Article on "Draft to Be Improved on Corporate Ethics and Responsibility"

Article 10 pages (3536 words) Sources: 15

[EXCERPT] . . . .

Corporate Ethics / Responsibility

Over the last several years, the issue of corporate ethics and responsibility has been increasingly brought to the forefront. Part of the reason for this is from: a host of different disasters and events that would have a major impact upon public policy. At which point, a backlash occurred against the corporation in question and their overall practices. Where, the company was trying to make it appear as if they were acting an ethical manner. Yet, beneath the surface, executives and employees were lacking these attributes, leading to an inevitable crisis. A good example of this can be seen with the Exxon Valdez oil spill. What happened was the company would knowingly overlook the supervision of the captain and crew on the ship (as the captain was drunk at the time of the accident). Exxon also failed to provide sufficient pilot and escort services through Prince William Sound, Alaska. These two factors would contribute to the accident, as they would highlight the overall lack of ethics and responsibility that existed at Exxon. (West, 2010) This is significant, because it shows an underlying trend has been occurring at numerous corporations around the world. Where, many have been putting the interests of increasing the overall bottom line ahead of safety and the protecting the environment. This has led to a series of different events that would underscore the lack of ethics and morals at most corporations. To fully understand how this has been taking place requires examining several different cases that changed corporate ethics and responsibility. This will be accomplished by looking at: the McDonald's McLibel case, the Nestle Hydration incident and the BP Deepwater Horizon accident. Together, these three different situations will highlight how the lack of: ethics and responsibility has contributed to a host of problems.

The McDonald's McLibel Case

This case began when Helen Steele and Dave Morris were handing out anti-McDonald's literature at number of their different stores in the United Kingdom. Steele (a gardener) and Morris (a postman) from London were long time Greenpeace activists, as the group was critical of McDonald's practices. What happened was, the two would distribute literature that was written by Greenpeace called, "What is Wrong with McDonalds." Inside the document they questioned the claims that the company was making about their foods being: healthy and their environmental practices in the past. In particular, the use of cattle supplied from deforested areas of Central and South America. This was problematic, because the publicity that the company was receiving was hurting their sales and it was damaging their reputation. ("McLibel Case," n.d.)

In response to what was occurring McDonalds would sue Steele and Morris under the UK libel laws. The idea was that since this was considered to be a civil action, the defendant does not have to be given the right to legal council. Where, they are only facing the possibility of financial penalties if they lose. At the same time, the case is decided by a Judge instead in front of a jury. From McDonalds' perspective, this was an ideal solution for going after activists, who are attempting to damage the image of the company. Where, they felt that the libel law should work in the favor, which is why they pursued the case so aggressively. However, contrary to the views of company executives, the trial would highlight the lack of: ethics and responsibility at McDonalds. ("McLibel Case," n.d.)

During the trial, McDonald's would win an initial victory against the defendants. Where, they were able to receive an award of £60,000 for the damages inflicted from these actions. However, given the fact that no jury was present and the defense was denied basic legal protections, means that the case would be appealed to the European Court of Human Rights. They found that the trail and law were: in violation of article 10 on the Convention of Human Rights. As a result, they would reverse the decision and forced the UK government to pay the defendants £57,000 in damages. This is important, because it shows how within a number of different corporations, there is a lack of ethics and responsibility. The reason why is because, they are more interested in protecting their reputation and bottom line. In the case of McDonald's, they knew what they were doing was unethical. However, executives wanted to prevent as much negative fallout as possible to their image. This would create a situation where they wanted to go after the defendants at all costs. At which point, they were seeking out different laws that they could use in their favor (because executives did not like this criticism). ("McLibel Case," n.d.)

Nestle Hydration

The Nestle hydration case involves the way Nestle would deal with the citizens and local government for host of small towns. These are the locations where the company would establish plants that are used to collect and bottle water (that is sold around the world). The problem began, when Nestle decided that they wanted to build a plant in McCloud, California. What happened was the company would use the standard approach, when building any plant in these communities. This involved working closely, with local government officials (behind the scenes), lacking transparency and public disclosure. In 2003, Nestle would follow a similar practice with the plant in McCloud. Where, they would have one public meeting, in which they decided to approve the plant. This essentially prevented public disclosure or transparency. At which point, the community would begin to protest the project and the approval process. This caused Nestle to begin engaging in unethical actions against community leaders. Where, the company would obtain financial information on those individuals, who were against the construction of the plant. This is because, they wanted to limit decent (from these individuals) and increase their overall profit margins, by having the plant operational. The end results were that Nestle was unable to build the facility, as the grass roots opposition to the project would reopen public debate. ("Top Six Reasons Why Communities Can't Handle Nestle Waters," 2010)

What this example shows is that there is a lack of: ethics and morals inside many corporations. In the case of Nestle, this began when the company would seek out smaller communities to: build water bottling plants and then streamline the approval process (with little to no transparency). Once the citizens of McCloud began to oppose the project, is when executives would seek out other ways to intimidate the citizens. This is significant, because it shows how the culture of unethical behavior would have an impact upon the way, the company handled the situation. As executives, began to engage in: more brazen and immoral behavior, as part of their desire to increase their overall profits at any cost. ("Top Six Reasons Why Communities Can't Handle Nestle Waters," 2010)

BP Deepwater Horizon

The BP Deepwater Horizon accident highlights, how the lack of ethics inside an organization can have devastating consequences for: public safety and the environment. In this particular situation, BP had been engaging in a policy of unethical behavior over the course of many years. The main reason for this is because the company was focused on cutting their costs dramatically, to increase their overall profit margins. What happened was managers were given a directive from headquarters to cut the cost of running various facilities as much as possible. To ensure that everyone was embracing these practices, the company would dramatically cut funding for a host of different activities. This would have ripple effects upon: the safety procedures and maintenance of different facilities. At the same time, executives were encouraged to cut corners, in an effort to maintain the company's profit objectives. These different elements would create a culture that would allow: unethical and immoral activities to take place (which would eventually lead to the Deepwater Horizon accident).

However, the events and unethical behavior leading to the disaster would go unnoticed (with BP being at center of host of: safety issues and environmental accidents). The lack of understanding how ethics and morals would contribute to the incident set the stage for future accidents. Where, the culture of immoral activities (at the expense of safety and the environment) would be continually embraced within the organization. A good example of this can be seen by looking no further than the incident at the Texas City refinery in 2005. This would kill 15 people and injury 170. What happened was an explosion would occur (when the facility was closed for maintenance). This was because there were: consistent environmental and safety problems that the staff was running into from the extreme budget cuts. As a result, managers would continually encourage everyone to engage in actions that would ignore key safety provisions. This is important, because during the process of restarting the facility (which led to the explosion), they were closed due to safety concerns. The desire to maintain the company's profit objectives would lead managers to push the staff, to restart the refinery. At which point,… READ MORE

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