MGT 498 week 2 (750 words excluding reference)

Introduction

When you think of an essential part of any organization’s identity, ethics and social responsibility come to mind. Most organizations have the huge responsibility to do business in a very ethical way that is socially acceptable in any economic marketplace. Most decision makers in various organizations will use a strategic plan that includes specific needs of stakeholders. All business organizations are also held to ethical standards and failure to follow those standards will have an adverse impact on stakeholders. It is important to balance the agenda of the stakeholders and also ethical responsibility by creating necessary preventive measures.

Developing Strategic Plans

Ethics and social responsibility is important when developing a strategic plan. Taking the easy way out would be a big mistake when setting and accomplishing your goals. One argument is that if we can better our society if we contribute to every person helping them becoming better. If an oil company like Halliburton did not want to spend their money on extra equipment to protect the environment, people would take notice of their unethical behavior, oil well companies will be less likely to use Halliburton’s well services. Stakeholders might have to give up some of their money in the short term by paying for oil and chemical pads to place on the ground, but in the long term, the company will make more money than they would have saved because of how environmentally friendly they are. Society has rights. Organizations should respect those rights and be fair and honest with their products and services. This means companies should put warning labels or ingredient labels because society has the right to know. Ethical behavior generates the freedom for society. People care for one another, display compassion with each another, and are invested in meaningful relationships (Dyer, J., Godfrey, P., Jensen, R., & Bryce, D. 2016).

Overstepping Ethical Boundaries for Stakeholder Agendas

The BP oil spill is a perfect example of a company trying to increase production efficiency at the expense of safety. Safety has their own department where they walk around locations looking for discrepancies and hazards. The “safety guys” as the crews would call them, would observe employee performing a job for about 20 minutes. Employees were then given feedback after the job was done. No one would get in trouble it was constructive feedback, employees would learn the proper way of operating. For example, safety would let them know if they need to work on their lifting or hand placement while climbing a ladder. On April 20, 2010, a company chooses not to trade safety for efficiency. An off-shore BP oil rig located in the Gulf of Mexico exploded killing 11 employees and sank two days later. This disaster created one of the worst oil spills in US history. Although the fatal explosion was an accident, an investigation concluded the problem should have been detected during the pressure test. The explosion was caused because by safety procedures not being correctly followed and as a result, the well located 1,500 meters below the ocean started to leak. The pipe was estimated to have started leaking 1,000 barrels of oil a per day, but when all was said and done it was estimated to be leaking around 60,000 barrels of oil per day (Farber, D. 2014). In the article The Relationship Between Corporate Governance, Global Governance, and Sustainable Profits: Lessons Learned from BP, the author goes on to explain how BP was already suffering financially and had to pay twenty billion dollars in compensation claims. (Nick Lin‐Hi, Igor Blumberg, 2011). Some preventative measures that could have been taken to avoid this type of situation are training, extra testing just to be sure the equipment and instruments were functioning right, and something as simple as asking a question could have been the difference between life and death. The Huffington Post states that if one of the BP employees simply asked why are the pressure test results reading inaccurate? This whole calamity could have been avoided (Bagley, W. 2017).

Conclusion

It is very important to be mindful of the stakeholders’ needs and agendas when developing a plan that is ethical and socially responsible. Utilitarianism is a great theory to follow when making ethical decisions, keep in mind is theory is not perfect it has its faults. Lastly, we learned from BP that something as simple as asking a question could have saved numerous lives. Not only save lives but also save the environment, the public health, animals, and the economy in the areas affected by the disaster.

Nick Lin‐Hi, Igor Blumberg, (2011) "The relationship between corporate governance, global governance, and sustainable profits: lessons learned from BP", Corporate Governance: The international journal of business in society, Vol. 11 Issue: 5, pp.571-584, https://doi.org/10.1108/14720701111176984