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Shell oil has a code of ethics that can be found in any other business because it is very standard. This paper will identify the ethical system employed at Shell Oil and discuss how this code of ethics is applied within the company. In this paper, I will also identify the type of ethical system used within this company by including information regarding the different departments and the code of ethics.
All the stakeholders in a company need to understand the whole code of ethics because each will find different uses for the code in their respective duties. In addition, a discussion of the modifications to the code will be looked at to identify any amendments if necessary. Lastly, the paper will explore possible amendments to the code of ethics by employers and employees.
Shell oil is one of the leading oil, gas and petrochemicals producers in North America. It is a prominent company in the oil production industry in the Mexican gulf. Shell is a branch of Royal Dutch, which is a prominent company in the oil industry. Shell oil has purposed to operate in the same way as the Royal Dutch.
The company has also purposed to handle its clients in a way that will create a close relationship with them. The company also aims to help its employees achieve their full potential. The company’s code of ethics is aligned to ensure that the company succeeds financially and that its clients are well taken care of.
The code of ethics is specifically written to spell out the main requirements of employees, how breaches are to be reported, and how to deal with the accountability issue (Shell Oil 2011, p. 1).
Type of ethical system
The code of ethics and consequently the ethical system at Shell Oil is a duty-based or deontological ethical system. A duty based ethical system involves a moral obligation for an individual to act in a certain way, but an outside authority determines right and wrong. Such a system simply states that some things are right and others are wrong and therefore individuals have a duty to do or avoid them.
This is in line with the key requirements stated in Shell Oil’s code of ethics. The requirements have a list that spell out the moral principles at Shell. The list says that all employees should act in accordance with high standards of honesty, integrity and fairness and expect others to do the same for them while maintaining a work climate that fosters the same standards.
It also states that employees must not in any circumstances, seek or accept any favor in whatsoever form from third parties to their own advantage as described in the code of ethics of any Shell company unless such things are gifts of nominal value appropriate in particular circumstances (Kerns, n.d, 1).
At Shell, the code of ethics is used to guide employees to act with honesty, integrity and fairness. Employees are encouraged to maintain high moral principles towards senior management and customers to foster a good business environment that will ensure that the company meets its goals.
Employees are also expected to adhere to the SGBP in dealing with securities and any other provisions. This is done to avoid conflicts of interest as stipulated in the terms and conditions of employment.
The code has been used in many occasions to bar management from using their positions for their own interests. It also prohibits them from soliciting or accepting favors or doing special favors and from misusing the company’s resources. It is common practice for employees to model their own behavior after executives and managers have shown a good example.
Therefore management should first adhere to the code. If they fail then they should not expect junior employees to perform any better. Management also employs the code of ethics when hiring employees.
It is not just the ability and willingness to do a job that determines potential employees but their level of honesty and integrity plays a great role. Management should display the same when hiring potential employees making sure that they are not biased in their selection.
The Board of directors should also conduct itself with integrity because this affects the bottom-line results. They are expected to apply ethical standards in making decisions or before taking an action. It is confirmed that company’s that succeed in promoting ethics make them a top priority starting from the hiring of employees and communicating them clearly.
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When employees feel that they are working in a friendly environment, they a less chance of them engaging in activities like covering up mistakes. They will instead work with a sense of integrity and accountability. They will feel indebted to the company because of its ethically strong management team and board of directors (Shell Code of Conduct, n.d).
Employees at Shell oil have been complaining of age discrimination by those above the age of 54 have been retrenched or demoted from ranks of higher management and replaced by what some managers call the youth. This has been made possible by the decentralization of authority at Shell.
There is no doubt that empowered lower level employees and managers may use their authority and engage in unethical issues such as this. Such cases on many occasions have gone unpunished. This calls for a modification of the code of ethics because the existing ones are not being followed. The code of ethics should be modified to include restrictions barring management from sacking or demoting any employee without a justifiable reason.
In case an employee has to be sacked, then the affected party has to be notified about the same and also be given a chance to defend himself. In this way, the principle of honesty, integrity and fairness to all will be upheld. The principle of inclusiveness especially in the area of decision making should be encouraged. This will ensure that decisions affecting the company are not left to a select few.
Reactions and effects of the code
Various reactions are expected from employees. Those who are perceived to have been the most affected by the previous systems are expected to agree without any problem. Those who benefitted from it will feel aggrieved especially those who misused their authority will feel deprived. It should be clear that all employees should abide by the code and those who will fail to do so will have no option but to quit.
This will drastically change the culture of the company from decentralized structure, where individual had the power to decide on behalf of the company to one where decisions are pooled from all parties. Such an environment will boost employee morale and work productivity.
In this paper we have seen that a code of ethics is not just a formal statement that outlines related policies. It helps in integrating positive values within an organization. Following its code of ethics, Shell Oil has achieved in its goal of taking care of its customers; it is a model of diversity in corporate America; it has achieved a leading edge in financial, health, safety and environmental performance.
The company however fails in the area of allowing people to achieve their full potential, but with a change in its code of ethics will see it achieve this. It should be understood that having a code of ethics alone will not prevent an organization from every crisis. A code of ethics only ensures that employees have a clear understanding of the company’s expectations.
Management should therefore collaborate with its employees on defining and setting up of rules so that everyone becomes aware of the requirements. With this in place, the management can then take necessary actions to make sure that core values are instilled in the system.
With regular review and reinforcement, Shell Oil will rest assure that its ethics will guide every decisions that its team will make, they will become a vital element in the way it conducts its business.
Kerns, T. (n.d). A brief introduction to formal ethics. Web.
Shell Code of Conduct. (n.d). Shell Code of Conduct: How to live by the Shell general business principles. Web.