School Of Management

Semester I, Academic Session 2013/14

ATW 394 Business Ethics

Slot 4
Case 4: Global Oil

Prepared For:

Dr. Azura Abdullah Effendi

Prepared By:

Baarathi Rajan A/L Ganeson

116142

Farah Amira Bt Nordin

116151

He Jing

106859

Jayanthi A/P Marimuthu

113647

Nik Syahirah Bt Nik Min

118184

CASE 4: GLOBAL OIL

Question 1
Did Global Oil commit any ethical violations here? Why or why not?
Yes, it is an ethical violation because it caused pollution where the oil spills damaged the coastal
waters of the region, irregularities around the company area like accidents to those in contact
with media, threats to employees who considered discussing Globals business activities with
local journalists and caused injury and death to one of the leading members of the humans rights
organization.

Question 2
Did Bannets response reinforce Globals public commitment to CSR?
Yes, Global Oil reinforce Globals public commitment to CSR because they fulfill the
requirement which is the global oil launched the new initiative A Plan of action for the Odone
people and also promise to clean up all the oil spills, address any threats to local employee and
further increase Globals community projects in the area. Global Oil announced its new initiative
at a press conference from Globals regional headquarters. It is shown that Global Oil is concern
after some unwanted things occurred. No one from the Odene was informed of the new initiative
before the press conference, nor was anyone from the Odone people invited to attend since it is
only for companys reputation purposes.

Question 3
Why did the good neighbor suddenly become the corporate bully?
Global Oil Incs initial CSR contribution to the people in Africa includes improving
infrastructures, schools and health care initiatives. The company uphold the role as a good
neighbour in each region in Africa that result in significant development to the welfare of the
people. There were preventive health care, improved water supply, schools and working
opportunities - all of which gave a public impression of a good neighbour behaviour of Global
Oil towards the people in Africa. A great social conscience exhibited by Global Inc.
However, a few incidents changed the perception of Global Oil being a good neighbour to
becoming a corporate bully. It started with the oil spillage in the Odone region that damaged the
coastal waters and few accidents involving the employees who considered discussing Globals
business activities to the local journalist. These two occurrence gave rise to protestors picketing
outside the refinery gates which eventually attracts higher media profile until it reached the
attention of environmental and human rights organizations. Making matters worse was when one
of the leading members of the human rights organization died after being beaten in a remote area
of Odone land. It could be anybody that could have beaten the deceased but since Global Oil was
having an environmental issue at that time, so the company was accused for the crime despite
there was no proof. Global Oil Inc name was badly tarnished hence it became the corporate bully
with its product was boycotted.

Question 4
How could Global Oil have handled things different?
The new initiative pledged by Bennett came without performance deadline. No one from Odone
people was informed and invited to attend the press conference. Actually many organizations
have found it difficult to make the transition from CSR as theoretical concept to CSR as an
operational policy. Many CSR initiatives do not generate immediate financial gains to the
organization. The suggestion for Beneett to improve the new initiative should ensure the pledges
come with specific performance deadline to show the organization sincerity to solve the issue
and mitigate the worry from Odone people. Global Oil should also inform the new initiative to
the Odone people before press conference and invite them to attend the conference. The Odone
people could have voting rights about the new initiative pledged by Beneett. If majority people
agreed with the new plan, then the plan could be carried out to show the respect for the majority
Odone people, according to the utilitarian theory. However, if less than half Odone people agreed
with the new initiative. Beneett should make another plan for the Odone people or make the
Odone people announce the solutions which they wanted. Meanwhile, the third agency may
invite for the conference to justify whether the initiative pledged by Beneett or Odone people
was reasonable or not. If the plan announced by the Odone people is quite acceptable. Beneett
and the Global Oil organization should comply with the Odone people to show the respect and
caring in the moment to remedy the previous neglect for the Odone people before and rebuild the
reputation of the Global Oil organization which put failure of CSR into practice and ensure the
organization still have sustainable future for the whole enterprise and Beneet keep his job that he
really deserved by solving the issue for Odone people equitably.

One of the other problem faced is the disparity between perception and reality. Jon Beneet had
enough funds to support a few strategically placed projects to keep the locals happy at each
project. However, the daily incident was increasing. The negative like oil spill which damaged
coastal water. The threats also were given by the company to warn their employees who would
like to discuss the issue with African local journalists.
The basic reason for the way of the company handling this issue is the deficiency acknowledge
of corporate social responsibility. The suggestion is to be aware of the sustainability which is one
of the driving forces behind corporate social responsibility which each company should pay
attention and comply with the provision. The earths natural system is now in serious and
accelerating decline, while global population is rising precipitously in the last 30 years alone.
One-third of the planets resources have been consumed.

Because of the oil spills, the

employees health would be impacted by the environmental pollution. Moreover the threats given
to the employees who wished to discuss the issue with local journalists and caused psychological
insecurity in their workplace. According to the social contract approach, there is an obligation for
the corporate to maintain a long-term perspective like keeping sustainability for the society to
maintain environmental friendly for the next generation for the locals. CSR also indicates that
the company should not only achieve a social benefit over and above maximizing profits for its
shareholders and meeting all its legal obligations which the compliance with all legal industry
standards in operating a safe working environment for its employees.
In addition, one of the leading members of human rights organization was dead. The media
response was immediate and extremely negative, accusing Global Oil of either direct or indirect
involvement depending on the angle of the story. The reason why the media response was so
negative because actually activists

always target the most visible for successful part of

companies or the successful companies merely to draw attention to an issue. However, if the
dead person was really beaten by the person from Global Oil organization, the company need
transparency that organization can no longer sweep things under the rug whatever they do will
be known, almost immediately, around the world, according to the driving forces behind
corporate social responsibility. Although the real fact would not be known in public, eventually
the truth could be uncovered generally. Because the picket line was larger and louder than ever
after the issue resolved. Therefore there is high possibility for them to continue to find out the
real cause of the death. Until then the reputation of Global Oil will be impacted again and even
more seriously.