The aim of the following paper is to make a profound discourse regarding ethical risks and environmental hazards related to oil and gas exploration activities through making in-depth answers of three questions, provided in given case study. The first questions, which is going to be dealt is the discussion regarding reducing ethical risks for minimizing accidents. The second question is going to find out the difference in the risks, which are frequently faced by each of the organizations mentioned in the case study. Finally, in the third question, the paper will identify the importance of ethical leadership for minimizing environmental hazards and accidents.
Working in an ethical way to extract natural oil and gas is indicative of those techniques, which does not bring potential harm to natural resources. It is because, ethical risks in the oil and gas industry are mainly caused by the application of varied ways of drilling oil and gas, which are applied to gain oil and gas in a cheap and less time-consuming way (Frynas, 2009). However, it should be also kept in mind that there are several ways of extracting oil and gas, which instead of being ethical, inflicts major harms on nature and society (Dahle et al., 2012). Nevertheless, it should be considered that in most of the time, unethical applications of oil and gas exploration bring potential hazards and accidents resulting in environmental pollution and deaths of the workers. Therefore, it is indicative of the fundamental fact that ethical risk is one of the chief determinants of accidents in the oil and gas exploration cites.
In this case, there are a number of strategies that can be approached in order to ensure that ethical risk is managed effectively. One of the strategies that have been pointed out to be super effective is that ensuring that incentives are given in order to encourage the culture of safety (Martin & MacNaughton, 2004). It is important to encourage employees to continue adhering to some of the set standards in order to promote safety. This will not only protect the companies from bad reputation but will also prevent unfortunate occurrence of accidents (Olsen, 2002). In this context, it is required to mention that there are several strategies, which help organizations of oil and gas exploration in minimizing occurrence of accidents and hazards. One of the strategies that the government policies can provide in order to ensure that safety is effectively achieved is by providing tax holidays to some of the companies that adhere to the set ethical standards. It must be understood that most of the companies that do not adhere to the ethical regulations do so in order to maximize their profits. If the government gives out tax incentives, the companies will not need to bypass some of the set standards as a way to increase their profits (Magrini & dos Santos, 2007). Policies on ethical standards should also be set at a high level in order to protect the people from any risk of accidents that may arise because of low ethical standards being set. Certification and training is also a very important aspect that should be considered in order to ensure that the chances of any accident from occurring are brought down. Most companies do not want to have their employees to undertake training due to the high costs that are associated with the same. Trainings will ensure that the employees are up to date with some of the new developments that are being witnesses in the sector and this is very important, as it will ensure that the chances of avoidable accidents from occurring are reduced. Certification is also important since this will act as confirmation that one has the necessary experience and expertise to work on the projects that they are awarded. Effective management of change is also very essential aspect of any organization in order to ensure that the change process is experienced without many difficulties (LeMenager, 2013). It is important to note that most managers fail to manage change that resulting into problems in future. In order to ensure that there is a smooth transition in places whereby change is needed, the management must ensure that the same is done in a slow but sure manner (Arscott, 2003).
First, it is important to inform and train the employees about the expected change in order for them to be ready for it. It is also very important to ensure that before any change is implemented in an organization the same is taken through a pilot phase. This prepares the management to understand some of the problems that may be faced and prepare for them before hand. Implementing change in a large scale without first taking it through the pilot phase may result into more harm than good. Some of the managers fail to ensure that any change that is needed is undertaken through a slow and sure process due to the fact they want fast results or expect the same to bring about increased revenues thus failing to see some of the problems that may arise along the way.
From the case study, it has been understood that all oil and gas exploration organizations are encountering environmental and operational risks in order to provide an adequate supply of energy. From the case study of BP, it has been identified that the organization deliberately tried to renew their commitment for considering safety and sustainability their utmost responsibilities. However, their approach did not help the organization in accomplishing their commitment for safety and sustainability as the enterprise has repeatedly faced failure in their underwater drilling activity. In case of BP, the risk is related to the organization’s process of quality testing and installations of them, which are making the well of oils vulnerable. Therefore, it can be said that oil spills and vulnerability of the oil wells are the risks that the organization continued to face. On the other hand, the case of Exxon Valdez is indicative of the fact that the organization is facing risks due to wrong directions and management. Considering the case of BP, it is also understandable that vulnerability of the wells are due to inappropriate implementation of pipes, which means the organization has not applied ethical and responsible procedures for accomplishing their operations. Thus, it can be said that both Exxon and BP have been facing in appropriate management that is causing the similar risks of oil spills. On the other hand, the case of the fracking industries is indicative of the fact that the risks, which the organizations are facing frequently, are due to the fracking activity. In this context, it is essential to mention that fracking activity itself is a risk bearing activities as the procedure reduces high amount of chemicals as well as methane into the environment (Martin & MacNaughton 2004). Therefore, it is understandable that unlike the companies like BP and Exxon, the fracking organizations are more susceptible to frequent risks and hazards. Unlike BP and Exxon, who are mainly facing the risks of sudden oil spills, the fracking organizations are facing risks regarding the harmful emissions, which are caused by the activities of fracking. Therefore, one matter should be considered regarding all the three cases that the frequency of the risks is mainly related to the unethical and inappropriate activities of extracting oil and gas. Thus, inappropriate procedure is common for each of the organizations provided in the case.
One of the factors that may avert some of the risks that have been mentioned above is ethical leadership. Ethical leadership ensures that the decision makers have taken into consideration some of the ethical factors before making any decision in the company. Developing a responsible and transparent culture is one of the factors that any ethical leader must promote. It must be noted that all decisions that are to be made in the company should not only be focused on the money that the company will make but also the risks that are involved (Fadul, 2004). A culture whereby one is responsible there is a high likelihood that they will make decisions knowing very well that they may face some repercussions for the same. Along with ethical leadership, a transparent culture is also very essential, as it will be able for the employees to point out areas that they may feel that some improvement is needed. However, environmental risk management is a very important factor that should be considered in order to ensure that decisions those are made in the oil and gas sector, are ethical. It has to be noted that environmental impact due to oil and gas accidents is felt in an area even years after the same as occurred (Frynas, 2009). Most decision makers overlook some of the negative effects that may be realized on the environment as a result of accidents reported. By ensuring that high level standards of quality and safety are upheld, there is likelihood that the accidents that are to be reported are minimized (Mariano & La Rovere, 2007). Some of the accidents that have been reported so far are because of low safety standards that would have been averted if the decision-making organs abided by the set standards. As it has been noted there are number of areas that need change in the oil and gas industry. If all the players were able to abide by them there is, a high probability that risks being witnessed would be averted. In order to accomplish the aforementioned consequences, it is essential to employ ethical leadership, which can only successfully implement effective ethics and compliance programs in an organization. In this context, it should be also kept in mind that ethical leadership is also necessary for ensuring a sustainable approach to the society as well as to the environment, which is a determinant of organizational reputation too (Spence, 2011).
From the above discussions made through three questions, it has been understood that one of the chief reasons for the occurrence of accidents in the oil and gas exploration activities is lack of ethical leadership. The above paper is indicative of the fact that ethical risks brought terrible hazards to the organizations of oil and gas exploration and each of the cases presented in the given paper is evidence of the fact.
References
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