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Fraud Risk Question Answer
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What was the major risk driver affecting BP DH
British Petroleum (BP), the world's second-largest oil corporation, experienced an oil
spill accident in its Deepwater Horizon sector in 2010. The company's key risk factor was
implementing a risk and safety hazard standard throughout the board.
Is BP an ethical company? Yes/No? Why/Why not? Explain
Yes, BP's management creates a code of ethics for employees. Still, a series of
occurrences have revealed that the company cannot properly execute risk and safety risks
measurement and control all through the company. The BP DH situation resulted in oil spills,
suggesting a lack of ethical deployment in the company from a range of perspectives, including
no precautionary policies, failure to adhere, lack of training for employees, no notification of
changes, and a lack of conscious respect for possible risk at the company's various refinery areas
(McMasters, 2018).
To what extent does BP plc act ethically to all of its stakeholders? Explain.
BP is an ethical corporation because it takes numerous initiatives to treat all its
stakeholders ethically. BP displays its dedication by cleaning up the spill, implementing health
and safety precautions and regulations, and corporate social responsibility, protective
precautions, and employees' rights through the company via multiple advertisement channels.
However, in the case of BP DH, the corporation was unable to maintain an ethical standard and
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did not effectively follow the crisis management guidelines. Despite well-communicated ethical
policies and regulations, the corporation cannot reclaim its industry's ethical position.
What are the ethical issues/questions surrounding the BP oil spill? Explain
Even though the US government was fully aware of BP's previous oil spillage incidents
in other locations, the US government strictly failed to enforce ethical considerations at the BP
Deepwater Horizon site. The BP DH incident had a tremendous impact on the US economy, but
it also put a financial strain on the firm because of a large fine imposed by the US government.
Socially, the corporation lost its market reputation, and it was eventually forced to establish a
nearly $20 billion trust fund to cover claims related to the BP Deepwater Horizon tragedy
(Tatariw, 2018). Though the corporation was a world leader in safety prior to the catastrophe, it is
now recognized as a technology failure oil and gas company in the industry. Following the BP
DH oil spill, the firm was subjected to US government restrictions limiting corporate activities
and a $7.8 billion settlement deal punishment (Tatariw, 2018). Because of various oil spill
incidents in various locations, environmental perspective companies failed in the oil and gas
industry.
Could better corporate ethics have prevented the BP oil spill? Yes/No? Why/Why not?
How?
Yes, BP DH workers could have avoided the oil spill tragedy if corporate ethical norms
and regulations had been effectively applied at the site. Before the US government established
the commission's investigators, the workers failed to give knowledge of health and safety and
protective measures and precautions (Crane et al., 2019). Furthermore, site leaders provided a
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wrong explanation rather than investigating the true cause of the incident to prevent it from
happening again. BP site management might have avoided the DH incident by implementing an
ethical code of conduct and rules and regulations, but they failed to do so both physically and
ethically.
What about Tony, the CEO? Assess "tone at the top" and his behavior during crises?
Nonetheless, in the aftermath of the world's worst calamity, the company's CEO acted far
more professionally than the previous CEO. He and his current management explained the
tragedy, viewing it as a completely avoidable disaster rather than their industry's ethical failing.
Furthermore, the CEO emphasized the effective execution of ethical standards and regulations at
other firm sites (Gottschalk, 2019).
Refer to the BP Code of Conduct: Why didn't this ethics base policy achieve its purpose?
The corporate management might easily achieve its personnel and site safety goal by
referring to the BP code of conduct ethics and compliance section. Nevertheless, during the BP
Deepwater Horizon catastrophe, management could not properly execute the BP code of conduct
ethics and compliance section on every site area, particularly at the BP Deepwater Horizon site.
Management demonstrated neglect in performing their roles properly prior to the tragedy, and
even after the disaster, instead of admitting responsibility, top management argued that the
disaster was unavoidable due to natural disasters (Gottschalk, 2019).
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References
Crane, A., Matten, D., Glozer, S., & Spence, L. (2019). Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press.
McMasters, M. (2018, March 9). BP Deepwater Horizon Crisis- A Case Study. Linkedin.
https://www.linkedin.com/pulse/bp-deepwater-horizon-crisis-case-study-michael-
mcmasters
Tatariw, C., Flournoy, N., Kleinhuizen, A. A., Tollette, D., Overton, E. B., Sobecky, P. A., &
Mortazavi,B. (2018). Salt marsh denitrification is impacted by oiling intensity six years
after the Deepwater Horizon oil spill. Environmental pollution, 243, 1606-1614.
Gottschalk, P. (2019). BP Deepwater Horizon Oil Spill Claim Investigated by Special Master
Freeh: A Case for Application of Convenience Theory to White-Collar Misconduct.
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