difficult. It is imperative to ensure such happenings are documented to exposed the rot the company which end up becoming a national problem that can get out of hand and late uncontrollable. The company overlooks the fundamentals of doing goods and becomes an income generating projects for the high and the mighty. Before one is employed, he is forced to pay some money which is just embezzled while denying citizens to the right of employment (Petronas, 2012). PETRONAS is owned by the public although no one has an opportunity to queation how the company is managed. Critics are more concerned with the manner in which the company can be made to earn more money than before. It is unethical that the company does not become answerable to the parliament which is an indication of impunity in the world. The company ought to bear its activities to the parliament, but they are not willing to show that responsible move because the insulation from public and political scrutiny uplifts the manner in which they act in a manner beyond reproach. This action makes the employees in the company feel as untouchables and as if they are not supposed to be questioned by anyone in the society. This one makes the company be in the risk of being influenced by ill willed politicians and powerful people in the country. It is unethical to shun the society from interfering with the running of the activities of PETRONAS through the right agencies such as the parliament. Social stratification such as the manner in which the employees of the company suffer from is unethical because it widens the gaps of the individuals in the society instead of fortifying integration in the society. Even if PETRONAS published books about what they do, there is a need for an audit which exposes the happening in company hence reducing the risk of impunity to manifest itself (Flynn, 2008). Even if the employees in PETRONAS represent the epitome of Malay success in management we should not accept blind trust to rein in such tricky moments. The fact that the employees work for such an organization does not shield them from inspection hence holding them as more patriotic than other people is unethical. They ought to be castigated in the time they go wrong rather by accepting all that they do. All of the employees and workers in the country are patriotic. It is imperative to know that they are all the same with any other worker in the country because they develop the country in the same manner that workers do (Asia Sentinel, 2007). When money issues are involved they throw their patriotism away because there have been a recent development where PETRONAS lost staff to the Middle Eastern oil companies for they follow the higher pays in the companies. This is an indication that they are not paid enough money by the company. Being the first in profit making, in Asia, PETRONAS is supposed to pay its employees a substantial amount of money instead of underpaying them hence increasing turnovers. It is unethical to underpay people yet the company makes a lot of money (Petronas, 2012). This kills the morale of the workers and increases the chances of them migrating to other countries or companies sin search of workers. It is also an indication that the government pay its employees cheaply. There is a need to see how the company runs its affairs for instance in the purchase of products as well as process of petrochemical products (Pywong, 2009). By wanting to intervene in the conduction of the activities in PETRONAS, the public wants to se the accountability in the company. PETRONAS had planned to purchase various projects although the public was to put into the limelight. This is a questionable issue which should not be ignored but dealt with in a serious manner. People are interested for instance in knowing if the purchasing of shares worth US$1.1 billion shares in the troubled ROSNEFT which is a giant Russian oil company. The people want to know the viability of such transaction instead of just being spectators in the business conduction. The company participates in suspicious deals, which the public, does not trust for instance participation in Iran’s GOLSHAN and FERDOWSKI gas fields. Although the company has highly trained employees, it is supposed to be open to scrutiny by agencies such as the parliament (Nuffnang, 2009). The company does not become transparent about its financial which is the reason for conducting business. The moral reason in business conduction is realizing profits which should be done in an open manner rather than dubious operations. This show the way the employees are unethical because they do not want criticism in case they have flouted the principle which are in the whistle blower policy. Most of the national corporations of PETRONAS magnitude tend to suffer from corruption cases because of interference from international syndicates, which siphon money, from the companies and fleece the countries in dubious deals (Flynn, 2008). The company flouts most of the principle which hold consumers and stakeholder together. The sections of board members are always internally influenced by people who have interests to benefit from the company. This is not ethical because most of these people do not work hard because they want to transform the company but for their selfish gains (Flynn, 2008). Most of the board people are not interested with the welfare of the company hence the portrayal on in genuine mission they have towards the company interests. The content of leadership is questionable because, merit is not the follow criteria but nepotism (Flynn, 2008). In 2009, the prime minister of Malysia Najib Razak nominated Mustapa to the PETRONAS board. Omar Mustapa did not deliver was given a scholarship to the United Kingdom. This is an indication that the company rewards mediocrity. Najib nominated Omar even if there were protests against the nomination in the company. This shows impunity of the highest ordered practiced by the mighty in the country and government.This is an indication that the directions in the company are not according to merit but according to autocratic leadership practiced by the prime minister and his ilk. It is imperative that the leaders are people who morals are not questionable, but the board in PETRONAS is composed f people who are immoral yet striving to work on behalf of the government or meeting the targets stipulated in the financial years. Poor leadership is eminent in the company which is propagated by the top leadership in the government (Ramanathan, 2010). It is unethical that even if PETRONAS was among the companies in the Fortunes 500, it did not have a successor in the leadership. This is because it could not resist the political influence. The politicians who are von the government side use the company to fund their election bids. This is unethical because they use taxpayer’s money to reach their interests without feeling responsible at all. It is an indication that impunity reigns in the country and organizations that are connected to the government. PETRONAS has become a tool for political parties in the country. Lack of independence and the internal governance of PETRONAS accepting influence are unethical which should not be tolerated at all in the company. This is because by allowing politics in the company, there will be siphoning of resources to individuals who are only egocentric (Flynn, 2008). Most of the decisions are perpetuated by the prime minister who installs the people he wants for instance Hassan. He harnessed Hassan’s leadership whereby the petroleum cost went high. The rising cost of fuel is a cover of many sins, which the leaders, bring in the company because they want to conceal their ill acts in the company. If one is responsible enough he holds not allow intoxification of such organization with political interests because sometimes politics is not genuine. Failure of the company to raise a successor show disintegrated the company is because they ought to know the most likely candidate to the position. The politicians divide the boards so that there is no unity (Ramanathan, 2010). Conclusion PETRONAS is companies which can help Malaysia to progress further, but with the influence from the political parties, it is bound to fail. It is by the act of the employees that the company sticks together for the show dedication to the company despite many wrangles about power and authority. It is imperative to consider the most applicable means of dealing with unfair trade. The company lacks organizational culture, which is manifested, in the disability to have a successor. All in all, the company can redeem the, Malaysia population from abject poverty. Scholarships, which are offered, by the company are an indication that it cares about the humane perspectives of the citizens. Education is the only thing which can redeem an individual to a level of self actualization. By educating people and offering those jobs, the company did an ethical thing which should be commended by the whole nation. The company ought to conduct free and fair elections instead of interference from the politicians. It is imperative to allow criticism and be answerable to the parliament so that the affairs of the country can be in the right hands rather than fall in the hands of rogues. There should be organizations where employees should report case such as intimidation by the seminars as well as racism and other social vices. Corruption should not be practiced in the company so that it thrives to the highest level hence change the lives of the people (PEMANDU, 2011). ReferenceS Asia Sentinel. (2007). Bailout Alert in Malaysia. Retrieved on 10th April, 2012 from http://www.asiasentinel.com/index.php?option=com_content&task=view&id=510&Itemid=229 Cragg, W. (2005). Ethics Codes, Corporations, and the Challenge of Globalization. London: Edward Elgar Publishing. Flynn, G. (2008). Leadership and Business Ethics. New Mexico: Springer. Luqman, A. (2011). The Influence of Personal and Organizational Factors on Ethical Decision Making Intentions among Managers. International Journal of Business and Management. Vol. 6, No. 9; September 2011. Pp. 261-270. Nuffnang. (2009). The Imapcts of Globalization on PETRONAS. Retrieved on 10th April, 2012 from http://ivythesis.typepad.com/term_paper_topics/2009/07/the-impact-of-globalization-on-petronas.html Pywong. (2009). The PETRONAS issue again. Retrieved on 10th April, 2012 from http://www.tindakmalaysia.com/threads/990-The-PETRONAS-issue-again Performance Management & Delivery Unit (PEMANDU). (2011). Corp Leaders Convene to Gain Insight on Biz Ethics & Integrity. Retrieved on 10th April, 2012 from http://www.pemandu.gov.my/gtp/Press_Releases-@-Corp_Leaders_Convene_to_Gain_Insight_on_Biz_Ehtics_-%E2%97%98-_Integrity.aspx Petronas. (2012). PETRONAS Code of Conduct and Business Ethics Guide. Retrieved on 10th April, 2012 from http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCIQFjAA&url=http%3A%2F%2Fwww.petronas.com.my%2Fabout-us%2Fgovernance%2FDocuments%2FCoCBE%2520Guide%2520280312%2520final%2520with%2520cover.pdf&ei=epqDT4HlMdTS4QTX8KyGCA&usg=AFQjCNHUTsmhKfkN15nvhH4AeAYHYh-z_A&sig2=f6n8wHkCZ-5U-Updo-0c5g Ramanathan. (2010). PETRONAS and the character of leadership. Retrieved on 10th April, 2012 from http://write2rest.blogspot.com/2010/02/petronas-and-character-of-leadership.html Shaw, W. (2010). Business Ethics: A Textbook with Cases. London: Cengage Learning. Read More

There is a policy which provides avenues for all PETRONAS employees to have a chance to disclose any misconduct in the company. This helps the workers to be stakeholders in the company rather than just workers who strive to achieve the targets in the company. The policies enhance the top level management to delegate the powers in running the company. Subdivision of roles helps the company to be very effective in the duties, in the company. There are many incidences, which ensure that, fraud is controlled in the company (Shaw, 2010).

Whistle blower policy The scope of the whistle blower policy was to control and prevent fraud, bribery, power abuse, embezzlement, and non compliance with the procedure. It is not able go exhaust the list of the things that can be unethical in the company, but it is imperative to check the loop holes which create such misconducts in the company. By ensuring the policy was effected in the company is an ethical process towards realizing the ethical behaviors in the company. There is no racisms issue sin the company because the company needs have a teamwork approach towards realizing its goals.

The policy also ensures there is no impersonation whereby most of the people disguise themselves to occupy official duties and commit theft. Most of employers are advised to disclose the identity of the people they report instead of stating anonymous people in the company. In that respect, the company will have measures as per the statutes of the office to offer protection for the suspect and conduct investigations (Petronas, 2012). By being truthful about the business operations in the company helps the customer relationship where there is the creation of value that exceeds the service provision cost in the company.

In the recent wave, of globalization, the way businesses are carried out has changed. It is through communication that business transactions are carried. There are a lot of cyber crimes involved in transacting business deals. A lot of loopholes are being used by rogue operators who intend to swindle people their fortunes in the name of transacting business with the PETRONAS Company (Cragg, 2005). In that regard, there are counter measures put in place to ensure that there are no unethical process being carried out by the employees.

sin the PETRONAS company website there are a lot of authentication passwords for identification. This helps the employees who are held responsible with the information to have the secrecy of operation. Oaths are taken before working where workers remain faithful to their offices ad all the duties within their jurisdiction so as to reduce theft cases (Shaw, 2010). In the upstream activities of sourcing for oil through exploration, the company has measure that ensures that there is no degradation of the environment.

Compensation is highly recommended by the board of PETRONAS because eviction of people from the mining area is unethical. There are legal proceedings, which are followed, to ensure that people are not unlawfully evicted from their environment in pursuit of oil resources (Petronas, 2012). The company signed the Corporate Integrity pledge which was formulated in Malaysia for the purpose of upholding transparency in the country and elsewhere. Since the launching of the corporate integrity pledge on 31st March, 2011 which took place in Bursa Malaysia, there have been twenty four countries which signed the contract for the purpose of ensuring transparency.

The pledge enhances that there is no violation of anti corruption principles which shield the government corporate from being mishandled by employees who are egocentric. PETRONAS Company ensures that the employees attend integrity workshops so that they are imparted with ethics in operating the transactions in the company. Because of a lot of money in the company one can be tempted to make away with some or bribe the auditors. This one is stopped by the personal conscience which has been affected by the use of ethics (Cragg, 2005).

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